Category Archives: Miscellaneous

JLP Responsible Sourcing Part VII: Working Hours

In our last post, we discussed the importance of employee representation and their need to freely associate, corresponding to section F of the report. In today’s post, we cover section G of The John Lewis Partnership‘s “Responsible Sourcing Supplier Workbook” which covers working hours.

In some countries, such as Vietnam, Thailand, Indonesia, and China in particular, some workers routinely work 12-16 hours, 7 days a week, in peak periods. Even in the UK, studies have found that a surprisingly high proportion of workers in the food production industry exceed 48 hours per week (and even 60 hours per week) on a regular basis. Furthermore, it is often the case that workers are not allowed to refuse overtime. The facts reported in the workbook are staggering:

  • nine economies reported over 2,000 annual hours worked per person in the latest year for which data was available to the ILO
  • 17% of UK employees work more than 48 hours per week
  • one in four workers in the UK working long hours reported suffering a physical ailment or stress as a result
  • an estimated 1.3 Billion working days are lost each year in the UK due to stress-related illness
  • workers in China often work 360 hours per month, and some up to 400 hours per month, almost twice the legal limit

This issue should be tackled immediately if you think you may have a problem. You can start by doing the following:

  • keep good records;
    this will allow you to identify the “hot spots” where long hours are the norm and seasonal peaks
  • gradually reduce hours;
    this will reduce employee stress and exhaustion and will result in increased productivity without any additional action; furthermore, improved production planning, communication, and training will also result in increased productivity allowing for a further hour reduction if overtime is a serious issue
  • increase wages to a fair level;
    if many employees are working long hours by choice, then this is a sign that they are not able to make ends meet working normal hours and wages need to be raised; furthermore, the increase in employee contentment and decrease in overtime-related stress and exhaustion should make up for most, if not all, of the productivity loss
  • make sure all overtime is voluntary
  • ensure all employees have enough time off for rest and sleep; furthermore, ensure that they have at least one day off a week, even during seasonal peaks – this can be accomplished with proper planning
  • make sure management fully understands the law and the rules related to overtime;
    managers who don’t are more likely than the employee to be the source of the problem

In our next post, we’ll tackle the seventh major issue addressed by the workbook, that of equality of treatment. (You can access all of the posts in the series (to-date) by selecting the JLP category at any time.)

Supply Chain Humor This Week II

Before we get started, Hat Tips to Tony Poshek, The Cynical Sorcerer.

Oops! And you thought it was sickening when the USDA paid farmers not to farm! Well check out this doozy: “The Agriculture Department sent $1.1 billion in farm payments to more than 170,000 dead people over a seven-year period, congressional investigators say.”

About 12 weeks ago, we discussed The Real American Fat Farm and how the current farm bill supports five, and only five, commodity crops – corn, soybeans, wheat, rice, and cotton – and effectively pays farmers not to farm other crops while encouraging unhealthy lunches in American public schools. I didn’t think it could be worse than that … but, apparently, it is. It seems that they’re more interested in farm payments to the dead than to the needy living (Yahoo News). It’s a wonder they haven’t bought a 19 Million Dollar Toilet to flush money down!

I’m rubber, you’re glue! “China Says US Food Has Its Own Problems”

China, the cause of 431 recalls in Canada alone since 2005, and the current poster child for bad quality in the public media, is starting their own smear campaign, citing cases of contaminated local food in the U.S. domestic market and flawed exports of pork and poultry, which had to be banned from distribution. I guess when it comes to pig, they’re just chicken!

Auction – Part III:

A California town that was the first town ever sold via auction on ebay, is

up for sale once again (for the 3rd time). The last buyer… ummmm…

killed himself.

The great thing about a free market is that you can buy anything … even your own town – complete with your very own troubled spirit! What more could you ask for!

I know I don’t mention this enough, but Tony Poshek, the newest member of the Aptium Global team, is available to handle all of your sourcing needs – even your unusual ones! Tony, the inventor of The Puddy Principle to Strategic Sourcing, has single-handedly sourced over 2B in the last decade and saved 15%, on average. With that resume, how can you go wrong?

Another Public Nomination

Astute readers will have noticed a comment yesterday by one Ron Holland of FreedomFest News, regarding the creation of the Free Market Hall of Fame where members of the Freedom Movement (not clearly defined or referenced on the site) will have the opportunity to initially vote on individuals contributing most to the success and advancement of free markets and free people around the globe during 2007. My first instinct was to delete it, since even if it wasn’t spam, it was obviously some sort of non-approved advertising, and more than likely in violation of at least one of the Sourcing Innovation Blog Comment Rules, and Rule #1 in particular (since it did not seem to have anything to do with the post).

However, I decided to check it out since I really couldn’t see too much harm leaving it as long as it did not put forth the views of any particular government party or political association. And although I’m still not entirely sure what it is, I am a bit intrigued. I’m particularly intrigued by the fact that write-ins are permitted and “journalists and writers” is a category. After all, I think the supply and spend management space needs all the attention it can get, and a few bloggers in particular definitely need more attention.

So it got me thinking. Specifically, it got me thinking that maybe if not a lot of people vote and maybe if a lot of sourcing and procurement professionals vote (for the same write-in candidate), maybe one of our own can get an honorable mention. (After all, you know Stephen Colbert is going to win once the Colbert Nation picks up on this, assuming it hasn’t already.) And that would make a great story.

So, even though he’d probably tell you it’s likely a big waste of time, if you have 30 seconds, please go to the Free Market Hall of Fame Survey, write-in Jason Busch for Question 1, and enter a valid e-mail address and zip code for question 2 and submit.

Then, if you have another 30 seconds, as the comment instructed, please e-mail ron@freedomfest.com and nominate Jason Busch for a Free-Market Hall of Fame Position under the “journalist and writer” category. To aid you, I’ve created a short nomination that you can cut and paste.

For the last two years, Jason Busch, a pre-eminant thinker in the supply and spend management space and author of the Spend Matters blog, has been diligently blogging multiple times a day on issues, events, best practices, and thought leadership in an effort to raise not only the profile of the space, but to inform each of his readers - peers, consultants, vendors, and general practices alike - of it's, and their, potential.

As one of the first practitioner's to realize that procurement is undergoing a transformation into a strategic supply and spend management function that will cross all boundaries and borders of the business, Jason's thinking is second to none. He was also one of the first to realize that forward thinking organizations not only need to consider long term price hedging contacts to insure supply and spend stability but also need to consider securing, and securitizing, raw production capacity, which they can then trade on a new type of open market if they secure more, or less, than what they need. (For example, see his great post "Sourcing Innovation: Securitizing Direct Materials"* on August 28, 2006.)

He is a firm believer in free markets who strives hard to get the message across that as procurement evolves into the most strategic supply chain function, so does it's position and recognition within a corporation. Considering that good sourcing and procurement can save an average billion dollar company tens of millions while bad sourcing and procurement can cost them tens of millions, or more, it's important to have such a forward thinking journalist embrace the web, the new medium for content delivery, and blog almost religiously in an effort to simply open the minds and increase the understanding of others. And in this regard alone, he is a thought leader of the Free Market Movement and deserves to be recognized as such.

He may not win, but if the Colbert Nation can convince Google that Stephen Colbert is the Greatest Living American by overloading the system, maybe we can do the same and finally get this sector a little limelight!

* All posts prior to 2012 were removed in the Spend Matters site refresh in June, 2023.

India has Problems Too

With all the negative attention that China has been getting lately, I only thought it fair to point out that before you think of jumping ship to one of its closest neighbors, India, it also has its share of problems.

According to “Speeding Up, but still not ahead” in the Business Standard, despite their increasing presence in the global market, the Indian IT firms still have a way to go before they can play with the global giants.

The reasons for this are the rupee appreciation (it’s worth whole cents now!), wage inflation (since all of the IT outsourcing has increased the size, and wealth, of the middle class), high attrition rates (still not enough skilled talent to meet demand), and skill shortages (an estimated shortage of almost 500,000 qualified employees by 2009).

Then there’s Is “India Too Big to Fail?” in Knowledge @ Wharton, which reviews Edward Luce’s In Spite of the Gods: The Strange Rise of Modern India which notes that India is holding itself back because of an unwillingness and almost inability to take decisive collective action.

This is partly due to the fact that it seems that India has given a higher priority to stability than it has to efficiency. But likely more due to the fact that India has a deeply entrenched culture of pluralism. Whereas China has one script, one official language, and very little religious division, India has 18 official languages, several different scripts, and deep religious and caste divisions. Makes it very hard to even contemplate agreement, let alone reach one.

And there’s “The Dark Side of the Moon: The Downside to India’s Economic Rise” which reviews Niranjan Rajadhyaksha’s book The Rise of India. The article starts off by pointing out, as highlighted in the book, five major issues that India has to deal with if it wants to become a true player in the global economy: poverty trends (at least 25% of its population live below the poverty line), income inequality (all of the outsourcing has created a middle class that is almost rich in comparison), energy (it is a high-octane economy that has to import over 70% of its petroleum), employment (not enough skilled people to meet needs), and infrastructure (not near enough).

I could go on, but I think you get the picture. There might be challenges in dealing with China, but challenges exist with every off-shoring and Low-Cost Country. So don’t jump ship just because the boat starts to rock. Do a careful comparison of the advantages and disadvantages, build a total cost and a total value model, and perform a careful analysis before making a decision to go to a new off-shoring destination. Even if you run into problems now and again, staying the course might be the best thing to do.

The U.S. Bureau of Labor Stastics is Wrong. Dead Wrong!

Over on Supply Excellence [WayBackMachine], Tim Minihan posted a VERY SERIOUS piece entitled “Purchasing is Dead. (And Other Conspiracies.)” that calls to light the recent injustice of the Bureau of Labor Statistics to supply and spend management professionals everywhere! It’s so devastating, that I asked for kind permission to re-post Tim’s original blog post in its entirety, since I do not have the time to dig into the atrocity contained within today. I encourage you to read this post in its entirety and take the action he suggests. Thank you!

As proof that you can’t believe everything you read, the U.S. Bureau of Labor Statistics reports that overall employment for purchasing and supply managers is expected to “grow slower than the average for all occupations through the year 2014.”

What?

  • Don’t tell that to the VP of Procurement and Operations at a Massachusetts-based manufacturing company I met with last week. He was griping “I can’t find people with the right talent fast enough.”
  • Or the U.K.-based procurement executive that worried that his veteran team lacked the skill set required to compete in today’s global and technology-proficient marketplace: “Many of our [supply management] team have been doing purchasing a certain way for decades. They are uncomfortable with adopting new processes and systems. I am concerned about driving adoption.”
  • And certainly keep it a secret from the hordes of CPOs that have sounded the alarm on talent poaching occurring in their ranks.

In fact, in a recent study of top purchasing and supply management executives, Aberdeen Group outright refutes BLS’ claims, reporting that ” top CPO’s rank recruiting, training, retaining, and aligning their organizations as their #1 goals.” (Download a free copy of the full report for a limited time.)

BLS’ errors don’t stop there. The government agency goes on to wrongly report that “demand for purchasing workers will be limited by improving software.” On the contrary, every recent study on supply management employment trends reports that technical skills and experience implementing, managing, and using procurement and supply management software are among the most in demand. (Listen to Professor Joseph Carter of Arizona State University and the Center for Advanced Purchasing Studies’ views and advice on the supply management talent issue.)

Pulled from 2004 assessments, the overview makes working in a salt mine seem more attractive than joining the purchasing ranks. (Although, BLS is positive about working conditions for purchasing employees, stating that “most work in comfortable offices.”) Case in point: the agency’s stats for purchasing compensation is also way off the mark when compared to recent annual salary surveys from ISM and Purchasing magazine. BLS reports the average purchasing/supply management salary at $72,450 while the Purchasing survey found it to be $83,205 and the ISM survey found it to be $88,380.

BLS’ assessment is not only wrong, it casts the entire purchasing and supply management discipline in a bad light. (And just as the C-suite is beginning to recognize the critical importance of the function.) With the purchasing getting such a bad rap as a career choice, the talent crunch in this sector will only get worse.

What can you do? In addition to improving your recruitment, training, and retention approaches, write or call the Bureau of Labor Statistics and demand they correct this egregious mistake. The agency has a special “hotline” set up to field “complaints concerning information quality.” And, when it comes to their 411 on purchasing there is a serious quality issue.

Lodge your complaint via e-mail: dataqa@bls.gov. Be sure to identify the information quality issue (see above), how it is negatively impacting your organization (ditto), and provide references on how the data can be improved (double ditto).

Your action can help secure the continued growth and enhance the profile of the purchasing and supply management profession!

Thanks Tim for this great piece of investigative work and bringing this injustice to the profession to light!