Future of Sourcing - Risk Management https://futureofsourcing.com/topic/risk-management Today's procurement professionals must identify the risks that can impact an organization and implement strategies to mitigate and manage those risks. en 2023 FOSA Finalists https://futureofsourcing.com/2023-fosa-finalists <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://futureofsourcing.com/sites/default/files/articles/1690394054577.jpeg"><a href="https://futureofsourcing.com/sites/default/files/articles/1690394054577.jpeg" title="2023 FOSA Finalists" class="colorbox" rel="gallery-node-2310-4e_-rusoHxA"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/1690394054577.jpeg?itok=GgF-hnia" width="800" height="440" alt="" title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <p align="center" style="font-size: 13.008px;"><strong>2023 FOS Finalists</strong></p> <div>&nbsp;</div> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/the-top-10-actions-cpos-must-take-in-2021">The Top 10 Actions CPOs Must Take in 2021</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p align="center">&nbsp;</p> <p><strong><u>Innovations in Digitization</u></strong></p> <p><strong>Dräeger</strong>&nbsp;-&nbsp;Using Smart Processes to Create Resilient Supply Chains</p> <p>&nbsp;</p> <p><strong>Dubai Municipality</strong>&nbsp;&ndash;&nbsp;&ldquo;Utilitizing Digital Transformation to Facilitate and Maximize Effectiveness of RPA in Supplier Performance Evaluation&quot;</p> <p>&nbsp;</p> <p><strong>GEP</strong>&nbsp;&ndash;&nbsp;Top Asian Retailer Transforms Procurement Operations By Deploying GEP SMART</p> <p>&nbsp;</p> <p><strong>GEP</strong>&nbsp;&ndash;&nbsp;How GEP Helped Retailer Transform Its Procure-to-Pay Operations In Stores</p> <p>&nbsp;</p> <p>&nbsp;</p> <p><strong><u>Innovations in Environmental, Social and Corporate Governance (ESG)</u></strong></p> <p><strong>bp / JLL Vested Sources, a University of Tennessee Case Study</strong>&nbsp;&ndash;&nbsp;bp and JLL: Reimagining Real Estate and Facilities Management Outsourcing</p> <p>&nbsp;</p> <p><strong>Danfoss LLC</strong>&nbsp;&ndash;&nbsp;Leading by Example: Decarbonization Through Circularity at Danfoss Turbocor&reg;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p><strong><u>Innovations in Governance/Compliance</u></strong></p> <p><strong>American Tire Distributors</strong>&nbsp;&ndash;&nbsp;Streamlining Success: Unleashing Efficiency and Compliance with Contracting Excellence</p> <p>&nbsp;</p> <p><strong>Applied Materials</strong>&nbsp;&ndash;&nbsp;&ldquo;How Applied Materials Quickly Responded to Evolving Industry Regulations to Ensure Compliance and Data Protection&rdquo;</p> <p>&nbsp;</p> <p><strong>Danfoss LLC</strong>&nbsp;&ndash;&nbsp;Leading by Example: Decarbonization Through Circularity at Danfoss Turbocor&reg;</p> <p>&nbsp;</p> <p><strong>RapidRatings</strong>&nbsp;&ndash;&nbsp;Enabling Private Company Visibility Through Financial Health: RapidRatings&#39; Drive for Transparency and Collaboration Among Business Partners</p> <p>&nbsp;</p> <p>&nbsp;</p> <p><strong><u>Innovations in Outsourcing</u></strong></p> <p><strong>GEP</strong>&nbsp;&ndash;&nbsp;How GEP Drove Post-M&amp;A Cost Savings for a Fortune 100 Pharma Company</p> <p>&nbsp;</p> <p><strong>GEP</strong>&nbsp;&ndash;&nbsp;GEP Helps U.S. Retail Chain Manage Costs &amp; Risks By Transforming Procurement</p> <p>&nbsp;</p> <p><strong>GEP / Bayer AG</strong>&nbsp;&ndash;&nbsp;Bayer partners with GEP; jointly transform procurement with efficient operating model</p> <p>&nbsp;</p> <p><strong>RapidRatings</strong>&nbsp;&ndash;&nbsp;Enabling Private Company Visibility Through Financial Health: RapidRatings&#39; Drive for Transparency and Collaboration Among Business Partners</p> <p>&nbsp;</p> <p>&nbsp;</p> <p><strong><u>Innovations in Sourcing</u></strong></p> <p><strong>American Tire Distributors</strong>&nbsp;&ndash;&nbsp;Streamlining Success: Unleashing Efficiency and Compliance with Contracting Excellence</p> <p>&nbsp;</p> <p><strong>bp / JLL Vested Sources, a University of Tennessee Case Study</strong>&nbsp;&ndash;&nbsp;bp and JLL: Reimagining Real Estate and Facilities Management Outsourcing</p> <p>&nbsp;</p> <p><strong>Calculum Inc.</strong>&nbsp;&ndash;&nbsp;How Calculum&rsquo;s ADA Platform allows leading organizations to optimize their payment terms, aligned to their competitors and unlock working capital and generate millions in free cash flow.</p> <p>&nbsp;</p> <p><strong>GEP / Bayer AG</strong>&nbsp;&ndash;&nbsp;Bayer partners with GEP; jointly transform procurement with efficient operating model</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p><strong><u>Innovations in Supplier Diversity</u></strong></p> <p><strong>American Tire Distributors</strong>&nbsp;&ndash;&nbsp;From Zero to Hero: Recognizing ATD&#39;s Outstanding Supplier Diversity Achievements in less than 3 Years</p> <p>&nbsp;</p> <p><strong>BGIS Global Integrated Solutions</strong>&nbsp;&ndash;&nbsp;Inclusion Excellence: The BGIS Journey to a World-Class SDI Program</p> <p>&nbsp;</p> <p><strong>BlueCross BlueShield of Tennessee</strong>&nbsp;&ndash;&nbsp;&ldquo;How BCBST Transformed our Spending Habits to Mirror our Employee and Customer Demographics&rdquo;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p><strong><u>Innovations in Supplier Performance</u></strong></p> <p><strong>Dubai Municipality</strong>&nbsp;&ndash;&nbsp;&ldquo;How Dubai Municipality best utilizes Digital Transformation to Facilitate and Maximize Effectiveness of Robotic Process Automation in Supplier Performance Evaluation&quot;.</p> <p>&nbsp;</p> <p><strong>SalesLayer</strong>&nbsp;&ndash;&nbsp;Adding a Sales Layer to B2B Networks to Simplify, Facilitate, &amp; Expand Supplier Participation</p> <p>&nbsp;</p> <p><strong>Simfoni</strong>&nbsp;&ndash;&nbsp;How Simfoni&#39;s AI-Driven Tech Brings Efficiency and Strategic Advantage to Customers</p> <p>&nbsp;</p> <p><strong>VSP Vision</strong>&nbsp;&ndash;&nbsp;Supplier management at VSP Vision helps retain revenue, drive innovation and reduce risks.</p> <p>&nbsp;</p> <p>&nbsp;</p> <p><strong><u>Innovations in Sustainability</u></strong></p> <p><strong>Dräeger&nbsp;</strong>&ndash;&nbsp;Using Smart Processes to Create Resilient Supply Chains</p> <p>&nbsp;</p> <p><strong>SAP / DSM - Firmenich</strong>&nbsp;&ndash;&nbsp;How Royal DSM and SAP Digitalized Global Procurement Processes for Strategic Source-to-Pay Capabilities and Sustainability</p> <p>&nbsp;</p> <p><strong>Safety Projects International, Inc.</strong>&nbsp;&ndash;&nbsp;&ldquo;How a simple initiative helped save millions of lives from the Aids Epidemic.&rdquo;</p> <p>&nbsp;</p> <p><strong>Scoutbee</strong>&nbsp;&ndash;&nbsp;&ldquo;How Scoutbee Drives Supply Base Resilience and Competitiveness with the AI-powered Supplier Intelligence Platform.&rdquo;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p><strong><u>Innnovations in Talent Management</u></strong></p> <p><strong>Open Assembly / UST</strong>&nbsp;&ndash;&nbsp;Open Talent - Opening The Door To Boundless Growth for UST by winning the battle for talent</p> <p>&nbsp;</p> <p><strong>Safety Projects International, Inc.</strong>&nbsp;&ndash;&nbsp;&ldquo;How a simple initiative helped save millions of lives from the Aids Epidemic.&rdquo;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p><strong><u>Innovations in Third Party Management</u></strong></p> <p><strong>Applied Materials</strong>&nbsp;&ndash;&nbsp;&ldquo;How Applied Materials Quickly Responded to Evolving Industry Regulations to Ensure Compliance and Data Protection&rdquo;</p> <p>&nbsp;</p> <p><strong>ICON</strong>&nbsp;&ndash;&nbsp;How ICON Unified Departments and Transformed Audit Practices with a Best In Class Third-Party Risk Program</p> <p>&nbsp;</p> <p><strong>Pfizer</strong>&nbsp;-&nbsp;How Pfizer&rsquo;s External Sourcing Colleagues Helped Advance the Discovery, Development and Delivery of the First FDA-Approved Oral Therapy for COVID-19</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p><strong>Individual Finalists:</strong></p> <p>&nbsp;</p> <p><strong>Rising Star</strong></p> <p>Jen Andretta - Simfoni</p> <p>Mitch Gustafson - NationsBenefits</p> <p>Martin Rand &ndash; Pactum AI</p> <p>Priyanka Mouli Shankar &ndash; Applied Materials</p> <p>Mark Raffan &ndash; Negotiations Ninja</p> <p>Jason Steel - The Boeing Company</p> <p>&nbsp;</p> <p><strong>Sourcing Star</strong></p> <p>Adrian Dragomir - REI</p> <p>Peder Gustafson &ndash; United Health Group</p> <p>Q Noor Crocket &ndash; American Tire Distributors</p> <p>Amanda Prochaska &ndash; Wonder Services</p> <p>David Romo-Garza -&nbsp;Airbus U.S. Space and Defense</p> <p>Cheryl Willis &ndash; Applied Materials</p> <p>&nbsp;</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/covid-19" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">COVID-19</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/vendor-management" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Vendor Management</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/eprocurement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">eProcurement</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/request-for-proposal-rfp" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Request for Proposal (RFP)</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="2023 FOSA Finalists - Future of Sourcing" addthis:url="https://futureofsourcing.com/2023-fosa-finalists"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Fri, 28 Jul 2023 20:10:49 +0000 David Scherzer 2310 at https://futureofsourcing.com https://futureofsourcing.com/2023-fosa-finalists#comments Emergency Proof Your Procurement Processes https://futureofsourcing.com/emergency-proof-your-procurement-processes-0 <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://futureofsourcing.com/sites/default/files/articles/Emergency%20Proof%20Your%20Procurement%20Processe.png"><a href="https://futureofsourcing.com/sites/default/files/articles/Emergency%20Proof%20Your%20Procurement%20Processe.png" title="Emergency Proof Your Procurement Processes" class="colorbox" rel="gallery-node-2307-4e_-rusoHxA"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Emergency%20Proof%20Your%20Procurement%20Processe.png?itok=3mnTOZEa" width="624" height="325" alt="Emergency Proof Your Procurement Processes" title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <h1>Emergency Proof Your Procurement Processes</h1> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/the-top-10-actions-cpos-must-take-in-2021">The Top 10 Actions CPOs Must Take in 2021</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>In March 2020, Pedernales Electric Cooperative (PEC)&mdash;the largest electric cooperative in the United States, servicing more than 346,000 accounts in Central Texas&mdash;had to go from being fully in-office to fully remote virtually overnight, like many organizations across North America during the COVID-19 health crisis.</p> <p>Procurement has historically been one of the last organizational functions to migrate to the cloud. Fortunately, PEC was already in the midst of digitally transforming their paper and email-based workflows and was able to accelerate their eProcurement adoption to successfully work from home (and ultimately see a <a href="https://gobonfire.com/wp-content/uploads/CaseStudy-PEC-v2021.pdf" target="_blank">150% increase</a> in the RFPs they were able to run in 2020).&nbsp;</p> <p>Less than a year later, in February 2021, Texas was at the center of an unprecedented winter storm that left more than 4.5 million homes and businesses across the state without power for several days. Between February 11 and 18, PEC line worker crews completed 16-hour shifts to restore power to the citizens of Central Texas. The Texas State Senate adopted <a href="https://www.pec.coop/news/2021/lineworkers-honored-for-service/" target="_blank">Senate Resolution 85</a> to honor the frontline workers who responded to the power crisis.</p> <p>In times of calamity&mdash;whether it&rsquo;s a natural disaster, a pandemic, an economic crash or something else entirely&mdash;organizations rely on their procurement teams to source the goods and services they need to weather the storm (sometimes, in the case of PEC, quite literally). PEC&rsquo;s adaptation to two major crises in less than one year serves as a reminder to procurement and sourcing professionals everywhere that COVID-19 isn&rsquo;t the last emergency you&rsquo;ll need to tackle head-on.</p> <p>Of course, there&rsquo;s no way to predict what kind of crisis your organization will need to face next. After all, who among us could have predicted that a global pandemic would impact our lives the way that it has? But there are steps you can take now to emergency-proof your procurement operations and workflows for whatever the future holds.</p> <h2>Reevaluate &ldquo;Patchwork&rdquo; Systems</h2> <p>As organizations across North America needed to make quick changes to respond to the COVID-19 health crisis and adjust to remote work, many procurement teams found themselves stitching together a myriad of tools and software inadvertently creating a &ldquo;patchwork procurement&rdquo; process. That is, instead of using one centralized tool for all procurement activities, these organizations use a patchwork system of software and tools that have been molded to fit the needs of procurement.</p> <p>Here are some tell-tale signs that you might be leveraging patchwork procurement:</p> <ul> <li>You receive requests through a Google form</li> <li>You accept vendor submissions through email</li> <li>You evaluate bids and RFPs using Microsoft Excel or Google Sheets</li> <li>You store contracts in a shared drive or Dropbox</li> </ul> <p>Patchwork procurement might seem like a step in the direction of truly digitized procurement, but it&rsquo;s actually a liability in an emergency. The more systems you use, the more you are at risk of duplicating processes, misplacing files, opening the door for human error, or even increasing the risk of your organization being the subject of cyber attack or a personal data breach. When you are racing the clock to find new vendors during times of supply chain disruptions, or re-prioritizing your pipeline to address urgent requests, you don&rsquo;t have the time to triple check your (and your evaluators&rsquo;) work. Not to mention, patchwork procurement systems can lead to a confusing and inconsistent vendor experience, time wasted training non-procurement users on disparate systems, and a lack of transparency and visibility for your stakeholders.</p> <p>To better prepare for future emergencies, it&rsquo;s time to reassess your patchwork procurement processes. <a href="https://gobonfire.com/blog/is-now-the-time-to-advocate-for-digital-procurement-tools/" target="_blank">eProcurement</a> can help, but not all platforms are created equal. In order to evaluate sustainability over the long haul, it&rsquo;s worth considering how well the technology you&rsquo;re evaluating helps you do the following:</p> <ul> <li>Connect, digitize and manage your operations end-to-end, from intake to contract management</li> <li>Centralize your project pipeline, so everything is easily accessible in one place</li> <li>Make processes intuitive and easy-to-use for all internal clients</li> <li>Accelerate, rather than impede, project lifecycles</li> <li>Provide full transparency and robust reporting</li> </ul> <h2>Develop Your Vendor Database and Improve the Vendor Experience</h2> <p>Remember at the beginning of COVID-19 when things like PPE and hand sanitizer were practically impossible to source? Organizations such as <a href="https://gobonfire.com/blog/procurement-during-covid-19-experts-share-their-4-lessons-learned/" target="_blank">St. Joseph&rsquo;s Health System</a> had to get creative when overbed tables went out of stock nationwide because so many long-term care facilities could no longer allow communal dining; thankfully, classic folding TV tables&mdash;a lead St. Joseph&rsquo;s Health System found thanks to the recommendations from their established vendors&mdash;did the trick when in a pinch.</p> <p>The way you approach your relationships with vendors is key to navigating any future emergency-related supply chain disruptions. Investing in a <a href="https://gobonfire.com/blog/how-bonfire-supports-emergency-procurements-during-covid-19-and-beyond/" target="_blank">vendor database</a> that contains a pre-existing pool of qualified vendors, and can suggest vendors based on commodity codes, can help with this process of developing and managing relationships with a wide variety of vendors.</p> <p>Improving your vendor experience is also key. Is finding information, submitting complete responses, and getting help when they need it straightforward and easy to do? Are you able to easily create and publish public notices and addenda to your open opportunities? Ensuring these boxes are checked will result in a more frictionless experience for your vendors.</p> <h2>Efficiency and Adaptability are the New Normal</h2> <p>In <a href="https://gobonfire.com/wp-content/uploads/Survey-Results_-Public-Procurement-Priorities-and-Strategies-for-2021.pdf" target="_blank">a recent survey</a> conducted by Bonfire, when public sector procurement professionals were asked what their team&rsquo;s biggest priority for 2021 was, 27% of them said increasing the speed and efficiency of their process&mdash;making it the number-two priority for procurement teams, right after cutting costs and reducing budget.</p> <p>To address the initial emergency response during COVID-19, almost every procurement team across North America had to adjust their processes to source goods and services as fast as possible amidst constantly changing conditions. The value of an adaptable and agile process goes beyond emergency procurement, too. PEC, for instance, once needed to award a contract the same day before energy prices changed. Features in their eProcurement software allowed the PEC procurement team to send out NDAs and confidential files to each vendor individually, enabling a successful 18-hour turnaround time.</p> <p>The pandemic demonstrated that, when push comes to shove, procurement can act fast&mdash;and it looks like those expectations are here to stay. The Bonfire <a href="https://gobonfire.com/wp-content/uploads/Survey-Results_-Public-Procurement-Priorities-and-Strategies-for-2021.pdf" target="_blank">survey data</a> also found that 28% of procurement professionals believe their stakeholders and internal clients expect faster results now than they did before COVID-19. For both the public and private sector, the &ldquo;next normal&rdquo; of procurement must involve re-examining your operations, making them faster and more agile for the long-haul&mdash;not just in emergencies&mdash;to meet these new expectations. The result will be a faster, stronger and more productive organization now, and prepared for any emergency in the future.</p> <p>The reality is that COVID-19 has transformed the path of procurement and sourcing forever. Procurement teams around the world had to adjust to unprecedented challenges, such as navigating supply chain shortages, introducing new technologies, and working from home for possibly the first time. Sourcing professionals can&rsquo;t just wait for things to go &ldquo;back to normal,&rdquo; considering the past year brought to light many gaps to procurement emergency preparedness. The steps your procurement team takes now to learn from the COVID-19 health crisis are imperative to preparing your organization for future emergencies.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/covid-19" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">COVID-19</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/vendor-management" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Vendor Management</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/eprocurement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">eProcurement</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/request-for-proposal-rfp" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Request for Proposal (RFP)</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Emergency Proof Your Procurement Processes - Future of Sourcing" addthis:url="https://futureofsourcing.com/emergency-proof-your-procurement-processes-0"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Mon, 17 Jul 2023 15:01:00 +0000 Omar Salaymeh 2307 at https://futureofsourcing.com https://futureofsourcing.com/emergency-proof-your-procurement-processes-0#comments Fragile – Handle with care https://futureofsourcing.com/fragile-handle-with-care <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://futureofsourcing.com/sites/default/files/articles/procurement%20and%20disrupted%20supply%20chains%20%281%29.png"><a href="https://futureofsourcing.com/sites/default/files/articles/procurement%20and%20disrupted%20supply%20chains%20%281%29.png" title="procurement amid disrupted supply chains" class="colorbox" rel="gallery-node-2216-4e_-rusoHxA"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/procurement%20and%20disrupted%20supply%20chains%20%281%29.png?itok=yWVnVF0Q" width="624" height="325" alt="procurement amid disrupted supply chains" title="" /></a></div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/do-you-want-chips-with-that">Do You Want Chips With That?</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">How are business and industry leaders transforming their approach to procurement amid disrupted supply chains, rising costs, and growing uncertainty?</span></p> <p style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">This is just one of many questions Economist Impact set out to answer in its global survey, conducted earlier this year, of 430 C-level executives across various organizational functions, including chief financial officers, chief operations officers, chief procurement officers, and chief supply chain officers.</span></p> <p style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">The survey&rsquo;s objective was to explore how procurement is changing to meet existing and emerging challenges. It also examined trends for the future in procurement and the actions business leaders take to ensure continuity and optimization.</span></p> <p style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">The survey results are published in a new paper,&nbsp;</span><a class="editor-rtfLink" href="https://www.ariba.com/resources/library/library-pages/chain-reactions?campaigncode=CRM-Y122-ISM-1497332&amp;source=blog-glo-TEGblogpost" style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;; color: #4a6ee0;" target="_blank">Chain reactions: Building value in procurement through digitalization</a><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">.</span></p> <h2 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;; font-weight: normal;"><strong style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">A lively and informative discussion</strong></h2> <p style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">A few weeks after the paper was published, a select group of business leaders convened for an Economist Impact roundtable to share their thoughts on the business pressures they are facing. The roundtable was convened under Chatham house rules, so this article won&rsquo;t reveal who was there or what they said.</span></p> <p style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">However, some striking themes emerged in this lively and informative discussion, including:</span></p> <ul style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"> <li style="background: transparent; margin-top: 0pt; margin-bottom: 0pt; list-style-type: disc;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">Sustainability and alignment</span></li> <li style="background: transparent; margin-top: 0pt; margin-bottom: 0pt; list-style-type: disc;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">Risk management</span></li> <li style="background: transparent; margin-top: 0pt; margin-bottom: 0pt; list-style-type: disc;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">The fragility of supply chains</span></li> </ul> <h2 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;; font-weight: normal;"><strong style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">Sustainability and alignment</strong></h2> <p style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">Unsurprisingly there was a great deal of discussion around sustainability and how it is essential for procurement as a function to align with the broader organization. This is partly because requirements for &ldquo;buying&rdquo; companies are now being driven through the supply chain to effect change. This includes requiring suppliers to commit to certain initiatives, such as:</span></p> <ul style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"> <li style="background: transparent; margin-top: 0pt; margin-bottom: 0pt; list-style-type: disc;"><strong style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">Checking modern slavery,</strong><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;and ensuring that the early payment terms the buying company was paying were being cascaded down through their supply chains.</span></li> <li style="background: transparent; margin-top: 0pt; margin-bottom: 0pt; list-style-type: disc;"><strong style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">A commitment to net zero emissions,&nbsp;</strong><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">which would be checked, and future opportunities would be dependent on organizations meeting those (for certain thresholds of contracts).</span></li> </ul> <p style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">There was a lively discussion about a recurring question around sustainability drivers. Specifically, which is more effective in driving sustainability initiatives ꟷ greater regulation or consumer demand? Although the exchange was fascinating, the panel didn&rsquo;t come down either way. At this point, I believe sustainability is quite industry driven. That is, in B2C scenarios, consumer demand drives sustainability action. In a B2B context, it is regulation.</span></p> <p style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">Panelists also noted that changes in consumer buying patterns create the need to reduce complexity in what is seen by the consumer. This also creates an opportunity for value analysis and engineering strategies to achieve cost targets in the current inflationary environment.</span></p> <h2 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;; font-weight: normal;"><strong style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">Risk management</strong></h2> <p style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">With the state of risk in the world at the forefront of many procurement leaders&rsquo; agendas, the roundtable spent a significant amount of time discussing risk. There was an interesting discussion on the merits and difficulties of reshoring strategies, how long it would take and whether the business case stacked up. What was evident, though, is that the previous strategies of supplier base consolidation and using leverage as a chief tool have created an imbalance that many markets are now feeling.</span></p> <p style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">The biggest issue is the overall supply chain and availability of certain commodities ꟷ first impacted by the pandemic and now by the war in Ukraine. These affect commodities ranging from food (wheat, fish, etc.), to building materials (wood, nails), to energy (gas supplies). Current supply issues are driving procurement professionals to gain greater visibility into their supply chains.</span></p> <h2 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;; font-weight: normal;"><strong style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">The fragility of supply chains</strong></h2> <p style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">The roundtable agreed that many supply chains right now are incredibly fragile. The goal then is to make them boring again! Visibility was identified as a major initiative in the goal of achieving this. The group agreed that before COVID-19, there wasn&rsquo;t a huge amount of visibility into supply chains (although for many industries, one or two did stand out). However, for key direct items, visibility into the depth of the supply chains is increasing. Visibility into indirect spend is less clear. For instance, where gas supplies originate takes some time to identify.</span></p> <p style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">What the increased visibility has identified, however, are massive capacity issues buried deep in the supply chains, which are essentially driving some of the fragility. While initially, this is troubling, it does present opportunities to solve that wouldn&rsquo;t be there if the problem weren&rsquo;t identified. Increasing visibility also identified saving opportunities, which all the participants identified were still a priority despite being in an inflationary environment.</span></p> <p style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">Overall, it was an enthralling discussion to hear. If you would like to find out more, the research paper from Economist Impact is available to download&nbsp;</span><a class="editor-rtfLink" href="https://www.ariba.com/resources/library/library-pages/chain-reactions?campaigncode=CRM-Y122-ISM-1497332&amp;source=blog-glo-TEGblogpost" style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;; color: #4a6ee0;" target="_blank">here</a><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">.</span></p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/supply-chain" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supply Chain</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/risk" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Risk</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/procurement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Procurement</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/sourcing" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Sourcing</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Fragile &amp;ndash; Handle with care - Future of Sourcing" addthis:url="https://futureofsourcing.com/fragile-handle-with-care"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Sun, 04 Sep 2022 15:53:22 +0000 Gordon Donovan 2216 at https://futureofsourcing.com https://futureofsourcing.com/fragile-handle-with-care#comments Four Resolutions for Supply Chain ESG Management https://futureofsourcing.com/four-resolutions-for-supply-chain-esg-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/Four%20Resolutions%20for%20Supply-Chain%20ESG%20Management.jpg"><a href="https://futureofsourcing.com/sites/default/files/articles/Four%20Resolutions%20for%20Supply-Chain%20ESG%20Management.jpg" title="In order to improve ESG performance, organizations must be more open about reporting ESG risks." class="colorbox" rel="gallery-node-2166-4e_-rusoHxA"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Four%20Resolutions%20for%20Supply-Chain%20ESG%20Management.jpg?itok=UbcyD2kM" width="624" height="325" alt="In order to improve ESG performance, organizations must be more open about reporting ESG risks." 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>In order to improve ESG performance, organizations must be more open about reporting ESG risks, disclose ESG metrics in line with industry peers, find a way to track hard-to-find metrics like supplier diversity, and tap technology to improve ESG governance and risk management says Riskonnect CEO&nbsp;Jim Wetekamp. He shares four&nbsp;ESG supply chain considerations for every risk and sourcing leader who wants to proactively improve ESG performance.</p> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/three-tips-for-dealing-with-pandemic-driven-risk">Three Tips for Dealing with Pandemic-Driven Risk</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 pressure is on to strengthen environmental, social and governance (ESG) performance. ESG factors influence a multitude of critical decisions &ndash; from where <a href="https://www2.deloitte.com/global/en/insights/topics/strategy/trust-in-corporate-climate-change-commitments.html" target="_blank">people invest</a> to where they work. Indeed, 42% of consumers say they will only buy from <a href="https://www.ey.com/en_us/consumer-products-retail/us-future-consumer-index-7-how-to-satisfy-the-sustainable-consumer" target="_blank">brands that align with their values</a>. &nbsp;</p> <p>Maybe you have taken steps to integrate ESG into operations, but what&rsquo;s next? Given that two-thirds of the average company&rsquo;s ESG footprint <a href="https://www.mckinsey.com/business-functions/operations/our-insights/buying-into-a-more-sustainable-value-chain" target="_blank">lies with its suppliers</a> and nearly 90% of greenhouse-gas emissions <a href="https://www.mckinsey.com/business-functions/operations/our-insights/the-ceo-architect-of-the-new-operations-agenda" target="_blank">come from a company&rsquo;s supply chain</a>, the answer is simple: your third parties. Even small, incremental improvements on environmental and social factors within the supply chain can significantly improve your overall ESG performance.</p> <p>Here are four ESG supply chain considerations for every risk and sourcing leader who wants to proactively improve ESG performance.</p> <h1>1. Be More Open About Reporting ESG Risks</h1> <p>Everyone is <a href="https://www2.deloitte.com/global/en/insights/topics/strategy/trust-in-corporate-climate-change-commitments.html" target="_blank">leery of &ldquo;greenwashing</a>.&rdquo; Customers and stakeholders want to know that the companies they work for and do business with are being authentic in their commitments &ndash; and transparency is critical to delivering on expectations. &nbsp;</p> <p>While most ESG reporting today is voluntary, regulations are imminent. But don&rsquo;t wait for specific requirements to shake out. Be proactive and start reporting on the ESG metrics most important to your organization. Embracing transparency sends a signal to your stakeholders that you place a priority on being a good corporate citizen, have a plan to address any issues and are dedicated to improvement. Starting early will also give you a competitive edge once regulations inevitably roll out.</p> <h2>2. Disclose ESG Metrics in Line With Industry Peers</h2> <p>ESG performance is a major force in the investment world &ndash; specifically the access to and cost of capital. Today&rsquo;s investors are demanding credible ESG data to evaluate their options. Consider providing metrics similar to what your peers are reporting to help investors compare performance and make informed investment decisions.</p> <h2>3. Find a Way to Track Hard-to-Find Metrics Like Supplier Diversity</h2> <p>Diversity, equity and inclusion (DE&amp;I) is a key part of the social element of ESG. While corporate America has increased its awareness of workforce diversity, comparable data from global suppliers can be hard to come by.</p> <p>Differing local reporting requirements and definitions of what constitutes &ldquo;diversity&rdquo; may mean the data you need is simply not there. In that case, you will have to work with your suppliers to begin collecting the type of DE&amp;I data that you need in the form you require.</p> <h2>4. Tap Technology to Improve ESG Governance and Risk Management</h2> <p>Organizations serious about improving supply chain ESG will invest in technology to streamline and standardize the complex process of ESG data collection and analysis. The data you need could be scattered across myriad departments and locations. Gathering that data, staying on top of requirements, keeping track of policies and ensuring your supply chain partners are adhering to your standards is virtually impossible with decentralized systems like spreadsheets.</p> <p>Integrated software is instrumental in bringing ESG risk insights from across the extended enterprise into one place. The right platform can automatically pull relevant data you already collect from wherever it currently resides inside or outside your organization. Any missing information can be seamlessly added via supplier portals, third-party data feeds and more.</p> <p>Having real-time information in one place enables you to understand the full scope of your exposure and proactively manage ESG metrics in a way that will positively impact your operations, brand and stakeholders.</p> <h2>Start Early and Invest Big</h2> <p>The focus and scrutiny on ESG reporting will only intensify. As ESG becomes more ingrained in internal operations, executives will increasingly expand their focus to include supply chain partners. Start now to define the ESG metrics most meaningful to your organization and your industry. You will be ready for any future regulatory requirements &ndash; and will be well on your way toward earning the trust of your stakeholders.</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/riskonnect" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Riskonnect</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/environmental-and-social-governance-esg-0" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Environmental and social governance (ESG)</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/supplier-diversity" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supplier Diversity</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/supplier-relationship-management-srm" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supplier Relationship Management (SRM)</a></div></div></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="Four Resolutions for Supply Chain ESG Management - Future of Sourcing" addthis:url="https://futureofsourcing.com/four-resolutions-for-supply-chain-esg-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><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, 29 Jun 2022 02:00:00 +0000 Jim Wetekamp 2166 at https://futureofsourcing.com https://futureofsourcing.com/four-resolutions-for-supply-chain-esg-management#comments How to Jump Off the Inflation Bandwagon https://futureofsourcing.com/how-to-jump-off-the-inflation-bandwagon <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/How-to-Jump-Off-the-Inflation-Bandwagon.jpg"><a href="https://futureofsourcing.com/sites/default/files/articles/How-to-Jump-Off-the-Inflation-Bandwagon.jpg" title="Inflation continues to be a thorn for procurement teams who want to maintain a strong bottom line without sacrificing quality." class="colorbox" rel="gallery-node-2188-4e_-rusoHxA"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/How-to-Jump-Off-the-Inflation-Bandwagon.jpg?itok=bziaERvb" width="624" height="325" alt="Inflation continues to be a thorn for procurement teams who want to maintain a strong bottom line without sacrificing quality." title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <p><em>Inflation continues to be a thorn for procurement teams who want to maintain a strong bottom line without sacrificing quality says TealBook CEO Stephany Lapierre. She analyzes what&#39;s causing the latest inflation increases and shares three ways to combat it.</em></p> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/battling-inflation-strategies-for-cost-containment">Battling Inflation: Strategies for Cost Containment</a></div><div class="field-item odd"><a href="/strategic-sourcing-in-a-hyperinflationary-environment">Strategic Sourcing in a Hyperinflationary Environment</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>It&rsquo;s a word that everyone from high-ranking executives to the average grocery-store shopper dreads hearing: inflation. As the world continues to experience <a href="https://www.tealbook.com/resource/how-will-you-weather-the-next-storm-building-a-stronger-supply-chain/">supply chain disruptions</a> caused by a number of factors&mdash;the ongoing COVID-19 pandemic, political crises, changes in production patterns and more&mdash;we&rsquo;re seeing prices for goods and materials climb faster and higher.&nbsp;</p> <p>According to the <a href="https://www.worldbank.org/en/news/press-release/2022/04/26/food-and-energy-price-shocks-from-ukraine-war">World Bank</a>, many commodities are currently priced well above the past five-year average. The increase in oil prices over the last two years haven&rsquo;t been this high since the 1973 oil crisis, and the increases in the price of food commodities are the highest they&rsquo;ve been since 2008. Unfortunately, the same report indicates that we won&rsquo;t see prices drop in many areas until 2023 or 2024.</p> <p>While this is creating stress across various kinds of businesses, it is particularly troubling for procurement teams who have worked for decades to achieve higher cost savings. They are now faced with one of two options: maintaining profits using materials from current suppliers and increasing costs to consumers; or maintaining current consumer prices and spending more to produce the same products.</p> <p>As CPOs work to battle the challenges of inflation, there is a path that offers a solution to problems across the board, giving organizations the opportunity to achieve lower costs, produce the same quality products or services, and avoid heavily raising costs on consumers. By focusing on supply chain resiliency, supplier diversity, pricing negotiation and innovation, you can combat the challenges of inflation and maintain a strong bottom line without sacrificing quality.</p> <h1>What is Causing the Latest Inflation Increases?</h1> <p>While the world is no stranger to inflation and the effects it has on the economy and consumers alike, this latest increase and the speed at which costs are rising requires a strong understanding of how we arrived at this point.</p> <p>According to the <a href="https://www.uschamber.com/economy/econ-101-inflation-is-caused-by-supply-and-demand" target="_blank">United States Chambers of Commerce</a>, we saw such a drastic increase in inflation for several reasons:</p> <ol> <li><strong>Supply and Demand</strong>: In the last two years, spending on goods has increased by 30% while the spending on services has only increased by 5%.</li> <li><strong>Supply Chain Problems</strong>: Many organizations and supply chains have not fully recovered from the constraints the global pandemic placed on their supply chains, pushing production costs higher.</li> <li><strong>Worker Shortages</strong>: With more workers demanding higher and fair wages, companies are experiencing higher operating costs.</li> </ol> <p>International factors have also placed further strain on supply chains. Commodity costs have risen in the energy and food sectors, as a large portion of these are produced in Russia and Ukraine, and the continued war has led many organizations to divest from these countries and seek goods elsewhere.</p> <p>Additionally, stringent COVID policies globally have caused a number of issues in supply that have fueled the rise in inflation, as cited by a number of procurement professionals in a recent <a href="https://fortune.com/2022/04/22/china-covid-lockdown-shanghai-supply-chain-crisis-ports-disruption/" target="_blank">Fortune article</a>. Shipping costs have sharply risen, there has been a reduction in the production of vital raw materials and with China <a href="https://fortune.com/2022/04/23/china-lockdowns-inflation-supply-chain-nightmare-shanghai/" target="_blank">accounting for 18% of all U.S. imports</a> &ndash; 35% if we focus specifically on computers and electronics &ndash; there is great concern over the impact this will have on supply chains.&nbsp;</p> <p>With all these factors affecting inflation costs, how will focusing on supplier diversity and supply chain resiliency help to combat the current state of affairs?</p> <h2>Strengthening Your Supply Chain to Combat Inflation</h2> <p>While there is no &ldquo;quick fix&rdquo; to handle inflation, there are steps you can take to make sure your supply chain is ready to handle any impact it may have on your day-to-day and long-term operations. ​​By building resiliency through diversifying your supply chain and working with new, potentially smaller or underserved suppliers, you can leverage the benefits of a more diverse supply base.</p> <h3>Ensure Your Supplier Records are Accurate</h3> <p>To ensure resiliency within your supply chain, every decision needs to be made using strong, dynamic supplier data. Knowing the accurate price, location and diversity factors (among other things) of your current suppliers ensures that your organization can accurately track production, shipping, and distribution processes and pivot to account for inflation-induced challenges when necessary. What&rsquo;s more, having this supplier data intelligence allows you to build a stronger contingency plan and maintain resiliency to avoid costly mistakes.</p> <h3>Create Competition and Allow for Price Negotiations</h3> <p>There are a number of factors that procurement teams take into consideration when choosing a supplier, such as a supplier&rsquo;s cost, product quality, price, etc. By diversifying your supply chain and going past the initial pool of suppliers you typically work with, you can introduce competition into your sourcing event, giving your team the chance to better analyze these factors and decide what exactly is in your best interest to focus on.</p> <p>It also gives existing and potential suppliers a greater incentive to better negotiate pricing and do what they can to earn your business, driving down costs on the buyer side. Additionally, by adding competition, you can better negotiate long-term spend forecasts and pursue non-pricing levers to keep costs lower for customers, which <a href="https://www.mckinsey.com/business-functions/operations/our-insights/responding-to-inflation-and-volatility-time-for-procurement-to-lead" target="_blank">McKinsey</a> cites should be a high priority for tackling inflation.</p> <h3>Drive Innovation and Reduce Operating Costs</h3> <p><a href="https://www.jaggaer.com/blog/5-advantages-of-having-a-diverse-supplier-base/" target="_blank">Research</a> conducted by The Hackett Group revealed that procurement organizations that work with a diverse supplier base also had lower overall operating costs and spent 20% less on their buying operations</p> <p>While procurement teams constantly strive to lower general operating costs, this goal has become even more important as inflation continues to affect supply chains and organizational operations. By leveraging supplier diversity, you can achieve higher cost savings at the operational level. Building a wider supplier base also allows for new ideas to be implemented into procurement processes so teams can leverage innovation to reduce costs and find workable solutions to inflation-related problems.</p> <p>For example, consider moving away from a larger, off-shore supplier who traditionally has supplied your firm with a certain product and onboarding a diverse supplier closer to home. You may be able to reduce shipping costs and get the product faster, reducing the risk of it getting stuck in a port and costing your company even more time and money, and find you&rsquo;re greatly improving your bottom line.</p> <h2>Jump Off the Inflation Bandwagon</h2> <p>Inflation has impacted and will continue to impact procurement teams across the globe for years to come. By expanding your supplier base and <a href="https://www.tealbook.com/blog/global-supplier-diversity-revenue-influencer/" target="_blank">leveraging the benefits of supplier diversity</a>, organizations can combat additional challenges caused by inflation while still hitting goals and working to keep costs low both internally and externally.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/inflation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Inflation</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/teal-book" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Teal Book</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/supplier-relationship-management-srm" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supplier Relationship Management (SRM)</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="How to Jump Off the Inflation Bandwagon - Future of Sourcing" addthis:url="https://futureofsourcing.com/how-to-jump-off-the-inflation-bandwagon"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Sun, 12 Jun 2022 17:00:00 +0000 Stephany Lapierre 2188 at https://futureofsourcing.com https://futureofsourcing.com/how-to-jump-off-the-inflation-bandwagon#comments Managing Supplier Risk and Value: Making the Most of Supplier Information https://futureofsourcing.com/managing-supplier-risk-and-value-making-the-most-of-supplier-information <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/Managing%20Supplier%20Risk%20and%20Value.jpg"><a href="https://futureofsourcing.com/sites/default/files/articles/Managing%20Supplier%20Risk%20and%20Value.jpg" title="How to Make the Most of Supplier Information" class="colorbox" rel="gallery-node-2162-4e_-rusoHxA"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Managing%20Supplier%20Risk%20and%20Value.jpg?itok=8Slva0u4" width="624" height="325" alt="How to Make the Most of Supplier Information" title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <p><em>Managing supplier information and screening for ethical business practices is expected by regulators and consumers says&nbsp;Costas Xyloyiannis, CEO of HICX. Having good supplier management processes in place can help organizations stay ahead of regulators to avoid costly fines, minimize reputational damage and reduce friction in the buyer-supplier relationship.</em></p> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/a-fresh-perspective-on-supplier-relationships">A Fresh Perspective on Supplier Relationships</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>What was once nice-to-have information has now been defined by law. As concern grows around modern slavery, GDPR, conflict minerals and climate change, governments and related third parties are demanding &ndash; with regulatory backing &ndash; that businesses ensure ethical supply chains.</p> <p>To mitigate regulatory and reputational cost, organizations need robust, accurate and extensive supplier information. For those with large complex supply chains, this is no mean feat. But apart from alleviating risk, getting your supplier information ducks in a row can also drive value.</p> <p>So, how can organizations take full advantage of the information their suppliers provide?</p> <h2>Know What&rsquo;s at Stake</h2> <p>In addition to organizations being able to provide certain supplier information, they must also fully understand it. The penalties for not getting this right can range from fines running into millions of pounds or dollars to exclusion from bidding for government contracts.</p> <p>Another consideration is that employees and consumers are starting to move away from companies that they consider unprincipled. A study by <a href="https://www2.deloitte.com/uk/en/pages/consumer-business/articles/sustainable-consumer.html" target="_blank">Deloitte</a> found that 45% of Gen Z consumers stopped purchasing certain brands because of ethical or sustainability concerns. As this stakeholder pressure continues, so does reputational risk for companies that don&rsquo;t comply.</p> <p>Equally, these stakeholders favor brands that make an effort to be conscientious. Moral commitments, such as exclusively using biodegradable packaging and supporting suppliers that pay a living wage, are at the heart of many marketing strategies.</p> <p>A more internally focused opportunity is managing the value that suppliers generate for the lifetime of the relationship. To achieve this, organizations must have good supplier management practices in place that help them to receive relevant information and recognize where more may be required.</p> <h2>Gather the Right Information</h2> <p>Supplier master data, the foundation on which all supplier-related information can be built, must be well managed. It&rsquo;s crucial that organizations gather the right information at the beginning of the relationship, before keeping it updated. This must be done in a structured and controlled manner.</p> <p>The three types of supplier information that are subject to this closer scrutiny are basic business, performance and risk management material. Mostly collected before they start collaborating, the first category relates to what the supplier does and items they supply, as well as contact and payment details. It also includes prices, references, certifications and the signed contract.</p> <p>Performance information is collected throughout the partnership. As the name suggests, it applies to production and output information, as well as factors like KPIs, customer satisfaction, service-level information, delivery, quality, contract compliance and progress reports.</p> <p>Lastly, risk management information covers both the supplier&rsquo;s financial situation and their business beliefs. This includes information on their stance and practices around issues such as modern slavery, the environment, health and safety and human rights issues.</p> <p>The goal is to receive and capture superior quality information, so that it can be assessed and put to good use.&nbsp;</p> <h2>Step Into the Supplier&rsquo;s Shoes</h2> <p>Considering that organizations are dependent upon suppliers for this information, having healthy supplier partnerships in place is an absolute necessity. Being more supplier-centric begins with prioritizing a single source of truth in supplier data, and then removing all relationship friction.</p> <p>One such point of friction for suppliers is the process of providing information. The way in which these requests are communicated at the outset is often counterproductive. It&rsquo;s not unusual for suppliers to be inundated with a steady stream of requests that are complicated to complete.</p> <p>In most cases, information must be maintained across multiple portals, each with unique login details. The systems and processes suppliers use to respond, are rarely designed with their experience in mind. Nor are the questionnaires, which don&rsquo;t always marry certain details about the supplier with the information being mined.</p> <p>In reality, all suppliers want is to get paid and renew their contracts. So, when providing information is confusing and time consuming, they treat the task as a tick-box exercise, rather than working together with the organization as partners towards a common goal.</p> <h2>Request Information by Segments</h2> <p>Undoubtedly, offering suppliers the most engaging and relevant experience empowers them to provide the best possible information. One way to achieve this is to use a single source of truth in supplier data to segment them into groups. Once clustered according to certain filters &ndash; for example, by country, category and spend &ndash; the organization can drive an efficient workflow that leads to the right information from each recipient group. When managing risk, this is crucial.</p> <p>Incidentally, it also helps to craft a better supplier experience. By removing communication bugbears, suppliers can provide better information more often, in addition to doing great work. This information further drives a healthy supplier experience, and so the cycle continues.</p> <p>While managing suppliers by segments is not new in procurement, there&rsquo;s an opportunity for the tactic to be deployed in a modern context. In recent years, the mandate of the function has progressed from being purely transactional to more strategic. As the function evolves, it&rsquo;s also becoming more digital. Encouragingly, procurement teams in leading organizations are starting to embrace contemporary technology that supports more agile and resilient supplier management.</p> <p>The requirement for buyers to manage their supplier information is likely to continue growing, as are the associated regulatory and reputational exposures. But with the right mindsets, processes and platforms in place, organizations can obtain robust supplier information. It is from this foundation that the risk and value suppliers present can be managed.</p> </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="Managing Supplier Risk and Value: Making the Most of Supplier Information - Future of Sourcing" addthis:url="https://futureofsourcing.com/managing-supplier-risk-and-value-making-the-most-of-supplier-information"><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, 10 Jun 2022 02:00:00 +0000 Costas Xyloyiannis 2162 at https://futureofsourcing.com https://futureofsourcing.com/managing-supplier-risk-and-value-making-the-most-of-supplier-information#comments As the Threat of Lost Business Erodes, Supplier Hostility is Emboldened https://futureofsourcing.com/as-the-threat-of-lost-business-erodes-supplier-hostility-is-emboldened <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/The-Threat-of-Lost-Business.jpg"><a href="https://futureofsourcing.com/sites/default/files/articles/The-Threat-of-Lost-Business.jpg" title="Fortune 1000-sized firms feel they have no choice but to retain incumbent suppliers under less than favorable terms." class="colorbox" rel="gallery-node-2187-4e_-rusoHxA"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/The-Threat-of-Lost-Business.jpg?itok=e-0oQr8D" width="624" height="325" alt="Fortune 1000-sized firms feel they have no choice but to retain incumbent suppliers under less than favorable terms." title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <p><em>Businesses, especially Fortune 1000-sized firms, feel they have no choice but to retain incumbent suppliers under less than favorable terms says <a href="https://www.finetuneus.com/" target="_blank">Fine Tune</a> CEO Rich Ham. With this power imbalance dramatically favoring sellers over buyers, he discusses how industry consolidation, anti-competitive supplier behavior and a lack of customer resources to fight back have come to exacerbate the &ldquo;threat of lost business&rdquo; dilemma.</em></p> <p><em>This article is part of the ongoing series examining &ldquo;</em><a href="https://www.finetuneus.com/insights/the-emergence-of-hostile-supplier-behaviors-what-to-do-about-it/" target="_blank">The Emergence of Hostile Supplier Behaviors &amp; What to Do About It</a>.&rdquo;</p> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/how-to-fix-procurements-fake-savings-problem">How to Fix Procurement’s Fake Savings Problem</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 threat of lost business.</p> <p>Without it, even the largest customer lacks any real power in the marketplace. When a supplier doesn&rsquo;t feel any plausible threat of lost business, it can adopt&mdash;figuratively, of course&mdash;the sales tactics employed by Vito Corleone in <em>The Godfather</em>, as relayed by Michael to Kay:</p> <p>&ldquo;<em>&hellip;my father assured him that either his brains or his signature would be on the contract.&rdquo;</em></p> <p>For a range of reasons, in 2022, businesses&mdash;<em>especially</em> Fortune 1000-sized firms&mdash;are struggling more than ever to portray a plausible threat of lost business to their vendors, and as such, feel as if they have no choice but to retain incumbent suppliers under less than favorable terms.</p> <p><a href="https://www.finetuneus.com/insights/the-emergence-of-hostile-supplier-behaviors-what-to-do-about-it/" target="_blank">A massive&mdash;and growing&mdash;power imbalance dramatically favors sellers over buyers in this landscape.</a></p> <p>Why is the threat of lost business so elusive in 2022? Naturally, the answer is complex and hugely varied, but a few stark realities constitute a significant portion of the answer:</p> <ol> <li>Industry consolidation</li> <li>Anti-competitive supplier behavior</li> <li>Lack of customer resources to fight back</li> </ol> <p>Let&rsquo;s take a closer look at each of these phenomena and how they&rsquo;ve come to exacerbate the &ldquo;threat of lost business&rdquo; dilemma, starting with&hellip;</p> <h1>Industry Consolidation</h1> <p>It should go without saying that if there are fewer supplier options, then there are fewer places to threaten to take your business. And in one industry after another, only two or three viable national options remain (at most), where as recently as a decade ago, four to six might have prevailed.</p> <p>Participants in the American economy for the last 100+ years have generally felt they had the ability to &ldquo;take their business elsewhere,&rdquo; protected against cartels, price fixing, monopolies and monopolistic behaviors by our federal antitrust laws, chiefly the <a href="https://www.archives.gov/milestone-documents/sherman-anti-trust-act#:~:text=Approved%20July%202%2C%201890%2C%20The,U.S.%20Congress%20to%20prohibit%20trusts." target="_blank">Sherman Anti-Trust Act of 1890</a>, the <a href="https://guides.loc.gov/this-month-in-business-history/october/clayton-anitrust-enacted" target="_blank">Clayton Antitrust Act of 1914</a>, and the <a href="https://www.ftc.gov/legal-library/browse/statutes/federal-trade-commission-act" target="_blank">Federal Trade Commission Act of 1914</a>.</p> <p>This fundamental accordance of power to the buyer has since been a critical underpinning of our economy, and an entire industry of purchasing practitioners has evolved with the expectation that this would remain the state of play as they learned to use the marketplace to advance their business&rsquo; interests. But in 2022, those very practitioners have seen their marketplace power lessened by massive consolidation across essentially all industries from which they buy.</p> <p>Just a few months ago, the Federal Trade Commission (FTC) and the Justice Department&rsquo;s antitrust division launched a joint inquiry seeking ways to prevent illegal and anti-competitive mergers and acquisitions. Assistant Attorney General Jonathan Kanter cut to the heart of the matter saying, &ldquo;We need to understand why so many industries have too few competitors, and to think carefully about how to ensure that our merger enforcement tools are fit for purpose in the modern economy.&rdquo;</p> <p>With dwindling options in the marketplace stripping customers of their power, increasingly emboldened suppliers are, only naturally, attempting to grab more and more power, including through progressively&hellip;</p> <h2>Anti-Competitive Supplier Behaviors</h2> <p>The FTC has been looking into this area, too, opening a <a href="https://www.regulations.gov/docket/FTC-2021-0036" target="_blank">portal</a> last fall seeking public comment on unfair and anti-competitive contract language. <em>Access to Markets</em> <a href="https://accesstomarkets.org/the-latest/potentially-unfair-or-coercive-business-contract-terms/?emci=534f9361-a406-ec11-981f-501ac57ba3ed&amp;emdi=7ce5db34-a806-ec11-981f-501ac57ba3ed&amp;ceid=3055180" target="_blank">nicely summarizes</a> the emerging threats to buyers in this realm.</p> <p>When options are limited to begin with, it&rsquo;s easier for suppliers to get away with asking for more and more onerous commitments from their customers, and with today&rsquo;s technologies and a robust information ecosystem, it&rsquo;s far easier for the ever-shrinking pool of supplier options to follow each other&rsquo;s lead in this regard.</p> <p>And of course, these anti-competitive behaviors aren&rsquo;t limited to contractual terms. In the indirect services arena, hostility to audits and hostility to third-party management have increasingly become the norm for an emboldened universe of suppliers, regardless of whether the governing contracts allow for these strategies or not.</p> <p>But the erosion of the threat of lost business can&rsquo;t be understood solely through the lens of industry consolidation and anti-competitive supplier behaviors. No, dramatically exacerbating the problem is the fact that just as marketplace battles have become more demanding than ever, the vast majority of corporate procurement and expense management departments face a glaring&hellip;</p> <h2>Lack of Resources to Fight Back</h2> <p>As we&rsquo;ve <a href="https://www.finetuneus.com/insights/the-elephant-in-the-procurement-room-under-the-radar-expenses/" target="_blank">covered extensively</a> in the past, corporate procurement and expense management functions have found themselves increasingly vulnerable as they&rsquo;ve seen their departmental resources dwindle or fail to keep pace with overall company growth. We&rsquo;ve discussed the <a href="https://www.finetuneus.com/insights/the-revolving-door-of-corporate-procurement-resulting-bottom-line-vulnerabilities-part-i/" target="_blank">range of vulnerabilities</a> this leanness has created, and among the most acute is the erosion of the threat of lost business.</p> <p>This explanation for the phenomenon is especially vexing for the largest organizations. These multi-billion-dollar companies, which have always fancied themselves the power brokers in their supplier relationships, now find themselves grappling with the reality that their suppliers know they frequently lack good options&mdash;and even where good options may exist, <em>they don&rsquo;t possess the resources to manage time-consuming and distracting supplier transitions.</em></p> <p>In many cases, the corporate-level expense owners&mdash;tasked with &ldquo;managing&rdquo; $100MM in annual spend across a dozen or more categories&mdash;simply can&rsquo;t marshal the cross-departmental bandwidth required to transition away from an incumbent supplier. Just as critically&mdash;the incumbent supplier senses this, and simply does not feel any plausible threat of lost business.</p> <p><em>All too often, the corporate expense owner faces a &ldquo;triple whammy&rdquo; in this regard: very few options, barriers to using the marketplace due to anti-competitive supplier practices and lack of resources to effectively fight back.</em></p> <p>Stay tuned as we dive further into the other challenges entangled in the emerging landscape of hostile supplier behaviors and the power shift from customers to indirect suppliers, each of which was briefly introduced in the opening article on this topic, <a href="https://www.finetuneus.com/insights/the-emergence-of-hostile-supplier-behaviors-what-to-do-about-it/" target="_blank">The Emergence of Hostile Supplier Behaviors &amp; What to Do About It</a>.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/supplier-relationship-management-srm" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supplier Relationship Management (SRM)</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="As the Threat of Lost Business Erodes, Supplier Hostility is Emboldened - Future of Sourcing" addthis:url="https://futureofsourcing.com/as-the-threat-of-lost-business-erodes-supplier-hostility-is-emboldened"><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, 08 Jun 2022 02:00:00 +0000 Rich Ham 2187 at https://futureofsourcing.com https://futureofsourcing.com/as-the-threat-of-lost-business-erodes-supplier-hostility-is-emboldened#comments Building a Risk Management Strategy: Where to Start https://futureofsourcing.com/building-a-risk-management-strategy-where-to-start <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/Building%20a%20Risk%20Management%20Strategy.jpg"><a href="https://futureofsourcing.com/sites/default/files/articles/Building%20a%20Risk%20Management%20Strategy.jpg" title="Learn three considerations to keep in mind as you build your risk management strategy that stays ahead of the next big disruption." class="colorbox" rel="gallery-node-2184-4e_-rusoHxA"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Building%20a%20Risk%20Management%20Strategy.jpg?itok=krMHYHv0" width="624" height="325" alt="Learn three considerations to keep in mind as you build your risk management strategy that stays ahead of the next big disruption." title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <p><em>There are numerous factors to consider when thinking about risk management and where to start says Omer Abdullah, Co-Founder of The Smart Cube. He explores the three considerations to keep in mind as you build your risk management strategy that stays ahead of the next big disruption.</em></p> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/3-ways-to-empower-procurement-and-prepare-for-the-next-supply-chain-crisis">3 Ways to Empower Procurement and Prepare for the Next Supply Chain Crisis</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>Risk management isn&rsquo;t a new term or notion to the supply chain and procurement industry, yet it continues to be one of the least addressed priorities within organizations. KPMG recently shared a <a href="https://home.kpmg/xx/en/home/insights/2022/01/third-party-risk-management-outlook-2022.html">report</a> on fourth-party risk that notes roughly 80% of businesses say they need to urgently improve their assessment of fourth parties in their supply chain. While it&rsquo;s certainly a topic of conversation within the boardroom, preemptive action is imperative to building a resilient strategy.</p> <p>There are numerous factors to consider when thinking about risk management and where to start. We&rsquo;ll explore the three considerations to keep in mind as you build your risk management strategy.</p> <h1>1. It&rsquo;s Not a Matter of If, but When</h1> <p>While many businesses may have risk management in mind, they often don&rsquo;t have precautions in place. If the last two years have shown us anything, it&rsquo;s that risk and crises aren&rsquo;t a matter of if, but when. Between the pandemic, the <a href="https://futureofsourcing.com/procurement-gets-competitive-with-ai-technology">Great Resignation</a> and the ongoing conflict in Ukraine, risk factors continue to come from every angle. It&rsquo;s important to keep this in mind when building out budget and priorities on a quarterly basis.</p> <p>Leaders must also understand that the goal isn&rsquo;t to completely eliminate risk but to have a plan in place to monitor and mitigate ongoing risks. Risk factors will continue to live around us and nothing can diminish that fact. It is only with diligence, critical analysis and planning that we can manage these risks and achieve fluid, profitable movement of goods and services, minimize supply disruption and maximize business continuity.</p> <h2>2. Software Solutions are Not One Size Fits All</h2> <p>Purely manual risk management solutions are outdated and unrealistic with too much data to manage. At the same time, by definition, software solutions are a one-to-many solution. The reality is that every company and its supply chain is different. While software solutions can reduce the hours of manual research, a successful solution requires sifting through the insights to find the weaknesses.</p> <p>That&rsquo;s where the intersection of artificial intelligence plus human intervention (AI + HI) come into play. Advanced analytics, AI, and the availability of expertly curated datasets and insights help procurement and supply chain teams learn more than ever before about suppliers, <a href="https://futureofsourcing.com/is-it-time-to-add-ai-to-your-commodity-insights">market and commodity trends</a>, and emerging risk factors.</p> <p>Crucially, they&rsquo;ve helped procurement teams evolve from spending long periods of time analyzing historical information to enabling truly proactive procurement operations.</p> <h2>3. As the World Evolves, Your Risk Management Must Also Evolve</h2> <p>As mentioned, risk is constant in all aspects of modern business. It&rsquo;s constantly evolving and plays a role in every decision made at every level. So, it must be constantly managed and monitored too.</p> <p>After any major crisis event, teams will want to take a deep dive into available data, see the impact, and conduct a deep supply chain risk assessment to understand how they can better manage and mitigate risk.</p> <p>In addition, true risk management must be ingrained within your culture &ndash; something that&rsquo;s part of every business decision &ndash; not just looked at after the fact or at the end of every quarter. As such, supply risk management can&rsquo;t just be based on snapshot assessments, <a href="https://futureofsourcing.com/real-time-risk-intelligence-the-antidote-to-supply-chain-disruptions">it must be a proactive as well as a reactive effort</a>.</p> <p>The risk landscape is constantly shifting and only by weaving risk management into your day-to-day operations and decision-making processes can you hope to control and contain it.</p> <p>Every decision ultimately involves some level of risk but by having visibility into that risk and the potential impacts, you&rsquo;re already a step ahead within building a manageable risk management strategy.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/third-party-risk-management" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Third Party Risk Management</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/supplier-risk-management" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supplier Risk Management</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/the-smart-cube" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">The Smart Cube</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="Building a Risk Management Strategy: Where to Start - Future of Sourcing" addthis:url="https://futureofsourcing.com/building-a-risk-management-strategy-where-to-start"><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, 01 Jun 2022 17:21:07 +0000 Omer Abdullah 2184 at https://futureofsourcing.com https://futureofsourcing.com/building-a-risk-management-strategy-where-to-start#comments Three Steps to Minimize Supply-Chain Disruptions https://futureofsourcing.com/three-steps-to-minimize-supply-chain-disruptions <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/Three-Steps-Minimize-Supply-Chain-Disruptions.jpg"><a href="https://futureofsourcing.com/sites/default/files/articles/Three-Steps-Minimize-Supply-Chain-Disruptions.jpg" title="With no foreseeable end date to supply chain disruptions, now is the time for organizations to examine the likelihood of interruptions and aim to get ahead of the problem before it takes hold." class="colorbox" rel="gallery-node-2181-4e_-rusoHxA"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Three-Steps-Minimize-Supply-Chain-Disruptions.jpg?itok=fFOX608-" width="624" height="325" alt="With no foreseeable end date to supply chain disruptions, now is the time for organizations to examine the likelihood of interruptions and aim to get ahead of the problem before it takes hold." title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <p><em>With no foreseeable end date to supply chain disruptions, now is the time for organizations to examine the likelihood of interruptions and aim to get ahead of the problem before it takes hold says Jim Wetekamp, CEO of <a href="http://www.riskonnect.com" target="_blank">Riskonnect</a>. He shares a three-step plan to build supply chain visibility, plan for various situations and the benefits of diversifying your supply sources.</em></p> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/three-tips-for-dealing-with-pandemic-driven-risk">Three Tips for Dealing with Pandemic-Driven Risk</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>Most businesses didn&rsquo;t anticipate having to handle the supply-chain impacts of several disruptive forces at once: an ongoing pandemic, a severe crunch for talent and Russia&rsquo;s invasion of Ukraine.</p> <p>Pandemic-driven shortages are still in full swing. New <a href="https://www.scmp.com/economy/china-economy/article/3172932/shanghai-port-operations-hit-citys-covid-19-outbreak" target="_blank">COVID outbreaks in China</a> are slowing the flow of goods into the U.S. The <a href="https://www.reuters.com/business/autos-transportation/us-companies-grapple-with-surging-costs-supply-chain-problems-persist-2022-02-25/" target="_blank">ongoing mass exodus</a> of supply chain and logistics workers continues to make it difficult for companies to keep up with demand. Russia&rsquo;s invasion of Ukraine compounds these challenges. Economic sanctions from Western countries are <a href="https://www.washingtonpost.com/business/2022/03/18/russia-ukraine-war-china-covid-supply-chain/" target="_blank">driving up global logistics costs</a> and lead times, exacerbating supply shortages.</p> <p>The odds of so many risk events coalescing are seemingly low. But the past few years have shined a spotlight on the interplay of risks. Every big risk event weakens you for any subsequent event, amplifying the damage and disruption.</p> <h2>What Could Come Next?</h2> <p>Europe is facing its worst migrant crisis since World War II as Ukrainian refugees flee to Poland and other neighboring countries. The rippling economic effects could tack onto current supply-chain pressures. The prospect of disruptive cyberattacks is also becoming more likely. Ransomware actors are <a href="https://news.yahoo.com/exclusive-ransomware-attacks-on-us-supply-chain-are-undermining-national-security-customs-and-border-protection-bulletin-warns-191403260.html" target="_blank">focusing their attention</a> on manufacturers&rsquo; supply chains, threatening to cripple already strained operations and undermine national security.</p> <p>At the same time, climate change and an uptick in damaging extreme weather events are threatening supply-chain resilience. Coastal flooding due to rising sea levels can lead to port closures, facility shutdowns and other logistical challenges.</p> <p>No matter what risk events lie in wait, there are ways to lessen the potential impact and speed your response time.</p> <h2>How to Act Now</h2> <p>There are three steps you can take today to bolster your supply-chain risk management capabilities.</p> <h3>1. Build Supply-Chain Visibility</h3> <p>Incomplete, scattered, or out-of-date information can leave you blind to what&rsquo;s coming and flat-footed when disruptions hit. Companies often work with an array of procurement and enterprise resource planning (ERP) systems, each home to different pieces of supplier, product and transaction data. These disparate technologies limit teams&rsquo; view of the supply base, which hinders the ability to make fast and confident decisions.</p> <p>Trustworthy data is table stakes for supply-chain risk management. Build visibility by getting all your supply-chain data &ndash; product quality, contracts, on-time delivery performance, supplier financial and cyber health, ESG metrics and more &ndash; in one place. Bringing all your information into one platform with relationship mapping capabilities gives you deep insight into supplier performance, potential risks and the impact each partner has on the organization. If a supplier is in poor financial standing, for instance, you can see your total risk exposure and quickly pivot before that supplier goes out of business.</p> <h3>2. Model Various Scenarios</h3> <p>If a major hurricane shuts down several key ports, how severe would the supply-chain interruptions be for your business? How quickly could you detect and respond to a cyberattack on your supply-chain operations? Could you handle both events if they happened at the same time? If you aren&rsquo;t confident in your organization&rsquo;s ability to withstand coinciding disruptions, now is the time to prepare.</p> <p>Scenario planning is an invaluable tool to up your game. Play out various potential risk scenarios to understand the impact each would have on your organization. Assess your ability to respond to multiple events at once and choose appropriate mitigations. It&rsquo;s critical to proactively look beyond daily risk exposures to prepare for more disruptive events and bigger abnormalities.</p> <h3>3. Diversify Your Supply Sources</h3> <p>COVID-19 highlighted the drawbacks of heavily relying on offshore supply-chain operations. Even still, companies&rsquo; <a href="https://www.bloomberg.com/news/newsletters/2022-04-04/supply-chain-latest-american-companies-are-overstocking" target="_blank">reshoring efforts have been slow</a>, and many supply chains still lean on distant supply sources.</p> <p>Supply-chain resilience hinges on having a diversified portfolio of suppliers to tap in the event your primary relationships can&rsquo;t deliver. If a port shutdown closes off a key supplier on the other side of the world, being able to identify and pull the trigger on an alternative supply source, possibly closer to home, is paramount. &nbsp;This will help protect the flow of goods when confronted by future pandemics, geopolitical issues and other major risk events.</p> <h2>The Interplay of Risks</h2> <p>Supply-chain hiccups are inevitable. What makes today&rsquo;s landscape especially challenging is the interplay of major risk events, including the pandemic, talent shortage, war and more. There will be more disruption. Build up your supply-chain and risk management capabilities now so you&rsquo;re ready for what could come next.</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/environmental-and-social-governance-esg-0" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Environmental and social governance (ESG)</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/enterprise-resource-planning-erp" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Enterprise Resource Planning (ERP)</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/riskonnect" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Riskonnect</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/supplier-diversity" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supplier Diversity</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Three Steps to Minimize Supply-Chain Disruptions - Future of Sourcing" addthis:url="https://futureofsourcing.com/three-steps-to-minimize-supply-chain-disruptions"><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, 30 May 2022 02:00:00 +0000 Jim Wetekamp 2181 at https://futureofsourcing.com https://futureofsourcing.com/three-steps-to-minimize-supply-chain-disruptions#comments Insights on the Evolving Role of Supply Management https://futureofsourcing.com/insights-on-the-evolving-role-of-supply-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/Insights%20on%20the%20Evolving%20Role%20of%20Supply%20Management.png"><a href="https://futureofsourcing.com/sites/default/files/articles/Insights%20on%20the%20Evolving%20Role%20of%20Supply%20Management.png" title="Insights on the Evolving Role of Supply Management" class="colorbox" rel="gallery-node-2065-4e_-rusoHxA"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Insights%20on%20the%20Evolving%20Role%20of%20Supply%20Management.png?itok=GWXZEAyl" 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"> <h1>Insights on the Evolving Role of Supply Management</h1> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/the-three-pillars-of-successful-supply-chain-risk-management">The Three Pillars of Successful Supply Chain Risk Management</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>The global COVID-19 pandemic put supply chain management and procurement in a very bright and positive spotlight for keeping life moving as normal as possible during all the shutdowns, disruption and general uncertainty.</p> <p>It also highlighted that business and supply chain disruption are ongoing facts of life &ndash; such as ongoing extreme weather events globally and a megaship blocking the Suez Canal for weeks, to name just two. And the impacts created a snowball effect on other industries:</p> <ul> <li>Automakers don&rsquo;t have enough chips to build cars, leading to shutdowns</li> <li>Construction companies don&rsquo;t have enough wood to build homes, and the prices are skyrocketing</li> <li>Cargo is sitting waiting to be unloaded at ports around the world, creating shortages</li> </ul> <p>There are many factors at work behind these and other situations the world finds itself in right now, and will continue to find itself in the years ahead. But one thing is for sure, the role that supply management plays will have to adapt to meet a fast-changing future.</p> <p>A recent article on the Institute for Supply Management explored the shifting and evolving discipline of supply management and the professionals in it, and what the future may/can/will/should hold for the function and job roles. Here we take a look at some of those roles more closely.</p> <h2>The Role of Technology</h2> <p>The <em>Gartner Predicts 2021: Supply Chain Technology</em> report highlights a very revealing key finding: &ldquo;While the pace of change in supply chain accelerates, only 42% of supply chain organizations have adopted agile methodologies, breaking projects into smaller increments and allowing quicker realization of failures and reallocation of efforts.&rdquo;</p> <p>That shows a real lag in SCM digital transformation efforts, in everything from visibility to data analysis and predictive forecasting. Those aspects are mutually critical, because as supply management professionals and Procurement get better at leveraging tech and data, there will be increased demands on suppliers for transparency. This will impact relationships and collaboration &ndash; see more on that below.</p> <p>Technology adoption is mandatory to effectively leverage all the massive data that is increasingly inundating companies from multiple sources, and to better inform strategy and decision-making. As Procurement gets better access to data and better tools to leverage it, more day-to-day activities will center around the insights it provides that are not possible today.</p> <p>In the case of supply management, these include outside sources like weather, global news, supplier financial health, etc., to gauge how global changes will influence spend/supplier relationships.</p> <p>With the continuing advancements in the areas of <a href="https://futureofsourcing.com/how-organizations-are-driving-value-from-procurement-with-ai">Artificial Intelligenc</a><a href="https://futureofsourcing.com/how-organizations-are-driving-value-from-procurement-with-ai" target="_blank">e</a> (AI), Robotic Process Automation (RPA), block chain, IoT, and so forth, the role of technology in supply management will become even more useful for predictive analytics, forecasting, compliance, agility and other areas.</p> <p>This reliance on technology doesn&rsquo;t mean that Procurement and SCM practitioners need to become data scientists, but those who are the most familiar and capable with the tools are going to have the most advantages. This is something to bear in mind as supply management recruits new (and probably younger) teams.</p> <h2>The Role of People&nbsp;&nbsp;</h2> <p>As supply management itself morphs and changes, so too will the role of people within it. In the years ahead it&rsquo;s easy to see that, in addition to the tech skills mentioned above, that SCM professionals will need an increased focus and broader perspective on disaster recovery and supply chain risk, especially for Tier 2 and 3 direct materials, as well as indirect commodities that have the ability to shut down supply (such as N95 masks and cleaning products). Everyone in the field now has been living this since the start of the COVID-19 pandemic (and probably earlier, if not to the same degree).</p> <p>The increased need for diverse skillsets goes together with digital transformation if organizations are to achieve the highest levels of agility in staying ahead of natural shifts in demands, as well as during disruption. With that comes the need for improved business cases for technology investment.</p> <p>There will be a greater institutionalization of knowledge and management of key categories, as well as a renewed emphasis on supplier relationship management, especially multi-supplier cooperation. Whether or not current roles expand to encompass a broader skillset, or new roles need to be created remains to be seen. Most likely, some combination of the two as supply management attains greater importance (and value) within organizations.</p> <h2>The Role of Relationships + Collaboration</h2> <p>As mentioned, one of the key &ldquo;benefits&rdquo; for Procurement and supply management teams during the pandemic was the increase in perceived value they bring to an organization (and the public). It became blindingly obvious that without Procurement and the supply chains they manage, businesses, societies and economies come to a standstill.</p> <p>A lot of the success in keeping things moving has to be attributed to managing relationships with suppliers, and what that process actually entails. These relationships are gaining in importance and are (or should be) becoming much more collaborative. Getting beyond the traditional buyer/supplier dynamic certainly has its challenges, but a shift toward mutual success and reliance (for innovation, time-to-market, agility) is going to provide enormous advantages to both sides.</p> <p>Procurement and supply management teams will also need to have an increased focus on internal stakeholder education and collaboration. This naturally includes the C-suite, which is critical for not only strategic planning, but for nuts-and-bolts support in terms of digital transformation/IT budgets and human resource needs.</p> <p>Improving information sharing and collaboration across business silos and systems and working more closely with stakeholders at all levels in the organization puts Procurement in a position to achieve greater agility/flexibility collectively, rather than trying to drive it independently.</p> <p>It will also facilitate other goals like diversity and sustainable sourcing. This is akin to internal marketing of Procurement, which all Procurement groups need to be good at, but also will need to be a priority for Procurement managers and leaders to increase influence.</p> <h2>The Role of Risk</h2> <p>In the same way that &ldquo;leadership&rdquo; means &ldquo;technology leadership&rdquo; today, &ldquo;supply management&rdquo; means &ldquo;risk management.&rdquo; As disruption becomes a way of life, staying ahead of the risk curve will involve a real focus on everything from geopolitical threats and natural disasters to the increasing problem of global cybersecurity. Ironically enough, this is a direct result of the expanding reliance on technology.</p> <p>Since every industry, business, department and location increasingly leverages technology, this exposes enterprises to more vulnerabilities from more sources. Internally, there is greater opportunity to try and control these cybersecurity risks, but external control is going to take a more concerted and creative effort.</p> <p>Procurement and supply managers specifically need to be better educated in vetting suppliers (and <em>their</em> suppliers) during the sourcing process, as more and more projects will involve some technology touchpoint with the suppliers if the buy doesn&rsquo;t include technology itself. This goes back to the role of people in the future, as this will involve training, <a href="https://sig.org/sig-university/about">certifications</a> or increased role specialization.</p> <h2>Where Does Supply Management Go From Here</h2> <p>As ISM concluded in their research, &ldquo;Mobility, improved data sets and a focus on supply risk for both direct and indirect materials will evolve today&rsquo;s supply chain professionals into tomorrow&rsquo;s operational business leaders.&rdquo;</p> <p>Procurement and supply chain management are better placed than most other functions within organizations to have visibility of and control over spend, costs, savings and risk. With the adoption of advanced Procure-to-Pay and data/spend analytics solutions that integrate AI and other advantages, teams will be able to achieve greater proactivity, agility, and be more analytical and business focused in order to do their job effectively to bring more value to the enterprise.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/supplier-relationship-management-srm" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supplier Relationship Management (SRM)</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/digital-transformation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Digital Transformation</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/corcentric" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Corcentric</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></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="Insights on the Evolving Role of Supply Management - Future of Sourcing" addthis:url="https://futureofsourcing.com/insights-on-the-evolving-role-of-supply-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><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, 26 May 2022 17:00:00 +0000 Joe Payne 2065 at https://futureofsourcing.com https://futureofsourcing.com/insights-on-the-evolving-role-of-supply-management#comments