Rajeev Karmacharya is Head of the Strategic Sourcing and Category Management group in Fannie Mae. He leads a team of category management, sourcing/contracting and supplier operations professionals managing $4.5+ billion in external spend.
Risk management isn’t a new term or notion to the supply chain and procurement industry, yet it continues to be one of the least addressed priorities within organizations. KPMG recently shared a report on fourth-party risk that notes roughly 80% of businesses say they need to urgently improve their assessment of fourth parties in their supply chain.
Most businesses didn’t anticipate having to handle the supply-chain impacts of several disruptive forces at once: an ongoing pandemic, a severe crunch for talent and Russia’s invasion of Ukraine.
The global COVID-19 pandemic put supply chain management and procurement in a very bright and positive spotlight for keeping life moving as normal as possible during all the shutdowns, disruption and general uncertainty.
It also highlighted that business and supply chain disruption are ongoing facts of life – such as ongoing extreme weather events globally and a megaship blocking the Suez Canal for weeks, to name just two. And the impacts created a snowball effect on other industries:
Global businesses have now spent nearly two years navigating the various challenges of the pandemic. Although some of the fallout was predictable, the dramatic impact we have witnessed on the global employment market was more unexpected. Companies that were already adjusting to new ways of working now find themselves in the middle of arguably the worst employment crisis in modern history—a phenomenon known as the Great Resignation.
In business, actions with the greatest payoff can sometimes be risky. This certainly applies to outsourcing software development, AI projects or IT support to third parties. While it can help you get your digital transformation projects off the ground, accelerate timelines and provide you with the scarce tech talent while reducing the cost of full-time internal employees, there will always be a level of risk associated with it.
Tania Seary is the Founding Chairman of Procurious, an online network for procurement and supply chain professionals. Born and based in Australia, Tania’s fascination and commitment to procurement development began 20 years ago in the United States. After finishing her MBA at Pennsylvania State University, she became one of Alcoa’s first global commodity managers.
When a company seeks a strategic supplier, the crucial first step is to choose the right sourcing model, which will make or break the relationship. Unfortunately, many organizations are not operating with sourcing strategies: they are anchored in buying strategies developed more than 30 years ago.
In October 2021, the U.K. government published its “Build Back Greener” strategy with the goal of tackling climate change by decarbonizing all sectors of the economy and meeting its net zero target by 2050.
As global citizens, our hearts go out to the people and communities directly impacted by the Russian invasion of Ukraine. As procurement, sourcing and risk leaders, we must face the challenge of understanding in real-time how the trickle-down effects of the war will impact our global supply chains in order to minimize disruptions.
Between increasing prices, sanctions and bans, shipping disruptions and more, the impacts are widespread. Here’s what to expect and how full-spectrum, real-time intelligence can mitigate the growing supply chain disruptions.
Customers, employees and investors are increasingly putting ESG front and center when making decisions about the companies they engage with. Rising shareholder and consumer activism, as well as new forms of regulation, mean that it is no longer enough to simply state good intentions. The challenge is to prove to stakeholders that policies and initiatives are translating into meaningful action and impact.
Supplier normalization can also be referred to as standardization. Normalization is giving your existing suppliers a common name or grouping so that you can see how much you are truly spending with them or selling to them.
Sounds silly though, right?
Surely companies must know how much they are spending, selling or using with their suppliers already? You might think that, but there are a number of reasons that you might find multiple versions of the same supplier in a database.
About 65% of innovations are sourced through external suppliers and partners (ISM). This makes supplier and partner contributions to a supply chain’s production and profitability rather pivotal.
Put into simple math: Good supplier performance = good supply chain performance.
Supplier performance management (SPM), when done right, can help your procurement organization to harness supplier performance and innovation to positively impact your business’ top-line value creation.
Supply chain and procurement professionals are now tasked with the near-impossible: fighting off upstream price increases and obtaining year-over-year cost savings in today’s inflationary environment. For the first time in years, suppliers are in control and cost savings are hard to find. Where does one start? Are cost savings even possible in today’s world? Is cost avoidance the only hope moving forward?
Today, a lot of the low-hanging fruit has been picked by CPOs. But one area where there is significant scope for procurement to deliver value is supplier-enabled innovation (SEI). With 25% to 45% of revenues coming from product innovation and up to 65% of innovations sourced externally through external partners and suppliers, SEI represents a treasure trove of opportunity.
