Tag Archives: supply chain

Supply Chain And Procurement Leaders Anticipate Seismic Post-Pandemic Strategy Shifts As Executives Brace For Peak Of Impact

Confidence levels remain high, despite widespread disruption


Today we released the results of our How Now? The Supply Chain Confidence Index. The research reveals that nearly all (97%) of the 600+ professionals we surveyed experienced a supply chain disruption related to COVID-19. In response, the majority (73%) of organisations are now planning major shifts in supply chain and procurement strategy post-pandemic, including supply base expansion (38%), reductions in supply chain globalisation (34%) and increases to inventory levels (21%).

When asked where COVID-19 had the biggest single impact on their supply chains:

  • 31%: Decreased demand for products and services
  • 26%: Lack of available supply due to production downtime and shutdowns
  • 21%: Logistics and transportation slowdowns and delays

“We expect to see seismic strategy changes in the months ahead that fundamentally alter the makeup of global supply chains,” said Tania Seary, founding chairman and CEO of Procurious. “For decades, low-cost country sourcing and offshoring was the foundation of global supply chains. The pandemic has many executives considering reducing globalisation—and for good reason. But these changes won’t come easy.”

Reflecting on lessons learned, 39% of those surveyed said they were blinded by a lack of supplier and geographic risk and 29% said they didn’t understand the upstream supply chains of their suppliers. Fifty-nine percent of respondents believe the Fortune 500 should reduce globalisation by localising supply chains and bringing manufacturing back home.

Confidence Remains High, Despite Looming Uncertainty  

Uncertainty around when the disruption will peak continues to loom. Procurious found that while 34% of business leaders believe the worst has come and gone, nearly half believe the peak impact will occur within the next six months.

“The message from frontline practitioners is that the end to these supply chain disruptions is not near. Most professionals believe the crisis will peak in or after June,” said Seary.

As a result, supply chain and procurement teams will continue to play a key role in recovery and resiliency initiatives. During the crisis, 40% of respondents said their recommendations were solicited more than usual internally, and 22% said they now have a seat at the executive table.

This growing platform has inspired a new generation of professionals to further pursue careers in supply chain and procurement. Procurious found that 62% of all respondents and 71% of millennials said their interest in procurement and supply chain has increased as a result of the pandemic.

“We found that most practitioners stepped up in a big way and responded effectively to a crisis that literally brought the world to a halt,” said Seary. “The spotlight on performance will lead to increases in budgets, tech investments and board-level involvement, and create new opportunities for practitioners to make their mark at the executive level.”

Analyzing employment trends, Procurious found that 20% of supply chain and procurement departments experienced job cuts and 23% of departments were forced to take pay cuts. However, go-forward job confidence remains high. On a scale of 1 – 5, weighted job confidence for the next 12 months is a 3.96—meaning employees are more confident than not.

The full report, which dives deeper into COVID-19’s effect on supplier payments, technology investments, jobs and supply chain and procurement operations, as well as plans and predictions for the future, is now available for download.

Big changes ahead for supply chain and procurement strategy. What are they, and how do we get ahead? Find out now in our ‘How Now?’ report.

Methodology: 605 survey responses were collected via SurveyMonkey between Apr. 28 through May 12.

Fake Masks And False Cures: The Dark Side Of COVID-19

Criminals exploit COVID-19 fear with fake medical equipment. Here’s how world governments are fighting back.


COVID-19 means huge opportunities for criminals.

They are taking advantage of essential goods demand by flooding the market with their own shoddy versions – exploiting public fear.

Here’s a look at the most common (and concerning) fake products on the market.

Fake goods in the EU

Counterfeit pharmaceuticals and healthcare products are everywhere, according to Europol, the European Union’s law enforcement agency.

In a recent report, it listed the most worrying fake items they’ve uncovered:

Medical equipment: face masks, virus test kits, gloves

Disinfectants: alcohol-based hand sanitiser, disinfectant cleaning wipes

Medicine: choloroquine (an anti-malaria drug initially thought to help treat the Coronavirus), other fake cures

Europol says the fake goods are sold through online stores created just to profit from the pandemic. Some even target victims through messaging apps like Telegram.

The goods originate from ‘frequently changing addresses in Asia’, making it extremely difficult to trace.

Europol is concerned these inferior goods could put people at serious risk.

“Counterfeit goods sold during the corona crisis do not meet the required quality standards and pose a real threat to public health and safety,” says Europol Executive Director Catherine de Bolle in the report.

“People who buy these fake products have a false sense of security, while they are in fact left unprotected against the virus.”

Substandard masks in the North America

And it’s not just Europe. The pandemic is keeping United States’ Homeland Security busy, with more than 200 criminal investigations related to COVID-19 so far.

One woman was caught selling illegal pesticide on eBay, claiming it could provide immunity from the virus.

Another man allegedly tried to sell 100 million facemasks to the government, despite not actually having any.

The man claimed his stash came straight from 3M, one of the biggest healthcare equipment manufacturers in the US.

3M responded with a lawsuit, saying: “3M’s legal team is taking strong action to protect 3M and the public against the conduct of those who seek to exploit 3M’s brand and reputation and defraud others during this time of emergency and crisis.”

3M is also suing a Canadian company for re-selling 3M masks at five times the retail price, vowing to “[put] a stop to those who are trying to cash in on this crisis.”

Another worrying trend in inferior products is testing kits.

The University of Washington School of Medicine spent thousands exporting kits from Shanghai, only to find some of the tests were tainted with bacteria.

The university has since recalled all tests to be on the safe side.

Seizing test kits in Australia

Australia has similar issues with shoddy test kits, according to Zoran Kostadinoski, Head of Border and Biosecurity at the Customs Brokers and Forwarders Council of Australia (CBFCA).

He said the border force has intercepted hundreds of dubious testing kits and personal protective equipment (PPE).

Even though members of the CBFCA aren’t directly responsible for checking the authenticity of goods, they warn importers and exporters to be diligent.

“Procurement professionals need to ensure they source PPE from reputable manufacturers that provide quality products and meet the health standards of the importing country,” he warns.

“Until there is a global regulation of such products that provides certification, the issue of counterfeit goods in the supply chain will continue, as some look to make quick profit based on demand of such products due to COVID-19.”

China pledges to clean up

Authorities are doing their best to help people identify goods that meet safety standards.

The US Centers for Disease Control and Prevention even set up a website with photos of the most common counterfeit face masks.

Nevertheless, the question remains: why isn’t there greater effort to stamp out fakes before they are ever exported?

It’s complicated, as LA Times journalist Alice Su explains.

“It’s common for Chinese suppliers to export a product under one licensed company’s name but to source their products from second, third or fourth factories, like a chain of Russian nesting dolls, with little to no traceability down the chain of supply,” she writes in an article.

She also points out not all suppliers set out to produce inferior products. Many factories shifted to PPE production at the government’s request without knowing the proper quality controls.

Regardless, the Chinese government is making a concerted effort to shut down offending manufacturers and revoke their export licenses.

Fighting online crime in the UK

That process isn’t happening quick enough for people like Sarah Stout, however.

She’s the CEO of Full Support Healthcare Ltd, a supplier to the UK’s National Health Service.

Recently, she shared on LinkedIn that her company gets dozens of offers every week from manufacturers of the sought-after N95 mask.

95% of the masks are fake with forged certificates, she says.

“When I informed one supplier that I knew their certificates were fake, they said to me, “[O]k, if I give you real certificates for other product will you place an order?’” she writes.

Her experience isn’t unique. UK authorities say they’ve taken down 2000 Coronavirus scam websites so far, including 471 fake online shops.

Many of these websites were discovered through spam emails. One common email appears to come from the World Health Organization and offers COVID-19 health tips in exchange for personal password information.

James Brokenshire, UK Minister for Security, urged people to be aware of the many ways criminals exploit technology like email to gain advantage.

“It’s despicable that they are using the coronavirus outbreak as cover to try to scam and steal from people in their homes,” he wrote in a press release. “We all have a part to play in seeing they don’t succeed.”

In response, the UK’s National Cyber Security Centre is asking for people to send them any suspicious emails.

It’s not just a UK problem, though. Pandemic spam mail is a global headache, with Google detecting 240 million COVID-19 related spam messages so far.

How to tackle it

Even though technology is used for exploitation, it’s also a key to stopping Corona crime.

One company in the fight is Systech, which lets you check if PPE product is authentic by simply scanning the product’s barcode with a smartphone.

The company uses blockchain technology to trace the product journey throughout the entire supply chain.

Similarly, Zuellig Pharma, an Asia-Pacific pharmaceutical giant, utilises SAP’s blockchain platform to verify authenticity.

Customers can scan a barcode on the package using the eZTracker app, and know instantly if the medicine is a legitimate Zuellig product.

This use of technology, along with the efforts of governments and the vigilance of the public, go a long way to combat the dark side of COVID-19.

However, until essential goods supply can match global demand, criminals will find a way to cash in.

Want to keep up with the latest coronavirus and supply chain news? Join our exclusive Supply Chain Crisis: Covid-19 group. We’ve gathered together the world’s foremost experts on all things supply chain, risk, business and people, and we’ll be presenting their insights and daily industry-relevant news in a content series via the group. You’ll also have the support of thousands of your procurement peers, world-wide. We’re stronger together. Join us now.

5 Cost Levers To Pull Right Now With Your Outsourced Services

At times of enormous disruption to global supply chains, it’s easy for procurement only to think about direct spend. But it’s just as critical to ensure value is delivered in outsourced service contracts.


“Today’s health and economic crisis, as a result of coronavirus, means that typical approaches to cost management will need careful consideration as business’ key focus has to be staying in business” Lorna Brown, Former CPO, Global Financial Services

We live in an ever-changing world, where what had been predicted as a prosperous year for a business could turn into a fight for survival thanks to something that it has no control over. As the world pulls together to combat COVID-19, businesses face the challenge of reduced revenue forcing them to tighten their belts and search for further savings.

In times of crisis, most organisations will fall into the same pattern and focus their cost reduction effort on direct spend categories. After all, your first thought in a crisis or risk management situation is more likely to be ensuring the stability of your production supply chain, rather than identifying the cost savings you can secure from the organisations delivering your HR or IT Support services.

But why is this the case? Organisations may consider their direct categories as more business critical, or believe that they can release greater value from them with closer management of their global supply chain.  For an increasing number of organisations, however, outsourced services form the core of their business. And by focusing on the right cost levers, review of these service contracts  could deliver just as much in terms of savings as direct spend.

Pulling on the Cost Levers

Structuring a contract for the procurement of services is can appear to be a different beast to one for the procurement of goods. Many procurement professionals will go their entire careers without creating a single RFQ, tender or contract for an outsourced service.

The reality is, however, that there isn’t a great deal of difference beyond what is delivered by the supplier. Procurement still needs to know that suppliers are able to meet an organisation’s requirements. A robust contract needs to be put in place to ensure that services are delivered efficiently and effectively.

And when it comes to cost levers, there’s no need to start with a blank sheet of paper when proven procurement strategies will still fit the bill. Everest Group, a consulting and research company with an established history in the outsourced services space, has conducted extensive research on this topic. Amy Fong, Vice President in Everest Group’s strategic outsourcing and vendor management practice, is clear that this research has highlighted five key cost levers for procurement to use right away when it comes to their outsourced services: “we see a lot of common themes where buyers can do a better job.”

1. Pay the Right Price

Former CPO in Global Financial Services, Lorna Brown, believes that organisations need to be “a bit curious and engage with the supplier to understand how they are delivering the services.” This will allow for a greater understanding of how the service is built up, but also what is driving the costs, and consequently the price in the market.

Services in high demand, but with a lower supply where there are fewer people capable of providing a quality service will cost organisations a premium.  In the  IT services market, this premium has been charged for everything from basic digital skills all the way up to large-scale, highly complex data analytics over the years. The availability of labour with these skills is the key cost driver.  With each ebb in the requirement for these skills, rates for outsourced services will come down.

Being clear about how the cost of labour has influenced your price is a great way to pull this particular cost lever.

2. Understanding Total Cost

Procurement’s consideration of cost needs to go beyond the ticket price that is paid. There are other factors to take into account such as quality of support and adherence to Service Level Agreements (SLAs). It’s all about Total Cost of Ownership.

Got a great price for your basic service agreement? Great! But did you discuss and agree a price for ongoing support? Or agree how many people are assigned to your contract? Or how much you are paying for secure data storage? It’s critical to understand the whole picture beyond the basic price.

If you are just looking to drive savings on the bottom line price by whittling down your supplier’s margin, they will look to move or hide costs elsewhere. No matter how good a deal you think you have at the outset, if you aren’t tracking TCO you’re probably losing any savings you may have initially achieved and leaving this cost lever un-pulled.

3. Find the Right Deal Structure

One of the key decisions an organisation will have to make regarding its services is which model or structure their deal is going to take. In outsourcing of services, a fully Managed Service can be very attractive to an organisation with day-to-day operation provided by an external specialist, with the business free to focus time and effort elsewhere.  

However, organisations using a Managed Service have to accept the fact that they will hand over a level of control, which in turn raises their risk.  Procurement still needs to understand what’s happening throughout the outsourced service provider’s supply chain.

Organisations may also choose to use on-demand outsourcing, where they pay for support based on the number of times it is used, or a ‘Break/Fix’ service where it pays for just the work that is done. There is no right or wrong answer as this will differ from organisation to organisation. What’s important is picking the right option.

4. Innovation

When it comes to cost savings, innovation is a key part of the puzzle that cannot be missed. And when it comes to pulling the innovation cost lever for outsourcing services, the focus should be on “Big I” Innovation (i.e. digital transformation), rather than “Little i” innovation (i.e. continuous improvement activities).

As with the other cost levers we have shown, innovation that is being looked at in other areas of the business can just as easily be applied to outsourcing too. Consider all the current industry favourites such as Robotic Process Automation (RPA), AI and Machine Learning – these can have an impact on costs.

However, despite the fact that there is increasing importance placed on innovation in outsourcing, many organisations are still missing the mark. There’s a lot that can be achieved from deploying this cost lever in the right way at the right time.

5. Financial Engineering

Cost lever number 5 takes the modernisation and digital transformation found in the innovation space one step further: when it comes to the concept of innovation not just about the business scoping out activities for different areas of its categories, but more about how it modernises the entire solution.

It’s important to use financial engineering to have the impact on profit that is required as the initial outlay or investment across the board will be significantly higher than a service that doesn’t include these types of outcomes.  Organisations may choose to look at alternative sources of finance, assess potential Joint Ventures or Managed Services with flexible margins (in line with traditional Financial Engineering). Using this cost lever is about getting creative and perhaps walking the path less travelled for success.

Pull the Levers with Care

The 5 cost levers for outsourced services represent an individual and collective strategy for cost savings in the outsourced services space.  Pulling one alone would be effective, and using all of them in some way could deliver also deliver great results.

To find out more about these cost levers, and to access expert advice on how to use them, register for the Everest Group sponsored webinar 5 cost levers to pull right now with your outsourced services, to be broadcast on Thursday May 7th 2020 at 2:30pm GMT. To find out all the information you need, including how to sign up, visit the Procurious website or click here.

How To Set Your Supply Chain Up For Coronavirus Recovery

How should you set your supply chain up for coronavirus recovery? Find out the steps here.


With the majority of the world still in lockdown, no detailed blueprint for economic recovery, and no vaccine in sight, the end to the coronavirus pandemic still seems a while off. But reassuringly, there’s signs that we may now at least be in the recovery phase, with many European countries contemplating easing restrictions, and the US announcing they may do so in May. With these reassuring steps, supply chain managers the world over, many who felt blindsided by the speed and force of coronavirus disruptions, are keen not to make the same mistakes again. So they’re now asking themselves the critical question we all need to know the answer to: How do we set our supply chains up for coronavirus recovery? And when we do enter the recovery phase, how do we ensure it’s successful and ideally, fast? 

Step 1: Ensure your cash strategy is fit for purpose 

Early on in the crisis, many optimistic leaders predicted that our economies would simply bounce back in what they called a ‘V’ shaped recovery. But as the pandemic has unfolded, it’s become clear that this is most likely not going to be the case. Economists now predict that we’ll have more of a ‘U’ shaped recovery, where business and consumer spending slowly return over time, although activity is still expected to be significantly subdued until a vaccine is found. 

This leaves most companies, and as a result, most all of us in a tight spot. The uncertainty of it all means that you may need to adjust your cash strategy to ensure it’s fit for purpose. 

Adjusting your cash strategy may take many forms. One strategy is to try to ensure you have more cash available by adjusting your accounts receivables strategy, for example, trying to get invoices out and paid more quickly, and removing barriers to debt collection. 

Another method is to adjust your accounts payable strategy, although if you do so, ensure you do it strategically. Take this opportunity to analyse your suppliers. Who provides the most strategic value? Can you strike a more favourable deal? If you can, ensure you negotiate, for example, perhaps you will give more business to a certain supplier in exchange for favourable payment terms? Analyse everything and strike the delicate balance between looking after suppliers and maintaining your business’s cash reserves. 

Step 2: Identify and assist at-risk suppliers 

Conserving cash is the first critical step in coronavirus recovery, and the key one when it comes to pure business survival. But recovery, when it comes, will be about much more than that. 

By now, most of us have realised how resilient – or not – our supply chains really are. Hopefully, we’ve all had time to look deeper into our supply chains, and map the manufacturing capabilities of each of our suppliers, looking into exactly what part is made in what location. Beyond that, hopefully we now understand – if we didn’t before – the exact dependencies of our products and what needs to happen when, and from where, in order to give our customers what they need. If you haven’t yet undertaken this analysis, now is the time to do so. 

Assuming you have, though, you may have encountered suppliers who are now struggling, or who will be struggling in the near future. Even if your suppliers may not have told you as much, signs that a struggle is indeed present include incomplete or delayed deliveries, changes in debt covenants, or sudden changes in your key contacts. 

As any supply change manager would know, protecting your suppliers is key, and now, more than ever, you may need to do what you can to help. If you’ve identified a supplier who is struggling, try to help by committing to orders or even exploring credit options, such as lending against future orders or applying your company’s credit to loans. In extreme cases, you may even need to look at an equity investment scenario if that supplier is critical to your production. 

Step 3: Look after your people

Cash and suppliers may be fundamental to our day jobs. But what would those look like without … us? 

As any seasoned leader understands, your people are critical to just about anything you want to achieve, and especially a ramp up after a prolonged period of stress and uncertainty. And while, with the current job market, you’re not likely to lose staff if you don’t make an effort right now, when recovery is in full swing, the difference in productivity between disengaged and engaged and motivated staff (which can be up to 22%), can be monumental. 

But what’s the best way to look after your staff right now? Experts recommend: 

  • Be realistic, kind and flexible: With the current crisis affecting the lives and livelihoods of most of the world, now is an extremely stressful time for all of us. Be clear about what you need from your staff, but also be kind and realistic about what you expect them to achieve, and be flexible about when you need it. 
  • Offer mental health support: Right now, the WHO (World Health Organisation) estimates that one in four people are experiencing new or heightened mental health issues due to the crisis. If you can, offer your staff counselling support or direct them to government resources so they can seek help, if needed. 
  • Give upskilling options: While having a high workload right now can be stressful, so too can not having enough to do. If your team isn’t that busy, do your best to reassure them that their jobs are safe (if possible). Beyond that, endeavour to offer upskilling options. These options don’t need to cost a lot or even take long – here are ten critical skills your procurement or supply chain team can learn, for free, for a $0 budget. 

Step 4: Look after your customers

How you treat your staff during a crisis will determine whether or not you’re able to retain them in the recovery period and beyond. Likewise, how you treat your customers is just as important. 

With significant disruptions to supply chains, freight and logistics worldwide, there’s a high chance that at some point, you may disappoint your customers. There’s two key ways you need to manage this: through communication, and through prioritisation. 

For the first, communication, you need to do your best to determine, far ahead of time and with your own suppliers, what delays might exist or what changes in orders you foresee. Once you know, let your own customers know and keep them regularly updated on progress. As always, it’s better to give a worst-case scenario and then delight them when orders do come through faster than expected. 

For the second, prioritisation, if you’re facing considerable shortages and you can’t find an alternate supplier, you may need to prioritise your most valuable customers. Look at factors such as profit margins and key customer segments when figuring out who to prioritise, or alternatively, look at allocations to certain customers if required.  

Get prepared – now 

Recovery might seem a while off, but it’s closer than you think. Make sure you take these steps, now, to ensure you’re in the best place. 

Is there anything else you’re doing to plan for recovery? Tell us in the comments below.  

Want to keep up with the latest coronavirus and supply chain news? Join our exclusive Supply Chain Crisis: Covid-19 group. We’ve gathered together the world’s foremost experts on all things supply chain, risk, business and people, and we’ll be presenting their insights and daily industry-relevant news in a content series via the group. You’ll also have the support of thousands of your procurement peers, world-wide. We’re stronger together. Join us now.

Grocers Battle In COVID-19 Last Mile Delivery: Supply Chain News

As you sit home in your COVID-free sanitised domestic bubble, there’s a war raging outside your door.


As social distancing and lockdown measures are implemented around the world, a growing number of food and grocery players have been forced to ramp up their capability to handle last mile delivery. And it’s no mean feat.

Supply chains are adept at shifting a tonne of cornflakes to a remote supermarket in Northern Wales or Nashville, but a single ready-to-eat takeaway to someone’s door is an entirely different scenario – it’s a service that’s expensive and time-consuming to offer.

But that doesn’t mean it’s not important. Right now, amid COVID-19 lockdown scenarios around the world, that’s exactly what everyday consumers need from their friendly corner grocery or takeaway retailer.

A report by CB Insights reveals that retail will be more personal, more immersive and more automated as we roll into 2020. Retailers and brands will have to understand shoppers better, and will continue to turn to new retail tech options. Profitability and technology will remain a top focus. 

The other battlefront for the grocery sector is keeping stock levels in check, as consumers stockpile household groceries around the world. Basic food items such as canned items, flour and pasta have been flying off the shelves far faster than they can be restocked.

While disruptions have so far been minimal and food supply has been adequate, there are predictions made in the media that this scenario could change as food supply chains are disrupted by COVID-19.

For example, if big importers lose confidence in the reliable flow of basic food commodities, panic buying could ensue, driving prices up.

Delivery startups bloom

Of course, there are already established last-mile delivery providers in this space. On-demand startups have mushroomed into the space around the world, transforming the way consumers order and enjoy takeaway food.

They’re all being handed the ultimate test as a huge surge in demand amid tougher operating conditions amid the shutdown of workplaces takes hold.

Uber Eats and Deliveroo are dominant players in this space, and have been run off their feet amid the pandemic in markets around the world. Deliveroo was crowned the UK’s fastest-growing technology firm by Deloitte last year, boasting an incredible rate of 107,117% over four years.

And while it’s hard to pinpoint just how much growth they’ve had in recent months, higher demand has led to higher pricing in some areas, while some companies are recruiting new drivers for their delivery staff.

Meanwhile, Amazon is run off its feet fulfilling one-hour delivery windows via Alexa.

To keep up with demand, the company is bolstering its capability, adding 100,000 jobs to meet customer demand and fulfil orders for essential products. It is also increasing capacity for grocery delivery from Amazon Fresh and Whole Foods Market.

The challenge has been maintaining high levels of hygiene in the home delivery service, with many providers rushing to email customers and assure them that standards have increased.

Bicycles in London

Of course, home delivery of groceries is not new. Nearly 30 years ago, when just 15 per cent of Americans had a computer, Thomas Parkinson set up a rack of modems and started accepting orders for the internet’s first grocery-delivery company, Peapod, which he founded with his brother Andrew.

In an unprecedented move, Sainsbury’s in the UK is expanding its capacity to support its efforts to feed the nation and meet growing demand for home grocery deliveries. This comes in the form of bicycle deliveries in central London.

This has been an invaluable service offering for the elderly and customers with immune issues who were self-isolating in their homes.

Sainsbury’s is also trialling its fast delivery service Chop Chop to deliver groceries to customers from closed convenience stores, offering shoppers another way to access essential grocery and household items.

The supermarket, which was forced to temporarily close to a number of its local convenience stores across the UK due to a drastic drop in customers, is planning to use some of these locations as logistics hubs to deliver goods to the most vulnerable.

Sainsbury’s chief digital offer Clodagh Moriarty says demand has reached unprecedented levels and they’re doing all they can to find new ways to serve more customers. “While we started the trial in London, we hope to be able to bring this fast delivery service to other cities in the UK very soon,” he says.

Customers who might be self-isolating or unable to get to a local store will be able to order a top-up shop of up to 20 grocery products through the Chop Chop app and have them delivered to their doorstep in as little as an hour.

A further 400 essential grocery and household products are available on the service, offering customers another way to access the essential items that are most important to them quickly and conveniently.

Demand Down Under

In Australia, both major supermarket brands Coles and Woolworths were forced to halt  online deliveries to catch up with demand in recent weeks.

However, Coles has announced a move to advanced robotics in recent weeks to help double the number of home deliveries it can make. The supermarket giant has entered into an exclusive partnership with British supermarket and solution provider, Ocado, to deploy its end-to-end online grocery solution.

Ocado includes an online grocery website, fulfilment technology and last-mile routing management technology.

One thing is for sure. Once things return to normal, customers will continue to expect the convenience of home delivery from food and grocery players now offering this service.

Just how key players manage this demand is yet to be seen.

Want to keep up with the latest coronavirus and supply chain news? Join our exclusive Supply Chain Crisis: Covid-19 group. We’ve gathered together the world’s foremost experts on all things supply chain, risk, business and people, and we’ll be presenting their insights and daily industry-relevant news in a content series via the group. You’ll also have the support of thousands of your procurement peers, world-wide. We’re stronger together. Join us now.

DOS And DON’Ts For Supply Chain Pros Right Now

DOs and DON’Ts specifically for supply chain professionals that you should consider during coronavirus


There has never been a moment in time since the second world war, that there has been so much global awareness and need for resilient and dynamic supply chains, and the qualified professionals to manage them; in a single strategic battle toward a common enemy. The COVID-19 outbreak was initially concerning to firms with established supply chains embedded throughout China, but it’s clear now, that it’s effects are going to be far more reaching on a global scale, and felt throughout the months and year(s) ahead.

In my job, I have the privilege of constantly speaking with dedicated supply chain professionals globally. From the woman director controlling over a half a billion dollars worth of global spend in the fast-moving consumer goods industry in the ‘big city,” to the little guy ordering replenishment stock for a small chain of regional tire repair shops in Piqua, Ohio. Lately, they’ve been asking the same question: “What are we going to do?”

So whether you are quarantined and idle at home, or your employer is an essential service and you’re confined to toiling behind a desk at work, here are some DOs and DON’Ts specifically for supply chain professionals that you should consider – NOW.

DOs

Identify how your firm’s production capability and equipment can be retooled to produce hand sanitizers, gloves, gowns, face masks or shields, medical supplies or other vital equipment. There is still a need, and will be for quite some time.  Who knows, by doing so, you’ll not only be helping front line workers and healthcare providers, you could also get your firm re-classified as an essential service, kick starting idle production lines, and help your fellow employees get called back to work and earning a steady income again.

Identify where in the supply chain your firm may have spare capacity, to assist in National/Regional relief efforts. It’s not only physical commodities that are in need, it could also be transportation, distribution, or even warehousing related space or activities to move vital supplies and equipment around.

Review your entire supply chain – top to bottom, to evaluate where problems are arising and you’re vulnerable, opportunities which may be presenting themselves, and develop a status report and comprehensive supply chain action plan for management. 

Revisit your disaster contingency plan and develop a new one, specifically including virus and pandemic related situations. (This wasn’t our first, and certainly won’t be the last pandemic.)

Review your firm’s supply chain exposure and resiliency to recover from natural disasters and pandemics, and the preventative measures that you can design and implement now, to cope with swings in stock availability, transportation, and security issues and evaluate potential recovery times. 

Review all your existing contracts for force majeure (unforeseeable circumstances) clauses; and determine which of your suppliers may be in a position to try to enforce them – leaving you vulnerable to disruption and stock outs. Develop solutions.

Check to see if your firm has insurance protection covering any losses, should your supplier(s) not be able to fulfil their contractual obligations.

Reassess your current supply chains in China, India, and other global hot spots. Consider other possible regional opportunities for the future (such as Vietnam, Bangladesh, etc.), as contingencies, as these countries have been working to improve working and business environments recently.

Increase your level of communications and collaboration with overseas suppliers to understand not only their challenges, but monitor ongoing labour, discriminatory wage practices and health and safety regulations as well. These have led to manufacturing, transportation, and other related strikes and protests. Keep in mind that political protests that disrupted business recently were not limited to strictly Hong Kong and China, but also happened in Latin America, Middle East, Brazil, India and Mexico as well. 

(Yes, do a deeper dive and move toward becoming a ‘Geopolitical Specialist’ when analyzing regional risk in your global supply chain.)

Ask all vendors about their plans on dealing with demands and changing capacity, and how swings may impact their stock availability, quality, increased production and delivery times, and their labor force.

Sharpen the saw.  Take the time to invest in yourself and consider taking online courses in the Supply Chain field, offered by your favourite professional association.  They can help with strategies and possible solutions to supply disruptions during challenging times. Perhaps use the time to finally finish your study toward the Supply Chain Management Professional (SCMP) accreditation?  

Catch up on your supply chain reading with issues of your favourite trade magazine.   Why reinvent the wheel, when you can learn practical information from the titans of industry themselves; who are guiding their firms and making a difference in the supply chain community. 

DON’Ts

Don’t wait to step up or be asked for your supply chain expertise, your firm’s production abilities and it’s logistical capacity and how they can be used to keep critical supplies and support services open to front line workers and healthcare providers struggling in your communities.

Don’t take a ‘wait and see’ attitude and hope that another major disruption to your supply chain doesn’t occur again in the future… it will. Learn from today, plan and prepare for tomorrow.

Don’t lessen your due diligence when sourcing urgently needed supplies -via new or potentially alternative sources of supply away from China, Asia, or other parts of the globe experiencing problems.  Beware that counterfeit markets thrive in times of crisis; and quality and social responsibility risks should also be considered in addition to simply cost and immediate availability. Now is the time to increase efforts to protect your firm and supply chain; not lessen or weaken it with quick or cheaper sounding alternatives.

Don’t forget the potential to accidentally involve your firm in forced and/or child labor, poor working conditions, other human rights abuses or environmental concerns; when pre-qualifying any new and potential vendors. Practice responsible and ethical sourcing.

Don’t immediately threaten legal action against suppliers (local or distant) caught in a bad situation and who attempt to enforce the force majeure clauses within their contracts. Work with them to determine a reasonable course of action instead.  Right now cooler heads should prevail and honest transparency about their situation and capabilities, shared with you – as partners and lenders, is of paramount importance, if you’re going to get through the storm.

Don’t participate in the hoarding, resale, or profiteering from food, cleaning and medical goods, protective equipment and other essential items which could be redirected and used in the production of medical supplies for front line workers in your community.  Whether personally or on behalf of your employer – it’s just not right.

Don’t wait for authorities to enact and enforce new sweeping regulations controlling the supply chain.  Lend your knowledge and expertise and see how you and your firm might participate in regional supply chain coordination units, to ensure the public’s safety and the continuance of a strong and resilient supply chain of much needed food and medical goods and services. 

This article was originally published on LinkedIn on 29 March 2020 by Tim Moore , Canadian Supply Chain Recruiter. It has been republished here with permission.

Want to keep up with the latest coronavirus and supply chain news? Join our exclusive Supply Chain Crisis: Covid-19 group. We’ve gathered together the world’s foremost experts on all things supply chain, risk, business and people, and we’ll be presenting their insights and daily industry-relevant news in a content series via the group. You’ll also have the support of thousands of your procurement peers, world-wide. We’re stronger together. Join us now.

Coronavirus: What You Missed

Last week’s critical covid-19 news

New technologies gaining traction in the fight against Covid-19

If our supply chains are at war with the coronavirus, then technology is our ammunition … and it’s working. Right now, we’ve got every reason to be excited about the future of technology and how it can help us better mitigate risks. Some technologies are proving particularly useful, including AI and automation, reports EPS, as well as a suite of other digital technologies.

Toilet paper, renewables and restaurant supply chains still broken

By mid-February (which feels like aeons ago), Fortune had already declared that 94% of the world’s supply chains had been disrupted. Now, we believe that number would be closer to 100%. But there’s a number of supply chains that continue to make the news for the issues they’re having, including restaurant supply chains, renewables, and perhaps unsurprisingly, toilet paper.

Can China still be trusted as the world’s factory?

With some countries already planning their transition back to ‘normal,’ whatever that might mean for the future, many supply chain professionals are wondering, is now the time to start asking ourselves the big questions? Many say it is, and something that’s come up often is whether or not we can continue to trust China as our key manufacturer. 

It’s a contentious question, and many people have heated views on it. Read all the  compelling reasons why Kobus Van Der Wath, CEO of Axis Group, Beijing, believes China’s dominance will continue unabated in our latest expose, Can China Still Be Trusted as the World’s Factory?

Coronavirus vaccine trials start mid-May

In the best possible news Easter could bring, The New York Times is reporting that Norvavax, a Maryland-based biotech company, will start human trials of a coronavirus vaccine mid-May. It’s one of two dozen companies that have announced promising vaccine programs. The solution to end this pandemic might be closer than we think.

Want to keep up with the latest coronavirus and supply chain news? Join our exclusive Supply Chain Crisis: Covid-19 group. We’ve gathered together the world’s foremost experts on all things supply chain, risk, business and people, and we’ll be presenting their insights and daily industry-relevant news in a content series via the group. You’ll also have the support of thousands of your procurement peers, world-wide. We’re stronger together. Join us now.

5 Reasons Why Santa is the Ultimate Procurement Professional

Think you’re at the peak of the procurement and supply chain profession? Think again – Santa is the ultimate procurement professional (festively speaking…).

santa
Photo by Ylanite Koppens from Pexels

We’re fast approaching the end of 2019. It’s a time to reflect on the past year and consider what we have all achieved. We can look at all our successes, the lessons we have learned and everything that we will do in 2020. Perhaps there’s even a plan for how to take the next big step to that coveted leadership role in the profession.

But at this time of year, we all need to remember that our efforts pale in comparison to one individual. As we start thinking about the office party season, holidays and general festivities, this individual is only just revving up into top gear. Their whole year is driving towards this moment, but they are as prepared as they ever are.

And, while displaying all the skills we seek as a top procurement professional, they’ll deliver on all the wishes and promises that have been made. We are, of course, talking about…Santa. Father Christmas. Pére Noël. Svaty Mikolas. Kris Kringle.

Of course, there are other brilliant procurement professionals out there. But, at least in a festive setting, there’s none like Santa Claus for getting the job done. Here are my 5 reasons why:

1. Santa always has the right specification

Working tirelessly with his external (children, parents) and internal (elves, Mrs. Claus) stakeholders, he makes sure the specification is right. It can’t be a coincidence that children get exactly what they ask for, year after year. It all comes down to knowing your customers and then passing on the full specification to your manufacturing department/elves.

2. His Logistics operation is second to none

The global population is currently 7.7 billion people. Of this, an estimated 1.9 billion are children. Let’s assume then that the average household contains 4 people – this means Santa will visit 1.9 billion homes.

If there are 2 presents per child, this is a whopping 3.8 billion presents, delivered at a rate of 158.3 million per hour, 2.6 million present per minute. All of this with a team of 9 reindeer and one sleigh. Without the best logistics division and the latest technology, there’s no way all the presents are delivered to the correct child!

3. Belief, Influence, Leadership

Santa wields influence that most procurement leaders can only dream of. A following of magical, semi-magical and mortal people and creatures all follow him willingly. They work for the entire year to prepare for one day, then start again for the following year almost immediately.

Forming part of this leadership is belief. As we all know well (or at least we should) Santa’s sleigh and reindeer don’t fly without the belief in him and the Christmas spirit. And given he’s not missing deliveries to your house, it’s safe to assume this belief is still going strong!

4. Santa can always get the right price

Short of being some form of crazy, benevolent trillionaire (with superlative investments), Santa needs to be a dynamite negotiator or run the best RFQs. How else could he source all the toys or raw materials without bankrupting himself each year?

And like the best procurement professional, he doesn’t pass any cost increases on to his customers but works out the best deals to keep costs down so his end customers (the parents, of course!) don’t have to foot the bill.

5. He’s got the Nice-Naughty List on blockchain

How else do you create a fully traceable, immutable record of who has been naughty and nice in any given year? Santa needs to be able to trust the information he has on all behaviours, without the possibility that it has been compromised. Plus, it’s also handy for making sure that all the sourcing he does is ethical and sustainable…

So, if you have ambitions for a higher office in 2020, you’d do worse than looking at Santa as a good example to follow. And if all else fails, at least you’ll have a sunnier outlook on life! Ho, ho, ho!

How to Explain Procurement Using a Christmas Turkey

Still struggling to explain procurement to your friends and relatives? This festive season, why not put it in easily understandable terms – using your Christmas turkey?

Christmas turkey
Photo by Engin Akyurt from Pexels

“So, er … Cindy – what is it you actually do?” 

It’s the holiday season, which means that at some point you’re likely to find yourself making small talk at a social event with someone who is showing polite interest in what you do for a living.

The trouble is, the word “procurement” is quite often met with a blank look. I know that I certainly had no idea what the term meant the first time it was mentioned, and even today I’m still discovering that there’s way more to procurement than the word suggests.

So, how should you answer someone who presses you on what procurement actually is?

Don’t be boring

Let’s have a look at some of the common definitions of procurement that come up with a basic Google search.

From Wikipedia (a quote from MIT press):

“Procurement is the process of finding and agreeing to terms, and acquiring goods, services, or works from an external source, often via a tendering or competitive bidding process.”

Sorry, I think I nodded off in the middle of reading that! Apart from being wordy and dull, the real problem with this definition is that it talks about process rather than outcomes. Nobody cares about tenders or competitive bidding processes. They’d rather hear about outcomes such as money saved, the eradication of modern slavery, and environmental benefits.

In its whitepaper on this very topic, CIPSA canvassed its members to come up with this definition:

“Procurement is the business management function that ensures identification, sourcing, access and management of the external resources that an organisation needs or may need to fulfil its strategic objectives.”

Accurate, but soporific. What’s needed is a definition that explains procurement in a way any layperson would understand.

Don’t make it just about buying

Usually, my advice would be to keep your definition as simple as possible. But oversimplifying procurement inevitably ends up with procurement being described as “buying” or “purchasing” only.

I once witnessed a CPO dad telling his six-year-old daughter: “I do the shopping for my organization; I’m the one pushing the giant shopping trolley.” It’s a great image, but procurement does so much more than sourcing products and services.

Without trying to cram everything a procurement professional does into your answer (the other person will roll their eyes and walk away), try to capture some of the activities procurement does beyond sourcing: identifying cost savings, building relationships, managing risk, driving innovation and sustainability.

Procurement and the Christmas turkey

Let’s assume you’re sitting around the table at Christmas lunch when your partner’s elderly and inquisitive great-aunt asks you what procurement is. While you take a few seconds to consider your answer, your gaze rests on the magnificent turkey in front of you.

Why not use the turkey to help illustrate what procurement does? Let’s give it a try:

“Well, Aunt Edna, take this turkey as an example. Someone here had to go to the shops and buy that turkey – that’s simple enough. But imagine if you worked for a company that wanted to buy 100,000 turkeys.

It would be procurement’s job to first of all understand exactly what type of turkeys the company needs. Then we’d look around for suppliers who can not only reliably fulfill an order this large, but do it on time, with every turkey meeting quality expectations. Procurement would negotiate with that turkey supplier to get the best-possible price by seeking a bulk purchase discount.

But it’s not just about reliability, quality and price – it’s also about sustainability and social outcomes. Is there a supplier who breeds turkeys in a more sustainable way than others?

Are the turkeys cruelty-free and free-range?

Are the human workers paid fairly, and do they work in safe conditions?

Can we spend our turkey budget with a minority-owned supplier, or one that focuses on positive social outcomes such as hiring workers with disabilities?

What else can that supplier do for us? Is there some sort of innovation they can come up with (such as cheaper or more sustainable packaging) that would be beneficial for both my company and the supplier?

So you see, Edna … (oh, she’s fallen asleep).”

Further reading

Looking for more inspiration to help you explain procurement to others? Check out these other resources:

UNA is a Group Purchasing Organisation that generates cost savings for members across a wide range of products and services (including Christmas turkeys).

Where Does Your Supply Chain Begin and End?

Supply chain professionals are no doubt an important link in any supply chain but it is but one link in the end-to-end process.

By releon8211/ Shutterstock

Working in any supply chain management role can be all-consuming as well as challenging -but we can’t work in a vacuum. Supply chain professionals are no doubt an important link in any supply chain but it is but one link in the end-to-end process.

In the simplest type of supply chains, items and services are sourced from suppliers and converted into products and delivered to the customer or end-user.  During this process, both products and information move forward through the chain.   In the same way, products and related information move back up the chain.   

If only it were that easy. 

Any supply chain involves interactions between people, entities, information, and physical resources that combine, hopefully harmoniously, to sustain a company’s competitiveness.  It also has an objective to reduce overall costs and speed up the production and distribution cycle. As supply chain professionals know very well, if a supplier is unable to supply on time, and within the stipulated budget, business is bound to suffer losses and gain a negative reputation.

Q.  What is the main goal of an efficient supply chain?

A.  To get the customers what they want, when they want it, at least cost.  

If a company fails to focus fully on the consumer or end-user its ability to surviveis severely at risk. 

How to improve your supply chain

Sourcing is an early activity in the supply chain but demand planning comes first. By sharing projected requirements with your suppliers you can assist them to manage their own sourcing process and their inventory. Any forecasts that you supply them may not be cast in stone but they help to take the guesswork out of your order process.    Your Tier 2 suppliers, i.e. your supplier’s suppliers, are the ones that provide the items and services needed to fulfil your orders.  What products do they supply, what are their costs and what are their lead times?   

 The automotive industry is particularly good at this.  Modern vehicles are made up of more than 30 000 component parts.  Most leading vehicle manufacturers have a close grip on their Tier 2 suppliers: the parts suppliers for engines and equipment and computer software and hardware needed to make them run.

Technology in the supply chain 

The use, speed, and capabilities of technology are defining the trends in modern supply chains.  The cost of these technologies is starting to decrease making automation more affordable for mid-size companies. 

Demanding and techno-savvy customers are effectively re-shaping supply chains in the e-commerce world.  Customers expect to receive their order within a day or two whether it’s food, fashion or new bed linen.  They can choose not only what to buy, but who to buy it from and how to buy it.  E-commerce is creating new challenges throughout the supply chain from demand planning through procurement to warehousing, distribution and logistics.  Whether a customer is shopping in-store, on their laptop or mobile device, they expect their experience to remain the same, wherever they are in the world.  Retail companies that can adapt their supply chain operations to the new era of e-commerce will have the best chance of success.  

Global supply chains

Global supply chains are becoming very fragmented and dispersed and so require lots of resources and technologies to function well. Complex supply chains such as those in aerospace, hi-tech, chemicals and pharmaceuticals are becoming more difficult to design and manage.   According to Gartner, some of the most efficient global supply chains are in fast-moving-consumer-goods (FMCG) companies such as Unilever, Nestle, Nike and Inditex (Zara).  These companies have close relationships with their suppliers, even owning some of them, which is contributing to their successes. 

Johnson & Johnson is a confirmed leader in the healthcare industry due to its on-going focus on its supply chain capabilities such as end-to-end visibility.  The company prides itself on being a customer-centric organization.  It is an early adopter of new technologies such as 3D printing which it is using to enhance its manufacturing and distributions operations and unlock new opportunities.  Its global team has played a large part in streamlining the sourcing processes for both ingredients and packaging.    They realized that their supply chain was not as nimble and agile as it could be, and they weren’t leveraging their global scale in sourcing enough.

The professional association for supply chain management and the leading provider of research and education (APICS) provides a supply chain operations reference model (SCOR) on which you can assess your current abilities. It identifies steps in four measures:  process, performance, practices and people.    

The SCOR Model

APICS proposes that to improve your supply chain you need to:

  • Analyse your supply chain business processes and their dependencies with the SCOR framework in mind
  • Document and design your supply chain strategy, processes, and architectures to increase the speed of system implementations
  • Design internal business processes while taking organizational learning goals into consideration
  • Simulate the process to identify bottlenecks, gaps and process enhancements to improve supply chain performance

Underlying any successful supply chain is a strong organizational structure, up-to-date technology and strong leadership. An organisation’s supply chain is a significant source of competitive advantage and business leaders are embracing it as a strategic capability. 

Want to get your wheels turning towards a supply chain career one could only dream of? Then don’t miss our upcoming Career Boot Camp with IBM – a free 5-part podcast series with some of the very best of the best. Check it out here: https://www.procurious.com/career-boot-camp-2019