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After 64 matches across 11 cities and three time zones, the world's largest sporting event has drawn to a close once again. That means France's championship victory is the last World Cup match we'll get to see until 2022. The next four years should give soccer fanatics and cynics alike plenty of time to reflect. Hopefully, they'll also use this downtime to plan for their next opportunity in 2022.

Is your organization hoping to make a run for the Procurement championship? Check out some of the Supply Management lessons Source One learned at this year's World Cup.

1. Study the Competition 

Championship coaches, regardless of sport, are constantly studying their competition and adjusting their training strategies accordingly. If you're like me, watching 'game film' was always the best part of practice. No running, no contact, just a chance to build a competitive advantage from the comfort of a chair. It's a less leisurely experience for more gifted coaches and athletes. For the savvy strategist, this off-field time is an indispensable opportunity to draw up new plays and analyze trends among the competition. Taking these lessons learned onto the practice field ultimately promises a greater chance of success when the game is on the line.

Supply Chain Managers gain these same competitive advantages by keeping their eyes and ears open. Scouring publications, absorbing thought leadership, and engaging in ongoing discussions, they can witness the evolution of new best practices and industry standards. This knowledge will help refine their internal processes and provide for more informed decision making across the enterprise.

2. Develop Flexible Training Programs

Knowledge is one thing, but putting that knowledge into practice is another thing altogether. It's not enough for coaches and Supply Chain Managers to build a database. They've got to share their knowledge with the broader team and collaborate in putting it to use.

Many Procurement teams run into trouble as a result of inflexible, ineffective, or outdated training modules. Poorly suited to Procurement's current strategic state, these programs and materials tend to internalize inefficiency and provide for uninspired results. A world-class Procurement function requires training programs customized to its unique structure, goals, and objectives. As these components evolve, so, too, must the training programs.

Any coach will attest to this. Certain drills have become old stand-bys for a reason, but no world-class would settle for simple jogging and weight training. Soccer evolves constantly as new, more dynamic players step onto the world stage. Coaches know they can only prepare for new competition with new methods. In many cases these training methods will take advantage of emerging technologies. In Germany, for example, cutting-edge tools play a key role in talent development. According to The Economist, the German youth soccer program emphasizes the importance of "creativity in random environments." In pursuit of this, experts developed a robotic cage that flings balls randomly from a variety of angles. Though Germany under-performed at this year's Cup, their history of success suggests the value of a tech-enabled approach to training.

3. Defense, Defense, Defense

France entered the 2018 World Cup final having allowed the third-fewest shots of any competitor. The eventual champion, a team that boasts over $1B in talent, took a defense-first approach throughout the tournament. Even renowned goal-scorers Paul Pogba and Antoine Griezmann functioned mostly as contributors to what The Ringer's Ryan O'Hanlon calls, "one of the all-time great World Cup defenses." This relatively conservative approach paid huge dividends and once again proved that old cliche accurate: Defense wins championships.

Procurement has the capacity to perform like an organization's striker. Aggressively pursing cost reduction opportunities, the function can bring a whole lot of hardware to the trophy case. Across increasingly global and digital supply chains, however, Procurement could prove most essential as a largely defensive function.

Cybersecurity attacks are a daily concern for organizations across a number of industries. Procurement, with its diverse skills and supply chain visibility, is well equipped to manage both preparedness and responses. Just as France broke down the barrier between offense and defense, organizations should blur the lines between IT and Procurement. Without siloes between them, the two departments can more openly share their expertise and align on strategies to address these emerging challenges. Defense doesn't have to be reactive either. Working together, Procurement and other stakeholders can develop an aggressive approach to security that solves problems before they arise.

Work these lessons into your game plan. With time you'll find it easier than ever to meet Procurement's objectives and goaaaaaaaaaals.

ICYMIM: July 16, 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.

Big Data and Supply Chain Risk Management
Kristin Manganello, Thomas Net, 7/12/2018
In today's innovative, fast-paced world, supply chains must adjust to a vast, complex information landscape that seemingly shifts every day. Evolving factors that supply chain professionals must face include material shortages, natural disasters, unpredictable pricing, regulatory issues, labor ethics, and global social and political unrest. However, technological advancements have allowed professionals to track and organize the large pool of information, in turn, enabling them to prepare in the form of risk management. 

Diversifying the Supply Chain
Conor McGlade, Thomas Net, 7/11/2018
The sum of the parts is greater than the whole- ever heard that before? There are a variety of factors that contribute to an organization's decision-making process. Revenue, logistics, customer engagement, and inventory are just a few that play a role. Supplier diversity is another factor that is vital to the process, as such diversity can provide a great benefit for all supply chain aspects. These benefits extend past the supply chain itself to different sectors of an organization including regulation, reputation, and finances.

Suppliers and ePayables Acceptance: Latest Findings
Dennis Bouley, My Purchasing Center, 7/5/2018
Recent surveys have observed that supplier acceptance of card payments has increased since 2009 across  a number of spend categories. In particular, experts have observed significant growth in professional services and utilities since 2013. The surveys uncovered a variety of other findings, including topics such as instruction reception, international acceptance rates, and program prevalence and resistance. Bouley discusses these findings and provides an informative overview of ePayment.

There's an unmistakable tide of tech transformation sweeping the procurement function at companies of all kinds. Many of the processes typically delegated to employees within these departments are subject to automation, which can deliver impressive benefits to organizations that make the switch. When companies become more technologically enabled, they can make their operations increasingly strategic, delegating low-effort work to automated systems and spending more time on effective decision-making and collaboration throughout organizations.

The actual process of getting on board with automation systems is a complex one, and timing may be key to making the event successful. Many companies are lagging behind in infusing their supply chains with modern IT, while others may be charging in too quickly. Experiencing transformative moments in business technology is never easy, and leaders will have to show extraordinary judgment to commit when they'll experience maximum value.

Transform soon, or talent may leave
There's a reason to adopt process automation that goes beyond the operational benefits of having the software. According to Spend Matters, top employees, ones who can truly make a difference in their organizations, may become frustrated if their employers don't possess up-to-date systems. Great workers want to know they're serving industry-leading businesses, ones that will give them an optimal chance to succeed. Firms that haven't begun to upgrade their IT don't give off this feeling.

The effects of modern IT deployments often build employee capabilities, as more data-intensive firms help workers be productive and allow them to access data remotely, quickly and easily. Workers who know these technologies exist in the marketplace, but don't see them at their own firms, may consider moving on to other companies that will place them in more IT-enabled environments and scenarios.
Spend Matters quoted a recent Unisys report that found employees at "laggard" tech companies report frustration levels of 51 percent. Workers at tech leaders are far less fed up with their employers - only 6 percent frustrated. The divide is a serious matter for leaders to consider when making decisions. Spend Matters offered a reminder that businesses will have a hard time reaching ambitious goals if their best team members get frustrated and leave.

A businessman navigates metaphorical arrows.What's the best way to navigate the tech transformation landscape?
Don't transform too quickly, either
While there is risk associated with leaving IT adoption too late, there are also ways to go about the upgrade process to quickly and haphazardly. Nearshore Americas' Matt Kendall pointed out leaders who pushed their way into previous tech areas such as the cloud too early ended up trapped with poorly optimized solutions or ones that didn't reflect their actual needs. Buyers who believe that a tech tool represents an "endgame solution" instead of a means to reach their objectives are in particular trouble.

Kendall recommended a middle way that acknowledges process automation in the supply chain is a trusted and transformative solution, one that companies shouldn't ignore, it's also a tool to consider in strategic terms. When the cloud was a young tech area, some leaders thought about becoming cloud-powered as an end rather than a means to accomplish something. These organizations ended up with systems that didn't move them closer to their objectives.

Working with a recruiter to help fill your procurement and supply chain roles? 

Companies should monitor how supportive they are of their recruiters- the success of the recruiter's efforts depends on it. When working with a third party during the hiring process, it is important to ensure your actions properly reflect your brand. If all parties are not on the same page, your company may be misrepresented and its messaging may be misinterpreted. You want to build credibility with your recruiter and the contractor pool, and should aim to foster mutual respect with every interaction. Not doing so could make your company stand out as a company that is a firm not to work for. 

Check out some Source One's tips for starting off on the right foot with your new Procurement recruiter. 

As I approached my first day at Source One Management Services, A Corcentric Company, I felt a mixture of emotions. I was excited, nervous, and anxious to finally start my first job in business analytics. The only other time I felt something like this was for my first day of high school sports. I asked myself, Will I be good enough? Am I prepared? Are they going to like me? These questions popped into my head for both sports tryouts and this internship. Doing an internship is essentially participating in a three month tryout. The company thinks you might be a good fit so they offer you an opportunity to prove yourself. Since sports and internships pretty similar, I decided to share what I learned from playing sports, and how I can implement those lessons into my job. 

My sports career was a great experience. I was able to play football and basketball all four years in high school. While I really only played sports because it was fun, I did not realize the impact it had on my life. I learned many lessons that I have been able to implement in my day-to-day life , and more specifically, my internship. Each of the points below are the most valuable lessons I learned.

Failure is not Permanent

Learning that failure does not last forever was important for me to understand. Everyone fails in sports. You can fail multiple times in a sporting event and still win the game. This lesson has helped me while being an intern. Having no prior experience in procurement, I have made plenty of mistakes as an intern. Learning from my mistakes is how I try to improve each day.

Learn to Adapt

Source One offers so many different sourcing, procurement, and consulting services. One moment I could be working on auditing and the next I shift into a spend analysis project. Being able to quickly adapt from project to project has helped me complete my work on time without sacrificing any quality.   

Hard Work Yields Results

I saw players that were filled with talent get beat out by players that outworked them. This taught me the importance of hard work and how talent is not always everything if you do not have the work ethic to go with it. Coming to work everyday ready to work hard will allow me to learn as much possible in the three months I am here. 

Now that I have hit the halfway point of my internship, I am beginning to realize how much I have learned in such a short amount of time. The life lessons I was able to take away from sports has helped prepare me for the life of an intern. The Source One team has helped me understand how the strategic sourcing process works and why they have been so successful at implementing it for the past 25+ years. I know I still have a lot to learn but I am very happy with my experience so far and excited to keep learning! 

July 13, 2018

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

New Whitepaper Series:
Source One's new whitepaper series picks the brains of Supply Management's most celebrated thinkers and leaders. The five-edition series includes the experts' takes on the hot topic of Procurement transformation.Using their collective decades of experience, the leaders analyze the subject through numerous lenses and drive the conversation forward. Check it out to absorb some actionable best practices for refining your Procurement department. 
Jim Baehr of Sourcing Strategies Group provides his thoughts on Supply Management's continued strategic evolution. Looking at the overall progress of Procurement Transformation, he suggests that both its definition and function have matured and evolved over the last few decades. Baehr charts these changes while reflecting on Procurement's current state, using this insight to forecast what's in store for Supply Management. 

When pursuing a Procurement Transformation, it is unfortunately common for many organizations to experience shortcomings. Phil Ideson and Joe Payne discuss the source of these disappointments. Both agree that Procurement's typical mission, motivations, and mindset are the likely causes. Procurement must adjust and reflect the way it views and presents both itself and its role in order to completely transform its operations. 
A comprehensive Procurement Transformation is no small task. Often, organizations target specific areas of their department's operations in order to make the process as seamless as possible. The thought behind this is that focusing more areas that more obviously require attention will allow the organization to utilize their time and efforts more efficiently and provide greater strategic value. However, every critical component of the function must be analyzed and aligned in order for a complete, successful transformation. This includes Procurement's people, processes, and technologies, as aligning these components is an essential task to ensure both short and long-term value generation.

Consistency is key when developing an optimal Procurement function, especially when it comes to  effort. Procurement Transformation is just the first step in the pursuit of reaching the full potential of the function and making continuous growth a cultural imperative. The complete process needs constant attention, unceasing momentum, and an innovative spirit. Vendor Centric's Tom Rogers, Sourcing Innovation's Michael Lamoureux, and Source One's Diego De la Garza talk about what's in store for the ‘transformed’ Procurement team.

Part 5 - The Last Word (For Now)
Procurement Transformation: Industry Perspectives comes to a close with Jennifer Ulrich, Source One's Procurement Transformation Lead, touching upon additional areas and final insights on the subject. She highlights the vital importance of reporting and metrics, noting that these aspects are essential for building a business case in Procurement. Proper utilization of these factors, Ulrich says, is necessary to help keep teams motivated throughout a Transformation and help make Procurement's evolution part of a broader conversation.

Recent Blogs:
Customer Service Advice from 18 Small Business Consultants
Leigh Merz, PATLive, July 11, 2018
18 different consultants, ranging from accountants to content-generators, contributed their experience and suggestions to enhance customer service channels. Topics ranged from communication channel responsiveness, to intent listening, to creative branding. Source One's Leigh Merz touched upon the idea of using customized communication to establish a personal connection with a customer. She emphasized the importance of understanding that every client and organization needs to be looked at from an individualized perspective- everyone has different strengths, weaknesses, goals, etc.

A Matter of Perspective: Taking an Abstract View of Procurement
Kaitlyn Krigbaum, SIG, July 10, 2018
Source One's Kaitlyn Krigbaum discusses how a wealth of knowledge can actually impede creativity for some procurement professionals. The struggle arises from in-depth experience in one specific subject area, clouding one's vision and thought horizon. Krigbaum highlights the importance of thinking outside the box and embracing fresh perspectives in order to produce procurement success. Implementing a culture of creativity, she suggests, can foster innovation and progress for any procurement organization.

Recent Podcasts:
The Source One Podcast picked the brain of Tom Rogers, the CEO of Vendor Centric. With supply chains becoming increasingly digital, global, and interconnected, risk factors continue to evolve every day. Rogers suggests that it is now time for Procurement to undergo an evolution of its own, meeting these factors head-on. Maintaining a prominent position within Vendor Management Committees, Procurement can enable risk management to become a part of an everyday, organization-wide conversation. Hear more about this potential in the full episode here.

"Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis."

Patagonia's mission statement makes it clear the organization is committed to far more than keeping nature lovers warm. While communicating this mission is mostly a job for Marketing, carrying it out is Procurement's responsibility. After more than three years, Patagonia's purchasing team believe they've settled on sourcing practices that serve their dedication to both environmental responsibility and product quality.

Supply chains that handle animals and animal products are - by their very nature - a lightning rod for controversy. With over a million vegans in America alone, organizations like Patagonia cannot help but attract scrutiny. This is particularly true in the era of cell phone videos and social media campaigns. While inhumane practices might have gone unnoticed in the past, today's consumers enjoy almost real-time visibility into the their preferred brands' supply chains.

Even among animal product supply chains, the market for wool is particularly fraught. To protect against blowflys, Australian sheep typically undergo the mulesing process. Introduced in the 1930s, the procedure involves the removal of wool-bearing skin from the animals' hindquarters. The painful practice has inflamed animal rights groups for decades and inspired organizations including Abercrombie & Fitch and Liz Claiborne to boycott Australian wool altogether.

It was a 2005 anti-mulesing campaign that first inspired Patagonia to reevaluate its approach to wool procurement. At the time, Patagonia made its purchases in an open market. Untraceable, these purchases led Patagonia to tacitly support the controversial procedure. They responded to PETA's campaign by gradually migrating their wool fiber supply chain to traceable regions of New Zealand and Australia. They were so committed to making the switch that they even delayed the development of a new merino wool product line.

The California-based organization took another step toward a mulesing-free supply chain in 2011 when they partnered with The Nature Conservancy and Ovis 21. Promoting holistic grazing practices, these partners not only promised a cruelty-free supply chain, but also shared Patagonia's commitment to restoring grasslands. Over the next three years, the partnership saw Patagonia eliminate untraceable wool from its supply chain and spearhead the creation of the Responsible Wool Standard (RWS).

In 2015, however, Patagonia learned the hard way that close, consistent auditing is an essential component of managing a supply chain. In August of that year, PETA released a a graphic video depicting inhumane practices within Ovis 21 farms. Patagonia quickly accepted the blame and acknowledged their gaps in supply chain visibility.  "We have worked closely with Ovis 21 on its progress toward holistic grazing," a company spokesperson wrote, "however, beyond verifying that no mulesing occurs, we have not audited its animal-welfare practices and were unaware of the issues raised in the video." Patagonia cut ties with Ovis 21 and suspended all of its wool purchasing soon after.

The organization recently announced that its efforts to develop a more responsible wool supply chain are complete. Over the last three years, they've worked to ensure that every one of their products meets the RWS's strict requirements and developed even stricter standards of their own.

Describing their years-long effort, Patagonia lists supply chain visibility as its primary challenge. "For the majority of wool sourcing brands," they write, "even mapping their wool to the farm is nearly impossible due to the number of consolidators, agents, and traders that are a feature of the global wool market." It's a testament to Patagonia's commitment that they've managed to identify suppliers capable of providing visibility at the farm level and across the supply chain.

The successful campaign is also a case study in world-class supplier partnerships. Patagonia is quick to admit that they're asking a lot of the farmers they work with. Their Patagonia Wool Standard not only includes stipulations related to product quality, environmental sustainability, and humane treatment, but also tasks farmers with providing visibility into their own downstream supply chains. That means the farmers must provide information related to their animals' transportation, sale, and slaughter. Patagonia is immensely grateful to their new, progressive partners and looks forward to producing more of the high-quality, cruelty-free products they're known for. They write, "We are honored they chose us to feature their wool in our products and applaud them for their commitment."

Poor supply chain visibility is dangerous, common, and altogether preventable. Looking to take a closer look at your operations and develop more transparent supplier relationships? Reach out to Source One's sustainable Procurement experts today.

The complexities and challenges of the grocery supply chain are unique, and combine elements from other industries. The pressures of retailing goods in an era of changing consumer preferences and expectations are present, coupled with the difficulty of keeping perishable goods fresh and salable. Organizing a truly modern grocery supply chain is a challenge worthy of a new generation of creative and ambitious leaders, and success in this area can convey competitive advantage.

Traditional grocery industry players can use such differentiation to fight back against the alternative, online-native companies that are making their mark in food sales. Whether a business comes from the previous era of large retailers or the current milieu of agile disrupters, there's value in a responsive and intelligent supply chain.

Leadership vs. industry pressure
International Grocery Distribution's Alan Hayes recently described the distinctly modern issues facing food retail organizations. Coping with the situation will require a commitment to constant, forward-thinking change, because the forces acting upon the grocery space are continuous processes rather than one-off events. Hayes specified that existing business models are crumbling. Rather than simply tuning up their speed or cost structures, chains may have to rethink the basic ways they operate.

In addition to the disruptive nature of supply chain model changes in grocery, firms are finding themselves reacting rather than leading the way. When an outside force such as global economic conditions, shopper preferences or environmental pressures takes a hand, it's up to grocery leaders to come up with a way forward. Hayes specified that the presence of systems such as artificial intelligence and process automation - trends well known in other kinds of supply chains - will allow companies to fight back.

The type of leadership that can get a grocery supply chain through the gauntlet of modern pressures and model changes will involve contributions from managers at all levels of an organization. Decisions that once could have been handled by a company's CEO, taking on every significant initiative personally, should now be shared among the team. Hayes stated the importance of both an established hierarchy - which keeps companies organized - and shared, integrated leadership at all levels.

Produce on display in a grocery store.What does effective leadership mean in the modernizing grocery space?
Making modern decisions
What does some of the resulting bold and creative decision-making look like in practice? Forbes contributor Brittain Ladd suggested a recent partnership between Tesco and Carrefour could act as a testing bed for truly modern grocery operations, especially if the two companies fully combine their forces and adopt systems such as AI and advanced forecasting. These new intelligent functions would be handled from a "center of excellence" and have a direct positive impact on customer experience.

Collaboration could come in many forms for organizations with such a close bond, and successfully coordinating such a supply chain advancement would be a way to fight back against increasingly fierce competition. In the example of Tesco and Carrefour, both organizations come from the legacy side of the grocery market. Becoming more tech-savvy and collaboration-happy could be a way to derive performance improvements that will allow the chains to compete against the online-native interlopers entering their space.

Supply Chain Management can be equated to a well-oiled machine: use it properly and yield successful results; use it improperly and yield skewed results. Although supply chain management is a constantly evolving industry, certain practices can help reduce issues and keep the supply chain management machine running smoothly toward a prosperous future. After serving the supply chain management space for several decades, we’ve identified our top five lessons learned in how to ensure success and diminish risk.

1. Quality Control: Quality control, also known as the standardization of principles a product or service must pass before moving toward selling/consumption, is a vital component of the supply chain management space because it mitigates hazards that can hurt consumers and thereby hurt big brands. Take Samsung, for instance – not long ago, Samsung had to recall their phone, the Galaxy Note S7, because its batteries would overheat and ignite fires. While Samsung initially blamed this issue on one of their battery suppliers, batteries from a different supplier caused the same issue, indicating Samsung had not done its due diligence in understanding and checking the true nature of the issue within their supply chain.

The Lesson Learned: Had Samsung conducted proper quality control to find the true source of the problem, they may have circumvented criticisms and backlash against their brand

2. Recall Planning: When quality control fails, the next logical step in Supply Chain Management is recall planning. When companies realize that one of their products on the market poses safety hazards, is defective, or otherwise causes brand criticism from consumers, companies turn toward creating detailed plans on how to remove the item from market, fix the issue, then re-release the item re-branded to highlight new and improved features, thereby replacing the previous ‘image’ consumers held of this item, and restore their faith in the brand. Unfortunately, not all companies are capable of conducting smooth recall planning – once again, Samsung’s misstep with the Galaxy Note S7’s initial recall exemplifies a failed recall plan. Rather than restore their image, Samsung drew further criticism with their rushed fixes to the problem that led to its continuation.

The Lesson Learned: When conducting recall planning within the Supply Chain, do not rush an end result. Instead, conduct proper due diligence within a realistic timeframe, then move to re-release the product with improved features and functionality to regain consumers’ trust.

3. Social Responsibility: When sourcing items for inclusion in a company’s products and services, it’s often easy to fall into the trap of choosing the lowest cost option at the sacrifice of social, moral, or ethical principles. This is the exact dilemma Nestle recently faced when an independent study revealed that fish used in their Fancy Feast cat food products were a result of forced labor. According to the study, the fish were caught mostly by Burmese and Cambodians who were forced into this line of work to pay off unreasonable debts. While Nestle issued a public apology and a strategy plan to increase transparency and eliminate human rights abuses, this incident likely tarnished their reputation for some consumers.

The Lesson Learned:  Although Nestle is not the first nor last company to implement poor social responsibility in their supply chain, their case highlights consumers’ growing awareness of corporate accountability and the need for it now more than ever in the age of easily accessible information and a plethora of competitive options to choose from in the marketplace. Do your due diligence during the sourcing process to understand your suppliers’ operations and practices.

4. Inventory Management: Yet another issue commonly plaguing supply chain management, as well as other industries, is poor inventory management. It is imperative that firms gain transparency on inventory supply and demand; through this understanding, they can optimize spend. For evidence on the power of inventory management within supply chain, look no further than Nike – in the late ‘90s and early 2000s, Nike was notorious for its major inventory management problems that lost them roughly $100 million in sales. By 2001, however, Nike implemented a complex inventory management system that allowed them to generate supply to meet forecasted demand. Although the system was not full proof – bugs and data errors in their software causing them lost revenue with certain segments – their move toward an inventory management software system highlights how pivotal proper inventory management can be for companies.

The Lesson Learned: Economic decisions within supply chain management should partially be guided by reliable inventory management systems, whether these systems take the form of software or other means.

5. Poor Communication: Words, or lack thereof, can make or break any relationship – including those in supply chain. Perhaps no better example underscores this issue than the 2009 – 2011 Toyota scandal, in which certain Toyota vehicles would abruptly accelerate without the ability to stop or slow down the car. During the fallout, Toyota struggled to communicate their recall response with the public because the vehicles’ issues arose from the car’s design, rather than from factory errors or quality control problems. As a result of failing to communicate properly with the public about their supply chain problems, Toyota faced immense media backlash. Eventually, they assembled emergency counselors and committees to more adequately communicate with consumer concerns over the issues before finally moving onto fix the problem within the supply chain.

The Lesson Learned: By channeling open, transparent communication between an organization, consumers, and even employees, this can more smoothly address problems that arise in supply chain.

There are plenty of reasons to turn to cloud computing. This methodology has made its mark throughout the enterprise world as users have discovered the benefits of using applications that aren't tethered to proximate data centers. The widespread use of the cloud in the supply chain is a trend on the rise - we've previously noted the technology's ability to connect disparate systems and act as an integration enabler.

In an industry as global and fast-paced as logistics, it's unsurprising to see leaders gravitating toward new technology that may lead to smoother connections between departments and organizations. Businesses are searching for any competitive advantage they can find, and those that fail to see the potential in cloud-based technology may fall behind the curve.

Cloud as the default
The cloud is a rising tech option for supply chain use, which raises an important question - how long before it becomes the automatic choice for IT departments? Logistics Management recently explained the motives driving organizations to use the cloud to host the totality of their systems and the practices making this into an effective practice.

The fact that the cloud is becoming the first choice for infrastructure hosting is natural when leaders consider the potential advantages. In fact, Logistics Management tied the recent surge in popularity to a boost in confidence. Leaders discovered that their initial fears regarding loss of data control were misguided. With this reassurance in hand, they have embraced the new capabilities open to them.

Those powerful benefits include the ability to select infrastructure with more precision. Some vendors sell features on an as-needed basis, with companies able to save money by cutting unnecessary functionality. The subscription-style payment plans for the cloud are also attractive for supply chain organizations just getting started, as they don't have to spend much money up front.
Logistics Management also noted that the way patches and upgrades are handled in the cloud has influenced companies to use the cloud as their main software deployment method. Solution vendors provide the necessary updates, allowing internal IT departments to focus their attention elsewhere.

A visualization of the cloud.Why is the cloud the right model for supply chain infrastructure?
Watching the tide turn
In 2015, when the cloud was first making its presence felt as a supply chain option, Supply & Demand Chain Executive laid out many of the benefits that have built its popularity in the years since. For example, companies were eager to overcome the on-premises limitations of data use. Increasingly complex organizational structures involve employees around the world handling data on devices of their choice, all made possible through the cloud. Not only can internal employees access data more easily, so can new partners at other organizations.

The use of optimized systems specifically developed for particular industries is another of the primary benefits associated with using the cloud. Supply & Demand Chain Executive explained collaboration between organizations and their service providers has enabled internal improvements. When technology is tailored to demand and service for those systems is available and carefully tailored, operational models can improve drastically. This smooth and efficient IT deployment methodology is a drastic change from old operational styles that involved intensive on-premises hardware and software work.

Recently, I’ve been finding numerous articles and posts about technological advancements. From computerized butlers you can have a conversation with, to self-driving cars, many human aspects of our lifestyles are quickly becoming “tech-ified.” This does not exclude the world of Procurement. Hot topics like AI, cognitive processing, and blockchain technology are popping up on news outlets, blogs, and discussion boards alike. Various people throughout the industry are wondering and analyzing if it’s all worth the “hype.” After collecting thoughts on this subject throughout the Procurement community, these are what I found to be some of the popular takes.

Blockchain technology can be thought of as an architecture allowing users to make transactions, and the records of any data entered are permanently stored and utilized. It is a peer-to-peer network with a time-stamping server, allowing parties to exchange information without the involvement of an administrating server. With such a large computing resource, privacy can come into question, but since the networks involve a tremendous amount of computers and servers, every single one would need to be hacked, which is nearly impossible.

Nicolas Cary, co-founder of, holds that blockchain technology will become as vital to the world as the 15th century Gutenberg printing press. Now that’s a (pretty lofty goal, Herb) hefty innovation to emulate. 

As Google has entered our frequently spoken vocabulary so much so that it became its own verb and action, Cary feels that phrases such as “check it out on the blockchain,” will become just as prevalent. 

Business Insider Australia decided to see if this was “worth the hype,” picking the brains of Austrilian experts. The overall sentiment was in agreement with Cary regarding the intensity of blockchain technology’s impact, but possesses a different take on the human perception of it.

For example, David Ballerini, co-founder of Liven, feels that blockchain implementations need to be practically invisible, hidden underneath strong interfaces, in order to be completely successful. 

Basically, we’re going to utilize this technology as a necessary part of our lives, but aren’t going to be thinking about the type of technology when benefitting from its processes. Some of these already exist- have you participated in an online survey, shared cloud storage, or sent money to someone through an app? If you have, you’re doing exactly as Ballerini predicts- using the technology without even knowing it!

Looking in another direction, artificial Intelligence allows humans to program computers to fulfill tasks they themselves normally would, giving them more time to focus on other things. Cognitive processing, however, takes this to the next level, giving computers the ability to not only complete tasks, but to analyze and make decisions, as the human brain would. Basically, with cognitive processing, a human can give a computer a mind of its own. Mind = blown (no pun intended). 

Regarding Procurement, a specific instance would be to program computers to make purchasing decisions. Decisions such as these require thought, as taking into account all of the factors as they come and go cannot be developed into a computerized system. The idea is that cognitive processing would allow computers to think as a Procurement purchasing professional would.

Hesitations arise given that there aren’t really any active tangible examples of cognitive processing successfully working in the industry. However, as innovations develop, many feel that Procurement could certainly be the beneficiary of such technology. One take was that allowing computers to think when making Procurement purchasing decisions will emphasize the thought and time put into Procurement. This will further the value-creation sentiment of the practice as opposed to the perception that Procurement is all about cutting costs through a structured process.

So, are these technologies worth the “hype”? Opinions seem to vary- I guess we’ll just have to wait and see!

This week, Vendor Centric's CEO Tom Rogers joins the Source One Podcast to discuss his contribution to Procurement Transformation: Industry Perspectives. Providing additional insights and context, he reminds listeners that Procurement (and the organizations it supports) can no longer afford to focus on compliance alone.

For decades, Procurement has operated as a largely tactical function within most organizations. Enforcing compliance on an "as needed" basis, the department has rarely performed to its full potential. Rogers, an expert in Vendor Relationship Management, maintains that today's digitized and interconnected supply chains provide a golden opportunity for Procurement to evolve and accept a more nuanced role.

The evolution of cloud-based technologies and the emergence of an "open source information environment," Rogers suggests, leave organizations vulnerable to a slew of new risks. Many have already learned the hard way that a dedicated approach to third-party risk management is no longer optional. Rather, programs and committees focused on managing and mitigating risks are an absolute necessity for organizations looking to avoid embarrassing headlines, hefty fines, and lost revenue.

Rogers believes that Procurement should enjoy a prominent role within these programs and committees. He is careful, however, to caution Procurement against going it alone. He suggests that few Procurement teams are "fully equipped to perform the necessary duties and facilitate the necessary conversations" at present. Evolving risks mean Procurement, too, must evolve sooner rather than later.

It's essential that Procurement build the business case for its own transformation. As the department evolves, leaders from across the organization will take notice and continually invest in the function. More importantly, however, Procurement needs to take the lead in making risk management an enterprise-wide concern. "Risk management," Rogers concludes, "is not just a Procurement issue. The department needs to be in concert with every internal stakeholder to ensure it's recognized as a priority for the entire organization."

Check out the full conversation.