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Outsourcing the procurement function has traditionally been viewed as a risky venture better left to large global firms such as Deutsche Bank and Kimberly-Clark. But according to Jim Mikell, country manager with consulting firm Everest Group of Canada, that perception is changing.

Mikell spoke at the international symposium organized by the Purchasing Management Association of Canada (PMAC) and McMaster eBusiness Research Centre in Toronto earlier this month. "I get a request at least once a month to meet with a senior executive," said Mikell, reflecting on the burgeoning interest in procurement outsourcing.

More importantly, the trend to farm out procurement to a third party is starting to trickle down to smaller companies, especially as more service providers join the market, and prices for the contracts come down, he said.

It's an idea the senior executive will increasingly focus on in the months to come; not just for the cost-savings and efficiencies, but because procurement outsourcing is starting to become a hallmark of world-class companies.

A recent survey by Accenture's Supply Chain Management Practice showed procurement "masters" are four times more likely to outsource one or more procurement function. The survey involved 225 executives at leading companies around the world.

Procurement outsourcing—once viewed as an eccentric idea—may soon rank as a strategic best practice. The trend is off to a slower start in Canada, but we'll all be staying tuned for announcements of major contracts by industry bellwethers.

—Lisa Wichmann
Editor

We welcome your comments. Contact the editor at lisa.wichmann@pb2b.rogers.com
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TradeCard adds social responsibility
TradeCard Inc., a supply chain solutions company in New York, has partnered with Worldwide Responsible Accredited Production (WRAP) to help buyers identify ethical products.
WRAP is an independent, non-profit organization which certifies lawful, humane and ethical manufacturing throughout the world. Working with WRAP will allow TradeCard to promote social responsibility to its network of 3,000 trading partners.
Factory certification data from WRAP will be available on the TradeCard Platform to enable buyers to check ethical compliance status and social track records before they contract with the factory.
"Thousands of TradeCard users that transact on the platform each day will have the ability to make a difference by confirming WRAP certification," said Kurt Cavano, CEO of TradeCard.
WRAP has published a list on its web site of factories in 70 countries certified as socially responsible. See www.wrapapparel.org.

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Academics form supply chain group
The Association of Canadian Community Colleges (ACCC) has formed the new Supply Chain Affinity Group, comprised of academics and education stakeholders focused on the supply chain sector.
The Group was formed in conjunction with the Canadian Supply Chain Sector Council (CSCSC). Formed in 2006, the CSCSC is a non-profit association with a mandate to forge a human resources strategy for the supply chain field.
So far, the Supply Chain Affinity Group includes 55 representatives in 28 colleges and institutes across Canada. Members have access to an electronic network, enabling them to share information and ideas, and to work together to develop cohesive national training programs for supply chain students.
The CSCSC will collaborate with the group on joint projects and research. More information can be found at www.accc.ca/networking

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Canadian executives fear security breach
Nearly half of Canadian executives aren't confident in the security of their organizations' confidential data, according to the latest Fusepoint Data Confidence Survey, conducted by Leger Marketing.
The poll showed 71 per cent of executives say they have policies and procedures in place to guard against security breaches, but 48 per cent still worry about leaks. Customer data is an area of particular concern, especially since there's a heightened awareness among Canadians about identity theft and privacy infringements. The poll showed 85 per cent of working Canadians are concerned about their personal information being stored in online databases.
"Security is not just a technology issue; it's a corporate governance issue," said George Kerns, president and CEO of Fusepoint Managed Services. “Many executives are speeding down the information superhighway without a seat belt and putting businesses and consumers at risk. ”
The survey also found executives believe security threats from external hackers have increased since 2005. But according to Fusepoint, an equal threat is posed by internal staff who may unknowingly download viruses, spyware and adware.
In terms of impact, 42 per cent of executives have no idea what dollar value would be associated with a security breach at their company.

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Propurchaser: Natural gas down
Natural gas for November delivery fell 13 cents to close at $6.76 per million BTUs in New York last Tuesday, after forecasters predicted warmer than normal temperatures for much of the US from December through February. In the shorter run, heating needs were expected to be 20 per cent below normal for the rest of October, according to Weather Derivatives Inc.

This update was provided by Propurchaser.com
For up-to-date commodity information and analysis in areas such as metals, natural resources and energy, visit www.propurchaser.com/pb2b

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We visit Jane Gershon, an up-and-coming purchasing manager at truck body manufacturer DEL Equipment in Toronto. At just 23 years of age, Gershon manages the entire purchasing function at DEL—buying millions of dollars worth of steel, paint, parts, and everything required to keep the plant and offices running.

Plus:

• Unilever's green fleet;
• Longo's superior supply chain;
• Recapping PMAC's recent symposium.
  

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