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With current events such as the rise in pulp and paper demand and the soon to be imposed steel and aluminum tariffs organizations are turning towards their supply chain for solutions. In today’s world supply chain resiliency is imperative. But how do you ensure that your supply chain is prepared for scenarios such as this? There are aspects of supplier relationship management (SRM) and supply chain best practices that can be incorporated to best prepare yourself.

It’s imperative to internally identify the components that are most critical to the operations of your organization as well as the raw materials that they are composed of. If there is a disruption within any aspects of these supply chains, top line revenue will be adversely effected. Through best practices you can minimize disruption’s effects. Let’s use the recent steel tariffs as an example.

Companies are scrambling to not only mitigate the price increases that they will face but also to identify alternate sources of supply because of the spike in domestic demand. This is why for all critical components you should ensure you have a qualified alternate source. Also if you fear that there is potential instability outside of capacity constraints like impending tariffs, you should be qualifying sources within other locations, both foreign and domestic.

Typically, the qualification process begins with market research to identify suppliers with the capabilities you are seeking. Once you have a list of prospective suppliers the best way to begin the qualification process is by conducting a Request for Information (RFI). The RFI should be developed in a way that you can properly assess the stability of the supplier, their ability to meet your requirements and their overall operations. Responses should be reviewed and qualified suppliers should be down selected. Now that you have been able to identify the qualified suppliers you can focus on price to determine who is both qualified and competitive. These are the preliminary steps to qualifying an alternate source. Later steps include things like site visits, audits and product testing which are common to ensure everything is in fact what the supplier has indicated and meets your organizations standard.

Organizations with resilient supply chains have done their due diligence and are prepared for the worst. They have secondary and tertiary sources in place to protect themselves from capacity issues and supply fluctuations. Since these companies already have their supply chain networks setup in advance they’re far ahead of their reactive counterparts. They can continue with business as usual while their competitors are scrambling to find alternative sources. This means that the laggards will either approach competitive sources that are already at capacity, be forced to go to utilize a non-competitive source and pay a higher cost or procure from a substandard supplier. Worst case scenario they are not be able to secure materials at all, causing significant disruption to operations. Best in class organizations are prepared for the unexpected and tend to thrive against their competitors when situations such as this happen. Their top line revenue either stays constant or increases as their competitors suffer.
Relationships with suppliers take more than technology

The art of managing procurement and sourcing has gotten more complex over the past few years, as the most automatic transactional processes involved have become automated and less time-consuming. This has given departments more time to get deep into their most in-depth and value-adding duties, analyzing data and making intelligent, purposeful choices. The strategic sourcing revolution has been built on these functional pillars, and leaders in the industry are finding ways to maximize their potential.

Old-fashioned sourcing involved a heavy focus on the negotiations that go on before a contract is signed, especially around price. Cutting-edge supply chains, however, have learned to focus on the ongoing process of supplier relationship management, leveraging their new capabilities to drive value over time.

Time to expand sourcing's purview
A recent Supply Chain Management Review editorial by longtime industry voice James Baehr drove home the point: There is value in communicating well with other organizations. He specified that procurement is currently stuck between old and new ways of viewing supplier relationships. Leading companies are stocked with strong soft skills, with good ongoing contact between company stakeholders and the partners they contract with. These firms are in the minority, however - most organizations' abilities focus heavily on the highly technical negotiations that go on before finalizing deals.

Team members' abilities will have to shift to make more room for relationship management and communication. According to Baehr, this may mean a different hiring focus, or potentially an approach that creates contact between procurement pros and experienced sales team members. Whether by reaching out to employees in other sections or by hiring strategically, supply chain executives have to find people who can drive their ongoing relationships with key suppliers.
Despite the encroaching presence of technology in all corners of the supply chain, post-contract communication is one area better served by a human touch, according to Baehr. He specified that there are supplier relationship management tools available to help smooth out the process of dealing with third parties over time, but that there should be a steady and thoughtful human presence behind the digital tools.

A handshake on a world map.Supplier partnerships should stay open and communicative over time.
Get specific and think big
Spend Matters recently presented more supplier relationship management insights, gleaned from the panel discussion at ProcureCon Indirect East. The subject of the discussion involved giving partner organizations the "white glove treatment," making sure all parties are happy with their contracts over time and leaving room to discover new value-adding benefits. Clear expectations and flexibility are essential parts of long-term connections, and panelists urged procurement leaders to be personal with the way they adjust to suppliers, rather than simply checking requirements off of a list.

In-person meetings can give more depth to companies' supplier communications, and these discussions should go beyond managing costs and setting deadlines. If suppliers and buyers trust one another, they can innovate in their contracts and agreements and set clear expectations that point the way forward for both parties. In cases where those expectations aren't being met, there is room to split up the partnerships, but with enough focus and clear interactions, it becomes less likely contracts will end up that way.

To prepare for ISM2018, the Procurement and Strategic Sourcing experts at Source One are recording a new podcast series. Every week on ISM2018 Session Insights, specialists from the leading Procurement Services Provider sit down to discuss the topics that will figure into the conference's agenda.

This week, Senior Project Analyst Jennifer Engel joins the podcast to discuss the potential benefit of rotational programs. Talent optimization promises to dominate the conversation at ISM2018. Experts have suggested that rotational programs could help incoming millennial professionals develop the skills they need to accept leadership roles. Jennifer agrees. She offers tips and best practices for developing these programs and effectively nurturing young Procurement talent.

Haven't had a chance to download the episode? Here's a transcript of the conversation:

Source OneHow has the strategic evolution of Procurement changed the mold for an effective Procurement professional?  What new skills do professionals require to set themselves apart?

Jennifer Engel: Procurement isn’t as simple as tactical purchasing anymore.  Before, suppliers could be selected based on who could provide the materials at the lower cost.  This meant that sourcing efforts could be driven by the stakeholder, or that a procurement professional could source virtually any category through a straightforward process.

With the evolution of strategic sourcing, the person or team involved in the sourcing process must be a subject matter expert in the product or category being purchased and fully understand sourcing best practices.  There is nothing boilerplate about strategic sourcing, and the more diverse a sourcing professional’s skillet, the more value that can be driven for the organization.

S1What is it about Procurement that commands such a diverse skillset?

JE: Procurement impacts so many parts of an organization.  Aside from having an understanding of the direct and indirect materials being sourced, procurement’s activities involve collaboration from quite a few other internal departments.

First, procurement professionals need category specific knowledge. They have to understand market trends and any factors that might impact pricing and demand. They should also maintain an awareness of emerging technologies and constantly look for leverage points that can support negotiations.

They need to be familiar with Logistics as well. These days, Procurement is focused on total cost of ownership. That means professionals in the space need to understand the intricacies of how products are transported and inventory is managed. The best know how to use this information to reduce costs and achieve better agreements with suppliers. 

They've also got to understand payment terms and financial processes. Collaborating with Finance, they should work to make savings calculation simple enough to be repeated and approved. This will ultimately help the entire business recognize Procurement's considerable financial impact.

Next, they should make themselves experts in Accounts Payable. This will enable them to streamline the Source-to-Pay process,  implement processes and workflows that prevent maverick spend, cut down on savings leak, and eliminate non-strategic purchasing. 

Procurement also needs to familiarize itself with IT and Data Management. The biggest challenge when preparing for a sourcing initiative is oftentimes collecting and cleansing category data.  Sourcing professionals need to build the intelligence necessary to navigate databases, understand spend, and extract what is needed to accurately take products to market and construct baseline documentation.

And finally, Procurement needs to develop legal expertise. During the negotiations and contracting phases, Procurement professionals have to understand enough legalise to protect the business, and identify areas where compromise might provide additional value.  Sure, legal can provide contract templates for use during negotiations, but knowing where leverage lies beyond pricing and business terms will lead to a more successful and faster negotiation period.

S1What does the incoming generation of Procurement professionals have that their predecessors didn’t? What are they missing?

JE: This generation is coming in at the tail-end of a major transformation in the Procurement space.  They didn’t have to make the switch from tactical to strategic purchasing mid-career, they are already coming in with a strategic mindset.  Operational management and supply chain focuses are more and more common at universities, and the they're learning analytical skills from the get-go.

The gap still remains, however, in the external knowledge that only comes with exposure and experience.  You can teach financial principals and business law, but each organization and industry comes with variables that are best taught by watching, doing, and evolving.  They are also missing the subject matter expertise which is more common in today’s purchasing landscape than in previous years.  Sourcing and category managers now have specific focuses, whether on direct or indirect categories, and tailor their skills and knowledge to support these specific categories.

S1How are companies locating applicants with the right skillsets? How are they ensuring they mature to reach their full potential? 

JE: Recruiting strategies remain the same, it is the desired skillsets and talent pool that are evolving with time.  Sourcing strategy is something that can only be learned overtime.  The variant is that companies are now looking for candidates with the core skills to support growth and development.  For example, in a role that will focus on strategic acquisition of MRO Supplies, a company may desire a candidate with a heavy analytical and critical thinking background, and trust that the MRO knowledge will be learned on the job.  Diametrically,they may seek a candidate with a warehousing background and teach the necessary skills for analysis and sourcing on the job.

Of course, the ideal would be to acquire a candidate familiar with both, but those are not always as readily available, and will not necessarily achieve better results.  Cultural misalignment could still occur with a candidate who on paper has all of the necessary skills.

The primary issue that companies face is figuring out where their training strengths are and striking that balance.  If an organization has strong analytical training, recruiting with a focus on subject matter expertise would yield more successful results than recruiting a strong analyst who never fully has the opportunity to immerse themselves in a category.

S1What can companies do to nurture the necessary skillsets in their current employees?

JE: There are a few things that need to be done to ensure that employees are best prepared for a role.

From the start, employees should have an idea of what their goals are, both those that are quantifiable and those that are only able to be measured softly. Then, managers need to measure progress against goals so that employees remain motivated and are aware of areas that need additional work.

They've also got to consistently provide feedback. Feedback is important both in formal evaluation settings, and after each project or deliverable is complete.  It is important to point out errors and allow the employee to correct rather than fixing their work behind closed doors.  Even relatively small details like spelling errors or formatting issues should be brought to the employee’s attention with opportunity to correct.

Both internal and external training should also be made available immediately.  Both organization-specific and general knowledge training adds value to an employee's overall development and helps foster confidence.

Lastly, managers need to provide exposure. The more an employee can integrate themselves into the culture, goals, activities, and challenges of external departments, the better an understanding they will have of the overall organization, and the better they can focus their individual efforts on adding value.  More and more companies are recognizing the benefits of employee exposure in various sections of daily operations and have been forming formal rotational programs to give an employee opportunity to be involved in different departments.

S1What does a rotational program entail?  How does an employer know if a rotational program is right for their talent pool?

JE: A job rotational program gives select promising employees an opportunity to transition among various jobs within an organization.  The scope of the program varies by company, but typically includes 3-6 months of exposure in each role, with 4-6 roles being transitioned throughout the duration of the program.  The idea is to give the employee enough time to become acclimated and immersed in a particular role, and experience the challenges and successes that a typical employee might realize.  This is not a shadowing exercise, the employee should be expected to perform tasks within a department or focus area as though they are an employee.

Rotational programs are best for employers that desire multi-faceted employees that have a deep understanding of overall company operations.  Sure, that's something that every employer wants in theory, but rotational programs require a considerable investment.  As employees move through jobs, there is obviously a ramp-up period while they learn the ropes.  Organizations need to have available resources in each area to train and guide the employees as they work through the rotation. 

S1Why are rotational programs particularly appealing to employers? What do they offer that other programs for professional development and training do not?

JE: Rotational programs are essentially a way to custom train an employee to be an expert in a particular organization.  Silo'd departments often lead to misalignment and misunderstanding which can hinder collaboration.  Employees that undergo rotational programs are able to understand the culture in each area and translate that culture to work for everyone in collaborative projects.  It also prevents short-sightedness in decision making. Rotated professionals are encouraged to make decisions that benefit or have a neutral impact in each area.  For example, if a sourcing professional is developing a deal that would create issues in finance to track and calculate savings, time within the finance department would give that employee the knowledge to recognize this and adjust their strategy before friction occurs.

S1Why is it appealing to employees? What about these programs is especially appealing to millennials in Procurement?

JE: The knowledge and skills that employees gain through a rotational program is highly concentrated.  An employee will be favorably exposed to multiple areas that can help further their career and foster growth.  Additionally, rotational programs are often tailored more towards promising employees with the end result being an achievable goal, often a promotion.

Millennials change jobs more frequently than any other generation.  A rotational program allows them to have their hands in many different buckets without the desire to jump ship.  Depending on the organization it may also allow opportunity for relocation geographically and travel while remaining with a single company.  It is a great way to sustain employee interest.

S1What are some of the risks involved in implementing a rotational program?  How can employers mitigate these risks?

JE: One risk is that the employee will become overwhelmed or bored within their new role.  Employers need to ensure that workload is challenging enough, but will not be so stressful as to overwhelm the employee with new information and responsibilities.

Another is that while the employee is on rotation, their original department may face some resource strain picking up that employee's previous workload.  To mitigate this, employers need to ensure that remaining responsibilities will not put these employees over capacity. They may want to heavily monitor the transition period or consider hiring temporary labor.

Finally, employers need to ensure that the departments involved in the rotation have the bandwidth to support the employee being rotated in and not just throw them lower-level tactical work to keep them occupied.

The best way to foster a successful rotational program is to ensure that each leg of the journey has specific goals and objectives tied to it and that those goals are being measured against. 

S1What ROI can an employer expect from these programs? How can they be sure their programs have proven successful?

JE: The proof will come in the success of the employees work upon completion of the program.  Procurement ROI will surely increase with the ease of collaboration between the employee and external stakeholders. Additional value adds that were previously ignored or misunderstood such as payment term adjustments, process automation, and innovative products will drive down costs and increase the overall procurement ROI.

Prior to the start of the program, s baseline of employee performance should be established in the form of qualitative and quantitative performance factors. Success can be directly measured based on this report.

Participating employees should be asked to provide candid 360-degree feedback about the process. As programs are developed and executed, adjustments should be made to focus on departments and roles that made the most impact, so that each rotation yields the greatest possible result.

S1: Thanks, Jen.

JE: Thanks for having me.

Interested in hearing more from the ExecIn sponsors? Subscribe to ISM2018 Session Insights today. You'll gain new insights every week, and get a head-start on the discussions that will dominate this year's conference. 

Anthropology is defined as the study of human societies and cultures and their development. The definition of anthropology is intentionally broad. It's meant to encompass the wide spectrum of human life. At first glance, one might be tempted to believe that the anthropologist’s job is as simple as asking questions of a particular group of people, but the true job of the anthropologist, is to adapt to the culture of the group of people he or she is studying. 

To be a consultant is to be an anthropologist, investigating the cultures and practices of a particular company, analyzing how people go about their day-to-day lives, and determining how these corporate rituals dictate the success of the Procurement department and the company as a whole. How do we do this? Through cultural adaptation.

Although in anthropology cultural adaptation might look like using the local language, eating local food, or sleeping in a local family’s extra bed (—which may pertain to your job as a consultant? I don’t know what you choose to do on your on-site trips). In most situations, however, cultural adaptation in terms of consulting might be a bit more subtle. It could mean using different terminology, technology, or methods of gathering data. Like an anthropologist, if you are not fully integrating into your client’s corporate customs, you might always be perceived as an outsider. Just as one would only share their most intimate secrets with their closest friends, it is important to recognize that without a solid relationship with your client, data will be hard to come by.

Though individual relationships are important, it is crucial not to read too much into any one interaction. An anthropologist wouldn’t try to make claims about an entire group of people by interviewing one member of that group. A consultant should exercise the same restraint. It's essential that a consultant not only come to understand the stakeholder, but the practices and customs of the company as a whole. Recognizing the significance of one’s corporate culture- much like recognizing the significance of any culture- allows the consultant and the client to develop a mutual respect for one another. This, ultimately, gives the consultant an upper hand, as they are better equipped to articulate the needs of the client. They'll earn the client's investment and more efficiently come to a final agreement.  

Sometimes it is difficult for Procurement consultants to look outside of a particular project’s scope. We create routines. Calling clients/suppliers, obtaining data, plugging it into Excel, and then we rinse and repeat. We often forget, however, that for some of our clients, this process is totally foreign-- and so are we. By making that extra effort to understand the roots of a company, and showing the client that we care about them as much as we care about saving $.25 on staples, we can reassure them that we are ultimately here to serve their company’s vision. By hearing a client’s entire corporate story, we are able to create stronger client/consultant relationships, and conclusively, provide services that are unique to the culture and mission of the company as a whole.

Prioritize supply chain alliances with other departments

Silos between departments at today's companies are often harmful, creating an inability to communicate that weakens overall strategy and performance. Considering the wide variety of tools connecting employees to one another, allowing them to share data at a moment's notice, there is little excuse for running a disjointed office where leaders can't communicate.

The supply chain's role interacts with every other section of the business, providing the materials these departments need to function and thrive. That makes it doubly important for sourcing and procurement officials to have open lines of communication with their fellow decision makers. This applies to both the relationship with overall company management and day-to-day collaboration with other sections.

Winning board members' stamp of approval
Supply Chain Dive recently presented some thoughts on gaining board approval from Neiman Marcus Supply Chain and Operations Senior Vice President Willis Weirich. Getting this kind of top-down support is vital because no matter how much good work the sourcing team has put in internally, directors have the ability to stop a plan before it truly starts.

The key to keeping the board engaged and approving of supply chain decisions may involve toning down jargon and section-specific language. Weirich stated that changes to logistics approaches should be couched in terms the directors prefer. This could mean taking away acronyms that need explanation and being sure to match the strategy's targets to the overarching goals that interest the executives. Meeting leaders on their own terms is a good way to promote the supply chain's value.
Furthermore, presenting information to the board is only half of creating a productive relationship.

According to Supply Chain Dive, Weirich advocates for listening and responsiveness. When a director comes to a supply chain leader with a recommendation or concern, it's best not to dismiss that idea or shut off communication. The supply chain may be a naturally quiet department, one that often works behind the scenes, but it may improve its impact on the business as a whole if its representatives are listening to input and ready to engage in productive discussions.

Team members view a wall of diagrams.Every department has a part to play.
Collaborating to launch a new project
Executing a complicated business move such as launching a brand-new product will involve hands-on involvement from a host of departments, sourcing and general supply chain management among them. Quality Digest described the team lineup behind the product launch process: Procurement teams will interact with quality-control officials, supplier management will get involved and production planning will have a voice. When all of these teams collaborate rather than working in silos, launches can move more smoothly.

Meeting objectives is easier when each team can add its input early in the process and make contributions easily. Since each element of a product's launch is essential and reliant upon the others, from the quality of the finished item to the marketing push and a steady supply line of raw materials, there is little to gain and much to lose from teams not becoming aware of one another's work until absolutely necessary. Quality Digest explained that collaboration can help companies spot potential roadblocks early on in development and avoid having to make expensive late-game pivots.

It’s no surprise that one of the key variables in strategic sourcing is the suppliers a company engages with. Understanding and continuously striving to improve the relationships with your company’s suppliers will not only add value to the business, but also provide additional opportunities to implement better strategies going forward. With supplier identification being the starting place for evaluating your company’s options, your team will become aware of which suppliers have the capabilities and quality you’re looking for, and who may be a good fit for your company’s needs in the long-term.

Whether your company is working with newer suppliers or suppliers you have worked with for years, there is always room to enhance the current relationship. Several benefits can come from improving these relationships such as reduced costs, increased efficiency, and improvements in operations. Developing the lines and frequency of communication between your company and the supplier is key in improving the supplier relationship. It ensures that everyone is on the same page and minimizes the risk of having miscommunication, which can lead to saving time and money.

By working closely with the supplier and maintaining a positive working relationship, through good communication, the supplier will be more likely to provide competitive costs. If there is ever an event in which your company feels the need to test the market and see what other suppliers could offer for your business, this can be a true test to see how your supplier feels the relationship is going. Generally, when companies take their business to market, incumbent suppliers who have developed great working relationships with these companies tend to compete and fight for their business. Even if the business does not feel the need to go to market, if both parties are happy with the current relationship, suppliers will be more willing to provide cost reductions and discounts to their customers. Aside from taking your company’s business to market to achieve cost reductions, many suppliers are willing to implement incentives and tiered discount structures to good customers. Keep in mind, these are not the only types of cost reductions available, but working to improve your company’s relationship with its suppliers will unlock doors to savings opportunities.

Receiving cost reductions may be one of the most important aspects of a well-developed supplier relationship, it is not the only benefit of improving the relationship. As companies work closely with their suppliers and get to know each other, there is a better opportunity to identify ways in which both companies can grow together and develop a mutually beneficial relationship. Both parties can create strategies for improving product quality, and continuously improve operations to ensure lean and efficient production. This is key in the relationship because collaborating efforts will lead to better strategies to improve the product and production processes. Developing strategies together will instill a more efficient portion of the supply chain that can lead to greater business opportunities for both the company and the supplier.

Reducing costs, clear communication, and improving operations and efficiency are all great benefits of improving the relationships with your suppliers, however, another benefit to add to the list includes supply stability. Relationships with your suppliers will be most effective if they are built for the long-term and turn into partnerships, rather than ad-hoc relationships. With these relationships continuing to grow, there becomes a steady supply of the goods and services provided by the supplier. With a mutual understanding of the relationship and operations involved, there will be a more consistent effort to develop a more concrete supply of goods and services. This can also minimize any issues with on-time delivery, product shortages, and other supply issues.

As we wrap things up, another very important outcome of developing the relationship with a supplier is the opportunity of supplier consolidation. By working together and improving production and operations, the supplier may be able to supply items that your company currently purchases from another, similar supplier. By consolidating the supply base, your company will be able to achieve greater savings with discounts and cost reductions by giving the supplier additional business that your company had with alternative suppliers. Additionally, your company will receive great products that come from one supplier, as the supplier will most likely be appreciative of the increase in business and devotion to growing the relationship. Consolidating the supply base will also involve consolidating the lines of communication and again, minimizing risks of miscommunication. The consolidation will allow your company to streamline the supply base and implement a much more straightforward supply chain with a few strategic suppliers rather than an abundant amount of suppliers that supply similar products.

With a consistent effort to improve existing relationships with your company’s suppliers, doing business with these suppliers will become much smoother, and in most cases, cheaper. Identifying areas in which your company and the suppliers can work together to develop mutually beneficial strategies will help the businesses grow together for the long-term.

Procurement deserves to occupy a leadership position within every organization. The department's potential for driving change, developing long-term strategy, and producing value are all but limitless. Often, however, departments are forced to struggle against misconceptions to attract the right talent and earn buy-in from internal stakeholders. These obstacles make it challenging to assemble the world-class team necessary for Procurement to transform and achieve its full potential.

ISM2018 attendees looking to initiate a procurement transformation are in luck. On May 7th, Source One Procurement Analyst Kaitlyn Krigbaum will present Orchestrating a Successful Procurement Transformation: A Symphony of Recruiting, Branding, and Leading. Alongside MRA Global Sourcing's Nick Lazarra and QBE's Scott Ottenheimer, she'll share some of the insights that have helped her stand out as a member of Source One's procurement transformation team.

Whether you're looking to narrow a talent gap within your organization, sell leadership on Procurement's value, or refine an ongoing transformation, this ISM2018 is not to be missed. 

Attendees are also invited to register for Source One's exclusive ExecIn forum. Featuring a customized agenda of thought leadership sessions, this private event will provide additional networking opportunities for supply management leaders.

Procurement's strategic evolution has changed the mold for Procurement professionals. New, more essential tasks require unique skillsets. Coupled with a widening talent gap, Procurement's new responsibilities have many organizations scrambling to attract and optimize the right talent.

As millennials enter the workforce, industry leaders are hoping they'll provide the means for Procurement's next evolution. Attracting millennial talent is one thing, but how can companies ensure their hires perform to their full potential? Many are leveraging rotational programs to acclimate millennial hires and expose them to various areas of Procurement.

Source One Senior Project Analyst Jennifer Engel joins ISM2018 Session Insights to discuss the benefits of rotational programs. In her years with Source One, she's enabled a number of clients to implement these schemes. Providing diverse, hands-on experience, they've proven effective for optimizing Procurement's operations.

ISM2018's agenda is loaded with sessions dedicated to managing millennial Procurement professionals. Get in on the conversation early by listening to this week's episode.
State Department supply chain project targets forced labor

Creating an ethical and sustainable supply chain is as important as it is difficult. Today's sourcing relationships can span continents, with so many miles and partner companies between the beginning and end of the chain that visibility becomes murky and hard to maintain. Companies and government agencies have taken to using technological means to ensure the suppliers they work with are operating legally and ethically, at all levels of the supply chain.

One technological area that has potential in this regard consists of blockchain-based systems. While the most famous use of blockchain digital ledger systems is powering cryptocurrencies such as Bitcoin, the centralized and real-time nature of this data storage method gives it the ability to perform other tasks. Blockchain-based supply chain responsibility projects are drawing interest around the world.

Coca-Cola teams up with the State Department
Better supply chain visibility benefits many different parties, so it makes sense that a public-private sector alliance is working on such a concept. Reuters recently reported that Coca-Cola and the U.S. State Department are creating a worker registry that will span the globe and hopefully prevent companies from employing forced labor. The International Labor Organization explained that there are currently millions of people suffering in forced labor conditions - 25 million, as of its most recent count.

Reuters explained that research has shown many major food and beverage companies aren't doing enough to remove noncompliant suppliers from their networks. The Coca-Cola alliance with the State Department is designed as a concrete response to the problem. The end result will be a validated record of information on labor contracts that will make it difficult for companies to cover up wrongdoing. It has always been incumbent on companies to audit and manage their supply partners and ensure good labor practices. Instead of changing the nature of their duties, the blockchain-based project will make it easier to carry them out.

The attention around blockchain technology has been gathering for years now, and Coca-Cola representatives told Reuters the company has been considering using the systems as parts of multiple projects. The ledger created in the labor oversight program could affect a large sample of suppliers, considering the global reach of the beverage giant.

A word cloud around "labor laws."Enforcing labor laws is easier with better visibility.
Countering counterfeiters
Worker safety isn't the only supply chain integrity issue being targeted via blockchain-based projects. Sweetbridge CEO Scott Nelson wrote for Supply Chain Digital that his company is working on a transparency ledger designed to prevent counterfeit goods from entering the global marketplace and being sold as legitimate. In addition to protecting workers' jobs and companies' bottom lines, getting rid of false products could protect consumers - these items are presumably never tested for quality or safety.

The problem of counterfeit products is widespread, according to Nelson. He added that the International Chamber of Commerce has predicted counterfeits will take $4.2 trillion from companies by 2022. The proliferation of illegitimate items will put 5.4 million jobs at risk within verified supply chains. The superior visibility and tracking capacity of blockchain-powered ledgers could help eliminate thee frauds. This is another of the many potential blockchain roles emerging.

ICYMIM: March 19, 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.
Sydney Lazarus, Spend Matters, 3/15/2018
Lazarus summarizes the results of a recent Riskmethods survey. Drawing responses from over 250 senior Procurement executives, the survey found that risk mitigation is a priority for most Procurement departments and that major supply chain disruptions are increasingly common. Nearly half of respondents reported weathering at least one major interruption to their operations. More than 10% of executives reported suffering more than 20. While Procurement teams hope to prepare for natural disasters and similar events, few currently have effective contingency plans in place. Only 1 in 5 surveyed executives believe their company currently have sufficient plans for managing and responding to risk factors.

Don't Get Sucked in By Impressive Words
Michael Lamoureux, Sourcing Innovation, 3/13/2018
In anticipation of conference season, the doctor takes a closer look at some of Procurement's most popular and, to his mind, meaningless buzzwords. He dismisses digitization, for example, as a word that's long outlived its usefulness. He reminds readers that utilizing data is nothing at all new for Procurement. Postmodern, he suggests, is similarly outdated in spite of its continued popularity. Coming to popularity in the mid-20th century the word has no relevance to speak of in the world of Procurement. He concludes by suggesting that Procurement professionals not only abandon these terms, but start to focus their resources on identifying genuinely time-saving and value-adding functions.

Nick Heinzmann, 3/13/2018, Spend Matters
Lazarus examines the increasing emergence of labor clouds. These curated networks of talent are already proving helpful for companies of all sizes and stripes, but Heinzmann takes time to describe particularly conducive environments. He suggests that companies with large, disorganized freelance teams and those in need of highly specialized talent could find labor clouds especially useful. After detailing a few recent examples of successful implementations, Heinzmann lists his tips and best practices. It's essential, he writes, to involve key stakeholders early and often and to provide ample opportunity foe improvisation and experimentation.

Giant-scale supply chains can make excellent use of artificial intelligence

Artificial intelligence systems, when applied to supply chain decision-making, can shake up the fields of procurement and sourcing as few solutions have before. These processes don't replace human number-crunching - in ideal cases, they can move more quickly than any living employee, letting companies optimize their supply chains at speeds that would not have previously been possible, catching savings opportunities invisible to the unaided eye.

The evolution of business intelligence over the years has led to machine learning and other AI processes. Pools of data have grown larger and more diverse, and the algorithms' power has increased along with them. Supply chain leaders who haven't checked in with these systems in a few years may not realize the opportunities their organizations are missing out on.

Making an impact in the hotel business
There are few better showcases for AI's potential than large-scale supply chains. Gigabit Magazine recently profiled Crown Resorts' sourcing approach. This massive hospitality company has to deal with a vast amount of information flowing in from multiple properties. Before the business refreshed its procurement system, its information was fragmented, and insights were hard to come by. After a digital revamp, things have changed.

Gigabit explained that with a smart procurement management system in place, Crown now has more visibility into its spending and fewer manual processes to slow it down. It uses AI-powered analytics to perform spend management across the whole chain at a speed that wouldn't have been possible before. In a reflection of modern, highly automated supply chain capabilities, the tech system can automatically apply categories to all the supplies bought for Crown across its multiple locations.

The procurement leaders no longer have to prioritize their supplier network. When all the data flowing through the system is highly visible there's less need to focus on a core group of companies. Now that the organization has immediate visibility into its transactions and the companies behind them, it can capitalize on chances to increase efficiency or otherwise optimize processes.

Points around the globe, connected.Big organizations don't have to suffer from lack of visibility if they have AI.
Showing potential in manufacturing
An in-depth World Economic Forum report on the manufacturing supply chain recently demonstrated another potential venue for AI to prove its worth. Decision-making among executives can improve when the choices are based on high-speed insights generated by algorithms. The research noted that AI is one of the technologies with the ability to close the gap between large and small companies when it comes to agility. Big businesses, once encumbered by their size and number of moving parts, can boost their efficiency and speed when equipped with AI-derived insights.

The WEF called the changing nature of large company operations a "structural and, ultimately, cultural shift." Firms that use their digital tools to their fullest potential will be able to drive better cost reduction amounts when optimizing their processes. An era of large manufacturing organizations moving with the speed of much smaller competitors may be at hand, because data visibility can now reach every corner of those huge businesses.

The potential of AI is becoming clearer, but organizations still have a lot to learn. For now, it seems evident that leaders must keep an eye on these algorithms.

Just because the world is rapidly going digital doesn't mean that direct mail marketing campaigns have outlived their usefulness. Catalogs and mailers are still an effective and popular method for expanding into new markets and developing ongoing relationships with consumers.

Just because postage can prove a costly, complicated, and confusing spend category doesn't mean it has to. Source One's Procurement specialists have spent years helping Marketing teams better manage their direct mail postage spend. Check out our latest infographic to see a few of the best practices we've learned over the years.

Interested in learning more about optimizing your postage spend? Contact the Direct Mail Marketing experts at Source One today. We'll not only optimize your spend, but also leverage our years of success to tailor the content and delivery of your mailers.