Procurement News – the Latest Stories

The run up to Christmas has actually seen some pretty significant procurement and supply chain stories. It doesn’t really seem worth featuring them at great length now, with so many people in holiday mode, but here are a few things we may well come back to in the New Year.

- Apple got very upset about the BBC Panorama investigation into their supply chain practices, which found supposed issues with both treatment of staff and raw material issues - e.g. using tin from Indonesia (in tiny quantities it has to be said) which is apparently a bad thing. I suspect the problem is that a. Apple do more to support good conditions in their supply chain than pretty much anybody, which is why their top management gets annoyed about this sort of thing but b. Apple is the benchmark and acts as a proxy for the whole electronics industry (and maybe industry even more generally). So they are always going to be the first firm looked at when someone wants a story like this.

- After all their problems this year, Tesco are now going to be investigated for their accounting practices. The Financial Reporting Council said it would scrutinise the preparation, approval and audit of Tesco’s accounts for the past three financial years. Tesco, Britain’s biggest supermarket chain, revealed in September that it had overstated its first-half profits by £250 million before revising the figure to £263 million a month later following a review by Deloitte. Treatment of supplier discounts, rebates and so on are a key factor in this whole issue. As well as Tesco, PWC, their auditors, can’t be looking forward to this review very much.

- Talking of treatment of suppliers, it is not just retail where suppliers are complaining about inappropriate treatment from large customers. The Times reported that the “Specialist Engineering Contractors’ Group (SEC) has written to Vince Cable, the business secretary, to demand that a proposed inquiry into the treatment of suppliers by large companies must not be isolated to retailing”. Premier Foods were in the firing line recently but apparently “some construction and outsourcing companies regularly demand payments from suppliers simply for the opportunity to bid for contracts, although the fees come with no guarantee of work”.

- On the more positive side, Tungsten, the e-Invoicing and supply chain finance firm, announced they had agreed a deal with Insight Investment Management that will make “billions” in capital available for supply chain finance over the next few years. That means Tungsten won’t have to worry about bond issues or other potentially trickier routes to raising funds. Of course, they still have to get their clients, and the suppliers to clients to sign up to the financing operation, but it is a big step in the right direction, and Tungsten shares shot up some 18 percent this week. A nice Christmas present for staff and investors!

And of course we have had a lot of stories about supply chain problems with on-line ordering, and customers losing their delivery "slots" from the supermarkets for their Christmas orders. We hope none of our readers are suffering from that anyway.

 More on all these stories and more in 2015.

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