All posts by Procurious HQ

The Elephant in the Room: Aligning the Executive Team for Change

“You cannot swim for new horizons until you have courage to lose sight of the shore.” ― William Faulkner. Lora Cecere considers how to align the executive team for change.

Photobank gallery/Shutterstock.com

Take a hard look at this lonely elephant. In my travels, in most corporations, this is the picture I see. My goal for this blog is to connect with you. We have an insular thinking problem in supply chain. What do I mean? Let me explain.

Each week, I travel and visit companies and speak at conferences to talk about the future of supply chain management. When I speak, my definition of supply chain is the process of aligning process flows from the customer’s customer to the supplier’s supplier. Many companies define supply chain more narrowly as a silo within operations focused on logistics or customer service. This limited view is a mistake.

There is also a false belief that efficient organizational silos make effective supply chains. In the automation of business processes, over the last decade, we automated the vertical silos of sales, marketing, customer service, logistics, manufacturing and procurement, but have not aligned to serve the customer. (The deployment of Customer Relationship Management (CRM), Enterprise Resource Planning (ERP), Advanced Planning (APS), Supplier Relationship (SRM), Warehouse Management (WMS), and Transportation Management (TMS) created efficient silos, but not effective cross-functional flows.)

Efficient silos are a barrier to driving value. As a result, only 10 per cent of manufacturing companies are making progress on a balanced portfolio of metrics including growth, operating margin, inventory turns and Return on Invested Capital. Why? Many business executives have a functional business leader mindset. The use of new technologies to build outside-in, and cross-functional processes requires the redefinition of business processes and architectures. It is more than a project or a single change management initiative. It also requires process innovation. This is difficult because most companies are on a forced march for Information Technology (IT) and process standardization. In this traditional journey, there is no room for process innovation.

Some Background

Last week, I spoke four times. The first was at a S&P 500 company contemplating a digital transformation. The second was at a cognitive computing conference. The third stop was a network design conference, and the fourth presentation was at an industry consortia. At each session, when I finished my speech, I asked for questions. The common question was, “I hear your message. I agree and believe that my organization is stuck in driving improvement and defining a balanced portfolio. How do I educate the executive team on the basics of supply chain and gain leadership support on defining a vision for the future of supply chain?”

This is a great question, but the answer is not simple. My recommendation is to take five steps

1. Force a Discussion on a Balanced Metrics Portfolio Against a Strategy.

Define the mission of the supply chain as a balanced portfolio based on balance sheet and income statement metrics. In the process, avoid supply chain speak. (Throw away your three and four letter acronyms and speak the language of business.)

2. Politely Question the Status Quo. If Only 10 Per Cent of Companies Are Making Progress, Do We Have Best Practices?

I like the quote by Faulkner at the start of this blog. “We cannot swim to new horizons if we hug the shore.” Self-fund process innovation to test new technologies and drive process innovation. This break through thinking happens with small and scrappy teams in the business. (These are groups of diverse people aligned to question the current state and improve an outcome against a business goal.) When you drive break through thinking, market the achievements using language of the balance sheet. By self-funding these initiatives, do not limit the boundaries of the testing by a fixed ROI. Test when you do not know the ROI.

3. Educate

Use network design technologies and discrete event simulation tools to help executives visualize the supply chain as a complex system with finite trade-offs. Through these discussions help them to understand what is possible and feasible.

4. Benchmark and Align the Goals to Business Potential

I often see teams set unrealistic goals. Use our recent Supply Chains to Admire report to understand what is possible by industry and use this to benchmark your current capabilities. Use the data to set realistic goals.

5. Build a Guiding Coalition for Change

In your efforts, of education, sharing and testing, build a guiding coalition for change. As shown in Figure 1, the issues of executive understanding and change management are large gaps when companies with supply chains working well are compared to those that struggle

 

Figure 1. Difference in Capabilities of Companies with Supply Chains Working Well and Those with Room for Improvement

The market is full of consultants today touting easy answers. This is not easy work. Side-step the hype and focus on driving business results. Address the elephant in the room and give him a name. His name is insular thinking. In doing this, help your executive team to swim towards new horizons. Feel free to share your stories with others in the comment section of this blog.

This article was written by Lora Cecere, Founder and CEO of Supply Chain Insights and was orginally published on 21st June 2017 on LinkedIn.

7 Ways IoT Is Already Changing the World

From connected healthcare to retail and water management, the IoT will revolutionise the way we live. It’s already having some pretty major impacts…

Agor2012/Shutterstock.com

This article was written by Gauri Bapat.

The wave of connectivity had extended beyond phones, laptops, and tablets and is permeating into our daily lives. With an explosion of connected devices in the market and a healthy adoption rate, we can safely assume that we are taking confident strides into the ‘connected life’ made possible by the IoT.

A report by Gartner suggests that by the year 2020, the number of connected devices across technologies will touch 2.6 billion. As we move towards an increasingly automated world, this technology will be used to improve the productivity and quality of life and industries alike. The IoT is poised to grow from a technological phenomenon to one with a more global and social impact…and the cogs are already turning in that direction. Things that we once saw only in sci-fi movies and Steven Spielberg specials are a reality today.

Let’s take a look at how the IoT is already changing the world we live in.

Manufacturing

IoT in manufacturing is ushering in the fourth Industrial revolution (Industry 4.0) that aims to make manufacturing smarter. Smart manufacturing involves the use of sensors that are retrofitted on existing manufacturing equipment to improve efficiency and performance. Siemens ‘ PLC manufacturing plant in Amberg, Germany, has implemented the principles of Industry 4.0 and has completely automated the production of their automation systems. Post this implementation, they witnessed a 99.99885 per cent “perfect” production quality rate. Now that’s impressive!

Airlines

The airline industry has seen massive adoption of the IoT in order to increase operational efficiency and drive the age of ‘connected aviation’. Virgin Atlantic has every single component of its Boeing 787 attached to a wireless airplane network. These incredibly connected airplanes use IoT data to evaluate everything right from the airplane’s performance to issue identification.

So, if a Virgin Atlantic jet reveals low-performance mid-flight, this information is related to the ground staff real-time. Thus, when the flight lands, the airport engineers are ready to solve the problem. Other airlines such as KLM, Qantas, Lufthansa, and Delta are also using IoT to improve aircraft performance, discover new business insights, and maintain greater efficiency.

Airports such as Miami airport, London City airport, Helsinki Airport, amongst otherS, use IoT to track passengers, prevent bottlenecks and queues, offer personalised services to the customers, track assets and also deliver location-based services to the travellers.

Water Management

One of the areas where IoT has made a tangible difference is in water management. Proper use and management of water have been a problem that many cities across the globe have been battling. IoT has been put to work in cities such as California and Bangalore in India to not only identify the cause of water shortage but also to identify avenues as to how water management can be optimised. The Bangalore Water Supply and Sewage Board (BWSSB) employed an IoT monitor to manage the complex water distribution system by creating an operational dashboard using IoT. They realised that almost 45 per cent of the water supplied by BWSSB is unaccounted. San Francisco employed smart meters to measure water consumption and notify their customers when their water consumption exceeds the specified limit or if, for example, the water is left running continuously for 24 hours.

Retail

The retail industry has witnessed a huge adoption of IoT. IoT implementation in retail has been done to not only improve the supply chain or to create more engaging and tailored marketing campaigns, but also to make shopping a more interesting experience. Retailer Rebecca Minkoff created the ‘connected store’ using RIFD tags on each piece of clothing and used smart mirrors in the dressing rooms. The customers could try on the product, and also take a look at other looks, available colors and sizes without even leaving the dressing room!

Target has been using beacons across 50 stores to provide personalised offers and present their customers with hyperlocal content to make shopping more exciting for their shoppers. Ralph Lauren’s Polo Tech apparel, which is a smart workout shirt, monitors vital activities of the user on a real-time basis and enables ongoing health monitoring.

Connected Energy

2016 saw us looking towards connected energy solutions to help us save energy. IoT products such as Google Nest, ecobee3 thermostat, the heating system Hive by British Gas have seen huge adoption to track and measure energy consumption. 46 per cent of technology enthusiasts in Germany and 42 per cent in the US already own a connected energy solution and save almost 72 per cent on their monthly utility bills – that amounts to a USD $80 reduction in the monthly bill.

Lighting Control

Moving beyond the smart lights of a connected smart home, smart lighting control can generate huge financial savings by controlling street lights. Mayflower CMS successfully employed IoT to control and monitor an excess of 180,000 street lights, bollards and signs in the UK and Ireland with its largest installation in Hampshire that has over 90,000 nodes. The Hampshire City Council has been able to reduce energy consumption by 21GW/hr per annum which is a reduction of 40 per cent and has successfully reduced carbon emissions by approximately 4000 tons per year.

Connected Healthcare

The global IoT healthcare market is expected to touch USD 160 billion by 2020. The last few years healthcare has witnessed wellness sensors to surgical robots to improve efficiencies and better patient outcomes. Ingestible sensors help measure if patients are taking their pills on time and helps medical practitioners manage their patients remotely. Barton Health, a 62-bed health system in rural Lake Tahoe, California, is one of the first users of the ingestible sensor by Proteus Discover, a Digital Medicine to help patients suffering from diseases of the central nervous center such as schizophrenia and place the patient in the driver’s seat regarding their health management with the help of technology.

“When wireless is perfectly applied, the whole earth will be converted to a huge brain, which in fact it is, all things being particles of a real and rhythmic whole. We shall be able to communicate with one another instantly, irrespective of the distance.”– Nikolai Tesla

This famous statement by Nikolai Tesla predicts the invention of the smartphone at a time when the mere thought of such an advanced device was nothing but unimaginable. Take a closer look at the statement and you can see that Tesla foresaw the impact of the Internet of Things (IoT)… a world that becomes so connected that it becomes one ‘huge brain’.

What Tesla spoke of decades ago, we are experiencing today

Gauri Bapat is Director, Strategic Business at Inteliment. This article was orginially published on LinkedIn.

China’s TIP Demotion: Productive ot Provocative?

2017’s Trafficking in Persons report highlights China as one of the worst global offenders of human trafficking. How does this impact your supply chain decisions? 

Feng Yu/Shutterstock.com

The U.S.  government revealed details of its annual Trafficking in Persons (TIP) report last week. The report is the government’s principal diplomatic tool to engage foreign governments on human trafficking.  Rex W. Tillerson, Secretary of State said this year’s report “highlights the successes achieved and the remaining challenges before us on this important global issue.”

The U.S department of state assigns each country to one of three tiers (Tier 1 being the best and Tier 3, the worst) based on their government’s efforts to acknowledge, combat and prosecute instances of human trafficking. Countries must consistently demonstrate improvement in these areas to maintain the highest ranking and avoid demotion.

Myanmar, for example, was one of the countries to be upgraded to Tier 2, following its efforts to reduce child recruitment for the military.

But the most controversial decision this year was China’s demotion to Tier 3, where it will join the likes of Iran, North Korea, Russia and Venezuela.

“China was downgraded to Tier 3 status in this year’s report in part because it has not taken serious steps to end its own complicity in trafficking, including forced laborers from North Korea that are located in China,” Tillerson said as he presented the report.

The demotion marks the first time that  the Trump administration has publicly criticised Beijing’s human rights record, and it prompted an unsurpringly frosty response from the Chinese, “The government’s determination in fighting human trafficking is unwavering and outcomes are there for all to see,” spokesman Lu Kang said. “China firmly opposes the US’ irresponsible remarks on other countries’ fight against human trafficking, based on its domestic laws.”

How Will This Impact China And Global Supply Chains?

There are a number of things to consider if your global supply chain extends to China or other countries ranked in Tier 3.

  • The U.S may consider imposing sanctions that limit access to US and international aid. Congressman Chris Smith said  “Hopefully, the new tier ranking coupled with robust diplomacy—including the imposition of sanctions authorised under Tier 3—will lead to systemic reforms that will save women and children’s lives and ensure that Chinese exports are not made with slave labor.”  Whilst such sanctions have often been waived in the past, it would come as no surprise if Trump decided to break with tradition. Indeed, given his vocal criticism of Chinese trade, he will be under some pressure to impose consequences.  It has been reported this week that Trump is considering trade actions against Beijing including tariffs on steel imports.
  • Suppliers operating in newly placed tier 3 countries will, appropriately, be under increased preasure to audit their supply chains. If you’re sourcing in China, it’s entirely plausible that you’re complicit in trafficking or forced labour.  With supply chains facing extra scruntiny, it would be prudent for organisations sourcing in China to have accurate information at their fingertips. Make sure you know who you are sourcing from, what’s going on behind the scenes of your product and make detailed lists of every farm, vessel or facility to which you are connected.
  • China’s demotion might prompt organisations to stop sourcing in China altogether. Will  “Made in China” labels deter consumers who want to avoid supporting slave labour and traffcking? Changing suppliers, particularly when it’s to a new country,  is time-consuming and expensive. This will be the greatest concern for procurement and supply chain pros.

You can download the TIP Report in full here

What do you think about China’s demotion in this year’s Trafficking in Persons Report? Productive or provocative? Should President Trump impose sanctions on China? Let us know what you think in the comments below. 

In other procurement news this week….

Will Supermarkets Go Uber On Us?

  • Britain’s major supermarkets are testing ‘peak time’ pricing allowing grocers to raise or cut items based on demand
  • Tesco, Morrisons and Mark & Spencer are running trials of electronic labels which allow them to change prices at the click of a button
  • Retail experts say this could spell the end of fixed prices for consumer goods and services within five years, to be replaced by an Uber-style pricing revolution
  • Morrisons said its trial was in the “early stages” and it had not yet decided whether to roll it out across the country

Read more on International Business Times.

Apple Is Moving Its Supply Chain Towards Green Energy

  • Two years ago, Apple embarked on an ambitious plan to help its biggest suppliers switch to clean power sources. As of early June, the tech giant has managed to get eight partners on board
  • According to the tech giant’s latest update on its progress toward environmental goals, integrated circuit packaging maker Ibiden will be the first partner in Japan to power its Apple-related operations completely with renewable energy
  • Apple’s $1.5 billion green bond issued in February 2016 is still the largest issued by any U.S. technology company

Read more on Green Biz.

AI that can read minds 

  • CMU scientists have been working on is a system that can apparently read complex thoughts based on brain scans, possibly even interpreting complete sentences
  • Using a smart algorithm, the team could discern what was being thought about at any given time — and even the order of a particular sentence
  • After training the algorithm on 239 of the 240 sentences and their corresponding brain scans, the researchers were able to predict the final sentence based only on the brain data

Read more on Digital Trends 

 

B2B Is Dead. B4B Is Born

B2B or B4B? Does it really matter? After all, what’s in a title? Perhaps everything….

BoxerX/Shutterstock.com

Isn’t that a bold idea?

What’s in a title? Maybe everything.

Something that is very personal and possibly deep. A worldview that can shift our thinking and inspires us to do few things totally different.

Nah. How can that be? How is it possible?

How can you change a word, a preposition, ‘to‘ and replace it with ‘for‘ and call it a game changer?

We have seen it all. Haven’t we all been in business far too long to be moved by play of words. A small change from ‘To‘ to ‘For‘ means nothing.

Well, I don’t think so. And I’ll tell you why in a moment.

Let’s dive deep inside and explore the nuances that can help shape the idea.

Defining Business to Business (B2B) 

Business to business, also called B-to-B or B2B, is a type of transaction that exists between businesses, not consumers. This term got popular around the 1998 dot com era when the internet phenomenon was at its peak.

It was an acronym used to communicate how commerce flowed between two business entities. This term became so popular that it prefixed everything that connoted a transaction between two businesses.

B2B procurement, B2B buyer, B2B marketing, B2B sales, B2B market place, B2B e-commerce, B2B market research, B2B Software, B2B Offering and many more.

The idea caught on. It flourished. It also spawned into other variants. Say B2B2C or even B2B2G (where G is Government).

It was going well. Until now.

So why do I think that this terminology should die?

Simple reason. The word ‘to‘ in B2B is no longer relevant. To explore why this is not relevant we will need help of a dictionary.

Here is the English dictionary meaning for the preposition ‘to‘:

expressing motion or direction toward a point, person, place, or thing approached and reached, as opposed to from”.

In line with this meaning, so far businesses have marketed to, sold to, pitched to, offered services and products to and provided support to other businesses.

This was very much needed as businesses needed to take their products, services and support to other business. It metaphorically meant the direction was from left to right. Just like this arrow mark ‘—->’. One was the seller and the other was the buyer.

The word ‘to‘ is so ingrained in our psyche, like the arrow, the stress was more on ‘motion or direction‘. Our entire organisation structures were built to make, sell and service our customers. Along with it came top-down command and control, various functions/departments, centralised structures, and standardised routines.

To‘ was programmed deep in the business model. Resulting in a path dependency.

We are all perfectly ‘ locked in‘ by behaviours that connote – motion and direction from left to right.

Now, let’s use another lens to see the world.

The new world order – Business For Business (B4B) 

Before we explore this new terminology, let’s understand the meaning of the preposition ‘for‘ from English dictionary.

with the object or purpose of “

“suiting the purposes or needs of”

In the digitally connected era, as Nilofer Merchant points out in her book “11 Rules for creating value in the Social Era“, successful businesses like Uber, AirBnB, Tesla, GE Digital, Alibaba, Etsy, KickStarter create value through a different paradigm – networks, collaboration, community, social purpose and openness.

They are businesses built FOR businesses and consumers.

They are businesses built suiting the purpose and needs of their customers. There can be many sellers and buyers across a community.

Quoting General Electric, a 124 year old company, was once a seller of products to customers. Now it is a digital platform company with many buyers and sellers. It has now transitioned to a B4B company.

When you do something FOR somebody you do care for the other business or person. Not just for yourself. The preposition ‘forhumanises the act.

Suddenly you shift from providing ‘action and directionto a business and think about what can you do for another business. You can even ask, ‘Can I exist for my client’s success?“. This right away injects empathy into your business.

Business For Business. B4B. Injects empathy in the language.

In doing so, you will allow yourself to ask fundamental questions that can shift your thinking and behaviours:

  • What should be our business model that allows our customers be successful?
  • How can I structure my organisation for my customer’s success?
  • How can I create products, solutions and services for my clients to be successful?
  • How do I create a Go to Market model for my customers to engage, experience and buy?
  • How do I create experiences for my customer so that I can partner for an extended life time value?

B4B shifts thinking from you to your customer. It brings purpose and empathy in everything you say and do.

Over a period of time it perhaps will bring your business closer to the customer. Isn’t that we all want?

It all starts with one change in preposition – substitute ‘to‘ with ‘for’.

Magendar Rajasekaran is People Success Evangelist at Agility Nexus This article was orginally publishd on LinkedIn.

Surviving The AI Revolution

Will you be a survivor of the AI revolution? You’ll need to be well equipped and prepared for anything…

This article was written by Naveen Joshi.

Artificial Intelligence is speeding the robot revolution and can be responsible for replacing a huge portion of the human workforce with machines, and there’s nothing we can do to stop it, other than preparing for AI revolution.

Artificially intelligent robots are finally set on replacing humans in the labor pool, and due to this, the society can shift dramatically. Until the AI revolution is complete, humans can either try to slow the automation of the workforce or start preparing for AI.

If the popular media are to be believed, AI is coming to steal your job and threaten your life, as we know it. The AI revolution is indeed underway and for ensuring that you are prepared to make it through the times ahead, we’ve listed a few guidelines for you.

Recognising the AI Revolution

The first step for winning every conflict is to understand your target. It is important to acknowledge that the concept of AI is not in the future; it is already here and people are using it on a daily basis. For example, because of the AI technology, Netflix knows what to suggest you watch next, and Google predicts where you are heading when you jump in your car. AI also encompasses disciplines such as machine learning, using which companies are finding patterns in data and learning to predict trends, as well as speech processing, computer vision, and robotics. Moreover, it also encompasses deep learning, which is inspired by the model of the brain. Deep learning systems work by mapping inputs to a set of outputs based on features of the thing being examined.

Identify where AI Thrives

With sufficient knowledge of AI technology, you can now start to understand where AI is optimally positioned to take over. Have a look at your market trends and conditions and take note of tasks that require huge amounts of big data processing. For example, companies are now looking through everyone’s click patterns on Google to figure out what someone wants.

Essentially, AI works best for any task that requires a huge amount of repetitive processing. If this sounds like your job, you might have to start thinking of a survival plan. You can also access websites that evaluate your automation risk, to find out what researchers have calculated for your field.

Devise an Action Plan and Start Preparing for AI

The best strategic action plan is to form a treaty. You should accept that AI will increasingly become a part of our society and look for possibilities to collaborate. There is a huge potential for AI to assist in places where humans are today falling short, precisely because of the processing power. Companies are already using AI for aiding clinicians in medical diagnosis, personalizing customer experiences, and creating agricultural methods that reduce the cost to the environment. AI has the ability to learn very well but it cannot learn flexibly. You can. There are new jobs now available that did not exist a few years ago. If you are allowing AI to do the grit work, this can create an opportunity to embrace the attributes that humans excel at, namely social intelligence and creativity.

As with every big and impacting change, there are fears about new technology like AI. Ultimately, the way you can survive the impacts of an AI revolution is by embracing the partnership. By understanding the potential that AI has to improve the world, you can look around for those opportunities to implement positive change.

Naveen Joshi is Director at Allerin Tech Pvt Ltd. This article was orginally published on LinkedIn. 

9 Signs You’re Undervalued At Work

Feeling undervalued at work? If you can’t remember the last time you got a pay rise , haven’t received any formal training since your role commenced and are consistently working unpaid overtime, you probably are!

lassedesignen/Shutterstock.com

This article was written by Anna O’Dea, Director and Founder of Agency Iceberg. 

We all have a sense of our personal worth in the workplace, and sometimes it can feel as if our valuable experience, strong commitment and innovative ideas are being taken for granted.

At Agency Iceberg, I meet a lot of people facing this situation. They suspect they aren’t being supported by their managers, they’re being underpaid for their knowledge and input, or are being overlooked for well-deserved promotions.

From my experience working for eight years in the recruitment industry, my team and I have found there are nine key signs that suggest you could be being undervalued by your employer. If they sound familiar, it could be time to speak up or move on!

1) The numbers aren’t stacking up

In the current economic climate, pay rises aren’t vast. But if you’re constantly stuck with getting just the minimum cost of living rise, while your peers get bumped up for a similar job, you might not be getting the financial reward that you should be. With the internet, it’s not hard to compare your earnings with what others in the same role are getting. Do the research and you’ll have tangible evidence to back your case.

Another one to watch is bonuses. Did your colleagues get a flash of cash that you missed? If there’s no logical reason why you were skipped over, there could be unfairness at play.

2) Your performance and pay reviews are constantly postponed

If your annual performance and remuneration review keeps getting put off another week, month, or a few months, with lots of excuses from management (and no guarantee of back pay) you’re being taken for a ride. The longer you don’t get a pay rise, the more you’re working at a higher skill for the company’s benefit.

3) You have to ‘act’ in a higher role before you’re promoted

It’s common to get told you need to step up your responsibilities to ‘prove your worth’. But if ‘acting’ in the next role goes on for too long, the advantage can again pass from you gaining experience, to your employer getting excellent skills for less pay.

4) People are promoted around you

If you’ve got the credentials and factual evidence to deserve a promotion, yet continually miss out, they may not be seeing your true worth. More worrying, and harder to fix, could be signs of favouritism, sexism or ageism.

5) You’re not trusted to be autonomous

If you have to run every move by your manager, or aren’t trusted to manage your schedule or clients your own way, your abilities may not be recognised. In extreme situations, you could be being micro-managed, which can be quite destructive to growth.

6) Your input is curtailed

When you show your talent, such as sharing innovative ideas in meetings, or suggesting positive ways to improve processes, and it’s clear they’re not welcome, it’s a concerning sign. In some cases, insecure managers won’t let you shine, which is not only letting you down, but also the business.

7) Overtime is expected, and you aren’t given time in lieu

We’ve all read that clause in contracts that says ‘extra hours may be necessary’. However when overtime is systemic and with no lieu time offered, the business has you in its claws. We see this when people travel for work – enduring overnight flights or early morning trips with no time off.

8) You can’t be sick on sick days

Sick used to mean staying at home and sweating out the bug. However technology has shifted the expectations of many bosses to be on 24-7. If your boss insists you stay online when you should be recovering, or text messages and countless emails on the weekend from your boss doesn’t sound out of place, it’s a sign you’re being overworked.

9) You’re not getting trained for growth

Every good employer should encourage the development of their employees. If your employer isn’t investing in your training or opportunities, you could be in a one-way relationship.

If some of these signs ring true, take time to consider the next phase of your career. Your professional pride, mental health, sense of purpose and financial future are too important.

Anna O’Dea is a recruitment expert, LinkedIn Top Voice 2016 and Founder and Director of Agency Iceberg. This article was originally published on LinkedIn

A Whole (Foods) New World For Amazon

Whole Foods: it’s fresh, it’s organic and it comes with a hefty charge. So where on earth does Amazon fit in? Procurious investigates…

hacohob/Shutterstock.com

Last week, to the public’s surprise and the retail world’s horror, Amazon announced that it was buying organic supermarket chain, Whole Foods. For the meagre (in Amazon terms) sum of U.S.$13.7bn the retailer will take ownership of the United States’ first certified organic grocer.

It’s a bold and unexpected move given that Amazon is well known for its cheap price points, which have traditionally  undermined brick and mortar stores. Whole Foods, by contrast, is a reasonably exclusive and fairly expensive, organic retailer.

Jeff Bezos, Amazon founder and CEO said “Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy,” said Jeff Bezos, Amazon founder and CEO. Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades – they’re doing an amazing job and we want that to continue.”

The annoncement has sparked much discussion and speculation ; What are Amazon’s intentions? How will other supermarkets be impacted? Will Amazon reinvent Whole Food’s supply chain?

John Mackey, Whole Foods Market co-founder and CEO believes “This partnership presents an opportunity to maximize value for Whole Foods Market’s shareholders, while at the same time extending our mission and bringing the highest quality, experience, convenience and innovation to our customers.”

What does this deal mean for other retailers?

Whole Foods is most prevalent in the U.S. with 431 supermarkets. Unsurpsingly, rival retailers were dealt a hefty blow following the announcement.. Walmart’s shares fell 4.7 per cent, Target’s fell 5.1 per cent Costco’s fell 7.2 per cent and Kroger’s  by 9.2 per cent.

The impact was even felt in the UK, despite there being only nine stores as Tesco and Sainsbury’s by some 4-5% on Friday.

Raanan Cohenn, CEO of last-mile delivery software provider Bringg asserts that “Amazon has become a leading player in the grocery industry overnight. It’s crunch time for the industry.”

“In one word, it means pressure” he continues. “Profit margins are traditionally razor-thin for grocery chains and Amazon will have a greater ability to squeeze margins throughout the supply chain even further.

Latest news implies that Walmart could enter into a bidding war; it’s certainly true that the biggest competitors will do their utmost to make this deal as tricky as possible for Amazon. Given that Whole Foods stock is trading significanlty more per share than Amazon’s $42 offer, a counter bid is entirely conceivable.

The Supply Chain challenge for Amazon

“The challenge for online grocers is that freshness and variety are hard to combine — if they sell one type of tomato, their stock will turn over fast and be very fresh. If they offer 20 types, the choice is wider but the tomatoes will sit in warehouses longer. The supply chain for groceries is trickier and costlier than for non-perishables”says , writing for the Financial Times.

It might be the cost-effective reigning champ of online efficiency but fresh, organic produce is a whole new ball game, and not one that Amazon has been good at winning in the past.

Jason Busch and Pierre Mitchell, Spend Matters, speculated that “Acquiring Whole Foods is perhaps proof that Amazon is willing to buy its way into managing adjacent supply chains in which it has struggled or not focused on yet. It also could provide a fascinating localized test-bed for Amazon Go bridging the consumer and B2B divide.”

If, bidding war allowing, the offer is accepted, Amazon is in a favourable postion to redfine the retail market. They’ll be able to sell fresh groceries online and give customers the option to collect  their deliveries from Whole Foods stores, which would  become instant fulfillment centres. Perhaps Amazon’s ultimate aim will be making same day delivery for groceries the norm.

And, as ZDNet pointed out, “Whole Foods’ roughly 30 million (typically affluent) customers are also likely to be Amazon Prime customers already, which further strengthens the connective tissue between the two brands.”

What do you think about Amazon’s purchase of Whole Foods? How will retail supply chains be affected? Let us know in the comments below. 

IBM Announces Blockchain Truck-Tracking

  • A partnership has been announced between IBM and AOS, a Colombian provider of logistics solutions, which finds the two firms developing a new blockchain and Internet of Things (IoT) solution for the logistics business
  • IBM Blockchain and IBM Watson will be able to track the provenance and status of trucks and their goods using RFID tags that contain the vehicles’ data
  • The solution integrates with IBM’s Watson IoT system to check in on factors like weather and temperature, which can impact the journey and the estimated delivery time

Read more on Coin Desk 

AI to spot Slavery Site From Satellite Images

  • Online volunteers are helping to track slavery from space. A new crowdsourcing project aims to identify South Asian brick kilns – frequently the site of forced labour – in satellite images
  • Nearly 70 per cent of the estimated 5 million brick kiln workers in South Asia are thought to be working there under force, often to pay off debts
  • So far, over 9000 potential slavery sites have been identified by volunteers taking part in the project. The volunteers are presented with a series of satellite images taken from Google Earth and they have to click on the parts of images that contain brick kilns

Read more on New Scientist

Norway Bans Palm Oil Procurement

  • The Norwegian Parliament has voted to introduce a ban on the procurement of palm oil and palm oil products for use as biofuels
  • Rainforest Coalition Norway, which had been lobbying for the ban, welcomed the move. It said: “Palm oil-based biofuel is a bad choice for the climate and drives rainforest destruction”
  • The organisation believes this is the first time a country has banned all use of palm oil biofuel by public bodies

Read more on Supply Management

The Impact Of Blockchain On Procurement

Blockchain won’t wait for you to be ready for it, which means it’s time to brush up on your knowledge and understanding right here, right now! 

Vadim Sadovski/Shutterstock.com

Blockchain technology will not only impact procurement and procurement professionals but is expected to be more pervasive in our business and personal lives than the internet itself. To put the enormity of impact on procurement and procurement professionals in perspective picture yourself twenty years ago trying to explain how the Internet is going to change things. Where would you even begin?

Like the Internet the Blockchain is a network. In the case of Blockchain comprised of decentralized “ ledgers”, many are referring to it as Internet 2 or more commonly the Internet of Value or Internet of Trust.

The benefits

The most important thing to understand is that Blockchain addresses many of the most critical problems we’ve encountered doing business on the internet.

1)  Security: Practically speaking the Blockchain is unhackable.

2)  Transactions are verified by network participants (consensus), eliminating the need for third-party intermediaries’ (banks) costly, time-consuming and predominantly manual settlement processes. In addition to slowing down our supply chains banks alone have estimated these processes are costing them more than $20 billion annually.

3)  Eliminating high transaction processing costs for high volume/low margin retailers who accept credit cards could significantly add to their bottom line.

4)  Once transactions are verified they are secure and immutable. (unchangeable)

5)  The immutability of the Blockchain means that supply chain provenance can be assured. This is particularly important for conflict minerals, pharmaceuticals, food and many other supply categories where provable chain of custody is critical.

6)  Payments can be made directly from buying entity to selling entity “ledgers” by-passing intermediaries (banks, brokerage, clearing houses, title companies, etc.)

7)  Payments can be automatically triggered based on the codified terms of “ Smart Contracts” stored in transaction blocks.

8)  Blockchain capabilities will change, if not eliminate the role of accounts payable and accounts receivable departments.

9)  Blockchain enables the concept of micro-units and micro-payments. It is estimated that approximately one -third of the world’s economic opportunity exists for products and services such as energy or digital rights where backend settlement costs currently constrain those markets.

10) It is also estimated that 25 per cent of the global population does not participate in the global economy because they have no bank accounts and/or credit cards. Without these tools they cannot participate in the Internet economy. The primary reason they do not have these economic tools is because they cannot prove their identities. Immutability of the Blockchain can enable these people.

What do I need to understand?

The capabilities I’ve outlined just scratch the surface on how Blockchain impact all of us. Aside from the aforementioned, as a procurement professional are several important things to understand.

1)  Blockchain is a much wider and more pervasive concept than Advanced Cognitive Systems, Big Data, Predictive Analytics, Robotics, 3-D Printing or even the Internet of Things. In fact these technologies will become infinitely more practical and secure because of Blockchain.

2)  Do not think of Blockchain and BitCoin, FinTech or Crypto Currencies as synonymous. They are not.

3)  Do not think that it will take 20 years to mature and be mainstream. The estimate is 5-7 years for full maturity.

4)  Do not assess progress by the US/Euro FinTech Community. While they were the first to recognise Blockchain’s inherent value and arguably have the most to gain by adopting it, they also have the biggest hurdles to overcome and could very well be last to cross the finish line.

5)  Don’t make the mistake of waiting to become knowledgeable about Blockchain; it is the most highly disruptive technology we’ve seen since the Internet and it won’t wait until you are ready for it.

Michael Shaw is CPO and Executive Board Member of Sourcing and Procurement Executives (ACSPE) and Chief Information Officer at Blockchain Executive.  This article was originally published on LinkedIn.

The Five Myths Of Workplace Underrepresentation, Busted!

Too scared to talk about workplace diversity and inclusion? Dominic Price will happily go first as he debunks the 5 most common myths about underrepresentation.

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As a 6-foot-4-inch straight white guy in tech, it might seem unusual that I’m writing about diversity and inclusion. The reason is,more of us need to: write about it, talk about it, and, especially, do something about it.

Just looking at the nightly news in recent weeks, or a new report that underscores the gaps between how tech workers view diversity within their companies and the realities of the situation, it’s apparent how crucial it is to speak out on issues of equality. Speaking up can feel uncomfortable (and heck, by writing this I know I’m making myself a target for criticism), but it’s no longer an option for those of us in groups who hold the most power to stay silent.

My colleagues rightly point out that as a white guy, I’ve got quite a bit of privilege in my industry, and there’s lots of good use for it. So, here’s my boldest attempt yet to make my privilege work for everyone. Specifically, I want to clear up some major misconceptions I hear from others, and predominantly from people who look like me.

Our position of privilege means we are the most removed from the hardships others face and we need to proactively reject the myths we hear.

Myth #1: “Why should we give women and minorities a leg up? Isn’t that unfairly prioritising one group over another?”

Standard words from a fish that doesn’t know it’s in water. It’s much easier to blame others’ misfortunes on lack of intelligence or hard work than on a lack of equal opportunities. This is a protectionist strategy by the strong and wealthy to reduce the power and potential of the perceived weak. For all of the talk about being “data-driven,” many seem to believe that everyone has an equal chance to be in the workplace, despite loads of evidence to the contrary. While it would be nice to think we are all treated equally, simply being a minority can mean being treated differently by others and having fewer social and economic opportunities.

Our position of privilege means we are the most removed from the hardships others in our industry face and need to proactively reject the myths we hear.

Advocating for increased diversity in our industry doesn’t mean people from marginalised groups want an unfair advantage or hand-outs. They just want the same opportunities that others have had.

Myth #2: “You have to be a minority to be involved in diversity & inclusion (D&I).”

A wonderful way to pass the buck. The prevalence of underrepresented minorities talking about a lack of opportunities is because they feel the pain every day and are intrinsically more motivated to make it right. Just because we’re not personally guilty of creating the unequal playing field does not mean we’re not personally responsible for helping to fixing it. When your child spills milk, do you say “not my mess”? Our predecessors helped tilt the playing field, and now it’s our turn to level it out. The sooner we realise we contributed to this problem, (even if only passively through lack of action) the quicker we move from rhetoric to making a difference.

Just because we’re not personally guilty of creating the unequal playing field does not mean we’re not personally responsible for helping to fixing it.

There are plenty of ways to get involved: From merely drawing attention to biased behaviours you see, to getting involved in your company’s existing diversity efforts, or starting your own.

Myth #3: “We just don’t have a diverse applicant pool.”

Ah, yes. A favourite of many, especially in Silicon Valley where recruiting is particularly tough — for example by 2020, there will be nearly 1.5 million unfilled computer science roles. But have you asked yourself why you don’t have a diverse pool? Are you hiring your grads from the same tiny set of schools with very homogeneous student populations? Have you searched for underrepresented candidates, or created programs to bring more into the fold? What have you changed to attract and support them? While the talent pipeline is a common excuse, in truth discrimination,  implicit and explicit, constantly blocks underrepresented minorities from entering or advancing in the field; two-thirds of predominantly white and Asian women in STEM report having to constantly prove themselves in the workplace, with black women facing even more extreme biases and challenges.

It’s also worth examining your recruiting tactics to see if you’re doing anything that could be discouraging underrepresented candidates. From gendered language in job descriptions to playing up the office pool table versus paid parental leave on your careers page, you can inadvertently send the wrong message without realising it.

Myth #4: “This is political correctness gone mad.”

Political correctness is a real thing, but it’s also irrelevant to what we’re discussing here. Can efforts to promote diversity be merely political correctness when there’s a mountain of evidence pointing to it being a real problem? Many studies also show diversity has huge benefits when it comes to business and team performance, so it’s something we should all care about.

It’s true that diversity conversations can be very nuanced, which creates fear about saying the wrong thing. But there is a pretty simple fix, which is to ask questions. Listen to and believe the stories from people from backgrounds different from yours. Educate yourself. In the same way you’d tackle a new project or product feature, gather as much information as possible so you can make better, more informed decisions. This isn’t about stifling your voice, but creating room for everyone to express themselves in a way that helps us all do our best work.

Myth #5. “I don’t see gender or race” or “I treat everyone the same.”

This is straight up empirically false. Your brain sees gender, it sees race and it sees just about every other visible category imaginable, whether you consciously pay attention to it or not. Let me say it again: It is neuroscientifically impossible for you to not see attributes like race and gender, and to keep them from affecting your decision-making. I used to think treating everyone the same was what I should strive for, but it turns out that doing so actually results in discrimination and unequal opportunity. Treating everyone the same, even when they’ve faced vastly different challenges, only serves to keep them on a tilted playing field.

Embracing and supporting diversity is something we’re all responsible for and something that, by definition, we are all a part of (a single person can’t be diverse, so diversity includes white guys like me). To move forward, we need to take the crazy myths we’ve told ourselves that attempt to justify the status quo and throw them out the door. Guys like me have benefited from this mess of inequality more than any other group, so it’s our job to actively share opportunities. We’ll all win, as a team.

With what’s happening in the world, it’s important to keep an open heart and an open mind. The choice is yours. You can either become an active part of the solution or a stoic part of the issue in need of solving. Which one sounds more exciting?

Dominic West is Head of R&D and Work Futurist at Atlassin. This article was originally published on Collective Hub

Is P2P Keeping Us Stuck In The Mud?

Still debating maverick spend in your organisation, griping about tail spend or struggling to implement the right systems? Perhaps P2P is holding you back!

This article was written by Eva Milko. 

Is it me or has not much changed in the world of Purchase-to-Pay (P2P)? Twenty-five years have come and gone and yet we continue to discuss maverick spend, we gripe about tail spend and struggle with the right systems and the right processes to enable the simplest of transactions a company has in its portfolio: buying stuff.

In the meantime, those who realised that their value sits in higher areas of supply chain opportunity are doing wonders to automate, digitiSe, codify and outsource P2P work to those who have become transactional experts. Entrusting a part of your procurement house to others is not an easy task, many failing in the process, but I argue that it is somewhat necessary when the world is getting more complex, challenges more broad and opportunities often surpass the risks.

The CPO seat belongs to the one who carefully coordinates all aspects of the source to pay process with a keen eye on what can be standardised, outsourced, digitised, robotised and automated, balancing that with strategic decision making on where to place their precious human resources.

P2P buying systems remain a mystery. They are the most disliked, worked-around and challenged factor by employees in almost any company.  Our research found that only 36 per cent of stakeholders find procurement systems favourable and comfortable enough to engage with.  Our internal stakeholders are screaming “make it easy for us” and yet we continue to throw them into the bowels of twenty process steps, multiple buying channels and layers of authorisations. That’s not to mention lost time and corporate energy.

Procurement Prime

Molson Coors Procurement Office recently hosted an Executive Roundtable on this very subject and we challenged ourselves to envision a world of guided buying where the stakeholder is not exposed to procurement rigmarole but interacts with an intuitive and interactive set of buying steps. We called it Procurement Prime, taking our inspiration from the most admired ordering system in the world; Amazon Prime.

Many procurement executives and their friends in finance will say to me “but wait, we need to mitigate and monitor supplier risk” …..True, and it  is possible with a set of algorithms and predictive tools embedded into your P2P ordering process, alerting the requisitioner at the time of purchase of the supplier’s health status, including fulfillment capabilities, shipping disruptions, banking and payment alerts, further yet, providing alternative solutions.

If you can imagine it, you can plan it. If you can plan it, you can get it done.   Paying attention to how your corporate buyers embrace the P2P steps (or not), diving into their buying methods, listening and empathising will go a long way. Interestingly enough, we found that Procurement functions aligned to the Chief Supply Chain officer have much greater alignment in their organisations than those who report to the CFO. Is is time to change alliances?  Not so fast! Here are a few enablers to make such transformations possible.

Changing your functional and corporate mindset

Let’s start by recognising that your procurement value does not reside in chasing requisitions around the office and beating internal stakeholders into procurement policy submission.  Successful companies are taking a much more customer-centric approach, focusing on relieving the organisation of procurement jargon and building sophisticated systemised methods, especially for more repetitive buying.  Think Guided Buying and think Procurement Prime! This is your future and #tomorrowstartsnow

Changing your skill set

This is pivotal to opening up these conversations and imagining the possibilities.  In procurement, we do not hire enough creative people who are empowered to challenge the status quo and bring forth cool solutions.  We need more inventors, technology savvy, stakeholder centric entrepreneurs who are bold, persuasive and get things done! Yes – these transformations take money, take energy and take skilled resources to get it done, but thinking long term possibilities versus short term barriers will unshackle the organisation from procurement processes horrors and free up resources to address much more interesting issues.

Changing your focus

In our recent study, we found that 84 per cent of procurement organisations remain firmly rooted in functional effectiveness and cross functional collaboration buckets. What goes with that are correlating trends of declining year on year cost savings, the most admired and used procurement metric on the planet.  Enhanced value, total shareholder return, enhanced recognition, awesome jobs and great pay will not come from these areas.

Getting rid of the important but non-essential procurement work and entrusting it to someone much more capable is part of the transformational focus that all CPOs need to consider embracing.  Successful partnerships are built on a shared long term vision, shared values and a solid long term plan.

In our research, we found that that introducing robust supplier collaboration, supplier enabled innovation and total value chain coordination is where procurement can truly make a difference for the organisation.  Some organisations have made the leap but many struggle to make ends meet.

My prediction for these organisations is bold:  transform or die – become de-prioritised, outsourced or automated. #tomorrowstartsnow

This article, by Eva Milko, was originally published on LinkedIn. Eva is Managing Director at Procurement Leaders.