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BeyondRed &GreenBooks..[Away from AMS, OPs, BPs & NOLs, this is a snippet of procurement happenings around us. An informalmedium for procurement colleagues to share news, views and new developments in Procurement]

1st PCDC Flash

PollThe Role of

ProcurementResults, 15 September 2011

The Procurement Capacity Develop-ment Centre (PCDC) of the UN hasinitiated a series of flash polls togauge the opinions of the global public procurement community,including practitioners, policy mak-ers, advisors and other stakeholders.The first flash poll looked into therole of procurement, asking howrespondents see the current role pro-curement being perceived, and how itwill be perceived in the future. Re-spondents to the first poll werespread globally with every majorregion in the world represented. 40

organizations and institutions from National and state Governments,Development Agencies, Academia,Consultants and Civil Society wererepresented in the poll. Key findingswere:

How is Procurement Function

Perceived Today?

Where do you believe

Procurement Function will be

in 5 years?

Happy Birthday !!!

GuestEditorofthis

issue:ToufiqAhmedDesgin&layout:PayalM. MadanEditorialTeam:

SenapatiBalagopal

KaleshKumar

1.Bangladeshs gain : Bangladesh -

The country is well-poised to take onthe role of a global low-cost sourcingdestination after China loses its positiondue to increasing labour costs and anaging workforce. A report by KPMGInternational revealed that while "nosingle country can match the scale ofChina, countries such as Bangladeshhave large low-wage workforces thatare now starting to be employed, whileSoutheast Asian countries are makingmoves to remove tariffs and customsrestrictions".

frozen food, and agricultural products.With an export target of US$26.36 billion for the year ending next July,executive director of the BangldeshFrozen Food Exporters AssociationMohammad Abul Bashar believed thecountry is likely to exceed the target by20-25%. The country is seeing a grow-ing number of exports of non-conventional goods and services suchas ship, jute, and IT.

Source: Procurement Asia

Magazine

2. Singapore to see wage hike in Pro-

curement SingaporeA growing de-mand for procurement professionals inSingapore, with many companies expect-ing to increase hiring and belt out salaryincreases in the sector, a new MichaelPage survey revealed.

in Singapore, according to Michael PageInternational's Salary Forecast 2011/2012.Apart from a need for skills in demand

planning, there is also a growing require-ment for skilled logistics professionals andproject managers within both procurementand supply chain sectors.

Salary increases of 3-7% will typically beawarded to help retain top performers,while increases in excess of 10% may bemore common for professionals with skillsin higher demand.

Companies in multinational companiescan expect an average salary increase of15-20% depending on their skill sets.The survey also stated hiring activity inthe procurement and supply chain sectorsis expected to strengthen, with skills in

most demand include energy, FMCG,healthcare, and third-party logistics as-pects.

Source: Procurement Asia Magazine

3. Procurement Benefits Decline

China and India? The advantageprocuring goods and services fromcost countries are diminishing, procompanies to use more sophisticatetechniques for identifying the righters.

components, 10-25% for machine cnents and 40% for tools, accordingBoston Consulting Group(BCG). B

low-cost effects are expected to eroproduction technologies catch up whigher Western standards. Andreassenior partner and managing directBCG's procurement practice says "'low cost' is not low cost anymore.plastics, the cost advantages could 510% by 2020 from about 15% curhe predicts. Fluctuating exchange rand logistics costs mean that compneed to be constantly prepared for step.

Whereas fluctuations of low-cost ccurrencies compared with import ccies was historically 20%, procuremdepartments now must allow for a

of up to 45%, Gocke says. "Shippihave likewise proven to be increasvolatile, having gone up by a factoover the last four years."

Source: ICB

Global Manufacturing Outlook:

Managing Volatility leads to Industries reshaping

Supply Chains :According toKPMG's 2011 Global Manufacturing Outlook, standardisation is one of the key

strategies - 55% of manufacturers plan to standardise their production process while 45% willrequire standardised inputs. Further, just over 40% said they will focus on cost reduction througha shortening of the overall product development life cycle. This new research reveals that, to bettermanage volatility, most global manufacturers are reshaping their supply chain models. Despite contin-ued volatility, manufacturers are cautiously realigning their businesses toward top-line growth whilemanaging a multitude of challenges. KPMGs new report, Global Manufacturing Outlook: Growth while M

Volatility, provides a comprehensive overview of the global manufacturing sector, along with observationsights from a wide range of industry experts and leaders based on a recent industry-wide survey and executviews.Nearly half of respondents say they will invest in technology to improve visibility across the supply chain, tmost important tool for managing risk. Other measures include helping suppliers develop risk management and assessing supply chain processes.

Asia Procurement News Round-up:

The cost beof procurinand servicecountries wlabor costs significant15% for pla

There is a greaterneed for skills inprocurement andcost managementdue to the num-ber of new prod-ucts launched

Vol. X Octob

Bangladesh iswell-positioned toimprove as asourcing destina-

tion due to itsstrong sectorssuch as apparel,

http://www.bcg.com/http://www.bcg.com/http://www.bcg.com/

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"No one wants to die. Even people who want to go to heaven don't want to die to get there.And yet death is the destination we all share. No one has ever escaped it. And that is as it

should be, because Death is very likely the single best invention of Life. It is Life's change agent. It clears out the old to makeway for the new. ....... it is quite true.

ProcurementHow important was it for Steve Jobs in the recipe of Apples success? What role did Supply Chain play inApples mammoth success. Apple has ranked #1 for four years running in Gartners Supply Chain Top 25. In the 2011 list, published iof this year, Gartner identified four key themes that were emerging in 2011: (i) How companies deal with volatility; (ii) Their approachvalue chain network integration; (iii) Their focus on sustainable execution; and (iv) Their ability to orchestrate movement up the demadriven maturity curve.

The themes above in fact talks about one core capability of Supply Chain to meet the changing customer needs. For Apples fast

product lines, the procurement has to be attuned to the pace of marketing and RnD department to make it a successful tango of success

fact is Apples supply management philosophy: Measure your supply chain as your customers experience it. Develop the capability

nalize customer needs, and proactively build customer feedback into your supply chain design.

So, is Apples procurement philosophy too aggressive to ignore core procurement values? Quote from the procurement website o

Apples sourcing process is designed to ensure equal and fair treatment of suppliers so that they can fully participate in a competitive

ment process. The 2011 Apple Supplier Progress Report reflects upon Apples and Suppliers responsibility to ensure Empowering W

Protecting Foreign Contract Workers, Preventing underage labor etc.

Having one of the best supply chains in the world has played a tremendous role in Apples success. And that is why; its no coincid

Apple has named Tim Cook, former Apple COO, to replace Steve Jobs as CEO. Tim Cook came to Apple with deep procurement kn

He came from Compaq where, as Vice President of Corporate Materials, he was responsible for procuring and managing product inve

entire Compaq. Before being CEO, Tim Cook has been responsible for end-to-end management of Apples supply chain. Putting the

chain guru in the top spot reflects a growing recognition of the importance of supply chain management and procurement to the overall

strategy of Apple.

According to a CNN article How Apple blocks its Competition, by David Goldman, Apples supply chain benefits from having str

components and a consolidated supply base. According to Goldman, Apple predominately sells just five different gadgets iPad

iPod, Mac and Apple TVand a combined total of 15 different variations of those devices, excluding modifications like the amount

able memory. Only small handful of products shares many parts common to all the devices. It shouldnt be amazing to procuremen

sional that one of the most profitable companies in the world benefits from such a basic sourcing practice, which contributes to a simp

ing strategy. This simple practice, all companies should follow no matter how big or small they are. Steve Jobs was always a big propsimple solutions.

Rest in peace Steve Jobs.

This Newsletter is a collage of available articles from public domain for limited internal sharing of information. This does not reflect views or positions of World Bank or ay further information contact pmmadan@worldbank.org*.

Procurement Humor:

Happy Birthday !!!

Amadou Tidiane Toure Oct 0

Arun Kumar KolsurOct 02

Swayamsiddha Mohanty Oct

Palwasha AndishaOct 25

Guest Editors Pick :ProcurementHow important was it for Steve Jobs

in the recipe of Apples success?

Only 3 Biddings: A Brain Teaser.

You are given twelve (12) identical sp

one (1) among which is of a different

Identify the odd oneusing a weighi

ance only 3 times.Source: WSP's cartoon calendar 2012

http://money.cnn.com/2011/04/22/technology/apple_supply_chain/index.htmhttp://money.cnn.com/2011/04/22/technology/apple_supply_chain/index.htmhttp://money.cnn.com/2011/04/22/technology/apple_supply_chain/index.htm