April 2016
In one of my more recent blog posts, we saw Pepsi embracing the Emoji, bridging the gap between retail and digital marketing. It was definitely a smart move for Pepsi to be one of the first companies to employ the emoji, because emoji development is trending across numerous brands.

The Kellogg Eggo’s were the latest brand to release its own emojis. AdAge stated that “over a 90-day period last year, Eggo saw nearly 1,000 mentions of people hankering for a waffle emoji.” With millennials being such a big audience for Kellogg, the brand brought social influencers to the Eggo factory in California to create the emoji waffle art where an agency partner then took pictures of the art and created digitized images with a cartoon-like emoji feel. These Eggojis, as they are being called, rolled out with a soft launch on Kik, Paltalk, and Tango apps and are now available for Android, and should be released for Apple devices soon.

Remember the Super Bowl ad that got everyone talking? #LikeAGirl! Well the Proctor & Gamble Always brand did it again by employing emojis in their advertising. If you recall during the original Always commercial, Proctor & Gamble sought to challenge traditional advertisements promoting feminine products by instead focusing on positively affecting the self-confidence of their customers. Again the Leo Burnett agency asked the Always brand consumers, young girls, if they felt the emoji options available to them reflected “who they really were.” The girls said, “they’re all mainly pink, and there are no girls in the professional emojis-unless you count being a bride as a profession…” Always conducted research which found that 70 percent of young women would like to see female emoticons portrayed more progressively, depicting professions such as lawyers or partaking in activities like wrestling and weight lifting. Michele Baetan, associate brand director and Always #LikeAGirl leader at Procter & Gamble said, “Of course, societal limitations are broader than just emojis, but when we realized that stereotypical, limiting messages are hiding in places as innocent as emojis, it motivated us to demand change.” With 81 percent of females aged 16 to 24 using emojis on a daily basis, it was about time that the Always brand worked to create commercials highlighting the current emojis and redirecting attention to what the emojis should really look like. Always is continuing to target their mission of positively affecting girls’ self-confidence.

Mentos, Coca-Cola, GE, and Comedy Central are all also employing emojis in their branding. Why are some of these brands taking to emojis? One Ikea spokesman said, “In general you could say emoticons offer a great way for brands to-potentially on a global scale-become part of the everyday conversations of people.” However, one reason some brands aren’t taking advantage of this trend is because of the difference between emojis and emoticons. The emoji keyboard which is now standard on most keyboards is comprised of emojis approved by the Unicode Consortium, and brands looking to create their own emoticons have to make their own apps or partner with apps like Kik, WhatsApp and Facebook Messenger. Taco Bell lobbied Unicode Consortium add a taco emoji to the keyboard, but the decision is still pending. Taco Bell is thus not creating an emoticon at this time because they want the use of the emoji to be more natural to the users and be right on the standard keyboard. This doesn’t necessarily mean though that brands shouldn’t jump on board with the trend, notice that Pepsi created the emojis to be used in retail and not on the phone keyboard.

So, whether bridging the gap between retail and digital marketing or used to foster a positive emotion, emojis are being employed by more and more brands. Even President Obama was discussing the influence of emojis at the South by Southwest Interactive Festival in Austin. Mr. Obama said that audience members should develop technology to ease the voting process, mentioning that it is easier to order a pizza at Dominos, using an emoji, than it is to take part in voting. Pepsi might have been one of the first brands to utilize emojis but it is a trend that is progressing and dominating brand marketing. So if you are looking for a creative agency to develop emojis for your brand, contact Source One and we can help you choose the right agency.
The price of responsible supply chains

Supply chain transparency, sustainability, environmentally conscious - these are all terms that have been thrown around frequently when discussing supply chains. Consumers everywhere are starting to ask questions about where their products are made and in what conditions. The general takeaway from these conversations has been a push toward more sustainable and ethical practices across supply chains. Yet, one major question remains unanswered. Are customers willing to stomach a price increase for more ethically-sourced products?

The question is being raised once again in light of the recent report by Fashion Revolution and Ethical Consumers which revealed a ranking of supply chain transparency for 40 major apparel brands. The research, which we covered in depth last week, found that 40 percent of the 40 analyzed organizations had no monitoring system in place to investigate whether or not their supply chains were compliant with current labor standards.

These kind of supply chain issues still run rampant across industries and the reasoning has a lot to do with money. While global sustainability is increasingly becoming a consumer expectation, according to Supply Chain Brain contributor Robert J. Bowman, not all customers are willing to pay the price. And a recent Associated Press-GFK poll proves just that.

Respondents were asked to choose between two pairs of pants. The garments were made of the same fabric with identical designs. The difference? One touted a "Made in the USA" label and cost $85 while the other was made overseas at $50. Regardless of their household income, 67 percent chose the cheaper pair.

While this doesn't necessarily directly address poor labor standards, it does clearly indicate that price is a distinct value for American consumers, TakePart explained. According to Starre Vartan, a titan in the sustainable fashion industry, it all comes down to understanding the real-life human price of a cheaper garment and contextualizing the issue in terms of broader societal issues.

"If the people reading support women's empowerment, they will support fair fashion. The vast majority of garment workers in the world (60 million) are women (80 percent), and most clothing is consumed by women," explained Vartan in an email to TakePart. "Are you willing to throw another woman under the bus for a cheaper shirt? Considering how responsive the younger generation is on gender issues in the U.S., it doesn't make sense to dismiss issues of who makes your clothes."

While many major businesses are making some distinct moves to improve the sustainability, transparency and general ethicality of their supply chains, true changes can't be made until consumers are willing to pay the price. 

As a follow up to a recent post on supplier engagement, I wanted to share a quick story on how I recently applied some of these methods and the success achieved from doing so. Just to recap, the concepts that I discussed last time included Initiation (the right steps to set the tone with the supplier), Collaboration (playing on the supplier’s expertise in the category to produce mutual benefits), Communication (tips on how to keep the supplier engaged), and Sustentation (why maintaining a long term relationship is so important).

I just completed a project for a client who was looking to renegotiate with a facilities related supplier and in short order. They were happy with the current provider, but had not recently vetted the costs in the contract to ensure they were the most competitive. This particular category is one where we have a great deal of experience and market intelligence and could meet the client’s needs as requested. The timeline for the project from first stakeholder contact to contract draft was 30 days.

In order to meet the rigorous timeline it was important to apply supplier engagement concepts as mentioned and do so effectively. I began by interviewing the stakeholder to determine his wants and needs on the project, followed closely by a similar interview with the account representative contact I was given. It was clear right away that this representative, while effective in his role, was not the right person to speak with, in other words he was not a decision maker. This is a critical point in any negotiation, make sure you are talking to the right people on both sides, otherwise you will quickly find yourself running into roadblocks as those you work with have to constantly “go back to their manager” to get anything accomplished. Once I was able to connect with the correct individual that would drive the decision on the supplier’s side, I initiated the conversation in a manner that was reflective of the mutually satisfied relationship with the client. I was very clear about what I was trying to accomplish and the timeline associated. I requested that they present their ideas on how to improve the contract while offering my insight into this as well. The supplier communicated their appreciation for the transparency and committed to meeting the deadline I established.

Throughout the next steps of collecting some initial data, benchmarking and providing targets, I maintained a clear line of communication with the supplier and the client. In doing so I was able to complete the negotiations portion of the project within seven business days. I worked closely with the supplier to collaborate on ways to ensure that the contract was drafted right the first time with minor changes needed thereafter.

In the end I was able to reduce the billing cost to the client, improve the contract language to provide more clarity where needed, as well as adding value through incentives to the staff on the contract with wage increases. All of which met the needs of the client and the supplier, and within the 30 day timeframe. And as a side note I developed a good working relationship with the supplier, one that may benefit me in the future if I come upon this category in their region in the future. My belief is that this is very much due to my application of supplier engagement best practices. Sometimes, it is just a matter of being straight forward and working as a team to meet the set objectives.

Source One Management Services is the exclusive sponsor of Exec IN, an elite forum for industry-leading supply chain and procurement executives at ISM2016. Visit our supplier engagement experts at Booth #528!
Manufacturers of consumer goods struggling with supply chain visibility

The issue of supply chain visibility has recently been a major area of concern for companies across the globe. Failing to enhance operational transparency can lead to legal ramifications, reputation damage and noncompliance fees. It also puts businesses at increased susceptibility for disruption. Unfortunately, being able to see into end-to-end operations is particularly difficult for operators in some markets.

The Sustainability Consortium, or TSC, recently published its 2016 Impact Report that revealed most manufacturers of consumer goods lack supply chain visibility. Of the 1,700 businesses that participated in the survey, less than 20 percent said they have end-to-end transparency. Furthermore, the majority, or 54 percent, of companies said they didn't have any visibility into their supply chain whatsoever. 

A glaring problem with these findings is that, without being able to see into the supply chain operations, organizations can't identify, let alone resolve, any unethical or damaging areas. And for consumer goods manufacturers, this is especially troubling. According to the report, these products are the cause of more than 60 percent of greenhouse gas emissions worldwide. Additionally, when it comes to instances of forced and child labor in supply chains, more than 75 percent of cases occur along consumer good assembly lines.

Manufacturers must measure and monitor
"The Sustainability Consortium's findings are helping us solve a big challenge, which is how do we get our arms around our total supply chain," Wal-Mart Senior Vice President of Global Responsibility Sustainability Laura Phillips stated in the announcement. "And how do we really focus for impact in our supply chain with our partners? TSC's 'hotspot' analysis approach helps us do exactly that, together with the global community."

The report outlined three essential steps needed in order for manufacturing companies to improve the state of their supply chain:

  1. Retailers and procurement leaders should measure and track the sustainability of products
  2. Manufacturers must focus on enhancing visibility and performance throughout the supply chain
  3. Stakeholders should collaborate to create better scalability

In society's efforts to build a greener planet, a major priority is producing products that are sustainable and energy-efficient. And this eco-friendly initiative starts in the manufacturing process.

But, as the TSC report pointed out, it is not possible for companies to manage parts of the supply chain that they're not able to measure or even see. And, as Environmental Defense Fund Corporate Partnerships Managing Director Elizabeth Sturcken said in the press release, "Progress can only be achieved if companies are measuring performance within their supply chains."

Additional tips for increasing supply chain transparency
In an article for Green Biz, Adam Siegel, vice president of sustainability and retail operations for the Retail Industry Leaders Association, highlighted some of the ways companies can improve supply chain visibility. One strategy he suggested is leveraging a third-party partner that can ensure responsible sourcing practices. These firms can also help with risk assessments by conducting audits. Siegel added that organizations should train workers and suppliers and encourage them to be more transparent. 

The importance of having a visible supply chain is obvious. But achieving it can be challenging. This is why it is critical that companies are proactive in their attempts to gain more transparency along end-to-end operations. Organizations that lack the resources, time, tools or experience needed to ensure the successful execution of such initiatives are highly encouraged to work with consulting firms and solutions providers that do. 

Increased visibility can help companies reduce the risk of disruption, uncover cost-savings opportunities, demonstrate social and environmental responsibility and properly maintain compliance. As the pressure to enhance the efficiency of operations and crate a more sustainable organization intensifies, it will become  increasingly necessary for supply chain leaders to embed transparency into their business models. 

Highlights from the State of Retail Supply Chain 2016 report

Martec International and RELEX recently released the State of the Retail Supply Chain 2016 report which revealed some interesting findings surrounding the primary issues affecting supply chains today.

The report surveyed retailers with annual sales surpassing $110 million from the U.K., North America and the Nordic countries, explained Material Handling & Logistics. The research covered forecasting challengers, supply chain planning, productivity, stock pools and overall supply chain transparency.

Of the issues addressed in the report, three major business issues arose as the top concerns:

  • 62 percent of retailers are concerned are about increasing availability without increasing stockholding
  • 47 percent are worried about reducing stockholding without affecting sales
  • 44 percent cited the automation of key processes/better collaboration with suppliers as a top concern

The research also revealed some interesting findings concerning forecasting. Of the mentioned forecasting challenges, effective forecasting across supply chains was cited as a major issue by 69 percent of respondents. MH&L explained that this highlights the continued struggle of global suppliers to effectively analyze and report on their supply chains.

"It is interesting to discover that whilst 64 percent of retailers globally highlighted forecasting for promotions as one of their main challenges, only 35 percent have a system in place that can build automatic demand forecast for promotions and only 22 percent have a system that can manage promotion stock run to clear fixtures for the next promotion," noted Group CEO of RELEX Solution Mikko Karkkainen, according to the source

Supply chain process improvement and omnichannel offers
Clearly, improving supply chain processes needs to be a major goal of retailers throughout the remainder of 2016. Spend Matters reported that many upper-level executives plan to increase their spending on improvement processes for supply chains as well as omnichannel fulfillment.

In fact, 56 percent of respondents claimed their investments would be higher than in 2015 while 42 percent reported their spend would remain the same.

Another pressing priority for retailers involved the increased consumer demand for omnichannel offers. This is causing leaders to innovate when it comes to supply chain management in order to ensure they are equipped to handle the demand.

While responding to these consumer preferences with additional warehouses and backroom inventory is a smart move it certainly adds a whole new level of complexity to business and supply chain oversight, explained Spend Matters.

As retailers move further into 2016 they will need to keep a focused eye on their supply chains in order to ensure they are not just responding to consumer demands but meeting them at an exceptional level.

We're getting closer to the premier supply chain event of the year: ISM2016! This year's event offers eight different learning tracks, loaded with educational and networking sessions designed to help professionals advance in the practice of supply management and procurement. Conference attendees are encouraged to take advantage of the wide range of learning sessions by customizing their experience based on their goals for the event. 

In this week's episode of the Countdown to ISM2016 Podcast Series (The People Track: Evolving and Optimizing Human Capital Strategies), we're taking a deeper look at the People Track. This Annual Conference learning track focuses on providing you with the tools, resources, and solutions necessary to evolve and optimize your talent management strategies. 

This week we sit down with Howard Levy, Co-chair of ISM2016's People Track and VP of Global Sourcing at Zimmer Biomet to learn his vision for the Annual Conference. Levy shares why attending ISM2016 and conferences like it are vital for professionals at any stage in their career, along with his plans for attending the various sessions with his team. As moderator for the panel titled Transformation Superchargers: What Private Equity Expects from Sourcing Leaders, Levy explains how sourcing in private equity is unique and makes the case for why more supply management professionals should be exposed to these types of firms.

For more information on the annual conference, visit www.ISM2016.org. 
Don't miss out on any of the cost-reduction best practices or conversations with ISM leaders covered in the Countdown to ISM2016 Podcast Series

Outcomes matter.

They’re the difference between accepting an annual “discount” from a supplier versus going to market not just to reduce costs but to find a strategic partner that offers value added services and innovation. Outcomes are the difference between only interacting with your vendors when making a cyclical purchase, as opposed to frequently discussing new opportunities for product improvement, and market expansion. They’re the difference between settling for procurement operations that ‘just work’ versus establishing policies and procedures that deliver a sustainable strategic advantage for your company.

No matter what your supply management goals are – results count - Which is why this year’s Institute for Supply Management’s Annual Conference is focused on providing you with the insights necessary for achieving your goals. For the first time r, ISM2016 is bringing you a solution oriented track: The Corporate Team Experience, designed for executive level conference attendees to get you up to speed with supply management best practices and the latest tactics delivering results.

Executives from organizations with over $1.5B revenue won’t want to miss out the exclusive Exec IN forum, sponsored by leading procurement consulting firm Source One Management Services. This invite only event is packed with thought leadership sessions centered on addressing challenges specific to companies with large scale supply chain operations. The highly elite Exec IN forum also features exclusive sessions from keynote speakers Alan Mulally, former President and CEO of Ford Motor Company and Susan Cain, best-selling author of Quiet: The Power of Introverts in a World that Can’t Stop Talking.

To check out the conference agenda visit, www.ISM2016.org. To save on your event registration, contact Source One’s Carole Boyle at CBoyle@sourceoneinc.com.
5 tips for overcoming supply chain disruption

Earlier last week we reported on the Japanese earthquake that forced Toyota Motor Corp. to considerably reduce production. The company's facilities - located in southern Japan - are projected to be closed down for two weeks or more. This production halt could reduce operational profits by as much as $267.15 million.

The 6.5 magnitude earthquake is what supply chain leaders refer to as a supply chain disruption. A report by the British Standards Institute concluded that in 2015, global supply chains accrued a combined $56 billion in additional costs due to a variety of different supply chain disruptions including extreme weather, terrorist threats and crime, reported Supply & Demand Chain Executive.

Supply chains are very delicate systems and when links in those chains are severed or otherwise disturbed, the damage can spread quickly throughout the remaining links. Disruption within a supply chain can result in major consequences such as increased production costs and decreased productivity levels.

In fact, according to Supply Management, a recent analysis by Allianz Global Corporate & Specialty found that global supply chain disruptions are playing a big hand in the growing severity of business interruption. The average losses were found to total up to $4.3 million as a result of the increased interdependency of supply chains in our global economy.

"Whereas in the past a large fire or explosion may have only affected one or two companies, today losses increasingly impact a number of companies and can even threaten whole sectors globally," explained CEO of Allianz Global Corporate and Specialty Chris Fischer, according to the source.

Tips for dealing with supply chain disruption
Supply chain disruptions have always been an unpleasant reality of operations. As with any potential risk, supply chain leaders should make an increased effort to effectively prepare for the near-inevitable arrival of supply chain disruptions. This involves taking some critical measures to minimize risk to a business's bottom line. Let's take a look at a few tips for preparing your supply chain:

1. Ensure end-to-End visibility: Visibility is a critical component of dealing with supply chain disruptions in a quick and efficient manner. According to Thomas Net, 72 percent of suppliers lacked the full visibility needed during a supply chain meltdown to effectively address the problem. Supply chain managers must ensure they have a complete view of every last piece of their respective supply chains in order to ensure an optimal response during periods of disruption.

2. Create and implement a strategic plan: Organizations should have distinct plans in place that work to lessen the impact of potential disruptions. Leaders must reconsider the way things are organized within their supply chains. From inventory positioning to sourcing, a flexible supply chain is better suited to brave most disruptions.

3. Perform a supply chain vulnerability audit: Supply chain disruptions are essentially inevitable. And while vulnerability audits can be time-consuming, they are a great way to prepare your organization for future disruptions. Test the potential pain points of your supply chain and determine whether your proposed solutions are effective or if there is a better way, explained Thomas Net.

4. Update plans consistently: The only thing more important than having a plan in place for supply chain disruptions is consistently updating those protocols. There are hundreds of factors that could warrant strategic revision, from new suppliers to updated government regulations. It is crucial to update your plans on a regular basis to reflect these changes. An outdated plan is nearly as bad as no plan at all.

5. Communicate: Supply chain disruptions require increased communication by nature. There are a million different things being done to mitigate the problem and keeping your team on the same wavelength is crucial for success, explained Thomas Net. Every level of the supply chain should be informed of every move to ensure consistency and efficiency.

Supply chain disruptions, like the quake in Japan, are an unfortunate reality of business. The best thing and organization can do is equip its team with the relevant tools to mitigate the crises as best as possible. When supply chains are compromised, the consequences can be costly. Ensure your supply chain is ready to face the problems head on to secure optimal business continuity. 

In our last post, we talked about the significance of the Institute for Supply Management's (ISM) Annual Conference. This one-of-a-kind event is a key milestone in the calendar of every procurement professional, marking another year of progress for the Supply Management function as a true value-adding partner in the business.

At ISM’s 2016 annual conference (ISM2016), Source One’s presence is immense. This year, ISM2016 is being held in Indianapolis May 15-18, just weeks ahead of the famous Indy 500.  Source One’s cost reduction and category management experts will be found all over the ISM2016 conference venue – in the exhibition hall, leading several educational sessions, receiving AND giving out industry awards and recognition (ThomasNet & ISM’s 30 under 30; the Richter Scholarship) and most prominently, as the one and only sponsor and services firm for the exclusive, invitation-only, highly elite sub conference known as Exec IN (which you may know as the CSSL).

In the prestigious Exec IN conference, a select group of CPOs, VPs, and Directors of highly successful and prominent companies ($1.5B+ annual revenue) will gather together for exclusive panels and workshops, and also enjoy breakout sessions with the ISM Conference’s keynote speakers Alan Mulally (former Ford CEO) and Susan Cain (Best-Selling Author)). Source One’s senior leadership has the  honor of sponsoring this highly acclaimed group of procurement and sourcing innovators.  

The entire Source One team of sourcing professionals, procurement staffing and transformation experts, and category leads is highly anticipating the conference with its “Countdown to ISM2016 Podcast Series,” featuring not only the Source One team’s insights on best practices within all the ISM Learning Tracks but also commentary from industry heavyweights and ISM Conference Leaders such as MRA Global Sourcing, Zimmer Biomet, and QBE.

ISM2016 is truly an event not to be missed, and time is running out to register!  Contact Source One’s ISM Team to find out how you can save on your registration costs.
Embedding cybersecurity in the supply chain

Safeguarding the supply chain is a critical endeavor. But it is one that is growing in complexity. As the systems and processes used to drive a business become more connected, it is increasingly challenging for supply chain managers to ensure end-to-end protection.

Cybersecurity has quickly become a priority for all organizations - even federal government agencies. And with good reason. The risk of data breaches and other digital disruptions threatens the production, profitability and intelligence of a company. The possible ramifications that can be incurred from operating on unsecured platforms and networks are serious, which is why preventative measures must be taken along all points of the supply chain.

Supply chain risk management is an ongoing necessity that needs continuous updating. Efforts to combat cyber risks must adapt in tandem with the rapid pace at which they are evolving and becoming more sophisticated. It is safe to assume that there will never be a day when an organization can be sure there is absolutely no possibility of a disruption. However, there are specific steps and strategies to implement that can greatly reduce the chances of disasters occurring.

Understanding the depth of security threats
When trying to ramp up cybersecurity initiatives, it's important for supply chain leaders to look beyond their immediate operations. In a blog post for BitSight, Melissa Stevens recently pointed out that it would be beneficial for business managers to consider the ways in which all tiers of the production line can contribute to its overall vulnerability. For example, for organizations that assemble products in their facilities, it would be wise to consider what processes outsourced suppliers use to manufacture the necessary pieces and parts.

Another point Stevens touched on is the importance of addressing the security obligations of vendors in their contracts. The digital landscape of supply chain management has provided organizations access to more potential suppliers and partnerships. And while cloud-based systems can help businesses enhance visibility and connectivity between themselves and third-party contractors, it also makes them more susceptible to cyber threats.

Evaluating contractual agreements
Exploring this topic further, CIO Contributor Stephanie Overby recently interviewed Paul Roy and Lei Shen, partner and senior associate, respectively, of Mayer Brown, a global law firm well-versed in cybersecurity and data protection.

Roy explained that, even if the vendor is responsible for a IT-related disruption or failure, it is the customer that ultimately pays the price of damages. And this is why it is crucial that companies that outsource a contract set forth clear guidelines on the requirements for both legal and technical compliance. Essential protection measures that should be contained in the contractual agreements include ensuring the vendor will be held responsible for breach-related costs and fines, as well as those for remediation and notification.

In addition, Roy highlighted some of the most important contractual provisions that can help combat the risk of cloud vendors, which are:

  • Supplier security requirements
  • Subcontracting restrictions
  • Worker-related safeguards (training, screening, etc.)
  • Security assessments and audits
  • Investigation and reporting of security incidents
  • Data restrictions and accessibility

To increase efficiency and reduce costs, many supply chains are outsourcing IT operations to third-party vendors. However, as the supplier network grows, it can also become more permeable. It would be in the best interest of organizations to extend their cybersecurity efforts beyond the contractual level.

Monitoring vendors
On top of ensuring vendors will be liable for any data breaches or digital disruptions, businesses are encouraged to regularly monitor suppliers to maintain effective risk management operations.

"Customer data and systems are only as secure as the weakest link in the vendor ecosystem," Paul Roy said, according to Overby. "The risks for customers are twofold: Not only does the customer increase its risk of a data breach, it also increases the risk that it will be in breach of its regulatory or contractual obligations if its vendors fail to comply with such obligations."

The cybersecurity expert also added that as these threats become a growing concern, regulations will likely continue to evolve. And, therefore, it is imperative that organizations stay up to date on any adjustments or changes that occur and ensure both their own supply chains and those of their outsourced vendors are maintaining compliance.

As an industry pioneer, Source One recognizes the importance of conferences, tradeshows, and networking events in the strategic sourcing, procurement, and supply management profession. Procurement professionals and executives from all industries, career levels, spend categories, and regions come together to get away from the office, network with other sourcing experts, and learn best practices and insights to bring back to their teams at home.  Industry events and conferences have the twofold advantage of advancing one’s career in supply management and growing one’s personal knowledge base for the benefit of their organization’s value delivery and company bottom line growth.

Since 1992, our sourcing experts have been featured as key sponsors, exhibitors, speakers, moderators, and presenters for dozens of industry conferences all across the US and abroad. But there is one conference that clearly stands above the others – the Institute for Supply Management’s (ISM) Annual Conference. ISM is the most unique and well-respected global organization dedicated to the advancement of procurement and supply management. They offer a variety of industry-recognized certifications, training, educational resources, and networking events. Every year, thousands of supply chain and procurement’s  best and brightest turn out to meet their fellow best and brightest – and further the progress of the Sourcing, Procurement, and Supply Management professions.

At the ISM’s annual conference in 2015 (ISM2015) held in Phoenix, Arizona – Source One’s industry-leading experts introduced ISM members to Source One’s unique Nearshoring Advisory Services, to great success. The firm’s Nearshoring practice was already booming before this presentation, but since then, company interest in Nearshoring to Mexico and Latin America has substantially increased as ISM members learned about all the gains to be had from moving operations closer to home. ISM2015 was also a time for the firm to advance its partnerships with respected organizations like MRA Global Sourcing, ThomasNet, and others.

After ISM2015, Source One’s partnership with the Institute for Supply Management has increased. Source One Associate Director and Nearshoring Expert was featured in the ISM Podcast, and Senior Project Manager Michael Croasdale was recognized by ISM and ThomasNet as a 30 under 30 Rising Supply Chain Star.  In our next post, we'll tell you all about the different opportunities to meet our cost reduction experts at ISM2016.
Report reveals lack of transparency in fashion supply chains

Fashion Revolution and Ethical Consumer recently released a report that revealed some of the world's most popular fashion brands have been less than honest about their supply chains. According to Vice, industry fixtures including Forever 21, Chanel, Michael Kors and Prada are seriously lacking when it comes to supply chain transparency for consumers.

"Lack of transparency costs lives," the report states, according to the source. "It is impossible for companies to make sure human rights are respected and that environmental practices are sound without knowing where their products are made, who is making them and under what conditions."

The report release comes on the heels of the third anniversary of the Bangladesh factory collapse. On April 24, 2013 over a thousand people were killed and 2,500 injured when the eight-story Rana Plaza factory complex fell apart.

The tragedy was undeniably tied to the terrible conditions in garment buildings across the country. Yet it took weeks for retailers across the globe to determine what part they played in the disaster, explained Ecouterre. The cause of delay? Transparency.

Intricate webs
The fashion industry contains supply chains that are notorious for their levels of complexity. In fact, they are so intricate that they often become opaque, explained the source. A given company could place an order with one supplier but the actual work could be done among numerous unregulated "shadow" facilities. This goes on without the knowledge of brand supply chain management.

Additionally, the majority of fashion brands have no ownership over the buildings where production is handled. This means they have no ability to monitor or regulate conditions for laborers, reported Ecouterre.

"Some brands may work with thousands of factories at any given time," explained the report, per Vice. "And that is just the facilities that cut, sew and assemble our garments, but there are also further facilities down the chain that dye, weave and finish materials and farms that grow fibers too."

Major findings
Advocacy organizations Fashion Revolution and Ethical Consumer authored the report to shed light on the importance of understanding these supply chain intricacies. The data they found was rather troubling.

According to the report, 40 percent of the 40 major companies analyzed had no system in place to monitor whether their supply chains are compliant with labor standards. While most organizations have an active and publicly accessible policy on environmental and labor standards, only three companies (Gap, Primark and Levi Strauss) have long-term initiatives in place.

So, which organizations topped the list for worst transparency track record? Chanel hit dead last on the scale with Hermes, Claire's, Forever 21 and Fendi following close behind.

"These companies have little to no information about their supply-chain practices available to the public," Fashion Revolution said, according to Ecouterre. "Many of these companies seem to do little more than have a code of conduct in place - whilst this might have been best practice in the 1990s, corporate responsibility has moved on a great deal in the last 20 years."

Admittedly, the survey did not have the full spectrum of information. According to Vice, Fashion Revolution sent a questionnaire to all 40 fashion companies listed in the study but only received 10 filled out copies. The remaining 30 organizations were analyzed based on the information they made public.

It is possible that some of the non-participating companies received lower scored due to the fact that they were not able to present all the relevant internal information, noted the report.

One thing is clear: Supply chain transparency is a major issue throughout the fashion industry. While some major companies are taking strides toward remedying the inconsistencies, more needs to be done in terms of supplier relationship management to ensure more ethical production methods.

The 4 P's of procurement (aside from pricing)
Many aspects of supply chain management are changing, procurement being no exception. And, given the digital transformation that is influencing critical areas of business and affecting the way operations are managed, the strategies executives employ in achieving their goals are also beginning to shift. To facilitate organizational success and sustainability, procurement professionals must ensure they are adopting the best-in-class solutions for their companies.
An obvious goal of any procurement leader is to uncover cost-savings opportunities. However, solely focusing on ways to save money is not an effective approach to supply chain optimization because it has the potential to hurt other critical areas. For example, obtaining services or goods based on price alone may mean overlooking the value (or risk) the chosen partner presents.
In addition to pricing, here are four important elements procurement professionals should prioritize.
1. Planning
Companies across the globe are facing increased pressure to improve transparency and end-to-end visibility. Not being able to see into both immediate and distant tiers of the supply chain can hurt organizations. Risk mitigation planning needs to be a primary goal of business executives, especially as the elevated levels of connectivity and digitalization bring a growing amount of chances for disruption. Natural disasters and other unplanned disruptions can severely stall production. It is imperative that supply chains are able to maintain business continuity in the event of an unexpected event. But it is also critical that they ensure their suppliers are able to do the same.
2. Partnerships
Supplier relationships play a pivotal role in the success of an organization. Supply Chain Digest recently reported that, according to a Deloitte global survey, only 32 percent of procurement executives said they consider their strategic partnerships to be "excellent." The majority, or 65 percent, reported that their efficiency in this department is "mixed." This clearly indicates the need for more companies to improve their relationship management strategies.
3. Performance
Another essential responsibility of procurement leaders is to evaluate the performance of suppliers to ensure they are delivering the expected quality and quantity of goods and/or services. As Modern Materials Handling editorial contributor Shruti Agrawal pointed out, there are some key areas that should be identified when evaluating and considering new suppliers. For example, it is beneficial to not only look at their capacity and capabilities for meeting the existing needs of the business, but future ones as well. The digital environment is making it so supply chains must be agile and adaptive; as should their partners. They must also be monitored and measured on their risk and compliance levels. As previously mentioned, low cost is not the only factor to consider with procurement because lower pricing can be offset by a supplier that is constantly running into production delays or making late deliveries.
4. Processes
One of the most effective strategies for procurement and supply chain professionals hoping to lower costs is to improve operational efficiency and streamline production. And making sure the best, most cost-effective processes are being used is part of this goal. The rapid adoption of automation and digital technologies is providing businesses with new, better ways of enhancing operations. Just about every function of supply chain management can be supplemented with a technological tool or system - from finding and onboarding new suppliers to detecting and preventing risks.
And, according to Supply Chain Digest, the Deloitte survey cited digital procurement strategies as one of the biggest emerging trends and top priorities. Furthermore, the source suggested that the study's findings indicated it may not be too long before executives are focused more on competing for technology solutions than for talent. This prediction makes sense, considering robotics and automation processes are already starting to replace some of the roles and responsibilities of traditional workers, particularly in warehousing and factory settings.
All the above factors play a critical role in procurement leaders building an effective strategy. And regardless of what the specific goal at hand is, it is going to become increasingly necessary for corporate executives to implement technology and automation tools into their solutions. The most successful procurement models are those that leverage the advanced sources available to them without exceeding budget. For some, this may mean outsourcing certain functions to third-party firms.

Source One's strategic sourcing and procurement transformation are leading experts in helping companies adopt best-in-class solutions to enhance their procurement operations. Find our industry thought leaders at ISM2016, where Source One is the diamond sponsor of the exclusive procurement and supply management leaders conference, Exec IN.
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This past week, a 6.5 earthquake and a 7.3 magnitude quake hit Japan. A total of 41 people were confirmed dead in Kumamoto and many more have taken temporary shelter. While these quakes have caused problems for many families, they have also disrupted operations of many businesses located in the area.

Since it is not a matter of if, but when, it is always important to prepare your supply chain for unexpected weather. In Japan, Toyota said it would gradually halt vehicle production this week at most of its plants due to a shortage of components following the quakes. Additionally, production will halt for the car plant in Fukuoka where Lexus vehicles are made and at the Tsutsumi plant where Prius vehicles are produced.  While these quakes affected production, Toyota followed protocol for preventing a supply chain disaster, among those being taking into consideration potential threats and filling the gaps. To accommodate for the halted production at these plants, Toyota is set to increase production at other factories in Japan and in other countries to minimize the impact.
Another company in Japan affected by the quakes was Sony Corp. Sony’s plant in Kumamoto was also damaged; this plant manufacturers image sensors for smartphones including Apple’s iPhones. Consequently, Sony’s shares fell 7 percent, the biggest decline since Feb. 9. The Kumamoto plant is Sony’s main chip factory and typically operates 24 hours a day, and this stoppage due to the earthquake hit Sony hard. Sony still has plants operating in Nagaski, Oita, Kagoshima and Yamagata however, the proximity of these facilities is a supply chain risk. Should the same natural disaster affect all of the plants, production could potentially come to a complete halt. This is a potentially devastating practice that can be avoided by diversifying plant locations as to prevent a natural disaster from halting all production.

In addition to diversifying manufacturing locations to keep up production should a facility go down, there are also logical concern for a diverse supply base. As a result of the quake, Japan’s Kumamoto airport was closed Sunday, canceling all flights. In addition, the Kyushu Railway Co. said its bullet-train service on the island remained halted. For Sony these logistical challenges caused more of a disruption since this was Sony’s main manufacturing plant, in contrast, Toyota has operations in other cities in Japan as well as other countries and was able to increase production at these facilities to offset the loss of production in Kumamoto.

With 40 percent of businesses not reopening after a major disaster, preparedness is crucial. Even a small amount of planning can be the difference from maintaining continuity in your company and having to halt operations entirely.
Toyota's supply chains feel impact of Japan quake

Toyota Motor Corp. was forced to reduce production in its southern Japan facilities this week due to a magnitude-6.5 quake on Thursday, reported the Wall Street Journal.

Toyota officials chose to close 26 car assembly lines across the country as a result of halts in production by suppliers. This shutdown of production reveals some recurring flaws in the company's lean manufacturing system, according to WSJ. The way in which Toyota's supply chain is organized makes it particularly sensitive to disasters.

The auto company structures its inventory system in what is referred to as a "just-in-time" model. Toyota's assembly lines across the globe function in this way as a part of its efficient production method. The process works by keeping minimal amounts of inventory on site, allowing for cost reductions and improvements in quality and consistency for components, explained the source.

This supply chain problem is reminiscent of a similar scenario in 2011 when a large quake crippled automotive supply chains across Japan. For Toyota, company officials claim they have learned from past mistakes.

"There are always risks, and they wouldn't necessarily be resolved even if we have parts inventory worth two weeks," said a Toyota official, according to WSJ. "Rather, we have been focused on how to understand and identify issues in case of a problem, and how quickly we could recover."

The cost of disaster
Toyota, which stands as the biggest automaker in the world, is set to take a considerable financial hit due to production reduction after the earthquake. Material Handling & Logistics reported that the company could face a reduction in operation profits totaling around $267.15 million.

The business continuity plan that was created post-2011 will truly be put the test in light of this disaster and the results hold some pretty high stakes. Toyota Motor Corp. and its partners produced over 4 million vehicles in Japan during 2015. This production accounts for 40 percent of the company's global output, noted MH&L. Toyota heavily relies on domestic manufacturing compared to other industry competitors.

And this is not the first time production has been curtailed this year, explained WSJ. In fact, it is the second time in three months that problems with Japanese plants have caused supply chain issues.

In February of this year an explosion at a steel supplier caused the lost production of upwards of 90,000 vehicles, lasting over a week, reported the source. This delayed vehicle deliveries and caused Japan's industrial output to drop by 6.2 percent.

This time around, industry leaders are projecting that the shutdowns could last for more than two weeks. In a company statement, officials noted that this will have no effect on overseas vehicle production, noted WSJ.

Shares in the company fell 5 percent on Monday, according to Reuters. This dip has lead to drastic declines for other manufactures' shares.

Late scorecards and early presentations to build success

After conducting RFPs, it is expected that well established procurement departments will leverage a scoring methodology to measure bidder responses; mechanisms such as scorecards and onsite presentations – typically in that order – are classic next steps. Through this process, RFP responses are compared side-by-side and graded based on predefined criteria. High scoring suppliers are down selected and invited to present on their capabilities prior to entering the negotiations phase. This approach enables a streamlined process by optimizing time spend on presentations by only inviting the most favorable suppliers to participate. Does this process sounds familiar? Does it work? Does it drive innovation? (Response Key: Yes, sometimes, No).

If you read my previous posts (Beyond Business as Usual Part I and Part II) and the ideas that I present make any sense to you, it is very plausible that the process above will not entirely apply to you. Naturally, if you “rethink” the RFP process, then you also must rethink the evaluation process.  (Un)fortunately, requesting creative solutions to your needs instead of template driven answers will deliver incomparable responses, rendering a scorecard almost useless. If you decide to use a scorecard regardless, it is likely that it won’t be conducive to the down selection process as decisive components would be left out of the evaluation.

Innovation driven RFPs – as I like to call them – focus on real value driven responses and call for different down selection methodologies. Instead of developing an overly complex scorecard (which by the way, may be impossible to develop), why not use a checklist instead? This simpler mechanism captures the essentials of the proposal received from the bidder to determine if true value is being perceived. Companies who comply with the list, should be invited to conduct presentations on their value proposition. In other words, their vision of enabling your company to thrive and drive innovation through the services they plan to provide.

You might think this could produce as many presentations as RFP participants, but you would be wrong for two reasons. First, an “innovation driven RFP” will be much more effective in vetting bidders out of the process. Second, after reviewing responses, you will be in a much better position to identify value-driven proposals that resonate with your company’s culture and align with its strategic objectives -a much more powerful filter than a scorecard.

Plus, even if you must conduct presentations with several companies, it wouldn’t hinder the process. It either means that proposals are diverse enough to show there are multiple ways of solving your needs, or that several opportunities at your organization are available. Evaluating diverse approaches to solve the same challenge will provide as richer perspective than a scorecard alone. Presentations should allow bidders to discuss their proposal and defend their value proposition (ROI) to YOUR organization, instead of parading what makes them great. After presentations conclude, good fits should be evident and a more contextualized scorecard can be developed then.

An even more effective approach that puts the bidder evaluation process under a much more assertive light is conducting pre-screening presentations before the RFP is administered. Consider that for some innovation driven RFPs, the sourcing initiatives you will conducting will sometimes lack a proper scope of work expectation, simply because you won’t exactly know what you need and what to look for, cases for which you know there’s a need but you aren’t sure how to solve it, or what would be the right solution (new systems or technologies are a good example).

Supplier presentations before RFPs are issued may be a very effective way to learn what we want for our company and identify elements that we like from bidders early in the process. Then the RFP can be tailored to cater for exactly what we want and a supplier preselection can be achieved by administrating the RFP only to those who seem capable; therefore streamlining the subsequent evaluation process.

Think about your next sourcing need, and before drafting an RFP and inviting bidders to participate think about the strategy overall, and whether it makes sense to let suppliers educate you early in the process. You’ll be prompt in building rapport and aligning culturally with those that are preselected, and will simplify the negotiation process later. If you are a bidder, think about recommending the prospect an early meeting to get to know them, listen to what they want to accomplish through the sourcing process and learn the communication style of the company, this will help you prepare responses aligned with expectations and boost your bid by showcasing the strengths that really matter.

If you want to go beyond business as usual with your RFP administration process, catch Source One's supplier engagement and evaluation experts at the ISM annual conference (ISM2016), where our team of industry thought leaders at the premier sponsor of the exclusive executives sub-conference, Exec IN
Sensing risk in the supply chain
There are some supply chain disruptions that are extremely difficult to prepare for, such as the earthquake that recently hit Japan and forced many major manufacturing facilities to halt production. However, there are also a good amount of risks that businesses can plan ahead of time for.
Unfortunately, many organizations face difficulties when it comes to implementing effective risk management strategies. Some focus on the wrong threats while others are still relying on outdated protocols. The problem is that, oftentimes, businesses don't dedicate the necessary time, attention and resources to threat mitigation and emergency response planning until after a disaster has already occurred. And, by this point, it's a little too late.
Securing technologies
As more companies begin integrating digital systems and the Internet of Things into supply chain operations, it is becoming increasingly important for business executives to ensure these connected processes and applications are secure. Web-based platforms present a whole array of risks that could lead to serious disruptions, even if they do help streamline workflow efficiency and reduce costs.
However, innovative technologies can also be used to safeguard supply chains from the growing risks. Spend Matters recently reported that sensors are gaining popularity among organizations looking to improve operations without resisting the shift toward digital. The reason this type of technology is so beneficial is because it gives supply chain leaders more transportation-related data on goods; sensors are capable of letting managers know not only where the products are located but what kind of condition they are in.
Savi Technologies Vice President of Solutions Jim Hayden told the source that businesses are starting to adopt the tech at increasing rates because it enhances visibility throughout the entire supply chain. Traditionally, companies would be notified if a shipment was made or not but, as the industry evolves, it is becoming necessary to go beyond these "milestone" touchpoints.
Benefits of supply chain sensors
The sensors also alert supply chain managers if a product has been altered or messed with, which more businesses will likely be interested in amidst reports of increasing cargo crime rates. Any notifications the organization gets can be delivered to employees' digital devices.
TechTarget recently explained that the use of RFID, or radio frequency identification, tags in sensors can further enhance the real-time data and analytics available to businesses. This allows them to gain even more insight and improve their ability to predict demand, instead of relying solely on historical data.
According to Spend Matters, research conducted by Deloitte and MHI revealed that these sensors, as well as automatic identification, are contributing to the "always-on" supply chain of today. Almost half, or 44 percent, of businesses use sensors in their supply chains, indicating they are being implemented almost as much as cloud computing and storage. And it may not be long before more organizations begin using them. The research also showed that 87 percent of supply chain leaders said they plan to eventually integrate the technology into operations, Spend Matters said.
Risk versus ROI
If businesses are slow to adopt sensors, however, it may be because the benefits are not immediately clear for some. Hayden told the source that companies consider the use of this technology as part of a risk mitigation plan and, therefore, assume the return on investment will be hard to prove right away.
But it is essential that supply chain managers don't wait to implement plans for disaster response and take significant measures toward investing in the technology and tools that prevent disruptions from occurring in the first place. And that is what sensors can help with. They can protect businesses from loss of sales or delays in production attributed to unexpected disturbances such as cargo theft. In addition, they can help improve efficiency and accuracy which, in turn, leads to better customer satisfaction levels.
Hayden also recently spoke with CIO on the benefits of using sensors in the supply chain and strategies for lowering adoption barriers. He pointed out that although some organizations may perceive the technology as an expensive investment, especially when they aren't able to see whether or not it will help them ultimately improve their respective bottom lines, the costs aren't anywhere near what businesses may be forced to pay if a major disruption occurs.

Risk is also a clear topic of interest as one of the Speaker Tracks for ISM2016, where Source One's risk management experts are the exclusive sponsor of the CPO Exec IN conference.
Google is the world’s largest search provider, and arguably the world’s largest advertising company. In 2014, the company generated revenues in excess of $65 billion, with more than $45 billion being generated from Google’s Adwords and Search Advertising Business. While most end-users will never see a direct monetary cost associated with Google services, the company’s primary model for revenue generations comes from its ability to understand its users, make that information actionable, and provide advertisers with a platform to serve relevant advertisements.

It was estimated that Google captured 55%, or nearly $82 billion, of all search advertising dollars in 2015. It is easy to overlook the fact that Google is providing a service to the agencies and businesses that utilize the AdWords platform, and with that in mind Google has started to unveil a refreshed UI and an enhanced platform that will benefit the administrators of the service. This revision marks only the second major revision to the platform, and the first in eight years. AdWords launched over 15 years ago with only 250 clients and has since grown exponentially into the billion dollar cornerstone of Google’s business.

AdWords has over one million unique customers, and while there are certainly many large Fortune 100 companies who utilize the service for millions of dollars annually, Google is making this change with the smaller companies in mind as well. Data has defined the last ten years, and it hugely important in advertising, where excellent data allows for more informed choices that enable a better advertisement served at the exact right time in the customer lifecycle. With that being said, Google’s primary focus for this update is not to adjust the backend of its service, which is incrementally updated to ensure that more information is captured and advertisers have added freedom. Google even opened their advertising platform up to additional networks recently, which means that potential revenues may not flow directly to Google, but will (at a minimum) flow through Google.

With data being the buzzword, how does a UI refresh work to enhance the average user experience? Visualization is key. Something that Google has made very clear in their revisions is that not every user of AdWords is a data scientist or a specialist in data analysis. With that being understood, Google is taking a step toward automated visualization and is providing users with an easy way to visualize their data to better understand the insights. Further improvements in visualization and presentation allow for an easier interpretation of campaign success across various mediums. The spreadsheet-style layout that has been key to the presentation of the user dashboard will be replaced with more elegant and responsive charts, drawing increased focus on performance as opposed to the actual words.

While this may seem like a small step, Google is redesigning the administration of AdWords for the foreseeable future in a cross-channel world with greater access for all users. The services offered by Google are powerful and robust, and can be critical to the success of any business. Understanding the value and the capabilities offered in the tools is the first step to success with AdWords, and thanks to a redesign by Google, that reality of closer than ever for most users. 

We're less than a month away from the premier supply chain event of the year: ISM2016! This year's agenda is loaded with educational and networking sessions designed to provide attendees with career development tips, strategic sourcing and procurement best practices, and lessons learned. In continuing our Countdown to ISM2016 Podcast Series we're sharing best practices for supplier relationships: Keys to Solid Supplier Engagement.

This week Source One's Associate Director Jennifer Ulrich shares how to engage suppliers from the start of a sourcing engagement and throughout the life cycle of the relationship. Ulrich explain how to leverage initiation, collaboration, communication, and sustentation for a setting up supplier relationships for success. These four concepts are a critical foundation for Supplier Relationship Management - a topic of discussion during ISM's Exec IN forum - sponsored by Source One Management Services. The exclusive event, designed for forward-thinking executives of industry leading organizations, will explore a number of challenges unique to companies with large-scale supply chain operations.

Adding to the Exec IN discussions are keynote speakers Alan Mulally, former CEO of Ford Motor Company and Susan Cain, author of the best selling book, Quiet: The Power of Introverts in World that Can't Stop Talking. Both will provide insights into the people and processes best practices necessary for a competitive advantage in today's increasingly demanding landscape.

Several weeks ago, The New York Times broke a story about Instagram’s intention to make a major adjustment to the order in which photos are presented on a user’s feed. Under the current chronological presentation, Instagram asserts that users only see about 30% of posts in their feeds, and that a new algorithm accounting for user interest, relationship, and timeliness will be utilized in the feeds new presentation. Instagram is yet to implement any changes, but with over 100,000 users petitioning for the feed to remain chronological, one is forced to consider Instagram’s intentions.

The outlook for Instagram is hopeful, and the simplistic concept of taking and sharing visual content has propelled the network to more than 400 million active users. Instagram also has no real competitor, with similar platforms lacking the simplicity and promise currently available on the Instagram network. It is important to recall that Instagram is a Facebook owned company, and like Facebook, Instagram is an advertising revenue-based platform that relies on engagement rates for continued success.

As the platform continues to hurtle toward maturity, it has introduced a variety of changes aimed at both users and advertisers. Most notably, Instagram launched the infinite video loop, carousel ads, layout, enhanced search, new filters, additional picture aspect ratios, in-feed advertising, and the ability to switch between accounts. These changes all enhance the core of Instagram and provide advertisers with a variety of new opportunities.

Even though Instagram made changes last year with advertisers in mind, engagement lagged, growth stalled, and brands were increasingly being pressured to engage in pay-for-play. The issue facing Instagram is not in new user growth, but in the advertiser engagement that if the lifeblood of the platform. Users are content with the tools and forum in which they are able to interact with other users, but a recent study noted indicated users may be experiencing advertising fatigue. In seeing advertisements so frequently, users are more likely to simply scroll by and disregard to post.

While none of this is breaking news, Instagram’s issue with advertisers is likely a key driver in the network’s motivation to change their feed algorithm. Of course, users may benefit from being served the posts they are most likely to engage with, but many users are comfortable with the order of their feed, and while likes and followers may be a currency in-and-of itself, many end users just want to see the pictures their real-life friends post. By adjusting the feed, Instagram enable brands to reach higher levels of growth and engagement, which is necessary for the platform to continue growing. This is a similar situation that Facebook experienced over five years ago, with advertisers and the news feed experiencing major changes.

An initial rollout of the algorithmic feed will only roll out of a “single-digital number of users,” so it is unlikely that the majority of users will see this soon. Additionally, the algorithm is sure to be tweaked with user-feedback in mind. With growth and engagement at the forefront, Instagram is betting big on their ability to lure in brands and advertisers with an algorithmic newsfeed to will boost ROI. It is impossible to predict the potential impact of the changes, but if Instagram is unable to keep advertisers investing, the future of the platform is very much jeopardized.

The network could easily argue that the upcoming changes are all made with the end-user in mind, but it is impossible to separate Instagram’s business goals from their upcoming changes. Without advertisers, there is no Instagram, regardless of the user base, and Instagram is very much aware that their changes must assist marketers in reaching their population if they expect to succeed in a similar manner to Facebook. Lucky for Instagram, there is no alternative at this time offering a similar experience, and Instagram does have the financial, and more importantly, the data backing of their parent, Facebook. This will be a critical year for Instagram, and all bets are on the algorithmic feed to reinvent the platform. 
Japan's natural disaster causes supply chain disruptions

The earthquake that hit Mashiki, Japan Thursday night, killing nine and injuring at least 800, has caused serious supply chain disruptions for many of the region's manufacturers.

The Associated Press reported that the 6.5-magnitutde earthquake wrecked homes, collapsed entire buildings and destroyed expressways. The natural disaster, which occurred around 9 p.m., had a depth of 11 kilometers, or 7 miles, and forced about 44,000 people to seek shelter and safety. Although it did not cause any major disturbances to nuclear plants, many areas lost their access to water and power.

Organizations that have been impacted, however, include some of the country's biggest manufacturing facilities. According to Bloomberg, Mizuho Securities Analyst Kenichi Saita explained in a report that the aftershocks of the earthquake are still a reverberating risk throughout the region.

Factories stop supply chain production
Although smartphone chipmaker Sony Corp. halted production, Saita said it shouldn't drastically affect the firm's supply chain because Sony is well prepared to transfer its operations to other manufacturing plants in the country. However, if it does cause delays or disruptions in production it could lead to a decrease in sales - which could signal a larger economic issue for businesses throughout the country. Bloomberg also reported that Sony shares dropped 3.2 percent on Friday.

The Tokyo-based factory is not the only electronics maker to have paused operations to inspect factories and ensure the safety of its works. According to Reuters, Honda Corp., Toyota Motor Corp., Mitsubishi Electric Corp. and Bridgestone Corp. have all suspended production until investigations are complete, though none of plants was damaged.

The source revealed that a Toyota Motor spokesperson said the automaker will resume operations throughout its supply chain "at the first available opportunity."

Although this recent natural disaster was not as severe as the earthquake and tsunami that hit Japan in 2011, it still bears the potential to hurt sales for many businesses across a wide range of industries, highlighting some economic fears and concerns.

Japan's economy at risk of recession
Mizuho Securities Co. Chief Market Economist Yasunari Ueno told The Japan Times that the country has had a weak and fragile economy and that any unplanned disruption or disaster might force the region into a recession. According to the news source, the transportation industry was also affected, with disruptions to both airline and train companies. One train in Kumamoto was derailed and All Nippon Airways Co. and Sola-seed Air Inc. flights were canceled.

The Japan Times explained that, prior to this earthquake, the city had already been struggling with business activity, especially pertaining to travel. A Kumamoto branch of Bank of Japan revealed that confidence in business throughout the area is declining.

This quake highlights the effects natural forces can have on operations and production, as well as the importance of supply chain managers implementing a sound risk management and disruption response plan. The disaster preparedness of an organization is a large reflection of its enterprise agility.

Source One Round Up: April 15, 2016

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


Robots, Warehouses, and Fulfillment  
With robots supporting automation in warehouses all over - it seems as though the robot take over is imminent. Not so fast! Yes, robots are boosting efficiency. However, the key for the companies implementing the new technology has been the synergy between living, breathing warehouse employees and their nuts and bolts colleagues. This week Source One's 30 Under 30 winner and MRO category expert Michael Croasdale takes a look at the robots shaping the future of warehouse automation. 

ISM2016 is just one month away! Happening in the home place of the Indy 500, Indianapolis, the premier supply management event of the year will host over 2,500 of the industry's brightest for three days of networking and educational sessions. Session tracks include best practices, career development, process improvement, lessons learned, and so much more! 

What does the future of procurement and supply management look like for the major  
companies by the likes of Pepsi, Google, and General Motors? This will be the topic of discussion during ISM2016's Exec IN forum - sponsored by Source One. The Exec IN hosts executives of organizations with over $1.5 Billion in revenue, as an opportunity to gain insights from one another and address supply management challenges specific to organizations with large-scale supply chains. This year, the event features keynote speakers Alan Mulally, former CEO of Ford Motor Company and  Susan Cain, author of the best selling book Quiet. 

Be sure to check out Source One's Countdown to ISM2016 Podcast Series, as we get ready for the big event. Our cost cutting experts are sharing their best practices and industry insights to help you optimize your strategic sourcing and procurement operations.

Is your company confusing social distribution with content effectiveness? As more and more companies are expanding their social, particularly into the realm of social media, it is becoming crucial to understand the metrics. Content Marketing Institute states that, “metrics such as shares, re-tweets, and views are often the easiest and most obvious to gather, but they may be the most deceptive and unreliable when evaluating whether your content is genuinely making a difference.”
                The point of social is to build a relationship with your customers, to market your brand, but more importantly to increase your ROI, meaning conversion to an increase in sales. Marketers these days may be tracking metrics, but you need to be sure they are tracking the right metrics. For example, engagement used to mean something. It meant capturing, holding attention, and interacting with customers, but now with social media, engagement may just mean a “like”, a “re-tweet”, or an open.
                According to The Fournaise Marketing Group, 76% of marketers use the wrong KPIs and metrics to assess the effectiveness of their strategies. And most marketers are still considering market effectiveness to be about awareness (74%) and/or engagement (71%). About 86% believe engagement was a form of conversion. But just think, are customers scrolling through your social content and then “liking” your page or “re-tweeting” your content but then never buying the product?

Here are four of the worst social metrics, since they do not necessarily imply conversion:

1.       Shares: Whether this means re-tweeting on Twitter, posting on your Facebook wall or Instagram page, sharing content does not reflect the impact of the social media platform on conversion rate. In fact, as of September, Twitter removed the share counts from its widgets, buttons, and API because the share count was “never an accurate measure of social engagement with the content.” Your customer shared something you posted on social media, so what! A better metric would be to track if whatever you posted and the customer shared then resulted in a sale as a direct effect of the content posted.

2.       Views on Facebook: On Facebook, if a customer is slowly scrolling through their feed and scroll upon a video, the video posted begins silently streaming and within three seconds, Facebook counts it as a view. But did your customer even see the video? Did they watch it? Most likely not, they were probably scrolling slowly and they might have looked away from the screen or if you are lucky they may have briefly saw it. YouTube, however, only counts a view after approximately 30 seconds, reducing the number of accidental views or bounces. But even this is a flawed metric. How many viewers made it to the end of the video? So, when marketers are sending metrics to you about number of video views, at least now you are educated about what this means and can ask more questions to get better metrics.

3.       “Likes” on all social media platforms: As you may know, Twitter, Facebook, Instagram, Pinterest, and even LinkedIn have ways for you to “like” content shared. But what do these “likes” mean? You may be thinking well even if a like is an inaccurate measure of content effectiveness at least it is still better than no measure at all. To your point, numbers don’t lie, but they do not tell the whole truth. Presenting the number of “likes” to your boss in reality means nothing. For starters, you aren’t comparing apples-to-apples. What if you have more followers on Instagram than the number of friends you have on Facebook? Then coincidentally you are already not able to reach as many people on Facebook. So if you post one piece of content on Instagram that gets more “likes” than a different post on Facebook how are you able to compare? Additionally, how many of these “likes” contributed to your bottom-line? Was it a direct correlation to a sale? Likely, just by presenting these “likes” you did not ask these questions and the metric “like” here means nothing.

4.       Opens for email: You know those automatic emails that get generated daily and sent to your entire address book? Even if you are requesting a read receipt from the email sent, sometimes the email doesn’t even get opened. The reader may be able to view it in their side viewing panel and then click “yes to send read receipt.” And even if the email was opened, within seconds it might be deleted and therefore there was no conversion. Great, you sent 100,000 emails that day and 95% of them were opened, but what was the effect on your company? This is another useless metric that needs to be avoided.

It is important to not hide behind numbers that are flawed, inaccurate, inconsistent, or meaningless. Social can be a great way to share content and while we are not advising you to stop distributing content, we do caution you about the types of metrics you are analyzing. Stop to think if the metrics being measured really show insight into content effectiveness and translate directly to your bottom-line, if not, you have to take the numbers for what they really are, just numbers that don’t say anything about your ROI.