February 2017

February 17, 2017

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

In a role that contributes to all business functions, sourcing professionals are required to consistently offer evident value for the organizations they support. Vice President of Professional Services, Joe Payne, reiterates how the particular role of strategic sourcing and procurement need to define their efforts to influence the perception of procurement from professionals of other functions in their organization. The industry has grown from the traditional concept of procurement and sourcing, and the experts in these areas need to keep up with the new definition of their role, while encouraging C-suite and stakeholder support for the opportunities procurement can create for the organization.  

As February wraps up, the experts at Source One look ahead to the industry events held in the spring and summer months. On March 16th, our strategic sourcing professionals will attend the Institute for Supply Management's New York area conference. This meeting is held annually, as a one day opportunity for procurement and risk management experts to join in sharing industry trends and expectations for the coming year. Executives in the industry will present informative sessions on balancing change and innovation in 2017, and their educated predictions for the future of procurement, based on recent patterns and trends in the industry.

ISM 2017
While we prepare for the supply chain and procurement industry events of 2017, the Institute for Supply Management's annual conference in May is highly anticipated. Over the four day event, more than 2,500 global supply chain and procurement professionals will be networking, attending educational sessions, and getting exposure to some of the leading supply chain and procurement executive's through informative presentations. Source One will be hosting ExecIn, a sub-conference designed specifically for supply management leaders. The keynote speakers at ExecIn present exclusive sessions designed for executives at non-consulting organizations, that ultimately allow them to evaluate their processes and find opportunities for improvement in their business. 

UPS to take up solar new energy push
Sustainable energy can take many forms in the supply chain, and for at least one delivery company, solar is a key concern. UPS recently announced that it would invest $18 million in a push to add more solar panels to existing facilities.
As part of this effort, the company announced it would buy more than 26,000 solar panels for use in eight current locations, and install them before the end of the year. The plan reflects a continuing interest in solar, a statement from the business said, and could potentially ensure power generation for at least 25 years to come.
While this is just one of the "green" tactics UPS is reportedly undertaking, the company's Facilities Procurement Director, Bill Moir, emphasized the importance of solar power specifically, as it connects to other aspects of production.
"Solar technology is a proven way to effectively and efficiently provide long-term power to our facilities," Moir said. "We have a significant number of facilities that are well positioned to deploy solar at scale and increase our sustainable energy options for our buildings and electric vehicles."
Is solar gaining steam?
The cost of using solar power may prove to be a big incentive for businesses. In December, Bloomberg reported on the changes in the industry, compared to the similar (but more consistent) wind power. As data from Bloomberg New Energy Finance showed, solar power cost finally dropped below wind late last year.
"Solar power cost finally dropped below wind late last year."
Based on information from 58 different countries, the average cost of using this power source dropped notably from more than $5 million per megawatt in 2010 to $1.65 million in 2016.
And while wind power was almost at exactly the same average price at $1.66 million, the activity also showed an interesting and definite downward trend for the industry, suggesting it might continue in this direction in the future, offering further eventual cost efficiency for companies as a whole.
An international interest
Solar power might have multiple advantages to companies expecting international business. In addition to granting them greater efficiency, these updates could put companies on the same playing fields as efforts in other countries, either in competition or in alignment.
China's National Energy Administration recently stated that it is in the midst of a plan to increase the amount of photovoltaic capacity it uses over the course of the next three years. Reuters reported on the country's new claims to have added 34.54 GW last year, making it the "biggest producer of solar energy by capacity" on the planet. This perhaps reflects the statement made last April cementing both the Chinese and U.S. commitment to the Paris Agreement for combating climate change.
Whatever this means, it does show a growing use of solar power in different regions, perhaps paving the way for more pressure to be placed on businesses that want to expand their commitments among other activities. As UPS shows, it doesn't have to be among that large a percentage of facilities to make a notable difference.
Along those same lines, global sourcing could still be a significant tool for new plans.
Ah – the procurement professional’s trusted best friend: The RFP. This sweet mechanism is your first step to securing a great deal on your offices supplies, implementing new IT and telecommunications tools and services throughout your organization, partnering with the right marketing agency to grow your company’s brand, or improving the quality of your product by contacting a new supplier for your direct materials. Most importantly though, the RFP is both yours and contending suppliers’ way of getting to know each other’s companies and deciding if and how your companies can work together.

Think of the RFP as a first impression that you have the ability to shape based on the information you share with your contending supply base, the information you request from them, and your approach to communicating with them. Just as you’ll be using the RFP to vet suppliers, suppliers will also be using the RFP as a means for deciding whether or not they want to work with you. So, you want your RFP to set you and your potential suppliers up for success.

What Not to Do:

Overuse boiler plate language: A double-edged sword, boilerplate language can both help and hinder your RFP. While it may save time to leverage a templated RFP, often these include unnecessary information that is irrelevant to your project goals. When used improperly, boilerplate language can also send the wrong message to your contending supply base, giving the appearance of clumsy or hasty work and suppliers may not be motivated to give you’re the thorough responses you’re looking for.

     Instead… Don’t be afraid to reframe your templated RFP. Templated language serves a purpose for covering your legal basis and providing a consistent structure. Aside from that, don’t be afraid to remove components of the template that aren’t relevant to your project requirements. For example, you may be inclined to include information about your company boasting its accomplishments to give participating suppliers a better view of your company's profile. However, suppliers are only likely to skim over this information to focus on how their products and services could address your needs. As a result, the fluff you included only adds the length of the RFP and adds minimal value to the process.

Be Vague: The RFP is your opportunity to get an apples-to-apples comparison of your potential supplier. Despite this, many companies struggle to provide enough detail in their scope of work to enable a simplified comparison. Ambiguity leads to assumptions and assumptions will vary across your suppliers, leaving you with a wide ranges in pricing, service levels, and conditions to asess.
     Instead…Be Specific in Your Scope of Work. Think about the information your contending suppliers would need to be able to deliver a proposal (mostly) consistent in structure to the many others you'll be receiving - allowing you to conduct as close to an apples-to-apples comparison as possible. What exactly are you looking for them to provide? What processes are currently in place that you’re looking for your contending suppliers to adapt to? What capabilities do they need to have? Be as specific as possible within this section of your RFP in an effort to simplify the assessment phase later on in the process.

Strictly Limit Communication: Chances are, you’re inviting a number of suppliers to submit responses to your RFP and you probably don’t want to be constantly inundated with questions or even sales pitches. In the perfect world, your RFP would be absolutely clear and concise and suppliers would perfectly understand what you’re looking for and be able to give you clean-cut answers. The reality is, in most cases, suppliers will need to reach out to you to ask clarifying questions and completely shutting out that communication can prevent you from working with a supplier that could be a perfect fit for your organization’s needs.
     Instead…Open the Lines of Communication: There are ways to add structure to the communication with your contending supply base without opening the flood gates. The trick is building in opportunities to interact with these suppliers to your RFP process and taking them into consideration when developing your timeline. One way is to have them submit their questions via email with a set deadline for submissions. Once, you’ve received all of these questions you can then formulate your answers and compose a simple document with all of the questions you’ve received and then share it with the participating suppliers. This gives your contending supply-base an opportunity to have their question(s) answered and receive answers to questions they may not have thought of all -while not overwhelming you.

While designing and administering an RFP can be challenging, keep in mind that this is the first step to establishing a strong relationship with your future suppliers. Ultimately you and your supply base have the same goal of working together. Make your first impression on your future suppliers one that shows you’re mindful of their time, thoughtful of work you’re asking them to provide, and open to their perspectives and concerns.

Recognizing the importance finding and working with the right supplier or vendor, Source One is committed to sharing our know-how and insights to deliver tools and methodologies that set our clients up for sourcing success.  While you may already be familiar with our e-sourcing platform, WhyAbe.com, the world’s only free e-sourcing tool is getting a make-over. Stay tuned for how its new features will make it even easier to manage RFX events and supplier relationships!

The Strategic Sourceror's Intern Corner introduces the students and young professionals that are joining the Source One team as analyst interns throughout the year. These individuals are sharing their backgrounds and what brought them to Source One, and reflecting on their experiences so far at Source One while discussing their intentions and aspirations for the future. Through the internship program, these students receive hands-on experience in strategic sourcing efforts and supply chain processes that allow them to see their potential with a career in consulting.

Source One provides services and solutions for businesses from a variety of industries, which creates opportunity for students seeking early career experience to apply their education whether focused on supply chain management, engineering, accounting, or finance. This spring, Source One welcomes Vincent, Maxwell, and Nick as analyst interns from both our Chicago, IL and Willow Grove, PA locations. Learn more about them below:

My name is Vincent Ciaramitaro and I am twenty-six years old, based at Source One's Chicago office.  I was born and raised in Kansas City, Missouri and received my undergraduate degree in chemical engineering from The University of Kansas in 2012.  After graduation, I immediately began my professional career as a production enhancement engineer for Halliburton in Colorado.   After four years of large scale project design and implementation throughout the Rocky Mountains, I decided to leave the oil patch in order to achieve a higher education.  I am currently pursuing an M.B.A. degree from DePaul University.  It was tough to leave behind the skiing, mountain biking, and endless adventure that Colorado provided, but it didn’t take long for me to discover that Chicago is a world-class setting as well.

I am very excited to be here at Source One and everyone in the Chicago office has welcomed me with charm. Not only does Source One offer me direct exposure to a myriad of business types, but I also gain valuable experience in the consulting process of delivering value to our clients.  In my M.B.A. program at DePaul, I am specializing in Supply Chain Management, and Source One's subject expertise allows me to learn about the industry first hand.  During my internship, I hope to be challenged in a new environment, impact the advancement of procurement and strategic sourcing, and continue to refine my analytical and project management skills.  

My name is Maxwell Glass, and I am twenty-two years old originally hailing from Abington, PA. I am working in Source One's Willow Grove, PA office. Currently I am a senior at Drexel University in Philadelphia, PA, where I am majoring in Finance with a minor in Anthropology. I’ve focused my collegiate career on the financial aspects of the macro economy, whether that be applying myself to balance sheet analysis, working with derivative trading products, or conducting financial research. I was drawn into consulting by the ability to translate the technical skills I've gained from previous experience into the everyday efforts by professionals in the industry. 

Since starting at Source One, I have been placed with the spend analysis team where I am working directly on both internal and external projects analyzing and optimizing general ledgers. In addition to this I have been given a more technical focus where I am now beginning to work with Python and debugging scripts such that I will be able to act as an intermediary between the business and technology functional groups.

While I still have much to learn about the role, the surrounding support network has been tremendous in helping me to transfer my financial knowledge to the practical situations I am being tasked with handling every day. 

Going forward I know that with the support I have at my disposal, and the rigor of work challenged of everyone, my skills and abilities will progress boundlessly. As an individual with deep interest in financial strategy and game theory, as well as the practical application of these ideologies, the spend analysis team provides me an exponentially growing environment in which I can prosper alongside my co-workers. I look forward to not only the next step of our current project, but also to see what is next for us.

My name is Nick Salek and I am working at Source One’s Chicago Office. I am twenty-one years old and grew up in Elmhurst, a suburb of Chicago. Currently, I am a senior undergrad at DePaul University, majoring in Finance with minors in International Business and Accounting. I am the treasurer of DePaul Club Water Polo and a member of the Finance Honors Cohort. One of my favorite parts of living in Chicago and going to DePaul is the opportunity to participate in internship programs, like at Source One, that offer valuable learning experiences. I greatly enjoy the opportunity to take what I learn in class one day and see how it directly applies in the real world. I’m happy to say I’ve been able to do that daily at Source One!

Source One’s Chicago office is filled with friendly and knowledgeable professionals. Since starting  in January of this year, I’ve had the opportunity to work on projects in a wide variety of industries. While my role was limited in the first few projects, I’ve been able to take on greater responsibility as my skills and industry knowledge grow. As my industry knowledge has grown I’ve recognized a strength in Telecomm and IT, working with the team on a number of projects. While I have already built a general understanding of Procurement and Sourcing Consulting, I look forward to expanding my knowledge even further. With Source One, I also hope to further develop my analytical and communication skills and continue my career in consulting after graduation. 
'Glocal' solutions takes the best from global and local practices
Strategic sourcing may help companies adapt to a new landscape, and that might mean being both global and local at the same time. In the industry, this is sometimes known as "glocal," and while it's hardly a new term, it could take on a special relevance now that supply chains are increasingly intricate. In fact, sourcing goes right along with the classic idea of what "glocalization" represents.

What does it mean to be glocal?

A glocal business is working on two fronts: expanding around the world while also managing each individual region successfully. Businesses have to keep their brands intact while shifting to match each new environment and market to adapt to new regional preferences.
This concept actually goes beyond manufacturing and includes all of business. TechTarget once revealed how even a company like Disney has had to redefine itself in certain ways to help engage with new cultures.

Done well, a glocal enterprise could become newly significant among a possible market. Glocalization offers the chance to connect with different people around the world, such as setting up communication between the U.S. and Pacific markets.

Maintaining strong connections

Another aspect of going glocal could be changing the way the a company operates. In a glocal situation, a regional business arm could end up being more of a lever for local action than an extension of the larger, general company body. Last year, Uniqlo President of Brand Creativity John Jay told The Business of Fashion about the ways businesses can respond on the local level and stay equally important for each new market.

"The goal is to be relevant," he said. "We are a Japanese company trying to be relevant around the world and we're going to do that by joining forces with many different cultures around the world. In order to be a great global company, you have to be a great local company, because you have to touch people where they live."

The source said that this can benefit from a local culture that engages consumers and creates a substantial desire for the business, paving the way for successful interactions with local institutions. If there's a sufficient supplier relationship management strategy in place, a business can be both globally present and locally relevant.
"Supplier and buyer communication could open up newer opportunities."
Applying this to supply management

Moving across international borders can be a big step, even for a well-known brand. As Bloomberg Technology noted, there's a clear drive for foreign merchants to connect with U.S. shoppers, with logistics providing the possible bridge.

Of course, Amazon is still poised to make maneuvers in this space, the article from last year said, and has been for some years. Since it wants to eventually develop a global logistics operation of its own, the short-term goal could be enabling international merchants and taking over the shipping management role itself.

Not every company may be able to follow that model, but it does hint at the way strategic sourcing stands to help. Supplier and buyer communication could open up newer opportunities for improvement as companies use their software to promote a unified approach to working with third parties.
In today’s technological landscape, data drives virtually all facets of business operations in any given industry.  There is an abundance of software to choose from to streamline and manage critical business functions from finance and accounting to customer loyalty and every department in between.  When utilizing this available information to support ongoing process improvement, data availability can quickly shift from being the protagonist of operational success to the antagonist – creating confusion via data quantity, data significance, and data accuracy.

A solution to the segmentation of enterprise data is a platform concept known as Master Data Management (MDM).  Gartner defines MDM as “a technology-enabled discipline in which business and IT work together to ensure the uniformity, accuracy, stewardship, semantic consistency and accountability of the enterprise’s official shared master data assets.”  Creating a seamless database is critical in tying together the separate functions of a business to create a holistic view of the supply chain from raw material to consumer.  This data is extremely valuable in optimizing supply chain operations across the following common challenges that arise from lack of data uniformity.

1.       Optimizing Purchasing Leverage across Multiple Business Silos
Normalization of purchasing data is key in productively managing spend categories and continuously improving purchasing relationships.
  In an ideal procurement landscape, supplier relationships are managed at the enterprise level to maximize volume leverage and reduce total cost.  If separate departments are purchasing from the same supplier, yet are operating under separate account management structures, there are unrealized efficiencies within the supply chain.  This can be difficult to monitor without a standardized data system which normalizes supplier data points such as name and vendor number across the entire business.

2.       Managing Parts Information
One of the biggest pain points in conducting a sourcing initiative, especially in the Maintenance, Repair, and Operations (MRO) and Direct Materials space, is locating the proper product specifications to adequately go to market.  For simplicity sake, consider a corrugated box that is used in a company’s warehouses to repack items before distribution.  While used for the same purpose at each location, perhaps the exact box specifications are determined by each warehouse’s supplier of choice.  With an MDM system in place, a centralized database stores the company part number, supplier part number, and specifications of these boxes, creating visibility into areas that have opportunity for standardization.  This single source of data can be used to rationalize specifications, and centrally locate the information needed to go to market to find best value pricing for all purchasing locations.

3.       Inventory Management and Forecasting
An MDM platform ties data from both ends of the inventory requirement spectrum.  Monitoring product availability from direct material suppliers down through customer demand gives a full view of factors that may affect inventory needs, such a seasonality of raw materials down to seasonality of customer demand.  This visibility is critical in striking a balance between the risk of inventory reaching obsolescence and the risk of a stock-out.  Furthermore, uniform data availability is key in implementing and maintaining Vendor Managed Inventory (VMI) programs with suppliers, which can reduce overall inventory burden.

The benefits of an MDM platform far surpass just the impact that can be made to purchasing and inventory management.  Compiling meaningful and readily available data is critical in customer retention, marketing success, and new product development.  Required architecture for such a system will vary dependent on a multitude of factors including industry, size, geography, and existing data systems in place.  The critical factor to note despite these differentiators is that unless the decided upon format must be able to support the strategic goals of the business.
When was the last time you negotiated your fleet management services contract? Was the negotiation conducted in a competitive environment or did you negotiate directly with your incumbent provider? Here at Source One we conduct competitive negotiations primarily using a Request for Proposal (RFP) and subsequent negotiations.  This approach allows us to leverage our market intelligence to select the best incentive offers and create best-in-class fleet management service contracts. Make sure to check out my previous post on core fleet management services. This post highlights the incentive structures you may see and some you may not have considered.

Incentive Structures:

  • Signing Bonus – The most common incentive structure in the fleet management services marketplace is a signing bonus for new providers or a retainer bonus from incumbents. This is essentially upfront funds, either in the form of a check or an account credit, granted upon contract execution. Depending on the size of your fleet, we have seen these bonuses upwards of a million dollars. Certain Fleet Management Companies (FMCs) offer signing bonuses to buy the business, typically, your program fees from these providers will come at a slightly higher cost than their competition. Upfront funds are a great solution if you a looking to achieve hard-dollar savings as soon as possible.
  • Services Rebates – Rebates on particular service programs are also common. Generally, these rebates apply to participation in a fuel card program and by driving maintenance services to national account maintenance & parts providers (think Michelin, Pep Boys, Jiffy Lube, etc.…). These rebates are assessed as a percent of the periodic spend with the participating providers and are typically applied as an account credit on a quarterly basis. Some FMCs are open to more or less frequent credit disbursements, whatever will work for your firm. If your current fuel card solution does not come with an incentive, ask for one! The same goes for your fleet maintenance program, make sure you are getting the most for your money by asking for a national accounts rebate. Service agreements more than a few years old may not include these rebates. 
  • Annual Loyalty Incentives – A less common and maybe more unique incentive is the annual loyalty bonus. These bonuses are applied each year on the anniversary of the contract execution date. They are commonly tied to a certain level of annual unit acquisition and/or the annual average number of units enrolled in service programs, but we have also seen them offered without these caveats. This type of incentive helps reduce the cost of service program enrollment throughout the duration of the agreement. If your firm prefers open-ended contracts, this may be an ideal incentive for you. 
  • Unit Discounts – If you are enrolled in your FMC’s leasing program, the FMC acts as the dealership to provide your fleet with new vehicles. This means the automobile manufacturer (OEM) extends dealership guaranteed revenue to the FMC (Holdback, Floorplan, Distant Delivery, etc.…), you can ask for this back. There two primary unit discount structures: flat fee/percent and triple net. The flat fee/percent structure allows the FMC to keep all OEM funding and applies either a flat dollar discount or a percent based on the invoiced cost of the unit as a reduction in capital cost. Triple net pricing essentially passes through certain portions of the OEM funding and typically comes with an additional credit. For example, you may negotiate holdback, floorplan, and a $50 credit as a reduction in capital cost per unit. The triple net scenario provides more clarity into the funds the FMC is receiving from the OEM to sell/lease units to your firm. 

You should have at least one of the aforementioned incentives included in your fleet management contract. With the ever-changing list of service providers and technologies available, make sure to ask for a creative approach to fleet management service program incentives.

Source One has assisted multiple clients in various market sectors to achieve savings and execute contracts with the best-fit service partners. We have the market intelligence and tactical know-how to get you the perfect solution tailored to your firm’s needs. Our team members are consistently posting about fleet topics, check out our recent posts on selecting light fleet automobile manufacturers, tips for fleet sourcing, and tips on OEM fleet sourcing.  Contact our fleet management sourcing experts to learn how you can optimizing your fleet budget!


ICYMIM: February 13, 2017

Source One's series for keeping up with the most recent highlights in procurement, sourcing, and supply chain news week to week. To stay updated on the latest supply management articles, check in with us every Monday.

What Can You Do To Create More Supply Chain Transparency?
Christina O'Handley, ThomasNet, 2/8/2017

Every supply chain professional can agree that productive, adequate monitoring systems can be more than difficult to develop and maintain. This is credited to the structure of the supply chain industry and the amount of variety involved in the individual processes. Data latency is one of the main contributing issues that prevents clarity in a supply chain and causes obscurity for suppliers or manufacturers and the organizations they work with. Errors within the data that is available is another key factor in how transparency is countered between operations in the supply chain industry.

Blockchain: A Shared Ledger to Rid Waste from the Supply Chain
Susan Avery, My Purchasing Center, 2/9/17

Blockchain can offer the supply chain industry opportunity for transformation by providing a platform for information to be shared, in a public layout, that allows for data sets and ledgers to be confirmed as exact. As a new technology, blockchain is a trusted system of record that can be used among all the suppliers and manufacturers within an organizations supply chain. With this information widely available, blockchain is convenient while also raising concerns of visibility for data that might want to be private from some.

February 10, 2017

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

Strategic Sourcing Throughout the Product Lifecycle
The experts at Source One share their insight on demonstrating the value sourcing and procurement groups can offer when their capabilities are applied in multiple areas of an organization, the manufacturing process and the Product Lifecycle. When given the opportunity to work with the engineering team or department, sourcing and procurement professionals can create strategic approaches to improve the entire process, from increasing the speed-to-market, conforming to cost targets and promoting innovation. These new techniques sourcing can offer greater value and more opportunity that surpasses the traditional approach formerly applied by procurement and sourcing groups.

ExecIn at ISM 2017
Exclusively sponsored by Source One, the ExecIn executive subconference at the Institute for Supply Management Annual Conference (ISM) welcomes procurement and supply chain leaders from organizations with a specific amount of annual revenues. These professionals are invited to participate in special executive-level sessions with keynote speakers, as well as networking events with other high level professionals. Along with sponsoring this exclusive conference, Source One's sourcing and procurement experts from the millennial generation will present a session on how their generation has the potential to be successful in careers in supply management. 
4 Strategies for Regulating Career Pathing with Performance Management
This blog post is brought to us by MRA Global Sourcing.

Knowing what it takes to advance and how to do so is important to employees. Without a clear understanding of the path forward, top talent may jump ship to an employer with a more clear definition of how to advance, presenting companies with the imperative to more clearly outline their potential progression through the organization.

Creating a clear roadmap through career pathing provides both employers and employees a mutual understanding of the criteria required for the employee to advance and prevents loss of talent by increasing employee retention. By developing these guidelines for what is necessary for an employee to reach their career goals, employers are motivating performance and ensuring, for their own benefit, that the employee's plan aligns with the goals of the company. While career pathing is specific to each individual employee and offers them benefits, the process also allows the organization to achieve its goals.

1.       Offer employee investment options that stand out from competitors.

Employers who demonstrate the value of their employees by investing in training and professional development opportunities are more likely to retain talent and prevent these valuable individuals from being recruited by competitors. By offering these options to employees, companies can offer the career development desired by most professionals in today’s workforce and have a competitive edge over similar organizations seeking the same talent for the industry. The best methods for offering these opportunities at a low cost approach include implementing programs for new training developments or encouraging mentorship from an advisor.  “Career pathing can have the added benefit of functioning as a branding tool that will appeal to industry talent,” says Naseem Malik, Managing Partner of MRA Global. “If a company can demonstrate how employees have advanced with them internally, and how this option exists for all employees as a performance management process, candidates will value this organization compared to competitors.”

2.       Preserve and encourage development for initial talent

An on-going risk for many employers is a combination of a lack of talent and inability to retain employees in areas where they require seasoned professionals. Voluntary turnover does not come without its penalties, as productivity, institutional knowledge, organizational and industry relationships all decrease while remaining employees are left to make up for the lost talent. The employees who are central to the business strategy need to be identified by organizations so they can be prepared to implement retention plans that fulfill the needs and intentions of these workers. As an employer, being able to provide clear career paths is a key factor in any successful retention plan, including training for talent employees and high performers that allow them to reach new roles where they can apply the skills and knowledge achieved earlier in the process.

3.       Apply commitment incentives for newer generations 

Tactics to recruit previous generations don’t apply for millennial workers, based on a recent study conducted by the MRINetwork on Millennial Hiring Trends for 2017. In this study, more than half of those surveyed ranked career pathing as a priority in their workplace, and was selected as a deciding factor when seeking new employment. The new generation of workers prefers to have control in their situations, and by allowing them to set out their career paths and expectations for their performance review, managers give them this desired authority. They appreciate the power to share with management their career goals, and management provides them with what they are expected to do and how they are expected to perform to achieve their goals.

4.    Modernize employee performance management practices 

During the annual review, managers are responsible for determining how well employees fulfilled the career pathing plans agreed upon, and determining new ones for the upcoming year to continue to drive results and encourage employee commitment to the company. “Career pathing allows the employee to drive their own career goals, since they’ve mapped out a success plan with their manager and the road to advancement is clear,” says Malik. “This new concept is a welcoming aspect of company culture that will be valued by existing employees and sought out for by new, potential talent. 

This alignment can be accomplished through changes in the organization’s performance management process specifically. Some adjustments every employer should consider includes:

  • Reduce the amount of steps to ease the overall process and remove anything that requires too much time and isn’t necessary.
  • Confirm the strategic goals of your organization align with the system you enforce for performance management.
  • Initiate new structure and guidelines for performance management that will offer continuous feedback for both employees and you as the employer, which in turn with show regular development.
  • Encourage management to participate in an ongoing acknowledgement for quality employee performance and to respond with praise.
  • Separate discussions regarding performance from discussions regarding compensation, when combined the employee can have difficulty interpreting the feedback that could influence their performance.

Both the organization and employee need to invest time and be willing to commit to career pathing in order to achieve the benefits and mutual success the process provides. The advantages of career pathing include a more satisfied and easier to operate work environment and an increase in long-term employees. Talented individuals who are developing inside the organization are motivated to remain with their current employer because of the confidence they find in career pathing that demonstrates the influence their valued abilities and expertise has on the company. 

Impact Of 3D Printing Could Grow In Auto, Aircraft Sector
Flexibility and autonomy are strong values to prioritize for the future of the supply chain, and 3D printing could bring both of those with it, since it offers solutions for prototype testing. Let's examine some of the news stories surrounding 3D printing and see how the business could unfold from here.

Car manufacturing: BMW

First of all, it may be increasingly important to look to different types of materials for 3D objects in the future. According to CNET, BMW is taking steps to possibly develop a strategy for metal 3D printing, which could create parts for testing that mimic the real thing more closely than similar prototypes made out of plastic. The process would do this by fusing tiny metal grains together to form a coherent material.

The source added that this specifically comes from BMW i Ventures, an enhanced fund for venture capital-related projects that could spark similar innovations later on. In November, BMW AG Board of Management member Peter Schwarzenbauer described the expansions made with his department, which reflect the general progress seen in the forward-minded tech sector.

"These days, more and more innovations come from the start-up scene," he said. "Venturing allows us to tap into this potential at an early stage. To achieve this, we are now giving BMW i Ventures a much broader footing and will expand our involvement in Europe and Asia, as well as at our new location in Silicon Valley."
"New developments could bring 3D printing to more departments."
Design divisions: Portable printers

New developments could also bring 3D printing to more departments as the technology itself gets portable and easier to manage. Stratasys, for example, recently developed a printer intended for simple use in offices and even classrooms.

The apparent intention behind this, putting models in the hands of design groups more quickly, could end up being a bigger priority, since speed is already a clear perk to 3D printing in general.

3DPrint also reported on the "portable" aspect of 3D printing, and what it could mean for the industry in the future. Although there are challenges, this article said that innovations in battery power, specifically, could help portable 3D printers reach more users as they become less dependent on energy.

There may be power and expense barriers to doing this in the short term, but later on this could evolve into what the source dubbed a "mobility package" including a power source, as more people think of the 3D printer as just another tool.

Space flight: Boeing's Starliner

For yet another posible glimpse at the future, we can look to space travel. Boeing reportedly wants to use 3D printing in spacecraft part production, at least when it comes to the Starliner vehicles. Unlike BMW, Boeing is still interested in chiefly plastic materials for this purpose, although this is a strong and resistant plastic that would withstand the conditions of space.

Even though there's still data yet to be gathered to show the effects of printing, the comparative benefits are still clear. To continue prioritizing efficient partners, businesses could use global sourcing and improve their efforts in different regions.

3 challenges for autonomous supply chains to overcome in 2017
The development of autonomous vehicles, including those which could run in the supply chain, has been gradual, and will probably see slow results in the marketplace rather than occurring all at once. However, new attention to this issue means that 2017 could see companies and the government alike step up their efforts to embrace this technology.

For businesses with supply chain success on the mind, here are some of the factors that remain important this year:

1: Meshing human and AI drivers on the same road

The estimated safety benefits of autonomous vehicles may take effect as the technology spreads, but what about the time until then? Hosting both human and AI-driven cars at once poses possible risks, as the Governors Highway Safety Association recently said.

According to this organization, states should take their time and remain "flexible" in approaching legislation involving autonomous car use. While ten states have continuing automated vehicle testing going on, two states, Tennessee and Massachusetts were said to have this technology "coming soon."

The organization also predicted that autonomous vehicles will make up between 40 and 60 percent of all vehicles on the road in the 2050's, making it the common "standard" for buyers. Compared to that, the 2020's are only expected to see this technology available as "high price premiums" to a maximum of 2 percent of the vehicle population.

2: More companies getting into the same space

There's little doubt that Amazon is setting the industry standard to follow when it comes to logistics technology and supply as a service. According to the MIT Technology Review, another well-known brand, FedEx, is working on modernizing for the future, using self-driving trucks as just one of the tools in its future arsenal.
"FedEx plans to release a 'semiautonomous' truck technology by the end of this year."
The source spoke to FedEx CIO Rob Carter, who didn't give a complete timeline of the company's switch to autonomous vehicles. However, he did say that FedEx plans to release a "semiautonomous"  truck technology by the end of this year, and that it is working with major car companies toward this aim.

Even if the actual adoption is some time in the future, the fact that more businesses are exploring this could indicate a growing market for new stakeholders to take part in.

3: Consistency
Finally, one large issue for automated vehicles is the need to keep performance consistent between different autos, industries and locations. Farm and Dairy recently spoke to University of Wisconsin-Madison Traffic Operations and Safety Laboratory Program Manager Peter Lafferty about the national effort to coordinate these vehicles and what it means for Wisconsin in particular.

"There are still a lot of questions of safety and human interaction and plenty of technological challenges that need addressing," he said. "The Department of Transportation wants to make sure the lessons learned in that work are being shared, and being involved in this network means Wisconsin has access to that knowledge and an opportunity to contribute."

That is clearly just a microcosm of the larger push to address multiple stakeholders at once. The overall goal is improving supply chains, so managed IT services could be the answer for supporting more connected work.

Logistics forecasts see growth into next decade
Over the next seven years, the logistics market around the world could change, as businesses look for better performance and cost savings for some time to come. Multiple predictions show the way future developments could play out, going beyond 2017 in the upcoming new decade.
TradeArabia News Service recently relayed data from an Al Masah Capital forecast for the worldwide performance of logistics. According to this source, just three years from now will see the third-party logistics compound annual growth rate jump by more than 5 percent. What's more, the logistics market as a whole could hit a revenue value of $15.5 trillion four years after that.
This wasn't the only source predicting high CAGR to come. In a February press release, ResearchMoz said that the global secure logistics market would grow at a 9.38 percent CAGR until 2020. While this is a different sector than the global logistics market itself, it relates to the kind of activity necessary to keep logistics stable around the world during the same important period.
Global rail also set to increase
Getting more specific, another report showed the particular CAGR benefits on the horizon for rail-based logistics. Global Trade Magazine recently spoke to Technavio logistics research analyst Sharan Raj about the improvements coming to the rail freight industry. Technavio recently forecast that rail logistics will be worth $210.13 billion in 2021 and have a CAGR around 4 percent between now and that year.
Sharan Raj said that the American rail market has room to improve over the next few years, leading to an increase in demand.
"Rail freight operators across the globe are investing in redesigning freight cars to increase the capacity to accommodate an increased volume of goods in a single trip, and to increase the efficiency of each container," he said
This could follow a much larger prediction for rail travel growth around the world. Arup Foresight's Future of Rail 2050 report takes the forecast further into the future, and although it largely focuses on the travel side of rail, it references trends which could influence rail in general, such as massive growth in urban populations, improvements in green technology, and, perhaps most crucially, entirely new types of transport, such as airships and low-earth orbiting space vessels from NASA. These could have freight implications, despite how far off they might seem at the moment.
The report also looked at the outside factors which could undoubtedly impact production. By 2050, the world will consume 140 billion tons of resources, for example, which could both impact the way logistics operates and put more value on flexible, green transportation. Automation and robots could not only improve production, but also make it easier to perform dangerous inspection and maintenance tasks, as the amount of repair robots increases.
A forecast for forecasts?
It's also useful to think about the role of forecasts in general. Predictions are both a useful tool now and one of the possible advantages of greater use of analytics. In a piece for Supply Chain Digital, Dr. Muddassir Ahmed outlined several of the advantages, including responding to customer needs and aligning current inventory with likely market conditions.
In the same sense, procurement management ahead of time is a possible benefit for future logistics planning.

ICYMIM: January 30, 2017

Source One's series for keeping up with the most recent highlights in procurement, sourcing, and supply chain news week to week. To stay updated on the latest supply management articles, check in with us every Monday.

Christina O'Handley - ThomasNet, 2/1/2017

Just a month into the new year and we've already seen some ingenious concepts launched in the manufacturing industry, including a few of the highlights covered by O'Handley in this post. These product developments come from engineers of all different specifications and backgrounds, some offering solutions for recent issues and others adjusting existing models to be more universally friendly. 

Kelly Barner, riskmethods, 2/3/2017

Some supply chain experts are familiar with recalls in the manufacturing industry, but rarely one that lasts for nearly a decade. The effects of a recall this long include continued disturbances in the supply chain, and uncertainty in the industry, along with the expected fines and charges for damages from the faulty product. Barner uses this example of the Takata case that proves how the results of a recall are damaging to any business. 

The Doctor (AKA Michael Lamoureux) - Sourcing Innovation, 2/3/2017

Supplier management professionals can verify the department covers quite a bit of responsibility, more than the initial title consisted of. The future of this function, similarly to procurement, is a bit unclear. Three main points of where experts in this group can improve included more visibility, value-driven design and verocity. The Doctor breaks down these three points and examples their crucial role in the development of supplier management. 

February 3, 2017

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

Should You Go To Market? Strategies For 3 Common Sourcing Scenarios 
Determining the level of investment for each sourcing initiative requires consideration of the potential return on investment. Before you dedicate resources to sourcing efforts, there are different approaches you can take for the best ROI and you'll want to ensure your strategy will offer that. Project Analyst Jennifer Engel offers three solutions for typical sourcing situations that require specific strategies to achieve the most favorable return.

Building and Maintaining High Performance Teams
Most organizations encourage individual professional development as well as advancement in the company as a whole. Constantly improving is just one of the two key factors for high performance teams, according to Vice President of Professional Services, Joe Payne. Along with growth, continuous alignment at every level throughout a business is crucial in being effective as a group.

ISM 2017
Project Manager and recipient of the 30 Under 30 Rising Supply Chain award, Michael Croasdale, and Associate Director and CSCMP Emerging Leader Award winner, Diego De la Garza, will co-present a session analyzing millennial talent trends in the supply management industry at this year's event. The Institute for Supply Management (ISM) Annual Conference will be held this spring in Orlando, Florida and host an executive subconference, ExecIn, sponsored by Source One. 

Healthcare supply chains face cost, data hurdles
In the data-heavy world of 2017, health care supply chains face continued difficulties. The price of modernization, as well as the rise of more integrated technology, can put pressure on these organizations to try something new. Comparing the challenges and innovations shows what health care logistics has to look forward to in the coming years.
New technologies becoming commonplace
Some of the innovations we see as disruptive could set a powerful standard in the year to come. Last month, Healthcare Dive spoke to the medical delivery company Zipline through email about the possibilities of drone-based drop-offs. This service reaches remote communities in Rwanda and brings blood transfusion supplies where they might not otherwise go.
If efforts like this are successful, they could parallel the rise of remote video conference calls with physicians as parts of the health care community's push to reach more isolated patients. Another technology which could become more familiar is the reliance on the internet of things, which medical businesses could dissipate throughout complex supply chains and make asset and staff management simpler for various businesses.
This point comes from a Verizon Wireless Director of Enterprise Product Management & Business Development Thomas Villa. In an article for Healthcare IT News, Villa described the drug tracking and monitoring that newly wired and omnipresent devices can possibly provide. Adapting to and managing these devices, though, may prove their own challenges as businesses try to keep up.
Addressing counterfeit and tampered shipments
Drugs that aren't approved or are in some way dangerous have made their way to certain practices, according to the FDA. In a letter last year, the FDA announced that TC Medical distributed counterfeit Botox with some telltale markings on the outside of the package. It was unclear, based on this letter, exactly where the products come from, but the source definitely connected the counterfeit shipments to TC Medical.
This could be the sort of activity more sensors would help detect. Discovering these issues and taking steps to correct them could also require money and effort on the part of the affected business. Supplier relationship management could also stabilize relationships and ensure that production meets compliance needs.
Rooting out all costs
At the base of it all is the need to balance costs. In a recent press release, Black Book Market Research announced the results of a survey of 1,158 leading members in health care system procurement and technology.
Respondents said that 30.5 percent of a hospital's average annual operating budget goes toward supplies. Furthermore 57 percent of the surveyed C-suite executives didn't fully understand their supply chains' complexity.
Doug Brown, Black Book's Managing Partner, referred to the Enterprise Resource Planning-related decisions in the health care sector.
"Crucial back-end software that manages finance, supply chain and inventory management, purchasing, payroll and coding have been disregarded into a confused entanglement of different products that don't communicate and left executives with the inability to realize cost savings in preparation of value based care," he said.
These concerns together should make procurement managing a top priority for any health care supply chain management stakeholder in the future. Governance and risk management are major paths for revitalizing a supply chain fraught with issues.

Sourcing, technology and the future of sustainable supply chains
Global sourcing initiatives can go hand-in-hand with the desire to go green, as businesses use the latest data to save money while proceeding responsibly. With much of the year still ahead of us, it's still possible to estimate what the newest developments will be that steer sustainability efforts in the future.
Greener vessels
While reducing carbon emissions generated by fulfillment centers and land vehicles has gained much attention, sea vessels can also possibly play a role here. Supply Chain Dive recently reported on the future of wind as a power source for ships.
A key factor in determining whether or not this design will take off lies in the rotors used for upgraded ships. As the source said, retrofitting can be a serious expense in an industry already trying to keep costs manageable.
However, some argue that this trend is currently in development and could gain traction soon, at least in Europe. WorkBoat said that the vessel Viking Grace is set for an upgrade which would put wind-sensing systems on it by the end of next year. Even if options like this don't completely replace standard fuel for ships, they could at least add to existing systems as a kind of backup.
Harnessing AI
Artificial Intelligence represents a major possible boon to logistics, and businesses should also prepare for it to potentially help them reach green targets. As with auxiliary wind power, AI could be not a full replacement so much as a supplement to go alongside human intelligence.
Green Biz specifically wrote about this, saying there is a growing awareness of the possibilities in logistics. Automation, machine learning and self-sufficient systems could, at the very least, maintain consistency and respond to the latest observable data.
Whether or not it applies to sustainability, AI does seem to already have companies preparing for the future. Green Biz cited an Infosys survey which looked at the possible improvements coming with the AI revolution.
These include a 39 percent revenue increase three years from now, among organizations using or planning to use AI. The survey also found that 60 percent of decision-maker respondents plan to "invest in supporting IT infrastructure," laying the groundwork for further developments.
Broader sustainable sourcing
Industries from apparel to electronics are seeing the benefits of supply chain overhauls. Organic Monitor released its predictions for the cosmetics sector going forward this year, which include greater use of green materials, sustainable packaging and certification under "natural" and "organic labels.
Because of this, natural ingredient sourcing and the very means of measuring sustainability are also possible areas for growth as businesses seek to embrace better habits throughout their supply chains. These could end up being part of a larger movement to influence this sphere.
Other examples of responsible sourcing include Ralph Lauren Corporation: the clothing company is planning to change its own sourcing to have a better impact. Environmental Leader said that the business is planning to release updated "sourcing guidelines" later this year, as a sign of its commitment. This initial policy change could also be just the start of a greater shift, as the company said it will keep developing this plan, according to the source.
For Ralph Lauren, strategic sourcing means monitoring certain fabrics in its products. Fairphone, a smartphone company, said that certain minerals could be part of  supply chain improvement, according to Mobile World Live. These include copper, gold and tungsten.
Smart sourcing leaves multiple impacts
With low-cost country sourcing/nearshoring, businesses can work internationally and have the means to keep costs low. This could both benefit the immediate supply chain and create important links with trustworthy suppliers for the future. Deciding which companies to work with depends upon a long list of factors, including labor, local resources and the ultimate market.
3 ideas for building more collaborative supply chains
For companies looking to improve logistics, one of their goals could be not just greater visibility, but also stronger collaboration with other businesses.
This idea comes from Supply Chain Quarterly, which recently examined the idea of "collaborative technology partnerships" for better sourcing. However, there are multiple ways to approach collaboration in planning, so let's look at three of the processes potentially pointing the way forward.
#1: Sharing information
If collaboration is all about including more participants in the supply chain, then digitizing seems like a necessary step for the future. In an article for Manufacturing.net, Tyson Foods Senior Director of Business Process & Systems John Buckley described his company's approach to collaboration in the wake of new technical advances.
As he puts it, the chance to share directly with third-party partners and suppliers should give businesses "even greater power" than was previously the case with data. Distributing important information among the supply chain can increase its value, Buckley argued, and also give companies a simple way to reach out to their consumers, who are often as hungry for information as the suppliers are.
#2: Responding to customer expectations
With better communication between parties, businesses may be able to make sure customer demands are driving all different parts of production. In an article for Apparel, Michelle Covey of GS1 US said that the tighter relationships are making meeting business audiences easier, as the endpoint stays in sight. This gets at a point behind many different positive innovations: Something which is good for the supplier is also fundamentally good for the customer.
Another example of a customer-targeted change comes from Chain Store Age. This source said that Nebraska Furniture Mart has used its new chain to cleanly coordinate business, again with the final goal of a better customer experience. The store's supply chain and logistics general manager, Scott Hansen, explained the thought process behind this.
"Our customers look to Nebraska Furniture Mart to provide a wide selection of products and excellent customer service at a fair price," Hansen said. "The integrated supply chain planning and execution solution has helped bring all departments together onto a single platform to communicate in a common language. The bottom line, we have achieved more effective inventory investments and better customer service."
#3: Security
Just as businesses share data to improve customer service, they may also need to counter security threats that threaten multiple points at once. But with increased digitization comes the risk that hackers might have more information to target, making supply chain risk a chief concern.
According to a Forbes survey, the amount of businesses that are most worried about security issues could continue to rise. Out of 1,408 respondents, 30 percent believe that IT and security incidents are very concerning.
Unlike other supply chain issues, this one has been at the top of the list for several years, maintaining a high spot since 2012. As such, the source said that the future of collaboration could also require some security measure that makes consolidating processes less risky.
In all of this, enterprise continuity is a common thread. Supplier relationship management can keep complicated processes aligned with company goals.
5 Recruiting Trends for Millennials in 2017
This blog post is brought to us by MRA Global Sourcing.
In an effort to deliver continuous insights on various employment trends, the MRINetwork released the results of its recent research on millennial talent management titled, 2017 Millennial Hiring Trends Study. The MRINetwork conducted a survey of over 200 recruiters in over 600 office locations, along with 181 millennial professionals to get an inside look at millennial talent trends. 
From the results of this survey, we highlighted the top 5 trends:

1. Most companies reported not concentrating on Millennials when recruiting, even considering succession planning as this younger generation will need to fulfill the C-Suite roles that will soon be abandoned by the Baby Boomer population.

2. Advancement and mentorship in the company were lower priorities compared to compensation, which was the first priority for Millennials.

3. 40% of Millennials admitted to being influenced more by market reputation compared to online presence, which is what 54% of recruiters believed was a stronger priority for this technology-driven generation.

4. A career pathing process has been credited as the most effective for retaining Millennials. This approach gives Millennials a layout for advancing into new roles within the company, a perspective they appreciate compared to previous generations.

5. 71% of recruiters claim it’s not apparent if the market is compelled by candidates, but 53% of the millennials surveyed felt employers had the advantage.