February 2017

ICYMIM: February 27, 2017

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

Philip Ideson, The Art of Procurement, 2/20/2017

In this conversation with the founder of procurement online learning and networking platform, Procurious, Philip Ideson learns about Procurement 4.0. Industry 4.0 refers to the automation and data exchange in manufacturing technologies, causing a change in the way business functions operate, to which procurement responds to with Procurement 4.0. In needing to adjust to the new way business operations will change, Procurement 4.0 gives procurement functions a boost in keeping up. In addition to these changes in the industry, Ideson discusses how he came to creating the Art of Procurement.  

Sonda Sahley, Corporate United, 2/22/2017

Reducing office waste is a great way to cut back on costs for supplies in office facilities like breakrooms and restrooms, where paper products are used in large quantities. Sahley provides an infographic with details on how devices like portion-controlled soap and towel dispensers can both reduce waste and decrease spending for office supplies. Between less packaging waste and less supplies being utilized with portion control, there is significant cost reducing efforts to be made in the breakroom of any office space. 

Andrea Brody, BravoSolution, 2/15/2017  

When consumers or the general public are unsatisfied with the way a product is being manufactured, or the origin of the product, supply chain professionals are usually the first to hear about it. Social and environmental issues are driving many supply chains to be more sustainable, including for products that are utilized in multiple areas of an industry, for example, the food industry and it's issues with palm oil processing. Recently, guidelines were released trying to prompt companies to release the percentage of palm oil they procure from traceable suppliers, in an attempt to publicly declare their dedication to health and safety concerns, and workers rights. 

Procurement management and the fight against corruption
In recent years, businesses have taken action against the problem of dark purchasing or procurement. This occurs when companies don't have proper visibility of their purchasing and supplier processes and need technology to look more closely at the different actions all happening in confluence with each other. Without this examination it's not possible to weed out corruption and other problems.
Procurement corruption a strong contender
The Organization for Economic Co-operation and Development established the persistence of procurement difficulties in a 2016 report on the subject. The source determined that public procurement volume was responsible for 29 percent of OECD member country expenses, but that this sector was also susceptible to problematic bribes. Citing previous information, it said that 57 percent of foreign bribes were intended for procurement contracts.
This was a significantly higher percentage than any of the other given purposes for bribes, including customs clearance or favorable tax treatment. This corruption was said to ultimately be expensive and hurt public funds, and it isn't difficult to imagine even private businesses suffering some of the same results through unacknowledged corruption and payment scams.
"Corruption was said to ultimately be expensive and hurt public funds."
International differences
Perhaps unsurprisingly, there can be marked differences in the chances of corruption depending on where organizations choose to operate. However, this doesn't mean that only certain countries represent the key dangers to procurement: Every company can stand to investigate possible issues.
Transparency International's 2016 Corruption Perceptions Index measured 176 countries to determine where each stood in a ranking of corruption: the higher the score, the less corrupt the country. The two nations tied for first place were Denmark and New Zealand, both of which achieved a score of 90. The U.S. ranked at No. 18 with a score of 74.
The index took various symptoms of corruption into account, including how effective laws and regulatory measures were, as well as whether or not any major, significant corruption cases surfaced to swing the scales.
Moving away from "dark" procurement
Information, benchmarking and proactive sourcing can all be tools to help lower corruption. This is reflected in the relationship between the various business partners working together and the ultimate opinion of the consumer. Global Supply Chain Institute Director Mike Burnette recently spoke to Global Trade Magazine about the importance of transparency.
"A lack of ability to provide that kind of information in the face of safety or environmental violations can create a negative perception of the brand that may require immediate remediation and could take a brand years to recover from, if at all," he said of product sourcing data.
Complete procurement transformation could help change the nature of business operations for the better. One way to be more aware of procurement threats is to upgrade the strategy and BPO model so there's a relevant structure in place. Over time, the business will likely need to adapt its sourcing solutions to proceed, and a more advanced platform will be flexible enough to allow for important changes in the future.

February 24, 2017

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

 Fleet Management: What are the Program Options?
As a Senior Sourcing Analyst, Jonathan Groda has worked with clients that had histories of not using the full breadth of services provided by their Fleet Management Company (FMC). These companies have the potential to deliver a range of core services, through a variety of programs offered by most FMCs, that are most often used to help manage larger fleets. This otherwise time-consuming and tedious task can be simplified when utilizing services available through existing resources, like FMCs, that can not only save time and money, but also ensure that your fleet is as efficient as possible. Groda provides sample of said programs, and explains the benefits of utilizing these programs.

Guiding Millennials in Your Workplace
Project Analyst Nicholas Harasymczuk discusses how his role has allowed him to mentor new hires, including those on the younger end of the millennial generation, and shares the techniques he feels are crucial to utilize when managing this specific group of young professionals. Harasymczuk recommends applying structure in the workplace, communicating often, demonstrating leadership, and valuing a work-life balance when it comes to managing millennials effectively. As a millennial in the middle of the generations spectrum, this advice comes from a source that has experienced the management patterns of previous generations and the work ethic of younger colleagues.

The supply chain professionals at Source One are looking forward to all the events the industry has in store for the spring of this year. The Institute for Supply Management's New York area location will host a conference on March 16th, a one day opportunity for procurement and risk management experts to network and discuss their predictions of industry trends for 2017. This conference offers sessions presented by experts in the industry on industry hot topics, while providing their educated predictions for the future of procurement, based on recent patterns and trends in the industry.

ISM 2017
Source One is preparing for various industry events approaching in 2017, including the Institute for Supply Management's annual conference in May. Designed for global supply chain and procurement professionals, this event brings together over 2,500  for four days of networking, educational sessions, and opportunities to learn from some of the leading supply chain and procurement executives. ExecIn, a sub-conference created as a meeting specifically for supply management leaders, is exclusively hosted by Source One. Featured speakers at ExecIn present exclusive sessions  produced for executives at non-consulting organizations, that provide the opportunity for them to reevaluate their processes and discover potential for improvement in their business.

The Road to SYNERGY - Baltimore, MD
In preparation for the annual SYNERGY conference Source One's partner Corporate United will host one day regional events in anticipation of the annual national meeting held later in the year. The first meeting will be in Baltimore, Maryland in early June, As a Gold Sponsor, Source One will be attending and sharing their innovative category solutions with other procurement professionals in the area. A day focused on leadership in the industry, best practices and personal development, local procurement professionals won't want to miss the opportunity to network with their peers on a smaller scale before the national conference. 

Millennials contribute to procurement management
Many industries are considering how to involve the younger millennial workforce, and procurement needs to adapt to this group as well. Part of this will include finding the knowledgeable staff needed to keep operations going in the future.
Employment statistics
As of May 2015, the Bureau of Labor Statistics estimated that 72,600 people worked as procurement managers throughout the U.S., and 71,740 worked as procurement clerks. The company and enterprise management industry employed the greatest amount of managers, and the three states with the highest employment rates were California, Texas and Illinois.
California and Texas were also the two biggest employer states for clerks during this time, though the third was New York.
Employer and employee needs
Both businesses and the millennial staff they hire have something to gain from the equation. Employers can fill out their workforce with engaged talent that is ready to commit to a longer career. Furthermore, the millennial employee base seems ready to embrace that sense of stability, and could offer relevant savvy and skills in exchange for a stable job option.
Spend Matters recently spoke to Southeastern Louisiana University management professor David Wyld, who explained the link between millennial values and the procurement industry in particular.
"I think that procurement as a profession will only be helped as millennials come to the fore," he said. "They see themselves as more solutions-oriented, more socially aware and certainly more comfortable than prior generations in working not just with new technologies, but [also] with new people and in new situations."
Facing industry costs
Procurement also needs to keep costs down for businesses, which could demand new strategies and workers. A 2016 Deloitte and Odgers Berndston report surveyed 324 senior procurement officers about the most pressing needs in their industry. Nearly three quarters of respondents said that cost reduction is their highest priority in 2015. This was a 5 percent increase compared to similar figures from a year earlier.
What's more, the report also showed a strong need for employment and staff changes. CPO confidence in their respective staffs dropped noticeably between 2014 and 2015. The latter year saw 62 percent say their workforces could not follow through with the company's procurement efforts.
"Adding new talent to the workforce is more than just sensible business practice: it could become unavoidable."
There was also a significant lack of interest in outsourcing. While 32 percent of these officers were dedicated to retaining existing talent, just 16 percent were focused on outsourcing procurement tasks. The report concluded that procurement can implement newer technology to try and improve as times and demands change.
The millennial necessity
Adding new talent to the workforce is more than just sensible business practice: it could become unavoidable. A ManPowerGroup report said that both Generation X and millennial workers will each account for 35 percent of the overall global workforce.
The U.S. was also one of the nations where millennial workers felt the most confident about jobs. Other countries in this same bracket (with between 70 and 80 percent of millennials optimistic about work) included China, Germany, India and Mexico.
This concern over millennial workers also echoes the need for procurement management staff in general. Staffing services augment existing teams and leave them with more ways to approach difficult demands.
Traditional vs. Holistic Approach to Product Lifecycle Sourcing
We see it all too often: A product makes its debut. It experiences popularity but then sales begin to dwindle. Costs remain higher without revenue to offset production.

Enter strategic sourcing and procurement

SS&P is then brought in as the "necessary evil" to help cut costs. And, we can do this in a number of ways: negotiate prices decreases through order volume increases, partnering with a contract manufacturer, or even support the process of taking manufacturing on internally. These may all be viable options, but the truth is, waiting later in the product lifecycle is selling SS&P short. Waiting until maturity or even the decline stages of the product lifecycle caps the impact SS&P could have when it comes to not only optimizing budgets, but also innovation.

It's a symptom of a greater challenge for many Strategic Sourcing and Procurement Groups - a lack of strong collaboration between SS&P and other functional department stakeholders. Demonstrating SS&P's impact beyond cost savings remains a challenge in the industry and a topic to be addressed during the Institute for Supply Management's Annual Conference coming up in May. For many companies, functional departments simply see SS&P as an added obstacle to the process of obtaining the goods and products they need. As a result, particularly in direct materials sourcing, SS&P is brought in later in the Product Lifecycle. As a result, major opportunities are left on the table.

Addressing this continued challenge, Source One's direct materials sourcing experts have published a new supply management white paper titled, Strategic Sourcing Throughout the Product Lifecycle: Balancing Competitive Costs with Innovation & Speed to Market. The white paper, which includes case study examples, presents the business case for engaging SS&P at each stage of the Product Lifecycle, including Ideation, Production, Manufacturing, After Sales Service, and Product End of Life. The white paper aims to demonstrate Sourcing's value as a strategic partner and not just a resource for cutting costs.

Wal-Mart leads in effort to streamline buyers
Changing supply methods can help a company redefine itself for a new market, or better match what consumers have come to expect. Reuters reported on Wal-Mart's strategy to consolidate its buying practices and make it easier to purchase all of its products at once for more efficiency.
The new mode will use one of Wal-Mart's buying teams for goods both meant for in-store and online purchases. By trying to manage items for both of these spaces, the company wants to mature in two sectors simultaneously, in a way that could be easy for customers to understand and efficient for suppliers behind the scenes.
A combined change
According to this report, the shift is intended to further blur the lines between in-store and e-commerce as Wal-Mart tries to bridge the gap between the two spheres. Reuters spoke to an unnamed "large consumer goods supplier" which told the source about the problems in the previous system.
"The shift is intended to further blur the lines between in-store and e-commerce."
"The way it operated until now was extremely inefficient for us and them," this company said. "For example, they would buy 5 million cases a year for stores and 500 cases (for) online and then make us go through a different buyer for online. It was a nuisance."
All retail operations should perhaps note this new approach, as it indicates a dual strategy for handling the twin channels of online and in-store purchases.
Since the strategy also seeks to make the product offerings in both settings match, companies that want to follow suit may have to use new spend management options to make the best use of resources.
E-commerce set to expand
In a forecast for the current year, the National Retail Federation recently announced improved sales for the sector as a whole, but especially online. The latter channel could end up growing as much as 12 percent compared to 2016, whereas the highest estimate for in-store sales growth is 4.2 percent.
The lowest forecast for in-sales purchases would mean a .1 percent decrease from the 3.8 percent rate seen in 2016. While that number was up from the previous year, an overview of changes since 2008 has shown some ups and downs since 2013. However, every year since 2008 has seen some level of growth, the source said, except for 2009, when these sales dropped by 3.6 percent.
The changing world of retail
For retailers, acknowledging both growth rates could be the important task going forward. The physical store may still exert some influence over the customer experience, which means the system for handling supply needs to enforce strong relationships no matter where the sales are ultimately going to take place.
Digital technology is expanding its reach, enabling retailers to host online experiences within their stores as visitors enter. One way to keep costs low is to prioritize spend management for indirect costs that pose a drain on the company's resources as it tries to expand on a global level. The sourcing technology needs to be ready to address the needs of every individual entity involved.
Last fall, Source One introduced the Communications Intern position to have a designated intern support the specific efforts of the Communications team. In the past, analyst interns had the opportunity to contribute to the blog and marketing strategy that the Communications department at Source One manages. 

While the Intern Corner allows for analyst interns to share their individual experiences with Source One, my role is responsible for contributing to the blog regularly with weekly posts in our ICYMIM (In Case You Missed It Monday), the Source One Round Up, and other blogs announcing company updates and industry news.

Just like the analyst interns, I perform extensive research and evaluate data but rather than being directed towards client sourcing projects, my efforts support the internal marketing and business strategies for Source One. Being actively involved in the communications initiatives at Source One has helped me understand both the broad range of service offerings Source One provides and the expanding procurement, sourcing, and supply chain industries. I’ve experienced a variety of functions in the communications department to discover my preferred focus, which I have found to be with media and public relations specifically.

After observing the processes for arranging and sponsoring event and speaking opportunities in the fall, I’ve learned how we prepare for these occasions to demonstrate Source One’s presence in the industry. Now that I’m familiar with the process, I can confidently communicate with correspondents for the conferences and events we are interested in for the upcoming year. As the service offerings at Source One continue to grow, I had the opportunity to create webpages for new offerings and generating content for the website to demonstrate our capabilities and experiences.

These are simply a few examples of the many processes I've been involved in during my time at Source One. My understanding of the different initiatives, beyond how to execute them, has always been a priority for everyone I've worked with, from upper management to my direct supervisor. Besides the dedication to professional development, Source One also has a unique company culture. Even as the organization expands, they maintain a familiar environment that values work and personal life balance. No one gets lost in the crowd here, every member of the team contributes a particular expertise that contributes to the organization overall. 

ICYMIM: February 20, 2017

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

Calculating the True Cost of Safety Complacency in Your Operation 
Megan Urbas, Corporate United, 2/16/2017

As the role of procurement professionals expands beyond cost-reducing efforts, the responsibilities included in the profession are increasing and the influence procurement has in other areas is becoming more significant. While safety culture isn't a direct responsibility, suppliers and facility management is, and as an extension of your organization's safety culture, you'll want to ensure suppliers and facilities meet local, regional, and national regulations to avoid costly fines and mitigate risk.

Standard Terms and Conditions in Your RFP
Charles Dominick, SPSM, SPSM2, SPSM3, Next Level Purchasing, 2/15/2017

Any procurement expert can argue that multiple factors of the RFP depend on specific details based on the organization and their individual goals, and can rarely be standardized. The terms and conditions for the RFP are mainly dependent on the market, and while they can be similar across other businesses that prospect suppliers are working with, these can still differentiate depending on the client. If a supplier can't agree to the terms and conditions you've provided in the RFP, the can be disqualified from the process fairly easily.

Do College Grads Have The Right Degrees For Today's Manufacturing Workforce?
Michael Cosgrove, ThomasNet, 2/15/2017

While the strategic sourcing function can contribute to just about any area of an organization, it is also influenced by many industries, including manufacturing. During the RFP stage of the sourcing process for direct materials or engineered products, procurement experts work directly with manufacturers as potential suppliers for these products. Recently, the industry has seen changes that are altering it's capabilities to be much more involved, creating a skills gap that manufacturing companies are responding to with worker training programs.

February 17, 2017

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

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

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

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

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

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

What Not to Do:

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

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

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

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

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

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

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

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

My name is Shiji Varughese and I am currently working at Source One’s Chicago office. I am twenty-three years old and am completing my degree in Finance with a minor in Accounting at DePaul University, after transferring from Oakton Community College where I received my Associate in Arts degree. I have strategically focused my career to center around investments, and have a specific interest in equities. I was able to do this by participating in various opportunities at DePaul,through which I gained valuable exposure to the field. Through these opportunities I was able to develop skills with financial trading technology, data analysis and market research which I apply regularly to the processes I am involved in as an Analyst Intern at Source One. 

The internship opportunity Source One provides students like myself with a window to further advance this skill set I have already developed, and apply these strategies to the strategic sourcing and procurement processes implemented on a regular basis. The internship opportunity promises a tremendous amount of potential for growth into a full-time position in consulting and procurement. I look forward to expanding my knowledge on the industry working alongside the experts at Source One. 

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

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

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

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

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

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

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

Source One’s Chicago office is filled with friendly and knowledgeable professionals. Since starting  in January of this year, I’ve had the opportunity to work on projects in a wide variety of industries. While my role was limited in the first few projects, I’ve been able to take on greater responsibility as my skills and industry knowledge grow. As my industry knowledge has grown I’ve recognized a strength in Telecomm and IT, working with the team on a number of projects. While I have already built a general understanding of Procurement and Sourcing Consulting, I look forward to expanding my knowledge even further. With Source One, I also hope to further develop my analytical and communication skills and continue my career in consulting after graduation. 

'Glocal' solutions takes the best from global and local practices
Strategic sourcing may help companies adapt to a new landscape, and that might mean being both global and local at the same time. In the industry, this is sometimes known as "glocal," and while it's hardly a new term, it could take on a special relevance now that supply chains are increasingly intricate. In fact, sourcing goes right along with the classic idea of what "glocalization" represents.

What does it mean to be glocal?

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

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

Maintaining strong connections

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

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

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

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

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

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

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

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

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

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

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

Incentive Structures:

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

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

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


ICYMIM: February 13, 2017

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

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

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

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

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

February 10, 2017

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

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

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

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

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

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

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

2.       Preserve and encourage development for initial talent

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

3.       Apply commitment incentives for newer generations 

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

4.    Modernize employee performance management practices 

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

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

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

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

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

Car manufacturing: BMW

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

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

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

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

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

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

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

Space flight: Boeing's Starliner

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

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