November 2017

Part of being in business is being capable and willing to take risks. In a supply chain, risks are seemingly everywhere and some may be relatively simple to address, whereas others may take time to mitigate. While focusing on how to effectively manage the more common risks within a supply chain as they relate to suppliers, there are a few best practices that can be implemented to lessen the potential of risks taking a turn for the worse. The amount and severity of risks greatly depends on the industry in which the business operates. However, the following best practices will assist in managing various risks that remain similar regardless of industry.
When working with suppliers, a great starting point to manage potential risks involves having a contract in place as the relationship between supplier and customer begins. Having an agreement with suppliers will assure both parties that they each have responsibilities for their portion of the business relationship. With an established agreement, both parties can also hold each other accountable for what they agreed on. If no contract is in place, there is a much greater risk related to quality, costs, production and purchasing processes, as well as intellectual property protection that may suffer as a result. Putting agreed upon terms in writing will ensure the supplier and the customer that the other party will perform their due diligence. It will also aid in not only better governing the relationship as business continues, but to mitigate risks in key areas such as costs and quality. Contracts outline payment terms, service levels, among other mutually agreed upon terms and conditions that will decrease the severity of risks associated with production and the final product. However, it is important to note that contracts do not completely alleviate risks within the relationship. They set the terms and conditions for the business relationship and provide information on managing certain risks, however another best practice to manage risks involves keeping the lines of communication clear and frequent.

In any relationship, communication is key. It is necessary for businesses to communicate regularly with their suppliers and vice versa to ensure that both sides are on the same page. Setting aside a designated time on a weekly or even monthly basis to check in with the other party will maintain a healthy level of communication. These meetings should be used as an open discussion to evaluate production process, identify any risks that may be present on either side, and implement risk mitigation plans. During these meetings, suppliers and customers have the opportunity to discuss any capacity, capability, forecasting or any other concerns that may pose a risk to either business. Keeping an open line of communication allows each party to address issues or risks they see, in addition to collaborating and developing plans to manage these risks moving forward.

Ultimately, maintaining a great relationship between the business and its suppliers will help manage and reduce risks as they relate to the supply chain. Reviewing and agreeing on a contract’s terms and conditions will lay out how the relationship will work and what is expected of the supplier and the customer. Maintaining clear communication with suppliers makes it easier to collaborate, ensure business is being handled as agreed on, and ensure risks are being identified and reduced as soon as possible. Though there are various risks associated with suppliers, these are a few best practices that will play a key role in identifying these risks and managing them to the best of the business’ ability.


Coming to Source One, I didn’t know what to expect. My hope was that it would be what I was looking for and what was advertised: an opportunity to get the full experience of an analyst in a warm, fun, and challenging environment. After a couple of months, I can safely say that the experience has been everything I could have hoped for.

After initial training, I was thrust into support roles.  I've collaborated with consultants and other members across various department on everything from external client work such as analyzing suitable suppliers for major clients, looking over invoices, and categorizing client’s spend, as well more internal work.  These tasks have included  tools to expedite ticketing processes and developing marketing presentations to pitch to prospective clients. 

Working in these different departments has really been a perk of the position.  The diversity of my daily tasks provides the opportunity to develop a number of skills. For instance, a month ago, I was tasked with helping develop a ticketing system within Excel. Though I was provided with instructions, I was also afforded a good deal of autonomy.  It was largely up to me to decide how the system would come together. I saw this as a great opportunity to challenge myself and learn some VBA (Visual Basics for Applications) skills to create the ticket system. With the encouragement of the Jonathan Groda, a Senior Analyst at Source One, and James Patounas, a Senior Data Scientist, I was quickly able to develop a rudimentary ticketing system. Thanks to some additional guidance, I successfully developed a more robust, streamlined system.  Throughout the execution of that task, I enjoyed the opportunity to lead meetings and take part in sessions with Source One's thought leaders. They've helped introduce me to development shortcuts and aesthetic standards to consider while writing code. The encouragement and constructive feedback I received throughout this project is really representative Source One's office culture.  Everyone here is not only an expert, but they also care deeply about developing new experts and encouraging professional growth.  

I've also appreciated the opportunity to interact with co-workers across the organization.  The flexibility of my position and Source One's close-knit community make it possible to get to know just about everybody.  The idea of being placed in a 'Data Science silo' doesn’t mesh with my varied interests, so the opportunity to work across different departments and get a holistic idea of Source One's operations has been great. 

So far, my experience with Source One has been both enjoyable and instructive. I have essentially gained the experience of a full-time analyst and have been able to develop my communication, qualitative, and quantitative skills while having fun in a relaxed and supportive workplace.
Risk in the supply chain: Declining yet still elevated

Uncertainty is the enemy of efficient supply chain operations, and it's also everywhere. This unresolved tension will always have an impact on sourcing and procurement strategies, as no company can afford to be caught without a fallback plan when an unexpected issue strikes, whether it takes the form of an environmental catastrophe, a technical problem or even a man-made disruption.
Effective risk management is therefore a must-have element for any modern procurement department. As today's sourcing organizations take on more duties and responsibilities, risk mitigation is one piece of the puzzle they can't forget about. This means coming to grips with a connected world that holds its share of unexpected events.

The state of risk
A recent global report by the Chartered Institute of Procurement & Supply declared that for the third quarter in a row, the amount of supply chain risk decreased in 2017's third quarter. The researchers urged readers not to assume that their findings mean there is a lack of uncertainty or danger around the world. The three quarters of decline follow the fourth quarter of 2016's all-time high rating.
The report pointed to specific places around the globe where issues have stabilized, with a new trade agreement between the European Union and Canada allowing the involved countries to trade multiple items tax-free and similar EU agreements in progress with Japan and Indonesia. Other European factors, including a new government taking power in Macedonia and a cessation of disruptive protesting in Albania, have also cut supply chain risk.
That said, there are still governmental factors that could throw a proverbial wrench into supply agreements. The CIPS named the U.S. as a generator of uncertainty, with the Trump administration potentially set to change American trade relationships. The many potential outcomes regarding this large economy are preventing the supply chain risk barometer from decreasing further.
CIPS Economist John Glen stated that the persistent risks haunting increasingly long and complex global supply chains are reason enough to keep alternative suppliers on call. Procurement departments that aren't ready to have their operations disrupted may fall behind better-prepared competitors during periods of increased strain.

Risk around the world takes many forms.Risk around the world takes many forms.
The real keys to risk management
Getting ready for those disruptive events may go wrong unless companies go about it the right way. Supply Chain Management Review contributor Mark Trowbridge explained the problems that take hold when companies assume a formulaic or overly structured approach to risk management. In these cases, policies created outside of sourcing limit executives' ability to succeed. Trowbridge stated that when risk mitigation evolves into a general "outsized fear of failure," organizations are in trouble. They may potentially pass up good new suppliers or give contracts to cumbersome but protected partners.

The right approach to limiting risk without weakening supply chain performance involves setting up innovative and optimized contracts. When organizations become good at performing assessments and establishing redundancy, they don't have to be locked into working with bloated companies that move slowly. From insurance and liability management to greater financial visibility, good supply practices help provide resiliency. Trowbridge suggested that when companies establish strategically sound risk management, they'll be better able to cope with circumstances up to and including events unforeseeable via data-based projections.
The subtle art of supplier relationship management

The expanded procurement responsibilities that come with strategic sourcing involve a deeper entanglement with suppliers than under past models. When a company's supply chain focus is taken off of cost alone and expands to incorporate other elements of the relationship between companies and their suppliers, procurement executives have to update their competencies.

This expanded purview means taking a more substantial and data-based approach to finding partner companies and a greater focus on keeping them. Ongoing negotiations between organizations and their suppliers can encourage professional relationships to become stronger when times are good and repair issues when communication has broken down.

Manage with an eye on the future
Forbes contributor Jonathan Webb noted that companies should look beyond the present moment when managing supply chain relationships. While there is a tendency to think in absolutes - for instance, assuming that past issues may derail the connection between organizations permanently - great procurement departments can move through such mishaps.
Buyers that generate future goodwill via clear strategies for the future, ones that are shared with partner companies rather than created unilaterally, can win trust. Once this bond has been rebuilt, the rewards can range from better rates to future expansion of the scope of the companies' collaboration. A sourcing department that has been empowered to negotiate effectively will be able to guide such a relationship in a way that would be impossible if procurement's only role was to negotiate prices.
Webb added that the reasons why a contract breaks down in the first place are often human factors rather than raw numbers. If people make assumptions that prove to be untrue, trust may chip away. When one side performs a perceived slight of the other, a difference in perception could cause the whole relationship to crumble. Strategic and empowered sourcing departments can look into matters and get back on solid footing.

What happens when a supply chain relationship begins to fracture?What happens when a supply chain relationship begins to fracture?
Stay aware of suppliers' importance
A recent Spend Matters post by contributor Muddassir Ahmed, Eaton divisional supply chain manager, delved into the current role of supplier relationship management. With companies' products becoming increasingly complicated and consumer expectations greater than ever, it's clear that the link with suppliers has taken on extreme importance. The components provided by key partners are now essential to organizations' efforts to establish their own names. Suppliers aren't easily replaced, which means collaboration and ongoing relationship management are strategic competencies.
Ahmed cited foundational 1993 research from the International Journal of Purchasing and Materials, which indicated that having a strong network of partner organizations is at the root of everything companies do - keeping costs down, manufacturing items on time and maintaining high quality standards are all functions of suppliers that work well with the rest of the supply chain.
Mutual benefit is the guiding principle that will help these networks of strong, lasting relationships come together. Ahmed specified that supply chain teams at organizations of all kinds must have a strong basis in decision-making, even when circumstances are unsure. Rather than facing simple decisions around prices, companies will have to find ways to unite their strategies and interests with one another.

ICYMIM: November 27, 2017

Source One's series for keeping up with the most recent highlights in procurement, strategic sourcing, and supply chain news week-to-week.  Check in with us every Monday to stay up to date with the latest supply management articles.

Tara Berezowsky, Spend Matters, 11/22/2017
Looking back on the year in Procurement and Strategic Sourcing, Berezowsky predicts the dinner table conversations of industry professionals.  She suggests that discussions may have focused on topics like balancing cost savings with cost avoidance and properly leveraging millennial talent.  Like any impassioned Thanksgiving discussion, these are sure to continue throughout the rest of 2017 and well into the new year. 

Michael Lamoureux AKA The Sourcing Doctor, Sourcing Innovation, 11/23/2017
Markets often shift at a moment's notice.  For the Procurement and Strategic Sourcing professional, this could mean facing serious losses if an RFX event continues unchanged. Organizations need to develop methods for quickly putting events on hold and implementing more effective replacements. This could make the difference between huge gains and huge losses for your Procurement team. 

Ara Arslanian, Corporate United, 11/20/2017
Arslanian shares key takeaways from the Hackett Group's latest report.  Titled 'Are Strategic Sourcing Resources Providing the Best Return?', it examines strategies for optimal work selection and prioritization.  Organizations, the study suggests, need to ask themselves if going to market is always the most efficient way to produce savings. This is especially true when achieved savings are repeatedly less than expected savings. The study provides a number of other recommendations for resource allocation that should help maximize ROI.

From supply chain leadership to corporate management

The rise of strategic sourcing has brought the supply chain closer to the rest of the company than ever before. This means that executives within the procurement and sourcing department are interacting with other departments more and expanding the operational details of their particular roles. Considering the relative newness of this strategic alignment, it's not outlandish to say that companies are still discovering new and valuable ways to work with their supply chain leaders.
"It will be essential for supply chain professionals to apply their expertise outside of procurement."

It's up to these management professionals to rise to the occasion. In the years to come, it will be essential for supply chain professionals to gain experience with other departments and apply their sourcing-specific expertise in functions outside of procurement.

Top leadership, via the supply chain
In an article contributed to Supply Chain Dive, industry trade group APICS, formerly the American Production and Inventory Control Society, explained that today's expanded roles for logistics and supply officers can point the way to overall corporate leadership. Due to the fact that the supply chain is relevant to every other unit of a given company, talented leaders from within this department can turn into overall organizational power players.
The development of supply chain professionals into corporate leaders begins with giving the employees a thorough grounding in supply processes and the way the organization moves its products. From dealing with suppliers to interacting directly with customers and serving every internal department imaginable, it's clear that these workers can pick up traits and talents that will serve them well further up the chain of command.

Creating advancement and education opportunities within the supply chain may provide companies with both long- and short-term advantages. The article stated that with the right level of support and mentorship, great overall corporate leaders can emerge from supply chain roles over time. Before this process is complete, the individuals will be able to apply their wide-ranging and strategic knowledge to improving functions such as procurement.

Improvement from within procurement
While the idea of crossing over to a larger role within the corporate structure is exciting, a modern supply officer will be able to enforce a great deal of change within the supply chain itself. APICS CEO Abe Eshkenazi stated to Industry Week that today's supply chain professionals are like members of the finance department, in that they should possess wide-ranging knowledge of every other functional silo, as each department will eventually need to work with sourcing.

This deeply involved model of participation stands in contrast to the traditional image of the procurement professional as someone who deals with contracts and little else. Eshkenazi noted that modern supply chain professionals are taking control of software and forging connections with the rest of the organization. During the first few years of enterprise resource planning software use, it was perhaps tempting to assume that the systems would be a largely automatic way to get companies connected. It has become clear, however, that a such a system requires personal guidance, which starts in the supply chain.

Whether they stay within their own department or go on to larger corporate roles, today's sourcing and procurement officers delive valuable results to their companies.
Looking to source new telecom products or services? How about renewing existing services? There's no doubt your telecom contract will be filled with an array of intricate terms and conditions. All of which, aren't necessarily in the large print. Many items are buried within complex language of the often lengthy document. 

Don't panic! Here are a few items to consider when assessing your telecom contracts:

Telecom Contracts 101

Telecom contracts are just one area IT and Procurement teams should align for optimal vendor relationships. Too often, Procurement is simply relocated to processing the PO rather than providing guidance during the sourcing process. This approach severely limits the impact Procurement teams can have in terms of providing market insight and budget optimization. 

Learn more about how Procurement and IT and Telecom teams can work collaboratively to support enterprise-wide objectives in Source One's latest whitepaper, titled: Equipping Procurement to Tackle IT Spend: Building Successful Relationships with Stakeholders

Need support ensuring the terms and conditions within your contract are best-in-class? Source One's Contract and Negotiation experts can help! 

Unless you live under a rock you have heard of 5G in some context. However, the question is do you REALLY know what it is? Well if not, you’re in luck! Even though news was recently just released that 5G is not coming as soon as we had hoped it would it is definitely still coming so it’s never too early to start planning and understanding how 5G will fit into IT plans across organizations of all sizes and industries.

Simply put, 5G is a business opportunity that is being designed to be implemented to provide all of the communication capabilities and performance we expect from a wireline network on our mobile devices. Therefore, end-users will now have additional throughput, capacity, and other elements to address the continuing growth in geographic availability, user base, range of devices and application requirements as well as enable carriers, operators, and service providers to benefit from new opportunities in overall strategy, service offerings, and broadened marketplace presence. This means that it will completely change the evolution of cell phones from a wireline extension to a wireline replacement and to a mobile only requirement.

So, now what you’ve been waiting for. Some of the many benefits we will be able to take advantage of once 5G is released.

1.) Enhanced throughput 
With so many devices we use daily on Wi-Fi the issue of throughput has become obvious. With 5G there will be major advances in cellular data with new upper bound throughput numbers. It has been mentioned that in 5G the floor for Wi-Fi will be 1 Gbps with a ceiling as high as 10 Gbps.

2.) Reduced latency 
Just as important or to some even more important than throughput is a reduction in the round-trip time for your data to get to where you need it to go. Reducing latency is important for voice and video, which for 5G will all be over IP.

3.) Advances in management and Operational Support Systems (OSS
This may not seem like a direct benefit for businesses and consumers but if the suppliers now reduce overhead and operating expense, they are able to enhance their system management and OSS which produces improvements in reliability, availability, serviceability, resilience, consistency, and operational efficiency, which all directly benefits consumers.

4.) Increased mobility 
An issue with our current mobile devices is the inability to use them on all different modes of transportation. That will now be solved with very high speed user mobility, to as much as hundreds of kilometers per hour.

5.) Improved security 
Security seems to be an increasing issue these days with many top name companies reporting a security breach of consumers’ private and crucial information. Therefore with 5G there will be enhancements to encryption, authentication, and privacy.

6.) Industry growth 
5G will allow all carriers, operators, and equipment vendors of both infrastructure and subscriber devices to deploy all new types of technologies and devices for consumers and businesses with countless end-user visible benefits.

This is only a short list of the various advantages we will see in the world of technology with 5G. It definitely seems like an exciting time within the always evolving IT and telecommunications world. From the talks of carriers and suppliers it looks like 5G will not come into our lives until late 2019 or early 2020 but whenever it does come we will be ready.
Ethics are now sourcing's business

Sourcing and procurement departments have been going through numerous changes in recent years, with the shift to a strategic model being perhaps the most notable. The general theme of the evolution within the role is that while companies once called upon these individuals to manage contracts and negotiate prices down, today's positions are far more integral to overall operations.
"It's not worth pursuing the lowest possible price for goods if it comes at the expense of unethical practices."

Letting supply chain leaders take a more active hand in finding and working with suppliers from an early stage means these departmental heads can put their data to good use, informing the business as a whole and guiding decisions in a new direction. Sometimes, that effort involves adding new variables to how partners are chosen. For instance, it's not worth pursuing the lowest possible price for goods if it comes at the expense of unethical practices.

Awareness and ethics
According to TechTarget, ethical sourcing decisions are becoming relevant from a number of perspectives, including reputation management. Consumers have become committed to dealing with businesses that set and live up to moral standards. This reality means that a failure to adequately vet a new supplier could be a disastrous decision down the line, as inhumane practices are sometimes present throughout the supply chain. Companies that are found to have contracts with companies that have criminal labor standards or cause damage to nature may suffer image damage.

Today's procurement departments have to complete the tough task of obtaining their goods from sources that live up to high moral standards. With supply chains stretching around the globe and professional conditions different from one region to the next, this is a role for deep research by the sourcing department. These departments can lay out inviolable standards of conduct to partner organizations, and in cases where suppliers are out-of-line with those rules, large organizations can work on new training programs to directly influence conditions.

Companies that have access to large databases can use analytics to help them navigate the world of ethical sourcing. TechTarget explained that this is a risk management issue, falling into the same category as preparing for a natural disaster or a man-made supply chain disruption. When suppliers violate codes of conduct, the companies they deal with will feel negative effects.

A new role
Indeed, getting a company's moral compass pointing in the right direction is such an important operation, professionals dedicated specifically to this task may soon be commonplace. TechRepublic named ethical sourcing officers among 21 job titles that could be widely used within the next few years. These employees would be coordinators of teams who ensure the business's moral standards are universally understood - and being met.

From customers to workers to leadership, there will be many sources of input that will inform a company's moral code. TechRepublic explained that when organizations have ethical sourcing officers, they gain professionals who are dedicated to turning values into actionable priorities, and then inspecting the supply chain to ensure such ideals are being upheld. The company's contracts should also be open to scrutiny to make sure the business is living up to the standards it demands of suppliers.

Retail procurement: The fight against out-of-stock

Creating a strong chain connecting suppliers to customers is a major objective with many smaller goals within it. For instance, avoiding out-of-stock situations wherever and whenever possible may be one of the keys to selling success, as it represents a way to keep potential business from slipping away. In an era when people can make large-scale purchases from the phones in their pockets, losing customer attention due to an out-of-stock item is a more damaging prospect than ever before.
Today's innovations, from omnichannel operations to the increasing speed of delivery and logistics, have the simultaneous effect of making quick inventory adjustments possible and complicating the overall retail picture. Some manufacturers will find ways to master these processes, while others may struggle to help their retail partners put the right items in front of shoppers.

Cleaning up the supply chain
Supply and Demand Chain Executive contributor Paris Gogos explained that tracking down and preventing out-of-stock situations comes down to many different factors, and identifying what has gone wrong is the key to discovering an answer. Gogos offered several of these worrisome possibilities - if a manufacturer is able to pinpoint a single store in a chain that is suffering from "phantom" stock or incorrectly predicting the demand for an item, it can take a more active hand in getting retail partners on the right track.

More advanced supply chain technology can help companies resolve their connections with retailers and counter any stock outages. Gogos suggested cloud-based technology with clean and accurate data. Establishing close links to data flowing in from point-of-sale interactions at stores may be a more effective route to information gathering than simply relying on the databases operated by retailers; Gogos warned that stores' systems can be high on incorrectly entered data or phantom stock.

Data is the key to monitoring stock situations.Data is the key to monitoring stock situations.
Being proactive
Food Dive contributor Victoria Vessella recently explained that there is value in not just accurately determining when items are out of stock but also getting ahead being proactive. Focusing on food manufacturers that deal with businesses through sales representatives, Vessella stated that this active and effective approach to anticipating out-of-stock situations is based on auditing and frequent data gathering.

Representatives from food brands can become invested in ensuring that they account for all sales variables, from whether stores are complying with the planograms for product displays to the habits they have displayed in ordering new products, as well as the effects those purchases have had on inventory. Seasons and consumer preferences over time can also have an impact on which items linger on store shelves and which sell out quickly. If retailers track such fluctuations and keep their information up to date, they may be able to help their retail partners - and their sales - thrive.

Solid links needed
The retail supply chain from manufacturer to shopper can break down if even one step of the process has gone awry. Keeping products on store shelves is one of these potential failure points. Even supply agreements that look great on paper can disappoint all parties involved if problems appear in data, retailer policies or enforcement of those agreements.
Strategic sourcing experts, Jennifer Ulrich and Nicholas Harasymczuk, discuss the main elements that comprise a successful facilities management sourcing strategy in their 4-blog mini-series (Part 1, Part 2, Part 3, Part 4). The discussion centers around the most common roadblocks while sourcing facilities management and ways to overcome these challenges in order to reduce costs and increase efficiencies. Following the recommendations from Source Ones’ facilities management subject-matter experts can lead to the following results: 

ICYMIM: November 20, 2017

Source One's series for keeping up with the most recent highlights in procurement, strategic sourcing, and supply chain news week-to-week.  Check in with us every Monday to stay up to date with the latest supply management articles.

Creating a Successful Third-Party Risk Management Strategy: What You Need to Know
Sydney Lazarus, Spend Matters, 11/15/2017
It's almost 2018.  That means it's the perfect time to start thinking about third-party risk management strategies for the new year.  Most unsuccessful plans fail due to a lack of planning.  It's essential to tie risk management goals into the broader objectives of your business.  Successful businesses will determine methods for aligning their risk mitigation and cost reduction efforts while also driving revenue.   In addition to poor planning, Lazarus suggests many organizations have trouble creating measurements for success.  These are all things to consider as 2017 draws to a close.

Why You Need to Capture the Flag Sooner Rather Than Later 
Michael Lamoureux AKA The Sourcing Doctor, Sourcing Innovation, 11/16/2017
Companies of all sizes are leveraging Procurement in search of savings.  Many have found themselves coming up short. They're failing to meet expectations and missing out on potential billions. The Doctor suggests that "dirty data" may be to blame for these disappointing figures. Failure to get data under control leads to lost savings in the form of unnecessary RFXs, wasted buyer time, and missed opportunities for consolidation.  Those are just a few of the ways bad or insufficient data can hurt your savings initiatives.

The Amazon Effect: Competition for Procurement Talent
Nick Lazzara and Naseem Malik, Spend Matters, 11/15/2017
As Amazon's service offerings and technological solutions expand, they continue to disrupt hiring and retention throughout Procurement.  It's not hard for the number one supply chain company on Earth to lure industry leaders away from their companies.  Procurement organizations should be wary.  There's still hope, however, for companies who take Lazzarra and Malik's advice.  By setting realistic career paths, offering workplace flexibility, and leveraging their CPO's brand, top Procurement organizations can still compete with Jeff Bezos and his behemoth.

Increased sourcing focus may fuel competition for talent
A major change of corporate priorities has ripple effects throughout any company. When organizations reorder their goals and decide to pursue new objectives, they'll have to revise the way they operate from the chain of command to technology use. Strategic sourcing represents such a high-level turning point, which means it's time for businesses to consider how to correctly support this new form of supply chain management.

Staffing is one area due for a serious rethink in the era of strategic sourcing, as the day-to-day productivity demanded of a strategic procurement department is different from the expectations placed on a traditional setup. Whereas in the past, officials were mainly called upon to cut costs at the contract negotiation stage, their input into all areas of the company's supply chain approach has become critical.

The talent crunch
In the midst of a revolution in the way companies look at sourcing and procurement, it shouldn't be surprising that top corporations are igniting a talent war for the services of the best procurement employees. Spend Matters explained that businesses such as Amazon are in the market for effective new workers, and that supply chain leaders will have to work closely with their top contributors to ensure they feel like staying rather than taking a role with an industry giant.

Procurement managers can get closer to their employees by working out customized and preferred roles and paths for progression. When workers' contributions are recognized, and when they are serving in roles that suit their talents and interests, offers from other companies will be less appealing.

As with any department, procurement is the sum of its employees; losing even a single top contributor could have a lingering effect on a company while it tries to replace that person's production.

When teams have trusted leaders, they are better equipped to attract and retain people. Spend Matters explained that chief procurement officers have a strong personal impact on their departments. When companies seek high-quality new recruits for their supply chains, applicants will look at the CPO's history. If there's leadership who can get results, the prospective employee will see a chance to join a successful group.

People make the supply chain - so procurement departments must learn to make their people stay.People make the supply chain - so procurement departments must learn to make their people stay.
Retention is a challenge
Getting ideal new workers is a difficult task worth focusing on, and so is retaining the best members of today's team. A Procurious study warned that a significant percentage of procurement professionals are considering moving on from their jobs. Looking two years into the future, 40 percent of respondents anticipate finding new work, and 70 percent want to make a change within five years.

The report found that more than half of sourcing workers surveyed do not believe their present leaders will be able to help them progress within their careers. This data should worry CPOs and serve as a sign that they have to try harder than ever to create an environment that will incubate and retain talent. If they fail to convince their top performers to stay, there are many other organizations searching for talent to shore up their supply chains.

November 17, 2017

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

New Whitepaper: 

5 Pro Tips for Impactful Procurement
Today's best-in-class Procurement groups serve as a valuable, strategic, influential business units that deliver value across entire organizations.  Calling upon thousands of successful initiatives, Source One's consultants provide tips for optimizing Procurement's performance and emphasizing its value.  Obviously, there is no one-size-fits all approach to employing a Procurement team.  These tips, however, should provide an effective starting point for any business looking to align purchasing with their enterprise-specific goals.

Recent Blogs:

Redefining Modern Procurement 
William Dorn, Supply & Demand Chain Executive, 11/15/2017
Source One's VP of Operations looks back on the last 25 years of Procurement and Strategic Sourcing.  Though some Procurement groups have evolved from purchasing teams to more strategic units, Dorn argues this is hardly the norm.  Many organizations are still far too comfortable with purchasing as usual.  He suggests that Procurement's continued maturity will depend on its ability to produce value beyond cost savings.  Then, it can align itself with company-wide goals to drive future initiatives and promote innovation.

Recent Podcasts:

25 Years of Service from Source One
Take a look at how Source One Management Services, LLC has matured into a leader in Procurement and Strategic Sourcing with this short video.  Over 25 years, we've grown from a small firm specializing in contingency-based MRO and Telecom purchasing to a best-in-class provider of sourcing services.  Today, our clients trust us to produce savings across myriad industries and spend categories.  What's more, our expert procurement consultants and innovative tools are a driving force for innovation throughout our industry.

Entering college, the discussion surrounding majors in the business school focused mostly on the basics: Accounting, Finance, Marketing, and Management.  Soon after arriving and introducing myself to other business students, I started to hear more about Minors or Double Majors in Management Information Systems (MIS), Computer Sciences, and similarly tech-based fields. Personally, I like to describe my as nearly tech-illiterate.  I can barely operate a TV remote.  However, as unfamiliar as many prospective business majors are with technology, it’s becoming an essential part of life and work for us.  Without developing some background knowledge in technology, without keeping an eye on where the industry is headed, we can say goodbye to the prospect of reaching our full potential.

Throughout several internships, I would constantly hear about the future of artificially intelligent technology.  Robots, I was told, are continually growing more capable of performing human jobs.  This projected disruption of the workforce seems to thrill employers while it terrifies employees.  How are people going to provide for themselves and their families if robots can perform their jobs for less?

I grew even more aware of this during my first few weeks with the procurement specialists at Source One. Working with colleagues to analyze strategic development among companies in the consulting and advisory field proved particularly educational. We analyzed where competition in the workforce was and how companies typically allocated resources.  Technology ranked highly across the board.  This wide range of companies, including many brand-new start-ups, considered emerging technology essential for growth in Procurement.  What’s more, it became clear that employees with backgrounds in programming and data science are increasingly sought after. 

This can look like cause for concern.  Young professionals looking for work might feel especially worried about entering ever-evolving, unpredictable fields.  Job security is a key consideration for students and graduates, and it’s unfortunately difficult to assess. Today’s recent graduates, however, also enjoy distinct advantages. We’re the youngest members of the workforce and our innovative, collaborative, and tech-savvy qualities can help drive the future of our industries. There’s also no reason that technological advancements should eliminate the need for diverse skillsets in Procurement.  Certainly analytical skills will help anyone looking to establish themselves in supply chain management and strategic sourcing.  It’s important, however, for both employees and employers to seek out a balance of hard and soft skills.  There’s no one-size-fits-all strategy for approaching sourcing initiatives, and there’s certainly no single model for an effective Procurement professional.
E-procurement now and in the future

The increasing use of technology in procurement and sourcing is one of the most visible and urgent trends in the global supply chain. Communication in particular has become drastically faster in recent years. Failure to incorporate this new speed of contact into sourcing and procurement strategies is a missed opportunity for companies of all kinds, and it may open up an efficiency gap between businesses with competent information technology in procurement and those without.
The potential positive effects of a technology refresh are among the many reasons to embrace strategic sourcing. It will likely be easier to find an effective IT improvement plan for the procurement department when this section is more closely integrated with overall organizational leadership and direction.

Searching for a workable solution
As Spend Matters recently indicated, the tech tools powering modern procurement are complex and powerful. These products are also customizable, and no two sourcing departments will have exactly the same requirements. When it comes to adopting such a program, the best approach may involve gradual progression. First, the teams can select a spend analysis tool. Next, the company can add on a related e-procurement tool - or replace the vendor entirely if the first implementation has gone poorly.
The mere act of buying a software tool doesn't ensure it will provide value. Spend Matters noted that companies have to deal with possible confusion and a lack of familiarity with the potential outcomes of their new platforms. The source reported that better implementation and usage of software tools is necessary and added that as of now, numerous sourcing departments that have e-procurement products use them only one-fourth of the time. With a little extra knowledge and some collaboration with analysts and consultants, companies can get these statistics up.

Data is the basis of procurement's future evolution.Data is the basis of procurement's future evolution.

Anticipating AI's rise
hat comes after today's IT tools? The answer to this important strategic question will likely involve better procurement analytics and data use. Artificial intelligence programs that use a flow of valuable data to make key decisions are in development, and they promise to be a fruitful next step for tech-conscious supply chain participants.
PYMNTS recently spoke with Xeeva CEO Dilip Dubey about how this technology will make its impact felt in procurement departments. He explained that supply chain executives shouldn't be afraid to think about moving into AI use if they still have trouble digitizing their transaction data and making it structured and machine-readable. Indeed, the powerful algorithms being considered for industry use could help make analog data into a usable resource for a company, without having to digitize it.

One of the most promising elements of AI is that these decision-making algorithms can fit into several different roles when integrated with more standard procurement technology. Dubey pointed to processes from sourcing to cataloging; anywhere there's data to assess, an AI program could help. Companies that want to ensure their supply chains run smoothly may soon have help from these new programs, with their own data serving as the fuel. For businesses still struggling with the early stages of e-procurement, this future enhancement can serve as further motivation to evolve.

Since 1992, Source One's procurement consultants have executed thousands of strategic sourcing initiatives.  Clients in a variety of industries trust us to reduce costs across all areas of spend and drive efficiency throughout their organizations.  Though every company and every initiative is unique, a number of fundamental strategies always help produce success.

We've spent the last few weeks sharing some of these foundational best practices.  Check out our latest infographic to learn more about standing tall in procurement and building future savings

Contact Source One's team of sourcing specialists today.  We'll assess your operations and help you construct a more strategic approach to purchasing and supply chain management. 

25 years as a leader in strategic sourcing provides a unique vantage point.  Source One’s procurement experts have both witnessed and inspired monumental shifts in the nature of their business.  While our diverse offerings still set us apart, we were practically an anomaly in the early days.  Just a decade ago, most of the purchasing groups we encountered were purely reactive; they employed age old tactics, and relied on 'conventional wisdom.'  Procurement and purchasing were more or less synonymous.  So long as stockrooms stayed stocked, there was little cause for concern.  Even many of our larger clients lacked the structures and resources for sourcing indirect spend items or accurately assessing risk.  A number of Source One's veterans can recall explaining the very idea of strategic purchasing.

Persuading clients to abandon the ease of the three-bid process and the comfort of preferred supplier relationships was no small feat.  After all, bad or inefficient purchasing habits are just that – habits.  The worst ones are never easy to break.  What’s more, cost reduction can make people uncomfortable.  Reduced budgets often conjure images of inferior products and subpar services.  Even seasoned Procurement professionals still face friction during early discussions.  This continues to ring especially true during collaborations with areas like IT and Telecom for whom Procurement can look especially unfamiliar.

Reducing costs is still a key objective for Procurement groups.  The best, however, know that their advisory role must go well beyond savings considerations.  Locating the right suppliers and markets for our clients depends upon our ability to establish, nurture, and maintain amicable relationships.  Strict budget policing encourages the exact opposite sort of partnership.  Focusing on costs not only inspires resentment, but undersells Procurement’s considerable potential for shaping a business’strategy

In its newest iteration, Strategic Sourcing is increasingly linked to category management.  Successful organizations appoint sourcing leads to oversee particular departments (IT, Marketing, etc.) or spend categories (Telecommunications, MRO, etc.).  Dedicated subject matter experts do much to inspire meaningful collaboration between business units.  Working across organizations, Procurement teams can better gain a comprehensive understanding of stakeholder needs and deliver results that can profoundly reshape an entire enterprise.  Though these changes are still very much underway, Procurement's new role in negotiations suggests more change to come.  

Tomorrow's Procurement organizations cannot hope to reach best-in-class status without further developing management skills and building credibility across businesses.  Simply put, many companies retain internal structures that could discourage Procurement from fulfilling its potential.  Successful procurement departments will navigate corporate politics and continually emphasize the broader implications of the word 'savings.'  As always, some Procurement groups will drive these changes while others watch from afar.  Count on Source One strategic sourcing specialists to remain the former.

ICYMIM: November 13, 2017

Source One's series for keeping up with the most recent highlights in procurement, strategic sourcing, and supply chain news week-to-week.  Check in with us every Monday to stay up to date with the latest supply management articles.

Supplier Rationalization - Revisited
Tom Finn, Spend Matters, 11/8/2017
Finn reminds procurement professionals that supplier rationalization does not have to mean consolidating or reducing your supply base.  In fact, securing more strategic relationships can often mean increasing the number of suppliers utilized, routinely shifting a supply base, or developing a strategy that allows for continuous changes to supplier relationships.  It's important to remember that the process of supplier rationalization is a constant one.

Cottrill Research's Open Access Research Provider List of Honor
Cottrill Research, 11/2/2017
To commemorate Open Access Week, Cottrill Research has announced their annual list of honorees.  These are organizations and publications who reject traditional, exclusionary publishing models and choose instead to provide valuable information absolutely free. This year's Top Honorees include Spend Matters and Buyer's Meeting Point.  My Purchasing Center also earned an Honorable Mention.  Thanks to each of the recognized organizations for the vital service they provide procurement professionals everywhere. 

Leveling up to E-Sourcing Mastery: A Collaborative Approach
Nick Heinzmann, Spend Matters, 11/8/2017
It's clear that many e-Sourcing providers have failed to adequately inform procurement teams of their tools' benefits.  Heinzmann suggests a number of options for encouraging adoption.  The key, he suggests, is to treat it like a game.  For example, providers could introduce modules that provide "selective access" to their e-Sourcing platform.  This would encourage users to continually employ the tool in hopes of earning access to more sophisticated features.  Consultants, too, can stagger their on-boarding procedures to ensure tools are introduced more effectively.

Jennifer Engel, one of Source One's Senior Procurement Analysts will attend and address the American Supply Association's Fall Dinner on Monday, November 13th.  This annual event has become a valued tradition for a reason.  Bringing together supply chain professionals from across the Midwest, it always features impassioned discussion and expert insights from industry leaders.

Engel has years of experience helping best-in-class organizations produce cost savings in their MRO and Facilities purchasing.  As a result, she possesses considerable insight into the motivations and considerations behind procurement decisions.  She'll call upon her history of successful initiatives to discuss recent developments in the ever-evolving field of e-Commerce.  In particular, she'll address how online transactions have affected supplier relationships and the potential threats posed by industry giants like Amazon.

Amazon Business, introduced in 2015, has quickly established itself as a rival to more traditional industrial distributors.  Though Amazon offers convenience in the form of its Prime delivery services, they have yet to develop a customer service apparatus to match that of their more established competitors.  Engel will take special care to discuss the value-adds that can help veteran firms not only stay competitive, but continue to outperform these emerging challengers.

Check out Source One's recent infographic 'Can Amazon Business Really Compete with MRO, IT, and Office Product Suppliers' for more information on how Amazon Business compares to similar services.

November 10, 2017

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

New Whitepaper: 

5 Pro Tips for Impactful Procurement
Today's best-in-class Procurement groups are not merely tactical purchasing teams.  Instead, they serve as a valuable, strategic business unit that delivers value across entire organizations.  Leveraging 25 years of sourcing experience, Source One's consultants provide tips for maximizing Procurement's influence.  Obviously, there is no one-size-fits all approach to employing a Procurement team.  These tips, however, should provide a starting point for any business looking to align purchasing with their enterprise-specific goals.

Recent Blogs:

Managed Print Services Models Part 2: Actual Volumes or Allowance + Overages?
Torey Guingrich, Buyer's Meeting Point, 11/07/2017
Guingrich concludes her series on procuring copiers and printers by taking a closer look at maintenance structures.  First, she says, it's important to determine whether you'll pay for the actual volume of printing, or make payments based on your adherence to a predetermined allowance.  Companies that opt for the latter need to pay particular attention to their organization's overall print strategy.  They should also push suppliers to underline cost-savings opportunities during quaterly meetings. Without a detailed look at this spend area, it can prove especially challenging to optimize savings.

Recent Podcasts:

25 Years of Service from Source One
Take a look at how Source One's become an industry leader and helped drive the evolution of Procurement over the last 25 years. In this short video, you'll see how a small firm specializing in MRO and Telecom purchasing matured into a best-in-class service provider.  You'll also learn more about Procurement's decades-long shift from a mostly tactical function to a more nuanced, strategic business unit.

How Much of your Telecom Spend is Going Unreviewed?
Taxes, surcharges, and fees often account for as much as 30% of an organization's total Telecom spend.  Many companies lack and the time and tools necessary to effectively audit these charges.  Others are simply unaware that a little effort could mean huge cost savings and efficiency boosts.  In this short video, David Pastore takes a closer look at the potential benefit of assessing these charges.

Upcoming Events:

American Supply Association Fall Dinner: Oakbrook Terrace, IL
Senior Project Analyst Jennifer Engel will speak at the American Supply Association's annual fall dinner on Monday, November 13th.  Drawing from years of procurement experience, she'll discuss the emergence and ongoing evolution of e-commerce.  She'll pay particular attention to the ways it has affected relationships between buyers and suppliers.