Tag Archives: supply chain technology

4 Reasons To Be Excited About The Future Of Supply Chain Technology

What’s next in supply chain systems? There’s plenty to be excited about


First-generation supply chains were good at automating and optimizing processes. But they were restricted to functional silos – and that’s not enough for what we need in supply chains today.

Advances in supply chain technology are needed if procurement teams are to manage supply chains that are dynamic, responsive and interconnected with ecosystems and external processes. The new tech needs the capacity to manage much, much more data (by several orders of magnitude). This in turn will make it possible for an individual procurement manager to make sense of entire supply chain ecosystems in real-time.

These demands are driving progress – which is why I am excited about the future of supply chain technology.

1. We’re actually getting fairly good at applying AI repeatably in supply chains.

In order to continue to maintain the labor ratios and level of service to which we’ve become accustomed, we need AI within supply chains – this is non-negotiable.

The IBM Sterling Supply Chain Suite gives end-to-end visibility, real-time insights and recommended actions to turn disruptions into opportunities for customer engagement, growth and profit. 

It’s an open, integrated platform that easily connects to a company’s supplier ecosystem. And that connection and openness provides the data necessary to build self-correction into supply chains.

2. With blockchain, we finally have a chance to change the way we manage multiparty sharing of supply chain data.

It’s clear that use of AI in supply chains will be essential. But it is important to start from the understanding that organizations are at different stages of maturity in this area. Nevertheless, companies can make dramatic improvements simply by deploying existing tech to digitize and implement an organizational commitment to information hygiene and managing data effectively. Being able to digitize, catalogue and normalize supply chain data means having real-time information in the right place to make decisions quickly.

One survival from the old-tech world of supply chains is the use of enterprise resource planning (ERP) systems built to manage the data for each individual company. Each company’s ERP was its view of the world. The procurement team spent their lives comparing notes with other ERPs to reconcile differences. Everything from invoices to purchase orders had to be reconciled and supply chain processes were put in place to facilitate this.

For the old-world supply chain really to change, we need to recognise that we can’t each have our own copy of what we believe to be true. We need to have an accepted, shared view of the truth. This idea of multiparty shared data is a promising one. And technology such as distributed databases, shared ledgers and blockchain helps build these common views of the world.  


3. We are seeing the emergence and coordination of specialty ecosystems and networks that can be integrated in a ‘network of networks’.

Before hyper-interconnectivity and the opportunity to create ecosystems or a network of networks, we operated in a limited way – for example, connecting one value-added network (VAN) to another VAN in a logistics network with practical applications like document exchange for advance shipping notices and the like.

We’re now seeing that an interconnected ‘network of networks’ really adds value. People are using technology and data to work together to solve domain-specific issues like fresh food provenance with Food Trust and ocean-shipping visibility with TradeLens.

These specialized ecosystems can be seamlessly integrated into existing business networks to provide a wealth of information about previously opaque areas of the supply chain – where things went dark at critical moments.  

4. It’s possible to have personalized ‘control towers’ that can track the essential elements of global ecosystems but are tuned to what we each want to measure and act on.

Finally, we’re able to see the world the way we want to – from each of our perspectives – bringing together actionable recommendations from real-time intelligence to act on supply chain implications. 

From a simple example of inventory management that can have downstream supply implications for a logistics analyst, to the same information tracking financial implications and payment terms for a financial analyst, the varying views, insights and interrelated metrics stemming from core supply chain activity helps everyone across the organisation.  

Also knowing that no two supply chains are the same means the ability to quickly configure and personalize ‘control towers’ is twice as useful as simply having the static data.

So just when the need for a strong supply chain has never been greater, technology is increasingly proving itself up to the challenge of meeting this need. And what’s more, small changes can have big impacts.


Hear Vijay present in our recent webinar – 4 Supply Chain Capabilities You Need For The Decade That’s Going To Change The World here.

 

Information Hoarders Be Gone

Knowledge is power, but knowledge is now being democratised and made accessible to all, thanks to the development of AI.

Long live the democratisation of data

Is there someone in your work life who is hoarding information? Holding the data cards very close to their chest? Making it difficult for you to succeed because they have vital information and know-how shackled up close to their desk?

Good news – their days are numbered!

Knowledge is power, but knowledge is now being democratised and made accessible to all, thanks to the development of AI.

A democratisation of data

In supply chain, data plays a very critical role; data about suppliers, shortages, shipping and shelf life, the list goes on. And supply chain professionals are inundated with making sense of all this data.

Traditionally, to unlock the value from this data we’ve needed a group of people with deep technical skills in our teams to gather, manage and query.  Exhausting and time-consuming work, leaving little space or brain power for problem solving and decision making.  The need for these skills has concentrated the power of data in the hands of a few, rather than the wider team.

Nobody knows this better than the supply chain team at IBM.  With thousands of supply chain employees, over $40 billion in spend and millions of SKUs to manage from over thirteen thousand suppliers in their supply chain across 175 markets, there is a lot of data to keep track of.  There is a real need to ensure every supply chain professional has all the information to make the right decisions at the right time.

I reached out to IBM’s Chief Supply Chain Officer Ron Castro – firstly to congratulate him on his Manufacturing Leader of the Year by the National Association of Manufacturers. However, I also asked him to participate in our Supply Chain Career Boot Camp and then went on to quiz him on the detail behind why Gartner had been recognised by the IBM Supply Chain team as a Finalist in their Chainnovator Awards.

Given the scale and complexity of the IBM supply chain, Ron and his team turned to AI to augment the team’s capabilities.

Ron’s experience leading teams across the globe resulted in a really pragmatic approach.  AI was used to upskill supply chain talent and engage with subject matter experts. The analytics and tools developed gave wider access to data insights for their supply chain pros around the world.

Now, everyone in IBM’s supply chain can make better decisions and be creative – which is just the kind of capability needed in this new and challenging decade ahead.

There’s no more tedious data capture and formatting for the IBM team.  No more worrying that they’ve missed something in the never-ending news stream or even the weather forecast.

The Human + Machine Personas

For many years, the IBM Supply Chain team has known that one type of tech solution couldn’t fit all the needs of their team.  Everyone has different data needs according to their role – some are forecasting, others are planning and many are executing or delivering.

IBM’s approach is simple – it’s people-centred.  Data personas were created to map each supply chain team member’s requirements.  Now AI serves up data in the format and time that suits their needs. 

IBM Sterling’s AI helps you:

  • Gain visibility into data from across your systems and silos
  • Understand external events and their impact on your supply chain
  • Get ahead of events and buy yourself time with predictive insights
  • Capture and share knowledge and best practices with digital playbooks

By creating these personas, IBM Sterling uses AI to provide just what the forecaster needs to augment their brain and make the decision to keep those supply chains flowing.

Unlocking Collaboration

The final piece of the jigsaw is a concept that’s close to my heart – collaboration. 

IBM Sterling’s AI reviews unstructured data in its many and varied forms.  Whether it’s emails, discussion threads or reports, AI now has the power to find insights from previously inaccessible data sources such as team conversations, social media and news feeds, and weather reports… and serves it back to the person who needs it, when they need it.  AI makes key suggestions like:

  • Why don’t you consider this? – “They used it in the UK when weather conditions were similar”
  • Is this a change in risk level?  – “The last time this supplier’s lead times dropped to this level there was an underlying shortage issue”

It’s exciting thinking about the improvements in supply chain from the introduction of AI Augmentation.  I think we’ve only scratched the surface and can’t wait to see what happens as the power of IBM Sterling’s AI is unleashed on our supply chain brains.


The Samsung Smartphone Debacle: Suppliers Pushed Too Far, Too Fast?

Samsung has apportioned some of the blame for its exploding Note 7 phones to two of its battery suppliers. But who is ultimately responsible? Is the pressure to innovate at all costs leading to unsafe development and testing time-frames?

Esa Riutta/Shutterstock.com

What Went Wrong?

Samsung  has begun the long task of rebuilding consumer trust in its smartphones. But questions remain.   Why didn’t Samsung pick up design and manufacturing faults before they sold 1 million unsafe devices to customers? The cause appears to lie in Samsung’s rush to beat its arch-rival Apple to market. This led to a failure to properly test lithium-ion batteries in the Note 7 phone.

The pressure to innovate that tech giants such as Samsung place on their suppliers is immense. Particularly when competitors such as Apple are constantly upping the ante. Every new release on a phone must be demonstrably better than the last.  This means delivering ever-smaller and lighter batteries that customers can charge rapidly and use for a full day and evening.

Battery manufacturers responded to the challenge by using a thin “club sandwich” design. In this battery positive and negative electrodes are stacked and kept apart using layers of separators. Unfortunately, the pressure for an ever-thinner battery meant that the separators were too thin, leading to shorts and subsequent over-heating. A second, unrelated design fault lay in an abnormal welding process. This led to contact between a positive terminal and a negative electrode.

Spreading the blame

The fallout for the exploding smartphones follows a familiar pattern where, although the technical fault lies with a supplier of products and services, the big-name parent company takes the lion’s share of the blame. Even when the parent organisation attempts to publicly offset some of the blame onto its suppliers, consumers typically assign responsibility to the most recognisable brand.

An example of this famously occurred in April 2010 with the Deepwater Horizon oil spill in the Gulf of Mexico.  The owner of the well, BP, took most of the responsibility (and $54 billion in associated costs), whilst the contracting operators came under considerably less scrutiny. Tellingly, a U.S. District Judge apportioned 67% of the blame for the spill to BP, 30% to Transocean and 3% to Halliburton.

Samsung, to its credit, did accept overall responsibility for the $6.9 billion mistake even while it pointed the finger at battery manufacturers. Samsung Electronics America senior vice president Justin Denison told a press conference: “Ultimately we take responsibility for this. It’s our product, we set the specifications, and it’s up to us to catch the problem before it leaves in one of our devices.”

The long road to brand recovery

Youtube users may have noticed Samsung’s brand-repair efforts have gotten underway, with ads such as the following appearing online:

The South Korean company has invested $170 million into safety.  It is assertively broadcasting its new 8-point safety check which includes a durability test, visual inspection, x-ray test and others. Samsung’s investigation into the Note 7 failures included over 700 R&D engineers. These engineers tried to replicate the issue by testing 200,000 phones and 30,000 standalone batteries.

But, in a further unfortunate setback for the brand, one of the affiliates responsible for manufacturing the faculty batteries – Samsung SDI – experienced a factory fire last week in Tianjin, China, with 110 firefighters and 19 trucks responding to the blaze.

Senior executives from Samsung have commented that they’ve learnt an enormous amount about crisis management in the past few months. Observers, too, can draw some valuable lessons around the dangers of rushing new innovations to market and the ineffectiveness of attempting to apportion blame to suppliers.

Read more about Samsung’s smartphone battery issues.

In other procurement news this week…

Boeing’s Space Taxi to include 3D printed components

  • Boeing has commissioned 600 3D printed components from Oxford Performance Materials for use in its Starliner space taxi.
  • Boeing expects the spacecraft to fly unmanned in June 2018. and will have a first crewed test flight in August 2018. It will ferry two astronauts to the International Space Station for the first fully operational flight in December 2018.
  • The inclusion of 3D components marks a first for 3D technology usage in spacefaring technology, with increasing recognition that printed plastics perform well under the pressure of launch and in a temperature of absolute zero.

Read more at Supply Chain Dive.

New research reveals CEOs still don’t “get” procurement

  • Consultancy firm 4c Associates released the findings of a poll of 521 CPOs, managers and procurement personnel to understand how procurement is perceived by the C-Level.
  • 48% of participants claimed their boss “doesn’t get what the procurement team does, or can do”. 55% said the C-Level regards procurement as a support function. It exists to cut costs, rather than add strategic value to the organisation.
  • Mark Ellis, senior partner at 4c Associates, commented that procurement needs to proactively highlight the services they can provide beyond cost cutting. “If all the function does is speak in terms of savings, then that’s how it will be perceived: as a cost cutter”, Ellis said.

A Whole New World: The Cognitive Computing Era

The age of cognitive tech is coming, whether procurement likes it or not! How can we be ready for the changes coming our way? 

Syda Productions/Shutterstock.com

Register your attendance for our free webinar, Man & Machine, which takes place on 8th February 2017. 

A New Era Of Computing

 We’ve entered into a new era of computing: “the cognitive computing era”, which follows the eras of programmable and tabulating systems and represents a massive jump forward that will transform how enterprises operate.

This new era is defined as such because there is a fundamental difference in how these systems are built and how they interact with humans. Traditional programmable systems are fed data, knowledge, and information, and they carry out and return results of processing that is pre-programmed. In this case, humans are doing most of the directing.

Cognitive technology is different; it accelerates, enhances and scales human expertise to solve more complex problems by understanding language and interacting more naturally with humans. It can reason to find patterns and form hypotheses, making considered arguments and scenarios planning. And this is exactly what Watson is about.

Watson is a cognitive technology that can think like a human and is available as SaaS products and a set of open APIs (Applications Programming Interface) such as natural language classifier, speech to text, text to speech, visual recognition, etc.

What Does Watson Mean For Procurement?

This disruptive technology, by creating a new digital ecosystem, is pushing Procurement to create a new business model, moving away from objectives centered on cost take out and taking a new customer centric and revenue growth approach. CPOs must employ the right strategy, structure, skillset and cognitive technology if they want to be in a strong position to demonstrate their relevance and value to the organization.

Procurement organizations and their leaders need to embrace the reality and potential for Artificial Intelligence (AI) and cognitive procurement as readily as they would accept other technologies and developments. AI will bring changes and challenges but it will also bring amazing opportunities for the profession.

As we apply AI to certain procurement tasks and processes, we will begin developing internal capability and expertise.

Applying Cognitive Tech To Procurement

Cognitive technology has already proven to be particularly helpful at helping procurement with a number of specific tasks and programs. These include:

  • Quickly sorting through very large amounts of structured or unstructured data. This is especially useful for benchmarking and supplier analysis
  • Providing very detailed supplier assessments of a single supplier, a group of suppliers or the whole supply base
  • Providing in-depth risk assessments, identify hidden risks, and calculate rate risks
  • Supporting and validating decision-making during supplier selection

More generically, cognitive computing will undeniably be a key ingredient to innovation, helping to find new ways of operating, providing new insights, uncovering new opportunities and last but not least it will elevate procurement professionals to the well-deserved advisor role by extending their capabilities and growing their experience.

How Can Procurement Prepare For The Changes That Are Coming? 

The question that so many procurement organisations are asking is how can they make cognitive tech a reality and where to start?

Adopting and integrating cognitive solutions into an organization is a journey and not a destination.

Firstly, CPOs need to be clear about what matters the most. In order to grow their company’s business and best benefit from the technology, they must set realistic expectations and develop long-term plans with incremental milestones

Secondly, transformation doesn’t happen by itself. It requires the vision and support from the top. As an example, Bob Murphy, IBM’s CPO, is the biggest driver of change in terms of transforming his organization. He saw the potential in cognitive technology and the prospects for Procurement and became an evangelist within the team; encouraging, sponsoring and demanding we embrace this opportunity.

Thirdly, leveraging big data is a key area to take advantage of, especially in data management. This ensures that organisations have the right structure and strategy. At IBM, we have appointed a Procurement Data Officer and also hired data scientists within the procurement team as we understood that procurement needed to take a more active role in extracting and analyzing data to demonstrate its value especially by leveraging the data we are managing and generating. (i.e data in RFP answers, ….)

The Race Is On – Can Procurement Shape Up In Time?

With cognitive technology, procurement teams will be equipped with the tools to navigate the procurement process quickly, easily and more compliantly. This will allow more time for procurement teams to focus on strategic supplier activities after contract signature, such as performance management or supplier collaboration and innovation programs. But is the function ready for this shift?

Embedding such advanced technology requires some serious changes in skills and competencies within our teams. Procurement leaders will have to search for procurement professionals not only focusing on their core competencies, such as category expertise, negotiation skills or market knowledge, but it will be more and more important to hire people with the “right” soft skills. The function must onboard and retain people with excellent relationship management and analytical skills and with a high aptitude to work with advanced technology and financial acumen.

The procurement landscape will have to reshape to a more business leading capability that has to operate in a much more virtual and networked environment where emerging roles of data scientists, business relationship managers and innovation scouts, to mention a few, will be increasingly required.

In short, beyond just being capable of creating visible savings, the role of the procurement organisation will have to shift its focus beyond cost reduction efforts, and move towards a trusted advisor role; accurate, fast and efficient.

There’s no doubt about it, late adopters of the digital transformation or organisations failing to take into consideration the growing exigencies such as speed, value for money, collaboration will be soon perceived as road blockers rather than enablers.

Join Procurious’ free webinar, hosted by Tania Seary with Manoj Saxena, Pascal d’Arc and Nathalie Fekete to make sure you’re ahead of the cognitive technology game. 

 

 

Looking Back: 3 Top Supply Chain Tech Trends In 2016

To look forward, we first need to look back and learn. What are the key supply chain trends from 2016 procurement needs to take account of in 2017?

As we look ahead to the New Year, this is also an opportune time to take a look back at the trends and innovations that began reshaping the supply chain in 2016. These trends will continue to impact procurement professionals throughout 2017 and beyond.

A Stronger Focus On Digital Supply Chain Networks

Many supply chains still utilise a mix of paper-based and technology-driven processes. However, more and more companies are moving towards fully-digital supply chain models.

In fact, in a recent survey, more than 75 per cent of respondents said that it was important or very important for their organisation’s supply chains to undergo a digital transformation.

An all-digital supply chain provides procurement teams with more visibility into their supply chain. This enables them to better understand their data, their processes, and their overall operations. Armed with this insight, it is much easier to address issues and implement improvements.

These are advantages that all supply chain professionals seek. As a result, the adoption of digital supply chain is expected to increase in 2017.

The Rise Of Blockchain Technology In the Supply Chain

All businesses are at risk of a cyberattack. Recent large-scale DDOS attacks that crippled sites like Netflix, Paypal, Reddit, Twitter and thousands of others proved a sobering reminder.

That is why many organisations and supply chain teams have started to adopt blockchain data structures to protect their valuable information.

A blockchain is a data structuring approach that groups data together into ‘blocks’. Every block cross-references the previous block and the following block to ensure the data is valid, creating a “chain.”

In addition, the full chain is not stored in a central location. Rather different blocks are stored on different computers and networks at the same time. Only those who have authorised access to the blocks within the chain can access other blocks and implement changes.

As a result, data stored in blockchains are very resistant to tampering, making it extremely secure in the face of cybersecurity risks.

Major companies are beginning to incorporate blockchain into their supply chains as part of their invoicing, auditing, and inventory-tracking processes. For example, IBM launched a platform to test blockchain technologies to track high-value goods. And Walmart used Blockchain to tackle food safety.

Blockchain gives supply chain professionals a means of combating cybersecurity threats while ensuring that items can be tracked in a transparent and secure way.

“Uberization” Takes Hold

If you’ve ever taken an Uber from the airport or rented a vacation home through a service like AirBNB, you are already familiar with the benefits of an on-demand, pay-per-use service. Now, the supply chain is getting familiar with them as well, as procurement professionals seek to leverage the approach to manage inventory and reduce costs.

For example, companies are now offering on-demand warehousing services, which could reduce (or eliminate) the need to maintain expensive distribution centres.

Just as procurement professionals are looking to benefit from the trend, companies are looking to capitalise on it. Boeing is betting big on the pay-per-use model and is leasing their planes to Amazon for its Air Cargo network. In the retail space, companies such as Nordstrom’s, Costco and Whole Foods are implementing new options for customers.

About a third of all supply chain professionals see Uberization as a disruptive and important element of the supply chain.

In the past year, these three technologies had a big impact on supply chains and the people who work in them. And they will continue to shape the supply chain in 2017. However, they aren’t the only ones. What other technologies do you think will play an essential role in supply chains in the New Year?

Getting Millennials on Board the Collaborative Procurement Bandwagon

Could the secret to e-procurement adoption success be Millennial engagement? Could more collaborative approaches be the key?

fotozick/Shutterstock.com

This article was first published on My Purchasing Center.

No matter how good your e-procurement solution is, its success depends on user adoption. Getting employees to purchase through an e-procurement system is a hurdle that needs to be overcome in any organisation, particularly when it comes to engaging Millennials.

This generational powerhouse is having a major influence on corporate culture and how we interact with technology and communicate with each other.

This generation, which grew up with technology and social media, is accustomed to getting information at the tap of a finger, participating in digital communities, and relying on online reviews and opinions.

And they have come to expect this same level of convenience, immediacy and ease of use with the enterprise technology solutions – including the procurement systems – they use.

Raising Millennial Interaction

Understanding how millennials interact with technology is critical to increasing adoption of procurement systems. And as their significance and numbers in the workplace increase, so too does the importance of recognising their needs.

So how can you effectively engage them? Here are five strategies for increasing Millennial adoption of procurement systems:

1. Make it Relevant

To minimise rogue buying, make sure your system is relevant to the daily work lives of the users. Ensure it is as fast and easy to use and as user-friendly and intuitive as consumer sites. This means offering users efficiencies that resolve challenges unique to their specific roles.

Create a seamless process, enabling users to quickly and easily find what they are looking for and submit travel and expenses on-the-go. By creating these user-friendly systems and processes, you will encourage users to make the best decision possible because it’s the easiest thing to do in the natural course of their work.

2. Leverage Critical Intelligence

Gather knowledge from users across the enterprise to tap into the wisdom of the crowd and promote success. Create your own crowdsourcing environment on your procurement system.

Allow employees to suggest the items they need to do their jobs best so that procurement teams can negotiate the best contracts for those items. Help users save time by creating a system that recognises their needs and serves up the right information at the right time.

Create social opportunities. Consider setting up a reviews section where employees can post and read products and services reviews from their colleagues. This section could also promote corporate social responsibility by allowing them to share information on suppliers with green practices.

3. Instil a Bottom-up Approach

Instil a bottom-up approach to system design, roll-out and management. Empower users to drive and improve the process, instead of trying to control people and force them into compliance from the top down.

By making users active participants in strategic company initiatives, they will have a sense of ownership and feel more engaged. This also ensures you’re delivering a system that meets users’ needs and one that they will like using.

4. Foster Awareness of Actions

Foster awareness across the user base by incorporating gaming and making it fun. The Pokémon Go craze, which has caught on like wildfire, shows the appeal that games have with millennials.

You could create healthy peer competition by showing employees how their efforts compare to their peers, such as who are the smartest shoppers, and who are the most frugal travellers. Recognise them on the system with bronze, silver and gold achievement levels.

Share the visibility you have into spend, and track usage and measurable results across the enterprise so employees can see the value they are adding, how their actions directly contribute to company goals and what others are doing to achieve success.

For example, show the progress your company is making on overall savings goals, user adoption and total spend under management. This will create the mindset that every person who buys goods and services is not only helping to optimise processes that streamline their daily tasks, but also creating spend data that can be used to make better decisions and save money for the organisation.

5. Reward the achievers

In our research, we’ve found that the number-one reason users drop out of a process is because they don’t understand what’s being asked of them and feel their actions are not making a difference.

Create a greater level of awareness by acknowledging company “rock stars” – employees who make big strides toward company goals through consistently demonstrating desired behaviours.

You can reward these individuals through points and badges. For example, “Speedy Approver” for those in the top percentile of the approval cycle. Or “Compliance Champion” for those requesting items that are on contract 98 per cent of the time.

These strategies will help you build a collaborative procurement culture that not only engages millennials, but all of your employees. As users better understand greater company goals and are incentivised to participate, they will gradually shift their spend behaviours to strategic, deliberate approaches that help realise collective goals.

You will not only turn Millennials and other employees into stewards of company funds, but your company will also benefit from the cost savings, and optimised processes that collaborative, strategic purchasing delivers.

Tehseen Dahya is General Manager, North America for Basware, a leading provider of networked purchase-to-pay solutions, e-invoicing and financing services.

Reliance on Outdated Tools Hamstrings International Growth

An over-reliance on outdated tools and processes in the supply chain is harming growth, and cutting competitive advantage.

Today’s international business environment is more complex than ever. As this complexity, and volatility, continue to grow, companies need to ensure that processes and tools are up to date. Without doing this, they risk cutting their growth prospects, and erasing their competitive advantage.

Growing global risks, evolving supplier networks, and economic difficulties in key, and traditionally stable, markets all must be factored in. Businesses not taking advantage of Advanced Planning & Scheduling (APS) systems run the risk of much increased costs.

Failure to adapt to new technology also means that companies will be left with limited flexibility to respond to changing market conditions.

Responsiveness and Agility

In the past twelve months, the global economy has suffered from a period of unprecedented, and unheralded, volatility. Events like Brexit, ongoing civil unrest, and the rise of extremist terrorist organisations, have left global supply chains in jeopardy.

Organisations can no longer rest on their laurels and bank on continuing success. Ensuring success in this environment requires robust scenario planning, the ability to adapt quickly to change, and the capability to deal with changing suppliers and business partners.

As many experts have highlighted, procurement and supply chains need to be agile in order to adapt to external changes.

Outdated Tools and Systems

Global supply chain consultancy, Crimson & Co, recently conducted research into the tools and processes organisations were using in their supply chains. At a majority of respondents, they found a continued reliance on outdated tools, and legacy systems.

The research found that over two-thirds of those surveyed still relied upon ERP and spreadsheet systems.

The findings also showed the benefits that an effective APS system could deliver. Respondents highlighted a potential 20 per cent reduction in working capital, 5 per cent increase in service level, 6 per cent reduction in logistics costs, and 3 per cent reduction in the cost of goods sold.

This research has gained more credence in recent weeks, with the bankruptcy of Hanjin shipping, and the associated issues for US retailers.

Failure to Rise to Challenges

Dave Alberts, Director at Crimson & Co, explained:

“A continued reliance upon outdated planning tools like Enterprise Resource Planning (ERP) systems, bolstered by an array of spreadsheets, prevents many businesses rising to these supply chain challenges.

“If supply routes need to change following disaster, or old trade agreements can no longer direct freight transport, businesses leaning on ERP systems can find themselves on the back foot and unable to take advantage of such changes.

“All in all, these outdated tools can result in significantly increased capital and service costs in the case of any changes to the supply chain status quo.”

Alberts also highlighted the need for businesses to update their planning tools in order to remain competitive. Legacy systems inhibit the ability to innovate and improve supply chain processes.

Alberts argues that these companies will likely fall behind more reactive and agile businesses supported by more flexible planning tools.

“There is a clear incentive for businesses to adopt a robust APS system. Through benchmarking of planning and scheduling solutions, companies can quickly work out the systems that need updating and the practices that need improving. They can then work to develop these areas where necessary.

“In most scenarios, the adoption of an APS system can result in reduced overall supply chain costs and greater ability to deal with complex business decisions,” Alberts concluded.

How Blockchain Technology Can Revolutionise Procurement & Supply Chain

Blockchain technology could prove to be a valuable tool for procurement and supply chains in their quest for transparency.

Zapp2Photo/Shutterstock.com

In today’s world, the process of procurement, and even supply chain management, is facing more scrutiny than ever before.

Due to several different advances in technology (many of which relate more to our personal lives than business management), people are more sensitive than ever to issues of accuracy and matters of record. We want transactions verified, sources authenticated, and, generally, transparency in all things.

Where procurement and supply chain management are concerned, that level of transparency has been pretty much impossible in years past. However, there are some that believe that Bitcoin’s blockchain technology, of all things, has vast potential to alter how procurement is monitored and could improve accountability on all sides.

Blockchain Explained

For those who may be unfamiliar with how blockchain technology works, this overview of Bitcoin explains that it’s essentially a public ledger on which all Bitcoin transactions are recorded.

Every transaction generates a series of letters and numbers indicating the two parties involved and the amount of Bitcoin exchanged. While specific identities are protected, it makes it absolutely, automatically clear where your Bitcoin came from, such that amounts of Bitcoin can be traced back through various transactions.

It’s basically a fool-proof system of transparency meant to guarantee the authenticity of these transactions.

Supply Chain Transparency

But how exactly would such a system help companies dealing with procurement and supply chain concerns?

This explanation clarifies the idea in a very effective manner, stating that a blockchain can track what went into a product, and who handled it along the way, revealing the provenance of a product to everyone involved, from origin to end user.

The article uses the example of a taco supply chain. When you buy a taco from a food truck you’re making a lot of trusting assumptions: that the truck is sanitary, that the taco’s ingredients are fresh, etc. But with a system of transparency in place you can personally check that those assumptions are indeed based in reality.

Considering that example with a product in the process of procurement, you begin to see the immense potential value of a blockchain.

Authenticity Checks

Indeed, the same article discusses a range of examples covering different industries and points of interest along the supply chain. For instance, you might be able to look at a blockchain-style log and determine if a shirt you might buy was made with child labor, or you might see if a bottle of olive oil is just olive oil, and if so where else in the world it might be procured. You might even be able to confirm the authenticity of an antique or special product before purchasing.

Perhaps the most interesting example, however, comes in the form of a new company that’s arisen as a result of the blockchain to combat fraud and crime in the diamond trade.

Everledger is essentially building a vast data network, tracking diamonds in circulation by their identifying features and serial codes, and thus legitimising an industry that’s frequently been overrun by criminals and fraudulent transactions.

With a public ledger, diamonds could be traced back to their origins, appropriate values could be maintained, and selling a stolen diamond without being on record as doing so, would be all but impossible.

At this stage most of these examples concern consumer issues and supply chain transparency. However, as blockchain technology becomes more common, it’s easy to see its potential aspects in procurement as well.

For a technology that’s fundamentally simple, it’s somewhat amazing that it might solve transparency issues that have persisted in business transactions for most of human history.

When Logistics Tracking Apps Become Cyber Stalkers

Where should we be drawing the line between a logistics tracking app and cyber stalking? Turns out, the difference might be hard to pinpoint.

To watch the video version of this article, click here.

Here’s what a Logistics Manager needs to be aware of, and the boundary lines that he/she really shouldn’t be crossing.

Logistics tracking devices or Apps are nothing new these days, and anyone that has a smart phone and uses one of the various map apps is constantly satellite tracked. The stark reality is that both Google and Facebook know you better than your parents, partners, friends and loved ones!

Logistics Assets

As this technology has grown, many companies are now using it as part of their logistics tracking and customer service. Even small businesses, like your local plumbers, have them in their little white vans, so Cheryl the office manager can tell irate customers that Bob the toilet un-blocker is on his way.

But this usually works better when they’re less than 4-8 hours away!

However, one company in California took this all a step further and had a ‘staff tracking app’ installed on employees’ work phones. Nothing sinister about that you might think…

The apps are great for:

  • productivity,
  • time management,
  • personal security,
  • and a myriad other reasons.

However, the issue arose with a travelling female sales executive, whose movements were being tracked 24 hours a day. That’s right, 24 hours – covering both work and personal time.

The device had been set so that it was unable to be turned off during non working or “private time”. I mean who wants your boss to know that every Thursday night you attend Knitters Anonymous, or involve yourself in over 50s Morris dancing on Sunday mornings!

Disappearing Privacy

Anyway, the female executive decided to uninstall the app due to ‘privacy’ reasons. And got herself fired for doing so. This was even after her boss boasted about the ability to know how fast she was driving down the highway.

So what’s happening now?

She is taking him to court for alleged unfair dismissal and invasion/breach of privacy to the sum of $500,000 USD.

That’s scary.

And the moral of the story? Staff tracking apps should only for work time management and security, not be used for following each and every move an employee makes. And also, organisations need to be very careful about employee/employer gender and power dynamics, and how they could be interpreted.

It might just make you think again when an app on your phone asks to access your location!

Now where’s my phone…

Productive Minds work with Managers and Supervisors of Supply Chain Companies, providing people management training and mentoring to help leaders manage change, manage work stress and inspire creative problem solving in their teams.

Technology Will Expose Supply Chain Deficiencies in Near Future

In the not-too-distant future, technology will reveal everything about products, and expose all the supply chain deficiencies that exist.

Smartphones, embedded with the technology that enables consumers to scan items in the supermarket and see the entire supply chain process, will happen sooner rather than later, according to Fairtrade Australia and New Zealand CEO, Molly Harriss Olsen.

“We’re getting to the point that we can build these technologies. Mark my words, it’s on the way and it will be instantaneous. The world of connectivity isn’t coming – it’s here,” she told the room.

Cleaning Up Supply Chains

While the procurement industry well and truly knows about the challenges of cleaning up the supply chain, the fact that the technology that would automatically expose supply chain deficiencies was met by furrowed brows. As she made the statement, you could literally hear a pin drop in the large conference room.

Fairtrade assists marginalised producers (mostly in the agricultural space) and addresses issues like child labour, environmental issues, water usage, waste management, ensuring the employment of women and helping these farmers to have profitability in their farms and a robust foundation upon which they can succeed.

This includes the 30 million coffee farmers around the world who are at the mercy of speculative financial markets.

She impressed on the procurement professionals in the room that they had the power in their hands to either resolve the problems the planet faces in the future, or contribute to it.

“The biggest leadership decision you need to make as a procurement leader is implementation. Once you make that, you can’t even begin to imagine what the impact might be.”

Moving Away From Economics

Harriss Olsen was asked by a major Australian food brand representative, whether Australian businesses were embracing the initiatives implemented by Fairtrade.

“On the whole, I’d say we’re on the edge of embracing it. I’d urge you to take the next step. We need to stop making every decision based on economic grounds. We are either part of the solution, or we’re part of the problem. All our decisions are based on improving the planet. Virtually everything we can buy is traded on the stock market, and value the farmer gets on a daily basis,” she says.

“It might come as a surprise to you that while we got rid of slavery some time ago, there is still an extraordinary amount of it going on today. And until is blows up in your face, you often don’t know what you’re dealing with it.”