Top Strategic Sourcing Articles by Source One:

Top News

Over the last decade best-in-class Procurement departments have made the transition from executing tactical purchasing activities to supporting strategic company-wide goals, being seen as a valuable business function beyond achieving cost savings. As an essential piece to increasing a company’s competitive advantage and overall profit margin, organizations with a more mature Procurement department complete with well-defined metrics, category management plans, talent development strategies, and adequate tools reap the benefits of improved contract terms and conditions, swifter internal processes, and better vendor relationships.

So what does the process for evolving procurement functions look like for companies equipped with traditionally reactive approaches to purchasing? The truth is, transforming procurement operations looks slightly different to each organization. The starting block for all companies, however, is conducting a Current State Assessment and Gap Analysis.

What is a Currently State Assessment and Gap Analysis?
To know where you need to go, you must first understand where you are. Gaining understanding of your current procurement operations means assessing your human resources, tools and technology, metrics, and established processes. Some of the elements you’ll want to evaluate include current contracts, metrics, vendor relationships, sourcing procedures, etc. Commonly, internal surveys are conducted of key stakeholders to gain a sense what works and what doesn’t. With the help of third-party firms specializing in spend management, you can also learn how similar profile organizations approach supply chain management and procurement, benchmarking your operations against industry standards.

With this information in hand, an end-state vision can be formed addressing questions of how your strategic sourcing and procurement organization should look. From there, you can examine how your current procurement operations stack up against your desired end-state via a Gap Analysis. The ideal gap analysis will thoroughly outline areas where your supply management operations can improve along with the anticipated impact of results. With this gained insight both internal and external to your organization, a proper strategy for transforming procurement operations can now be formed.

Demonstrating Procurement’s Value
This October, Procurement Transformation Advisors from Source One Management Services will be speaking at ProcureCon Pharma and the Next Level Purchasing Association (NLPA) Annual Conference addressing how companies can enhance their procurement operations to drive more value. During the NLPA Annual event, happening October 24-25 in Pittsburgh, Associate Director Jennifer Ulrich will be sharing how Procurement groups can challenge the traditional role of Procurement and lead change within their organizations with improved metrics, improving talent management of internal resources, and leveraging external support.

Focusing specifically on demonstrating Procurement’s value beyond savings, Source One Director David Pastore is a featured speaker during ProcureCon Pharma, taking place October 26-28th in Philadelphia. Pastore joins as roster of impressive speakers including representatives from leaders in the Pharmaceutical industry such as AstraZeneca, GlaxoSmithKline, Otsuka, and more. His session, title From Savings…to Value will cover key questions to consider when deciding metrics that will ultimately demonstrate the value Procurement delivers your organizations they serve, as well as advice for properly communicating that value to key stakeholders.
On October 24th and 25th the Next Level Purchasing Association welcomes procurement professionals to Pittsburgh, PA for their annual conference. This year’s attendees are invited to ‘make their mark on procurement history’ alongside leading procurement practitioners, thought leaders and other key players in the industry. Created with the needs of today’s procurement pros in mind, this conference offers valuable insight and takeaways for participants through an assortment of workshops and presentations. In between educational sessions, networking opportunities allow for meeting with other members of the procurement industry including a variety of providers of procurement-related products and services.

Associate Director and Procurement Transformation Advisor, Jennifer Ulrich will present a session titled No Taxation without Representation: Procurement’s Crucial Seat at the Table -keeping with the historical theme of the event. The session will guide participants on how to redirect the traditional approach to procurement by using better metrics, improved hiring practices and means for supplementing internal resources with the right partners. Ulrich offers these methods and more to demonstrate the value of procurement for any organization. Attendees can look forward to bringing these materials into important discussions and contribute to decisions with an informed voice. Other sessions include advice on negotiations, KPIs, cost saving ideas, and more procurement trends.

Cybersecurity becoming priority concern for US, European aviation

Across the globe, organizations at every level are struggling to deal with the rising threat of cyberattacks. As globalization continues, technologies advance and business applications reach new heights of connectivity, companies are finding it more difficult to ensure end-to-end protection. The risk landscape leaves virtually no industry untouched.

This is why aviation regulators in the U.S. and Europe are turning their attention to enhancing the safety of airline data-transmission systems, The Wall Street Journal reported. One system in particular is of utmost concern: Aircraft Communications Addressing and Reporting System, otherwise known as Acars. So far, there have been no reported incidents of the data and information exchanged on the network being compromised. However, because it is an outdated system, concerns that it could be a target for hackers have been raised by both U.S. and European authorities, the source indicated. 

Over the past few years, it has become abundantly clear that cybercriminals are rapidly advancing in their capabilities and motivations. And some of the biggest vectors of attack are platforms that are loosely monitored and maintained. As The Wall Street Journal explained, if Acars were to be penetrated, it could cause massive disruptions for airlines and affect a number of operations.

Outdated systems pose security risk
In a recent article for Fast Company, Steven Melendez pointed out that, although none of the many computer-related disruptions airline giants such as Delta and Southwest have experienced within the past year have been the result of a hacking attempt, it is only likely only a matter of time. For example, Melendez explained, the Government Accountability Office released a report recently saying, essentially, that the more connected airline systems become, the higher the risk of them falling victim to cyberattacks.

Last month, Astronautics Corp. was given a contract by the Federal Aviation Administration to create tools that would help uncover security vulnerabilities in aircraft technologies. And it seems that the first system to be assessed with these tools was Acars. In addition to examining and evaluating the security risks of existing systems, The Wall Street Journal revealed that both the European Aviation Safety Agency and FAA are working on developing more modern, innovative technologies for air traffic control and communication. These efforts for safer aviation systems also include plans to revamp guidelines and certification requirements for the industry.

Ensuring protection
These moves taken by regulators in the aviation industry show the growing concern - and urgency - for companies across the globe to update their technologies and digital tools. Furthermore, as connectivity and integration continue to increase among organizations, ensuring safe, sound protocols are implemented becomes increasingly necessary - not just for internal operations, but for those throughout supplier and partner networks as well. This is especially true for applications and devices that store and exchange data, as well as those that handle private and sensitive information, such as financial transactions.

Maintaining proper monitoring and threat detection tools is necessary for companies to defend networks against today's aggressive cybercriminals.

ProcureCon Pharma is coming to Philadelphia for the 2016 conference starting on October 26! The three day event attracts procurement and strategic sourcing professionals from industry leading pharmaceutical companies including AstraZeneca, Otsuka, Bristol-Myers Squibb, GlaxoSmithKline, and more for engaging sessions addressing the unique challenges facing pharma procurement groups. Attendees anticipate a full agenda of panels, workshops, and roundtables designed to provide procurement professionals with strategies for managing costs and driving value in procurement and sourcing processes.

The first day of ProcureCon Pharma will exclusively welcome procurement executives to discuss using procurement to drive value in today’s fluctuating pharmaceutical industry. The following day focuses on strengthening internal and external partnerships to further today’s procurement organization and the final day of the event will examine the future of procurement and what to expect when preparing for the needs of your business down the road. Between presentations from industry leaders including Johnson and Johnson, Takeda Pharmaceuticals, and Boehringer Ingelheim USA, and more, daily panel discussions and roundtables generate progressive conversation that continue during networking opportunities in the evening. 

Among the roster of anticipated speakers is Source One’s Director David Pastore. Pastore’s session, titled From Value, will explore the ways Procurement groups can demonstrate their value beyond cost reduction. Procurement has evolved passed a tactical purchasing role, and is quickly being leveraged as a strategic function for achieving overarching company-wide goals. As a result, companies need to reevaluate their approach to measuring Procurement's performance and communicating their success. Pastore will share how capitalizing on the growing discipline of data science for procurement can teach your team to exhibit progress on management-driven procurement and sourcing goals. 
In our Spend Analysis Series we’ve recommended Where to Begin, reviewed the Types of Data you’ll be working with and gave suggestions on how to approach Decentralized Data Sets. You’ve collected data but now it needs to become information that can tell us how to proceed with our cost reduction initiatives. The next step involves standardizing and categorizing all the of the information gathered up to this point to organize it further and help reach a better understanding of your cost reduction opportunities. 

In this fourth episode of the Spend Analysis Series, Spend Consultant Jennifer Ulrich outlines important details to consider when grouping data into sourcing categories to create a visual of project areas and leverage opportunities. Whether you're considering consolidating your supply base or simply classifying the amount of suppliers for a category of goods or services, Jennifer explains how to use this valuable information for your organization’s advantage.

Through the use of a spend analysis, data is easier to manage and a better understanding of your organization’s overall spend profile is established. Source One Spend Consultants make it easy for you to get the spend visibility you need without the hassle of conducting a manual spend analysis. 

Retail supply chains: 3 tips for better inventory management

The peak holiday season is upon us, with retailers across the globe racing to prepare their supply chains. One of the biggest issues companies face during the months when demand is highest can be attributed to inventory. Over the past few years, e-commerce and omnichannel purchasing have completely transformed the retail industry. Sellers have been presented with an overwhelming amount of complications and complexities when it comes to maintaining profits while also speeding up delivery times and managing consumer expectations.

In these weeks leading up to the holidays, when more orders are being placed through a growing number of platforms, it is crucial for supply chain managers to ensure that they have the proper facilities, tools and processes in place - ready to handle the influx of sales coming their way. To be blunt, retailers can't afford to mess up during peak season. As industry expert Vivek Sharma explained in a LinkedIn post, the National Retail Federation has found that as much as 40 percent of retail companies' total revenue can be attributed to holiday sales. So it's not hard to see why making sure customers are satisfied and operations go smoothly is incredibly important.

Retailers have always had to deal with busy and sometimes tumultuous times during peak seasons. However, if they thought the obstacles they were presented with in the past were as bad as it gets, they may want to revisit that notion. According to eMarketer, this year e-commerce retail sales for the holiday season are expected to increase significantly, forecast to grow by about 16 percent (compared to total retail sales, which are expected to rise by no more than 4 percent).

Tips for improving inventory management
While there are countless areas and aspects of the supply chain retailers can - and should - be fine-tuning in anticipation for peak months, there are few points better to start with than inventory. Organizations must prepare for the rush and optimize operations in a way that will translate to a smooth and seamless holiday season, with as few issues as possible. Below are a few ways to do that.

1. Use updated technology and systems
At this point, it is probably a bit too late in the year for you to adopt an entirely new inventory management system. Implementing innovative technologies into the supply chain takes careful consideration, timing and planning. Failing to properly prepare, train and test the solution can quickly lead to disruptions - which is the last thing you want to experience during the busiest time of the year. However, making sure any tools, technologies and processes you do already have in place are updated, secure and working efficiently is crucial. If the system is relatively new, verify that each and every worker is thoroughly trained and efficient in using it. The more detailed you are in doing this, the less likely you are to face an unexpected disruption. 

It is also highly recommended that you have a backup and incident response plan in place. In the event that your current system suddenly shuts down, you'll want to have an alternate strategy to ensure you can still keep production flowing. Employees should also be aware of who will be responsible for what in the event of a disruption.

2. Consider seasonal hiring
One of your responsibilities as a manager is likely to uncover the best solutions for improving operational workflow while also staying within budget. And while reducing costs throughout the holiday season is surely just as big a focus for you as it is throughout the rest of the year, adding more holiday employees during this busy time is an idea worth considering. Whether it is to help sort and ship packages in inventory warehouses, work the floor at in-store locations or something else, it's important to make sure you have enough workers to cater to the wave of customers coming your way. 

3. Stay organized
It sounds simple. But, as Sharma pointed out in his article, having to track inventory throughout disorganized warehouses is one of the biggest time-wasters for retailers, especially during the holiday season. To enhance your inventory management system, it is important to make sure you have an optimized picking process in place. The more organized, clean, clearly labeled and efficiently structured a warehouse is, the easier it is going to be for supply chain workers to fulfill orders, maintain proper stock levels and identify items as quickly as possible. 

With the holidays just around the corner, there is no shortage of tasks to check off your list and operations to prepare for. However, the peak season is likely to go a lot smoother for retailers everywhere if they take the time to properly plan for it and prepare their supply chains in advance - starting with optimizing their inventory management systems.

The following article comes to the Strategic Sourceror courtesy of Eire Direct, a direct marketing specialist firm based in Chicago, IL.


Simply put, a loyalty program is a program that rewards customers who make frequent purchases or repeatedly exhibit desired behaviors. The goal of a loyalty program is to encourage customer engagement to create advocates who become loyal shoppers of your brand.

 But don’t confuse a loyalty program with a discount program. While offering discounts is a great way to forge a relationship with the consumer, a successful loyalty program implements an engagement strategy that fully utilizes data to understand customer behavior.

Today’s customer relationship management (CRM) and point-of-sale (POS) technologies are impressively sophisticated. Executing a well-designed loyalty program is dependent on the right technology platform. A simple google search will uncover a variety of out-of-the-box and custom solutions. But don’t rush a decision. Do your homework and consider a consultant to help you find a solution that will work best for your business. Procuring vendor partners that best fit your business needs requires some upfront planning:

  • Identify your business objectives for the loyalty program 
  • Assess the vendor’s ability to access customer transaction and behavioral data from your point of sale or customer billing files
  • Determine the lifetime value of a newly engaged customer to support your upfront investment
Often times, companies will pilot loyalty solutions before they select a long term provider. You will need to meet with suppliers who have off-the-shelf type of solutions that you can bolt on to your current marketing platforms, or you may want to develop a custom solution. The choice is yours!

Source One Round Up: October 14, 2016

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

Data, Data, Data: What Procurement Needs to Know about Master Data Management 
Every industry from retail to medical relies on data for improving customer engagement and business performance. Today, consumer data is constantly being collected. Think the GPS on your smart phone, your fitness watch, and home systems. But, what do companies do with this data? Source One's Senior Project Analyst Liz Skipor explains how companies use this data and it is then managed to guide smarter business decisions. 

Source One's spend management experts are featured speakers at two upcoming industry annual conferences: The Next Level Purchasing Annual Conference and ProcureCon Pharma. During both presentations, we'll explore the value Procurement delivers the organizations they serve and how Procurement professionals can demonstrate this value. 

Looking to reduce costs? That means you need an understanding of your company's spend profile.

Conducting a Spend Analysis is your first step on the path to cost reduction and category management. In addition to supporting your cost reduction goals, analyzing your company's spend history and profile has a number of other benefits. A spend analysis can also reveal hidden risks such as a lack of supplier diversity, opportunities for process improvement such as centralizing spend data, and improving relationships with suppliers that are key to your product or service.

What does the spend analysis process look like? Check out our Spend Analysis 101 infographic for a quick how-to guide for assessing your company's spend profile.

Looking for more support conducting your spend analysis? Our spend management experts can help! Source One's spend analysis as a service and web platform,, means you can get the spend visibility you need to launch your cost reduction initiatives quickly and easily without the hassle of conducting a manual spend analysis. And, with the web tool, simply log in to view your spend data and see your cost reduction opportunities along with category specific strategic sourcing advice and tips!

When working with clients who are aiming to establish a centralized procurement model, I have seen hesitation in (or complete disregard for) establishing and enforcing company policies that support the new model. There seems to be an assumption that if Procurement is introduced into an organization, then it will be utilized, and utilized efficiently and effectively at that.

The gap between the goals for the Procurement department and actual utilization by stakeholders is due in part to the view of Procurement by many business units as a “three bid” department, meaning everything that is purchased needs to be bid to a minimum of three vendors. While this is a typical start for many Procurement departments to introduce the idea of competitive pricing, it is a very tactical approach to sourcing.  By undergoing a transformation to become more strategic, Procurement is able to drive value through cost reduction, improved quality and service standards, strengthened supplier relationships, and better forecasting, just to name a few.

In order to realize and sustain that value, there typically needs to be a catalyst for use of Procurement in the organization. An often overlooked step is to actually build Procurement’s authority through company policy. Policy sometimes seems like a “dirty word” when companies are accustomed to taking a carrot vs. stick approach, but leadership can tend to lean too heavily on the idea that Procurement will be generating value and assuming that stakeholders will be jumping at the opportunity to drive down costs or manage their supply base better. In an ideal world, it would be great to set up a Procurement practice and have all levels of the company recognize the potential, but that simply is not the case for most (dare I say all) companies. It is very tough for Procurement to gain footing and oversight in an organization that sees the Procurement process as a suggestion or even an impediment to getting the necessary products/services, rather than something that stakeholders and management view as a required part of the organization. I can’t tell you the number of times that I, either working internally in past Procurement roles or working as a consultant with other sourcing departments, have seen Procurement have to justify  to stakeholders the value that the sourcing process can bring or negotiating with department leaders to get advance notice of projects in the pipeline that will have a sourcing component. While Procurement still spends time doing the internal sales pitch even with established company policies, it does give the Procurement function an advantage to, at a minimum, communicate that Procurement’s involvement is company policy and that policy exists because of the value that comes from utilizing the established processes and best practices.

By establishing a company policy, the idea is to begin with the “stick” (e.g. require departments to go through Procurement to source items, get agreements approved), and ideally stakeholders will begin to see the “carrots” of working with Procurement (e.g. savings, improved service/quality, better supplier management). Once the policy is defined, it should be communicated at all levels of the organization with established oversight channels to ensure it is being followed. Executive sponsorship of not only the guidelines, but Procurement as a whole, is critical to ensuring all levels of the organization recognize the new method for purchasing products and services. Early in my Procurement career, a manager of mine told me that because Procurement holds “purse strings”, it will also be a battle to be viewed as an ally within the organization. While leadership may think that establishing hard-nosed rules around sourcing and procurement will only amplify this attitude, if you truly want, or more likely need, a successful Procurement department, the rules are necessary to bring stakeholders on board. In a follow up blog, we’ll review some of the guiding principles around establishing these policies and where the focus should be to ensure a successful policy along with a successful Procurement group.
Virtually every procurement department in a large organization has been founded on two basic premise.  First, from an objectives perspective, the primary goal of the function is cost savings.  While there are other drivers (ensure supply, minimize risk, etc.), the most visible, most measured and most consistently tracked metric is cost reduction or the cost impact of the function.
Second, most procurement organizations, particularly large ones, build out their org chart using a category management structure, where category managers are assigned to different verticals or departments, and source/buy specifically for those groups. 

These two foundations of procurement, if they continue on their existing path, will lead to the outsourcing and/or demise of the function as a whole.  Inherently, both of these concepts, which are now considered Standard Operating Procedure, which are evangelized by consulting firms and are a key component of many Procurement Transformation efforts, lead to diminishing returns, fragmented, inconsistent service levels, vertical-ized staffing structures that are too rigid and specialized, and failure to align with long term business objectives.

Cost Savings
Let’s start with cost savings - the Gold Standard by which Procurement is measured.  It’s the primary reason for our existence as a function, otherwise, why not just let departments buy for themselves?  I am not hear to argue that Procurement shouldn’t be a cost focused entity, but the amount of time we spend measuring, analyzing and justifying cost savings, aligning with finance on numbers, making projections and tying numbers back to budgets provide little, if any, value to the organizations we are supporting.  No other department within a company, save Sales, is so focused on their own measurement as Procurement. 

Further, cost savings can only go so far.  If a Procurement group saves the organization $50 million this year, they will be tasked with $55 million next year.  But is that really possible?  Without access to additional spend, probably not.  Logic dictates that eventually, available cost savings should go to $0.  Yet I’ve never seen a Procurement goal decrease year over year.

So what’s the solution?  Well, the best fix would be to stop measuring.  I’ve actually worked with one company that didn’t measure Procurement savings.  The thought process of their CFO was that it is Procurements job to help keep costs in line.  As long as Procurement is involved in the process, he felt comfortable that the bottom line was being considered.  To this CFO, the exact amount of “savings”, “cost avoidance”, or “procurement impact” was not relevant, as long as stakeholders were satisfied with the result, a rigorous process was followed, and total cost was within budgetary parameters.

Just imagine a world in which you didn’t have to measure, account for and be judged on cost savings!  How much time would that free up, allowing procurement to perform more detailed supplier risk assessments, meet with suppliers about new innovations, or better aligning with the business.  Think of it this way – you can go to the CEO and tell them you can pull another 10% out of office supply spend, or you can tell them that you can partner with a supplier on a new technology that will increase market share by 10%.  Which one do you think that CEO will care more about?

Category Management
Most large procurement organizations are structured using a category management based org chart – where resources are assigned to specific categories of spend and aren’t responsible for work outside of that cost center.   This structure is antiquated – both in how it engages with business owners and how it allows for career growth within the procurement function and the organization as a whole. 
From a stakeholder engagement perspective, it’s very easy to identify why this structure doesn’t work.  Business units and stakeholders don’t see their needs as individual requirements that can be bucketed into “sourcing categories”.  If you are trying to align sourcing strategy with the over-arching business objectives of the departments you support, staffing resources with a procurement mindset isn’t going to work. 

Further, as procurement organizations grow, the category focus becomes narrower and narrower.  For example, I know of a large procurement organization that has a team supporting marketing activities, and they have lead sourcing folks in the following areas:  digital marketing, media buying, creative advertising, marketing operations, primary market research, secondary market research and corporate communications.  However, for marketing departments, each of these “spend categories”, which by the way they would call strategies or tactics, tie into an overall marketing plan.  Getting this granular from a org chart perspective doesn’t allow the procurement team supporting marketing to get a clear picture of that plan, and how these different requirements tie together.  Further, it absolutely kills the leverage you would get by looking at the requirements holistically, and developing agency relationships in a more comprehensive manner. 

This segmented approach also makes staffing incredibly difficult.  As the level of specialty/focus increases, the ability to identify qualified resources to fill positions decreases.  Go to a job board and you will see plenty evidence of this - sourcing professional with 10 years sourcing print in the life sciences marketplace, sourcing analyst with 5 years of IT managed services experience, etc.  As individuals become more and more specialized, their overall business acumen, and ability to support other areas of the business gradually decreases.  This leads to two issues.  First, it makes flexing resources incredibly difficult.  Take your facilities category manager and ask them to support an HR benefits initiative.  That probably wont work out well.  Second, it doesn’t account for the unique nature of sourcing, which requires a substantial amount of widely varying skill sets that aren’t just category focused specialties.  These include being proficient in data analytics and financial reporting, having a solid procurement/sourcing mindset, and being a skilled negotiator and change management agent.

So what’s the alternative?  The ideal procurement org chart should be flexible and scalable, with room for lots of growth.  The team should include a small, key set of  “leads” that do have high level category focus, with a pool of analysts and managers that can handle a diverse set of assignments and the need arises.  The model should ensure resources go through rotations in different areas, allowing team members to find their niche but also get exposed to a very diverse set of business needs. 
One of the best kept secrets in procurement (that we all know) is that solid sourcing principles can be applied to nearly any category.  Rather than being category focused, CPO’s should plan on having the right set of core subject matter expertise based on the industry they are in.  Outside of those core areas, CPO’s should focus on diversifying the knowledge base of the team, while at the same time allowing them to expand on the “specialty” areas best suited for their skill set.  

This will be my last post for 2016.  In 2017, you can expect me to write a lot more on this topic, providing clear guidance on how to move away from a cost savings and category management focused organization, to one that can adapt to any situation, properly align with business to increase customer satisfaction and top line revenue growth. 
Samsung supply chain mistakes: A cautionary tale

Samsung Electronic Co.'s recall of its Galaxy Note 7 product has been problematic - to say the least. Between significant drops in shares and the potential end of the entire Galaxy Note series, the South Korea-based smartphone manufacturer is facing a lot of issues right now. And major financial losses and reputation damage are just two of the challenges Samsung is being confronted with.

But in order to truly understand how to come back from the debacle of exploding batteries, failed recalls and growing customer and stakeholder scrutiny, the company must first identify exactly what caused the issue in the first place - a task it has demonstrated as being far from easy at this point.

Initially, after being forced to recall over 2.5 million Galaxy Note 7s just a month after they were first released in August, Samsung blamed the issue on one of its battery suppliers (though the vendor has not been officially confirmed by Samsung, there has been speculation that it is one of its subsidiaries, Samsung SDI).

After removing the supplier from its production process, the company issued replacement devices - only to find that those, too, led to reported cases of catching fire. It then became obvious that the error was embedded deeper in the supply chain than originally thought. And perhaps more concerning than the problem itself is the company not knowing what caused it.

Lack of visibility and integration
After announcing this week that the halt in production of the faulty smartphones will be permanent, it is bringing to light some critical supply chain issues that are relevant and important for most organizations today.

As the Wall Street Journal recently pointed out, when it comes to upgrading or manufacturing a product, quality control is critical. However, although advancements and innovations are continuously being made, modern technology and management software may not be able to adequately handle the increasingly complex nature of supplier networks.

"A design flaw should have been caught during review and testing, and this is much harder to do at global scale with multiple suppliers and factories for the same part," Forrester Research Principal Analyst Frank Gillett told The Wall Street Journal.

Many supply chain issues can be attributed to a breakdown in communication, integration and collaboration - both between internal departments and third-party vendors. The bigger and more complex a supply chain network gets, the more difficult it is to see into distant tiers and get a full view of a product's lifecycle.

Recall and risk management
In an article for EPS News, Gina Roos pointed out some glaring issues with Samsung's supply chain strategy - which should serve as a cautionary tale to other retail and manufacturing companies, inspiring them to take necessary measures to avoid the same problems.

In addition to not having a recall management plan in place, Samsung received most of its lithium batteries from one supplier, rather than allocating orders between multiple vendors. As such, it limits the company's options in the event that it is forced to recall a product.

As supply chains continue to expand and incorporate new technologies - as well as suppliers - it is essential that managers are making visibility and traceability a priority. Failing to do so will make it not only more likely that an issue will eventually surface, but that it will be more difficult to pinpoint and resolve the source of the problem if and when one does emerge.

One of the most damaging mistakes an organization can make is waiting until a disruption has already hit before assessing its risk management strategy. Because, at the end of the day, the companies that thoroughly plan and prepare for the unexpected are the most resilient.