By Rebecca Langdon
It is an unfortunate fact that supply chain fraud takes place, and can be an expensive and unforeseen cost of doing business. One of the roles of a supply chain professional is to ensure that there are robust policies and procedures in place to make fraudulent activity very difficult to carry out. Don’t forget this activity might happen from within the business, or outside. We are going to look at a few common avenues from fraudsters with recommendations to resist their attempts.
Scenario 1 – A business stakeholder hands out contracts to their friends/family
This is one of the most common types of supply chain fraud. A business stakeholder who has control over budget or signing off invoices will offer a contract to their friends/family. This might be in exchange for some sort of monetary payment outside of the formal transaction, a gift, or simply to help them out. The issues are that the vendor might not be suitable, or the best people for the job. Furthermore, they are unlikely to be the most cost effective option, and I suspect limited commercial negotiations will take place. Finally, the business stakeholder may not do the appropriate due diligence or implement a robust contract.
Make it company policy to run tender processes or at least some sort of formal due diligence before vendors are appointed. The brevity of the procedure will typically be governed by the value and risk of the product/service. Furthermore there should be a gift policy.
Scenario 2 – Vendors over invoice for products/services that have not been consumed
Most supply chain managers will have been in the situation where there are a huge amount of vendors, invoicing at different times, on different terms, and against varying commercial structures. This can very easily lead to incorrect invoices being approved. Now they may be incorrect because the vendor genuinely made a mistake or perhaps they are attempting to defraud you.
Somebody needs to be responsible for understanding the commercial arrangement with the vendor, and then checking every invoice against that. For some vendors this will be simple as there will be a fixed fee, but for others that are based on consumption it will be a little more complicated as the business will need to track for themselves what they use (or at least be able to confidently validate the vendors number). There are also an abundance of really useful AP systems that can help with wider validation between PO’s and invoices.
Attempts at fraudulent activity are not going to go away, despite the potential repercussions. A qualified Supply Chain professional should be equipped with the tools and knowledge to build robust policies and procedures.
By Rebecca Langdon
If you haven’t heard of Twitter, Facebook, Instagram and Pinterest then you must have been living in a cave for the last ten or more years. In the last 5 years the use of social media has been hugely pervasive across almost every facet of our lives – professional and personal. We are going to take a whistle stop tour of how social media can empower your supply chain.
- Monitor demand Using social media, organizations can get to understand the demand of consumers in a more honest and transparent way than they could ever possibly access before.
- Research People typically have a lot to say on social media and this could give you great insight about your current and potential vendors, and perhaps even future clients.
- Find new vendors Through these channels you could find better vendors that you can build relationships with.
- Delay updates Shipment providers and other carriers may use social media as standard to provide status updates to communicate any delays both quickly and in real time.
- Know your customer Customers often won’t call you up to tell you if they have an issue – their first port of call will be to complain on social media.
- Communicate A lot of businesses now communicate with vendors on social media – answering queries and providing service updates.
- Collaborate and innovate Use social media as a business tool that provides you with the opportunity to learn from others and to collaborate and innovate. It is a huge platform for ideas sharing.
Social media can be daunting at first. It is a big place with lots of different channels, but don’t let this put you off. Social media offers huge potential to empower the supply chain if you are willing to put in the effort. Why not consider a supply chain qualification with Morgan International.
By Rebecca Langdon
The larger organisations typically have a well implemented project management capability, often with a PMO team, a host of PM’s, the works. Their size often makes it economic and efficient to have this separate team. However what about smaller businesses that are growing, doing an increasing number of projects, but are still feeling the way in terms of project management processes and what they can do for them? These are the 4 key ways that Project Management best practice can help a growing business.
- Improve Project Estimation
What something is going to cost is almost always critical to whether or not that project is feasible or not from a business perspective. One of the key mistakes made when project management process is not employed is absent or inaccurate project estimation. Upfront estimation and a process for periodically updating that estimate is vital for project success. It also assists businesses to not carry out projects that are not economically viable, and to avoid unexpected cost slip during a project.
- Resource Capability Planning
If you are a small business you may not have a huge amount of resources, whether that be internal or an external pool you tap into. However, that does not negate the need to plan resources and assess what the output capability is of the resources that you do have. In fact, it is this project process of estimating resource output that is excellent best practice to be used more widely in the organisation.
- Encourage Team Collaboration
A Project Team when set up correctly will be able to efficiently and effectively communicate and collaborate, within the team itself, and to other stakeholders. This is often instigated via a set of project processes, but the result is typically increased collaboration which was spring-boarded from the initial processes.
- Improved Reporting and Transparency
The thing about formal projects is that they usually have reporting and data collection requirements built into their processes. Data collection and reporting when done correctly are valuable business tools that are useful throughout the business. Therefore if this can be learnt through the project process, it can be implemented more widely.
Smaller businesses may not feel that they can afford project management from both a financial perspective and the burden of additional time. It is true that when implemented poorly, project management can cause unhelpful delays and unwanted costs. Yet in reality, when used appropriately, and mindfully of the size of the project and business in question, it can be hugely beneficial for the project itself and for the wider organisation to learn from. For further information on project management techniques, feel free to explore the PMP course.
By Rebecca Langdon
As human beings we continuously push towards less and less human intervention. Why? Because machines are typically more reliable, need less downtime, make fewer errors, and do not want to be paid. The upfront investment can be significant but very often the business case still stacks up given the cost of human labour. This will undoubtedly cause concern among delivery drivers, warehouse pickers, and so on. Yet the progress will not be halted. So how are businesses going to achieve an autonomous supply chain?
Amazon are already trialling drones which have the potential to deliver small packages to customers’ homes in super quick time, without getting stuck in traffic, and without any sort of remote driver. They use GPS to navigate their way from the Amazon distribution centre to the customer’s home.
Self-driving trucks and forklifts are no longer in our imaginations. Of course fuel will remain a burden of cost that will need to be considered, alongside the considerable capital investment. There will be a number of additional value adds such as interfacing to satellite information that will ensure the car takes the quickest route according to point to point distance and traffic.
Which can be used in factories to pick and pack up stock ready to be delivered to the customer. Industry stats say that robot pickers are 4 times as quick as human pickers! It is not hard to believe since robots know the location of all items, can calculate the fastest route around the warehouse.
An autonomous supply chain for many years has been no more than a fantasy, but a number of technologies have evolved to a point that it may no longer be fiction. This is an incredibly exciting time to work within a Supply Chain role as we enter an unprecedented period of disruption. For more information on courses and qualifications within the supply chain management space, please take a look at our website.
There has been a lot written about facilities management finally having centre stage to offer organizational strategic advantage. But is this really true or just rhetoric?
The first thing to recognize is that Facilities Management has had negative press in the past, and has been seen as a stuffy and archaic profession that only really focussed on getting the office carpets cleaned, and making sure there were supplies of tea and coffee.
Yet the strategic positioning of FM is far from rhetoric and there are a number of key areas of opportunity that can be exploited.
- Catering to attract clients
Michelin star chefs, private dining rooms, and exquisite ingredients offered in office environments can attract new clients, or at least sway them to be keener to have meetings and appointments in your office space.
- Video conferencing v travel
Many organizations are operating more globally than ever before. This naturally results in requirements for individuals to travel which can become incredibly expensive, and time consuming for employees as they wait around in airports and so on. There are now a number of more cost effective options such as video conferencing which has become so advanced that participants can almost feel that they are in the same room.
Organisations can produce a lucrative revenue stream from leasing floors and space from within office buildings. This might be a lease or sub lease depending on the ownership status, but by strategically evaluating the space, there could be money to be made.
Organizations are looking for strategic advantage in places they have never looked before. The great thing about Facilities Management is that it has been previously fairly untapped, so there is a wealth of opportunity. It is such an interesting time to work within a Facilities Management role and a perfect time to consider the FMP qualification.
By Rebecca Langdon
You will not be surprised for me to tell you that Project Managers make mistakes – of course they do – they are only human. These mistakes are unfortunately fairly common and simply having awareness of them can make it easier to avoid.
- Mismanagement of project scope
Whilst project scope should be clearly defined at the beginning of a project, we recognize that project change may be necessary. However, there should be a clear change management process in place which is carefully reviewed for dependencies. One of the most common mistakes is allowing additional requirements to come into scope causing scope creep, when proper due diligence has not been completed.
- Mismanagement of resources
A project will usually have a team of resources, some fully assigned to the project and others who work on it part time. Within that team you will have a mix of skill sets. There is usually scope throughout the life of the project to vary the profile of the resources. The first mistake PM’s make is to not optimally use the resources they have, and the second mistake they make is to not review the resources they need periodically against the plan and adjust accordingly.
If a team is to evolve and become more productive, there should be an environment where feedback can be shared and there is a process for learning what went badly, and what went well, and embedding that into future processes. This is something sprint teams are very good at as they incorporate this into their process via retrospectives. If a culture of feedback is not developed there is no environment for growth.
A Project Manager is there to manage the team, and a key part of that is to ensure that there is the right type and frequency of communication both within the team and to stakeholders. Surprisingly, one of the most common mistakes made by PM’s is either not communicating themselves and/or not ensuring communication within and outside of the team.
The project manager is there to manage, but this does not give them carte blanche to go on an ego trip, with it being their way or the highway. Project Managers should be collaborative and encourage input and discussion.
Being a Project Manager is all about coordinating a set of resources to achieve a particular outcome. It is a role where if the basics are not done right, the project will quickly be impacted. It is however a really interesting role, and one that you can gain an accreditation in called the PMP.
By Rebecca Langdon
When I started my career in supply chain we learnt a lot about sustainability in text books. As I eagerly joined the workforce I came to realize that sustainability was something the smaller organizations rarely cared about, and the larger ones paid lip service to. As standard practice we would ask vendors about their own sustainable practices in tender processes, but they were seldom reviewed. Why? The truth is that unless it was legislative to perform sustain-ably, most organizations saw it as a distraction from the bottom line.
In more recent years I noticed a shift with organizations hiring professionals who were focused on organizational sustainability and environmental issues. Yet the same issue seemed to linger – that these individuals invariably had any real influence to enforce the issues. As we rapidly move through 2017, a lot of voices in the industry are finally saying that organizations are genuinely interested in sustainable supply chains. The pessimist in me wonders what could have caused this change – when altruism had always failed to produce wide reform in the past.
Long term resilience
Board rooms are not focusing on the short term only, they recognize that to be successful they must plan for the future. They are looking as far as 20 years ahead, and are taking business continuity and disaster recovery within their supply chains very seriously.
Increasing public pressure
This is not an issue that is going to go away from a public perspective, and there are an increasing number of consumers that want transparency about how products and services they consume are manufactured. If they don’t like the answer, they will be willing to vote with their feet.
Smarter measurement of environmental impacts
As technology advances we are becoming better at measuring and understanding environmental impacts. This in itself allows the government and other bodies to more accurately measure the impact organizations are having on the environment and introduce controls accordingly.
Businesses have long talked about supply chain sustainability but rarely genuinely backed this up by their actions. As the interest in this increases I would expect supply chain professionals to be tasked with driving it forward. It looks like they may finally get to practically use what they have studied in their qualifications.
By David L
If you look around your company you can probably identify a number of areas that would benefit from a Six Sigma project, but trying to tackle everything at once is a greater issue that not tackling anything. The adage of if a job is worth doing it is worth doing well holds here and only half-heatedly running a Six Sigma project is likely to leave you in a worse position.
Instead of trying to solve all of your problems in one go, a structured approach will give you more wins in a shorter period of time, and by evaluating your likely projects using certain criteria, you will be able to identify which should be tackled first as well as checking progress at strategic points. The ten most effective measures are;
- Establish a link with business imperatives. Not every project will have an obvious business strategic element, but if it positively impacts business goals, productivity, employee well-being, or quality of process or product, then it can only help the business.
- Business buy-in. Six Sigma projects are best completed when they are run with the knowledge and the support of the whole company. At the start of a project you should make both the problem and the team tackling it known throughout the company, and ensure that they get full support.
- Team engagement. Black Belts invariably lead projects but some tend to forget that as well as applying their Six Sigma knowledge, they are expected to motivate and lead the other team members. If your leaders are really doing their job, the whole team will be focused on the task.
- Positive sponsor engagement. You need to ensure that the project sponsor is just as engaged as your team and understands the positive effects that a satisfactory conclusion will bring. The sponsor should be the most engaged of the whole team.
- Realistic timescales. Projects should be chosen on the basis of specific deliverables that are achieved in a set timetable. Any project that risks not meeting either of these criteria should not be attempted.
- Delivery of expected results. Your project should set out what it intends to achieve before starting. Fluid goals are worse than no goals.
- Transition enabled. With goals met, any process or system changes should be smoothly handed over to the area owners, who should be able to use them and get full benefits right from the start.
- Replicable results. A completed project should return the same results as demonstrated by the team. If it does not, then the project is incomplete.
- Use Data Envelopment Analysis. DEA can be used to compare and evaluate like performances, so a process that has undergone Six Sigma modification, can be measured against a comparable one that has not.
- Sustained improvement. The results from a modified process should show continued and measurable improvement that continues with time.
Many businesses choose to focus on their own core competencies and outsource various aspects of facilities service provision to third parties. When a Facilities Manager outsources a service it does not extinguish their responsibility for what is delivered to the organisation. This means that Facilities Managers need to be equipped with the skills to both select and manage suppliers. Here we focus on how to get the selection right.
1 Run a process
Don’t contract with a random recommendation or the first company that cold calls you. You need to undertake a sourcing process, even if it does not require a full blown RFP. Make sure you consider all of your requirements and understand if and how each vendor can meet those expectations.
2 Do your due diligence
In any tender process, vendors will make plenty of representations about what they can and cannot do for you. It is prudent not to take this on face value but to speak to some of their current clients to do references. Avoid allowing the vendor to be present for this meeting as you want to try and get the best opportunity for the truth.
If you are seeking a long term relationship with a supplier, you have a vested interest in understanding their road map for future products/services they plan to offer.
- Proven service transition experience
You are likely to be working on a service that is already provided internally or by another third party. The priority is to be confident that the vendor has experience in managing service transitions seamlessly and confidently.
- The vendor hires appropriately
Employees of the vendor will be providing services to your organization. This may be in the form of account managers, helpdesk staff, engineers, and so on. You are outsourcing the service so it is not your role to be involved in the management of those employees, but you want to be confident that the vendor is hiring good staff. Ask about hiring processes, training, retention, and so on.
As I said at the beginning, outsourcing a service is not equivalent to extinguishing your responsibilities. It is in the interest of the Facilities Manager to select the best vendor possible. To learn more about facilities management, you might consider undertaking a professional qualification such as the FMP.
Each project is different but the steps to get from a business requirement to execution remain the same. The project itself starts with a statement of need that outlines what the project is aiming to achieve and usually a brief statement of what it is not trying to achieve. There are four steps to follow to ensure a smooth path to execution.
All requirements must trace back to the statement of need. This might be checked and documented using an Excel document for example. The purpose of this is to ensure that there is no project scope creep being introduced, and conversely that the entire statement of need is covered within the requirements.
The other purpose of a traceability matrix is to make it clear where each requirement originated so that the entire team has transparency of the project direction.
Requirements should be captured in a way that is easy for the team to understand. However, as multiple members of the team may have produced the requirements, at varying levels of detail, and over a period of time, the Project Manager may need to clarify what has been provided. This may include running sessions to ensure that all team members have a common understanding of what has been produced. The PM may also need to seek additional detail if requirements are not complete.
As the PM and the wider team work through the requirements they will produce specifications to create the final product. Keeping full documentation of how the requirement formed the specification is important for the team to stay on track and as something to refer back to.
The fourth and final step is to check the original requirement against what has been executed. This is often done through testing and is the last step before the project can be officially closed.
Project Management is far more straightforward through adherence to processes and procedures such as the 4 steps from requirements to execution as described above. For further information on project management techniques, feel free to explore the PMP course.