Tag Archives: technology

7 Ways IoT Is Already Changing the World

From connected healthcare to retail and water management, the IoT will revolutionise the way we live. It’s already having some pretty major impacts…

Agor2012/Shutterstock.com

This article was written by Gauri Bapat.

The wave of connectivity had extended beyond phones, laptops, and tablets and is permeating into our daily lives. With an explosion of connected devices in the market and a healthy adoption rate, we can safely assume that we are taking confident strides into the ‘connected life’ made possible by the IoT.

A report by Gartner suggests that by the year 2020, the number of connected devices across technologies will touch 2.6 billion. As we move towards an increasingly automated world, this technology will be used to improve the productivity and quality of life and industries alike. The IoT is poised to grow from a technological phenomenon to one with a more global and social impact…and the cogs are already turning in that direction. Things that we once saw only in sci-fi movies and Steven Spielberg specials are a reality today.

Let’s take a look at how the IoT is already changing the world we live in.

Manufacturing

IoT in manufacturing is ushering in the fourth Industrial revolution (Industry 4.0) that aims to make manufacturing smarter. Smart manufacturing involves the use of sensors that are retrofitted on existing manufacturing equipment to improve efficiency and performance. Siemens ‘ PLC manufacturing plant in Amberg, Germany, has implemented the principles of Industry 4.0 and has completely automated the production of their automation systems. Post this implementation, they witnessed a 99.99885 per cent “perfect” production quality rate. Now that’s impressive!

Airlines

The airline industry has seen massive adoption of the IoT in order to increase operational efficiency and drive the age of ‘connected aviation’. Virgin Atlantic has every single component of its Boeing 787 attached to a wireless airplane network. These incredibly connected airplanes use IoT data to evaluate everything right from the airplane’s performance to issue identification.

So, if a Virgin Atlantic jet reveals low-performance mid-flight, this information is related to the ground staff real-time. Thus, when the flight lands, the airport engineers are ready to solve the problem. Other airlines such as KLM, Qantas, Lufthansa, and Delta are also using IoT to improve aircraft performance, discover new business insights, and maintain greater efficiency.

Airports such as Miami airport, London City airport, Helsinki Airport, amongst otherS, use IoT to track passengers, prevent bottlenecks and queues, offer personalised services to the customers, track assets and also deliver location-based services to the travellers.

Water Management

One of the areas where IoT has made a tangible difference is in water management. Proper use and management of water have been a problem that many cities across the globe have been battling. IoT has been put to work in cities such as California and Bangalore in India to not only identify the cause of water shortage but also to identify avenues as to how water management can be optimised. The Bangalore Water Supply and Sewage Board (BWSSB) employed an IoT monitor to manage the complex water distribution system by creating an operational dashboard using IoT. They realised that almost 45 per cent of the water supplied by BWSSB is unaccounted. San Francisco employed smart meters to measure water consumption and notify their customers when their water consumption exceeds the specified limit or if, for example, the water is left running continuously for 24 hours.

Retail

The retail industry has witnessed a huge adoption of IoT. IoT implementation in retail has been done to not only improve the supply chain or to create more engaging and tailored marketing campaigns, but also to make shopping a more interesting experience. Retailer Rebecca Minkoff created the ‘connected store’ using RIFD tags on each piece of clothing and used smart mirrors in the dressing rooms. The customers could try on the product, and also take a look at other looks, available colors and sizes without even leaving the dressing room!

Target has been using beacons across 50 stores to provide personalised offers and present their customers with hyperlocal content to make shopping more exciting for their shoppers. Ralph Lauren’s Polo Tech apparel, which is a smart workout shirt, monitors vital activities of the user on a real-time basis and enables ongoing health monitoring.

Connected Energy

2016 saw us looking towards connected energy solutions to help us save energy. IoT products such as Google Nest, ecobee3 thermostat, the heating system Hive by British Gas have seen huge adoption to track and measure energy consumption. 46 per cent of technology enthusiasts in Germany and 42 per cent in the US already own a connected energy solution and save almost 72 per cent on their monthly utility bills – that amounts to a USD $80 reduction in the monthly bill.

Lighting Control

Moving beyond the smart lights of a connected smart home, smart lighting control can generate huge financial savings by controlling street lights. Mayflower CMS successfully employed IoT to control and monitor an excess of 180,000 street lights, bollards and signs in the UK and Ireland with its largest installation in Hampshire that has over 90,000 nodes. The Hampshire City Council has been able to reduce energy consumption by 21GW/hr per annum which is a reduction of 40 per cent and has successfully reduced carbon emissions by approximately 4000 tons per year.

Connected Healthcare

The global IoT healthcare market is expected to touch USD 160 billion by 2020. The last few years healthcare has witnessed wellness sensors to surgical robots to improve efficiencies and better patient outcomes. Ingestible sensors help measure if patients are taking their pills on time and helps medical practitioners manage their patients remotely. Barton Health, a 62-bed health system in rural Lake Tahoe, California, is one of the first users of the ingestible sensor by Proteus Discover, a Digital Medicine to help patients suffering from diseases of the central nervous center such as schizophrenia and place the patient in the driver’s seat regarding their health management with the help of technology.

“When wireless is perfectly applied, the whole earth will be converted to a huge brain, which in fact it is, all things being particles of a real and rhythmic whole. We shall be able to communicate with one another instantly, irrespective of the distance.”– Nikolai Tesla

This famous statement by Nikolai Tesla predicts the invention of the smartphone at a time when the mere thought of such an advanced device was nothing but unimaginable. Take a closer look at the statement and you can see that Tesla foresaw the impact of the Internet of Things (IoT)… a world that becomes so connected that it becomes one ‘huge brain’.

What Tesla spoke of decades ago, we are experiencing today

Gauri Bapat is Director, Strategic Business at Inteliment. This article was orginially published on LinkedIn.

The Impact Of Blockchain On Procurement

Blockchain won’t wait for you to be ready for it, which means it’s time to brush up on your knowledge and understanding right here, right now! 

Vadim Sadovski/Shutterstock.com

Blockchain technology will not only impact procurement and procurement professionals but is expected to be more pervasive in our business and personal lives than the internet itself. To put the enormity of impact on procurement and procurement professionals in perspective picture yourself twenty years ago trying to explain how the Internet is going to change things. Where would you even begin?

Like the Internet the Blockchain is a network. In the case of Blockchain comprised of decentralized “ ledgers”, many are referring to it as Internet 2 or more commonly the Internet of Value or Internet of Trust.

The benefits

The most important thing to understand is that Blockchain addresses many of the most critical problems we’ve encountered doing business on the internet.

1)  Security: Practically speaking the Blockchain is unhackable.

2)  Transactions are verified by network participants (consensus), eliminating the need for third-party intermediaries’ (banks) costly, time-consuming and predominantly manual settlement processes. In addition to slowing down our supply chains banks alone have estimated these processes are costing them more than $20 billion annually.

3)  Eliminating high transaction processing costs for high volume/low margin retailers who accept credit cards could significantly add to their bottom line.

4)  Once transactions are verified they are secure and immutable. (unchangeable)

5)  The immutability of the Blockchain means that supply chain provenance can be assured. This is particularly important for conflict minerals, pharmaceuticals, food and many other supply categories where provable chain of custody is critical.

6)  Payments can be made directly from buying entity to selling entity “ledgers” by-passing intermediaries (banks, brokerage, clearing houses, title companies, etc.)

7)  Payments can be automatically triggered based on the codified terms of “ Smart Contracts” stored in transaction blocks.

8)  Blockchain capabilities will change, if not eliminate the role of accounts payable and accounts receivable departments.

9)  Blockchain enables the concept of micro-units and micro-payments. It is estimated that approximately one -third of the world’s economic opportunity exists for products and services such as energy or digital rights where backend settlement costs currently constrain those markets.

10) It is also estimated that 25 per cent of the global population does not participate in the global economy because they have no bank accounts and/or credit cards. Without these tools they cannot participate in the Internet economy. The primary reason they do not have these economic tools is because they cannot prove their identities. Immutability of the Blockchain can enable these people.

What do I need to understand?

The capabilities I’ve outlined just scratch the surface on how Blockchain impact all of us. Aside from the aforementioned, as a procurement professional are several important things to understand.

1)  Blockchain is a much wider and more pervasive concept than Advanced Cognitive Systems, Big Data, Predictive Analytics, Robotics, 3-D Printing or even the Internet of Things. In fact these technologies will become infinitely more practical and secure because of Blockchain.

2)  Do not think of Blockchain and BitCoin, FinTech or Crypto Currencies as synonymous. They are not.

3)  Do not think that it will take 20 years to mature and be mainstream. The estimate is 5-7 years for full maturity.

4)  Do not assess progress by the US/Euro FinTech Community. While they were the first to recognise Blockchain’s inherent value and arguably have the most to gain by adopting it, they also have the biggest hurdles to overcome and could very well be last to cross the finish line.

5)  Don’t make the mistake of waiting to become knowledgeable about Blockchain; it is the most highly disruptive technology we’ve seen since the Internet and it won’t wait until you are ready for it.

Michael Shaw is CPO and Executive Board Member of Sourcing and Procurement Executives (ACSPE) and Chief Information Officer at Blockchain Executive.  This article was originally published on LinkedIn.

The New Age Of Procurement Technology

Procurement technology went full sail and you eagerly jumped on board. But now 90 per cent of all technology is about to become obsolete. Are you prepared for the new age? 

As the vice president of Basware’s Purchase-to-pay solution it goes without saying that I’m involved in a lot of procurement technology selection decisions. And over the years, I’ve noticed a recurring pattern in the process, across numerous organisations. It tends to play out a little bit like this:

A CPO of a large organisation is at the end of their tether thanks to a messy purchase-to pay process. It’s the age-old story with AP and procurement operating independently, maverick spend with unapproved suppliers, late payments and paper absolutely everywhere.

The easiest, and seemingly smartest, solution to the problem is the implementation of a new purchase-to-pay system, which said CPO requires, being extra savvy, to be a Software-as-a-Service solution. The CPO knows they can get a decent ROI on whichever supplier they choose.

So what’s the problem?

Unfortunately, our CPO is only looking 5 inches in front of their face! It’s no exaggeration to say 90 per cent of today’s procurement technologies will be obsolete in the coming years. And so procurement needs to start looking much further ahead!

Remember Siebel? We can’t either…

You’d be pretty hard pushed to find an organisation that uses Siebel nowadays. You might even struggle to find someone who knows what it is!

Siebel was the cream of the Customer Relationship Management (CRM) crop in the late 90’s and early 2000’s. It was the absolute best at its time.  Hundreds of millions of dollars were spent on licensing and implementing Siebel, with the promise of visibility, efficiency, and improved customer satisfaction.

Fast forward a mere ten years and…nobody uses it.  It turned on a dime thanks to Software-as-a-Service and, more specifically, Salesforce. An enormous technology shift took place, and suddenly Siebel and everything like it was utterly obsolete. More than a few CMO’s were fired as a result.

What can we expect from the next tech shift?

What can we expect from the next technology shift? We hear about  AI, machine learning and cognitive computing all the time and there’s a lot of concern amongst procurement professionals that it’s going to displace our workforce.

But it’s coming to procurement whether we like it or not. There’s a glaringly obvious application of AI for procurement professionals.

One word: data.

When today’s CPOs try to objectively evaluate the functionality of potential new solutions, they’re often bypassing  a crucial aspect (opting to solely measure tactical functionality); the game-changing competitive advantage their organisation can achieve through the power of the data.  There are two major considerations to be made here.

  1. Is the system architected for centralised data capture?

    The system should be able to capture your data, the data of all organisations using the solution  and, ideally, be able to connect with other solutions.  The more the system is designed for centralised data capture, the better chance you have of being able to take advantage of the latest  data-driven tech changes.

    My advice is that you eliminate anything that focuses solely on you and your data.  If it’s not central, you can be sure you’ll get stuck behind and end up like one of the organisations using Siebel.   But, of course, design alone is not enough.

  2. Does the system actually capture that data?

To capture all of this data, there are three parties that matter: suppliers, requisitioners, and AP. This is where tons of business cases fall apart.

  • Suppliers: To capture data you have to get all your suppliers on the system. Not just your big sophisticated suppliers, every single one! You have to get them connected, or you will fail, if not today then most definitely in the imminent future
  • Requisitioners: Who are the worst employees when it comes to using a procurement system? It’s fair to say that it’s often the sales and exec teams;  the people driving revenue for the company. These groups are only going to use a new procurement system if it’s the easiest and fastest way for them to get their jobs done, which means it has to fit in seamlessly with how they work.   If you don’t give them a system that they want to use, you won’t have them, and again you won’t be capturing the data from their transactions.
  • AP:  This is probably the most important part but so often an afterthought when looked at from a Procurement perspective. Consider how many hundreds of thousands or millions of invoice transactions are processed within your company. Now multiply that by the thousands of other companies out there and you’ll get a sense of how quickly that data can scale. Most P2P systems can’t process all of those different kinds of invoices. And that’s where we end up in Siebel world, yet again!

By committing to finding and using a system that captures all of this data, and does so not just for your organisation, but in a truly centralised platform, procurement will soon be able to achieve the following:

  • Fraud detection
  • Machines that know when you need something. Doesn’t it seem miraculous when Amazon knows what you need and presents it to you when you login?  Let me tell you that it’s not. It’s data
  • Dynamic discounting marketplaces
  • Exceptions handled without any human intervention, based on patterns of prior behavior in the data. This might not be behavior that humans can readily identify, but machines can with ease by crunching all of that data

Procurement would do well to remember that, In today’s world, the big value is in the data, not in tactical functionality.

Eric Wilson is the head of Basware’s Purchase-to-Pay business for the Americas and APAC. 

Can Procurement See Past The End Of Its Nose?

Procurement must learn to think the unthinkable, predict the world weather forecast and look further than the end of it’s own nose when it comes to technology in order to remain relevant!

luckyraccoon/Shutterstock.com

The Procurious London Roundtable was sponsored by Basware

Procurement 4.0, Cognitive Procurement and Thinking the Unthinkable were among the hot topics canvassed at last week’s inaugural meeting of the Procurious London Roundtable.

Packed with leading-edge speakers, a ready supply of valuable expertise, peer-led market intelligence, and networking, CPOs were unanimous that a reimagined Procurement must be the business’ source of market intelligence on these issues – if it is to secure and maintain a “seat at the table”.

Speakers addressed everything from global politics to AI and making it ito the C-Suite. If you’re intrigued to hear what they had to say, look no further; we’ve managed to pack the finer points into one, handy article!

Learning To Talk Across The  Lily-Pads

Nik Gowing, BBC Broadcaster,  Visiting Professor at King’s College and Big Ideas Summit 2016 Speaker,  joined the roundtable to provide an update on Thinking The Unthinkable.  Unthinkables are critical events that are not being considered or prepared for by organisations or by our governments around the world.

From Brexit to the election of President Trump;  from Putin’s invasion of Crimea to upcoming European elections, unthinkables have been occurring frequently over the last few years and they’re not letting up! In fact, if anything, unthinkable events are happening more rapidly than ever before.

Nik firmly believes that, in a world of social-media, time-scales for unthinkables which were once 20 years could now be 20 months, 20 days or as little as 20 minutes!

Take the infamous United Airlines (UA) flight as an example. Last month,  a passenger was violently dragged off a plane, the incident was filmed and then instantly shared around the globe. In a matter of minutes, UA’s reputation was destroyed and has perhaps threatened  the way airlines will operate in the future.

Nic’s advice for preparing for the future? Instead of destroying mavericks within our organisations, we need to turn them into visionaries and harness a culture where they can thrive. Nic has likened the current situation to frogs on lily pads – everyone is sitting in the same pond but not talking to one another – we need to find a way to come together and talk.

Grab An Umbrella And Face The Future

Justin Crump, CEO Sibylline, shared Nic’s concerns for the future and expressed his desire for organisations to address the current void of awareness about, and study of, the corporate security intelligence environment.

An intelligence-led approach to managing risk and predicting disruptions to your business  is absolutely the  way to go. It allows you to work out when you might be forced to take risks and when it’s worth taking them!

But how do you go about doing this? It all starts with reading your morning paper with purpose! Justin suggests you ask yourself why you’re reading it  and how and why it’s relevant or interesting to you. Consider where your clients work and where your supply-chain  is based. If missiles started flying over a particular country, would it be critically damaging to your business?

It’s possible, and preferable, to turn reading the news into a data-collection process by collating information and highlighting the important areas to disseminate to people within your organisation.

If in doubt, implement the ADAM model:

ASSESS – Understand your business and your world and what these interactions mean to you

DECIDE – Derive actions to help mitigate risks and refine into an achievable plan

ACT – Implement planned actions

MONITOR  – Use ongoing world risk register outputs to understand what is changing in your world. This will help you predict the world weather forecast and figure out when you’ll be needing an umbrella!

Looking Further Than The End of Your Nose

Eric Wilson, head of Basware‘s Purchase-to-Pay business for the Americas and APAC, discussed the critical actions CPOs can take today in order to safeguard against technology obsolescence. When 90 per cent of technology is about to become irrelevant can procurement implement a watertight process that evolves with industry trends?

Eric asked our roundtable attendees to consider the following scenario:

A new CPO comes into an organisation and instantly sees that there is  a problem with procure-to-pay and maverick spend.  They know they can save a whole load of money for the business. They challenge their employees to develop a business case, which a cross functional team evaluates and a score-card of criteria is developed.  Whilst this might sound like a totally reasonable approach there is a one major problem. Eric explained that the challenge with this process is that it focuses five inches in front of the CPO’s face; they’ve seen a problem and they’ve fixed it.

Remember Siebel? Not so long ago it was the best CRM system you could possibly use and was responsible for shifting the entire workplace environment into customer relationship management. Anyone who hadn’t bought Siebel already was about to and huge investments were made.

But, almost overnight, it became completely obsolete thanks to arrival of the Cloud. Siebel went bust, many a CMO lost their job and money was wasted, all because no-body looked further ahead.

Eric explained that the next wave of procurement technology is not just about the traditional goals of visibility, control and savings.  Harnessing the value of the transactional data running through the system will be key.

Given the way tech is trending, particularly AI, within three years 90 per cent of procurement tech will be obsolete.  People will not raise requisitions – robots will! And procurement must prepare for that.

What’s Holding Up Cognitive?

Pascal d’Arc, former GM of Cognitive Scale, talked us through the journey to cognitive and what some of the practical applications are in today’s world. Is cognitive really all the fuss it’s hyped up to be?

Judging by some of the fascinating examples Pascal gave us, absolutely! One such example was a cognitive system that had been given the ability to experiment with building a drone. The resulting machine had a frame shape which was modelled on the pelvis of a flying squirrel, representing something very close to nature.

But why is the progress of advancing and using cognitive tech so slow, what’s holding us back in procurement? According to Pascal it comes down to a number of things:

  1. The technology so far has been very experimental. There has been a sense of frustration towards IBM but they are still experimenting
  2. Expectations are huge. We are often missing the low hanging fruit when it comes to deciding what to tackle
  3. Procurement isn’t a key investment area…yet! Fintech and healthcare are the current priorities

Aiming For The C-Suite

Damian Walsh, Partner at Heidrick & Struggles,  gave our CPOs some top tips on what it takes to get to the very top. How do you successfully move on to a bigger CPO role, step up to CEO or take on a non-executive role.

  • Whatever it is you want to do, tailor your approach accordingly
  • Be clear about what you want and position yourself for it
  • Be clear about what you have to offer – think in terms of business solutions. There is no such thing as a “transport”company any more
  • Get your CV in order and make sure it’s accurate- so many people don’t!
  • Manage the search firms – be selective and understanding and clear about what you’re looking for
  • Work on your personal brand- thought leadership, speaking engagements etc.
  • Work your business and personal networks

The Procurious London Roundtable was sponsored by Basware

If you’d like to secure your seat for our second London Roundtable on 11th October 2017, please register your interest with Olga via [email protected]

Apple To Finally Get Into Bed With Amazon

Will Apple and Amazon put aside their differences and unite in time for the launch of Apple TV? 

The professional relationship between tech giants Apple and Amazon has been rocky to say the very least.

Firstly, In 2014 Amazon removed  in-app payments from the iOS versions of several of its services  in response to Apple demanding a 30 per cent share of the profits.

And then, in what was considered by many to be a bizarre decision, Amazon announced in October 2015 that it would no longer be selling Apple TV or  Chromecast because of the direct competition between them and Amazon’s own streaming products.

At the time, the move was likened to Apple TV’s refusal to play Netflix’s streaming service because they did not want to promote a competitor, but Apple eventually gave in.

Whilst certain reports this week suggest there are changes in the waters, Amazon’s Echo Show announcement  this week might be a little too close for Apple’s comfort.

Will Apple Echo Amazon’s product?

Last week, Amazon introduced the latest Alexa expansion, unveiling an Echo with a touch screen and a camera. The Echo Show features “everything you love about Alexa” with the added benefits of being able to show you things – whether it’s the weather forecast, a wikipedia page, a video, photos and more.

The device allows users to video chat with anyone who has an Echo, Echo Dot or the Alexa App, posing a big threat to Skype and  Apple’s FaceTime video-calling service.

Watch Amazon’s Introducing Echo Show video below to find out more.

The device costs $229 and is expected to be a huge hit when it begins shipping in late June, quite possibly to the dismay of Apple.  Indeed, the rapid speed at which Amazon has managed to expand its Echo hardware and the reasonable price points present a real threat to Apple.

As its already proven many times, Amazon is in the unique position to deny competitors access to its store. And that’s not to mention it’s currently ahead of the game and anything Apple subsequently releases is likely to come with a hefty price tag.

Time will tell what Apple has up its sleeve and whether consumers are willing to sack in their i-products for Echo.

Amazon Video for Apple TV

Various rumours have suggested this week that Amazon and Apple are headed in a much friendlier direction.

Last Thursday, Buzzfeed announced that the one major flaw of Apple TV was to be addressed: Amazon’s Prime Video service will, at last, be made available. Apple are expected to announce an Amazon Video app designed for Apple’s set-top box at the Worldwide Developers Conference (WWDC) on June 5 in San Jose.

Last year Amazon CEO, Jeff Bezos, explained that the company was waiting for  “acceptable business terms” with Apple before  a Prime Video app was considered.  Perhaps those terms have now been agreed.

If all goes ahead, Amazon is expected to return the favour by resuming sales of Apple TV’s on its website, following a two year hiatus.

In other news this week…

Co-op releases first slavery statement under the Modern Slavery Act 

  • Co-op has outlined how it sources, the clauses it uses in contracts and the steps it takes to audit suppliers withe regards to modern slavery. It also describes how the Co-op helps former slaves into work.
  • The 10-page statement outlines the Co-op’s ethical policies, its supplier approval process and how it carried out 444 audits in 2016.
  • The Co-op said it provided training for suppliers and it planned to develop a new procurement academy and roll out a business-wide training and awareness plan on ethical sourcing.
  • Cath Hill, group marketing director at CIPS, said: “The Co-op’s modern slavery statement is an excellent example of what organisations should be doing to combat this important issue. “

Read more on Supply Management 

Like coffee? You’ll like it even more when it’s sustainable!

  • Australians use an estimated one billion disposable coffee cups annually, but these cups are not recyclable in most states…until now!
  • Melbourne-based social entrepreneur Soula Thuring has taken the direct approach, selling biodegradable coffee cups with an additional Enviro Grow kit which turns the used cup into a plant
  • The $2 Grow Cup of Life kit contains a soil pellet that expands with water, a seed mat and instructions for growing kale, beetroot, rocket and other healthy foods. It can be planted in the backyard or elsewhere and it breaks down in a few months
  • Recently the social enterprise, Streat, teamed up with Melbourne-based coffee startup Pod & Parcel to put its coffee in biodegradable coffee pods to be used in Nespresso machines

Read more on The Guardian 

2017 FM Global Resilience Index exposes supply chain risks

  • The 2017 FM Global Resilience Index, which was recently released, provides SCMR readers with additional insights on emerging nations
  • The annual index, which is online and interactive, ranks 130 countries and territories by their enterprise resilience to disruptive events
  • Supply chain managers are being told that three of the most pressing risks to business performance in the 21st century are cyber attack, natural hazards and supply chain failure

Read more at Logistics Management 

Image credit: AppAdvice

Talk About A Revolution: The Smart Factories of The Future

You say you want a revolution? Well, you know, all procurement pros want to change the world… Perhaps that starts with the smart factories of the future, which will need to embody innovation. 

Revolution is in the air. Smart factories of the future will need to be innovative, nimble and smart; constantly changing and improving on the back of intelligent use of data. Professor Robert Harrison explains the challenges and opportunities for forward-thinking manufacturers.

If you haven’t heard of smart factories yet, you’ve probably heard of Industry 4.0 or the fourth industrial revolution. Smart factories are the next big predicted change to affect manufacturing, causing a new revolution in industry.

By integrating technology and information in real time, traditional factories will turn from cost centres into profitable innovation centres. Cyber-physical systems (CPS) will monitor the physical  processes within modular structured factories, and a virtual copy of the physical world will be mined for data in real time, enabling decentralised decisions.

What’s all the smart factory fuss about?

These new systems could, for example, identify run-time optimisation by feeding back information related to product, process and production resources, or identify best engineering re-use. We will be able to be ‘smart’ in our manufacturing choices, from product design and evaluation, right through to manufacturing, the supply chain and service provision.

The increasing availability and use of distributed industrial CPS devices and systems, if aligned with the Internet of Things (IoT) and Internet of Services (IoS), could radically change the nature of manufacturing and provide new opportunities to develop more-effective, finer-grained, and self-configuring automation systems.

To achieve this, manufacturers will need to make changes. To realise effective CPS for industrial automation implies the need for engineering tools capable of supporting distributed systems. This is coupled with a major shift in emphasis from traditional monolithic, specialism-based, isolated engineering tools and methods, towards integrated, cloud-based infrastructure based around an IoS and associated data.

So what’s the problem…?

Current automation systems engineering methods are frequently criticised for their poor performance in supporting re-use, and are often unable to effectively validate automation solutions across supply chains. Integration between real and virtual systems is often less than ideal, which makes it difficult to plot an efficient automation system lifecycle from specification and design, through to commissioning, validation, operation and reuse of systems.
Simply put, the engineering process we have at the moment is disjointed and it could be so much smarter.

Another oft-cited problem is that the majority of the automation tools currently at our disposal are vendor-specific and support largely closed control environments. While they may offer good point-solution functionality, are well supported, and can deliver robust operational systems, they often have limited agility.

These factors lead to delays and ultimately to poor lifecycle uses of information, with lessons learned not being fed back into subsequent iterations of the system.

… and the solution?

Cyber-physical systems are distributed, heterogeneous systems connected via networks, and usually associated with the concept of the IoT. The vision for the new CPS lifecycle is one of seamless integration between engineering build and operational phases.

The digital model continuously updates to and from the physical system, and lessons learned are fed back into subsequent refinements of the system, making them ever smarter.

At WMG, we focus on the design and implementation of automation, systems engineering tools and methods adapted to the specific nature of CPS. Part of a new engineering software environment – vueOne – is currently being used to support Ford’s virtual engineering activity in powertrain assembly in the UK. vueOne is also being used to support engineering of battery and electric motor make-like-production systems in partnership with a range of automotive companies.

Properly supporting the full manufacturing lifecycle is important if we are to maximise the business benefits for the smart factory. At a simple level, once a digital model of a production station has been created, this information can be utilised via apps on mobile devices to enable support for production systems on the shop floor. This may be in the form of viewing digital data for monitoring and maintenance purposes.
However, in more sophisticated scenarios, augmented reality can be provided, overlaying key system information visually over physical views of the production system, and to support this we’re currently developing a suite of mobiles tools.

A key aspect of smart factories that will ensure they are truly successful is having a pipeline to progressively develop and then maximise the impact of innovative automation systems. For example, developing proof-of-concept systems from bench-top demonstrators, through full-scale pilot implementations, make-like production lines, and ultimately to factory installation, working closely with industry partners at all phases of this activity.

This article was originally published on The Manufacturer, via the THOMASNET Blog

Procurement Needs People: How To Nurture Your Top Talent

As the global marketplace changes exponentially, the need for both personal and professional development becomes ever more crucial for procurement pros. Jim Baehr explains why  organisations need to invest in their people.

Category Management. Risk Management. Contract Management. Supplier Relationship Management. All are part of the Supply Management vernacular in 2017. They represent best practices. Those who have mastered these competencies are sought by companies wanting to take their Supply Management to the next level and beyond. Yet, step back and look at the big picture. How many Supply Management professionals have the time, the skill or the support to pursue these best practices?

Applying the 80/20 Rule In Procurement

Continuing to look at the big picture, let’s apply the 80/20 principle to this question. Considering all the spend of all companies – large, medium and small – it’s reasonable to believe that 20 per cent of the professionals in Supply Management are managing 80 per cent of spend. (This number may be even more acute based on benchmarking articles found elsewhere at My Purchasing Center.)

Bigger companies have more spend and are more likely to have invested in their organisation as led by a Chief Procurement Officer. The professionals in these organisations are expected to be proficient in these higher-end responsibilities – the Managements (Category, Contract, Risk, Sourcing, Supplier Relationship, etc.). These professionals can practice and hone their competencies daily. This is a good thing. This means that in many ways the profession has taken the lead set by the Peter Kraljic “Purchasing Must Become Supply Management” article found in the September 1983 issue of the Harvard Business Review.

Flipping the principle would make it logical to believe that 80 per cent of Supply Management professionals are handling 20 per cent of the spend. Here’s the challenging part: It is likely that these are the same professionals who are handling 80 per cent of the purchasing churn – dealing with requisitions, purchase orders out the door, tracking delivery, invoice reconciliation, etc.  The result is they don’t have the same opportunity to apply best practices like their counterparts in bigger companies. Not because they don’t want to. They simply don’t have the time. Or, more frustratingly, the ability. But, seeing the articles and blogs – all the attention given to “the Managements” they want to do the same.

Purchasing Vs Procurement

While the terms Purchasing and Procurement tend to be used interchangeably, there is a big difference; moreover, the responsibilities of a Purchasing and Procurement professional are not the same.

Purchasing is operational, process driven,  ordering, receiving and paying for goods or services. Procurement is more tactical, more purposeful. Procurement calls for establishing requirements, performing market research, evaluating/selecting suppliers, and negotiating contracts or purchase orders. (Yes, POs can be negotiated.)

For the purpose of the remainder of this article Purchasing is used as the title for the group that handles  buying, procurement and, in some cases, sourcing.

It’s understood that technology is automating many of these routine functions. It’s agreed that that the developers of these systems are doing their best to “democratise” the technology – making it available, applicable and affordable to all companies – regardless of size. While the technologies are making inroads, there’s still a long way to go. And, when we get there one of two things will happen – positions will be eliminated or, companies will direct their Purchasing professionals to become more Procurement-like. Hopefully, it will be the latter.

Do we need to wait until technologies and automation address operational needs to free up the time for (paraphrasing Kraljic) Purchasing to become Procurement? The answer is “no.” Good Procurement, efficient and effective,  for the foreseeable future, is a people matter.

Is Purchasing Only About Getting The Lowest Price?

Before offering any recommendations, we first must recognise the realities. Purchasing, in many cases, is still viewed as “getting the lowest price”. This perception impacts relationships internally with business units and externally with suppliers. It creates a misunderstanding of purpose. The Purchasing professional is relegated to coordination of buying activities instead of having the opportunity to collaborate with internal clients, and suppliers, to produce value.

If we go back to the 80/20 rule the negative perceptions of Purchasing are conceivably based on the interaction of internal business groups and suppliers with the 80 per cent group. They are the majority population and they drive a perception that Purchasing “gets in the way” rather than adds value. Again, flipping the numbers, 80 per cent of the expectations for Purchasing come from what senior leadership reads or hears about the state-of-the-art techniques that the (upper) 20 per cent apply to the “Managements.” The result is that many businesses think their Purchasing group is not effective.

Research shows that staff and talent constraints inhibit Purchasing professionals from being all they can be and, more importantly, all they want to be. The abilities of these professionals are, and may continue to be, underdeveloped. But, there is an opportunity to build on what they already know and have experienced. We can reinforce what they know and make them comfortable with the basics and then introduce them to the “Managements.”

Personal and Professional Development Is Crucial- So What’s The Solution?

As Purchasing becomes more sophisticated, as business becomes more demanding and as the global marketplace changes exponentially, the need for both personal and professional development becomes proportionately as important. Let’s accept that not all the next generation of Purchasing professionals will come with MBAs from universities with Supply Management programs.-

So, now that the problem has been stated, what’s the solution? Keeping it simple – consider the following:

  • Recognize that the 80 per cent is underdeveloped but able and wants to do more.
  • Accept that this same 80 per cent  is under-appreciated and underserved.
  • Acknowledge that talent management requires talent development.
  • Commit. Business leadership, as well as professional associations, must step up and do more for the 80 per cent.
  • Invest in developing the 80 per cent as the cost pales, in comparison, to the potential return in value.

Here’s the good news: There are companies that already recognise this need. They are making the commitment to invest in their people. But, there must be more – many more. Quoting Eleanor Roosevelt – “Nothing has been achieved by the person who says, ‘It can’t be done.’”

Jim Baehr is the Lead for the Sourcing Strategies Group LLC (SSG).  Currently he is the President of the ISM – Pittsburgh Affiliate, a member of the Board of Governors of the Joint Chemical Group of Pittsburgh and a member of the Visionary Council of Coupa Software Incorporated based in San Mateo, Calif. This article was first published on My Purchasing Center

In Business Relationships, It’s All About H2H (Human to Human)

Simona Pop shares her Big Idea on why procurement technology needs to promote – not obstruct – trust, transparency and common goals.

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Register as an online delegate for the London Big Ideas Summit 2017 here.

We know that many organisations are still mired in decades-old procurement processes. Besides the inherent inefficiency of paper-based workflows, spreadsheets and other manual tools, the real concern lies in their opacity.

One of the things I’ve learned working with various businesses and multiple stakeholders within supply chain and finance is that there is no real B2C/B2B divide. It’s all H2H: human to human. The concept was coined by Bryan Kramer and is the real foundation for every single business relationship we cultivate, internal or external.

Now, human beings are complex creatures, but for all their complexity, they greatly appreciate simplicity. Finding, understanding and communicating the complex in its most simplistic form is the recipe for success when it comes to relationships.

And a more recent way of translating the very complex into simple formats is technology. For many however, the subject of technology is a double-edged sword to be approached with extreme caution. It is seen as both a huge challenge and an opportunity depending on the maturity of the business and its stakeholders. Zooming in on procurement departments in particular, distinct feelings of inertia and unease prevail when it comes to tech.

So many procurement professionals I have sat down with continue to apply traditional tools to the purchase-to-pay process even though better, more efficient alternatives are available to them. The reasons? That mighty focus on cost savings is undermining the VOI (value on investment) and the temptation to keep things as they are because “if it’s not broke, don’t fix it or risk it” is holding organisations in a “vintage” status quo that’s affecting their competitive edge on a daily basis.

The current climate is very much a head in the sand affair. Procurement processes that have been around for the past 10, 20, 30 years are characterised by a great degree of opacity. The reason for this is the historic dependence on paper, manual work and fragmented software systems. This opacity means the relationships between departments/stakeholders within a business are not exactly what you would call fully functional. There was a time when things had to be this way because that was the best there was. That is no longer the case and pretending nothing has changed is far more dangerous than “risking” change.

Always reacting to situations as opposed to being proactive towards challenges is a symptom of traditional process that needs upgrading. The ability to stimulate internal collaboration and valuable relationships is affected by the permanent race against time. There isn’t one finance professional I’ve met who isn’t completely incapacitated by “month end” as a result of delayed purchase approvals or lack of a PO system. Incomplete or delayed information passing between departments opens the door to fraud and perpetuates false data. These draining complexities can be simplified by shining a light on proceedings. That light? Technology.

Technology is an agent of empowerment, not a antagonistic nuisance that must be adopted just because everyone else is doing it, with no real merit of itself. The key advantages technology brings are speed and transparency. Moving the information processed from paper/desktop to cloud/mobile and delivering it in real time as opposed to post-fact is all about simplicity. Eliminating the need for 100 spreadsheets, lengthy manual approval chains and data entry clerks will empower people from the bottom up, the top down and across the board. Accessing objective information and using it in real time will ensure each task is performed to the best standard and in full compliance.

A move towards value-based relationships is already happening as businesses are acknowledging that well-functioning relations are worth as much as good prices or good bonuses. Trust, common values and clear, real-time communication are all hallmarks of good service. Something every business needs to achieve to stay competitive, right?

In conclusion, using technology to empower the talented people across the P2P process is the key to better relationships and ultimately, better business. Accessing data in real time and performing tasks on the go will not only make people better practitioners but better collaborators too. The human-to-human foundation of successful business is based on trust, transparency and common goals. Given the goal of procurement is to make a business successful, promoting trust, efficiency and transparency should be a natural move.

This article was first published on Spend Matters.

Stay tuned for more Big Ideas from Simona Pop as we lead up to the Big Ideas Summit 2017!

Join the conversation and register as a digital delegate for Big Ideas 2017 now!

Technology Is The Answer. But What’s The Question?

Companies everywhere are super-keen to invest in technology and an eye-watering $3.49 trillion will be made available in 2017 for this purpose – but how can CPOs and IT buyers ensure they make the right decisions? 

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If you ask any CPO what their main priorities are for the next five years, you’re almost guaranteed to receive an answer involving technology. Spend for software and IT services is rising at a dramatic rate, and is expected to increase by an incredible 29% in 2017 to $3.49 trillion in the U.S. alone.

The urgency for harnessing cutting-edge technology is understood, and the good news is that business are making the money available. But how do you make sure you’re investing in the right tools?

Here’s the secret: you need to make sure you’re asking the right questions

Supply management professionals will gather in Washington, D.C. on March 22-24 for ISM Tech 2017, where they will gain access to the knowledge required to make intelligent technology investment decisions for the unique needs of their organisations. IT procurement experts will reveal new possibilities and cost-saving efficiencies in areas including advanced analytics, manufacturing 4.0, the role of robotics, going digital and utilising augmented reality.

Keynote speakers include Rick Smith, CEO of Fast Radius, who will be presenting on “Our 3D-printed future”, while Silicon Valley Entrepreneur and bestselling author Martin Ford will deliver a keynote titled “How data is driving the transportation revolution”. Other big names include Abtin Hamidi, Co-Founder and Executive Vice President of Cargo Chief; Amanda Prochaska, Vice President Procurement Program Management Office, MGM Resorts International; and Tom Martin, Director of Learning Solutions at ISM.

What questions will Tech 2017 help you to answer?

  • How can robotics streamline my business processes?
  • What’s the best way to use the Internet of Things (IoT) in the supply chain?
  • How can my organisation use technology innovations to capture digital customers?
  • How can I leverage analytics to align planning with demand?
  • How should I mitigate technology-related risks?
  • What capabilities will my team require to keep up with technological advancements?

As with every ISM Event, Tech 2017 is all about the networking. Attendees will have the opportunity to meet scores of innovative suppliers and exchange ideas with representatives from top providers in the field, strategizing with experts on their technology needs to identify new ways to tackle existing challenges and future growth opportunities.

This is one event where just about any conversation taking place in the Exhibition Hall is likely to make fascinating eavesdropping. Instead of the usual procurement “chatter” around traditional practices such as sourcing, contracts and requisition-to-pay, attendees will discuss cutting-edge concepts like cognitive analytics, 3D printing, digital reporting, artificial intelligence and machine learning.

As you network, keep in mind that IT procurement experts have been tipped to be the CPOs of the future. According to Procurious founder Tania Seary, the profession is now looking to this highly-skilled group for leadership, and IT experts are on the fast-track to leadership due to five key advantages:

  1. IT experts already control an important chunk of their organisations’ strategic spend.
  2. Soon everything we buy will include an element of technology.
  3. IT procurement experts know how to drive change.
  4. They are innovation scouts.
  5. They understand cyber security.

Don’t miss out – ISM Tech 2017 will take place at the Gaylord National Resort and Convention Center, Washnigton D.C. from March 22-24, 2017.

Best and Worst Sectors for Online Customer Service

Utility companies and local authority services are among some of the worst ranking sectors in the UK for online customer service, according to new research.

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The new report from social media experts, myclever™ Agency, found that consumers put utility companies (water, gas, electricity, phone and broadband) as the most frustrating sector for online customer service, with local authorities close behind. Retailers and professional services came out as the least frustrating sectors.

The report surveyed 1,000 UK consumers on whether current digital services are fully meeting consumer expectations, and their views on whether new technology, such as Chat Bots, could help improve customer service.

Biggest Frustrations

It found that the biggest online service frustrations across all sectors was a lack of basic information contained on everyday commercial websites such as retailers, utilities, banks and local government services (45 per cent).

Close behind was the inability to ask simple questions (40 per cent), while a third of the sample (33 per cent) said that, even when the option to ask questions existed, the tools they had used in the last month were of poor quality and didn’t provide a timely response.

The main frustrations lie in the inability companies have to answer simple questions quickly. However, when told about the benefits, consumers regarded Chat Bots as the key-holders to speed, unlocking immediacy and convenience in online services. They felt that these virtual assistants, designed to simulate conversation with human users, would significantly improve online services.

More than two thirds (68 per cent) liked that Chat Bots would be able to provide a 24-hour service, and 64 per cent felt it would resolve the problem of not getting quick answers to simple questions. More than half (51 per cent) felt happy they would get an instant response, mirroring the frustrations felt about current online customer service providers.

When compared to other forms of customer service channels such as apps – an area where businesses have invested heavily – chat bots scored more highly on all perceived benefits.

Demand for Online Customer Service

Rob McNair, managing director of myClever, commented on the findings: “Ever-evolving technology and an increasingly digitalised world has changed commerce forever. Online services that were once a luxury are now being demanded by consumers 24/7. In order to stay competitive, businesses are racing to keep up with consumer demands and technological innovations.

“The frustrations clearly indicate the need for online customer service to improve. And, although frustrations exist in all sectors, it’s interesting to see that the industries exhibiting the most frustrating customer experiences online are the least likely to improve them. Public sector bodies, for example, are notoriously slow to provide accessible online services – and when they do, they’re often inadequate, confusing and riddled with poor user experiences.

“It’s one thing if bots can make that a thing of the past, it’s another whether those ranking highest on this list will be prepared to adopt and invest early enough. However, while modest budgets can be a challenge for the demands of digital innovation, the investment in the long term will mean huge cost savings.

“Businesses offering the best customer experience will be at considerable advantage in converting browsers into buyers and earning repeat business. Chat Bots offer a solution to most major problems of each sector by promising a swifter, smarter online experience. New virtual assistants will be ever-ready, able to listen to our questions and respond intelligently. They will answer our queries, aid our searches and anticipate our needs, learning all the time to refine and improve the experience on offer.”

The full list of rankings and report can be found here. For more information on myclever™ Agency, visit their website.