Future of Sourcing - Blockchain https://futureofsourcing.com/tags/blockchain en Why Supply Chain Leaders Need to Bolster the Circular Economy https://futureofsourcing.com/why-supply-chain-leaders-need-to-bolster-the-circular-economy <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://futureofsourcing.com/sites/default/files/articles/FoS%20Graphic%20%284%29%20%281%29.png"><a href="https://futureofsourcing.com/sites/default/files/articles/FoS%20Graphic%20%284%29%20%281%29.png" title="Circular Economy" class="colorbox" rel="gallery-node-1917-fsyheLzVQP0"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/FoS%20Graphic%20%284%29%20%281%29.png?itok=ycRS-z7o" width="624" height="325" alt="Circular Economy" title="" /></a></div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/its-time-for-it-to-transition-to-a-circular-economy">It’s Time for IT to Transition to a Circular Economy</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>The concept behind a circular economy is simple: minimize waste by reusing, sharing and repairing goods that are already in use. That allows items to remain in the economic system, preventing the need for as many new products to be introduced.</p> <p>This results in a closed loop. New resources aren&rsquo;t being used, so energy is conserved.</p> <p>In recent years, the rise of the circular economy is most significant in the fashion industry and supply chain. For instance, companies such as Depop and Poshmark are now <a href="https://us.bouncepad.com/blogs/news/in-a-world-of-fast-fashion-how-does-depop-succeed">widely-recognized</a> for selling unique luxury clothing and accessories secondhand.</p> <p>Corporate examples such as these have encouraged consumers to invest in the circular economy, largely for sustainability reasons.</p> <p>This article explores three major reasons supply chain leaders should invest in the circular economy, satisfying the needs of their customers and embracing more sustainable business practices:</p> <ol> <li>Keeping products in use</li> <li>Fueling innovation</li> <li>Making your business more sustainable</li> </ol> <h2>Keeps Products in Use</h2> <p>One of the main perks of the circular economy is that it keeps previously created and processed items in active use.</p> <p>This allows for a meaningful shift from the traditional procurement process of clothing items, for example. Using secondhand services also minimizes waste. When someone no longer wants or grows out of an article of clothing, it can be used by someone else.</p> <p>&nbsp;</p> <p><img alt="This process includes keeping products in use, regenerating natural systems, and designing out waste and pollution." src="https://futureofsourcing.com/sites/default/files/Circular%20Economy.png" style="border-width: 0px; border-style: solid; width: 409px; height: 423px;" /></p> <p>Source: Ellen MacArthur Foundation&nbsp;</p> <p>This process includes keeping products in use, <a href="https://www.ellenmacarthurfoundation.org/circular-economy/what-is-the-circular-economy">regenerating natural systems</a>, and designing out waste and pollution. Each of these actions will only make the others more attainable to companies committed to sustainability.</p> <p>Instead of creating waste after products are used, they&rsquo;re reintroduced into the economy for purchase. By relying less on new products to be created, you also take the pressure off of your supply chain and reduce spend on inventory production.</p> <p>How do you ensure your products will be able to stay in use? Companies looking to support the circular economy may need to reinvest funding from manufacturing into repairs.</p> <p>Manufactured goods, especially those made using cost-effective strategies, aren&rsquo;t built to withstand the test of time.</p> <p>Denim clothing manufacturer Hiut Denim has figured out a way to do just that. Ethically made and sold by women in Great Britain, the company promises to repair &ldquo;damage due to <a href="https://hiutdenim.co.uk/pages/faq">wear and tear</a>&rdquo; for free. This encourages shoppers to invest once in a sustainable pair of jeans, continuing to wear them over many years.</p> <p>Keeping goods in circulation helps companies bolster the circular economy. It also makes it easier for you to focus on providing quality products instead of the cheapest way to create them.</p> <h2>Boosts Your Business&#39; Sustainability</h2> <p>When considering sustainability in the supply chain, the first concepts that typically come to mind may not involve the circular economy.</p> <p>In industries such as clothing and fashion, however, adopting the circular economy is essential to achieve a high level of sustainability.</p> <p>Sustainable fashion, for example, has the potential to positively impact the planet, both in terms of greener production practices and introducing labor equality to your procurement processes.</p> <p>The clothing production industry is currently influenced by the popularity of &ldquo;fast fashion,&rdquo; which is an extremely cheap way to create mass volumes of clothing products. While this attracts customers by offering goods at very low prices, fast fashion comes at a significant cost to the environment.</p> <p>Typically, in electing to adopt fast fashion manufacturing processes, a business has to invest in inequitable labor and reject the use of clean, innovative materials. For example, materials like polyester can make the production of clothing items very cheap. Since polyester isn&rsquo;t naturally made like cotton or hemp, synthetic materials aren&rsquo;t as good for the planet as other textile options.</p> <p>Experts indicate that it can take up to&nbsp; <a href="https://www.forbes.com/sites/ellevate/2019/10/07/why-sustainable-fashion-matters/#2bd1fb871b8e">200 years for clothing to decompose</a>. That&rsquo;s especially the case for materials not found in nature. Moving away from synthetic materials won&rsquo;t spark change if it&rsquo;s your sole effort. It&rsquo;s recommended that supply chain leaders discover methods of incorporating renewable energy into production. Taking the most holistic approach possible with your sustainability efforts will increase your ability to support the circular economy.</p> <p>For instance, secondhand clothing companies like ThredUp actively contribute to the circular economy within the fashion industry. To raise awareness of the importance of buying used pieces, the company showcases how secondhand purchases contribute to a greener future.</p> <p>The image below indicates that if all consumers purchased one reused product in a year, it would be equivalent to removing 449,000,000 pounds of waste from landfills.</p> <p>&nbsp;</p> <p><img alt="The image belowabove indicates that if all consumers purchased one reused product in a year, it would be equivalent to removing 449,000,000 pounds of waste from landfills. " src="https://futureofsourcing.com/sites/default/files/Consumer%20Savings.png" style="border-width: 0px; border-style: solid; width: 368px; height: 256px;" /></p> <p>Source: ThredUp</p> <p>ThredUp&rsquo;s partnerships with brands like Free People and Madewell push the mission and accessibility of the circular economy to the forefront of customers&rsquo; minds.</p> <p>Taking a holistic approach to sustainability is an extremely effective way to support the circular economy.&nbsp;</p> <h2>Fuels Technological Innovation and Collaboration</h2> <p>Adopting new supply chain processes requires you to <a href="https://clutch.co/logistics/supply-chain-management">discover and explore technological solutions</a>. The circular economy may push early adopters toward cutting-edge technologies that will boost efficiency.</p> <p>Because the supply chain is innately a global network of companies, it can be complex to navigate in traditional scenarios. The circular economy, while consumers desire it, is challenging to efficiently implement.</p> <p>Experts at Forbes recommend companies operating in the circular <a>economy </a><a href="http://forbestechcouncil/">try blockchain technology</a>.&nbsp; Blockchain solutions can leverage your participation in the circular economy to an even greater extent while affording users greater traceability and process transparency. With those benefits, companies are able to execute more efficiently.</p> <p>Businesses like MonoChain have leveraged blockchain in their effort to contribute to the circular economy. In fact, with the help of the technology, they&rsquo;ve kept an estimated $460 billion of clothes from being <a href="https://www.mckinsey.com/business-functions/sustainability/our-insights/mapping-the-benefits-of-a-circular-economy">thrown away and wasted</a>.</p> <p>This early success at the cross-section of blockchain and sustainability can serve as a source of inspiration for companies that are unsure they can commit to the complexities of the circular economy. Their participation through innovative, cutting-edge technologies will propel internal operations forward, making them more efficient and sustainable.</p> <h2>Use Your Resources to Participate in the Circular Economy</h2> <p>For supply chain companies everywhere, connecting yourself to the circular economy will be vital in this new decade. Consumers expect sustainability from brands they trust. You can win their trust through your commitment to both green practices and keeping products in the market for the long-term.</p> <p>Additionally, you can make your presence in the circular economy benefit your internal operations. Take the opportunity to introduce blockchain technology to your team. That will ensure that you have the information you need to trace goods and information throughout the complex exchange process.</p> <p>&nbsp;</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/supply-chain" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supply Chain</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/sustainability" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Sustainability</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/circular-economy" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Circular Economy</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/procurement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Procurement</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/blockchain" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Blockchain</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/transparency" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Transparency</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Why Supply Chain Leaders Need to Bolster the Circular Economy - Future of Sourcing" addthis:url="https://futureofsourcing.com/why-supply-chain-leaders-need-to-bolster-the-circular-economy"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Thu, 28 Jan 2021 19:28:21 +0000 Sydney Wess 1917 at https://futureofsourcing.com https://futureofsourcing.com/why-supply-chain-leaders-need-to-bolster-the-circular-economy#comments Lead Like a Boss: Master Global Supply Chain Shifts https://futureofsourcing.com/lead-like-a-boss-master-global-supply-chain-shifts <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="https://futureofsourcing.com/sites/default/files/articles/Global%20Supply%20Chain.jpg"><a href="https://futureofsourcing.com/sites/default/files/articles/Global%20Supply%20Chain.jpg" title="Sustainable procurement practices can reduce supply chain costs by 9 – 16%" class="colorbox" rel="gallery-node-1874-fsyheLzVQP0"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Global%20Supply%20Chain.jpg?itok=NPskWZ2_" width="1024" height="682" alt="Sustainable procurement practices can reduce supply chain costs by 9 – 16%" title="" /></a></div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/how-to-manage-the-hardest-part-of-a-new-tech-project-the-people">How to Manage the Hardest Part of a New Tech Project – The People</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 supply chain strategy paradigms we have held close and true for decades are being challenged. The questions are complex, important, urgent and without easy answers.</p> <p>Consider some of the traditional supply chain paradigms such as lean manufacturing, just-in-time inventory management and extended payment terms. In light of COVID-19, is the status quo still the right way to operate? Take supplier payment terms, for example. Maximizing working capital has been a top priority for as long as we can remember. Now, given the rise in bankruptcies and the clear connection between supplier viability and business continuity, many procurement leaders are taking a step back and thinking more about their suppliers&rsquo; cash flow in addition to their own.</p> <p>These paradigm shifts are substantial but pale in comparison to the potential changes around supply chain globalization.</p> <h1>Supply Chain Globalization: Is It Time to Localize?</h1> <p>For decades, supply chain strategies have revolved around moving production and sourcing to low-cost geographies. This traditional low-cost sourcing mindset affects everything from lead times, supplier selection, production, quality, margins and more.</p> <p>Today, leaders everywhere are asking if their heavy reliance on global suppliers is less strategic and more of a risk. When Procurious <a href="https://www.procurious.com/how-now" target="_blank">asked more than 600 procurement and supply chain professionals</a>&nbsp;where COVID-19 had the biggest impact, 21% said logistics and transportation slowdowns or delays. Over one in four cited lack of available supply due to production downtimes and shutdowns. Ninety-seven percent said they were impacted in some capacity.</p> <p>Pressure and attention are heightened when disruptions cause shortages to critical supplies such as ventilators or personal protective equipment, direct materials and popular merchandise. Beyond the headlines, there&rsquo;s also a significant impact to the services supply chain. When critical outsourced services, including customer support, security and IT, were suddenly forced to go remote, we saw a corresponding rise in risks related to quality, fraud and compliance.</p> <p>When a supply chain disruption occurs, it is impossible to control what is happening, especially when the product or service you rely on is thousands of miles away and completely inaccessible. What business leaders can control, however, is from where they source. That explains why over one-third of the profession is currently planning to either expand their supply base or shrink their global supply chain and depend more upon local suppliers.</p> <p>The idea of realigning supply chains is not new. Questions about globalization <a href="https://www.procurious.com/procurement-classes/is-it-mexico-s-turn-alternative-supply-to-china" target="_blank">and the heavy reliance on China</a> have been bubbling for years. Macro and geo-political events such as the China-U.S. trade war and Brexit brought the topic to the surface. COVID-19 caused it to boil over. <a href="https://www.procurious.com/procurement-news/will-mexico-overtake-china-as-the-worlds-biggest-manufacturer" target="_blank">Forbes even went as far as to say COVID-19 will become the final curtain on China&rsquo;s nearly 20-year role as the world&rsquo;s leading manufacturer</a><u>.</u></p> <p>Our research shows that over half of supply chain and procurement professionals believe Fortune 500 companies should reduce globalization by <a href="https://www.procurious.com/procurement-news/supply-chain-is-this-seismic-strategy-shift-possible" target="_blank">localizing supply chains and bringing manufacturing back home</a>. But as most industry veterans recognize, that shift is far easier said than done.</p> <h1>The Catch-22 for Supply Chain &amp; Procurement</h1> <p>Surprisingly, 27% of executives plan to stay the course and not make any meaningful post-pandemic strategy shifts. Many of them probably want to alter approaches, but recognize the inherent complexities and costs associated with doing so.</p> <p>Understandably, most executives have never before experienced a supply chain disruption to this extent. While localization seems like an appealing strategy to minimize future risks and boost the local economy, it&rsquo;s far from a quick and easy fix. The obstacles are plenty.</p> <p>Overcoming the deep reliance on low-cost sourcing is the first challenge. The second is production complexity. Technology gets more innovative, personalized and sophisticated by the day. It would be nearly impossible for a single manufacturer to hold all the technical capabilities and expertise to produce these products 100% in-house. To keep up, manufacturers outsource critical components to others, who outsource to sub-suppliers and so on.</p> <p>Breaking this chain, while simultaneously bringing production closer to home and swaying the board to accept lower margins, will require executives and procurement teams to perform in a new reality.</p> <p>Of course, there are clear benefits of going local. The end-to-end supply chain impact on carbon emissions is more than five times that of companies&rsquo; direct operations. Localization optimizes and shortens the supply chain network, lowering emissions.</p> <p>In addition, sustainability performance is proven to impact the bottom-line. According to the World Economic Forum, sustainable procurement practices can <a href="https://www.weforum.org/agenda/2015/03/how-to-create-sustainable-supply-chains/" target="_blank">reduce supply chain costs by 9 &ndash; 16%</a>. On a larger scale, shifts toward localization strengthen national and local economies, support the job market and, in many cases, reduce enterprise risk.</p> <h1>What&rsquo;s to Come?</h1> <p>The decision to move production requires long-term planning and commitment. It won&rsquo;t and can&rsquo;t happen overnight.</p> <p>Companies planning to make seismic strategy shifts like localization require proper technology investments. Over <a href="https://www.procurious.com/procurement-news/now-is-the-time-to-learn-industry-4-0-technologies" target="_blank">90% of companies</a> are already using at least one Industry 4.0 technology, including blockchain, artificial intelligence, internet of things and more. While adoption of blockchain is still relatively low, the network promises to play a pivotal role in whatever changes come next.</p> <p>The following 6 &ndash; 12 months will be crucial for every company and require a great amount of flexibility and adaptability. It&rsquo;s impossible to predict (with 100% accuracy, at least) what&rsquo;s next. Anyone that tells you differently is out of their mind. My advice to C-suites and supply chain and procurement leaders is to remain agile, invest, lean on your peers and prepare for anything.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/supply-chain" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supply Chain</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/procurement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Procurement</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/blockchain" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Blockchain</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/artificial-intelligence" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Artificial Intelligence</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/internet-of-things" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Internet of Things</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></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="Lead Like a Boss: Master Global Supply Chain Shifts - Future of Sourcing" addthis:url="https://futureofsourcing.com/lead-like-a-boss-master-global-supply-chain-shifts"><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, 19 Oct 2020 23:08:31 +0000 Tania Seary 1874 at https://futureofsourcing.com https://futureofsourcing.com/lead-like-a-boss-master-global-supply-chain-shifts#comments From Procurement Police to the Chief Partner Officer https://futureofsourcing.com/from-procurement-police-to-the-chief-partner-officer <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="https://futureofsourcing.com/sites/default/files/articles/Chief%20Partner%20Officer%20%281%29.png"><a href="https://futureofsourcing.com/sites/default/files/articles/Chief%20Partner%20Officer%20%281%29.png" title="Embrace a new norm and hope for a change that leads to transforming the Chief Procurement Officer role into a Chief Partner Officer." class="colorbox" rel="gallery-node-1870-fsyheLzVQP0"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Chief%20Partner%20Officer%20%281%29.png?itok=y-mdOWwq" width="624" height="325" alt="Embrace a new norm and hope for a change that leads to transforming the Chief Procurement Officer role into a Chief Partner Officer." title="" /></a></div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/the-case-for-changing-the-chief-procurement-officer-role">The Case for Changing the Chief Procurement Officer Role</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><strong>Cause and Effect of Past Practices</strong></h1> <p>To continue our <a href="https://futureofsourcing.com/the-case-for-changing-the-chief-procurement-officer-role" target="_blank">discussion from Part 1</a>,&nbsp;let&#39;s consider the roles of cause and effect on evolving Procurement practices.&nbsp;&nbsp;</p> <p>Suppose an organization installed a Finance procurement overseer that does not have domain or market knowledge. This overseer will not be well-positioned to lead innovation or transformation initiatives. As a result, broader stakeholder engagement will be needed to transform Procurement and align future metrics to create greater value.</p> <p>We must also recognize that if we have the unexperienced leading the unexperienced, our organizations will not be set up for success. However, in some Procurement functions (perhaps not yours), the inexperienced leading more experienced team members is even less sustainable.&nbsp;&nbsp;</p> <h1><strong>Leadership Value Transformation&nbsp;</strong></h1> <p>As leaders, we have to self-reflect and become aware of the need to transform and not become the roadblocks holding our function or talented teams back. Using the stick instead of a carrot and a &quot;Whose fault is it?&quot; mindset makes you more likely to lose skilled Procurement talent. Instead of seeing new approaches as threats to the established &quot;compliance and control&quot; methods of Procurement, we need to look inward, adapt, learn, and lead from the front.</p> <p>Over recent years, a dramatic shift has been occurring whereby the business and market models are moving to As a Service, Managed Services, and Cloud. Prior to these market models, &quot;shadow IT&quot; was embraced by the business because the IT function had become too reactive and unable to effectively address business needs. These self-inflicted wounds resulted in many IT organizations growing transactional for &quot;keeping the lights on,&quot; instead of driving strategic business discussions.</p> <p>Procurement, now more than ever, faces a similar predicament. With business leaders embracing these market models for processes and functions, we have no choice but to get on with it. We can learn from our business partners&#39; experiences to help guide our teams in adding value so that we don&#39;t become lost in &quot;shadow Procurement.&quot;</p> <h1><strong>Creating New Norms and Embracing Market Shifts</strong></h1> <p>Procurement marketplaces, AI, and other approaches offer more effective means of solving these long-endured problems if the CPO can get on with the transformation. These market models have already started demonstrating more effective results and efficiencies than the traditional Procurement approaches. These models are here to stay with nowhere to go but up. Over the next 18 to 36 months, these Procurement models will continue to outperform on value delivery and performance that long-established Procurement practices cannot match or surpass. These new Procurement models will be on solid ground while still effectively managing organizational risk and compliance, pushing Procurement to transform.</p> <p>It is crucial to recognize that organizations have invested in the Procurement infrastructure that is now deeply rooted and widely accepted as the &quot;norm.&quot; The solution isn&#39;t necessarily to blow up the entire Procurement function. To improve inefficiencies resulting from the past incremental and just enough practices, Procurement will require vision and support to transform.&nbsp;</p> <p>First, we need to reflect by taking a step back on how our function and the CPO role can transform into becoming a Chief Partner Officer. We need to revisit how we hire, teach, and retain talent. We will need to review if we promote leaders with domain expertise, vision, and experience to lead the transformation. Organizations must have sufficient support with investments and refined metrics to drive partnerships across the organization.</p> <h1><strong>Transformational Procurement Leader for the Fourth Industrial Revolution</strong></h1> <p>Procurement transformation can only succeed with a leader that possesses a different type of expertise and approach. With AI, not having domain experts as decision-makers willing to be held accountable for process changes will be detrimental to the adoption of this emerging technology.</p> <p>If left unchecked, AI implementations will be rife with biases that have persisted in organizations and be ill equipped to streamline existing ineffective processes. Suppose AI is implemented merely as another tool for Procurement. In that case, it will not produce the highest benefits nor reduce the friction of poorly designed processes.</p> <p>When a functional leader lacks domain knowledge, they will be hard-pressed to simplify processes, reimagine to pivot, or transform to embrace newer business models or technologies. These insecurities often lead to an organization becoming hampered by politics and run on fear, which ultimately undermine Procurement&rsquo;s ability to run like a business. There are many improved ways to manage risk and compliance without sacrificing partnership and value-driven activities using AI and automation.&nbsp;</p> <p>There will be resistance to Procurement unless there is a collaborative partnership approach with the stakeholders, teams, and supplier community that places Procurement leaders at the helm. It will continue to be seen as a &quot;check the box&quot; function that is devoid of value-add by most, making it difficult for Procurement to gain a seat at the table.</p> <h1><strong>Determining Your Current State</strong></h1> <p>Suppose your organization has experienced Procurement challenges and is now seeking ways to transform. Start by reviewing the function carefully to ascertain:</p> <ul> <li>What is the perception of Procurement in the organization and its effectiveness?</li> <li>What are the Procurement metrics? How have they evolved?</li> <li>How do Procurement metrics take into consideration market dynamics?</li> <li>Are there well-defined, clear, and transparent career paths for all Procurement roles?</li> <li>What are the learning and training investments made for the Procurement teams?</li> <li>Does the Procurement function have processes that are agile, proactive, and focused on the partnership?</li> <li>When was the last time Procurement processes were reviewed, optimized, or transformed?&nbsp;</li> <li>How much automation across the process lifecycle exists in your Procurement function?</li> <li>Do the Procurement processes have self-service and customer-centered capabilities across the end-to-end process value chain beyond shifting Procurement administrative responsibilities to the stakeholders and calling it self-service? For example, think about what else one can do beyond request a purchase order, gain system-based approvals, or approve invoices on the PO system for compliance control.</li> <li>How much of the self-service and automation capabilities focus on the stakeholder user needs and not just the Procurement user?</li> <li>Are automation and self-service designed with the user experience of all personas in mind?</li> </ul> <p>What should you do if you find answers to any or all of these to be unsatisfactory? Carefully examine Procurement leadership to understand their motivations or lack thereof to evolve the function. Between this pandemic-induced pause requiring all areas to form new norms and the coming age of AI, Procurement should have no choice but to transform. However, to gain support from its internal and external stakeholders, a few rules will need to be rewritten.</p> <h1><strong>Finding a Path Forward</strong></h1> <p>Imagine a world where sales and Procurement processes are transparent, consistent, and set up to remove biases and distrust that currently exists in the cycle. Inefficiencies, bureaucracies, and risks would fall to the wayside. Additionally, metrics and reporting relationship restructuring can help to transform Procurement. So, let&#39;s make a case for shifting focus to grooming Chief Partner Officers who are willing to self-reflect, adapt, and continuously learn.</p> <p>Led by AI, the fourth industrial revolution will push organizations and functions to adapt substantially. As skillfully articulated by&nbsp;<a href="https://in.linkedin.com/in/tnvora" target="_blank">Tanmay Vora</a>&nbsp;and his team, transformation will require a leadership&nbsp;<a href="https://qaspire.com/2015/11/23/mindset-shifts-for-organizational-transformation/">mindset shift</a>.&nbsp;</p> <p><img alt="Procurement stands to have the most impactful transformation for an organization. " src="https://futureofsourcing.com/sites/default/files/leadership%20mindset%20shift.jpg" style="width: 650px; height: 919px;" /></p> <p align="center">&nbsp;</p> <p>If done correctly, Procurement stands to have the most impactful transformation for an organization. The Procurement function can still be relevant in the upcoming age of AI and the experience-based economy if we choose to lead the transformation.</p> <p>For a Procurement function to be &quot;its best self,&quot; it requires shifting the role to becoming a Chief Partner Officer who is a visionary and ready to lead from the front. Our metrics should be reflective of the partnership value achieved and end-to-end process transformation.</p> <p>To thrive in the digital and experience economy, visionary leaders focus on these foundational tenets to embrace transformation:</p> <ul> <li>Reimagining the scope and responsibilities of Procurement</li> <li>Adapting newer business models, such as digital procurement marketplaces</li> <li>Leveraging emerging technologies, such as AI and blockchain, to free up our teams to focus on strategic initiatives</li> <li>Embracing automation to speed up transactional tasks</li> <li>Creating the end-to-end Procurement process lifecycle with all user personas in mind</li> <li>Simplifying and designing the end-to-end process with emerging technologies such as AI and blockchain in mind instead</li> <li>Moving from being process and compliance police to becoming a partner</li> </ul> <h1><strong>Future Procurement Leadership Qualities</strong></h1> <p>Transforming Procurement will require leaders who are secure in their skills, operate from the foundation of trust and support, plus can partner with their teams and stakeholders. Procurement and stakeholder teams have been breathlessly waiting for this function to transform. This is only possible if we can shift the role from being a Chief Budgeting Officer to a Chief Partner Officer mindset with fresh metrics for accountability and performance.</p> <p>A Chief Partner Officer will be invaluable to an organization and effortlessly bring improvements to its top and bottom lines. This leadership style will make the function more scalable to meet the organization&#39;s demands, improve transparency, and reduce cycle time to manage risk and compliance more effectively. When there is a genuine intent to increase transparency, efficiencies, and automation, there will be additional support from stakeholders to benefit everyone involved for mutual success.&nbsp;&nbsp;</p> <p>The transformation of Procurement will spur improvements in other business areas. To reap the full benefits, Procurement transformation that includes people, processes, and automation must be part of the dialogue.&nbsp;&nbsp;</p> <h1><strong>Final Thoughts on Transforming Procurement</strong></h1> <p>To gauge Procurement engagement and sentiment, I welcome participation in this&nbsp;<a href="https://www.surveymonkey.com/r/YTL7HJ3" target="_blank">Sourcing Industry Group&nbsp;poll</a>.&nbsp;&nbsp;</p> <p>It is inspiring to hear success stories where the Procurement organization value delivery changed using strategic and partnership-driven metrics and where stakeholders became advocates of Procurement for others embarking on this journey. It would be great to hear success stories of when adequate investments to automate the end-to-end Procurement process lifecycle helped propel the Procurement organization forward.</p> <p>So, let&#39;s turn a leaf while embracing a new norm and hope for a change that leads to transforming the Chief Procurement Officer role into a Chief Partner Officer!</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/procurement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Procurement</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/information-technology-it" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Information Technology (IT)</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/chief-procurement-officer-cpo" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Chief Procurement Officer (CPO)</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/artificial-intelligence-ai" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Artificial Intelligence (AI)</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/business-process-automation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Business Process Automation</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/blockchain" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Blockchain</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="From Procurement Police to the Chief Partner Officer - Future of Sourcing" addthis:url="https://futureofsourcing.com/from-procurement-police-to-the-chief-partner-officer"><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, 09 Oct 2020 19:55:49 +0000 Purvee Kondal 1870 at https://futureofsourcing.com https://futureofsourcing.com/from-procurement-police-to-the-chief-partner-officer#comments Exploring the Feasibility of a Blockchain-Enabled Supply Chain https://futureofsourcing.com/exploring-the-feasibility-of-a-blockchain-enabled-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="https://futureofsourcing.com/sites/default/files/articles/Blockchain-Enabled%20Supply%20Chain.png"><a href="https://futureofsourcing.com/sites/default/files/articles/Blockchain-Enabled%20Supply%20Chain.png" title="The adoption of blockchain technology can become the framework to solve supply chain issues from the point of origin of the raw materials to when it reaches end-of-life." class="colorbox" rel="gallery-node-1838-fsyheLzVQP0"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Blockchain-Enabled%20Supply%20Chain.png?itok=eQzprdxz" width="624" height="325" alt="The adoption of blockchain technology can become the framework to solve supply chain issues from the point of origin of the raw materials to when it reaches end-of-life." title="" /></a></div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/guide-your-artificial-intelligence-solution-with-a-proof-of-concept">Guide Your Artificial Intelligence Solution with a Proof of Concept</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>Given the attention on <a href="https://www.marketwatch.com/investing/cryptocurrency/btcusd">Bitcoin</a>, the underlying blockchain technology has been brought to the forefront for organizations looking to explore the benefits and feasibility of managing the supply chain. The level of trust, transparency, and efficiency promised by this technology opens the possibility of revolutionizing how we handle transactions.&nbsp;&nbsp;</p> <p>With the successes of Ethereum and the popularity of Bitcoin the big question is, can blockchain technology pave the way for transforming the supply chain? Can the traceability promised by this technology change how companies and industries track sourced goods from their origin point to the end consumer? Can it disrupt the way we design and operate our future supply chain? Can it make our supply chain more efficient? With the global pandemic, it has become more apparent that traceability of the supply chain is an essential consideration for organizations heavily reliant on the movement of goods and services.&nbsp;&nbsp;</p> <h1><strong>Bitcoin Technology Background</strong></h1> <p>After Bitcoin&#39;s inception over a decade ago, many were skeptical about the digital currency, and Bitcoins struggled in the market, barely attracting any investors. However, in 2013, Bitcoin&#39;s value rose from a mere ~$13/BTC in January to an astounding peak of ~$979 by November. By the end of 2017, the price stood at an all-time high of $20,000.</p> <p>Now, in 2020, even with the pandemic-induced volatility experienced by the market, it is at $11,000, still a staggering amount. Many nations that were resistant and almost hostile to this technology just a couple of years ago are now turning to it in determining the future of currencies. The sentiment change marks a significant shift in the understanding of this technology and its capabilities.</p> <p>It makes one wonder what has caused this investment to be so unique and attractive within such a short period, and why does it continue to generate such keen interest? Following the enormous success of Bitcoin, many companies, industries and researchers have been relentlessly looking at other areas where blockchain can be applied, including in the supply chain.&nbsp;</p> <p>But why supply chain? Why do experts see the supply chain as one of the most compelling use cases for blockchain? The answer is apparent when we consider how conventional supply chains remain the most complex operations to handle. They are slow, disjointed, and sometimes wholly unreliable. The global pandemic brought awareness of how our cross-border economies are intertwined and have brought tremendous complexities to our transactions. Supply chain processes deemed to be resilient and controlled became unsustainable and unreliable. It also brought a realization that not doing something about it can damage reputations and kill businesses.</p> <p>Today, it is common for a product to be produced in Asia, packaged in Europe, and sold in America with the trail of origin and movement being almost impossible to decipher quickly. The pandemic-induced disruptions in the supply chain have made this issue very evident, with organizations shocked by learning that their supply chain was indeed affected.</p> <p style="text-align:center;"><a href="http://info.sig.org/digital-disruption-in-sourcing-and-procurement" target="_blank"><em>&gt;&gt;Learn about the journey to enterprise-wide transformation with intelligent automation.&lt;&lt;</em></a></p> <p>With this lack of visibility and understanding, how can we ensure the security of supply and ascertain the quality of sourced goods? As designed and operating for a long time, it is technically impossible in the current supply chain model. As new entrants continue to shape the market or with M&amp;A activities, the uncertainty level of the supply chains grows even further. With the traditional supply chain, the coordination of the information, tracing the flow of materials or goods, and finance across each of the components continue to be extremely challenging and untenable for sustainability in the future. So, this is where blockchain can be beneficial in solving these problems.</p> <h1><strong>Can blockchain improve supply chains?</strong></h1> <p>To start, let&#39;s understand what exactly blockchain is and how it works. Blockchain is essentially a decentralized database that holds records of information or events in a tamper-proof way. These records allow many users to access, assess and add more data to the source. However, they can&#39;t change or erase the original data source. Since the first data stays constant, it provides a lasting, open data trail and chain of exchanges. Blockchain technology enables the ability to provide proof of transaction records throughout its life.</p> <p>Every business yearns for a collaborative system for transportation, logistics and distribution, which is the premise of an Enterprise Resource Planning (ERP) system. However, ERP implementations have been less practical and have become costlier with the investments made over the decades. ERPs still aren&#39;t as effective or efficient to provide these insights even with more investments.</p> <p>Blockchain technology can help lower costs, reduce waste, prevent overproduction and ensure that customers are more content with a product, price and service. The technology can help bring cutting-edge competitiveness to the marketplace.</p> <p>The ability to track each transaction real-time both securely and transparently across the supply chain will transform the future distribution and delivery models. Blockchain is essentially a digital spreadsheet that will allow us to track our products and transactions across the entire eco-system throughout its life-cycle.</p> <h1><strong>Today&#39;s Supply Chain Challenges</strong></h1> <p>Blockchain is a technological innovation that offers an improved approach to record transactions in a secure, transparent and auditable manner, with both sides of the participants undergoing simultaneous execution. Since the records are updated automatically, very few or no intermediaries are involved.</p> <p>Blockchain&#39;s underlying foundation is a decentralized ledger, resulting in every transaction being visible, transparent, traceable and therefore verifiable. Using blockchain, since all processed exchanges are immutable and irrevocable, results in bringing more reliability to the transaction, making the technology more resilient than existing methods.</p> <p>Since it requires almost no intermediaries with transactions relying on computing power for validation, it will reduce the previous attendants of trust along the chain. The removal of multiple layers of the many touchpoints will increase productivity and efficiencies while significantly reducing the overall cost of transactions.</p> <h1><strong>The Modern Supply Chain Network</strong></h1> <p>The modern supply chain network partners are worldwide, multi-layered and have closed frameworks. As simple as this may look, numerous inherent challenges encompass today&#39;s supply chain&mdash;these range from lacking end-to-end visibility to counterfeits to not knowing the safety and quality. There are still many constraints and potentially unnecessary costs in where, when and how products are made, distributed and financial payments between parties. This supply chain hugely relies on trust and not control. Many prominent organizations have faced hefty consequences in fines and reputation due to a lack of accountable and auditable supply chain processes that encourage fair trade.&nbsp;&nbsp;</p> <p>The global pandemic, a catalyst to improve our existing supply chain approaches to bring traceability and accountability, has led organizations to seek solutions using technology. The adoption of blockchain technology can become the framework to solve these supply chain issues from the point of origin of the raw materials to when it reaches end-of-life.</p> <h1><strong>Benefits of Blockchain Technology</strong></h1> <p><span style="font-size: 13.008px;">The challenges faced by current supply chains relate to information sharing and trust. However, with the transparency of the </span><a href="https://futureofsourcing.com/6-ways-blockchain-will-revolutionize-supply-chain-management" style="font-size: 13.008px;" target="_blank">blockchain-enabled process</a><span style="font-size: 13.008px;">, it will be easier to access all the critical data regarding transactions, even with the massive amount of information tracked.</span></p> <p>Blockchain can quickly link physical products to serial numbers, bar codes, digital tags, RFID and more to help companies create a supply chain map. This map traces the movement of goods, a change from the varied methods that organizations use today to locate products. A blockchain-enabled system can make critical information available in real-time that is currently very difficult to gather and understand, such as:</p> <ul> <li>Gaining material origination knowledge&nbsp;&nbsp;</li> <li>Visibility to product safety&nbsp;&nbsp;</li> <li>Identifying counterfeit goods&nbsp;</li> <li>Tracking of environmental and social responsibilities&nbsp; &nbsp;</li> </ul> <p>Given the effective fraud detection processes integrated into the technology, counterfeit goods will be a thing of the past. A consumer will have the confidence to know and verify that the branded goods they have purchased are indeed genuine. Brands can better track their products through the supply chain to ensure handling through authorized channels. It will improve brand reputation defense capabilities when counterfeit products show up in the marketplace. Besides, with the blockchain technology&#39;s transparent features, what will be something that one has to hide?&nbsp;&nbsp;</p> <p>Blockchain can also help with improving the purchasing, logistics and shipping processes. It can help automate and track purchase orders, change orders, receipts, shipment notifications and other trade-related records that stay maintained through the supply chain movement.&nbsp;&nbsp;</p> <p>Currently, these records are altered by individual organizations that choose to modify them for their internal processes, making it challenging to connect the same information. We have all dealt with the challenges of something as simple as supplier name being input incorrectly in a system of record. While seemingly so simple, this small variation tends to cause several downward inefficiencies in the supply chain processes and systems. Perhaps it was because an organization didn&#39;t think a supplier name would need more than 50 characters in the future, or maybe the dated system cannot accommodate it. These variations create inefficiencies that refrain us from quickly identifying that we are dealing with the same supplier across the chain. In other examples, imagine being able to have critical information at our fingertips, such as:</p> <ul> <li>Accurate cost data&nbsp; &nbsp;</li> <li>Real-time shipping and logistics status&nbsp;&nbsp;</li> <li>Transaction settlement progress&nbsp; &nbsp;&nbsp;</li> <li>Automating planning, purchasing and logistics through a single source of truth</li> </ul> <p>Streamlining and automating a complete end-to-end process using a secure blockchain would lead to faster processing, lower costs and a big win for the supply chain. With all exchanges being immutable, it can help build the trust between the two involved parties. Having this trust and enhanced connectivity will improve the security and safety of products in the market, allowing us to support more responsible and accountable economic growth globally through:</p> <ul> <li>Having an audit trail for transparency and better governance&nbsp;&nbsp;</li> <li>Accessibility to information for enforcement of tariff and trade policies&nbsp; &nbsp;</li> <li>Bringing visibility to product safety issues with the finished goods or materials sourced</li> </ul> <h1>Final Thoughts</h1> <p><span style="font-size: 13.008px;">Large organizations that lack agility or forward-thinking vision tend to be left behind by others that use technology to transform and disrupt traditional business models. It&#39;s not a matter of if but rather when. We have all seen these repeated with Kodak, Blockbuster Video and where Amazon sits in the supply chain today. Transformative leaders are already thinking about how blockchain can be leveraged within their supply chain to reap the benefits so that they are not left behind.</span></p> <p>The benefits of blockchain to manage the supply chain for enterprises are many and holds the key to working collaboratively with others to optimize the flow of goods, the complex flow of information, and financial transactions. Since blockchain can finally help bridge the gaps in the conventional supply chain processes, undoubtedly, its early adopters will reap big rewards from embracing 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/blockchain" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Blockchain</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/bitcoin" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Bitcoin</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/ethereum" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Ethereum</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="Exploring the Feasibility of a Blockchain-Enabled Supply Chain - Future of Sourcing" addthis:url="https://futureofsourcing.com/exploring-the-feasibility-of-a-blockchain-enabled-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> Thu, 27 Aug 2020 17:00:00 +0000 Purvee Kondal 1838 at https://futureofsourcing.com https://futureofsourcing.com/exploring-the-feasibility-of-a-blockchain-enabled-supply-chain#comments Rising Star Interview: Edmund Zagorin https://futureofsourcing.com/rising-star-interview-edmund-zagorin <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="https://futureofsourcing.com/sites/default/files/articles/Edmund_Zagorin_FOS%20Individual%20Award_Interview%20Graphic.png"><a href="https://futureofsourcing.com/sites/default/files/articles/Edmund_Zagorin_FOS%20Individual%20Award_Interview%20Graphic.png" title="Rising Star Interview: Edmund Zagorin" class="colorbox" rel="gallery-node-1600-fsyheLzVQP0"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Edmund_Zagorin_FOS%20Individual%20Award_Interview%20Graphic.png?itok=sNK2dYBg" width="624" height="325" 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>This October, the&nbsp;<a href="https://futureofsourcingawards.com/?__hstc=215510152.344406f4865c40604cf6029be7e958e0.1543422516683.1570480939500.1570484130773.635&amp;__hssc=215510152.3.1570484130773&amp;__hsfp=2721840510" target="_blank">Future of Sourcing Awards</a>&nbsp;will celebrate individuals newer to the industry whose thought leadership and expertise have shown promise that is likely to have a lasting impact on the industry. Below, read about Rising Star Finalist Edmund Zagorin, the founder and CEO of&nbsp;<a href="https://bidops.com/" target="_blank">Bid Ops Inc.</a>, the first company to apply artificial intelligence to vendor negotiations.</p> </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"> <div> <h3><em>How did you get into this field &ndash; was it purposeful or by accident?</em></h3> </div> <div>My path into sourcing was very much by accident. The first sourcing projects I worked on were for independent films. Independent films are notoriously low-budget and chaotic, so it was always an adventure getting the right equipment and set of vendors for each commercial project. When I got into more traditional procurement management consulting later in my career, I focused on designing multi-phased sourcing processes to qualify vendors and evaluate their products and services for large enterprises. As dry a topic as it may sound, I found designing sourcing processes fascinating (especially for high-value negotiations) because it was an incredible opportunity for large organizations to truly leverage their buying power. Through these experiences, I began to think about leverage as expressed in business results, both in terms of savings and total enterprise value. This was the inspiration for founding Bid Ops: using AI to automate some of the low-value (but 100% necessary) tasks in these multi-phase sourcing processes and thereby democratize access to excellent sourcing processes and value-creating vendor relationships.&nbsp;</div> <div>&nbsp;</div> <div> <h3><em>In what ways do you hope to influence or transform the industry?</em></h3> </div> <div>My hope is to influence the sourcing industry through Bid Ops by sharing access to hassle-free sourcing processes that can support better vendor negotiations and better vendor relationships. &nbsp;</div> <div>If sourcing teams can decrease the friction and busywork associated with using excellent processes, they can really be heroes helping their organizations align spending habits with their organization&rsquo;s overall mission and values. To me, using AI to create alignment between stakeholders, buyers and vendors is an immensely exciting opportunity.&nbsp;</div> <div>&nbsp;</div> <div> <h3><em>Who are the mentors or role models who have guided you in your career?</em></h3> </div> <div>When I first moved to Silicon Valley, Alec Wright, CIO at GSVLabs gave me some Bill Campbell-style coaching about how to listen and ask questions to prospective customers at the beginning of the technology development lifecycle that continues to play a huge role in Bid Ops&rsquo; growth today. Early investors Gab Draney, Whitney Sales and Rich Eggers were very generous in sharing their immensely valuable insights about the startup lifecycle for enterprise-focused technology businesses. Cindy Padnos of Illuminate VC, our venture investor and board member, is an inspirational fountainhead of energy and enthusiasm. As the founder/CEO of procurement technology startup Vivant, Cindy always takes time out of her day to share lessons from her successful operating experience. Neeraj Gupta of Cervin Ventures, our venture investor and board member, has been an awesome role model for truly digging into &ldquo;why&rdquo; behind the business requirements of a customer. Matt Ziskie, former CPO of Airbnb and Box and now a Bid Ops board member is a paragon of procurement excellence with a bias towards telling really amazing supply chain adventure stories. Brent Maas and Ken Desowitz each answered my cold phone call years ago for no good reason and offered their perspective about the future of public procurement, and the role that technology would play in that future. Chris Yin, an early employee and product executive at Coupa spent a lot of time advising me on product functionality and helping our founding team think through our own technology roadmap. Through a twist of fate, I had the pleasure earlier in my career of meeting and interviewing legendary Microsoft product manager Steve Sinofsky, whose remark about &ldquo;capturing the ephemeral magic of conversation&rdquo; left a lasting impact. &nbsp;</div> <div>&nbsp;</div> <div> <h3><em>What is something you wish more people knew about the sourcing and procurement industry?</em></h3> </div> <div>When people talk about &ldquo;the market&rdquo; as an abstraction, I often wonder if they truly know the utterly vital role that procurement and sourcing play in creating competitive opportunities for enterprises. Without the rigor of this vendor competition created by excellent sourcing processes, businesses will inevitably overpay for whatever the most talented, hardworking salespeople are selling (rather than what the business really needs or what solution creates the most authentic value). Simply because many vendors and solutions exist in &ldquo;the market&rdquo; does not mean that all businesses can benefit from market competition. In a world where so many technology cycles are sales-led, building a disciplined, value-focused sourcing organization can be a real competitive advantage (rather than solely a lever for cost-reduction). The market does not work by itself, and certainly not in every category. Rather, sourcing and procurement processes must create markets in which the most value-creating vendor and solution can be recognized and put into scalable practice. &nbsp;</div> <div>&nbsp;</div> <div> <h3><em>Looking ahead, what trends do you think will emerge in the sourcing and procurement space?</em></h3> </div> <div>Mass adoption of technology solutions (as well as economic consideration) will continue to put pressure on the procurement and sourcing industry to &ldquo;do more with less.&rdquo; Mass adoption will likely be driven by a mix of breakthrough technologies such as AI and blockchain alongside simple, user-friendly, best of breed digital platforms and apps that mirror developments in the consumer market, such as Amazon, Uber, Slack and Airbnb. As enterprise business applications become designed increasingly with the goal of delighting users, procurement leaders will begin to prefer cloud-based technologies with rapid deployments over traditional platforms that require a costly up-front ERP integration. Procurement technology will move from &ldquo;end-to-end&rdquo; solutions that claim to do everything to best of breed solutions that do one or two things really well. This unbundling of procurement technology will follow the same evolutionary trajectory of sales and marketing automation over the past decade, e.g. technology &ldquo;stacks&rdquo; including Salesforce and Hubspot for CRM, Marketo for campaign automation, LinkedIn for business networking and a host of other smaller applications for contact discovery and database management. Following this trajectory will mean the emergenc of a &ldquo;procurement stack&rdquo;, where different segments of the source-to-contract and procure-to-pay cycle are radically improved by modular digital apps.&nbsp;</div> <div>&nbsp;</div> <div> <h3><em>What advice do you have for those who are considering a career in sourcing or procurement?</em></h3> </div> <div>Sourcing is more fun than most people realize. If you enjoy teamwork and executing complex communication maneuvers on a tight timeline, you may find yourself loving your job. If deadlines stress you out and you really hate telling people &ldquo;no&rdquo;, then perhaps it won&rsquo;t feel like the best fit. &nbsp;</div> <div>However, life outside of procurement is chock-full of stressful deadlines and people whose unsolicited expectations you&rsquo;ll absolutely want to shatter. If strategic decision-making is an executive skill that you want to cultivate, then a career in procurement and sourcing can provide a fantastic learning curve.</div> </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/artificial-intelligence-ai" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Artificial Intelligence (AI)</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/vendor-relations" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Vendor Relations</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/blockchain" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Blockchain</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/technology" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Technology</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/future-of-sourcing-awards" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Future of Sourcing Awards</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="Rising Star Interview: Edmund Zagorin - Future of Sourcing" addthis:url="https://futureofsourcing.com/rising-star-interview-edmund-zagorin"><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, 11 Sep 2019 21:35:36 +0000 Edmund Zagorin 1600 at https://futureofsourcing.com https://futureofsourcing.com/rising-star-interview-edmund-zagorin#comments Innovations in Governance & Compliance: GEP https://futureofsourcing.com/innovations-in-governance-compliance-gep <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="https://futureofsourcing.com/sites/default/files/articles/FOS%20Header%20Image_Innovations%20in%20Governance%20and%20Compliance_0.png"><a href="https://futureofsourcing.com/sites/default/files/articles/FOS%20Header%20Image_Innovations%20in%20Governance%20and%20Compliance_0.png" title="Innovations in Governance &amp; Compliance: GEP" class="colorbox" rel="gallery-node-1597-fsyheLzVQP0"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/FOS%20Header%20Image_Innovations%20in%20Governance%20and%20Compliance_0.png?itok=t9PaiJRX" width="624" height="325" 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>This October, the&nbsp;<a href="https://futureofsourcingawards.com/?__hstc=215510152.344406f4865c40604cf6029be7e958e0.1543422516683.1570117954601.1570123446421.621&amp;__hssc=215510152.10.1570123446421&amp;__hsfp=2721840510" target="_blank">Future of Sourcing Awards</a>&nbsp;will celebrate organizations and individuals that have shown innovation, leadership and transformation in categories that are critical to the sourcing industry. Interviews with the finalists provide helpful insight about their projects, the problem they sought to solve and the impact to their organizations. Read how GEP partnered with a multinational Oil &amp; Gas company to implement a single, integrated procurement platform that could replace the legacy system already in place and also be fine-tuned to incorporate regional nuances.</p> </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"> <div> <h3><em>Can you outline why your team embarked on this project and the problem that needed to be solved?</em></h3> </div> <div>The client, a multinational Oil &amp; Gas company with users across multiple locations had been using a legacy system along with other stand-alone systems to drive its procurement operations and associated activities such as savings tracking. The lack of integration between these different systems complicated the processes to be followed by the end user. Along with reducing process complexities and improving efficiencies, the client also wanted to improve compliance to global procurement processes across all sites while pushing locally required differences for each affiliate.&nbsp;</div> <div>&nbsp;</div> <div>GEP partnered with the client to implement a single, integrated procurement platform &ndash; SMART by GEP &ndash; that could replace the legacy system and also be fine-tuned to incorporate regional nuances. The aim was also to automate controls, thereby improving compliance. Integrating the process on a single application and redesigning it would help cut down the procurement cycle time. &nbsp;</div> <div>&nbsp;</div> <div> <h3><em>How were things done originally and what was the inspiration to innovate the process?</em></h3> </div> <div>The legacy software was an on-premise, outdated system being used by the procurement team along with other home-grown tools. This resulted in low visibility and transparency into procurement processes across different locations. In addition, procurement processes were also being managed offline, using tools such as MS-Word, PowerPoint, E-mail, etc. The then-adopted processes required the same information to be entered across multiple systems, causing errors due to manual data entry and reducing the procurement team&rsquo;s focus on strategic, value-adding activities. &nbsp;</div> <div>&nbsp;</div> <div> <h3><em>What KPIs did you use to measure success for this project? (For example: performance, customer satisfaction, revenue, sales or relevant financial gains?)</em></h3> </div> <div>The outcomes were measured using the following metrics:&nbsp;</div> <div>&nbsp;</div> <ul> <li>Time taken to replace the legacy systems with SMART by GEP for end-to-end procurement operations &nbsp;</li> <li>User adoption across different global locations</li> <li>Number of suppliers onboarded &nbsp;</li> <li>Number of sourcing events conducted using the platform</li> <li>Time taken to complete each procurement activity</li> <li>Number of savings projects initiated, and savings realized&nbsp;</li> </ul> <div> <h3><em>How do you plan to ensure that the new model remains relevant and adapts to the future needs of the market? </em></h3> </div> <div>SMART by GEP is an open platform that supports future innovation with emerging technologies such as AI, RPA, IoT and Blockchain. The platform can be further leveraged to automate spend analysis, project tracking, opportunity assessment and the entire source-to-pay process. With the ability to be able to process heavy volumes of procurement information and drive procurement processes &ndash; for instance: build a huge contract repository or a supplier database with thousands of supplier catalogs &ndash; SMART by GEP would help users of the platform perform compliant purchasing to fulfil their requirement with just a few clicks. &nbsp;</div> <div>&nbsp;</div> <div>Since SMART by GEP is a cloud-native procurement platform, any changes and enhancements would reflect enterprise-wide for the client. In addition, GEP invests heavily in innovation and the client will be able to enable any future improvement to the existing platform directly from the cloud. &nbsp;</div> <div>&nbsp;</div> <div>In addition, a feedback loop has been implemented within the client organization to get feedback. This feedback will be used to enhance the product roadmap and improve user experience. &nbsp;</div> <div>&nbsp;</div> <div> <h3><em>What advice do you have for those who may want to implement this innovative approach in their own organizations?</em></h3> </div> <div>&nbsp;</div> <ul> <li>Identify clear goals and objectives for the program, ranging from tangible business case benefits to intangible goals such as improving end user experience</li> <li>Ensure alignment with senior stakeholders on goals, project timing, staffing and approach</li> <li>Agile deployment methodology with continuous user engagement and the willingness to iterate and improve design continuously</li> <li>Suppliers having a seat at the table as very important stakeholders in the S2P process</li> <li>Organizational focus on process optimization, master data harmonization and change management</li> <li>Not being restricted to the program as a technology-only project and having a razor focus on the end-user experience, adoption and the business benefit&nbsp;</li> </ul> <div> <h3><em>How did you get your company and/or stakeholders to get on board and support this project? </em></h3> </div> <div>Multiple factors contributed toward building a strong business case for this project:&nbsp;</div> <div>&nbsp;</div> <ul> <li>The client&#39;s legacy system was outdated and on-premise. Upgrading the system and implementing the change across all locations would be a time-consuming and expensive affair. &nbsp;</li> <li>Deploying cloud-native SMART by GEP unified procurement platform with functionalities supported by Artificial Intelligence, RPA and NLP, among others, was a better option compared to upgrading the aging infrastructure of the legacy system. The acquisition and operational cost of SMART by GEP was comparatively lower than the cost to upgrade the existing legacy application.</li> <li>GEP was open to co-develop, enhance and fine tune SMART by GEP based on the client&#39;s requirement to ensure coverage of the end-to-end procurement process</li> <li>Internally, with this client, GEP also increased its portfolio of clients in the Oil &amp; Gas industry significantly through the successful implementation of SMART by GEP. The client is currently pleased with the capabilities of the SMART by GEP platform and intends to increase its spectrum of usage within the organization.&nbsp;</li> </ul> </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/artificial-intelligence-ai" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Artificial Intelligence (AI)</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/blockchain" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Blockchain</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/internet-of-things-iot" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Internet of Things (IoT)</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/governance" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Governance</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/future-of-sourcing-awards" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Future of Sourcing Awards</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="Innovations in Governance &amp;amp; Compliance: GEP - Future of Sourcing" addthis:url="https://futureofsourcing.com/innovations-in-governance-compliance-gep"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Tue, 10 Sep 2019 19:37:44 +0000 Future of Sourcing Awards 1597 at https://futureofsourcing.com https://futureofsourcing.com/innovations-in-governance-compliance-gep#comments 4 Traits to Look for in a Software Development Outsourcing Vendor for Perfect-Fit Alignment https://futureofsourcing.com/4-traits-to-look-for-in-a-software-development-outsourcing-vendor-for-perfect-fit-alignment <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="https://futureofsourcing.com/sites/default/files/articles/4_Traits_Software_624x325.jpg"><a href="https://futureofsourcing.com/sites/default/files/articles/4_Traits_Software_624x325.jpg" title="4 Traits to Look for in a Software Development Outsourcing Vendor for Perfect-Fit Alignment " class="colorbox" rel="gallery-node-1459-fsyheLzVQP0"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/4_Traits_Software_624x325.jpg?itok=C7W_JenL" width="624" height="325" alt="" title="" /></a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <div>Newsflash for any company with tech job openings: <strong>there are three (!!) opportunities for every candidate, which creates negative unemployment for software developers in North America</strong>. For procurement teams, this means it&rsquo;s time to find software development service providers. You may have &ldquo;been there done that,&rdquo; or you might be facing this issue now. The big question is&hellip;how do you find the perfect-fit provider that will set your team up for success?&nbsp;</div> <div>&nbsp;</div> <div>Your choices for an outsourcing partner are LITERALLY across the globe. The challenge is to understand what traits a potential software development partner must possess to be right for you. &nbsp;</div> <div>&nbsp;</div> <div><strong>Warning: You Shouldn&rsquo;t Hire 97% of Software Development Vendors &nbsp;</strong></div> <div>&nbsp;</div> <div>My company has reviewed more than 8,000 software firms around the world to assess their ability to serve Western clients and here&rsquo;s a scary fact: <a href="https://www.accelerance.com/blog/software-outsourcing-companies" target="_blank">most software development teams aren&rsquo;t good enough</a>. Our findings reveal that 97% of global software teams should not be hired. So, how do you find the 3% of the <a href="https://www.tiempodev.com/blog/20-questions-to-ask-when-outsourcing-software-development/">software development </a><a href="https://futureofsourcing.com/cognitive-procurement-is-trending-and-cognitive-outsourcing-is-up-next" target="_blank">outsourcing vendors</a> with perfect-fit alignment for your needs&hellip;or, better yet, top 1%? And what criteria are the most important?</div> <div>&nbsp;</div> <div><strong>Here are 4 critical traits to look for when hiring a custom software development partner. &nbsp;</strong></div> <div>&nbsp;</div> <div><strong>1 . Size &nbsp;</strong></div> <div>&nbsp;</div> <div><em>Is your software outsourcing partner too big? Too small?&nbsp;</em></div> <div>&nbsp;</div> <div><a href="https://www.accelerance.com/blog/outsourcing-vendors" target="_blank">Look at your list of potential software outsourcing companies</a>. What is their company size in terms of dollars and staff? What is the impact your engagement as a percentage of revenue and personnel commitment? You cannot get good results from a software outsourcing company that&rsquo;s too large if your project is small potatoes in their portfolio of work. The top-tier, large IT outsourcing companies have thousands of developers, so, unless you&#39;re hiring hundreds of developers, <strong>you&rsquo;ll get better attention from software development companies where your business matters more</strong>.&nbsp;</div> <div>&nbsp;</div> <div>Conversely, you don&#39;t want to be the only client your outsourcing partner serves. The right size outsourcing company will have bench strength to cover for unexpected absences and breadth so that your assigned team never misses a beat with your software. There&rsquo;s no reason to accept days of down-time if a team member is absent. &nbsp;</div> <div>&nbsp;</div> <div><strong>The 5% Rule&nbsp;</strong></div> <div>&nbsp;</div> <div>Unless your outsourcing engagement uses a team of developers greater than 5% of the total number of developers at your outsourcing partner company then you&rsquo;re not likely to get the attention you need to be successful. We call this guideline our 5% rule. <strong>Make sure your engagement represents at least 5% and no more than 20% of your outsourcing company&rsquo;s business base</strong>.&nbsp;</div> <div>&nbsp;</div> <div><strong>2. Experience&nbsp;</strong></div> <div>&nbsp;</div> <div><em>Does your partner have the right experience across multiple dimensions? &nbsp;</em></div> <div>&nbsp;</div> <div>&ldquo;Experience&rdquo; as a software development outsourcing company is more than just skills in the most popular programming languages. Technical skills are important - I&rsquo;d even say, essential. But even more important are skills PLUS relevant experience. When we do post-mortems with clients on previously failed attempts at outsourced software development, we often find our clients aligned with a vendor who possessed the right technical skills but lacked important relevant experience in the industry, application or other team and business maturity aspects.&nbsp;</div> <div>&nbsp;</div> <div><strong>Industry Experience&nbsp;</strong></div> <div>&nbsp;</div> <div>Your industry vertical may have very distinctive considerations. Some of those considerations are the regulations which provide guardrails in which you conduct business. Most verticals have generally accepted &ldquo;best practices.&rdquo; Does this sound familiar? Then a software development partner with experience in your industry is a better fit than a vendor who isn&rsquo;t.&nbsp;</div> <div>&nbsp;</div> <div><strong>Application Experience&nbsp;</strong></div> <div>&nbsp;</div> <div>Some application categories have their own best practices that transcend industries, such as:&nbsp;</div> <div>&nbsp;</div> <ul> <li>Accounting (GAAP)</li> <li>Payables (3-way matching)</li> <li>HRMS (SHRM Standards, ISO 30408, 30409, etc.)</li> <li>Blockchain (Hyperledger)&nbsp;</li> </ul> <div>A suitable software outsourcing partner for your needs will demonstrate a strong capability in the application space you need filled. The vendor should know and proactively counsel you on standard processes, tools, common issues and so on for the type of application you want developed.&nbsp;</div> <div>&nbsp;</div> <div><strong>Experienced Team Members and Team Composition&nbsp;</strong></div> <div>&nbsp;</div> <div>A software development company with a proven outsourcing track record will also know how to staff your project team with the right mix of senior-level and junior-level developers, as well as specialists versus generalists. &nbsp;</div> <div>&nbsp;</div> <ul> <li><strong>Generalists are valuable on development teams because of their broad knowledge base, but &nbsp;</strong></li> <li><strong>Specialists increase the value of your software and your outsourcing investment. &nbsp;</strong></li> </ul> <div>Teams with a mix of junior, mid-level and senior developers perform best. A team comprising all junior-level developers will be less expensive, but will also lack the experience to be productive. In contrast, hiring only senior-level developers will cost you more. In our experience, balanced teams are your best option.&nbsp;</div> <div>&nbsp;</div> <div><strong>Company Maturity&nbsp;</strong></div> <div>&nbsp;</div> <div>Finally, we find that many companies seeking software vendors fail to look deeply enough at the MATURITY of a candidate firm. &nbsp;A mature software outsourcing company will have certain characteristics:&nbsp;</div> <div>&nbsp;</div> <ul> <li><strong>Years in existence.</strong> A mature software development partner with years in operation is indicative of a healthy management team that offers services that companies are willing to pay for.&nbsp;</li> <li><strong>Recruiting processes</strong>. Software outsourcing is a people-centric business. A mature vendor will have robust processes to keep a steady pipeline of new talent flowing into their company: locating top talent, vetting the candidates and onboarding them effectively. &nbsp;&nbsp;</li> <li><strong>Company size.</strong> A mature software development company will have a healthy critical mass of talent, and evidence of growth year-over-year.&nbsp;</li> <li><strong>Proven ability to deliver.</strong> A mature company will be able to proudly point to award-winning solutions they delivered and referenceable clients.&nbsp;</li> </ul> <div>Seek a software vendor with attributes of innovation, great leadership and the highest hiring standards. &nbsp;</div> <div>&nbsp;</div> <div><strong>3. Communication&nbsp;</strong></div> <div>&nbsp;</div> <div><em>Does your partner have the right tool set to communicate and collaborate effectively with Western businesses? &nbsp;</em></div> <div>&nbsp;</div> <div><a href="https://www.accelerance.com/blog/how-to-communicate-with-your-offshore-or-nearshore-software-development-team" target="_blank">Look for the ability to learn, work collaboratively, maintain clear communication and integrate with your company&rsquo;s culture and core values</a>. These are characteristics of a best practice software development partner. &nbsp;&nbsp;</div> <div>&nbsp;</div> <div><strong>Ability to Collaborate with Agile Methodology&nbsp;</strong></div> <div>&nbsp;</div> <div>No one is going to argue that collaboration is important. Yet, collaboration is sometimes under-valued in an outsourcing relationship. If, like most companies, you are planning to exploit Agile development methods with your vendor-partner, then collaboration is not just important - it&rsquo;s ESSENTIAL.&nbsp;</div> <div>&nbsp;</div> <div>An Agile software development project is a series of iterative work sets (Sprints). Each Sprint is intended to capture the best known design and quickly deploy it in usable code. In Agile software development &ldquo;speed is king&rdquo; and without great collaboration (a perfect marriage of great processes and good tools) - &ldquo;the king is dead!&rdquo; A software development company that lacks proven processes and tools to ensure effective collaboration is a BAD FIT for you. &nbsp;</div> <div>&nbsp;</div> <div><strong>English (say what?)&nbsp;</strong></div> <div>&nbsp;</div> <div>It may seem obvious, but you&rsquo;d be surprised how many of our clients are shy about insisting on strong English language fluency from an offshore vendor, until we coach them differently. If language barriers exist, you&rsquo;ll lose real project time, incur unnecessary costs, compromise the quality of your software solution and frustrate your employees and the vendor team. INSIST on good verbal and written English language skills from a prospective software development outsourcing partner. &nbsp;</div> <div>&nbsp;</div> <div><strong>4. Cost&nbsp;</strong></div> <div>&nbsp;</div> <div><em>Cost is not the only thing in making a <a href="https://futureofsourcing.com/time-to-worry-about-your-software-supply-chain" target="_blank">purchase decision,</a> but cost is never irrelevant.&nbsp;</em></div> <div>&nbsp;</div> <div>Of course - everyone looks to outsourcing for cost savings. But, never limit your assessment of a candidate partner to price alone; &nbsp;always examine an outsourcing opportunity from a value perspective. &nbsp;</div> <div>&nbsp;</div> <div><strong>Strike a balance between talent and cost &nbsp;</strong></div> <div>&nbsp;</div> <div>Never hire the &ldquo;least-cost provider.&rdquo; Shop for a software development partner like you would shop for a good family car. You aren&rsquo;t looking for a high-speed Ferrari or a cheapo rust-bucket; you want a Honda. Solid, stable, low maintenance, cost effective with years of experience and tens of thousands of hours of engineering on its résumé to back it up. &nbsp;</div> <div>&nbsp;</div> <div><strong>Offshore, nearshore, dual-shore?</strong></div> <div><strong>&nbsp;</strong></div> <div>Hourly rates vary depending on location. <a href="https://www.accelerance.com/blog/software-outsourcing-onshore-offshore-nearshore" target="_blank">Do you want to work offshore, nearshore or dual-shore</a>? Historically, the lowest cost provider has been, literally, halfway across the globe from the U.S. and multiple time-zones away. Many of our clients have found exceptional value in software outsourcing partners that:&nbsp;</div> <div>&nbsp;</div> <ul> <li>Leverage U.S. based experts who provide management and technical guidance to an offshore team of developers.&nbsp;</li> <li>Partner with nearshore companies who provide good economics plus the benefits of U.S. culture familiarity and overlapping workdays with the U.S.&nbsp;</li> </ul> <div><strong>Learn More&nbsp;</strong></div> <div>&nbsp;</div> <div>Yes, there&rsquo;s a podcast for that. To hear more on how to select the right software development outsourcing partner, check out Episode 10 of the Software Outsourcing Show - Searching Online for Software Outsourcing. (Available everywhere you listen to podcasts.)&nbsp;</div> </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/vendor" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Vendor</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/outsourcing" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Outsourcing</a></div><div class="field-item even" 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 odd" rel="dc:subject"><a href="/tags/blockchain" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Blockchain</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/accounting" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Accounting</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="4 Traits to Look for in a Software Development Outsourcing Vendor for Perfect-Fit Alignment - Future of Sourcing" addthis:url="https://futureofsourcing.com/4-traits-to-look-for-in-a-software-development-outsourcing-vendor-for-perfect-fit-alignment"><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, 03 Jun 2019 18:00:24 +0000 Steve Mezak 1459 at https://futureofsourcing.com https://futureofsourcing.com/4-traits-to-look-for-in-a-software-development-outsourcing-vendor-for-perfect-fit-alignment#comments What’s Ahead for 2019: Doing More With Intelligent Technology https://futureofsourcing.com/whats-ahead-for-2019-doing-more-with-intelligent-technology <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="https://futureofsourcing.com/sites/default/files/articles/What%E2%80%99s%20Ahead%20for%202019-Part%201.jpg"><a href="https://futureofsourcing.com/sites/default/files/articles/What%E2%80%99s%20Ahead%20for%202019-Part%201.jpg" title="What’s Ahead for 2019: Doing More With Intelligent Technology" class="colorbox" rel="gallery-node-1377-fsyheLzVQP0"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/What%E2%80%99s%20Ahead%20for%202019-Part%201.jpg?itok=r1WukmRV" width="624" height="325" alt="" title="" /></a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <div>Intelligent technologies are changing the supply chain game everywhere. The simple fact is that intelligent technology is what often separates the leaders from the followers in today&rsquo;s digital economy. Technologies like the Internet of Things (IoT), machine learning and predictive analytics help organizations derive greater value from their most valuable corporate asset: their data. Here are some specific thoughts. &nbsp;</div> <div>&nbsp;</div> <div><strong>IoT, Machine Learning and Data Analytics Will Deliver Competitive Advantage &nbsp;&nbsp;</strong></div> <div>&nbsp;</div> <div>In 2019, the number of organizations using <a href="https://futureofsourcing.com/artificial-intelligence-whats-now-and-next-in-iot-driven-supply-chain-innovation" target="_blank">IoT</a>, machine learning and advanced analytics to leverage big data and streamline supply chain operations will increase tremendously. The technology will become critical for running live supply chains that meet evolving customer demands in real time. &nbsp; &nbsp;</div> <div>&nbsp;</div> <div>A recent <a href="https://www.forbes.com/sites/insights-inteliot/2018/09/14/cover-your-assets-the-rise-of-the-super-intelligent-supply-chain/#584063c29858" target="_blank">Forbes Insights survey</a> of 700 executives found that 22 percent of respondents are implementing IoT to provide greater transparency across their supply chains. IoT is not just about connectivity and accessing &ldquo;big data.&rdquo; At its core, it&rsquo;s about gaining the visibility needed to increase efficiency, predict what&rsquo;s coming and improve business outcomes. &nbsp;</div> <div>&nbsp;</div> <div>Keep in mind that IoT without analytics is pointless. Data transmitted from a smart product or asset does little good unless you know what to do next. Leading companies in 2019 will increasingly incorporate IoT deployments into core business applications to add vital business context. &nbsp;</div> <div>&nbsp;</div> <div>From there, the goal is to use predictive logic to determine the correct course of action and machine learning to continuously improve. This approach can transform daily operations. In 2019, I expect to see more companies moving toward predictive maintenance &ndash; leading to improved service profitability, reduced maintenance costs and increased asset viability.&nbsp;</div> <div>&nbsp;</div> <div><strong>Blockchain Projects Will Move from Proofs of Concept to Proofs of Value&nbsp;</strong></div> <div>&nbsp;</div> <div>While we see a lot of push from executives to &ldquo;investigate blockchain,&rdquo; most projects still fall into the proof-of-concept category. Supply chain, however, will be one of the first areas where we see proven value of blockchain technology. Mass adoption may still be in the future, but companies in 2019 will start moving beyond proof of concept to proof of added value.&nbsp;</div> <div>&nbsp;</div> <div>The key is to identify standard business processes where <a href="https://futureofsourcing.com/a-primer-on-cryptocurrency-mining-malware" target="_blank">blockchain</a> has the ability to generate a return on investment. Areas where a clear and indisputable chain of custody needs to be documented are perfect candidates. &nbsp;</div> <div>&nbsp;</div> <div>Take, for example, farm to table offerings at organic restaurants. Blockchain can provide a valuable track and trace function to authenticate where the food you&rsquo;re eating has come from. In a similar vein, blockchain can also minimize counterfeiting by demonstrating provenance, reduce fraud by authenticating transactions publicly and confirm the ethical sourcing that customers demand. These are just a few examples. Expect companies to find more ways to make blockchain pay off in 2019. &nbsp;</div> <div>&nbsp;</div> <div><strong>3D Printing in Manufacturing Will Grow &nbsp;</strong></div> <div>&nbsp;</div> <div>Adoption of robotics and three-dimensional (3D) printing (additive layer manufacturing) will continue apace. A key trend will be the move toward distributed manufacturing rather than outsourced manufacturing. &nbsp;</div> <div>&nbsp;</div> <div>Outsourced manufacturing may deliver labor cost advantages, but it does not necessarily deliver production agility. The distributed model means that organizations produce where the market exists rather than where the production facilities exist. With 3D printing, organizations can move the means of production (the &ldquo;3D printer&rdquo;) to where the demand is needed &ndash; sending the designs for whatever needs to be made through the cloud. This gives companies the flexibility to respond to changing customer demand, provide individualization of products and even &ldquo;print on demand&rdquo; services.&nbsp;</div> <div>&nbsp;</div> <div><strong>Robotic Process Automation (RPA) Will Become a Bigger Thing&nbsp;</strong></div> <div>&nbsp;</div> <div>When it comes to artificial intelligence (AI) and machine learning, RPA is relatively easy to deploy and shows rapid benefit. Expect, therefore, more organizations to seize more RPA opportunities in 2019. The key is to realize what can be automated and what requires human intervention. With RPA, software bots follow along as system users perform specific tasks and then replicate those tasks moving forward. Admittedly, RPA technology is good at the simple stuff &ndash; but, as it happens, the simple stuff makes up about 50 percent of the workload for administrative jobs. &nbsp;</div> <div>&nbsp;</div> <div>The goal, of course, is to augment humans with AI and robotics, not replace them. As I was once told, &nbsp;&ldquo;AI doesn&#39;t take the person out of the process. It takes the robot out of the person.&quot; In 2019, expect more companies to automate repetitive warehousing, logistics and manufacturing tasks with RPA and free up worker time to focus on higher value tasks that help improve the customer experience. &nbsp;</div> <div>&nbsp;</div> <div>Thus, in the year ahead of us, I expect to see more companies dive in with intelligent technology. They will grow increasingly comfortable with how it can help drive supply chain performance and deliver better customer experiences. This will lead to wider adoption in general.</div> </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/robotic-process-automation-rpa" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Robotic Process Automation (RPA)</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/iot-internet-of-things" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">IoT (Internet of Things)</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/machine-learning" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Machine Learning</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/data-analytics" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Data Analytics</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/blockchain" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Blockchain</a></div></div></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="What&amp;rsquo;s Ahead for 2019: Doing More With Intelligent Technology - Future of Sourcing" addthis:url="https://futureofsourcing.com/whats-ahead-for-2019-doing-more-with-intelligent-technology"><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, 18 Feb 2019 17:27:38 +0000 Richard Howells 1377 at https://futureofsourcing.com https://futureofsourcing.com/whats-ahead-for-2019-doing-more-with-intelligent-technology#comments Digital Supply Chain – The Enabler of Business Innovation https://futureofsourcing.com/digital-supply-chain-the-enabler-of-business-innovation <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="https://futureofsourcing.com/sites/default/files/articles/digital_supply_chain.jpg"><a href="https://futureofsourcing.com/sites/default/files/articles/digital_supply_chain.jpg" title="Digital Supply Chain – The Enabler of Business Innovation" class="colorbox" rel="gallery-node-1320-fsyheLzVQP0"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/digital_supply_chain.jpg?itok=oT1KZ8GK" width="624" height="325" alt="" title="" /></a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <div>We are in the midst of a perfect storm. Customers are becoming more informed and demanding, and therefore, organizations are rapidly implementing technology (IoT, AI, <a href="http://www.futureofsourcing.com/will-machine-learning-save-procurement-millions-a-year" target="_blank">machine learning</a> and <a href="http://www.futureofsourcing.com/blockchain-a-new-link-in-the-supply-chain" target="_blank">blockchain</a>) to address these demands. This hyper-competitive environment presents organizations with the opportunity to rethink business processes in a way that places the supply chain within the &ldquo;eye of the storm.&rdquo;&nbsp;</div> <div>&nbsp;</div> <div>Companies leading the new age of retail are already adapting to this innovative model, enabling them to bring new products, delivery models and services to the market. &nbsp;</div> <div>&nbsp;</div> <div>Here are just a few examples.&nbsp;</div> <div>&nbsp;</div> <div><strong>From Mass Production to Mass Customization &nbsp;</strong></div> <div>&nbsp;</div> <div>As customers increasingly expect individualized product options, companies must evolve their supply chain business processes to meet these demands. &nbsp;</div> <div>&nbsp;</div> <div>From the design of a product that can be customized to order from a base model to the logistical processes that deliver these high volumes of smaller batches (or even a single unit) to the customer, Industry 4.0 and Smart Factory initiatives are popping up all over the world.&nbsp;</div> <div>&nbsp;</div> <div>Companies supporting individualized products at scale are redesigning their plants to move away from continuous production lines that manufacture set quantities of a narrow set of products and toward manufacturing cells that can yield flexible quantities of various product configurations. &nbsp;</div> <div>&nbsp;</div> <div><strong>From Selling a Product to Delivering a Solution &nbsp;</strong></div> <div>&nbsp;</div> <div>There are also new ways of engaging with the customer. Leading companies are no longer pursuing the single sale of a product, but rather, the development of a relationship that requires the customer to pay on an ongoing basis for a service. In this model, because the customer is now using the product as a service, the supplier is not only the supplier, but is also the party responsible for maintaining and servicing the product.&nbsp;</div> <div>&nbsp;</div> <div>For example:&nbsp;</div> <div>&nbsp;</div> <ul> <li>Paying for a drill based on hours of usage or even the number of holes drilled</li> <li>Paying for a pump based on the volume of water pumped</li> <li>Paying a monthly fee for a car based on miles driven&nbsp;</li> </ul> <div>These examples not only alter the nature of the customer relationship by creating regular, sustained touchpoints, but also require the manufacturer to design and build assets that are smart enough to capture and share information about usage (for billing) and performance (for maintenance). As such, the supplier/customer relationship becomes a continuous exchange, with the ability to drive both customer loyalty and insight, as opposed to one single payment.&nbsp;</div> <div>&nbsp;</div> <div>On the flip side, if the asset is not in working condition, then the customer is not using it and the manufacturer is not getting paid&mdash;a lose-lose situation. &nbsp;</div> <div> &nbsp;</div> <div><strong>From Cost Reduction to Increased Revenue&nbsp;</strong></div> <div>&nbsp;</div> <div>The digitization of the supply chain through innovative technological solutions is not only a way to reduce costs but it can help expand an organization&rsquo;s vision. When digital supply chains shift from reactive to predictive, setbacks can be avoided and operations will run smoothly regardless of external factors. &nbsp;</div> <div>&nbsp;</div> <div>Having a streamlined supply chain from end to end will help get products to consumers faster, delivering on high expectations and ultimately creating long-lasting customer relationships. &nbsp;</div> <div>&nbsp;</div> <div>We can now drive innovation, revenue and growth by utilizing the data, predictive analytics and innovation that a <a href="http://www.futureofsourcing.com/artificial-intelligence-whats-now-and-next-in-iot-driven-supply-chain-innovation" target="_blank">digitally enabled supply chain</a> provides.</div> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/supply-chain-management" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supply Chain Management</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/internet-of-things-iot" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Internet of Things (IoT)</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/artificial-intelligence-ai" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Artificial Intelligence (AI)</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/blockchain" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Blockchain</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/machine-learning" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Machine Learning</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="Digital Supply Chain &amp;ndash; The Enabler of Business Innovation - Future of Sourcing" addthis:url="https://futureofsourcing.com/digital-supply-chain-the-enabler-of-business-innovation"><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, 19 Nov 2018 22:34:25 +0000 Richard Howells 1320 at https://futureofsourcing.com https://futureofsourcing.com/digital-supply-chain-the-enabler-of-business-innovation#comments 6 Ways Blockchain Will Revolutionize Supply Chain Management https://futureofsourcing.com/6-ways-blockchain-will-revolutionize-supply-chain-management <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="https://futureofsourcing.com/sites/default/files/articles/6%20Ways%20Blockchain.jpg"><a href="https://futureofsourcing.com/sites/default/files/articles/6%20Ways%20Blockchain.jpg" title="Blockchain has plenty of other applications as well, particularly for supply chain management. " class="colorbox" rel="gallery-node-1162-fsyheLzVQP0"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/6%20Ways%20Blockchain.jpg?itok=ENGBOLym" width="624" height="325" alt="Blockchain has plenty of other applications as well, particularly for supply chain management. " title="" /></a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>When you think about blockchain technology, you may picture cryptocurrencies like Bitcoin. But <a href="http://outsourcemag.com/blockchain-a-new-link-in-the-supply-chain" target="_blank">blockchain</a> has plenty of other applications as well, particularly for supply chain management.&nbsp;</p> <p>Think of blockchain as a type of digital ledger. This ledger records transactions in blocks, and multiple copies are stored over multiple computers (called nodes). Ledgers are secure because each transaction is linked to previous blocks in a way that prevents tampering. This makes blockchain an excellent option for supply chain management. Here are some of the ways blockchain will revolutionize the industry:&nbsp;</p> <p><strong>1. Increased Transparency&nbsp;</strong></p> <p>Deloitte recently surveyed more than 500 procurement leaders from 39 countries. The survey found that one of the biggest problems they face in the supply chain is transparency, with <a href="https://www2.deloitte.com/us/en/pages/operations/articles/chief-procurement-officer-survey.html" target="_blank">65% of procurement leaders</a> saying they have no visibility (or limited visibility) beyond their Tier 1 suppliers.&nbsp;</p> <p>With multiple suppliers across multiple countries and states, it can be difficult to pinpoint issues. This is where blockchain can make a massive difference. Blockchain records and tracks transactions, making it much easier to see what&rsquo;s happening in real time.&nbsp;</p> <p><strong>2. Greater Trust&nbsp;</strong></p> <p>Before <a href="http://outsourcemag.com/the-meaning-of-facebooks-fall-out-centralized-vs-decentralized-systems" target="_blank">blockchain technology</a>, it was difficult to get a large number of supply chain partners to agree on a shared set of data. The only way to make this happen was to use an impartial intermediary which would process and reconcile all transactions. Blockchain removes this problem, synchronizing all transactions and data. Each organization can then verify the calculations and work while removing extensive amounts of cross-checking and redundancy.&nbsp;</p> <p>The Deloitte survey found that procurement leaders around the globe have indicated a desire to focus on building partnerships and collaboration with key suppliers to improve innovation within their organizations. Two-thirds of respondents said &ldquo;generating trust and win-win situations&rdquo; are a key approach to do this.&nbsp;</p> <p><strong>3. Increased Customer Satisfaction&nbsp;</strong></p> <p>Customers are increasingly interested in the journey that products take before they reach their hands. Millennials, in particular, are known for &ldquo;<a href="http://www.pkgbranding.com/blog/5-reasons-why-visible-sustainability-matters-to-millennial-consumers" target="_blank">conscious consumerism.</a>&rdquo; They&rsquo;re happy to pay more for eco-friendly products, and want to know as much as possible about a product and where it came from before they decide to buy. Blockchain presents an opportunity to engage these consumers. Organizations can be increasingly transparent with potential customers, demonstrating that their products are cruelty-free every step of the way.&nbsp;</p> <p>Global startup Everledger is already using blockchain technology. The company has uploaded data identifying <a href="http://www.wired.co.uk/article/blockchain-conflict-diamonds-everledger" target="_blank">a million diamonds to a ledger system</a>. This ensures jewelers are not inadvertently purchasing blood diamond products. It also helps prevent insurance fraud and fencing.&nbsp;</p> <p>Walmart is working with Tsinghua University in Beijing and IBM to use blockchain to follow the movement of pork within China. As sensor and chip technology continues to improve, this traceability will be increasingly powerful when it comes to customer satisfaction.&nbsp;</p> <p><strong>4. Improved Data and Analytics&nbsp;</strong></p> <p>Companies usually end up compensating for uncertainty around how much product is sitting in different locations. They do this by adding extra inventory to ensure they don&rsquo;t run out of those products. While this extra inventory is often a better option (and cheaper) than losing sales, it&rsquo;s not exactly free. In the technology industry, keeping $1 of stock costs between 20 and 40 cents each year when you consider how rapidly <a href="http://outsourcemag.com/the-future-of-operations-in-the-robotic-age-summits" target="_blank">technology</a> products depreciate and the cost of capital.&nbsp;</p> <p>Blockchain solves these problems, with better data leading to better outcomes. Since blockchain allows businesses to track and manage their resources every step of the way, this leads to greater accuracy, better forecasts and less inventory being stocked unnecessarily.&nbsp;</p> <p><strong>5. Decreased Delays Between Procurement and Payment&nbsp;</strong></p> <p>Many businesses have a large gap between when they deliver a product or complete a task, and how long before they&rsquo;re paid. Products are sent or work is completed, and invoices are generated and sent to customers. Those customers then have the ball in their court and can choose how and when to pay those invoices. This often leads to a dance as suppliers send invoice reminders and call customers while customers process invoices slowly, occasionally losing them completely.&nbsp;</p> <p>Blockchain can end this, by integrating payment and delivery in digital contracts. These would integrate with banks and logistic partners. These smart contracts would immediately send proof of delivery, triggering automatic invoicing and payments. That removes the payment gap between suppliers and customers, directly impacting the bottom line and ending procure-to-pay gaps.&nbsp;</p> <p><strong>6. Fewer Mistakes</strong></p> <p>In 2015, 55 people who dined at Chipotle Mexican Grill were <a href="http://fortune.com/2017/02/02/chipotle-sales-decline-2016/" target="_blank">infected with E. coli</a>. The company&rsquo;s stock dropped by 42%, and its reputation still hasn&rsquo;t recovered.&nbsp;</p> <p>Unfortunately, Chipotle has also experienced a Norovirus outbreak (from one of its stores) and a salmonella outbreak (associated with tomatoes). If Chipotle had used blockchain technology, these outbreaks could have been prevented and contained. The company could have seen their ingredients&rsquo; journey at every step, tracing the origin of the outbreaks immediately.&nbsp;</p> <p>Blockchain is an excellent opportunity for businesses to track supplies throughout their journey and prevent reputational damage.&nbsp;</p> <p><strong>Blockchain: Meeting Today&rsquo;s Supply Chain Challenges&nbsp;</strong></p> <p>Supply chain management has many challenges. These include planning and risk management, cost control, lack of end-to-end visibility and partner/supplier relationship management. Blockchain will increase efficiency, decrease costs and ensure greater transparency for both businesses and customers. However, this revolution won&#39;t happen without an agreement between stakeholders to invest in blockchain and IoT technologies. The regulatory environment also needs to evolve to support this implementation. One thing is certain: Companies that invest in blockchain technology early are sure to gain a competitive edge.</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/blockchain" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Blockchain</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/cryptocurrency" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Cryptocurrency</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/bitcoin" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Bitcoin</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/data" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Data</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/transparency" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Transparency</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="6 Ways Blockchain Will Revolutionize Supply Chain Management - Future of Sourcing" addthis:url="https://futureofsourcing.com/6-ways-blockchain-will-revolutionize-supply-chain-management"><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> Thu, 03 May 2018 21:35:58 +0000 Joanna Sharma 1162 at https://futureofsourcing.com https://futureofsourcing.com/6-ways-blockchain-will-revolutionize-supply-chain-management#comments