Category Archives: Trending

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).

Why CPOs and CIOs are the new #BFF

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 claims that collaboration may encourage corruption

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.

Impact 3D printing will have on manufacturing

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

Future trends in technology

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?

Money

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.

Automation Can Unlock Savings In Accounts Payable

Research shows Accounts Payable Automation is a top trend when it comes to improving the procure-to-Pay cycle.

Accounts Payable

With enterprises realising the continued inefficiency of mostly manual, paper-based Accounts Payable (AP) processes, new research provides insight to the top trends for improving the procure-to-pay cycle.

 

According to “Total Transformation: Trends and Value Drivers for AP and Procurement,” written by Ardent Partners, top performing AP functions are indeed driving greater process efficiencies and delivering strategic value to the enterprise. Leading the way is the continued focus on AP automation. 83 per cent of respondents to Ardent’s survey believe that within two years, AP processes will be largely automated.

“Ardent Partners research has shown that automation is a critical element for enterprises seeking to drive value across their procure-to-pay processes,” said Andrew Bartolini, Chief Research Officer. “When P2P processes are linked and automated, procurement and AP groups can operate on a platform that promotes collaboration, visibility, and efficiency.”

Ardent found that following AP automation, stronger AP and procurement partnerships, evolving AP staff skillsets, and greater involvement in working capital optimisation are the top trends for greater efficiency. The research suggests that organisations of all sizes must leverage the strategies and technologies that can jointly transform AP and procurement, leading to significant competitive advantages.

“While many organisations are realising the benefits of AP automation, that is just one part of the equation,” said Jim Wright, Vice President of Sales at Corcentric. “This important research suggests that a more holistic approach and breaking down silos between procurement and AP is what will ultimately drive down costs and inefficiencies.”

Procurecon Asia: Evolution from Operational Procurement to Strategic Procurement

procurecon asia

At this time of year, the events season is well underway and many of us are already starting to think about applying what we’ve learnt to our 2016 activities.

I recently attended the ProcureCon Asia Conference 2015 at The Amara Hotel in Singapore. I wanted to share my pre and post event thoughts on Procurious.

The ProcureCon Asia conference is aimed at CPO’s and senior strategic procurement leaders within Asia Pacific. I was fortunate enough to have secured a pass to the event. This is third year the conference has run and my first time in attendance.

According to company’s website: “ProcureCon Asia has firmly established itself as Asia’s only gathering for global and regional CPOs and Asian heads of procurement actively engaged in the evolution towards full strategic procurement”.

This event is one of the more important dates on the Asian procurement calendar. Procurement professionals from across the region flocked to Singapore to network and listen to an impressive list of speakers.

I was personally looking forward to meeting new and old procurement colleagues and hearing from thought leaders on how our profession is progressing in Asia Pacific. I was particularly interested to compare how Asia stacks up against the rest of the world in terms of our procurement best practices especially given the technological changes driving business.

How did our region compare globally and what are the opportunities now and in the near future? What does it mean for procurement as a profession?

Developing Procurement Maturity in Asia  

The conference theme was about progressing procurement strategically in Asia (to reach 3rd generation procurement and beyond) and there were many workshops that discussed that in more detail. I had also seen various industry data to indicate that Asia Pacific was behind other regions in procurement maturity (e.g.)

Report from Procurecon Asia

Having been a procurement professional working in the technology and automotive sectors for many years and having led a number of innovation projects (i.e. regional Ariba and MSP rollouts etc.), I was aware of that there was some differences between the maturity of procurement functions in Asia vs. the rest of the world.

Asia has seen massive economic progress in the last decades with impressive innovation and developmental steps taken by many companies and countries. A lot of the conversations at the event focussed around whether procurement was maturing at the same rate as the rest of the Asian economy.

There are a great number of individual industry leaders in Asia and there is no reason why Asia cannot be seen as global leader across industries in future years. We just need to be clear around how to get there.

Maturity Requires Talent

I think one of the most important steps to achieving procurement maturity in Asia is the development of future talent. We need top talent to ensure we have an ongoing skill base our companies require and as a driver of innovation and high standards into the future.

I know CIPS has a development plan with thousands of new students enrolled in China, I am not sure about other countries? CIPS now has an office in Singapore, which is great. ASEAN countries definitely need more procurement graduates entering into our profession, as those countries will provide strong growth, both now and into the future.

Innovation is Critical to Success in Asia 

The path to procurement maturity is unique to each business and industry sector. All companies and entities are coming from different starting points and have different drivers and priorities. What is common to all procurement teams based across Asia is the need to come up innovative solutions to the regions unique challenges.

While there was some discussion and workshops covering innovation and disruption topics, I felt the event could have gone into a little more detail on these areas. Something to think about when it comes to themes for next year’s event perhaps?

Measuring Procurement Maturity in Asia 

Going forward, how can we measure regional progress in Asia as a whole? It was possible to get some gauge at the conference, but given the vast size of the Asia Pacific region, the event was a tiny sample size.

It would be good to be able to out measures in place that would us understand regional procurement development in Asia Pacific.

The Role of China 

There were many questions and discussions about China throughout the conference. What is happening within? Have they come to the end of the growth road with rising costs and what it means for our profession? All agreed China has many years of progress ahead still, along with many challenges. Second tier Chinese cities and regions are already beginning to grow and play a role in the complex China story. This will continue for many years to come.

In summary, the event was a great experience; there was an impressive line-up of speakers and a room full of regional and global colleagues in attendance, so it was well worth the trip just for that.

During my three days in Singapore, I was able to have many one and one discussions and understand how these Asian based procurement professionals were managing their challenges.

Sadly, a couple of days does not really allow the time needed to have deep discussion on many topics but I am sure everyone had personal takeaways and made many new contacts as I did.

See you all there next year.

How Can We Better Manage Compliance Across The Supply Chain?

New research states that half of global firms have faced supplier non-compliance challenges.

Don't be the odd one out... comply!

2014 was a year marred by risk… Whether we’re talking about plentiful product recalls, compliance and environmental issues, or devastating data security breaches – it seemed supplier compliance management was never far from the spotlight.

Today, companies are increasingly being held responsible for the actions of their suppliers, thus breaking the long-held tradition of the buyer turning a blind eye. Ultimately the blame and consequences of the actions lay at the gates of both parties – forcing buyer and supplier to tackle tricky compliance issues head-on.

At the same time supply chains are growing larger, heightening both the impact and odds of non-compliance incidents. As a result companies, customers, NGOs, and regulators are rapidly stepping up their efforts to manage and monitor compliance across their suppliers. The expectation for companies to develop comprehensive supplier compliance policies,  along with regular audits and inspections to evaluate supplier compliance is a heavy cross to bear…

In order to gauge the challenges presented MetricStream conducted an in-depth survey that looked into the ways organisations across industries are managing, measuring, and monitoring supplier compliance. Respondents were made up of 100 supplier compliance and governance professionals from various industries.

The survey found…

The survey contains seven main areas of concern. We’ve highlighted some of key the findings below.

Non-compliance issues around management systems and documentation are widespread

The most common area of non-compliance was around management systems and documentation (59.5 per cent). This highlights non-compliance with a company’s internal documentation such as product specifications and quality policies; or, absence of systems and processes at the supplier’s end to ensure compliance with external regulations.

The other dominant area of supplier non-compliance pertains to Environment, Health, and Safety (EHS) standards (29 per cent). In the last few years, some of the world’s most reputed brands have been criticised after their suppliers were found to be violating environmental norms, or running factories that were unsafe and exploitative.  Companies will need to find ways to strengthen supplier compliance with EHS standards, keep pace with new regulations and guidelines in the field, and resolve or mitigate compliance issues before they occur.

Local laws are often overlooked

Only 43 per cent of respondents focus on local laws while drafting supplier policies. This could be a cause for concern, especially since local laws vary from one region to the next. For instance, the minimum age for employment in China is different from that in the US. If companies overlook these differences when drafting supplier compliance policies, they could face regulatory penalties.

Compliance information is only gathered when potential suppliers are being evaluated

Most of the respondents indicated that their organisations gather supplier compliance information either when evaluating a potential supplier (50 per cent), or while onboarding a supplier (26 per cent). Only 19 per cent of organisations gather supplier compliance information when adding a new product or service to the supplier’s portfolio.

To read the full findings you can download the report from here.

Understanding The Chinese Yuan And The Fluctuating Economy

 

Down, down, up. The revaluation of the Chinese Yuan…

The revaluation of the Chinese Yuan

About five years ago I stopped ‘doing’ procurement and starting writing about it.

One of the very first pieces I ever wrote was for Procurement Leaders. The article focussed on the impact the value of the Chinese currency (the Yuan) has on supply chains and more specifically the role that the Chinese government has allegedly played in manipulating this exchange rate for the benefit of its economy.

Manipulation 

China has, in the past, been accused of deliberately altering the value of the Yuan in order to make its products appear cheaper and thus more desirable in the export market. The strongest opposition to this practice has come from the US, who feel this manipulation has adversely impacted domestic suppliers as many American’s elect to buy cheap Chinese goods over US made products.

The US have also claimed the currency manipulations are anti-competitive and highlighted they have hindered the progress of US firms in China. By having a weak Yuan in relation to the US dollar, companies like Apple, that price in USD, found it more difficult to compete in the Chinese market with local suppliers who could produce a similar product at a lower price.

Despite the fact the value of the Yuan is not subject to market forces, but rather, is set by a team of economists, China has always maintained that its currency was fair and not been deliberately manipulated.

The debate continues

Jump forward five years and the value of the Yuan is once again making the front page of global business newsfeeds. Last Monday (August 10th) The People’s Bank of China announced it would make a ‘one time correction’ to the value of the Yuan.

This action, and accompanying confusion, sent global currencies into a spin. The Yuan dropped 2 per cent against the US dollar in a day.

Despite announcing only a ‘one time correction’ to the Yuan, The People’s Bank of China announced a further devaluation of the currency on Wednesday of last week. This caused analysts to fear that China’s wavering economic performance may be worse than they initially thought. Commodity prices and share values have continued to drop on the news.

To add further confusion to the situation, on Friday (August 14th) the central bank opted to raise the value of the Yuan against the dollar. The Bank has come out and stated “the market will play a bigger role in exchange rate determination.” Perhaps they were keen to show the value of the currency can go up as well as down?

For the time being, it appears Chinese goods will continue to be relatively cheap compared to the rest of the world. Some analysts have predicted that a flow of cheap Chinese made products will flood foreign markets (haven’t they already?) The uncertainty of over China and its currency is also likely to cast a continuing shadow over the tumultuous global commodity markets.

How To Spot Supplier Risk During Pickups & Deliveries

When your transportation vendor picks up or delivers your cargo, you should take some time to check for risky behaviours. This article reviews what to look for to ensure you’re not working with vendors that will put your business at risk. 

Delivery

Thanks to Spendrix for granting Procurious permission to republish this article. This article is the second in a series on how to identify various types of supplier risk. Catch up with the first in the series.

To wrap up our series on identifying supplier risk, we examine what you should look for during pickups and deliveries. Earlier articles in the series covered the importance of risk profiling as well as other situations where you should look for supplier risk.

When it comes time for a transportation vendor to pickup or deliver your cargo, review this checklist to ensure you’re not working with a carrier that will put your business at risk.

Equipment

One of the first things to inspect during pickups and deliveries is the equipment used to transport your business’ cargo. Before any cargo is loaded, identify the exact truck and trailer being used for the job. Make sure the truck and trailer aren’t damaged from previous trips. Also, check the deck of the trailer to make sure it’s intact; and that the rest of the trailer is rust free. Finally, inspect tires for adequate tread and proper inflation.

Before your cargo is ever moved, make sure your transportation vendors’ equipment is in good condition.

Driver State

Another serious risk factor to look for during pickups and deliveries is the physical and mental state of the driver that will be responsible for transporting your business’ cargo. Drivers will spend a lot of time with your cargo, so it is in a shipper’s best interest to ensure their driver will be safe. Obviously, check that your driver is not under the influence of any drugs or alcohol. Just as important, make sure they aren’t groggy or tired, which can be just as dangerous as having alcohol in your system.

Also, do your transportation vendors help ensure driver compliance by maintaining organised and up to date logbooks? Do they have a detailed understanding of their drivers’ hours of service, and work to avoid violations? If not, that vendor and their drivers could be putting your entire business at risk.

If you ever have any doubts about the state of a driver, don’t be afraid to speak up. Checking the mental and physical state of the driver transporting your cargo is a crucial way to protect your business from supplier risk.

Personal Protective Equipment

During pickups and deliveries, make sure your transportation vendors’ employees are using the proper personal protective equipment for the given job. OSHA requires, “protective equipment to be provided, used, and maintained in a sanitary and reliable condition wherever it is necessary.” This includes safety glasses, respirators, steel-toed boots, work shirts, gloves, hard hats, and hearing protection.

Unfortunately, workplace accidents do happen, but using the proper equipment goes a long way to minimise these accidents and protect workers. It is also a good idea to make sure the proper first-aid medical equipment is available if needed.

If your transportation vendors provides personal protective equipment and mandates its proper use, this is a great sign you are working with a reliable and safe carrier. However, if you repeatedly see carriers engaging in risky behaviours during pickups and deliveries by not using proper safety equipment, you may want to consider a different vendor for your transportation needs.

Securement

Properly securing your cargo is one of the most important steps for minimising damage. Therefore, you need to make sure your transportation vendors’ securement equipment and practices won’t put your cargo at risk. First, check all securement equipment for damage and the effects of ageing. This means inspecting chains for rust, tarps for holes, and straps for tears.

Also, ensure carriers are using the proper equipment for the type of trailer. Flat decks need corner protectors, and blocking and bracing should be used if loading a van. Finally, ensure your transportation vendor tightens down all cargo before the truck moves anywhere.

Making sure your business’ cargo is properly secured during pickups and deliveries dramatically lowers the chances of an accident involving your cargo. By checking your transportation vendors’ securement practices, you can spot risky behaviours during pickups and deliveries.

Overall, we’ve covered three areas where you can identify supplier risk – communication, on-site evaluations, and pickups and deliveries. By looking for risky behaviours during these interactions, you can help protect your business from the consequences of supplier failure.

Ben is a business development professional currently working with Spendrix. He enjoys the challenge of helping a young company grow. Ben is passionate about risk analysis, business administration, and technology issues affecting the transportation and logistics industry.