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Megatrends in procurement 2022.pptx 120619_Utrecht_Schiele Page 1 UTIPS. Megatrends 2022 Prof. Dr. Holger Schiele, Utrecht, 19.06.2012 This report is intended exclusively for employees of the client. Its distribution, quoting of its contents and reproduction complete or in part for the purpose of conveying it to a third party requires the prior written consent of Universiteit Twente. The text and graphics summarised here have been used in the course of a presentation; they do not represent a full documentation of the event. Input for this presentation: h&z, PIU, Prof. Dr. H. Schiele , Niels Pulles and Klaus Möller. UTIPS.

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Page 1: UTIPS. - Hét platform rondom facility management. Een ... 9... · Source: participants NEVI Nyenrode Congres 2011 “Trends for Future”, n= 211 Average market performance for lowest

Megatrends in procurement 2022.pptx 120619_Utrecht_Schiele Page 1 UTIPS.

Megatrends 2022

Prof. Dr. Holger Schiele, Utrecht, 19.06.2012

This report is intended exclusively for employees of the client. Its distribution, quoting of its contents and reproduction – complete or in part

– for the purpose of conveying it to a third party requires the prior written consent of Universiteit Twente. The text and graphics summarised here have been used in the course of a presentation; they do not represent a full documentation of the

event.

Input for this presentation: h&z, PIU, Prof. Dr. H. Schiele , Niels Pulles and Klaus Möller.

UTIPS.

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Megatrends in procurement 2022.pptx 120619_Utrecht_Schiele Page 2 UTIPS.

Developing future scenarios through megatrend analysis

Five megatrends

Acceleration of technological progress

Political and economical instability

Shift of growth centres

Demographic decline

Increasing corporate social responsibility

Implications of the trends

Megatrends 2022

Agenda

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Megatrends in procurement 2022.pptx 120619_Utrecht_Schiele Page 3 UTIPS.

„Ich glaube an das Pferd. Das Automobil ist

eine vorübergehende Erscheinung“

Kaiser Wilhelm II.

It is difficult to forcast future trends

Recognising trends

“I believe in the horse. The car is a temporary occurrence.”

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Megatrends in procurement 2022.pptx 120619_Utrecht_Schiele Page 4 UTIPS.

Mega trends are formed of a series of micro trends that build upon one another

Mega trend logic

Time 2011 2020

Dis

trib

utio

n

Mega Trend 1

Mega Trend 2

Micro movements

Mega Trend n

Widely distributed, decade long movements, each consisting of numerous micro movements

Following the mega trend logic we can examine the world around us and identify trends that

might have the potential to become mega trends and influence us for a long time

Only possible scenarios can be developed, no scientifically “proven” trends

Source: Procurement Intelligence Unit, Naisbitt (1982)

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Megatrends in procurement 2022.pptx 120619_Utrecht_Schiele Page 5 UTIPS.

Expert panels of leading practitioners and academics identified mega trends which

are expected to substantially impact future procurement practices

Challenges in procurement 2020

Source: h&z; to get a copy of the report please refer to www.huz.de

PROCUREMENT 2020

WHITE PAPER

MUNICH – DUSSELDORF – PARIS – VIENNA – ZURICH

www.huz.de

PROCUREMENT 2020

WHITE PAPER

MUNICH – DUSSELDORF – PARIS – VIENNA – ZURICH

www.huz.de

Europe/ Munich

December 16th, 2010

America/ New York

January 20th, 2011

Asia-Pacific/ Shanghai

February 18th, 2011

Firms:

AkzoNobel, Alcoa, Ann Taylor Stores,

BASF, Cofely, Colgate-Palmolive,

Deutsche Post, Hochtief, IBM, Johnson

Controls, Kone, Möller-Maersk,

Schindler, Interpublic Group

Universities:

Arizona State University (USA),

Universität der Bundeswehr München

(D), Cranfield School of Management

(UK), Fudan University Shanghai (PRC),

Rutgers Business School (USA),

Universiteit Twente (NL)

Organised by

h&z consulting (D) and PIU –

Procurement Intelligence Unit (UK)

Participants

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Megatrends in procurement 2022.pptx 120619_Utrecht_Schiele Page 6 UTIPS.

Study participants expect five trends to coin supply management’s activities in the

next decade

Global mega trends and their effect on procurement

Source: h&z and workshop participants

Corporate Social

Responsibility (CSR) is

expected to be of greater

importance

Changes

in political

& macro-

economic

environ-

ment

Fundamental market

instabilities are expected

more frequent and access

to raw materials might

become more critical

Acceleration

of technological

progress

Innovations (from suppliers)

are expected to become a

key success factor: buyers

need to be preferred

customers of innovative

suppliers

Shift of economic

growth centers

Growth in traditional market is expected to slow down, while

developing (supply) markets are expected to grow

Demo-

graphic

decline

Increase of

environmental

and social

responsi-

bility

Demographic decline is

expected to impact

availability of both skilled

and low cost labor (war for

talent, purchasing job

attractive?)

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Megatrends in procurement 2022.pptx 120619_Utrecht_Schiele Page 7 UTIPS.

Adding to the “triadic study”, we asked participants of a congress to give a hint on

their firm’s reaction to the megatrends and validated findings through a master

thesis Procedure

Survey at the NEVI Nyenrode congress 2011

Source: UTIPS

Up till now the megatrends had been

identified by an international group of

experts, only

While the amount of experts and their global

spread ensured some reliability, we wanted

to test the importance of the trends with a

large and representative sample of

organisations

During the NEVI Nyenrode 2011 congress a total of 211 purchasers filled in a questionnaire expressing

their perception concerning

the importance of the trends

possible reactions

Next to describing them, data were analysed by comparing responses of the members of the 25% best

performing firms in the sample vs. the least successful quarter

Expanded through

master thesis Klaus

Möller

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Megatrends in procurement 2022.pptx 120619_Utrecht_Schiele Page 8 UTIPS.

Developing future scenarios through megatrend analysis

Five megatrends

Acceleration of technological progress

Political and economical instability

Shift of growth centres

Demographic decline

Increasing corporate social responsibility

Implications of the trends

Megatrends 2022

Agenda

Page 9: UTIPS. - Hét platform rondom facility management. Een ... 9... · Source: participants NEVI Nyenrode Congres 2011 “Trends for Future”, n= 211 Average market performance for lowest

Megatrends in procurement 2022.pptx 120619_Utrecht_Schiele Page 9 UTIPS.

Each mega trend consists of a series of currently observable micro movements,

which have been aggregated

Global megatrends – micro movements

World's bio-capacity

Increasing energy costs and

focus on renewable's

Increase in regulations

Reputation

Changes

in political

& macro-

econo-

mical

environ-

ment

Protectionism

Political instability

Crises and terrorism

Infrastructure bottlenecks

Supply risks

Scarcity of raw materials and

volatility of markets

Acceleration

of technological

progress

Knowledge management,

transparency

"Leapfrogging" of high growth

markets in terms of

innovations

IT, social media etc.

E-business applications

Shift of economic

growth centers

Demo-

graphic

decline

Increase of

environmental

and social

responsi-

bility

Talents; attractiveness

of (western) companies in

emerging countries

Difference in birth rates

Diversity

Aging population: Working

population vs. retired people

Urbanization

Changing and more

demanding consumers

Critical mass moving to high growth markets

Increasing consumer base in new growth centers

Increasing global competition

Localization

Source: h&z and workshop participants

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Megatrends in procurement 2022.pptx 120619_Utrecht_Schiele Page 10 UTIPS.

The leading firms dedicate significantly more attention to ensure full collaboration by

leading suppliers by trying to become their preferred customer

Applying a preferred customer strategy

Further reading:

Schiele / Veldman / Hüttinger (2011): Supplier Innovativeness and Supplier Pricing: The Role of Preferred Customer Status. Int. J. of Innovation Management, 15 (1), 1-27

Source: participants NEVI Nyenrode Congres 2011 “Trends for Future”, n= 211

Average market performance for lowest 25% = 2.72

Average market performance for highest 25% = 4.14

Lowest 25%

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Megatrends in procurement 2022.pptx 120619_Utrecht_Schiele Page 11 UTIPS.

The speeding up of technological progress seems to be a real phenomenon, in

particular as also the research productivity per capita is rising

Scientists and publications

469 154

1.423

4.595

2007

total

Japan

Germany

Brasil

Russia

India

China

1.342

265

491 115

810

3.740

2002

1.425

290

USA

Scientists

25 18

38

457

2002

272

76

26 27

36

104

615

2008

226

65

Publications

tho

usa

nd

tho

usa

nd

Source: UNESCO (2010), the per capita productivity of scientists in the above named countries has risen by 9.8%. World: Scientists from 5.8 Mio. to 7.2 Mio.; publications from 733’ to 986’.

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Megatrends in procurement 2022.pptx 120619_Utrecht_Schiele Page 12 UTIPS.

Amount papers and IPSERA conference contributions

Conference Academic papers on purchasing

The global knowledge base is constantly growing

Example purchasing know-how

Source: Kamann (2011)

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Megatrends in procurement 2022.pptx 120619_Utrecht_Schiele Page 13 UTIPS.

The share of firms steadily implementing updated knowledge seems to be

stagnating

Utilisation of purchasing know-how

Source: Kamann (2011)

Implementation of know-how with large firms

Po

rcen

tage

As per 1981 Knowledge of the year

Page 14: UTIPS. - Hét platform rondom facility management. Een ... 9... · Source: participants NEVI Nyenrode Congres 2011 “Trends for Future”, n= 211 Average market performance for lowest

Megatrends in procurement 2022.pptx 120619_Utrecht_Schiele Page 14 UTIPS.

Including suppliers in the process of innovation is expected to be a key challenge

Innovation

Source: Roberts (2001), Chesbrough (2006), BEST-Innovationsstudie

% firms relying on

external technology

sources ( 16% p.a.)

R&D expenditures

outside home ( 4,4%

p.a.)

Discussion

point

The speeding up of technical progress (due to?) open innovation makes it imperative for

firms to become preferred customer of the leading suppliers in their industry. Purchasing

has to become a motor of innovation

Not the

globalisation of

knowledge

production, but its

move out of the

laboratory of a

single firm were

the main changes

Page 15: UTIPS. - Hét platform rondom facility management. Een ... 9... · Source: participants NEVI Nyenrode Congres 2011 “Trends for Future”, n= 211 Average market performance for lowest

Megatrends in procurement 2022.pptx 120619_Utrecht_Schiele Page 15 UTIPS.

Developing future scenarios through megatrend analysis

Five megatrends

Acceleration of technological progress

Political and economical instability

Shift of growth centres

Demographic decline

Increasing corporate social responsibility

Implications of the trends

Megatrends 2022

Agenda

Page 16: UTIPS. - Hét platform rondom facility management. Een ... 9... · Source: participants NEVI Nyenrode Congres 2011 “Trends for Future”, n= 211 Average market performance for lowest

Megatrends in procurement 2022.pptx 120619_Utrecht_Schiele Page 16 UTIPS.

Each mega trend consists of a series of currently observable micro movements,

which have been aggregated

Global megatrends – micro movements

World's bio-capacity

Increasing energy costs and

focus on renewable's

Increase in regulations

Reputation

Changes

in political

& macro-

econo-

mical

environ-

ment

Protectionism

Political instability

Crises and terrorism

Infrastructure bottlenecks

Supply risks

Scarcity of raw materials and

volatility of markets

Acceleration

of technological

progress

Knowledge management,

transparency

"Leapfrogging" of high growth

markets in terms of

innovations

IT, social media etc.

E-business applications

Shift of economic

growth centers

Demo-

graphic

decline

Increase of

environmental

and social

responsi-

bility

Talents; attractiveness

of (western) companies in

emerging countries

Difference in birth rates

Diversity

Aging population: Working

population vs. retired people

Urbanization

Changing and more

demanding consumers

Critical mass moving to high growth markets

Increasing consumer base in new growth centers

Increasing global competition

Localization

Source: h&z and workshop participants

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Megatrends in procurement 2022.pptx 120619_Utrecht_Schiele Page 17 UTIPS.

In order to handle growing macroeconomic instability many firms have intensified

their risk management

Extensive risk-management practices

Source: participants NEVI Nyenrode Congres 2011 “Trends for Future”, n= 211

Average market performance for lowest 25% = 2.72

Average market performance for highest 25% = 4.14

Result of survey (Scale from 1= low to 5 = high)

2,82

3,37

Lower 25%

Top 25%

As a reaction to growing instability risk management systems have been implemented. This practice

does not seem to be temporary, but is expected to be an enduring tool for procurement practitioners

Further ways how to react to changes in the macro economical environment next to the installation of a

cross-functional, anticipatory risk management with KPI and contingency plans would be to closely

monitor and support political processes proactively

Source: Universiteit Twente

Further reading: Schiele / Hoffmann (2010): Testing an integrated risk management system, Paper presented at the Academy of Management Meeting, Montreal 2010 (best

paper nomination)

Page 18: UTIPS. - Hét platform rondom facility management. Een ... 9... · Source: participants NEVI Nyenrode Congres 2011 “Trends for Future”, n= 211 Average market performance for lowest

Megatrends in procurement 2022.pptx 120619_Utrecht_Schiele Page 18 UTIPS.

Above average return resources

Political instability can be interpreted as a logical consequence out of resource

scarcity

Link resource scarcity – political instability

10%

20%

5%

0%

„normal“

investment

Total return

Risk neutral standard return

Locational rent

Total return raw

material

investment

Raw materials

15%

Distribution fights about the distribution of the

locational rent associated with mines can lead to

political instability

Trade raw material derivates

100

200

2003 2008

Speculation in raw materials fosters price volatility

Bill

ion

Source: European Commission (2011)

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Megatrends in procurement 2022.pptx 120619_Utrecht_Schiele Page 19 UTIPS.

In order to produce the same output continuously less raw materials are needed

Resource intensity

Decreasing resource intensity in time

Discussion

point

Due to decreasing resource intensity as a consequence from technological progress the

current resource scarcity is no more than a temporary phenomenon

Source: Arbeitsgemeinschaft Energiebilanzen, Statistisches Bundesamt,

IdW (2011)

Page 20: UTIPS. - Hét platform rondom facility management. Een ... 9... · Source: participants NEVI Nyenrode Congres 2011 “Trends for Future”, n= 211 Average market performance for lowest

Megatrends in procurement 2022.pptx 120619_Utrecht_Schiele Page 20 UTIPS.

Developing future scenarios through megatrend analysis

Five megatrends

Acceleration of technological progress

Political and economical instability

Shift of growth centres

Demographic decline

Increasing corporate social responsibility

Implications of the trends

Megatrends 2022

Agenda

Page 21: UTIPS. - Hét platform rondom facility management. Een ... 9... · Source: participants NEVI Nyenrode Congres 2011 “Trends for Future”, n= 211 Average market performance for lowest

Megatrends in procurement 2022.pptx 120619_Utrecht_Schiele Page 21 UTIPS.

Each mega trend consists of a series of currently observable micro movements,

which have been aggregated

Global megatrends – micro movements

World's bio-capacity

Increasing energy costs and

focus on renewable's

Increase in regulations

Reputation

Changes

in political

& macro-

econo-

mical

environ-

ment

Protectionism

Political instability

Crises and terrorism

Infrastructure bottlenecks

Supply risks

Scarcity of raw materials and

volatility of markets

Acceleration

of technological

progress

Knowledge management,

transparency

"Leapfrogging" of high growth

markets in terms of

innovations

IT, social media etc.

E-business applications

Shift of economic

growth centers

Demo-

graphic

decline

Increase of

environmental

and social

responsi-

bility

Talents; attractiveness

of (western) companies in

emerging countries

Difference in birth rates

Diversity

Aging population: Working

population vs. retired people

Urbanization

Changing and more

demanding consumers

Critical mass moving to high growth markets

Increasing consumer base in new growth centers

Increasing global competition

Localization

Source: h&z and workshop participants

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Megatrends in procurement 2022.pptx 120619_Utrecht_Schiele Page 22 UTIPS.

Generally, local sourcing offices are not used so often

Local sourcing offices

Source: participants NEVI Nyenrode Congres 2011 “Trends for Future”, n= 211

Average market performance for lowest 25% = 2.72

Average market performance for highest 25% = 4.14

Result of survey (Scale from 1= low to 5 = high)

2,35

2,84

Lower 25%

Top 25%

Neither by top firms nor by less successful firms local sourcing offices in emerging (procurement)

markets are used very often

During the NEVI conference, the associated trend “shift of growth centres” has also been discussed

controversial, in particular in relation to the sourcing potential of newly industrialised countries (for

instance IKEA again sourcing increasingly in Europe due to a low labour content in their products)

Other possible reactions to the trend of a shift of economic growth centres could be the installation of a

dispersed organisation with local expertise in the emerging markets, offshoring and outsourcing, but

also closely observing if for instance Chinese suppliers could not become global competitors

Further reading: Steinle / Schiele (2008): Limits to global sourcing? Journal of Purchasing and Supply Management, 14 (1), 3-12

Schiele / Horn / Vos (2011): Estimating cost saving potential from international sourcing and other sourcing levers. Int. J. of Physical Distribution and Log. Management, 41(3), 315-336

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Not all “developing countries” are catching up. Brazil, for instance, has lost ground

relative to Germany or Japan

GDP per head

Gross domestic product per head (USD)

1980 2009 Change (%)

USA 12,153 45,674 276 %

Japan 8,387 32,018 282 %

Germany 9,778 36,332 272 %

Brasil 3,741 10,453 179 %

Rusia - 19,023 -

India 416 3,039 631 %

China 251 6,786 2603 %

Source: OECD (2011)

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The loss of importance of the USA and Japan in manufacturing has NOT bee the

faith of Europe, too

“Old Europe?”

Production output 2000-2007 in Billions (USD)

2000 2001 2002 2003 2004 2005 2006 2007

China 0,48 0,53 0,57 0,66 0,79 0,94 1,15 1,41

Europe 1,90 1,88 2,00 2,37 2,76 2,93 3,18 3,70

India 0,09 0,09 0,10 0,11 0,13 0,15 0,17 0,22

Japan 1,17 0,98 0,92 1,00 1,10 1,07 1,04 1,04

USA 1,85 1,78 1,79 1,85 1,98 2,14 2,24 2,46

Source: Suresh (2009), World Bank Data

Production-output of selected regions

Discussion

point

The thesis of de-industrialisation promoted by anglo-saxon literature is not true for

Europe, some parts of which establish as production centre

Page 25: UTIPS. - Hét platform rondom facility management. Een ... 9... · Source: participants NEVI Nyenrode Congres 2011 “Trends for Future”, n= 211 Average market performance for lowest

Megatrends in procurement 2022.pptx 120619_Utrecht_Schiele Page 25 UTIPS.

Developing future scenarios through megatrend analysis

Five megatrends

Acceleration of technological progress

Political and economical instability

Shift of growth centres

Demographic decline

Increasing corporate social responsibility

Implications of the trends

Megatrends 2022

Agenda

Page 26: UTIPS. - Hét platform rondom facility management. Een ... 9... · Source: participants NEVI Nyenrode Congres 2011 “Trends for Future”, n= 211 Average market performance for lowest

Megatrends in procurement 2022.pptx 120619_Utrecht_Schiele Page 26 UTIPS.

Each mega trend consists of a series of currently observable micro movements,

which have been aggregated

Global megatrends – micro movements

World's bio-capacity

Increasing energy costs and

focus on renewable's

Increase in regulations

Reputation

Changes

in political

& macro-

econo-

mical

environ-

ment

Protectionism

Political instability

Crises and terrorism

Infrastructure bottlenecks

Supply risks

Scarcity of raw materials and

volatility of markets

Acceleration

of technological

progress

Knowledge management,

transparency

"Leapfrogging" of high growth

markets in terms of

innovations

IT, social media etc.

E-business applications

Shift of economic

growth centers

Demo-

graphic

decline

Increase of

environmental

and social

responsi-

bility

Talents; attractiveness

of (western) companies in

emerging countries

Difference in birth rates

Diversity

Aging population: Working

population vs. retired people

Urbanization

Changing and more

demanding consumers

Critical mass moving to high growth markets

Increasing consumer base in new growth centers

Increasing global competition

Localization

Source: h&z and workshop participants

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Megatrends in procurement 2022.pptx 120619_Utrecht_Schiele Page 27 UTIPS.

Internal marketing in the firm in order to improve the purchasing function’s

attractiveness among the labour pool

Internal marketing to increase visibility of Procurement

Source: participants NEVI Nyenrode Congres 2011 “Trends for Future”, n= 211

Average market performance for lowest 25% = 2.72

Average market performance for highest 25% = 4.14

Result of survey (Scale from 1= low to 5 = high)

3,09

3,68Top 25%

Lower 25%

One possible reaction to the war for talent could be to increase the internal efforts, collaborating with

the HR department in order to make the purchasing function more attractive

Due to increasing complexity of the procurement role, its visibility is increased. Other reactions to the

demographic decline and a consequent shortage of labour could be the establishment of retention

strategies for high potentials (e.g. supporting DBA programmes), job rotation and definition of clear

career paths

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The birth rate is not declining in central Europe, only

Demographic decline – example Iran and Turkey

Source: Courbage / Todd (2008)

As comparison:

fertality rate NL: 1,8

fert

alit

y r

ate

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Fertility decline is a global phenomenon triggered by the alphabetisation of women

Demographic decline – example Arabic countries

Source: Courbage / Todd (2008), Alphabetisierung: > 50% kann lesen und

schreiben

The role of alphabetisation

The correlation coefficient between

alphabetisation of men and start of

reduction in birth numbers is 0.84;

concerning women the value is 0.8

About 20-30 years after women passing

a minimum threshold of alphabetisation

birth decline begins

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Around 2050 the global age structure will be similar to Japan

today: less talents, less consumers?

Vicious circle population decline – example Japan

Shrinking population and ecomomy Increase taxes and debts

Source: Weltwoche (3/2011), Bloom et al. (2010)

Discussion

point

Hypothesis: The “war for talent” is a temporary phenomenon, since demographic decline

induces economic decline

Counter argument: higher consumer expenses with high age, stronger participation of

women in labour market

Share working

population (world)

2010: 66,3%

2040: 62,1%

Page 31: UTIPS. - Hét platform rondom facility management. Een ... 9... · Source: participants NEVI Nyenrode Congres 2011 “Trends for Future”, n= 211 Average market performance for lowest

Megatrends in procurement 2022.pptx 120619_Utrecht_Schiele Page 31 UTIPS.

Developing future scenarios through megatrend analysis

Five megatrends

Acceleration of technological progress

Political and economical instability

Shift of growth centres

Demographic decline

Increasing corporate social responsibility

Implications of the trends

Megatrends 2022

Agenda

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Each mega trend consists of a series of currently observable micro movements,

which have been aggregated

Global megatrends – micro movements

World's bio-capacity

Increasing energy costs and

focus on renewable's

Increase in regulations

Reputation

Changes

in political

& macro-

econo-

mical

environ-

ment

Protectionism

Political instability

Crises and terrorism

Infrastructure bottlenecks

Supply risks

Scarcity of raw materials and

volatility of markets

Acceleration

of technological

progress

Knowledge management,

transparency

"Leapfrogging" of high growth

markets in terms of

innovations

IT, social media etc.

E-business applications

Shift of economic

growth centers

Demo-

graphic

decline

Increase of

environmental

and social

responsi-

bility

Talents; attractiveness

of (western) companies in

emerging countries

Difference in birth rates

Diversity

Aging population: Working

population vs. retired people

Urbanization

Changing and more

demanding consumers

Critical mass moving to high growth markets

Increasing consumer base in new growth centers

Increasing global competition

Localization

Source: h&z and workshop participants

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Result of survey (Scale from 1= low to 5 = high)

Top firms have significantly more often included CSR criteria into their supplier

evaluation and development efforts

CSR as part of supplier evaluation and development

Source: participants NEVI Nyenrode Congres 2011 “Trends for Future”, n= 211

Average market performance for lowest 25% = 2.72

Average market performance for highest 25% = 4.14

2,83

3,56

Lower 25%

Top 25%

CSR aspects seem to make their entry into supplier evaluation systems

However, during the conference this trend has also been criticised on the ground of difficulties in

definition

Other practices to promote CSR include the installation of a corporate CSR board with procurement

participation, implementation of CSR performance indicators and a particular emphasis on monitoring

local CSR regulations in case of international companies

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Europa plays a minor role as originator of potentialy climate critical emissions

Example carbon dioxide

Source: Mongabay (2011), Guardian (2011), ca. 17% CO2 through traffic

CO2 emission (countries)

USA

Germany

Brasil

India

China

Mio

. m

etr

ical to

ns

Dutch participation in

CO2 emissions: ca.

0.2%

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Up till now CSR has found most repercussion in Western Europe

Organisational maturity CSR

Source: BME / Roland Berger (2010)

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In particular with „low wage country“ sourcing a discrepancy between CSR

aspiration and reality is visible

Study on social and ecological purchasing

B2C firms showed 30% more maturity as compared to B2B firms

Surveys showed that firms still have problems in understanding and

calculating the economic beneftis of CSR (work conditions, ecological

benefits, energy efficiency, recycling etc.)

42% of the participants did not include CSR in their supplier evaluation

Economic benefits

not fully

acknowledged

Firms with large purchasing volumes in low wage countries revealed the

largest discripancy between sourcing-compliance and industry expectations

LWC Sourcing –

Compliance

Source: h&z business consulting & Universität der Bundeswehr (2011)

Discussion

point

In practice, CSR first means supplier development in Asia and fostering of renewable

energy in China

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Developing future scenarios through megatrend analysis

Five megatrends

Acceleration of technological progress

Political and economical instability

Shift of growth centres

Demographic decline

Increasing corporate social responsibility

Implications of the trends

Megatrends 2022

Agenda

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The megatrends are linked to each other. For instance, technical progress seems to

enable environmentally neutral growth

Linking trends

0,4

0,6

0,8

1,0

1,2

1,4

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

CO

2 (

ton

s p

er

he

ad

)

Source: McKitrick et al. (2007)

The trend for sustainability

influences many other trends

Our survey indicated that the

acceleration of technical

progress is seen as the most

important trend, but that all other

trends follow closely

Establishing as preferred

customer of innovative suppliers,

closely monitoring if CSR fully

reaches Asia and implementing

a comprehensive risk

management system could be

agenda points for the next years

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The main results of our study can be downloaded from the magazine “Supply Chain

Management Automotive”

Further reading

download at www.ipm-scm.com

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Appendix

Purchasing research and education at the University of Twente

This report is intended exclusively for employees of the client. Its distribution, quoting of its contents and reproduction – complete or in part

– for the purpose of conveying it to a third party requires the prior written consent of Universiteit Twente. The text and graphics summarised here have been used in the course of a presentation; they do not represent a full documentation of the

event.

UTIPS.

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About 40 students attend the specialisation “Purchasing” at the University of

Twente in the current study year

Specialisation “Purchasing” in Twente

Purchasing in Twente

The new specialisation „Purchasing“ is part of the bachelor „International Business Administration“, which

started in 2011 in English language. Part of the education includes an internship. For this, our students are

available between in June and August

From April 2013 on they will be working on their bachelor assignment, preferrably with a firm

About 40 students chose for this specialisation in 2011/2012

In a total of 4 classes (18 ECTS) the students gain an overview on the purchasing activities along the year-

cycle. By firm visits and guest lectureres they have got a first contact to business

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Course layout

Background

Supply Management Specialisation

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Based on a solid foundation, students in Twente chose two specialisations which

offer work skills and prepare them for the obligatory internship

Functional specialisations

Specialisation class – basic (Y2Q1)

Specialisation - seminar (Y2Q3-4)

Specialisation class – complementing

(Y2Q2)

Specialistion track

Obligatory classes

Options not chosen by student

Disciplinary toolbox –

introductory class

(Year 1)

Source: IBA committee

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Why to chose supply management? In modern industrial firms in central Europe

there is one dominant cost block which has not gained prominent attention, so far!

Operations and the cost distribution of a firm

Source: Schiele (2010) - Example of a modern industrial high tech firm in Central Europe in the metal-electro sector

10%

Earr

ings

0,7%

2,5%

4,0%

Overh

eads

Co

st o

f S

ale

s

Fin

an

ce

8,5%

R&

D

1,5% L

og

istics

62,3%

Purchasing

10,5%

Pro

du

ctio

n

other operations

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Supply management was the second most popular choice in the last year

Specialisations

Source: IBA committee

Student‘s choice Acceptance (2011)

Organi-

sation and

Human

Resources

...

Information

technology

Supply

manage-

ment

Corporate

finance

B2B

marketing

0 20 40 60

Organisation / HR

Corporate Finance

IT

Supply Management

B2B Marketing

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Purchasers are responsible for ensuring the supply of materials and services for

their firm: selecting, contracting and managing suppliers on a global basis

Conceptual overview of purchasing classes

supply market

the firm

supply partner

firm demand

purchasing SUM 2 course:

tactic purchasing

SUM 3 course:

strategic purchasing

Source: UTIPS

SUM 1 course:

introduction

SUM 4 seminar:

leading edge topics

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The specialisation supply management covers tactic and strategic purchasing

Three classes in the specialisation, next to the obligatory introductory class in the first year

Tactic supply

management (year

cycle)

Strategic supply

management

(management tasks)

Seminar supply

management

(leading edge)

This course introduces into the ongoing work

of a purchaser

The year cycle of the purchasing

department is discussed (supplier selection,

contracting, performance measurement,

evaluation)

Management tasks are the focus of this

course

Formulating a sourcing strategy, learn how to

implement it and how to monitor its success

Understanding and changing the

organisational structure in which a purchasing

department operates

The last section addresses leading edge

topics in supply management: those which

distinguish good from average firms

Collaboration in the supply chain, innovations

from and with suppliers, green procurement

and global sourcing are the topics

Students prepare a term paper

Source: UTIPS (University of Twente Initiative for Purchasing Studies)

Humboldt: unity of research and teaching

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NEVI: K27

Collaboration in the supply chain, innovation with suppliers, global sourcing, green procurement (current

literature, students prepare term paper)

The curriculum is oriented along the “NEVI 2” topics established by the Dutch

association of purchasers

Content

SUM 2: Tactic supply management SUM 3: Strategic supply management

NEVI : V21, V22, K25

(1) 1_Demand planning Introduction: The purchasing

year cycle

(2) 1_Demand planning: Supply market analysis

(3) 1_Demand planning: Demand planning

(4) 2_Selection: Supplier selection

(5) 2_Selection: Negotiation

(6) 3_Contracting: Designing contracts

(7) 3_Contracting: Contract management

(8) 4_Executing: Operative procurement

Text book: Monczka et al., 2010, papers

NEVI: V21, V29, K25

(1) 5_Evaluation: Supplier evaluation

(2) 6_Controlling: Purchasing controlling

(3) 7_Cost: Cost analysis

(4) 8_Sourcing strategy: Purchasing and corporate

strategy

(5) 8_Sourcing strategy: Sourcing strategy

(6) 9_Organisation: Organising purchasing

(7) 9_Organisation: HR in purchasing

(8) 9_Organisation: Closing: Purchasing maturity

Text book: Monczka et al., 2010, papers

SUM 4: Seminar supply management

Source: UTIPS. NEVI = The Dutch association of purchasers; offers evening courses to prepare purachasers for the job (NEVI I, II and III). The courses in Twente follow the NEVI

guidelines.

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Supply Management Specialisation

Course layout

Background

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University of Twente

The University of Twente is a leading research university in the Netherlands with

the theme “high tech – human touch”

University of Twente

One of the three technical universities of the Netherlands

More than 7000 jobs created in its science park

About 8000 students, out of which 2000 are members of the faculty of management and governance

Since 2011: English language programme “International Business Administration” (started with 100 students, mainly from the Netherlands and Germany, inflow 2012/13: about 300 students)

Theme: “High tech, human touch”

Main strengths: supply management and innovation and technology management

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Centre of Excellence Supply management in Twente

Twente one out of five global “centre of

excellence” in supply research

On the most important meeting in the field

(IPSERA congress) researchers from Twente

presented more than 10% of all papers

Only university in NL were students can chose a

specialisation in purchasing

Courses are oriented along the association’s

requirements for strategic purchasers (NEVI)

Research group on “upstream open innovation

and industrial purchasing”, i.e. innovations from

and with suppliers (Prof. Dr. Holger Schiele),

“public and service procurement” (Prof. Dr. Jan

Telgen), “purchasing in construction” (Dr. Hans

Voordijk)

UTIPS (University of Twente Initiative for

Purchasing Studies) is one of the “centres of

expertise” of the University of Twente

The University of Twente is leading in supply management research and education

Strengths Twente

Source: UTIPS

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Twente is quoted in the world for its supply management research, while students

profit from being exposed to the latest research findings

Scientific impact Twente (Management) – Brief sketch Top 20 papers

Source: Scopus analysis (11/2011), sorted for „business management“, 70% of

total, papers published by authors with affiliation Twente appearing on document

There are other databases and sorting

keys. With current professors, only,

finance would emerge as fourth topic.

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We welcome you!

UTIPS – University of Twente Initiative for Purchasing Studies

Dr. Petra Hoffmann

Dr. Hans Voordijk

Dr. Jasper Veldman

Prof. Dr. Holger Schiele Prof. Dr. Jan Telgen

Dr. Fredo Schotanus & o

ther

researc

hers

Pro

f. D

r. H

olg

er

Schie

le | P

rofe

ssor

of Technolo

gy

Ma

na

ge

me

nt -

Inn

ova

tio

n o

f O

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ratio

ns | S

ch

oo

l o

f

Ma

na

ge

me

nt a

nd

Go

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rna

nce

| U

niv

ers

ity o

f T

we

nte

|

P.O

. B

ox 2

17

NL

-75

00

AE

En

sch

ed

e | T

he

Ne

the

rla

nd

s |

h.s

ch

iele

@u

twe

nte

.nl | p

ho

ne

+31

53

48

9 5

61

5

UTIPS.