Welcome to November’s edition of CPO News. We’re covering a lot of ground this month, including announcements of Chief Procurement Officers taking the reigns at several companies, several up and coming procurement leaders being recognized for their contribution to procurement, and what some enterprises are doing to diversify their supplier base. We’re also following up to a couple of stories we ran earlier this year – one from “friend of the site,” Luca Guzzabocca, and another on procurement fraud at the U.S. defense contractor, Boeing. There’s something for everyone today on CPO Rising – enjoy!

Wheeler Named Fluor Corporation’s Newest Chief Procurement Officer

On November 10, the Fluor Corporation (NYSE:FLR), an Irving, Texas-based engineering and construction firm that services the petrochemical industry, announced that it had selected Mike Wheeler as its Chief Procurement Officer (CPO). He will lead Fluor’s sourcing, procurement, logistics, complex spend, export control, and other categories for its global operations. Wheeler joins Fluor with 35 years of experience in both the petrochemical and consulting industries. In his last role, Wheeler was Senior Vice President at Reliance Industries where he led its Procurement and Contracting Centre of Excellence.

According to Ray Barnard, Executive Vice president of Fluor’s Systems and Supply Chain group,  “His recent experience leading a procurement and contracting transformation program for a major Fluor client, along with his consulting experience in transformation and change management, will help Fluor’s supply chain grow and develop to better serve client needs.”

Wheeler earned a bachelor’s degree in accounting and business administration from Wartburg College, as well as a Bachelor’s degree in Business and Computer Science from Coe College.

CIPS Awards McCafferty, Pitcher at Annual Australasia Awards Ceremony

Last month, the Chartered Institute of Procurement and Supply (CIPS) honored two procurement and supply chain leaders at its tenth annual Australasia Awards ceremony in Sydney, Australia. Kevin McCafferty, who is the Group Manager of Strategic Procurement and Supply Chain at Fortescue Metals Group, was named CIPS Australasia Procurement and Supply Chain Management Professional of the Year. Prior to joining Fortescue, McCafferty served as the Chief Procurement Officer (CPO) at Qantas Airways, and as general manager, strategic procurement and supply for RailCorp NSW. This is not the first time that CIPS has honored McCafferty; in 2010, he received the CIPS Leadership Award. McCafferty spoke at the 2014 awards ceremony and is also CIPS fellow.

The CIPS also awarded Bree Pitcher, who is a Senior Category Specialist at Stanwell Corporation Limited, as the Australasia Young Procurement and Supply Chain Management Professional of the Year. Pitcher has worked her way up the category management track at Stanwell over the past three years. Prior to joining Stanwell, she was a procurement officer at Tarung Energy for more than three years.

[Editor’s note: Pitcher is the face of a younger procurement workforce that in the coming years will fill the void left by many retiring procurement and sourcing professionals. As such, it is nice to see the CIPS recognizing her and others like her as the future of procurement.]

Shell Launches New Tool to Increase Supplier Diversity

On October 31, Royal Dutch Shell (NYSE: RDS) announced that its Supplier Diversity Program has a new tool to discover and leverage disadvantaged suppliers within their supply chain. Shell’s Diverse Supplier Pipeline Management System is meant to make it easier, more efficient, more effective, and more transparent for Shell’s Supplier Diversity Program to identify and reach out to small, minority-, or women-owned businesses that can supply goods or services to Shell. When a team member meets a potentially qualifying supplier, the new program records their basic information in Shell’s Supplier Pipeline. It then sends the supplier a link where they can provide further information that then gets routed to the appropriate party within Shell. The program also allows Shell’s diversity team to track the progress of each supplier they meet and determine if they were ever tapped.

According to Debra Stewart, Director, Supplier Diversity, Workforce Development and Diversity Outreach, “Shell recognizes that potential suppliers invest a lot of time in their business development efforts with large corporations. We believe that by streamlining and simplifying things on our end, we can ultimately improve our interaction and turnaround time with potential suppliers that are a good fit for Shell.”

Most Federal Agencies Shun Cloud Contracting Best Practices, Report Finds

A recent report issued by the Council of the Inspectors General for Integrity and Efficiency (CIGIE) found that a majority of the U.S. government agencies that it reviewed failed to adopt best practices for contracting with cloud service providers (CSPs). For example, of the 77 contracts that CIGIE reviewed, 59 failed to be compliant with the Federal Risk Authorization and Management Program (FedRAMP) by June 2014. FedRAMP was instituted as a top-down, government-wide authority on safe, secure, and effective cloud computing and was supposed to save the various federal agencies the time, expense, and risk of developing their own cloud risk management and security programs. As a result, most of the agencies and contracts reviewed by CIGIE have non-standard contract service-level agreements (SLAs) with the CSPs for security, access control and management, and inventory management features. With such variance in cloud SLAs and features, the U.S. government as a whole and its assorted agencies in particular are assuming more cost and risk to leverage the cloud than it needs to.

With the U.S. government projecting to spend upwards of $10 billion a year on cloud computing by 2018, CIGIE has recommended that the U.S. government’s Office of Management and Budget (OMB) enforce FedRAMP standards to mitigate unnecessary and costly risks. To do this, CIGIE recommends that OMB find best practices for its agencies to ensure that its CSPs get FedRAMP compliant before delivering cloud services. They also recommend standardizing contract clauses when engaging with CSPs for cloud services. Lastly, CIGIE recommends that OMB continuously monitor federal agencies’ information system inventories. Although CIGIE’s recommendations seem sound, OMB remains apprehensive to adopt them due to the difficulty of issuing top-down guidance that may not suit every agency’s or department’s needs.

In other Sourcing and Procurement News…

• Acquisti & Sostenibilita to Release 2014 Sustainable Supply Chain Review Findings in Milan in December: We caught up recently with a friend of the site, Luca Guzzabocca, Co-Founder and Chairman of Acquisti & Sostenibilita, about their 2014 Sustainable Supply Chain Review (SSCR), due to be released on December 4 at the Italian Stock Exchange in Milan. Since 2007, Luca and his team have published the SSCR, which reports on the sustainable supply chain practices of global companies of all sizes and in all industries. Previous reports have focused on Italian companies; but this year, Luca and his staff have widened their analysis to include over 400 global enterprises. This year’s report will also benchmark various sectors and industries along various sustainability and corporate social responsibility (CSR) factors, which should give procurement and supply chain managers a holistic view of current CSR and sustainable supply chain trends. A link to the event’s site can be accessed here.
• Former Boeing Procurement Officer and Accomplices Sentenced for Procurement Fraud: This is an update to a story we published in the July 28 edition of CPO News, in which Deon Anderson, a former Boeing procurement officer, along with two of his accomplices – William Boozer, owner and operator of Globe Dynamics International, and Robert Diaz, Jr., owner and operator of Inland Empire and Associates – pled guilty to several charges of procurement fraud. In late October, Anderson was sentenced to 20 months in jail for providing confidential bidder and historical pricing information to Boozer and Diaz in exchange for cash bribes and kickbacks on contracts that Boeing subsequently awarded these companies. For their part in the scheme, Boozer received an 18-month prison sentence and was ordered to pay a $10,000 fine, while Diaz received a 15-month sentence and was ordered to pay a $2,000 fine. Sources: FederalNewsRadio.com and FBI.gov.
• Remko van Hoek Joins the Walt Disney Company as Senior Vice President, Sourcing and Procurement: In September, the Walt Disney Company selected Remko van Hoek as its new Senior Vice President of Sourcing and Procurement. Van Hoek brings more than ten years of senior procurement and supply chain leadership experience to Disney, having recently served as Global Procurement Director at PricewaterhouseCoopers. In addition to leading Disney’s Sourcing and Procurement operations, van Hoek is a visiting professor the Cranfield School of Management.

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