Archive: August, 2011

Breaking with tradition

Here’s a great example of procurement listening to the business’s needs and adopting an innovative approach to selecting a supplier (Breaking with Tradition, Supply Management 11 August 2011). Last year, UBS built a new 700,000 square foot office in the heart of city of London. A strategic review resulted in a requirement to source a new partner in mechanical and electrical engineering (M&E) maintenance services and award a 10-year contract worth around £60 million. The procurement team set about the task by looking for every opportunity to engage with suppliers and gain a deep understanding of the market. Taking the time to meet with a range of suppliers, running well prepared workshops with some of those suppliers and finally visiting a couple of client sites would have given the procurement team a great insight into the options available. If you want to read more about it click on the link below:

Outsourcing is down but not out

Over the past few decades, outsourcing has transformed global business. It is estimated that 1 in 10 workers in the UK have  “outsourced” jobs and companies spend $200 billion a year on it. Procurement has played a central role in this transformation.

Recent data suggests that companies in mature markets like the UK and US may be outsourcing less and adopting approaches that are less risky. The Economist reports that the total value of outsourced contracts for the second quarter of 2011 fell by 18% compared to the same period the year before. Poor delivery and the high cost of resolving legal disputes have led companies to choose smaller, more flexible outsourcing contracts.

For more information read ”The trouble with outsourcing” in the Economist on 30 July 2011.