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Market Intelligence: How to Find Information to Supercharge Your Sourcing

By Connor Cantrell, The Hackett Group Strategy & Operations Consultant.

Gaining market intelligence is a recognised way to both develop and support strategic sourcing decisions that will ultimately pay dividends for an organisation. However, the ability to gather market, supplier and industry information that is both accurate and timely is a challenge many organisations face. Understanding the core components, and creating a library of tools and resources to effectively collect this information, will enable an organisation to promote a culture of informed decision-making and support efficient third-party supplier relationships.

Core Components of Market Intelligence

Three types of intelligence can be collected to optimise your strategic sourcing and business performance: market research, competitive intelligence and market intelligence. Market research covers a broad range of applications and techniques for gathering, storing, analysing and providing access to data, while competitive intelligence is the process of obtaining information for strategic purposes. Although, understanding and applying all 3 areas will ensure optimised decision-making, for purposes of supercharging a company’s sourcing processes, this article will focus on market intelligence.

Market Intelligence

Developing market intelligence includes elements of market research and competitive intelligence, but is largely defined by the process of gathering and analysing information relevant to a company’s supply markets, specifically for the purpose of supporting accurate and confident decision-making in the procurement process.

The potential benefits can be “bucketed” into 2 main categories: gaining external awareness and developing data to better support internal planning. It is imperative that an organisation has the ability to view the external marketplace in order to gather data on supply market capabilities, observe how the competition is developing and managing their supply base and supply chain, as well as understand key trends impacting or occurring within the market. On the flip side, it’s critical that an organisation effectively synthesises the external environment to refine internal product plans, identify competitive opportunities and execute enhanced sourcing strategies in support of the organisation’s stated strategy and business requirements.

The ability to simultaneously pair the external awareness capability with internal planning allows an organisation to effectively leverage buying power, which in turn will provide a competitive edge in the marketplace.

Market Intelligence: How to Find Information to Supercharge Your Sourcing

Library of Tools

While the benefits of market intelligence are visible and apparent, a common struggle for many organisations is finding pertinent information from credible sources. These difficulties may include: supply data for spend categories not readily available, biased information or a lack of knowledge on where to begin. Luckily, market research sources exist across multiple dimensions and avenues. There is not a “golden rule” on how to start or where to research. Several examples of sources and types of research are outlined below:

Market Intelligence: How to Find Information to Supercharge Your Sourcing

These resources are not all-inclusive, and as you define your research process, you can customise the process to fit your organisation’s needs and extend your reach. A great way to grow your resource base is to review known sources for additional material. For example, what sources are cited in a quarterly report on a particular commodity or service – where do they get their data? However, it is important to keep in mind not all of these resources will be in-scope. Also, remember to prioritise resources in a way that enables you to identify useful, timely research in a cost-effective manner.

Market Intelligence: How to Find Information to Supercharge Your Sourcing

Going Forward

Market intelligence allows category managers to make credible, data-driven strategic sourcing and supply base decisions by leveraging a wealth of market facts and data. We can’t do our jobs effectively without constantly staying abreast of relevant industry, market and competitive developments. If you want to test your knowledge on a particular commodity – go back to the home page of Spend Matters and type the commodity name (goods or services) into the search bar. See what comes up, who is publishing it, and what is happening that is relevant to your work. It’s a great starting point for developing your subject matter expertise!

In summary, it’s important to explore the plethora of resources available in order to categorise and tailor your research to meet the specific requirements of both your commodity/service and the organisation. Your team will increase its strategic sourcing capabilities and buying power by supercharging your market intelligence and continuously updating its market, industry and competitive knowledge to create value for the organisation.

What Can Olympians Teach CPOs About Leadership?

CPOs and Olympians gather to discuss leadership.

During the month of August, The Faculty Roundtable once again took to the road. Sessions were held with leading Australian CPO’s in Melbourne, Sydney, Brisbane and Perth. What stood out from this series of events was the changing role of the CPO. As we highlighted in this article, the rapid change of pace in the procurement landscape is challenging CPOs to lead and motivate their teams in entirely new ways.

During its August session, The Faculty Roundtable brought together a group of elite Australian CPOs as well leaders from the business world and the sports field to discuss the changing face of leadership in Australian procurement.

The points below present a summary of these discussions.

An Olympic Perspective

Jenn Morris, the guest speaker at our Perth event, has a truly impressive record in leadership. Jenn is currently a partner at Deloitte, a director at the Fremantle Dockers Football Club, the Commissioner of the Australian Sports Commission and a dual Olympic gold medallist. So when Jenn speaks about leadership, she is provocative, challenging and it pays to listen.

Drawing on fascinating examples from both her corporate career and time with the Olympic gold medal winning Australian hockey team, Morris’s discussion on leadership highlighted some truly valuable lessons for Australian CPOs. She spoke on the importance of leaders setting the bar for performance within an organisation. It is the responsibility of CPOs to define what ‘high performance’ is and ensure the workplace is structured in a way to deliver this kind of performance.

Morris also described the importance of leaders sticking to their guns, suggesting that it takes courage to develop a plan and stick it through thick and thin. This statement was given some context with the example of the Fremantle Football Club, a team that for 15 years was perceived to be underperforming. The organisation undertook a top-to-bottom strategy change. Many of the decisions made in this process drew criticism from the clubs fans and footballing media. However the leadership team stuck to their plan and this year the team has finished the season on top of the ladder. Morris, a director at the club, emphasised the importance of not being distracted as a leader, suggesting that success is about setting a path that you believe in and having the courage and faith to stick to it.

New Projects that Challenge Procurement’s Traditional Modus Operandi 

Perhaps one of the most innovative initiatives we’ve seen come out of the Roundtable in recent times was a project that saw a number of firms in the same industry (traditional competitors) working together to develop a joint supplier pre-qualification process. The CPOs involved in this fascinating project were able to put traditional rivalries behind them and work together on a project that would be mutually beneficial for all involved.  This project perfectly highlighted the need for CPOs to challenge their traditional thinking to come up with solutions that will provide optimal benefit for the business.

Hurdles to effective leadership

A dramatic discussion in Sydney led by managing director of Transfield Holdings, Luca Belgiorno-Nettis, highlighted the role that external forces (such as governments) play both in hindering and enabling corporate leadership in Australia. Belgiono-Nettis is a passionate follower of disruptive models and spoke of his work in exploring random citizen selection as a community change tool that challenges traditional notions of power in the political process.

CPOs discussed the challenges that they felt stood in the way between themselves and optimal leadership. Belgiorno-Nettis challenged CPOs to try and understand what is was that brought people together in a collaborative manner and to harness a culture that encouraged this. Also highlighted, was the fact that true leaders are unfazed by taking new approaches to old problems. Drawing references to current political systems, Belgiorno-Nettis suggested that sometimes a complete rethink of power and leadership structures is necessary to impact positive change.

Linking Procurement Activity with Board Strategy

Annabel Chaplain, a non-executive director at Downer, highlighted that as procurement continues to move into the corporate spotlight, the function’s leaders are realising the importance of taking actions towards achieving corporate objectives set by the board rather than their own ‘procurement objectives’. Knowledgeable boards are now seeing procurement as a legitimate avenue for competitive advantage and the CPO is viewed as the conduit between board level objectives and procurement activity. It is the leadership of CPOs that will ensure corporate objectives are met.

Chaplain’s presentation pointed out that the leadership qualities shown by CPOs need to go both up and down the chain. Truly successful CPOs are able to lead their teams to achieve corporate goals but are also able to educate board members about the opportunities and challenges that lie within the businesses they are tasked with guiding.

IT departments revealed as ‘maverick spenders’

New research suggests IT decision makers like to go it alone when making purchasing decisions.

According to a recently-published survey, billions of pounds of business IT spend is being put at risk annually by IT teams that skirt corporate procurement rules and processes. The survey reveals that (crucially) most IT leaders dismiss the value of the procurement function out of hand.

In the Procurement Perceptions research, which surveyed 200 procurement professionals and their colleagues by Redshift (on behalf of Wax Digital), an overwhelming 78 per cent of the IT professionals surveyed suggested that procurement hindered rather than helped their department, with one in three admitting to bypassing official purchasing processes as a result.

Where procurement is involved in the process only 19 per cent of IT respondents said that the procurement team actually led on IT cost savings initiatives. This is compared to 43 per cent of procurement claiming that they did. 

The two departments are also found to have a polarised view of spending priorities for IT, as procurement focuses its support on front-end technology devices and hardware, while IT places greater importance on infrastructure and security.

In a spend category which typically deals in high value multi-year agreements, supply chain risk was at least one area where IT and procurement teams are more closely aligned. Almost half (46 per cent) of IT respondents identified the most important contribution from procurement was in the areas of supplier risk and negotiation. 

Daniel Ball, director at Wax Digital, comments: “IT is a complex spend area, but that is all the more reason that procurement expertise and rigorous policies are brought to bear here. The fact that IT departments often spend without procurement’s oversight makes maverick over-spending likely and could open the organisation up to severe financial and reputational risk. Let’s face it, it’s an industry littered with project failures, therefore it’s critical that these two departments look to collaborate more effectively than is obviously the case in many organisations.”

Why It Makes Sense To Do Business In Africa

Sitting amidst the buzz of 300+ SME exhibitors in the Enterprise Development Hall in Johannesburg, it’s not hard to see why Harvard Business Review (HBR) believes Africa’s time is now.

Here to attend and speak at the Smart Procurement Conference, this has been my first trip to South Africa and I’ll leave tonight with an overwhelming sense of four things:

  1. The warmth and friendliness of the South African people
  2. Their relentless desire to connect and learn
  3. An all pervasive energy to try new things and support the country’s growth
  4. The truly excellent beef. Really, it’s delicious!

It was very good fortune then that as I was about to make my way back to the hotel, I happened upon Selven Moodley’s presentation in the Knowledge Hub, titled: Doing Business in Africa.

As Selven explained, two years ago, Harvard Business School, identified 7 Reasons Why Africa’s Time is now. As you’ll see below, all continue to apply:

  1. Africa has huge market potential

There are 52 cities on the continent with populations of 1 million or more – the same as Europe. And don’t be fooled by outdated misconceptions – there is a middle-class here which is bigger than India’s and who need everything from healthcare, to retail, to telecommunications.

  1. The region is increasingly stable

Africa appears to have entered a modern era of greater stability, particularly in Sub-Saharan content, with a declining number of coups. Though moving at different rates across the continent, political reform is also underway.

  1. Africa has the world’s largest workforce

By 2035, Africa’s workforce will outnumber China’s and this paired with the Government’s growing investment in education, could prove game changing.

  1. Mobile traffic exploding

Mobile penetration, which stood at 2 per cent in 2000, has increased to half a billion subscribers (just shy of 80 per cent) in 15 years. As handsets become more affordable and the internet is democratised through low cost data for rich and poor, this trend will only accelerate.

One quick word of warning: Don’t necessarily expect your African procurement or supply partners to be on WhatsApp just yet. Smartphones remain very much in the minority, making up only 15 per cent of overall mobile phone usage so you may need to figure out how to do business with non-smart phones for a time yet.

  1. Intra African trade is in its infancy

Intra-African trade currently only accounts for 11 per cent of South African trade. With Government mandated investment in local content and a subsequent boom in SMEs, there is enormous potential to move the needle on this.

  1. Increasing Government spend on education

On average, African countries spend nearly twice what OECD governments spend on education.

  1. Africa contains most of the world’s arable land

A fact that surprised me, were you aware 60 per cent of the world’s uncultivated farmland is in Africa?

Of all these reasons, Number 5, the potential for Intra African Trade cannot be understated.

Selvern offered the example of one of his Ghanaian clients who imports large quantities of copper cabling from China. Selvern queried the origin of the copper, only to discover it is mined in Zambia, before being taken to China, made into cable and only then sent back to Africa. Imagine the benefits – cost, speed, continuity etc. – if Africa was able to produce the wiring in-region?

Number 6, Education, also feels to me to be a tipping point. Although secondary school enrolment remains low across the region by world standards, the talented individuals I met at Smart Procurement World were truly exceptional and I’ve never felt a stronger thirst for learning at a procurement conference before. If Africa can develop skills in those areas that will drive the economy, then when paired with the size of its workforce, will eventually challenge China and India for supremacy in this area.

Without getting into the myriad of environmental issues that accompany the destruction of natural habitats for farming, Africa clearly has the potential to become an agricultural powerhouse. Add to this oil, gas and her other natural riches, and it’s safe to say that if Africa is not already part of your supply network (or even consumer market), it almost certainly will be in the near future.

Speaking with the entrepreneurial business owners in the Enterprise Development hall, I am struck by the fact that to be successful here in Africa, foreign investors must use local businesses, hire local people, and likely, produce for the local market. To do otherwise, will not only short-change Africa but deprive your business of the experience, innovation and local know-how that exists here.

While Selven’s advice was directed to SME owners, I have a feeling his tips are just as applicable for Procurement professionals looking to do business for the first time in the region (or any new geography for that matter).

Selven’s advice follows:

  • Understand market you are operating in
  • Understand the logistics of operating in Africa
  • Familiarize yourself with trade agreements, export processes, workforce agreements
  • Interact regularly in your field to learn and determine if there are opportunities as both buyers and suppliers to ‘hunt in a pack’
  • Understand the support mechanisms offered by Government incentive schemes, NGOs, insurance businesses etc.
  • Get out from behind the desk, go work in the field. Link up with a partner in country to accelerate your learning

Naturally this last piece of advice is music to my ears, highlighting yet again, the value of building your global procurement network here on Procurious!

If you are one of our new African members to Procurious, don’t forget to join the African Procurement Professionals Group here.

What is causing Aussie CPOs to lose sleep?

What’s causing Aussie CPOs to be sleep-deprived? Talking-points from The Faculty Roundtable’s latest round of discussions reveal all…

Following on from the success of Tania Seary’s recent article ‘The Five Disruptive Forces that will Keep CPOs Awake at night in 2015,’ The Faculty Roundtable (a series of CPO meetings held in Australian capital cities and in Singapore) decided to put the same question to some of Australia’s leading CPOs.

The issues below are summary of the discussion that took place on this topic in the recently completed August Roundtable series.

  1. Cost vs. Customer Centricity Dichotomy

In Roundtable meetings across the country, CPOs discussed the challenge they faced in finding a sustainable balance between meeting the expectations and requirements of its internal customers, while at the same time ensuring corporate cost cutting objectives were achieved. CPOs discussed how providing value-add services often flew in the face of traditional cost-saving procurement and that one of their greatest challenges was to navigate this tricky dichotomy.

One Sydney CPO highlighted creating close links with the C-Suite as the best means to achieving this balance. He linked the challenge to a business analogy discussed in the Harvard Business Review, claiming that CPOs needed to have a sound understanding of the legwork and operational challenges their team faced while stressing the importance of taking a step back and viewing the team’s performance “from the balcony” and linking every activity and strategic decision directly to corporate objects.

CPO discussions in Perth centred on the increased spotlight the procurement function has found itself under since global commodity prices started to slide. CPOs there said they had been asked to not only cut costs but also to identify and define new revenue streams.

The discussions in Perth covered the necessity for procurement teams to drop the procurement lingo and start speaking about the business more broadly. Melbourne Roundtable members suggested procurement teams need to address how we as a function can help achieve organisational success not procurement metrics. Perth Roundtable presenter and 2015 Procurement Leader of the Year, Kylie Towie has previously discussed this on the Procurious blog.

  1. Developing Talent

Talent continues to be a major cause of concern for Australian CPOs. One CPO went so far as to say “Capability building is the biggest issue facing Australian procurement.”

Throughout the roundtable series, CPOs discussed the fact that as the role of procurement continues to grow and change within our organisations, so too does the required skill set of procurement teams. A Brisbane CPO claimed that attracting and retaining top corporate staff needs to remain a top a priority for procurement. He went onto to say; that while the functions image is improving the battle to attract top corporate talent is as ferocious as ever.

Another Brisbane-based CPO made gave some interesting insights into the disconnect between talent management theory and practice. He claimed that theories alone couldn’t motivate teams to do something; only actions can do that. The same CPO claimed that implementing talent management processes required constant attention and commitment. The example of a mentorship program was used to describe the challenge. The organisation had decided that implementing a mentoring program would be a great way to motivate and develop junior staff. This was in fact true. However, the challenge lay not with motivating junior staff to participate, but rather in encouraging senior staff to act as mentors. Many leaders either were unable to see the value in the project or did not feeling comfortable acting as a mentor.

  1. Proving Procurement’s Worth

This fear has long been with the CPO and it seems it’s as strong today as ever. Across the country, CPOs highlighted the constant need to validate and prove their worth. There was general agreement amongst the Australian procurement leaders that this will (and should) continue to be the case.

CPOs, particularly those working in the resources sectors, mentioned that they were under increasing pressure from CEOs to not only identify savings, but to track these benefits all the way through the P&L. To this end, CPOs expressed great interest The Faculty’s upcoming research paper “Making it Stick” which is designed to ensure that CPOs and procurement teams realise all negotiated savings. The paper, which will be release on 17 September, highlights that more than 50 per cent of savings negotiated by procurement teams fail to find their way to the bottom line. The report provides a road map and points out pragmatic strategies that procurement teams can implement to ensure these savings are realised. Stay tuned to Procurious for more information about this highly anticipated research paper.

  1. Managing the Rate of Change

“The pace of change is so intense, it can be a struggle just to keep up,” claimed one CPO. This sentiment was echoed by most of the CPOs we spoke to as they discussed the importance staying on top of technology trends and tried to understand how this rapidly changing environment might impact their operations.

Discussing the need to leverage new technologies, a Brisbane based CPO claimed, “its not enough to just carry on running tenders, we need corporate game changers.”

The CPOs went into some detail discussing the challenges procurement teams faced when it came to adopting new and disruptive technologies. A lot of it boiled down to procurement professionals having a strong fear of failure.

“Some of our staff are scared to fail and this impacts what we can achieve,” said one CPO. While this aversion to risk may be beneficial in many areas of procurement, when it comes to implementing new ideas or ‘game changers’ its can hinder progress.

Pulling reference from the tech and start-up sectors, one CPO stated that, “In order to take full advantage of new technologies and operating processes we need to be ready to fail fast and fail often.”

The Faculty Roundtable comprises of an elite group of Australian and Asian procurement leaders who gather to share their experiences and insights, to achieve greater commercial success for their organisations.

Meetings are held throughout the year in Melbourne, Sydney, Perth, Brisbane and Singapore. To find out more or to get involved click here.

Why CPOs and CIOs are the new #BFF (That’s Best Friend Forever, duh!)

Lisa Malone writes from The Smart Procurement World Conference, held this week in Johannesburg, South Africa (On Twitter? Follow @SmartSPW).

With the exception of Supplier Development (more on this in a future article), technology, specifically Cloud-based solutions and social media, has been the hot topic of this Smart Procurement World Conference.

This should come as no surprise really… Technological change has never been more rapid, nor impacted more areas of the business. Today everything from regulatory requirements, internal controls, data mining, business intelligence, supply chain visibility and customer experience, are largely controlled by technology platforms.

Technology has not only changed the way we are running our businesses internally, but increasingly businesses are pivoting and building their entire value proposition on the back of technology.

Take for example some of the globe’s fastest growing businesses: Uber and Airbnb have both disrupted their respective industries and rather than a physical product or service, have a technology interface at their core.

Between robotics, artificial intelligence, 3D printing and Terahertz imaging, technology is undoubtedly disrupting the way every business operates. For some, this paints an exciting vision of the future, but for others it’s downright scary.

What all this change makes implicit is the growing importance for CPOs to develop closer working relationships with the CIO.

Mariette Steyn, VP Supply Africa, South 32, opened discussions on the Ariba Panel today by saying CPOs need to have a much greater appreciation of the business’ technology roadmap.

“CPOs must develop a much deeper understanding of the role technology will play in the future of their industry and business.

“With technology so central to competitive advantage, buying technology at the lowest price will rarely be seen by the C-Level as delivering value.”

Mariette’s second observation is that CPOs now, more than ever, need to speak the language of the business.

It should be noted that the ability to have intelligent conversations with functional stakeholders (and particularly, being able to speak the language of finance, is nothing new.

If you’re not aged between the ages of 13 – 17 (where this kind of linguistic ability is achieved through osmosis) or a bona fide technology-geek, talking tech can be especially tough. The mere mention of Tweets, hashtags, or tera-bytes, never mind API, RSS feeds and Xcode and plenty of CPOs’ eyes will simply glaze over.

But with technology increasingly becoming the business (rather than a physical product or service), tech literacy will soon be fundamental for every businessperson and in particular, CPOs.

It goes further than this: In the resources sector, where cash is king, Maria explains it’s not simply about being able to talk the technical advantages of Cloud. The best CPOs will be multi-lingual, jumping effortlessly between CIO-ese and CFO-ese.

“In one breath, I need to speak intelligently about Cloud solutions with my CIO, and in the next breath, translate this message, or rather sell Cloud’s to the CFO on it’s ability to scale, accuracy of forecasting and where it makes sense, the benefits of moving spend from CAPEX to OPEX.”

If only it were that simple… These days you’ll be expected to help your CIO articulate potential financial implications in one breath, while bestowing the benefits of using operating expenses to account for technology investments in the other.

Speaking from their own decoupling with BHP Billiton, Mariette also explains that in their case, the conversation could be framed in terms of Cloud’s advantages in a demerger environment.

“Not having to physically pick up a server means you can exploit the technology and decouple technology far more quickly.

Were you at the Smart Procurement World Conference too? Follow along with our coverage on Twitter and Tweet @SmartSPW.

Why Collaboration May Encourage Corporate Corruption

A new scholarly study has looked into the collaborative roots of corruption, and the results may come as a surprise…

New research from Nottingham University suggests that collaboration encourages corrupt behaviour.

“Collaborative settings, not just greed, can provide fertile ground for corruption, as typified by recent scandals in the football and banking worlds. But while much is known about individual immoral behaviour, little is known about the collaborative roots of corruption,” researcher Dr. Ori Weisel said in a statement.

Weisel and his team focused on cases where working together meant violating moral rules, by lying, at a possible cost to the larger group, or the organisation to which they belong.

For the study, researchers created a die-rolling game in which study participants could adhere to one of two competing moral norms: collaborate or be honest. In the main experiment, the outcomes of the two players are perfectly aligned.

“Humans are an exceptionally cooperative species, which is at least partly driven by deeply ingrained moral sentiments that help to build trust and achieve mutual beneficial outcomes. However there can be tension between two fundamental moral obligations — to tell the truth or to join forces in collaboration,” said Weisel, a research fellow who specialises in group cooperation and decision-making.

Researchers found that the highest levels of corrupt collaboration occurred when parties shared profits equally, and were reduced when either player’s incentive to lie was decreased or removed.

Weisel said the findings support the view that collaboration might have been a liberating effect, freeing people to behave unethically.

The researchers suggest that organisations may be paying a (corruption) premium for having their employees team-up and work together.

“From the point of view of an organisation seeking to reduce corrupt behaviour, assuring a decent base salary that does not depend on performance can reduce the likelihood that its employees engage in brazen lying,” Weisel added.

4 key collaboration takeaways that will make your job easier

The Imminent Impact of 3D Printing on Manufacturing

A triple-whammy of recently published reports highlight current and impending trends in 3D printing.

The global market for 3D printing is set to grow from $4.5 billion today to $17.2 billion by 2020, finds research by A.T. Kearney.

According to the analysis titled ‘3D Printing: A Manufacturing Revolution’, the 3D printing market – defined as the market for hardware, supplies and services – is set to boom over the coming five years. Today the market is worth approximately $4.5 billion, with Aerospace (including Defence) and Industrial (including Construction) both accounting for18 per cent of the pie, followed by Healthcare at around 16 per cent. The Automotive and Jewellery sectors both represent a 12 per cent market share, while Energy holds 5 per cent, with the remainder taking about 20 per cent of the share.

Benefits of 3D printing

The boom in the application of 3D printing is based on several benefits the technology has over traditional forms of manufacturing, which according to A.T. Kearney can be bundled across five dimensions.

1. Mass customisation – the technology will allow people to create items build to the specifications of customers, with custom-built designs opening up a wealth of possibilities.

2. New capabilities – items can be mass produced without high-fixed capital costs related to specific design.

3. Lead time and speed – the technology allows for = printing in a wide range of mediums on the basis of data templates, benefiting the whole design and production process, ultimately leading to reduced lead time and speed to market.

4. Supply chain simplification – with printers easily deployable and moveable, the whole process can be enacted close to markets, thereby requiring less inventory.

5. Waste reduction – unused base material can be used in a variety of other products, and only what is needed is used, thereby reducing the waste of offcuts, among others.

There’s riches in the 3D material supply chain…

Research compiled by Smartech examines the future of current material supply chains for the key plastics used today in 3D printing.

Many 3D printer firms are racing to fill out their plastic material portfolios and are using them to create competitive advantages. At the same time, major materials companies are also starting to see 3D printing as a profitable niche market worth jumping into now, with the promise of large opportunities down the road.

The quantity and quality of plastic materials available for 3D printing systems are key determining factors in the number of 3D printer purchases.

The report hereby goes into detail on the idea of plastics as a source of competitive advantage for 3D printer firms. Since many OEMs are looking to plastic materials as a source of substantial revenues over the next few years, 3D printing firms have set about acquiring materials to force development themselves. This inexplicably raises questions about the future role of the OEMs – will they even be needed in the 3D printing factories of the future?

A further piece of research taken on by leading 3D printer manufacturer – Stratasys, proves that 3D printing is THE trend of the moment…

Stratasys’ report is based on an independent survey of 700 designers, engineers and executives – 40 percent of whom are employed by companies with over $50 million in revenue.

“We needed to look beyond our factory walls to get a more complete sense of where 3D printing is headed, so we turned to those who live and breathe the technology just like we do – professional users,” said Joe Allison, CEO of Stratasys Direct Manufacturing. “We set out to uncover the common themes among companies who are on the spectrum of larger-scale adoption and integration of 3D printing into their manufacturing process. We’re sharing our findings to help advance adoption and help manufacturers’ maximise the business benefits.”

Trends in 3D printing

The report indicates what applications, business benefits and challenges, equipment, materials and services are capturing the attention of 3D printing’s most committed users – and where their companies will invest. Among the more attention-grabbing of the results are the following:

  • The majority of respondents – representing the aerospace, automotive, consumer and medical sectors – strongly believe more end-use parts will be designed specifically for additive manufacturing (AM) in the future
  • Additive metal use is expected to nearly double over the next 3 years
  • The majority of respondents said that regardless of their company’s in-house AM capabilities, they believe there will always be value in partnering with an AM service provider to augment internal capabilities

“The results may serve as a wake-up call to take swifter action,” added Allison.

The Four Topics Procurement Conferences Should be Addressing

Last week I wrote a post about my (very positive) experience at the Procurecon Asia 2015 conference. You can read my thoughts here.

Attending the conference and indeed, writing up my thoughts, got me thinking about what I would have liked to have heard more about. So with this in mind, I’d like to present four topics that I feel upcoming conferences should be addressing.

1. Social Procurement and Ethical Procurement

This has a different meanings across different countries, something I came to understand at the Procurecon event. Luckily, there is now a consistent way to measure it. An organisation called the Centre for Citizenship Enterprise and Governance has developed the go-to metric for measuring social value. The metric is what sits behind the UK Social Value Act 2012 and Modern Slavery Act 2015. The organisation works with more than 20,000 members and has measured the social value of organisations with a combined value of £2.7 trillion

Given the rise of modern slavery and exploitation of vulnerable people globally (especially within Asia), CPO’s, leaders and progressive companies need to be more active. We need to discuss this at our conferences and measure progress every year.

2. Anti-Corruption

Currently Thailand, China and Japan are going through an anti-corruption push. This topic should always be on the agenda at major procurement conferences to share insight, provide support and continue to show leadership to eliminate criminals from our profession.

Total transparency of procurement and supply chain is the future and will reduce the opportunity for fraud. Technology is helping us achieve this high standard of accountability.

3. Business Analytics

Procurement has an amazing opportunity to create significant commercial value with world-class analytical tools and technology that can provide 360-degree visibility and business reporting of your corporate data.

We can be seen as key facilitators and leaders by adopting cloud computing, data analytics and machine learning which have been instrumental in recent times. These areas will continue to hold strategic importance as procurement becomes increasingly viewed as trusted business advisors.

4. Disruption technologies – The Internet of everything and 3D printing

Much has been written on these topics so I won’t recover them much, i.e. (read: http://www.topfunded.com/iot/internet-of-things-iot-growth-in-southeast-asia/)

Technology is driving significant change in business and all things. It would be great to hear from procurement thought or industry leaders on the topic. Both will have major impacts on procurement and supply chain in the future.

Does Cost Plus Encourage Lazy Procurement?

Many thanks to Market Dojo for giving Procurious permission to republish this article.

Cost plus (definition, adjective): “relating to or denoting a method of pricing a service or product in which a fixed profit factor is added to the costs.”

You could argue that every item or service sold is cost plus.  In other words you need to make a profit to stay in business so everything purchased has to have a margin added so the final sale will be more than the sum of their parts.

The area of cost plus that I would address is where the client has agreed to buys products or services from a supplier and the final price for those bought off the contact is not known.

This unknown value will be created from a cost plus relationship to ensure a profit is maintained. However, if the client continues to pay, where is the incentive for the seller to ensure they are procuring the goods or services at the market price.

Surely the client should be ‘on the ball’ and focus on year on year cost reductions although many times complex and varied builds on a contract prevent this.

‘Should cost’ exercises would be a useful tool in a perfect world if we all had the time but isn’t that why you are together with a trusted supplier?  Surely the supplier would focus on procurement costs so their sales exercises would be more competitive?

You would think so, but what if the market is not so competitive. In fact, does the cost plus model mainly arise in non-competitive markets dominated by larger players?

If this is the case you could draw the conclusion that procurement is not being driven in the right direction due to a number of unbalanced forces (cost plus, lack of competition, lack of customer focus). This bad practice could easily spiral downwards.

Will increased globalism be enough to shake up these suppliers or will the customers drive better value? Either way it often seems that procurement in these type of industries can be an afterthought that is of little importance.

Viva la procurement revolution.

Market Dojo is a pioneering software-as-a-service (SaaS) company that offers professional, intelligent and easy-to-use online negotiation software and accessible eSourcing software. Find out more at www.marketdojo.com.