New Cleaning and Security Agreements Help Prevent Human Trafficking

securityLUPC’s brand new, innovative framework agreements for cleaning and security services are specially designed to help prevent human trafficking in these high-risk spend categories.  LUPC is launching both agreements at a free event for Members at the Museum of London on 31 October (0930).

Many of our Members will doubtless be finalising their Slavery and Human Trafficking Statements for publication, as required under Part 6 of the Modern Slavery Act.  These agreements will enable Members to state that, owing to LUPC’s supplier due diligence processes coupled with an in-built supplier management programme, mitigating actions are taken to help manage the risk of human trafficking in these sensitive markets.

All our security services suppliers are committed to responsible provision in accordance with the rule of law and with respect to human rights of all people, while our cleaning contractors have all committed to the ETI Base Code.

Both new framework agreements require that suppliers must work with LUPC to identify and mitigate the risk of potential modern slavery, human trafficking, forced and bonded labour and labour rights violations in its supply chain.  Within 90 days of the commencement date, each supplier must produce a Modern Slavery in the Supply Chain Due Diligence Report identifying the main risks of modern slavery, human trafficking, forced and bonded labour and labour rights violations in its supply chain, highlighting the main areas, countries and suppliers at risk and the steps to be taken to mitigate such risks in the short, medium and long term.

Suppliers must update the Report annually for the duration of the contract.  More regular updates are to be provided when the risks are assessed as imminent, either by the supplier or LUPC.  Suppliers must also draft a Modern Slavery Action Plan and must nominate a person to liaise with LUPC in its drafting and implementation.

Special conditions in the framework agreements were designed by the Business Human Rights and Environment (BHRE) Research Group at the University of Greenwich.

LUPC’s own first Slavery and Human Trafficking Statement was published in December last year.

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It’s Anti-Slavery Day

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LUPC became a founding member of Electronics Watch, an independent supply chain monitoring organisation, in 2014.

Today (18 October) is Anti-Slavery Day.  A day for reflection.  A day for thinking about this scourge of our society and what we can do to help alleviate the suffering.

We know that abusing and exploiting people is both easy and lucrative.  The International Labour Organisation estimates that 21,000,000 people across the world are in forced labour.  This evil crime generates $150,000,000,000 in illegal profits around the world, every year.  While here in the United Kingdom, the Home Office estimates that up to 13,000 people are living in modern slavery today.

But we, being involved in the purchase of millions of pounds worth of goods and services every year, with and on behalf of our Members, have the power to influence markets and decision-makers.  We can and do make a difference together.  Purchasing consortia shouldn’t be just about getting better value.  We should also be about getting best value without causing harm to others.

To protect people from modern slavery, human trafficking, forced and bonded labour and other human rights abuses, we in the procurement profession are going to have to acquire new skills.  We will have to learn to do things a little differently.  Like working with our suppliers to find risks in our supply chains, and taking action to mitigate those risks.  We need to be ready to share that responsibility.  This is a problem in our society – not just our supplier base – and that means it’s one we have to work together to manage.

At LUPC, we’ve made a good start, as we hope you’ll agree.  Becoming a leader in ethical and sustainable procurement is an important part of our corporate strategy.  And we think we’ve done quite a lot so far.  But there is a long way to go and a lot more to do.

2014

  • Awards innovative new framework agreement for sustainable waste management services.
  • Becomes founding member of Electronics Watch, an independent monitoring organisation for public buyers in the global electronics industry.

2015

2016

  • Introduces Electronics Watch clauses to new, national higher education agreement for Apple products, requiring suppliers to respect labour standards in Apple’s supply chain.
  • Awards new cleaning and security services agreements committing suppliers to take steps to protect workers from human trafficking.

We know there’s a lot more we can be doing to protect human rights and the environment in our supply chains.  And we’ve learned that we can do much more when we work in collaboration with others.  Now we want to work more closely with students, sustainability managers, academics and other experts, as well as buyers.

And starting when our new LUPC Ethical and Sustainable Procurement Advisory Group meets for the first time on 11 November, we will expand our ethical and sustainable procurement programme, so that we can better reflect the values and direction of our Members.

We will report on our progress.

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Developing collaboration Down Under Part II

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In my second and final blog from Sydney (the first is here), I shall be describing what colleagues at the Australian Universities Procurement Network (AUPN) are planning to do to complement the University Procurement Hub and other collaborative activities in HE procurement here in Australia.

Firstly, though, I managed to catch up with Richard Allen yesterday morning at a trendy cafe in Darlington near to his base.  It gave me the ideal opportunity to put to him some of the questions that had occurred to me about the University Procurement Hub.

Richard is director of procurement and CPO at the University of Sydney, Australia’s oldest with 54,000 students.  According to its 2015 financial statements, the university turns over AUS$1.9bn (£1.08bn) and has net assets of AUS$4.2bn (£2.38bn), so, needless to say, his is a big job.  A PPE graduate from the University of Edinburgh with a background in rail and at PwC, he now leads a team of thirteen, including specialists managing all the categories you’d expect.  I asked him first why it was felt necessary to partner with Accenture in establishing and operating the hub.  (Collectively, 17 universities are investing AUS$20m over five years with the aim of saving AUS$300m NPV.)

“Why we are doing it this way is why we haven’t done so in the past.  And as for the investment, it’s equivalent to two FTEs.  It’s not big for us at all.”  Affordable enough for the third largest university, you might think.  But Australian universities do tend to be bigger than their UK counterparts.  The UK’s largest, the University of Manchester, were it possible to transport it and its 38,000 students here, would only rank about 13th in the country by size.

Is he happy that a partner incentivised by gainshare won’t sacrifice quality to achieve their targets?  “Yes, because the Hub’s members aren’t committed to accept any of the contracts Accenture negotiates for us.  The Category Councils will make recommendations, but it will be up to the universities whether they actually take up the deals.”  So none of the members are, in fact, committed to the contracts up-front?  “No, we can’t do that. But I do believe take-up of the first wave of contracts will be strong and that that will give us the momentum to carry forward into the waves that follow.”

“Once the five-year project is over, and skills and knowledge have been transferred, one of our options will be to establish a procurement consortium like LUPC,” Allen said.

One of the main objectives of the Hub is to uplift its members’ procurement capability. Allen intends to achieve this in partnership with AUPN, which is managed for the sector by Higher Ed Services Pty Ltd (HES), based in Sydney’s business district.  On the previous evening, I’d met with HES’s new CEO Andrew Trnacek, himself a former manager at Accenture and latterly a partner at Grant Thornton.  Andrew is keen to build on AUPN’s capability offering.  At present they offer a procurement maturity self-assessment tool, with which they plan to amass benchmarking data.  It sounds very similar in nature to our own PMA.

Andrew and AUPN’s members showed a strong interest in HEPA and in particular, the on-line discussion forum and eLearning package.  My hope is that we will be able to reach a more formal partnership agreement to support HE procurement development in both countries.  It certainly sounds promising.

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Developing collaboration Down Under

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Universities in Australia are taking giant leaps to better collaboration in the procurement of goods and services, a meeting of the Australian Universities Procurement Network was told, which I attended this week in Sydney as a guest of AUPN.

Roughly half of the sector has signed up to an exciting collaborative sourcing programme run jointly with a major consulting firm, while many more are developing a best practice sharing model under the AUPN banner, including a procurement capability assessment programme quite similar to our own in the UK.  I’ll write more on the best practice endeavour in a later blog.

Australia’s University Procurement Hub went live on 4 April this year.  Seventeen of Australia’s 39 institutions, supported by their partner Accenture, who were selected following a rigorous procurement process, are aiming to save around AUS$300m NPV (£172m) over an ambitious five-year programme (see their striking promo video here).

As Executive Board Chair and director of procurement at the University of Sydney Richard Allen set out the programme, it was obvious that the Australians certainly mean business. They plan to attack an addressable spend of AUS$1.2billion in four waves of collaborative procurement exercises across no fewer than 60 spend categories.

The first wave, Allen believes, will be the easiest to master as they seek to optimise the operating effectiveness of the Hub, ready to tackle the trickier categories later on. These initial categories will sound familiar to LUPC Members: IT, office supplies, furniture, travel and accommodation and laboratory consumables.

The programme has three principal objectives:

  • to achieve savings by aggregating the buying power of its members;
  • to achieve end-to-end effectiveness through innovation and the use of technology; and
  • to uplift organisational procurement capability through process improvement.

Governance is important to the programme.  An Executive Board (EB), made up of finance directors and CPOs in equal measure, oversees the project, while a Program Committee (the “engine of the Hub”, according to Allen) consists of representatives of 8 or 9 universities nominated by the EB.  This group, in turn, co-ordinates five Category Councils, involving 50 participants drawn from all seventeen participating institutions. Their task is to plan sourcing and contracting milestones, provide legal support and work in tandem with the Accenture team.  A single point of contact (SPOC) ensures that each university’s requirements are met throughout the programme.

It doesn’t look easy, though, as they will need to be equal to some hefty challenges if they’re to succeed.  Clearly the deal with Accenture is a complex one.  The good news is that Accenture’s minimum participation level, its critical mass, has been achieved.  This means the project is viable as a commercial proposition.  I understand that the project aims to achieve purchase cost savings of between 8 and 12%, with additional commercial incentives available to Accenture if they perform beyond that.

More universities are considering signing up, but there is a sizeable investment to be considered first.  Between them the seventeen will part with in excess of AUS$20m (£12m) in fees spread over the five years and front-end loaded (incrementally reduceable if sufficient further institutions join).  For that, they will receive all the technology (proper spend analysis, procure-to-pay systems and so on) and the services of a 15 FTE-strong highly skilled and motivated Accenture team.  Even with systems included, this still works out at a weighty daily rate for our sector and especially for such a big chunk of work.  Of course, it’ll look small if the savings get delivered, but I do hope they’ll be good for it.

And, of course, not every institution is going to be able to enjoy the benefits of every deal that’s done, as presumably some will be locked into existing contracts, for a while at least. For the first wave of (less contentious) categories, there’s just about complete participation from every institution – and that’s good news.  But in the later waves, fewer appear quite as interested.  Indeed, for the management consultancy category, hardly anyone has shown a strong interest in participating, but perhaps that’s not such a surprise given the nature of the relationships involved.

I also wonder about the wisdom of a model where the partner is incentivised purely by savings at a time when we are seeking to extol the virtues of good procurement as a value-adding discipline.  It might be a challenge building in safeguards to ensure that targeted savings aren’t delivered at the expense of quality.

But you can’t fault the collective ambition or the steely Aussie resolve on show here.  The project clearly has momentum and the CPOs I spoke to whose institutions have signed up are dedicated to the project and to its success.  In my next blog I’ll describe how AUPN plans to complement this activity with a different kind of collaboration, one about raising standards of professionalism and providing support for one another, for the greater good.

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Five Important Reasons to attend the LUPC Conference

collaborate_webOur hugely popular annual conference is this year scheduled for Wednesday, 15 June at Mary Ward House in Bloomsbury and, once again, it’s completely free for our Members to attend.

It’ll also be the first time we’ve staged the conference in close collaboration with our colleagues at Southern Universities Purchasing Consortium.  But why would you and your team bother to attend Collaboration in Action, when you’re so busy in the office?

Well, here are five (we think) pretty good reasons for coming along:

  1. Network with colleagues who are interested in the same things as you.  We’re running special category-specific workshops at conference so you can hear the latest supply chain developments in the Estates, ICT, Professional Service and STEMed categories.  They’re essential if you want to stay informed and get the best deals for your institution.
  1. New to framework agreements?  Find out how to get the best out of them for your institution.  Many people don’t realise that with the application of a few tips, Members can improve on the already advantageous terms offered through our supply agreements.  Roll-up at one of our workshops to find out how.
  1. Hear how Brexit could affect procurement for your institution.  Would it mean the end of EU procurement rules?  Hear the experts debate how the vote may – or may not – mean a fundamental change in the regulatory landscape for procurement in our sector.  Remember, the referendum will be just over a week away by then!
  1. Learn what you need to do to comply with the Modern Slavery Act 2015 and hear what a difference campaigns like Electronics Watch can make with your support to tackle labour rights violations in your supply chain.
  1. Meet with over 50 suppliers that have beaten off intense competition and passed rigorous selection processes to offer goods and services to our Members at advantageous terms.  Try doing that in a single day without coming to an event like this, laid on especially for you, our Members!

Don’t delay!  Reserve those free Member places for you and your team (as many as you like) by registering here.

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Ensemble Purchasing launches and announces fourth member

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Ensemble Purchasing’s first procurement professional Kat Humphries MCIPS (2nd right) is flanked by finance directors (L to R): Barry Douglas (Trinity Laban Conservatoire of Music and Dance), Ensemble Purchasing’s Chair Judith Barber (Royal Academy of Music) and Marcus McDonald (Royal College of Music)

Last night London’s new shared procurement service, Ensemble Purchasing, was formally launched at a reception hosted by the Royal College of Music (RCM).

Honoured guests were invited from participating institutions RCM, Royal Academy of Music and Trinity Laban Conservatoire of Music and Dance, from the Board and senior staff of LUPC, from legal advisers to the project Veale Wasbrough Vizards, tax and financial advisers Knox Cropper and close friends and colleagues.

The project is the brainchild of retired London School of Economics Director of Finance and former LUPC Board member Mr Andrew Farrell, who was also in attendance.

The highlight of the evening was the announcement of the election of Ms Judith Barber, Finance Director of the Royal Academy of Music as Ensemble Purchasing’s first Chair and the admission of the cost sharing group’s fourth member, the Royal College of Art.

Ensemble Purchasing is now looking to appoint a second procurement professional to work alongside Ms Kat Humphries, already enjoying her role at the company.  Kat’s first contract award at Ensemble Purchasing was for RCM’s new €1m organ for the Amaryllis Fleming Concert Hall at the College, which will be built in the autumn of next year.

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CIPS Ethical Procurement eLearning becomes essential

At the weekend, I undertook CIPS’s eLearning course on ethical procurement and supply.  It gives a sound, basic grounding in just a couple of hours and, because it has a fairly tough test at the end of it, you get a certificate.

This is a fee-earner for CIPS in that continued certification requires the test to be re-taken each year.  I’m hoping this will mean that CIPS will update the course materials from time-to-time as effective practice in tackling modern slavery and labour rights violations develops.

There are two compulsory modules, each with a case study and a 10-question assessment, followed by a mandatory 30-question test.  The first deals with the eradication of unethical behaviour to the human race, which includes an excellent introduction to labour standards and human rights.  The second deals with personal conscience, compliance and influence.  There’s also an optional module, which is in fact a very useful collection of CIPS knowledge papers on a range of ethical procurement issues.

I didn’t find the test easy, even though you might have expected some of the material to be fairly intuitive.  But the best thing is that the course is free to CIPS members until October 2016, while non-members need to pay a fee, currently £38 plus VAT.

I’d say that as ethical matters are climbing the public procurement agenda right now, especially following the introduction of the Modern Slavery Act 2015, this sort of training is going to become essential for public, private and third-sector buyers alike.

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