May 2017

In a previous post, I discussed supply chain and the complexity around defining it. It revolves around process improvement for all activities that move your product or service from infancy to the end-user as efficiently, safely, and cost-effectively as possible. Given the definition, supply chain becomes a mindset more than a department within a corporation. Its role in business is changing almost as quickly as the technology that it thrives on. There is a drastic need in this ever-growing field and a plethora of career paths and opportunities to choose from. Some areas within include inventory management, merchandising, lean, demand planning, sourcing/procurement, logistics, and category management and they work directly with manufacturing, engineering, and finance to improve the business. Where supply chain becomes even more exciting is when you have overlap and common goals between those departments. It can help the corporation drastically as well as the career paths of its individual employees.
               From my own experience, in wholesale, retail and consulting environments, I have found a direct correlation between inventory management and sourcing and would go as far to say that strategic sourcing can be considered the backbone of supply chain. The analytical capabilities gained in inventory management can help in any role but the strategy behind each move is key. When you consider forecasting, inventory turns, service level, space/order management, and product flow you build a basis for understanding the importance of budgeting and accountability. Often times there will be tension with how to best capture sales but it is ultimately the job of the inventory manager to promote sustainable growth.
This type of strategic capability can be used throughout the sourcing process as well; including data collection, research, RFx, negotiations, contracting, implementation and continuous improvement. Although the most basic functions within sourcing and inventory management can be tactical and tedious on the surface, in a holistic light they can be strategic. The ability to effectively negotiate the final stages of a sourcing initiative relies heavily on integrity of the data from the beginning stages. The analytics around the POS data in inventory management can be very similar to that of the cost of goods or services data in a sourcing project. With that said, an argument can be made that sourcing is the backbone of supply chain because the steps remain constant from category-to-category, business-to-business. There will be more variability between managing indirect vs. direct spend but sourcing, if done correctly, can be used at any company in any industry.

Again, supply chain isn’t going anywhere! Supply chain is a big bag of tricks and it’s best to see several of the different pieces. You’d be surprised just how much interconnection there is and how much easier change management becomes when you have prior experiences to look back on. For the departments to work cross-functionally there must be some commonality between them and understanding the point-of-view from many will aid in the understanding of the supply chain in its entirety. A separate part of the equation is understanding these concepts from several different business sectors and consulting can be a great approach!
Last week top supply chain and procurement industry publication Spend Matters announced their list for the 2017 Providers to Watch, including Source One Management Services for the second year in a row. This list is the result of careful consideration, discussion and debate among the Spend Matters analysts as they aimed to exclusively feature innovative firms in the technology and consulting space. Source One is honored to be recognized in their 25th year as they celebrate this anniversary in business as providers of procurement and strategic sourcing services.

Spend Matters released the list during the annual ISM conference held last week, where Source One partnered with the Institute for Supply Management as sponsors of ISM2017 and exclusive sponsors of sub-conference Exec In. The list is notorious for being a reliable resource of prominent procurement technology and service providers that annually supports enterprises as they go through the process of researching vendors and eventually selecting the firm best for their organization. As Source One continues to grow and support a variety of spend management initiatives, it exemplifies the qualities that Spend Matters recognized when selecting the firm over other competitors.

Some of the highlights from the past year for Source One include the launch of it's spend analysis as a service web platform, Spend Consultant offers procurement professionals an easy to use spend analysis and cost-reduction opportunity assessment in a convenient setting accompanied by the expertise provided by consultants on the Source One team. The firm is also looking ahead to its eSourcing and reverse auction platform, which is seeing major improvements to be released in the next year. These developments are just a few of the many examples of Source One's sustained growth as they continue to offer innovative services and solutions for industry leading organizations.

3 health care supply challenges to watch for during the second half of 2017
Both health care and supply management are complex, difficult fields, and the interaction between the two can bring special challenges. As we keep up with the latest issues facing this overlap, here are some of the most prominent areas supply chain professionals may need to respond to with accurate data and an efficient path to transformation.

Reluctance to modernize

Health companies may not be ready to embrace efficiency simply because of possible disruption. The focus on readable data and clear transparency may be difficult to square away with typical staff behavior. The Hospitals of Providence's market CEO, Sally Hurt-Deitch, told FierceHealthcare as much when she addressed the issue of staff members who keep things to themselves. She implied this may be antithetical to the clarity that can be a priority for modern supply chains.
"We know that in general, staff are hoarders," she said. "They fear they're not going to have something one day, and people keep putting stuff away because the apocalypse may come."
Despite the hyperbole in this statement, there are clearly some possible hurdles for staff to overcome, simply when it comes to their own preferences and current practices. Physicians can also have an impact on what finally becomes of the supply chain, the source said, because of the differing costs and behaviors in each branch.

High costs

This can be an issue at the heart of other modernization concerns, since without sufficient financial support, decision-makers might not be able to invest in their desired areas. A Deloitte 2017 health outlook report indicated a predicted growth in both global and national GDP health care expenditures. The former of these is expected rise to $8.7 trillion in just three years from now.
Looking more closely at the different possible regional trends, the report said that North America is still set to spend the most in this area by 2020, with more than $4 trillion devoted to health care expenditures compared to the mere $3.3 trillion expended in 2015.
The need to lower costs while still managing patient needs is also leading to different cost containment strategies, the source said. Knowing this, it makes sense that professionals find the most appropriate solutions for health care chains that allow them to achieve efficiency, strong relationships and other goals in a market with high demand.
"A transformation plan can leave the procurement or supply strategy in a better place."

Once again, different conditions can also bring their own concerns. The report mentioned cardiovascular disease as one example, but whatever the most pressing condition, a transformation plan can leave the procurement or supply strategy in a better place.

Cyber security threats

Health care has long been a particularly targeted area by attackers, and it seems that supply chain managers in this industry may want to stay aware of this. In a press release from last year, IBM announced the results of a Ponemon Institute study it sponsored.

This included the statistic that health care breaches cost $355 for each record compromised during an attack, echoing the general rising costs for all industries. In the wake of this information, strategic sourcing may seem more attractive. Professionals can use these challenges as a guide to what will work best for them.
In my previous blog in this series I set the stage for a particularly bad RFP to which Source One was invited. The RFP was being administered by a third party for an unnamed company, and we were given 2 business days to turn around a response. Though these two factors made me highly suspicious, I decided to give the rest of the RFP a look to qualify it further. You shouldn’t rule out a strategic sourcing business opportunity on these bases alone. So I looked at the actual RFP content. That’s when I noticed that the RFP was riddled with spelling and grammar mistakes. “Februray,” “servces,” “Standarization”– and there were a lot more. Now, we get it – sourcing people don’t need to be eloquent writers and perfect spellers to do their job well. But we do expect them to use a handy dandy tool called Spell Check (guess what? Spell Check works in Excel, too!). The whole thing reeked of a rush job that was not quality checked.

If you are entrusting a procurement services provider to represent your company’s interests, to build relationships with potential vendors – you need make sure that they don’t give participants the impression that they don’t take this project seriously enough to use spell check. How can you expect potential vendors to take the opportunity seriously if, as far as they know, you don’t?

Remember that in many cases, when you are dealing with services organizations - the people who develop proposals aren’t just sitting around twiddling their thumbs until an RFP comes along. They are fielding inquiries from dozens of potential customers at a time – and if they’re a reputable industry player – they are custom-developing proposals and Scopes of Work that best meet their customers’ requirements. In other words, a good procurement services provider is not simply taking their “Proposal Template X” off the shelf, slapping your company’s logo on it, and sending it over to you expecting you to sign on in short order. Any procurement services provider worth their salt is likely investing hours and hours of their valuable time and pulling in Subject Matter Experts (SMEs) from billable work to carefully craft a detailed proposal and supporting documentation to differentiate themselves from their competitors.

But let me take a breath here. Maybe I am being too dramatic. We’re just talking about some spelling mistakes, right? Spelling errors in an RFP aren’t the end of the world / incontrovertible evidence of bad sourcing. Well - we’d be willing to look past spelling and grammar mistakes in an otherwise solid RFP.

This wasn’t otherwise a solid RFP...I'll wrap this up in Part 3...

ICYMIM: May 29, 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.

The Power of Positive Thinking in Uncertain Environments
Kelly Barner, riskmethods, 5/24/2017

When it comes to recognizing opportunities for growth, we occasionally need to take risks and make decisions that may have undesirable effects if they were not to work in your favor. As procurement professionals there are certain risks that we have witnessed to be profitable when approached with a positive outlook, including trying new suppliers and business models. Creating a new partnership is never easy, but one that can compliment your business like a new supplier that offers innovation potential could be a risk you're willing to take. Similarly with applying a new business model to an old offering, product or service, it can be risky but it offers a new perspective that will provide otherwise achievable benefits.

Trash Talk: Evolving Policy Changes Affecting Waste Management For All Types of Business
Megan Urbas, Corporate United Blog, 5/23/2017

A key aspect of every facility management project is waste management, and how to go about this inevitable by-product of business. This category specifically offers an opportunity to utilize a strategic partnership for your organization's long-term environmental liability and sustainability initiatives. In addition, companies that don't comply with policies enforcing regulations for waste removal/management are subject to facing fines and other fees for improper disposal that has negative effects on the environment. It will serve useful to be aware of waste management regulations that simple compliance with can prevent costly consequences.

The True Achiever Challenge
Charles Dominick, SPSM, SPSM2, SPSM3, NLPA blog, 5/24/2017

Even the most successful professionals have room for improvement, especially in an industry like procurement with consistently new and improved best practices. Even the best procurement negotiators are constantly looking for opportunities to enhance their skills and develop even more efficient skills. Even if you are considered great at your procurement work according to objective standards, there are ways you can achieve more by improving skills that will support your expertise to make you a well rounded professional that offers more than just a specific focus and has multiple categories of expertise that compliment each other.
Worker-focused initiative to target Adidas supply chain transparency

With accurate data about supplier practices, businesses can promote humane conditions. One of the ways to use transparency for good is to implement new technology to try and enforce anti-slavery laws and achieve compliance goals, or even go beyond them. Sportswear brand Adidas is taking the initiative to do this, according to Reuters.
Adidas works toward empowerment
The Thomson Reuters Foundation recently spoke to Adita Wanchoo, Adidas Group's Senior Manager for Development Partnerships, who is specifically looking to help the company try and create a supply chain built on clear information on slavery and employee conditions. Part of this has involved increasing communications with laborers through an app that would allow them to submit complaints. This comes in addition to the company's existing anti-slavery practices but could set a new tone if it expands.
"We want to make it as easy and anonymous as possible for workers," Wanchoo said. She added that "sometimes there can be resistance from suppliers, but we work with them to demonstrate how this can help them in the long run by improving supply chain transparency, communication, productivity and worker retention."
While this may have just begun as a pilot program, Adidas could see the practice expand and become normal at many of its factory locations. Even if other companies don't adopt this practice exactly, could it send the message that such apps are useful for gathering information?
As it's based on both technology and a current need, it seems to be very much of the times, and could play into similar efforts. Procurement management professionals may also find themselves increasingly tasked with addressing slavery, and making a key effort to transform procurement is a way to do it.
What procurement can do
Empowering this department within a business, or possibly creating a position to tackle slavery specifically, as Adidas did, may help define what a given company plans to do about slavery risks. A report from Walk Free Foundation and the Chartered Institute of Procurement and Supply specifically explained the role that procurement has to play.
This includes thinking ahead, planning out enforcement measures and creating a company culture that leads employees to enforce the policies laid out. In a broader respect, the report also said that businesses should hold themselves accountable and look for ways to promote sufficient auditing standards.
"It might also help to pay attention to possible problem signs of high-risk areas."
It might also help to pay attention to possible problem signs in high-risk areas, with conditions that might be more prone to exploitation. The document listed some of these, such as conflict zones, places where raw materials are and regions with high poverty levels.
A matter of international importance
There's been an emphasis on solving this problem that goes beyond companies. Spend Matters reported on former U.K. Prime Minister David Cameron, who recently appeared at a supply conference and explained the need for "responsible capitalism," something that could involve the procurement sector. He also referenced his government's efforts to respond to the industry and take a stand against slavery.
As necessary as ending supply chain slavery is, making a major change can be a difficult process. To ensure it works well, businesses can use benchmark data to drive a productive transformation.
Source One Round Up

May 26, 2017

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


50 Providers to Know and 50 Providers to Watch for 2017
Nancy Clinton, Spend Matters, May 23, 2017

Earlier this week, Spend Matters announced their lists for the 50 Providers to Know and 50 Providers to Watch for 2017. Every year, their industry analysts reveal the firms that they believe to be both recognizable and up-and-coming in the industry. These decisions were based on months of careful review of the latest procurement service and technology offerings. Source One was featured in the 50 Providers to Watch list as a firm that pushes the envelope and drives innovation in the industry. It is an honor to be recognized by the leading supply chain publication as a strategic sourcing firm that strives to challenge traditional practices and consistently offer a unique approach that enhances procurement and supply chain management capabilities.

ISM 2017 News & Update
The Institute for Supply Management, May 24, 2017

After four days of the annual international conference, the Institute for Supply Management reflects on the highlights of each day and summarizes the most anticipated sessions and speakers throughout. Monday began with ISM2017's kick-off keynote which featured General Colin L. Powell, USA (Ret.) speaking on how to be a successful leader in times of uncertainty which he had a considerable background in. In addition the conference featured more than 175 speakers, 73 sessions, and experiences including the Exec In sub-conference. Attendees were exposed to practical solutions delivered by industry experts, world-class strategies and case studies, best practices and networking opportunities throughout the course of ISM2017 and returned to their organizations with valuable takeaways for consideration as they plan for the future of their supply management organization.


This summer, Corporate United is inviting procurement and supply chain professionals from regional areas around the U.S to participate in exclusive one day conferences. The first stop on their Road to SYNERGY series will be in Baltimore, Maryland on June 6th, where industry professionals local to the area have the chance to collaborate in a personalized atmosphere with other supply chain experts in the region. The audience will have an opportunity to learn from industry leaders and discuss hot topics with other attendees throughout the day. Highly anticipate educational presentations and engaging sessions will allow attendees to exchange insights and predictions for the future of supply chain that will be valuable takeaways for getting back to work and planning ahead for their organization. After Baltimore, Corporate United and Source One get back on the Road to SYNERGY to head to Dallas, Texas for the next event in the series!

Originally scheduled for the end of March, ISM New York's annual Risk Management conference was postponed and later rescheduled for June 14th. Attendees can still look forward to the schedule as planned, including all of the informative sessions and educational presentations anticipated for the March event. Procurement and supply chain experts will offer a variety of perspectives on industry hot topics and provide a range of valuable insights for the audiences to consider while planning the future of their function in their organization. This opportunity to exclusive to those in the greater New York area and local procurement professionals can use this one-day conference to regroup after the international event this past week in Orlando. Source One's procurement and supply chain professionals are looking forward to ISM NY's Risk Management event to meet with other industry experts.

IBM and SAP join forces: Imagining the world of cognitive procurement
Applying analytics and smart technology to procurement is a clear way for the industry to evolve, and major computing businesses are working toward this goal. Incorporating the power of sufficient processors and big data could help companies focus on transparency, effective improvement and other modernization issues, all in the name of better efficiency.

In that light, an announcement involving two computing giants working together on procurement could be another sign of new technology supporting the systems needed for future work. In that spirit, IBM announced an alliance that looks to help the industry save money and work faster, thanks to automation and prediction.

A procurement project
IBM's Watson and SAP Leonardo and Ariba will all contribute to a platform that leads to more intelligent operations, IBM said in a press release. According to this statement, the combined power of these two systems would also help companies prepare for the future using benchmarking data and supplier insights.

The president of SAP Ariba, Alex Altzberger, also commented on this in the same statement, citing what both participants could bring to the table by working together and calling the development "a major milestone".

"With the deep horizontal integration capabilities native within SAP Ariba's mature platform and the innovative capabilities of SAP Leonardo and IBM Watson delivered by the industry's most experienced and trusted providers, companies can realize an even more intelligent source-to-settle process for managing all categories of spend that creates value across the entire business," he said.

It's worth noting that SAP Leonardo has been part of other projects dealing with new technology trends and their potential. In January, SAP announced Leonardo as an Internet of Things portfolio, indicating a possible focus on the future of newly connected devices. Deliberately attaching this to procurement may be a sign that this sector could benefit from it.

" In January, SAP announced Leonardo as an Internet of Things portfolio."
Automation and prediction
Though it's still in development, a key feature of this collaboration seems to be using smart artificial systems to "fill in the gaps" of potentially tedious operations and help users see their best move for the future.
Concerns about AI and cloud security are likely to persist despite these advances, but the strategic use of automation does suggest a more realistic mode for companies to follow, with only certain elements of planning falling to these new intelligent systems.

An Information Age piece sourced from a different SAP Ariba employee, Dr. Marcell Vollmer, said that automation is set to "eliminate mundane tasks" instead of replacing the role of humans outright, and that it will also require new data-related roles for employees to fill.

Machine learning
Automation increasingly begs to be seen in relation to other features. An Industry Week interview with SAP SO co-founder Hasso Plattner, taken from a recent news conference, hinting at the role of voice recognition and security along with automation. Plattner also seems to believe that human input will never fully leave the enterprise.

So many factors can influence a company's bottom line that spend management has to change to keep up.
Summer is just a few weeks away and the Source One team is looking forward to the supply chain, procurement and sourcing industry events taking place this season from June to August. Corporate United's Road to SYNERGY one-day conferences kick off on June 6th with the first stop in Baltimore, Maryland.These regional events invite procurement and supply management professionals to join with other local experts in the industry to network, learn, and plan for the future of their organizations. The Source One team looks forward to attending the Road to SYNERGY as a featured Gold Sponsor of these events.

The sessions featured during these events are guaranteed to inspire and educate attendees while creating an setting for exchanging the latest in procurement best practices based on case studies provided by speakers and presenters during breakout sessions throughout the conference. These events also feature dynamic workshops for attendees to participate in interactive discussions with procurement thought leaders who can provide actionable insights.

The agenda for Baltimore's Road to SYNERGY conference begins with a morning of breakfast and networking and a Keynote General Session followed by an assortment of informative sessions and educational presentations and workshops throughout the day. Finally the evening will conclude with an evening event aboard the USS Constellation, the last all sail ship built by the US Navy on Baltimore's historic waterfront. The Road to SYNERGY events are all complimentary for all Corporate United members, friends and practicing procurement professionals.

For a detailed agenda and to find out more information about the Road to SYNERGY event in Baltimore, MD on June 6th, visit the event's website.
 Today's agenda for Day 3 of ISM2017 is just as exciting as the first two days, and features more of the educational and informative sessions that are highly anticipated by attendees! This morning kicked off with the J. Shipman Gold Medal Award before attendees gathered for another insightful Keynote General session from a renowned speaker who offered his perspective on recent current events and political trends that are affecting the economy and influencing key aspects of global supply chains. Following the keynote session was a variety of signature sessions and other panels and presentations throughout the Learning Track that attendees are looking forward to hearing from industry experts and thought leaders on procurement and supply chain hot topics. The Outside Track of Learning Track includes sessions that offer new and effective methods for improving skills and growing as a professional in the supply management field. 

With a variety of unique perspectives who provide their own best practices for attendees, these sessions are key resources for discovering how to establish a professional presence, enhancing skills in related fields and gaining strategic networking abilities that lead to valuable professional relationships. Included in today's Outside Track sessions was Emerging Professionals: Should I Stay or Should I Go?, which featured a panel of emerging professionals who have experienced the benefits of both staying with one organization for a majority of their career and moving from company to company. This session included Source One Director Diego De la Garza, who led the conversation as the panel moderator as the group discussed employee retention efforts and discussed the contributing factors into panel members decisions to either stay with or leave their current companies and previous employers. 

Today is also the final day of the executive sub-conference sponsored by Source One, Exec In. These select attendees are high-level executives that act as decision makers in their organizations, who had the opportunity to attend private sessions within a unique agenda designed specifically for them. This morning they had the opportunity to attend a Behind the Scenes event with the Keynote presenter after he spoke to the general audience to begin the day. In between the morning and afternoon sessions, the Exec In audience attended a Networking Lunch that included two rapid-fire insight sessions. Source One VP, Operations Bill Dorn shared the Three Cardinal Sins for the Modern Procurement Organization to prepare attendees for the coming year in supply management. 

With the final day tomorrow, the Source One team is sorry to see ISM2017 coming to an end while simultaneously excited to return to work with inspiration from the educational sessions and other industry experts they met throughout the conference. 
This post is part of a series discussing BPOs and Strategic Sourcing:

Over my last 5 posts, I reviewed the growing trend of outsourcing strategic sourcing to your BPO provider who handles your traditional transactional P2P.   And while I was a bit negative in discussing the concept and results of many of the existing providers, I don’t mean to imply that every onshore/offshore BPO provider is a bad choice.  I simply think that companies need to do a greater level of due diligence and become less focused on simple ROI calculators when trying to determine if and which BPO is a fit for them.   This final post in the series will hopefully present some other thinking and considerations that should take place as you evaluate your sourcing BPO options.

Here are some of the evaluation criteria and questions that you need to consider when you are selecting a BPO provider for Procurement:

  • Is the BPO model a hybrid model of offshore/onshore resources

  • What is the mix of resources of onshore vs. offshore?

  • How do the onshore resources manage the offshore resources?

  • What level of training is provided to each of the resources?
  • What is the turnover rate?

  • Of the onshore team?

  • Of the offshore team? 

  • Of the Jr./Sr. resources? 

  • Are they named resources or do they come from a pool?
  • Can you interview the resources?
  • Are the resources you interview the same resources that will stick with you through the life of the account, or will they be swapped out?
  • Do you have the ability to demand/request replacement resources?
  • What are the backgrounds of the Subject Matter Experts?

  • How long have they been doing sourcing/procurement? 

  • How long have they been employed with the BPO itself?

  • Will they be working on more than just my account?

  • If not, how many accounts do they work at once?

  • What is the category manager or SME’s role specifically?  
  • What is the quality control process of the work product coming back from the low-cost resources?
  • Have the resources that are assigned to your account worked on other accounts together?
  • How does the BPO provide a consistent on-boarding and culture and handle turnover?
  • Are they willing to provide a breakdown of hours worked on your account and allocations for the senior delivery team?
  • How do they communicate with your team/stakeholders?
  • How do they measure savings vs how do you measure savings? – get buy-in on this before you sign anything!
  • Test their acumen on a variety of categories.   

  • Make sure that the strategies used are not canned 3-bid and buy RFP mentality.

  • Look at work examples from both tactical and non-tactical categories.

  • What tools do they have at their disposal?  

  • Do you have access to the same tools? 

  • What happens if to the tools/data/knowledge if we terminate the relationship?

  • What databases or other content-pools do they have to pull from to support category specific knowledge?
  • How do they measure a successful supplier relationship (meaning your relationship with your suppliers)?

  • Do they only focus on the financial aspects of your relationships?

  • How do they share institutional knowledge with each other?

  • From your account?

  • From other clients?

  • And that’s just scratching the surface.   Also, here’s a pro-tip; you should be asking a lot of these questions in meetings/phone calls, not in canned RFP documents.  Make sure that the organization you select is compatible with your stakeholders.

    And lastly, most importantly, is outsourcing your strategic sourcing really the right thing to do at all? Many companies have found that it was a mistake, and have been trying to bring the resources back in-house which is much harder to do than giving it away.  Further, much better options exist out there, such as supplementing your existing capabilities with high-quality services.  They might not be as cheap on the surface, but the true impact (and financial benefit received in savings and finding the right suppliers) will far outweigh any differences in costs.

    Any other useful evaluation criteria come to mind?  If so, add them to the comments.

    As Day 2 of ISM2017 comes to a close, we want to share some of the highlights from the conference over the past two days. While there are still many exciting sessions and presentations lined up for Tuesday and Wednesday, attendees have already learned so much from the last two days of experiences and educational presentations. The members of the Source One team that are attending ISM2017 are looking forward to gaining more of the already valuable takeaways they have achieved thus far at the conference. Kicking off Sunday morning, attendees had the opportunity to attend the Business Behind the Magic tour in the morning followed by Signature Sessions, networking events and other educational presentations in the afternoon. In the evening, attendees had the chance to attend Procurement Transformation: Is a GPO right for your organization? which featured a panel of executives, including Source One's VP, Operations, William Dorn.

    This interactive discussion allowed the audience to ask Dorn and other panel members questions about how GPOs can offer value for any organization, and the opportunities that GPO members are exposed to beyond cost savings. This session was featured on the Learning Tracks session in Bust track of the Economic Segment, that included other sessions that offered effective strategies and tactics for surviving when economic times get tough. The evening of the first day concluded with the ISM2017 Welcome Party at the World Showplace at Epcot for networking and other activities to excite attendees for the rest of the conference.

    Monday began with a Keynote General Session for all audiences before executives separated from their teams for Day 1 of the exclusive sub-conference Exec In. Source One is featured as the exclusive sponsor of Exec In, that includes sessions designed for industry professionals who act as decision makers in their organizations. These sessions include Open Mic: Why Here, Why Now?CPO Roundtable and Procurement 4.0 which featured Source One Senior Data Scientist James Patounas discussing how to prepare the industry for a world that is driven by artificial intelligence and machine learning.

    Day 3 of ISM2017 has attendees anticipating even more excitement, with sessions including Emerging Professionals: Should I Stay or Should I Go? that includes panel moderator and Source One Director Diego De la Garza discussing the benefits of staying with one company for the majority of one's career compared to the benefits of frequently switching companies. Stay tuned to find out more about the exciting sessions and educational experiences at ISM2017 as the Source One team reports live from Orlando for the rest of the event!

    ICYMIM: May 22, 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.

    50 Providers to Know and 50 Providers to Watch for 2017
    Nancy Clinton, Spend Matters, 5/22/2017

    The Spend Matters industry analysts have shared their official lists of 50 providers to Know and 50 Providers to Watch for 2017. These lists are the results of careful consideration, intense debate, lengthy discussions and multiple refinements, and feature firms that have demonstrated innovative efforts in their work as professionals in the industry. Source One Management Services, LLC is pleased to be included on the 50 Providers to Watch list, being recognized as an organization that pushes the envelope and strives to find unique solutions through world-class procurement practices.

    Supply Management Technical Difficulty Part 1
    Michael Lamoureux, AKA The Sourcing Doctor, Sourcing Innovation, 5/17/2017

    The Sourcing Doctor differentiates between the aspects of e-Sourcing that are truly challenging and those that don't actually offer a technical challenge. While decision optimization and contract analytics are exceptions, baseline e-Sourcing can be acquired through a variety of providers. They may not all be equal, as some possess the true decision optimization and genuine contract analytics that surpass their competition and take the challenge out of coding. In Part II, the Doctor discusses
    e-Procurement, followed by Part III with supplier management.

    Why Should I Update To A Responsive Website?
    Shawn Fitzgerald, ThomasNet, 5/18/2017

    Coding best practices are evolving regularly with updates in technology, and applying these allow for more convenient, efficient, and attractive digital interactions. It's important to stay up to date with these developments to allow for a better user experience, faster loading times, and increased trust with partners, clients, etc. Updating your site regularly to meet these new solutions will also make it easier as mobile use increases over time. People are accessing the internet through their mobile devices more than any other system, and as that amount increases you will want to be prepared for this new standard of online formatting.
    This post is part of a series discussing BPOs and Strategic Sourcing:

    In this lengthy series of posts we’ve been exploring the idea of giving the strategic sourcing function to your procurement BPO provider.   I’ve outlined how they might propose an ROI and define the resources that they’ll provide; but I’ve also outlined that I think the ROI calculations they provide should not be trusted.   Further, I’ve argued, that in many cases, the low-cost nature of their services lends to having bad sourcing practices and overall crappy results.    We call this RFP spam, and onshore/offshore BPO providers are the worse culprits of this in the entire industry.

    What is RFP Spam?  If you don’t feel like reading about it in my many previous rants; here is the short of it:   RFP spam is taking a very basic level of requirements, slapping it into a document or online sourcing tool, and blasting it out to as many or supplier addresses that you can find.   If and when you don’t get a response, you move on to the next one.  Maybe if you send 20 or 30 emails out, you’ll get 3-6 responses which become your vendor pool.  And this doesn’t just relate to RFPs, it’s more frequently the RFI itself.  And to be clear, in an RFI, you the procurement expert, should be making as much effort to engage a supplier as they should be to win your business.   If you think that the best suppliers are going to bend over backwards for opportunities they don’t think are real, then you are sorely mistaken (and WILL overpay).   And this is the primary reason these BPOs could never get to the level of performance that your own properly equipped team could achieve.

     “My BPO explained to me that they have solid procurement processes and have smart category leads that will ensure this will not happen.”  Oh really?   I will not name names; but I could produce literally dozens of examples of this RFP spam process from the most recognizable BPO organizations, from this year alone.   Let’s discuss:

    • On average, about once every three weeks, we receive an RFI from one the fastest growing offshore supplemented BPO research companies.   It’s frequently in broken English, and starts with something along the lines of: we identified you as a leader in xxxxx.  We need you to answer these questions (10-20 questions, most of them unrelated to the topic at hand).  Then, it says they need the response within 24-48 hours.    If we attempt to reach out to these BPO providers to gain clarity, we are told that they will only speak to companies that pass their RFI stage, and that due to timing of the event, they do not have time to speak now.   If that doesn’t sound motivating to a supplier, let’s follow it with:
      • Want more?  Track me down at the ISM national conference or give me a call through Source One and I'll show you just how far I've gone with these BPOs that 'just don't get it'.   This includes responding with out-of-this-world outrageous answers to to these repetitive RFPs complete with photoshopped pictures of coffee stains and dead flies on top of my responses to make the page illegible....  And guess what; they still qualified us and asked us for more info!
    • We get the SAME requests from the same research BPO for DIFFERENT clients of theirs about once a month.   This means, that even had we submitted our answers, there is NO institutional knowledge at that organization.   That means that, contrary to what they sales team told you, the BPO does not leverage their internal databases in order to drive efficiency in the work flow.  It means that any client of theirs is paying for redundant services and that the BPO itself is not gaining any efficiency; nor lessons learned about the supply community.
    • Need more?   Another international provider reaches out to us and wants to discuss our services.   They need to execute 2 NDAs, one for the client, and one for themselves (with us). What they hadn’t looked at is the fact that we already had a direct NDA in place with their client; and we had about 3 direct NDAs that covered this same topic in place with them already. To top it off, it took them nearly 2 weeks to get through the NDA process and then release the RFI to us.  And, you guessed it, they need the RFI turned around in 24 hours. Why would any reasonable supplier want to get involved with a RFP process like this?  (They won’t).
    • Then there is the repetitive work.   As suppliers, we’re engaged by an offshore team.  They might do some light research and provide some dialog with us (if they are any good).  Then they introduce us back to their client.  However, the knowledge handoff is non-existent.  All of the discussions we had before are either inaccurate, misrepresented, or completely missing.  Us, the suppliers, have to go through the introduction process all over again.  What do you think that does to our cost/proposal?
    • The subject matter experts are not even familiar with the subject matter.    We see this entirely too often.  A blanket email, phone call, or linkedin request asking for information.  Problem is, the question is irrelevant or doesn’t make any sense.   Any requests for clarification are met with zero response, or an answer such as “just answer as best as you can”.
    • An RFP/RFQ document that is asking for pricing in a way that does not make sense, or would be cost prohibitive to the buyer.    We frequently get requested to provide pricing, but are not giving any specifics on what it is for nor are we provided the opportunity to provide alternative solutions.  Case in point “send us your rate card for benchmarking”.   Rate card for what?  How much volume are you providing us?  How quick is your turn-around requirements?   What are the categories your company wants benchmarked?   What exactly do you want benchmarked, price, business operations, competitive offerings?  It’s not as simple as a “rate card”.   Many of these providers don’t even know how to construct a proper SOW, let alone run a supplier qualification process.
    These are just a few of the examples of the non-efficient process that we’ve seen from some of the BPO providers.   Hopefully it’s transparent enough for you to realize that the 30% savings they promised you can quickly disappear by losing just one or two potential suppliers that are lost during the sourcing process for any of your categories.

    Are all BPOs bad?  Definitely not.    Will they all under-perform?  Of course not.     
    My intention was to highlight some of the overlooked issues that finance and management teams often overlook when they look to outsource the strategic sourcing of their tail-end spend.   In MANY cases, they focus on cost only, and fail to recognize the total value the supplier provides. 

    With these posts, I didn’t even focus on how important it is to find the right supplier; I tried to focus more on the savings aspect of it that many of these companies seem to chase.  Hopefully I’ve shed a bit of light on some things to explore during your BPO selection process.   

    In the next post, I’ll actually provide some specific talking points and consideration points to keep in mind while you are deciding whether or not to outsource.
    Telco Consolidation Part 1
    M&A activity is not uncommon to the telecom industry, but in the past couple years, there have been some major players coming together. Here is a sampling of some of the more major Tier 1 and Tier 2 M&A announcements from the last two(ish) years:
    • CenturyLink acquisition of Level 3
    • Verizon acquisition of XO’s fiber business
    • Charter, Time Warner Cable, and BrightHouse merger
    • Verizon select services sold to Frontier
    • Windstream acquisition of Earthlink (and recently announced Broadview Networks)
    While your organization is likely to be affected by these changes in the market, there are some key areas that can be proactively addressed to prepare for the changes and mitigate potential negative impacts. Part I of this series will focus on the account-level and billing aspects that are likely to be affected:

    Customer Service:
    If you do not have an assigned account rep or account management structure in place with the acquired and/or acquiring carrier, you may experience some level of run around while services and accounts are in transition. When Verizon sold select services to Frontier, I worked with clients who were stuck in a cycle of customer service where Frontier did not yet have the account on file, but Verizon was no longer servicing the area, leading to a lot of frustration. Work with the carriers to proactively determine customer service transition dates and push for new account numbers and to ease some of this back and forth.

    Account Management: Be aware that different carriers stratify their customer accounts in different ways with unique definitions for the level of scrutiny and account management for each type of customer. Certainly the aim/pitch from the carriers would be that your quality of account management will improve with any merger/acquisition, but do consider where your company, spend, and services fall in terms of priority for the acquiring/consolidated supplier. For example, you may have been 2% of the revenue at a smaller carrier, but only .2% or less once you combine multiple carrier revenue streams. Talk with your account rep to understand where your account falls in terms of a defined customer group and the impacts to your account management structure (for better or worse).

    Billing/Reporting: You may be rejoicing at some of the M&A announcements and assuming that your company’s billing and reporting will now be consolidated between suppliers who are now one entity, but don’t expect too much, too soon when it comes to consolidation. You are likely to see separate billing systems, reporting platforms, account codes, etc. for quite some time. There are certainly still vestiges of carrier consolidation from many years ago – your best defense against this is to have a well-managed telecom inventory and a billing/compliance tracking system in place so that as changes occur, you are able to make necessary updates and address changes as needed with the carriers.

    Pricing/Flexibility: Certain carriers are known in the market for being more competitive from a pricing standpoint than others, so while you may benefit from larger footprint and less administrative burden (eventually), there’s likely to be a trade off when it comes to price. Similarly, smaller carriers tend to more flexible in their offerings and ability to respond to customer needs. Not to say that this flexibility will completely go away, but for those who are used to dealing with the more rigid processes or slow turnaround times associated with the larger carriers, it can be long process to get agreements negotiated or to resolve billing issues. By leveraging existing pricing you have in place and taking a strategic sourcing approach to telecom services, you can continue to push your carriers to remain competitive and tailor services to your organization’s needs.

    Of course the positive part of market consolidation should be that top suppliers are expanding their footprint, increasing their suite of services, and pushing for more creative solutions to differentiate themselves. In Part II of this series, we’ll look at the potential service/logistics impacts of carrier consolidation and how it may affect your organization and services; until then, continue to watch the market, look for these announcements, and position yourself for change!
    Source One Round Up

    May 19, 2017

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

    ISM 2017

    Next week members of the Source One team will be attending the Institute for Supply Management's annual international conference in Orlando, Florida. ISM2017 welcomes more than 2,500 supply chain professionals from all over the world for informative presentations, networking opportunities, educational sessions and a variety of other unique experiences. The four day conference features sessions for professionals at every stage of their career, from young professionals in the millennial generation to the executives that act as decision makers in their organizations. Supply management leaders are invited to attend the exclusive sub-conference Exec In, with an agenda designed specifically for these high level executives. As the exclusive sponsors of Exec In, Source One wanted to offer this audience a setting to discuss the future of procurement with other industry experts.

    Corporate United is inviting supply chain experts from select cities across the country to attend one-day conferences on their Road to SYNERGY series this summer! The very first event will be on June 6th in Baltimore, Maryland where industry experts local to the area will have an opportunity to collaborate in a close setting with other supply chain professionals in their region. While discussing hot topics with other attendees is highly anticipated during these meetings, the audience will also learn from industry leaders as they present throughout the day. Informative sessions and engaging conversations will allow for endless opportunities to exchange insights and expectations for the future of supply chain during these conferences, and attendees can guarantee valuable takeaways. Once they wrap up in Baltimore, Corporate United and Source One will get back on the Road to SYNERGY to attend the next event in the series in Dallas, Texas!

    ISM New York's annual Risk Management conference was originally scheduled for the end of March but was canceled due to Snow Storm Stella and has since been rescheduled for June 14th. The agenda will remain as planned and attendees can anticipate all the sessions that they were looking forward to at the March event. The event will feature presentations from procurement and supply chain experts who will discuss industry trends while offering their valuable insights and expectations for the next year and foreseeable future of the industry. An opportunity for procurement professionals in the New York area, this one-day conference is ideal to regroup after the international annual ISM event in Orlando just one month prior. The procurement and supply chain experts from Source One's team are anticipating ISM NY's Risk Management event to collaborate with other professionals and look forward to attending next month!

    What does it take to be a Strategic Sourcing Consultant
    The procurement profession can be unclear to those even in the consulting world, and their function and capabilities is a mystery for those that work in different areas of an organization. To summarize, the role requires a broad knowledge base of business functions in addition to a wide range of subject matter expertise. Strategic Sourcing professionals need to have a fundamental understanding of an organization's procure to pay model, GL coding, KPI reporting, and more.

    In addition, they have to be capable of adapting to a client's organizational culture to foster meaningful strategic partnerships, and category adaptation, product specification interpretation and essentially understand all areas within an organization that procurement interacts with. The job also requires data analytics, the utilization of market intelligence and research, sharp negotiation skills, and the ability to drive value during the contracting process. These skills and expertise requirements are just some of the many that successful strategic sourcing consultants offer, and demonstrate the wide range that is truly necessary for these professionals to be the most effective in their efforts.

    These skills and more on the strategic sourcing consulting profession are discussed during the final episode of Source One's Countdown to ISM2017. Throughout the series we've had the opportunity to talk to organizers of the highly anticipated Learning Track, Signature Session presenters, and moderators for the CPO Roundtable session during executive-only sub-conference hosted by Source One, Exec In. Attendees can look forward to meeting members of the Source One team as they share their insights during sessions over the course of ISM, beginning with VP, Operations William Dorn's participation on the panel of Procurement Transformation: Is a GPO right for your organization? on the first day. On Day 2, Source One Senior Data Scientist James Patounas will participate in Procurement 4.0 on the Exec In agenda, and Day 3 will feature Associate Director, Diego De la Garza as the moderator of panel session Emerging Professionals: Should I Stay or Should I Go?

    As the series comes to an end, the team is gearing up for the kickoff of ISM2017 this Sunday, May 21. Source One is recognized as Diamond Sponsors of ISM2017 and is looking forward to the annual international event that will welcome more than 2,500 global supply chain professionals. In addition to the sessions we discussed during the Countdown to ISM2017, the schedule includes a variety of exciting sessions and educational presentations that are guaranteed to offer valuable take-aways for every attendee at every level.

    New Theft And Piracy Threats Could Challenge Businesses
    Shipping businesses obviously have a big stake in curbing piracy. Security and enforcement could be the major drivers to keep attackers away, and companies could want to look more closely at their own sourcing methods to determine exactly when and where goods are traveling.

    Watching Somalia

    The Wall Street Journal specifically spoke about pirate activity off the coast of Somalia, an infamous area where the U.S. is looking at the effects. Despite the stigma of Somali pirate activities, the new wave of attacks seems to be only a slight uptick and not necessarily the sign of a resurgence. In fact, previous efforts to stem piracy in this area seem to have been effective.
    The source quoted General Thomas Waldhauser of the United States Marine Corps and United States Africa Command on the role of shipping in particular in reducing the number of encounters with pirates.

    "Some of the reasons piracy went down to zero here is because of the security measures the shipping industry has taken," the General said. "We want to make sure the industry continues not to be lax in that." He added that "we're not ready to say there's a trend there yet, but we will continue to watch it."

    The Aris 13 Hijacking

    An incident involving an oil tanker gained press in March, potentially adding to the worries of a new wave of piracy. Reuters said that suspected pirates seized an oil tanker named Aris 13 near Somalia, eventually steering it to Alula. The size of the ship and the timing of the hijacking, five years since the previous year a similar case occurred there, are both possibly significant.
    "The Gulf of Aden area had a greater variety of pirate attacks."

    Before the attack, the vessel was traveling to Mogadishu, Somalia's capital, from Djibouti. The fact that this happened so close to the ship's final stop may lead to reluctance to traffic in the region, should more reports along these lines continue.

    The BBC more recently reported on a different attack a month later, when a cargo ship, the Al Kausar, was also hijacked while en route to a different Somali city, Bosaso. This article also said that the Aris hijackers seem to have relinquished it "without conditions" later on.

    Another report, this one from Maritime Executive, said that China's navy played a role in resolving  the Aris hijacking, apprehending three possible pirates and also going after other ships later on.

    Piracy facts and figures

    All of this news may unfairly put the focus on one region. The International Chamber of Commerce Commercial Crime Services said that there were 191 reported incidents in 2016 alone. The organization showed the sites where pirates struck based on region and the type of encounter.
    While most of the pirated vessels in the Singapore and Thailand areas were boarded, the site said, the Gulf of Aden area, between Somalia and Yemen, had more variety, including cases when pirates hijacked or fired upon their targets. Other hotspots for piracy in 2016 included the Gulf of Guinea on the other side of the African continent and the Caribbean coast of upper South America.
    Without assuming too much about this apparent uptick, companies may still need to revitalize their global sourcing practices.
    This post is part of a series:
    Does your Procurement BPO take the "Strategic" out of Strategic Sourcing:
    Part 1: A one stop shop for strategic sourcing and P2P
    Part 2: Solutioning, the proposed cost model and ROI of a Procurement BPO
    Part 3: Adding in Change Management, The Real ROI of Procurement BPO

    To recap, in prior posts, we discussed the latest craze to bundle outsourcing of strategic sourcing with your transactional procurement BPO.  We highlighted how they might model a solution and proposal for you, and how, once engaged, they might revise their proposal with some additional “value added” services.   But then, I introduced the idea that this still might not get you to the results you are looking for; and that the ROI model doesn’t really show the true impact outsourcing has to your bottom line.

    Let’s go back to Excel and do some more simple calculations.   This time, I’ll take $150 Million in spend that you might outsource.  We’ll reasonably assume that the bulk of it is in highly tactical categories, and the rest split in moderately complex or complex categories that would require more skill, subject matter expertise and category knowledge.  Let’s also assume that the BPO can perform the same as an internal team on the tactical side, but is marginally less talented on the more complex categories.  Don’t worry, I’ll describe why we make that assumption later on in another post.


    As you’ll now see above, even a slight change in the quality of the work of the BPO in more complex categories can have such an impact on your total cost that it offsets any and all savings you would have seen by outsourcing in the first place.   I’ve used the term impact above, instead of savings, as you shouldn’t be measuring yourself or your provider on hard dollar savings alone.

    Now, I’m actually being kind here.  I’ve seen firsthand that more often than not, many of these BPO providers cannot get to within 4 or 5% of the impact that a properly supported internal team, or an experienced consulting firm could get.  I’m also being really generous by saying that they’ll match a traditional sourcing department’s efforts on the tactical side as well.  The reality is, BPOs very rarely can produce close to what an internal team supported by experienced consultants can achieve.  So, you’re looking for evidence of this, right?   How do I know this?  Well, let’s discuss.

    • Here is the subjective part, you’ll have to take this for what it is; my opion. I know some of the more notable experienced individuals in some of these providers personally, and have been told of the frustrations the delivery teams have expressed in trying to meet the goals outlined in their SOWs and promises that suppliers made for them.  In short, the sales teams over promise and they under deliver.  Not that these are bad people, they just don’t have the support and raw horsepower to accomplish what they need to do with the resources they were allocated by their company.
    • Another subjective one here …   Source One has followed several traditional procurement BPOs into clients and worked the same categories that the BPOs sourced using their own processes.   In those accounts, we still manage to find, on average, 6-10% additional HARD-DOLLAR savings, beyond what the BPO provided.  We also find, in many cases, suppliers are not satisfied with the relationships they have with their clients once a BPO has taken over.
    • But outside of my opinion, let’s think about the procurement/sourcing industry holistically for a moment.  I think we’ve all experienced that there is an extreme lack of qualified sourcing and procurement experts right now.   The profession, as a whole, is still relatively new.  If you look beyond the old traditional “buyer” type roles, there really is a big shortage of category experts, procurement analysts and the like.   More so, consulting firms, HR departments at big companies, and BPOs alike are all grabbing at those same resources right now.    So, even looking at those higher-priced onsite category managers that your BPO proposed, know that the real “cream of the crop” are likely writing their own tickets and landing much more desirable positions than at a BPO or might even be going the freelance route.  So, in short, the best resources often will be found in places other than traditional BPOs.
    • But it’s not all about having the best people, right?  If the BPO has good controls, good processes, and a bench of tools/resources at their disposal; it can easily allow them to operate in a more cost effective way than just looking at their payroll costs.   While, yes, this is true; the reality of it is much different in practice (at many of the BPO firms).   But unfortunately, the lean low-cost nature of these BPOs instead exaggerates BAD sourcing practices and poor business processes.   Let me explain, because I see a lot of this first hand. Ironically, even though Source One is a provider of some competing services, we are the frequently the beneficiary of seeing first-hand; the quality of work that some of the more notable companies in this industry produce.  You see, some of these companies; acting as outsourced providers to their customers; send us RFIs and RFPs for services they are looking to acquire for their clients.   RFP and RFI is a strong term though, what I really mean to say is that they are sending us one my my most despised procurement outputs, and one of my favorite topics to blog about: RFP Spam.
    What is RFP Spam you ask?  Glad you asked.  I’ll write more on this topic on my next post.
    Phishing and ransomware: What cyber risks mean for procurement and supply

    We live in a world full of potential cyber dangers. Everyday internet users need to be aware of this and companies have to take measures to protect procurement processes and their goods. The exact nature of new threats is changing as criminals get bolder, and two recent crises show the stakes riding on good digital security. The political dimensions of these incidents may be important, but as a business, your immediate concern is probably how to put up the best defense against it.
    The WannaCry Ransomware scare
    Ransomware refers to a type of malware which locks computers and forces users to pay to access their files. If victims refuses to pay, they risk losing their data as the criminal deletes it, but if they do, they reward the attacker, and there's no guarantee they won't become victims again.
    The most famous recent instance of this is the WannaCry or WannaCrypt program, which, according to NPR, appeared in countries around the world. As of this writing, much of the concern regards who is behind this attack, with some security researchers suggesting it might be a state-sponsored effort from North Korea. Flashpoint researcher Paul Burbage denied this, though, despite other assertions.
    "We compared the code samples between WannaCry and previous [Democratic People's Republic of Korea] activity, but the only similarities are public libraries," he said. "Perhaps Symantec has more to go on than us at this point, but we are not seeing a DPRK link with the WannaCry worm campaign at this point."
    BBC News reported that the attack had a wide range of targets, from government agencies to companies such as Nissan, although the latter said there was no significant effect from the attack. Still, businesses should weigh the cost of disruption when such attacks are possible.
    "Businesses should weigh the cost of disruption when such attacks are possible."
    The Google Documents Phishing scam
    Another noteworthy case included a phishing attack through Google Docs that seemed to fool more people than usual. The Washington Post estimated that this incident may have affected more than a million Google users, based on the company's own statements of the damage.
    Phishing is essentially the use of fake email links and attachments to trick targets into clicking on bad links or surrendering important data. In this recent case, the Post said, users opened their inboxes to see what appeared to be a legitimate request to share email access with a third party.
    Since it used the actual Google login page, there was a higher possibility that even those who were phishing-savvy might have fallen for it. This subverts one of the typical main ways to fight against phishing emails, which is usually to look for "tells" that the message isn't legitimate.
    Taking action
    Supply Chain Dive elaborated on why companies should think of the impact of cybersecurity threats on their business systems. The source said the businesses might avoid updating security because it seems too expensive or complicated. However, with more ways for criminals to attack, businesses may face more pressure to adopt managed IT services and other ways to stay relevant.