At the end of a year when all our plans fell through, the Big Ideas Summit sets the tone, agenda and cements the possibilities for 2021. Here’s how.
Back in 2010, when you were making your ten year plan, what did you say your end game was? Multiple promotions? An overseas secondment? Perhaps a holiday home? Whatever you put on your plan, we’re pretty sure it didn’t include a pandemic, and we’re almost 100% sure that if asked if the last decade prepared you for this, you’d say a loud and clear no.
But that’s exactly why our Big Ideas Summit is more important than ever. Back in February, we knew that COVID-19 would represent a watershed moment for procurement professionals everywhere when 94% of the world’s supply chains were interrupted. And what we predicted (if you could even call it that!) has come true: procurement and supply chain management has irrevocably changed, and so has our world. This year’s Big Ideas Summit is dedicated to that very transformation, so here’s four reasons you simply can’t miss it:
We’ll learn to think the unthinkable
The global pandemic has been described as ‘unthinkable’ by many, but the truth is that world leaders had, in fact, planned for a pandemic, even if their response in reality was a little different. So this begs the question, was COVID really as unthinkable as we all initially thought?
While the jury is out on the answer to that, it’s clear that we’re living in increasingly uncertain and volatile times which require a vastly different set of skills than before. One person that knows this better than anyone is Nik Gowing, TV presenter and journalist. He recently completed an in-depth study into global leadership, and he has some truly fascinating insights into what attributes are now required to lead businesses into the future.
We’ll decipher today’s risk landscape
This year, new risks have emerged so fast that many of us have barely been able to update our management plan before we’ve had to throw it out the window and start again. In 2020 (and likely, in the years to come), risk management is going to look vastly different to what it does today.
At this year’s Big Ideas, we’ll hear from prominent CEO Dawn Tiura on how we should approach risk, especially from a third-party relationship perspective.
We’ll ask the important questions about business continuity
When it comes to global business, we always thought where there was a will, there was a way. And thankfully, in the face of harsh lockdowns and enormous supply chain disruptions, many of the world’s industries have found a way to continue in some form, even if everything is done virtually.
For businesses like this, how does business continuity work? And does it even apply? One thing that the inspirational Kelly Barner, MD of Buyer’s Meeting Point, knows is that you need to be prepared for surprises. We’ll delve into exactly how we can all do that from a business continuity perspective plus much more.
We’ll discuss how we can all protect our careers
While many of our colleagues may have been furloughed or laid off altogether, procurement and supply chain professionals have fared increasingly well career-wise throughout the pandemic. But while we may still have our jobs, how are our careers going in this increasingly uncertain landscape? It’s fair to say that while there may have been many opportunities, there may also have been various reasons why we couldn’t or didn’t take them.
But in good news, 2020 isn’t finished yet. There is ample time to analyse the year that has been, and decide how to best protect – and grow – your career. We’ll discuss this at length in a panel at Big Ideas with four of the globe’s best procurement and supply chain recruiters. The catch phrase of the year is staying apart keeps us together. Now, it’s time to get together for real (virtually!), learn from those who have managed best, and plan for whatever 2021 may hold. Join us at The Big Ideas Summit here.
Procurement has seen some revolutionary changes over the last two and a half decades. From manual processes to powerful P2P Suites, there is no denying that procurement is becoming more innovative and tech savvy. But as a whole procurement tends to lag behind other professions – it’s time to lead the way for innovation, but where do we go from here?
Technology is driving industry forward at an exponential rate, globally. It’s hard to think of an industry that hasn’t adopted a new technology, at least to some extent, in the last several years. Technological breakthroughs are changing the world over, both from a consumer perspective, but also from a business one. From smart phone companies using fingerprint scanning and facial recognition to car companies implementing park-assist, adaptive cruise control, and in some cases, even self-driving capabilities. This is truly a world driven by innovation, and most industries and business sectors are investing heavily to that end. But what is procurement doing to keep up?
Where We’ve Been
To answer that, first it is important to see how far the profession has come. Although it has taken longer than other markets – the progress has been remarkable.
· Manual Processes – Like most, this is what dominated the industry for a large period of time. Everything was done manually, from drawing up contracts, to sourcing and purchasing materials. This was quite a time-consuming process at a time when procurement lacked the complexity of today.
· Emails & Spreadsheets – As technology began to become more mainstream the manual communications started to give way to emails, no longer requiring procurement professionals to travel onsite as often. The use of spreadsheets began to build the framework of an organizational system with excel becoming the main database of choice for many in procurement.
· ERPs – Enterprise resource planning (ERP) is a software that handles business process management it allows an organization to use a series of integrated applications to control and automate many functions related to technology, services and human resources. This is one of the most widely adopted pieces of technology used in procurement today.
· S2P Systems – This is the current cutting-edge procurement technology. A good S2P suite can bring cost savings, efficiencies and data visibility to your business. Our source-to-pay (S2P) platform, JAGGAER ONE, is a comprehensive suite that automates, optimizes and provides insights across the source-to-pay spectrum. Integrating seamlessly with your ERP, JAGGAER ONE can provide data transparency and visibility, while giving access to a powerful suite of end-to-end supply chain and sourcing solutions.
Procurement is at a Cross-Roads
Procurement has long been a cost-focused profession, largely relying on siloed processes and teams, taking a reactive and tactical approach. And, at one time, that was all that procurement needed to do. But it is now time for procurement to move into a new role – one that takes charge of the business and leads the way, becoming an integral part of the overall business strategy.
I believe that procurement professionals around the world stand on the threshold of a new age. The old paradigm of cost reduction, being reactive and only focusing on purchasing is drawing to a close. In this dynamic, complex and disruptive era, procurement leaders and experts the world over are searching for a secure, successful future.
With technology like artificial intelligence (AI) and robotic process automation (RPA) becoming more mainstream, the applications for procurement are virtually limitless. Technology like JAGGAER’s Smart Assistant, which is powered by AI, is one such possibility. This conversational platform designed for procurement is a powerful tool, which will eliminate much of the tedious and manual processes that still plague the procurement profession today. AI will be a driving factor in the development of the procurement profession.
Where We’re Going
The result of all these technological advances in several years’ time will be autonomous procurement. As I’ve written in a previous blog “autonomous procurement is a platform with embedded intelligence, but a system that also continues to build on those capabilities to automate the full source to pay process without human interaction. However, this will happen only in instances where human input isn’t necessary or desired, such as repetitive or time-consuming tasks”.
It is incredibly important to remember that autonomous procurement is not meant to eliminate human input or the role of procurement professionals. The end goal here is to augment people, freeing up time to focus on value adding tasks and strategic thinking. Human insight is crucial in business – but this is all about using technology to eliminate mistakes, monotony and cut out repetitive patterns. The future platform will assist you at every step of the source-to-pay process and over time it will manage more & more complex activities autonomously, so we can focus on doing strategic analysis to unlock new opportunities.
The procurement leaders of the future will need to combine strategic thinking, along with an analytical mindset. Leaders are crucial in today’s times, especially with the rise of AI, algorithms and automation. In order to stay ahead of the curve procurement professionals will have to evolve – becoming more data-driven and strategic, because that is something that will always require a human touch.
The word of the moment is definitely resilience. But where do you start?
Bill says it’s a process. Not long ago, most organisations were hunting for better information to react faster as threats emerged.
“So this is what I would really categorise as being reactive,” Bill explains. “We want to get better at reacting to events (which is a fantastic place to start by the way) and what I would think of as the journey to resilience.”
The pandemic obviously changed many companies’ perceptions of their own resilience.
“That means that for organisations who weren’t before acting the mandate is clear; this is the responsibility of supply chain leaders,” says Bill.
“If they are unable to deliver on this responsibility, they’re going to be losing credibility within the organisation.”
The good news is senior management is recognising the importance of proactive supply chain risk management, which will likely lead to more funding.
Treat suppliers better
So we’re all after resilience. But what does that actually look like?
It starts with a shift in the way companies treat and manage suppliers, Bill explains.
“I think we’re on the precipice of moving into what I would call the era of collaboration,” Bill says.
“Traditionally, we’ve seen working with most of our suppliers in kind of a generic manner and we treat a few of them very specially.
“But I think that collaboration needs to extend to a broader set of enterprises and so that continuum will continue to be a major transformation element.”
From reactive to transformative
Changing the way we see supplier relationships is a good step, but it’s only the start.
Once an organisation can react quickly and be more resilient, it’s time to transform. That’s why the most mature and forward-looking organisations are overhauling their processes right now.
“Transformation is not just enough for me to figure out how to be reactive, but I really need to think more proactively on how I can change the elements and the way that I think about the category,” says Bill.
These advanced organisations are asking how well they understand category risk exposure. And how they can incentivise people to act on the risks they uncover.
“So it’s really more of a holistic approach to risk resilience,” says Bill.
Automation frees up resources
The other hot topic is automation. Bill says it’s incredible how much of our supply chain can be automated.
“Supply chain folks are just automating everything that they can and it’s crazy,” says Bill.
“We’re trying to automate all the AP functions, we’re trying to automate all the contract functions, and now we’re actually moving up into the next level and trying to automate the analysis in the diagnosis of the data and the information and insights in those systems.”
“[W]ith this automation we’re able to free up the scarce resources and get our folks to focus on some of the proactive resilience and collaboration efforts they really need for the organisation to thrive,” says Bill.
Risk management in today’s environment
What does great risk management look like today?
Bill narrows it down to three priorities:
1) Change jobs descriptions and incentives. You need to think about culture change.
2) Put in place technology that can standardise processes, then measure them.
3) Manage your people well. Ensure that staff are actually following those processes in the way you expect.
“That’s the shift in the maturation that we’re seeing from our customers. Before, they would just get the information. Now they are working out how to best utilise that information and become proactive in their risk approach,” says Bill.
Minimise risk, no matter company size
You might be thinking, “That’s all well and good, but I work for an SME. How does that work for a smaller company like mine?”
And it’s true. You may not have the resources or capability at the moment with everything going on, says Bill.
“A lot of smaller organisations are so busy just keeping the business going, no one is taking the time to take a look back and actually think about what it’s going to be in three to five years out,” says Bill.
“They’re just worrying about survival today.”
Even if your organisation is small, you’ll likely notice a rising interest in risk management – whether it’s from your customers and executive team.
“Customers are asking them, potentially assessing them and looking to measure them in terms of their risk preparedness so that’s definitely helping [put risk management on the agenda],” Bill says.
“We are also starting to see a really strong sense of awakening from [senior leaders] and with the idea of a supply network.
“[They’re] thinking it’s not just enough for me to take care of my house, but I need my suppliers to also do the same for theirs.”
What can you do?
So whether risk management is at the top of your agenda already, or it’s just starting to gain importance, Bill suggests three key areas to get your house in order.
1) Using technology to manage risk: “There is an enormous amount of information that’s out there and the largest challenge that organisations have is how to filter through that information and uncover specific and relevant insights.”
2) Make risk information visible: Can people in your organisation easily find information about risk?
“We’ve seen a lot of folks who create risk scorecards or risk audits, and that information gets locked away somewhere,” says Bill.
Instead, he suggests putting that information on your employees’ phones and laptops so they can easily access it when they’re talking to suppliers.
3) Integrate: The final step is to embed all of that risk information and data into other company systems.
As a supply chain professional, Bill says you should ask, “How can I integrate the technology and make it something that really impacts the way that we work?”
Now that risk management is firmly on the agenda, you can use it to get ahead in your career.
Bill predicts the most valuable procurement professionals in the future will be able to manage risk in two ways.
The first is artificial intelligence. Companies will need people who can use AI to spot patterns in suppliers to predict future events.
“For example, if a supplier shutters a plant and fires the CFO, I could predict a bankruptcy is coming and reorganise my supplier geography to avoid disruption,” says Bill.
“We can utilise artificial intelligence techniques to start doing pattern recognition and help folks better predict – never with 100% accuracy – but better predict what may be coming down the pipe for them.”
The second is to make suggestions on the best way to react if a threat actually comes to fruition.
“There’s a number of different approaches that we’ve seen utilised to respond to an event, so we can bring all that information together and present to the individual in a way that allows them to very quickly assess their options, make decisions, and run.”
If you haven’t already delivered bad news to a supplier, you’ll likely have to soon. Here’s how you should do it.
Economically, this year is officially the worst year since the Great Depression. And while we, as procurement professionals, have largely been shielded from the worst of it owing to our critical importance to organisations, many others have not been so lucky. Many businesses, too. And unfortunately, some of those businesses include our suppliers. Even worse, sometimes it may be us that has to deliver some bad news to them.
Psychologically, humans find it very difficult to deliver bad news. Procurement professionals would agree with this finding: telling a supplier, especially one that you’ve cultivated a valuable strategic relationship with, that something drastic is going to change can be nerve-racking at least, terrifying at most. But can you deliver bad news in a good way? You can, and here’s how.
What kind of news might you have to deliver at the moment?
So much is changing in the economy and our supply chain relationships at the moment, that there’s literally hundreds of different types of bad news that you might have to dish out to your supplier. But for most companies, bad news will fall in a number of categories.
Firstly, you may need to tell your supplier that you have to reduce your volume. On the surface, they may see this as unfair, especially if they know that your overall output hasn’t changed much. But what they may not understand is that in the current risk environment, you can no longer be reliant on them and need to diversify. Similarly, you may not be able to use your supplier at all due to a whole host of risk-based reasons.
Secondly, for just about all of us, COVID has meant that we’ll have to amp up our compliance. What this will mean for your supplier, and they certainly may not like it, is that you now need more documentation from them and more authentication of their sources.
Thirdly, you may need to adjust payment terms. In an ideal world, especially if you work with small businesses, this adjustment may mean that you’re paying earlier. But for many reasons, this may not always be an option due to cash constraints. A conversation about longer payment terms is always challenging.
Finally, COVID has forced many of us to change our requirements. Whether this be a changing product or input spec, whatever these changes are, it will most likely affect your supplier’s business, so may be a difficult conversation.
How should you deliver this bad news?
Businesses all over the world are struggling right now, especially many small businesses. So what may have been a difficult conversation last year, may now mean the difference between hanging on and financial ruin for your supplier. For this reason, you need to approach all conversations with suppliers delicately. When you do, make sure you employ all of the following:
Listen – before you speak
Usually in organisation-supplier relationships, procurement professionals are used to having the ‘upper hand’ – so to speak. Essentially, we are effectively the ‘client’ of our suppliers, and we expect a level of professionalism and respect as a result. Interestingly, in relationships where the power lies more with one party (even if we may not act like it), the individual that holds the power usually does more of the talking.
Yet given the precarious economic situation, now might be the time to do less of the talking, and more of the listening. Even if you do have to give bad news to your supplier, it pays to first listen to how they have been going, and what, if anything, you might be able to do to cushion the blow of the bad news you’re about to deliver.
Have empathy – not sympathy
In situations like these, it’s tempting to want to show sympathy to suppliers, especially if they’re struggling. But research shows that sympathy is often misguided, and empathy is better. But what’s the difference?
Sympathy is when you feel bad for someone, and pity them on account. For example, showing sympathy to your supplier when they tell you that they may be going into administration would be to say ‘That’s awful – I understand how you feel.’ This statement could be a little frustrating to them, as in your position, you don’t actually understand how they feel.
Empathy in these situations is always a better response. Empathy is when you take the time to listen to someone and understand what emotions they are feeling, but you acknowledge that you don’t necessarily feel their emotions. For example, an empathetic response might be: ‘I’m so sorry to hear that. I couldn’t possibly understand what you’re going through.’
Be upfront – but also see if you can give, a little
When it comes to delivering bad news, it’s best to simply be honest and upfront about what it is that you need. Prolonging delivering the bad news drags it out and will most likely make your supplier frustrated and nervous for the future.
But after you’ve delivered your news, don’t just leave it there. See if there is anything you can do for your supplier, and then genuinely try and do it. This may include negotiating a slightly longer contract, flexing payment terms, or referring them elsewhere. Little things help and in this economy, those little things could be everything.
Have you had to deliver any bad news to your supplier? How have you done it? Let us know in the comments below.
Far from being a solution looking for a problem, Blockchain is revolutionising jewellery, tea and coffee, beverage, food and automotive businesses.
While there is still some question as to whether blockchain technology can live up to the hype it has generated, it is making inroads into the supply chain environment.
The diamond and gold, tea and coffee, beverage, food, and automotive industries all have participants with blockchain applications under test, operating as pilots, or implemented as digital solutions to improve supply chain operations.
In most cases, these companies are using blockchain as an aid to supply chain visibility and product tracing, but some have applied it as a tool to streamline transactions and speed up the flow of information, goods, and materials.
In addition to private enterprise, blockchain’s interest among commercial organisations, authorities, and governmental bodies is also intensifying, increasing the technology’s credibility as a useful supply chain tool, although not the cure-all or panacea that early hyperbole may seem to have suggested.
The days of blockchain technology being considered exclusively synonymous with BitCoin and other cryptocurrencies have long been behind us.
Indeed, in the last couple of years, it has been hyped by many as the next big thing in revolutionary digital developments. Meanwhile, other, less-convinced observers have suggested that blockchain is a solution looking for a problem.
So how well is blockchain living up to commercial and organisational expectations?
Let’s look at some of its real-world uses in 2020 across the public and private sectors to see which prominent players have embraced blockchain, to what end, and what kind of inroads it’s making into the supply chain environment.
Blockchain in the Jewellery Supply Chain
Technology oriented participants in the jewellery industry, or more specifically, those in the diamond and gold businesses, began to adopt blockchain-based traceability solutions a couple of years ago. Today, at least two or three platforms are well established, and being exploited by several companies.
As diamonds, and to a lesser extent, perhaps gold, are resources with origins that can sometimes be controversial, companies like De Beers have seized upon blockchain to provide evidence that their gems come from sources that don’t involve insurgency funding or forced labour.
De Beers’ Tracr can provide provenance data for diamonds and track them from the mine to the retail outlet. The system has been enjoying success throughout its early phases.
As a result, plans are now in place to spin it off into an industry-wide association accessible to any organisation needing to track diamonds through the supply chain. At least two jewellery retailers are already taking part in a pilot of the platform.
A platform similar to Tracr is in use with American conglomerate Berkshire-Hathaway. This multinational enterprise counts jewellery retail chains and precious-metals companies among its vast portfolio of holdings.
TrustChain Jewelry is a blockchain initiative focused on the gold and gemstones used in rings. Its objective is to give confidence to the 70% of consumers concerned about the ethical background behind their jewellery purchases.
Some smaller enterprises in the jewellery industry, too, are either taking advantage of blockchain technology already or planning to do so as a way to improve supply chain transparency.
The sector appears to be one that does not need to look for a problem that blockchain can solve. It already has one in the form of conflict gems, and reputable industry participants believe blockchain can help them disassociate themselves from the controversy by proving ethical sourcing and refining.
T is for Transparency, and Tea
Lest you perceive that blockchain solutions are exclusively for high-value products such as diamonds and jewels, one industry that produces a far-less-costly, but highly treasured commodity, is also using the technology to improve supply-chain transparency.
Not too many of us are prepared to go for more than a few hours without the restorative effects of a cup of tea or coffee. But are we sure we’re drinking the real McCoy and not something with somewhat less beneficial effects being passed off as the most delicate Darjeeling?
It appears that the tea industry, in particular, has a problem with counterfeiting. Unscrupulous merchants pass off inferior tea as that made from much higher-quality leaves originating in the world’s celebrated growing regions — and the more significant and well-known the brand, the more vulnerable it is to counterfeiting.
Even more nefarious practices exist in the tea trade, such as cutting real tea with other organic, or sometimes inorganic products to increase yield from a plantation’s crop.
It is against that backdrop that tea producers and even India’s government are hoping that blockchain will help deny counterfeiters access to consumer markets—and boost profits for producers and merchants that deal only with the best quality tea.
It’s Teatime for Blockchain
Unilever owns tea plantations in Africa and is using blockchain to improve sustainability and combat counterfeiting. It’s not that tracking and tracing tea through the supply chain is a new departure for the company: Unilever has been doing that for some time. However, blockchain technology is improving the speed and efficiency of the activity.
The blockchain solution, called Trado, is the result of a partnership between Unilever, Sainsbury’s, and the University of Cambridge’s Institute for Sustainability Leadership (CISL).
Initially convened as an experiment, the participants, including farmers who received a financial incentive to feed data into the system, have deemed it a success, claiming that it has increased visibility in the tea supply chain and brought down the costs of financing sustainability incentives.
In a similar experiment, the Indian government’s Coffee Board of India is using blockchain to monitor coffee supply, and has already received some 30,000 registrations from farmers wishing to participate. The Tea Board of India is now planning to introduce a similar system as an end-to-end traceability solution.
Examples of Blockchain in Food Supply Chains
The examples we’ve looked at so far illustrate the uses of blockchain to promote sustainability in the supply chain and assure consumers that they are buying ethically sourced products. However, this fledgling technology also has the potential to save shoppers from harm to their health or safety, and perhaps even save lives.
Walmart’s Blockchain Projects
Blockchain’s potential has been recognised and seized upon by consumer-goods giant Walmart, which has already undertaken several projects and proofs of concept in supply chain traceability. They include:
Tracing the origins of mangoes sold in Walmart’s US outlets
Tracking supplies of pork for sale in the company’s stores in China
A drone communication solution based on a blockchain platform
A new project in partnership with KPMG, IBM, and Merck to create a blockchain solution for tracing products in pharmaceutical supply chains
Among the objectives of these projects, is to enable fast responses on the rare occasions that quality issues arise in consumer-packaged-goods, requiring batches to be identified quickly and quarantined.
Walmart leaders believe blockchain technology can prevent, or at least minimise, the impacts of food contamination issues such as the e-coli contaminated lettuce and melamine-adulterated milk crises that rocked the US and China, respectively, several years ago.
With all movements of produce recorded immutably in a distributed ledger, tracing quality-compromised food or commodities back to the source can be achieved in hours, rather than the days, or even weeks, otherwise required for such an exercise.
Big Names are Backing Blockchain
Other opportunities presented by the use of Walmart’s blockchain solutions include the ability for consumers to scan products in-store and receive instant information about them, including their sources and the logistics processes involved in their journeys from origin to retail outlet.
Walmart has stamped its name in the blockchain early-movers hall of fame, not only with the projects already mentioned, but also as part of a partnership with several other food companies including Nestle, Dole, and Unilever, and technology behemoth IBM. The result of the collaboration is the Food Trust Blockchain, a distributed ledger solution capable of recording data associated with more than a million individual products.
Other Food Industry Blockchain Initiatives
Further examples of blockchain’s use in the food supply chain, with solutions either already operational or at the proof of concept stage, include the following:
An initiative by standards body GS1, in collaboration with IBM Food Trust, SAP, ripe.io, and FoodLogiQ, to solve interoperability challenges in food-industry blockchains.
The entry of Kvarøy Arctic, a large salmon producer, into Food Trust, as a way to facilitate the capture of provenance data for arctic salmon and the feed upon which they are raised.
The Norwegian Sea Food Association’s implementation of a blockchain for its members, enabling records about catches to be maintained relating to catch time and location, storage temperature, customs clearance, and details of fish feed used
Blockchain for Beer and Beverage
Brewing companies, both large and small, are tapping into the potential of blockchain, with benefits ranging from the visibility of ingredients and processes for interested consumers, to the empowerment of subsistence farmers in third-world and developing countries.
Farmers Can Bank on Blockchain Benefits
Anheuser-Busch Inbev is the largest brewer globally. With the help of blockchain software, this giant of a company is helping subsistence farmers in Africa become more commercially capable, and connecting them directly to its supply chain without the need for expensive intermediaries.
Working with a blockchain startup called BanQu, AB Inbev is using a distributed ledger solution to build a relationship of trust with some 2,000 farmers in Zambia that supply raw materials for its beers.
The blockchain serves two primary purposes. The first is the one most commonly acknowledged as a supply chain benefit—transparency.
The second has a direct impact on the welfare of these impoverished farmers. The immutable records generated by the blockchain allows them to prove creditworthiness, open bank accounts, and develop their farms into commercially viable businesses.
Blockchain Passes the Alpha Acid Test
Other projects in the beer industry highlight the value and suitability of blockchain for SME’s supply chains. For instance, in the United States, a regional brewer in the San Francisco Bay area, Alpha Acid, has teamed up with tech giant Oracle to develop a blockchain-technology platform that’s accelerating and automating supply chain transactions.
The venture has provided Alpha Acid with an end-to-end dashboard view of its supply chain. It allows digital sign-offs for each stage in the beer-production process, from hop harvesting, through malting, brewing, and maturation.
This level of visibility is invaluable in brewing supply chains. The consistency of beer products depends on always following a precise formula, using ingredients that are inherently volatile in their chemistry, such as yeast, hops, and malt.
Alpha Acid’s blockchain solution receives sensor data from the brewery’s fermentation vessels and the company’s yeast, hop, and malt suppliers.
With all this information on record, any issues with a finished batch of beer can quickly be traced, enabling it to be isolated for problem resolution. Before the availability of blockchain, a much broader product recall would have been necessary, as it would not have been possible to quickly identify the affected batch.
Blockchain in the Automotive Supply Chain
Vehicle manufacturers have long been among the most avid adopters of digital supply chain technology, so penetration of blockchain into the sector should come as no surprise. Ford, BMW, Renault, General Motors, and, most recently, Tesla, all have solutions either in their sights or already in use.
Ford and BMW Among the Early Movers
For Ford, the blockchain is a potential answer to assuring the ethical procurement of cobalt — a mineral increasingly used for the batteries in electric-powered cars. Like several of the companies already mentioned in this article, Ford has teamed up with IBM to develop a blockchain for end-to-endsupply-chain transparency.
Currently running as a pilot, the platform traces the provenance of cobalt and records all supply-chain events—from the bagging of the mineral at the mine, through refining and shipping, to delivery at car manufacturing facilities.
BMW, meanwhile, has piloted its PartChain platform, initially using it to track the supply chain movements of vehicle headlights, including all raw materials and components, and intends to broaden the scope to include suppliers of several other car parts.
Tesla is Trying it Too
As for Tesla, a blockchain partnership with port and shipping companies is all about improving supply chain speed and effectiveness. The progressive carmaker, known for its focus on clean fuels and electric power, has tested a blockchain application for imports to its factory in Shanghai, China.
Working alongside COSCO Shipping and Shanghai International Port Group, Tesla successfully used the technology to streamline the inbound supply chain to its production plant, achieving the following benefits, according to a report by Business Blockchain HQ:
Accelerated cargo pickup processes
Shortened release times for cargo offloaded at Shanghai port
Faster delivery times to the factory
Improved efficiency in the supply chain
All these gains arose because the blockchain solution enables faster transactions, helping materials move through the supply chain faster than would be possible using conventional handoffs.
Blockchain Gaining Real Traction in the Supply Chain
From high-value products such as jewellery and motor vehicles, through to everyday commodities like tea and packaged consumer foodstuffs, enterprises are finding thatshared ledger systemscan solve some of the issues they face, at least those relating to visibility and information flows.
Blockchain is proving itself a versatile solution, as applicable in the small-business environment as it is among the corporate giants. The examples we’ve looked at in this article are just a few of many projects, pilots, trials, and tests that companies across the world are undergoing.
Blockchain might not be a silver bullet to end all supply chain ills, but, like many other emerging digital technologies, it appears to be a welcome tool toaid supply chain management in most, if not all, industrial sectors.
We’ll be sure to keep an eye on its progress here at Logistics Bureau, and will continue to update and inform you about the growth and development of blockchain in the supply chain.
Here at Procurious, we saved the best for last. Register today to reflect, re-energise and refresh for another year of innovation at the most inspiring supply chain and procurement conference of the year.
We’ve (finally) entered the homestretch. However, before we can bid farewell to 2020 – the year that quite literally turned our world upside down – we still have quite a bit of planning and ideation left to do. That’s why now, more than ever, you deserve a distraction.
But do not head for the couch and sign into Netflix just yet. Instead, step back from the day-to-day chaos and join us virtually for the 2020 Big Ideas Summit (BIS). Reflect on the year that was and the opportunities ahead; represent your organisation and all its accomplishments despite the pandemic; regroup and re-energise among like-minded professionals.
Procurious itself is proof that great things can happen when we come together. As a community of 42,000-plus supply chain and procurement professionals, we adapted to survive and thrive under the conditions of the “new normal”.
BIS 2020 takes us a step further. Since the beginning of the pandemic, we’ve gone above and beyond what was asked of us. Now, together, we’ll welcome 2021 stronger than ever – both individually and as a community.
Take, for example, our response to the challenges McKinsey & Company presented us with earlier this year:
We redefined the procurement mandate and fostered a culture of innovation to evolve beyond the traditional, transactional stereotype.
We made investments in digital and analytics, integrating automation and digitisation to optimize performance and leverage untapped data that enhanced productivity across the board.
We future-proofed our organisations by making proactive investments that develop existing talent and enable a more agile workforce.
Somehow, we were able to find the silver lining, increase our influence and succeed against all odds, positioning our function for a watershed 2021. So, together, let’s make next year full of innovation and shared success. That journey starts at BIS 2020.
Big Ideas: Make a Difference and Get Ahead
All it takes is one idea. A single idea can change the trajectory of your company and your career. A single idea can make a difference. A single idea can solve problems for people and businesses across the world.
But good ideas don’t always come easy.
You need time to think, create, learn and share. We’ll provide this in a BIG way at BIS 2020 – and give you everything you need to ignite your passion, fuel your creativity and THINK BIG.
BIS 2020 will have dedicated sessions on everything that’s top of mind for you right now: leadership, supply chain threats, supplier management, digital transformation, supply chain continuity and more.
Together, our community will present and share hundreds of ideas and best practices to help you make a difference, advance your career and get ahead in 2021. But remember, you only need one.
Think the Unthinkable and Prepare for Anything
Those that have joined us at Big Ideas in the past have learned the importance of thinking the unthinkable. Never has this lesson been more true than in 2020.
We’re in the midst of a transformational journey that is changing business and life as we know it.
The good news: our digital-first network is designed to change the face of the profession from the inside out, starting with each individual member of the community. The BIS and our Procurious community will help you think differently: we provide big ideas, first-hand experiences and lessons learned – from the best and brightest from across the world – to help you navigate through this unchartered territory and stand out from the rest of the pack.
Trust me, events don’t have to be in-person to be inspiring. Come ready to share what you are proud of and encourage others to do the same. The more you put in, the more you get out. It’s time to lead, thrive and take back control of your professional development. Rest assured; you’ll leave with everything you need to do just that.
A robust Category Plan and a Strategy will guarantee significant impact for your organisation with these 6 elements.
In my last article “The #1 Reason You Need a Well- Defined & Formally Documented Category Strategy!“, I purposefully oversimplified what a category strategy is by stating that it answers the 5 W’s (Who, What, Where, When, Why) as well as the How of a particular group of spend. Ultimately, it will act as a guide to the Category Manager in his/her application of different procurement levers & tactics to generate value in the assigned spend area. I want to dive a little deeper on this topic by discussing 6 key elements that make up a robust category strategy:
1) Internal Needs Assessment: this should set a baseline for the category and provide a basic understanding of sub-categories, major suppliers, key requirements & stakeholders, internal controls/policies currently in place, and a brief category history and some of the challenges & successes it experienced. This section is particularly useful when reviewing your category strategy with someone who is unfamiliar with the category and it scope.
2) Spend Analysis: the foundation of any category strategy depends upon a solid understanding of the historical and (ideally) forecasted spend. Without accurate and granular detail, it’s hard to imagine how you can formulate any worthwhile strategy that you can feel confident in. If you didn’t do anything else in developing a category strategy, at least conduct a thorough spend analysis before making any type of recommendations to stakeholders or your leadership. There are a million different ways to slice and dice your data, however, at the bare minimum you should break your spend down by sub-category, supplier, location, and business group/facility. Data visualisation is worthwhile to mention here and a skill in itself: how do you take data and transform it into an eye-opening story that opens the door to powerful business insights? There are several data visualization tools out there like Tableau that can help with this, but you can never go wrong by simply utilising Excel or PowerPoint. One of my go-to formats to visualize spend data is the infamous Pareto!
3) Supply Market Analysis: understanding of the supply market is key to developing a robust strategy. You can begin by gathering market intelligence and benchmarking information via a myriad of places and sources, however, Beroe Live is a decent place to start and it’s free. Commonly used market analysis tools are the Porter’s 5 Forces model as well as the Structure, Conduct, Performance (SCP) model. Personally, I feel Porter’s 5 Forces model is more useful when entering a specific sourcing event or deal negotiation as it will help analyze the level of competition that exists at a specific point in time. Therefore, I tend to utilise the SCP framework as party of my category strategy development process.
4) Category Segmentation: segmentation modeling really sets you up to effectively apply the appropriate strategies for the goods/services you are sourcing and should help prioritize where you spend your time and with who. The Kraljic Matrix, developed by Peter Kraljic, is a segmentation model that evaluates two key factors:
1) the overall importance of the good/service (commonly based off total spend, profitability impact, or value-add to the company) and
2) market complexity or supply risk.
These factors are then evaluated on a Low to High scale across 2 x 2 matrix creating 4 quadrants or categories:
Strategic Items(High Value + High Market Complexity/Supply Risk)
Leverage Items (High Value + Low Market Complexity/Supply Risk)
Bottleneck Items (Low Value + High Market Complexity/Supply Risk), and
Non-Critical Items (Low Value + Low Market Complexity/Supply Risk).
Similarly, this tool can also be used to segment your suppliers. This is important to note because your counterpart on the other side of the table has most likely engaged in a similar segmentation process in helping them evaluate the strategies to deploy with their customers. Do you know where you fall in their model? Does your supplier/category segmentation align with how your supplier views you as customer?
5) Strategy: all the fact-based analysis that has been conducted up to this point should highlight and allow you to articulate 2-3 high level strategies that will guide all procurement activity that will occur (I highly recommend anyone engaged in Category Management to read “The Purchasing Chessboard“ as it is a great tool to stimulate thinking around category strategy, procurement levers, and tactics that can be deployed). It should also include goals or KPIs to help measure the effectiveness of its implementation. Leveraging 1 of the 4 general strategies in the The Purchasing Chessboard, if my strategy is to “Leverage Competition Among Suppliers” one of my goals or KPIs could be “Achieve 15% year-over-year costs savings in x good/service for next three years”.
6) Category Plan: now that you have this amazing strategy with lofty goals to save millions, a list of initiatives, projects or tactics must be developed that will deliver the results. The Category Plan should call out the name of the project, description of the project or tactic to be used, strategy alignment, value, and timing. A Project Prioritisation Matrix is a useful tool here to help you through this process. Although you may not formally develop criteria to plot your project on the matrix, it’s important to think about the Business Value and Ease of Implementation of the initiatives you have listed.
In summary, a category strategy is much more than a document that answers the 5 W’s as it becomes the critical guide to the Category Manager in his/her application of different procurement strategies, levers & tactics to generate value for the company they represent. By including these 6 elements in your category strategy, you are sure to deliver significant impact for your organisation and see transformative results.
Let me know your thoughts and the tools you utilize to develop your category strategies (I’ve created a Category Strategy template for those who may be just getting started!)
Make your new tech project a success with these tried and tested tips.
If you’ve managed a new technology project before, then you know the tech is the easy part.
People are the challenge (and I mean that in the nicest way possible!)
Luckily, people and projects follow predictable patterns – no matter the size of your company.
So here’s the playbook you need to make your new project successful. It’s the same one I’ve used to help dozens of companies like Credit Suisse and Honeywell launch systems on time and on budget.
And it’s yours to steal.
Step 1: Get the right people in the room
The most successful organisations are those that get the right people in the room from day one and keep them engaged the whole time.
Who are the right people? It’s likely a mix of people across your organisation. Obvious inclusions are senior level decision makers. You also need to get the best technical brains in the room who understand the legacy system better than anyone else.
You need people who really understand your business – warts and all. Why are things done in the way that they are? What is the history? What are the processes? Are they defined in flowcharts and documents?
You might think your own processes are well-documented, but they need to be really specific for the design phase (i.e. do emails/reminders have to be sent at a particular stage and what happens after X number of days; who do we escalate to?)
Next, you need to spend significant time making sure everyone understands and agrees the objectives of the new system. You need the people who hold the purse strings to agree, so you can get resources in place.
And prepare for scepticism – especially from people who have been around a while. These long-time employees have seen it all, and they might carry hard feelings from previous projects that didn’t live up to the promises.
So don’t be quick to dismiss those who seem negative; sometimes they are the key to understanding why something was done in the past, and to identifying where complexity can be removed.
You’ll find if you address stakeholder concerns early on and make sure everyone feels heard and understood, you can get them on board and keep them there. And who knows? They could become your biggest ambassadors for the project.
Plan for pushback
No matter how great your new system is – or how much time and money it will save the company – you should expect pushback. Most humans hate change.
So approach their concerns with sympathy; after all, it can be hard to learn a new system.
And don’t forget about potential pushback from your suppliers. I often have customers who struggled previously with getting suppliers on legacy procurement systems.
Avoid that chaos by bringing your key suppliers in early.
For example, Maxim Healthcare struggled for seven long years to get suppliers on their legacy system. The suppliers pushed back en masse against the terms they had to accept, and possible fees faced by the vendor’s supplier network approach.
So when they asked us to help them launch a new system, we put suppliers at the centre. Their suppliers were thrilled with the friendlier terms and approach. The result? Maxim Healthcare launched a shiny new P2P system in eight weeks with more suppliers than they acquired in the previous seven years.
Define requirements and objectives
Before you go shopping, do the important work of laying down requirements and objectives.
Think of it like painting a room. The actual painting goes quickly; it’s all the prep work that takes the time.
Now is the opportunity to review your old processes and see if they’re still serving your company.
Get into the detail at the design phase and understand that documenting your processes will help to work out what you are doing now and where you can find efficiencies, cost savings, and better user adoption.
Everyone in your stakeholder group should agree on what your company needs in a new system. That will save you from scope creep (and many headaches) later on – when changes will be infinitely more expensive.
Once you know what you’re looking for, scrutinise different technology providers. Make sure you understand what is possible now with current technology.
At this stage, your provider should act as a friendly interrogator, questioning any areas they find in your processes that could be simplified. However, the act of removing that complexity is up to you. Will you make the most of the new technology you are paying good money for?
Look at the whole puzzle
A system may seem perfect in isolation, but you need to understand how it fits with the rest of your company set-up.
After all, you’re looking for a seamless flow of information, a consistent user experience, and a unified data model that supports 360 degree visibility of suppliers and activity.
None of that is possible if your company systems aren’t compatible.
Also understand how the new tech system you choose can grow and change as your company changes.
Some systems are too rigid to support those changes, meaning you could have a redundant system on your hands after only a few months.
And you should also consider how other existing company systems could change in the future. Are any of them due for an upgrade soon? Stay close to your CIO so your company makes the most of tech investments.
Allow for flexibility
Successful projects allow for flexibility in timing. Things will change and bumps will come up over the course of your project – no matter how precise your planning.
That’s why we use a hybrid agile/ waterfall method on our own projects (and encourage customers to use the same).
What does that mean? The waterfall approach is to build the system and then show it. Agile means to build as you go.
Instead of choosing one over the other, we use both methods. That brings a nice balance of predictability with a level of flexibility to address unforeseen or evolving requirements.
At the design phase we try to lock down 80% of requirements and in this way we still maintain 20% for a level of flexibility. Though as mentioned earlier, it’s wise to get as specific as possible.
You might be surprised how quickly a project can come together this way. Take the Los Angeles Department of Water and Power for example. They needed the ability to upload bid submittals electronically, and we helped them launch the feature in just one week.
Nailing down exactly what you need will make the actual build phase go quicker. And building in contingency time means you won’t get caught off guard when you reach a hiccup.
Send in the A-team
You need to take people off their day-to-day work and give them the time to focus on this project.
Have dedicated project team members who solely work on launching the new system. They should be able to answer business and technical questions, and to report back on user issues and gripes.
This is especially important during the early stages of the project, but no less important throughout the entire process.
The best way to mitigate issues is to plan for them by making sure that you have enough and the right resources.
Once the procurement system is rolled out, it’s key to keep the same team engaged so a knowledge exchange to the support team can take place. They should stay put for at least a few weeks after launch to ensure a smooth transition.
Successful project teams are always communicating.
At the start of any new project, I set up monthly steering meetings at the executive level. There are weekly project status meetings with project leaders, Ivalua, partners and clients to share what has been done, the challenges and what’s planned for the next week.
We put any roadblocks or risks on the table and take a realistic health check on the overall project status.
I also schedule “Work in Progress” reviews to keep everything on track and spot issues a long way off.
These checkpoints allow us to confirm we are headed in the right direction, and we can take some feedback to adjust it when needed.
You can do this
To summarise, when you managing a new tech project of any size, there are the three keys to success:
1) Know what your goals are, and make sure these are communicated to your internal teams and to the companies you are working with.
2) Have the right people in the room.
3) Complete a robust, open and transparent design phase to get what you want and guarantee that your organisation gets what it needs.
Perhaps the best way to get things done is, ironically, to abandon the myriad processes we established to get things done!
I’ve discussed with a number of CPOs during the last months on how they have managed procurement during COVID-19. One recurring answer is along the lines of “we broke all of our processes and went to wild-west-mode.” Now, many say this with an interesting combination of sadness and pride. Sadness that they had to give away the great processes perceived to be the basis for any professional procurement organization. Pride and excitement of how procurement teams were able to improvise, work hard, and survive.
There shouldn’t be sadness for the breakdown of processes. This period has shown that processes are slow, boring and self-centered – and that we can live and thrive with much less of them. Many processes are manifestations of control-freak, risk-averse mediocre management but I admit there are cases where they can be beneficial.
Occasionally processes are great – when they allow for (almost) complete automation. For example, it’s great when routine tasks are mapped out as a process and automated to save people’s time and attention. Even in this case I see process more as a tool to enable (software based) automation rather than as the end-game.
Sometimes, processes can be helpful guidelines for a less experienced employee, and/or to facilitate coordination in teams. If you’re doing a supplier risk evaluation for the first time (and if it needs to be manually done), it may be good to have a process description to guide through the first steps. In these cases, processes should be seen as a learning method. Having consistent vocabulary and descriptions of a process helps communication and coordination across individuals.
Those are the exceptions. In most cases processes bring many hidden costs to our businesses.
Why procurement needs less processes
Processes are, almost by definition, designed to cover all sets of actions taken. This tends to lead to complex multi-step processes that often include a number of bottlenecks in the form of approvals and reviews. Whenever something bad happens in a company, management often asks “how we can prevent this from happening again.” The answer commonly is “let’s create a process.” Over time, there are more and more complex processes in place, gradually suffocating the organization and its creativity.
All this put together brings on a number of problems with processes:
Things get slow – there are so many steps to cover and so many approvals that getting even a simple task done takes a lot of calendar time. I believe this is the reason that lot of processes were broken during COVID-19: they were just way too slow to create a meaningful result.
Things get boring both for managers and the people driving the processes forward. CPOs often talk of a talent shortage in procurement. How to fix this? Definitely not by trying to reduce our exciting work to a process-led obstacle course. Nobody ever said “I just completed a 15-step sourcing process and that was the greatest moment of my life.” People don’t get excited about running processes but, unfortunately, they may get overly excited designing them. People get motivated about purpose, outcome, creativity and freedom, but not about executing processes. If we provide processes as tight guidelines on how to do things, we don’t get talent. Once we get real talent, we definitely can’t keep them with strict processes. It’s equally bad for managers – their job becomes one of reviewing and approving. Approving POs, business cases, vacation requests, what not. The brightest people who have worked hard, learned a lot, and would have a lot to give become rubber stampers.
Processes are also very self-centered. They assume that we can dictate the timeline – it may make our own lives more plannable, but it also takes out any options to leverage the opportunities that are coming up. Say, for example, you follow a strict quarterly business review cycle with suppliers. If supplier collaboration happens only through process-driven reviews, you are not leveraging opportunities coming up in between.
The world is getting faster and more volatile. In this new world, as the COVID-19 era has proven, processes are just too slow. I truly hope that COVID-19 did not only teach us that remote work is possible, but also that a more action-oriented, exciting procurement world is possible … But more on that on my next blog article.
This article was originally published here – it has been republished on Procurious with kind permission.
Ever wonder what recruiters are REALLY thinking when they give you “the news”? I’m dishing out the real dirt to help you better understand the process behind finding your next job!
If you have ever played a game with a small child, you know it can be frustrating because they seem to change the rules halfway through. My daughter is always making up new cards for Uno [she wanted to create a card that made us switch hands whenever I called “Uno”!] so I never quite know what to expect when we play!
Looking for a job isn’t much different, is it?
Each company has its own process, its own application, and not too many are very transparent about what to expect once you hit that submit button. Wouldn’t it be handy to have a few ideas of what might be happening on the other side?
Even though from the outside, company applications all look different, the general recruitment process is essentially the same. All recruiters seem to use the same playbook when giving feedback to candidates. I hope my insights can help you better interpret their comments, see the other side of recruitment and make you feel a little more confident when playing the game.
What recruiters say: “We decided to go with an internal candidate”
What recruiters really mean: It really can come down to who you know. You should be networking within your industry before you need a job. Someone you know can open a door for you for an interview. You still need to have the knowledge, skills, and abilities, but sometimes there are so many people in line for a position, you need a hand up.
What recruiters say: “We are looking for someone with “x” experience or “y” education”
What recruiters mean: As much as we’d like to give you (and everyone) a chance, we aren’t working for you. We are working for the hiring manager to fill a role with a specific set of qualifications that need to be met. And we aren’t writing job descriptions; we try to write job postings (and we aren’t all that good at it).
Many times the application system is set up to just post the actual job description. We aren’t huge fans of this. But it can be cumbersome to change the posting and chances are the day-to-day recruiters weren’t involved in the selection or implementation of the system anyway. The main point here: we aren’t setting the qualifications.
Which means, if you don’t meet the qualifications of the position, we won’t send you on. Sorry. (See above) And yes, we likely don’t quite agree that a Master’s degree or a minimum of 10 years of experience should be required. There may be lots of folks we want to consider for a role but just can’t — and trust me, this frustrates me as well, as both a recruiter AND a candidate. I’ve been rejected for many positions because I haven’t had the right title or right years of experience. I’m confident I could have done the job and done it well, but as there are many others with similar experience, I can’t fault the recruiter for rejecting my resume.
Experienced Recruiter Amy Miller explains “we take direction (and work for) the companies that pay us … the hiring manager is the ultimate decision-maker on who gets hired (or invited to the interview in the first place!); we can only work with the information we’re given, which is why a targeted resume which fully demonstrates fit for the role you want is so important.”
And sometimes, even if you meet the qualifications of the role, you might not get an interview. You aren’t owed an interview just because you meet the qualifications. If you are in a role that isn’t in high demand, there may be 30 others who have similar qualifications. We can’t interview everyone.
What recruiters say: So, we don’t actually say anything here, you just get the generic rejection email, but it doesn’t feel like we even reviewed your application. So you complain that the “system” kicked your application out or look for someone to help you rewrite your resume so it won’t get kicked out.
What recruiters mean: We were likely reviewing applications when yours came in or in the process of finishing up the hire. Artificial Intelligence likely did not reject your resume. I did. Most recruiters I know do not work with an applicant tracking system (ATS) that automatically rejects anyone’s resume. Most applications are reviewed by a person. And getting rejected quickly doesn’t mean it was AI either – just means I happened to be reviewing applications when yours came in.
What recruiters say: “We’re still reviewing candidates and should be back in touch soon”
What recruiters mean: The hiring manager STILL hasn’t made a final decision. Most hiring managers really do believe there is a “perfect” candidate out there. Rarely is this the case. We want the right fit, but often we have to talk the hiring manager out of keeping the posting open “just a bit longer” for that “perfect” candidate that they think is out there. We know that there are likely many people that can do the position and we want to find one of them.
It is also likely the hiring manager hasn’t been well trained in the selection process. So, sometimes, the hiring manager will pass the buck onto the recruiter for a bad experience. As experienced recruiter Laura Mazzullo shared “it is the hiring manager who needs education! It’s the hiring manager who may need more training on overcoming bias, being more open-minded with qualifications, learning candidate experience —it’s a bit of a “don’t shoot the messenger” situation more often than not!”
Recruiting can feel like a game. It can take time to figure out what you need to do to move forward, and then the rules change. But just like in a game, once you understand the rules, you may enjoy the challenge and even have a little fun. May the apps be ever in your favour!