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I'm sure you've seen the headlines. A decade removed from the last recession, we're past due for another economic downturn. Fear not. While recessions certainly present challenges and obstacles, they also present opportunities for effective organizations to set themselves apart and gain new competitive advantages. 

When the next recession hits, follow these tips from the risk mitigation experts at Source One. You'll not only survive the next recession, but thrive as a stronger, more strategic and resilient business. 






















This guest blog comes to us from Matthew Clyne of VendorPanel.

Procurement professionals will need to channel their inner Dr. Frankenstein to create the tools and systems of the future. Discover why focusing on what makes us uniquely human is vital for long-term career planning. 

Technology has always been an enabler and a signal of change, whether people are ready for it or not. Good or bad, automation has been happening for centuries. The term disruptive technology describes any new kid on the block that shakes up the way things are done. Today’s “new kids”, including blockchain and artificial intelligence, will inevitably change how we work in procurement. The question is: will that change be good or bad? First, a look at the disruptors:

Blockchain is a distributed ledger that records transactions and is maintained across computers linked together through a peer-to-peer network. Its immutability means that blockchain provides a form of “digital trust”, particularly in terms of provenance. With blockchain, customers can trace their morning coffee from bean to cup, or their evening bar of chocolate back to the cacao plantation where the ingredients were first planted.
   
Procurement can use blockchain technology to map the true end-to-end customer journey regardless of who “owns” each part of the journey. It relies on members of the blockchain forming a network where each transaction can be viewed by all parties.

Artificial Intelligence (AI) refers to the creation of intelligent machines that work and react like humans. Also referred to as machine learning, AI has the potential to remove a great deal of manual, repetitive or tactical tasks from human workers, freeing them up for strategic and value-adding activities instead. In procurement, AI is already being used in areas such as procurement chatbots for internal customers, and algorithms that make sense of spend data and turn this information into actionable insights linked to organisational goals. 

After years of media hype and dire predictions of mass job losses to automation, a picture is beginning to emerge of the types of jobs that will be replaced. Repetitive, manual tasks such as truck driving or checkout operating can (and will) be automated. Professionals whose jobs involve the stewardship of a process should consider retraining. But the good news is that for many professions, AI will not replace our current jobs, but will take away the tactical elements and help us to work better.

Developing some key human skills today will pay dividends in the  AI-enabled workforce of the future. 

Three skill sets where the robots can’t win

1. Engagement
Imagine a work environment where the day is not spent glued to a computer screen. Procurement professionals often do our best work engaging with people by talking to our customers and suppliers. Genuine stakeholder engagement often comes down to social intelligence. It is the ability to read a person’s body language to work out their motivations and then subtly change your approach as the situation requires. While there has been some progress in teaching AI to read human facial expressions, our instinctive skill in this area gives humans a key advantage in face-to-face engagement.

2. Creativity
As Victor Frankenstein discovered; it takes a human to build a monster. Anyone can be creative; whether you’re an artist or an accountant, because creativity is simply a mode of discovery and questioning. The brain can be trained to default to this mode, particularly when organisations encourage creative thinking by giving their employees a safe space to try new ideas. While AI can store and access infinitely more data than humans, it lacks the creative spark or human X-Factor that leads to out-of-the-box ideas and innovative problem-solving.

3. Leadership
Leadership is an innate quality that can be difficult to teach. By nature, leadership relies heavily on soft (human) skills such as communication, decision-making, problem solving, empowerment, motivation and empathy, rather than technical skills or tasks that could be performed by AI. That being said, a manager whose idea of “leadership” is to use procurement software simply to monitor and report on KPIs of team members could very well be replaced by a piece of software. 

Matt has several years of experience at the intersection of technology and procurement. As Head of Partnerships & Alliances, he works with major clients and complementary software providers to further VendorPanel's integration strategy.

Companies build competitive advantaged when they’ve got access to valuable, accurate information. What you do with this information is, of course, paramount; but it’s the process of collecting and analyzing it that will determine the effectiveness of any next steps. When you look at a company’s wins and losses, whether it be a contender or your own company, you can always trace things back to the information that got them there.

This information is called market intelligence. You don’t only want to know what your consumers are doing; you want to know why they’re doing it. You don’t just want to know how your competitors are performing; you want to know why they are performing that way.

No matter the size or nature of your business, monitoring the state of your industry is a serious prerequisite for success. Broadly defined, market intelligence is any internal or external knowledge relevant to your products or services at the current date and time. In the procurement space, market intelligence can help to cut costs, efficiently manage suppliers, and give the insight to make even the toughest decisions.

There are many different types of market intelligence and they must be collected from somewhere by somebody. The quality of the data that you collect will depend on the quality of this team. Procurement teams commonly use market intelligence to analyze costs and options for financing a particular product or service. To produce best-in-class results, you need a strong, diversified group that boasts a number of key traits. Let’s make a checklist; does your team check out?

✔ Technical skills: Whichever type of data mining initiative your company chooses to pursue, whoever is executing the strategy will need to do so skillfully. The zero-cost model is an exemplary product analysis method. The idea is that you build your product or service cost from scratch rather than working backward from the final product. To perform this task, you must have the correct industry knowledge to identify spend categories and the technical skills to account for every factor. In this a particular example, your team would potentially be able to ask suppliers to justify each price point and likely talk down the originally-communicated price.

✔Analytical skills: Data that doesn’t inspire action is useless. Your team needs to be able to break down large data sets and fully comprehend the nature of the metrics. Furthermore, proficiency in Microsoft Excel spreadsheets is essential. If your team is unable to create pivot tables or graphically plot data, slow-moving data analyses or gross manipulation of data is more likely to occur.

✔ Communication skills: Teamwork makes the dream work. Once an individual has the skills and knowledge to attain and interpret data, they must know how to communicate their findings. When the entire team contributes, connections will be made and solutions will be developed. The inferences will not work for themselves; the entire team must collaborate for market intelligence to reach its full potential.

All of these skills are necessary, but it’s important to note that most people don’t have a perfect sense of all three. When you’re building your dream team, don’t forget to diversify. Not all members will have the same skill set, and you don’t want them to. Ensure that you select a blend of different types of people and the team will be more likely to function efficiently.

There are many other factors to carefully consider when it comes to approaching market intelligence. You must establish the right criteria, ask the right questions, and act accordingly.


In Part 2 of this series, we’ll take a deeper look into how to establish the right metrics in your research.


When you attend a networking event and the business cards get passed around, "procurement specialist" isn't exactly the most eye-catching job title in the mix. Not only are people generally un-thrilled by your department, many don't even know what it is.

Even if the individuals are familiar with the profession, they aren't likely to show excitement. This is because procurement has a budget-slashing, opportunity-limiting reputation. Other departments see procurement as a one-dimensional apparatus looking for cost reduction and cost reduction alone.

This assumption is, of course, untrue. Procurement is more of a transformative entity than it is a restrictive one. While we're known for cost reduction strategies, we can also contribute valuable insight to fundamentally shift a company's approach.

Are external factors alone to blame? Not exactly. Procurement has a dark past of letting itself fit into this narrow framework and people haven't forgotten. Some Procurement teams today rely on an outdated, penny-pinching approach. We can, however, repair the function's reputation of by redefining Procurement as a process optimizing tool rather than a purely cost-cutting one.

Source One Consultant Johnathan Groda, recently shared his thoughts on the subject in a blog titled "How Can We Make Procurement More Relatable?" He discusses:
  • The common misconceptions around procurement and the mindsets that cause them. 
  • The true value of procurement and what it can bring to the table. 
  • How to make Procurement an inspiring and exciting conversation point. 
Check out the rest of his thoughts on ThomasNet. 

Early this week, NASA circulated images of a flaming woodland area. Are these the California wildfires back again? Is this the beginning of a new wildfire disaster? Nope, worse. It's an even more alarming development, and it's definitely not just beginning.

These pictures come from Brazil - home of the largest rainforest on Earth.  The Amazon, which covers around 1.2 billion acres of green, lush land, is commonly referred to as the "Planet's lungs." Producing as much as 20% of the oxygen in our atmosphere, these lungs are now in serious danger. What's most horrifying about these ongoing wildfires is that they've been raging for three whole weeks. That's right-- almost an entire month of mass ecological destruction has passed without making global news.

So, why are we just now hearing about this? The delay probably isn't a coincidence.

Did American news outlets know about the fires and de-prioritize the information? Or was this news being purposefully suppressed by Brazil? The latter looks like a plausible explanation. Seemingly, the Brazilian government has motives for keeping the disaster under wraps.

Many are pointing fingers at Brazilian President, Jair Bolsonaro. Since Bolsonaro came into office in January, he has been facilitating logging, mining, and deforestation efforts to open up land for new business. Unsurprisingly, CNN reports that Brazil has seen an 80% increase in fires this year. According to Amazon Watch, he's been consistently flippant about ecological issues and the well-being of indigenous people in the Amazon.

In the wake of recent fires, Bolsonaro has not only neglected to accept responsibility, he's shifting blame to a third party. The group he's suggesting is responsible is... environmentalists? A quote from President Bolsonaro himself illustrates his stance on the issue:

"Regarding the fires in the Amazon, I’m under the impression that it could have been set by the NGOs because they had asked for money. What was their intention? To bring about problems for Brazil." Later on, he states, "Maybe – I am not affirming it – these (NGO people) are carrying out some criminal actions to draw attention against me, against the government of Brazil”.  

Rather than attributing the disaster to his own anti-green tendencies and policies, he is firmly asserting his belief that the forest fires are a direct action against him.

While commentators are torn on the true cause of the fires, they've proposed several possibilities.

A piece by CNN  heavily suggests that the fires are caused by farming civilians. Fires have been used as a land clearing technique for ages, especially in dry seasons. Environmentalists are suggesting this is the only way the fires could have spread this quickly. While they acknowledge climate change's role in causing similar disaster, they dismiss the idea that Mother Nature is solely to blame. But Bolsonaro isn't of the hook yet.

Many believe these farmers were encouraged to do so by the President as a way of supporting "pro-business" actions. Brasil de Fato reports that the president's repeated statements regarding "exploring economic activity in the Amazon" have prompted farmers to organize a "fire day" at the beginning of August which left smoke-covered cities all over the country. As Bolsonaro lacks evidence to show NGOs are culpable, these perfectly-aligned timelines do not help his case.

Bolsnaro's actions will likely lead make the terms "pro-business" and "anti-environment" synonymous throughout Brazil. Will the U.S. begin to conflate them as well? Not if we push for businesses that are pro-environment and pro-profit simultaneously. More economic growth does not have to mean more ecological destruction and greener practices do not have to mean a negative impact to the bottom line.

Environmentally conscious companies are becoming more and more numerous as the rising generation of consumers begins to raise its voices. According to a survey by Deloitte, Millennials and Gen Z-ers are making shopping decisions based on company ethics. They regard environmental responsibility as particular crucial.



Environmental tensions aren't going anywhere any time soon. Consumer and voter awareness will only heighten and the most forward-looking politicians and companies will naturally align their efforts with eco-conscious individuals. For the Procurement space, that means ensuring your materials are sourced responsibly and that all operations are carried out in a sustainable matter.

For now, we hope Brazil can save this valuable and beloved ecosystem. This is not the first time a massively-important ecosystem like this has faced total destruction. Scientists announced last year that the Great Barrier Reef, the world's largest coral reef system, is dying and can no longer recover from the effects of climate change. What's more, Forbes reported last week that 12.5 billion tons of ice has melted in Greenland. We were not expected to reach this total until 2070.

Can Brazil save the rainforest, or will our planet soon need a lung transplant?





One of the more difficult (and common) hurdles commonly faced by procurement is the transitional process from a longstanding incumbent supplier to a new one.  The domino effect of this decision can be felt throughout your organization from all levels, and more often than not, lack of compliance from one level has the ability to derail the entire initiative.  The purpose of this article is to demonstrate how to prepare and react to these potential hurdles, and how to put your organization in the best position to handle this transitional process.

Buy-In at Management’s Level:
Obtaining approval to transition from a long-standing incumbent supplier can be difficult. Oftentimes, you’ll need to present a strong, compelling case study to your leadership group.  The phrase “if it isn’t broken don’t fix it” holds true within all tiers of business. If this transition isn’t due to poor supplier performance, be prepared to identify a clear path that can lead to significant savings and benefits to the organization’s total cost of ownership.  A positive impact to the bottom line can go a long way in obtaining approval and affirmation from this group.

Once the new supplier is approved, it’s important to provide open communication and transparency as the transition takes place.  Historically, providing management with an implementation roadmap highlighting key milestones has proven to be a key driver in keeping this group at ease.  Once presented, updates via bi-weekly (or monthly) meetings should also be considered to help share any updates to the roadmap as supplier implementation unfolds.

Buy-In at the Local Level:
This initiative will only go as far as the local plant level takes it, so it’s important to generate clear and concise messaging anytime a supplier transition is conducted.  If your local buyers and plant workers aren’t properly informed and trained on how to purchase and communicate with the new supplier, this initiative will fail immediately.

First and foremost, providing complete transparency throughout this process helps establish respect and ownership at the local level.  For instance, implementation is a complex process that often times faces many unforeseen hurdles.  Being open about these potential challenges and requesting input and solutions from the get-go will help create ownership and teamwork at the local level.

Greater transparency can also be achieved through structured communication channels to help drive compliance.   For instance, following these two steps has proven to be effective in accomplishing this task.  The first step is the distribution of internal memos highlighting this transition which leads to the second step of face-to-face meetings with account managers from the new supplier.  The face-to-face meeting will help establish relationships in addition to also establishing a clear line of communication to help reiterate the key points established within the internal memo.

While a definitive blueprint does not exist for transitioning suppliers, hopefully these steps will help guide your team and overall initiative in the right direction.  Just to reiterate, communication and transparency will be a key driver to ensure a successful implementation is accomplished.

 

The Strategic Sourceror has served as a resource for supply chain and procurement professionals since 2008 and covers everything from Procurement transformation to the specifics of packaging costs.

In this series, we're giving you a curated list of our all-time top blogs in key categories. This is a perfect opportunity for anyone getting an introduction to Procurement and Supply Chain Management to familiarize yourself with the field.

This time around, we're looking at our top-performing Logistics blogs.

1. The Increasing Impact of Global Warming on Supply Chain and Logistics
The melting of the West Antarctic Ice Sheet is predicted to cause a 10-to-15 foot rise in global sea levels. Scientists also assert that sea levels will continue to rise as more Antarctic ice melts. Will this environmental disaster affect supply chains globally? Absolutely. Port cities, in particular, face risks related to material costs and working conditions. Read on to learn more about how our changing climate threatens global supply chains.

2. Sourcing Specialty Courier Services
Sourcing transportation services is never easy. Things get particularly complicated when a business requires the support of a specialty provider. These couriers are capable of transporting materials that require extra care and, fittingly, relationships with them tend to require extra care. This blog provides insights for selecting a best-fit provider and optimizing each step of the sourcing process.

3. Top Four: Reasons to Leave Asia
Sourcing and manufacturing on a global scale has long meant operating facilities in Asia. Recently, the risks of doing business abroad have begun to outweigh the benefits. From rising labor costs to industrial property theft, this blog examines the emerging risks of operating in China and other Asian countries.

4. Buying vs. Leasing Your Supply Chain: Lessons Learned from Brew Masters
Craft beer is one of America's fastest-growing industries. Why not learn a lesson in strategic outsourcing from the sector? Dogfish Head is a Delaware-based brewing company that partners with a third-party logistics company rather than operating independently. Their story provides a case study in supply chain optimization.

Thanks to eCommerce giants like Amazon, consumer preferences are evolving quickly. Traditional retailers are looking for creative solutions to keep themselves afloat. For many, this means developing a hybridized shopping experience. The Buy Online, Pick-up In-Store (BOPIS) and Buy Online, Ship-to-Store (BOSS) models have so far proven popular.

6. Walmart Looks to Reduce Cost of Shipping
Walmart has multiple solutions to its shipping cost problems. Because nearly two-thirds of all US consumers live within five miles of at least one Walmart, it's a no brainer for them to jump on the BOSS train. In addition to providing a newly convenient shopping experience, the shift will mean lower shipping costs for the world's largest retailer.

7. How to Reduce Food Waste in Your Supply Chain
A whopping 14 % of Americans today regularly experience periods of food insecurity. This makes the global food waste epidemic all the more troubling. This blog calls on stakeholders throughout the food value chain to do their part to address this situation.

8. The Spend Analysis and LTL Shipping – This is How You Do It, Part I
Less than Load (LTL) freight can be a tricky spend category to operate within. Most carriers have a pricing structure that's specific to their own tariff base rate which can make a price comparison tricky. In this blog, we address these concerns to offer readers a step-by-step guide for optimizing LTL spend.

9. Blockchain: How Can it REALLY Be Applied to Supply
Blockchain isn't just about digital currency anymore. The technology promises to transform entire industries and bring a new level of security to the global value chain. Check out our comprehensive guide to the what, how, and, why of blockchain-powered solutions.

10. Feeding Modern Cities: Why Disappearing Farmland Could No Longer Matter
The demand for produce is growing exponentially, but farmland isn't. How can farmers flex to meet demand? The truth is that they might not have to. Vertical farming is on the rise as agriculturalists experiment with growing "up" rather than "out." Learn more about this intriguing phenomenon. 

Check out some of our other "Greatest Hits" collections: 

People aren't good at picking out jobs. Even with a record number of positions to choose from, more American workers feel disengaged and discouraged than engaged and enthused - many more.

Why is finding the right fit so challenging?

Tomas Chamorro-Premuzic, an organizational psychologist, has identified several reasons in a new blog for the Harvard Business Review.

Unsurprisingly, money plays a big role. While there's little correlation between salary and satisfaction, impressive paychecks still tempt countless applicants into positions they'll only grow to despise. Chamorro-Premuzic also points to poor self-awareness. He writes, "people are generally quite inept at evaluating their own talents." The same goes for their real interests. Once they've found the job they think they want, these folks tend to work on one skill more than any other: suffering in silence.

So what are professionals really looking for? According to Chamorro-Premuzic, it's not the outrageous perks and near-complete flexibility that make all the headlines. His ideal workplace provides three simple things.

A Sense of Competency and Mastery

It's thrilling to feel good at your job. Even without external recognition, the knowledge that you've persevered past obstacles and mastered once-difficult tasks presents a powerful reminder that you're where you ought to be. 

That's not to say recognition isn't important. In fact, the Society for Human Resource Management (SHRM) suggests it's absolutely essential. 89% of survey respondents credit recognition programs and "more frequent check-ins" with promoting professional growth. Managers can't count on every employee to generate feelings of competency and mastery on their own. Sometimes that extra reminder is necessary.  

Fostering feelings of competency and mastery is about more than introducing a program to send out thank-yous. Recognition works best when it's aligned to an organization's core values and serves as an integral part of culture. Effective programs provide a consistent reminder that leadership cares - not just about results, but about the happiness of the entire team.

Chamorro-Premuzic notes that employees feel especially gratified by the opportunity to "perform above the expectation of [their] role[s]." In a business unit like Procurement - one that's long existed in a silo - such opportunities aren't always available. The function's leaders have the potential to change this with rotational programs and ambitious career paths that broaden its role. When they make this investment, managers and executives receive a more invested and inspired team in return. 

A Sense of Community and Affiliation 

Recognition - from managers as well as peers - also goes a long way in stoking these feelings. When co-workers exchange feedback with one another, they begin to establish a collaborative and productive community. Many will go on to build genuine friendships that enliven their day-to-day tasks. While it's easy to make fun of water cooler small talk and the 'mandatory fun' of team building activities, workplace friendships can make a big difference. 60% of employees say they're more likely to stay with a company that's staffed with good friends. This number rises to 74% and 69% for Millennials and Gen-Zers respectively.

Even professionals who work remotely have expressed their desire for a sense of belonging.  They're also more likely to quit - or consider quitting - if they don't feel it. Experts have begun to regard loneliness and isolation as an epidemic among this growing sector of the workforce

Employers have a distinct challenge ahead of them. How do they provide flexibility and promote human connection? Writing for Reuters, Lauren Young advises managers to occasionally place the spotlight on offsite workers. Encouraging them to lead meetings, she suggests, will remind them that their perspective matters and ensure their voice is never muffled. It'll also guarantee they're accountable and always serve as an active participant in workplace conversations. 

A Sense of Meaning and Purpose

Like workplace friendship, corporate purpose is sometimes tempting (and always dangerous) to dismiss. Far more than a buzzword, 'purpose' has become an all-important factor for applicants, employees, and consumers across the globe. And it's not just young loudmouths calling on businesses to do more. 70% of all U.S. adults want to make a difference at work. They're eager to do more than earn a paycheck or advance in their careers. They're hungry to work for companies that operate with a clear mission.

This mission should result from a community effort rather than a top-down decree. Adopting a company-wide approach, one that welcomes all perspectives, will stimulate engagement while providing for a more purpose-driven business. It will also produce a far more authentic sense of purpose than an executive brainstorming session possibly could. 

Introducing a sense of purpose doesn't have to mean setting ambitious goals to fight climate change or eradicate waste in the supply chain. While organizations should always identify opportunities to serve the planet and its people, workplace purpose can come from far simpler initiatives. It's often enough to remind employees that they have a clearly-defined purpose within the office and that their efforts make a noticeable difference. 

A lot of people hate their jobs. They spend weeks, months, and years regretting their decision to let a big paycheck or exciting location woo them. Surprisingly few, however, ever regret the decision to quit. Are you providing your team with everything they're looking for? 


Miguel Patricio, the new CEO of Kraft Heinz, faces a wealth of challenges in his new position. He joins the organization as its profits are flagging and its public perception is at perhaps an all-time low. In addition to losing health-conscious customers, the maker of supermarket staples like Jell-O and Heinz 57 has faced months of scrutiny from the SEC.

The SEC probe could not have come at a worse time for the struggling brand. Kraft Heinz broke the news to stakeholders alongside an utterly disastrous earnings report this February. News that the company had engaged in procurement and accounting misconduct quickly took things from bad to worse and drove consumer confidence even lower. Required to re-file its financial statements, the company also conducted an internal investigation of its own.

While they've wrapped up their own inquiry, Kraft Heinz is still contending with SEC investigators and its stock hit a new nadir earlier this month.

Where Did it All Go Wrong?

Kraft and Heinz have seen their problems multiply since the two organizations merged in 2015. Spearheaded by Berkshire Hathaway (Warren Buffet called it "my kind of transaction"), the deal produced a combined entity that quickly set about reducing costs. It's this dogged focus on slashing expenses that led Kraft Heinz to engage in procurement misconduct and attract the attention of investigators. 

Kraft Heinz' internal investigation revealed financial misstatements accounting for around $200 million dollars. "The misstatements," a spokesperson explains, "largely relate to the timing and recognition of supplier contracts in the procurement area." Most likely, this means that employees accelerated the rebates and discounts they negotiated with suppliers to reflect cost savings more quickly. The company also noted that it had reprimanded several dozen employees for these actions.

Citing conversations with current and former employees, CNBC suggests this tricky contracting was just one symptom of a culture dominated by savings targets and annual bonuses. In addition to inspiring "rapid-fire promotions of often inexperienced employees," Kraft Heinz' policies appear to have encouraged bad behavior. As sales declined throughout 2016 and 2017, the pressure to cut costs at all costs grew even more intense. "A large portion of that pressure," writes CNBC, "fell on the procurement and operations teams."

More specifically, it fell on hungry, young employees eager to make an impact and elevate the company's procurement group. They tended to strike suppliers as overly-aggressive, even combative in their pursuit of low-cost contracts. One described the call for savings opportunities as little more than a "blunt instrument." 

What's Next? 

For a company looking to change with the times, Kraft Heinz relied on surprisingly outdated methods. Coming down hard on suppliers and beating the drum for cost savings are the tactics of Procurement's dark, ineffectual past. Patricio acknowledged this in his first earnings call last week. "I believe," he remarked, "that we persisted with integration-minded cost cutting and did not commit to a continuous improvement, productivity-driven mindset soon enough." 

This mindset will prove essential for rebuilding Kraft Heinz' reputation and (hopefully) winning back the consumers it's lost over the last decade. If nothing else, the hard work of rebuilding and rebranding will provide a valuable opportunity for the Kraft Heinz procurement group to evolve in their approach and make the function a force for more than just savings. 



Since J.C. Penney’s decline, beginning in 2009, the company has made efforts to rebrand itself in hopes of spiking sales and creating opportunity. Last year, sales for J.C. Penney fell 25 percent: a net loss of $985 million. J.C. Penney was largely affected by the Great Recession and in the period of 2009 to 2011, the company witnessed their yearly revenue decrease by one billion dollars. In 2007, J.C. Penney’s yearly revenue peaked at $20.18 billion, compared to its current revenue of $11.7 billion. Throughout the recession, shoppers who would frequently purchase at J.C. Penney turned to cheaper stores.

However, J.C. Penney’s rapid downfall is mostly attributed to its former CEO Ron Johnson, appointed in 2011. Under Johnson’s management, J.C. Penney changed its marketing method and its pricing model. The goal was to appeal to wealthier shoppers and turn J.C. Penney into a more upscale retail store. J.C. Penney also stopped carrying many brands which were mostly purchased by low-income and middle-income customers, who made up a large share of J.C. Penney’s customers. Prior to 2011, the company had a successful private label program and their management properly handled costs and shortened the supply chain.

Johnson wanted J.C. Penney to stand out from its competitors and introduced a unique shopping experience: a store within-a-store-concept. Customers could indulge in services such as manicures, an effort to convert the company into more than just a retail store. Nonetheless, Johnson’s focus on tailoring to a higher-income market was a tough call in a time where many Americans had lost their jobs or were struggling financially.

Another substantial mistake was terminating clearance sales and coupons. Instead of pricing their products and then lowering the price-tag after six weeks of sitting on the shelves, Johnson decided to not waste retail space and capital, so he decided to initially list products at an already reduced price. However, customers want to feel that they are saving money and find good deals; therefore, this tactic proved ineffective. As a result, sales declined by $4.3 billion in 2012. J.C. Penney’s stock (JCP) also took a hit; its highest stock price was $82 in 2007, compared to $27 in 2011 and a current low of $0.60 a share.

Ever since the Ron Johnson era, J.C. Penney has been working to increase its revenue and satisfy its investors. However, with Amazon conquering the e-commerce segment and consumers buying more online instead of in department stores, the market looks different for J.C. Penney than it did ten years ago. If J.C. Penney wants to achieve the success it did in the past, it must capture a larger market share of the shrinking retail segment. Current CEO Jill Soltau aspires to eliminate the company’s four billion dollars of debt. Her vision is to reduce inventory in stores, in order to boost margins on products, while shutting down underperforming outlets. Soltau also plans on renovating locations and replacing outdated goods with women’s apparel and home goods. J.C. Penney will also introduce a centralized pickup and returns center in its stores, as well as an efficient checkout process.

Another growth opportunity for J.C. Penney lies within the secondhand clothing industry. J.C. Penney agreed on a partnership with consignment firm ThredUP to introduce the sale of secondhand women’s clothing in thirty of its locations. Soltau hopes this will cause an increase in budget-minded millennial shoppers. J.C. Penney’s efforts to turn the company around will take years to show results; however, with the right management and decisions, the company can work to reduce its debt and reverse some of the damage made by past management.


Consumers want to be assured that the products they purchase are the genuine article and of the highest quality possible. However, experts increasingly say that because of how complicated the global supply chain and the rising prevalence of "gray-market" commerce are, it may not always be easy for companies to keep bootleg items from reaching their shelves.

Recent estimates from the Organization for Economic Cooperation and Development shows about 1 in every 20 products purchased by consumers in the U.S. is counterfeit these days, and that number is rising, according to Logistics Management. A large part of this is specifically because of the gray market, in which genuine products are removed from the supply chain - either directly from the factory or somewhere in transit - and sold at a discount. At the same time, counterfeit goods are becoming easier to make and pass off as the real thing.

Today, the vast majority of bootleg or gray market items come from China, but other nations - including India, Malaysia, Pakistan, Thailand, Turkey and Vietnam - generate sizable portions of the counterfeit market as well, the report said. Indeed, some of those countries are seeing their foothold in the counterfeit market growing these days, and companies may find there's little in place to prevent the trend; in fact, U.S. Customs and Border Patrol only stops about 1% of counterfeit goods coming into the country.

Spotting counterfeits in the supply chain is vital to keeping consumers happy.Spotting counterfeits in the supply chain is vital to keeping consumers happy.
A potential risk
One area where this trend may be particularly concerning is when it comes to food and drink, according to Business Insider. The fact that people will consume these products means quality control is of the utmost importance, but bootleggers cannot be counted on to uphold any such standards. A recent unfortunate case in Costa Rica highlights this quite well: 25 people there died after drinking bootleg alcohol tainted with methanol.

The International Alliance for Responsible Drinking estimates that almost one-fifth of all alcohol in the Central American nation is counterfeit, and unfortunately the most recent incident is not isolated, the report said. These products often end up in perfectly reputable establishments, and typically they aren't purchased knowingly. Often, the people doing the ordering may just think they're getting a slightly better deal on a normal order.

What can be done?
Experts say that while there's no way to ensure there is nothing but real products in your supply chain, steps can certainly be taken to reduce that risk, according to QSR Web. For instance, advanced technologies including the blockchain may be used to identify products at every step of the chain, from factory floors to transport vehicles to store shelves. That may be especially useful in sourcing food and drink products to better ensure products are safe to consume.

The more that can be done at every step of the supply chain to better monitor for quality in any type of product, the better off companies will be in keeping consumers' confidence.


While the economy has been going strong for years, many experts now believe some cracks in the foundation for all that growth are starting to form. In the past few weeks, warnings of another recession looming a year or so down the road have become more common, and that could have a major effect on the global supply chain.

At the end of June, a survey of supply chain professionals found that 55% of those experts expect to see a recession of some kind take place before the end of 2020, according to a the new Plans & Tactics to Recession-Proof the Enterprise: Survey of Procurement & Finance Professionals study from Suplari. While the majority of respondents think a downturn is 15 months or so away, at most, 30% feel they or their companies are not prepared to deal with a recession.

Moreover, because so many companies are anticipating financial difficulties, 80% are trying to rein in costs before the end of the fiscal year, the survey found.

"Finance and procurement professionals operate closely and holistically in relation to the matters of spend management, purchasing activity, savings optimization and risk factors," said Nikesh Parekh, co-founder and CEO of Suplari. "They are likely to be the first in their organizations to perceive and deal with the impact of a recession."

Concerns about a recession are mounting.Concerns about a recession are mounting.
Assessing the potential impact
In recent decades, recessions typically take place soon after the yields on 10-year Treasury bonds are surpassed by those for two-year Treasuries, and that happened in mid-August, according to supply chain expert Steve Banker, writing for Forbes. That in and of itself should serve as a warning to supply chain pros: They need to speed up their preparations for a downturn, or at least have plans in place for how they will react.

Companies need to consider the ways in which a recession would impact their ability to source materials or products and then link up with other businesses in the supply chain, and start building those projections into their integrated business planning, Banker added. However, it may be vital to speed up the regularity of that planning, based on the size and ability of an operation to handle it.

Some may benefit from upgrading monthly IBP to weekly, or quarterly to monthly, to put themselves in a better position to deal with these issues.

Already feeling the effects?
Meanwhile, investment bank Goldman Sachs recently cut its own growth forecast by about 10% because it has already begun to feel some of the early effects of a potential recession, triggered in large part by the "trade war" between the U.S. and China, according to CNBC. Goldman Sachs chief economist Jan Hatzius recently told clients that as much as one-third of the drag on the United States' GDP could come from just the latest escalation of the trade war's tariffs, some of which has been delayed over concerns about the holiday shopping season.

In fact, Hatzius specifically cited fears about complications in the supply chain that would lead to difficulties in the U.S., the report said.

With all this in mind, supply chain professionals would be wise to make sure they start their planning as soon as possible for a potential recession, so  they aren't caught half-prepared when and if the downturn hits.