Jacquelyn Palantino on Friday, September 23, 2016
The Strategic Sourceror on
As we discussed in the first part of this blog series, it is virtually impossible for companies to effectively digitalize the supply chain without a clear strategy. Once the organization establishes which technological investments offer the greatest value, the next step is implementing them.
When it comes to adopting a new system or solution, companies should be cautious about prematurely deploying them. Launching an application before it - or the people who will be using it - are ready can have devastating impacts, including production delays, security risks and unnecessary costs.
All employees should be informed and aware of the new processes and receive in-depth training on how to use them. Furthermore, prior to fully transitioning to a digital technology, it is highly recommended that managers put policies and procedures in place that clearly lay out what to do in the event the system stops working, as well as who will be responsible for executing specific functions and tasks.
Training and timing
As Inbound Logistics pointed out, a common mistake companies make with supply chain digitalization is cutting the training process short because they start to run out of time as the go-live date nears. But skimping on employee awareness, training and education should be avoided at all costs, since operational disruptions are often attributed to human error.
Going back to the importance of having a clear strategy and plan for the digital supply chain, company leaders are less likely to have to choose between pushing back the launch date and rushing training if they have a comprehensive timeline for the project laid out.
Furthermore, businesses should try to plan for the digital implementation to happen during a slow or easy time of year for the supply chain. There is too much at stake during a peak or high-demand season to run the risk of adding to what is already a chaotic and stressful environment.
Preparing for the unexpected
Simply taking the time to anticipate any potential problems they may run into during the implementation process can help supply chain managers facilitate a smooth and seamless transition. For example, according to TechTarget, some of the biggest challenges supply chains face when integrating new technology include dealing with inaccurate or outdated data and trying to implement everything at once.
To ensure a new digital supply chain tool provides the greatest benefits possible, it is crucial to understand its full functionality. Failing to do this can quickly translate to wasted money and overlooked opportunities to enhance operational performance.
Trial runs should be conducted prior to it going live so that any issues, challenges or inefficiencies can be identified - and resolved ahead of time. This will also help make employees feel more comfortable with using the technology and point out any problem areas that weren't otherwise considered.
Leverage the right resources
Digitalizing the supply chain can offer tremendous advantages to companies. However, these benefits won't be realized unless the new technologies and systems are implemented correctly. Integrating technology with existing platforms requires some IT skills, which is why it is important that supply chain managers involve people who have experience working with similar tools, whether that is an internal or external resource. Consulting with a third-party supply chain solutions company can help ensure that the implementation process is as efficient and cost-effective as possible.
Once the application has been launched, the next step to successful supply chain digitalization is making sure that is properly monitored and protected - which we cover in the third part of this blog series.
Strategic Sourceror on Thursday, September 22, 2016
So, as a procurement and supply management professional looking to drive change within your organization, how do you go about engaging stakeholders?
1. Empathy: First, you need to understand your stakeholders' perspective. Find out why they aren't onboard with your recommendations. What is it about their current supplier that makes them unwilling to switch? Understanding their current perspective and reasoning will help you better formulate your argument for your proposed solution. For example, your stakeholders may really be attached to the level of customer service they receive with their current vendor. Knowing this may help you establish improved customer service level agreements within your new vendor contracts, including KPIs surrounding response times, etc.
2. Partnership: Along the same lines as empathy, collaborate with your stakeholders. Try to get their involvement early in the process so they can provide input. This will not only allow you to make decisions that are aligned with their expectations, but also help them feel like decision makers in the process.
3. Create Advocates: Leverage your success stories to build credibility within your organization. Think about it- how often do you read product reviews before making a major purchasing decision? The same concept applies here. Your customers (aka. department stakeholders) want to understand the value you deliver. Leverage your success stories as references and advocates for the work of your procurement department. Presenting these success stories may help you get stakeholder buy-in and build credibility from the start.
Of course stakeholders are an undeniable component to any strategic sourcing and procurement (SS&P) initiative. In some case, they are absolute advocates for the changes SS&P groups recommend. In others, they are hurdles we need to overcome to get to the finish line. On this topic, Source One's VP of Professional Services Joe Payne will be leading an interactive webinar as a part of the inaugural Procurement Revolution.
On Tuesday September 27th from 12-1 PM EDT, join Joe Payne, Greg Tennyson, Kelly Barner and Philip Idelson for Is Stakeholder Alignment the Key to Procurement's Survival? Together, the procurement leaders will discuss stakeholder engagement and how procurement can become better business partners. To register, visit The Procurement Revolution.
The Strategic Sourceror on
With access to more technologies and tools than ever before, it is becoming increasingly necessary for businesses to optimize operations to improve workflow efficiency and accuracy. Across the globe, supply chain managers are looking for ways to go digital - leveraging robotic processes, automation technology and other electronic systems to accelerate production, increase visibility and reduce costs. However, because the concept of a digital supply chain is still in its infancy, the landscape of it is fraught with challenges and complexities. In this three-part blog series, we will be covering the benefits, latest trends, best practices and strategies involved in digitalizing the supply chain.
As with any new business venture, the first - and arguably most important - part is the planning stage. Transforming legacy systems into innovative solutions requires a specific and strategic approach. Often, companies are too quick to adopt a new technology and prematurely deploy it before proper training and planning have taken place. Doing so can result in major supply chain disruptions, production delays and inefficiencies that end up hurting the business's bottom line, rather than helping it.
Structure and strategy
A critical aspect of the preparation process is identifying which technologies to invest in. According to Supply & Demand Chain Executive, over the next year, 50 percent of companies will spend use as much as 40 percent of their budgets on digital technologies but the majority of them aren't using them effectively - which is to say that they are not leveraging them in a way that would provide them with a competitive advantage. And part of that problem can be attributed to the organizations failing to tailor the solutions to meet their specific needs. A Supply Chain Digest 2016 benchmark survey found that only 21 percent of companies said they had a clear digital supply chain strategy. Forty-one percent said they did not - whereas 37 percent indicated they had a partial strategy.
Identifying valuable investments
At this point, it's safe to assume that most supply chain leaders realize the importance of being responsive and adaptive in their business models and ensuring they are not being held back by outdated and inefficient processes. However, the benefits of digitalizing the supply chain can only be realized if it is done correctly - and investments are made in the areas that offer the most value.
For example, the SCDigest research revealed that the top areas where supply chain leaders said digitalization can offer the greatest benefit include:
- Advanced analytics (51.9 percent)
- Supply chain visibility (58.6 percent)
- Supplier system integration (43.9 percent)
When deciding which technologies to invest in, it is important to define key metrics and goals. The more in-depth and specific, the better. It is difficult, if not altogether impossible, to ensure that the right solutions are selected without knowing exactly what the current weaknesses are and where improvements need to be made to drive profitability. Furthermore, key performance indicators (KPIs) are important for ensuring that the new technology is operating effectively. Being able to track and monitor its progression is the only way for businesses to guarantee that they are optimizing performance.
Getting C-suite support
A major barrier many supply chain managers face when it comes to digitalization is a lack of budget - as well as a lack of support from upper management. Essentially, the two go hand in hand. In order for SCMs to get the resources they need to effectively adapt their operations and processes, they need to get the C-suite on board with the initiative.
Supply & Demand Chain Executive reported that more than 31 percent of companies say not enough interest in shown among executives in digitalization - and nearly 40 percent agree that they are simply not an organizational priority. The source added that, to overcome such hurdles, it is necessary for supply chain leaders to create "additional key performance indicators (KPIs) specific to digital performance that capture market share and more cross-functional governance."
A final component involved in the planning stage of the supply chain digitalization process is to figure out which key players will be involved. Which decision-makers need to have a say in which solutions investments are made in? Who will be responsible for implementing the new systems, training workers at all levels of the organization, as well as measuring and reporting its progress? Each department has different objectives it is focused on achieving - so it is important to make sure there is a healthy level of internal integration and collaboration throughout the process. This will help ensure that the digital supply chain benefits all parties.
The more thorough and careful you are in the planning stages, the more likely it is that the implementation stages will go smoothly - which is what we will cover in Part 2 of this series.
The Strategic Sourceror on
Robotic and automated processes have emerged along supply chains across the globe, presenting businesses with new, cutting-edge solutions for improving workflow efficiency, increasing accuracy and reducing costs. And as machines continue to become more intelligent and self-learning, they are expected to disrupt the operations of organizations across virtually every sector.
Commercial and retail supply chains, for example, have recently been teased by the possibility of soon being able to make residential deliveries to consumers using drones or unmanned aerial systems (UAS). Although still largely in the testing and regulatory-development stage, the flying robots have showed promising signs for future applications, with companies such as Amazon, 7-Eleven and Flirty all playing a hand in demonstrating how they could be used outside manufacturing and warehouse facilities to enhance operations. Ideally, these self-flying machines would provide organizations with a way to make quicker deliveries while reducing costs.
And it seems that, eventually, autonomous vehicles could make their way into the shipping industry. According to The Verge, the Amsterdam Institute for Metropolitan Solutions recently revealed that MIT researchers, as well as the Delft University of Technology and Wageningen University and Research, are collaborating on a new research project, forecast to span the next five years, in which they will study the possibilities of self-driving boats.
"Imagine a fleet of autonomous boats for the transportation of goods and people," MIT Principal Investigator and Researcher Carlo Ratti said, according to the source. "But also think of dynamic and temporary floating infrastructure like on-demand bridges and stages that can be assembled or disassembled in a matter of hours."
In what they referring to as "Roboat," this research initiative will have €25 million, or $27 million, in funding, The Verge reported. Furthermore, the goal is to have prototypes for the self-driving boats in Amsterdam waters by next year.
This project is about more than enhancing transportation, though. Those involved explained to the news source that they will also be considering ways in which the robots may help improve environmental and health issues. For example, they want to use data collection, sensor and monitoring tools in sewer systems to create safer conditions. Additionally, one of the researchers suggested that the floating robot boats could be useful in combating the rising sea levels plaguing certain regions.
Although still very much in its infancy, the development of floating robotic boats indicates where the future of shipping and maritime transportation may be headed.
Nicole Krummert on
Scorecards are most beneficial when they align supplier performance with corporate goals. Such goals often include risk reduction and mitigation, as well as identifying and decreasing cost. The buying team can work with the supplier to ensure those goals are turned into KPIs within the scorecard, thus ensuring they are pivotal focus of the supplier/buyer relationship. This kind of proactive management also helps to drive strategic direction. Suppliers who do not meet expectations can be held accountable for under performance and if necessary, receive less opportunity for future business. Suppliers who demonstrate strong performance may be able to gain future business, can be turned into strategic partners, or at a minimum, are able to continue working with the buying team.
Since scorecard KPIs often refer back to Agreement terms, this tool also helps to ensure terms that are agreed to are both realistic and understood. It is not uncommon for agreements to be written in favor of the side from which the terms originated. This kind of practice necessitates that the alternate side fully and adequately review all aspects of the contract. By initiating the scorecard conversation during the contracting phase, both sides are inherently forced to speak to essential aspects of the working relationship. Terms that are turned into KPIs and are measured will likely be those that the supplier is most attentive to. Similarly, KPI related conversations can bring out any cause for concern or risk within the supplier’s service offerings, or even mitigate the risk of breach of contract.
A third benefit to supplier performance scorecards is that they help strengthen external relationships. Scorecards give the supplier visibility into the buying team’s priorities, which enables them to meet or hopefully exceed those needs. When appropriately implemented, scorecards are used to discuss supplier performance at identified intervals during the duration of the contract, and help to open the floor for conversation. These conversations refer to factual data and help to keep the conversation away from any he-said, she-said blame game. It can also help buyers speak to areas of the relationship that are going well, which is easily overlooked during feedback type conversations. Both sides can be transparent with their strengths and areas of opportunity and then work together to make improvements on both sides, where needed.
As discussed, performance scorecards have multiple purposes and benefits for suppliers and buying teams. They are an invaluable tool that allows a corporation visibility into how its supplier relationships contribute to the company’s own performance, and proactively manage any need for revision. Such evaluation inevitably enhances the relationship through increased collaboration and innovation. To learn more about opportunities for supplier performance scorecards or Supplier Relationship Management as a whole, feel free to visit www.sourceoneinc.com.
Strategic Sourceror on
Strategic Sourceror on Wednesday, September 21, 2016
The Strategic Sourceror on Tuesday, September 20, 2016
When it comes to being socially or environmentally responsible, Apple Inc. hasn't always had the best reputation. However, the tech giant is making some significantly attempts to change that.
This week, the company announced that it has joined RE100, a worldwide renewable energy initiative, and declared that it is committed to driving clean energy throughout its supply chain and hopes to eventually make it entirely renewable.
"Apple is committed to running on 100 percent renewable energy, and we're happy to stand beside other companies that are working toward the same effort," said Apple Environment, Policy and Social Initiatives Vice President Lisa Jackson. "We're excited to share the industry-leading work we've been doing to drive renewable energy into the manufacturing supply chain, and look forward to partnering with RE100 to advocate for clean-energy policies around the world."
According to the press release, Apple operations in 23 countries (including China and the United States) use 100 percent renewable energy already. Furthermore, last year, the majority, or 93 percent of its global operations were powered using renewable energy.
Suppliers pledging sustainability
The smartphone manufacturer has invested in clean energy projects, including the development of an Arizona-based solar panel farm, which will power its global command data center. And it's not just its own internal operations Apple is focused on making more "green."
The source also said that it is working to help transition its major suppliers to renewable energy. For example, Solvay Specialty Polymers, a maker of iPhone antenna parts, recently pledged to use 100 percent renewable energy in producing supplies for Apple by the end of 2018, which includes 14 manufacturing centers spanning 8 countries. Similarly, Catcher Technology, a manufacturer of aluminum enclosure, made the same promise - which means it will be reducing annual emissions by almost 600,000 metric tons.
And these are just a few examples. The amount of clean energy accounted for by all the Apple suppliers that have made renewable commitments in manufacturing products over the next two years so far equals more than 1.5 billion kilowatt hours per year. The source noted that this amount is comparable to how much electricity is consumed by more than 1 million houses in China.
Committing to clean energy
According to Mashable, Apple's global supply chain is responsible for approximately 77 percent of its total carbon dioxide emissions. And, because most of these suppliers are organizations that it does not own or manage, it can hurt efforts to ensure 100 percent renewable energy is used.
"So Apple can say, if you're using iTunes, that's from 100 percent renewable electricity, but they can't necessarily say the same for your Macbook Air," Emily Farnworth, member of the nonprofit organization The Climate Group, which is directing the RE100 campaign, explained to the news source.
Mashable also noted that, considering Apple's popularity, these efforts demonstrate that the brand is using its position to positively influence the conversation surrounding climate change, indicating the importance of companies moving toward more clean, renewable sources of energy - especially along supply chains.
Iyana Lester on
Strategic Sourceror on Friday, September 16, 2016
Source One Round Up: September 16, 2016
Here's a look at where Source One's cost reduction
experts have been featured this week!
5 Reasons Your Marketing Procurement Strategy is Doomed
Listen up Procurement Professionals! If you're trying to make an impact in Marketing Spend, your tried-and-true traditional approaches aren't going to fly. Marketing is different than other spend categories - and your procurement strategy needs to be tailored accordingly. The relationship between Marketing and Procurement has a rocky history, but it is possible to find common ground that better serves your overall organization. This week, Source One Senior Project Analyst Peter Portanova breaks down 5 common preconceived notions procurement has about marketing that often prevents an effective budget optimization strategy.
On Thursday, September 22nd, members of the Source One team will be attending St. Joseph's University's Fall Career Fair. We're looking for analyst interns for the spring semester. The St.Joe's Career Fair kicks off a busy season of collegic speaking engagements and recruiting events for Source One! We're looking forward to meeting the early talents!
Our spend management consultants kicked off this week with a trip to Atlanta, Georgia for Synergy 2016, hosted by Corporate United. The two-day event was packed with insightful presentations aimed to Inspire, Educate, and equip supply management professionals to Perform. Special thank you to everyone who made the event such a success!
Diego De la Garza on