Tag Archives: supply chain

China’s TIP Demotion: Productive ot Provocative?

2017’s Trafficking in Persons report highlights China as one of the worst global offenders of human trafficking. How does this impact your supply chain decisions? 

The U.S.  government revealed details of its annual Trafficking in Persons (TIP) report last week. The report is the government’s principal diplomatic tool to engage foreign governments on human trafficking.  Rex W. Tillerson, Secretary of State said this year’s report “highlights the successes achieved and the remaining challenges before us on this important global issue.”

The U.S department of state assigns each country to one of three tiers (Tier 1 being the best and Tier 3, the worst) based on their government’s efforts to acknowledge, combat and prosecute instances of human trafficking. Countries must consistently demonstrate improvement in these areas to maintain the highest ranking and avoid demotion.

Myanmar, for example, was one of the countries to be upgraded to Tier 2, following its efforts to reduce child recruitment for the military.

But the most controversial decision this year was China’s demotion to Tier 3, where it will join the likes of Iran, North Korea, Russia and Venezuela.

“China was downgraded to Tier 3 status in this year’s report in part because it has not taken serious steps to end its own complicity in trafficking, including forced laborers from North Korea that are located in China,” Tillerson said as he presented the report.

The demotion marks the first time that  the Trump administration has publicly criticised Beijing’s human rights record, and it prompted an unsurpringly frosty response from the Chinese, “The government’s determination in fighting human trafficking is unwavering and outcomes are there for all to see,” spokesman Lu Kang said. “China firmly opposes the US’ irresponsible remarks on other countries’ fight against human trafficking, based on its domestic laws.”

How Will This Impact China And Global Supply Chains?

There are a number of things to consider if your global supply chain extends to China or other countries ranked in Tier 3.

  • The U.S may consider imposing sanctions that limit access to US and international aid. Congressman Chris Smith said  “Hopefully, the new tier ranking coupled with robust diplomacy—including the imposition of sanctions authorised under Tier 3—will lead to systemic reforms that will save women and children’s lives and ensure that Chinese exports are not made with slave labor.”  Whilst such sanctions have often been waived in the past, it would come as no surprise if Trump decided to break with tradition. Indeed, given his vocal criticism of Chinese trade, he will be under some pressure to impose consequences.  It has been reported this week that Trump is considering trade actions against Beijing including tariffs on steel imports.
  • Suppliers operating in newly placed tier 3 countries will, appropriately, be under increased preasure to audit their supply chains. If you’re sourcing in China, it’s entirely plausible that you’re complicit in trafficking or forced labour.  With supply chains facing extra scruntiny, it would be prudent for organisations sourcing in China to have accurate information at their fingertips. Make sure you know who you are sourcing from, what’s going on behind the scenes of your product and make detailed lists of every farm, vessel or facility to which you are connected.
  • China’s demotion might prompt organisations to stop sourcing in China altogether. Will  “Made in China” labels deter consumers who want to avoid supporting slave labour and traffcking? Changing suppliers, particularly when it’s to a new country,  is time-consuming and expensive. This will be the greatest concern for procurement and supply chain pros.

You can download the TIP Report in full here

What do you think about China’s demotion in this year’s Trafficking in Persons Report? Productive or provocative? Should President Trump impose sanctions on China? Let us know what you think in the comments below. 

In other procurement news this week….

Will Supermarkets Go Uber On Us?

  • Britain’s major supermarkets are testing ‘peak time’ pricing allowing grocers to raise or cut items based on demand
  • Tesco, Morrisons and Mark & Spencer are running trials of electronic labels which allow them to change prices at the click of a button
  • Retail experts say this could spell the end of fixed prices for consumer goods and services within five years, to be replaced by an Uber-style pricing revolution
  • Morrisons said its trial was in the “early stages” and it had not yet decided whether to roll it out across the country

Read more on International Business Times.

Apple Is Moving Its Supply Chain Towards Green Energy

  • Two years ago, Apple embarked on an ambitious plan to help its biggest suppliers switch to clean power sources. As of early June, the tech giant has managed to get eight partners on board
  • According to the tech giant’s latest update on its progress toward environmental goals, integrated circuit packaging maker Ibiden will be the first partner in Japan to power its Apple-related operations completely with renewable energy
  • Apple’s $1.5 billion green bond issued in February 2016 is still the largest issued by any U.S. technology company

Read more on Green Biz.

AI that can read minds 

  • CMU scientists have been working on is a system that can apparently read complex thoughts based on brain scans, possibly even interpreting complete sentences
  • Using a smart algorithm, the team could discern what was being thought about at any given time — and even the order of a particular sentence
  • After training the algorithm on 239 of the 240 sentences and their corresponding brain scans, the researchers were able to predict the final sentence based only on the brain data

Read more on Digital Trends 

 

A Whole (Foods) New World For Amazon

Whole Foods: it’s fresh, it’s organic and it comes with a hefty charge. So where on earth does Amazon fit in? Procurious investigates…

Last week, to the public’s surprise and the retail world’s horror, Amazon announced that it was buying organic supermarket chain, Whole Foods. For the meagre (in Amazon terms) sum of U.S.$13.7bn the retailer will take ownership of the United States’ first certified organic grocer.

It’s a bold and unexpected move given that Amazon is well known for its cheap price points, which have traditionally  undermined brick and mortar stores. Whole Foods, by contrast, is a reasonably exclusive and fairly expensive, organic retailer.

Jeff Bezos, Amazon founder and CEO said “Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy,” said Jeff Bezos, Amazon founder and CEO. Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades – they’re doing an amazing job and we want that to continue.”

The annoncement has sparked much discussion and speculation ; What are Amazon’s intentions? How will other supermarkets be impacted? Will Amazon reinvent Whole Food’s supply chain?

John Mackey, Whole Foods Market co-founder and CEO believes “This partnership presents an opportunity to maximize value for Whole Foods Market’s shareholders, while at the same time extending our mission and bringing the highest quality, experience, convenience and innovation to our customers.”

What does this deal mean for other retailers?

Whole Foods is most prevalent in the U.S. with 431 supermarkets. Unsurpsingly, rival retailers were dealt a hefty blow following the announcement.. Walmart’s shares fell 4.7 per cent, Target’s fell 5.1 per cent Costco’s fell 7.2 per cent and Kroger’s  by 9.2 per cent.

The impact was even felt in the UK, despite there being only nine stores as Tesco and Sainsbury’s by some 4-5% on Friday.

Raanan Cohenn, CEO of last-mile delivery software provider Bringg asserts that “Amazon has become a leading player in the grocery industry overnight. It’s crunch time for the industry.”

“In one word, it means pressure” he continues. “Profit margins are traditionally razor-thin for grocery chains and Amazon will have a greater ability to squeeze margins throughout the supply chain even further.

Latest news implies that Walmart could enter into a bidding war; it’s certainly true that the biggest competitors will do their utmost to make this deal as tricky as possible for Amazon. Given that Whole Foods stock is trading significanlty more per share than Amazon’s $42 offer, a counter bid is entirely conceivable.

The Supply Chain challenge for Amazon

“The challenge for online grocers is that freshness and variety are hard to combine — if they sell one type of tomato, their stock will turn over fast and be very fresh. If they offer 20 types, the choice is wider but the tomatoes will sit in warehouses longer. The supply chain for groceries is trickier and costlier than for non-perishables”says , writing for the Financial Times.

It might be the cost-effective reigning champ of online efficiency but fresh, organic produce is a whole new ball game, and not one that Amazon has been good at winning in the past.

Jason Busch and Pierre Mitchell, Spend Matters, speculated that “Acquiring Whole Foods is perhaps proof that Amazon is willing to buy its way into managing adjacent supply chains in which it has struggled or not focused on yet. It also could provide a fascinating localized test-bed for Amazon Go bridging the consumer and B2B divide.”

If, bidding war allowing, the offer is accepted, Amazon is in a favourable postion to redfine the retail market. They’ll be able to sell fresh groceries online and give customers the option to collect  their deliveries from Whole Foods stores, which would  become instant fulfillment centres. Perhaps Amazon’s ultimate aim will be making same day delivery for groceries the norm.

And, as ZDNet pointed out, “Whole Foods’ roughly 30 million (typically affluent) customers are also likely to be Amazon Prime customers already, which further strengthens the connective tissue between the two brands.”

What do you think about Amazon’s purchase of Whole Foods? How will retail supply chains be affected? Let us know in the comments below. 

IBM Announces Blockchain Truck-Tracking

  • A partnership has been announced between IBM and AOS, a Colombian provider of logistics solutions, which finds the two firms developing a new blockchain and Internet of Things (IoT) solution for the logistics business
  • IBM Blockchain and IBM Watson will be able to track the provenance and status of trucks and their goods using RFID tags that contain the vehicles’ data
  • The solution integrates with IBM’s Watson IoT system to check in on factors like weather and temperature, which can impact the journey and the estimated delivery time

Read more on Coin Desk 

AI to spot Slavery Site From Satellite Images

  • Online volunteers are helping to track slavery from space. A new crowdsourcing project aims to identify South Asian brick kilns – frequently the site of forced labour – in satellite images
  • Nearly 70 per cent of the estimated 5 million brick kiln workers in South Asia are thought to be working there under force, often to pay off debts
  • So far, over 9000 potential slavery sites have been identified by volunteers taking part in the project. The volunteers are presented with a series of satellite images taken from Google Earth and they have to click on the parts of images that contain brick kilns

Read more on New Scientist

Norway Bans Palm Oil Procurement

  • The Norwegian Parliament has voted to introduce a ban on the procurement of palm oil and palm oil products for use as biofuels
  • Rainforest Coalition Norway, which had been lobbying for the ban, welcomed the move. It said: “Palm oil-based biofuel is a bad choice for the climate and drives rainforest destruction”
  • The organisation believes this is the first time a country has banned all use of palm oil biofuel by public bodies

Read more on Supply Management

The Value of Social Media Voices in Supply Chain

Social media: It’s vast, it’s unstructured, and it’s overwhelming. But the value for supply chain is there to be extracted!

According to Business Insider, social media sharing outpaces some of the most data intensive B2B activities: Facebook processes 500 times more data each day than the New York Stock Exchange and Twitter exceeds NYSE’s daily data storage by 12 times.

Social media gives voice to anyone looking for a platform: consumers and corporates, individuals and organisations. By enabling the democratisation of instant worldwide communications, services such as Twitter and Facebook have created an overwhelming volume of unstructured data in a short period of time.

While the development of social media voices is dynamic and continues to evolve without pause, businesses have yet to tap into its true power. What happens to these spontaneously created bits of data? Who is listening? Is there actionable value in the voices?

Social media voices are the sum total of all the unstructured data shared around the world.

Social media data may be unstructured, but the voices within it have a perceptible tone. By establishing a baseline and monitoring changes up or down, it is possible to detect shifts in tone and frequency and leverage them as a kind of early warning system. By tracking all of the mentions of compliance and sustainability over a period of time, unstructured data forms a workable trend. With this carefully built intelligence legacy in hand, changes are easier to identify and respond to in near real time.

The challenge of extracting value in social media

The challenge associated with trying to extract value from social media voices is enormous – but so is the associated opportunity. Traditional methods of monitoring company news and developments may work for a limited number of key strategic suppliers, but the scale associated with tracking the entire supply base is prohibitive, let alone looking beyond the first tier. In the absence of a new, technologically enabled approach, it would be impossible to proactively manage risk from a fully-informed position.

Monitoring social media voices makes it possible to remotely audit the majority of a company’s suppliers in a scalable and automated way, requiring limited human resources while still providing constant ’uptime’. For companies competing on a global stage, there is perhaps no greater use case for social media voices than managing the compliance and sustainability of their supply chain.

Compliance incidents among first tier suppliers (and elsewhere in the supply chain) can lead to significant reputational damage and a loss of revenue or company value. IntegrityNext’s Social Media Compliance Intelligence Engine provides the capabilities required to examine thousands of suppliers in real time. The IntegrityNext platform uncovers a wealth of publicly available data on suppliers to better inform the business by crawling approximately 500 million messages per day, revealing key insights by tracking relevant voices and the topics trending among your suppliers.

The power of social media voices is not just for increasing the visibility of decision makers, it enables leaders to draw actionable insights using real-time analytics to manage the compliance and sustainability of the entire supply chain.

The IntegrityNext platform covers all major aspects of corporate social responsibility (CSR) and sustainability requirements, allowing companies to instantly monitor thousands of suppliers and their entire supply chain 24/7 with minimal administration. IntegrityNext brings together pre-built supplier compliance assessments, blacklist and sanction checks, and real-time social media insights in a user-experience driven platform that covers international standards and extends multiple tiers into the supply chain. For more information, click here.  

This article was originally published on LinkedIn

What To Do When Slavery Is Revealed In Your Supply-Chain

It’s the stuff of every CPO’s worst nightmare; finding evidence of slavery within their organisation’s supply-chain. Sadly, it’s probably more common than you think…

It’s relatively easy to turn a blind eye to modern slavery, particularly when it’s not happening on your own doorstep.

It’s also easy to assume that modern slavery isn’t a prevalent issue in today’s society.

But the stats don’t lie. The Global Slavery Index 2016, produced by the Walk Free Foundation, revealed that over 45 million people are estimated to be affected by modern slavery, more than in any other period in history.

58 per cent of those living in slavery are based in five countries:

  • India
  • China
  • Pakistan
  • Bangladesh
  • Uzbekistan

India, China, Pakistan and Bangladesh all provide low-skilled labour for industries such as food, production, textiles and technology. Uzbekistan is a major cotton exporter.

The Global Slavery Index, which resulted in 42,000 interviews spoken in 53 languages across 25 countries, helps governments, organisations and communities to stay focussed on eradicating modern slavery wherever and whenever it occurs.

Perhaps, given the overwhelming statistics, it’s a case of when, not if, modern slavery will be discovered within your supply chain.

So what do you do when it is?

Red Flags: What will you find?

Firstly, it’s important to understand and look for the red flags, which might be extremely subtle. The likelihood of modern slavery is increased in conflict zones and unregulated sectors, particularly if the jobs are low-income and do not require education or specific skills. Migrant workers, women and children are among the most vulnerable.

Circumstances when passports or identification documents have been removed, excessive recruitment fees are subjected upon migrant workers or subcontractors further outsource work without prior consent are all indicators of exploitation.

Encountering one of these situations may not in and of itself amount to modern slavery but your organisation mustn’t assess anything  in isolation. It’s important to look for the series of signals in order to  decipher whether they paint a clear picture of modern slavery.

Developing a Corrective Action Plan For Modern Slavery

Fiona David, Executive Director of Global Research for the Walk Free Foundation, has some words of guidance and reassurance “My first tip would be ‘don’t panic’.  We know that modern slavery exists in supply chains, so if you find it, you are looking in the right places. The issues that are identified will drive the response”.

Companies responding to modern slavery should develop a corrective action plan based on two fundamental priorities:

  1. The first is short term priority; immediately protecting the victims involved in order to end the abuse
  2. The second is the long term priority.  Companies must find solutions to eradicate the underlying problem which allowed modern slavery to exist in the first place. This may require fundamental shifts in business models or the nature of supplier relationships

These two priorities should underpin every company policy, which should be focused on finding solutions rather than punishments. Critically, those within the organisation and supply-chain must feel safe and confident to speak up, and not fear punishment or recrimination.

Advice from the Walk Free Foundation

  • Be open about what you’ve found: “Companies such as Marks and Spencer, Nike and Rio Tinto and Fortescue Metals Group have all been open about risks identified and violations.”
  • Collaboration is key: Fiona is keen to remind organisations that “no one company can address [modern slavery] in isolation.” Organisations must collaborate with suppliers, competitors in the sector, governments, NGOs, and civil society.
  • Does your organisation have a part to play? Perhaps the culture within your organisation has fuelled the occurrences of modern slavery within your supply chain. Maybe you’re applying unrealistic pressures and time frames? This could be inadvertently encouraging suppliers to use unreliable operators resulting in excessive working hours or under unacceptable work practices.
  • Grievance Mechanisms:These are a formal way for workers to lodge complaints and resolve working condition problems. As well as improving employee satisfaction and productivity, these are crucial in safe guarding workers’ rights. Safe helplines or whistle-blowing procedures must, Fiona explains,  “be freely accessible in appropriate languages, regions and throughout your supply chain, without fear of recrimination.”

What not to do

It might have crossed your mind that an easy solution to tackling, or simply avoiding, modern slavery in your supply-chain would be to pull out entirely from high-risk countries.

Removing Bangladesh, for example, from your supply-chain could be a quick solution to a complicated problem, right?

Wrong!

Communities in countries with high proportions of modern slavery are in desperate need of the economic opportunities your organisation provides. Taking your business elsewhere would only worsen the situation.

Fiona explains the importance of global supply chains because they “create employment and other opportunities for economic and social development, and pathways to help those break the cycles of poverty.” Similarly “immediately terminating supplier relationships is often not the right answer because it can drive the issue further underground.”

The correct, and most socially aware, response is to continue sourcing from these high-risk countries whilst ensuring you have credible audits and systems in place to address any potential problems.

Fiona also makes the important point that “Modern slavery occurs in every country whether developed or under-developed” and so it cannot be avoided simply by vetoing certain countries.  “A recent case found Hungarian workers being exploited in conditions described as ‘modern slave labour’ in a factory in Yorkshire, England.  This factory produced beds, which were supplied to British high street retailers such as John Lewis and NEXT. ”

Procurement needs to share the work load

“Procurement teams are on the frontline,” Fiona asserts. “They manage supplier relationships, they understand the business, the risks and the regions in which they operate. The indicators of modern slavery, being a grievous crime, is actually quite easy to identify, when you know what you are looking for.”

But advocacy groups and investigative reporters mustn’t be the sole figures doing the digging to reveal incidents of modern slavery.

“CSR and Procurement teams should work together across the sectors on these issues, as addressing modern slavery is a “pre-competitive” issue.  Companies can’t compete on sub-standard ethical and criminal practices.”

Searching for modern slavery within your organisation and acknowledging its presence might be one of the tougher pills to swallow but any CPO with a conscience would prefer to reveal and address it head-on. Surely that’s better than burying heads in the sand?

And, as Fiona reminds us “Not only is it the right thing to do morally, but it is also legally required. With laws in the UK, EU and US and debates in Australia about whether to adopt equivalent laws, increasingly it is no longer a voluntary issue, businesses must look at these issues and report on them.”

Fiona David, Executive Director of Global Research,  Walk Free Foundation, will be delivering a keynote speech at PIVOT: The Faculty’s 10th Annual Asia Pacific CPO Forum.

Transparency: Is Your Supply-Chain Crystal Clear?

Organisations are under increasing pressure to improve on supply-chain transparency but meeting these demands is easier said than done…

Improving supply chain transparency is a high priority for companies, especially in industries such as foodservice where consumers and regulators are pushing for more publicly available information on how products are made and delivered. Increasing product complexity—growing demand for organic and gluten-free foods, for example—as well as food safety and security concerns, continues to drive the demand for more transparency.

How Can Organisations Meet These Demands?

Responding to these demands is no easy task. The fragmented nature of the supply chain can make it difficult to achieve the kind of consensus that is needed to create efficient, end-to-end monitoring systems. However, as the industry responds to the need for more transparency, there is a huge opportunity to take a leadership position. Key to developing the level of transparency that is now expected is changing the behavior of stakeholders and harnessing the power of data visualization technology to present abundant data in easily understood and actionable formats. With these changes in place the industry can open the way to innovations that could take supply chain performance to a new level. Moreover, the journey provides some valuable lessons for other industries that are striving to meet market demand for increased supply chain transparency.

Companies in the foodservice industry sell food that is prepared and served in venues outside the home (the most familiar outlet is restaurants). A complex supply chain that stretches from agricultural growers across the globe to end consumers supports each restaurant. The supply chain also includes manufacturers, freight carriers, forward warehouses, distribution centers (DCs) and third-party logistics providers (3PLs). Many of these players tend to operate in silos that can impede the end-to-end flow of information.

What Challenges Does Data Present?

Data latency represents one of the most difficult hurdles. For example, some trading partners share daily inventory and sales information in single, large batches; by the time the data is uploaded into supply chain visibility tools, it may be too old in “food time.”

The veracity of data is another challenge. There are many reasons why inaccuracies creep into supply chain data streams. An overarching problem is a lack of widely adopted, consistent standards for exchanging data. There are also various operational issues to contend with. An example is the reuse of product numbers and warehouse identifiers without alerting trading partners to such changes.

Untimely or inaccurate data is always an issue, but particularly in today’s highly variable consumer environment. Demand for food products can be unusually volatile because shifting consumer preferences influences it. Some peaks in demand—for example, when a restaurant dish suddenly becomes popular because a celebrity tweets about it—are almost impossible to anticipate.

Industry Fragmentation

The industry fragmentation described above compounds such problems. In a fragmented environment, trading partners tend to optimize locally. For example, a DC might build safety stock of a critical product for a favored restaurant chain that is not visible to other players. Unseen inventories scattered across a supply chain cause significant inefficiencies.

Add the dramatic increase in the volume of data to the mix, and it becomes clear that operational models have opportunities to improve before the industry can deliver the levels of supply chain transparency that are expected in today’s world. These changes are within reach—and many are being implemented.

Changing behaviours to tackle supply chain transparency

One of the first steps to overcoming these problems is to change the behaviors that cause data errors and latency.

For example, Armada, a Pittsburgh-based fourth-party logistics provider (4PL) to the foodservice and retail industries, is working with DCs and other entities to make sure that the inventory and shipment data they provide is as near to real-time as possible. Huge improvements are possible by simply rethinking the way data is managed and shared, and by breaking down operational silos.

Changing stakeholder behavior lays the foundation for the new technology that drives greater supply chain transparency. At Armada, this emerging technological base has two key elements.

First, an integrated platform allows the company to receive data in multiple formats such as EDI. Second, Armada is working to fundamentally change the way this data is stored and accessed for clients and their network stakeholders. For example, the practice of generating reports from data stored on applications is no longer sufficient. Data warehousing and extraction as well as business intelligence capabilities are being built to support the high-volume information management systems that are now needed.

This is not cutting edge—but harnessing these capabilities to develop tailored visual displays of complex data represents new territory for foodservice supply chain practitioners.

Why traditional methods won’t do

Traditional methods of displaying and analyzing operational data through columns and rows aren’t enough if the goal is to redefine supply chain transparency. In addition, practitioners need faster, more effective ways to consume and use the large volumes of data now available. And it is likely that the flood of data will increase over the next few years.

Importantly, much of this data needs to be configured for mobile technology platforms that are growing in importance. An example of an innovative display format is an “items at risk” dashboard that shows when items in specific DCs are reaching stock-out levels based on lead times.

These are exciting innovations, and the industry is only at the beginning of this journey. For instance, there is huge potential for developing more advanced analytics. The ultimate analytical goal is to develop systems that automatically identify potential problems and trigger remedial action.

Consider, for example, a case where the “items at risk” screen shows that an item is nearing an out-of-stock situation. The system automatically initiates a transfer order from a DC that it identified as a source of additional stock. The DC is notified, and the order approved without having to engage unwieldy manual procedures. Moreover, the system issues alerts and updates to designated managers via their mobile devices.

This article was originally published on Supply Chain MIT  via the ThomasNet Blog

Rising Stars: I Fell Into Procurement (With Style!)

Did the ISM and ThomasNet 30 Under 30 Rising Stars always have a burning desire to embark on a procurement career or were they late converts? Procurious investigates….

Last month, THOMASNET and ISM announced the 2016-2017 winners of the 30 Under 30 Rising Supply Chain Stars award, presenting the profession with an inspirational batch of role models who are sure to attract more Millennials to the supply management profession.

Procurious has been lucky enough to sit down with many of the winners to find out what the award means to them, what it takes to be one of the  30 Under 30 Rising Stars and the key skills needed for a procurement and supply chain career.

But how did these rising stars first embark on their careers? Were they passionate about procurement from the offset or did a chance encounter or inspiring internship inspire them to “fall into” procurement later down the line?

Andrew Bagni, Procurement Manager at General Dynamics Mission Systems recalls that “ten years ago supply chain wasn’t as hot a topic as it is today. Specific supply chain degrees weren’t offered at my college at the time but this is now an option for students.”

Perhaps it’s not surprising, then, that 66 per cent of this year’s 30 Under 30 Stars didn’t plan a career in procurement.

The Slow Burners

Bagni applied for an internship with General Dynamics “in the hope of gaining some of the business experience l was lacking at 18 years old! I  worked the internship for the summer, which went really well and carried on throughout college whilst I was studying business management. It’s not been a lengthy career so far but the whole of my career has been spent working in supply-chain despite having fallen into it completely by chance.”

Nick Imison, Subcontract Administrator at Northrop Grumman Systems Corp, had a similar experience to Bagni: “I fell into it sideways. I was a finance major. I went to job trade fairs, interviews, and just wasn’t passionate about finance. One day I stumbled on a supply-specific career fair, which was put on by the University of San Diego who push undergrads and postgrads to the supply chain field. They were very convincing and introduced me to the many sides of the business, giving me a holistic view. That piqued my interest and, from there, I enrolled in a few supply-chain courses.

Corey Gustafson, Senior Buyer at Deluxe Corporation initially attended school in Wisconsin to train in engineering, ” I went on a programme  that focused on the printing industry including graphics and communication management and eventually  started taking a procurement and supply-chain management course. The instructor happened to be the program director for the supply-chain programme and it was the best course I’ve ever taken. I was interested in the way the function  impacts the business and wanted to continue with to focus on that.

The Die-Hard Procurement Pros

Not all of the 30 Under 30 winners came to procurement by accident, however.  Barbara Noseda, Global Sourcing Associate at Johnson & Johnson, has a particularly notable passion for, you guessed it,  shipping containers! “I know it might sound random” she says, “but I swear it’s the truth! I did my bachelors degree agree around shipping and logistics in Hong Kong and  then went into supply chain.  Even  today, every time I can get on a project about shipping containers I jump on it.”

Matthew Montana, Category Lead at Pacific Gas and Electric Company, was also interested in supply-chain at the offset, “supply-chain really caught my attention. I liked the analytical aspect and qualitative aspect. There’s a good balance between creative thinking and working with numbers. It’s the balance of quantitative and qualitative that really drew me to supply chain.

And Matthew has another reason to be passionate about procurement. His father also works for Pacific Gas and Electric. “He’s been in supply chain for several years now. Growing up and seeing him work there and seeing how good the company has been to him and his good career influenced me. It’s a good company and a good industry. I had inside info and insight from him so he was one of my mentors early on.”

Amanda DeCook, Sourcing Associate A.T. Kearney, knew exactly where her career was headed, “I knew which University I was going to and I knew I wanted to pursue a Business Major. Michigan State University’s Eli Broad College of Business has the best supply chain program in the USA, and I loved the tangible,  practical skills involved in the course.”

Indeed, several of the 30 Under 30 stars credit their colleges for propelling their careers. Jeff Novak believes his “college had a lot to do with [his career choices]. I went to Penn State Uni,  which is one of the top supply-chain schools in the states, if not the world. It seems that however your procurement or supply-chain journey starts out, you could have a vibrant and successful career ahead of you- take it from the 30 Under 30’s!

The 30 Under 30 Rising Supply Chain Stars will meet for the first time as a group at ISM2017, where ISM and THOMASNET.com will roll out the red carpet to celebrate the winners’ achievements and broadcast their success stories to other young people considering a career in supply management. 

How To Turn Your Procurement Team Into A Cracking Intelligence-Gathering Organisation

According to Justin Crump, CEO, Sibylline, procurement professionals would be foolish to underestimate the value in becoming more active intelligence-gatherers.

Justin Crump spoke at the Procurious CPO Forum in London, Big Ideas In Action, sponsored by Basware

In his book, Corporate Security Intelligence and Strategic Decision Making,  Justin Crump, CEO Sibylline, addresses the current void of awareness about and study of the corporate security intelligence environment. “The increasing size, scale and sophistication of corporate activities  on the world stage – coupled with increasing legislative attention is driving an increasing focus on the [topic of corporate security], and the traditional gap between “business” (which makes money) and security ( a corporate cost center) is markedly narrowing.

Procurement’s value to an organisation has long been due to it’s position at the interface between the supply-chain and the business itself.  Its external reach offers a unique insight into market trends across the globe.

But is your team sufficiently engaged with the external world to spot these trends and push them  back out to your organisation to ensure that you, the CPO, get a seat at the table.

Justin outlines Sibylline’s five tips to bear in mind for anyone seeking to build out their internal process:

Corporate Intelligence is both an art and a science, and is often misunderstood. It is, perhaps sadly, not the province of dashing secret agents and beautiful women in fast cars; rather it is a process that involves everyone in the organisation, refining the myriad data in the world around us into some sort of meaning. Put simply, intelligence is the process which delivers timely, accurate and relevant insight to decision makers, allowing them to value risk and weigh opportunity effectively for their organisation.

The state of the world at present makes the need for an effective security intelligence process in businesses more important than ever. Drivers include:

  • Legislation – duty of care, safe workplaces, negligence
  • Threat environment – scale and tempo
  • Complexity of supply chains – “just in time”, dependencies
  • Information availability – expanding, data overload
  • Global marketplace – challenges and opportunities

Research has shown that truly resilient organisations not only survive but thrive in this environment. Taking an intelligence-led approach allows for effective and efficient risk management and demonstrates clear value add. After all, if you’re not intelligence-led, then what are you being led by…?

1: Perfect is the Enemy of Good

Intelligence is an imperfect process – inherently, returns are a the function of time and resources. While we equate security forecasting to weather forecasting, the weather does not deceive or lie to you – humans do, whether accidentally or deliberately ! In this uncertain world, everything represents a “best effort” – and you more or less get out what you put in.

 2: Understand what you Care About

Understanding what you care about is at the heart of an effective intelligence function. Faced with a mountain of information, it is answering the “so what” question that matters the most – and clear requirements are the fuel for this. Thorough understanding of the organisation, including its people, its business processes, its strategy and its areas of key exposure, is a key facet of making this all work.

3: Make the Most of People, Processes and Technology

Overcoming the constraints of limited time, imperfect information and strained resources relies on a combination of well-trained people, slick processes and appropriate technology. This helps to generate the best possible results in the time and resources available. All too often companies address only one of this triad, meaning that results are imbalanced and opportunities to provide effective insight are missed.

4: Make an Impact

The best analysis, from the most perfect process, is no good at all if people are not listening. One way to ensure this is to speak to their needs; but sometimes even this is not enough. Presentation is therefore important; what suits your consumer? How much detail do they need, or can they absorb? How much information is too much, or not enough? These are the questions that the practitioner must answer in order to ensure that they make a meaningful impact.

5: Manage Intelligence as a Project

Introducing an intelligence function need not be complex, but needs to be managed as a project and with rigour. As the function begins to build a head of steam, it will start to generate more client interest and greater demands will be made, requiring a steadily evolving approach in order to satisfy expectations. It is therefore best run as a project, within a coherent framework that allows it to grow in a controlled fashion.

We at Sibylline earnestly believe that the best decisions are taken on the basis of intelligence, and an intelligence-led process helps make organisations resilient – allowing them to cope with the challenges of the modern global marketplace. This is a minor investment that returns a great deal, often requiring little more than enforcing things that are already happening within a more effective and disciplined system.

The process of examining yourself and examining the world, within a cohesive framework, gives a stable way to reference what is changing in your environment and therefore highlights both risks and opportunities. Procurement functions in particular are well placed to understand the world and the organisation, and so have a vital part to play in making sense of it all – however crazy the world threatens to get, and well know that there are opportunities amidst the doom, gloom and fake news!

This Little Procurement Pro Went To Market…

How do you know when you should  go to market? ThomasNet discuss strategies for three common sourcing scenarios. 

Strategic sourcing is all about generating a return on investment for every sourcing initiative. However, different sourcing scenarios require different levels of investment – in terms of time, effort and resources. Therefore, it’s important to approach each situation differently as well in order to produce the best results.

Here are three common sourcing scenarios, along with proven advice you can use to ensure an optimal return.

Scenario 1: Reducing Costs With A Strategic Partner

Your current supplier is deeply involved in the design, engineering, and process improvement of your product. You rely on them for the success of your day-to-day operations, and they have invested heavily in technology to ensure the success of your product. However, you are exploring ways to reduce costs.

When your incumbent supplier already acts as a strategic partner, the potential return on investment from pursuing alternate suppliers is significantly reduced. In fact, pursuing alternative suppliers can actually yield greater risk than reward. That’s because the supplier has provided you with capital investments that they have engineered and maintained, and the transition costs are likely to exceed the cost savings opportunities available with an alternate vendor. In addition, your current supplier has a comprehensive understanding of your product design, so they are less threatened by outside competitors who are likely working with imperfect information, and therefore less likely to reduce their pricing.

The Strategy

Rather than pursue alternative suppliers, you should engage the incumbent supplier in direct negotiations. Leverage the value your business brings to their operations; be upfront with your desire improve pricing; and be transparent about your procurement goals. Should negotiations prove unsuccessful, that may be a flag that your supplier is too complacent in the relationship, and alternate options can be explored at that time.

Scenario 2: The Unsolicited Proposal

Before reviewing a purchasing category, you reach out to suppliers within that category to notify them about your initiative. One supplier responds with an unsolicited proposal that reduces costs or otherwise increases value.

As a Supply Chain Project Analyst at Source One, this is a situation I encounter often. After a supplier realizes that their spend is being reviewed or a sourcing initiative is being considered, they attempt to get ahead of the process by offering up a proposal. The proposal typically includes a cost reduction in exchange for a longer contract or additional business.

The Strategy

The supplier is aware that their costs are not market competitive and are adjusting accordingly. However, while it may be tempting to award your existing supplier and reap the savings, it’s better to conduct a full sourcing initiative through an RFP, eAuction, or even an RFQ. At worst, you will have alternative bids to use as leverage with your incumbent supplier. At best, you can save a substantial amount of money. In fact, in my experience, the savings you can realize from alternate suppliers is often greater than the cost reduction proposed by the incumbent.

Scenario 3: Tactical Versus Centralised

Your business has been purchasing tactically in a particular category. The overall market basket is high mix, low volume, with very few recurring purchases to leverage for specialized pricing.

This is a common occurrence in indirect categories such as industrial supplies, industrial hardware, safety supplies, and office supplies. Employee preferences and unique company needs can influence purchasing, and standardization of products is nearly nonexistent.

The Strategy

 In this scenario, the continuation of tactical purchasing may seem like the most appealing option, as prompting a centralized supplier to bid on such an immense market basket would likely result in poor pricing and participation. However, it’s almost always prudent to conduct an RFP. Invite suppliers that can cover all required geographies and product categories. Focus on leveraging the overall value of the market basket to establish discount structures, rather than having suppliers exhaust resources pricing out an extensive product list.

To gauge the potential savings available, examine a random sampling of products and ask suppliers to apply the proposed discounts to those items to compare to your baseline price. If you do eventually move to a centralized account, lean on the supplier to drive product standardization and compliance. This will give you the opportunity to further refine pricing and terms down the line.

Other Strategies


Granted, not all sourcing events will fall into one of these three scenarios. However, there are some principles that can be applied universally:

  • Closely monitor the relationships with current suppliers
  • Don’t be afraid to shake up the status quo if a competitive event can yield cost savings or product improvements
  • Maintain clear and consistent communication between procurement and other departments
  • Above all, remember that the strategic sourcing process does not begin with the identification of an initiative, it thrives on the constant analysis of the current state of purchasing

Jennifer Engel is a Supply Chain Project Analyst at Source One Management Services, responsible for executing strategic sourcing and process improvement initiatives for Fortune 1000 clients.

This article was orginally published on the ThomasNet blog. 

Order Up! 5 Supply Management Capabilities You Can’t Leave Off The Menu

When it comes to supply management, are you managing your customer orders effectively? Dave Food discusses Order Management and five more capabilities you just can’t go without.

Last week, Dave Food talked us through five of the key supply chain capabilities that everyone needs. This week, he’s come up with five more!

From order management to shop floor execution and supply chain visibility, these are the things procurement and supply chain professionals should be on top of.

1. Order Management (OM)

Knowledge and skill necessary to manage the receipt and scheduling of customer orders. An integrated OM system may encompass these modules:

1) Product information (descriptions, attributes, locations, quantities)

2) Inventory available to promise (ATP) and sourcing

3) Vendors, purchasing, and receiving

4) Marketing (catalogues, promotions, pricing)

5) Customers and prospects

6) Order entry and customer service (including returns and refunds)

7) Financial processing (credit cards, billing, payment on account)

8) Order processing (selection, printing, picking, packing, shipping)

2. Shop Floor Execution

This is the area in a manufacturing facility where assembly or production is carried out, either by an automated system or by workers or a combination of both. The shop floor capability may include equipment, inventory and storage areas. You can create customer orders and shop orders for each product manually or import shop orders from an ERP system. When this shop order authorisation is created or received, it contains a specified quantity of the product to be built on the Shop Floor.

Once you define your production work floor processes and rules, the platform to optimise operations can be implemented. Real-time status updates can be provided to your organisation and your customers as they need them. A SF provides an on-demand view of bill of materials, routing details, work instructions, material availability, part and product images and programs, to develop optimal SF processes. These should match your business needs, increase view production work orders at any stage of manufacturing, and rework instructions are sent directly to the factory floor to coordinate processes efficiently and improve customer service.

3. Supply Chain Continuity Planning

This is the process that seeks to optimise Supply Chain strategy, processes, human resources, technology and knowledge. Supply Chain Continuity Planning controls, monitors and evaluates Supply Chain risk, which serves to safeguard against new uncertainties that may emerge affecting profitability. The continuity of the company is vital for the long-term success of the business, in today’s world; all aspects of the functioning of an organisation are vulnerable to disruptions and risks. Supply Chain Continuity Planning controls, monitors and evaluates Supply Chain risk.

4. Supply Chain Visibility

Supply chain visibility (SCV) is defined as the ability of parts, components, or products in transit to be tracked from the manufacturer to their final destination. SCV enables you to perform “what-if” scenarios. Visualising these different scenarios can help you predict issues and problems that may arise, and then plan for them and their solutions.

Visibility allows people in the supply chain to see problems before they occur and take necessary steps to avoid the expense in real time. Visibility also provides insight to make more intelligent decisions early in the order cycle (just in time inventory) and perform more intelligent audits in the distribution centres on inbound shipments. Finally, visibility can also be a major driver increasing throughput in the existing distribution network and thus delaying the need for costly new DCs

5. Supply Chain Network

The collection of physical locations, transportation vehicles and supporting systems through which the products and services firm markets are managed and ultimately delivered; it can be manufacturing plants, storage warehouses, carrier, docks, major distribution centres, ports, intermodal terminals whether owned by a company, suppliers, a transport carrier, a third-party logistics provider, a retail store or an end customer.

Emerging technologies and standards such as the RFID and the GS1 are now making it possible to automate these SCNw in a real time manner making them more efficient. A SCN can be strategically designed in such a way as to reduce the cost of the supply chain. Designing a SCN involves creating a network that incorporates all the facilities, means of production, products, and transportation assets owned by the organisation or those not owned by the organisation but which immediately support the supply chain operations and product flow.

There is no definitive way to design a SCN as the network footprint, the capability and capacity, and product flow—all intertwine and are interdependent. Following on from this, there is also no single optimal SCNw design, in designing the network there is an apparent trade-off between responsiveness, risk tolerance and efficiency.

Dave Food is a supply chain innovator, a passionate educator, a futurist, a trend-watcher, an insightful consultant and a marketing strategist. This article was originally published on LinkedIn.

Gender Diversity: Would You Leave $12 Trillion On The Table?

Anne Tesch is one of those professionals who has facts and figures at her fingertips to back up every point she makes. As she tells Procurious, it’s vital that supply managers have the facts in their possession when pursuing a goal as important as increasing gender diversity.

Why should gender diversity be high on every company’s agenda?  

Where should I start? There’s a vast amount of global research and evidence on the importance of women’s economic empowerment and the benefits of hiring women-owned businesses. To list a few key studies:

  • McKinsey’s Global Institute report found that $12 trillion could be added to the Global GDP by 2025 by advancing women’s equality. Economies most impacted (with GDP gains) would be India (16%), Latin America (14%), China (12%), and Sub-Saharan African (12%);
  • Another McKinsey survey found that 34% of companies said working with women-owned suppliers had increased their profits;
  • Women perform 66% of the world’s work, produce 50% of the food, but earn only 10% of the income, and own very little of the world’s private property;
  • There are approximately 187 million women entrepreneurs worldwide who own between 32% and 39% of all businesses in the formal economy;
  • Women dominate the global marketplace by controlling more than $20 trillion in consumer spending that will rise to $30 trillion in the next decade; and
  • According to research conducted by WEConnect International, women-owned businesses globally earn less than 1% of the money spent on products and services by large corporations and governments.

What are your recommendations for supply managers looking to increase their engagement with women-owned businesses?

1. Know your numbers

Firstly, it’s important to know the percentage of women-owned businesses in your supply arrangements.  Why not do some research and ask suppliers if they are “women-owned” which, by definition, means that they are at least 51% owned, managed and controlled by one or more women. Furthermore, why not consider tracking tier 2 spend, as smart companies will often increase spend with women-owned businesses to win large contracts.

 2. Spread the word

Convince others in your team that working with women-owned suppliers is good for business. A recent McKinsey survey indicated that working with women-owned suppliers increases profits, while the Hackett Group’s research last September shows 99% of diverse suppliers meet buyers’ expectations, with nearly 25% exceeding expectations.

Though improvement to the bottom line is always important, incorporating women-owned businesses in your supply chain also provides an opportunity to grow your customer base, attract and retain talent, and enhance your branding – all while increasing profits and reducing costs.

 3. Network, network, network

Accessing networks of women-owned businesses, even just to participate in RFPs, is a critical success factor but one of the more difficult parts of starting and managing a supplier diversity program.  Engaging with third parties that specialise in connecting buyers with diverse suppliers, such as WEConnect International, can assist this process. Our organisation certifies women-owned businesses through a rigorous, globally accepted process, and provides access to these organisations through our eNetwork.

What are the proven benefits of having more women in your supply chain?

Women influence the vast majority of purchasing decisions globally, but they are significantly underrepresented in global value chains. Even though more than one third of private businesses are owned and controlled by women, on average, women earn only 1 percent of large corporate and government spend globally. Benefits of having more women in your supply chain include:

  • Mirroring your diverse customer and employee base – it’s important to reflect the communities around the globe where you operate, not only with staffing, but also with your supplier base;
  • Supporting your corporate clients – more corporates are growing their tier 2 inclusive sourcing programs and requesting reporting from their prime suppliers;
  • Supporting business growth in new markets;
  • Accessing innovation and securing competitive advantage from new SMEs offering more creative options;
  • Reducing costs through competitive bidding;
  • Accessing local networks and knowledge; and
  • Enhancing the company brand and community engagement by promoting success stories about working with women-owned businesses.

Anne Tesch and other leaders in the profession will be speaking at Quest’s Women in Procurement 2017 event in Melbourne on 26-27 April. Visit Quest Events to download a brochure and find out more.

WEConnect International is a global network that connects women-owned businesses to qualified buyers around the world.