What do these thought leaders think about covid-19 when we asked them recently at Big Ideas Summit London 2020?
As of yesterday, the number of coronavirus cases topped 500,000 worldwide – doubling in just over a week.
While we can all do our part to stop the virus spreading, there is an added pressure on procurement & supply chain professionals with the business world on our shoulders.
So, we seized the opportunity recently at our Big Ideas Summit London to ask some of our favourite thought leaders what we can do when it comes to coronavirus.
This is what Group Procurement Director at Just Eat, John Butcher had to say when we asked him ‘What’s been your #1 risk with the coronavirus and how are you mitigating it?’…
Procurement Digital Transformation Lead at Diageo, Amit Sheth had a slightly different response when asked the same question…
Strategic Supply Chain Risk Expert and Professor of Supply Chain Management, Omera Khan had this brilliant bit of advice when we asked her ‘How can companies manage supply chain risk in times of crisis?’…
We’re living in extremely uncertain business and economic times at the moment with many sources indicating that a deep global recession is coming. So, what should procurement be most worried about? This is what Rachel Stretch, Consultant at John Lewis & Partners suggests…
Pressure is something that procurement & supply chain professionals everywhere would be feeling right now. So, last, but certainly not least, we asked legendary Rugby coach, Sir Clive Woodward ‘How do you work under pressure?’
Want to stay ahead of the curve with all things coronavirus and supply chain? Join our exclusive Supply Chain Crisis: Covid-19 group. We’ve gathered together the world’s foremost experts on all things supply chain, risk, business and people, and we’ll be presenting their insights and daily industry-relevant news via the group. You’ll also have the support of thousands of your procurement peers, world-wide.
Companies today are facing a rising tide of regulations and an
increased awareness among consumers around the sustainability of the goods they
buy. With an average of 65% of a company’s added value being generated by its
suppliers, consumers and regulators today hold companies responsible not only
for their own practices, but also for those of their suppliers. To meet the
demands of regulators and consumers, procurement chiefs must be prepared for a
drastic increase in transparency regarding the sustainability of their
suppliers – a tricky task that can only be mastered with the help of modern
An increasing number of regulations require companies to monitor
and even report on the sustainability practices of their suppliers. Adding to
existing standards such as the US Foreign Corrupt Practices Act and the Ten
Principles of the UN Global Compact, many new laws have been passed in recent
years. This includes the EU CSR Reporting Duty that came into effect in 2017,
the French Duty of Care Act (2017), the UK Modern Slavery Act (2015), the UK
Bribery Act (2010) and various regulations around things such as the sourcing
of conflict minerals.
Increasing consumer awareness
Consumers today are well-informed and increasingly aware of
sustainability aspects. This reflects strongly in their buying behavior,
creating a demand for products that come from ethically-sound value chains.
With the increased transparency enabled by social media, companies often come
under scrutiny if they turn a blind eye to unethical practices in their supply
For instance, when a spate of suicides among workers at Foxconn
plants occurred, there was pressure on Apple, one of its customers, to take
action over the working conditions at those plants. The textile industry was
similarly affected when more than 1,000 workers died in the 2013 Rana Plaza
accident in Bangladesh. For companies to stay competitive and meet consumer
demands, procurement needs full visibility so it can identify and react swiftly
to such issues.
Sustainable investing on the rise
Investors are increasingly integrating sustainability aspects into
their investment strategy. Over $30 trillion of assets are now being invested
according to the premise that environmental, social, and governance (ESG)
factors can materially affect a company’s performance and market value. And
after Larry Finks 2020 letter to CEOs we can
all be certain that this trend is here to stay.
With trust, revenue and funds at stake, sustainability will become
the key for businesses to maintaining their license to operate. For companies to
succeed at this, they must leverage the unique position of procurement to
foster their sustainability agenda. Ensuring sustainability in the supply chain
is not only a mandatory legal requirement, but an opportunity to transform
procurement into a value-adding function.
Making a smart bet on tech
However, monitoring the sustainability of thousands of suppliers
is a complex and difficult task. Traditional methods, such as supplier audits,
are resource-heavy. Many companies therefore focus on just a few strategically
important suppliers. Medium-sized and smaller companies often shy away from the
effort completely, which leaves them dangerously exposed to undetected risks
lurking in the supply chain. Advanced technology can pick up the slack here and
help CPOs gain greater insight into their supply chains. A standardised,
scalable approach is necessary: one that can be applied to 100% of a company’s
suppliers, not just the strategic ones. With this technology in place,
procurement functions can then determine where risk lies and use their
resources effectively to investigate further and take action.
Big new ideas don’t always meet with universal approval – but sometimes the most controversial ideas are the most useful.
Last week Procurious had the pleasure of spending the day dreaming big with some of the brightest minds and expert thinkers from inside and outside our profession.
Yes, it was the time of year for Big Ideas London – and what a day it was!
Our speakers delivered keynotes across a huge range of topics, from social media and procurement technology to smart pills and why winning at IT tended to make you the winner in the long run. Each session brought its own insights into the current and future state of the procurement profession – providing, as ever, tangible ideas for our audience of senior procurement professionals to take back to their organisations.
Bu there wasn’t always agreement. Discussion abounded, both inside the room and outside on social media, as to what procurement needs to do to evolve and what the next 10 years will look like.
Some ideas proved far more controversial than others. But every single one was useful for the audience.
We’ve picked out 5 of the most controversial, but still useful, ideas from the day.
And you know we’ve had some great discussions when the use of smart pills to ‘hack’ your brain isn’t one of the most controversial concepts from the day!
1. If you’re going to be boring on social media, you might as well not bother!
Social media is disrupting everything it touches. And social selling lies at the very heart of the business model. This doesn’t mean everyone is selling a product, but social media platforms can be vital tools for procurement when it comes to finding what they are looking for.
According to Tim Hughes, CEO and Co-Founder at DLA Ignite, 92 per cent of B2B buyers start their search online. And by using social media 78 per cent of salespeople are outselling their peers.
But the idea on which Tim focused was how people are perceived on social media when they appear in searches.
Social selling products is one thing. But social selling can also mean promoting yourself on social media as a professional, an expert thinker, an influencer – or even the next manager young professionals want to work with.
For too many professionals and experts, the perception of them on social media isn’t good. You’ll find profiles lacking key information and not providing any evidence to back up claims of experience and knowledge. And, for many, profiles that are downright boring!
Tim’s view is that if your profile is boring then it’s not even worth your time getting involved. Tim used the example of two global experts in a niche market – one with a wealth of information across all of his profiles and the other with barely their name on the page.
Who, as a user, are you going to approach for advice? Even if the person with no information is the global expert, you’re going to look elsewhere.
Social media is absolutely the way to go, but you need to commit to it and share all the right information in order to make an impact.
2. Technology solutions providers have failed procurement
Eighty-one per cent of firms who have invested in technology solutions for risk management aren’t satisfied with the results. What are we all doing and why would we accept this, asked Justin Sadler-Smith, General Manager at Basware.
But Justin wasn’t finished there. In what was a bold and controversial statement from the general manager of a major player in the technology solutions market, he argued that technology solutions providers have failed procurement. Failed in their software, failed in their support, failed to provide what was required beyond a one-size-fits-all approach.
But, according to Justin, this failure was a two-way street. Procurement teams had to share a measure of the blame because they had accepted these solutions (with a shrug) as ‘good enough’.
This led to a great opportunity for our first keynote hashtag of the day (#goodenoughisnolongergoodenough) and a healthy discussion on exactly what the profession needed to be doing in the future.
3. It’s time to rethink the Triple Bottom Line
You’ve heard of product recalls – Toyota; Samsung; Pfizer; Mattel – but how about recalling an idea? It might sound strange but that’s exactly what John Elkington, the founder of the concept of the Triple Bottom Line (TBL), has done.
The thinking behind the recall was outlined by Professor Omera Khan, a strategic supply chain risk expert and champion for sustainability in business. The concept of the TBL is still sound, according to Omera. But as sustainability becomes even more critical the TBL needs to be stronger to challenge existing concepts and really make supply chains sustainable.
Supply chains need exponential or fundamental, rather than incremental, change – and to stop marching to the drumbeat of old ideas and concepts. Omera talked about creating regenerative supply webs that will help prepare procurement for the future and the ‘green swans’ that are inevitably heading our way.
4. CPO to CVO
If there was one idea that lit the blue touchpaper in the room and on social media, it was this controversial suggestion by Diego De La Garza, Director, and Philippe de Grossouvre, Business Development Director, both at Corcentric.
The duo discussed what the procurement profession was going to look like in 20, 30, 40 and 50 years’ time. Even with this long-term view, Diego and Philippe emphasised the importance of procurement understanding where it came from in order to better understand its future.
It was the idea that procurement will become recognised as a part of finance in the future that really got discussion going. The movement from CPO to CVO (Chief Value Officer) would give a wider-ranging strategic role, but could it also take procurement thinking back 20 years to when this idea was first espoused?
The audience was split on whether this was the correct approach. Does procurement need to go backwards to go forwards? You decide.
5. RIP the RFP?
The final controversial idea was one that had the most experienced professionals in the room recoiling in horror. OK, not really, but it was a theme that was brought up time and again over the rest of that day.
Once again we return to Justin Sadler-Smith’s keynote and the idea that procurement is too wedded to traditional concepts to really evolve.
The biggest cause of this was the continuing use of RFP/RFQ/RFx in sourcing activities. Justin argued that in a world of big data that can be analysed almost instantly by technology and AI, why would businesses continue to use valuable time and resources on an RFP?
Could the same answer not be found from stored supplier data, compared and reviewed as required?
Or could there be a balance? Rather than taking RFP/RFQ/RFx away altogether, organisations should be looking to use them in the appropriate settings.
Think tenders for multiple millions or billions of pounds/dollars. Or follow Chris Fielden at Innocent, for whom going to market can help provide genuinely innovative solutions to problems that raw data analytics just couldn’t provide.
Whether you’re a traditionalist or a futurist, this debate is not going away any time soon.
Dream big – like a champion
So there you have it. We dreamed big and created some great, new, big ideas for you to take away to think about and discuss in your organisation. You may not agree with all of the ideas and you might not agree with our list, either.
But the important thing, as our final speaker Sir Clive Woodward, England’s 2003 Rugby World Cup-winning head coach, noted: ‘Do not underestimate where new ideas can come from, so always keep yourself open. Practice “Relentless Learning” and you too can develop the DNA of a champion.’
Whether or not your business is prioritising sustainability right now, there’s no doubt that it will be the focus for many of us in 2020 and beyond.
As we all well know, executing on sustainability can be challenging. Is it even possible to have full supply chain transparency? How do we manage the requirement to be sustainable against risk and cost savings? Almost all sustainability initiatives, while well-intentioned, can be fraught with complexity.
While this may be the case for many of us, one person who believes that sustainability isn’t as complex as it seems is Chris Fielden, Group Supply Chain Director for Innocent Drinks. Innocent Drinks is a revolutionary health drinks company that gives an incredible 10% of their profits to charity. Beyond this, Innocent focuses on sustainability throughout every part of their supply chain, from creating a plastic bottle that’s made from 100% renewable material to developing a carbon neutral factory.
Prior to his keynote at Procurious’ Big Ideas Summit, we sat down with
Chris to see how he helps drive such incredible sustainability achievements at
Live your values – and incorporate them into your
Have you ever looked at a corporate values chart
and thought to yourself, ‘those don’t really seem to matter here?’ Many of us
feel the tension between aspirational values and lived values, but one of the
reasons Chris thinks that Innocent is so successful in sustainability is
because they don’t do this.
Chris believes that sustainability can’t simply be
a ‘tick box’ but it needs to be front and centre of a business’s genuine value
set if they want to achieve it. On this, Chris says:
‘Innocent drinks is a values-led business,
absolutely. We believe in [and live by] sustainable capitalism. We hire people
against those values.’
‘Often the right way [to do things] might not be the easy way, but we do things the right way anyway because we truly live our values.’
Even beyond this, Chris says that sustainability
needs to be incorporated throughout an organisation’s entire business
‘Here at Innocent, we’ve incorporated sustainability
into our entire business model through becoming a B-Corp.’
Give your people freedom
Sustainability is often about pushing boundaries
and doing things that haven’t been done before. So, in order to achieve that,
Chris thinks you need to give your people creative freedom – and this is
exactly what’s happened at Innocent.
‘[The carbon-neutral factory idea] came about
primarily because we told our people not to accept no. We told them “don’t accept
it when someone says it can’t be done.” In all aspects, we try not to constrain
Not limiting people also applies to the suppliers
you work with, says Chris. In fact, when you don’t give suppliers limitations,
you can sometimes achieve things you never would have imagined. When planning
Innocent’s carbon-neutral factory, Chris gave his suppliers an unusual
challenge – which yielded an unusual (yet highly beneficial) result:
‘With the carbon-neutral factory, we said to the contractors
we employed – just geek out and tell us what you would do if you had unlimited
funds and no restrictions.’
‘Doing so meant that it actually turned out cheaper
than we budgeted and the solution is ever better!’
Giving their people and suppliers freedom has meant
that Innocent’s new carbon-neutral factory, to open in Rotterdam in 2021, is truly one of
a kind. Costing over $250 million, it will incorporate
initiatives such renewable energy, sustainable water use, and resource-based
waste management. Its Rotterdam location will also mean considerable C02 is
saved, as the drinks are produced close to where ingredients arrive, saving
trucks over 13,000 trips a year.
Not being afraid to fail
Despite Innocent Drinks being a relatively large
company (it recently surpassed £10 million in donations alone), everyone works
hard to cultivate an entrepreneurial spirit, says Chris. And a big part of this
is not being afraid to fail.
‘Failure is a big part of what we do. We only have
to be 70% sure of what we’re doing. And failure has led us to where we are –
we’ve doubled in size because we’re not afraid to fail.’
This can sometimes be hard to stomach as a
procurement professional, Chris thinks, as we’re trained to mitigate risks. But
Chris insists that Innocent still do this:
‘We do have risk registers so it’s not as if we’re
Where to from here?
With Innocent being at the forefront of all things
sustainability, it’s hard to imagine what Chris might still want to achieve.
But there’s always more, says Chris, and ultimately, he’d like to see more
businesses taking an active role in helping the environment:
‘I would love to see more businesses doing more –
but we can’t wait for politicians to mandate this. The impetus needs to come
Ultimately, Chris has an important message for all
procurement professionals out there:
‘If you put sustainability at the heart of your
agenda, then know this: you can make a difference very quickly.’
What are you doing to drive the sustainability
agenda at your business? Let us know below.
Want to learn more about exactly how Chris is
driving the sustainability agenda at Innocent, and how you can do the same?
Chris is speaking at the 2020 Procurious Big Ideas Summit on March 11, and you
can hear all of his insights through becoming a Digital Delegate. Grab your free pass
And if that isn’t enough to entice you to watch along, we’ll leave the final words to those from some past events.
Big Ideas Sydney 2018 – Live from the sidelines
Question: What does it take to be an influencer in an organisation?
Big Ideas Chicago 2019
Question: What’s the most exciting social or environmental change you’ve been able to drive in your career?
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It might have started with dollars and cents, but what should procurement really be saving now? It’s time to shift the dial.
For years, procurement was stuck in the old ways of doing business. It was the role of the profession to beat down suppliers and the only consideration was cost, but the proponents of this methodology are fast becoming extinct as procurement undergoes a new evolution. While savings will always be an important element in what we do, the important question we now need to address is: what are really trying to save?
I’ve previously spoken about how strategic sourcing in procurement can help us to change the world, but it’s easy to believe that issues like modern slavery and environmental pollution are still beyond our reach. They’re buzz words or problems too big to solve, they’re issues that are unlikely to find a solution within a single career.
But that’s not true. Every day we’re seeing political mandates, new regulations and social pressures that are driving change at an unprecedented pace. However, the window for change to actually solve environmental issues is closing just as fast – meaning we can’t sit back and focus on cost alone if we’re really committed to making change.
Saving vs the Social Good
When we talk about optimising our supply chains, there will never be a time where cost doesn’t form part of the conversation. Even if you’re not solely focussed on cost-cutting measures, there needs to be the ability to invest in solutions that will drive positive outcomes in the years that follow – and that can’t come without the budget to back it up.
In fact, when we look at how much money we’re able to save through strategic sourcing for large multi-million dollar companies, compared with how much their net value can fluctuate on the stock market from day to day, the savings are actually negligible.
What we’re really able to do when
we’re effectively reducing costs within our supply chain is reinvest that money
back into the organisation. This macro-level approach to cost-saving lets you
support the needs, beliefs or even employees of your company to help bring
about changes that will actually have an impact. Whether you’re looking for
widespread industry reform or to bolster your own company initiatives, cost
will always join the conversation.
Saving and the Successful Supply Chain
At Source One, a Corcentric company, we counsel our customers to constantly be improving and optimising the way their companies develop relationship with suppliers. To get the best results and a positive, long-lasting supplier relationship, there needs to be an element of a partnership between procurement professionals and their supply chain.
Good supplier relationships help to create value for both sides of the agreement – whether it’s a new product, process or an improvement that can make everything more efficient. The key piece of supplier and vendor management that is often overlooked is the ability to be creative and innovative to help challenge the status quo.
We’ve seen that by following and developing procurement best practice, and encouraging our suppliers to think about the problem we’re trying to solve together, we can enable these things to have a bigger impact in a tangible and evident way.
What changes the way a company acts?
Not all companies are started with a social responsibility guidebook in place. The organisational stance on environmental, social or political issues usually develops with time and as such, there is rarely a budget set aside for supporting global issues. New regulations or social pressure can both have an impact on the way a company acts.
Its reaction to these pressures is either going to change the way the company is perceived – in market share or reputation – or it will change how the company will need to do business going forward.
For example, a new worldwide mandate will come into effect on 1 January 2020, where all ships and vessels operating anywhere in the world will be required to use fuel with a sulphur content of less than 0.5 per cent, compared with the current regulation of 3.5 per cent.
While those operating in the shipping industry can change to a cleaner type of fuel, they’ll now find these are more expensive due to increased worldwide demand, likewise they could utilise ‘scrubbers’ to essentially clean their current fuel source, but this will come with its own ongoing investment.
Those who don’t comply with these new regulations will face hefty fines – so no matter which solution each company implements we’re looking at $30 billion dollars worth of investment across the industry.
What We’re Really Saving
This type of regulation will fundamentally change how that company does business as they’ll now have to factor in the increased cost of fuel to operate once it comes into effect. This also presents an opportunity for procurement to support the ability for shipping companies to comply, which will present its own positive solutions to environmental issues, while also absorbing some of the cost or finding other ways to mitigate, diversity or reduce their exposure and help lead the way to a more sustainable future.
Procurement really can make a difference, but these outcomes are best achieved when they’re working with and are supported by our cost saving measures rather than being seen as the antithesis to an optimised supply chain. Sure, you can have one without the other, but by reinvesting in the future of the world around us we’ll find the best way forward.
The best insights in the world are no good if nobody acts on them. Time for procurement to follow through with some great, Big Ideas.
Last week, I had the pleasure of hosting a room full of some of the top procurement professionals in the country. This wasn’t just any old networking event though, it was the Chicago Big Ideas Summit. Not only were we inundated with interesting speakers and lively discussions that inspired us to keep pushing the boundaries of what procurement can do, but we were able to make new connections and let our hair down with our peers.
While we expected to be challenged and excited by the ideas shared, nothing could have prepared us for how much fun the day turned out to be.
As procurement professionals, we have an important role in driving change in the world around us – both locally and globally – and these changes are about so much more than saving money.
While I have enough notes from the day to fill a book, here are three of my biggest takeaways from the Chicago Big Ideas Summit:
Procurement must become the knowledge centre of an organisation
reach of procurement growing every year, defining where it sits within an organisation
can be a challenge. Strong cases can be made for both operations and finance,
but as risk management rises as a crucial pillar for the profession,
procurement is increasingly becoming known as the knowledge centre of an organisation.
As Justin Crump, CEO of Sibylline said, “The best insight in the world is no
good, if nobody acts on it.”
With unique insight into potential and emerging threats including environmental, political and social issues, it’s the procurement professional’s responsibility to not only understand how to navigate these risks, but to share them with the rest of their organisation to ensure swift action can be taken.
Pat McCarthy, SVP & GM for SAP Ariba and SAP Fieldglass, agreed that harnessing this information network is crucial to the future of procurement. “Information and insights light the way for procurement to add value.”
With oversight of risk, slavery and cost to data and solutions, we need to be able to share and integrate this knowledge into our organisations to truly demonstrate the value of effective procurement.
How do we invest in the future of procurement?
The war for talent is underway and with many coming to the profession through alternative channels, we need to be constantly thinking about how we can attract and retain the right type of talent. As Professor Moran Cerf told us, “We might be the last versions of humans that will train the brain to think differently due to technology.”
That means that not only do we need to ensure we’re hiring people who understand and can develop alongside the evolving technologies, but we need to be conscious of emerging soft skills and emotional intelligence to help the next generation of procurement professionals succeed.
We have top talent in the United States, but we need to help unleash them from “inside the box” thinking to ensure we’re working together to innovate and solve emerging issues of the future.
Our panel discussion lead by Dawn Tiura, President and CEO, Sourcing Industry Group, discussed how the procurement professionals who prefer the ‘beat up and buy’ sourcing mentality have become irrelevant, and we’re now more interested in talent who can demonstrate their Adaptability Quotient (AQ). The ability to demonstrate agility, be naturally curious and respond to change will all be crucial going forward.
Supplier and Stakeholder Partnerships are Key
This might not be the most mind-blowing concept in procurement, given that maintaining relationships with stakeholders is at the core of what we do, but how we work with our suppliers in the future is going to be the key to success.
Diego de la Garza, Director of Source One, said, “We need to know the problem we are trying to solve, then facilitate the process between stakeholders and suppliers to create ideas that will solve that problem.” That means that we must let go of the idea that contract negotiations and supplier relationships are about beating down the price and embrace the partnership style of working.
“Reliable supply chains give you control over the unknown,” said Bradley Paster, VP North American Sales, riskmethods during his presentation. The most effective way you can ensure you have a reliable supply chain is by working with your suppliers and stakeholders to add value, solve problems and innovate to find a better way forward.
Value will always drive buying decisions, but the true value of procurement can be measured beyond cost and working with our stakeholders can ensure we’re adding value not just to our bottom line, but to the improvement of our global community.
As Jamila Gordon reminded us in her closing speech of the day, there is hope. The future is bright and procurement is the key for driving great changes in our world.
Feel like you’re late to the party? Or did you just get swamped and weren’t able to tune in on the day? Well, fear not, you can still access all the great content, videos, keynotes, presentations and all the discussion in the Big Ideas Summit Chicago 2019 Group! By clicking here, you can join the group and catch up when it suits you.
Procurement’s new direction comes complete with a number of new risks to consider. And automation accounts for a few of them.
For several years now we’ve heard the same message – procurement is going to become more strategically focused in organisations. One of the key enablers cited in this change is technology and the increasing automation of transactional tasks to help free up time and resources.
not just technological advancements that represent a key risk, but also the
role of technology in the changing nature of work. Being educated and aware of
these risk factors will help put mitigation strategies in place. But it will
come down to how well risks are managed when it comes to understanding the
impact of any future major risk events.
selected three areas linked to technology and automation that procurement must
be mindful of as they take their new strategic direction.
Third Party Risk Management &
has helped to drive and support the rise of the gig economy.
A 2018 report estimated that over one-third of US workers (36 per cent; 57
million people) were part of it. It may have started smaller, but the gig
economy has grown beyond the names traditionally associated with it, the like
of Uber, Lyft, Deliveroo and Freelancer.com.
attractiveness of the gig economy lies in greater
flexibility on where, when and how people work. For organisations it means
they don’t have pay all the costs associated with a full-time worker –
potentially saving 50 per cent on rates by using a gig worker. This would even
hold true in spite of recent legislation passed in the EU and in California regarding
workers’ basic rights.
organisations may not realise that they are exponentially increasing their
third-party, technology-associated risk. An estimated 90 per cent of hacks
targeting organisations take place through an individual employee’s computer.
can they be sure that the laptop or internet-capable device the worker is using
is compliant with network security? Or free from viruses or malware? It’s not
only the gig workers, but the employees too, with 87
per cent admitting that they use their own devices for work purposes.
will organisations support the gig economy workers to carry out their tasks
while managing their risk levels? It’s a question no-one has really answered
Changing Skill Sets for Sourcing Professionals
An increasing level of automation in procurement will naturally change the skill set that sourcing professionals require to do their job. This will be seen in a move away from data and analytical skills, and an increasing focus on Emotional Intelligence (EQ) and soft skills like change management, negotiation, selling, presenting.
question is what are organisations going to do with displaced employees? Do
they have an ethical responsibility to retrain them, retain them or up-skill
them to allow them to move on? Yes, EQ and soft skills can be trained and will
come more naturally to some people. However, there will still be a number who
have difficulty in moving into this new way of working.
my opinion the key skill, even accounting for EQ, will be adaptability. With
the speed of technological advancement we are now seeing, people have to be far
more adaptable than they ever used to be.
impossible to fight change – some people embrace change, others fight it,
others are paralysed by it. People will struggle if they don’t have that adaptability
as a natural barometer. It’s a much tougher skill set to train, but as
technology continues to advance, it’s a risk that organisations need to be
to this is the final risk factor I’ve chosen to highlight here – responsible
automation is pretty obvious, for example, installing an ordering kiosk instead
of a human for ordering fast food, or having self-service checkouts at the
grocery store. What people don’t see is the impact on the low to mid-level
managers, who lose much of their transactional and managerial work as a result.
are at risk as much as the frontline employees, but this isn’t always
considered. Organisations have the social responsibility to have intelligent
automation, to consider this through the risk management lens and assess how
their technology fits with the social agenda.
more socially responsible with automation will represent a dramatic change from
the current situation. Organisations need to stop automating for the sake of
it, only eliminating the transactional elements because there is good reason to
being too keen to automate, organisations lose site of the need to have humans
in the process, which may in turn increase risk. Until such times as bots and
AI have the EQ we discussed before, they will miss out on the human aspect of
detecting fraud or seeing the human thought process behind decision-making.
This is a more responsible approach, but also, from a risk point of view, protecting organisations against the loss of the crucial human element in some tasks.
About the Author
Dawn Tiura is the CEO and President of SIG, SIG University and Future of Sourcing and has over 26 years’ leadership experience, with the past 22 years focused on the sourcing and outsourcing industry.
In 2007, Dawn joined SIG as CEO, but has been active in SIG as a speaker and trusted advisor since 1999, bringing the latest developments in sourcing and outsourcing to SIG members. Prior to joining SIG, Dawn held leadership positions as CEO of Denali Group and before that as a partner in a CPA firm. Dawn is actively involved on a number of boards promoting civic, health and children’s issues in the Jacksonville, Florida area.
She is a licensed CPA and has a BA from the University of Michigan and an MS in taxation from Golden Gate University. Dawn brings to SIG a culture of brainstorming and internal innovation.
Dawn provided some great insight and thought-provoking ideas at the Big Ideas Summit Chicago 2019 this week. If you weren’t able to be there on the day and couldn’t get there as a Digital Delegate, don’t worry. You can still sign up to access all the great content by clicking here.
Spend all your time at work fighting fires? Proactive risk management can help douse the flames and get you ahead of the game.
For as long as procurement has been a profession, risk management has largely been seen as a data collection exercise, undertaken at alarmingly infrequent intervals. Often, it was nothing more than a checked box to indicate assumed compliance, with no deeper insight or follow-up.
But as the reach of procurement extends beyond savings, compliance and performance. The profession touches almost every facet of a company, and mitigating risk is increasingly being seen as the fourth pillar of the profession. To be truly successful, risk management requires robust insight into all links of a supply chain – a task that has often been insurmountable.
How can you properly manage your company’s risk as supply chains go global? And who should be responsible for ensuring you’re ahead of issues before they arise?
Procurement teams have the potential to drive big changes on a global scale. If you’re not successfully navigating your risks then you’ll struggle to join the ranks of the world leaders.
Proactive vs Reactive
Whether caused by bankruptcy, politics or even severe weather events, risks to your supply chain come in all shapes and sizes, so it’s not completely unreasonable to be overwhelmed. Preparing for every single eventuality is a daunting task that seems to stop procurement professionals in their tracks.
As such, many people start on the back foot, considering the risks only when their bottom line has already been affected. However, if you understand your risk profile – the types of threats that will have the biggest impact on your business, whether they’re physical, logistical or reputational – then you’ll be able to develop proactive risk mitigation plans that can keep your business flowing seamlessly through strikes, shut downs and storms.
Successful risk management in action
At riskmethods, we combine advanced AI technology with human support to offer comprehensive risk management solutions for our customers. We train our AI using over 5 million articles relevant to their unique risk profiles, to allow us to give our clients the visibility into what the current and future risks are for their business and offer insight into the underlying threats in their supply chain – so they can take action before it hits.
For example, when Hurricane Harvey hit Texas in 2017, it made landfall three times in six days, causing $125 billion in damages and sending a third of Houston underwater. As the storm began making news, we were able to use our technology to create storm projections for our customers that narrowed down the affected location as the storm approached. This alerted them to the risk of damage or delays, and allowed them to contact any suppliers or manufacturers within the impact zone before the storm arrived.
As a result, they were able to take action to create proactive mediation plans for their impacted suppliers with outstanding orders before the storm even hit the ground, successfully navigating potential shutdowns that could have impacted their supply chain for weeks to come.
In an elite enterprise, this active monitoring of new and emerging threats means that while it may not be financially possible for all enterprises to have crisis management teams on hand, ready to pounce at the first hint of trouble, they will have contingency plans in place. This increases your ability to react faster and could potentially give you the leg up on your competition.
Where is risk management going in the future?
The next procurement transformation is taking the profession from a singular discipline to a cross-organisational centre for increased collaboration and supplier transparency.
Risk management is set to go hand-in-hand with this transformation to alleviate the risks within an enterprise, bringing another tool to the table for CPOs to leverage and creating a competitive differentiation for enterprises. While this direction may seem like common sense going forward, the reality is that it’s only in recent years that its importance has really been acknowledged.
Those who continue to think of risk as someone else’s problem will soon find themselves falling behind.
riskmethods was one of the sponsors for the Big Ideas Summit Chicago 2019, with Bradley Paster delivering an ace keynote too. Don’t worry if you missed out, you can still sign up to access all the great content. Register now by clicking here.
If suppliers are treated as part of the team, rather than punching bags, it can actually help to accelerate procurement’s ability to add value.
When you are hiring employees, do you focus just on the salary negotiations? With the only goal being to get the lowest cost talent? No, because we know the value we are going to receive from that individual is through many years of ideas, quality work and the leadership they provide to others.
The price negotiation is a point in time, while the relationship is the multiplier.
The same holds true with suppliers.
As you look across our supply base, procurement has a range of suppliers from “high potential” to “needs improvement”. As we do with top performing teams, procurement has the opportunity to cultivate high potential suppliers through exposure, stretch assignments, and trust.
There is also an opportunity to manage up or out the “needs improvement” suppliers by developing their capabilities and giving them the opportunity to improve. Through this approach, procurement now has the ability to discuss with their new-found talent how to creatively reduce total cost of ownership, to solve problems, and to provide innovative solutions.
When trusted are offered development opportunities, suppliers will go above and beyond for the customer. They assign their best people on the account. They look for ways to improve the relationship, reduce costs, and proactively call out risks. And, in times of short supply, will serve their preferred customer of choice first.
Through one change in perspective, one change in a relationship, procurement achieves lower TCO, lower risk, more innovation, and a reliable supply chain – this is the key to delivering value.
The Next Big Idea in Procurement
Procurement is on the brink of significant change, as are many more areas of our lives. There will be many big ideas that brilliant procurement professionals implement into their organisations to support the advancements in technology, the new expectations of talent, and techniques to add value well beyond cost. These are exciting times to lead, inspire, and create within procurement.
Each year a small group of influential procurement thought leaders gather in Chicago for the Procurious Big Ideas Summit. Participants are inspired and take back many big ideas for their personal growth as well for their organisations.
While technology advancements often receive a lot of focus, perhaps the biggest shift within procurement is the expectation to move beyond cost to becoming value providers. Procurement is being challenged to find new ways to reduce risk, increase sustainability, to help solve complex business problems, to increase revenue, to generate new innovations, to become an internal consultant to their stakeholders to obtain the best out of every investment.
This expectation is becoming more pronounced and will allow procurement to analyse how they measure success, the skills their talent need, and even what technology they might need to deploy.
Those organisations who make this change exceptionally well will also realise that their suppliers offer a limitless capability to accelerate procurements’ ability to add value. When suppliers are treated as an extension of the supply chain, as part of the team, the relationship with suppliers also moves beyond cost. In fact, one could argue that becoming a customer of choice to suppliers is the key to unleashing value, reducing risk, increasing innovation, and achieving agility within the supply chain.
Leading the Supply Base
An idea is just an idea until it is implemented, so how do procurement organisations get started with this change? Below are some low investment ways to start this journey.
Toss out outdated segmentations – Start looking at the supply base like one would talent. Understand high potential suppliers, remain in role, and need improvement suppliers. This does not need to be complicated nor does this need to be scientific. Without putting much effort into this, the top performers and the lowest performers could be listed. Start there.
Offer development programmes – As one would with their internal talent, offer programmes that will help suppliers operate with excellence. These programmes can even be supplier funded, but it shows suppliers that procurement cares about their success. It develops a relationship where it is understood that procurement is only as good as their suppliers. When suppliers perform at their best, procurement, suppliers, and the communities around them all benefit.
Think differently about procurement’s role – When procurement starts thinking about their role as a hiring manager to suppliers, it creates a change within every interaction. Set the expectation that a procurement manager’s role is to lead their team of suppliers to success. This will have downstream impacts around measurements and skills needed but starting here will start the cultural change needed for success.
Procurement is on the move. These are indeed exciting times to renew the spirit of what procurement is all about. Let’s not be overwhelmed and paralysed by the amount of opportunity. The best thing to do now is to start. Start taking the small steps that will create big change and the next big ideas.
As the Big Ideas Summit Chicago facilitator, Amanda Prochaska will be harnessing the biggest and brightest ideas presented. You don’t need to be “in the room where it happens” – you can register as a digital delegate and get up-skilled and uplifted from the comfort of your own desk. Register now by clicking here.