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A good juggler can keep three balls in the air at once. A great juggler can maybe keep seven or eight circling above them. All things considered, however, each of these two jugglers only has a single ball in hand at once.

With all the day-to-day tactical tasks on Procurement’s plate these days, just trying to keep the trains running can seem a lot like juggling. There are only so many tasks we can focus on each day. At some point, with so much going on, we’re bound to make at least one mistake.

Mistakes happen. Even the best Procurement team will drop a ball now and then. However, even seemingly small mistakes can have huge consequences.

While not exhaustive, I’ve listed several big mistakes that are becoming all too common these days.

Not checking the market. I’ll start with the most obvious mistake first. There are always long-term suppliers that we’ve worked with for years. They know our business and we trust them to support us. Perhaps we’ve conducted a few rounds of negotiations over the years and, to their credit, they conceded some marginal price reductions. Is this a win? Hard to say – if you haven’t gone to market in the past couple years, you have no idea what competitors are charging. Beyond costs alone, you don’t know what advancements hungry competitors are devising that could revolutionize your own processes.

You don’t know what you don’t know. Identify the key players in the market today, and gather intel through an RFI or RFP – see what you’re missing out on. Minimally, your incumbent will likely come to the negotiating table with a much stronger discount next time.

Discounting Suppliers’ Value. I want to return to one point I glossed over above. To be sure cost reduction is important, but getting a lower price isn’t the only value suppliers bring. Suppliers know their markets better than Procurement can – they have the benefit of deep focus, where we need to be familiar with a great breadth of offerings procured. Too often, however, Procurement ignores valuable insights from these experts. Reach out to your suppliers at a more strategic level – find out where they see the industry moving, and what advancements they’re making that could benefit you.

Failing to communicate with suppliers. As mentioned, running an RFI or RFP is a great way to learn more about a supplier’s offerings and how they can solve your problems. However, communication needs to be a two-way street. You can’t simply outline a short list of specs and expect a supplier to respond with the perfect plan. Suppliers will have questions. They’ll have a need for clarification. Too often, an open forum for Q&A is omitted from the RFP time line.

Make no mistake, blocking off this communication will hurt you. If suppliers don’t get the information they need, they’re left to make assumptions about your needs. The more assumptions that get baked into a proposal, the more likely they won’t be a fit for your needs. Additionally, comparing two proposals filled with assumptions is essentially comparing apples to oranges.

Failing to negotiate. By the end of our market event, if we played our cards right, we should have strong market intelligence on competitive pricing and SLAs. If the lowest cost supplier also offers competitive service, that’s a win, right? Yes – but not as much of a win as it could be. Identifying a competitive initial cost does not replace the need to further negotiate. Everythign is on the table until you sign on the dotted line.

Failing to enforce policy. So we’ve set up a competitive agreement with a new supplier that should save us huge sums of money. Great! Or is it? That all depends on if that agreement is adhered to. Office supply spend is a simple example, and a very common place for this mistake to occur. You’ve worked to put together a competitively priced contract list of common items. However, employees continue to order off-contract, thereby sidestepping all the work you’ve done in order to buy supplies that are more expensive than the items you negotiated.
We’re rounding out the bottom of the third quarter of 2018 and, when you consider the upcoming holiday season, not too far away from 2019. Many of you may already have your eyes on developing trends as we approach the New Year and may be wondering, “What’s 2019 going to bring for Procurement trends?”

Another year has gone by without me getting my hands on a crystal ball. That said, I’d wager a few concepts will be on everyone’s mind. You’ll find my predictions below in no certain order. While all may be big topics moving forward, they aren't necessarily concepts that Procurement pros have made their minds up about yet. In my mind, 2019 won't be about whether these trends continue, but how Procurement reacts to them.

Where do you stand on these hot button items?

Why do so many companies fail to optimize their MRO spend profile, even after committing to making a change?

In many cases, it's because they neglect to conduct a thorough and effective spend analysis. The process of diving into historical spend provides the foundation for a more effective, strategic approach moving forward. Done correctly, spend analyses make it possible for Procurement to achieve an overview of their historical purchases within a category and identify opportunities for both short and long-term cost reduction. In a high-volume category like MRO, however, the process often looks too daunting for Procurement to even attempt.

In Part II of Source One's new whitepaper on MRO spend management, the Strategic Sourcing experts take a closer look at the value of a good spend analysis. They offer best practices backed up by their collective decades of supply chain experience and aim to alleviate any misgivings Procurement might have about this complicated category.

Check out MRO Demystified Part II: The Value of a Spend Analysis to learn more about:

  • Rethinking historical approaches to analyzing and managing MRO spend. 
  • Developing the right goals for spend analyses and sourcing initiatives.
  • Selecting the right taxonomy for an MRO spend analysis.
  • Collecting and categorizing spend data in the most efficient way possible.
  • Leveraging MRO spend data to identify opportunities for cost reduction. 
  • Encouraging suppliers and stakeholders to develop more effective data collection processes.
  • And more . . . 
Make no mistake, wading through years of MRO spend data is a time-consuming process. This is doubly true for organizations who've historically relied on their suppliers to collect and store data. That's no reason to abandon hope. With the insights offered by Source One, organizations should find that even the (admittedly) hard work of constructing an MRO market basket is simpler. 

Download the whitepaper today to start refining your approach to MRO spend management and be on the lookout for Source One's team at ProcureCon MRO next month. The leaders in spend management aren't just attending, but serving as sponsors for this exciting event. Stay tuned for more updates in the coming weeks. 

Like all business units, Procurement stands at the brink of a new technological era.

You don't need to be an expert in Supply Chain Management to understand this. A quick glance at any industry blog should provide a sense of how loud and how pervasive the hype machine has become.

It's not hard to see why. Long dismissed as a tactical, low-value entity, Procurement is eager to land on the next big thing. This enthusiasm, however, has its downside. In their efforts to embrace new tools and reach the cutting edge, Procurement groups often rush into things. As a result, many find themselves struggling to implement tools that are mismatched to their actual needs and capabilities.

To make matters more complicated, most solution providers are moving away from the consultative space to focus on developing their core competencies. Oftentimes, this means Procurement is left to assess, select, and implement technologies on its own. Even the most well-appointed team can feel overwhelmed when this is the case.

That's why Source One introduced it's suite of Procurement Technology Advisory services. Leveraging their collective decades of supply chain experience, the spend management experts offer end-to-end support to help organizations develop an optimal approach to their tools and solutions.

Source One's Procurement Technology Advisory Services include:
To learn more about how Source One's team help your organization kick off its digital transformation, check out this new video outlining Source One's Procurement Technology Advisory practice. 

It’s a hard pill to swallow, but Trump’s tariffs are here to stay (at least for now). China has been the Mecca for raw materials, labor, electronics, etc. at incomparable prices. However, that might all be changing. President Trump hit China with tariffs on $200 billion worth of goods earlier this month on top of the $50 billion worth already taxed earlier this year. Goods on the list include: steel, aluminum, solar panels, circuit boards, vinyl, automotive parts, food processing machinery, lasers, medical equipment, plywood, and much more.  If that wasn’t enough to rattle financial markets,
Trump stated that he was prepared to “immediately” place tariffs on another $267 billion worth of imports if China retaliated again. 

What does this mean? It means roughly half of all Chinese imports into the US will soon face levies. High profile companies Microsoft, Google, and Amazon to name a few are investing considerable resources lobbying against the tariffs. Recently, retail giant Wal-Mart has warned the US Trade Representative that they will have to raise their prices for house items ranging from cribs to Christmas lights due to tariffs. Unfortunately, the trade war will not only affect corporations but also affect the everyday consumer. The tariffs are said to raise prices on food, electronics, tools, furniture, and much more.

For readers not keeping up with political news (don’t worry, you’re very much not alone) and wondering why Trump is tariff happy, here's the gist. The tariffs are intended to pressurize China to change their trade practices that Trump states are hurting American businesses. Trump asserts that the US can no longer tolerate the trade gap between what is exported to China and what is imported back in. America’s economic strength along with China’s economic slowdown was an advantageous environment for Trump to strike. The only way for China to gain relief would be to reach an agreement with the administration’s trade demands, which include allowing American companies have greater access to the China market. Economists and trade analysts widespread are stating that Trump’s actions are unfavorable for U.S. growth. The National Association for Business Economics survey showed 91% of respondents stated the tariffs will have “unfavorable consequential impacts” on the U.S. economy. Furthermore, let’s not forget that China isn’t the only one being taxed. Trump’s administration have also imposed tariffs on other countries such as Canada, European Union, Australia, Mexico, India, and Argentina.

This trade war has intensified pressure on companies, specifically, Procurement organizations to reevaluate their strategies in order to mitigate the current landscape. 

Three approaches Procurement organizations can take include: 1) find alternatives sources/suppliers; 2) optimize their supply chains; 3) identify cost savings opportunities in other areas of the business in order to remain cost effective, competitive, and retain their customer base. 

Option 1 would include extensive market research into the category(s) affected by the tariffs in order to find new sources. Once you do, you will want to strategically negotiate a new agreement(s) to ensure continuity of supply while reducing transitioning costs. Option 2 would require a full investigation of your organization’s supply chain and thoroughly understanding the logistics and handling of your goods to identify efficient work arounds to alleviate added costs. Option 3 would require a collaboration across the enterprise to review the organization holistically and engineer a savings pipeline in order to offset costs. If you have exhausted all three options or if the three options don’t make sense for your organization, you will have to strategize an effective way to communicate with your customers and allow them to fully understand the reason for the downstream impacts and possibly incentivize in order to hold their business.

Though President Trump continues to tweet upbeat about his actions and progress, only time will tell the future of the economy. We will have to continue to keep a close watch and remain agile in order to sustain this ever changing landscape of the global economy.  

ICYMIM: September 24, 2018

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 news.

Brian Alster, Spend Matters, 9/21/2018
It is incredible how much a typo in data can cost a company. Brian Alster explores 3 common, dangerous problems businesses run into when doing data collection and analysis. Citing Gartner, Alster states that organizations with problematic data quality lose $15 million annually on average. Duplicate data, inaccurate data, and conflicting data can be expensive, but the article provides a starting point for understanding how to prevent, and possible remedy, these data errors within your company.

Charles Dominick, Next Level  Purchasing, 9/19/2018
Regardless of your political position, the Trump Administration's new approach to trade puts a great deal of American businesses in an interesting spot. Years ago, changes in the global market made it, for some, an almost unconscious decision to begin purchasing from China. Now, due to drastically different tariffs, American suppliers have seemingly regained their edge on their overseas competition. The change in steel prices has been heavily covered by the media, but there a number of other tariffs that may also effect the way your company spends. Charles Dominick asks you to take the appropriate time to review your sourcing. Is it a good idea to explore American suppliers and gut your Chinese spending this early? Due to low production capacity and high demand stateside, Dominick thinks the answer may be yes.

Biji John, Spend Matters, 9/18/2018
It feels like all anyone is talking about these days is blockchain. But how useful is it really, and in what fields can it be utilized most practically? Though it seems that a lot of the buzz surrounding the topic is in the realm of finance, the supply chain management functions have a lot to gain here and have been making effective use of blockchain for some time. Though it may seem like a no-brainer now, unlocking businesses from the traditional, silo-style management technique was nuanced and seemingly risky less than a decade ago. John dissects how everyone has something to gain here, and how finance and supply chain management can be, and should be, leading the charge.

Procurement professionals everywhere have one word on their minds, Transformation. Tools are evolving, a new crop of professionals is entering the workforce, and the Procurement function is finally starting to secure some of the executive buy-in it rightly deserves. It's an exciting time and Procurement is understandably eager to evolve and enter a new, more strategic era.

But what does a Procurement Transformation actually look like? Is it a realistic goal for every organization?

The answer is complicated. Procurement Transformation isn't a term with single, static definition. It means something different to each and every organization. That particular definition will depend on Procurement's current state, its standing within the organization, and its goals for future strategic growth. For some companies, Transformation might be as simple as recognizing Procurement's strategic potential and beginning to invest in its growth. For others, the process will see Procurement bolster its strategic credentials and accept a spot at the executive table.

Whatever the process looks like, getting it started is often an initiative unto itself. Without a true sense of how and why Procurement should go about transforming, many organizations find themselves quickly admitting defeat. In all likelihood, these organizations skipped an essential step in the Procurement Transformation process. They've neglected to conduct a Procurement Maturity Assessment.

In theory, every organization wants to achieve best-in-class status. This lofty goal, however, is rarely a realistic one for your average Procurement team. A Maturity Assessment enables Procurement to reach a genuine understanding of its current capacity and capabilities. The exercise makes it possible for Procurement to set more realistic goals for itself and strategically target areas for improvement.

Where does your Procurement function land?

Laggard (Tactical)
Laggard Procurement teams are stuck in the function's tactical past. There's little if anything strategic about these small, obscure groups. In fact, these folks are the sort that have earned Procurement its less-than-stellar reputation. At best, they're perceived as a necessary evil within their organizations. Cutting costs and making purchases on a reactive, as-needed basis, they're helping keep the lights on. And that's about the nicest thing you can say for them. At worst, these groups are the cause of organizational friction. That's not entirely their fault. Organizations who've never watched a more strategic Procurement function at work can't reasonably be expected to invest in building one.

Traditional (Operational)
These Procurement teams aren't doing much better. For a traditional Procurement function, the three-bid-and-buy process is about as strategic as the sourcing process ever gets. Purchases are still made on a largely reactive basis with little thought to anything other than hard dollar cost. Though they occupy a slightly more prominent role than laggard departments, traditional Procurement units are still mostly mired in tactical processes. Managing inventory, processing purchase orders, and renewing contracts constitute the bulk of their daily workload. Though more and more organizations are working to build strategic Procurement teams, the majority still find themselves in this spot.

Augmented (Strategic)
Here's where Procurement starts to distinguish itself as a value-adding function. Enjoying a good level of executive support and buy-in, these teams employ a strategic sourcing process that takes into account far more than price alone. Though an augmented Procurement team isn't necessarily a leader within the business, it's earned internal respect by optimizing supplier relationships, providing for greater spend visibility, and (crucially) gathering metrics to report on its success. An augmented Procurement team looks for opportunities to boost its performance with the help of training programs, new technologies, and collaboration with representatives from other business units. If your Procurement team can count itself among this class, it's well on its way to becoming truly exemplary.

World-Class (Innovative)
These are the rare Procurement groups that occupy a fully-strategic, highly-valued role within their organization. They have the ear of the C-suite and are trusted to drive organization-wide strategic initiatives. Thanks to a strong, consistent brand identity they have no trouble attracting and retaining world-class talent. This talent enables them to make change not merely a goal, but a cultural imperative for everyone across the business. A culture of continuous improvement enables them to stay on the cutting edge of emerging technologies and consistently refine their own internal processes.

Want help determining where your Procurement team stands? Reach out the Procurement Transformation experts at Source One today.

In a candidate-driven marketplace, employers are the ones that need to set themselves apart. The emerging crop of Procurement candidates is looking for a lot in their future organization. In addition to compensation, opportunity for advancement, and flexibility, they want to join a Procurement team with a strong, impactful brand. 

Looking to refine Procurement's brand identity to attract leading talent? Check out some of Source One's tips for standing out as an employer of choice in a crowded marketplace. 

As quarter 3 draws to a close, Source One's spend management team is gearing up to share their insights and absorb thought leadership at a number of supply chain conferences. Over the next several weeks, the leading Procurement consultants will join their industry peers to network and exchange best practices at several exciting events.

From September 24th-26th, representatives from Source One's Telecom and IT Procurement team will head to Philadelphia for the Enterprise Technology Management Association's Annual Conference. ETMA, an independent non-profit, commits itself to building awareness around emerging solutions and encouraging cross-functional collaboration. The theme for this year's conference is 'The Revolution of Connected Technologies' and its agenda will include panel discussions on topics like 5G, Telecom Expense Management, and Managed Mobility Services. Source One looks forward to gathering insights from other forward-thinking Supply Chain professionals and further refining its Procurement Technology Advisory practice.

On the 27th, Source One will take part in the Procurious Big Ideas Summit in Chicago. The invite-only event brings 50 of Supply Management's preeminent figures together to exchange their thoughts on the industry's most captivating topics. Described as a "CPO-level think tank event," the summit boasts an impressive roster of speakers and agenda covering topics like risk mitigation, corporate social responsibility, and change management. It promises to provide Source One's Procurement Transformation specialists with an even greater understanding how to drive the function forward.

Members of Source One's Marketing Procurement team will kick of Q4 with a trip to Boston for the MarTech conference. Intended to break down the siloes between Marketing, Technology, and Management, the event should provide valuable insights to Source One's collaborative consultants. Source One's team has long excelled at breaking down the barriers between business units. MarTech's conversations and panel discussions should help them do so even more effectively in the future.

Source One also looks forward to networking with fellow Procurement professionals at their fourth annual Chicago Happy Hour. For more information about this event, contact Kaitlyn Krigbaum (
Women may resolve construction industry's labor supply chain shortage

The production supply chain in the real estate industry isn't quite firing on all cylinders. The economy is at its strongest point in recent memory - with gross domestic product growth exceeding the unemployment rate, as reported by multiple news organizations - but this is part of the reason why the supply chain isn't meeting expectations - builders can't keep up with the pace of demand among homebuyers.

But there's another factor at work: labor. Developers don't have enough of it. In an attempt to build up the industry's manpower, builders are looking to women as a potential solution to the shortfall.

Women represent 9 percent of construction workforce
With Professional Women in Building Week in full swing - observed Sept. 17-21 - the National Association of Home Builders is renewing its entreaty for more women to join the ranks of the construction sector. At present, men outnumber women by a near 10 to 1 margin. Given that the country's populace is composed of more women than men - not to mention female employees representing 47 percent of the working population - this ratio is off-kilter.
Judy Dinelle, chair of the NAHB's Professional Women in Building Council, said there's never been a more opportune period for more women to come aboard and bring greater balance to labor crews.

"Right now more than ever is the time for our industry to not only increase our recruitment efforts, but to also change the way we talk about careers in home building to show women this industry has so much to offer them," Dinelle explained. "We need to help the public, guidance counselors and parents understand that the industry provides a high income, significant work values, job security and a sense of accomplishment."

Sold home sign.Homes are flying off the market due to high demand.
The average home sells in 27 days
Although the real estate industry is healthy and home values are rising - making investing in a home a move recommended by most financial advisors - insufficient inventory is preventing the sector from reaching its potential. In July, for example, the typical home sold less than a month - 27 days - after it went up for sale, according to the most recent statistics available from the National Association of Realtors. That's down from 30 days a year earlier.

The NAHB believes that the labor supply chain can get a real shot in the arm by directing more recruitment efforts toward women. Dinelle said the PWB intends to do so by developing more pre-apprenticeship programs, so women who may be unfamiliar with what the industry has to offer can get a better understanding of its value to them.

"We've seen examples of pre-apprenticeship programs that are really quite successful, so we need to replicate those programs and implement them into more communities across the country," Dinelle stated. "We should all promote and offer to help the programs and organizations that provide training for women. It's our responsibility to put our words into action."

The construction sector as a whole is short staffed, which is why the White House recently signed an executive order that would expand job training and apprenticeships opportunities for college students - both men and women. NAHB Chairman Randy Noel lauded the efforts made by the Trump administration and pledged to expand training and certification. The goal is to add 50,000 new workers to the industry by 2023.

September 21, 2018

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

New Whitepaper:
MRO Demystified: Repairing the Traditional Approaches to MRO Spend Management
No organization would dispute the importance of its MRO spend. Without the literal nuts and bolts of their operations, a company cannot hope to carry out operations. Understanding the importance of the category and tackling it effectively, however, are two very different things. Traditional approaches to the category often leave businesses struggling with inefficiency, missed opportunity, and poor communication. Source One's new whitepaper aims to correct this. Offering tips and strategies for organizations of all sizes, it promotes a more strategic approach to this critical category. 

New Podcast:
Strategic Sourcing: Back to Basics
Associate Director and Procurement Transformation Lead Jennifer Ulrich joins the Source One Podcast to discuss the knowledge gaps that exist within far too many Procurement groups. For many organizations, poor or nonexistent training is purely a budgeting issue. These companies, Ulrich suggests, still have options in the form of free online resources. However organizations elect to train their Procurement teams, Ulrich emphasizes the importance of training other business units on Procurement's role as well.

Upcoming Events:
Procurement Professionals Happy Hour: Chicago, IL 
October 18, Source One is hosting its fourth annual Procurement Professionals Happy Hour. Chicago-area Supply Chain professionals are invited to join us for cocktails, hors d'ouevres, and the opportunity to network with industry peers. Interested in attending? Contact Kaitlyn Krigbaum ( to learn more.

Enterprise Technology Management Association Conference: Philadelphia, PA
September 24-26, Source One's IT and Telecom Procurement team is headed to the City of Brotherly for this conference focused on 'The Revolution of Connected Technologies.' The event boasts a packed agenda covering topics like Telecom Expense Management, 5G, and more. 

Procurious Big Ideas Summit: Chicago, IL
September 27, Source One will join other forward-thinking Supply Chain Professionals at Procurious' annual thought leadership event. Aimed at driving the Procurement function into a new era, the invite-only event features an impressive roster and an agenda covering topics like corporate social responsibility, risk mitigation, and 

Food waste impairing restaurateurs' supply chain optimization

It's a simple concept: If you want good sales, make good food - so good that diners eat every last properly portioned bite. This straightforward principle makes a predictable food supply chain a core component of profitability and competitiveness, because it ensures that diners get what they expect - nothing more, nothing less.

But with as much as 40 percent of the nation's food supply winding up as waste, according to the U.S. Department of Agriculture, this dining doctrine is proving easier said than done.
"94% of restaurants' unused food is trashed, rather than donated or recycled."

Of all the industries whose profits derive primarily from food, the restaurant sector has the highest disposal rate. Indeed, according to a joint project spearheaded by the Food Marketing Institute, National Restaurant Association and Grocery Manufacturers Association, nearly 94 percent of the food that doesn't get used ends up in the trash. That compares to 27.6 percent in the retail/wholesale sector and 1.7 percent in manufacturing.

Transportation constraints common 
Part of the reason for such a large percentage of unused or partially consumed food end up being thrown out - as opposed to being donated or recycled - is due to hygiene and liability concerns, as cited by 39 percent of respondents to the report. The most frequent barrier - 43 percent - is transportation constraints, given perishable vegetables and meats often need to be chilled to stay fresh and reduce spoilage, which commercial trucks may not be capable of doing.
Frequently, however, perfectly good food winds up being thrown out when labels and expiration dates are misinterpreted. A report from the Natural Resources Defenses Council and Harvard Law School's Food Law and Policy Clinic found that as many as 90 percent of Americans may be throwing food away when it's still safe to eat.

Dana Gunders, staff scientist with the food and agriculture program at NRDC, said these actions make supply chain optimization virtually impossible.

"Expiration dates are in need of some serious myth-busting because they're leading us to waste money and throw out perfectly good food, along with all of the resources that went into growing it," Gunder explained. "Phrases like 'sell by', 'use by', and 'best before' are poorly regulated, misinterpreted and leading to a false confidence in food safety."

She added that since there isn't a universal standard for labeling or spoilage recognition, manufacturers get to decide sell-by dates for themselves, though how they determination this is unknown. The NRDC estimates that $900 million worth of food annually is removed from the supply chain, frequently due to businesses misinterpreting the meaning of "sell by" versus "best before."
Emily Broad Leib, director of the Food Law and Policy Clinic at Harvard, said there really ought to be a spoilage recognition methodology that is universal so everyone is working from the same understanding of what's safe to eat and what isn't. This would help with food cost reduction.
"We need a standardized, common-sense date labeling system that actually provides useful information to consumers, rather than the unreliable, inconsistent and piecemeal system we have today," Leib advised.

What can restaurateurs do?
Supply chain experts Siva Arumugam and James Cooke noted in FSR Magazine that restaurateurs should also be more strategic when they purchase the ingredients for menu items. In other words, managers should be cognizant of what dishes their customers are ordering the most, avoiding cost overruns on items proving less popular. They should also have a point-of-sale system that keeps track of demand trends.

"The digital network must be able to sense demand patterns, generate corrected forecasts, translate these forecasts from menu-items to supply forecasts for SKUs, and orchestrate replenishment from suppliers - all in real time," Cooke and Arumugam wrote.