Outside of the regular evaluation process, there may be times where factors such as changes in the economy or mergers and acquisitions require a company to evaluate their supplier relationships and determine where potential opportunities exist to demonstrate cost savings and optimize their supply chain. When clients are specifically requesting their long-standing suppliers to identify hard dollar savings because of these factors, we have found that suppliers provide responses in a few different ways. It’s interesting to see how some long-term suppliers value their client relationships and their business when they are posed with this task.
There are suppliers that can tell a great story about their relationship but never get down to the details of presenting an actual plan of real, hard dollar cost savings. Suppliers selling their value and using it as a deflector to drive cost reduction in the products and services that they are providing is not providing a complete solution. Services such as free training, rationalization of parts or products, or evaluating their systems for improvements are offered with an estimate of “cost savings” but can be difficult to quantify as hard dollar savings. These services are valuable and might be considered cost avoidance but when a company specifically asks for savings that can be clearly demonstrated through unit cost reductions, this is not solving the problem. This should not be considered the sole solution to the client. In a long-term supplier relationship, it is expected that these types of programs are already taking place and should be actively presented and utilized.
Then there are the suppliers that do nothing when asked to identify savings. These suppliers are too comfortable in their current state and may feel as though they have the advantage based on a product or service that they provide. It is probably time to consider the type of products and services and the criticality of the supplier relationship and identify potential alternate suppliers and compete the business.
Finally, there are the suppliers that demonstrate their true partnership to a company. They truly engage and find areas where they can help improve the company’s supply chain and demonstrate hard dollar cost savings. These suppliers come to the table with a variety of options which may include: unit cost reductions, improved discount structures, tiered rebate programs or other incentive programs based on their current business. Companies may find that they have the opportunity to drive further business to these partnerships by leveraging additional business whether through company expansion, or by determining if these preferred partners can competitively provide products and services from the suppliers that did not respond to the requests for cost reductions.
Developing preferred supplier partnerships, by engaging on a regular basis and developing metrics to measure the products and services that they are providing, helps to maintain long term relationships, improve the supply chain, and drive savings to the company.
Next discussion: Developing and managing KPIs with suppliers.
Have a Plan
This may seem a bit trite for some of you, but many organizations truly do not adequately plan their wide area network procurements. Some organizations are more technologically and operationally focused and others simply address the spend on an as needed basis (i.e. when contracts expire). Irrespective, there are some fundamentals that everyone should make sure they understand and are prepared to address. You must know your term, commitments, and your technology road map or WAN future vision. Carriers nowadays often try to get multiple commitment hooks into their customers during the contract process. They want circuit or service commitments, i.e. you will keep a service for a given period of time or else pay an early termination charge. They want a minimum revenue commitment such as a monthly, yearly, or term revenue quota that you must hit or pay a shortfall charge accordingly, and in many cases, they want a mix: you will commit to spend a certain number of dollars for certain services or basket of services throughout the contract period. No matter how successful or unsuccessful you may have been at combating some of these carrier practices during your most recent contract negotiation, you need to be extremely familiar with these commitments and be certain you understand how they may be favorable or unfavorable to you in order to identify and develop your negotiation position.
Minimize Non-contractual Commitments and Integration
Beyond contractual commitments lie more subtle, implicit commitments to your carrier(s) of choice. As you seek to develop your negotiation position, you should be aware of any barriers to changing carriers. Examples would include significant head-end infrastructure builds that would be difficult, costly, and time consuming to replace, heavy network native SIP deployments, or 3rd party integrations (e.g. AWS, Azure, Salesforce, etc.). Of course there are trade-offs -it's much simpler and easier to manage things when there are fewer carriers involved, but you compromise your ability to change carriers so finding a balance is important.
Decrease Loyalty and Introduce Competition
Stemming off of the idea of diversifying where possible/reasonable without unnecessarily complicating your operation, consistently testing your primary incumbent carrier(s) by bidding elements of business is a great way to keep them honest and on their toes. Need to replace or introduce a new Internet circuit? Why not shop around? Need to connect a new location to your private network? Maybe a private line or VPN would suffice instead of an MPLS link. Allowing your incumbent to bid and lose some of these opportunities goes an extremely long way in making them realize your business is not a foregone conclusion.
Leave Yourself Time
If you take only one thing away from this blog it's that you need to leave yourself time. It takes time to develop a plan for a renewal or procurement. It also takes time to develop a future vision for your network. And most of all -and the carriers know this best- it takes a lot of time to rip out and replace what they have installed. The instant you cross the threshold of what can be reasonably accomplished before you come off contract, you lose an incredible amount of leverage in your negotiations.
Bring It Together
Taking advantage of these best practices will undoubtedly yield dividends in your new agreement with your incumbent or an alternate carrier. But don't mistake these ideas as something you do only when you're getting ready to go to market or begin a negotiation. You should be consistently revisiting and managing around these ideas and in doing so, managing and reducing cost will become less painful and yield better, more consistent results then scrambling to catch up each go around. Getting started is the hardest part, for help getting your arms around your spend and developing and executing a sourcing strategy that will result in more robust infrastructure at a lower cost, contact us at www.sourceoneinc.com
There has been a lot of discussion recently about the possibility of drones making deliveries to customers in the future. And it seems that such a reality may not be too far out of reach.
Flirtey, a flying robot startup, recently announced that it has officially made the first residential delivery using an unmanned drone in the U.S. that has been approved by the Federal Aviation Administration, the Associated Press reported. On March 10, in Hawthorne, Nevada, the six-rotor autonomous aerial vehicle traveled approximately half a mile, guided through the pre-programmed route by a GPS. The package, which contained a first-aid kit, food and water, was delivered to an unoccupied home.
Federally approved UAV delivery
"Conducting the first drone delivery in an urban setting is a major achievement, taking us closer to the day that drones make regular deliveries to your front doorstep," Flirtey CEO Matt Sweeney stated.
This is not the only time the flying robot manufacturer made history. The AP also revealed that, in July, Flirtey claimed the first FAA-approved delivery made in a rural setting, which was at a Virginia-based medical facility.
The most recent milestone, which the AP said was recorded to include in an documentary for ABC-TV, signals that other companies may soon be able to accelerate their plans for drone deliveries in the U.S. Although retail giants, such as Amazon and Wal-Mart, have already begun developing unmanned aerial vehicle transportation, the operations have mostly been conducted in other countries.
According to the AP, the FAA has allowed UAVs to be tested in six states, Nevada being one of them, and the agency is currently working with NASA on creating regulations, guidelines and systems that will minimize the safety hazards of the drones. And the fact that Flirtey was able to use the flying robot to deliver a package without incident indicates progress.
"We think the safest way to deliver packages is for the drone to remain at a distance and lower it into the customer's hand," Sweeney told Fortune.
The box was placed on the front porch of the residence, using a rope to lower it down, the source said. In addition, thee drone was being observed and monitored by a pilot on standby in case anything went wrong. Fortunately for Flirtey, and other companies and consumers anticipating the rise of flying robots making deliveries, nothing went wrong.
SCM - Smart Cookie Millennials
For today's musing, we wanted to share a SCM story. We at MRA Global Sourcing have the privilege to get to know hundreds of Supply Management, Sourcing, and Procurement job candidates across every industry and category specialization. As our readers recall from an earlier post, we have met some millennials whose attitudes and behaviors reflect poorly on the whole generation. But as promised, today we'll focus on the flipside - the Smart Cookie Millennial (SCM).
This young lady went from a top tier management consulting firm to an Industry role for a F500 company. It’s a double-promotion that catapulted her to a Manager role with a 25%+ bump in total compensation. Key here was that she was an extremely passive candidate that had to be courted for an extended period of time before she made the move. On its merits, it would seem to be a no-brainer because the hiring manager had first made her acquaintance at an external event and remembered her and then solicited our help in wooing and closing her on this potential opportunity. Point is that this young professional did her due diligence and made the move when she was convinced that it would truly advance her career and help her new company as they enhanced their Procurement organization. Kudos to this budding professional Millennial, and may the Supply Management Force be with her!
Depending on the commodity group in question a simple request for quotation (RFQ) can be very successful. We've often seen that for off-the-shelf components suppliers actually prefer this approach. But, any time manufacturing services are concerned or the spend is high in the commodity group a closely managed request for proposal (RFP) has proven to be key.
Working closely with the suppliers means capturing both quality and value added services in a questionnaire and line item pricing in a costed bill of materials. By conducting telephone and in person conversations along with an online platform to distribute documentation a holistic picture of each supplier's offering can be brought into focus. Then, by weighing both service and price in this manner, you can be confident that a long term mutually beneficial relationship can be established between the suppliers and the client. After all it's year over year sustainable cost savings that's the reward you're seeking for your efforts.
In order to capture the true service offering of each supplier during the RFP open communications and transparency has proven to be critical. An NDA between the supplier and client will help alleviate tension and allow the sharing of the technical drawings driving manufacturing projects. In this way, the supplier can understand the full scope of the initiative and feel more comfortable sharing information concerning their supply chain optimization efforts during the RFP.
By not beginning openly and developing a relationship the process can turn quickly into a pricing exercises or reach a point of mutual standoff.
As a result, you may still identify which supplier has the best pricing, but will be unable to qualify the supplier. In other words, is the pricing sustainable, or is there underbidding because there is an eagerness to initially secure the business, with a sharp increase in cost after the initial agreed upon period? More importantly, does the supplier even have the capability to produce a quality product at the necessary volumes?
For Contract Manufacturers (CMs) there is the larger question of who is actually producing the products. Is it the CM contacted, or is it an offshore partner performing the actual manufacturing with the domestic company simply inspecting the products and passing on the costs with a markup.
These concerns will certainly become clear during the implementation phase of the process, but then the initiative will have to be restarted from step one.
Even when conducting an RFP, expectations have to be set up front by being clear about what information is expected. But, expectations should be balanced with an understand that not all suppliers are able to provide a complete set of information initially. And, these incomplete initial responses may have to be weighed before a final and complete costed bill of materials, labor, OH, and markup structure can be considered.
Although, most suppliers will understand that the client will not be able to make a final decision unless all information is shared.
Therefore, the success of the initiative rests on setting expectations at the beginning of the sourcing process, working closely with the supplier that are willing to work with you, and managing to a project plan while being flexible with requirements.
Robotic automation processing has been streamlining workflow production in warehouses for years. And while these digital innovations have helped businesses steadily improve supply chain optimization, they have also consistently raised concerns, specifically among factory and other workers. Now, the latest debate about artificial intelligence threatening the job security of United States employees is hitting the transportation industry.
The Wall Street Journal reported that one of the biggest ports in America, the Port of Los Angeles, has begun using robotic technology for cargo handling at its
How cargo robotics work
As explained by the source, these autonomous machines, also known as "straddle carriers," load and unload cargo containers from ships and transport them around the terminal. Using robotic cranes, they are able to pick up loads and bring them to organizing stations to, eventually, be picked up again and loaded onto truck beds.
The machines operate on magnetic grids that are embedded in the pavement and are directed by workers in the terminal office, who are able to control where and what the stacking cranes pick up and where they drop objects, using cameras installed on the cranes.
Peter Stone, a
Robots raise workforce worries
Although the robots have the power to reduce labor costs and enhance cargo handling efficiency, not everyone is happy about them. Many have argued against free-trade deals in the U.S., arguing that it would limit the job market for American workers and this technology will likely only fuel these fears.
The Atlantic recently revealed that a survey conducted by the Pew Research Center found that the majority, 65 percent, of Americans predict that within the next 50 years, robots will likely handle most of the tasks that humans are responsible for today and, of those worried about their job security, laborers were the most threatened.
Both the West Coast's International Longshore and Warehouse Union have permitted the robotic systems in contracts, but have not come to an agreement about exactly how the automation should be used, according to The Wall Street Journal. International Longshore and Warehouse Union's Local 13 President Bobby Olvera Jr. told the source that it has sought to "ensure there's a future for workers" and define "minimum manning standards."
Another concern is how expensive the technology systems are. The Wall Street Journal revealed that installing the automation in the TraPac terminal will cost about $1 billion to complete in its entirety and the return on investment is still unclear. The source added that union resistance has led to ports in the U.S. being slower to implement the robotic automation systems and that there has been ongoing debate over preserving longshore jobs, since adding positions increases operational expenses.
Terminal automation and labor job market outlook
Although the use of this machine technology could reduce the amount of
Aethon recently pointed out that the President's Council of Economic Advisors annual report has suggested some ways in which the technology can help, not hurt, the conventional workforce in America. For example, it can lead to productivity growth which can provide employees with better education and training, working conditions and even higher wages. By delegating the menial tasks to robotics, laborers can focus on areas of the business that consist of "higher-value work."
The source pointed out that robotic systems should complement, not substitute for, the workforce and that history has not shown any strong correlation between an increase in automation and the loss of worker employment. On the contrary, it has changed the nature of laborers' responsibilities in a way that has resulted in more job opportunities and higher pay.
Source One's Office Supplies category management experts will be at ISM2016, where Source One is the exclusive sponsor of the Exec IN forum. Want to save on registration costs to attend this landmark event? Learn more over at SourceOneInc.Com.
Risk mitigation planning has continued to become a primary focus for supply chain leaders. However, safeguarding operations against potential threats is becoming increasingly difficult, with no signs of it getting easier anytime soon.
The Load Star recently reported that research conducted by the British Standards Institute revealed that disruptions last year, attributed to everything from harsh weather conditions to criminal activity, cost global supply chains a total of $56 billion.
Non-economic disruptions threatening supply chains
The source added that some of the disturbances were due to cargo theft and, although FreightWatch International explained it is hard to get a definitive number of these crimes, BSI released a global intelligence report that said that $22.6 billion was lost internationally.
Furthermore, there has been an increase in trucking and vehicle robberies in regions within South Africa and China, with thieves now targeting both high- and low-value goods. The Load Star pointed out that criminals are becoming more sophisticated in their schemes. Although Europe has not suffered the same rising rates of theft as other regions across the globe, it has experienced trade disruptions from migration issues and terrorist attacks. Damages from natural disasters, such as floods throughout the United States and Indonesian forest fires, resulted in businesses losing $33 billion globally.
"Companies are facing an increasingly wide range of challenges to their supply chain, from human rights issues to acts of violent theft and natural disasters," BSI Global Intelligence Program Manager Jim Yarbrough said, according to the source. "Such complexity creates extreme levels of risk for organizations, both directly affecting the bottom line but perhaps more seriously, hidden threats to the supply chain which, if ignored, could do serious harm to a company's hard-earned reputation."
Consumer confidence impacted by business uncertainty
These were not the only findings recently published that highlight the extreme operational risk facing supply chains today. The Chartered Institute of Procurement and Supply Risk Index found that last year's fourth quarter marked a continued incline of global threats, Material Handling and Logistics reported.
What is especially noteworthy about this trend is that the majority of recent disruptions were not attributed to economic shifts. Oana Aristide, a Dun & Bradstreet executive, explained to the source that although terrorist attacks and refugee crises may not cause direct damage to business operations, they impact consumer and investor relations.
Source One's RFP administration experts will be at ISM2016, where Source One is the exclusive sponsor of the Exec IN forum. Want to save on registration costs to attend this landmark event? Learn more over at SourceOneInc.Com.
Source One Round Up: March 25, 2016
Here's a look at where Source One experts have been featured this week!
This week Source One's Project Analyst Brian Seipel explores the relationship between sales and procurement. While for many companies, the relationship between the two can be described as "okay-but-not-great', Seipel explains the benefits of aligning the two functions for making better purchasing decisions.
Why you should transition your business to VoIP
Continuing our Countdown to ISM2016 Podcast Series, this week Project Analysts Brian Seipel and Nicole Mahaffey team up to take a look at the reasons why suppliers aren't responding to your RFP. Despite your best efforts to develop a comprehensive RFP to fully assess suppliers' capabilities, there can be a few red flags that can send a supplier running from your RFP. Mahaffey and Seipel explain these fatal flaws within your RFP and the steps to take to ensure suppliers stay engaged throughout your cost-reduction initiative.
Agency reviews can be used to assess cultural fit, agency capabilities, agency costs, and technology, among numerous other aspects of the relationship. The American Association of Advertising Agencies reported that approximately 650 agency reviews are conducted annually. By conducting an agency review, your company can gain clarity into scope of work, the ability to negotiate terms, access to cutting edge technologies, improve KPIs, increase cost savings, gather insight into the market, or even the leverage needed to negotiate with an incumbent agency. Companies are realizing that there is added value from conducting an agency review, even if it is just to verify that you are receiving quality products and services from an incumbent agency.
During the event, students were eager to learn more about Source One. A few of the questions included:
Why do companies work with procurement service providers?
Organizations turn to companies like Source One with the goal of reducing costs and optimizing overall procurement practices. In some cases, a procurement services provider is used to offset the burdens of an organization’s internal procurement infrastructure. This includes, analyzing a company’s spend to identify areas for cost reduction, executing an RFx to identify best fit suppliers, conducting negotiations, and managing supplier relationships.
What gives Source One an advantage relative to its competition?
Specializing in procurement services, Source One combines market intelligence, staffing augmentation, strategic consulting, and software and tools into a dynamic, effective package for clients. Each client receives a customized approach specific to their organizational needs, executed by category experts. Solely focused on procurement, Source One leverages decades of experience to implement strategic sourcing and procurement best practices that optimize our clients’ supply management operations and impact the bottom line.
How does Source One fit into a client’s organization?
Source One provides procurement decision support- serving as an extension to clients’ existing teams. This saves clients time and resources. Our clients receive a suite of on-demand services including: people, processes, tools, subject matter expertise, and market intelligence necessary for decision support- scalable to project needs. In addition, we’re invested in the success of our clients’ cost cutting initiatives. A major component of Source One’s approach is knowledge transfer. At each step of the sourcing process, Source One provides clients with the training and documentation necessary for repeatable success in the future.
Source One enjoyed the opportunity to engage Temple University’s future graduates on the career paths in procurement consulting and looks forward additional speaking events at the college. Source One’s cost-reduction experts are also gearing up and counting down the days until ISM2016, taking place this May in Indianapolis. Source One is the exclusive sponsor of the Exec IN forum, a private event hosting senior-level supply management executives of top organizations to address the challenges and opportunities specific to large supply chain operations. Source One will also be exhibiting and presenting at ISM2016. Attendees are welcome to meet experts from the procurement services firm by stopping by booth #528. Joe Payne, Source One’s VP of Professional Services, will present a session on managing responsibilities and succession planning in an increasingly contingent workforce.
Robotic automation processing and other technological innovations have rapidly transformed the way businesses today operate. This digitalization has provided companies with devices, systems and platforms to streamline workflow, enhance visibility and reduce costs. The smart machines are able to take over the menial tasks traditionally handled by humans, and they are able to complete jobs quicker and more accurately then workers would be able to.
Although the widespread adoption of artificial intelligence has provided supply chain management with many benefits, it has also presented some challenges. For example, with the industry advancing and evolving at an unprecedented rate, today's workforce is experiencing a lack of employees equipped with the skill sets need to keep pace with it.
The importance and value of experienced and knowledgeable supply chain leaders were recently highlighted when Amazon sued its former employee and Target's new chief officer of supply chain and logistics, Arthur Valdez, for allegedly violating a non-compete agreement designed to shield confidential insight and information pertaining to the e-commerce giant's operational strategies.
In an article for Supply Chain Brain, Robert Bowman reported that faculty at the Haslam College of Business at the University of Tennessee, Knoxville published a white paper indicating that just about every level of supply chains is seeing a talent gap, one that isn't showing signs of narrowing any time soon. Most executives are aware of the problem, more than 90 percent in fact, and acknowledge the need to improve their ability to attract better supply chain professionals. The big question, though, is how can they do this?
Educating and training from the get-go
One of the paper's co-authors, Shay Scott, told the source that he "believe[s] we're entering into an era where the development of talent strategy is going to be required to go hand in hand with business strategy."
Furthermore, companies should not fall victim to the assumption that onboarding skilled workers is solely a human resources burden or that their respective budgets limit the ability to invest in recruitment and development strategies or the necessity of doing so. Bowman noted that a Deloitte study indicated a disconnect in how various levels of an organization perceive HR department's ability to attract top talent, with more than half of top executives and senior level positions saying they think they are doing a great job and just 28 percent of logistics and supply chain workers sharing the same sentiment.
The UT researchers suggested that one way to fill the gap is for companies to recruit students at the high school level and up. Businesses can offer apprenticeships and internship programs that allow graduates to immerse themselves in the supply chain atmosphere and jump-start their training.
Redefining supply chain and procurement roles
In a separate article, APICS Chief Executive Officer Abe Eshkenazi pointed out to Bowman that there are plenty of academic programs and degrees that emphasize professional development. There are also certifications and higher education classes centered on supply chain management, logistics and procurement practices. However, among those knowledgeable in SCM and operations, there is a lack of understanding regarding how these roles can be lead to executive-level positions.
Spend Matters recently revealed that one way to bridge this gap is, instead of focusing on hiring workers who are skilled in a specific category, restructuring roles to attract talented leaders who can exercise a dynamic range of capabilities, such as "increased business and leadership skills, technological prowess, knowledge of foreign policy and regulations and the ability to handle cross-functional complexity."
Certainly, there is a significant opportunity for business executives to target potential hires at the start of their careers and to promote more education in the field. Similarly, by creating a more cohesive and comprehensive relationship between business goals and supply chain objectives, companies will make it easier for both potential and existing employees to understand the corporate strategy and how their specific roles and responsibilities play a pivotal role in achieving success.
But, there are also more immediate solutions that can be utilized to fill the talent gap.
Workforce strategy experts
Businesses that are hesitant about investing in recruitment and training programs likely fear that they will be ineffective, or that their focus is of better used elsewhere. It can be all too easy for supply chain managers to get so caught up in day-to-day operations that the long-term strategy development falls to the way side.
However, in an increasingly competitive market, organizations simply can't afford to not onboard and retain top talent. This is why, to ensure the efforts are well worth the investment and minimize the chances of losing production by shifting current workers away from primary responsibilities, supply chain executives should leverage third-party partners that can provide them with staffing and recruiting solutions, as well as consulting services for strategic sourcing and training programs.
Retail companies across the globe have been facing mounting pressure to increase online market share and optimize supply chain strategies to better support the rising demand for omnichannel purchasing. Many have reported revenue loss attributed to inefficiencies in order fulfillment and inventory management.
Target Corporation has experienced a number of difficulties in these areas over the past year. Last year, it closed over 130 Canada-based stores and reported disappointing sales due, in large part, to implementing new supply chain management software that caused warehouse and distribution disruptions. It has since taken significant measures to reduce costs, streamline workflow production and enhance its overall business model. One of the moves was to onboard an experienced supply chain veteran.
Target hires former-Amazon leader
At the end of February, Target announced it was appointing Arthur Valdez as the retailer's new executive vice president, chief supply chain and logistics officer. At the time, the company released a statement saying that Valdez would head the planning, distribution and transportation operations of the organization. Target Executive Vice President and Chief Operating Officer John Mulligan said, "Arthur's leadership and experience will be a tremendous asset as we continue to drive improvements in end-to-end processes including leveraging our almost 1,800 stores to deliver a seamless experience for our guests."
And certainly the experience Mulligan referenced is extensive. Before being hired by Target, Valdez spent 16 years as a supply chain leader for Amazon Inc. Prior to that, he worked for other retail giants including Kmart and Wal-Mart. Valdez is set to assume his leadership role next week, on March 28, in Minnesota. But, if Amazon gets its way, this may not happen.
The e-commerce giant is apparently less than thrilled with Valdez taking his talents to a major competitor. GeekWire reported that, on Monday, Amazon filed a lawsuit with Seattle's King County Superior Court against Valdez, claiming his employment with Target violates a non-competition agreement. The lawsuit is being brought against Valdez, rather than Target Corporation. Amazon argued that it would be impossible for him to oversee supply chain operations at Target without compromising confidential insight he gained during his time of employment at Amazon. It also accused him of already releasing secret information during the interview process.
In its suit, Amazon said that, while working for Target, Valdez will be able to use proprietary information in a way that would put Amazon at a disadvantage and simultaneously benefit Target, with particular emphasis "in a core area of competition between the companies: the cost-effective and rapid movement of goods in the most efficient way possible for retail customers."
Amazon files lawsuit for alleged non-compete violation
The complaint went on to explain that, when Valdez decided to leave Amazon to work for Target, he said that his new job would not breach the non-competition agreement but failed to provide an accurate description of what his role responsibilities would entail. Furthermore, Amazon indicated that there are discrepancies in Target's press release that underline Valdez's experience working for Amazon would be directly leveraged to improve its own operations. Amazon has requested that the court enforce the 18-month "time out" set forth by non-compete clauses to prevent employees from working for competing organizations immediately after leaving a company.
In an email to GeekWire, Molly Snyder, a Target representative, said "We have taken significant precautions to ensure that any proprietary information remains confidential and we believe this suit is without merit. However, as this is pending litigation we are not going to comment further at this time."
According to the news report, Amazon implied it was forced to take legal action after Valdez and his attorney failed to respond to the company's direct attempts at communication.
If a company is already outsourcing many of its application support functions to a managed service provider, because of a perceived expertise in a certain area (ERP, HR, Marketing, etc.) the vendor ecosystem may have grown to the point where the soft costs, like contract management, SRM, and SLAs are taking up a large portion of your sourcing and procurement group’s time.
Source One's IT spend and category management experts will be at ISM2016, where Source One is the exclusive sponsor of the Exec IN forum. Want to save on registration costs to attend this landmark event? Learn more over at SourceOneInc.Com.
Earlier this month the United States Department of Commerce announced it was placing a trade restriction on China-based telecommunications supplier ZTE Corporation. The ban came after investigators learned that the company was violating a sanction previously enacted in the U.S. by "illicitly reexport[ing] controlled items to Iran" and acting "contrary to the national security or foreign policy interests of the United States."
This news was troubling to some because the ban may lead to supply chain disruptions for American companies as well as the Chinese manufacturer. How severely ZTE sales have been impacted by this event is still unclear. To The Wall Street Journal, ZTE indicated its 2015 earnings report would not be completed and released until it is able to conclude what the restrictions would mean for business operations.
Department of Commerce easing export restriction
At the time, U.S. officials explained that, although companies could apply for a trading license to do business with ZTE, approval was not likely.
However, this week the U.S. government revealed that it has decided to temporarily lift the trade ban in hopes of alleviating some of the controversy between the two regions, The Wall Street Journal reported.
"As part of the effort to resolve the matter, and based upon binding commitments that ZTE has made to the U.S. government, Commerce expects this week to be able to provide temporary relief from some licensing requirements," a government official stated, according to the source.
Furthermore, The Wall Street Journal added that this lift would only be allowed on a temporary basis and is contingent upon ZTE complying with the U.S. government. Although the Commerce department didn't reveal too much information on the matter, the news source said that officials indicated more details would be available later in the week in the Federal Register.
Beijing disputes being on U.S. trade blacklist
When the trade sanction was first announced, some pointed out that it would add fuel to the already existing tension between the U.S. and China, specifically pertaining to technology sourcing and exporting. The Wall Street Journal also reported that Beijing has protested the sanction and requested to have ZTE taken off the blacklist that prevents U.S. firms from selling goods and equipment to Iran.
The telecom giant recently released a statement assuring its partners it has been cooperating with the U.S. and that it has been engaging in "constructive discussions" throughout the past couple of weeks and plans to continue communication with the departments and key stakeholders to ensure a resolution is reached.