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More companies may soon invest in procurement software

Just about every headline about supply chains in recent months has related how hard the industry has been hit by the novel coronavirus pandemic. From just about any perspective, life in the supply chain is now a lot more difficult than it was several months ago, and it's likely to be a long road back to the way things used to be, if getting there is possible at all.

In some ways, though, that could actually be seen as a positive, with short-term pain - especially when it comes to procurement - prompting more companies to seek better long-term solutions, according to Supply Chain Dive. For instance, even as many companies were already investing in warehouse management and procurement software before the pandemic rocked operations, they've been forced to come up with more creative solutions amid social distancing and remote work.

After all, these companies didn't stop operations, but they did have to dramatically rethink how they worked and pivot to a solution that accommodated the "new normal," the report said. That, in turn, might encourage them to continue investigating their options for further investment that allow them to remain nimble even as conditions in the industry continue to evolve.

More companies are seeing the value in procurement software's insights.More companies are seeing the value in procurement software's insights.

A great example
One industry titan in developing procurement and inventory management software - SAP - recently announced that its business has boomed in recent months specifically because companies are taking the opportunity to modernize operations. In the second quarter of 2020 alone, the company saw 70 new major customers, as well as 245 renewals of existing contracts, and 290 customers pushing their new platforms live.

SAP Procurement Solutions President Chris Haydon noted that the current situation in the industry seems to have been the big driver in interest, because companies need more flexibility when examining both internal and external processes, and thus more insight into how effectively what they do today is working, the company said.

"As a result, we are seeing many companies accelerate digitalization projects to balance getting the supplies, materials and external talent resources needed to adapt quickly and meet customer demand no matter what comes next," Haydon added.

Getting it right
Of course, the entire supply chain also needs to have reasonable assurances their procurement efforts will be effective when it comes to guaranteeing the items they obtain are of the highest quality, according to Pro Bono. For that reason, especially amid the pandemic, more government entities are crafting plans to identify and certify suppliers that provide a good blend of quality, environmental impact, transparency and accountability, so the governments themselves and businesses within their borders can have more certainty about the quality and veracity of any items they need.

When companies are able to implement all the right technological solutions to ensure their efforts aren't in vain, and that they can move purchases through the supply chain as quickly as possible, they and their partners will be in a better position to continue evolving - even long after the pandemic recedes.

Supply chains still struggle to reduce fraud

Fraudulent products have long infiltrated supply chains, especially larger ones that involve more partners and suppliers, and that's a problem for all involved. This kind of crime can undermine the reputation of manufacturers, cause issues for freight companies and even harm customers - and all of those issues only seem to be increasing amid the novel coronavirus pandemic.

The increase in phony products in recent months has certainly been noted among supply chain professionals, and unfortunately, it does not appear to be something that can be addressed comprehensively when there are so many other concerns in the sector, according to Medpage Today. This issue was recently addressed in a hearing held by the U.S. Senate Finance Committee, as demand for personal protective equipment in particular has led to a surge in delays, hangups and even fraud.

Phony products are still a growing problem in the supply chain.Phony products are still a growing problem in the supply chain.

"Before the coronavirus pandemic, hospitals and healthcare workers could avoid purchasing counterfeits by tapping into tried-and-true supply chains," Committee Chairman Chuck Grassley, an Iowa Republican, said at the hearing. "However, as the demand for PPE skyrocketed, some of these providers have had to go outside their normal supply chains to source supplies, and in some cases have inadvertently purchased fake, faulty, and even illicit medical supplies."

Another major problem
Meanwhile, supply chain experts have also grown increasingly concerned with the prevalence of so-called food fraud - including substituting, omitting or diluting ingredients that can put consumers at risk, according to Food Engineering. Alma Delia Hernández, a food safety professional at a supply chain consulting company, noted that companies are increasingly successful at identifying these issues through emerging technology, but it's still a major problem for the industry.

Altogether, it's estimated that this kind of fraud costs the food supply chain some $50 billion per year, especially around certain products like seafood, spices, meat, coffee and more, the report said. A recent industry survey found that consumers are not especially confident in the safety of their food, and that may be particularly true when it comes to food products that are traditionally more expensive and, therefore, more likely to be counterfeited or otherwise tampered with.

A look at the tech
One of the easiest ways producers have found to combat supply chain fraud is to rely on the block chain, encryption and other digital technologies so that items can be tracked easily from the factory or farm to shippers to stores to consumers, according to the Enterprise Times. Properly traced shipments can tell partners or recipients everything that is supposed to be in a given shipment, serial numbers for every item within it and so on, all with a single scan. That, in turn, provides far more confidence about a given item's provenance for all involved.

Of course, this is not an issue that's going to go away any time soon, and companies need to continually plan for and evaluate how they combat fraud of this type on an ongoing basis. Just as manufacturers and freight firms innovate new ways to avoid fraud, those who commit it in the first place are likewise scheming for keeping up with that next wave of protection.

In recent months, there has been some fairly broad conjecture about the readiness of a vaccine to combat the novel coronavirus pandemic. Regardless of how close pharmaceutical companies are to actually having a working vaccine, one thing that is generally agreed upon is the world's supply chains are just not equipped to produce and distribute that potential solution right now.

A big part of the problem is the vaccine is being developed - and eventually pushed to production - amidst an economic downturn that means many businesses are actually shrinking their supply chains, according to Bloomberg News. Moreover, supply chains for vaccines and other medical products require specialized services and even with thousands of specially equipped cargo planes - it's likely only about half the global population could get a vaccine in a timely fashion. Simply put, that kind of transport infrastructure isn't exactly readily available these days.

"We're not prepared," Neel Jones Shah, global head of air carrier relationships at the freight company Flexport, said during a recent webinar, according to Bloomberg. "Let's all be honest here, vaccine supply chains are exponentially more complex than PPE supply chain. You can't ruin PPE by leaving it on the tarmac for a couple of days. You will destroy vaccines."

Supply chains for a coronavirus vaccine will be critical.Strong supply chains for a coronavirus vaccine will be critical.

Getting a head start
For these reasons and more, the understanding in the supply chain sector is that they need to start ramping up capacity to handle shipping of a potential vaccine in relatively short order, according to Medical Xpress. With well over 100 vaccines being tested worldwide, including a few dozen that are already in human trials, it's possible that a workable cure is just months away from being ready for mass production. On the other hand, some experts believe a vaccine that can be made in large quantities may be more than a year from being ready.

Effectively, that means freight companies may just need to have shipping processes on standby, just waiting to be activated, the report said. As such, shippers would be wise to start crafting their response plans now, so they can be "switched on" and ready to go with relatively short notice, even if the likelihood of having hundreds of millions of doses produced in short order is somewhat remote.

A bit of runway
Currently, even if a vaccine is proven effective and approved by regulators around the world tomorrow (which is certainly unlikely), it would still take months to ramp up production, let alone actually start distribution, according to European Pharmaceutical Manufacturer magazine. With that understanding, many of the world's biggest drug companies say they are simultaneously massing power for their supply chains so that the roll-out of a potential cure - no matter who develops it - is as smooth as possible. That includes the production of single-use vaccine equipment that helps ensure the fastest treatments.

Certainly, those companies in the medical supply chain would be wise to start crafting strategies and partnerships to ensure they can play a critical role in reading and reacting to whatever situations develop in the months ahead, and keep a close eye on what may be asked of them.

The latest topic of controversy is long-term effects of working from home. Is it sustainable, reasonable, and effective? Would this set-up our company for long-term financial success and improve communication skills? How will our employees react if all training exercises and miscellaneous activities takes place directly within the comfort of their home?

Companies large and small have been exploring this topic for decades, such as Bank of America, AT&T, Aetna, Yahoo, Reddit, and Best Buy.  Amid the COVID-19 shutdown, 95% of Best Buy’s corporate campus is working remote. “We expect to continue on a permanent basis with some form of flexible work options” a spokeswoman said.

On the flip side, Marissa Mayer, the chief executive of Yahoo, says “Some of the best decisions and insights come from the hallway and cafeteria discussions, meeting new people and impromptu team meetings.”

While these are all very important considerations and key ideas to discuss, we need to stay afloat with the current pandemic and ways to actively improve communication styles. The key strategy is to consistently be in-touch with your employees, supervisor, and fellow co-workers.

Due to the current pandemic, most Corcentric employees began working from home mid-March and will continue to do so unless notably safe to our co-workers and the community. Ultimately, the option to work remotely or in-office is no longer a preference, therefore we are working together to enhance the system(s) in place to effectively communicate virtually.  

I wanted to highlight the strategies Corcentric is applying to stay ahead, promote conversation, and answer any out-standing questions or concerns related to the current pandemic and long-term commitments to working remote.

Ways to Stay Ahead:

  • Surveys
    • Corcentric releases a survey to all employees to better understand how they are feeling about returning to the office, the pandemic, roadblocks experienced through working remotely, and ways to improve. The survey requires the employee to reveal the location by which they are headquartered to better understand comfort by location and responsiveness by employees located within that area.
    • Survey results are shared, addressed, and further discussed during Town Hall meetings
  • Town Hall Meetings
    • Company-wide meetings held quarterly to discuss the financial health of the company and address pandemic concerns by employees. The meeting includes open conversation and a dedicated period for “Q&A” to ensure all employee are heard.
  • Weekly / Monthly Touchpoints
    • Weekly and monthly meetings are held with immediate supervisors and directors to discuss important updates, address questions, and discuss long-term strategies to meet goals during this unprecedented period.
Additional Incentives:
  • Corcentric recently launched a program allowing employees to take extra PTO to volunteer and offer community service to our local communities. By doing so, we are actively promoting time-off to decompress, provide a sense of purpose, reduce stress, and protect our mental health.
  • Remote happy hour and game nights with co-workers to encourage employee engagement and to in-turn improve collaboration and teamwork. This gives a chance for employees to interact with one another, celebrate accomplishments, enhance company culture.
  • Actively promoting mental health days, vacations, and taking time-off to reduce burn out and address work/life balance.

While there are many questions, ideas, and discussions about the pros and cons to working remotely long-term, I would like to point out the importance of actively staying present and considering the employee(s) experiences given the recent pandemic. After all, the employees are the meat of the company and their value is key to reaching current and future success.

This guest blog comes to us from Megan Ray Nichols of Schooled by Science.

Strong supplier relationships are key for businesses wanting to maintain growth and expand into new markets. If a supplier is essential to your business, your relationship with that entity can easily develop into a strategic alliance — the success of your business helps theirs, and vice versa. 

With a strong relationship, both businesses can move away from cost-cutting and profit-maximizing moves to a shared strategy of real mutual benefit. 

Regularly working with the same vendors can streamline the procurement process and eliminate the costs typical to establishing a new supplier relationship. Also, as knowledgeable as you and your team are about industry trends and developments, suppliers have access to a range of contacts and other information sources you may not be privy to. Suppliers — if they're invested in your business's growth — may be much quicker to talk with you about new avenues for expansion, market shake-ups or new goods and materials your company may benefit from. 

If you lean heavily on suppliers like just about any business, then building strong relationships with them will be crucial. Below, we'll cover four different techniques you can use to grow your relationship with your suppliers: 

1. Manage Critical Suppliers Individually 

A personalized approach rather than an algorithmic or systemic one will be essential for fostering good relationships with suppliers. Management approaches that work with less critical vendors in a crowded market — like the use of e-auction systems — can be used, but they won't help you build strong relationships. 

Instead, work directly and closely with your suppliers. You may even consider involving them directly in product development, risk management programs or initiatives to build out your business's overall supply chain. 

Soliciting advice and expertise from vendors can provide immediate benefits and build communication between you and your supplier. 

2. Establish a Supplier Relationship Management Program 

To build a strong relationship with critical suppliers, you'll need an action plan. Start by identifying the most essential suppliers for your business. Depending on your organization's needs and resources, you may want to go further and classify them based on potential profit impacts and risks. 

Once you've identified the entities that will help your organization most in the long run, you can start putting supplier management strategies into place. These strategies will help you build and structure your relationship with a vendor. They'll also help you manage any potential issues or miscommunications that may arise, which can prevent a relationship breakdown in case of an error. 

3. Keep Lead Times Reasonable 

In general, it's a good idea to be careful about lead times and demands with quick turnarounds. Whenever possible, give your suppliers enough time to source the goods and materials needed to fill your orders. 

Similarly, you should be sure to pay your suppliers on time. Prompt payment may seem like a low bar to clear, but it's not unusual for vendors to wait days, weeks or even longer for businesses to pay after an order is fulfilled. Good payment practices can solidify your business as a reliable partner. 

4. Communicate Consistently and Effectively 

Keep communication channels open with critical suppliers and make transparency a top priority. Similarly, focus your relationship-building efforts on suppliers who make similar moves toward strong, reliable communication. Maintaining open channels with your vendors will prevent communication breakdowns. Regular discussions will also help you understand how your supplier operates, as well as their internal language and business culture. 

Sharing information with your supplier can also encourage trust. In the same way that they have access to valuable contacts and knowledge that your business may not, your team also has useful and exclusive data. 

 Time will help here. Being a reliable, long-term customer is often enough for a major supplier to become invested in the success of your business. Sticking with the same companies and building a rapport with your contacts can go a long way in laying the foundation for strong supplier relationships. 

Your Business Can Cultivate Reliable Supplier Relationships 

A strong supplier relationship can be a massive boon for any business. It can make procurement of goods easier and offer value for a company in the form of expert advice and insights. 

When building a long-lasting supplier relationship, mutual communication and reliability will be foundational. Maintaining open communication channels, paying suppliers promptly and managing supplier relationships individually can all go a long way in nurturing these connections. 

In some cases, time may be enough to solidify a valuable connection. Paying promptly, communicating clearly and keeping demands reasonable over time can convince a supplier to further commit to a mutually beneficial relationship with your company.

Thanks, Megan!


Each week, we will go into details on how to address project and change management now to create a resilient and robust organization for tomorrow.

Recent months have clearly demonstrated that business is always vulnerable to forces that are often outside of their control. But it does not mean they do not have control to prepare for such events. This blog series will address key projects and initiatives that procurement organizations can take on to improve internal operational and organizational processes and procedures. The first point to consider is how much value an internal project brings to a company, If all of an employee’s time is considered overhead and they never work on any client or customer-facing initiatives, it becomes much more difficult to determine the return on that investment. Every organization understands the importance of having such people on staff. IT, HR, and Accounting are typical departments where the time dedicated to the job is nearly 100 percent internal focused.

On the other side of the spectrum are the employees who directly work with or for clients or customers. Whether in sales, manufacturing, or engineering, most of the time spent by those team members is focused on products and services directly tied to a client or a customer. If an employee’s time can be attributed to a product, service, or a specific job, then it becomes easier to determine profitability and the success of those work streams.

So what happens when there is a temporary situation where those employees no longer have sustainable work coming in? What happens when there is a lack of product getting sold, no new clients coming in, the economy is in a tailspin, or there is a global pandemic nearly shutting down the entire global supply chain?

Companies should always have a strategy in place to navigate unexpected economic fluctuations due to industry uncertainty, national policies, or global calamities. When a crisis strikes, leadership can then pivot to those internal projects that are very important to a company’s overall efficiencies and ultimate successes but often get left on the back-burner due to the more immediate needs of clients and customers. The ability to reapportion project downtime by tackling those internal tasks or procedures that are often overlooked could be the key to a company’s survival when the work begins to pick back up.

A strong change management process is key for any organization to navigate corporate evolutions that arise – both planned and unforeseen. Change management provides the processes, tools, and techniques that guide leadership and employees through shifts in responsibility, while also fostering the productivity the organization requires to achieve business outcomes. When the organization needs to adjust how work will be done, change management focuses on how to help employees embrace, adopt, and utilize changes in their day-to-day work.

This week, we will look at the 1st of 6 ways a company can use downtime to impact the greater good of the organization and position themselves to be a better, stronger company when the work picks back up.

Cultivate Supplier Relationships

A critical component to any company’s success is its ability to maintain strong working relationships with suppliers and vendors. This may sound like an obvious statement but, oftentimes, both sides of the partnership become complacent in their processes. While everything appears to be fine (if it’s not broke, don’t fix it), opportunities to improve the relationship can be overlooked. Examples include streamlining processes or procedures and adjusting costing models that could ultimately save money. Those responsible for managing the relationships with suppliers should always be looking to challenge the status quo.

Specific Example: Engage in Process Mapping with Key Suppliers

Engaging a key supplier in a process mapping effort can be a very powerful method for improving business performance and increasing the valuable contribution of that key supplier. Process Mapping is the technique of using flowcharts to illustrate the flow of a process, proceeding from the most macro perspective to the level of detail required to identify opportunities for improvement. Process maps can be applied to anything from the journey of an invoice or the flow of materials, to the steps in making a sale or servicing a product. Mapping helps address questions related to individual and team performance, quality of work life, and work design.

As the trend toward outsourcing continues to grow, treating key suppliers as business partners becomes far more important to a successful enterprise value proposition. Top suppliers want to come to the table with a “help me help you” partnership philosophy.

Once a company has created a process map for all suppliers in a specific category, it becomes easier to see where supplier redundancy occurs and where there are opportunities for supplier consolidation. Companies should also use this exercise to identify the strengths and weaknesses of their suppliers and determine if the correct relationships are in place. Just because a supplier can do something, does not mean they should do it. Conversely, you might have suppliers capable of doing great things for the company that you may not have been aware of. Process mapping will help to identify those potential services or offerings. The goal is to make sure you have the right suppliers in place performing the services they excel at.

Example Tool for Process Mapping

SIPOC (A Six Sigma Tool)

Please check back next week for a look at part 2 of this series where we will discuss ‘Accessing Inventory Management’.

The impact of the novel coronavirus on just about every supply chain - from massive global networks to small regional efforts - is almost impossible to overstate. In fact, in addition to setting businesses behind the 8-ball and leaving them at the will of forces outside their control, it has also led them to reconsider their supply chain operations from the ground up. That includes scaling back on previous efforts to increase sustainability .

In fact, 15% of businesses in a recent Chartered Institute of Procurement & Supply survey said they would abandon plans for sustainable supply chains, and nearly half say they could be waiting at least 12 months to see productivity return to where they were before the pandemic hit. This decision to move away from sustainability may be something of a surprise, as more than 2 in 3 respondents also said they intend to take the opportunity presented by the current situation to re-examine their relationships with suppliers, and potentially look for new partners.

Sustainability isn't a priority for as many supply chain businesses these days.Sustainability isn't a priority for as many supply chain businesses these days.

However, there is one revelation in the CIPS poll that makes this decision more understandable: Two-thirds of respondents say they have seen their costs for goods and services rise in recent months, and they're likely to pass those expenses on to consumers. Given that sustainability also typically costs more to maintain, it's perhaps easier to see why about 1 in 7 companies aren't prioritizing those efforts.

What can be done?
Just because the current financial realities are precluding some sustainable efforts, that doesn't mean the industry as a whole isn't working to find solutions that reduce waste and pollution stemming from global supply chains, according to Christian Lang of the Forbes Technology Council. For one thing, there is a growing understanding that sustainability and the ability to pivot when things go wrong are complementary ideas. If you want a resilient supply chain, focusing sustainability could be a great way to achieve it.

The reason why is simple: Smaller operations tend to be more sustainable, and more numerous than larger competitors that may be more vulnerable to disruptions as well, Lang noted. In addition, such a switch can make supply chains more effective because smaller suppliers often have a better handle on their smaller volumes of data.

Understanding the value
It's for these reasons that some of the biggest companies in the world are now pivoting to increased sustainability in their supply chains as soon as they can. The computer and smartphone titan Apple recently announced that its supply chain and products will be 100% carbon-neutral by the end of the decade, with a goal to reduce emissions by 75% and make up the remaining one-quarter by investing in carbon removal technology.

Because of the company's influence, it can also encourage buy-in from its partners, Apple said. Indeed, at the end of 2019, 92 facilities were enrolled in Apple's Supplier Energy Efficiency Program, reducing more than 779,000 metric tons of carbon emissions in the process.

The more your company can do to look at its operations and determine areas where sustainability is an achievable goal, the better off both you and your partners are likely to be going forward.

When the novel coronavirus first hit China in late 2019 and early 2020, it didn't take long for the effects to be felt around the world. Global supply chains relied heavily on production in China to power their fast and easy access to all kinds of products, and the ripple effects of those first slowdowns are, to some extent, still felt in the industry. However, the companies that were able to weather the storm most effectively also tended to be the ones that had access to data at the time.

Certainly, since the pandemic really gripped the global economy - not just supply chains - more businesses have seen the importance of digitizing their various processes, but for some it was a bit late to truly avoid a serious impact, according to the MIT Sloan Management Review. As a general rule, the insight companies had into their supply chain partners' various operations helped them plan for whatever issues arose, but even those who thought they had great contingencies in place quickly found they weren't on the solid ground they thought.

Sharing data in the cloud can be a big help to entire supply chains.Sharing data in the cloud can be a big help to entire supply chains.

"Honestly, we didn't know how little we knew about our key suppliers until COVID-19 occurred," one supply chain executive based in Latin America told the publication. "We had to get all kinds of [new] information from them and - to make [our] factories work - we had to give them information we never had before."

That realization shifted a lot of change in a short period of time, turning digitization efforts that previously took years into a process that ramped up in a matter of months, the report said.

Where the cloud comes in
With so many companies now hustling to collect, interpret and share more data than ever before, the need to disseminate information quickly is pressing, and that's why the cloud has become such an important weapon in any supply chain company's arsenal, according to Antonio Gulli, engineering director at the office of the CTO for Google Cloud. Writing for Forbes, Gulli noted that companies in just about every industry now face the twin issues of seeing their supply chains strained and that even previously digitized processes just weren't equipped for the pandemic.

How can companies bounce back? Using the data they and their partners collect to game-plan for various predictable obstacles and find effective solutions virtually could be critical, Gulli wrote. That way, they don't have to risk real-world breakdowns but they can see how their own systems would react in certain situations, and smooth over any inefficiencies they encounter.

Why forecasting is critical
That ability to make estimates of how any given company in a given supply chain would react to a hiccup can allow for many businesses to simultaneously fall back to a contingency plan, effectively sidestepping many problems, according to Supply Chain Digital. Being able to forecast demand and see problems coming before they arise is a critical part of that. With even basic forecasting measures in place, enabled through the cloud, companies may be able to react positively in most cases and remain on stable footing.

There isn't a company on earth that can get by without the hard work of its employees, whose labor drives all business growth and success. As such, it's important to cultivate an environment in which your workers feel engaged and dedicated to your company's mission, so you can all flourish together.
The following ideals should help you strike that just-right balance between your needs and those of your employees, to both attract and retain talent in the supply chain industry as time goes on:

1) Set clear goals - and regularly redefine them
You likely have plenty of monthly, quarterly or annual targets for your business, but perhaps not for your individual employees, according to Ajilon. Changing things up and giving everyone clear objectives for a given week or month is a great way to make sure everyone stays on task, completes projects small and large, and generally feels like they're working toward something on an ongoing basis.

Keeping new hires and long-tenured employees happy is critical.Keeping new hires and long-tenured employees happy is critical.
2) Give them a reason to work harder for you
Often, executives decry that workers just don't put in the above-and-beyond effort the business wants, but may not consider why that is, Ajilon said. Giving them financial incentives for hitting those above-mentioned goals could entice them to do that little bit more work.
3) Consistently reevaluate your reputation
A big part of succeeding in business is being able to continually draw in new hires, so your company needs to set an exemplary standard, according to Supply Chain Dive. Regularly getting feedback from candidates about what you're doing well in your hiring process and employment practices could give you some outside insight.
4) Give workers the chance to grow with the company
A great way to make sure you can retain the workers you've had on staff for years is to give them a clear path up the corporate ladder, should they want it, Supply Chain Dive advised. Something as simple as paying for new certifications and other avenues of professional development could be highly valuable to any employee - and pay for itself easily over time.
5) Prioritize active recruiting
It's not enough to simply create a job opening when you have a position to fill - you need to actively seek out established talent within your industry, according to MEP Supply Chain Optimization. Being able to maintain contact with top workers in your field so you can potentially lure them away when you need to make an important hire can give you an edge on the competition.
6) Boost your internal culture
You should always be on the lookout for ways you can keep your workers more engaged, MEP Supply Chain Optimization noted. Frequently checking in with them to find out what about your business culture is working, and what needs to be tweaked, could help ensure they stick around for the long term.
7) Onboard new workers successfully
When you make a new hire, you want them to be able to hit the ground running, MEP Supply Chain Optimization further added. Pairing them up with an experienced employee can help them learn the ropes and find some friends quickly and easily.

The coronavirus-related headlines in recent months have not been good for the U.S.: Cases keep rising, especially in "hot spot" states that are not managing infection rates effectively, and the economic downturn is likely to get worse before it gets better. But in a testament to how resilient the national and global supply chain have become, there are some strong signs of recovery within the industry.
Nationwide, 97% of companies in the supply chain saw at least some disruption of their operations due to the novel coronavirus pandemic, and the vast majority pivoted their operations to deal with it in one way or another, according to a recent poll from Procurious. While the effects of the lockdown and virus spread have been varied to say the least, the most common issues were a drop in demand (experienced by 31% of companies in the supply chain), lack of supply (26%) and slowdowns in shipping (21%).
With the benefit of hindsight, supply chain pros now recognize their biggest weaknesses that left them vulnerable to these disruptions, the survey found. Nearly 2 in 5 said they didn't realize their geographic risks, and 29% said they just didn't understand their suppliers' own weaknesses.

Executives are confident their companies have reacted well to COVID-19.Executives are confident their companies have reacted well to COVID-19.
Changing landscapes
Of course, even despite these difficulties, many companies continued doing business - albeit at reduced or greatly altered levels - and some certainly made out better than others, according to Supply & Demand Chain Executive. The Hackett Group's recent 2020 Working Capital Study found that companies in the top 20% of their industries were able to turn over cash three times more efficiently than even the median business. That meant collecting money from customers or clients 19 days more quickly, paid suppliers 20 days slower and turned over inventory more effectively (holding less than half of median numbers).
All of that has become vitally important during the pandemic, the report said.
"For most companies, there's suddenly a 'burning platform,' a sense of urgency that is driving improvement," Craig Bailey, associate principal of strategy & business transformation at the Hackett Group, told the site. "Companies are making liquidity and cash flow a top priority."
Getting on the right footing
With all these changes, companies are now feeling much better about their standing today, according to a separate report from Supply & Demand Chain Executive. A recent APQC survey found that 82% of companies are either confident or very confident about their pivots to the "new normal," and 61% say they have already fully changed their supply chains to acclimate to the current situation.
However, challenges do remain, the survey showed. Nearly 1 in 3 say their biggest issue will be training employees to handle the changes, and more than a quarter still need to implement more changes to their organizations. Another 25% said they have yet to shorten their supply chains.
With all this in mind, companies will have to continue improvising and finding new ways to manage in these uncharted business waters. The situation is evolving across the U.S. and issues that may have been cleared up for some time in one state may continue to persist for some time to come just over the border.

Planning and executing a complex sourcing project is no small task. Procurement teams spend months defining requirements, running a sourcing event, negotiating with suppliers, and executing contracts. When an organized approach is followed this typically results in substantial savings. Yet too often organizations fail to realize the full potential of Procurement’s contributions due to implementation challenges following contract execution. In many cases, 40% of more of forecasted savings are not realized as a result.

The solution to this problem is Change Management. While Change Management is more often associated with mergers, acquisitions, and complex technology implementations, the reality is Change Management will yield positive results for any initiative that involves change. It is particularly effective at solving the problems that typically plague contract implementations such as savings leakage and rogue spend. Below I am going to introduce three Change Management tools than are useful when engaging with stakeholders throughout the Sourcing process and when implementing new contracts.

Stakeholder Analysis
Everyone knows we must engage the appropriate business units when planning a sourcing event to define requirements. However, taking things a step further and formally assessing the effects on different stakeholder groups can provide tremendous value when we reach implementation. The purpose of conducting stakeholder analysis is to ensure we identify ALL affected stakeholders and gain an understanding of the ways in which they are impacted. This will allow us to assess which groups are most impacted so we can be sure to carefully target these groups and prepare them to purchase goods and services once new contracts are implemented.

Resistance Management Plan
Resistance is the natural human reaction to change, and therefore should always be assumed. Stakeholder attachments to their supplier relationships is a prime example. While there is no magic answer to eliminating resistance, early anticipation and planning will greatly mitigate the occurrences. It is important to spend time considering which of the groups identified in our Stakeholder Impact Analysis are most likely to resist purchasing from new suppliers. Some basic questions we should be asking include:
  • What are some possible resistance points: particular groups, locations, managers?
  • What types of resistance should be expected: avoidance, rogue spend, vocally expressing discontent?
  • What are the reasons for resistance: fear over loss of control, personal attachments to suppliers, concern over needs being captured?

Once we have identified our expected sources of resistance and the underlying reasons, we can plan out tactics to neutralize the impacts. Reactive resistance management is much more difficult and time consuming to resolve. Developing a Resistance Management Plan puts Procurement in a proactive position and will greatly accelerate our path to ROI.

Communication Plan
My final recommendation for integrating Change Management into the Sourcing process is to develop a formal Communication Plan. The purpose of developing a Communication Plan is to ensure all necessary stakeholders are engaged and receive effective communications that will drive adoption. A well-designed Communication Plan will ensure stakeholders are aware of the categories and suppliers impacted and informed about important dates and timelines. A Communication Plan is also a great way to engrain sponsor participation into the project plan which reinforces the need to comply amongst stakeholders. The basic steps to completing a Communication Plan include:
  1.  Identify the audiences.
  2.  List key messages and timing.
  3. Determine means of communication packaging, method, frequency, and sender.
  4. Convert into detailed outline and schedule.

Savings projections typically assume 100% adoption and compliance. To come close to that mark all stakeholders need to know what categories and items are changing, when the new contracts take effect, and how to purchase the relevant goods and services. Following the steps outlined above to complete a Communication Plan will ensure that all stakeholders receive this information and are prepared as new supplier contracts are implemented.

Hopefully I have made it clear how incorporating Change Management into the Sourcing approach will greatly improve the odds of Procurement teams obtaining projected savings. When we achieve our saving projections, we improve our standing amongst our internal stakeholders and clients alike and move closer to reaching our goal of becoming trusted business advisors. If you are interested in learning more or receiving services related to Strategic Sourcing or Change Management, please visit our website.

In 2017, approximately 5% of workers in the US worked from home. This was an increase from previous years, as more companies were opening up to the idea of a remote or semi-remote labor force. Now in 2020, due to the global COVID pandemic, we have witnessed a historic switch to working remotely. According to Stanford researched published in July 2020, 42% of the U.S. labor force is now working from home full-time, while only 26%, mostly essential service workers, are working on site.[1]

This transition to working from home has been vital to help curb the spread of COVID-19. If we had been unable to work remotely, the negative impact to the economy would have forced workers to return to offices, and effectively made social distancing efforts near impossible. The decision on when and how to return to the office will vary from company to company, and in many cases by business function. The negative stigma associated with remote working has largely disappeared and many of us have learned to adapt and even thrive in remote environments. But not everyone has the ability or desire to continue to work remotely, and many other functions simply can’t be done off-site. So as companies look to reopen offices, they must partner with organizations that provide 
comprehensive testing programs and ensure employees return to the safest workplace possible.

Here at Concentric we have worked with our clients, in partnership with testing providers, to develop and source custom testing protocols to fit each company’s needs. These protocols center around:
1.       Testing regularity and cadence
2.       On-site and remote testing capabilities
3.       PCR virology tests
4.       Serology/antibody tests

If your company is working on a return to work plan, a strong testing protocol should be at the forefront of your strategy. This includes working with established testing providers to create customized plans that allow employees to return to the workplace in the safest and most efficient manner possible.

For a best in class return-to-work strategy, a competitive sourcing event should be run hand-in-hand with development of this testing protocol. From a high level, the process should operate like this:

1.       Identify site list, essential employees, and a wave plan

Have an understanding of what workers need to be onsite, and at what locations. If you have offices in multiple states, you might need to partner with multiple testing providers. Knowing who is returning to work at what locations is essential for developing a strategy. You might also consider a phased approach, where employees return to work in waves based off need.

2.       Establish best-practice testing methodology and cadence
3.       Competitively source established testing providers

Steps and 2 and 3 can and should be run concurrently. Companies need to create a partnership with their selected testing provider to ensure they are adhering to best practices while tailoring a program to meet their requirements. This may include PCR nasal swab tests, serology (antibody) venipuncture tests, temperature checks upon entry, and establishing on-site vs. off-site requirements and capabilities. Working with established testing providers to help develop testing methodology will help to ensure you are following CDC guidelines and minimizing risk to employees to the furthest extent possible.

By including the testing providers in the methodology development, it shows good faith heading into the sourcing event. As testing providers competitively bid their services, they understand your needs and desires and can develop a plan to best meet them.

4.       Negotiate pricing and sign service agreements

Cost of services is always important, but don’t forget to consider the human aspect here. Negotiations should not focus solely on the lowest price point. Instead, the focus should be on getting the most value with the best possible terms while keeping employee safety as the primary objective. This should include set turnaround times for testing results. The sooner you know if someone is positive, the sooner you can take action. Understand what you’re paying for, and make sure every cent you spend is going as far as it can to minimize the risk to your work force.

If you would like to work with Concentric to help with development of your return to work strategy, please do not hesitate to reach out to us. We are here to help.


Bloom, N. (2020, June 29). Stanford research provides a snapshot of a new working-from-home economy. Retrieved from Stanford News: