Top Strategic Sourcing Articles by Source One:

Top News

September 22, 2017

Here's a look at where Source One's cost reduction experts were featured this week!

As Corporate United's sole provider of IT and Telecom strategic sourcing, Source One has continually proven itself adept at reducing costs and optimizing spend in these categories.  Oftentimes, however, a lack of stakeholder engagement can lead to friction between these two groups.  Leveraging their years of experience, Source One's team of experts - in conjunction with Corporate United - provide advice for avoiding conflict and maintaining effective collaboration between IT and Procurement.

Recent Blogs:

The Live Negotiation Part 1: Should You Run an eAuction?
Kristina Kaku, My Purchasing Center, 9/17/2017
Though the use of online sourcing tools has increased in recent years, the prospect of conducting negotiations live can still seem daunting.  It's easy to become overwhelmed when faced with a wealth of live market insight. Plus, many suppliers are still wary of online events.  To conduct a successful eAuction its important to first assess the market, obtain clear specifications, and ensure a considerable contract value.  If you prepare well, you'll find the convenience and pressure of online events engages stakeholders far more than traditional methods could.

Why Bother Classifying Spend? 3 Ways Spend Analysis Will Improve Your Life . . . Part II
Brian Seipel, Sourcing Innovation, 9/15/2017

Seipel concludes his series on the benefits of thorough spend analyses.  Potential savings, he suggests, go far beyond hard dollars.  Assessing their vendor pool, companies can seek out opportunities for consolidation.  A smaller vendor pool will increase efficiency by building a less costly and time consuming procurement process.  What's more, a comprehensive view of spend could help identify instances of maverick spend.  While the occasional off-contract purchase won't derail a company, it's important to identify such purchases before they commonplace.  
“If a tree falls in a forest and no one is around to hear it, does it make a sound?” We’ve all heard this question, but may not recognize it for its practical value. It does, in fact, have practical applicability – I’m here to tell you how it applies to thinking about spend analysis. To that end, let’s posit the question a bit more specifically:

“If you perform a spend analysis and it isn’t being used properly, does it even matter?”

Data analysis, spend analysis included, is becoming more and more important to business operations. It is also a lot more prevalent than decades gone by. For Procurement pros to do their job most effectively, they need data analytics – no question there. What is questionable is the way we convey and ultimately the analysis.

Data vs. Information vs. Knowledge vs. Wisdom
Too often, analysts get too caught up in “data.” We spend our time collecting it, cleansing it, centralizing it… But then what? This data obsession is a mistake – we need to shift this preoccupation towards an obsession with developing “information” and transforming it into “knowledge.” Only then can we help our organizations create “wisdom.”

That was a lot of quotation marks and many people aren’t clear on the difference between these terms, so let’s break this down a bit:
  • Data is raw fact. Clean, simple, single-minded facts. By itself, a data point is useless.
  • Information is the organization of data into a collective whole. Information can be useful in terms of understanding a bigger picture.
  • Knowledge is the application of our subject matter expertise to information. Knowledge takes our information and applies it to our organization, specifically.
  • Wisdom is applying our knowledge to real problems to generate action. Wisdom allows us to improve upon our processes and practices.

This is vague summation of the DIKW pyramid, so let’s review in terms of spend analysis and sourcing in general.

An invoice lands on our desk. It’s for this month’s office supplies shipment. We see line items for pens: it has a SKU number related to a specific box of pens, 60 pens per box, and see we bought 10 boxes for $5.99 each. All of the things are data points. So far, so good.

As the months go by, we see several types of pens being purchased, all at different price points from a handful of different suppliers. We can compare costs and watch as they fluctuate over time. These differences are important bits of information for sourcing purposes.

Spend starts getting out of control on these pens – If the cheapest pen from the cheapest supplier suffices, then why are we buying all these expensive pens? Plus, if we consolidate pen purchases to a single supplier, ordering would be easier and we may be able to drive cost savings via consolidation among suppliers. This is knowledge.

We’ve reached our breaking point. Based on the number of suppliers and SKUs in play, we need to go to market to find the best price on the best product, and work harder to enforce on-contract office supply purchases. This is actionable wisdom.

This all Sounds Good – So Where are we Going Wrong?
Following a path from data inputs to insights to action, as we’ve done in our pen example, is exactly where we want to be. The problem is that we all too often don’t move all the way through. Too many of us as analysts get stuck hovering somewhere between point A (data) and point B (information), never closing in on the level of actionable wisdom to truly make an impact.

You can have the best spend analysis in the world, but it won’t matter one bit if upper management comes to you for proactive wisdom and all you can do is hand them a stack of facts and figures (with a few pie charts thrown in for good measure).

Where do we go from Here?
We need to get better in two ways:
  • We need to understand the value of data and where that value ends. Data will always be the crucial foundation of our analysis. However, the only time raw data needs to be presented should be as an addendum to this analysis, to be viewed only if our audience wants to look under the hood – A clear understanding of your data should never be a requirement to understand our analysis.
  • We need to move beyond providing a story and start providing action. Our CEO in the aforementioned pen saga isn’t interested in whether this supplier or that supplier charges more or less. He wants to know what we’re going to cut costs and maximize value – our analysis needs to end with a call to action and specific strategy for success.

Only once we learn to do these things are we going to make a true impact.
There’s been a lot of chatter about Amazon Business and its potential impact in the Maintenance, Repair and Operations (MRO) space. With Amazon’s rapid rise as a retailer of choice for consumers, there is cause for concern when taking a look at how the company could impact corporate purchases. But, will Amazon really become a top player as a go-to source for MRO products? Based on my experience working with many different organization across multiple industries my answer is no, at least not in the near future. Personally, I think it’s going to take quite some time before they crack the list of top MRO distributors and really compete with the likes of Grainger. I base this off several reasons, buyer resistance to change, lack of a personal service component as well as real account management and inability to provide inventory management.

Relationships between most buyers/facilities and industrial distributors are built over time. From my experiences, the suppliers utilized have often been used by the facility predating many of the employees there. The relationships in place have worked for years. Why tamper with something that isn’t necessarily broken? Also doing something different will most likely require additional time or effort further causing resistance. I’ve had difficulty managing the transition between like-for-like established distributors (i.e.: Grainger to MSC or vice versa). There’s a lot that goes into the transition process from correctly and updating the ERP system to flagging down non-compliance and illustrating lost savings or missed opportunity. Now imagine trying to tell someone who uses one of these top MRO distributors they now will be purchasing from Amazon Business. Top tier industrial supplies distributors have entire teams that focus on implementation and change management. This is relatively unchartered territory for Amazon Business who relies heavily on ease of ordering through their platform.

What Amazon fails to realize is that industrial suppliers embed themselves through the personal touch and there is more to a supplier relationship than just the simple exchange of currency for goods. Generally speaking, the facility has a representative from their industrial supplies distributor who makes site visits at minimum once a week. From the distributor’s perspective this serves multiple purposes. It creates a presence and allows the distributor to continuously market themselves on an ongoing basis. Their physical presence allows the facility to directly express their needs in person and allows the distributor an opportunity to upsell. Not only this, but larger accounts are tagged with an Account Manager who works with the account holistically to ensure set pricing, keep contracts updated, and make sure all facilities are happy with the service levels provided. The continued in-person dialogue ultimately creates a lasting relationship, putting a name and a face to the supplier that makes leaving the supplier more difficult and even more so when the switch is to an organization with no name and no face, just an online portal.

Top distributors also ensure products are purchased through them by providing vendor managed inventory (VMI) and/or vending machines. Essentially, the facility gets value adds like inventory control, auto replenishment, and on-demand purchasing while the distributor gets the assurance that all these products are purchased through them. Again something Amazon Business doesn’t really offer and something top MRO distributors utilize to create stickiness, making it increasingly more difficult for the facility to transition.

From my perspective within the MRO space, Amazon Business will primarily be utilized by smaller organizations and contractors. In order for Amazon Business to be taken seriously by larger organizations, at least for MRO, they will need to not only establish themselves from a pure pricing and product line standpoint but also adjust their business model to ensure purchasing activity and address the service side of things. MRO historically has been relationship driven and I see this as a big miss from Amazon Business.

Procurement poised to incorporate big data, AI

It's been stated many times that increasing use of data will improve various industries and functions, procurement definitely among them. The question then becomes more granular, concerning the exact ways in which access to better, faster or more accurate information will help the day-to-day operations that keep these departments functioning.
Leaders already have one of the ingredients for good data use: A contemporary supply chain is made up of a huge number of moving parts, all of which are great sources of information. Once supply chain executives find a way to harness and crunch the numbers generated by their operations, they can learn a lot about their businesses, and use that knowledge effectively.

AI and data analytics in sourcing
A recent Spend Matters piece focused on the use of high-powered artificial intelligence algorithms in procurement to improve the calculations that go into strategic sourcing. Today, supply chain officials make decisions based on retrospective data. Advanced systems, however, can go faster. Systems powered by machine learning and AI can work with real-time input rather than just crunching old data. Procurement teams can turn this extra edge into better decisions.
Furthermore, Spend Matters explained that powerful analytics have uses long after a contract is awarded. The continuing relationship between supplier and company is open for analysis, ensuring that the value has stayed constant, and that the business is indeed saving money based on its choice of partner. Before, during and after the act of selecting a supplier, companies are best served by fresh data input rather than retrospective figures.
The relevant data doesn't just come from historical analysis of suppliers or the companies themselves. Spend Matters pointed out that modern algorithms can crunch the numbers generated by overall market activity as well. Driven by machine learning and AI, powerful data analytics programs are able to make more accurate predictions than ever before, based on both the timeliness and variety of variables considered.
Various kinds of analytics
There is more than one kind of analytics at play in the sourcing and procurement world. As EPS News recently pointed out, multiple technologies that fit this description recently made appearances in Garnter's periodic analysis of supply chain tech readiness. The "Hype Cycle" tracks concepts as they make their way through the pattern of rising expectations and finally find their place in the industry. Different types of data use appeared scattered along the curve.
For example, Gartner sees true artificial intelligence in the "innovation trigger" stage of development. It could be 10 years before this technology becomes as common and well-known as descriptive analytics, which has reached the "plateau of productivity. Other forms of analysis counted include big data, which is two to five years from workaday usage, and prescriptive analytics, which should be mundane in five to 10 years.
Data analytics is in an interesting place, as both the present and the future of supply chain efficiency. Companies are crunching their numbers today, but as the technology involved becomes better and more affordable, they will grow progressively more insightful. When it comes to gaining valuable insights, the potential for improvement is staggering.

Frequently, strategic sourcing and procurement organizations are plagued by “seasonal illness,” meaning, due to the cyclical nature of certain industries, these teams struggle for air when it comes to finding the right resources. Thus, for businesses looking to remedy this dilemma, firms can look to supplement their teams with procurement services providers, contractor, or even a combination of both. For companies seeking strategic sourcing temporary staff services, selecting appropriate talent compatible with company core values, procurement recruiters and their strong temporary staffing solutions may just be what the doctor ordered.

While some firms may possess misconceptions about procurement contractors and feel temporary staffing is a bitter pill to swallow, with detrimental side effects consisting of employee unreliability and indifference to company causes, short-term staffing can relieve firms’ symptoms and breathe new life into businesses in best case scenarios, or euthanize businesses in worst case scenarios. Thus, to help firms achieve this best-case scenario, Dr. Head Hunter is here to present the Anatomy of a Good Procurement Recruiter; a list of tell-tale signs your firm is working with the right strategic sourcing recruiter ready to put your business in the pink:

1. Be an Expert: When it comes to working with procurement recruiters, there are few sicknesses worse than having foot-in- mouth disease. To avoid seeming out-of-touch, firms should ensure their procurement recruiters stay abreast of market trends, and use this information to further their 1.       head-hunting efforts.  After all, a procurement recruiter is never recruiting for just one position, but for future positions as well.

2. Make the Job & Relationship Well-Aligned: Firms should avoid procurement recruiter spin-doctors; information about openings should be candid, yet aligned with company core values and demands. Furthermore, procurement recruiters should ensure candidates will integrate into corporate culture by asking key questions that build off their interests; they must listen closely to find truth in the candidates’ experiences.

       3Respect People’s Time: While it takes time for strategic sourcing and procurement recruiters to drop in and see what condition the market’s condition is in, firms and candidates have limited time and resources to expend in the acquisition process. For businesses to avoid lost opportunities, firms should ensure their procurement recruiters maintain detailed correspondence with them and candidates, updating them about the process frequently.  

      4Keep Yourself Available: Just as it’s important to respect people’s time, it’s equally as important for firms’ procurement recruiters to keep from rubbing salt in candidates’ wounds by maintaining availability for candidates with questions, concerns, and feedback. An open-door process is like an apple-a-day; the same way apples will “keep the doctor away,” an open-door procedure will streamline the hiring process and eliminate miscommunication possibilities

      5Keep a Close Pulse with the Temp Staff: After on-boarding hired hands, firms’ procurement recruiters should consistently conduct check-ups on temp staff to search for vital signs of their performance taking a turn for the better or worst. Procurement recruiters should then communicate and engage openly with temp staff and firms about these observations, in order to maintain optimal temp staff performances and ensure the highest results are delivered to a firm. 
Ultimately, procurement recruiters are a valuable asset for strategic sourcing firms, given their medicinal qualities in providing firms with strong talent acquisition for the short-term and long-term. Additionally, for firms searching for supplemental staffing support in areas relating to spend optimization, supply chain contracting, category management, and more, consider investing some time into utilizing a hybrid model, which can provide onsite recruitment help, along with versatile tools, back-end market intelligence, and more, to help restore your firm to its healthy glory. 

This year, Source One celebrates its 25th anniversary.   You can learn quite a lot in 25 years. To commemorate our quarter century of innovation in procurement and strategic sourcing we'd like to share some of what we've picked up.  Over this five-part series, we'll share 25 tips for optimizing supplier relationships,  conducting effective risk assessments, and ultimately establishing a standard of excellence in procurement.  First, here are some basics for maintaining a healthy office environment. Communication and relationship building on an internal level are crucial to maintaining effective interactions with clients and suppliers.

1. Build a Dedicated Team
You've probably heard that a team is only as strong as its weakest player.  Well, just because something's clichéd doesn't mean it isn't true.  Every last person contributing to a project needs to provide their full energy.  Wrestling with specific tasks and goals, each team member should function as a dedicated resource and not simply offer their spare time.

2. Cultivate a Team Environment
You should take the word team fairly literally.  A feeling of camaraderie can greatly increase a group's investment in their work and its result.  Strive to create a dynamic that emphasizes teamwork, collaboration, and mutual respect both internally and externally.  It should always be clear that a win for the team is also a win for its every member. 

Inconsistent or unpredictable communication can lead to confusion and utter chaos.  Maintain order by establishing a clear chain of command and encouraging open communication amongst your procurement team. Setting this standard internally will inspire similar practices in external communications with suppliers.

4. Be a Savings Cheerleader 
If momentum or morale wanes, it's always a good idea to remind individuals at each level of the project what sort of potential savings wait on the horizon.  Such reminders encourage sound decision making and can lead to renewed focus.  If need be, discuss success in terms other than hard dollar savings.  Remind everyone what savings could mean for them in particular.  

5. Keep your Legal Team in the Loop 
Legal disputes can lead to major delays in the negotiation and implementation of an initiative.  To avoid trouble, don't wait until your reading a contract to begin consulting with your legal team. Their direct input during the data collection and RFx stages can help you avoid headaches later on.

Following these guidelines, we've helped countless companies to enhance their relationships with suppliers and have established a number of fruitful partnerships ourselves.  They are the foundation of our hands-on on-demand procurement services and we count them among the secrets to our success. Stay tuned for Part 2 next week.

     Procurement professionals require an extremely diverse skillset to be successful within their roles.  In a given day, a sourcing manager must be a master communicator, fostering supplier relationships and conducting negotiations.  They must also be analytical and able to manipulate data, forecast spend figures, and calculate key performance metrics.  All of these skills must be applied to a deep understanding of how a supply chain operates.  If that wasn’t enough, depending on the particular role, they may be expected to possess subject matter expertise across one or many categories.  This can vary from an area as simple as office supplies, to complex printed circuit board assemblies that must be procured to be placed in a finished medical device.

     Filling talent in such a complex position can be a challenge, especially in niche industries with unique product mixes, geographies, and inventory management requirements.  One solution to developing the proper skillsets needed to carry out sourcing that has gained popularity over the past few years is an employee rotation program.  These programs give employees exposure to various critical roles within an organization, and allow them to build unique skillsets across multiple functions over the course of the rotation.

     The benefits of such a program are plenty.  They are particularly appealing to the millennial workforce, who value position diversity and faster career path advancement than the older generations.  Employees will have the opportunity to train and build a resume across multiple areas within an organization.  In addition, they build interdepartmental mindfulness and foster relationships amongst their peers.  Employees will build a level of comfort and familiarity with working under managers with varying leadership styles and expectations.  Company culture is reinforced as employees gain more exposure, and employees are less likely to leave after a short duration due to lack of role diversity or upward mobility.

     In addition to the communication benefits, the hard skills developed ensure that employees are building flexible capabilities and gaining a deep understanding of company processes.  Exposure to more technical positions will build an understanding of the products and/or services being developed and the assurances that need to be made in building a sustainable supply chain to support output.  Integration with the marketing and sales departments will ensure that each employee is a proper ambassador of the company, its product base, and its core values.  Integration into research and development will prepare purchasing agents with a forward thinking, value engineering mindset as products evolve.

     There are a few risks to be mindful of when considering if a rotation program is right for your talent pool.  Improper skill alignment can cause an employee to become bored or overwhelmed in a particular position and may risk turnover.  Additionally, as employees are on boarded to their new roles, other resources within those departments may have to adjust their workloads to pick up any slack during an adjustment period.  It is important that management is aligned on the resource requirements that will be necessary to support each rotational scheme.  Finally, the ROI is not fully realized until the conclusion of the rotational period as an employee settles into his or her purchasing role with their new skillset.  As with any investment there is risk of loss before the benefits are realized.

     Despite these risks, overall an employee rotational program is an excellent way to develop talent that fits your organization’s unique requirements.  It shows an investment in your people and entices young talent with the promise of rapid skill development and opportunity for future growth.

     For more information on best practices in implementing an employee rotational program, stay tuned for Part II of this blog series or reach out to Source One to find out how we can custom tailor a solution for you.

Today's supply chains need new tech - not all have it
Today's companies have to move faster than ever before, but breakdowns in any area of the business can thwart this need for speed. For example, when delays appear in the supply chain, organizations may find their overall operations unable to proceed. The cure for this kind of slowdown involves casting a critical eye over the most recent IT developments and determining which ones can help that particular business excel.
When procurement and other supply operations fall behind, it may be because company leaders underestimate the potential impact of tech improvement. The goals and aims of procurement departments have stayed the same for years, with companies needing to establish good relationships with suppliers and receive the materials that make their operations possible. The internal mechanics of reaching those objectives, however, have changed.
What can technology do?
Supply Chain Quarterly reported that data management is the main innovation empowering modern supply chains. Using new IT systems to collect data and make sense of it is an effective way to make geographically sprawling operations seem more manageable. Performing analytics on a wide variety of useful inputs is a decision-making aid, one that can enable leaders to avoid missteps and move with a surety that would be impossible to gain using legacy systems.
Replacing old technology with newer versions could be the major challenge facing supply chain executives in the years ahead, according to Supply Chain Quarterly. These businesses have fallen into patterns, and are recording and communicating data in antiquated ways. If there's no easy way to make content available for analysis, the decision-making benefits will be slow to materialize.
The news provider tempered this drive for progress with a warning: Change shouldn't all happen at once. A PointSource report cited by Supply Chain Quarterly found that when Boeing tried to make a full-scale renewal of its supply chain, the manufacturing giant instead put its whole new aircraft production program behind schedule by three years. Tech implementation should be gradual, and begin with a focus on obvious improvements that workers appreciate.

Data is a friend to today's ambitious supply chains.Data is a friend to today's ambitious supply chains.
The supply chain's new role
The business climate today rewards organizations that work seamlessly. The internet's new default status as the method of communication between customers and companies has created a need for efficiency at the most basic level, and all processes leading up to transactions must keep up the pace. Logistics industry multi-organization board member Ingilby Dickson told Logistics Magazine that today's supply chains must be "smart and slick," as they play a critical role in helping companies fulfill their promises to customers.
End-to-end communication, including engagement between the supply chain and the rest of the organization, is another mark of the digital age. Dickson pointed out that logistics officers are being brought into high-level discussions, as the leaders of other branches of companies realize how hard it would be to achieve their customer-centric goals without supply professionals maintaining inventory, controlling costs and ensuring accountability.
While the basic goal of the procurement supply chain is basically the same as ever, these departments have seen their integration with the rest of companies increase. Adequate data use could help them in this newly relevant role.

As a leader in procurement and strategic sourcing, Source One relies on its team of dedicated experts to provide constant insights and solutions.  Many of our most successful analysts and consultants joined us as interns.  Source One's internship program provides young professionals with immediate hands-on experience in supply management, client services, marketing, business development and more.  Our diverse service offerings make for a fast-paced and consistently evolving workplace experience. Contributing to projects from day one, our interns build skills that should prove crucial in whichever field they choose to enter.

Say hello to the dynamic and talented individuals joining us as interns this fall.

My name is Samuel Cagle. I am twenty-six years old and working out of the Chicago office.  I was born and raised in St. Louis, Missouri and received my undergraduate degree in Business Economics from the University of Miami (Ohio) in 2013.  After graduation, I moved to Chicago and began working for TMC, a division of C. H. Robinson.  After years of working as a Logistics Analyst, I decided to pursue a higher degree.  I am currently working towards an M.B.A. from DePaul University, with a concentration in Business Strategy.  I expect to graduate in December 2017.  Despite living in Chicago for four years now, I remain an avid St. Louis Cardinals fan.

I am extremely excited to be here at Source One. Everyone in the Chicago office has been very welcoming.  This opportunity offers the unique combination of exposure to many different business types, and valuable experience in working the consulting process to provide value for our clients.  While at DePaul, my strategy courses focus on providing the optimal outcome given set variables.  Here at Source One, I get to see how certain strategies are executed first hand.  During this internship, I hope to continue learning about the many aspects of procurement and the sourcing strategy process, make a positive impact on those around me, and continue to improve my analytical and project management skills.

Hey! My name's Bennett Glace, and I'm a 23-year-old from Yardley, Pennsylvania.  Last year, I graduated from Hamilton College where I majored in English and Art History.   I spend most of my free time reading about Hollywood politics and celebrity gossip.  I also watch a lot of films.

Prior to joining Source One, I worked and interned mainly in the non-profit sector and in communications roles.  My experiences creating on-brand content, putting my personal stamp onto company scripts, and working to grow social media followings inspired me to apply.  I was pleased to accept the position and continue doing the sort of work I've grown to enjoy.

So far, so good.  Though relevant to my past experiences, my duties here have compelled me to dive into an unfamiliar industry and learn as I go.  It's been thrilling.  I hope to absorb all I can about strategic sourcing so that I can confidently and competently communicate on Source One's behalf. One of the first things that impressed me about the industry was the paramount importance of effective communication.  Strategic sourcing initiatives rely on writing that manages to come across as both comprehensive and concise.  Balancing these qualities is a distinct challenge, a challenge I'm excited to meet.

Hi there!  My name is Antonia Stroponiatis and I am a senior at Depaul University, double majoring in Accounting and Finance.  I grew up in Park Ridge, Illinois; however, I currently live in Lincoln Park, a neighborhood of Chicago.  I absolutely love to travel, read, and go to new restaurants and cafes with my friends in my spare time.  My past experiences have mainly surrounded accounting internships with financial companies, up until my last internship which focused on external audits.  Having seen the inside business that occurs within various clients, I became interested in looking into more than just the assurance of numbers on financials.  I am really enjoying my experience here at Source One so far because there is so much opportunity to gain experience outside of the typical finance classroom environment.  Consulting experience is gained through working in the field, not through time in the classroom.  The opportunity to see how the employees at Source One carry out their roles as consultants through supply chain procurement tactics has really allowed me to experience this specialization of consulting.

Everyone at Source One has been beyond kind and friendly which makes the workplace very inviting.  The experience has been wonderful so far because of their outreach to ensure my comfort with the work and projects so I can move forward confidently.  I am definitely interested in gaining more experience with analytics to see how I can apply myself moving forward.  I aspire to work within the accounting and finance fields.

My name is Alex Haile and I am a 22-year-old from Atlanta, Georgia.  I attend the University of Pennsylvania where I will be graduating with a Bachelor's of Science in Economics.  I have always been interested in a multitude of industries and going through the process of diagnosing and solving problems, so I have always been naturally inclined toward consulting.  However, prior to coming to Source One, I had experience interning in commercial real estate and working as a financial assistant, but did not have any experience in consulting.  I wanted an opportunity to really experience the tasks consultants face every day.

So, when the opportunity to work with Source One came up, I was particularly excited because of the prospect of working at every touch point in a consulting engagement.  Additionally, Source One's focus on procurement solutions, particularly cost savings, aligned with my own interests in being introduced to the execution and strategy side of consulting, as well as my interest in the sourcing techniques and supply chain processes of different businesses.  Through this experience, I hope to gain the skills necessary to take a project end-to-end and learn from the great consultants here.

Want to see yourself on this page? We're always looking for motivated individuals to join our industry-leading team. To learn more about becoming an intern, visit Careers at Source One today.
For a long time now, millennials have been the topic of conversation, especially for their impact in the workplace. To give you some perspective, the millennial generation is born between 1980 and 2000. If we consider this birth year window, the oldest millennial is turning 37 this year. This generation is also considered to be the largest generation in history since the soon-to-retire Baby Boomer generation. In fact, Pcw noted that they form 25% of the workforce.

There is no doubt that millennials are on the rise and moving into upper management positions within corporations. They have particular characteristics that the other generations lack, and their knowledge of technology has put them on the upper hand. Research into the leadership priorities and attitudes of millennial professionals reveals that their rise to executive leaderships may be a very good thing, especially for procurement.

Recently, there was a report published by the Conference Board titled “Divergent Views, Common Ground” that focused on the leadership differences between millennials and other generations in the workplace. Their findings showed three main differences relevant to the procurement and supply chain industry:

Interpersonal Skills
Millennials price interpersonal skills and relationships, regardless of their perceived reputation of being glued to their devices. This skill can benefit procurement heavily when it comes to stakeholder and supplier engagement. Stakeholders want procurement to spend more time listening to them, instead of treating them as data points, and suppliers want to have a relationship before investing in innovation on behalf of procurement. Additionally, this skill will be beneficial when millennials find themselves to be the youngest participants in a meeting trying to introduce new ideas to an audience that may or may not be receptive to them. Overall, many of the roadblocks that procurement faces on a daily basis can be overcome with better interpersonal dynamics.

Risk Aversion
Despite millennials willingness to speak out on issues of importance to them, they are risk averse. We all know risk is unavoidable in supply chain and millennials ability to be risk averse while having strong beliefs is a good sign for risk mitigation planning. In fact, they may be better positioned to raise awareness about risk potential, so that a cooperative solution can be achieved.

Outcome-based Accountability
Millennials stress outcome-based accountability in their definition of success. This will help procurement, specifically with their battle with the Finance department for claiming projected or estimated savings that are impossible to trace to the bottom line. If millennials are being outcome focused, then they will have a natural drive to see the impact of actual savings reach the bottom line. Additionally, this mindset will help procurement with supplier relationship management. Millennials will want to emphasize supplier impact on the business overtime, resulting in them determining how suppliers will achieve their goals.

It is no surprise that millennials are moving into upper management positions due to their unique characteristics and skill sets. With their interpersonal skills, ability to be risk averse and their focus on outcome-based accountability, they can influence the procurement industry and be the needed extra push procurement needs to get to the next level. 

ICYMIM: September 18, 2017

Source One's series for keeping up with the most recent highlights in procurement, strategic sourcing,  and supply chain news week to week.  Check in with us every Monday to stay up to date with the latest supply management articles.

Phillip Ideson, Art of Procurement, 9/11/2017
MRA Global Sourcing's Naseem Malik joins Ideson for a broad-ranging discussion that ultimately focuses on techniques for locating top procurement professionals and convincing them to stick around.  Recognition, Malik suggests, is a powerful tool for retaining employees.  Many top professionals cite a lack of acknowledgment as a primary motive for leaving their jobs.  By recognizing accomplishments and instilling a sense of workplace camaraderie, employers can better maintain their workforce.

Agile Procurement Can Work in the Private Sector . . . But the Public Sector?
Michael Lamoreaux AKA The Sourcing Doctor, Sourcing Innovation, 9/12/2017
While the more flexible, dynamic, and collaborative methods of Agile Procurement work great in the private sector, the Doctor suggests the move to the public sector will take some time.  The rules, regulations, and policies that sometimes complicate public Procurement are there for a reason. If they went away tomorrow we'd find ourselves in a chaotic world of lawsuits and trade complaints. Procurement principles and trade laws will have to change fundamentally before public Agile Procurement can become a reality.

Procurement Must Disrupt Traditional Workforce Models to Spur Growth
Andrew Karpie, Spend Matters, 9/14/2017
Despite the opportunities provided by new technology and a rising knowledge economy, many companies are still tied to outdated models of workforce engagement.  The evolving human capital market, however, presents Procurement the unique opportunity to take the lead in promoting workforce innovation.  By partnering more closely with HR, Procurement can work to encourage a perspective that focuses less on compliance and control and more on the potential benefits of alternative employment models.
There are many benefits to conducting a proper spend analysis.  Understanding the details of your spend profile is essential to planning and executing an effective strategic sourcing initiative. Completed with the appropriate attention to detail, a spend analysis provides the foundation for any successful cost savings project.

Done incorrectly, however, and a spend analysis can cause innumerable headaches. Going to market with inaccurate data can lead you to miss out on savings and delay the process to the point of creating "lost opportunity" costs.

Here are a few common traps that even the experienced procurement professional might find themselves falling into.

Obtaining an accurate picture of your purchasing habits is essential for both reducing costs and carrying out strategic initiatives.  For 25 years, Source One has helped its clients save billions thanks to our thorough spend analysis services.  Our unique solution, Spend Consultant requires little input from your team, but provides a comprehensive, individualized, and actionable plan to achieve savings and more easily manage spend categories.