Breaking the Groundhog Day Mentality: Enabling A True Category Management Mindset

Does your category management journey ever remind you of the movie Groundhog Day?  Our latest webinar will advise you on how to break that repetitive cycle!Our webinar, Breaking the Groundhog Day Mentality: Enabling A True Category Management Mindset takes, takes place at 1pm GMT on 29th November 2017. Register your attendence for FREE here. 

The life of a procurement professional can easily descend into a vicious cycle. You’re asked to do more and more, in order to drive bottom line results for the business, but you’re without the time to approach these challenges innovatively.

It’s often something straight out of the movie “Groundhog Day,” where procurement is given bigger and bigger targets, and has to scramble to execute on more projects, touch more spend, react to more stakeholders and more issues, and then simply do it all over again….and again!

The problem is, if our category managers can’t find a way to break the reactive cycle and start taking different approaches, they can’t add value and deliver the best results.

Successful organisations have embraced the request to do more, and have turned it into an opportunity for the function; to increase the strategic role of procurement and make it a destination role within the business.

How do successful organisations navigate this journey? What are the keys to success? And what is imperative for individuals and organisations to do when on this journey to ensure they become closer than ever before to the business?

What content can I expect from the webinar?

We’ll be discussing:

  • What does it mean to have a category management mindset?
  • What key competencies or skills should category managers be developing?
  • How will category management needs continue to evolve over time?
  • How can procurement leaders change the game for category management?
  • What mistakes are category managers repeatedly making?

Who are the guest speakers?

Tania Seary – Founder, Procurious

A true procurement entrepreneur, Tania is the Founding Chairman of Procurious, The Faculty and The Source. Throughout her career, Tania has been wholly committed to raising the profile of the procurement profession and connecting its leaders.

After finishing her MBA at Pennsylvania State University, Tania became one of Alcoa’s first global commodity managers.

In 2016, Tania was recognised by IBM as a #NewWaytoEngage Futurist and named “Influencer of the Year” by Supply Chain Dive. She hosts regular procurement webinars, and presents at high-profile events around the world.

Christophe Ysebaert – Partner, Transitive Management

Christophe Ysebaert is a Partner with Transitive Management with expertise in purchasing strategies, strategic sourcing and project management. He is also a Part Time Teacher at Skema Business School in Lille (France) teaching category management and strategic sourcing.

Prior to joining Transitive Management, Christophe worked during close to 30 years for Dow Corning as a global manager in Supply Chain and Purchasing jobs. He served roles in Global Planning and more recently in Purchasing as part of the Procurement Leadership Team responsible for strategic sourcing and for a global augmentation program with a third party provider. He has also managed a global portfolio of commodities as well as led the European Direct Procurement Group.

Christophe holds a Master of Science in Business Engineering from Mons University and a Post-Baccalaureate Certificate in Logistics and Supply Chain Management from Penn State University.

Alpar Kamber,  Executive Vice President, Denali – A WNS Company 

Alpar Kamber is Executive Vice President at WNS and the BU Leader for Procurement Services. He was the Founder and CEO of Denali Sourcing Services, a next-generation procurement services provider that enables procurement organizations to influence more spend and execute more effectively and efficiently.

In January 2017, WNS, a global business process management leader, acquired Denali Sourcing Services. Prior to joining Denali, Alpar held management positions at Ariba, FreeMarkets, Diamond Technology Partners and E&Y. Alpar leads WNS clients in building scalable sourcing programs and operationalizing their procurement function that drive consistency, repeatable outcomes, and bottom-line value across the organization.

Alpar’s expertise is in procurement value chain, organizational design, change management and global program execution. Alpar holds an MBA degree from Tepper Business School of Carnegie Mellon University. Alpar Kamber was named a 2011 Pros to Know by Supply & Demand Chain Executive. Read more about Alpar Kamber in the HfS Research interview, Meet the sultan of strategic sourcing.

Christopher Eyerman, Senior Director,  Denali – A WNS Company 

Chris Eyerman is the Senior Director for WNS-Denali. Chris leads WNS-Denali’s Solutions and Capabilities group to design, deliver and continuously improve procurement programs that provide real, lasting value and creates permanent change in how our customers conduct procurement business.

He is a senior supply chain and program management executive with more than 30 years of technical and business experience, including 18 years of leading category management, source-to-contract, procure-to-pay and supply chain transformation programs. Prior to joining WNS-Denali, he served roles in program management, business development, product management and operations at FreeMarkets, Ariba and Exostar.

Chris holds a BS degree in Mechanical Engineering from Penn State, an MS degree in Aeronautics and Astronautics from MIT, and an MBA degree from Carnegie Mellon University.

How do I register for the webinar?

Registering for our webinar couldn’t be easier (and, of course, it’s FREE!)

Click here to enter your details and confirm your attendance. We’ll send you a confirmation email with a link to the webinar platform and a handy reminder one hour before we go live!

I’m already a member of Procurious, do I still need to register?

Yes! If you are already a member of Procurious you must still register to access the webinar via this platform. We’ll send you a confirmation email with a link to the webinar platform and a handy reminder one hour before we go live!

When is it taking place?

The webinar will take place at 1pm GMT on 29th November 2017.

Help! I can’t make it to the live-stream

No problem! If you can’t make the live-stream you can catch up whenever it suits you. We’ll be making it available on Procurious soon after the event (and will be sure to send you a link) so you can listen at your leisure!

Can I ask a question?

If you’re listening live, our speakers would love to hear your questions and we’d love for you to pick their brains . Questions can be submitted throughout the live stream via the webinar platform, or via @Procurious_ on Twitter.

If you think of a brilliant question after the event, feel free to submit your question via the Discussion Board on Procurious and we’ll do our very best to ensure it gets answered for you.

Our webinar, Breaking the Groundhog Day Mentality: Enabling A True Category Management Mindset, takes place at 1pm GMT on 29th November 2017. Register your attendence for FREE here. 

Deal Or No Deal? The Brexit Effect

What are the implications of Brexit on Procurement? And how should the function be preparing for the various possible outcomes? 

Zycus’ webinar The Brexit Effect Understanding Brexit and Its Impact On Procurement takes place on Tuesday, 21st November 2017. Register for free here.

On June 23 2016, the world woke up to some very unexpected news.

This was the day around 17.4 million people in UK, by a sizeable margin of 52 per cent to 48 per cent, voted to become the first country to leave the European Union.

As the world looked on in shock, the then prime minister David Cameron immediately resigned, leaving his successor Theresa May to handle proceedings. She soon confirmed that Article 50 of the Lisbon treaty would be triggered and did so in March 2017.

From the time the UK submitted its Article 50 letter to the European Commission, a two year formal process of leaving the EU began.  A number of events were set in motion that cannot now be halted without significant agreement between the two governments.

What will happen in these two years?

Within these two years, the UK and the European Commission will either agree upon an interim agreement or trade will be governed under a pre-agreed set of tariffs. The impact of Brexit on the UK economy will be determined largely by whatever relationship the UK manages to forge with the EU, and this may not become clear for number of years.

In these uncertain and unpredictable times, how can procurement professionals prepare and what risks does the function face? In the EU, the public purchase of goods and services has been estimated to be worth 16 per cent of GDP and it is nearly 20 per cent of UK’s GDP.

Regardless of whether you work in the public or private sector, there is no doubt that Brexit’s impact extends across the entire breadth of the procurement industry. It’s really hard to understand how significantly regulations are going to change for procurement.

The worst case scenario for procurement

  • Cost: The costs to import goods within supply chains are likely to rise, whether it’s due to commodity prices or labour cost. In terms of commodity prices, we cannot know for sure of the impact; there could be a major change depending on the value of the pound or we might see no change at all. Labour cost will be dependent on the new immigration regulations, which could make it more expensive to hire EU nationals in the UK and vice versa.
  • Freedom of movement and supply chain delays: There is a chance that there will be a loss in freedom of movement both in goods and services for UK and European businesses with supply chains operating across borders. There is also a possibility that there will be some disruption in existing supply chains because of time-consuming border checks and paperwork at UK ports, which could increase custom processing time.
  • Procurement recruiting and talent management may suffer: Not only the flow of goods and services will be impacted but procurement talent will also be considerably affected. If the “leave” campaign succeeds in stopping migrants from the EU, there is a chance that the procurement talent pool in UK will be considerably reduced. Many of the EU procurement professionals might not want to be a part of UK given the current instability.

Procurement’s Pre-emptive Action

CIPS recently conducted a survey with 2100+ supply chain managers, which delivered some very interesting results:

  • Around 32 per cent of UK businesses using EU suppliers are currently looking for British replacements
  • More than one third of UK businesses plan to respond to Brexit by beating down suppliers’ process
  • 46 per cent of European businesses expect to reduce their use of UK suppliers

As supply chain complexity increases, many British companies are considering the possibility of shifting supplier base from continental EU to the UK. In the meantime, European companies that have operations in the UK are looking at moving their operations outside of the UK to ease business. This is because UK will become a separate market for EU and therefore like we discussed earlier, the movement of goods across borders with the UK will be deemed as imports and exports, attracting new customs controls. This will become more time consuming and attract paperwork, taxes, tariffs, excise duties and VAT which will have direct implications for revenue and cash flow of businesses.

If trade negotiations fail throughout the Brexit process, businesses inside and outside the UK should be ready to explore new options. Procurement must plan ahead to find alternative suppliers or start work with existing suppliers to put deals in place, soon!

If you are curious to know more about how Brexit will impact procurement, do join our upcoming webinar on Brexit featuring industry experts Mark Webb and Jon Hansen. They will be discussing:

  • The impact of Brexit on supplier risk assessment and management
  • The influence of trade tariffs on cost
  • Increasing demand for procurement talent
  • What is the procurement technology answer to Brexit? 

Speakers:

Jon Hansen – Editor and Lead writer at Procurement Insights

Mark Webb – Managing Director at Future Purchasing, UK

Kanishka Ghosh – Director of Product Management at Zycus Inc.

The Brexit Effect Understanding Brexit and Its Impact On Procurement takes place on Tuesday, 21st November 2017. Register for free here.

Have You Aligned Your SIM & CLM Systems?

Procurement teams with mature SIM and CLM systems can extract greater value from supplier relationships. How can the two be brought into better alignment?

This article was written by Kelly Barner for Determine

Procurement is so accustomed to aligning our technology and processes with the objectives of the business at large that we sometimes miss opportunities to align our own technologies and processes with each other.

Supplier Information Management (SIM) and Contract Lifecycle Management (CLM) provide a perfect case example. Both bring together suppliers and internal touch points, extend beyond procurement’s peak involvement in managing spend categories, and play an important role in addressing (and mitigating) supply chain risk.

Procurement teams that have mature SIM and CLM programs in place reduce their risk, but they also create opportunities to extract greater value from each supplier relationship and reduce confusion within the enterprise.

When we stop and think about how SIM and CLM can be brought into better alignment, three critical shared issues come into focus: information integrity, ownership and actionability.

  1. Information Integrity Through Integration

Information is such an important component of SIM it is included in the name, whereas with CLM the devil is always in the details. An incorrect piece of information in a contract can easily become a legal liability. Both start with essential supplier contact information and metadata and extend to the details associated with supplier onboarding and contract terms. Although the following information is collected for separate reasons, it is critical that it be consistent across SIM and CLM:

Supplier Onboarding

 When a new supplier is on-boarded post award, a standard set of information is usually collected. This includes their contact information, location details, proof of certification, and details regarding the users who will represent the supplier in company systems during the term of the agreement. Making sure as quickly as possible that this information is complete and accurate lays the groundwork for an equally smooth implementation and on-going relationship. Beyond simple collection and centralisation, procurement must also validate supplier information at the time of onboarding – paying particular attention to documentation associated with certifications that were included in the award decision.

Contract Initiation

When creating a new contract, it is natural for procurement to focus on product/service specifications, prices, terms and SLAs, but capturing other more straightforward information is just as important. For instance, specifying a production location might seem like a minor detail — until the supplier makes the decision to outsource their production to another facility, or even another country. Having specified the location in the contract may not prevent the change from being made, but it does create an opening for discussion of the associated quality and oversight expectations. As contracts become an increasingly dynamic part of supplier management, more details need to be incorporated.

  1. Ownership

Since managing risk and increasing performance are at the heart of both SIM and CLM, establishing ownership early on is critical. Who will manage the relationship and who will be the documented owner of the contract? Should it be the same person? Why or why not? Alignment of goals can not be achieved if the individuals associated with each responsibility are not also aligned.

Supplier Relationship Management

Any supplier may have multiple relationships in an enterprise. Procurement is certainly a point of contact, but so are the budget owner and any functions that have a high volume of demand associated with that supplier. Many people may have contact with a supplier in the course of daily business, but information about performance reviews and contract updates should be managed in an organised fashion so that the supplier is kept informed and no one speaks out of turn.

Contract Ownership

 In addition to including a complete set of terms and signatures, each contract needs an owner from the outset. While captured as a simple name field in many CLM systems, a lot of consideration must be given when deciding who will own each contract. The primary value proposition of CLM is that it allows contracts (and the business deliverables they govern) to “leave the filing cabinet” in order to have a measurable impact on the business. Empowered by automated CLM notifications, someone in the enterprise needs to take action based on the information provided; and having an appropriate designated owner from the start provides accountability and ensures a prompt response.

  1. Alignment Actionability

Putting SIM and CLM in place is not about static documentation or information centralisation, but rather the actions each motivates. Unlike information integrity, where consistency is key to alignment, actionability requires each of these systems to “feed” information to each other. There are supplier performance considerations in both systems, and while they are different, it is in their combination that the best result is achieved.

Supplier Performance

SIM systems often include supplier performance details submitted by procurement, as well as the other individuals in the enterprise who come into contact with the supplier’s products or services. In some cases, determinations of performance will be based on buyer perceptions and expectations. This information should be recorded and communicated to suppliers on a regular basis.

Contract Compliance

When viewed through the lens of a contract, supplier performance is about following the “letter of the law.” Just as suppliers can have performance issues that do not rise to the level of legal non-compliance, a supplier can be in perfect standing based on the requirements of the contract and still not meet the expectations of the company. If performance measurement and contract terms are not both aligned and visible, it will be hard for procurement to know the difference and lead the appropriate response.

The full benefits of SIM and CLM alignment are realised over the term of the agreement, as long as 3-5 years in some cases. The sooner the enterprise can achieve alignment in terms of information integrity, ownership and actionability, the shorter the timeframe to evaluate and lower the overall risk.

This article was orginally pubished on Determine. 

Check Out The Keynotes for ISM2018 Nashville

ISM has done it again, with three globally-recognised keynotes announced ahead of its highly anticipated annual conference in Nashville, Tennessee.

FXQuadro/Shutterstock.com

About this time every year, the Institute for Supply Management announces its keynotes for its upcoming annual conference. As usual, the lineup for ISM2018 is impressive, with Mitt Romney, Arianna Huffington, and John Rossman set to wow the crowd.

Mitt Romney was the 70th Governor of Massachusetts from 2003 and 2007 and the Republican Party’s nominee for President of the United states in the 2012 election, where he ran against the formidable incumbent, Barack Obama. Romney is also the founder and CEO of Bain Capital.

Arianna Huffington is the co-founder and former editor-in-chief of the Huffington Post, and appears regularly in Forbes’s most influential people lists. Huffington has recently launched a new startup, Thrive Global, focused on health and wellness information.

John Rossman is a former Amazon executive and author of “The Amazon Way: 14 Leadership Principles Behind the World’s Most Disruptive Company.”

Top-tier keynotes at ISM’s annual conference have become something of a tradition. Romney, Huffington and Rossman will join an alumni of household names who have spoken in the past, including:

Focused on “Global Insights, Peak Performance”, ISM2018 expects to draw over 2,500 supply management executives and professionals from around the world. More than 100 interactive sessions are a part of six practitioner-led learning tracks, and will feature executives from firms such as Google, Pfizer, and P.F. Chang’s China Bistro.

ISM2018 will be held from May 6th – 9th 2018 at the Gaylord Opryland Resort & Convention Center in Nashville, Tennessee.


In other news this week:

 Economists warn against NAFTA withdrawal

  • A report in the Wall Street Journal has given the probability of a U.S. withdrawal from the North American Free Trade Agreement is roughly 1 in 4.
  • Private-sector forecasters have said that such a move would likely weigh on economic growth.
  • S. President Donald Trump has threatened to pull the U.S. out of NAFTA if efforts to renegotiate it fail. Talks are set to resume on November 17th in Mexico City.

Read more: Wall Street Journal

 

Driverless shuttle hit by delivery truck

  • Only hours after its debut, a driverless shuttle in Las Vegas was hit by a semi-truck, demonstrating that robotic vehicles are still vulnerable to human error.
  • According to reports, the fault lies squarely with the driver of the semi, whose vehicle grazed the front fender of the shuttle. The robot shuttle’s sensors registered the truck and stopped the vehicle in an effort to avoid the accident.
  • None of the shuttle’s eight passengers were injured in the incident, but proponents of the self-driving vehicle revolution are concerned that incidents like this will delay the uptake of robotic vehicles.

Read more: MarketWatch

Why Public Sector Procurement Consolidation Won’t Take Forever

Driving change within the public sector takes forever… and ever! Right? Tim Hamper begs to differ as he explains why procurement consolidation will only accelerate in coming years, if not months!

A few weeks ago another UK public sector body, Fastershire (a partnership between Gloucestershire County Council and Herefordshire Council, backed by the Department of Culture, Media and Sport), began implementing a major new combined agreement – this one with Gigaclear, a rural Internet Services Provider. The deal is to roll out “ultrafast” Fibre To The Premise broadband to thousands of some of the hardest to reach homes and businesses across the two counties, at speeds of up to 1000Mbps.

After decades of individual procurement teams in separate organisations diligently applying public procurement rules (often with relatively small spend and time-consuming award processes), it’s now becoming normal to combine with others. The results are often not only larger economies of scale, but also better access to relevant products and services.

Public sector procurement consolidation

Combined (in other words consolidated) public procurements have for some time been delivering in areas where it’s fairly easy to see a commodity – energy, office supplies, facilities. They’ll really take off and show benefit when they fully embrace what used to be called “ICT” – now better labeled Digital. Leaders of public bodies won’t be interested in the details of latest products or software solutions, or even in traditional efficiencies. They’ll be concerned about big outcomes. How to better support local economies and communities? How to join up health and social care? How to keep the trains running?

The facts about consolidation are impressive:

  • Although not everyone is a fan, in 2016/17 Crown Commercial Services, the public sector aggregator, channelled £12.4bn of public sector procurement spend through its commercial arrangements including frameworks – £6bn from central government, £6.4bn from the wider public sector.
  • The National Procurement Strategy for Local Government in England was launched in 2014. By 2016, 53% of single tier/district councils and 48% of district councils said their organisation had made savings or achieved other community benefits by “partnering and collaboration”.
  • Owned by six county and city council authorities, one public sector buying group based in Leicestershire, ESPO, now has over £1.4bn of spend going through its frameworks. The organisation consolidates requirements from over 9,000 education customers across the country.
  • Another buying group, Kent County Council’s Commercial Services, is one of the largest trading organisations of its kind in the UK. As the contracting authority, Kent operates in partnership with 12 district councils and 289 parish/town councils. It recently published details of framework contract awards for water and sewerage services potentially worth up to £208m on behalf of a number of public sector organisations.

The tipping point for consolidation

The often-heard view is that change in the public sector takes forever (one digital industry leader recently claimed this is due to a “lack of vision, entrepreneurial thinking and execution”, another that “the last ten years have seen public sector organisations progress only 20 per cent of the way through the business transformation journey, with the remaining 80 per cent to be delivered over the next ten years.”). But with the focus on outcomes, the necessary speed and type of market engagement will mean the trend for procurement consolidation will only accelerate. The benefits will be big: public sector bosses are already seeing better outcomes and stretched budgets being brought back into balance. In Gloucestershire, County Councillor Lynden Stowe, Cabinet Member for Economy, Skills and Growth says “faster broadband is vital for our communities and businesses to thrive and grow. I’m delighted that the Fastershire project, in partnership with Gigaclear, will be taking faster broadband to even more homes and businesses in some of the most rural areas of the county where larger suppliers were not prepared to go.”

We’re probably already at the tipping point where most public procurements look across organisational boundaries, so the need for separate individual procurements will diminish. A lead or buying group will more and more be seen as the right place for consolidating spend, not just for commodity items but strategic stuff as well.

Suppliers will react quickly to this situation and respond to consolidation opportunities – not least because larger volumes are more attractive, and with fewer organisation touch points, the cost to them of doing business will be significantly reduced.

Dramatic change has already started, though not every public sector management team involved in commercial activity has fully embraced it. They should. Consolidation in public procurement won’t take forever – the focus on outcomes and market speed will ensure that it’s now measured in months, not years. Certainly not in decades.

Blockchain: Are You Bothered?

There are so many misconceptions around blockchain and its potential impact. Will the fundamental concept of blockchain really have a significant impact on procurement, finance and supply chain?

Last month’s Procurious London Roundtable was sponsored by Basware

Blockchain is the coolest technology of the moment and the hype surrounding it only appears to be growing year upon year. Whilst the concept was first used for Bitcoin, the digital currency, its potential is far wider, and many industries are actively investigating the possibilities of using blockchain-based solutions.

But despite organisations around the world jumping on the Blockchain bandwagon and advocating for its enormous potential, do the majority of professionals understand precisely what it is, what it can do and the extent to which it will impact our businesses?

At last month’s Procurious roundtable, Paul Clayton, Head of New Service Development, Basware put us through our paces with an overview of blockchain technology and his insights as to why procurement pros need to be cautious not to overestimate it’s bearing on the function.

What is blockchain?

A blockchain is simply a digitised, decentralised and cryptographically secured ledger of transactions.

“The biggest misconception” Paul begins, “is that there is only one blockchain. There are actually many blockchains in use today throughout many different industries.”

“Blockchain is actually only a concept, whose origins go back to academic work in the early 90s, rather than a thing. The concept was first publicly used to allow the crypto-currency Bitcoin to be traded virtually, anonymously, and without the need for a centralised bank.”

“Blockchain technology says where something has been transferred to and retains a trace of the transfer. Conceptually a blockchain acts like is a single ledger, a source of the truth if you like. In reality, it is physically distributed where there are actually multiple ledgers, known as nodes, that all work together to come to consensus on where something has been transferred to, which is then shared between them.”

An obvious advantage of this technology, is that it’s very difficult for you to break the integrity of the ledger. “There are multiple copies of the same ledger and so if someone hacks one it becomes immediately obvious that it is different.”

The flaws at the heart of blockchains

Whilst a blockchain itself is safe, an application using it remains hackable – Security researchers and hackers have proved it’s possible to hack someone’s Bitcoin wallet and empty it of crypto-cash. Mt. Gox infamously lost 7 per cent of all Bitcoins in circulation in 2014, which were worth, at the time, approximately $473 million. It also appears to be an uphill battle trying to prosecute someone for taking a Bitcoin

It’s can be too transparent – With public blockchains, once a transaction and its associated data have been placed onto a blockchain, anyone and everyone who has access to it can view everything, whether you like it or not

It’s not the most elegant solution – The very nature of the deliberately distributed ledger with multiple copies (nodes), means that you have multiple nodes undertaking exactly the same piece of work ie working out where something has been transferred to. From a pure computing power point of view, for certain applications, this is a highly inefficient way of doing things.

The blockchain for Bitcoin for example, has already had to be re-designed to increase its scalability as the number of Bitcoins in circulation and the growth in the associated transactions meant that the ledger became too unwieldy and it was taking too long for it to update.

You can still lose things!

Even if you know where something went, you can still then lose it. Who could forget the unfortunate James Howells, who mistakenly threw out a hard drive containing 7,500 Bitcoins, now estimated to be worth $7.5 million

 

Blockchain for business

There are some who would argue that these problems have been addressed and eliminated for blockchain for business. Paul is not one of them!

“The distributed nature of ledgers means blockchain is good at maintaining the integrity of who owns something but what it cannot do is determine whether the person who put something into a system owned it in the first place.”

This means, when making a transaction via a blockchain, the recipient needs to be able to trust the supposed owner of the thing that is being exchanged. “You are, essentially, reliant on the veracity of the source of what goes in to the blockchain.”

For example:

Does the “owner” actually own the rights to the house they are trying to sell you?

If you’re exchanging metals, does the “owner” have documents to prove they have the rights to the gold?

It might be good at preventing a fraudulent transfer of an asset but blockchain is “next to useless at establishing if a person owned something in the first place”

“As a ledger system it is extremely inefficient, almost clumsy in the way it works. In certain circumstances, where there are a high volume of transactions it uses so much computing power it’s almost not worth it.”

“And it’s for these reasons that, whilst it will have applications in many areas from supply chain through to electronic voting, blockchain won’t change the world!”

Where is the value for procurement?

“Is there value in blockchain tech? Yes. Does the value match the hype right now? Not even close!”

“From a procurement point of view the biggest area of impact right now is most likely to be in supply chain applications. There are obvious applications for the transfer of title and bill of lading. Of particular interest in this space right now are supply chains that can be subject to fraud such as pharmaceuticals and food

Going beyond that the application of so called “smart contracts” to a blockchain can help automate certain business processes. Smart contracts, are pieces of computer code attached to a blockchain that automatically execute an action once a set of agreed criteria have been met. For, example, a smart contract could be used to automatically pay a supplier once the buyer has received their goods without the need for invoice processing and payment.

” In 2017, blockchain is word of the year, it’s absolutely everywhere. But it’s not earth shattering, it’s not the third generation of the Internet its just an interesting concept with some obvious benefits and flaws.”

Last month’s Procurious London Roundtable was sponsored by Basware

How Do You Get Your Biggest Idea Through a Big Company?

Think you know what it takes to drive a big idea through an even bigger company? Watson Supply Chain was built on one big idea…

On 24th January 2018 3.30pm EST Procurious founder, Tania Seary, will be speaking with Joanne Wright in IBM’s webinar: How IBM Built the Cognitive Supply Chain of the Future. Register here.

Five years ago, Joanne Wright had a sizeable problem…a $30 USD billion supply chain problem to be precise!

Joanne was fortunate enough to be working with a company that could actually do something about it. Working with IBM’s engineers to design and implement a tailor-made solution to her supply chain challenges, she has now benefitted the entire global supply chain profession as a result of her intrapreneurship and ingenuity.

This is her story.

That “AHA” moment

Joanne had hers in 2011 following a series of unfortunate events.

The devastating earthquake, and subsequent Tsunami, off the Pacific coast of Tōhoku Japan in the early months of this year resulted in $360 billion USD of damage and wiped out componenets globally. It was frustrating and time consuming to even attempt an analysis with incomplete information.

Then, there were the volcanic eruptions in Iceland, which meant that freight couldn’t be moved in the same way it had been before.

Finally, the extreme floods in Thailand, triggered by the landfall of Tropical Storm Nock-ten, wiped out disc drive head production and heavily impacted the storage side of the business.

In each of these instances, Joanne considered how she might leverage the right data to make better decisions.

The need for faster, better intelligence

Given the speed at which circumstances can change in our world, the only way for procurement organisations to be successful is to achieve faster, better intelligence.

When Joanne reflected on how her team had managed the crises of 2011, it was clear that the situations could each have been tackled faster, more intelligently, and with a higher level of accuracy- if they could only utilize the right cognitive solution.

Getting the idea through a BIG company

Introducing and executing a new idea is no small feat in a company the size of IBM. How did Joanne get senior management support for her venture?

It was a long process of trial and error, during which her team learned a lot about how to best manage their data. It took nine months to get started, and furthermore, eighteen months to get to implementation. They needed coders; they ran design workshops where they spent time identifying data sources and emphasizing the importance of data to their clients.

Once you’ve identified the data, it has to be cleaned; and then you have to train Watson. A task that, according to Joanne, can’t be underestimated.

Joanne’s team quickly discovered that they weren’t just the early adapters, but they were the creators of Watson Supply Chain, which added a level of drive and passion to the project; needless to say, it took on a much bigger purpose.

How does the IBM Transparent Supply Chain operate today?

  1. Resolution Room

Resolution Rooms with Ask Watson capability provides cognitive-enabled insights, recommends experts and provides actionable advice based on learned best practices. This helps drive automation and collaboration in responding to disruptions and events. Resolution Rooms leverage Watson’s capability to develop a body of knowledge by learning about how issues were best addressed in the past. This enables greater speed and accuracy in responding to future events.

“My team gets to collaborate in one place.” Joanne explains. ” A demand spike in our new Z14 mainframe, planning of the new product introduction, what the new demand is, what the client order patterns will be and which countries will we be shipping to. Logistics, materials, suppliers, engineering, transportation and providers can all be in one place, with total transparency working with the best data you have available. We’re truly able to use our best experts (wherever they are in the world!) and Watson as your trusted advisor.”

And what does Watson bring to this resolution room?

“Watson provides the opportunity to deliver business value and insights from all of these data insights – structured (SAP) and unstructured, data from weather patterns, news, D&B and supplier IQ. And it does this with speed and accuracy. No more are we saying ‘OK…let’s get the data and meet again tomorrow’ because Watson takes my team’s input and incorporates that into the next iteration as we go.

  1. Operations Center

Operations Center with Smart-Alerts proactively monitors and governs operations with speed and agility, predicts disruptions, and provides configurable, intuitive alerts cutting through data overload. Supply chain practitioners can prioritize actions based on instant analysis of the financial impact of impending risks and disruptions.

This capability helps reduce number of expedites, reduce inventory and be more predictive on what we need to do for clients.

Joanne’s final words of advice to her peers “You can’t afford not to be engaged with these technologies. It’s a game-changer. You need to the winning recipes!”

On 24th January 2018 3.30pm EST Procurious founder, Tania Seary, will be speaking with Joanne Wright in IBM’s webinar: How IBM Built the Cognitive Supply Chain of the Future. Register here.

Whose Services Are You Really Procuring?

The workforce is fundamentally changing and it’s increasingly important that you can access the skills you need when, where and how you need them. But with the increase in corporate usage of external workers comes additional challenges and risks.

Driven by the digital age, we’re seeing a shift in the way work gets done. Globalisation and new ways of working are rapidly changing how talent interacts with companies, making it increasingly likely that the top talent needed by a business might not be – and might not want to be – on their payroll.

As a result, organisations increasingly rely on the external workforce – including contingent worker, Statement of Work (SOW)-based consultants, freelancers, specialized talent pools and more. In fact, these resources now account for nearly 40 percent of the average company’s workforce.

Why is this happening?

There are four factors impacting the way work gets done:

  1. Data: Data is the currency of the digital economy and we hear a lot about it these days. Big data is powering new insights and enabling better business decisions and outcomes.
  2. Digital technologies: Advancements such as artificial intelligence and machine learning are speeding processes and increasing efficiency. Looking forward, technologies such as blockchain will disrupt industries by facilitating the exchange of goods and services.
  3. Design-thinking or user-centered design: This is driving better experiences by putting people at the center of technology, not the process or the product.
  4. People: Perhaps the most profound change we are seeing in how work gets done is with people. Many of today’s workers – millennials, in particular – are looking for different experiences rather than spending decades with one company. As technology has enabled people to be untethered, the external workforce has boomed.

The result is that a significant portion of the external workforce is now comprised of service providers. To stay ahead of the competition, you need to be able to easily access this specialised and you need to be able to manage it effectively.

Challenges in services procurement

With more and more companies using external resources to fill vacancies, compensating for skills gaps and staffing ad-hoc projects, how do you know you’re getting the best talent at the best price?

With products, it’s relatively straightforward – prices are fixed and margins are small for suppliers. When it comes to services procurement, the situation is very different. Margins vary hugely and tend to be relatively high for the supplier.

For example: you’re looking for a plumber to work onsite at your facility for a specific time. Rates will vary depending on their experience and grade. When engaging your suppliers, how can you ensure that the person they send isn’t someone with little work experience who is charging a premium rate? Without insight into who is actually working for you at any given time and confirming that they are providing the level of service you expect, how can you ensure you’re not overpaying?

Organisations need a single place to go to source, engage and manage service providers. But many are managing this key labor segment with fragmented systems and processes which puts them at risk for excess spend, compliance issues and decreased quality.

A lifecycle approach

A solution lies in an external workforce management model. This model should include:

  • Visibility across multiple service providers and headcount tracking so you know who is working for you across your entire enterprise.
  • True demand management to enable the correct buying channels for each category of service.
  • Financial control, operational efficiency and collaboration, both internally and with suppliers.
  • Risk mitigation and compliance to rates and budgeting against contracts, along with the ability to discover how much a service cost last time to better forecast.

Enabling a services procurement solution to drive better operational control and rigor around services engagements not only enables cost savings opportunities, but enables key value levers including compliance, cost, visibility, efficiency and quality.

Procurement plays a strategic role in helping their organisation gain workforce visibility, be more agile and derive more value from their services procurement management. But executing the service only gets you halfway there – full potential is reached with management of the entire lifecycle.

Interesting in learning about more about the SAP Fieldglass External Workforce Management Model? Click here.

A New Role Emerges: Supply Chain Scrutinisers

Any increase in transparency is good news for the supply management profession. That’s why the rise of the 3rd-party Supply Chain Analyst is a development that the profession should welcome, rather than fear.

How many articles have you read about Apple’s supply chain? Dozens, no doubt. Tesla’s is similarly scrutinised, along with McDonald’s, Walmart’s and a handful of other household names.

The reason for the growing popularity of this news is twofold.

Firstly, increased transparency in reporting means that researchers have a lot more to work with. For example, a recent Forbes article from Jonathan Webb reports that recent legal changes in Taiwanese corporate law means analysts can now take advantage of mandated monthly earning reports.

Secondly, corporate supply chains are finally being recognised as a key factor that contribute to commercial advantage – such as risk levels and speed-to-market – or commercial disadvantage. As such, top analyst firms such as Bloomberg now employ supply chain research experts whose insights can affect a companies’ share price just as dramatically as a surprising result in a quarterly earnings report.

What does the role look like?

Here’s an example of a supply chain analyst role currently being advertised with Bloomberg:

https://careers.bloomberg.com/job/detail/62154

The role calls for someone who is capable of “researching and analysing business relationships on over 23,000 companies globally, “providing a roadmap for clients to view supplier and customer relationship networks, helping them identify and manage supply chain risk and generate investment ideas”.

The researcher is expected to interact with analysts, fundamental and quantitative portfolio managers and news agencies. In other words, the data uncovered by a supply chain analyst is much-anticipated and eagerly consumed. Gartner’s annual Supply Chain Top 25 Rankings, for example, make a splash not just within the supply management profession but within investment circles too:

Cleaning up the supply chain

Valuation and investment insights aside, another major role of supply chain analysts is to uncover malpractice such as human rights abuses, corruption, and environmental breaches. The biography of the aforementioned Forbes contributor, Jonathan Webb, says it all:

“I’m focused here on the murky world of supply chain corruption, looking at commercial bribery, supplier compliance and other nefarious goings on in the supply chain.”

And this is where the really interesting part of the supply chain analyst’s role begins. Once the domain of investigative journalists, supply chain malpractice is now being uncovered by experts who travel to hotspots to reveal and report on issues ranging from conflict minerals in the Congo, sweatshops in Bangladesh, and toxic waste in China.

Again, the big-brand household names are those that come under the most scrutiny for supply chain sustainability and human rights abuses, with subsectors such as clothing manufacturers and chocolate makers receiving the highest level of focus. Reporters and political enemies of Ivanka Trump, for example, continue to probe her clothing brand’s supply chain as a likely area of weakness. In response, the company has apparently made public information harder to find than ever.

What does this mean for the next generation of procurement pros?

The emergence of the supply chain research analyst opens up a new career path for procurement and supply management professionals. If you’re currently working as a data analyst for a single organisation’s supply chain, in the future you may consider scaling up your role to pull trends and insights from the supply chains of tens of thousands of organisations.

In other procurement news this week…

Procurement Fraud Is Costing NHS

  • The NHS Counter Fraud Agency (NHSCFA), launched 1st November, has estimated all types of fraud cost the health service a total of £1.25bn, with procurement fraud the second largest contributor after patient fraud
  • One of its aims is to identify problem areas in preventing – and increasing reporting of – invoicing and procurement fraud
  • This is the first time the health service has released an official estimate of the cost of fraud to the NHS. The total figure is roughly 1 per cent of the NHS budget

Read more at Supply Management

Stephen Hawking’s warning on AI

  • Stephen Hawking is concerned that artificial intelligence could replace humans. The world-renowned physicist fears that somebody will create AI that will keep improving itself until it’s eventually superior to people
  • “If people design computer viruses, someone will design AI that improves and replicates itself. This will be a new form of life that outperforms humans”

Read more on The Independent 

Weetabix sets out new supply chain vision

  • Milan Pankhania, who was appointed head of supply chain for operations at Weetabix, has just completed three months in the role and he has been identifying areas where the company could make efficiencies or cut waste
  • “My role is to help drive efficiencies across the supply chain process, while striving for excellent customer service,” he said.
  • “The focus for my strategy will absolutely include cost control and proactive risk management. It isn’t about cutting costs though, it’s about doing the right things to manage risk”

Read more at Supply Management

The CPO’s Guide To Persuasion

What’s the number one skill required by the CPO of the future? According to award-winning Australian CPO Kevin McCafferty, you won’t get far without mastering the art of persuasion.

Broadspectrum Executive General Manager and 2017 Asia-Pacific CPO of the Year Kevin McCafferty will deliver a keynote session at the upcoming GovProcure2017 conference, running from 5th-7th December in Sydney, Australia. Procurious caught up with Kevin to ask him about top skills required by the CPO of the future. 

Kevin, you’ll be talking about procurement in 2018 and beyond at GovProcure2017. How can CPOs equip themselves to meet the coming challenges?  

“In my opinion, the number one skill for the CPO of the future is what I’d call the ‘art of persuasion’. Procurement is a profession that a lot of organisations see as a tactical solution to some of the issues that they have. Most organisations spend about 50 per cent of their revenue on 3rd-party suppliers and service providers. If your business spends that much money externally, they need to become more strategic in doing so – and that’s where the need for persuasion arises.”

Which parts of the business generally require the most persuasion from CPOs?

“A CPO’s job is firstly to persuade the organisation when to be strategic in the way they spend it, and secondly, to invest in the profession so they get the best value-for-money outcomes every time they spend money. It doesn’t matter whether they’re buying pens and pencils, or if there’s a $10 million project your organisation wants to invest in; there’s an art involved in being able to persuade your board, your executive team, and your chief executive that investing in procurement to get those outcomes is absolutely critical to the profession.”

In your view, how important is networking for procurement professionals?

“The power of your network is absolutely critical to your career. In this profession, being able to talk to your peers and understand what’s happening in their organisations will help you work through your own strategies and goals.”

Kevin McCafferty will deliver the opening keynote at GovProcure2017 in Sydney on 5th December, where he’ll focus on:

  • an overview of procurement trends for 2018 and beyond
  • the age of commercialisation and digitisation, and how it’s impacting the profession, and
  • common challenges facing procurement and how to tackle the solutions.

Click here to learn more and download an event brochure.