EDF is trying to attract contractors for the Britain’s largest construction project

EDF Energy, a British subsidiary of Électricité de France, intents to build four new EPR reactors in the UK by 2025. EPR reactor is a new generation of nuclear plants, developed by Areva NP, Electricité de France (EDF), and Siemens AG. The arrangements for plants in Hinkley Point and Sizewell have already been made and hundreds of contractors will be involved. This project is going to be one of Britain’s largest construction projects.

EDF is holding an event on the 13th of September to highlight the company’s plans and talk to suppliers about opportunities available during this programme. “This is a long-term project and the opportunities are likely to be equally long term for those companies who take advantage of them,” said Alan Cumming, EDF Energy’s Head of Procurement.

General Motors recovery plans

It has been an eventful time for General Motors: after emerging from bankruptcy and receiving a substantial government bailout package, General Motors is now trying to get back on its feet. It has filed for an IPO with the S.E.C.

While GM is still a global behemoth (in the Year 2009: 7.5 million vehicles sold, which equals approx. 11.6 percent of worldwide vehicle sales) it suffers from the following problems:

- GM business model is built on volume, but global car sales have contracted due to the recessionary environment

- GM needs to tighten its supply chain as a lot of suppliers are themselves in financial difficulties and therefore try to pass-on their cost increases to GM

- GM with its high fixed cost base suffers under the competitive pressure from companies in India and China

- The company’s investments in R&D in green technologies are costly and a gamble as research might not yield many marketable ideas

- GM is highly dependent on the decisions made in Washington concerning fuel efficiency and greenhouse gas regulations

The procurement of Chinese telecommunication equipment was refused in Taiwan

Taiwan’s National Communications Commission (NCC), the Taiwanese regulatory body for the telecommunication and information sector, denied allegations that the refusal to allow Taiwanese companies the procurement of Chinese telecommunication equipment was politically motivated. According to NCC all procurement request are reviewed following the same guidelines.

Chinese telecommunication equipment is currently facing difficulties in various markets due to growing national security concerns. Whereas India has recently allowed the import of certain Chinese telecommunication equipment, in general the approval of procurement of Chinese technology seems to be handled on a case-by-case basis.

Santander banking group saved £63m in the supply chain

One of the world’s largest banks, Santander, has managed to reduce procurement cost by £63m, bringing it down to £617m for the first six months of 2010. The savings have become possible mostly due to the bank’s takeover of Alliance & Leicester and Bradford & Bingley and renegotiation of procurement contracts in the retail banking arm.

Cisco’s supply chain problems are likely to remain for the rest of the year

Despite narrowing margins for the second consecutive quarter, Cisco’s Q4 earnings have beaten Wall Street expectations. The strong performance of the Unified Computer Systems (UCS) segment has contributed to a profit growth of 79 percent y-o-y (year-on-year) and a revenue growth of 27 percent y-o-y.

Even though Cisco has successfully reduced the lead times of some of its suppliers, it still struggles with excess lead time in the supply chain. According to the CFO Frank Calderoni, this problem is likely to remain for the rest of 2010.

Toshiba plans to reduce its procurement cost

Toshiba, the Japanese electronics company, unveiled plans to reduce the procurement cost of electronic components by one trillion yen ($11.6bn) over the next three years through the help of overseas suppliers. This step is necessary due to the increased competition from Chinese and South Korean companies.

While Toshiba’s profit was positive during Q1 due to strong demand for memory chips as well as portable devices like smart phones, personal computers and flat-panel TV sets suffered strongly from the remaining Asian rivals.

BMW and Daimler partner to reduce purchase cost

The two companies already buy auto components and negotiate a better deal from their suppliers. According to BMW’s procurement chief, the estimated savings in 2012/2013 will be EUR100m. Herbert Diess, a President of BMW Motorrad, mentioned that this cooperation “will pay off over the years”. He also said that there is a possibility to further develop the partnership.

British farmers have issued warnings to their procurement partners

There is a potential beef crisis, which has been caused by low beef prices for an extended period during the last years which has forced many farmers to produce below their production cost. The Chairmen of the UK farming unions in Scotland, England, Wales and Ireland blame the low prices in the supermarkets for the problems and warn that unless there is a commitment to the UK supply chain, current quality cannot be ensured.

Sources of information: procurementleaders.com, purcon.com, bbc.co.uk, edfenergy.com, just-auto.com, smartplanet.com, toptechreviews.net, news.cnet.com