Future of Sourcing - COVID-19 http://futureofsourcing.com/tags/covid-19 en 2023 FOSA Finalists http://futureofsourcing.com/2023-fosa-finalists <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/1690394054577.jpeg"><a href="http://futureofsourcing.com/sites/default/files/articles/1690394054577.jpeg" title="2023 FOSA Finalists" class="colorbox" rel="gallery-node-2310-IXtszaHERWs"><img typeof="foaf:Image" src="http://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/1690394054577.jpeg?itok=GgF-hnia" width="800" height="440" alt="" 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"> <p align="center" style="font-size: 13.008px;"><strong>2023 FOS Finalists</strong></p> <div>&nbsp;</div> </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"> <p align="center">&nbsp;</p> <p><strong><u>Innovations in Digitization</u></strong></p> <p><strong>Dräeger</strong>&nbsp;-&nbsp;Using Smart Processes to Create Resilient Supply Chains</p> <p>&nbsp;</p> <p><strong>Dubai Municipality</strong>&nbsp;&ndash;&nbsp;&ldquo;Utilitizing Digital Transformation to Facilitate and Maximize Effectiveness of RPA in Supplier Performance Evaluation&quot;</p> <p>&nbsp;</p> <p><strong>GEP</strong>&nbsp;&ndash;&nbsp;Top Asian Retailer Transforms Procurement Operations By Deploying GEP SMART</p> <p>&nbsp;</p> <p><strong>GEP</strong>&nbsp;&ndash;&nbsp;How GEP Helped Retailer Transform Its Procure-to-Pay Operations In Stores</p> <p>&nbsp;</p> <p>&nbsp;</p> <p><strong><u>Innovations in Environmental, Social and Corporate Governance (ESG)</u></strong></p> <p><strong>bp / JLL Vested Sources, a University of Tennessee Case Study</strong>&nbsp;&ndash;&nbsp;bp and JLL: Reimagining Real Estate and Facilities Management Outsourcing</p> <p>&nbsp;</p> <p><strong>Danfoss LLC</strong>&nbsp;&ndash;&nbsp;Leading by Example: Decarbonization Through Circularity at Danfoss Turbocor&reg;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p><strong><u>Innovations in Governance/Compliance</u></strong></p> <p><strong>American Tire Distributors</strong>&nbsp;&ndash;&nbsp;Streamlining Success: Unleashing Efficiency and Compliance with Contracting Excellence</p> <p>&nbsp;</p> <p><strong>Applied Materials</strong>&nbsp;&ndash;&nbsp;&ldquo;How Applied Materials Quickly Responded to Evolving Industry Regulations to Ensure Compliance and Data Protection&rdquo;</p> <p>&nbsp;</p> <p><strong>Danfoss LLC</strong>&nbsp;&ndash;&nbsp;Leading by Example: Decarbonization Through Circularity at Danfoss Turbocor&reg;</p> <p>&nbsp;</p> <p><strong>RapidRatings</strong>&nbsp;&ndash;&nbsp;Enabling Private Company Visibility Through Financial Health: RapidRatings&#39; Drive for Transparency and Collaboration Among Business Partners</p> <p>&nbsp;</p> <p>&nbsp;</p> <p><strong><u>Innovations in Outsourcing</u></strong></p> <p><strong>GEP</strong>&nbsp;&ndash;&nbsp;How GEP Drove Post-M&amp;A Cost Savings for a Fortune 100 Pharma Company</p> <p>&nbsp;</p> <p><strong>GEP</strong>&nbsp;&ndash;&nbsp;GEP Helps U.S. Retail Chain Manage Costs &amp; Risks By Transforming Procurement</p> <p>&nbsp;</p> <p><strong>GEP / Bayer AG</strong>&nbsp;&ndash;&nbsp;Bayer partners with GEP; jointly transform procurement with efficient operating model</p> <p>&nbsp;</p> <p><strong>RapidRatings</strong>&nbsp;&ndash;&nbsp;Enabling Private Company Visibility Through Financial Health: RapidRatings&#39; Drive for Transparency and Collaboration Among Business Partners</p> <p>&nbsp;</p> <p>&nbsp;</p> <p><strong><u>Innovations in Sourcing</u></strong></p> <p><strong>American Tire Distributors</strong>&nbsp;&ndash;&nbsp;Streamlining Success: Unleashing Efficiency and Compliance with Contracting Excellence</p> <p>&nbsp;</p> <p><strong>bp / JLL Vested Sources, a University of Tennessee Case Study</strong>&nbsp;&ndash;&nbsp;bp and JLL: Reimagining Real Estate and Facilities Management Outsourcing</p> <p>&nbsp;</p> <p><strong>Calculum Inc.</strong>&nbsp;&ndash;&nbsp;How Calculum&rsquo;s ADA Platform allows leading organizations to optimize their payment terms, aligned to their competitors and unlock working capital and generate millions in free cash flow.</p> <p>&nbsp;</p> <p><strong>GEP / Bayer AG</strong>&nbsp;&ndash;&nbsp;Bayer partners with GEP; jointly transform procurement with efficient operating model</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p><strong><u>Innovations in Supplier Diversity</u></strong></p> <p><strong>American Tire Distributors</strong>&nbsp;&ndash;&nbsp;From Zero to Hero: Recognizing ATD&#39;s Outstanding Supplier Diversity Achievements in less than 3 Years</p> <p>&nbsp;</p> <p><strong>BGIS Global Integrated Solutions</strong>&nbsp;&ndash;&nbsp;Inclusion Excellence: The BGIS Journey to a World-Class SDI Program</p> <p>&nbsp;</p> <p><strong>BlueCross BlueShield of Tennessee</strong>&nbsp;&ndash;&nbsp;&ldquo;How BCBST Transformed our Spending Habits to Mirror our Employee and Customer Demographics&rdquo;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p><strong><u>Innovations in Supplier Performance</u></strong></p> <p><strong>Dubai Municipality</strong>&nbsp;&ndash;&nbsp;&ldquo;How Dubai Municipality best utilizes Digital Transformation to Facilitate and Maximize Effectiveness of Robotic Process Automation in Supplier Performance Evaluation&quot;.</p> <p>&nbsp;</p> <p><strong>SalesLayer</strong>&nbsp;&ndash;&nbsp;Adding a Sales Layer to B2B Networks to Simplify, Facilitate, &amp; Expand Supplier Participation</p> <p>&nbsp;</p> <p><strong>Simfoni</strong>&nbsp;&ndash;&nbsp;How Simfoni&#39;s AI-Driven Tech Brings Efficiency and Strategic Advantage to Customers</p> <p>&nbsp;</p> <p><strong>VSP Vision</strong>&nbsp;&ndash;&nbsp;Supplier management at VSP Vision helps retain revenue, drive innovation and reduce risks.</p> <p>&nbsp;</p> <p>&nbsp;</p> <p><strong><u>Innovations in Sustainability</u></strong></p> <p><strong>Dräeger&nbsp;</strong>&ndash;&nbsp;Using Smart Processes to Create Resilient Supply Chains</p> <p>&nbsp;</p> <p><strong>SAP / DSM - Firmenich</strong>&nbsp;&ndash;&nbsp;How Royal DSM and SAP Digitalized Global Procurement Processes for Strategic Source-to-Pay Capabilities and Sustainability</p> <p>&nbsp;</p> <p><strong>Safety Projects International, Inc.</strong>&nbsp;&ndash;&nbsp;&ldquo;How a simple initiative helped save millions of lives from the Aids Epidemic.&rdquo;</p> <p>&nbsp;</p> <p><strong>Scoutbee</strong>&nbsp;&ndash;&nbsp;&ldquo;How Scoutbee Drives Supply Base Resilience and Competitiveness with the AI-powered Supplier Intelligence Platform.&rdquo;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p><strong><u>Innnovations in Talent Management</u></strong></p> <p><strong>Open Assembly / UST</strong>&nbsp;&ndash;&nbsp;Open Talent - Opening The Door To Boundless Growth for UST by winning the battle for talent</p> <p>&nbsp;</p> <p><strong>Safety Projects International, Inc.</strong>&nbsp;&ndash;&nbsp;&ldquo;How a simple initiative helped save millions of lives from the Aids Epidemic.&rdquo;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p><strong><u>Innovations in Third Party Management</u></strong></p> <p><strong>Applied Materials</strong>&nbsp;&ndash;&nbsp;&ldquo;How Applied Materials Quickly Responded to Evolving Industry Regulations to Ensure Compliance and Data Protection&rdquo;</p> <p>&nbsp;</p> <p><strong>ICON</strong>&nbsp;&ndash;&nbsp;How ICON Unified Departments and Transformed Audit Practices with a Best In Class Third-Party Risk Program</p> <p>&nbsp;</p> <p><strong>Pfizer</strong>&nbsp;-&nbsp;How Pfizer&rsquo;s External Sourcing Colleagues Helped Advance the Discovery, Development and Delivery of the First FDA-Approved Oral Therapy for COVID-19</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p><strong>Individual Finalists:</strong></p> <p>&nbsp;</p> <p><strong>Rising Star</strong></p> <p>Jen Andretta - Simfoni</p> <p>Mitch Gustafson - NationsBenefits</p> <p>Martin Rand &ndash; Pactum AI</p> <p>Priyanka Mouli Shankar &ndash; Applied Materials</p> <p>Mark Raffan &ndash; Negotiations Ninja</p> <p>Jason Steel - The Boeing Company</p> <p>&nbsp;</p> <p><strong>Sourcing Star</strong></p> <p>Adrian Dragomir - REI</p> <p>Peder Gustafson &ndash; United Health Group</p> <p>Q Noor Crocket &ndash; American Tire Distributors</p> <p>Amanda Prochaska &ndash; Wonder Services</p> <p>David Romo-Garza -&nbsp;Airbus U.S. Space and Defense</p> <p>Cheryl Willis &ndash; Applied Materials</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/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/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/eprocurement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">eProcurement</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/request-for-proposal-rfp" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Request for Proposal (RFP)</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="2023 FOSA Finalists - Future of Sourcing" addthis:url="http://futureofsourcing.com/2023-fosa-finalists"><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> Fri, 28 Jul 2023 20:10:49 +0000 David Scherzer 2310 at http://futureofsourcing.com http://futureofsourcing.com/2023-fosa-finalists#comments Emergency Proof Your Procurement Processes http://futureofsourcing.com/emergency-proof-your-procurement-processes-0 <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/Emergency%20Proof%20Your%20Procurement%20Processe.png"><a href="http://futureofsourcing.com/sites/default/files/articles/Emergency%20Proof%20Your%20Procurement%20Processe.png" title="Emergency Proof Your Procurement Processes" class="colorbox" rel="gallery-node-2307-IXtszaHERWs"><img typeof="foaf:Image" src="http://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Emergency%20Proof%20Your%20Procurement%20Processe.png?itok=3mnTOZEa" width="624" height="325" alt="Emergency Proof Your Procurement Processes" 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>Emergency Proof Your Procurement Processes</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="/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"> <p>In March 2020, Pedernales Electric Cooperative (PEC)&mdash;the largest electric cooperative in the United States, servicing more than 346,000 accounts in Central Texas&mdash;had to go from being fully in-office to fully remote virtually overnight, like many organizations across North America during the COVID-19 health crisis.</p> <p>Procurement has historically been one of the last organizational functions to migrate to the cloud. Fortunately, PEC was already in the midst of digitally transforming their paper and email-based workflows and was able to accelerate their eProcurement adoption to successfully work from home (and ultimately see a <a href="https://gobonfire.com/wp-content/uploads/CaseStudy-PEC-v2021.pdf" target="_blank">150% increase</a> in the RFPs they were able to run in 2020).&nbsp;</p> <p>Less than a year later, in February 2021, Texas was at the center of an unprecedented winter storm that left more than 4.5 million homes and businesses across the state without power for several days. Between February 11 and 18, PEC line worker crews completed 16-hour shifts to restore power to the citizens of Central Texas. The Texas State Senate adopted <a href="https://www.pec.coop/news/2021/lineworkers-honored-for-service/" target="_blank">Senate Resolution 85</a> to honor the frontline workers who responded to the power crisis.</p> <p>In times of calamity&mdash;whether it&rsquo;s a natural disaster, a pandemic, an economic crash or something else entirely&mdash;organizations rely on their procurement teams to source the goods and services they need to weather the storm (sometimes, in the case of PEC, quite literally). PEC&rsquo;s adaptation to two major crises in less than one year serves as a reminder to procurement and sourcing professionals everywhere that COVID-19 isn&rsquo;t the last emergency you&rsquo;ll need to tackle head-on.</p> <p>Of course, there&rsquo;s no way to predict what kind of crisis your organization will need to face next. After all, who among us could have predicted that a global pandemic would impact our lives the way that it has? But there are steps you can take now to emergency-proof your procurement operations and workflows for whatever the future holds.</p> <h2>Reevaluate &ldquo;Patchwork&rdquo; Systems</h2> <p>As organizations across North America needed to make quick changes to respond to the COVID-19 health crisis and adjust to remote work, many procurement teams found themselves stitching together a myriad of tools and software inadvertently creating a &ldquo;patchwork procurement&rdquo; process. That is, instead of using one centralized tool for all procurement activities, these organizations use a patchwork system of software and tools that have been molded to fit the needs of procurement.</p> <p>Here are some tell-tale signs that you might be leveraging patchwork procurement:</p> <ul> <li>You receive requests through a Google form</li> <li>You accept vendor submissions through email</li> <li>You evaluate bids and RFPs using Microsoft Excel or Google Sheets</li> <li>You store contracts in a shared drive or Dropbox</li> </ul> <p>Patchwork procurement might seem like a step in the direction of truly digitized procurement, but it&rsquo;s actually a liability in an emergency. The more systems you use, the more you are at risk of duplicating processes, misplacing files, opening the door for human error, or even increasing the risk of your organization being the subject of cyber attack or a personal data breach. When you are racing the clock to find new vendors during times of supply chain disruptions, or re-prioritizing your pipeline to address urgent requests, you don&rsquo;t have the time to triple check your (and your evaluators&rsquo;) work. Not to mention, patchwork procurement systems can lead to a confusing and inconsistent vendor experience, time wasted training non-procurement users on disparate systems, and a lack of transparency and visibility for your stakeholders.</p> <p>To better prepare for future emergencies, it&rsquo;s time to reassess your patchwork procurement processes. <a href="https://gobonfire.com/blog/is-now-the-time-to-advocate-for-digital-procurement-tools/" target="_blank">eProcurement</a> can help, but not all platforms are created equal. In order to evaluate sustainability over the long haul, it&rsquo;s worth considering how well the technology you&rsquo;re evaluating helps you do the following:</p> <ul> <li>Connect, digitize and manage your operations end-to-end, from intake to contract management</li> <li>Centralize your project pipeline, so everything is easily accessible in one place</li> <li>Make processes intuitive and easy-to-use for all internal clients</li> <li>Accelerate, rather than impede, project lifecycles</li> <li>Provide full transparency and robust reporting</li> </ul> <h2>Develop Your Vendor Database and Improve the Vendor Experience</h2> <p>Remember at the beginning of COVID-19 when things like PPE and hand sanitizer were practically impossible to source? Organizations such as <a href="https://gobonfire.com/blog/procurement-during-covid-19-experts-share-their-4-lessons-learned/" target="_blank">St. Joseph&rsquo;s Health System</a> had to get creative when overbed tables went out of stock nationwide because so many long-term care facilities could no longer allow communal dining; thankfully, classic folding TV tables&mdash;a lead St. Joseph&rsquo;s Health System found thanks to the recommendations from their established vendors&mdash;did the trick when in a pinch.</p> <p>The way you approach your relationships with vendors is key to navigating any future emergency-related supply chain disruptions. Investing in a <a href="https://gobonfire.com/blog/how-bonfire-supports-emergency-procurements-during-covid-19-and-beyond/" target="_blank">vendor database</a> that contains a pre-existing pool of qualified vendors, and can suggest vendors based on commodity codes, can help with this process of developing and managing relationships with a wide variety of vendors.</p> <p>Improving your vendor experience is also key. Is finding information, submitting complete responses, and getting help when they need it straightforward and easy to do? Are you able to easily create and publish public notices and addenda to your open opportunities? Ensuring these boxes are checked will result in a more frictionless experience for your vendors.</p> <h2>Efficiency and Adaptability are the New Normal</h2> <p>In <a href="https://gobonfire.com/wp-content/uploads/Survey-Results_-Public-Procurement-Priorities-and-Strategies-for-2021.pdf" target="_blank">a recent survey</a> conducted by Bonfire, when public sector procurement professionals were asked what their team&rsquo;s biggest priority for 2021 was, 27% of them said increasing the speed and efficiency of their process&mdash;making it the number-two priority for procurement teams, right after cutting costs and reducing budget.</p> <p>To address the initial emergency response during COVID-19, almost every procurement team across North America had to adjust their processes to source goods and services as fast as possible amidst constantly changing conditions. The value of an adaptable and agile process goes beyond emergency procurement, too. PEC, for instance, once needed to award a contract the same day before energy prices changed. Features in their eProcurement software allowed the PEC procurement team to send out NDAs and confidential files to each vendor individually, enabling a successful 18-hour turnaround time.</p> <p>The pandemic demonstrated that, when push comes to shove, procurement can act fast&mdash;and it looks like those expectations are here to stay. The Bonfire <a href="https://gobonfire.com/wp-content/uploads/Survey-Results_-Public-Procurement-Priorities-and-Strategies-for-2021.pdf" target="_blank">survey data</a> also found that 28% of procurement professionals believe their stakeholders and internal clients expect faster results now than they did before COVID-19. For both the public and private sector, the &ldquo;next normal&rdquo; of procurement must involve re-examining your operations, making them faster and more agile for the long-haul&mdash;not just in emergencies&mdash;to meet these new expectations. The result will be a faster, stronger and more productive organization now, and prepared for any emergency in the future.</p> <p>The reality is that COVID-19 has transformed the path of procurement and sourcing forever. Procurement teams around the world had to adjust to unprecedented challenges, such as navigating supply chain shortages, introducing new technologies, and working from home for possibly the first time. Sourcing professionals can&rsquo;t just wait for things to go &ldquo;back to normal,&rdquo; considering the past year brought to light many gaps to procurement emergency preparedness. The steps your procurement team takes now to learn from the COVID-19 health crisis are imperative to preparing your organization for future emergencies.</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/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/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/eprocurement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">eProcurement</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/request-for-proposal-rfp" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Request for Proposal (RFP)</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="Emergency Proof Your Procurement Processes - Future of Sourcing" addthis:url="http://futureofsourcing.com/emergency-proof-your-procurement-processes-0"><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, 17 Jul 2023 15:01:00 +0000 Omar Salaymeh 2307 at http://futureofsourcing.com http://futureofsourcing.com/emergency-proof-your-procurement-processes-0#comments Is This the End of the Great Resignation? http://futureofsourcing.com/is-this-the-end-of-the-great-resignation <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/Is%20This%20the%20End%20of%20the%20Great%20Resignation.jpg"><a href="http://futureofsourcing.com/sites/default/files/articles/Is%20This%20the%20End%20of%20the%20Great%20Resignation.jpg" title="What is the state of the Great Resignation for employers and job seekers?" class="colorbox" rel="gallery-node-2190-IXtszaHERWs"><img typeof="foaf:Image" src="http://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Is%20This%20the%20End%20of%20the%20Great%20Resignation.jpg?itok=RDowy3x-" width="624" height="325" alt="What is the state of the Great Resignation for employers and job seekers?" 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"> <p><em>What is the state of the Great Resignation for employers and job seekers asks Mike Gibbs, CEO of Go Cloud Careers. He looks at the factors that originally drove people from their jobs and the transition to a&nbsp; focus on advancement.</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="/dollars-talk-but-great-leaders-keep-the-best-workers-from-walking">Dollars Talk, but Great Leaders Keep the Best Workers From Walking</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>There are a lot of factors that led up to the labor trend that has come to be known as the Great Resignation, including some that were in play before the pandemic began.</p> <p>For example, the baby boomers were an aging demographic starting to <a href="https://www.forbes.com/sites/jackkelly/2021/10/01/baby-boomers-are-leaving-the-workforce-to-live-their-best-lives-in-a-silver-tsunami-great-retirement-trend/?sh=49fee18260bd" target="_blank">retire</a> during this season. Additionally, there&rsquo;s a population migration of people leaving jobs in high-tax or expensive-to-live areas such as New York City and the San Francisco Bay area to relocate to places like Texas and Florida where they can find either lower taxes, a lower cost of living or a more friendly business environment. When the circumstances of the pandemic were added to these factors, it made things a lot worse.</p> <h1>Tech and Health Care Workers Pushed to Their Limits</h1> <p>Initially, the pandemic affected two sets of employees who were pushed to their limits: health care workers and technology workers. <a href="https://www.healthline.com/health-news/the-shadow-pandemic-covid-19s-impact-on-healthcare-workers-mental-health" target="_blank">Health care</a> professionals were working non-stop at hospitals caring for Covid patients, especially when we did not have the therapeutics to treat the disease.</p> <p>IT professionals were also taxed. Prior to the pandemic, we were used to people working in the office. But out of nowhere, IT professionals were called upon to create remote access environments to allow work to continue during the pandemic. This required the creation of a new technology infrastructure and supporting a work-from-home workforce versus an in-office workforce. To accomplish this, technology professionals had extremely huge demands placed on them for the past two years.</p> <p>Predominantly, the industries that saw the most change were healthcare and IT, but not exclusively. Workers across a wide range of industries have been affected.</p> <h2>New Work Environments Add to Workplace Tension</h2> <p>We went from working in normal office settings during normal office hours to much more stressful environments. Now it seems as if we are in meetings 24 hours a day, seven days a week. Before the shift to remote offices, we would go to the office and we would leave the office at five o&#39;clock, six o&#39;clock or even seven o&#39;clock. Regardless of the time, eventually we would go home.</p> <p>When you work from home, however, there is no stopping. You could be getting phone calls at six o&#39;clock in the morning and you can be on Zoom meetings until midnight. We are at many more meetings because the managers can&rsquo;t see what employees are doing during the workday like they could in the office. We have no boundaries, which means people are asking us, calling us and texting us 24 hours a day.</p> <p>The work overload we experienced in this new environment &ndash; being constantly on-call and always in meetings &ndash; has been challenging for some people. The socialization that occurred at work disappeared. When you are not able to hang out by the water cooler and talk to each other, you are always going to be working. Without this socialization, we went from spending our days in a half-work, half-social place to a whole-work place with no boundaries.</p> <h2>Many Workers Want Better Pay and Conditions</h2> <p>As the controls put in place because of the pandemic began to lift, we started to see workers looking for different work situations. Instead of short-term contract situations, they started searching for long-term positions.</p> <p>People were also looking to leave lower-paying jobs in the aftermath of the pandemic. A great reshuffling occurred in the hotel and the food industry where people are looking for higher-paying jobs. We have seen a migration from lower-paying jobs toward higher-paying jobs, and a migration from in-office jobs to work-from-home jobs.</p> <h2>Cost of Living Increases May Drive Additional Shifts</h2> <p>Now we are in a new environment with new circumstances that have the potential to prolong the Great Resignation. This hyper-inflationary state will cause one of two things to occur. Organizations can make <a href="https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/inflation-continues-to-surge-affecting-wage-and-benefits-planning.aspx" target="_blank">strides</a> to keep employees by increasing salaries. This would require organizations to raise the prices of their goods and services to provide resources to accommodate the higher salaries, which will cause runaway inflation.</p> <p>If organizations were able to increase wages to keep up with the inflation rate, we would see employees staying in the office. If not, then employees are effectively taking an eight-to-10% pay cut with the current aggregate rates of inflation. That would result in many more people quitting their jobs and looking for other opportunities.</p> <p>In addition, we are starting to see people called back to the office. This could also result in more resignations. There are people who are <a href="https://www.cnn.com/2022/02/16/success/pew-survey-covid-affect-on-work-from-home/index.html" target="_blank">scared</a> to go to the office due to health and other considerations. People are quitting their jobs just from the fear of going to the office and looking for work that allows them to continue to be remote.</p> <p>From increased workloads to new salary demands to new workplace expectations, there are many factors that could prolong the creation of environments in which the Great Resignation can continue. We may have seen the worst of it, but we have not seen the end of it.</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/talent-management" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Talent Management</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/remote-work" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">remote work</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></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="Is This the End of the Great Resignation? - Future of Sourcing" addthis:url="http://futureofsourcing.com/is-this-the-end-of-the-great-resignation"><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> Fri, 17 Jun 2022 02:00:00 +0000 Mike Gibbs 2190 at http://futureofsourcing.com http://futureofsourcing.com/is-this-the-end-of-the-great-resignation#comments Shipper-Owned Containers: The Future of Shipping in a Post-Pandemic World http://futureofsourcing.com/shipper-owned-containers-the-future-of-shipping-in-a-post-pandemic-world <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/Shipper-Owned-Containers.jpg"><a href="http://futureofsourcing.com/sites/default/files/articles/Shipper-Owned-Containers.jpg" title="The disruptions in the shipping container industry driven by COVID-19 have created the need for alternate sourcing strategies." class="colorbox" rel="gallery-node-2161-IXtszaHERWs"><img typeof="foaf:Image" src="http://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Shipper-Owned-Containers.jpg?itok=Btp67Pzz" width="624" height="325" alt="The disruptions in the shipping container industry driven by COVID-19 have created the need for alternate sourcing strategies." 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"> <p><em>The disruptions in the shipping container industry driven by COVID-19 have created the need for alternate sourcing strategies says Christian Roeloffs, Founder and CEO of Container xChange. One of these strategies is Shipper-Owned Containers (SOCs), which can lower costs, increase flexibility and offer more reliability.&nbsp; &nbsp;</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="/sourcing-disruption-to-continue-in-2022">Sourcing Disruption to Continue In 2022</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>Before the onset of the pandemic, the shipping industry operated with an abundance of capacity at par with the demand patterns. More than 80% of the market needs were met by three major shipping alliances &mdash; 2M (Maersk Line and Mediterranean Shipping Co.), THE Alliance (Ocean Network Express, Hapag-Lloyd and Yang Ming), and OCEAN (CMA CGM/APL, Cosco Shipping and Evergreen Line).</p> <p>But the pandemic plunged the world into a desperate tussle between supply and demand. Trade flows to and from major hotspots were halted and shippers scrambled through other options for sourcing their goods.</p> <p>What are these alternate sourcing strategies? What drove this shift of preference in the industry? And how long will this shift sustain in a post-pandemic world? We discuss these questions and more up ahead in this article.</p> <h1>Shipping Disruptions Caused by COVID-19</h1> <p>The pandemic had socio-economic repercussions globally, more so in the international trade and supply chain networks. The busiest commercial ports in regions of China and the U.S. had restricted vessel flow. This resulted in a huge setback to global trade operations.</p> <ul> <li>Container shortages and disruption in the entire supply chain haunted shipping companies for a long time (and continue to do so).</li> <li>Predicting the availability of equipment became harder due to fluctuating demand trends, especially on previously busy routes.</li> <li>Shippers were also burdened with a hike in detention and demurrage charges at major ports globally.</li> <li>On the sustainability front, the shipping and logistics industry was exploring alternate sources of fuel (with low sulfur content). So, vessels were undergoing retrofitting. But the process came to a standstill due to the low supply of workforce during the pandemic, thus further hampering vessel flow.</li> <li>Other challenges posed by the pandemic included labor shortages, excessive surcharge by carriers and lack of transparency across the supply chain.</li> </ul> <p>This made over <a href="https://www.container-xchange.com/blog/global-container-logistics-players-wary-of-the-industrys-future-in-2022/" target="_blank">75% of freight companies</a> across the world rethink their existing business and operational strategies, especially related to sourcing.</p> <p><img alt="Awareness of Shipper-Owned Containers" src="https://futureofsourcing.com/sites/default/files/Shipper-Owned-Containers-Awareness.png" style="width: 500px; height: 327px;" /></p> <h2>A Need to Change Sourcing Strategies</h2> <p>As the regulatory bodies continued talks on adapting and tweaking existing policies to ease trade restrictions, shippers and freight forwarders also deliberated ways to bridge this burgeoning gap of supply and demand.</p> <p>At the center of these deliberations was a heightened interest in Shipper-Owned Containers (SOCs).</p> <p>Acceptance of SOCs by major freight forwarders grew by 200% over the past three COVID-driven years. <em>(Source: Mystery Shopping SOC Report 2021 by Container xChange)</em></p> <p>Why? Because SOCs offer shippers the flexibility of managing equipment supply and saving costs on inland transportation. As equipment supply slowed down due to disruptions by COVID-19, SOCs paved the way for faster shipments.</p> <h2>A Shift Toward SOCs in the Shipping Industry</h2> <p>&ldquo;Due to the flexibility and availability of SOC equipment, the operator can work on new routes, and receive and release equipment for loading in regions convenient for them,&rdquo; said Alexander Gnedov, CEO of Conway.</p> <p>Although shipping companies try to make Carrier-Owned Contrainers (COCs) available for major routes, supply has seen a major decline as compared to the pre-COVID levels. In a recent survey conducted by Container xChange in Jan 2022, 25% of the 500 freight industry respondents considered using SOCs for sourcing in 2022.</p> <p><img alt="Rising Awareness of Shipper-Owned Containers" src="https://futureofsourcing.com/sites/default/files/Shipper-Owned-Containers-Rising-Awareness.png" style="width: 580px; height: 682px;" /></p> <p>SOCs are becoming more acceptable in the industry due to three major reasons: cost, flexibility and convenience. Here&rsquo;s why shippers prefer using SOCs for their daily operations:</p> <ol> <li>Shipper-owned containers (SOCs) are more reliable as compared to COCs because their availability is predictable. SOCs are also available in landlocked regions or smaller ports.</li> <li>The cost of loading and transporting goods to the equipment location adds up to the freight costs of the shipper. This problem is overcome by using SOCs. Shippers can easily plan their routes, negotiate with trucking companies and optimize their costs.</li> <li>SOCs are also an environmentally friendly option because they reduce empty truck runs and fuel waste.</li> <li>Another compelling reason is the low detention and demurrage costs. Shippers often face delays at the port, due to customs clearance, lack of space in warehouses or even vessel traffic. With SOC containers, costs arising out of such delays do not apply.</li> <li>SOCs can help shippers avoid extra freight charges when shipping to surplus locations. COCs are often priced higher because forwarders don&rsquo;t want to carry the cost of empty container moves from such locations.</li> </ol> <p>And yet&hellip;</p> <h2>SOCs Are Still Far From Common Usage</h2> <p>There&rsquo;s a steep increase in awareness around SOCs in the shipping industry.</p> <p>In the mystery shopping research conducted by xChange, only 35% of respondents knew of SOCs in 2019. This number grew to 90% in 2021. However, acceptance rates still do not match the awareness rates of SOCs.</p> <p>Now, as we enter a post-pandemic recovery phase, supply trends are expected to rise again. But, we are yet to see what kind of impact it will have on SOC acceptance in the industry.</p> <p>According to industry stalwarts, demand for SOCs will flourish but there&rsquo;s still a need for a trained team to manage such shipments. Management effort and cost can hike easily in case of return trips. Thus, shippers need to streamline their process flows to get full advantage of SOCs.</p> <p>The market is still volatile and tiptoes around these alternate sourcing strategies. On some days, you may easily get quotes for SOC shipments. On others, you will have a hard time finding slots because freight companies prefer transporting their own equipment.</p> <p>Although there are still many freight forwarders who do not offer options for using SOCs, the scenario is changing rapidly.</p> <h2>Summing Up</h2> <p>With the industry getting used to a new normal, there are many adaptations to be made. However, as we&rsquo;ve seen in the past years, the shipping industry is growing and evolving as time goes.</p> <p> With these new challenges, new technologies and container sourcing strategies are becoming increasingly important for the companies to rethink. SOC containers are just one of those solutions that are growing in increasing popularity in the shipping industry.</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/shipping-containers" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Shipping Containers</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/shipper-owned-containers" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Shipper-Owned Containers</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="Shipper-Owned Containers: The Future of Shipping in a Post-Pandemic World - Future of Sourcing" addthis:url="http://futureofsourcing.com/shipper-owned-containers-the-future-of-shipping-in-a-post-pandemic-world"><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, 31 Mar 2022 17:01:13 +0000 Christian Roeloffs 2161 at http://futureofsourcing.com http://futureofsourcing.com/shipper-owned-containers-the-future-of-shipping-in-a-post-pandemic-world#comments Sourcing Disruption to Continue In 2022 http://futureofsourcing.com/sourcing-disruption-to-continue-in-2022 <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/Sourcing%20Disruption%20to%20Continue%20In%202022%20%20Breteau.jpg"><a href="http://futureofsourcing.com/sites/default/files/articles/Sourcing%20Disruption%20to%20Continue%20In%202022%20%20Breteau.jpg" title="While 2021 was a bust for many who hoped that supply chain disruptions would abate, it appears the trend will continue well into 2022." class="colorbox" rel="gallery-node-2144-IXtszaHERWs"><img typeof="foaf:Image" src="http://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Sourcing%20Disruption%20to%20Continue%20In%202022%20%20Breteau.jpg?itok=8Fo4AHZ6" width="624" height="325" alt="While 2021 was a bust for many who hoped that supply chain disruptions would abate, it appears the trend will continue well into 2022." 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"> <p><em>While 2021 was a bust for many who hoped that supply chain disruptions would abate, it appears the trend will continue well into 2022 says QIMA&#39;s&nbsp;Sébastien Breteau. He shares recent data that sheds light on sourcing diversification activities in China, Vietnam and India, as well as troubling data on human rights and worker safety.</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="/five-technologies-to-future-proof-supply-chain-inspections">Five Technologies to Future Proof Supply Chain Inspections</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"> <h1>Sourcing Disruption to Continue In 2022&nbsp;</h1> <p>A volatile 2021 taught businesses a tough lesson about the fragility of supply chains. Just when many thought we were out of the woods, the promising trends toward recovery reversed. Supply chains quickly snapped amid the resurgence of COVID-19 outbreaks, China&rsquo;s utility crisis, logistics woes, labor issues, and mass supply shortages.</p> <p>In more positive news, consumer demand is strong. Even against records shortages, consumers splurged during the holiday season, and spending hit an all-time high in the United States according to the <a href="https://www.cnbc.com/2021/12/03/holiday-shopping-2021-spending-set-to-blow-past-records-nrf-says.html" target="_blank">National Retail Federation</a> (NRF). After predicting a year-on-year increase of 8.5% to 10.5%, NRF revised this figure to a whopping 11.5%, affirming consumer appetite to spend.</p> <p>However, with supply still short, this means unprepared businesses are missing out on a big opportunity to seize consumer demand.</p> <p>While some of the media headlines positioned the supply chains&rsquo; issues as a &ldquo;<a href="https://www.npr.org/2021/12/13/1063901970/the-toymakers-supply-chain-nightmare-before-christmas" target="_blank">nightmare before Christmas</a>,&rdquo; recent data from QIMA suggests that the disruption is poised to linger long into 2022. Businesses should take note of the following trends, as they are projected to shape the sourcing landscape this year.</p> <h2>China Sourcing Veers Off Track, but Recovery in 2022 is Still Possible</h2> <p>Reflecting a pattern observed in many of Asia&rsquo;s sourcing markets in 2021, China flaunted a remarkable rebound in the first half of the year as it outpaced most other countries in containing the virus.</p> <p>While this success stuttered in Q3 onwards in Asia at large, the world&rsquo;s leading manufacturing market is showing itself to be even more resilient compared to its regional competition. Notably, inspection and audit demand in China exploded +21.5% in 2021 over 2020. This growth even trounced pre-pandemic 2019 by +13%.</p> <p>Unfortunately for China, though, the second half of 2021 proved disappointing for its giant manufacturing industry as widespread power outages shut down factories and stymied orders. Adding salt to the wound, the blackouts happened in September &ndash; just as factories were looking to fill holiday orders from their buyers.&nbsp;</p> <p>However, demand for inspection and audits in China rebounded relatively quickly in most major consumer goods categories, including textile/apparel, toys and homeware. An important exception was the electronics and electricals industry, which has seen inspection and audit demand diminish steadily since May 2021. This is happening as more electronic manufacturers feel the pain of the global semiconductor chip shortage.</p> <p>QIMA data on inspections and audits reflects caution from Western buyers, with buyers being hesitant to expand sourcing in China throughout 2021. Instead of returning to China in droves, the data suggests many buyers simply maintained their existing business relationships with Chinese manufacturers. Subsequently, China&rsquo;s share among the top-five sourcing regions of both U.S.- and EU-based buyers in 2021 remained at a three-year low.</p> <p>China&rsquo;s sourcing patterns in 2021 foreshadow a post-pandemic recovery that, while not being derailed completely, has veered off track. In addition, power outrages may remain a threat in upcoming months. Accompanying this threat, the upcoming Winter Olympics in Beijing may impose further manufacturing restrictions in northern China. Subsequently, while there is reason to be optimistic for China&rsquo;s sourcing footprint in 2022, buyers should nonetheless heed caution and be prepared for further disruption.</p> <h2>Vietnam&rsquo;s Boom and Bust Reflects Buyer Hesitation</h2> <p>The collapse of sourcing in Vietnam in 2021 sheds light on how volatile the modern global sourcing landscape is, revealing the compounding effects of pandemic-related disruptions.</p> <p>In the first half of 2021, Vietnam experienced a tremendous growth spurt as enthusiastic buyers from the West eagerly flocked back to a familiar sourcing market that had been enjoying much attention pre-pandemic. In January through June 2021 &ndash; a period where Vietnam was successfully containing the spread of the virus &ndash; QIMA recorded a robust +67% growth versus pre-pandemic 2019.</p> <p>This rosy success story was interrupted in late July by the arrival of the Delta variant, when the country entered a stifling lockdown period. The latest data from QIMA shows Vietnam&#39;s manufacturing industry remained sluggish through the end of the year, even though the virus containment measures were lifted in October.&nbsp;</p> <p>Sharp labor shortages are likely a factor in Vietnam&rsquo;s slow path to recovery, as factory staff left the cities en masse. This left a shocking shortage of over 100,000 workers in the south of Vietnam. As a result, in late November, over a third of factories in Vietnam were reported to be operating below 80% capacity. In many cases, orders were even being delayed by more than eight weeks.</p> <p>The footwear and apparel sector in Vietnam has been among the hardest hit by the lockdowns and accompanying labor shortages, with inspection and audit demand plummeting -29% year-over-year in the fourth quarter. As a result of this dramatic reversal of fortune, Vietnam inspections and audits grew by a modest 3% in the first half of 2021 compared to the double digit booms it tracked during the pre-pandemic period. Based on this lethargic rebound, Vietnam&#39;s recovery is expected to be gradual and should last well into 2022.</p> <h2>India Enjoys the Benefit of Sourcing Diversification</h2> <p>Even though <a href="https://thediplomat.com/2021/08/the-rcep-conundrum-japan-awaits-indias-return/" target="_blank">India infamously bowed out</a> of the recently launched Regional Comprehensive Economic Partnership (RCEP) free-trade agreement, it&rsquo;s nonetheless experiencing exciting new surges in sourcing. Acclaimed by experts as an increasingly attractive sourcing market among many product categories, recent QIMA data shows buyers are shifting their gaze from China and making India a preferred alternative sourcing market.</p> <p>When comparing 2021 to the pre-pandemic period, the South Asia region at large flaunted double-digit expansion in inspection and audit demand. But India, specifically, has emerged as the conclusive favorite &ndash; outperforming its neighbors and the region as a whole in three out of four quarters of the year.</p> <p>India&#39;s newfound success can be attributed to surging interest among U.S.-based brands by and large: QIMA survey data shows the share of buyers naming India among their top-five sourcing regions nearly doubled in 2021 compared to 2019.</p> <p>After crossing the 2021 finish line with an impressive overall +60% spike in inspection and audit demand compared to pre-pandemic 2019, this figure astoundingly jumped +129% among U.S.-based buyers. Now, the next test for India is whether it can combat the threat of Omicron and keep the momentum going in 2022.</p> <h2>Sourcing Volatility is Wreaking Havoc on Human Rights and Worker Safety</h2> <p>Against the turbulent headwinds of the pandemic, workers around the world face <a href="https://www.worldbank.org/en/news/press-release/2020/10/07/covid-19-to-add-as-many-as-150-million-extreme-poor-by-2021#:~:text=The%20COVID%2D19%20pandemic%20is,severity%20of%20the%20economic%20contraction.">rising poverty and mass job losses</a> estimated to be around four times that seen during the 2008-2009 global financial crisis, according to a report released last year by the <a href="https://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_766949/lang--en/index.htm">UN International Labour Organization</a>.</p> <p>Even though diversification helped many buyers navigate disruptions in the short term, 2021 saw ethical compliance in global supply chains crumble at an alarming rate. Factory scores clocked in at a four-year low and nearly a third (29%) of the factories QIMA audited were identified as being critically non-compliant and in need of immediate intervention. This represents the highest share since 2017.</p> <p>Due to specific challenges presented by the pandemic, violations were unsurprisingly extensive in areas related to health and safety. In this area, 2021 scores dropped -7.5% compared to 2020. QIMA also tracked rampant violations in the area of working hours and wages, with scores dropping -8% in 2021 compared to 2020.&nbsp;</p> <p>By geography, QIMA audit data indeed shows deteriorating ethical scores in many key sourcing markets &ndash; especially in Southeast Asia. For example, Myanmar is among the worst offenders in the world: its 2021 ethical scores plunged -18% compared to 2020.</p> <p>These disheartening trends in human rights and worker safety are perhaps all too unsurprising and familiar. Unfortunately, data from recent years have shown human rights and ethical compliance falling by the wayside more and more as businesses are forced to operate in survival mode, prioritize cost concerns and diversify sourcing to less familiar geographies.</p> <p>We saw ethical compliance drop first during the throes of the U.S.-China trade war. Now the decline in ethical compliance continues to rear its ugly head during the pandemic and the ongoing supply chain crunch.&nbsp;&nbsp;</p> <h2>Looking Ahead</h2> <p>After a devastating 2020, many had placed their bets on 2021 being a year of recovery and a return to the pre-pandemic normal. Despite some glimmers of hope, the year did not live up to these expectations. Moreover, by some measures of sourcing metrics &ndash; such as ethical compliance &ndash; the situation became even more bleak.&nbsp;&nbsp;</p> <p>Amid new COVID-19 variants, disparate vaccination rates and varying regional approaches to virus containment, the pandemic continues to burden global supply chains. When you combine this with the woes of raw material shortages, logistics hurdles, labor issues and rapidly escalating ethical risks, global supply chains are expected to remain volatile throughout 2022.</p> <p>The struggles businesses have faced thus far do not have to be all for naught, as there have been many teaching moments throughout the pandemic. If emerging supply chain trends are kept top of mind, businesses will be able to exercise higher levels of agility and resilience &ndash; and nimbly adapt to the everchanging sourcing landscape.</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/compliance" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Compliance</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/qima" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">QIMA</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></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="Sourcing Disruption to Continue In 2022 - Future of Sourcing" addthis:url="http://futureofsourcing.com/sourcing-disruption-to-continue-in-2022"><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/north-america" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">North America</a></div><div class="field-item odd"><a href="/regions/asiapacific" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Asia/Pacific</a></div></div></div> Thu, 03 Mar 2022 17:00:00 +0000 Sébastien Breteau 2144 at http://futureofsourcing.com http://futureofsourcing.com/sourcing-disruption-to-continue-in-2022#comments Do You Want Chips With That? http://futureofsourcing.com/do-you-want-chips-with-that <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/Do%20You%20Want%20Chips%20With%20That.jpg"><a href="http://futureofsourcing.com/sites/default/files/articles/Do%20You%20Want%20Chips%20With%20That.jpg" title="While the shortage of semiconductor chips has been dominating news headlines and roiling corporate earnings, demand for chips has been steadily increasing prior the the COVID-19 pandemic." class="colorbox" rel="gallery-node-2139-IXtszaHERWs"><img typeof="foaf:Image" src="http://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Do%20You%20Want%20Chips%20With%20That.jpg?itok=nRUz0d6q" width="624" height="325" alt="While the shortage of semiconductor chips has been dominating news headlines and roiling corporate earnings, demand for chips has been steadily increasing prior the the COVID-19 pandemic." 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"> <p><em>While the shortage of semiconductor chips has been dominating news headlines and roiling corporate earnings, demand for chips has been steadily increasing prior the COVID-19 pandemic. In this article,&nbsp;Baber Farooq, Senior Vice President, Head of Product Strategy, Procurement Solutions, SAP, and Gordon Donovan, Intelligent Spend Evangelist, SAP, identify the multiple factors that have led to the current crisis, discuss how we got here, and suggest how procurement and supply chain leaders can seek to avoid these types of events in the future.</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="/successful-digital-transformation-requires-an-inspection-of-all-business-processes">Successful Digital Transformation Requires an Inspection of all Business Processes</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 semiconductor industry has an atypical problem: <em>everybody wants their product</em>. Semiconductor chips are the basic component of the digital products used in our everyday lives, from mobile phones to televisions to washing machines, but it doesn&rsquo;t end with consumer products. As many as 169 industries have been impacted by the current mismatch in demand and supply.</p> <p>The effect on car makers has been widely reported, with several carmakers temporarily shutting down plants or announcing delays in production which drastically impacts their earnings. Some car lines have announced the elimination of high-end services requiring chips in systems like navigation and intelligent monitoring just to keep business going. &nbsp;</p> <p>While the pandemic has not helped matters, it is not the root of the problem. Even prior to COVID-19, demand patterns were increasing for many reasons, including the emergence of 5G, automakers prioritizing electric vehicles, and the drive for ubiquitous internet access. These and countless more reasons led to an increase in the number of internet-connected devices that rely on semiconductors.</p> <p>This article identifies multiple factors that have led to the current crisis, discusses how we got here, and suggests how procurement and supply chain leaders can seek to avoid these types of events in the future.</p> <h1>First, the Issues</h1> <h2>COVID-19</h2> <p>The chip shortage has been building since late 2020 due to multiple supply chain disruptions. The pandemic initially caused a drop in vehicle sales in the spring of 2020, leading automakers to cut orders of the chips needed for functions ranging from touchscreen displays to collision-avoidance systems. &nbsp;</p> <p>When demand for passenger vehicles rebounded sooner than expected, chip manufacturers had already committed to supplying their big consumer electronics and IT customers, which had seen a huge increase in demand due to more employees working from home and children home schooling via virtual classes.</p> <p><img alt="The long wait for semiconductor chips." src="https://futureofsourcing.com/sites/default/files/Semiconductor-Chips-SAP.png" style="width: 688px; height: 373px;" /></p> <p>These factors had a significant impact on the demand for laptops, tablets, screens and more. In Q4 2020, computer sales increased 26% over the previous year.&nbsp;</p> <p>CC Wei, CEO of Taiwan Semiconductor Manufacturing Company (TSMC) stated in April, &ldquo;We are witnessing a structural increase in underlying semiconductor demand as a multi-year megatrend of 5G and HPC-related applications are expected to fuel strong demand for our advanced technologies in the next several years. Covid-19 has also fundamentally accelerated the digital transformation, making semiconductors more pervasive and essential in people&#39;s lives.&rdquo;</p> <p>This is great news for semiconductor manufacturers, but worldwide lockdowns led to the shutdown of chip production facilities causing stock to drain. Just as the world started to return to a new normal state, the delta variant hit South East Asia especially hard, preventing manufacturers from getting back to full production capacity at the pace required to catch up.</p> <h2>Geopolitical Issues</h2> <p>In the 1990s, 37% of chips were made in U.S. factories. By 2020 that number had declined to just 12% with China emerging as the new leader in chip production. Rising tensions between East and West compounded this issue for Americans. Sales of semiconductors to Chinese firms were restricted by the U.S. and those companies began stockpiling chips from other providers essential to 5G smartphones and other products.</p> <p>At the same time, U.S. firms were cut off from chips made by China&rsquo;s Semiconductor Manufacturing International Corporation (SMIC) after the firm was blacklisted by the federal government.</p> <p>American automakers and medical device manufacturers have asked the U.S. government to subsidize construction of new domestic semiconductor manufacturing facilities. The government also plans to conduct a supply chain review of &ldquo;critical and essential goods&rdquo; to ensure proper measures are taken to manage this crisis and reliance on Chinese manufacturers.</p> <p>Beyond the U.S., there is a rising effort to increase production from all corners of the world. The European Union (EU) has set a target to double its output by 2030. In 2020 it made 10% of the world&rsquo;s chips. But 2030 is a long time off in the world of technology.</p> <p>Even TSMC, currently the world&rsquo;s largest semiconductor manufacturer, has increased its 2021 capital spending budget to U.S. $28 billion and is investing $100bn over the next three years to address the shortages. The problem is that the effects of these investments will take time, as there are no &ldquo;quick fixes&rdquo; to remedy this issue.</p> <h2>Extreme Events</h2> <p>What seems to be continuous weather events have also added to the issue. A huge winter storm in Texas shut down semiconductor factories. Taiwan experienced its worst drought in more than half a century, leading to problems among chip manufacturers located there that require large amounts of ultra-pure water in their factories and clean rooms.</p> <p>There are unforeseen events that also play a role. Last year a fire at a Japanese factory cut off the supply of a special fiberglass used in printed circuit boards. Earlier this year a fire at Renesas, one of the world&rsquo;s largest chip manufacturers, deeply impacted its production and it has taken much longer than expected to ramp back up.</p> <h2>Logistics</h2> <p>The Suez Canal blockage in March 2021, the lingering COVID outbreak and the shutdown of Yantian (one of the world&rsquo;s busiest ports) inevitably resulted in significant shipping delays. Shortages of shipping containers resulted in companies having to pay premiums for shipping. <em>The Wall Street Journal</em> recently reported that the price of shipping a 40-foot container to the West Coast of the U.S. has jumped 63% since the start of the year to $6,341 according to the Feigtos Baltic Index. This is more than three times the price from the previous year.&nbsp;</p> <p>Outrageous shipping costs such as these have driven demand toward airfreight, which was already taxed with high demand due to global shipments of the COVID-19 vaccine. In addition, capacity had been reduced due to the pandemic-related drop in passenger travel, meaning that there are fewer planes available to carry freight.</p> <p>In fact, global air cargo capacity in the first quarter of 2021 is 25% less than last year. Factor in the grounding of the Boeing 777 fleet due to engine failures, and you have severe capacity constraints.</p> <h2>Talent</h2> <p>A 2017 survey of U.S. semiconductor manufacturers found that 77% experienced a talent deficit within the industry and 14% stated that by 2020 it would be critical. In Japan they are struggling to fill jobs that require expertise in AI, quantum computing and other advanced technologies.</p> <p>The Japanese government announced a one trillion-yen investment in the industry. Taiwan is investing hundreds of millions into universities to fill the talent shortage and South Korea is also investing heavily in the industry. As mentioned earlier, the EU wants to double its capacity and is investing accordingly.</p> <p>But this will take some time and won&rsquo;t solve the problem alone. China is struggling to fill 400,000 semiconductor engineering roles and the U.S., as part of its investment in the semiconductor industry, could create more than 12 million additional jobs through 2026.</p> <h2>Procurement</h2> <p>Many organizations have pursued an aggressive lean-inventory practice that has left manufacturers vulnerable. Agile businesses, mainly electronics manufacturers, that had visibility into the bigger picture and longstanding relationships with semiconductor manufacturers have been able to continue with their production, while other industries have been forced to slow down, or even shut down, certain plants. &nbsp;</p> <p>This supply base reduction has left many organizations without access to suppliers, as those relationships have been neglected.</p> <h1>What Are the Solutions?</h1> <p>Semiconductor suppliers are working to make up shortages at breakneck speed. From the buyer perspective, procurement functions need to have the ability to quickly and effectively, predict disruption in supply, and expand their supply base through a multi-supplier strategy to ensure alternate sources in these instances.</p> <h3>Treat Your Suppliers As Partners</h3> <p>It is all about relationships. Through an impactful supplier collaboration program, companies have an opportunity to remake themselves as extended enterprises, a model in which both their and their suppliers&rsquo; activities are so well aligned that they are able to avoid major supply chain disruptions, eliminate overlapping expenditures (including in R&amp;D), and ultimately become more innovative and efficient.</p> <p>Buyers and suppliers can take an integrated approach to supply chain optimization, aligning their processes to reduce waste and avoid redundant effort. Taking a network approach to supplier management provides the visibility required to engage multiple trading partners to collaborate on forecasting, planning, and capacity management &mdash; thereby improving service levels, mitigating risks, and strengthening the combined supply chain.</p> <h3>Expand Your Supply Base</h3> <p>Until now, the global supply chain has taken on big risks with just-in-time manufacturing and global supplier contracts to maximize returns. But from this current crisis we have seen that organizations following a supply base contraction strategy have generally suffered more than those who had established a more diverse supply base.</p> <p>In today&rsquo;s tenuous business environment, it is beneficial for procurement teams to pursue a multi-supplier strategy, especially for key components. This builds in more agility and rebalances the offshore, nearshore and onshore mix.</p> <p>According to a Deloitte CPO survey, nearly half (47%) of CPOs plan to expand their overall supply base. Of those who plan to expand, refining their geographic base was the top choice (31%), while a shift to nearshoring was the second choice (24%). Deloitte notes that companies are trying to reduce overreliance on a few suppliers in uncertain times, while also trying to locate suppliers closer to home to mitigate pandemic and international trade risk.</p> <h3>Technology</h3> <p>While the move to a multi-supplier strategy initially introduces more complexity, the benefits far outweigh the potential cost. The need then is for procurement to adopt technology to simplify the process and drive agility by choosing intelligent systems over inflexible and siloed systems. Organizations that embraced such technology and were further along in their digital transformation were the ones most able to adapt to the changes forced onto the global economy.</p> <p>Digitalization allows these systems to &ldquo;talk&rdquo; to each other, from identifying shortages to finding new sources of supply to reviewing forecasts and exchanging information with supply partners. This two-way information sharing between the buyer and its suppliers is necessary for aligning risk management strategies and demand-supply fluctuations.</p> <p>The need for procurement and supply chain leaders to understand the end-to-end supplier network and the risks that exist beyond their direct suppliers is essential. Driving visibility and transparency in the supply chain beyond tier one and into their second, third and fourth tiers is an essential part of managing supply chain risk. Only through a network approach can buyers fully achieve both that level of visibility and the ability to create the necessary communication flows to ensure a truly resilient supply chain.</p> <h1>Conclusion</h1> <p>As the world economic order continues to evolve and the fight against the pandemic rages on, governments and businesses will continue to be challenged with addressing supply disruptions in a manner that saves lives and dollars.</p> <p>Procurement teams must continue to evolve and to serve as the strategic partner that they are required to be &ndash; and in doing so, will most definitely have to rethink the rules.</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/semiconductor-chips" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Semiconductor chips</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/sap" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">SAP</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/supplier-management" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supplier Management</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/supplier-relationship-management-srm" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supplier Relationship Management (SRM)</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="Do You Want Chips With That? - Future of Sourcing" addthis:url="http://futureofsourcing.com/do-you-want-chips-with-that"><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, 20 Feb 2022 18:01:41 +0000 Baber Farooq 2139 at http://futureofsourcing.com http://futureofsourcing.com/do-you-want-chips-with-that#comments A Fresh Perspective on Supplier Relationships http://futureofsourcing.com/a-fresh-perspective-on-supplier-relationships <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/A%20Fresh%20Perspective%20on%20Supplier%20Relationships.jpg"><a href="http://futureofsourcing.com/sites/default/files/articles/A%20Fresh%20Perspective%20on%20Supplier%20Relationships.jpg" title="Procurement must prioritize true supply chain resilience and addresses the imbalance and barriers plaguing most customer-supplier relationships." class="colorbox" rel="gallery-node-2115-IXtszaHERWs"><img typeof="foaf:Image" src="http://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/A%20Fresh%20Perspective%20on%20Supplier%20Relationships.jpg?itok=Am-d1_P2" width="624" height="325" alt="Procurement must prioritize true supply chain resilience and addresses the imbalance and barriers plaguing most customer-supplier relationships." 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"> <p><em>Despite beginning a new year, lasting supply chain challenges continue to hold businesses back, says&nbsp;</em><em style="font-size: 13.008px;">Costas Xyloyiannis, CEO of </em><a href="https://bit.ly/34YaZoM" style="font-size: 13.008px;" target="_blank"><em>HICX</em></a><em style="font-size: 13.008px;">, a supplier experience management platform</em><em style="font-size: 13.008px;">. He outlines why procurement must prioritize true supply chain resilience and addresses the imbalance and barriers plaguing most customer-supplier relationships.</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="/top-5-strategies-to-improve-supplier-relationships">Top 5 Strategies to Improve Supplier Relationships</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>This year, business leaders are making it a priority to build resilience into their supply chains. In doing so, their relationships with suppliers are coming into view, and what&rsquo;s being exposed are some significant fault lines.</p> <p>But within the volatile landscape we continue to face, having supplier relationships that are strong and healthy is no longer a nice-to-have, it&rsquo;s a business imperative. So, what can enterprise leaders do to put things right?</p> <h2>Getting a Lay of the Land</h2> <p>It&rsquo;s no secret that large organizations are painfully dependent on their supplier networks. Like employees, happy and motivated suppliers are an asset. But despite this, many organizations have outdated processes, making it difficult for suppliers to do their best work. With supply chain resilience rising up the agenda, this relationship imbalance can no longer wait to be addressed.</p> <p>As things stand, a common approach to dealing with suppliers is the Supplier Relationship Management (SRM) model. If implemented well,&nbsp;SRM can be very beneficial. With performance at the core of the approach, SRM is immensely handy for certain supplier categories that use quantitative data to measure outcomes. It also offers collaboration and innovation opportunities for buying organizations while providing suppliers with a view on how they are doing.&nbsp;&nbsp;</p> <p>However, despite the value it promises, in practice SRM is often poorly executed. Its performance-based nature causes SRM to favor goal tracking over relationship building. It&rsquo;s not uncommon for organizations to drive healthy competition or withhold payments to get the most out of suppliers. Although SRM helps to extract ideas from suppliers, the methodology can be bureaucratic and arduous, which seriously limits supplier-led innovation. Also, the system doesn&rsquo;t support two-way feedback, making a genuine assessment of the health of relationships difficult to attain.</p> <h2>Appealing to the Masses</h2> <p>To make matters worse, when SRM is indeed implemented well, it only ever applies to a small handful of suppliers. It&rsquo;s usual for about 10% of suppliers &ndash; those who are strategically relevant &ndash; to get special treatment. For the overwhelming majority, there&rsquo;s a host of bugbears with which to contend. Continuous pain points, such as late payments, unrealistic demands, endless survey requests and unclear processes hinder supplier performance. This can seriously impact the organization&rsquo;s competitive position, especially during a crisis when the stakes are high.</p> <p>From quick response times and on-time delivery, to correct quantities and first access to innovation, enterprises need to receive the best from their suppliers. Being a customer-of-choice matters. Good suppliers will always have a choice, and leading organizations are the ones ensuring that they&rsquo;re being chosen. And in times of constrain, this becomes all the more prevalent.</p> <p>Gone are the days when organizations can rely on only a handful of suppliers. If COVID-19 has taught us anything, it&rsquo;s that manufacturers must be able to call on any given supplier, at all times. For instance, when the crisis first presented, indirect suppliers of cleaning materials, protective personal equipment and remote working technology were suddenly as vital to operations as their biggest ingredient suppliers. Given the choice of which customers to offer their best to, it&rsquo;s natural for suppliers to prioritize their top relationships. All suppliers matter, regardless of how tactical they are. So why aren&rsquo;t we treating 100% of suppliers as strategic partners?</p> <h2>Weeding Out Friction</h2> <p>This way of thinking forms part of a wider movement: Supplier Experience Management. The principle calls for organizations to really consider what it&rsquo;s like for suppliers to interact with them. Despite 78% of CPOs believing they&rsquo;re excellent to work with, over a third confess they should offer suppliers better services and support, and over two thirds know they need to resolve supplier queries faster, according to a <a href="https://sig.org/supplier-experience-study-year-supplier" target="_blank">HICX survey</a>.</p> <p>Supplier friction is a barrier to mutual success. Any supplier that is reluctant to volunteer information or unable to pivot in response to an unexpected request &ndash; because of a poor experience &ndash; weakens the buying organization. The good news is that enterprises can build a healthy supplier experience by establishing a single version of truth in supplier data. Only by accessing fact-based information can enterprises see where the friction lies, and then remove it.</p> <p>As with any relationship, once issues have been identified and addressed, it&rsquo;s necessary to actively preserve the health of the relationship. This happens by making a habit out of stepping into the supplier&rsquo;s shoes. Do any new or recurring issues need tackling? Is the &ldquo;give and take&rdquo; balance conducive to mutual success? Are we still recognising the value our supply base represents?</p> <h2>Committing to Mutual Success</h2> <p>To maintain good relationships with suppliers, having the right cultural mindset and technology framework is imperative. A deep commitment by the enterprise to view 100% of the supply base as partners with shared goals and wins is what it takes. As is having a digital strategy that supports a single source of truth in supplier data to help unlock a good supplier experience.</p> <p>To keep the relationship healthy, suppliers must receive a one-to-one journey that&rsquo;s relevant and streamlined. Rather than applying a blanket approach to all suppliers, different groups need to be treated independently. For example, a small florist providing flowers for a reception shouldn&rsquo;t be expected to fill in the same compliance forms or have the same insurance level as a large direct supplier of key components.</p> <p>Finally, to sustain a strong supplier experience, it needs to be owned. In successful organizations, marketing departments work to provide a positive consumer experience to drive sales. HR teams invest in employee experience programs to help retain and motivate staff. Equally, any business that values being a customer-of-choice should prioritize supplier experience. There&rsquo;s no better champion for this cause than procurement specialists, thanks to their visibility into the supply chain and deep understanding of the supplier landscape.</p> <p>As uncertainty in the business landscape continues, the Supplier Experience Management movement presents enterprises with a significant opportunity. By embracing this next evolution of supplier management, organizations can shape strong and healthy relationships with all their suppliers. This is the way to build true supply chain resilience.</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/hicx" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">HICX</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/supplier-relationship-management-srm" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supplier Relationship Management (SRM)</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></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="A Fresh Perspective on Supplier Relationships - Future of Sourcing" addthis:url="http://futureofsourcing.com/a-fresh-perspective-on-supplier-relationships"><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, 14 Feb 2022 02:00:00 +0000 Costas Xyloyiannis 2115 at http://futureofsourcing.com http://futureofsourcing.com/a-fresh-perspective-on-supplier-relationships#comments How Will You Weather the Next Storm? Build a Stronger Supply Chain http://futureofsourcing.com/how-will-you-weather-the-next-storm-build-a-stronger-supply-chain <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%20Will%20You%20Weather%20the%20Next%20Storm%3F%20Build%20a%20Stronger%20Supply%20Chain.png"><a href="http://futureofsourcing.com/sites/default/files/articles/How%20Will%20You%20Weather%20the%20Next%20Storm%3F%20Build%20a%20Stronger%20Supply%20Chain.png" title="How Will You Weather the Next Storm? Build a Stronger Supply Chain" class="colorbox" rel="gallery-node-2071-IXtszaHERWs"><img typeof="foaf:Image" src="http://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/How%20Will%20You%20Weather%20the%20Next%20Storm%3F%20Build%20a%20Stronger%20Supply%20Chain.png?itok=glpNNMWE" width="624" height="325" alt="How Will You Weather the Next Storm? Build a Stronger Supply Chain" 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>How Will You Weather the Next Storm? Build a Stronger Supply Chain</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="/how-to-recognize-and-manage-supplier-red-flags">How to Recognize and Manage Supplier Red Flags</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>In the world of procurement, there is <a href="https://www.supplychaindive.com/news/china-supply-chains-procurement-sourcing-resilience-vietnam/606321/" target="_blank">always another crisis right around the corner</a>. Time and time again, the industry has been rattled by various disruptions and forced to reconsider how we will weather the storm better than we have had in the past.</p> <p>Unfortunately, the latest disruptions prove that companies still have <a href="https://www.forbes.com/sites/edwardsegal/2021/10/31/at-g20-summit-biden-announces-new-steps-to-combat-supply-chain-crisis/?sh=1c6e61b63e1f" target="_blank">not taken the necessary steps</a> to protect themselves from the harrowing impacts of crises like loss of revenue, negative effects on consumers and more. So how are procurement professionals supposed to build stronger, more resilient supply chains that are agile enough to withstand these unfortunate events?</p> <h2>Examine the Past</h2> <p>Crisis can strike at any time, often causing a number of devastating results. Unfortunately, when it comes to better preparation, the age-old adage &ldquo;history repeats itself&rdquo; definitely applies. One of the best ways procurement leaders can learn from past mistakes is to be fully aware of what they&rsquo;re up against.</p> <h3>Natural Disasters</h3> <p>The last decade alone has presented its fair share of natural disasters that have caused major supply chain disruptions. Earthquakes have resulted in a loss of power to millions and an abrupt pause in vehicle manufacturing. Hurricanes and typhoons across the world have inflicted damage to transportation hubs and caused fuel shortages, while agricultural losses have affected local, national and international product supply chains.</p> <h3>Man-Made Crises</h3> <p>In 2015, the Port of Tianjin in China faced multiple explosions and uncontrollable fires as a result of a lack of proper safety protocols &mdash; thousands of vehicles meant for sale were destroyed and several buildings were compromised. In 2016, the new Brexit&nbsp; ruling caused a number of employment, trading and travel regulations to be upended, resulting in a stunt of the U.K.&rsquo;s economic growth.</p> <h3>COVID-19</h3> <p>It goes without saying that COVID-19 is the largest shock the supply chain industry has ever seen, and it&rsquo;s still not over. With unprecedented disruptions and a highly increased demand for supplies, in less than two years, this crisis has caused supply chains all over the world to come to a grinding halt and cost the industry an estimated $28 trillion in lost revenue.</p> <h2>Using Data to Protect Against Disruptions</h2> <p>Without plans in place &mdash; and the capability to properly execute those plans &mdash; organizations will face the same disruptions again. While procurement leaders can&rsquo;t prevent a crisis from happening, they can create a contingency plan that allows them to weather the storm without experiencing major disruptions. Formulating this plan begins, first and foremost, with good supplier data.</p> <p>Think about it: Supply chains experience disruptions when the supplier that was intended to provide a good or service is unable to do so. If you have strong supplier data at your disposal, you can develop a plan to replace that supplier quickly before a major disruption occurs.</p> <p>The problem is, very few organizations have that strong supplier data in the first place. In fact, 72% of procurement leaders are concerned that their supplier intel has not improved since the COVID-19 pandemic, leaving them vulnerable and unable to remain agile. The ironic thing is that 96% of that same group agrees that agility is more important than cost savings.</p> <h2>Improving Data Management</h2> <p>To improve supplier data, procurement teams need to first examine how they&rsquo;re aggregating and managing data. Too often, they use manual methods &mdash; such as web searches and spreadsheets &mdash; to keep track of information, but this leaves data siloed and teams unable to quickly find alternative and diverse suppliers.</p> <p>To improve agility and resilience, organizations need to invest in technology that automatically harvests, analyzes and improves supplier data. This digitization allows for better flexibility so they can easily find the suppliers necessary to maintain a strong supply chain.</p> <h2>Building Supplier Diversity Programs</h2> <p>When planning for crises, a good contingency plan will always include alternative suppliers, routes and production models. No matter how many or few suppliers your organization works with, there is always room for diversification to allow for better responses to any disruption.</p> <p>Planning to use alternative suppliers is one thing &mdash; finding them is another. Using an automated, digital system for supplier discovery can assist procurement teams in finding diverse, alternative suppliers in a fraction of the time compared to manual methods.</p> <h2>Strong Data is the Key to Weathering the Storm</h2> <p>In the procurement world, it&rsquo;s not a matter of <em>if</em> there will be the next crisis, it&rsquo;s a matter of <em>when</em> it will strike. By learning from past mistakes and improving access to quality supplier data, your organization will be able to&nbsp; handle the crisis with agility and flexibility and stand strong against disruption.</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/tealbook" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Tealbook</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/supplier-data" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">supplier data</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/supplier-diversity" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supplier Diversity</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 Will You Weather the Next Storm? Build a Stronger Supply Chain - Future of Sourcing" addthis:url="http://futureofsourcing.com/how-will-you-weather-the-next-storm-build-a-stronger-supply-chain"><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, 20 Oct 2021 02:00:00 +0000 Stephany Lapierre 2071 at http://futureofsourcing.com http://futureofsourcing.com/how-will-you-weather-the-next-storm-build-a-stronger-supply-chain#comments Why the Just-in-Time Supply Chain Model is Failing http://futureofsourcing.com/why-the-just-in-time-supply-chain-model-is-failing <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/Why%20the%20Just-in-Time%20Supply%20Chain%20Model%20is%20Failing.png"><a href="http://futureofsourcing.com/sites/default/files/articles/Why%20the%20Just-in-Time%20Supply%20Chain%20Model%20is%20Failing.png" title="Why the Just-in-Time Supply Chain Model is Failing" class="colorbox" rel="gallery-node-2067-IXtszaHERWs"><img typeof="foaf:Image" src="http://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Why%20the%20Just-in-Time%20Supply%20Chain%20Model%20is%20Failing.png?itok=hZim44Hs" width="624" height="325" alt="Why the Just-in-Time Supply Chain Model is Failing" 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>Why the Just-in-Time Supply Chain Model is Failing</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="/how-organizations-are-driving-value-from-procurement-with-ai">How Organizations are Driving Value from Procurement With AI</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 shortage of personal protective equipment (PPE) is a direct result of one of the biggest supply chain management disruptions in recent history -- the COVID-19 pandemic. These shortages aren&rsquo;t just bad news for hospitals and retailers, but can often mean the difference between life and death for healthcare workers and their patients.</p> <p>Even before COVID-19, the business model of highly coordinated international supply networks has come under pressure. Increasingly-uncertain political environments and the looming effects of climate change have prompted concerns about the structure of global supply chains &ndash; and organizations&rsquo; ability to respond.</p> <p>The just-in-time supply chain model, currently in use by many health systems is not only doing suppliers a disservice, but also costing organizations time, money and security at a time when those they take care of need it most. Instead of continuing to survive by the skin of their teeth, organizations would be well-served to pivot to a direct supply model that allows for more control to proactively manage the supplies they need and mitigate the impact of major supply chain disruptions.</p> <h2>Lack of Safety Stock? Lack of Preparedness</h2> <p>For example, when building a hospital, most healthcare systems originally plan for ample storage, but when it comes to finalizing the plans, they opt to maximize revenue and ensure quality patient care, so they end up substantially reducing the amount of space for supplies. Hospitals end up taking daily or weekly deliveries to keep storerooms stocked, rather than purchasing and getting deliveries in bulk.</p> <p>So what happens when a global supply chain disruption occurs and those regular, small deliveries are all backordered? Medical professionals don&rsquo;t have the supplies they need and&nbsp; patient care suffers. It sounds dire, but it&rsquo;s the truth. Now more than ever, we&rsquo;re seeing health systems that rely heavily on third parties, such as distributors and Group Purchasing Organizations (GPOs), detrimentally impacted by their inability to proactively plan ahead.</p> <p>The pandemic has gained the attention of a lot of CEOs in healthcare who now realize how important the supply chain is to mitigate supply risk and not compromise patient care. While the COVID-19 pandemic is an extreme example of what happens when organizations do not self-distribute, we have seen other major disruptions caused by hurricanes that can wreak similar havoc.</p> <h2>Take Greater Control of Your Supply Chain</h2> <p>Most health systems now have the scale and volume to build out their own self-distribution model. It is no longer sufficient to rely on distributors in a just-in-time or even stockless manner for critical supplies. It is far better to develop relationships directly with manufacturers who can deliver bulk quantities of the supplies your organization needs at a much lower overall cost.</p> <p>It&rsquo;s the same model that makes other industries such as automotive, high tech and retail so effective. If you can purchase items in bulk, thus lowering the manufacturer&rsquo;s or distributor&rsquo;s delivery costs, the savings will result in increased cash retention.</p> <p>There&rsquo;s also an element of control that comes into play. When something unforeseen happens, organizations that have built this relationship with the manufacturers will have better insight into manufacturer inventory and will be able to speak to the manufacturer directly rather than go through a middleman. Manufacturers are likely to fulfill customer orders before distributor orders.</p> <p>There is a direct correlation between the supply chain and an organization&rsquo;s ability to care for its patients. While we all hope COVID-19 proves to be a black swan event, the pandemic has also highlighted the fact that our globalized world should prompt organizations to focus on building a direct supply model that equips them to work directly with manufacturers to secure products in bulk so they&rsquo;re not caught off-guard during the next disaster.</p> <p>Returning to the example of the healthcare industry, hospitals and clinics truly focused on the health and welfare of their patients now realize that the supply chain has to be at the core of their efforts. All the work these organizations do to deliver the best quality and outcomes for their patients means very little if they lack the supplies and equipment to provide that care due to easily avoidable supplier issues.</p> <p>By being able to build a direct supply model that focuses on in-house distribution, health systems will be more agile and more equipped to survive the next supply chain disruption that comes their way while still serving patients with the level of excellence they deserve.</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/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/risenow" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">RiseNow</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/black-swan-event" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Black Swan Event</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/ppe" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">PPE</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/healthcare" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Healthcare</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 the Just-in-Time Supply Chain Model is Failing - Future of Sourcing" addthis:url="http://futureofsourcing.com/why-the-just-in-time-supply-chain-model-is-failing"><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, 13 Oct 2021 02:00:00 +0000 Matt Stewart 2067 at http://futureofsourcing.com http://futureofsourcing.com/why-the-just-in-time-supply-chain-model-is-failing#comments New Trends and Challenges For Sourcing http://futureofsourcing.com/new-trends-and-challenges-for-sourcing <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/New%20Trends%20and%20Challenges%20For%20Sourcing.png"><a href="http://futureofsourcing.com/sites/default/files/articles/New%20Trends%20and%20Challenges%20For%20Sourcing.png" title="New Trends and Challenges For Sourcing" class="colorbox" rel="gallery-node-2056-IXtszaHERWs"><img typeof="foaf:Image" src="http://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/New%20Trends%20and%20Challenges%20For%20Sourcing.png?itok=LBX2Mjbf" width="624" height="325" alt="New Trends and Challenges For Sourcing" 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>New Trends and Challenges For Sourcing</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="/the-three-pillars-of-successful-supply-chain-risk-management">The Three Pillars of Successful Supply Chain Risk Management</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>With the <a href="https://www.wsj.com/articles/global-recovery-accelerates-but-delta-variant-clouds-outlook-11627034563" target="_blank">COVID-19 Delta variant threatening pandemic recovery</a> around the world, brands that source products globally are facing supply chain challenges in a business landscape mired by transit limitations, factory shutdowns, surging shipping costs, delays, labor shortages and rampant supply shortages. As brands shuffle to meet volatile consumer demand, recent data on <a href="https://www.qima.com/qima-news/2021-q3-barometer-china-recovery-slows" target="_blank">inspection activity</a> and digital transformation initiatives outline the most recent trends that are reshaping sourcing and supply chain strategies.</p> <h2>Virus Resurgence Threatens China&rsquo;s Remarkable Rebound</h2> <p>Building on momentum after a promising first quarter, China&rsquo;s sourcing footprint continued to gain ground through the second quarter and recorded growth that exceeded 2019 levels, according to a <a href="https://www.qima.com/qima-news/2021-q3-barometer-china-recovery-slows" target="_blank">quarterly inspection and audit report.</a></p> <p>Demand for inspections and audits in China expanded by a colossal 34% year-over-year (YoY) in the second quarter of 2021, which represents 21% growth when compared to the same time period during 2019 &ndash; long before the COVID-19 pandemic tore apart global supply chains.</p> <p>However, with the world still entrenched in the pandemic and all eyes on the Delta variant, China&rsquo;s stunning rebound is putting a gentle foot on the brakes. The pace of expansion decelerated through the second quarter, slowing from 25% growth in April (compared to 2019 figures) down to 20% growth in May and then 17% growth in June.&nbsp;</p> <p>Unfortunately for China, the interest of Western buyers in its sourcing largely follows the same downhill trend &ndash; especially for North American buyers. While demand from U.S.-based brands for inspections in China was up by 10% in the second quarter (when compared to the second quarter of 2019), the pace of the rebound has also been losing steam on a month-to-month basis.</p> <p><span style="font-size: 13.008px;">While China&rsquo;s rebound in sourcing has been remarkable, it is worth noting that the recovery has not touched all consumer goods industries the same way. For example, while homewares and electronics recorded double-digit YoY growth in the first half of 2021 (compared to both 2020 and 2019), inspection and audit demand is still trailing behind pre-pandemic levels in some of the country&rsquo;s key sectors, such as eyewear and the clothing (textile and apparel) industries.&nbsp;&nbsp;</span></p> <h2>Sourcing Demand in South Asia Skyrockets</h2> <p>After a disastrous 2020, when clothing brands sat on mountains of <a href="https://www.ft.com/content/f030f125-0a15-4097-bb5f-4b0543544ec3" target="_blank">unsold inventory worth billions of dollars</a>, the textile and apparel sector is in comeback mode. As consumers emerge from quarantines and reenter public spaces, the clothing industry has compensated for its aforementioned reduced interest in China with continued expansion through various sourcing markets elsewhere in Asia.</p> <p>In particular, South Asia&rsquo;s established markets are recording explosive growth, with demand for inspections in textiles and apparel up 81% in India and 66% in Bangladesh in the first half of 2021 when compared to pre-pandemic 2019, according to the quarterly inspection and audit report.&nbsp;</p> <p>Growing demand for textile inspections was also recorded in markets of Southeast Asia (including Cambodia, Indonesia and Vietnam), South and Latin America (including Mexico, Haiti and Guatemala) and the Mediterranean (including Turkey, Morocco, Jordan and Egypt). Markedly, while the latter region has traditionally been favored as a sourcing market for European-based buyers, the second quarter of 2021 saw it recording an uptick in inspections and audits from U.S. buyers.</p> <p>The growth in these alternative markets suggest that brands remain focused on diversifying sourcing from new markets to circumvent sustained pandemic delays and alleviate uncertainties about the future.</p> <h2>Soaring Demand from Western Buyers</h2> <p>As the sourcing industry in multiple sectors and regions continues to defy the pandemic slump and vigorously climbs upward, some markets in Southeast Asia are benefiting from exceptionally high buyer interest. For example, Vietnam, Cambodia, Indonesia and Thailand all recorded double-digit growth in demands for inspections and audits in the second quarter, according to the quarterly inspection and audit report.</p> <p>Cambodia, in particular, remains high on the list of go-to alternative sourcing markets for U.S. buyers. In the second quarter of 2021, volumes for inspections and audits in Cambodia shot up nearly 100% compared to 2020; when compared to pre-pandemic 2019, 2021 volumes in the second quarter still represented a 23% YoY increase.</p> <h2>Digitization Illuminates Blind Spots and Enhances Quality Control</h2> <p>Up to 77% of companies admit to having sourcing blind spots in their supply chains, according to a recent survey of global brands from our digital and technology division QIMAone, and two-thirds report that they don&rsquo;t have streamlined communications in place with their suppliers.</p> <p>When you couple this lack of transparency with supplier delays &ndash; like we continue to see amid pandemic disruptions &ndash; it spells out disaster for a brand&rsquo;s sourcing footprint. Inevitably, to be successful, brands must illuminate these blind spots and achieve end-to-end supply chain visibility, particularly in the inspection process.</p> <p>Being successful on this front may require a shift in operational priorities, however. While pricing and perceived value have traditionally been seen as the main drivers of consumer trends, brands may be surprised to learn how influential quality measures are on the bottom line too. Poor quality costs can add up heftily and account for up to <a href="https://asq.org/quality-resources/cost-of-quality" target="_blank">40% of operational expenses</a> when there&rsquo;s an underlying problem.</p> <p>Moreover, some brands may be unprepared to level up quality control programs in an evolving consumer marketplace. According to a <a href="https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/survey-us-consumer-sentiment-during-the-coronavirus-crisis" target="_blank">recent survey on consumer sentiment</a>, product quality was found to be a key driver for 40% of younger consumers, suggesting that the focus on quality will continue to sharpen into the future.</p> <p>Considering the mounting prominence of quality, the case for sourcing digitization is quite compelling: 14% of brands say that product quality issues have a &ldquo;very serious impact&rdquo; on their business; but for those with highly digitized supply chains and sourcing processes, this number is cut down to just 7%.</p> <h2>Looking Ahead: Balancing Diversification With Compliance Objectives</h2> <p>Unfortunately, according to historical inspection and audit data, a sudden surge in export volumes has brands diversify sourcing markets &ndash; such as what we&rsquo;re seeing in South Asia and Southeast Asia &ndash; often comes at the cost of quality and ethical missteps, including compromised worker safety.</p> <p>This correlation is once again rearing its ugly head as brands try to move to the other side of pandemic recovery, according to data gathered by structural engineers during field audits at reopened factories. Among the factories inspected for structural, fire and electrical safety thus far in 2021, two-thirds were found in need of remediation, according to the quarterly inspection and audit report. Fire safety was a particularly dire concern, with over half of the factories audited in the first half of 2021 requiring improvements in the near term.</p> <p>Meanwhile, ethical compliance overall continues to plummet at an alarming rate, with average ethical scores dwindling by a further 4% (when compared to the first quarter of 2021) to scrape a three-year low. These troubling figures show that the ongoing specter of the pandemic &ndash; as factories globally struggle to reorganize, recoup and adapt to volatile consumer demand cycles &ndash; threatens to undo much of the pivots and improvements that brands made toward ethical supply chains in the pre-pandemic period.</p> <p>To forge ahead safely and responsibly in today&rsquo;s uncertain sourcing landscape, brands must prioritize human rights, environmental sustainability and quality in their recovery programs &ndash; or risk facing costly lawsuits, hefty fines, operational inefficiencies and irreparable brand damage.</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/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/china" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">China</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/qima" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">QIMA</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/compliance" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Compliance</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/digitalization" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Digitalization</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="New Trends and Challenges For Sourcing - Future of Sourcing" addthis:url="http://futureofsourcing.com/new-trends-and-challenges-for-sourcing"><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/asiapacific" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Asia/Pacific</a></div></div></div> Wed, 22 Sep 2021 02:00:00 +0000 Sébastien Breteau 2056 at http://futureofsourcing.com http://futureofsourcing.com/new-trends-and-challenges-for-sourcing#comments