How can organisations preserve integrity of their supply chains, protect their workforce and prepare to ramp up operations in the post-COVID world? Here are four quick steps.
At some point soon, the worst of the COVID impact will have passed. And so, organisations need to work now to preserve the integrity of their supply chains, protect their workforce, and prepare to ramp up operations in the post-COVID world.
With lockdown restrictions easing across the globe, returning to a regular work schedule is imminent. Some of the basic near-term measures include:
Scanning body temperature at work site entrances
Reorganising the workplace to minimize common touchpoints.
Implementing effective disinfectant processes
Training employees on workplace hygiene practices
Developing contingency to respond to suspected infections
These can be achieved through a four-step process:
1. Plan a Phased Reintroduction to Worksites
A large number of workers returning to a shared worksite pose a significant risk of the virus spreading in the workplace. The higher the number of workers the higher the risk of contagion. Remember that managing the number of workers entering a worksite will be critical in ensuring overall workplace health in a post-COVID world.
2. Revisit the Workplace Setup
Granting worksite access to employees doesn’t essentially mean removing all the restrictions imposed during the COVID-19 outbreak. You will still need to closely follow all the government regulations pertaining to employee gatherings, social distancing and workplace hygiene best practices. And, it’s likely that the pre-COVID working environment will be unsuitable for these new restrictions to be implemented.
3. Transport Inventory and Operations to Non-Affected Areas
Many regions at the heart of several global supply chains have been severely affected by the COVID-19 pandemic. Sudden supply shortages from these regions or over-dependence on a single supplier for inventory in these regions may lead to operational delays.
Shifting inventory and production lines elsewhere or opting for local sourcing alternatives can help lower your risk exposure. Additionally, you can also start sourcing pre-approved inventory or raw-material substitutions from regions where a primary supplier has been impacted but a Tier 2 supplier is still operational.
4. Mobilise Support Structures for the Extended Enterprise
Proper technology can help you quantify the pandemic’s relative impact on contractors’ supply chains. Leverage advanced cloud-based workforce management platforms to collaborate with workers working on remote locations. Keep communication as consistent and frequent as possible to remediate pitfalls.
The Long-Term Landscape: How to Evolve Your Business
Short-term measures will provide businesses and supply chains with the much-needed foundation for proactive resilience. However, enterprises are steadily coming to terms with the fact that the COVID-19 pandemic has clearly and irreversibly transformed the future of supply chains. In order to ensure long-term pandemic-proofing of global supply chains, organisations need to take several measures.
Three main trends will positively impact the Procurement space post-COVID-19 and beyond and help in responding to unexpected challenges
What a strange year it’s been. As we marked the start of 2020, and news started to circulate about a virus in China, no one could have anticipated the global health crisis that was on its way.
As more countries ease lockdown restrictions and business find new and creative ways to meet the needs of their customers, there are many learnings we can take from the pandemic. These range from critical changes to growth plans to adjustments to company culture to operational improvements to increase supply chain agility.
Like many companies, we recognized early in the crisis the difficulties we would all face in this new reality. To get ahead of the curve, our co-founders Samir Bodas and Monish Darda, along with our leadership team, developed a framework based on our values of Fairness, Openness, Respect, Teamwork and Execution—FORTE—to help everyone at Icertis make decisions to meet the demands we faced.
We call that framework our four rings of responsibility—taking care of self, taking care of family, taking care of community and taking care of business—and prioritize them in that order. We see the Four Rings of Responsibility as our way of amplifying our FORTE values to ensure we do our part to help win the battle against COVID-19.
Outside of our own workplace, I’ve been speaking with our customers about how the industry is coping with the upheaval. Their experiences map closely with the findings from the ‘How Now? Supply Chain Confidence Index’ from Procurious that show only 1% of procurement/supply chain professionals felt ‘frozen’ by the COVID crisis. This is a testament to the rate of innovation across the profession and the strong role technology is now playing in helping drive speed and agility within procurement.
There’s no doubt that the pandemic exposed weaknesses in modern supply chain strategies as evidenced by the survey’s finding that 38% of respondents plan to expand their supplier base over the coming months. One of the main lessons that we are hearing from customers and prospects is that businesses need to create stronger, more flexible and diverse supply chains. To do this, it will be essential for businesses to identify areas in their supply chain where efficiency improvements can be made.
Leading brands are increasingly realizing this work starts with contracts, which define how your supply chain runs. By harnessing the critical business information in their contracts, companies can quickly address areas like value leakage and regulatory compliance, while accelerating the pace of supplier onboarding and reducing business risk.
Three Post-COVID Trends
In fact, a greater focus on risk management is one of the three main trends that will positively impact the procurement space post-COVID-19. Risk management used to be an abstract concept in the C-suite, only a concern for the CFO or the audit committee; now it is painfully tangible to everyone in the organization. Every business now recognizes (or should recognize!) that they need to take a programmatic approach to responding to black swan events. This underlines the need for having solutions in place that will allow organisations to clearly understand the risk/reward trade-off in all business processes. For example, being able to identify and manage risk throughout the contract lifecycle, is enabling procurement teams to examine their sourcing strategies to ensure they are not overly dependent on a single supplier. In the current business environment, where unfortunately many businesses are still struggling to survive, having a multi-sourcing strategy in place is a business imperitive.
Secondly, we will see greater alignment between the CFO and CPO. By the nature of their roles, CFOs have always been focused on those technologies that can give them business oversight of income and spending. However, the impact felt by COVID on that cashflow—from supply chain failures to shift in demand—has increased their focus on working with other areas of their organisations to identify and mitigate risk. As a result, they have become more invested in being able to structure and connect all of their company’s contract data, applying Artificial Intelligence (AI) tools to enable them to quickly surface and respond to threats, growth opportunities and challenges.
And finally, it’s well documented that the pandemic has forced an acceleration of digital transformation efforts. Satya Nadella put it best when he observed, “We’ve seen two years’ worth of digital transformation in two months.” It is clear that innovation will take a front seat in the post-pandemic business world. Companies have seen the benefits of having cloud-based technologies and processes such as contract lifecycle management available to them when working remotely. I anticipate that we’ll start to see increased investments across the board as businesses look to protect themselves for future disruptions and reinvent how they do business.
Then beyond digitisation, a greater focus will be placed on investing in technologies that can enable advanced data analytics, so that businesses are able to use this insight to keep out in front. This is where contracts will take a central role, providing more intelligence and connecting to key business processes so they are able to provide the right foundation for growth and evolution, and allow organisations to respond to unanticipated challenges and changing marketplace dynamics.
It’s been a challenging few months for everyone, but I am more confident than ever that if we keep our four rings of responsibility top of mind and take the lessons learned from COVID seriously, we will look back at this strange time and realise that it transformed the way we do business for the better.
First of all, take courage in the procurement profession’s future.
That’s the advice of Mark Holyoake, Managing Director of New York-based Holyoake Search.
“It’s never a nice feeling to have to worry about your job security, and my heart obviously goes out to those who have already been laid off, or furloughed, as a result of this pandemic,” Holyoake says.
“That all being said, my message for supply management professionals who are in the market for a new job right now is actually a positive one. Procurement hasn’t been nearly as badly hit as other areas within the business; and over the past few months, it’s actually taken on a more important role than ever at many companies.”
Holyoake says a shift in procurement strategy means companies will seek to reduce cost, increase working capital, better manage unpredictable supply & demand patterns, and protect against supplier risk.
“That is going to require them to hire new talent into the company,” Holyoake says. “While some are undoubtedly still under a hiring freeze, our observation is that the job market is starting to turn a corner and job confidence over the next twelve months is relatively high.”
So if you haven’t found the right role yet, or even if you’re happy in your job for now but you’re concerned about the future, there are new opportunities on the horizon.
Step 2. Beef up your online reputation
You can’t control if your CV or resume lands on top of the recruiting pile.
But you can stay top of mind with an active online presence – boosting your credibility.
Are you the kind of person that rarely engages with your online network? You’re missing out.
“Online presence is vital to get noticed in today’s digital world,” says Imelda Walsh, Manager at The Source – a boutique procurement recruitment firm in Melbourne.
So jump in and join the ranks of those who offer meaningful, regular contributions on social platforms. In return, you’ll build your network, keep up with industry developments, and you could even get headhunted.
Take LinkedIn for example.
“HR, hiring managers and recruiters are using LinkedIn to search for talent at all levels and have been for the past few years,” Walsh says.
That’s why Walsh suggests these steps:
Develop content and share it on LinkedIn to show you are a thought leader in your area. This will help you build a community, get noticed, and assist with building your personal brand.
Contribute to your network by liking, sharing and posting relevant content.
Be specific about the value you can bring to a role or organisation in your LinkedIn Profile.
Treat your LinkedIn like an online resume; include your responsibilities and achievements on each recent role on your LinkedIn profile.
And the best time to start is now, says recruiter Mark Holyoake.
“Just by being more active on LinkedIn, sharing relevant articles, and participating in discussions with others from the wider procurement community, candidates are raising their visibility among prospective employers and those who already work for them, long before they go to submit a resume,” Holyoake says. “This is the edge you will need to stand out among your competition.”
But LinkedIn is only one platform, of course. You should be active wherever your potential employers are, says Naseem Malik, Managing Partner at MRA Global Sourcing, a specialist procurement and logistics recruitment firm in Illinois, USA.
On top of that, Malik suggests starting a blog to demonstrate your area of expertise, or even finding relevant volunteering opportunities with non-profits or charities.
Likewise, you might consider taking leadership roles in professional associations, and seeking out speaking engagements. You never know where your next opportunity will come from.
Step 3. Acquire in-demand ‘hard’ skills
Impressing potential employers and recruiters online is only one part of the equation, of course. You also need the practical skills to land a new gig or get promoted.
What skills do employers want right now? Risk management, says Malik.
“We have observed a keen focus from procurement executives on risk, both in regards to response and mitigation.”
These skills include:
Supply Chain Mapping
Many companies were caught off-guard when China went into lockdown, Malik explains.
“Procurement groups that had previously invested in obtaining deeper transparency across their supply chain, down to lower-tier suppliers, were able to quickly adapt and identify which suppliers, commodities, and facilities were affected early into the outbreak,” Malik says.
“This skill is of critical importance, lest we encounter another unprecedented event in the future.”
During the pandemic, thousands of suppliers have claimed “force majeure” declarations as their businesses have grappled with crippling circumstances, says Malik.
“Being able to collaborate with legal teams to build in contractual protections to mitigate future risk, and understanding nuances between different governing laws across the globe is the desired skill set for procurement employers moving forward,” Malik explains.
Supplier Risk Technology Aptitude
“As Deloitte’s 2019 CPO Survey reveals, “most CPOs are often not satisfied with the results of their digital technologies, especially when managing supply chain risk and supplier relationships,’” says Malik.
“This gap has surely been amplified in 2020, and additional investment in supplier risk technology is a certainty since companies need to have their hands on the pulse of the risk factors for their key vendors, especially from a business continuity and financial solvency perspective. Professionals who familiarise themselves with this technology will separate themselves from the pack.”
4. Keep learning
Malik also advises procurement professionals to learn about rapidly changing technologies that affect the industry, like AI, Blockchain, and big data.
Tech know-how also includes communication tools that are firmly part of office life – Zoom, Slack, Microsoft Teams, Google Meet, etc.
You likely won’t get any training on how to use these tools if you join a new company. You’ll be expected to know and use them, so now’s the time to practise.
Additionally, Malik says it’s wise to pursue industry certification and take the opportunity to continue your education.
“There are tonnes of free webinars to learn and hone skills, stay sharp, and develop new areas of expertise,” says Malik.
5. Sharpen your ‘soft’ skills
Right along those ‘hard’ skills, you should take the opportunity to work on your ‘soft’ skills, says recruiter Mark Holyoake.
“Of course, your ability to negotiate a killer contract should not be dismissed, but having the soft skills needed to gauge a situation and read behavioural clues to determine your course of action, as well as communicate your ideas and strategies, is arguably more vital to success in the modern procurement function,” Holyoake says.
Some soft skills that naturally fit procurement are:
Finally, take time to look after yourself, says Holyoake. And that’s doubly true in these strange times.
“Ensure you make time for your physical and mental health while you’re engaged in your job search,” Holyoake says.
“Don’t forget to give time to your relationships and the people who are supporting you like family and friends, too. It might sound counterproductive, but by taking some time for yourself, you’ll have more energy and focus.”
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Yet the domination of the news with COVID crisis has meant that there’s little room for much else, which, strangely, may have been a blessing in disguise for some of our organisation’s PR departments – and our own supply chain obligations. From whispers that much of the world’s current PPE is currently the product of modern day slavery to suppliers who have been caught out using substandard (and even contaminated) ingredients in food, there’s mounting evidence that while we’ve all been distracted this year, supplier standards may have been slipping. And while that may not have spelled disaster for us just yet, what do we do when the news catches up with them?
It’s not good for them, and it’s not good for you. Here’s why … and what you should do about it.
If your supplier makes the news, will your customers blame you?
If you think that your customers are savvy enough to distance you from the reputation of your suppliers, think again. Ever since the Nike sweatshop scandal rocked organisations worldwide, it’s been clear that if your suppliers take a fall, you will too – and it can be highly damaging, if not deadly, to your reputation going forward. Businesses are just as – if not more – responsible for their suppliers than ever before.
Concerningly, recent research has also found that even when a supplier mishap has, in essence, nothing to do with your product quality, consumers will still start to believe that your product is inferior. This means that if you were to have something like a COVID outbreak in your factory and it was widely publicized, even if you were able to maintain production, your reputation would still be tainted in your consumer’s eyes. Unfortunately, the reputational damage occurs no matter what the issue is: even if, for example, your supplier was caught polluting or even embezzling, your reputation would be the one to take the hit.
If this sounds terrifying, it’s because it is. Even worse, conditions are currently ripe for it to happen. With our supply chains becoming more and more global and complex, it’s becoming harder and harder to track the activities of our suppliers, let alone our second and third tier ones. And with the rise of social media, the world is becoming more and more savvy – and any issues are becoming more likely to be exposed. Take, for example, Change.org’s famous campaign against Hersheys, which exposed, through social media, the continued use of child labour in its cocoa production in Africa, and forced the company to quickly change track.
The conclusion? If your supplier has something to hide and the media finds out first, you need to be prepared to weather the reputational and financial hit.
If it’s just slightly bad news, does it matter so much?
As talented and thorough procurement and supply chain professionals, most of us already have an oversight of the worst risks and issues within our supply chain – and thankfully, we’ve mitigated them. So if something small slips through the cracks, will it really matter?
Unfortunately, yes. Firstly, humans have a predilection towards bad news. Decades of psychological research have shown that we’re all naturally drawn towards bad news, so much so that even if nine out of the ten news stories we read are positive, we’ll always remember – and act on – the negative one. What this means is that we, as supply chain professionals, need to be extra cautious about what mishaps might slip through the cracks.
Secondly, consumers don’t rationalise the ‘degree’ of bad news. In what psychologists call the ‘spillover effect,’ consumers were found to equally condemn companies for supply chain failures, even if the news wasn’t, technically, that bad. On every occasion, bad news in the supply chain meant that consumers were less willing to buy from the organisation for an extended period of time.
How do you mitigate the damage?
By now, you’re probably frantically checking and rechecking all of your suppliers, terrified that something may have gone wrong. And while the response is justified, and we should always aim to have as much insight as possible into our suppliers, know this: you can mitigate the damage done if your suppliers do end up in the news for the wrong reasons.
And the best way to do this is to simply try to help find a solution, and communicate this to all involved.
In positive news, research into the spillover effect has found that while damage can be done quickly, it can be undone at just the same speed. Organisations that act quickly to rectify issues, for example, those who instantly clean up environmental spills or put an end to labour issues, can rescue their reputation, if they take responsibility and put mechanisms in place to do better. And while consumer’s buying behaviour may not revert instantly, if you are able to win back the trust of your customers, the damage need not be long term.
Managing risk and reputation
Given the complexity of supply chains these days, maintaining accountability of your suppliers has long been an issue, especially when it comes to tier two or three suppliers. Yet just because this task is challenging, it doesn’t mean it isn’t important. Thankfully, if reputational damage does occur, it is possible to reverse it. But do we want to take the risk of finding out?
Has your supplier ever ended up in the news? What did you do about it? Let us know below.
It’s no shock to anyone that women have been shortchanged in the workplace for decades now. We’re still struggling for equality on so many levels. From being promoted last, to being passed over for the best assignments, we always end up seemingly on the short end of the stick.
That surely doesn’t mean we haven’t made progress. This problem literally comes two months after Forbes reported Women had started holding more jobs in the US than men. And now, they have accounted for 55% of the increase in job losses.
That means, a portion of our progress may be quickly erased with the new ‘Pink-Collar recession.’ So, what exactly is it?
In a recent article from The Guardian, they define it as the economic downturn from the COVID-19 outbreak, that has ended up affecting more women than men. The opposite of what we typically see in times of economic crises.
Great. It’s exactly what we don’t need when it comes to advancing the cause. It’s been hard enough fighting for equal pay, now this setting us back even further!
Causes of the Pink-Collar Recession
Although there may be some who may be happy that we are going back to more traditional ways, most of us are not. And that’s only a sliver of the problem; because, it’s tradition for women to stay home and take care of the kids.
Now, just because it’s tradition, doesn’t mean it’s the right thing to do. Women have more than proved themselves when it comes to being successful.
Just look at amazing women politicians like Angela Merkle and Jacinda Arden. Not to mention all the women who have their own businesses and made it to the C-Suite of Fortune 500 companies. We’ve overcome the odds to be some of the most powerful women in the world!
Unfortunately, not all women can work full time, and therein lies another problem. Women started out with a disadvantage from the beginning. Women are over-represented in low-wage roles.
Add to that the majority of industries women have chosen to work in have been the ones the hardest hit by the downturn. Retail, food services and accommodations (hospitality) are at the top of that list.
Even in certain industries like transportation (i.e. airlines), women with the least amount of seniority, are most likely to lose their jobs.
“Among those doing paid work at home, mothers are more likely than fathers to be spending their work hours simultaneously trying to care for children…that in lockdown, mothers in two-parent households are only doing, on average, a third of the uninterrupted paid-work hours of fathers.”
I personally can validate these statistics. And I can say that it isn’t something I’m particularly happy about.
Women Making it Through and Past the COVID-19 World
We’ve endured much tougher things as women than a virus, so I’m certain we will make it through these times. Some women like myself, have been able to keep their jobs and effectively multi-task taking care of their children at the same time.
But for some, that may simply not be true or as lucky. Therefore, the question then remains, what are the women who have been directly affected to do?
Well for one, the women who have managed to maintain their positions and family, must look out for those who were less fortunate. Being aware of the current impact to the work environment, just simply isn’t enough.
Second, we must push harder for gender equality in the workplace. Equal pay, pregnancy leave, and flexible work-schedules (remote too) are at the top of my list. But even succeeding with these things, won’t get us to equality.
Go out of your way to become a role-model or mentor to other women who have been held back in their careers. And if you are managing women employees, make sure that they know you value work and are rewarded to reflect this.
We always knew the path to gender equality wouldn’t be a straight one, but I’m sure few of us planned for this set-back. That’s why it’s so important for us to try and keep what advancements we had made. And then push harder, for more in the future.
Without this, we may be leaving ourselves open to a much dire situation. And I personally can’t think of anything worse than our society being sent back to the 1950’s. We deserve equality, so let’s not let each other down and support the fight!
A clean start: tips and tricks for corporates to create a COVID-safe workplace.
One of the biggest misconceptions out there right now is that cleaning is booming, says Estelle Lewis, who is the group executive general manager for partnerships at cleaning services and hygiene products company IKON Services.
The company, which provides cleaning services and hygiene products to a number of blue chip clients, including Crown Resorts, has been on a difficult journey.
A big challenge has been accessing accurate information and ensuring it’s disseminated to staff and clients, she says.
“People turn to cleaning companies as the experts about COVID-19, but the reality is that this has sort of hit us all very quickly and none of us have really had time to sort of take in what this virus actually means for all of these businesses.
“We’re learning while our clients are learning, but we need to be that one step ahead,” Lewis says.
The Group General Manager of Procurement and Supply Chains, Ben Briggs admits he’s had similar challenges at Crown Resorts, with approximately 16,000 staff and contractors regularly on site.
“Reopening a Casino will have its challenges. It’s probably one of the most difficult things to do because you don’t typically reopen, you’re always open,” Briggs says.
“So we have to understand how to create a safe working environment for people, staff and patrons as part of the reopening phase.
“There’s a lot of human elements that we’re going to have to work through over the next couple of months to make sure that we can create a safe working environment at Crown,” he says.
As people get back to work, there’s going to be a level of comfort around the fact that we’re getting back to normal. But we need to be reminded that it’s a ‘new normal’ and a complex space, the pair agree.
The pair opened up about some of the 7 biggest challenges for companies looking to create a Covid-safe work environment:
1. Public confidence
A key priority right now is looking for ways to make the public need to feel safe about returning, so a lot of work needs to go into messaging, Briggs says.
“It will be a different working environment and a different operating environment. You may see thermal scanners at entry points, limited access points into the casino, furniture removed so that we can create social distancing and all the communication that needs to go along with that so that people feel safe,” he says.
“It’s not going to be easy, but I’m pretty confident that with the measures we’re putting in place, people are going to feel safe to come back to the property and come back and enjoy our facilities again,” he says.
Briggs admits he’s been dubbed ‘The Sanitiser Guy’ and ‘The Sneeze Guard Man’ by his colleagues as he looks to overhaul Crown.
“Where practical be such as hotel reception desks, we’re putting sneeze guards up. There’s sanitisation stations everywhere you go. People are going to have access to masks and sanitisation,” he says.
2. Visual reminders
Visual reminders in the form of signs and messages are being erected throughout properties and visual reminders added to flooring to keep people apart.
Making sure that hand sanitisers and wipes are available to all for staff to clean down their environments when they come and go will be crucial, Briggs adds.
Remote working will also be crucial, because we are unlikely to get all the 15,000 people back to work in the same space. We’re going to have to be smart about it. “Assessing which roles can work remotely, how we structure the work environment to enable appropriate distancing and which roles are operational and are needed on the ground will require some finessing,” he adds.
Lewis adds that she’s looking at sourcing a piece of sophisticated technology with an LSD screen to allow customer communication that allows you to add COVID-19 messages and takes temperatures at reception points is on the cards for clients.
3. Communal kitchens
The communal kitchen was once a place where food, coffee and great conversation takes place in offices, but that looks set to be a thing of the past, Lewis says.
Communal plates, cutlery, glassware and the shared office fruit bowl is on the chopping block.
“Kitchens are also a tricky space from a cleaning perspective. It could be an area where fogging works really well, which is a mist spray that works well for tight spaces. The high grade chemical concentrate mist helps get into corners and edges where viruses can live, which I’d recommend doing on a regular basis,” Lewis says.
And while there a plethora of new cleaning companies entering the market offering fogging and sanitisation, businesses need to ensure they engage companies that stand for trust and integrity.
4. The boardroom
Board meetings will be a very different function within a business. The room will be transformed to adhere to social distancing, with every second chair removed, access to wipes and additional bins for wipes to prevent the spread of germs. Hand sanitiser will also be added to the room.
People will be expected to take responsibility for their own hygiene, and report any symptoms if they’re feeling unwell and stay home, Briggs says.
5. Vulnerable workers
Vulnerable workers who are considered high risk require special consideration in the workplace, Briggs says.
It’s about putting enough protections in place for them so they feel safe and willing to come back into the office. A perspex screen and floor markings to encourage social distancing perspective so that people have their own space will be crucial.
“Adapt our workplace policies and processes to ensure they are safe and their workspace is a safe haven will be crucial. Reporting and compliance is also important,” Briggs adds.
6. Response plan
Creating a rapid response process that provides specific measures for closing down in the event of an outbreak is crucial, Briggs says.
The rapid response plan ensures properties are closed down and reopened swiftly, which also needs to be part of a training regime for staff and enforced, he says.
7. Clean desks
The traditional desk station is being overhauled, while hot desking has been abandoned in corporate settings around the world.
While people will continue to be encouraging people so work from home, if they do need to come into work, each personal workspace will need to be kept tidy and minimalistic so surfaces can be cleaned is paramount, Briggs says.
“It’s about keeping those practices up so that we don’t get comfortable and lazy in the area that things have gone back to normal so that we can go back to our previous behaviours,” Briggs says.
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You might think that your most strategic suppliers are the ones you spend the most with. But supply chain crises may shine a light on which suppliers are actually strategic.
Modern-day supply chains are truly global, highly complex and getting longer and longer. 20 years ago, most of a company’s suppliers were probably within a very short radius. Today they could be on the other side of the world.
The reality is that organisations have more difficulty than ever keeping track of their entire supply chain – from Tier 1 all the way down to the smallest supplier organisations. This poses enough challenges for organisations when it comes to issues like environmental performance or modern slavery, let alone with supply chain efficiency or continuity of supply.
With so many suppliers to keep track of, organisations have to make decisions about who their strategic suppliers really are. Traditionally, organisations (and their procurement departments) have fixated on the suppliers with the largest spend volumes. In reality, they should be most concerned about a supplier’s risk profile.
This risk profile is thrown into light at times of crisis in global supply chains. This may come from volcanic eruptions disrupting global flights and travel, or from a global pandemic, such as COVID-19.
What Does the 1% Look Like?
All suppliers are unique, bringing different things to an organisation beyond the goods and services they provide. When assessing which suppliers to manage as ‘strategic’, procurement departments have traditionally focused on their visible suppliers. This usually is defined by spend profile and determined using traditional methods such as the Pareto 80:20 principle.
However, it’s the less visible, hidden suppliers that are often the most strategic. These are the 1%.
This group is made up of the suppliers who are easiest to ignore as they supply something low-cost and apparently trivial to the organisation. In truth, this trivial component may be manufactured from an expensive or rare raw material, be a proprietary item, or come from a supplier who has a monopoly or dominance in the market. Despite this item costing very little, the likelihood is that it is difficult, if not impossible to replace. This makes the potential impact on the supply chain huge should the supplier fail to deliver.
Assessing these suppliers using another procurement favourite, the Kraljic Matrix, they would fall into the ‘non-critical’ or ‘bottleneck’ categories (see below).
However, in many cases, the risk aspect of supply is downplayed or removed entirely, leaving the focus solely on profitability. This is where the issues with your 1% lie.
The Role of Technology
In times of supply chain crises, every supplier – even your ‘transactional’ and ‘bottleneck’ suppliers – need the same attention in order to ensure you’re not missing something. What may have once seemed like an impossible and highly inefficient task has been aided considerably by the advancements in procurement solutions and technology.
Organisations have gone from a reliance on their transactional systems, such as their ERP, and the knowledge and experience of their procurement teams to manage their suppliers. This has left organisations exposed through a lack of data to define and manage strategic suppliers, as well as the loss of knowledge when people leave to join another organisation.
Procurement technology and solutions have developed to the extent that they can help provide the necessary foundation for tracking an entire supply base. This has moved the profession from a position of weakness, to a position of strategic responsibility. In the current climate, people are now actively talking about supply chains and procurement’s role now and in the future.
Therefore, the profession cannot undermine itself by failing to manage its 1% effectively. Even big organisations, with highly developed supply chains can be caught out, as we can see below.
Real World #1 – Keeping Supplies Zipped Up Tight
The fashion industry has taken some very public, very high-profile hits for its supply chain. Organisations have a uniquely complex situation to contend with – finding suppliers who are flexible, reactive and usually low cost on one hand, while on the other ensuring that the highest ethical standards are still achieved.
Suppliers can frequently be small, family-owned and geographically challenging too. However, you might consider an everyday item on many items of clothing a product of a 1% supplier – the zip.
You might overlook it, but a zip is a critical item for manufacturers and designers. The market is dominated by two major suppliers, YKK and SBS, but there are other players there too. However, the majority of these are geographically focused in Asia – specifically Japan and China. Switching supply is unlikely to be easy, so all it takes is a supply chain crisis in this region, say a lack of key raw materials or alloys for production, and supply could be disrupted, without viable alternatives.
Low value compared to other items in the fashion design process, but very high risk.
Real World #2 – Bearing the Risk
Manufacturing is another industry with highly complex and multi-layered supply chains to manage. In automotive manufacturing, supply chains have moved towards the ‘Just-in-Time’ method pioneered by Toyota, making continuity of supply and supplier reliability critical at all times. It’s no use having 99% of the parts available to use, when the 1% is stuck in its factory, two tiers down your supply chain.
As such, a greater focus on quality over price is required, but even this is not fool proof. Fiat Chrysler announced in February that it was halting production at one of its factories in Serbia as it couldn’t get parts from China. Manufacturers who would traditionally hold minimal stock to remain competitive and agile are faced with a situation where that very strategy could pose a huge risk to their organisation.
As the impact of COVID-19 related factories closures around the world continues to grow, even large manufacturers may actually stock out before there’s a chance to re-align. And these items could be as simple as ball bearings for wheels – very low value, but huge risk at this time.
De-risking the 1%
Is there a solution that overworked procurement professionals can take advantage of in the face of a supply chain crisis? When it comes to supplier risk, there are a number of actions that may be taken immediately in order to reduce this.
According to KPMG, these can include setting up a response team to manage the flow of information across key stakeholder groups, reviewing key contracts with customers and suppliers to understand liability in the event of shortages, and conducting a full risk assessment to provide a list of actions to take, which may include shortening supply chains and assessing alternative options.
In the long-term, however, the focus needs to be more on supplier management and the creation of truly ‘strategic’ relationships, built on risk profiles rather than value. This should be done across the entire supply chain and aim to go down through the various Tiers that exist in it. This is defined as ‘Holistic Supplier Management’, a concept explored in more detail by JAGGAER in their latest whitepaper.
JAGGAER’s research uses a similar model to the Kraljic Matrix for supplier positioning, but with the key difference that it focuses on risk and cost to the business (rather than cost of supply) in the event of supplier failure.
A concept is all very well but being able to deliver Holistic Supplier Management and manage suppliers on risk and cost requires being able to access data on current performance, the impact of an individual supplier on your organisation, as well as the value that they deliver. This is where technology comes to the aid of procurement and it’s what is offered within the JAGGAER Supplier Management solution.
The solution not only provides the data and analysis that is required by procurement for key decision-making, but also gives a deeper understanding of suppliers to help construct better contracts that deliver greater value to the organisation. By using technology like this, procurement can effectively and efficiently de-risk their supply chains, keeping them better prepared for managing crises when they inevitably hit.
Don’t Get Caught Out
The key message, as every procurement professional knows, is that good communication is key to maintaining a strong and stable supply chain. However, as supply chains grow more and more complex, geographically dispersed and multi-tiered, individual procurement professionals and departments need to make use of all the resources at their disposal.
No matter how safe you think you are, how stable you believe your supply chain is and how strong your links are with your strategic suppliers, there is always an inherent risk within that 1%. By being better prepared and truly understanding your supply chain, you can avoid being caught out in time of crisis.
We all know networking and creating connections with the people around us is important, but how do we do at the moment? Here’s how.
Any successful person will tell you that it isn’t what you know, but who you know that gets you ahead. Forging new connections and fostering existing connections can help you broaden your horizons, discover new opportunities, and even secure a much sought-after promotion. Often though, creating these important relationships happens in person. Whether it be via a kitchen chat at your workplace or at an industry-specific event, great connections often start with a personal conversation, a handshake and perhaps an impromptu coffee.
Yet unfortunately, with the world the way it is at the moment, the face-to-face option is not appropriate and in many places in the world, not even possible. So does this mean that networking needs to stop? Certainly not. Here’s five creative ways to stay in touch with your connections, new and old, without ever having to shake a hand.
1. Check in people in your network
Given that demand for mental health services have soared worldwide, from a care perspective, there’s every reason to check in on people within your network, and a number of ways you can engage with them.
Connecting or reconnecting with people could be as simple as asking them how their pandemic experience has been, and whether they are, personally, doing ok. Doing so will help them feel supported, and could open up any manner of conversations about future plans or potential opportunities. Connecting certainly doesn’t need to happen in person, but instead should be done via industry-specific networking sites such as Procurious.
Given the high amount of people who have lost their job or had their hours or pay reduced, it is also a great time to ask others whether you can introduce them to anyone in your network. Well-timed introductions can make all the difference right now, and could be the source of hope and inspiration a colleague needs to get back on their feet.
Finally, it’s been a tough year for everyone, and every extra endorsement can help boost not just someone’s profile, but their morale as well. If you get a chance, give a colleague a recommendation. It could just be the boost they need to secure an opportunity.
With the unprecedented number of people out of work at the moment, many may be looking for work for the first time, so offering to look over someone’s CV could be of real benefit. Alternatively, you could direct them to opportunities within your network, or even recommend online events or upskilling options that might help. Helping others in need is what networking is all about – you never know when you’ll need to call in a favour and your connections won’t forget that you helped them out.
3. Give recognition and show as much appreciation as you can
When it comes to feeling appreciated by our colleagues and managers at work, people typically believe that money speaks louder than words. But research shows that isn’t true. In fact, simply saying thank you can go a long way – and can help deepen your connections with those around you.
Research conducted by Gallup of over four million employees showed that recognition at work boosts not only someone’s morale, but their productivity and engagement with those around them. In other words, recognition makes us happy! But how do you do it in a sincere and meaningful way?
One great way to do it is to give someone praise for something they individually contributed. Ideally, do this in a public forum, such as a procurement industry group discussion board. Giving someone praise publicly for their great work will help them amplify their impact.
4. Recommend learning content
While many of us in procurement have found ourselves busier than ever during the pandemic, some in certain industries may have found ourselves scratching our heads, wondering what to do. This might particularly be the case if we’ve been furloughed or worse, made redundant.
But if we’ve found ourselves with spare time, there’s plenty we can do about that! When this pandemic is over, the procurement landscape will look a little (or entirely) different from what it did before. That’s why now is the time to focus on a number of different technical and soft skills, including resilience. Many courses that you might be interested in are inexpensive or even free, and recommending them to other people can help showcase your industry knowledge and give you a reason to get in touch with your connections.
5. Start a group chat (and talk about things besides work)
The point of creating connections is to broaden your network and potential opportunities. But in creating and fostering these connections, sometimes it’s important to talk about everything but work. Plus, having a casual chat and even sharing some humorous banter with colleagues can inject some fun into your day and help you feel less lonely and more connected.
Whether it’s you sharing cat snap chats or talking about your children or the (limited) activities you’ve been able to undertake during lockdown, bringing your whole self into group conversations can help foster more authentic connections with those around you.
How have you been staying connected with your colleagues and those in your broader network? Do you have any other suggestions? Let us know in the comments below.
Considering this macro-economic turmoil, new research shows that most contracts and supplier partnerships held strong during the pandemic
The early days of COVID-19 were financially tumultuous and incredibly stressful. For most business executives, uncertainty ruled the day: Would my contracts hold? Will I get paid on time? And will I have enough funds to pay my team and suppliers?
The issue is exacerbated in the supply chain, where late payments and cancelled contracts in one part of the world create chaos for unrelated businesses located millions of miles away. Of course, these short-term concerns were ultimately trumped by even bigger issues relating to bankruptcies, business closures and unemployment.
Considering this macro-economic turmoil, Procurious’ latest research shows that most contracts and supplier partnerships held strong and stood up to the stress test – which is a major testament to procurement’s response and the strength of existing buyer-supplier relationships.
Our survey of 600-plus procurement and supply chain leaders found that nearly 60% of organisations (58%) are still operating and paying their suppliers per their contract. In fact, 14% of organisations are speeding up payments to suppliers and 6% are providing direct financial support. On the other end of the spectrum, 10% said they are delaying payment to all suppliers, and another 11% said they were delaying payments to non-strategic suppliers. Overall, this is positive news – for buyers, suppliers and the broader economy.
However, the longer the crisis plays out, the more financial strain it will cause. Despite the positive news on payments and contracts, there has already been substantial financial hardships and fallout among suppliers. Our research found that as of May 12, 2020:
6% of organisations said they had a key supplier go out of business
11% said they had multiple key suppliers go out of business
20% said they had a supplier declare fore majeure on contract obligations
Our analysis shows that the companies hit the hardest by COVID-19 were more than 50% likely to have multiple key suppliers go out of business compared to other organisations.
The Economic Forecast: Cloudy with 100% Chance of Unpredictability
Predicting what’s next economically is difficult, and possibly even an exercise in futility. We’ve heard it all from the experts, with projections changing by the day: V-shaped recoveries, U-shaped recoveries… and even the swoosh.
What’s not hard to predict: regardless of how fast the economy recovers, the response from procurement teams will continue to play a critical role in ongoing business continuity and financial resiliency. During the pandemic, 65% of organisations had to source alternative supplies for affected categories. Procurement responded quickly and effectively – with 53% able to lock down new suppliers in less than three weeks, and 18% finding new suppliers in a week’s time.
Post-pandemic, it will be interesting to watch if and how contracts evolve, and the weight put behind different conditions and KPIs. We are already expecting macro supply chain strategy shifts , which will naturally impact sourcing decisions and contract negotiations. Expect to see even more emphasis put behind collaborative supplier relationships, and new investments in predictive analytics and supplier risk monitoring, specifically as it relates to financial viability.
The financial picture remains uncertain at best. How are procurement and supply chain leaders responding? Get the latest in our “Supply Chain Confidence and Recovery” Report.
Procurement and supply chain leaders are experiencing newfound appreciation and opportunity following their response to COVID-19.
COVID-19 hit supply networks hard. So hard, in fact, that 97% of organisations experienced a related disruption. Still, there’s more to the story than disruption and chaos.
Insights shared by over 600 procurement and supply chain professionals actually paints a positive and inspiring picture: supply chain and procurement leaders were prepared – and responded brilliantly – when faced with a global pandemic that literally brought the whole world to a sudden halt. Now they have an opportunity to reset the procurement agenda.
A Look Beneath the Surface
Consider the data beyond headlines. While nearly every organisation was impacted, only 17% said the supply chain disruption was severe. On the other hand, almost half agreed the impact was minimal or moderate.
Similarly, despite the macro economic turmoil, the impact on supplier payments has been relatively modest. Most contracts and supplier relationships survived the chaos, showing the strength of existing relationships and strategies. According to our research:
58% of organisations are still operating and paying their suppliers per contract,
14% are speeding up payments to suppliers,
6% are providing direct financial support.
When the pandemic affected supply chains directly, procurement responded quickly and effectively. The majority of organisations (65%) were forced to source alternative suppliers for affected categories. As of early June, 79% of those surveyed had already found alternative suppliers for affected categories, with 53% locking down new suppliers in less than three weeks. Amazingly, 18% were able to find new suppliers in only a weeks’ time. This response has not gone unnoticed.
The Spotlight Shines Bright
The agility shown by procurement and supply chain leaders, along with their ongoing criticality in managing the crisis, has been a boon for the function with executives and board members.
“The crisis has put procurement in the spotlight,” commented Ian Thompson, Regional Director, UK and Nordics at Ivalua, a source-to-pay technology provider. “There are a lot of talented executives now getting the attention of the c-suite for the first time.”
When we asked how leadership leveraged procurement and supply chains teams during the crisis, only 16% of survey respondents said they were still being viewed tactically. On the other hand, 40% said their recommendations are solicited more than usual and 22% said they now have a seat at the executive table with input on key decisions.
“For as long as I remember, the question has always been how do we make the C in CPO a real part of the c-suite?” said Thompson. “It’s finally happening, and procurement needs to capitalise.”
According to Thompson, the key is taking advantage of the new platform. “Now that you have the attention of the c-suite, you need to have an agenda, and use the platform to properly set the record straight for what procurement is all about, and what’s possible. When called upon, you can fix the problem, or, you can fix the problem and reframe the conversation internally.”
The heightened attention has also led to renewed interest in procurement and supply chain careers. As a result of the crisis, nearly 62% of all respondents and 71% of millennials said their interest in procurement and supply chain has increased.
“The interest is very high. Procurement has become an essential function during the crisis, especially on the direct side. We have procurement teams that are fueling the food supply chain, sanitising the country and ensuring the flow of essential services across the globe. More people are recognising the importance of procurement and supply chain,” said Thompson.
The current dynamic should lead to fresh career opportunities for Generation Next. The function’s performance during the crisis sets the stage for increased investments in talent development and technology, a bigger seat at the executive table, and new opportunities for ambitious practitioners to make their mark.