February 2016
The following article comes to the Strategic Sourceror courtesy of Supply Solutions, a leading Supply Management services provider based in Brazil. 

The year 2016 in Brazil began with a very turbulent political and economic environment. Many denunciations have been reported to the Brazilian Federal Court, involving both the President and Ex-President’s party and members of the National Congress. All these events have been causing a very unstable business environment – effectively producing an inflation and a recession at the same time. Companies and customers have been careful; few companies are risking investing, unemployment is increasing rapidly; and people have not been consuming as they had been before. But  export can be the way out of the crisis for the installed industries.

Although the political climate is unpredictable, government sectors must continue to work and seek solutions to their problems. The Brazilian Ministry of Development, Industry and International Commerce had elected 32 markets to be won, recovered, or consolidated. Mercosul countries are the main market for Brazilian goods and services, followed by China, EU, and North America. Winning back market share will be a very challenging task. In 2002, 25% of exports were sold to the US. In 2015, they were 12.6%. In the meantime, other players filled the gap Brazil left behind, so companies will have to be more competitive and confident.

According to Apex (the federal agency created to develop Brazilian goods and services abroad), there are 16 million enterprises in Brazil, out of which 1% exports.  20% of those who export constitute 80% of all traded volume. Apex’s challenge is making Brazilian companies known not only for commodities production, but also for their manufactured and semi-manufactured products. Engineering, biotechnology, and infrastructure sectors will integrate Apex projects in 2016.

In December 2015, CNI – The Brazilian National Confederation of Industry – which is an organization that officially represents Brazilian industry, released a report on the importance of exports due to Brazil’s situation in the short and medium terms.

  • 28% of the enterprises which answered the survey on this subject have exported over the last 12 months. 57% of them intend to increase their volumes.
  • The main sectors willing to expand are Machinery and Equipment, Textile, and Nonmetallic Minerals.  Other sectors which intend to expand, but in a lower level, are Pulp and Paper and Mineral Extraction.
  • 48% of the respondents have not exported over the last 12 months. 13% of them intend to export from now on.
  • The main sectors new to export are Electrical Appliances and Materials and Household, Hygiene, Personal Care and Perfume. In a shorter term forecast there are Leather, Apparel, and Printing sectors.

Even if the current scenario improves and the business environment becomes more favorable in the medium term, some conditions such as currency devaluation and available skilled labor will unfortunately continue for a longer period.  This is why enterprises and the government are looking at export as an alternative to the falling domestic demand, and considering Brazil as a low cost country sourcing candidate also.
Effective risk mitigation requires supply chain resiliency

After a number of high-profile scandals uncovered forced labor and unfair working conditions in global supply chains, companies are now facing accumulating pressure to increase transparency and demonstrate environmentally and socially responsible practices. As the economy strengthens and the competitive landscape of the market intensifies, the trend of globalization and outsourcing to lower-cost regions is also growing. And while these strategies are intended to improve supply chain efficiency and enhance operations, they present a robust set of challenges.

A report recently published by Deutsche Post DHL Group revealed that the majority, or 74 percent, of companies experienced a supply chain disruption last year. In an effort to create more sustainable organizations, it is imperative that corporate leaders implement effective risk mitigation programs. However, predicting and planning for interruptions is becoming increasingly difficult as supplier networks grow. Not only is it harder to see into distant tiers of the production line, but transitioning to digital platforms is also adding to the vulnerability of companies by increasing chances of cyberattacks. This is why, the report indicated, the success of a business does not just depend on the efficiency of its supply chain, but on the resiliency of it as well.

Natural disasters
Some industry professionals believe the response government agencies have to natural disasters can actually weaken resiliency efforts, Business Insurance reported. Speakers who gathered at a Washington-based summit earlier this month, the source said, suggested that harsh weather conditions and other disruptions shouldn't be perceived as a surprise; they should actually be planned for so thoroughly that losses are incorporated into budgets.

Country Risk Solutions CEO of Bethel Daniel Wagner indicated that, when it comes to the evolving nature of supply chain threats, a predominant concern is the clash between disruptions that are naturally occurring and ones that are caused by humans.

"It's new for the simple reason because we had previously been accustomed to thinking about risks being in silos," Wagner said, according to the source. "It's important for every risk manager to become a decision-maker, and every decision-maker to become a risk manager."

In addition to natural disasters, the DHL report outlined a number of other issues threatening supply chains, including problems with quality, port congestion, cargo theft and cyber security. The source noted that it is important to understand the risks and potential impact each could have on operations.

Reducing risks
Although the need for better risk mitigation and resiliency is present across all industries, the processes for successfully implementing and executing these initiatives vary among sectors. The threats differ, so the mitigation solutions should as well. For example, DHL indicated that the automotive, manufacturing and engineering markets are mostly susceptible to problems related to compliance and transportation, so emergency response planning and multiple delivery channels should be major focus areas. Health care and IT companies, on the other hand, are more often plagued by reputation concerns, a limited supplier network and vulnerability to fraud, so their strategies should center on real-time visibility and threat detection solutions.

Another approach that the source suggested companies could use for risk mitigation is leveraging lead logistics partners, since working with LLPs can help create better organization and structure for complex supply chains.

"Wherever companies find they are no longer achieving sufficient performance improvements from their traditional sourcing-based approach to logistics, and where they want to improve visibility, control, agility, and compliance in their supply chains, the LLP approach can offer significant advantages," DHL Supply Chain President of Global Automotive and LLP Paul Dyer said in the report. "We also see a lot of interest as companies move from a regional to a global approach to their logistics operations, and as they tackle the rising complexity that comes with entry into emerging markets."

The source indicated that benefits of this strategy include better control and real-time risk identification, increased visibility and improved customer service.

Businesses today are presented with the conundrum of reducing costs by outsourcing to low-cost countries while also trying to achieve end-to-end visibility and total transparency. While capitalizing on cost-savings opportunities and creating a workflow of lean production, it is important that companies realize the magnitude of each consequence that could occur if disaster were to strike. Ultimately, the strategies supply chain managers implement for sustainability and success are only as effective as they are resilient.


There are plenty of reasons implementations get delayed, fall short of expectations, or outright fail. One key reason among them is timing. If you aren’t already managing your implementation timeline before kicking off your sourcing initiative, you have some big potential headaches waiting for you in the near future.
The future of global sourcing and free trade agreements

This year, a number of global trade agreements, regulation adjustments and economic changes will contribute to a shift in the supply chain industry. According to a Supply Chain Digest benchmark report, since the recession, international trading has slowed, but many expert organizations expect it will soon speed up again. For example, the World Trade Organization predicts a growth of approximately 3.9 percent this year.

The report revealed that these expectations for a surge in trade activity can be largely attributed to certain market trends. As the economy strengthens and people's incomes increase, more companies are driving revenue through globalization. And they are starting to focus on which lower cost countries they can source from; not as many are relying on China as a top sourcing region because the economy has fluctuated and managers want to minimize supply chain risk.

Cross-border trade acts and agreements
Furthermore, the source found that some of the top factors businesses cite as priorities in making global sourcing decisions include product quality, price, capabilities and consistency. More than 40 percent of companies have at least 100 off-shore suppliers and nearly half said they predict they will increase the use of global suppliers by 10 percent or more in the near future.

Another trend influencing the growth rate is the rising prominence of free trade agreements. SCDigest revealed that there are at least 500 trade deals now floating around. The Transatlantic Trade and Investment Partnership is currently in the negotiation stage between the U.S. and European Union and the African Growth and Opportunity Act, which is a preferential, not free, trade agreement, has been passed.

However, the one that is playing the most pivotal role in the global sourcing and trade market is the Trans-Pacific Partnership. It has not yet been formally approved, but it already has 12 member nations, including the United States, Mexico, Japan, Chile and Canada. If it is ratified, it will be the largest global trade deal ever and could drastically alter many aspects of economic transactions.

The TPP would remove 18,000 tariffs and facilitate a greater flow of goods and trade. The competitive atmosphere would significantly change. And while the partnership provides companies with a wide range of advantageous opportunities, such as lower production costs, uniform worldwide policies and greater global expansion, there are also many challenges that make effective strategizing imperative.

What the TPP means for supply chains
Key areas that may be affected were recently highlighted in an article by Melissa Harrington for Supply & Demand Chain Executive. Lower trade barriers and the removal of certain restrictions will mean, to meet qualification standards, businesses will be required to demonstrate compliance on a global scale. Sourcing and production strategies will have to be reassessed, as well as shipping networks.

As the SCDigest report also pointed out, the opening of borders leads to more import and export regulations and "taxes on business are also going up, meaning a highly tax efficient supply chain is a source of competitive advantage. That means being able to have quality information about all duties, tariffs, taxes and other potential non-product costs, as well as leveraging where possible the growing number of Foreign Trade Zones."

The proliferation of these trends indicates the global trade market will continue to grow over the next few years. And while the ratification of the TPP will seriously alter the reality of many supply chains and provide firms with an extensive array of opportunities, there will be a lot of strategic decision-making needed. Everything from how and who to partner with to streamlining production will require a second glance from executives.

And, when it comes to global sourcing processes, the benchmark study found that there is definite room for improvement. Only 21.1 percent of those surveyed said their existing approach to off-shore operations and inbound logistics was very strong and 36.7 percent rated it as average. These findings underline the importance of improving supply chain visibility, a topic that has gained paramount attention lately.

To create a more integrative, automated and ultimately successful global supply chain, companies must leverage innovative systems and technologies that enable better compliance and collaboration. Doing so will make them more attractive to both domestic and international partnerships and will boost their presence in an increasingly competitive market.

Source One Round Up: February 26, 2016

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





NEW BLOGS:

Creating Strong Relationships Between Procurement Organizations and Their Business Stakeholders
As a Project Manager, Source One's Boris Kopylov can attest to the challenges that arise when conducting a sourcing engagement in a spend category where procurement and the respective business units are not aligned. Kopylov explains, while in the past procurement may not have always been equipped to fully support purchasing decisions of complex categories beyond motivating savings, that the historical function of procurement is changing. As procurement evolves, there is a growing need for the department to have strong relationships with other areas of the business. 


Telecom Contracting 101
Telecom contracts are a labyrinth of terms and conditions and believe it or not, in many cases they're not always written in your company's best interest - making it all the more necessary to fully understand the different components of your contract. This week, Telecom subject matter expert, Leigh Merz shares her advice for navigating the maze that is your telecom contract to achieve best-in-class terms. 


The 8 Laws of Successful Supplier Transitions: Part I
Whether it's due to pricing or service quality, there can be countless reasons to switch vendors or suppliers. However, the actual transition process is often a major challenge for most organizations. In the first part of this blog series, Source One's Brian Seipel explains the risks associated with transitioning to a new vendor. 










Retail Marketing + Digital Marketing= 


Angry face emoji or winky face? Let’s face it, we all have our go-to emojis. More than 2 billion smartphone users globally send 6 billion emojis daily. “Emojis are the language of today but no one has put them into the world like Pepsi will in 2016. With more than 70 global and locally uniquely designed emojis printed on cans, bottles and cups all over the world, you’re going to be able to ‘say it with a Pepsi’ all through the summer of 2016,” PespsiCo CEO Indra Nooyi said in a presentation at the Consumer Analyst Group of New York meeting in Boca Raton, Florida.
                Pepsi is taking emojis out of the digital world and with it, bridging the gap between retail and digital marketing. This program is coming after Coca-Cola found success with its “Share-A-Coke” packaging promotion. Customers of Coca-Cola were able to personalize their Coke or purchase a Coke to share with their bestie, their Mom, or their superstar. This was a campaign that took off because customers felt included in branding. Even at sporting events or concerts, Coca-Cola had booths set up for customers to design their own Coca-Cola bottle. This allowed Coca-Cola to connect retail with digital.
                PepsiCo’s design and innovation center designed all the emojis for Pepsi’s campaign, and even created a copy that shows how emojiis and Pepsi come in handy. AdAge sites this example: “When you find yourself stuck at a train station in a foreign country or at a concert where it’s too loud to speak, you can use your emojis to communicate.” This program will begin this summer and run in about 100 markets. Pepsi even intends to extend the emojis beyond packaging, teaming up with fashion designer Jeremy Scott, and creating a collection of PepsiMoji-inspired sunglasses.
                Just think about it, daily, in our texts messages how often are words not enough? How often do we want to convey an emotion and instead of writing how we feel, we throw in an emoji? PepsiCo is capitalizing on this concept and creating the “Say it with a Pepsi” campaign. The world of digital is making an impact on retail. Pepsi chose Canada as a test market last year because it “is one of the few nations that has more than one official language, so this is a place we can really test the global appeal of emojis as an universal language of emotions that transcends linguistic barriers,” Brad Jakeman, president of PepsiCo’s global beverage group stated.
                PepsiCo is one of the biggest consumer brands to bring digital to life. As we continue to see the digital world expanding, I foresee more and more companies bringing trendy digital concepts into the world of retail. What could be next? Putting hashtags, retweets, thumbs up or thumbs down into your retail campaigns? Companies are constantly vying for customers and if they can create a way to reach these customers through a marketing campaign, they may be able to beat the competition.

So saying it with a Pepsi, might mean...    

How analytics and automation can create better supply chains

In today's fast-paced, digitized world, efficiency is a necessity for companies. The Internet of Things has provided global supply chains with a robust lineup of innovative technologies and solutions for optimizing workflow, reducing costs and improving customer service. Whether it is for manufacturing and assembly lines, warehouse and inventory management or transportation and logistics, each function of business operations can be significantly improved with the use of artificial intelligence. Computerized systems have the power to reduce human error, identify and mitigate potential risks and disruptions, increase performance and, ultimately, improve an organization's bottom line.

It is becoming increasingly important in today's competitive market for companies to implement strategies that facilitate cost reductions and streamline production to stay ahead of competitors. For this reason, supply chain managers are tasked with integrating solutions that give businesses back the time and money previously spent on unnecessary functions.

Adopting automation systems
As more business operations move to digital platforms, many areas are becoming data oriented. Manual entry of this essential information can be both time consuming and tedious. Some of the major downsides of humans being responsible for such processes were highlighted in a white paper published by Lexmark. Not only does it take longer and reduce productivity which, in turn, leads to higher costs, but it also leaves too much room for error.

However, as the source pointed out, by utilizing Robotic Process Automation, or RPA, supply chain executives can effectively resolve a lot of these concerns. Although this type of technology has long been used in assembly lines, it is becoming significantly more sophisticated. With advanced software, these robots possess dynamic capabilities that can improve workflow and lead to cost-savings by handling functions such as order scheduling and shipment tracking. This leads to reduced worker and labor-related expenses and improves customer service.

The white paper gave an example of when RPA was particularly beneficial to logistics transportation. A truckload carrier began using the technology to handle order scheduling, as well as retrieving, updating and filing customer documents. Workers were able to focus on other essential areas of business and the company reduced costs by 90 percent.

Leveraging analytics for supply chain optimization
At this point, it's hard for managers to ignore the prominence of data and analytics. This technology has been a huge aspect in the digital revolution because it provides business leaders with quantitative metrics that can help them learn more about their customers. However, it can and should also be used for internal process improvements as well.

And while the majority of companies acknowledge big data analytics can add considerable value to supply chain functions, according to an Accenture Global Operations report, only 17 percent have actually started using them. There are a wide range of benefits that the use of this information offers, including:

  • Increased visibility across multiple platforms
  • Real-time inventory management and order distribution
  • Better risk mitigation planning
  • Reduced order-to-deliver cycle times
  • Quicker response to disruptions and non-compliance issues
  • Improved traceability

The source also noted that two of the top concerns supply chain professionals have about big data analytics are security and financial investment. However, it is important that businesses identify where exactly the installation of innovative technologies will be most effective and profitable.

Although a certain degree of flexibility and patience is needed following the adoption of automated systems and new solutions, there should also be a return on investment that benefits the company in the long run. Many industry experts have warned against supply chain managers jumping too quickly at the opportunity to implement a modern strategy into the business model before first understanding that possible effects it may have on profits.

As Lexmark explained in its white paper, developing and enforcing a new, automated process involves IT divisions, which makes it all too easy for some companies to consider the adoption digital processes a low priority and focus on other day-to-day tasks. Unfortunately, it isn't uncommon for the projects to be forgotten about altogether. To avoid this, it would be wise for managers to consult with supply chain solutions specialists that have the knowledge and experience needed to ensure the best, most cost-effective strategies are used.

State officials to start taxing Internet retail sales

The e-commerce market has presented many retail supply chains with a number of challenges and obstacles lately. With online sales higher than ever, managers are being forced to restructure and reassess their approaches to efficiency and optimization. Now, in addition to dealing with difficulties such as maintaining high profit margins while increasing spend for online market share, merchants may soon be forced to pay taxes in states they have no physical presence in.

This week, The Wall Street Journal reported that more than a dozen states will start imposing Internet sales tax on retail companies. As it stands, Congress has not enforced a national policy that requires taxation of online purchases. The absence of such legislative law, these states indicated, can impact the revenue of local companies because people are able to buy goods and products online for better prices and there are no direct taxes.

U.S. states hoping to get sued
The report explained that the coalition has agreed to start taxing out-of-state retail companies even if, or, rather, especially if, it would lead to government interference. Alabama, for example, plans to audit merchants for tax return compliance for this quarter. If a corporation takes legal action, it could actually work in the favor of state officials because they would then be able to request that the Supreme Court appeal a law made in 1992 that prohibited taxation of online retail sales if there is no physical location present in that state.

"We're confident that some remote sellers will not comply and therefore it will lead to litigation," Joe Garrett, the deputy revenue commissioner of Alabama, told The Wall Street Journal. "We have been very open about what we're doing."

According to the news source, customers are supposed to pay taxes for purchases made out of state, though it rarely happens. Research conducted by the University of Tennessee found that these types of sales resulted in an approximately $23.2 billion state revenue in 2012. Additional states that agree with the idea of taxing Internet sales include South Dakota, Utah, Louisiana, Mississippi and Nebraska. 

Congress slow to act
Fortune magazine pointed out that there have been a number of states that, even without an official ruling from Congress, have found a way to collect sales taxes from Internet retail companies. New York taxes from some e-commerce giants such as Amazon.com. The source also added that, although many states expect, or even want, to be sued for enforcing sales tax on them, not all online retailers have not dismissed the idea. In fact, in an interview with Fortunate three years ago, John

Over the years, there have been a number of bills introduced to Congress that have tried to address the issue. The Marketplace Fairness Act was proposed in 2013, which would let states collect the taxes they are trying to now, Fortune revealed, as well as the Remote Transaction Parity Act in 2015.

But, since no laws have been signed yet, some state officials feel that it is time to take matters into their own hands.

Understanding and improving retail-supplier relationships

The consumer goods market is rapidly evolving and becoming increasingly competitive. This trend is highlighting the importance of healthy retail-manufacturer partnerships.

In a recent benchmark study, Supply Chain Digest conducted a survey to gain insight on the current state of retail-vendor relationships and how these alliances are hurting, or helping, supply chain efficiency.

Furthermore, the organization wanted to obtain a better understanding of the similarities and differences between perspectives. The findings of this research suggest the conditions can be broken down into three main categories.

Compliance trends and chargeback complaints
With global companies facing heightening pressure to demonstrate social responsibility, it has become particularly important for corporate leaders to ensure all tiers of the supply chain are adhering to ethical practices and regulation guidelines.

In the study, it was generally agreed that technological innovations have allowed retailers to identify more problems and occurrences of non-conformity. Digital systems are facilitating better supply chain optimization by offering merchant companies increased visibility into supplier networks. However, some vendors feel that the growth of ecommerce has created more regulations to adhere to, thus increasing the amount of possible violations. One vendor indicated to the source that this trend "seems to be a profit center for retailers" and another said non-compliance fines are increasing.

"But the best retailers are instead pegging chargebacks based on what the error actually cost them to mitigate and seek to use compliance to drive out errors and improve supply chain performance," the study stated.

From the vendor perspective, the chargeback levels are often seen as unfair and many complained of not being provided with enough detailed information as to why a certain fee was issued or how the cost of the fine was determined. Although 44 percent of merchants expect these penalties to become less severe over the next five years, more than half of manufacturers predict an increase.

Quality of collaboration
The benchmark report revealed that more than half of merchant companies feel the collaborative capabilities of their supply chains are average and 39 percent believe they are slightly above average. However, there were no retailers that described themselves as excelling in this area; more than half ranked themselves as being average.

The source suggested that one of the major issues forbidding better coaction is both retailers and manufacturers failing to assume responsibility for the divergence. The top barrier for vendors is "lack of trading partner skills" whereas retailers are "concerned [with] challenges in how to share the gains from any collaboration."

Although retailers and vendors are generally satisfied with the supply chain relationships, there is obvious room for improvement. The opposing perspectives and beliefs held by each party signal a cause for concern. While vendors are pessimistic about compliance and chargebacks and optimistic about current collaboration levels, the opposite is true for merchants.

"As SCDigest has seen in other studies, vendors seem to value collaboration more and believe they are better at it than retailers," the report explained. "We believe vendors in general have a more substantive view, perhaps because they actually benefit more in their supply chains from such collaboration than retailers usually do."

Centralized solutions
An emerging trend that global organizations are turning to for better integration, connectivity and agility with supplier relationships is cloud technology. In a white paper, GT Nexus, Inc. pointed out that moving beyond traditional Enterprise Resource Planning, or ERP, software and incorporating cloud-based systems into operations can provide retail supply chains with a range of benefits.

According to the organization, in an effort to reduce supply chain disruptions and minimize risks, many are sourcing from a number of different vendors. With an expanding network of suppliers, monitoring and managing the relationships is becoming more difficult. Leveraging collaborative, cloud-based platforms will provide retailers with enhanced insight and control of supplier performance. In addition, it enables better communication and collaboration with trading partners and provides manufacturers with more visibility into crucial activity.

By increasing the level of transparency between retailers and vendors, the efficiency and overall performance of supply chains can be significantly improved. Furthermore, GT Nexus indicated this approach could lead to extensive cost-savings opportunities and provide retail companies with the innovative solutions needed to maintain a competitive presence in the market.

Retail supply chains can't figure out cost-effective strategy for omnichannel

The importance of reaching potential customers online has become quite clear to business owners, which is why the ecommerce market is quickly becoming one of the largest and increasingly competitive sectors. However, knowing that selling on a digital platform is essential and actually understanding how to do it without losing revenue are worlds apart.

Many retail supply chains are struggling to maintain effective cost reduction strategies in a continuously evolving market. As online sales surge, companies are forced to adjust operations to support multichannel distribution.

Cost challenges
Nordstrom Inc., a leading global retailer, is facing difficulties in generating profits that counterweigh the rising costs of online market share, The Wall Street Journal reported. The company released its fourth quarter and fiscal year earnings last week, which revealed a profit decrease of 17 percent and expense increase of 10 percent.

The source pointed out that these numbers exemplify the challenge many brands are experiencing when trying to identify the best way to approach online selling.

"In evolving with our customers, we've made significant investments to enable customers to shop in multiple ways," Nordstrom Chief Financial Officer Mike Koppel told the news source. "This business model has a high variable cost structure, driven by fulfillment and marketing costs, in addition to ongoing technology investments."

The Wall Street Journal added that it is difficult for many retailers to effectively manage inventory for both in-store and online purchases, which is why the business told the source that a significant amount of spend has been used for inventory management solutions.

Issues with inventory
Research conducted by Forrester Consulting found that, in addition to making deliveries on-time and navigating the growing complexities of order fulfillment and management operations, companies are struggling to meet the rapidly increasing expectations of consumers. Of those surveyed, only 34 percent said that distribution processes were very effective. The report explained that fulfilling orders and managing multiple facilities significantly complicates the installation and execution of picking, receiving, packing and shipping operations.

To maximize potential for online retail success, the source indicated, organizations need to collect and leverage complex data and invest in warehouse management systems and supply chain solutions that can streamline these processes.

As digital technologies continue to dominate the retail space, it's possible that an increasing number of businesses will experience a drop in profits while trying to increase their share in the ecommerce market.

Investigation reveals Australian brand manufactured clothes in 'slave-like' factory

The topic of unfair working conditions in global supply chains has regularly made headlines over the past several months, with some major retailers facing accusations of sourcing materials from regions using forced labor. Government agencies and human rights organizations have encouraged companies to increase transparency, as well as publicly release details of the efforts taken to mitigate modern slavery. Complying with these requests has been difficult for many, due in large part to a lack of end-to-end visibility.

And it is not just policymakers, activists and legislative bodies that are taking the social responsibility of organizations seriously. The necessity for businesses to improve transparency and compliance is further fueled by the growing interest and involvement of the public.

This week, the Sydney Morning Herald reported that Australian surfwear business Rip Curl manufactured clothes for its 2015 winter line in a 'slave-like' facility in North Korea near Pyongyang. Fairfax Media, the parent company of the news source, received photos and videos, taken by people touring the facility, of the brand's clothing being made in the factory.

Irresponsible sourcing
The Sydney Morning Herald explained that one of the tourists, Nik Halik, documented the "made in China" logo being used on tags of apparel last July while the tour guide wasn't paying attention. Fairfax Media conducted an investigation on the conditions of the Taedonggang Clothing Factory and sent the images and videos to Rip Curl.

Following the report, the retail company placed blame on its supplier, claiming that a subcontractor failed to notify Rip Curl that manufacturing operations had been relocated. The business's Chief Financial Officer Tony Roberts released a statement that admitted the issue was realized before this investigation, though the Sydney Morning Herald indicated it is unclear whether or not the brand took any measures to actually notify consumers that some of its garments and ski gear were produced in harsh working conditions.

"We were aware of this issue, which related to our Winter 2015 Mountain-wear range, but only became aware of it after the production was complete and had been shipped to our retail customers," Roberts stated. "This was a case of a supplier diverting part of their production order to an unauthorized subcontractor, with the production done from an unauthorized factory, in an unauthorized country, without our knowledge or consent, in clear breach of our supplier terms and policies."

Rip Curl also posted an apology to customers on its Facebook page claiming it "take[s] full responsibility for this screw up." It also added that it has already taken action to correct the issue, including penalizing the supplier and expanding audits.

Combating the issue of human rights abuse
According to the Sydney Morning Herald, Oxfam Australia, an international workers' rights organization, encouraged Rip Curl to release the names and location details of its suppliers to increase transparency and facilitate progress. Dr. Helen Szoke, the group's chief executive officer, told the source that this step is necessary to prove to the public that it takes the matter seriously.

In addition, Michele O'Neil, national secretary of the Textile, Clothing and Footwear Union, admitted it is unlikely that this was a single, rare occurrence but, rather, an indicator that many retail supply chains are not adequately monitoring operations.

Outsourcing to cheaper regions is a common cost-reduction strategy used by many companies. However, according to a recent report published by Verisk Maplecroft, forced labor and traceability are two of the biggest risks that supply chains today face.

This scandal demonstrates the importance of each company thoroughly inspecting its sourcing practices and ensuring its supplier network complies with regulations. Although the disruption may be attributed to a subcontractor, ultimately, it is up to businesses to take full accountability for any unfair or unethical occurrences linked to their brands.

Wearable technologies facilitate operational excellence for manufacturers

The manufacturing industry is undergoing a major transformation, fueled by the dominating presence of the Internet of Things. Big data and analytics, Web-based systems and cloud computing have all played a significant role in supply chain optimization. These digital innovations provide companies with the platforms and tools needed to increase insight and visibility, enhance operational efficiency and improve customer satisfaction levels.

In an article for Manufacturing Business Technology, Sean Riley recently reported that wearable technologies are becoming especially useful in warehouse settings, specifically with order fulfillment functions. These devices, which mainly consist of smart glasses, watches and voice-controlled headsets, can lead to significant cost-savings in a number of ways.

Enhancing efficiency to meet evolving expectations
As Riley pointed out, traditionally, warehouse workers would have to pick and stage an item before having it inspected and reviewed for quality assurance. Manual operations leave a lot of room for human error; if the wrong product is given to a consumer, the retail company is blamed and, ultimately, the manufacturer loses money. However, the barcode scanning capabilities of wearable technology offer complete accuracy and expedited production. In turn, businesses are able to do more in less time, all while maintaining high levels of customer satisfaction.

According to an industry report published by top challenges that supply chains today face is meeting the growing expectations and needs of customers while reducing delivery costs. One of the strategies frequently employed to help drive operational excellence and stay relevant among competitors is adopting digital solutions.

"The pace of advancement in supply chain innovation is forcing organizations to change the way they evaluate, select, pilot, and deploy new technologies," said Deloitte Supply Chain Strategy Leader Kelly

Pros and cons of wearables
The report indicated that wearable technologies are expected to benefit warehousing and manufacturing sectors the most over the next couple of years. These devices provide workers with access to real-time information, accurate identification tools and interactive software applications that enhance inventory and order fulfillment operations. In addition to creating more efficient processes, the "hands-free" wearables can also be used to increase worker safety.

And, although the dynamic and intuitive features of this technology can provide supply chains with a wide range of benefits, there are still some downsides. For example, wearable devices are costly. According to Riley, a pair of Google Glasses runs at the retail price of $1,500. On top of the expense of equipment, supply chain managers also have to carve out time for installing the innovation and training workers on how to use it, both of which can delay production. The source also pointed out that additional security measures will have to be taken to reduce the risk of warehouse theft or "shrinkage."

Another major concern with wearable technology is security risk. Companies already face a wide range of complexities when it comes to safeguarding the supply chain. These devices could require further action be taken to prevent malware attacks, data breaches and personal privacy invasions.

Strategic approach to modern solutions
The MHI and Deloitte survey report revealed that, over the next couple of years, businesses anticipate spending at least $7 million on supply chain technologies, with the market for wearable devices expected to grow 38 percent a year from 2013 to 2018, a projected value of $12.6 billion. The source pointed out that, in an effort to implement cost reduction strategies, companies can sometimes make changes that are counterproductive and, ultimately, fall short of expectations.

Therefore, it is highly recommended that organizations are especially mindful of which investments in technological innovations are made, taking into account how each could impact overall supply chain quality and performance. The source suggested that business leaders thoroughly identify and assess the application of each solution and that manufacturers should focus on high-value assets and large distribution centers.

Though it will likely be a few years before wearable devices become adopted by the majority of manufacturers and warehousing companies, it would be wise for supply chain managers to, at the very least, consider how the use of such advanced innovations could influence performance.

Supply chain security threatened by growth in cargo theft crimes

There are many reasons why companies should focus on enhancing levels of supply chain security. As businesses begin shifting toward the Internet of Things and abandon the traditional model of operating in silos, they face increasing complexities for data protection and risk mitigation. But it is not just cyberattacks that organizations need to safeguard their supply chains against.

The Transported Asset Protection Association's Incident Information Service report revealed that the occurrence rate of cargo crimes last year was the highest it had been in five years, Will Waters of Lloyds Loading List revealed. According to TAPA, there were 1,515 freight theft cases reported in 2015, marking a 37.4 percent annual growth rate. These crimes have been especially prevalent in Europe, the Middle East and Africa, or EMEA, which could be due to the region's governments and police authorities collecting data and sharing with TAPA in hopes of helping the organization increase supply chain security.

"We know that the number of cargo crimes reported by TAPA and others still only reflects what may be a relatively low percentage of overall cargo crimes," said TAPA EMEA Chairman Thorsten Neumann, according to the source. "Often this is because freight thefts are recorded by law enforcement agencies only as commercial property or vehicle crimes, so it is difficult to extract the data that specifically relates to supply chain losses."

Increasing rates of stolen cargo
Waters also reported that most of the cargo crimes reported to IIS involved vehicles, often in areas where a driver would pull off the main highway to take a break. In some of these cases, the truckers were hurt or attacked.

Although rates of cargo theft are especially high in the EMEA region, the issue of securing shipments also affects the United States. According to Overdrive Online, Freight Watch International's annual report revealed that although the number of cargo crimes recorded last year was fewer than the previous year, threats to supply chains are growing. Of the 754 theft cases recorded in 2015, averaging $184,101, most happened on either Saturday or Sunday and nearly half occurred in California, Texas or Florida.

Furthermore, similar to the TAPA findings, the FWI report showed a whopping 86 percent of cases occurred in parking or dropping areas that were unsecured. The news source indicated that U.S. companies are still at supply chain risk because the thieves are becoming more structured and strategic in the organization and execution of crimes.

"Using intelligence to combat cargo crime is not just about protecting goods owned by major global corporations, it is also about protecting the wellbeing of people working in the supply chain that we rely on to deliver our goods," Neumann explained, according to Waters.

Insuring safe shipments
To improve supply chain security, TAPA recommends businesses adhere to Facility and Trucking Security Requirements set forth by the association. In addition, the organization is encouraging companies in all regions to work with law enforcement agencies to get a better picture of where, how and why cargo crimes are occurring because, with this knowledge, corporations will be better equipped to prevent them.

Another important aspect of supply chain security pointed out by Bob Andelman is an article for Global Trade Daily is insurance. If company leaders are willing to invest in property or health insurance, the source indicated, they should do the same for cargo since not having it can put them at risk for financial loss due to both stolen and damage shipments.

Andelman said that it is not when cargo is in transit that it is most at risk but, rather, when it is at a stopping point. As he worded it, "Cargo at rest is cargo at risk."

Travelers Inland Marine Crime and Theft Second Vice President Scott Cornell told Andelman that the reason shipping crime rates have been so high in certain states is because of the lack of security and accessibility controls at the ports, as well as the inability for companies to regulate operations at truck staging phases. Although it is technically a requirement for transportation drivers to provide their worker identification cards to access the port, there are ways around this.

For example, Cornell explained, "[the drivers with ID cards] will, on a daily basis, go in and out of the port to get the loads and bring them out. They'll stage those loads in areas just outside the port, so that the drivers who aren't working with port access can pick up loads and move that cargo to the final destination. That creates opportunity, a smorgasbord of cargo for the bad guys."

According to the source, in order to reduce the negative impact of lost, stolen or damaged shipments, it is important for supply chain managers to have a comprehensive understanding of insurance policies and contracts and ensure they can identify liability limitations and carrier coverage plans.

Over the last three weeks Source One's executives have reflected on the the hottest procurement and supply management trends shaping the industry and shared their insights on what to expect in the next year. Bringing the three part series to a close, we'll explore the tools and practices shaping the future of procurement, as well as what may be to come for the market landscape.  

Don't miss all of our predictions! Check out:


Data, Data, Data
Marketing and sales have been reaping the benefits of advanced analytics- using the data gathered to gauge consumer behavior and improve targeting. Procurement, on the other hand, has been slow to take the next step in the data movement, but the benefits of applying Advanced Analytics are seemingly unlimited. Imagine the ability to predict supply chain trends to make smarter purchasing decisions, better anticipate and react to risk, and build strategic relationships with suppliers. Predictive Analytics makes all of these things possible. Procurement professionals got a taste of it in 2015, but 2016 holds promise as Procurement advances with predictive analytics to make smarter and faster business decisions.

Knowing What it Takes to Transform Procurement
For many organizations, the past year has been one of self-assessment – taking a reflective look at practices that did and didn’t work. While these current state assessment exercises have been relatively easy to conduct, many companies are still challenged by understanding or gaining access to an accurate point of comparison to see how their operations stack up to the market. As a result, Source One’s executives have observed an increased demand for industry benchmarking and procurement transformation initiatives. While this trend is anticipated to continue, our experts also predict an increased need for not only clarity in terms of how their operations stack up to their competitors, but also support in taking procurement to the next level.

Supplier Relationship Management
With a growing trend of organizations seeking to drive further value from their supply base, it should come as no surprise in the upcoming months there will be brighter spotlight focused on the relationships we form with our suppliers. Pricing and savings, as we’ve discussed, are not the only measures of success. Procurement professionals are tasked with a number of other responsibilities, including fostering innovation and sustainability, all of which stems from the supply base. Over the next year and well into the future, organizations are anticipated to strengthen their relationships with suppliers and vendors, establishing well-structured programs encompassing everything from communication protocol to KPIs and reporting – allowing companies to truly see and measure the value their suppliers add to their business.

Consolidation of Procurement Outsourcing Market
As for the procurement market, our experts predict a shift in the landscape leading to increased collaboration between procurement services providers. Whether a procurement software or a boutique services firm, none is immune to the challenge of finding talent and these organizations are working together to fill in the gaps by working together to fill client needs. As a result, the upcoming year will mean additional acquisitions in the procurement outsourcing market, as well as an increase of services firms working together to leverage one another’s unique service offerings.

Without a doubt, 2015 has proved to be a significant year for supply chain and procurement, and our experts expect no less out of 2016. With a fresh start, the New Year presents new exciting opportunities and potential to shape the future of procurement. We’re ready. Are you?

Don;t forget, you can catch Source One, the exclusive sponsor of the Exec IN forum, this May at ISM2016. 



Source One Round Up: February 19, 2016

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





NEW PODCAST:

The  Future of Spend Management: Predictive Analytics
This week, Source One Project Manager Faris Jebara sat down with Kelly Barner of Buyers Meeting Point to discuss Predictive Analytics. 
Together, the two discuss the emerging use of predictive analytics in procurement and supply management, the potential it represents for these functions, how companies can find a balance between talent with technology, and what companies are doing to track ROI. For more information on the utilization of advanced analytics in strategic sourcing and procurement, check out our latest white paper - The Future of Spend Management: Predictive Analytics










Lack of traceability a major concern for supply chains

Managing a global supply chain is a difficult endeavor. There are many different functions, processes and supplier relationships to oversee. Companies must ensure business operations are efficient and productive and make sure the organization is complying with all safety and quality regulations. Adding to that pressure is the increased scrutiny many multinational corporations have faced, both from regulators and consumers, pertaining to unethical work conditions.

The Human Rights Outlook 2016 report just published by Verisk Maplecroft revealed the top risks for supply chains this year. Leading the list are mitigating issues related to forced labor and improving traceability and transparency levels.

Compliance issues
It has always been important for companies to demonstrate social responsibility and best practices. However, the subject has become especially prominent after an abundance of high profile cases of unfair labor and inhumane working conditions were uncovered. As investigators and the public crack down on such occurrences along supply chains, businesses are presented with an accumulating amount of compliance issues. Failing to reveal what measures have been taken to resolve modern slavery in its operations will put a company at both financial and reputational risk.

"The risks for business are amplified by increasing public scrutiny of unmapped tiers of the supply chain and benchmarking of company human rights performance," Verisk Maplecroft Principal Human Rights Analyst Dr. Alexandra Channer stated. "Damage to hard-earned brand equity, consumer backlash and divestment by ethically focused investors pose real threats to companies who are found to be knowingly or unknowingly complicit in abuses."

Improving transparency
The problem is not so much that businesses are unwilling to comply with mandatory reporting and audits but, rather, that many are unable to due to a lack of supply chain visibility. According to the 2015 Supply Chain Resilience Report, published by Zurich Insurance and the Business Continuity Institute, the majority of companies, or 72 percent, don't have complete visibility. This is a troubling statistic, considering 50 percent of the participants said direct, or Tier 1, suppliers were the main cause of disruptions.

Furthermore, the Human Rights Outlook report revealed that, because many companies are currently unable to monitor supply chain tiers beyond immediate suppliers, most will struggle to meet the increasing expectations that come with mandatory reporting regulations.

One area that the source indicated will be extremely important for businesses to enhance transparency in is the manufacturing of metals and minerals, such as tantalum, tungsten and tin, frequently used in components of electronics and automobiles. There have been a number of cases over the past few years in which well-known technology brands, such as Sony, were accused of using parts sourced from child labor mines in the Democratic Republic of Congo. Apple, Inc. has also been dealt its fair share of scrutiny for inhumane working conditions.

Supply chain solutions
To reduce risks, avoid reputation damage and minimize susceptibility to non-compliance penalties, it is imperative that companies be proactive in uncovering, reporting and correcting any and all occurrences of unethical behavior along supply chains. In order to do this, however, they must first adopt efficient strategies for increasing visibility and managing supplier relationships.

The Human Rights Outlook report indicated that a collaborative effort between a number of parties, from government bodies and human rights organizations to stakeholders and suppliers, will be needed to resolve these issues. It also suggested that, to better identify and correct unfair practices, companies should train workers and monitor suppliers. In addition, global supply chains are encouraged to leverage innovative tools and solutions, such as audit technologies, that will help enhance transparency and traceability.

Retail robots could enhance customer service operations

The use of robotic technologies in manufacturing and warehousing operations is not a new concept. As these automated systems evolve and create more productive workflows, there is a growing concern that artificial intelligence may slowly be taking job functions away from people. And this fear might soon be intensified, since an increasing number of robots are emerging from behind the scenes to handle customer-facing relations.

Innovating retail supply chains
Fast Company recently reported that a business arm of Lowe's Hardware Store, Orchard Supply Hardware, has started to use "OSHbot," an autonomous robot, to handle everything from customer service to inventory management.

According to the source, the multilingual robot uses both navigational and face-recognition technology that allows it to interact with shoppers, not only telling them where a certain item is, but accompanying them to the appropriate location in the store. In addition, it is able to provide real-time inventory tracking and alerts employees when a product needs to be re-stocked. The device was created by Lowe's Innovative Labs Executive Director Kyle Nel, who explained that the concept of OSHbot stemmed from science fiction writers he worked with in the past.

"The real-time inventory thing in retail is like the holy grail," Nel told the source. "Right now, inventory tracking at all retailers is a very tedious and very time-consuming and inaccurate process, so we're trying to attack that."

OSHbot is not the first robot to be used to improve retail supply chain operations. In a white paper, Tata Consultancy Services pointed out that Hointer, a Seattle clothing company, uses robots to bring apparel to the changing rooms at the store. And, according to the source, this is just the beginning.

TCS said that these autonomous robots are expected to provide retail businesses with distinct value in both internal and external operations, because they possess a wide range of advantages. For example, since a quarter of products that are believed to be out-of-stock are actually just misplaced within the facility, having these robots being able to accurately and quickly locate and manage items could significantly enhance inventory management. In addition, this technology could enable faster fulfillment of in-store pick-ups of online orders, an area many retailers struggled with this past holiday season.

Advancements in apparel manufacturing
Another obstacle retailers face is returned merchandise. Sourcing Journal recently revealed that, according to research performed by the National Retail Federation and the Retail Equation, returned items cost companies about $260.5 million in the U.S. alone in 2015. The source indicated that a handful of these returns could be attributed to the items not fitting correctly, since the standard system for sizing has not been modified in at least 70 years.

But this is yet another problem a robot may be able to resolve. Sourcing Journal reported that the Hong Kong Polytechnic's Institute of Textiles and Clothing spent four years designing the I.Dummy, a device intended to replace traditional retail mannequins that will have adjustable features that allow customers to personalize each element of the body to their measurements.

The source explained that this robot could enhance the efficiency of apparel manufacturers' supply chains by facilitating increased levels of productivity.

Although robots possess the capabilities to enhance retail supply chains, there are still limitations on what they are able to do, such as making personal connections with customers or leveraging creative solutions. And while it's possible these devices may one day dominate stores, it's safe to assume that, for the time being, they are most effective when used to supplement human employees, not replace them.

Back in December 2015 the Federal Trade Commission rejected Staples’ $6.3 billion attempt to acquire competitor Office Depot, filing a lawsuit to block the deal.  Recent developments in the acquisition both in the US and abroad may give Staples the edge they need for approval pending their trial which is scheduled to begin on May 10th.

The initial reasoning behind the FTC opposition was the risk of competition in the business to business office supply market becoming nonexistent.  Staples and Office Depot are the two largest players in the industry respectively, and the merger could eliminate the price stability that is driven by competition.  The third largest provider of commercial office supplies in the U.S., WB Mason, is regional to the Northeast and Midwest and as such does not make a significant impact as a direct competitor.  The FTC’s focus on preserving competition for enterprise accounts stems from the evaluation that the merger does not pose a risk to the average consumer who can just as easily purchase a package of pens or paper from Walmart or Amazon.

In order to combat the threat of a monopoly, the FTC discussed a proposal in which Essendant (formerly United Stationers) would overtake a portion of the wholesale accounts from Office Depot and Staples, focusing on accounts for which the companies are supplying to woman and minority owned office supply retailers.  The companies announced yesterday that they have reached an agreement to divest $550 million in business with approximately 50% stemming from Fortune 500 contracts.  Contingent upon the closing of the merger, Essendant will be purchasing the contracts for $22.5 million.

The decision is sure to ease the mind of commercial customers as it not only dilutes the B2B power of Staples and Office Depot, it also boosts Essendant’s presence as a national competitor. The increase in presence will also allow Essendant to build their capabilities and improve collaboration with independent dealers to further enable national competition.  While the purchasing leverage of Staples will be larger than ever before, they will still face pressures to offer competitive pricing for both consumers and commercial customers.

In addition to this new development, last week, the European Union signed off on the merger.  Similar concern for reduced competition was existent overseas, with a particular focus on competition in the international supplies market.  At this time Staples, Office Depot, and UK based supplier Lyreco are the only companies capable of entering into international contracts. The approval followed an agreement for Office Depot to divest their contract distribution business in the European Economic Area and Switzerland as well as their entire business operations in Sweden.  The EU ruled that these divestitures were sufficient to reduce competition concerns and sign for approval.

The nudge from the European Union combined with the Essendant agreement may be enough for the FTC to move forward with the approval of the merger.  There is, however, the possibility that come May 10th the FTC will decide that the $550 million in US divestitures is not enough to mitigate competition concerns.  Should the merger pull through, it will be interesting to evaluate the impact the deal has on companies included in the divested contracts, and if it will truly allow minority and woman-owned companies to compete nationally.

Source One's Office Supplies Strategic Sourcing experts will be at ISM2016, where Source One is the exclusive sponsor of the Exec IN forum. Want to save on registration costs to attend this landmark event? Learn more over at SourceOneInc.Com. 
Focusing on education to improve supply chain innovation

The world of logistics and supply chain management is not what it once was. Between the Internet of Things largely transforming the way organizations operate and a global economy that is slowly getting stronger, corporate leaders today are faced with a unique set of challenges. To facilitate suitability and success in a rapidly evolving market, businesses must be strategic in supplier relations and ensure they are utilizing the best possible processes and systems.

Furthermore, to enhance their position in the logistics and supply trade industry, it is imperative that companies recruit top professionals with in-depth knowledge and expertise. Unfortunately, there seems to be a lack of talent in the field.

Supply chain confusion
Industry Week reported that a study conducted last year by MHI found that the supply chain market will have approximately 1.4 million jobs to fill between 2014 and 2018, or about 270,000 annually. However, the research also found that there won't be enough skilled professionals to supplement the openings, ultimately stagnating the progression and growth of the supply chain industry.

According to the source, some corporate leaders attribute the problem to misconceptions about what supply chain management actually consists of. A lot of people do not realize how many different functions the segment embodies and, therefore, aren't aware of the wide range of opportunities that can stem from it.

In an article for Forbes, Kevin O'Marah recently explained that, although approximately 200 college universities worldwide offer some type of education pertaining to business and logistics, most do not grant degrees specifically for supply chain management. He also indicated that there is a serious discrepancy between which components of supply chain operations are studied in the classroom and the ones that are actually used in real world application. For example, in an academic setting, the primary focus is mostly on the mathematical and research aspects of operations. But there is so much more to it than that.

Perhaps this is why some industry leaders are shifting their attention to deepening and improving the presence of education in their logistics and supply chain operations.

Learning logistics
The Massachusetts Institute of Technology announced this week that the MIT Center for Transportation and Logistics, or MIT CTL, is collaborating with the government of Chinese port city Ningbo to create the Ningbo Supply Chain Innovation Institute China, or NSIIC.

The global research and education hub will be built at the Ningbo-Zhoushan Port, the largest cargo port in the world by tonnage. According to the announcement, this center will further expand the MIT Supply Chain and Logistics Excellence, or SCALE, Network, which currently has locations in Luxemburg, Columbia, Malaysia and Spain.

NSIIC, which will operate independently as an academic institution, has already begun development and is expected to open next fall, with the first wave of enrollment being offered in fall 2017. The press released revealed that the degree program will be structured similar to the Supply Chain Management Program at MIT for the Master of Engineering in Logistics degree. A doctoral program will also likely be offered.

MIT CTL, an arm of the School of Engineering, is a leading institute for supply chain research and, for over 40 years, has educated students and executives in managing and organization of supply chains, facilitating productivity and enhancing environmental responsibility. The SCALE Network was created in 2008 and has centers across four continents: Europe, Asia, Latin America and North America.

"The Government of Ningbo is eager to begin this partnership with MIT," the Mayor of Ningbo, Lu Ziyue, said in a statement. "Ningbo is already a global leader in cargo logistics, and the new institute will be at a global vanguard of supply chain innovation and education. The continual flow of supply chain ideas and leaders will enable companies to further expand and diversify the economic growth of our region."

Integrating education and experience
This move is similar to others made by countries in Asia to improve global supply chain and logistics operations. The Wall Street Journal recently reported that the Singaporean government has invested in port development, data analysis and automation advances by teaming up with the Georgia Institute of Technology and the National University of Singapore. Furthermore, the Singapore Economic Development Board is collaborating with Deutsche Post DHL to increase accessibility to students most qualified to work in the supply chain and logistics market.

In the MIT announcement, Yossi Sheffi, the director of MIT CTL and SCALE Network, explained that because China is a major region for global supply chains, creating this education and research center will give both students and employees a "unique perspective." In addition to being positioned at one of the prime locations for commerce, the center will also be advantageous for graduates because it will provide them with the opportunity to collaborate on research projects and with other institutes in the Network.

As the industry becomes more complex, it is imperative that corporate leaders take notice of emerging trends and promising strategies. And, considering China has always been a primary hub for multinational supply chain operations, this latest move could signify an increasing number of regions focusing on logistics education.

In this recurring series, the partners and consultants of MRA Global Sourcing share their learnings, observations, and the occasional rant cultivated from years of experience in recruiting and placement for supply management functions.

3M - Much Maligned Millenials

In this section, we’ll share stories about particularly memorable job candidates as cautionary tales for those Millennials actively searching for employment in Procurement and Strategic Sourcing. Think of it as a “what not to do” guidebook.

Our first ever 3M winner is a young man in his early 30s who has drifted in the world of the contingent workforce as a Sourcing mercenary.  Perhaps it is this freedom and flexibility that affords this Millennial the luxury to be so very picky that turns him into a caricature of sadness whilst seeking employment. You just cannot ask your interviewer and potentially future boss if they are a yeller or screamer, claiming that that behavior renders you ineffective in your job. Nor can you be a single person sans any familial encumbrances and ask your interviewer if you will be required to work more than 40 hours. And after said bungling, you sure as heck cannot wonder why with your stellar credentials and qualifications it is taking so long to land your dream job.  The big takeaways here?

- Remember to always put your best foot forward in an interview. You may think you’re just being forthcoming/forthright in asking direct questions about work environment or culture, but really what you’re doing is coming across as spoiled, entitled, inflexible – and frankly lacking the sensibility that makes for a strong career. Which brings us to our next points:

- You must be comfortable working with various personality types. Some bosses and co-workers wear their hearts on their sleeve. Some are extremely diplomatic and soft-spoken. You can’t expect that your career will only ever involve working with people with personality types you prefer. Certainly we’re not suggesting that aggressive or hostile behavior in the workplace is acceptable, but you must develop a basic competency in cooperating, coexisting, collaborating with all types.

- You must have expectations that match your ambitions.  Generally speaking, our younger workforce places an emphasis on “Work/Life Balance” – which often gets distilled down to “I don’t want to work nights and weekends.”  That’s a perfectly reasonable perspective - depending on the job you’re pursuing. If you’re an hourly worker, and you’re capped at a certain number of hours per week, then the equation is pretty straightforward. But if you are salaried, then you effectively have no hours restriction. It’s not as though you can work full steam ahead on an important project that is due the next day, and then suddenly drop everything and leave the work unfinished because the clock struck 5:00. You must accept the reality that, on occasion, you may need to work extra hours to really knock it out of the park.

-If you absolutely have to get answers to these questions during the interview process, think of different ways to ask that don’t put you in a bad light. For example, “How would you describe the way that this team responds when things don’t go according to plan?” or “Describe a typical week here.”

In our next blog, we will highlight the antithesis of the 3M – the Smart Cookie Millennial (SCM). Come back for more and you’ll learn what an SCM looks like!

‘Til then - Save Big and Prosper…

MRAGS

MRA Global Sourcing is the preeminent firm specializing in recruitment for procurement and strategic sourcing, connecting the best talent with the best opportunities. Visit them on the web to learn more.