Future of Sourcing - Supply Chain http://futureofsourcing.com/tags/supply-chain en Opening up supply chain data for the benefit of all http://futureofsourcing.com/opening-up-supply-chain-data-for-the-benefit-of-all <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="http://futureofsourcing.com/sites/default/files/articles/September%202022%20Article%20Graphics%20%281%29.png"><a href="http://futureofsourcing.com/sites/default/files/articles/September%202022%20Article%20Graphics%20%281%29.png" title="supply chain data" class="colorbox" rel="gallery-node-2218-9B1AxFfmCYw"><img typeof="foaf:Image" src="http://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/September%202022%20Article%20Graphics%20%281%29.png?itok=YuXrlH9n" width="624" height="325" alt="supply chain data" title="" /></a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p><span data-preserver-spaces="true">When considering global supply chains, it&#39;s not new news that they are notoriously complex and opaque. Among other challenges, this means that issues such as child and forced labor, deforestation and environmental degradation can remain in the shadows. Identifying the source of these problems becomes so complex that tackling their root causes and seeking remediation for affected communities becomes a near-impossible endeavor.</span></p> <p><span data-preserver-spaces="true">To tackle these issues, it&#39;s essential to go back to basics and work on the data. Even at the entry-level of name and address data for global production facilities, the quality of data about global supply chains is poor. This then begs the question: if there is no shared understanding of where facilities are located, how can there be any clear sense of those facilities&#39; social and environmental conditions? While efforts have been made in recent years to map supply chain data, with the apparel sector at the forefront of this movement, it has been - and in many cases, continues to be - hidden behind lock and key, which benefits very few. There are several interrelated problems at play here:</span></p> <ol> <li><span data-preserver-spaces="true">Insufficient thought and attention have been paid to how data is&nbsp;</span><em>gathered</em><span data-preserver-spaces="true">: what data points are being collated, and why? How is that data being logged? How is it being standardized?</span></li> <li><span data-preserver-spaces="true">How is that data being&nbsp;</span><em>shared</em><span data-preserver-spaces="true">: what consideration has been given to the format? Tables embedded on websites, data locked in PDFs and other non-machine readable formats are of limited use to anyone trying to use that data in a practical way. This leads to the third point:</span></li> <li><span data-preserver-spaces="true">What is the intention behind gathering the data? How will it be&nbsp;</span><em>used</em><span data-preserver-spaces="true">? Gathering and even sharing data is not an end in and of itself: it is how the data will be used, in a practical sense, that holds power.&nbsp;</span></li> </ol> <p><span data-preserver-spaces="true">Open, standardized data can overcome all this. Making this data accessible to all brings enormous benefits, whether powering interoperability between different datasets, bringing visibility and clarity to complex supply chains, or enabling supply chain stakeholders to work together on the social or environmental improvements that are so desperately needed. Open, standardized data allows anyone to efficiently make connections about global supply chains, in turn enabling:</span></p> <ul> <li><span data-preserver-spaces="true">Informed discussions regarding upcoming legislation and how to meet the raft of incoming ESG reporting requirements</span></li> <li><span data-preserver-spaces="true">Much quicker routes to remediation for affected communities</span></li> <li><span data-preserver-spaces="true">The development of mitigation strategies for the impacts of climate change</span></li> <li><span data-preserver-spaces="true">A clearer understanding of supply chain issues or hotspots at major companies and retailers, of which they may not previously have been aware</span></li> </ul> <p><span data-preserver-spaces="true">Without open, standardized data, these connections may never be made.&nbsp;</span></p> <p><span data-preserver-spaces="true">By opening up supply chain data as a free, public good tool and acting as a single source of truth for global supply chains, we believe stakeholders across sectors and supply chains can come together to improve human rights and environmental conditions in and around factories - a win-win for everyone.</span></p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/supply-chain" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supply Chain</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/data" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Data</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/supplier" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supplier</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/supplier-data" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">supplier data</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/supplier-management" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supplier Management</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Opening up supply chain data for the benefit of all - Future of Sourcing" addthis:url="http://futureofsourcing.com/opening-up-supply-chain-data-for-the-benefit-of-all"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div> Wed, 14 Sep 2022 14:51:01 +0000 Natalie Grillon 2218 at http://futureofsourcing.com http://futureofsourcing.com/opening-up-supply-chain-data-for-the-benefit-of-all#comments Uncovering Hidden Opportunities and Mitigating the Impacts of Inflation in Indirect Procurement http://futureofsourcing.com/uncovering-hidden-opportunities-and-mitigating-the-impacts-of-inflation-in-indirect-procurement <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="http://futureofsourcing.com/sites/default/files/articles/September%202022%20Article%20Graphics.png"><a href="http://futureofsourcing.com/sites/default/files/articles/September%202022%20Article%20Graphics.png" title="Mitigating the Impacts of Inflation in Indirect Procurement" class="colorbox" rel="gallery-node-2217-9B1AxFfmCYw"><img typeof="foaf:Image" src="http://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/September%202022%20Article%20Graphics.png?itok=1xhSvM77" width="624" height="325" alt="Mitigating the Impacts of Inflation in Indirect Procurement" title="" /></a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p><span data-preserver-spaces="true">Indirect procurement isn&rsquo;t a new field. It&rsquo;s been around for decades, helping to control spending and reliably source the goods and resources internal teams need to do their jobs and keep the business operational.&nbsp;</span></p> <p><span data-preserver-spaces="true">But, today, it still finds itself in the same position that direct procurement was in up until a few years ago. Perceptions of indirect procurement as a cost-saving, enabling function have caused many organizations to overlook the potential value it can deliver.&nbsp;</span></p> <p><span data-preserver-spaces="true">It&rsquo;s an area of massive opportunity. And right now, with ongoing supply shortages, long supply chain delays, and inflation hitting a 30-year high, no organization can afford to overlook opportunities to optimize spend.</span></p> <h1 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;; font-weight: normal;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">Four Big Opportunities That Many Organizations are Missing</span></h1> <p><span data-preserver-spaces="true">During a recent webinar conducted by The Smart Cube in collaboration with CASME, all four speakers shared what they see as the biggest opportunities available across indirect procurement teams today that many organizations aren&rsquo;t taking advantage of:</span></p> <ul> <li>Sharing best practices and optimizing resource use across the business</li> </ul> <p><span data-preserver-spaces="true">Stepping up to offer his insight first, Mike shared how the indirect procurement team at Newell Brands has effectively become a pollinator of best practices across diverse lines of business. Using its complete view of indirect purchasing habits and spending, the team can find commonalities in needs, guide domains towards using the same or similar tooling and learn from each other to improve and optimize how they&rsquo;re using resources.</span></p> <ul> <li>Looking beyond basic spend KPIs to drive business value</li> </ul> <p><span data-preserver-spaces="true">Following Mike, Klaids shared a valuable anecdote from Schneider Electric, where his indirect procurement team had worked closely with production staff buying metal cutting tools. The engineering team convinced them to pay for premium tools, negatively impacting procurement&rsquo;s spend KPIs but delivering huge value to the business.&nbsp;</span></p> <p><span data-preserver-spaces="true">The premium equipment accelerated production and output, and lasted far longer than the cheaper alternatives. If you look solely at procurement&rsquo;s KPIs, that was a wrong move. But it was certainly the right move for the business &mdash; generating massive value and building enterprise confidence in procurement&rsquo;s commitment to providing them with everything they need to do the best job possible.</span></p> <ul> <li><span data-preserver-spaces="true">Leveraging indirect procurement as an internal crisis response resource</span></li> </ul> <p><span data-preserver-spaces="true">At the start of 2019, very few people would have predicted that in under a year&rsquo;s time, Personal Protective Equipment (PPE) like face masks and hand sanitizer would become a strategy category for tens of millions of businesses around the world.&nbsp;</span></p> <p><span data-preserver-spaces="true">Once the pandemic hit, indirect procurement&rsquo;s ability to source PPE directly impacted every organization&rsquo;s ability to return to business. Prices may have been high, but the teams that reliably source PPE at the right time delivered immeasurable value to their businesses &mdash; and their people.&nbsp;</span></p> <p><span data-preserver-spaces="true">With the frequency and severity of crisis events increasing globally, that&rsquo;s a key source of value for indirect procurement moving forward. When uncertainty and global events hit, highly responsive indirect procurement teams are a massive asset, helping to minimize the impacts those events have on businesses.</span></p> <ul> <li><span data-preserver-spaces="true">Looking at data beyond spend analytics</span></li> </ul> <p><span data-preserver-spaces="true">Indirect procurement teams have a wealth of data available to them today. They&rsquo;re used to closely monitoring and analyzing spend across the business, but if that&rsquo;s all they&rsquo;re looking at, they&rsquo;re missing some powerful opportunities to create value.</span></p> <p><span data-preserver-spaces="true">During the webinar, Klaids highlighted the internal data available to help indirect procurement understand how it could better serve the business. By diving into its processes and performance, indirect procurement can uncover opportunities to improve and accelerate buying &mdash; moving towards delivering B2C levels of convenience and speed to internal customers.</span></p> <h1 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;; font-weight: normal;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">What&rsquo;s the Impact of Inflation?</span></h1> <p><span data-preserver-spaces="true">Global inflation has dominated headlines recently. So, it&rsquo;s no surprise that the conversation quickly turned to its impact during our webinar. Together, the team shared three valuable tips to help indirect procurement professionals respond to, and manage today&rsquo;s hugely inflated pricing landscape.</span></p> <ul> <li><span data-preserver-spaces="true">Understand the data first, so you know what you&rsquo;re dealing with</span></li> </ul> <p><span data-preserver-spaces="true">With inflation hitting a 3-year high in some countries, Graham pointed out that many professionals working in indirect procurement today won&rsquo;t have to deal with inflationary conditions like these. So, the first step towards making good decisions on mitigating inflation impacts is to understand exactly what you&rsquo;re dealing with.</span></p> <p><span data-preserver-spaces="true">Fortunately, all of the data available to us today can help. Teams can look at their cost models and start to break them down to understand all of the individual drivers influencing them. Then, they can even begin to forecast what the short-term future of those drivers might look like &mdash; bringing some much-needed control and predictability to today&rsquo;s environment.</span></p> <ul> <li><span data-preserver-spaces="true">Spend your time focusing on the things you&nbsp;</span><em>can</em><span data-preserver-spaces="true">&nbsp;control</span></li> </ul> <p><span data-preserver-spaces="true">You can&rsquo;t influence the price of oil. But you can optimize the amount you use &mdash; the same is true for virtually every category and service your business spends money on.</span></p> <p><span data-preserver-spaces="true">This period of intense inflation should be a watershed moment for resource allocation and utilization. By looking closely at how well you&rsquo;re using the things you&rsquo;re spending money on, you can not only save money and mitigate the short-term impacts of inflation. You can build more efficient processes and operations that deliver value and support sustainability efforts for decades to come.</span></p> <ul> <li><span data-preserver-spaces="true">Look at new levers to relieve short-term pressure</span></li> </ul> <p><span data-preserver-spaces="true">Businesses can&rsquo;t stop buying the things they need just because of inflated prices. So, rather than bringing those prices down, indirect procurement needs to start looking at other levers it can influence to relieve some of the pressure caused by high prices.</span></p> <p><span data-preserver-spaces="true">Working capital is a great place to start. By collaborating closely with suppliers, indirect procurement teams can negotiate better payment terms, for example, which can help them get through the constrained conditions we&rsquo;re seeing today. Keep in mind that suppliers don&rsquo;t want to squeeze every dollar from your team. Your mutual survival is in their best interests, so most will be very happy to work with you in a way that helps to continue thriving and buying.</span></p> <p><span data-preserver-spaces="true">Kickstart a new era of indirect value creation</span></p> <p><span data-preserver-spaces="true">Strategically managing indirect spend is now more essential than ever.&nbsp;</span></p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/inflation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Inflation</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/supply-chain" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supply Chain</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/procurement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Procurement</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/indirect-procurement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">indirect procurement</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/suppliers" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Suppliers</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Uncovering Hidden Opportunities and Mitigating the Impacts of Inflation in Indirect Procurement - Future of Sourcing" addthis:url="http://futureofsourcing.com/uncovering-hidden-opportunities-and-mitigating-the-impacts-of-inflation-in-indirect-procurement"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div> Fri, 09 Sep 2022 17:02:10 +0000 Omer Abdullah 2217 at http://futureofsourcing.com http://futureofsourcing.com/uncovering-hidden-opportunities-and-mitigating-the-impacts-of-inflation-in-indirect-procurement#comments Fragile – Handle with care http://futureofsourcing.com/fragile-handle-with-care <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="http://futureofsourcing.com/sites/default/files/articles/procurement%20and%20disrupted%20supply%20chains%20%281%29.png"><a href="http://futureofsourcing.com/sites/default/files/articles/procurement%20and%20disrupted%20supply%20chains%20%281%29.png" title="procurement amid disrupted supply chains" class="colorbox" rel="gallery-node-2216-9B1AxFfmCYw"><img typeof="foaf:Image" src="http://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/procurement%20and%20disrupted%20supply%20chains%20%281%29.png?itok=yWVnVF0Q" width="624" height="325" alt="procurement amid disrupted supply chains" title="" /></a></div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/do-you-want-chips-with-that">Do You Want Chips With That?</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">How are business and industry leaders transforming their approach to procurement amid disrupted supply chains, rising costs, and growing uncertainty?</span></p> <p style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">This is just one of many questions Economist Impact set out to answer in its global survey, conducted earlier this year, of 430 C-level executives across various organizational functions, including chief financial officers, chief operations officers, chief procurement officers, and chief supply chain officers.</span></p> <p style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">The survey&rsquo;s objective was to explore how procurement is changing to meet existing and emerging challenges. It also examined trends for the future in procurement and the actions business leaders take to ensure continuity and optimization.</span></p> <p style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">The survey results are published in a new paper,&nbsp;</span><a class="editor-rtfLink" href="https://www.ariba.com/resources/library/library-pages/chain-reactions?campaigncode=CRM-Y122-ISM-1497332&amp;source=blog-glo-TEGblogpost" style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;; color: #4a6ee0;" target="_blank">Chain reactions: Building value in procurement through digitalization</a><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">.</span></p> <h2 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;; font-weight: normal;"><strong style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">A lively and informative discussion</strong></h2> <p style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">A few weeks after the paper was published, a select group of business leaders convened for an Economist Impact roundtable to share their thoughts on the business pressures they are facing. The roundtable was convened under Chatham house rules, so this article won&rsquo;t reveal who was there or what they said.</span></p> <p style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">However, some striking themes emerged in this lively and informative discussion, including:</span></p> <ul style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"> <li style="background: transparent; margin-top: 0pt; margin-bottom: 0pt; list-style-type: disc;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">Sustainability and alignment</span></li> <li style="background: transparent; margin-top: 0pt; margin-bottom: 0pt; list-style-type: disc;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">Risk management</span></li> <li style="background: transparent; margin-top: 0pt; margin-bottom: 0pt; list-style-type: disc;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">The fragility of supply chains</span></li> </ul> <h2 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;; font-weight: normal;"><strong style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">Sustainability and alignment</strong></h2> <p style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">Unsurprisingly there was a great deal of discussion around sustainability and how it is essential for procurement as a function to align with the broader organization. This is partly because requirements for &ldquo;buying&rdquo; companies are now being driven through the supply chain to effect change. This includes requiring suppliers to commit to certain initiatives, such as:</span></p> <ul style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"> <li style="background: transparent; margin-top: 0pt; margin-bottom: 0pt; list-style-type: disc;"><strong style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">Checking modern slavery,</strong><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;and ensuring that the early payment terms the buying company was paying were being cascaded down through their supply chains.</span></li> <li style="background: transparent; margin-top: 0pt; margin-bottom: 0pt; list-style-type: disc;"><strong style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">A commitment to net zero emissions,&nbsp;</strong><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">which would be checked, and future opportunities would be dependent on organizations meeting those (for certain thresholds of contracts).</span></li> </ul> <p style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">There was a lively discussion about a recurring question around sustainability drivers. Specifically, which is more effective in driving sustainability initiatives ꟷ greater regulation or consumer demand? Although the exchange was fascinating, the panel didn&rsquo;t come down either way. At this point, I believe sustainability is quite industry driven. That is, in B2C scenarios, consumer demand drives sustainability action. In a B2B context, it is regulation.</span></p> <p style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">Panelists also noted that changes in consumer buying patterns create the need to reduce complexity in what is seen by the consumer. This also creates an opportunity for value analysis and engineering strategies to achieve cost targets in the current inflationary environment.</span></p> <h2 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;; font-weight: normal;"><strong style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">Risk management</strong></h2> <p style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">With the state of risk in the world at the forefront of many procurement leaders&rsquo; agendas, the roundtable spent a significant amount of time discussing risk. There was an interesting discussion on the merits and difficulties of reshoring strategies, how long it would take and whether the business case stacked up. What was evident, though, is that the previous strategies of supplier base consolidation and using leverage as a chief tool have created an imbalance that many markets are now feeling.</span></p> <p style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">The biggest issue is the overall supply chain and availability of certain commodities ꟷ first impacted by the pandemic and now by the war in Ukraine. These affect commodities ranging from food (wheat, fish, etc.), to building materials (wood, nails), to energy (gas supplies). Current supply issues are driving procurement professionals to gain greater visibility into their supply chains.</span></p> <h2 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;; font-weight: normal;"><strong style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">The fragility of supply chains</strong></h2> <p style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">The roundtable agreed that many supply chains right now are incredibly fragile. The goal then is to make them boring again! Visibility was identified as a major initiative in the goal of achieving this. The group agreed that before COVID-19, there wasn&rsquo;t a huge amount of visibility into supply chains (although for many industries, one or two did stand out). However, for key direct items, visibility into the depth of the supply chains is increasing. Visibility into indirect spend is less clear. For instance, where gas supplies originate takes some time to identify.</span></p> <p style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">What the increased visibility has identified, however, are massive capacity issues buried deep in the supply chains, which are essentially driving some of the fragility. While initially, this is troubling, it does present opportunities to solve that wouldn&rsquo;t be there if the problem weren&rsquo;t identified. Increasing visibility also identified saving opportunities, which all the participants identified were still a priority despite being in an inflationary environment.</span></p> <p style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">Overall, it was an enthralling discussion to hear. If you would like to find out more, the research paper from Economist Impact is available to download&nbsp;</span><a class="editor-rtfLink" href="https://www.ariba.com/resources/library/library-pages/chain-reactions?campaigncode=CRM-Y122-ISM-1497332&amp;source=blog-glo-TEGblogpost" style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;; color: #4a6ee0;" target="_blank">here</a><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">.</span></p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/supply-chain" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supply Chain</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/risk" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Risk</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/procurement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Procurement</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/sourcing" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Sourcing</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Fragile &amp;ndash; Handle with care - Future of Sourcing" addthis:url="http://futureofsourcing.com/fragile-handle-with-care"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Sun, 04 Sep 2022 15:53:22 +0000 Gordon Donovan 2216 at http://futureofsourcing.com http://futureofsourcing.com/fragile-handle-with-care#comments Checking on Supplier Compliance in Challenging Times http://futureofsourcing.com/checking-on-supplier-compliance-in-challenging-times <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="http://futureofsourcing.com/sites/default/files/articles/GettyImages-1273010021%20%281%29%20%281%29.jpg"><a href="http://futureofsourcing.com/sites/default/files/articles/GettyImages-1273010021%20%281%29%20%281%29.jpg" title="Procurement’s role within an organization has changed dramatically over the past few decades. " class="colorbox" rel="gallery-node-1881-9B1AxFfmCYw"><img typeof="foaf:Image" src="http://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/GettyImages-1273010021%20%281%29%20%281%29.jpg?itok=fGyXUd8N" width="1024" height="683" alt="Procurement’s role within an organization has changed dramatically over the past few decades. " title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <h1>Checking on Supplier Compliance in Challenging Times</h1> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/meta-skills-what-are-they-and-how-are-they-relevant-to-the-procurement-function-of-the-future">Meta-Skills: What Are They and How Are They Relevant to the Procurement Function of the Future? </a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>Procurement&rsquo;s role within an organization has changed dramatically over the past few decades.</p> <p>Once primarily considered a tactical function focused on pricing and inventory management, procurement has now taken on a much more strategic role. Pricing is still an essential part of the job, as is managing inventory; however, the role has expanded to include oversight of asset utilization, confirmation of supplier compliance, and provision of&nbsp;data and analytics-backed&nbsp;insights to senior management. Risk assessment has also become a major concern, which is now being tested as never before.</p> <p>We need diversity in the supply chain and COVID-19 is presenting unique challenges to fulfilling that goal. But what obstacles does the pandemic pose for procurement&rsquo;s regular oversight of the supply chain including shortages, regulatory compliance, forced or child labor, and any product-borne illnesses or defects? Conducting this oversight globally while working from home rather than in an office presents an additional set of challenges.</p> <p>Fortunately, the emergence of digital supply networks has enabled procurement professionals to perform their tasks anywhere they might be. Nonetheless, despite where one works, this significant crisis has proven that procurement must reconsider a number of long-standing beliefs and behaviors.</p> <h1>Considering Supply Chain Challenges</h1> <p>Regardless of the situation, procurement still needs to focus on the core issues of pricing, inventory management, contracts and advantageous terms. Yet, faced with &ldquo;black swan&rdquo; effects (an unpredictable global event with potentially severe consequences), the legacy linear procurement practice is no longer viable. We need to be more flexible than we may have been in the past and should build both resilience and agility into our supply chain.</p> <p>It is so easy to become complacent, and that can mean that when a catastrophe occurs, we are not prepared to react quickly.</p> <p>Digital supply networks help us address the many hurdles we face, both as part of the normal global supply chain and in unforeseen events, from pandemics to terrorism, to demand spikes to supplier bankruptcy, and more. This technology, which provides end-to-end visibility and enables collaboration, allows procurement to optimize the supply chain. Yet there are practices that still need to be undertaken. Procurement can never minimize the oversight role it carries when it comes to supplier compliance.</p> <h1>Supplier Relationships</h1> <p>There are few relationships more important for an organization&rsquo;s success than that between procurement and suppliers.</p> <p>Maintaining solid partnerships with suppliers does more than simply guarantee good service in good times; it also can give the buyer priority positioning when it comes to disruptions and shortages (think PPE, Lysol, antibacterial wipes and paper goods such as toilet paper).</p> <p>A healthy supplier-procurement relationship involves a high level of mutual transparency. When procurement has a strong understanding of the challenges and obstacles a supplier may encounter, educated decisions can be made regarding the relationship.</p> <p>By understanding potential challenges, procurement can modify upcoming order schedules, control internal demand and avoid the mad rush to find a substitute in the event of a shortcoming by the supplier. Likewise, it is vital for a supplier to understand their client/procurement challenges. For example, if a company&rsquo;s policy requires long lead times before placing an order, the supplier should know and understand these requirements to reduce the roadblocks this could cause for either party.</p> <p>It is also important to understand how your suppliers are set up to respond to disruptions. This is where a risk assessment comes into play. Risk assessments are essential for developing a supplier profile. That doesn&rsquo;t mean your supplier is necessarily doing anything wrong; it just may mean, through no fault of their own, they cannot meet your demand in times of a disruption.</p> <p>If the risk assessment discovers areas of concern, procurement has several options:</p> <ul> <li>Option 1:&nbsp;Remove the supplier and find a reasonable substitute with an improved risk rating</li> <li>Option 2:&nbsp;Collaborate with the supplier to accurately identify the cause of the risk and work to correct it</li> <li>Option 3:&nbsp;Create contingency plans for a disruption event, such as alternative supply chain routes and sources</li> </ul> <p>More on expansion later. The best results are typically derived from a combination of these options. Professionals may elect to keep a supplier with a high-risk score while pledging to reduce the impact a disruption could cause to the company. Alternatively, they could terminate relationships with any high-risk strategic suppliers.</p> <p>It is essential to identify the weak links in your supply chain. Although we are now in the midst of a crisis, this is a practice you should undertake when times are good&hellip;just to not be caught unawares the next time a crisis arises. This can lead to&hellip;</p> <h1>Supplier Expansion</h1> <p>Procurement usually focuses their greatest attention on tier 1 suppliers. However, due to the crisis, many companies are now exploring their relationships with tier 2 and tier 3 suppliers as well, with the intent of pushing more business their way.</p> <p>Besides their own supply base, procurement is looking to expand that base, both nearshore and offshore. That&rsquo;s a bit counter-intuitive to the direction procurement had been taking over the last five years when it prioritized consolidating the supply base, especially in the area of indirect spend.</p> <p>However, COVID-19 has shown that you can consolidate too much. On that same thought, there are suppliers that also have a highly diverse supply chain. Procurement should understand how their suppliers receive that supply. With many suppliers operating in several countries, each location will be impacted with a different level of severity. These suppliers with diverse supply chains may still prove to be high-performing partners during a pandemic.</p> <p>In the same sense, suppliers with limited supply chains and operations could be the most dangerous to rely on. Adding in new suppliers can put an extra burden on procurement, especially when it comes to compliance. The response should be&hellip;</p> <h1>Better and More Frequent Auditing</h1> <p>When evaluating new suppliers, procurement professionals research how those suppliers not only fulfill their obligations but also how they handle issues including fair labor practices, complying with government and industry regulations, and maintaining safe and clean workplaces. To illustrate the last point, one only has to remember how the Coronavirus impacted the produce and meat industries, shutting down processing plants throughout the U.S.</p> <p>During times of a pandemic, it is reasonable to assume there has been a loss of human capital in the workforce. Worldwide, unemployment rates rise and businesses are getting by with fewer employees. On the other end, there are businesses that can&rsquo;t fill their vacant positions due to population drops.</p> <p>Procurement must ensure suppliers are not violating any labor practices due to resource changes. It is vital to monitor news stories and business updates of each strategic supplier during the relationship and take action when concerns arise.</p> <p>To safeguard compliance, procurement must not think the task is completed once the negotiated contract is signed. Circumstances can and do change, especially when a supplier does not have the infrastructure, policy and processes in place to handle an emergency (again, think processing plants). This makes it increasingly important for procurement to perform ongoing audits of how its supply chain is performing.</p> <p>The pandemic has forced us to re-examine the way we do business; however, many of the changes we have made should become part of our normal business practices in good and challenging times.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/supplier-relations" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supplier Relations</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/supply-chain" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supply Chain</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/covid-19" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">COVID-19</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/digital-supply-networks" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">digital supply networks</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/procurement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Procurement</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/risk-assessment" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">risk assessment</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Checking on Supplier Compliance in Challenging Times - Future of Sourcing" addthis:url="http://futureofsourcing.com/checking-on-supplier-compliance-in-challenging-times"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Thu, 19 Aug 2021 22:30:03 +0000 Brandon Hummons 1881 at http://futureofsourcing.com http://futureofsourcing.com/checking-on-supplier-compliance-in-challenging-times#comments Sustainable Sourcing: Greener Procurement Grows with Optimization http://futureofsourcing.com/sustainable-sourcing-greener-procurement-grows-with-optimization <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="http://futureofsourcing.com/sites/default/files/articles/Sustainable%20Sourcing%3A%20Greener%20Procurement%20Grows%20with%20Optimization.png"><a href="http://futureofsourcing.com/sites/default/files/articles/Sustainable%20Sourcing%3A%20Greener%20Procurement%20Grows%20with%20Optimization.png" title="Sustainable Sourcing: Greener Procurement Grows with Optimization" class="colorbox" rel="gallery-node-1990-9B1AxFfmCYw"><img typeof="foaf:Image" src="http://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Sustainable%20Sourcing%3A%20Greener%20Procurement%20Grows%20with%20Optimization.png?itok=XVExk5an" width="624" height="325" alt="Sustainable Sourcing: Greener Procurement Grows with Optimization" title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <h1>Sustainable Sourcing: Greener Procurement Grows with Optimization</h1> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/social-impact-sourcing-a-new-version-of-commerce">Social Impact Sourcing: A New Version of Commerce</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>The demand for sustainability is skyrocketing. With <a href="https://nam02.safelinks.protection.outlook.com/?url=https%3A%2F%2Ft.sidekickopen90.com%2Fs3t%2Fc%2F5%2Ff18dQhb0S7kv8bWFxmV3dJNL59hl3kW7_k2842QxXvyMvfnvNs1mpvW7w49q-2bzNN1f3l9LNN01%3Fte%3DW3R5hFj4cm2zwW4mKLS-3W2Q1FW1GHFsX3ZV6nwW43T4P23KbWrJW3FbtXB3GGxx2W3T4G6z3NB9tdW4kCJtP3_SNwqW1GCt8N4cQKzjW3zbVmm3CbGtQW4cNcV-3F7-mSW3vfNsJ1W-VH2w1WZKzBbz-2%26si%3D5697153419837440%26pi%3Dfaac9862-47d5-4481-90ac-f3a1e3861f0b&amp;data=04%7C01%7Cvvichroski%40corporateink.com%7Cdc78319cbf864e93ead308d900ccdd54%7Cc9239bde19544dc79e6b1a96daecb7a3%7C0%7C1%7C637541702197959597%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C2000&amp;sdata=ahQzns0YiYscQkVrRGklRT%2Bfo7Kd4p1QOKSCcaOmP0k%3D&amp;reserved=0" target="_blank">61% of brands claiming an increase in customer demand</a> for sustainability, it&rsquo;s crucial to drive change where it matters most: the supply chain.</p> <p>McKinsey reports that <a href="https://youmatter.world/en/sustainability-supply-chain-27935/?utm_medium=referral&amp;utm_source=uf-pdf&amp;utm_campaign=q2-roi-campaign" target="_blank">90% of a company&rsquo;s sustainability impact</a> occurs in the supply chain. Yet <a href="https://nam02.safelinks.protection.outlook.com/?url=https%3A%2F%2Ft.sidekickopen90.com%2Fs3t%2Fc%2F5%2Ff18dQhb0S7kv8bWFxmV3dJNL59hl3kW7_k2842QxXvyMvfnvNs1mpvW7w49q-2bzNN1f3l9LNN01%3Fte%3DW3R5hFj4cm2zwW4mKLS-3N-RYMW41Rklg3Fbt5SW3K72cX4hKKY8W4r50003zbVlrW3T1lbS3P1MrDW1LDLyT45RlhcW3F7xMD41p0V3W4cQgw741PF2_f3ZWWrh04%26si%3D5697153419837440%26pi%3Dfaac9862-47d5-4481-90ac-f3a1e3861f0b&amp;data=04%7C01%7Cvvichroski%40corporateink.com%7Cdc78319cbf864e93ead308d900ccdd54%7Cc9239bde19544dc79e6b1a96daecb7a3%7C0%7C1%7C637541702197969596%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C2000&amp;sdata=dcFjkskS2CjzktHmq%2FRH%2Bh2jk%2Bm3gwr%2FDfF6MQYVjmo%3D&amp;reserved=0" target="_blank">one-third of supply chain leaders</a> admit to no or low-maturity sustainability initiatives, according to Gartner. Companies continue to source suppliers with large ecological footprints and no reliable sustainability reporting. This not only hurts the environment &ndash; it could seriously hinder brand reputation, customer relationships and the bottom line. It&rsquo;s time for sourcing leaders to take a new approach.</p> <h2>Shift from a Low-Cost Model to a Low-Carbon Mindset</h2> <p>To achieve sustainability goals, sourcing teams must shift from a traditional, low-cost-only focus to a strategic decisioning model that favors environmentally conscious suppliers and weighs critical sustainability criteria. Success requires technology and automation, and specifically, sourcing optimization software to provide the analytical ease.</p> <p>Why? Let&rsquo;s take a look at the logistics category. Throughout the pandemic, sourcing teams frequently faced rapid spot bidding events for ocean and air freight to keep goods moving. In these cases, annual negotiated rates were tossed out the window, and shippers had to weigh a combination of factors and trade-offs in a short period of time. Put yourself in their shoes: When capacity is tight and prices are high &ndash; and you need to secure freight quickly to ensure operational continuity and demand fulfillment &ndash; making time to weigh the impact of CO2 emissions is easier said than done, especially if you are analyzing bids manually.</p> <p>Finding the right balance is always a challenge, regardless of whether procurement is operating in a crisis. Supplier availability, capacity, cost, delivery time, risk, quality and sustainability are all crucial factors to sourcing decisions. Without sourcing optimization, it is impossible to accurately project which combination will deliver the best outcome. With an analytical solution, procurement can collaboratively see and consider trade-offs, and compare scenarios to make the smartest choice and determine the best award decision for the business.</p> <p>The best place for a business to start is equipping sourcing teams with the tools and processes they need to maintain agility, analyze differentiating bids against each other, and make quick award decisions that weigh a multitude of factors at once.</p> <h2>Optimization is the New Differentiator</h2> <p>Sustainability and cost efficiency aren&rsquo;t mutually exclusive. With today&rsquo;s sourcing optimization software, buyers and their stakeholders can collect a wide range of price and non-price bid information from suppliers, and easily analyze various award scenarios based on those criteria and other constraints.</p> <p>The right optimization tool gives suppliers the flexibility to propose, for example, alternate pricing for a similar item that uses recycled packaging material or produces less waste. In logistics procurement, optimization offers bidding capabilities that allow carriers to bundle round-trip lanes and convey efficiencies that reduce emissions, time and costs.</p> <p>Collecting carrier capacity commitments at varying geographic combinations also helps mitigate reactive spot bidding when loads are not accepted. This can ensure that your Smartway Certified carriers are utilized more often, rather than resorting to a non-compliant backup carrier.</p> <p>Scale, automation, analysis and scenario building are key to strong optimization models. The advanced platforms make it easy to award based on complex criteria. For example, a buyer can set the optimization strategy to:</p> <ul> <li>Award at least 50% of the business to Smartway Certified carriers.</li> <li>Award 100% of these select lanes to slow steaming bids.</li> <li>Optimize on lowest CO2 possible and compare to the lowest cost possible.</li> <li>Award 100% of the items to sustainable-certified suppliers unless it costs more than $500,000.</li> <li>Favor recycled material bids by 5%.</li> </ul> <p>This type of outcome is either incredibly challenging and time-consuming or simply impossible to determine through basic e-sourcing tools and manual sourcing processes.</p> <h2>The ROI on Green Procurement</h2> <p>Optimization positions businesses to experience all the benefits sustainability has to offer, including cost savings, risk mitigation, increased operational efficiency, stronger sourcing process quality, and of course, supplier innovation.</p> <p>Expect sourcing optimization technology to become business critical in 2021 as more of the world&rsquo;s top brands make ambitious sustainability commitments. For example, leading processed food company <a href="https://gruponutresa.com/en/" target="_blank">Grupo Nutresa</a> has committed to make 100% of its packaging material recyclable, reusable or compostable by 2030. It&rsquo;s working with its suppliers to achieve this goal, as well as including sustainability criteria in its new bidding events to award likeminded suppliers. Sourcing optimization makes this all possible.</p> <p>Leading the charge for other corporations, Apple has vowed to be <a href="https://www.apple.com/newsroom/2020/07/apple-commits-to-be-100-percent-carbon-neutral-for-its-supply-chain-and-products-by-2030/" target="_blank">100% carbon neutral for its supply chain and products by 2030</a>. Through process and sourcing innovation, low-carbon product design and supplier partnerships, the technology giant has reduced their fluorinated gas emissions by more than 242,000 metric tons since 2019 &ndash; setting the standard for other industries to follow suit.</p> <p>Consumers &ndash; particularly younger generations &ndash; are placing increasing value on companies with a commitment to environmental consciousness. The most successful companies see sustainability innovation as a key strategic and tactical advantage, according to a recent <a href="https://www.corporateknights.com/reports/2018-global-100/2018-global-100-results-15166618/?utm_medium=referral&amp;utm_source=uf-pdf&amp;utm_campaign=q2-roi-campaign" target="_blank">Global 100 Most Sustainable Corporations in the World index</a>. I completely agree. The benefits of sustainable procurement go beyond contributing to a better world &ndash; they are core to your business strategy and growth.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/sustainability" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Sustainability</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/supply-chain" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supply Chain</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/green-procurement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">green procurement</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/roi" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">ROI</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/smartway-certified-carriers" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Smartway Certified carriers</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Sustainable Sourcing: Greener Procurement Grows with Optimization - Future of Sourcing" addthis:url="http://futureofsourcing.com/sustainable-sourcing-greener-procurement-grows-with-optimization"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Sun, 23 May 2021 17:00:00 +0000 Alan Holland 1990 at http://futureofsourcing.com http://futureofsourcing.com/sustainable-sourcing-greener-procurement-grows-with-optimization#comments Third Party and Supply Chain Risk Management: Then and Now http://futureofsourcing.com/third-party-and-supply-chain-risk-management-then-and-now <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="http://futureofsourcing.com/sites/default/files/articles/Copy%20of%20FoS%20Header%20Images%20%2846%29.png"><a href="http://futureofsourcing.com/sites/default/files/articles/Copy%20of%20FoS%20Header%20Images%20%2846%29.png" title="Third Party and Supply Chain Risk Management" class="colorbox" rel="gallery-node-1767-9B1AxFfmCYw"><img typeof="foaf:Image" src="http://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Copy%20of%20FoS%20Header%20Images%20%2846%29.png?itok=Y_L1p-IK" width="624" height="325" alt="Third Party and Supply Chain Risk Management" title="" /></a></div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/right-sizing-your-third-party-risk-management-program">Right-Sizing Your Third-Party Risk Management Program</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>The worldwide crisis made us hyper-aware that trust-worthy relationships are vital. Effective <a href="https://sig.org/sig-university/certified-third-party-risk-management-professional-certification" target="_blank">third-party risk management</a> is the best way to gain assurance that responses and decisions are risk-informed. Managing third-party relationships, calibrated for criticality and risks, has never been more critical. This is the most reliable path to strengthen business resilience, protect stakeholders and the bottom line.</p> <p>Before the pandemic, supply chain risk management was talked about but not treated like the professional discipline it is. And the broader scope of third-party risk management was often thought of as either a &ldquo;check-the-box&rdquo; compliance exercise or something imposed on your business by someone in headquarters.</p> <h1>Did third-party risk management capabilities just catch fire?</h1> <p>The term supply chain typically refers to physical goods, either input materials or distribution of input materials and finished goods. The term &ldquo;third-party&rdquo; blankets every relationship in a firm&rsquo;s extended enterprise, excluding their customer relationships. Third parties are part of supply chains, but every company has far more third-party relationships than supply chain relationships.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p> <p>Third parties are vendors, suppliers, service providers, outsourcers, resellers, agents, channel, brand and joint venture partners, market utilities such as SWIFT and intermediaries such as credit card processors, utilities, charities, subscription services, contractors, affiliates, rating agencies, government agencies, trade associations. And the list goes on, according to the products or services you offer, and the industry sector and markets you&rsquo;re in.</p> <p>You may be asking, &ldquo;why does the distinction between third party and supply chain risk matter?&quot; By broadening your thinking and scope of risk management activities, you can address supply chain risk and all third-party relationships.</p> <p>For example, with the ongoing pandemic, firms in every part of the world are dealing with exponential levels of third-party risk, including but not limited to supply chain risk. Just-in-time delivery practices mean that raw materials, parts and cleaning supplies are not readily available. And gone is predictability for the physical movement of goods.</p> <p>Beyond supply chain risk, most firms find themselves wrestling third-party risks like cybersecurity and denial of service attacks that impair the third parties&rsquo; ability to perform. Standard third party physical security risk controls flew out the window when third-party employees transitioned to working from home.</p> <p>Revenues fell to historic lows for many companies and their critical third parties when the world came to a halt, causing great uncertainty about their mid- to long-term financial health. This affects their ability to retain top talent, invest in technologies, processes and research. Business resilience, business continuity, pandemic planning and contingency plans for companies and their third and fourth parties immediately transitioned from status as an academic exercise to reality.</p> <p>Companies with strong third-party risk management practices have a better chance of surviving and thriving.</p> <h1>Lifecycle Management Model Versus Governance Framework</h1> <p>If third-party risk management were a two-sided coin, one side would have a Lifecycle Management model on it and the other would have a Governance Framework.</p> <p>A Lifecycle Management Model, sometimes called a &ldquo;Target Operating Model,&rdquo; is a visualization of the steps, repeatable processes and reusable tools that companies build to identify, assess, manage and monitor critical third parties throughout the lifetime of relationships, calibrated for criticality and the quality and quantity of risk.</p> <p><img alt="Lifecycle Management Framework" src="https://futureofsourcing.com/sites/default/files/Lifecycle-Framework.JPG" style="width: 960px; height: 540px;" /></p> <p>The Governance Framework depicts the methodologies, controls, and reporting that delivers risk insight and enables risk-informed decisions and alignment between the amount and type of third-party risk the company is willing to accept and its risk appetite.</p> <p><img alt="Governance Framework" src="https://futureofsourcing.com/sites/default/files/Governance-Framework.JPG" style="width: 960px; height: 540px;" /></p> <p>Third-party risk management is a complex discipline that crosses the company vertically and horizontally. It&rsquo;s a team sport, touching every part of every company&rsquo;s operations. Whether you&rsquo;re in a customer-facing segment or behind the scenes, a strong working knowledge of effective third-party risk management is a valuable asset.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/third-party-management" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Third Party Management</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/third-party-risk-management" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Third Party Risk Management</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/supply-chain" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supply Chain</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/vendor-management" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Vendor Management</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/supplier-management" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supplier Management</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Third Party and Supply Chain Risk Management: Then and Now - Future of Sourcing" addthis:url="http://futureofsourcing.com/third-party-and-supply-chain-risk-management-then-and-now"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Wed, 12 May 2021 02:00:00 +0000 Linda Tuck Chapman 1767 at http://futureofsourcing.com http://futureofsourcing.com/third-party-and-supply-chain-risk-management-then-and-now#comments How Digital Technologies are Changing Procurement http://futureofsourcing.com/how-digital-technologies-are-changing-procurement <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="http://futureofsourcing.com/sites/default/files/articles/How%20Digital%20Technologies%20are%20Changing%20Procurement%20Leaders.png"><a href="http://futureofsourcing.com/sites/default/files/articles/How%20Digital%20Technologies%20are%20Changing%20Procurement%20Leaders.png" title="Digital transformation is changing how procurement leaders operate." class="colorbox" rel="gallery-node-1467-9B1AxFfmCYw"><img typeof="foaf:Image" src="http://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/How%20Digital%20Technologies%20are%20Changing%20Procurement%20Leaders.png?itok=nTVxZwX0" width="624" height="325" alt="Digital transformation is changing how procurement leaders operate." title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <h1>Digital Technologies are Changing Procurement Leaders and the Organizations They Serve</h1> <p style="font-size: 13.008px;"><em><span style="font-size: 13.008px;">Mike Morsch, CIAP, is the Vice President of Procurement and Supply Chain at CDK Global and a <a href="https://sig.org/advisory-board" target="_blank">member of the SIG Advisory Board</a>.</span><em style="font-size: 13.008px;"><span data-contrast="auto" xml:lang="EN-US">&nbsp;From starting his career as a software developer, Mike worked his way up through IT organizations to hone the craft of IT and created the procurement function at CDK Global. After spending years working alongside the procurement organization in previous positions, he now leads a world-class procurement team and brings his unique insight to the procurement role. Leading CDK Global&#39;s digital transformation and championing RPA implementation within CDK, Mike is passionate about leading the sourcing and supply chain into the next generation of technology.&nbsp; Mike&rsquo;s message is clear: CPOs need to be technology evangelists to succeed today.</span>&nbsp;</em></em></p> <p style="font-size: 13.008px;"><em>Below is an excerpt of an interview with SIG CEO and President Dawn Tiura. It has been edited for brevity. <a href="https://sig.org/ideal-leader-mike-morsch" target="_blank">Listen to the full episode from The Sourcing Industry Landscape podcast.&nbsp;</a></em></p> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/the-top-10-actions-cpos-must-take-in-2021">The Top 10 Actions CPOs Must Take in 2021</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <h2>How Procurement Impacts the Organization</h2> <p>At CDK, we&#39;ve really focused on some of the changes needed to improve our customer support and experience. It&#39;s been a tremendous digital transformation with regard to what CDK does for our customers, but very importantly, what we are doing within the procurement and the supply chain team to help the business be more successful, take costs out, improve on-time delivery and then pick up some additional responsibilities as we&#39;ve gone along the way.</p> <p>I&#39;ve also picked up our global real estate function as well as our repair operation. I kind of keep adding the operations activities to what I do here at CDK. It&#39;s been very fast paced and exciting.</p> <h2>The Transition from CIO to CPO</h2> <p>It was pretty natural for me to come here and do this primarily because CDK at its heart is a software company, but we are specialized in the automotive dealership industry. CDK makes software and other technologies that help car dealerships run more successfully. Think of it as ERP or CRM systems.</p> <p>I will tell you, coming in, of course when I was in the technology organization at times you were trying to move as quick as you could and you might feel like the procurement organization was kind of holding you back. But coming in now and having the responsibility for procurement, I have a whole new appreciation for the really great practices that procurement brings to the company and how it&#39;s really not just really a cost-focused area, which might have been my cynical view a dozen years ago. Now it&#39;s become a value-added function for the company. I would say it wasn&#39;t a hard transition. It hasn&#39;t been easy, but it&#39;s been very exciting, and I&#39;ve learned a lot along the way.</p> <p>I actually was responsible for helping to create and run the IT procurement function at Motorola, which is very similar in a lot of ways when you look at the IT technologies that we consume here as a company: hardware, software and third-party labor services associated to technology. I had all those things on my resume and my background. So, coming into here, I did need to learn a little bit more about true procurement best practices and those type of things, but I had spent a lot of years working with the procurement teams at my previous companies and really understanding what they did.</p> <h2>Advice for Non-Technical CPOs on Digital Transformation<a href="https://sig.org/sig-university/certified-intelligent-automation-professional" target="_blank"><img alt="Become a Certified Intelligent Automation Professional" src="https://futureofsourcing.com/sites/default/files/Q1-Ad-Campaign-CIAP-300x250.jpg" style="width: 300px; height: 250px; float: right;" /></a></h2> <p>My advice to CPOs without a technology background is this: A procurement leader needs to be a technology leader going forward. We can no longer just look to the IT team or the CTO organization to provide us the technology. We need to partner with them and looking forward to how we&#39;re going to apply these technologies. We&#39;ve done that within CDK.</p> <p>If you&#39;re not looking at how you&#39;re going to take the technology and apply it and make your group more successful, get better analytics, <a href="https://sig.org/sig-university/certified-intelligent-automation-professional" target="_blank">apply robotic process automation</a>, you&#39;re going to get left behind, your organization&#39;s going to get left behind, and you&#39;re going to leave a lot of savings and insights and ability to help the business be successful on the table that no one will even know about, and you&#39;d probably put your job in danger too.</p> <p>I think it&#39;s critical that you embrace the technologies. They all don&#39;t work. They all have a challenge. But the technology will continue to help everyone be more successful and you need to have a foot in there, a toe in the water and really jump in and figure out how you&#39;re going to apply the technology to be successful.</p> <h2>Embracing AI and RPA Technologies</h2> <p>I think there&#39;s just so many things that CPOs and other procurement and supply chain leadership can do to embrace these technologies. Everyone is going to sub-optimize their organization unless they really start embracing this. It&#39;s not that RPA and artificial intelligence and other things will eliminate jobs; I&#39;m a huge believer in the fact that they&#39;re going to augment the jobs and make everybody much more successful and create new jobs that no one even knew existed before.</p> <p>I&#39;m a big believer that as you continue to apply the tech, and you continue to apply really good procurement practices, you&#39;ve got to have those basic skills and abilities to be successful, and you&#39;ll make your company more successful.</p> <p><a href="https://sig.org/blog/organizational-alignment-intelligent-automation-journey" target="_blank"><em>&gt;&gt;Read more: Organizational Alignment for the Intelligent Automation Journey&lt;&lt;</em></a></p> <h2>The Future of Procurement</h2> <p>The focus of where I want to take the organization is really moving forward on the rest of that digital transformation. I&#39;m still excited to be involved in the RPA activities, but I think there&#39;s a lot of very interesting technologies out there that are going to help the best and brightest on my team get insights on what they need to do next, whether it&#39;s a negotiation, or a new supplier, or some analytics around our internal data compared to external data that will help give them insights that are going to come right to their desktop every day.</p> <p>Really good category strategy people and people in procurement can all sit down and go out and do a lot of research and go figure these things out, but I think the artificial intelligence and some of these robotics things are going to help bring that information right to their desktop so they can start lining those up and start pursuing those.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/innovation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Innovation</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/supply-chain" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supply Chain</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/cdk-global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">CDK Global</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="How Digital Technologies are Changing Procurement - Future of Sourcing" addthis:url="http://futureofsourcing.com/how-digital-technologies-are-changing-procurement"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Tue, 16 Mar 2021 02:00:00 +0000 Mike Morsch 1467 at http://futureofsourcing.com http://futureofsourcing.com/how-digital-technologies-are-changing-procurement#comments Why Supply Chain Leaders Need to Bolster the Circular Economy http://futureofsourcing.com/why-supply-chain-leaders-need-to-bolster-the-circular-economy <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="http://futureofsourcing.com/sites/default/files/articles/FoS%20Graphic%20%284%29%20%281%29.png"><a href="http://futureofsourcing.com/sites/default/files/articles/FoS%20Graphic%20%284%29%20%281%29.png" title="Circular Economy" class="colorbox" rel="gallery-node-1917-9B1AxFfmCYw"><img typeof="foaf:Image" src="http://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/FoS%20Graphic%20%284%29%20%281%29.png?itok=ycRS-z7o" width="624" height="325" alt="Circular Economy" title="" /></a></div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/its-time-for-it-to-transition-to-a-circular-economy">It’s Time for IT to Transition to a Circular Economy</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>The concept behind a circular economy is simple: minimize waste by reusing, sharing and repairing goods that are already in use. That allows items to remain in the economic system, preventing the need for as many new products to be introduced.</p> <p>This results in a closed loop. New resources aren&rsquo;t being used, so energy is conserved.</p> <p>In recent years, the rise of the circular economy is most significant in the fashion industry and supply chain. For instance, companies such as Depop and Poshmark are now <a href="https://us.bouncepad.com/blogs/news/in-a-world-of-fast-fashion-how-does-depop-succeed">widely-recognized</a> for selling unique luxury clothing and accessories secondhand.</p> <p>Corporate examples such as these have encouraged consumers to invest in the circular economy, largely for sustainability reasons.</p> <p>This article explores three major reasons supply chain leaders should invest in the circular economy, satisfying the needs of their customers and embracing more sustainable business practices:</p> <ol> <li>Keeping products in use</li> <li>Fueling innovation</li> <li>Making your business more sustainable</li> </ol> <h2>Keeps Products in Use</h2> <p>One of the main perks of the circular economy is that it keeps previously created and processed items in active use.</p> <p>This allows for a meaningful shift from the traditional procurement process of clothing items, for example. Using secondhand services also minimizes waste. When someone no longer wants or grows out of an article of clothing, it can be used by someone else.</p> <p>&nbsp;</p> <p><img alt="This process includes keeping products in use, regenerating natural systems, and designing out waste and pollution." src="https://futureofsourcing.com/sites/default/files/Circular%20Economy.png" style="border-width: 0px; border-style: solid; width: 409px; height: 423px;" /></p> <p>Source: Ellen MacArthur Foundation&nbsp;</p> <p>This process includes keeping products in use, <a href="https://www.ellenmacarthurfoundation.org/circular-economy/what-is-the-circular-economy">regenerating natural systems</a>, and designing out waste and pollution. Each of these actions will only make the others more attainable to companies committed to sustainability.</p> <p>Instead of creating waste after products are used, they&rsquo;re reintroduced into the economy for purchase. By relying less on new products to be created, you also take the pressure off of your supply chain and reduce spend on inventory production.</p> <p>How do you ensure your products will be able to stay in use? Companies looking to support the circular economy may need to reinvest funding from manufacturing into repairs.</p> <p>Manufactured goods, especially those made using cost-effective strategies, aren&rsquo;t built to withstand the test of time.</p> <p>Denim clothing manufacturer Hiut Denim has figured out a way to do just that. Ethically made and sold by women in Great Britain, the company promises to repair &ldquo;damage due to <a href="https://hiutdenim.co.uk/pages/faq">wear and tear</a>&rdquo; for free. This encourages shoppers to invest once in a sustainable pair of jeans, continuing to wear them over many years.</p> <p>Keeping goods in circulation helps companies bolster the circular economy. It also makes it easier for you to focus on providing quality products instead of the cheapest way to create them.</p> <h2>Boosts Your Business&#39; Sustainability</h2> <p>When considering sustainability in the supply chain, the first concepts that typically come to mind may not involve the circular economy.</p> <p>In industries such as clothing and fashion, however, adopting the circular economy is essential to achieve a high level of sustainability.</p> <p>Sustainable fashion, for example, has the potential to positively impact the planet, both in terms of greener production practices and introducing labor equality to your procurement processes.</p> <p>The clothing production industry is currently influenced by the popularity of &ldquo;fast fashion,&rdquo; which is an extremely cheap way to create mass volumes of clothing products. While this attracts customers by offering goods at very low prices, fast fashion comes at a significant cost to the environment.</p> <p>Typically, in electing to adopt fast fashion manufacturing processes, a business has to invest in inequitable labor and reject the use of clean, innovative materials. For example, materials like polyester can make the production of clothing items very cheap. Since polyester isn&rsquo;t naturally made like cotton or hemp, synthetic materials aren&rsquo;t as good for the planet as other textile options.</p> <p>Experts indicate that it can take up to&nbsp; <a href="https://www.forbes.com/sites/ellevate/2019/10/07/why-sustainable-fashion-matters/#2bd1fb871b8e">200 years for clothing to decompose</a>. That&rsquo;s especially the case for materials not found in nature. Moving away from synthetic materials won&rsquo;t spark change if it&rsquo;s your sole effort. It&rsquo;s recommended that supply chain leaders discover methods of incorporating renewable energy into production. Taking the most holistic approach possible with your sustainability efforts will increase your ability to support the circular economy.</p> <p>For instance, secondhand clothing companies like ThredUp actively contribute to the circular economy within the fashion industry. To raise awareness of the importance of buying used pieces, the company showcases how secondhand purchases contribute to a greener future.</p> <p>The image below indicates that if all consumers purchased one reused product in a year, it would be equivalent to removing 449,000,000 pounds of waste from landfills.</p> <p>&nbsp;</p> <p><img alt="The image belowabove indicates that if all consumers purchased one reused product in a year, it would be equivalent to removing 449,000,000 pounds of waste from landfills. " src="https://futureofsourcing.com/sites/default/files/Consumer%20Savings.png" style="border-width: 0px; border-style: solid; width: 368px; height: 256px;" /></p> <p>Source: ThredUp</p> <p>ThredUp&rsquo;s partnerships with brands like Free People and Madewell push the mission and accessibility of the circular economy to the forefront of customers&rsquo; minds.</p> <p>Taking a holistic approach to sustainability is an extremely effective way to support the circular economy.&nbsp;</p> <h2>Fuels Technological Innovation and Collaboration</h2> <p>Adopting new supply chain processes requires you to <a href="https://clutch.co/logistics/supply-chain-management">discover and explore technological solutions</a>. The circular economy may push early adopters toward cutting-edge technologies that will boost efficiency.</p> <p>Because the supply chain is innately a global network of companies, it can be complex to navigate in traditional scenarios. The circular economy, while consumers desire it, is challenging to efficiently implement.</p> <p>Experts at Forbes recommend companies operating in the circular <a>economy </a><a href="http://forbestechcouncil/">try blockchain technology</a>.&nbsp; Blockchain solutions can leverage your participation in the circular economy to an even greater extent while affording users greater traceability and process transparency. With those benefits, companies are able to execute more efficiently.</p> <p>Businesses like MonoChain have leveraged blockchain in their effort to contribute to the circular economy. In fact, with the help of the technology, they&rsquo;ve kept an estimated $460 billion of clothes from being <a href="https://www.mckinsey.com/business-functions/sustainability/our-insights/mapping-the-benefits-of-a-circular-economy">thrown away and wasted</a>.</p> <p>This early success at the cross-section of blockchain and sustainability can serve as a source of inspiration for companies that are unsure they can commit to the complexities of the circular economy. Their participation through innovative, cutting-edge technologies will propel internal operations forward, making them more efficient and sustainable.</p> <h2>Use Your Resources to Participate in the Circular Economy</h2> <p>For supply chain companies everywhere, connecting yourself to the circular economy will be vital in this new decade. Consumers expect sustainability from brands they trust. You can win their trust through your commitment to both green practices and keeping products in the market for the long-term.</p> <p>Additionally, you can make your presence in the circular economy benefit your internal operations. Take the opportunity to introduce blockchain technology to your team. That will ensure that you have the information you need to trace goods and information throughout the complex exchange process.</p> <p>&nbsp;</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/supply-chain" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supply Chain</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/sustainability" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Sustainability</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/circular-economy" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Circular Economy</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/procurement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Procurement</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/blockchain" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Blockchain</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/transparency" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Transparency</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Why Supply Chain Leaders Need to Bolster the Circular Economy - Future of Sourcing" addthis:url="http://futureofsourcing.com/why-supply-chain-leaders-need-to-bolster-the-circular-economy"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Thu, 28 Jan 2021 19:28:21 +0000 Sydney Wess 1917 at http://futureofsourcing.com http://futureofsourcing.com/why-supply-chain-leaders-need-to-bolster-the-circular-economy#comments Sustainability and Notebook PCs: Behind the Scenes With TCO Certified http://futureofsourcing.com/sustainability-and-notebook-pcs-behind-the-scenes-with-tco-certified <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="http://futureofsourcing.com/sites/default/files/articles/FoS%20Graphic%20%283%29%20%281%29.png"><a href="http://futureofsourcing.com/sites/default/files/articles/FoS%20Graphic%20%283%29%20%281%29.png" title="Sustainability and Notebook PCs" class="colorbox" rel="gallery-node-1916-9B1AxFfmCYw"><img typeof="foaf:Image" src="http://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/FoS%20Graphic%20%283%29%20%281%29.png?itok=i7EoFqQT" width="624" height="325" alt="Sustainability and Notebook PCs" title="" /></a></div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/navigating-supply-chain-complexities-with-sustainability">Navigating Supply Chain Complexities With Sustainability </a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>IT products come with many social and environmental challenges. Conflict minerals, supply chain working conditions, hazardous substances, e-waste as well as the &nbsp;&ldquo;take, make, use dispose&rdquo; model of the linear economy demonstrate that the challenges and risks connected to our digital devices run wide and deep. Purchasers and users of technology are at the forefront of asking for better product options.</p> <p>There are two important sourcing aspects to consider: getting your sustainability priorities clear for vendors and making more informed product choices. TCO Certified is the independent sustainability certification for IT products and a leading decision support tool, providing robust sustainability criteria and independent verification of IT products for almost 30 years. Here, TCO Development, the organization behind TCO Certified, shares a behind-the-scenes look at how it&rsquo;s done.</p> <h1>Purchasers Hold the Key to Driving Sustainability</h1> <p>More than ever, sustainability is an integrated part of core business, which puts procurement at the forefront of delivering on targets for environmental, social and financial responsibility connected to products used in the organization.</p> <p>When it comes to IT hardware, the risks are significant. Buyers need to know that products are made responsibly with respect for human rights and worker safety in manufacturing. They also need more transparency around product content and how to reduce the environmental impact of computers and servers, for example. The challenge for purchasers is the complexity of both the IT supply chain and the products themselves, making these risks almost impossible to assess without specialist expertise.</p> <p>This is where external tools such as TCO Certified come in. Using TCO Certified helps purchasers achieve three main goals. Firstly, it&rsquo;s a clear signal to industry that sustainability matters. The primary driver of IT industry action on sustainability is demand from IT buyers.</p> <p>Secondly, the right combination of environmental and supply chain responsibility criteria provides purchasers with a way to cover sustainability aspects even in the manufacturing phase.</p> <p>Thirdly, and most importantly, it reduces risk of greenwash and reliance on unproven manufacturer claims. When an ecolabel or certification requires independent verification, this delivers vital proof to purchasers that the products they buy, and the factories where they&rsquo;re made, have been independently assessed and are included in a system of continued monitoring.</p> <h1>Increased Interest From Notebook PC Purchasers</h1> <p>TCO Certified has more than 3,500 certified products from over 25 brands and covers office IT products as well as data center hardware categories.</p> <p>Now, purchasers around the globe are starting to ask for more sustainable products. The fastest growing product category in TCO Certified is notebooks. In 2020 there was a 50% increase in new certified models compared to 2019, resulting in plenty of choice for purchasers. This demand is a direct effect of purchasers raising their voices and asking for IT products that take issues like climate, hazardous content and factory working conditions into account.</p> <h1>Declarations Are not Enough; Independent Verification Makes the Difference</h1> <p>With many labels, declarations and certifications on the market, it can be difficult to identify those that really make a difference. A good strategy is to avoid using declarations and look for certification that verifies compliance with criteria.</p> <p>Just checking the box is not enough. Real change happens when factories are visited, &nbsp;products are tested and materials analyzed. This should be done by an external independent party.</p> <p>The system of mandatory independent verification behind TCO Certified is the most robust on the market for IT products. Each year independent verifiers spend around 20,000 hours on assessments, product testing and factory social audits directly connected to certified models.</p> <p>For products certified according to TCO Certified, a social factory audit typically takes two to five days to complete, depending on the factory&rsquo;s size. Included in social factory audits are employee statements, observations and document reviews that verify factories are working in a structured way to comply with criteria for socially responsible manufacturing.</p> <p>If non-conformities are detected, an independent closure audit will later be conducted to verify that the non-conformities from the original audit have been corrected. A closure audit should confirm closure of the non-conformity within 12 months of the initial audit.</p> <p>TCO Certified criteria are updated every three years to ensure we meet the most pressing sustainability challenges on the market. By using TCO Certified as a purchaser, you enjoy the full benefit of the work we do in a free-to-use, global tool.</p> <h1>If You Want More Sustainable IT, Don&rsquo;t Think Utopia, but Do Something</h1> <p>The most important takeaway for IT purchasers is that we are a long way from fully sustainable IT products. Achieving a lifecycle that is truly regenerative and causes no negative impacts requires a long-term commitment to continuous improvement from industry, purchasers and experts alike.</p> <p>Our message to purchasers is simple &mdash; the more purchasers that make this commitment, the faster change happens. The good news is there are simple ways to get started. It doesn&rsquo;t have to be perfect, but it does need to be something!</p> <p>First, consider if you truly need a new product at all. Instead, try extending the life of the IT products you&rsquo;re already using. This is the single most important way to reduce the environmental footprint of your IT use. Upgrade and repair your products so they last longer. Used products are in high demand, so make use of the secondhand market and buy and sell your products there.</p> <div> <p>If you must buy a new product, choose ones that carry a sustainability certification that includes robust criteria and requires third-party verification. Select a durable product that can last longer. Avoid buying unrepairable electronics that you may risk having to throw away after a short usage time. Also think about climate compensating the e-waste footprint of your new product, either by recycling a product with a similar footprint or by purchasing the offsetting as a service.</p> <p>Finally, don&rsquo;t throw it out! Electronics contain valuable resources that can be reused. If it&rsquo;s not possible to reuse or sell your old products, take them to an electronics recycler or refurbisher.&nbsp;</p> </div> <p>&nbsp;</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/sustainability" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Sustainability</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/supply-chain" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supply Chain</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/information-technology-it" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Information Technology (IT)</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/risk-mitigation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Risk Mitigation</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Sustainability and Notebook PCs: Behind the Scenes With TCO Certified - Future of Sourcing" addthis:url="http://futureofsourcing.com/sustainability-and-notebook-pcs-behind-the-scenes-with-tco-certified"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Tue, 26 Jan 2021 17:17:03 +0000 Clare Hobby 1916 at http://futureofsourcing.com http://futureofsourcing.com/sustainability-and-notebook-pcs-behind-the-scenes-with-tco-certified#comments COVID-19 Proves Why It’s Time to Put the Supply Chain on Autopilot http://futureofsourcing.com/covid-19-proves-why-its-time-to-put-the-supply-chain-on-autopilot <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="http://futureofsourcing.com/sites/default/files/articles/AI%20Supply%20Chain%20%281%29.png"><a href="http://futureofsourcing.com/sites/default/files/articles/AI%20Supply%20Chain%20%281%29.png" title="The COVID-19 pandemic has exposed the vulnerability of the global supply chain. " class="colorbox" rel="gallery-node-1907-9B1AxFfmCYw"><img typeof="foaf:Image" src="http://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/AI%20Supply%20Chain%20%281%29.png?itok=12XbFqZC" width="624" height="325" alt="The COVID-19 pandemic has exposed the vulnerability of the global supply chain. " title="" /></a></div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/navigating-supply-chain-complexities-with-sustainability">Navigating Supply Chain Complexities With Sustainability </a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>The COVID-19 pandemic has exposed the vulnerability of the global supply chain. Precisely when the capabilities of international, interconnected trade mechanisms were supposed to kick into high gear, producers found themselves desperate for supplies while store shelves lacked essential goods. The global supply chain didn&rsquo;t rise to the occasion. Now, it&rsquo;s important to examine why.</p> <h1>Bulk Order Bottlenecks</h1> <p>Much of the blame can be traced back to large bulk orders. When chaos erupts within global supply chains, it becomes harder to push bulk orders through existing bottlenecks. When there&rsquo;s a pre-existing inventory pileup as well as unmet back orders, an onslaught of new orders only exacerbates the problem. By default, waiting in the queue slows down the delivery of critical supplies and extends lead times for producing more. Think of bulk orders as clogs in the supply chain tube. They hold back the speed and flexibility necessary for crisis response.</p> <p>These large orders also tie up cash, which takes longer than usual to convert even for in-demand products. When these supply chains span continents, the risk of on-time, in-full delivery failure also increases. As many suppliers learned over the past 12 months, having bulk orders in the pipeline made it difficult to pivot because so much of their cash was tied up in material flow that couldn&rsquo;t run its natural time-lapse along its regular value stream.</p> <p>Essentially, bulk orders hold suppliers back, especially in times of crisis. Smaller, more frequent deliveries can help manage risk, buffers and lead times more efficiently.</p> <h1>Moving Toward Smaller, Faster Deliveries</h1> <p>Tesla recently acquired the rights to a&nbsp;<a href="https://www.ft.com/content/b13f316f-ed85-4c5f-b1cf-61b45814b4ee">10,000-acre site</a>&nbsp;in Nevada where it plans to extract metal domestically rather than importing it. The automaker also intends to build a lithium refinery in Texas to further consolidate its supply chain on U.S. soil. Tesla hopes to lower battery costs this way, and it won&rsquo;t be the only company to bring more of its footprint within a smaller radius.&nbsp;</p> <p>With faster deliveries over shorter distances, producers can accelerate the buildup of free cash flow. That&rsquo;s because inventory buffers shrink to sustainable levels where the items can be refilled just in time. Lead times also improve, especially when manufacturers start localizing the suppliers.</p> <p>As supply chains shrink, the benefits extend to producers and their suppliers. Suppliers are encouraged to make to order instead of make to stock, which allows them to have more cash available to hire&nbsp;quality talent, make&nbsp;necessary capital purchases, undergo&nbsp;maintenance or&nbsp;sit&nbsp;in&nbsp;reserve.&nbsp;More frequent deliveries also allow&nbsp;suppliers&nbsp;to tweak&nbsp;their&nbsp;product mix to make better margins on the volume&nbsp;they&rsquo;re&nbsp;selling.</p> <h1>Unlocking Delivery Agility With AI</h1> <p>Drastically increasing delivery volume just wasn&rsquo;t feasible in the past. The scale of the variables involved made it impossibly complex and difficult to manage, but that was before the advent and proliferation of artificial intelligence (AI).</p> <p>AI takes what humans can do and elevates that to a scale beyond human capacity. It performs responsively and consistently for an extended period at high speeds. A holistic AI solution can quickly determine the product mix and thus replan the ideal logistics network of deliveries.</p> <p>In all fairness, a single factory managing two to three raw material inputs and four finished products may not need AI. But when talking about suppliers handling thousands of SKUs across dozens of factories and external warehouses, no human team would be capable of reorienting the entire company&rsquo;s supply chain based on customer demand within weeks. This is where AI&rsquo;s power becomes a competitive advantage and ultimately helps grab market share at scale.&nbsp;</p> <p>Being more responsive and predicting demand is one of the mainstays of AI. There are also gains in terms of reducing spoilage, improving quality and maximizing for flow instead of maximizing for asset utilization. The advent of internet-connected devices makes it possible to collect data at microscopic points throughout the supply chain that AI can then use to optimize processes and uncover insights throughout.&nbsp;</p> <h1>Tomorrow&rsquo;s AI-Driven Supply Chain</h1> <p>One can&rsquo;t overstate the applications for and impact of AI in the supply chain. It can create the most seamless, resilient and efficient supply chain ever &mdash; one that works optimally in the face of any obstacle.&nbsp;</p> <p>AI can leverage data to model the end-to-end supply chain. Once models can support global views of the supply chain, suppliers can enable unilateral and consistent flow throughout the system, ultimately requiring every part of the supply chain to only produce to sustain the global flow rate. This will shift focus from maximizing asset utilization to never missing customer demand.&nbsp;</p> <p>Tomorrow&rsquo;s AI-driven supply chain is more sustainable for financiers, operations and customers alike. AI can enable a scenario where all stakeholders of the global supply chain focus on getting material to the customer faster and in unison to accelerate the payment in the reverse direction, not focusing on costs and optimizing for price in local markets.&nbsp;</p> <p>Best of all, these capabilities aren&rsquo;t theoretical or in the early stages of development. AI has reached maturity, and it&rsquo;s ready to be deployed from one end of the supply chain to the other. Manufacturing and delivery as we know it will never be the same.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/supply-chain" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supply Chain</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/covid-19" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">COVID-19</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/sourcing" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Sourcing</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/procurement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Procurement</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/artificial-intelligence-ai" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Artificial Intelligence (AI)</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/manufacturing" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Manufacturing</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="COVID-19 Proves Why It&amp;rsquo;s Time to Put the Supply Chain on Autopilot - Future of Sourcing" addthis:url="http://futureofsourcing.com/covid-19-proves-why-its-time-to-put-the-supply-chain-on-autopilot"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Mon, 11 Jan 2021 19:30:41 +0000 Ali Raza 1907 at http://futureofsourcing.com http://futureofsourcing.com/covid-19-proves-why-its-time-to-put-the-supply-chain-on-autopilot#comments