The rise of ethically-raised animals in the food industry

on Thursday, January 29, 2015

The rise of ethically-raised animals in the food industry

Meat companies across the United States ultimately strive to provide consumers with the type of products they're willing to buy - it's not a difficult concept to grasp.

However, various reports present food organizations with disparate intelligence. While some surveys suggest people proactively search for meat taken from animals that were humanely raised, other studies indicate people couldn't care less.

Procurement departments within U.S. companies are looking at a number of factors when it comes to purchasing livestock from farms, slaughterhouses and other similar facilities. Depending on the target audiences their employers strive to accommodate, some procurement officers make look to build relationships with farmers who don't give their livestock hormones or antibiotics, for example. Identifying which businesses to align themselves with obligates meat-selling enterprises to determine what kind of products their customers are looking for.

An issue of humane treatment

The differences between ethical livestock-raising and antibiotic usage must be established. These issues are often confused to be under the same umbrella, but there are some consumers who may not care about what farmers are giving their livestock as far as hormones are concerned. However, those same consumers could care about how those animals are treated.

A survey of 2,600 consumers conducted by the American Humane Association, a fast-growing third-party audit initiative, discovered that people rank "humanely raised" labels over those that verify meat products as either organic, natural or antibiotic free. The following sentiments were also found among study participants:

  • 89 percent maintained they were "very concerned" about how farm animals were treated
  • 34 percent stated they were willing to pay 10 to 20 percent more for goods that were labeled as humanely raised
  • 74 percent asserted they would pay more for meat, dairy and eggs that came from ethically treated livestock
  • 28 percent of respondents reported they would pay as much as 20 to 30 percent more for humanely raised goods

An industry of collaboration

Although the AHA has been around for some time, it's still gaining traction among companies competing in the food industry. The association presents itself as an authority on what defines humanely raised livestock, but consumers apparently have a different perspective. When asked whether scientists, farmers or veterinarians should establish humane raising standards for farms, 99 percent of AHA's survey respondents believed such professionals should work together.

This attitude should be reflected in the procurement process as well. Consulting veterinarians, zoologists, farmers and others to determine how a company should judge whether a rancher is treating his or her animals ethically will give purchasers a clear picture of what look for in an ideal supplier.

A press release submitted by the AHA noted the number of farm animals under its American Humane Certified™ program grew nearly 1,000 percent over the past four years. That means approximately one in every eight animals on U.S. farms and ranches is accounted for by the association.

"Americans are increasingly interested in where their food comes from and how farm animals are treated," said AHA CEO and President Dr. Robin Ganzert. "The welfare of animals has always been a key issue for America's farmers and with growing demand from the public for humanely raised foods, enlightened farmers, ranchers and producers are seeking trustworthy, independent, science-based humane certification to verify good practices to retailers and the public."

The responsibility of procurement departments

Many would argue that purchasing officers are obligated to validate a farmer's claim when he or she states that his or her animals are certified by the AHA. This is where the investigation component of strategic sourcing comes into play. Receiving accreditation from an organization shows commitment, but there could be other elements at work that associations are overlooking.

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Procurement & Strategic Sourcing Temp/Permanent Staffing Solutions

on Wednesday, January 28, 2015

I think anyone that has been employed in the supply chain and procurement fields knows that our industry seemingly could not be any hotter than it is today.  At the forefront of this change is a fundamental shift in the way that procurement and sourcing groups are viewed.  No longer are these roles looked at as cost-centers or tactical purchasing jobs, they are viewed as strategic (and critical) to the overall profitability and growth of many organizations.

But this shift is happening right at a time that experienced professionals are leaving the market.  The world is starting to feel the crunch of baby-boomers retiring (and taking their procurement subject matter expertise with them) right at a time that businesses couldn't possibly need them more.   While colleges and universities are responding rapidly and building solid supply chain, logistics, and procurement curriculum; they seemingly can’t produce enough graduates for the demands that exist.

If you don’t want someone right out of school, be prepared to pay for talent.  Even a sourcing or supply chain professional with only a few years of experience finds themselves in an incredibly job-seeker-friendly market.  Add-in some category expertise or commodity subject matter expertise and see another 30% increase in what you should expect to pay.

And what if you don’t even need someone full-time or in a permanent role?  It gets even harder. Especially if you are a smaller company or are greatly restricted with your available recruiting and HR support services.  It’s simply not easy (nor cost-effective) to tap into these resource pools.

The good thing is, this new landscape for procurement and supply chain professionals has created a relatively new availability of contingent workers who have exactly the experience you need, when and where you need it.  More and more professionals are opting for the excitement of changing roles and new challenges over the safety of 15-20 year careers at one company.  Many candidates are also becoming highly focused in specific commodities or categories; and prefer to leverage their experience in one-time events for a variety of clients.  If you can tap into qualified procurement and sourcing temp and contingent workforce, you don’t necessarily need to bring in a recurring resources for commodities/categories that only need temporary or project-based support.

Regardless of if you need full-time permanent resources or are looking to build a contingent work-force strategy for your procurement and sourcing groups, you’ll find the idea is easier said than done. It’s obviously not very easy to attract good talent.

Source One can help.  For years, we've been helping companies build and execute strategies to better manage spend, people and suppliers.   Traditionally, we've offered a variety of on-demand solutions to help sourcing and procurement groups tackle more categories and reduce further costs.  But the last few years have been a shift for us as well.  Our customers are more frequently requesting long-term resources, onsite resources, or are asking us to help recruit permanent positions for their procurement and supply chain groups.   So, we've decided to leverage the thousands of resumes we've collected, the dozens of partnerships we have in place, and the hundreds of top-professionals we've networked with and build a formal service offering to help companies in need.

Please take a moment to learn about our new services, and please contact us if we can help you develop the right staffing solution for your supply chain and procurement groups.



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A Successful Medical Device Strategic Sourcing Conference

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This Monday and Tuesday, Source One served as key presenters and participants in Q1 Production’s Medical Device Strategic Sourcing Conference. The first-ever of its kind, the conference was a huge success – providing a forum for industry leaders and experts to collaborate and share best practices in the strategic implementation of cost modeling, supplier transparency, and regulatory compliance.

Serving as the Chairperson for Day One, Source One’s Vice President of Professional Services, Joe Payne, provided opening remarks and introduced each of the day’s discussion topics. Of particular note was the first topic: “Defining the Strategic Side of Sourcing: What Does it Really Mean?” – a core function and area of passion for the Source One team.

Also on Day One, Joe Payne served as the discussion moderator while industry expert panelists reviewed the value of supplier relationship management (SRM), another critical focus area for Source One. Supplier Relationship Management (SRM) programs have recently presented overwhelming evidence that firms who invest in these outlets achieve a significant ROI. In fact, companies considered to be leaders in SRM best practices see an average of 20x return on investment versus those who overlook the importance of this strategy.  Adopting the best SRM practices possible for your organization can yield a significant return. As medical device organizations establish partnerships with device component vendors, building relationships is key in addressing quality, cost, and risk concerns. This discussion was effective in providing ideas to help firms achieve maximum value from their existing supplier relationships that benefit core business activity.

On Day Two, Source One’s Vice President of Operations, William Dorn, facilitated conversation surrounding internal metrics to deliver optimal strategic sourcing performance in the medical device space. This is an area in all industries that has been gaining a ton of focus. Source One’s Vice President of Professional Services, Joe Payne, participated in this panel as well among two respected industry colleagues. The discussion revealed that although supplier pricing and external metrics are certainly a determinant of strategic sourcing success, there are a multitude of internal metrics that can be shaped to deliver optimal performance in the medical device space.

Throughout the conference, Dorn manned Source One’s exhibition booth as attendees stopped by to share their best practices and learn more about the benefits of hiring a procurement services provider (PSP). Dorn noted, “This was a fantastic opportunity to collaborate with respected industry leaders in this rapidly expanding market. Everyone benefited from a greater understanding of the various levels of sophistication in procurement operations – from the relatively small and simple to the very large and complex.  There is no one-size-fits-all solution; every organization must partner with suppliers and service providers who meet their particular needs and help them achieve sustainable growth – especially in this life-saving industry.”


If you are interested in discussing any of these topics with Source One to improve your medical device sourcing process, look no further. If you’d like to get in contact with our team, please reach out to myself, Heather Grossmuller, at hgrossmuller@sourceoneinc.com and we’d be happy to schedule a meeting. To learn more about Source One’s medical device sourcing capabilities, visit our webpage today.

Photo courtesy of: www.bbb.org
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How national concerns disrupt arms purchasing

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How national concerns disrupt arms purchasing

Arms procurement is a tricky business, both from a seller's side and a buyer's standpoint.

From the former's perspective, military equipment manufacturers must be cognizant of the implications of providing combat assets to certain organizations. From the latter's viewpoint, maintaining a reputation of ethicality is a priority, as any signs of human rights abuse will make it difficult for such an entity to purchase materials. 

In regard to purchasing concerns, a different approach to procurement must take place. In addition to ensuring an organization is providing its personnel with quality arms, it must walk a fine line between transparency and confidentiality when building supplier relationships. 

Germany halts weapons sales to Saudi Arabia 

According to the Agence France-Presse, Germany has decided to halt arms distribution to Saudi Arabia, citing the region as unstable. On Jan. 21, the German national security council, which includes Chancellor Angela Merke​l and Vice Chancellor Sigmar Gabriel as well as seven other ministers, made the official judgment. 

With this move comes the loss of what was once a strong seller-supplier accord. Saudi Arabia purchased approximately $400 million worth of arms from Germany in 2013. However, from the perspective of many German citizens, maintaining this connection isn't worth it - 78 percent of Germans assert their country should cease Saudi arms sales due to human rights violations. 

Contention in Saudi Arabia 

Why has Germany elected to alienate Saudi Arabia? Human Rights Watch noted Saudi Arabia increased arrests and trials of "peaceful dissidents" in 2012, and reacted with measured force against citizens who conducted protests or other demonstrations. 

What's most disconcerting for German citizens, as well as many people throughout the world, is Saudi Arabia's neglect for women's rights. HRW cited one instance in which a car chase by religious police left the driver's wife and daughter in critical condition. After the injured parties were transported to a hospital in Baha, the doctors could not amputate the wife's hand because there was no male legal guardian to sanction the procedure. 

In addition, the human rights association maintained that Saudi detainees often suffer routine psychological and physical mistreatment in corrections facilities. 

Procurement can't fix a bad reputation 

Procurement has its limitations, and as general human rights awareness has quickly become the norm among global citizens from all corners of the world, it makes sense that Germany and other nations will cease arms shipments to nations that disregard this sentiment. This makes the issue a widespread administrative and institutional problem. 

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US defense spending: Increasing or retracting?

on Tuesday, January 27, 2015

US defense spending: Increasing or retracting?

Spend management is a critical component of the United States government's military considerations. Equipping personnel with quality equipment is a necessity, but pressure from legislators can suppress expenditures. 

That is why officials from the Pentagon often make thorough assessments of not only how much the Department of Defense, its subsidiaries and other agencies spend on materials and operations, but also how well personnel are performing as a result of those expenses. Purchasing requires comprehensive analysis of all angles.

US military may receive leeway 

Bloomberg's Roxana Tiron acknowledged speculations from House Armed Services Committee Chairman and Texas House Rep. Mac Thornberry, who maintained that the U.S. military will likely be relieved of past spending caps in light of concerns about everything from cyberterrorism to nuclear weapons threats. 

"On both sides of the aisle, there's widespread agreement that the resources going to the Pentagon are not enough to meet that wide array of threats," said Thornberry, as quoted by Tiron. "If you got Republicans and Democrats in the House and Senate who want to do that, I think we will. I trust that the president, given all that the country is facing, will want to do that too."

Some contention regarding cap leniency comes from Democrats in Congress who are concerned that more defense spending may mean less funding for domestic programs. 

Looking toward greater savings 

While they may not be aware exactly how financial resources are being allocated, many U.S. citizens are calling for reduced defense spending in general. From the Pentagon's perspective, allaying the concerns of U.S. residents and legislators alike involves finding where capital can be more appropriately allocated. This measure can be undertaken by finding out where savings can be made - perhaps there are certain sub-departments that do not require as much funding as others. 

Defense Industry Daily acknowledged estimations made by the Pentagon's Defense Business Bureau, an advisory entity that is dedicated toward providing expertise to senior leaders from a private-sector perspective. The bureau discovered $25 billion annual savings within DoD practices, most of them in procurement, logistics, property management, human resources and health care.

While the military does not operate the same way as private firms do (the latter of which make top-to-bottom changes designed to improve efficiencies), the Defense Business Bureau's analysts did note that renegotiating contracts, cutting personnel, modernizing IT assets and re-engineering "business" processes can result in the savings highlighted above. 

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Is the future shining on copper procurement?

on Monday, January 26, 2015

Is the future shining on copper procurement?

Businesses across multiple industries are making assessments as to whether procuring copper over the next year and beyond will be rife with difficulties. 

When it comes to purchasing any sort of mineral, a number of concerns are regarded by sourcing specialists. For one thing, enterprises want to ensure their copper suppliers are executing fair labor practices and extracting the mineral efficiently. In addition, corporate procurement officers are concerned about how copper will be physically transported from mines to refinement centers, manufacturing centers and finally the consumer market. 

Industries impacted by the copper economy 

Democratic Republic of the Congo-based firm Somika, which specializes in copper and cobalt mining and processing, listed several sector-specific use cases of copper: 

  • The communications industry has used copper to develop both long- and short-range cables as well as printed circuit boards for electronic equipment. However, fiber-optic offers a faster method of data delivery, which is gradually rendering copper obsolete. 
  • The energy economy favors copper for its ability to conduct electricity and heat incredibly well. Furthermore, the mineral can be remanufactured to create alloys such as bronze and brass, which are more corrosion-resistant than pure copper. 
  • Plumbing and heating mechanism developers use copper to create portable water and heating systems, and regard the metal as the preferred material of professionals working in this space.
  • The automotive industry uses copper to make heat transfer devices such as radiators, bronze sleeve bearings and oil coolers. 

Somika's input makes it obvious just how important copper is to the global economy. It's no exaggeration when one says that billions of dollars are at stake. While this scenario isn't likely to occur, if copper production were to cease completely, the automotive, communications and energy sectors would have to find new materials to replace the precious commodity or reinvent the wheel, so to speak. 

Prices continuing to fall 

According to PricewaterhouseCoopers, the price of copper reached an all-time high of $4.60 per pound in April 2011, which indicates a high demand for the mineral. Since the beginning of 2013, copper has traded between approximately $3.00 and $3.80 per pound. 

From a copper mining perspective, forecasts don't look too attractive. PwC's survey of copper producers found that 60 percent of respondents believe the price of the metal will decrease throughout the next year. Diego Hernandez, CEO of Chilean copper mining enterprise Antofagasta plc, maintained that new extraction projects are expected to boost supply throughout the next year, causing oversupplies in 2015. 

Procurement officers are likely to favor this environment, especially those working at construction materials manufacturers and electronics producers. Overall, the consumer economy may benefit as a result because more affordable raw materials often translates to item price reductions. 

This environment doesn't mean copper miners will suffer over the next year. A large majority (85 percent) of PwC study participants asserted their operation expenses are anticipated to decrease within the next 12 months. None of the respondents acknowledged estimates that processing expenses will rise throughout the same timeframe. 

Some unable to support operations

Despite PwC's discoveries, some mining companies have been forced to downsize as a result of copper price reduction. Manufacturing.net noted Revett Mining, which is headquartered in Spokane Valley, Washington, recently announced that it will suspend activity at Troy Mine, which extracts copper and silver in Northwestern Montana. 

Seventy out of the 80 employees currently employed at the facility will be laid off. Revett CEO John Shanahan maintained that the center will not shut down completely, and will likely reopen in the event copper prices rebound. 

​However, Revett's situation isn't indicative of the industry as a whole. Montana Resources, another mining company with a facility located in Butte, Montana, employs 350 workers and will remain operational for the foreseeable future. 

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Should organizations hire a supply chain EHS leader?

on Friday, January 23, 2015

Should organizations hire a supply chain EHS leader?

Now more than ever, an organization's reputation is defined by how it executes sustainable practices. Supply chains typically receive scrutiny in this regard, attracting attention from consumers and potential business partners alike who want to associate themselves with socially and environmentally responsible brands. 

While conducting assessments of prospective suppliers, procurement professionals often scrutinize how well or poorly companies indoctrinate sustainable standards throughout their operations. Those that skimp on safety protocols or blatantly neglect their impact on surrounding ecosystems are written off as a risk and not considered. Even if a supplier is contracted, the purchasing department continues to analyze its practices throughout the duration of their accord. 

The birth of the EHS manager?

Given this approach to supplier relationship management, it's a wonder whether or not enterprises are creating environmental, health and safety positions within procurement departments. According to the National Association for Environmental Management, an EHS manager oversees internal and external operations to ensure all suppliers and staff are abiding by national EHS regulations in addition to supporting progressive environmental policies and worker safety programs. 

Surprising to some, EHS managers often started out as engineers or scientists. This provides them with an advantage of sorts, as it allows them to scrutinize manufacturing, chemical sourcing and processing operations from a technical perspective. Combine this unique expertise with knowledge of industry best practices and government policies and you have yourself a valued contributor to a supply chain management team. 

Extending to every facet of the supply chain 

Manufacturing Business and Technology contributor Paul Leavoy acknowledged the time when EHS compliance requirements only applied to organizations procuring goods from overseas enterprises - companies were not held accountable for the actions of their suppliers. While current EHS obligations remain quite confusing in this respect (standards may change depending on which industry you're referring to) public perceptions have motivated organizations to rigorously scrutinize every entity in its supply chain for environmental and workplace negligence. 

Never underestimate the convictions of a knowledgeable consumers. Social media has connected people from all over the world in a way businesses didn't anticipate in the past. Facebook, LinkedIn and a plethora of other platforms have created a global society that values the livelihoods of those living in different parts of the world. If abominable labor conditions, rampant pollution and negligent waste is persisting as a result of a company's supplier practices, the procuring enterprise will receive just as much criticism as its partner. This goes beyond disparaging Facebook comments and ventures into the realm of informal boycotts. 

Improving EHS adherence 

Businesses looking to maintain profitable, ethical supplier relationships must take a number of steps to ensure every entity within their supply chains possess the same values as their own. Leavoy recommended that creating an EHS position or sub-team within a larger procurement department is a step in the right direction. If a group of people can dedicate 100 percent of their time to maintaining EHS regulatory compliance and supplier sustainability assessment, thorough partner profiles can be developed and referenced as needed.

From there, enterprises must consider constructing a comprehensive supplier EHS review process comprised of the following steps in mind:

  1. Interview nonprofits and private enterprises about a prospective supplier's operations. Does its leaders proactively find ways to integrate sustainability into their operations?
  2. Visit facilities and interview laborers as if you're a government figure conducting an audit. 
  3. Ask the prospect whether its managers would be willing to submit regular EHS reports if an agreement is established. 

These measures are simple to take. In the long run, companies will be able to develop a portfolio of suppliers they can hold accountable. Consistent reporting will further solidify a brand's stronghold over its EHS efforts. 

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MRP Systems: Conserving Human Resources

on Thursday, January 22, 2015


MRP Systems: Conserving Human Resources

When a company underestimates its human resources, it can waste more than it saves in terms of money, time, and intellectual property. Companies considering investing in technology and its material requirements planning (MRP) system initially think that there is no need to invest in additional modules because enough employees exist to handle the tasks.

A Forbes article analyzed the ERP system market back in 2012. “SAP had just over $6B in total ERP software revenue in 2012, leading the worldwide market with 24.6% market share.  Oracle (ORCL NaN%) had $3.12B. From Burleson Consulting, “Oracle Applications is one of the world’s most complex ERP tools with over 130 specific business functional areas”. SAP’s Wiki informs SAP has more than 270 different modules.

These two companies are not deceiving hundreds of businesses with non-profitable modules. There is a reason they have such a variety and expansive service to offer companies. What they have to offer saves time and money and human resources.

Scenario A: A company decides to save money by not investing in a module that allows SAP to produce reports that show all orders with a supplier—including the exception messages for meeting that company’s production schedule. This module also has the ability to send the report directly to desired suppliers because it is connected with the company’s Outlook or messaging system.   Without this tool, the company’s employees have to take the time and run the reports. Those employees have to wait for the report to finish, export it to Excel, and then send emails to the suppliers. Depending on the amount of open orders and the amount of suppliers, this could take an employee ten percent of their weekly time allocation. With that ten percent of the employee’s time lost, there have no time to think strategically and consider ways to save the company money. The employees do not have time to develop new intellectual property for the company. The possibilities are endless with what a human could do with their time. The possibilities are limited when they are tasked with assignments a computer could do.

Scenario B: A company decides to save money by not investing in a module of Oracle that analyzes order patterns and inventory levels of a manufacturing company. This module could have provided insight to reaching the economic order quantity desired. The module could be set to a forecasting model that fits the companies industry and size. Instead the company now wastes money by purchasing more than what it needs of some products and has shortages of other products.

Why do so many companies neglect to take the time with an MRP expert to determine which modules fit best for their requirements, their staff capabilities, and ultimately their strategic goals?  We know that a dollar now is better than a dollar tomorrow. However, the dollar now can be better spent to save more money in the long run.


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How to Tackle Business Disruptions in Telecom & IT

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Imagine the frustration of dealing with a 40-hour maintenance shutdown with no access to sensitive data from a customer’s perspective. Or even more unpleasant, dealing with the backlash as the responsible party. This recently happened to Verizon as they underwent what was intended to be a “seamless upgrade functionality” for its cloud service. The irony being that the upgrade was intended to allow future upgrades to occur with no service interruption as Verizon pushes to become a leading enterprise cloud service provider. Credibility for cloud service providers is contingent on reliability. And while Verizon notified customers in advance of the shutdown, 40 hours of downtime for most is simply not acceptable. When customers see other telecommunication giants offering the same enterprise class cloud structure without all the headaches, Verizon immediately begins to lose credibility as a strong contender. Upgrades of this magnitude are always particularly challenging. And while every upgrade has some planned impact, what can be done to tackle business disruptions such as this one? Below is a list of strategies to assess and manage risks particularly related to telecom and IT:

Stay informed to the latest technological advancements and security measures. Monitoring advancements in security measures will serve as guide for key risk that should be in your organization’s radar. Observing technological advancements will help lessen the effects of any future technology disruptions and aid in prevention of your organizations falling “behind the curve”. Both serve as examples of how you should be altering your business model to support new functions.

Understand the risk of your main network technology type. Numerous business risks are due to a lack of end-to-end understanding of services, platforms and processes. It is imperative to understand both the current and historic network configuration. You cannot accurately mitigate risk on something you do not understand. By understanding the technology type you can then recognize the unique risk and issues associated with it.

Implementation of comprehensive IT security measures. Understanding emerging security threats and being able to maintain effective policies will help ensure that security measures remain proficient. While telecommunications has its own unique security standards and frameworks, it can prove beneficial to use different industry security models to offer a richer, broader approach. You can also collaborate with suppliers and partners to tackle privacy and security issues in new service areas.

Impose constant communication. Verizon poorly chose to notify consumers of service restoration through a press conference release leaving many consumers unaware and frustrated. When dealing with service disruption, providing consistent and constant updates to the consumer will ease tension while improving customer communications and increasing service trust. It is also important to enforce constant communication within your organization. By maximizing transparency with both the consumer and company disruptions.

Diversify your infrastructure.  By locking your organization into a single architecture, you create an inflexible and potentially more costly environment. Performing redundant backup of your data can help assure that it is stored securely and can be accessed quickly in case of any disruption to your core infrastructure. This can be achieved by looking into hosting with an alternative supplier or as simple as disk based backups.  In the event of an outage, the number of customers left with no access to vital information is substantially reduced due to the building of diversity into the infrastructure.

Perform strategic risk review. Conventional risk management techniques will only highlight service level risk. Depth analysis in key risk areas ensures that mitigation of the risks can be fulfilled. They should be assessed against established methodologies by staff with the necessary expertise. After completing a strategic risk review, impose new metrics to track and control the likely introduction of risk. While this process may seem very time consuming and costly, the return on investment is significant when compared to the mitigation of losses.  In addition, doing so will translate into true granularity to improve both organization performance and client experience.



Cited: http://www.ciosummits.com/media/pdf/solution_spotlight/wedo_future-telecoms-risk-management.pdf

http://www.fiercetelecom.com/story/verizons-cloud-comes-back-online-after-40-plus-hour-shutdown-upgrade-servic/2015-01-12?utm_medium=nl&utm_source=internal




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How oil procurement reduces consumer prices

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How oil procurement reduces consumer prices

There's a reason why gasoline is the cheapest it's been in six years. Bloomberg noted automobile owners in the United States paid an average of $2.20 a gallon for regular petrol throughout the first week of 2015. 

Reducing the length of the supply chain 

A large reason why this particular resource is more affordable now than it was in 2008 is because of where oil companies are purchasing it from. The past two years witnessed an uptick in domestic and Canadian fossil fuel extraction and processing, allowing companies to redirect procurement away from overseas countries. 

Essentially, there's more risk involved with transporting oil from countries as far away as Venezuela and Saudi Arabia, which were among the top five countries the U.S. imported petrol products from in 2013. Exactly 42 percent of total net imports (a figure developed by identifying total U.S. petrol exports) came from Canada in that same year, according to the U.S. Energy Information Administration. 

Thanks to robust rail assets, between the U.S. and Canada, it makes more fiscal sense for spend management officers to advise energy companies to source from domestic resources. Not to mention, the potential dangers associated with overseas shipping are causing such professionals to refrain from recommending their employers do otherwise. 

U.S. crude production rising 

Bloomberg acknowledged that U.S. oil out put rose to 9.13 million barrels a day at the tail end of 2014 - the highest level since 1983. Over the past five years, U.S. production has grown 66 percent thanks to the horizontal drilling and hydraulic fracturing techniques that have been so popular among industry participants as of late. 

Forbes contributor Thomas Landstreet regarded an announcement from the U.S. Bureau of Energy Management stating the U.S. government will allow seismic analysis of the outer continental shelf of the south Atlantic coast. Given environmental concerns associated with the fossil fuel industry, this development marks a significant shift in the U.S. economic policy. This will also further reduce the nation's dependence on foreign oil - the U.S. is already projected to surpass Saudi Arabia's oil output rate as a result of fracking. 

Effects on green energy 

This burgeoning sector will no doubt have an impact on the U.S. alternative resource economy. Research and development in solar, wind and other such technologies may decrease as oil becomes cheaper. However, booth Bloomberg and Forbes noted that price reduction is expected to slow to a standstill over the next year or so. 

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Did 2014 signal the end of physical piracy?

on Wednesday, January 21, 2015

Did 2014 signal the end of physical piracy?

Compared to the number of attacks that occurred between 2009 and 2013, 2014 was a relatively tempered year as far as oceanic piracy is concerned.

Statista noted 445 instances of ocean liners being infiltrated by pirates in 2010. Last year, that number decreased to 72 - a signal that the contentious environment that has stirred apprehension among procurement management officers and other professionals involved with the supply chain has largely decreased.

The question is: Are distributors out of the water? In order to determine whether ships can freely traverse the globe's waters without taking precautions to protect themselves against pirate attacks, it's important to assess whether ocean-bound plunderers are simply employing new tactics or are hitting other logistics assets. 

Statistics don't paint the whole picture 

Somalia has typically received the most attention in regard to pirate attacks, and a significant reduction in activity from pirates originating from that nation has contributed to an overall reduction in global piracy. The Seychelles News Agency noted that consistent victories over al-Qaida-linked Somali terror group al-Shabaab by the African Union Mission has weakened the organization's hold over territories that have served as bases for Somali pirates. 

Depending on who you speak with, a number of factors contributed to the rise of Somali pirates. The Telegraph reported that a lackluster fishing economy and the country's political collapse in 1992 spawned a nation berated by consistent clan wars. In the midst of a monetary environment that offers meager standards of living for those who choose to earn money through legitimate means, piracy presents itself as an attractive trade to up-and-coming denizens who want to rise out of the poverty they have been accustomed to.

"Young people get attracted into this business because there is very high unemployment here, almost 100 percent, with no factories or industry," said former Puntland Interior Minister Mohamed Kalombi to the source. "But now they see the chance to make millions of dollars through crime. With their money, the pirates are buying weapons and even bribing the justice institutions so that they will not be caught."

While the election and acceptance of political moderate Hassan Sheikh Mohamud in late 2012 has brought a level of stability to the country, what precautions did enterprises take to deter pirates from disrupting their supply chains? 

The rise of mercenary forces? 

Reuters noted the Queen Mary 2, a British cruise liner that carries 2,500 passengers and 1,300 crew members, apparently hires armed private contractors to escort them through waters that are at​ risk of encountering pirates. This precaution has become routine for Cunard, a British ocean liner company. Although exact security measures were not disclosed to the news source, the company did confirm that mercenaries aboard other vessels regularly carry assault rifles similar to that of M-16s. 

Despite the prevalence of private contractors, military networks are often leveraged for protection. Reuters referenced the establishment of the UK Maritime Trade Organisation, which allows British container ships, tankers, cruise liners and other vessels to register with UKMTO when they're traversing contentious waters. 

Not out of the water yet 

While these and other security measures have generally discouraged Somali pirates from conducting hijacks, Southeast Asia has not been exempt from such attacks. Maritime Executive noted that initiatives taken against small tankers throughout the region rose by almost 50 percent between 2013 and 2014. 

West African nations are also experiencing instances of piracy. The source noted that oil tankers have become the primary targets of Nigerian pirates. It appears, for the most part, these perpetrators are looking to steal the resource as opposed to holding vessels as ransom.

Regardless of these measures, consulting experts who keep a close on the wax and wane of piracy is advisable. 

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Unlock the Secrets of the Medical Device Industry

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Source One Vice Presidents Joe Payne and William Dorn will be featured attendees at the 2015 Medical Device Strategic Sourcing Conference, taking place January 26-27 in Atlanta, GA. Joe Payne will serve as the Chairperson for Day 1, providing the opening remarks and introducing the distinguished speakers.  On Day 2, Payne will participate in a panel discussion facilitated by his fellow Source One VP, Bill Dorn. Throughout both days, Payne and Dorn will host an exhibit for Source One’s capabilities as a partner for medical device manufacturers.

To prepare for the conference, we’ve been spending some time wrapped up in developments of the industry. Both Payne and Dorn paid particular attention to a recent Tech Crunch article that states, “Medical Devices are cool again”—and they couldn’t agree more.

With the development of 3D printed human implant parts in China at Peking University, many people have a revived interest in medical devices. The overall promise of the industry is overwhelming. Unlike other healthcare segments, the U.S. medical device field consists of 6,500+ companies with more than 80 percent small businesses with fewer than 50 employees. A main theme of the Medical Device Strategic Sourcing Conference becomes intertwined with our findings of this unique and evolving market: the need for reliable, compliant, and cost-efficient supplier partners is of great importance. This, however, is not the only determinant of value.

On Day One, Joe Payne will serve as the discussion moderator while industry expert panelists review the value of supplier relationship management. As medical device organizations establish partnerships with device component vendors, building relationships is key in addressing quality, cost and risk concerns. As this discussion unfolds, SRM will be established as a way to help firms get maximum value from existing supplier relationships, beyond the Strategic Sourcing/Procurement activity and contract signature.

During the panel discussion on Day Two, Source One’s Vice President of Operations, William Dorn will facilitate conversation surrounding internal metrics to deliver optimal strategic sourcing performance in the medical device space. Source One’s Vice President of Professional Services, Joe Payne, will participate in this panel alongside two esteemed industry colleagues. Based on Strategic Sourcing’s tendency to view cost reduction efforts through an external lens (solely dependent on supplier pricing), the panel will encourage attendees to look internally to promote lean business. This can be accomplished through establishing performance metrics to determine potential areas of improvement and drive efficiency wherever possible. With this discussion, Medical Device and Strategic Sourcing professionals can better develop plans to:
  •           Build a strategic sourcing metrics strategy
  •           Establish Key performance indicators (KPIs) in evaluating sourcing activities
  •           Define metrics to ensure sourcing’s comprehension of the plan
Whether it pertains to 3D printing technology, new product development, or prototyping labs, there are a ton of advantages the medical devices industry is seeing from emergence as a “cool” business sector. The Medical Device Strategic Sourcing Conference is designed to stay on top of these exciting changes, and discuss ways that strategic sourcing can best be implemented in these circumstances. Source One’s Joe Payne and William Dorn look forward to networking with medical device manufacturing firms on the cutting edge of developing a competitive sourcing approach. We have studied the challenges medical device and diagnostic equipment manufacturers are encountering, and through this conference we wish to add to the long list of ways Source One helps navigate these areas of difficulty.

Before, during, or after the conference, we are happy to set up time to learn more about your sourcing obstacles and show you how to overcome them. If you’d like to get in contact with our team, please reach out to myself, Heather Grossmuller, at hgrossmuller@sourceoneinc.com and we’d be happy to schedule a meeting. To learn more about Source One’s medical device sourcing capabilities, visit our webpage today.


Photo courtesy of: www.infotehna.com
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