The Moment When You Become Your Worst Customer

What happens when the shoe is on the other foot? What can you learn from being the customer?


By Billion Photos / Shutterstock

Recently I found myself buying graphic design services and it was a very interesting and informative experience. From the outset and initial engagement I was clear on the base concept and the output that I needed, but through the design process I found myself to be indecisive and part way through I completely changed track.

I’m sure we can all relate to these customer types that the company PATlive have coined.



  • The Complainer: A business’ greatest ally, this customer has a lot to be unhappy about and you’re going to hear all about it
  • The Overly Agreeable:These types will yes you to death and you never get to the root of their issues
  • The Expert: They know way more about your job than you do. Trust
  • The Pessimist: There’s a dark side to every solution. Well, the pessimist believes that’s true
  • The Staller: Hard to convince and hesitant, the staller can be a major toughie

In my experience, as the customer I became The Staller. It was such an unusual feeling for me and it made me think about communication styles and how we treat our stakeholders.

Stakeholder management

What is a stakeholder? Ultimately it’s someone that you need to work with from another part of the business in order to get things done. But really a stakeholder is just a person and the quickest way to keep things moving in your project, is to understand that person, what makes them tick and what world they operate in. You then need to adapt yourself in order to reach a successful outcome.

As a function, procurement can sometimes be considered a Dictator. Most of us would certainly never treat our customers that way, but, ultimately we are operating within a “rules” environment whether we are public or private sector. No matter how agile, flexible or creative we are, our game is managing risk. This can cause procurement people to put themselves in a position that is above the customer or stakeholder, in the earlier example we become “The Expert” and we expect the business to simply trust us based on our job title, our communication style can sometimes be influenced by this subconscious expert bias.

The mash up

In an information rich world, and information rich sector, overlaying customer types and communication styles can be a helpful way to ensure that we are efficient and effective. There are oodles of four box diagrams of stakeholder management, positioning, market dynamics, the list goes on and while this is interesting to understand categories of spend / suppliers and our business – it is largely academic. Just because a supplier sees your company as a “cash cow”, doesn’t mean that the relationship manager (who may be a “pleaser” type) will be seeking to exploit the contract. I find it much more effect to break down companies, contracts, teams and relationship contact points in to communication and customer types and to be open and receptive in stakeholder meetings

Back to basics

Tips for effective stakeholder meetings:

1. Prep

  • Be clear on what your questions are, what are the gaps that you need to know?
  • Be clear on your recommended way forward but be genuinely open to new ideas
  • Know the patterns of the business unit, the trends, what they’re likely to do and have plans A, B and C ready to go
  • Decide what you’ll concede on and what you will not

2. Chat

  • Meet face to face, or at least on the phone. The more connection the better!
  • Be open, be collaborative
  • But don’t be a pushover

3. Handshake

  • Agree what the actions are in a follow up email. We all know the people that smile and nod in front of you but run off and do the opposite! Take the time to follow up a summary of agreed points.

Learnings

By objectively observing my own recent experience, I was able to deepen empathy and understanding of what is like to go through a process you don’t understand or buy something that you’re not an expert in.

My designer being the super cool professional that she is, had me well and truly covered and had already seen my curve ball coming. Such is the role of any professional, she:

  • Know’s her stuff (technical knowledge)
  • Learned me as a customer
  • Interpreted my future needs to future proof hers
  • Led me through the process in collaboration even though she knew that I would land on the final concept right from the beginning

So what did I learn from this process?

It allowed me to fully understand that customers don’t always deliberately drag the chain, they don’t wake up in morning with the intention to delay the project, or with the sole purpose to throw out my work programme. That dilly dallying is not a sign of weakness. And that sometimes, I simply do not know better than my customer!

Although the above answers are tongue-in-cheek, there is some undercurrent of truth that I think we can all confess to thinking from time to time and so I encourage you in those moments to stop and consider how you would feel as your customer.

Extra for experts

When I was writing this it brought to mind the communication style toolbox “StraightTalk” this company has been around for awhile but for good reason, their communication styles make sense and they present them in a box diagram – procurement folk love a good box diagram!

Take their quiz and see what type you are!

Do You Know What Your Procurement Function Can— And Can’t—Do?

Leaders who know more about their procurement functions are more realistic about what procurement can do—and how much more it can achieve.

By RZ Images/ Shutterstock

For many business leaders, the procurement department may seem to rank low on the list of worries. In many companies, procurement accounts for less than one percent of the total functional budget, so it may not attract the same attention as functions with larger budgets. More importantly, however, we find that executives see procurement as purely a transactional function that executes commands and delivers goods, rather than a potential source of value.

But that myopia has consequences. The Global Procurement Excellence survey, encompassing more than 1,100 organizations worldwide, shows that the best-run procurement organizations have a far more accurate understanding of their own capabilities than other businesses have (Exhibit 1). Procurement followers, by contrast, are especially prone to overestimating their procurement skills.

Overestimating existing capabilities blinds companies to the need for improvement. And where is that improvement needed most? Certainly, procurement functions need to get the basics right in category management, global sourcing, supplier development, and risk management. But the survey data show that single most important driver of procurement performance isn’t in these “hard” metrics, but in “soft” metrics regarding the people in the procurement department (Exhibit 2).

Talent management is an especially major challenge, showing significant gaps between procurement leaders and followers. Scores were especially low on procurement career paths, consistent with perceptions of procurement as a field with limited advancement potential. Organizations that created selective job-rotation programs within procurement were more likely to be procurement leaders, as were those that made sure that high performers were well rewarded and moved on to other parts of the business.

Exhibit 1

Procurement leaders invest in talent management and set high aspirations

Exhibit 2

Procurement leaders are accurate in their self-assessment while followers fail to see performance gaps

Furthermore, with digital proving just as critical in procurement as in any other part of the organization, talent attraction and retention are becoming even more important for the future. Only by hiring, training, and retaining people with digital skills will procurement be able to deliver in an increasingly disrupted and competitive landscape.

These findings illustrate how important it is for businesses to keep procurement from becoming a backwater. It’s worth management attention, and it’s worth investing in procurement’s people.

This article was written by Riccardo Drentin, an associate partner in McKinsey & Company’s London office and Fabio Russo, an engagement manager in the Milan office.

Is Data A Promise Or A Peril? 3 Things That Really Matter

Why do organisations and leaders face such a challenge in using data at all, much less using it effectively.

By red mango/ Shutterstock

It’s everywhere and it’s generated every second. Just texted someone? You created data. Just booked an Uber. You created data. Did some grocery shopping? You created data. And that’s before we even get to your professional context. Sending an email, making notes in a meeting, paying invoices, assessing your business strategy. It’s all data.

With ninety per cent of the world’s data having been created in the last two years, Domo’s recent report shares some staggering facts about the explosion of information; equivalent to approximately 2.5 quintillion bytes per day. Not quite sure what quintillion is? If I say a massive, it’s a huge understatement. But you get the idea.

So, with all of this data, why do organisations and leaders face such a challenge in using data at all, much less using it effectively. And with all the talk of digital transformation and the role of analytics driving new insights, why is it proving so hard to translate data into meaningful actions and outcomes? These three things really do matter:

1. Upgrade your business and your thinking

Historically, legacy systems, fragmented business models and poor documentation are all elements that contributed to the difficulty of accessing meaningful data. Historically, organisations would have to work for months to collate important data on every aspect of the business; customers, sales, financials, and forecasting to name a few. Data would often be incomplete, unclear, or in some instances, missing. If you weren’t looking for it, you would be working on cleansing it, a painful by-product of the adage of ‘garbage in, garbage out’. The paradox of the digital world is that this becomes so much easier and harder at the same time. Easier because the capabilities of technology allow analysis of data to be faster and more insightful than ever before. We can now find patterns in historical information, and create predictions that help businesses position resources where demand and customer expectations intersect. And prediction is the alchemy of organisational success. Studying classics at university, I understand that prophecy and prediction are all about enabling the competitive advantage. And technology can enable that with thankfully a lot more clarity than a Delphic oracle.

The flipside of this however is that systems, processes and models are not necessarily well positioned to take advantage of what is now possible.  Doing things the same way is not designed to deliver a different outcome and for many organisations looking for quick wins, the foundational and cultural changes required to achieve foundational transformation are too complex. It’s easier to implement a digital technology. While that will improve the current state, the absence of a more comprehensive improvement strategy means an organisation will only go so far. To capitalise on the real opportunity data must become part of the DNA.

2. Don’t tell me more, tell me what matters

Along with internal and market data, organisations are now able to access a new world of data. Social media, third party data including weather and GPS, IoT and devices. Today data is literally and metaphorically, Big. The opportunity for an organisation here is that they can learn and use so much information that was previously unavailable. The agriculture industry can use weather and IoT to identify optimal harvest time, and retailers can use their own loyalty and purchase data with social media to target customers with highly personalised promotions and offers. And so with the quantum of data being so big, leaders are faced with another well known conundrum; that of analysis-paralysis. Where the challenge previously may have been not knowing enough because it wasn’t available or feasible to access, leaders are now confronted with the proliferation of data that creates a risk around not knowing enough because there is likely more that should be known. The organisational problem this creates then is that leaders are unable or unwilling to make a decision because the breadth of information is just too confusing or because there is personal risk in making a decision that may be proven to be incorrect if more data presents itself. Another mindset shift is required here and that is for leaders to make a decision based on the best possible facts at the time, and be ready to adapt and course correct should new data provide a different option.

3. How you use it matters even more than what you have

Data and big tech companies present very interesting case studies for cross-industry insight on how data can be used, and misused.  Some companies, like Apple’s Tim Cook, have come out very publicly to discuss privacy and how consumer data should be used, and how it should be protected. Others, like Facebook, have been conspicuous in their silence and their absence on their use of data given it underpins their business model. The last two years have seen a significant change in sentiment on what we, as citizens and as consumers, are willing to accept and condone. And while the conversation is still being played out, and the resolution is unclear at this time, it does provide valuable insight for any organisation that is collecting data and contemplating options for how it can be used. Trust in brand, and trust in leaders cannot be separated from how an organisation conducts itself.

The (Office) Walk Of Shame: Workers Who Quit Because They Are Too Embarrassed To Stay

It’s not all about the money. The real reasons why we quit range from bad bosses who make passes to wars over stolen food from the office fridge as well as shame – doing something so excruciatingly embarrassing we just have to resign.

By worradirek / Shutterstock

You might think that a chance to earn more money would be the number one reason why we quit our jobs. But you’d be wrong. Being offered more cash actually comes in at number three.

Topping the chart is the desire for a better work/life balance whether that is a job with more flexible hours or at least without the long hours most of us have to put in to get the job done.

Also making the top ten are long hours and long commute, which are basically other ways of saying the same thing: many of us are fed up with living to work and want to work in order to live.

We’ve had enough of bad bosses

The appalling behaviour of some managers is another reason why employees can’t wait to hand in their notice according to research commissioned by SPANA the working animal charity (yes, some animals work too!)

 “I thought the boss was useless” comes in at number five, “I fell out with the boss” at number nine and just making it into the top 20 at number nineteen “I had a physical altercation with the boss”. If things get violent, you know it’s time to leave (and perhaps sue?).

Despite #MeToo coming in at number sixteen for the number one most common reason for quitting is “My boss made a pass at me”.

Some of us get stroppy over petty squabbles

However, some reasons for handing in your notice are quite frankly ridiculous. Leaving because the free tea and coffee was taken away, because a colleague stole your food from the work fridge or you are not allowed to change the radio station or don’t like your desk position (all in the top 40) are a bit drastic…. There is no guarantee your next workplace will be any better.

That is why you should spend time really researching your new workplace – not just the job, but also who you will be working with including the boss, the office environment – (it might be a dingy basement not the plush interview office – and important work/life factors such as the commute to work.

Putting two fingers up to your employer

Half of us are so fed up, we just hand in our notice without having another job to go to.

Still, you can’t beat that “I quit” feeling… with half saying they felt a massive sense of relief after doing so. That probably includes those who did something so embarrassing (possibly at a work party or with the photocopier) that they just had to leave and never go back. In that case it is entirely understandable that you would not want to hang around while you find a new job.

But we’re not up to admitting why

You can see why someone would not want to admit that they had done something so shameful that they could not bear to return to work.

However, these quitters are not the only ones who shy away from the truth. One in four British workers have lied to their bosses when it comes to the real reason for quitting their jobs according to global recruitment specialist, Michael Page.

We may be leaving because we are not paid enough – or not feeling like we are valued – but we haven’t got the guts to fess up. Ironically, in this candidate-short market, saying you are leaving for a bigger salary could lead to a counter offer from your existing employer, so it might be worth making your point (after all, you are leaving anyway!)

The survey also found that one in ten just do not feel like they fit in – particularly LGBT workers, those from an ethnic minority background, workers with long-term health conditions and younger workers (aged 18 to 34.)

Top 20 reasons for quitting a job

1. Wanted to improve work/life balance

2. It was too stressful

3. Was offered more money

4. I didn’t like the company culture

5. Thought the boss was useless

6. Felt I wasn’t learning anything new

7. The hours were too long

8. The commute was too long

9. Fell out with boss

10. I hadn’t been given a pay rise in ages

11. The perks weren’t good enough

12. I felt I’d hit a glass ceiling

13. The atmosphere was dull

14. Fell out with colleagues

15. Hated my desk position

16. Boss made a pass at me

17. My ‘work best friend’ quit and it wasn’t the same without them

18. Had a physical altercation with colleague

19. Had a physical altercation with boss

20. Did something so embarrassing I was forced to move company

 

3 Success Factors In Building An Agile Supply Chain

Adaptability and agility in the supply chain are crucial in responding to fluctuations in demand and shorter product cycles.

By Nadezhda V. Kulagina/ Shutterstock

Today’s global marketplace is volatile and fast-moving.  Adaptability and agility in the supply chain are crucial in responding to fluctuations in demand and shorter product cycles. Agility within this unpredictable market requires that your supply chain is responsive and can deal with any sudden variations. According to most experts, there are three main success factors in effective and agile supply chains: your supplier relationships, your people, and the effective use of the supporting technology.

The FMCG sector

Organisations involved in the fast-moving consumer goods sector (FMCG) need to be able to adapt to unanticipated external shifts in customer demand.  Any company that has a constant stream of new, innovative products and services,   and is selling direct to the consumer (B2C) in the e-commerce world, needs to be doubly flexible.

Fast fashion poses real challenges. If you launch 10 000 new designs per year and you have more than 1 700 suppliers across 50 countries, you need to be both agile and quick.  Inditex, one of the largest fashion retailers in the world and the holding company of the Zara brand, does this successfully.

What contributes to its success is:

  • Market sensitivity.  Teams of retail and commercial specialists plan their products based on sales data collected on the fashion trends of target customers around the world.
  • Postponement of production.  Less than half their garments are sourced as finished products from low-cost producers. At least half are manufactured at short notice, mostly in Europe, depending on demand. 
  • Flexibility.  Manufacturing activities including labour intensive finishing operations are accomplished by a network of 300 specially trained subcontractors. 

Zara has gained accolades for its ability to swiftly implement decisions and deliver new clothes to stores faster than its competitors.  It has a supply chain that is not only agile and flexible but incorporates many lean characteristics into its processes, especially when overseeing the operations of its subcontractors.  In a lean approach, anything in the process that doesn’t add value for customers is eliminated.  Lean supply chain management is essentially about lowering the cost base and reducing waste as much as possible.   

The manufacturing sector  

In the manufacturing sector, being agile means that your supply chain must be responsive enough to deal with late deliveries and non-compliant suppliers.   The need to move raw materials, components and finished products across borders and over longer distances adds complexity.  This has resulted in longer planning time and increased levels of inventory.  Improving speed in logistics and minimising disruptions are important to gain competitive advantage and to reduce costs.  

Lean and agile supply chain solutions are often offered as an either-or option but many large global companies such as Unilever and Kimberly Clark are now embracing both approaches in their diverse operations. Having a hybrid supply chain strategy by using lean and agile approaches in combination is becoming commonplace.

Technology companies need to react quickly

 Communications and information technology company Nokiacommitted to achieving agility in its supply chain when it decided to move its manufacturing away from its home base in Finland. The company aims to refocus lower-value activities closer to component sources, thereby increasing supply chain responsiveness and streamlined logistics. “We are aligning our manufacturing strategy to increase competitiveness,” said Nokia spokesperson Mona Kokkonen. “We need to optimize our manufacturing operations so we can collaborate more closely with suppliers and be more responsive to customers’ needs.”

An I.T. systems company such as Cisco hasa highly diverse and extensive supply chain that spans the globe. Cisco has increased its agility, resilience and ability to scale by implementing new business models, a single ERP instance, standardization and automation throughout its supply chain.

The three success factors in building an agile supply chain

1.Focus on effective supplier contracts

If a key supplier fails it is necessary to have an alternative plan to avoid delivery crises and disappointing customers. In this situation, and especially if there is a sole-supply agreement, contingency plans must be put in place. Multiple supplier relationships for the same goods or services are sometimes necessary to reduce risk, but this comes at a cost. 

2. Build an agile team

The most effective people are those who are alert to external changes and market trends that may affect the business. They need to have a sense of urgency as well as being flexible. Exchanging information with suppliers, listening to customers and being aware of impending disruptions are all activities that, when acted upon, will set you ahead of the competition.  

3. Apply the right technology

Leaders in agile supply chains connect their supply chain partners on a shared technology platform, often cloud-based, so that they all have access to the same data in the same timeframe. Procter and Gamble (P&G) and Wal-Mart both speed up decision-making by analysing data on order status, inventory, shipments, documents, and payments.  The resulting information provides insights into future demand and facilitates forecasting.  

Supply chain agility delivers results when a company can quickly detect changes, opportunities and threats in the external environment AND act on this information speedily. This responsiveness depends on the ease of accessibility of usable real-time data and the electronic means by which to share it. 

Competition is fierce so organisations need to be alert and responsive to turbulent changes in the external environment.  As industrial and retail supply chains become more complex agility will become a real factor in a company’s survival. The use of appropriate technology will be a key success factor but only with the active involvement and support of both employees and suppliers.

If you’d like to read additional related content or get involved with thought provoking discussions check out the Supply Chain Pros group – a one stop shop for all your supply chain needs.

After Saving Costs, Now Is The Time To Save The World!

We, as procurement professionals and as citizens, have a responsibility to take action to tackle the challenge of working sustainably.

By Malchev/ Shutterstock

August 1, 2019: this could be when we reach the “Earth Overshoot Day” this year. For the rest of the year, we will be living on credit. When it comes to natural resources, that is.

“Earth Overshoot Day marks the date when humanity’s demand for ecological resources and services in a given year exceeds what Earth can regenerate in that year.” Source: OverShootDay.org

At the time of writing of this article, the actual date for Earth Overshoot Day is still unknown, but for several years in a row, we have reached the limit in early August. Based on this precedent, we can safely assume that it will be very similar this year. We may even reach it in July—a first! The situation also varies greatly by country. Some countries already reached it in February/March!

In short, this means that we would need 1.7 Earths to sustain our current level of consumption of natural resources.  Considering that we only have one Earth to go around, this is a very preoccupying statistic, and even more worrying is the trend and speed at which the day is arriving earlier and earlier each year:

This situation is clearly not sustainable and we, as procurement professionals and as citizens, have a responsibility to take action to tackle this challenge.

The end of the tragedy of the commons?

 “The tragedy of the commons is an economic theory of a situation within a shared-resource system where individual users acting independently according to their own self-interest behave contrary to the common good of all users by depleting that resource through their collective action.” Source: Wikipedia

To exit the tragedy of the commons, there is an urgent need for us to mobilise and act on a global scale. All economic actors have a role to play.

Governmental institutions can foster sustainability in two major ways. Firstly, by investing in businesses, research, and infrastructure and secondly, by creating regulations and policies to develop and promote socially- and environmentally-friendly practices. By adopting the right mix of carrot and stick, governments can steer behaviors and economic growth towards more favorable and sustainable outcomes.

Investors/shareholders also have an essential role to play, because by exercising their influence, they can push organizations to make sustainability a top priority. In fact, many green companies go beyond legal/governmental requirements and make sustainability the heart of their business model.

“[T]he next phase of business sustainability, what we call “market transformation,” is founded on a model of business transforming the market. Instead of waiting for a market shift to create incentives for sustainable practices, companies are creating those shifts to enable new forms of business sustainability.” The Next Phase of Business Sustainability in The Stanford Social Innovation Review (SSIR)

These companies and investors understand their obligations and interests, because the long-term survival of an organization depends on the health of its surrounding ecosystem. The concept of “Creating Shared Value” explains why a new type of investors is becoming more visible and active:

“Impact investing has become a broad umbrella that includes all investing with a focus on both financial return and social impact, but in its best form, impact investing prioritizes impact over returns and achieves outcomes that traditional investing cannot.”Jacqueline Novogratz, founder, and CEO of Acumen, a non-profit global venture capital fund whose goal is to use entrepreneurial approaches to address global poverty

Consumers represent another powerful force. Not only do they drive demand, their buying decisions also have the power to influence what products companies produce and, to some extent, how they produce them. The growth of the “business of sustainability” and of the “circular economy” are indicators of this shift.

So, when we ask ourselves who has the power to create a more sustainable future, the answer is really:  all of us. We can all exercise our influence as voters, investors, collaborators, and consumers to drive sustainable policies and practices forward.

And, when it comes to sustainability, procurement professionals have even more power than most!

Sustainable Procurement

Procurement plays a central role in transferring value from the upstream supply chain to the downstream of the chain. This means that, Procurement is the key player that enables a business to also “walk the walk” when it comes to sustainability by looking beyond prices and costs. Concepts like total cost/value of ownership (TC/VO) are not new, but they are still not commonly used, especially when integrating the impact on the ecosystem into TVO models.

For any sustainability efforts to be effective, businesses need to take a holistic approach. This is why truly “sustainable procurement” encompasses aspects related to the environment, labor & human rights, business ethics and, community development.

Many mature procurement organizations have already started to incorporate some of these aspects into their procurement approach, but the goal of these sustainability measures is often limited to “risk prevention.” Brand/reputation protection has long been a key motivating factor for organizations that have considered integrating sustainability into their approach.

And, as mentioned earlier, there is more to it than that. Sustainability can also be an engine for growth. So, to harness the full potential of sustainable procurement, procurement organizations must first understand and be aware of their role/duty, and then act accordingly to embed sustainability in all their activities. For example:

  • Sourcing decisions: Include sustainability in TVO models (e.g. CO2 footprint, use of best available techniques, supplier diversity, etc.)
  • Contract Management.: Incorporate sustainability clauses (e.g. reduction of waste/energy consumption, recycling, supporting disadvantaged or marginalized groups in the community, reporting on sustainability aspects, etc.)
  • Supplier evaluations: Integrate quantitative and qualitative criteria into scoring models and develop real-time scorecards that also leverage 3rd party data and public sources of information

“The obligation, and the self‑interest of every company is to build a robust society.” Tim O’Reilly

Sustainability is a challenge that requires the urgent attention of all of us. As Procurement professionals, our responsibility is even greater. Therefore, we should embed sustainability in everything we do and, as much as we are able, we should become the consciences of our organizations by ensuring that sustainability is not just an empty vision, but a practice. To do this successfully, we must ensure that suppliers

  • behave correctly in terms of Corporate Social Responsibility (CSR)
  • use performance indicators related to Environmental, Social and Governance criteria (ESG)

Only then can we play a role similar to an investor by following SRI (Sustainable, Responsible and Impact Investing) principles when making decisions and assessing options. This represents a much better purpose and meaning than just cost savings!

Redefining Procurement Excellence At The World Procurement Awards

Earlier this month Procurement Leaders hosted the World Procurement Awards 2019. And the winners are…


By vchal/ Shutterstock

Earlier this month Procurement Leaders hosted the World Procurement Awards 2019. The winners joined the ranks of the trailblazers before them and received the opportunity to proclaim their excellence to the world.

Now in their 13th year, The World Procurement Awards, in association with SAP Ariba, are the most celebrated and sought-after awards in procurement, recognising the most progressive people, projects and organisations across the globe.

The 2019 winners were announced during a prestigious ceremony hosted by Great British Bake Off presenter, Sandi Toksvig at the InterContinental London, The O2. The ceremony brought together 1,000 procurement elite and closed out the inaugural World Procurement Week, following the new Indirect Category Leadership Forum and industry-leading World Procurement Congress.

The independent regional judging panels were highly impressed with the quality of this year’s submissions: “The quality of the submissions is deeply impressive! What comes across clearly in almost all submissions is a
play-to-win mindset. We are fortunate to have that many top-notch procurement organizations across the globe creating real value for their companies.” Thomas Rothe, SVP, Procurement International, Strategy &
Governance, Bayer AG.

“It’s been an honour to serve as a judge for the awards. The process has been eye-opening as to the incredible progress being made by leaders of the function in areas from CSR to digital transformation, and becoming trusted advisors to their business stakeholders.” Howard Richman, CPO, Citrix Systems

All entries endure a thorough three-stage judging process, to ensure complete transparency and guarantee that the winners really are the best of the best. As another judge, Cindy Elliott, VP – Global Strategic Sourcing
at The Clorox Company explains: “To achieve the honour of being on the shortlist of winning entries, your submission is among the best-in-class of procurement being judged by leaders of multiple companies in a rigorous 3-step process! Congratulations!”

Other judges on the 2019 panel included senior representatives from Bugaboo International, Cisco, IBM Corporation, Mondelēz International, Novozymes, Siemens Healthineers, Swiss Re, and many more global leaders.

Congratulations to all winners and finalists and thank you to everyone who took the time to enter. We were overwhelmed with the sheer number of entrants and the evident innovation and passion displayed through these submissions.

World Procurement Awards 2019 Winners

Procurement Consultancy Project Award
Winner – MyBiz Solutions
Highly Commended – PwC

Procurement Technology Award
Winner – GEP
Highly Commended – Scoutbee

P2P Specialist Provider Award
Winner – Ivalua
Highly Commended – BuyerQuest

Corporate Social Responsibility Award, Partnered by EcoVadis
Winner – Mars Incorporated

Innovation Award, Partnered by Ivalua
Winner – Tomorrow Street (joint venture between Vodafone and Technoport)

Cross-Functional Collaboration Award
Winner – Mondelēz International
Highly Commended – GSK

External Collaboration Award, Partnered by Vizibl
Winner – China Mobile

Future Leader Award, Partnered by Capita Procurement Solutions
Winner – Cate Warman-Powell, BT, London

Risk Management Award, Partnered by IntegrityNext
Winner – Clariant

Supply Chain Initiative Award, Partnered by Maistro
Winner – IBM

Talent & Development Award
Winner – Turkcell

The ConnXus Supplier Diversity & Inclusion Award, Partnered by ConnXus
Winner – UNOPS

The GEP Procurement Team Award, Partnered by GEP
Winner – Heineken

The h&z Transformation Award
Transforming External Partnerships
Pioneering business impact Partnered by h&z

Winner – Vodafone Procurement Company

The h&z Transformation Award
Transforming External Partnerships
Pioneering business impact Partnered by h&z 

Winner – Vodafone Procurement Company

Internal Transformation
Establishing the function Partnered by h&z

Winner – Adidas

Cross-Functional Transformation Developing strong internal relationships Partnered by h&z 
Winner – Save the Children International
Highly Commended – Zalando

The SAP Ariba Procurement Excellence Award, Partnered by SAP Ariba
Winner – Vestas Wind Systems

The Smart Cube Procurement Leader Award, Partnered by The Smart Cube
Winner – Gary Foster, Highmark Health

Lifetime Achievement Award
Winner – Robert Monczka

Is Artificial Intelligence Destroying Your Job?

Just because a machine can learn from mistakes doesn’t mean it is self-aware and about to deploy robots to destroy humanity throughout time and space.  But it does mean that increasingly, machines can take on more and more human work.

By Leremy / Shutterstock

On 11 February this year, President Trump signed an executive order directing US government agencies to prioritise investments in Artificial Intelligence (AI) research and development. There isn’t any detail on how the AI Leadership executive order will be paid for, but as a statement of intent right from the top, it’s pretty powerful.  So, is this something you need to worry about?  Will robots be taking your job next Tuesday?  Probably not, but the answer is not as reassuring as it sounds.

When we think of AI, we probably think of Skynet (the evil computer that hunts humans in the Terminator films) or the similar tricked-up calculator that is the meanie in the Matrix films.  But real AI is a little more mundane.  It is more likely to be making sure your car headlights are on when you need them (and not on when you don’t), sending a nuisance spam call to your voice-mail or suggesting the next thing to watch on Netflix.  AI is the catchall term for software that can solve problems based on rules rather than a linear set of fixed instructions.  Really advanced AI can modify the rules based on how things turned out the last time or patterns that it detects in the environment.

Just because a machine can learn from mistakes doesn’t mean it is self-aware and about to deploy robots to destroy humanity throughout time and space.  But it does mean that increasingly, machines can take on more and more human work.  In recent decades we have seen this kind of automation steadily eat away at assembly line jobs as increasingly AI driven robots replace workers performing limited and repetitive functions.  A robot can sort big apples from small oranges more efficiently than a human and it never needs to take a break (or be paid). 

As the technology advances, it’s starting to creep into areas we might have thought of as immune from automation.  Medical diagnosis is increasingly the target for deep learning AI, the kind that recognises patterns and makes predictions based on those patterns.  During their career a doctor might see a few thousand x-rays or MRI images and get better at noticing patterns.  But AI software can review every x-ray ever made before the doctor has finished her morning coffee. 

A recent study, for example, compared the diagnostic precision of AI software with that of teams of specialist doctors from all over China.  The AI software was 87 per cent accurate in diagnosing brain tumours in 15 minutes.  The doctors could only diagnose 67 per cent and needed twice as much time to do it.  The AI increased precision and saved time because it was able to learn from a much larger base of experience than any individual doctor or team of doctors ever could. It uses like this that are why AI is predicted to add $15 trillion to the global economy by 2030.

President Trump joined the 18 other countries that have announced AI strategies since March 2017, because he wants the US to be a leader in AI rather than a follower.  And it is why investment in AI based startups jumped 72 per cent to almost $10 billion in 2018 alone.  

And even though some analysts are predicting 1.8 million jobs will be lost to AI in 2019 alone, those same analysts are predicting that the AI industry will create 2.3 million jobs in the same timeframe.  You can’t buy buggy whips now because the industry that created them was destroyed by Henry Ford, but there are many more jobs in the automobile industry he created than there ever were in the one he killed.

When analysts from McKinsey looked at the employment impact of AI in five sectors last year, they concluded that jobs which use basic cognitive skills, such as data input, manipulation and processing will likely decline, while demand for higher cognitive, social and emotional, and advanced technological skills should grow, as will the number of jobs that require customer and staff interaction and management.

If your job could be classified as administrative support then the future does not look bright.  And even if it requires you to do years of training so you can manipulate or recognise patterns in data, like those Chinese doctors, a financial analyst or a military strategist then AI will be coming to a workstation near you within the foreseeable future.  Humans are still a little too messy and unpredictable for the average AI bot.  So, if your job needs you to interact with humans and please them, such as in direct sales, management or counselling, then you are probably safe, for now.  And of course, if you are writing the programs that drive the AI then your career is assured.

AI is rapidly changing the face of the modern workplace.  And while nothing much will change by the end of the year, by the end of the decade, most jobs will be unrecognisable.  You’ve been warned. It’s time to transform yourself from a data geek to a people-person, before your computer takes your job.

Making Supply Chain Your Organisation’s Competitive Advantage

In order to succeed, a business must be able to deliver more value to customers than its competitors. How do you make supply chain your organisation’s competitive advantage?

By ShutterStockStudio/ Shutterstock

In order to succeed, a business must be able to deliver more value to customers than its competitors. It is becoming more difficult to find, develop and sustain these opportunities in the rapidly evolving business landscape.  The free movement of people across borders, developments in technology and real-time communications add complexity to global supply chain management. World trade is highly competitive, constantly changing and volatile.

As a result, supply chains today need to become more strategic. They are multi-layered, integrated manufacturing and distribution systems that, to work efficiently, need to be optimised on a continuous basis.

Technology

Automation of manufacturing using robotics and self-driving equipment in factories is now commonplace.  Software solutions and telematics improve information sharing, processing, and analysis of data which is converted into usable information to inform policy and operational decisions. However, it’s important to ensure that technology investments are based upon business needs – and not just the newest tech available.

Areas of competitive advantage

Many global businesses now compete on the basis of their supply chain capabilities rather than only on their product lines.  Leaders with efficient supply chains such as Wal-Mart, Proctor and Gamble, Tata Motors, and Unilever focus on rationalizing each activity in their supply chains. They constantly monitor costs, demand patterns, lead limes and administrative processes to achieve competitive advantage while applying relevant technologies.  

Cost of goods sold (COGS)

Reducing the cost of goods sold can be achieved through a more focused approach to procurement including price negotiation and strategic sourcing.  Inventory, distribution and freight costs are specific target areas where the potential to save can be found.  Walmart runs a retail compliance program that defines when, how and where their supplier must deliver. This helps the company reduce its costs by adjusting its storage and distribution needs in line with customer demand. This means lower prices for the customer.    

Freight costs can be managed down by outsourcing delivery logistics where there are potential economies of scale.  Telematics is used extensively by third-party-logistics providers (3PLs) to provide visibility into the movement of goods, both in the warehouse and in transit, and ensure their safety.   

Shorter lead times

There are many delays experienced in supply chains.  Some of these are because of slow processing of orders due to cash flow challenges, batching of orders, organizing shipping and freight and slow communication processes.

One of the main methods by which a business can drive increased value is by decreasing these lead times. Both business- and consumer-facing companies are experiencing increased demand for faster shipments. Speedy deliveries can have a significant impact on sales. Amazon Prime customers will often pay more for guaranteed next day delivery.

Flexible demand management

Technology now provides us with forecasts of future customer demand using artificial intelligence tools. Predictive analytics are extremely useful in determining the optimum seasonal stockholdings and allows us to prepare suppliers for increases in demand. 

A flexible supply chain can quickly adjust to fluctuations in supply and demand keeping inventory down when interest is buying is low but being agile enough to respond to spikes in demand.

Documentation and administration

Streamlined and slick documentation and administrative processes in the supply chain are a great competitive advantage.  Reducing re-work and duplication, increasing visibility and smoothing communication channels are real advantages.  Supply contracts and service level agreements are often neglected areas that create hold-ups and expensive errors.  Some progressive organizations are using blockchain technology for maximum visibility and security.      

Insource or outsource?

The decision of whether to outsource manufacturing and/or services depends on in-house capabilities. Ideally, areas where competency or capacity are lacking are prime candidates for outsourcing.   Some larger organizations have the capital and resources to manufacture their own products, others will typically outsource their manufacturing to white-label providers.   Building internal warehousing, logistics and distribution facilities is a major undertaking and capital intensive. Successful outsourcing contracts in this category have robust service level agreements and detailed contingency plans. 

Supplier relationship management (SRM)

SRM is a huge topic and ranges from simple tasks such as paying suppliers on time to developing long-term collaborative partnerships with suppliers for mutual benefit and to promote innovation.  Leading companies in SRM such as Nestle, Toyota and Coca-Cola treat key suppliers like collaborators to get them integrated and prepared to take extra steps to ensure quality and speed.

Sustainability

A sustainable supply chain makes long term business sense.  Consumer awareness of environmental and social issues is growing around the world. IKEA is one of many companies that work with suppliers on a variety of challenges, from energy efficiency to sourcing materials responsibly.  Ignoring this trend may create reputational damage that takes years to restore.  

Conclusion

Effectively making use of rapidly advancing technology could be the key to leveraging your supply chain to get ahead of the competition. Difficulties in supply chain management occur due to evolving complexities and interdependencies. Companies that work on achieving continuous improvement through consistently and persistently working on strengthening linkages will drive competitive advantage.  

If you’d like to read additional related content or get involved with thought provoking discussions check out the Supply Chain Pros group – a one stop shop for all your supply chain needs.


A Cross-Industry Look At Direct vs Indirect Spend

Vishal Patel explores the difference between direct and indirect spend across three different industries…

By jirawat phueksriphan/ Shutterstock

The most fundamental spend categorisation in procurement is the line between direct and indirect spend, but one effort that transcends this split is supplier management. This includes supplier information management, supply chain risk management/mitigation, and supplier performance management.

Whether spend is direct or indirect, supplier information should be maintained centrally and with a high level of accuracy. Who is the supplier, who are the points of contract, what are the terms of service or delivery? How much spend does the company have with the supplier and for what? As long as indirect suppliers are meeting expectations, they are doing what is required. Direct spend suppliers, on the other hand, must deliver a different level of ROI. Meeting expectations is the foundation for strategic partnership and collaboration.

Manufacturing

In manufacturing, materials, components and assemblies that will be sold to customers are direct spend while facilities, equipment, consumable supplies and MRO are indirect.

Direct suppliers often become strategic partners because the company’s collaborative efforts with them have a direct impact on innovative potential. They make it possible to develop products that lead to the expansion of market share and profit margin, both through their product offerings and their ideas. They sometimes participate in the R&D process, adding their IP to the company’s own.

Because of the key contributions these supply partners make to corporate performance, procurement needs to pay far more attention to risk and quality issues – whether they are present in the supplier or in their supply chain. Ensuring continuity of supply is far more critical when a supplier is a strategic partner and difficult to replace.

Most indirect supplier relationships are far more transactional, although services and deliveries still have to be dependable. Customer orders can’t be filled on time if machines don’t run, safety supplies are out of stock or facilities are poorly maintained. While procurement might not consider these relationships strategic, they are critical nonetheless. What you don’t necessarily want to do is separate your direct and indirect supplier information, risk and performance management efforts, ideally, you want to be able to look across all suppliers and spend.

Financial Services

One could make the case that financial services firms have no direct spend. Since salaries are beyond procurement’s purview, nothing the company ‘buys’ is resold to customers. That said, supplier information and relationship management are still high priority efforts. Risk and regulatory compliance requirements span nearly all categories of spend, and address global, high-profile concerns such as bribery, corruption, and data protection and privacy. We’ve all heard of KYC (know your customer) initiatives in banking for example. KYC has now gone beyond verifying and monitoring customers of the financial institution and now also often includes suppliers that provide IT solutions that touch the FI’s infrastructure (and thus their customers) called know-your-suppliers (KYS). For instance, a key piece of information that is often difficult to find but critical is knowing the ultimate parent of a supplier.

Although the vast majority of a financial services company’s spend is indirect, it can still affect the top line. In the case of banks, for instance, property management is critical to securing and maintaining customer loyalty and reinforcing brand identity. The remainder of indirect spend includes the ‘usual suspects’ like office supplies, travel and IT/telecom but often with a heavy services procurement need

Healthcare

Not unlike financial services, procurement teams in healthcare organisations are predominantly focused on indirect spend. The primary exceptions are the equipment and facilities that patients come into contact with. These indirect spend items have a direct impact on patient satisfaction despite not being resold. Machines must be running, supplies must be plentiful, and facilities must be spotless.

For the rest of indirect spend, Group Purchasing Organizations (GPOs) are common, based on the fact that the vast majority of transactional purchases are common across institutions. There are cases, however, where physicians need to have additional selection authority. These non-standard items, often referred to as Physician’s Preference Items (PPI), can present a challenge in terms of finding a qualified source and managing the cost and supply of the items. Those purchases, while indirect, do justify closer and more strategic supplier relationships, similar to a direct materials supplier

Supplier management is spend management – although the information, risks, and relationships vary by category and industry. Procurement’s challenge is knowing which supplier relationships are strategic and deserving of additional effort and which are not (but still knowing who they are) – regardless of the type of spend in question. Overall, having a strong supplier management capability and technology can work as a solid foundation to accelerate and improve digitisation and transformation efforts in all areas of procurement.

Ivalua is sponsoring the upcoming Procurious London CPO roundtable on 29th May. If you’re a CPO and would like to attend one of our roundtables in person please contact Olga Luscombe via [email protected] to request an invitation.