November 2018

The term logistics has its origins in military strategy. According to Supply Chain Dive, readers can learn the virtues of effective Supply Chain Management in texts published as far back as Sun Tzu's The Art of War.

It's clear that America's military personnel are more than warriors. They are also superlative logisticians. In the highest of high-pressure situations, they work to ensure that troops, weapons, ammunition, and life-saving equipment dependably reach their destination. As such, veterans are perfectly equipped to fill just about any position along the supply chain. From inventory management to decision planning, these are positions that organizations are increasingly eager to fill.

Abe Eshkenazi, the CEO of the Association for Supply Chain Management suggests that demand for Supply Chain leaders is far outstripping supply. "It's estimated," he remarks, "that demand for supply chain professionals exceeds supply by 6-1." He adds that demand is only expected to grow in the coming years. "The U.S. Bureau of Labor Statistics reports that the number of jobs in logistics will grow by 26% between 2016 and 2020."

In spite of high demand, many organizations still neglect to actively recruit military veterans. Citing findings from Deloitte and The Drive Project, Procurious writes that 30% of businesses have never even considered employing a veteran. Though the other 70% appear more open-minded on paper, the majority will not hire someone without explicit industry experience. Companies like SAP and institutions like Pennsylvania State University are offering veterans the chance to gain the experience, but far too many organizations are ruling out this valuable class of professionals.

Obviously, veterans boast hands-on experience with a unique brand of Supply Chain Management. In honor of Veteran's Day, let's take a closer look at the impact they could make on your Procurement team.

1. They Understand the Importance of Trust and Teamwork
Veterans are the ultimate team players. From the moment they join the Armed Forces, they are compelled to plan every action and make every decision with their team's well-being in mind. They should have no trouble applying these principles to help foster mutually beneficial relationships across the supply chain. Their facility for instilling trust could prove especially valuable in the Procurement consulting space. Suppliers and stakeholders will feel confident following the lead of an individual who has tailored their collaborative skills in the heat of combat.

2. They Can Both Lead and Follow
This is another unique skill that veterans begin developing from the moment they enlist. Our country counts on its servicemen and women to both follow orders and - where necessary - confidently take on a leadership role. While veterans understand the importance of carrying out their own tasks, they are willing and able to take the reins at a moment's notice. A veteran promises to gift your organization with a uniquely flexible and adaptable approach to Supply Chain Management. They'll happily embrace the chain of command, but they won't hesitate when new and unexpected responsibilities come their way.

3. They Embrace Diversity 
There's no place for biases or prejudice on the battlefield. Veterans are used to working alongside and placing their trust in a diverse group of people. They have experience leading and following people from a variety of backgrounds and they've likely internalized the value that diverse perspectives can bring an organization. As businesses look to place a greater emphasis on diversity and inclusion, the disciplined, goal-focused mentality of military veterans could also prove useful. Veterans can speak to diversity's tangible value in high-pressure situations and leverage their experiences to enforce compliance.

4. They are Comfortable with Ownership and Accountability
More than any group of people, perhaps, veterans understand that responsibilities matter and actions have consequences. Given a task, they see it through to the best of their ability whatever the personal cost. What's more, they'll actively seek out new opportunities to optimize Procurement's procedures and processes. They will not, however, make an excuse, attempt to hide, or look for a chance to pass the buck. Veterans cannot help but hold themselves to a high standard during their military service. Procurement groups who hire veterans can expect them to do the same once they've entered the workforce.

Eshkenazi acknowledges that, however eager and accomplished, every veteran will take to time to re-adjust as they enter the workforce. "One of the biggest challenges when employing veterans," he says, "can be chalked up to a simple translation problem . . . human resources specialists often don't understand the crossover between military and civilian experience."

As they look to fill a record number of open positions, these hiring professionals need to undergo an adjustment of their own. They need to begin retooling their processes and rethinking their methodology to better serve the pool of highly-qualified military veterans. The perfect hire could be out there waiting to report for duty.

Source One's Procurement Marketing and Sourcing team excels at driving collaboration between disparate business units. Though Procurement and Marketing aren't known for their close relationship, Source One's team has continually excelled at bringing them together to optimize budgets and agency relationships. This week, they'll join dozens of other thought leaders and innovators in San Diego for ProcureCon Marketing.

The three-day, executive-level conference is the world's only event dedicated to exploring the unique goals and challenges of Procurement professionals working in the Marketing space. Bringing peers and competitors together, the event's agenda focuses on topics including digital disruption and effective stakeholder engagement.

"Every year, ProcureCon's events provide a valuable opportunity to both absorb new insights and share thought leadership of our own," says Marketing Procurement consultant Megan Connell. "ProcureCon Marketing will welcome a number of true innovators this year and enable our team to advocate for our approach while further refining our service offering."

This year's conference will see Source One's team discuss their new agency assessment solution. The Marketing Infrastructure & Network Diagram (MIND) tool represents a major evolution in the firm's approach to Marketing Procurement and Sourcing. They look forward to introducing this innovative new solution to forward-thinking professionals.

Every year, ProcureCon's agenda includes thought leadership sessions and panel discussions featuring Procurement and Marketing specialists from a number of industries. This year's attendees include representatives from Toyota, Adidas, Visa, Uber, and dozens of other household names.

Can't make it to San Diego? Check out what Source One's Marketing Procurement specialists have had to say about some of this year's featured speakers:

Will these organizations use their time at ProcureCon Marketing to discuss these recent developments? There's only one way to find out. Stay tuned for more updates from Source One's budget optimization team.

ICYMIM: November 12, 2018

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 news.

Disrupting the Source-to-Contract Cycle: Putting Contract Management at the Start of Sourcing
Nick Heinzmann, Spend Matters, 11/12/18
"The typical sourcing cycle begins," Heinzmann writes, "by searching for and evaluating suppliers on two key criteria: Capability and Price." While this is the most popular process, Heinzmann suggests it may not be the most effective. Evaluating suppliers based solely on these factors fails to provide a truly comprehensive picture of their capabilities. Procurement can better understand its suppliers and - ultimately - make more strategic business decisions by emphasizing contract compliance and moving the contracting process from the end of the sourcing cycle to the beginning. The move will accelerate the pace of the entire sourcing cycle and encourage better relationships between Procurement and Legal teams. 

Michael Lamoureux, Sourcing Innovation, 11/5/18
The Doctor continues his series on rampant supply chain fraud by examining a number of suspicious activities and outlining the steps an effecting platform could take to combat them. Lost returns, for example, might affect the bottom line of a company that leverages an outdated tool. In this instances, someone will mark products as defective and ensure they go missing before credit is received. A next-level platform will calculate average defect rates and average return success to assess whether or not fraudulent activities are taking place. Advances solutions could also point our abnormal vendor selection, unusual payment patterns, and fixed asset fraud before these behaviors mature into serious cause for concern.

Walmart, Sam's Club Implement Food Safety Blockchain 
ThomasNet, Nicole Garman, 11/12/2018
Garman reports on Walmart's recent efforts to promote food traceability and protect the safety of its customers. Joining IBM's blockchain-empowered Food Trust, the company expects each of its leafy greens suppliers to provide farm to shelf visibility by September of next year. Before experimenting with IBM's solution, it took Walmart stores a full week to trace their produce back to the farm level. The retail giant can now do so in a matter of seconds. Walmart and its Food Trust partners hope emerging tools will ensure the next contamination is stifled before it can become deadly. This summer's E. coli outbreak proved particularly harmful and seems to have inspired Walmart's ambitious plans.
Tail spend can be a big pain in the, well, tail. There’s a lot of it, not much is known about most of it, and that high volume of nominal transactions makes wrangling these dollars difficult. Many Procurement pros question how much of an opportunity there really is in addressing it.

I ended my last post on the subject with the question, “is it worth it?” The most I could offer was a resounding maybe depending on your overarching goals and the criticality of the other initiatives you have on your plate. That said, I did give you all a week to think on it and a few benefits and risks  to chew on while you pondered.

For some, now may not be the right time, and that’s fine. However, if you’ve decided to take a deeper dive into tail spend management or just want to know how to do so before committing, then read on. I’ve outlined five steps we’ll need to cover as we move towards a well-managed tail.

Step One: Conduct a Spend Analysis
It’s the curse of a hammer to see every problem as a nail. I spend enough time in the world of spend analysis and opportunity assessment that it is usually a go-to recommendation when tackling a procurement problem. Be that as it may, a proper spend analysis really is critical to managing tail spend.

Spend data quality will be poor here – significantly worse off than core spend items. There will be little to no consolidation among business units, so data collection won’t be a one-stop shop. Supplier names will be a mess, with a dozen ways to misspell any given word. In fact, call it a baker’s dozen and consider this example from a client’s Einstein Bro’s spend:

  • 20 different spellings, ranging from “Einstein Bagel” to “Einstein Brothers” to “Einstein'S Bros Bagel.”
  • 210 transactions across a dozen organizations.
  • $11.16 median transaction value over a total of about $4,300, which would allow one to buy nearly 300 boxes of a dozen bagels (were one inclined to feed their entire home town or build a respectable yet unstable bread-based fort).

Keep in mind, our goal isn’t to dig into those 210 transactions. All we want to do is cleanse those names and aggregate our consolidated annual spend to arrive at out $4,300 spend mark so we can ask the question, “is this spend relevant to us?” In this case, maybe not.

This same client spends millions with Grainger on industrial supplies as a second example. Home Depot, not so much. Tens of thousands, maybe a hundred thousand a year. Same with Lowes and Menards and… Hmm. Nearly 100 other tail spend suppliers. Grainger makes up about 10% of total industrial supplies spend alone. While these suppliers are tiny individually, they total around 5% of the spend category when combined – all with offerings similar to Grainger.

Let’s ask the same question – is this tail worth looking into? This time, I’d say yes – we’ll talk more about this in step three.

Step Two: Prepare Internally
After our spend analysis is completed, we will likely see a few points along our tail where we could make an impact. There will likely be many more points that look tempting but fall outside of our areas of expertise, so we don’t know how well we can qualify them.

Given the small size and (up until now) relative obscurity of tail spend, Procurement likely won’t have a wealth of category subject matter expertise. We’ll need to seek out such SMEs from relevant departments and business units. Be forewarned – these spend owners and stakeholders hold the same views of tail spend that we held previously. Odds are good they’re not going to readily invest their own time and resources into chasing spend they don’t see as valuable. Luckily, we have the evidence we need in our spend analysis to show them the value.

Share your analysis with these stakeholders as well as upper management. Get the team on board to champion this cause. Brainstorm ways to bring this spend into the light and under management. The subject matter experts may bring ideas of their own to the table. Otherwise, steps three and four may both provide some inspiration.

Step Three: Integrate into Core Spend where Possible
Supplier consolidation strategies bring tail spend into the fold naturally. We discussed the relationship between Grainger and Home Depot spend earlier and should expand on that example. Now that we’ve classified our tail in step one, try to align these smaller suppliers with our marquee partnerships. Is there enough aggregated spend among them to move the negotiations needle with bigger suppliers? One easy way to tell is by referencing any tiered discount or rebate structures built into our agreements if we have them. If consolidating our tail brings us to the next tier threshold, then we’ve identified a good opportunity.

Minimally, we’re likely going to earn some unit cost savings as well as tiered discount dollars in addition to any free shipping or other concessions by migrating to our Grainger deal. Even better, we can leverage this additional spend to negotiate better deals with Grainger moving ahead – better terms, better discounts.

Ideally, however, our first option shouldn’t be to simply consolidate to our incumbent. We’ve found a great carrot by bringing more spend to them, but what about an equally great stick? Now is the perfect time to go to market. Identify competitors in the market and issue an RFP or RFQ using a new and improve market basket containing the spend from our tail. Now we have a carrot and stick: Incumbents can renegotiate our agreement to earn more of our business – or lose it all to a hungry competitor.

Step Four: Reduce Transaction Costs Everywhere Else
At the end of the day, suppliers stuck in the tail that are purchased from regularly cause a specific headache: Left unattended, they can start to cost more in terms of handling than they are worth from a product cost perspective. As such, the name of the game is to minimize the resource impact associated with these suppliers as much as possible.

Not all tail spend will naturally roll up to one of our larger suppliers as discussed in step three. That doesn’t mean consolidation isn’t beneficial. Even if we didn’t have our aforementioned Grainger deal, consolidation leads to fewer suppliers and therefore less time spent among organizational resources.

Other strategies help in a similar fashion. We should look for ways to automate and streamline ordering, and start to standardize products being purchased. Make ordering these products as fast and easy as possible to reduce the amount of time and operational cost of making these purchases. 

Step Five: Monitor Results
If we’ve followed the four steps above, we now have a clear view of our tail spend and used it as leverage to improve our core supplier relationships or, short of that, at least minimized the impact of the tail suppliers in terms of costs associated with maintaining them. Great!

But we aren’t done yet.

We need to ensure that buyers don’t fall back into bad habits. First, we need to establish proper SOP around orders to get them in the right habits. Buyers probably weren’t intentionally going to Home Depot and maliciously forsaking our Grainger deal – they likely went to Home Depot because doing so was easier. Understand their reasons, and work to build a plan to make such ad-hoc trips unnecessary.

Then, we need to monitor spend to ensure spend doesn’t end up sliding back into the tail. If employees are making Home Depot purchases on company cards, monitor card usage. If needed, tweak rules around maximum spend amounts that can be made on a card without seeking authorization or completing a PO.

Tail Spend in Review
Make no mistake, these steps take work. As you can see, we’re front-loading a lot of resource allocation to solve our tail spend problem. Considering how small a lot of this spend looks, it may seem like a bad investment.

However, these five steps are an effective way to manage tail spend and reduce costs that Procurement may not even have noticed before. Before disregarding this opportunity, perform some due diligence – Get a good view of your tail first and foremost, and judge for yourself how much of an impact tackling it can have.

Transformation is a scary word. To many, it connotes nothing less than a total overhaul, a metamorphosis, an admission that all previous processes and policies were a failure. Though it aims to inspire change, it often succeeds at doing just the opposite.

Procurement professionals working for leading organizations might scoff at the idea of Transformation. If it ain't broke, don't fix it, right? At the other end of the spectrum, under-staffed and under-resourced teams might hear the word and feel discouraged. Surely, Transformation is beyond their limited means.

In both cases, the Procurement team in question is dead wrong. Transformation is something that every organization can and should actively pursue. Whether incremental or sweeping, ongoing Transformation is necessary for any organization looking to remain adaptable and agile in the face of disruptive changes across the value chain.

Kick-starting the process is as simple as starting a conversation. By listening actively and asking the right questions, Procurement teams at any maturity level can set about instigating a cultural shift. With some effort, they can make turn an inert organization into an innovative agent of change.

Like the journey toward transformed Procurement, this initial conversation will differ based on your organization's size, industry, and approach to Procurement. Looking to build the business case? Here's how Procurement Transformation might fit into your organization's plans for the near future.

Fortune 500 Companies
Businesses at this level are perfectly equipped to let Procurement look beyond cost savings and deliver greater strategic value. In all likelihood, they have the resources to position the function as a driver of digital innovation, supplier risk management, and talent development. The business is probably already dedicated to advancement in these areas, why not offer Procurement a more prominent role in seeing it through?

Fortune 500 to 1000 Companies
Growing rapidly and gaining market share, these organizations are in an ideal spot for reassessing their approach to Procurement. By affording the function a new spot at the executive table and drawing up plans for transformation, these organizations can ensure they hold onto the competitive advantages they've got while adapting to develop new ones.

Mid-Size Enterprises
Organizations of this size have likely tuned their processes for efficiency and consistent results. It's time for them to start looking at the bigger picture and invest in Procurement's people and technologies. By transforming their approach to recruiting and retaining employees, mid-sized businesses can set the stage for evolution enterprise-wide.

Small Businesses
Sweeping transformation is probably a reach at this point, but even the smallest business is perfectly capable of inspiring a cultural transformation. At this stage, research and boundless curiosity are essential. By assessing competitors and building market intelligence, small organizations can begin adopting new Procurement best practices and retool their approach to the function altogether. In time, they'll have what it takes to initiate broader transformation.

Public Entities 
Public organizations are beholden to different rules and regulations than businesses from the private sector. That does not mean, however, that they cannot learn from these companies. Transformation tactics and best practices could serve these organizations well as they look to improve customer satisfaction and refine their internal processes.

Companies at Risk 
A sense of urgency is great fuel for a Transformation. So long as these companies take the time to carefully assess their pain points and plot a realistic roadmap for making a change, a Procurement Transformation could be just what they need to course correct.

These initial conversations could prove challenging. Treating Procurement as a tactical, low-value entity is a bad habit like any other. After years and years, it's not easy to break it right away. Procurement professionals looking to earn buy-in necessary for a Transformation need to come prepared. They must tell a compelling, data-backed story that frames Procurement as a much-needed ally in the journey toward best-in-class operations.

Want help selling your business on Procurement's value? Reach out to Source One's spend management specialists today. 

November 9, 2018

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

New Whitepaper:
MRO Demystified Part III: The Role of Strategic Sourcing in Spend Management
The third installment in Source One's whitepaper series on managing MRO spend offers actionable best practices for carrying out strategic sourcing events. Detailing the typical inputs and outputs, this MRO Demystified Part III offers readers the insights they need to develop an effective methodology for sourcing in this complex category. 

New Podcast:
Redefining Spend Under Management 
Just about every organization likes to believe it has its spend under control. On this episode of the Source One Podcast, Brian Seipel suggests they're often mistaken. In many instances, so-called 'spend under management' is really just spend that's been out of sight and out of mind. The term's nebulous definition doesn't help. Seipel advocates for a new understanding of spend under management and offers best practices for making it a reality.

New Blog:
Run for Your Life! 4 Signs it's Time to Quit
Bennett Glace, Procurious, 11/5/2018
Halloween has passed, but many Procurement and Supply Chain Management professionals are still living through their own personal horror movies. In this blog, Glace uses cinematic tropes as a jumping off point for a discussion of toxic and stifling workplaces. Quitting isn't a decision to make lightly, but Glace suggests it's sometimes the only strategic option. 

Upcoming Events:
ProcureCon Marketing | 11/12 - 11/14 | San Diego, CA
Source One's Marketing Sourcing team excels at bridging the gap between Procurement and Marketing. At this week's ProcureCon Marketing, they'll gain new insights for optimizing budgets and navigating the agency landscape. The thought leadership conference will feature presentations by experts from leading organizations including Visa, Toyota, Uber, and Adidas

A business is like a body. When one component starts to slow or deteriorate, it can quickly produce widely felt ripple effects. In time, these effects can worsen and small symptoms can evolve into serious illness. Acting fast and treating issues at their source is critical if an individual - or an organization - wants to avoid such a situation.

Unfortunately, many organizations lack visibility into their health. Operating with un-diagnosed, unrecognized illnesses, they experience diminishing returns and disappointing results. They require a rapid assessment, a check-up to identify the source of their symptoms and devise a treatment before its too late.

Source One's Procurement Rapid Assessment tool helps you take a holistic look at the function's vital organs. Assessing the maturity and stability of each, it provides a sense of your overall organizational well-being. Chrome users, Download the chart below to try it out.

Want a second opinion? Reach out to the Procurement doctors at Source One today. Together we'll develop a plan to boost Procurement's immune system, treat its symptoms, and not only help it recover, but ensure it thrives for years to come.

It's been a rough year for the food and beverage value chain. Consumers and corporations alike have suffered the consequences of contaminated products ranging from romaine lettuce to cake mix. While few episodes were as frightening as this summer's E. coli outbreak, each new headline has diminished consumer trust and amplified the calls for a more transparent, traceable supply chain. In late-May, a letter signed by nine consumer groups read, "It is no longer acceptable that the FDA has no means to swiftly determine where a bag of lettuce [for example] was grown or packaged."

Businesses including Nestle and Walmart hope that blockchain-powered solutions will provide the means to do just that. Joining IBM's Food Trust program, both brands have outlined ambitious plans for increasing traceability, improving product quality, and protecting the health and safety of their customers. They're not alone.

Cargill first experimented with blockchain-enabled tracing last Thanksgiving. The company's traceable turkey program - the first of its kind - began with years of surveys and focus groups. In 2017, Cargill's Honeysuckle White brand found that a whopping 88% of consumers want more visibility into food production and 80% prefer Thanksgiving turkeys raised by family farms.

To serve these discerning consumers, Honeysuckle White engaged four of its farms to participate in a pilot traceability program. Turkeys arrived at stores with special codes on their packaging. By entering these codes into their phones, consumers could quickly and definitively trace their Thanksgiving dinner back to its origin. They announced the program in a press release that concluded on a speculative note. "Cargill will use the pilot," it read, "to learn more about the value of traceability in its turkey supply chain."

Presumably, Cargill's findings were promising. The Minnesota-based corporation recently announced it would not only reintroduce the program, but expand it to include a full third of Honeysuckle White's fresh Thanksgiving turkeys. While last year's program mostly served Texas-based shoppers, this year's iteration will send traceable poultry to metropolitan areas in 30 states. These include Denver, Nashville, Seattle, and various markets across the Midwest. Kassie Long, brand manager for Honeysuckle White, remarks, "We launched this program as a pilot in 2017 and are expanding it this year to meet increased consumer demand for farm to fork transparency."

Consumers aren't the only ones eager to see the program grow. Honeysuckle White reports that their farmers have also "expressed an overwhelming interest in participating in the traceable turkey program" over the last year. The program's second iteration serves their enthusiasm by expanding to include more than 70 family farms. The codes on this year's batch of turkeys will also enable shoppers to engage more directly with these farmers and develop their understanding of the agricultural supply chain. In addition to the farm's location, these codes will tell a story by providing photos and personalized messages from each participating farmer.

Shoppers who elect to purchase a Honeysuckle White turkey will get an early holiday present this year. They'll enjoy the peace of mind that comes with a traceable, verifiable food supply chain and, in Cargill's words, "greater confidence in the food they purchase and eat."

Every organization likes to believe it's got a handle on its spend. IT? No problem. Marketing? You bet. Telecom? It's all under control.

In his years as a spend management consultant, Brian Seipel has learned that just about every Procurement professionals thinks they've done their due diligence. On this week's episode of the Source One Podcast, he discusses an unfortunate truth. These Procurement pros, he suggests, are often mistaken.

Oftentimes the process of bringing spend under management is really a matter of saying, "out of sight, out of mind." With Marketing spend, for example, an organizations might carry out "brand-wide strategies" without "searching for the agency best suited to see them through. 

Seipel places some of the blame on ambiguous definitions. He offers the typical working definition for spend under management, "any spend under active control by Procurement." While this is an appealingly simple way of addressing the issue, it doesn't actually tell Procurement much about the process of managing its spend.

He sets about developing a more useful definition for this all-important Procurement metric.

To determine whether spend is truly under management, Seipel encourages Procurement teams to ask themselves four questions:

As a concluding note, he reminds listeners that it's dangerous to consider this process a one-off. "Make no mistake," he says, "this needs to be a cyclical process." When it comes to bringing and keeping spend under management, Procurement's work is never done.

Want to hear more spend management insights? Subscribe to the Source One Podcast today.  

The Business Talent Group recently released its first ever Skills Index. This report reveals the attributes that Fortune 1000 companies consider most valuable and are most likely to look for in a consultant. Supply Chain skills ranked eighth and skills related to Market Analysis, Growth Strategy, and Customer Experience also ranked highly. The list was topped, however, by Project Management skills.

It's increasingly clear that growing into an effective professional means growing into an effective project manager. Organizations are looking for consultants and employees that can guide a team and a project to an effective close. Check out the infographic below to learn more about developing Project Management skills throughout your Procurement team and successfully carrying out initiatives.

I’d like to talk about one of Procurement’s least favorite topics: Tail spend.

Many organizations let this spend fall through the cracks, focusing on larger, more prominent spend. This makes sense to a degree – tail spend, by definition, is small in scope and less strategically significant. However, organizations are coming to the realization that “there’s gold in them thar hills.” Tail spend represents largely untapped savings potential. They’re also realizing the consequences of leaving those hills unexplored. Given the advantages and risks, they need ways to reign in this otherwise dark spend.

So, what are these advantages gained? What risks we need to avoid? And, ultimately, how can we go about managing our tail spend moving forward?

Defining Tail Spend
Starting these discussions as I often do, I’d like to spend some time defining our key term: What is tail spend, exactly? Every organization has its own way of splitting spend into the logical units of “core” versus “tail.”

  • From a cost perspective, some organizations draw a specific line in the sand. Using the good ol’ Pareto rule, tail spend may describe the 80% of suppliers that make up about 20% of overall spend.  Other organizations play with a looser term, simply stating that spend is in the tail if it is “low-value.”
  • From a supplier perspective, organizations may consider any spend not under management or covered contractually as tail, regardless of size. Or, again more generally, any suppliers not considered “core” from a strategic standpoint may be lumped together as tail.
  • Categorically, tail spend can occur across a taxonomy. However, some organizations consider all indirect spend, as opposed to direct CoGS spend, as tail.

Which definition is best? There’s no right answer. Organizations adopt the definition that best suits them, based largely on their industry, goals, and how they conducts business.

At the end of the day, I don’t want to dwell here too long. Why? Because I’m only concerned with one key point that all of these definitions invariably lead to – Regardless of the method used to sort spend into that tail bucket, it will go largely ignored once it lands there.

Tail Spend: Why You Should Care
Regardless of how we define tail spend, there are a few reasons we should care about it. Some are carrots, others are sticks. All of them should be given at least a little consideration on the road to deciding if we need to spend more time worrying about our tail spend.

Let’s start with the carrots and, for the sake of argument, stick to our Pareto definition. Even if 20% of spend is small in the relative sense, it can still be a huge amount in terms of absolute dollars. The metric we want to worry about here is ROI. If there are strategies that can net us a win here quickly and with low investment, the ROI may justify the initiative. And that’s considering the spend only in isolation. One of the hallmarks of tail spend  is poor classification and visibility. Consider a standard industrial supplies agreement you may have in place today:

  • Free shipping
  • Net-30 terms
  • 20% discount on selected spend categories
  • 10% base discount across the board on remaining spend

Not bad, but also not relevant for the ad-hoc purchases made on the corporate card during local trips to Home Depot. Consolidating Home Depot tail spend will not only immediately lead to savings in this case, it could also give us the leverage we need to establish a deeper discount structure. This last point leads directly to our first negative “stick” consequence.

Plenty of discount agreements follow tiered structures. Spend a certain amount, earn a percentage back; spending more with a supplier nets a larger discount, while spending less could kill your discount entirely. It can be hard work hammering out the most competitive rebate or discount structures – and it can be frustrating to have the deal fall apart when employees insist on those Home Depot trips and spend just enough to knock our discount down a tier. That’s money lost for entirely avoidable reasons.

I’m doing tail spend a disservice by staying in the realm of small fry industrial supplies spend. While tail is often made of a large number of small-scale purchases, this isn’t always the case. Our tail may include some relatively big ticket items that are infrequently purchased. In situations like this, odds are good that Procurement doesn’t have a deep knowledge base or expertise in that spend’s category. When this is the case, scopes have a habit of creeping and costs have a habit of ballooning. Left unchecked, that tail spend will push its way into the critical spend spotlight soon enough, potentially catching Procurement off-guard. Here’s an oldie-but-goody: The IT maintenance agreement that allows for price increases of up to 15% annually. Years may go by as that 15% mark gets hit over and again without Procurement noticing… Hey, it’s just tail spend, right? We’re left with egg on our collective faces when management demands to know why that spend doubled and we don’t even recall inking the deal.

Coming up next: Controlling Tail Spend
As with all strategic sourcing endeavors, managing tail spend requires an investment. Procurement needs to commit resources and time to tackle a subset of spend that, by all means, will need a good bit of work. The natural question you may be asking at this point is, “is it worth it?” I've discussed this topic previously, most recently in my series on Supplier Relationship Management. Not all spend needs to be reviewed as strategically important or viable for big initiatives.

Tail spend reviews certainly can be viable and, if I’ve done my job, I’ve given some compelling rationale for doing so. However, I can’t say that managing tail spend is always a valuable next initiative for any given organization – that depends entirely on what other initiatives are slated and how much of a project this tail spend management initiative will be from a time and resource perspective.

If you think its time to tackle tail spend in your organization, or are on the fence and need more intel before pulling the trigger, then join me next week as we review a few key strategies that make tackling tail spend easier.

Back in July, we reported on the ongoing race to introduce driver-less pizza delivery vehicles. At the time, Domino's looked to have a slight lead on its closest competitor. While Pizza Hut had hinted at its ambitious plans for an oven on wheels, Domino's had already conducted 100 test deliveries. 2018 has also seen Domino's surpass its rival in total sales for the the first time ever.

Last week, however, Pizza Hut turned up the heat once again. At Toyota's Specialty Equipment Market Association Show presentation, the Yum! Foods company unveiled the PIE Pro. Combining a pizza oven, a robotic chef, and a Toyota Tundra, the PIE Pro is a zero-emission vehicle that Pizza Hut hopes will "accelerate [their] commitment to transform both the team member and customer experience at Pizza Hut."

The PIE Pro's refrigerator, pair of computer-guided arms, and portable conveyor oven promise to break new ground for both speed and sustainability in the pizza kitchen. Powered by a "hydrogen fuel-cell electric powertrain," the vehicle can cook, cut, and box a pizza in as little as six minutes. By taking the kitchen mobile, Pizza Hut intends to "expand its delivery radius without compromising the quality of the pizza."

In a press release, Pizza Hut's Chief Brand Officer, Marianna Radley, expresses her enthusiasm. "The Tundra PIE Pro," she says, "brings to life our passion for innovation not just on our menu but in digital and delivery in order to provide the best possible customer experience."

While the PIE Pro eliminates one key link in the pizza supply chain (the chef), it is not a driver-less vehicle. Pizza Hut is open to further advancements, but a human driver is currently responsible for piloting the truck and keeping the on-board kitchen stocked with pizzas. For the time being, this should help Pizza Hut quiet some of the concerns regarding both job elimination and safety.

The Plano, Texas-based company intends to kick off test deliveries in the coming months. Their statements make it clear that the PIE Pro is decidedly a work in progress. Chief Operations Officer Nicolas Burquier remarks, "We're going to play with this prototype and then figure out what we can learn in order to build the future of our processes and our systems."

Supply Chain Dive notes that, if nothing else, the PIE Pro has boundless potential as a "marketing tool." Though it's currently losing the sales battle to Domino's, Pizza Hut could leverage this flashy kitchen on wheels to frame itself as the most innovative player in the delivery pizza space.

Toyota is among the dozens of industry leaders that'll join Source One's Marketing Procurement experts at ProcureCon Marketing later this month.  Perhaps the PIE Pro will figure into their conversations around disruption and emerging technologies.

Around the globe, the ongoing trade war between the United States and China has business leaders asking the same pair of questions, "How will tariffs affect us and what can we do about it?"

If your organization is just now asking these questions for the first time, then it's very, very late to the game. So late, in fact, that it probably already knows the answer. The cost of doing business and producing goods has increased. By now, consumers are starting to observe these price increases themselves. Organizations who can't or won't take action are now observing the consequences of a  disappointed consumer base. They're losing market share and - before too long - they could lose their business altogether. Worse still, organizations with flagging market share have only just begun to see the results of new legislation.

That doesn't mean they should give up hope. Admitting defeat is as foolish as waiting around for the situation to correct itself. Organizations and industry commentators alike can afford to learn this lesson. Rather than devising response plans, far too many are using this situation as an excuse to air grievances. In politically polarized times, they've got countless excuses for their lack of preparedness.

Are their gripes unfounded? No, but they're certainly unproductive. As tempting as it is to join the crowd in shooting the messenger, it's time for truly excellent Supply Chain Managers to set themselves apart by sending a message of their own. They know that failure to take action will mean lost market share. Taking action, on the other hand, presents a world of unknown possibility.

Supply Chain Management is all about agility, innovation, and quick thinking. The escalating series of tariffs provides ample opportunity for forward-thinking organizations to display all three. As they adapt to new circumstances they can write a new narrative for their organization. Rather than simply stating, "here are my specifications" they can begin to think bigger and ask, "how can I improve upon these specifications and establish a culture of adaptation and evolution?"

Business leaders have known for some time that the costs of doing in business in China were beginning to outweigh the benefits. That's why the last decade has seen more and more organizations nearshore their operations to Mexico and other locations. Though the nearshoring trend has steadily gained steam, many organizations have neglected to take part because the issues associated with Chinese supply chain operations had not yet affected them.

With patent infringements, quality control concerns, and inflated transit times, issues have piled up. For the short-sighted, however, they've long looked like someone else's problem. Now, with Trump's tariffs in play, the perils of doing establishing supply chains across the globe are inescapable. They present both a burden and an opportunity for all global organizations.

The nearshoring process is perhaps more attractive - more imperative even - than it's ever been. Writing for Forbes, Andria Cheng reports that apparel companies are particularly eager to relocate. She writes that a majority of global apparel sourcing professionals "strongly believe" they'll nearshore operations by 2025. Cheng quotes from numerous sources, but one sentiment is common among them. Conversations around relocation began long before President Trump took office. Tariffs, these executives suggest, have only accelerated them. While they represent an unexpected 'last straw,' business leaders were certainly anticipating a 'last straw' of some sort.

Nearly half of Americans oppose the new tariffs making headlines every day. More than 140 associations have joined the fight against them. One small group, however, must feel some measure of gratitude. Anyone who has struggled in vain to build the business case for a nearshoring initiative has found a new trump card. 

Surely every Procurement professional longs for a more predictable, stable global market. The events of the last year, however, should remind even the most unflappably optimistic professionals that stability is never a guarantee. Frankly, it's more reminder than anyone should have needed.

If your organization has found itself blindsided by new regulations, it's time to create systems to ensure you aren't blindsided again. You may have missed years worth of writing on the wall, but it's not too late to take action. Your organizations should look to enter new markets with the same enthusiasm that citizens carry into voting booths on Election Day.

It'll take time, and it'll occasionally look fruitless, but the right strategic action will guide your organization into a stronger, more stable future. However surprising the world around us grows, you'll enjoy the comfort of an optimized and adaptable approach to Supply Chain Management.

Considering that we just passed Halloween, I feel it is never too late to share more short horror stories related to procurement. Not only from dealing with stakeholders, but also some extremely unscrupulous buyers, I hope this never happens to you

The Friendly Buyer:

Imagine you are working hard to develop saving strategies across your categories, working hand in hand with your stakeholders to find different approaches, looking at alternatives, slicing and dicing proposals to find opportunities  he decided to try in again with another vendor, resulting in no real savings, but a pity 1 percent discount. The worst part is that he believed he was doing a great job and deserved a promotion…

. . .  engaging vendors and proposing changes, running events, etc. in other words actually doing your job. It is most likely you and all your fellow procurement colleagues are involved in similar business, proud of all the effort you are putting, bringing in savings, meeting targets and creating value for your company. Suddenly you hear a muffled conversation from one of your team members, it is a casual conversation, but you can’t avoid listening in as you register the following words coming out of the buyer: “I need a favor”. These words are quickly followed by “I need to reach my savings targets for my bonus”; you are in shock, but it doesn’t end there, he continues to argue that he is short, that he needs a specific percentage to meet the goal, and that he trusts that the vendor will give them those points because they are friends. To add insult to injury, he also asks the vendor to invite him to lunch in an upscale restaurant to have a good time and celebrate the friendship. After a couple of minutes of trying to convince the specific vendor and realizing that there were no positive results with his strategy

The Delusional Pseudo-Lawyers:

Part of dealing with vendors include negotiation agreements, statements of work and other legal documents. Of course we depend on lawyers to have our backs on language, standard legal clauses and sound advice. Sometimes it is not easy to work with legal, if you are lucky enough to work with the same lawyers on all your agreements, they learn to trust you and your criteria; you are also confident that your lawyer has a decent understanding of your subject matter expertise, making things flow much smoother than trying to explain from zero. The renewal of a supplier contract came around the corner and we were collecting all agreements related to that supplier across a newly acquired company to leverage the consolidation of goods and services; as we moved forward and started reviewing some statements of work and addendums we started noticing that none of those agreements had the approval of the legal department. We knew from other documents that legal from the acquired company was required to stamp and approve all signed documents, so flags were raised when we found so many of them without it. Looking at all these documents we noticed that they had all been reviewed, negotiated, and signed by a former junior buyer as well as a mid-level maintenance stakeholder, both without signature authority…

The Surrogate Stakeholder:

When engaged on a particular position, you have to put the interest of the Company in front of other interests and make decisions on unbiased criteria and information to help accomplish Company goals. Avoiding going deeper into this, the idea is simple, you know better than anyone the best way to approach your job and get the results you are looking for. Companies are comprised of multiple roles and expertise, but one thing should be clear, everyone should row in the same direction when doing their jobs; unfortunately it is a fact that a portion of people don’t like their jobs, some are lazy, and others take shortcuts in their work. For a company that deals with technology, engineers are a critical part of their innovation and staying ahead of the curve effort. Many times those engineers are bombarded by vendors that are trying to sell more of their products, and the majority have a critical eye and really focus on things that will benefit the Company instead of their “likes”. One of these engineers had other views, they had a deep liking for a particular vendor, which it’s not rare, but this one went a little too far; the vendor would do the engineers work, presenting him designs and other deliverables that benefited the vendor, additionally he would ask the vendor for help on matters that exposed internal and confidential information, all of which he passed as his own work without changes, inputs or questioning…

How to Navigate through Three Common Problems in Offshore Manufacturing

Recent studies have revealed that offshoring provides new, economically sound channels for product development. There are many avenues for securing a better price in your contract manufacturing and outsourcing initiatives, but far fewer to help assess the problems and challenges that come with engaging offshore suppliers.

Measuring cost reduction is easy. Within many organizations, the simple metric is enough to rationalize an outsourcing initiative. You should not, however, rely solely on this concern. For most organizations, a nuanced approach that considers a multitude of challenges will provide for a more productive, profitable relationship with an overseas supplier. By considering the following challenges, a company can better position itself globally to increase its volume capacity, develop market forecasts, and build strategic supplier networks with partners around the globe.

What Are the Challenges of Outsourcing?

1. Overcoming the Language Barrier

It has been said that to learn a language is to have one more window through which to look at the world. To expand on this analogy, it would be a herculean task to try to hold a conversation—let alone quote prices on an RFQ—with someone on the other side of a brick wall.

Companies may feel obligated to partner with international companies that have offices in their own home or more accessible countries without a language barrier.  This could certainly prove convenient, but there is no guarantee the convenience will outweigh the potential savings, lead time advantages, or minimum EOQ that a company based solely overseas could provide.

The most straightforward solution is to develop a diverse hiring process that favors candidates with proficiency in the languages you have in mind. Having fluent speakers at the ready will not only facilitate discussions, but it also presents opportunities to optimize research and market exploration in overseas markets. This could mean better search results, more relevant suppliers, and an abundance of valuable market information on the industry in question and its key players.

Another effective and popular method is visual and graphic communication. These can take the form of photographs, product designs, physical samples, and more. Vision is a dominant part of the human brain, and it functions universally as a means of communication. This is especially true when prominent language barriers are in place. Exchanging physical samples, for example, allow organizations to interact with and closely examine a product or component at their own pace and conduct a personal review. Incorrect translation or misrepresentation of functional requirements are both unlikely and easily corrected when these inspections occur.

2.  Solving Conflicting Interests and Processes

During my time engaging with multiple overseas suppliers, we were confronted with concerns and issues related to differences in documentation and procedures. These significantly slowed down each step of the sourcing process. Contract negotiations focused on service level agreements, nondisclosure agreements, or commercial term agreements take up precious time that could otherwise be spent pursuing other strategic initiatives. Communications regarding product specifications or dimensions can take days to answer as a result of drastic time zone differences and general unresponsiveness. Throw lengthy documents like requests for information (RFI) into the mix, and you are welcoming even more errors and miscommunication.

Some solutions include conducting the processes over the phone to display a higher level of investment in the initiative. This may illustrate to suppliers an admirable level of transparency, trust, and ‘skin in the game’ from your business. Hopefully, this is the sort of behavior they consider mimicking.

Additionally, basic principles of conversation apply. I have found that suppliers are more responsive to emails that highlight their organization’s name or the name of a key contact. This could indicate that the RFI was curated for suppliers like them, essentially framing it as a direct call to action. Most importantly, I found constant communication to be critical in retaining supplier interest and persuading them to adhere to requested procedures. Having patience and remaining firm in your company’s resolve while continually providing an open means of communication allows for the free flow of information and nurtures a better client-supplier relationship at the end of the sourcing project.

3. Adapting to Market Change

Ongoing developments such as the China–United States trade war, the 2018 holiday e-commerce season, and the supplier consolidation of ocean freighting companies could impact pricing and drastically change the playing field for procuring products and services overseas. Tariffs introduce new barriers of entry, the holiday season elevates demand for consumer goods and warehouse operations, and shipping mergers and acquisitions affect the balance of power in the market. Changes to offshore suppliers can rapidly and fundamentally affect inventory planning and management efforts. Therefore, new market analysis is essential in adapting to overseas markets and developing strategic purchasing methods. This is especially true for companies dependent on Just-In-Time purchasing, expedited shipments, or order fulfillment where time is of the essence and rapid market movement is punitive.

Staying relatively ahead of—or at least amenable to—change could mean discovering new, readily-available cost reduction strategies. These can then be implemented ahead of competitors for an advantage in the market. For example, as China slowly but surely modernize, the cost of Chinese labor is rising.  Forward-thinking manufacturers have anticipated this trend and are acting on it. They are now targeting raw material suppliers elsewhere. Adapting to this situation in the long-run could reveal cost-saving opportunities  in developing markets such as Cambodia and Brazil.

Taking a proactive approach to addressing these common obstacles to outsourcing initiatives could mean developing competitive advantages, boosting efficiency, and discovering cost reduction programs on the horizon.

ICYMIM: November 5, 2018

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 news.

Fraud Permeates Your Supply Chain . . . 
Michael Lamoureux, Sourcing Innovation, 11/1/2018
Outdated platforms are doing far more than hampering efficiency and results. In this follow-up to his iZombie series, the Sourcing Doctor suggests they're also allowing fraud and unscrupulous practices to prevail unnoticed. For example, a buyer and supplier might collude to inflate their quality and reliability metrics. Carriers might charge double for fuel, marketing teams might disguise extravagances as expenses, whatever the fraud, it'll likely fly under the radar if your organization employs an iZombie platform. Lamoureux continues to advocate for more modern solutions by exploring the various types of supply chain fraud in two additional blogs. 

Jonathan Messinger, Spend Matters, 11/5/18
Over the last few years, organizations in all industries have scrambled to adopt cloud-powered solutions and embrace the future of their business. Now that adoption is (largely) complete, a new issue has presented itself. How can organizations effectively manage the cloud? Softchoice's new report, The State of Cloud Readiness 2018, suggests it's a question that many organizations are still struggling to answer. Responses reveal that 43% of IT leaders have run into trouble developing cloud management strategies. More than half (57%) have exceeded their cloud budget at least once in their attempts. Still, the report was not without its promising findings. 61% of executives 'strongly agree' that the cloud has helped advance their organization toward its goals. 

Today's Most Important Ground Transportation Trends
ThomasNet, 11/5/2018
ThomasNet examines some of the trends driving the future of logistics and ground-based transportation. Digital disruption, they suggest, is a hot topic among industry professionals. Preparedness varies. Citing a DHL survey, ThomasNet suggests that only 55% of organizations feel equipped to hit the ground running when digitization takes full effect. A somewhat larger group (63%) expect AI to enhance their decision making capability. Among other things, they hope to realize the benefit of enhanced visibility, predictive risk management, and reduced carbon emissions. 

November 2, 2018

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

New Whitepaper:
MRO Demystified Part III: The Role of Strategic Sourcing in Spend Management
The third installment in Source One's series on managing MRO spend offers tips and best practices for carrying out strategic sourcing events. Detailing the typical inputs and outputs, this installment offers readers the insights they need to develop an effective methodology for sourcing in this complex category. 

New Podcast:
Scary Stories from a Supply Chain Recruiter
The hiring process can be a nightmare. Candidates and businesses have to put aside their fears and sell themselves in high-pressure interviews. Recruiters are tasked with alleviating those fears and ensuring both parties are confident and comfortable. Sometimes, however, they wind up in hair-raising situations of their own. On this episode of the Source One Podcast, recruiter Andy Jones shares some horror stories from his career in staffing. 

Source One's spend management experts will attend and sponsor this conference for forward-thinking Procurement executives. Focused on the "Age of Intelligence" in Supply Chain Management, the event will feature panels and presentations hosted by true thought leaders. The disruption-centric agenda should also provide Source One's Procurement Technology Advisers with valuable insights to refine their service offering.

ProcureCon Marketing | 11/12 - 11/14 | San Diego, CA
The Marketing sourcing team at Source One will join industry peers in the Golden State. There, they'll trade tips and best practices for optimizing marketing budgets and planning for digital disruption. Source One's experts have long excelled at bridging the gap between Procurement and Marketing. ProcureCon Marketing's presentations and discussions should help boost these efforts moving forward. 

Web ordering to test supply chain capabilities at Shake Shack

Supply chain optimization is indispensable in the restaurant industry. Profits are made and lost from the ingredients used in appetizers, main courses and desserts, which need to be properly stored and obtained from suppliers so patrons are free to select from menus.

Strategic sourcing will be particularly key for a well-known fast casual eatery, now that the chain is making it easier for customers to order from wherever they have an online connection.
As reported by Skift, Shake Shack is in the midst of implementing its web-based ordering platform, which allows regulars and brand-new clientele to log on to the company's website and "click" what they want.
"The plan is to take the platform nationwide."
Web ordering in trial run
The plan is to take the platform nationwide - Shake Shack has locations in California, Nevada, New Jersey, Massachusetts, Connecticut, Georgia and Texas, among a few others - but given its newness, web ordering is only available to customers at 10 locations in seven states at the present time.

Shake Shack certainly isn't the first to make to-go meal purchases available to web users. Taco Bell, Wendy's, Chipotle and Sweetgreen are a mere handful of the other household name fast food chains that have already done so, Skift noted.

What makes Shake Shack's platform unique? According to Shake Shack digital director Abbey Reider, it's about more than mere convenience.

"What's different is that we are very much focused on hospitality, and how are we impacting current guests," Reider told the online publication. "For us, it's about always making great moments."

Supply chain management touches all aspects of casual dining
The restaurant sector is one of the more competitive industries in the U.S., with a high failure rate largely because patrons have so many places they can choose from to satisfy their hunger and enjoy a night out. Thus, in addition to a fully operational food and beverage supply chain, eateries must focus on employee procurement management so wait staff, line cooks and chefs buy in to the "customer is always right" mentality. Successful companies must also deliver in food quality consistency, excellent service and speed, providing diners with their dishes as quickly as possible.

Randy Garutti, Shake Shack CEO, told Skift that he's confident the web-based platform will prove popular with people, particularly given its success with the mobile app it rolled out in 2017.

"One of the reasons the app does so well are the great food images," Garutti explained. "It's not a traditional menu board, you're browsing pictures of mouthwatering burgers. Our assumptions [about customer behavior for online ordering] are very similar."

Domino's, McDonald's and Burger King are a few of the fast food chains that enable customers to order via mobile apps. Third-parties have jumped aboard the app bandwagon as well, such as Uber Eats, Doordash and Postmates. These firms rely on operational excellence, on the part of restaurants, to stimulate sales.

For the most part, though, customers prefer to order straight from the source. Fifty-three percent of respondents, in a E-Poll Market Research survey, said they usually bought their meals from restaurant-produced apps rather than those from third-parties.

Restaurant Dive warned Shake Shack and other eateries that have online ordering options need to be mindful of the unintended consequences. While convenient for those ordering, the service can cause slowdowns for other patrons, which can complicate supply chain management.
Today more than ever, consumers have options when it comes to methods of procuring and acquiring merchandise. Consumers can procure merchandise by ordering online or shopping a physical store location. Similarly, consumers can acquire said merchandise via in-store pick-up, home/place-of-employment delivery, or even third-party receiving (think UPS or Amazon lockers). With consumer preference driving these trends, retailers have been getting creative with their handoff-to-consumer practices.

One creative way retailers have been meeting consumer acquisition preferences are buy online, pick-up models. The buy online pick-up models require the customer to come into a physical store location to get their merchandise, rather than shipping direct to consumer or a third-party receiving service. Retailers need to be flexible in order to remain competitive with the conveniences of the internet age. Retailers see benefit in in-store pick-up, as it drives consumers to the physical retail location, tempting them to grab additional merchandise from the floor. Retailers can encourage the pick-up in-store model by making the free shipment minimum dollar threshold high and offering free in-store pick-up.

Since the late 2000’s, when retailers began offering the option, Buy Online, Pick-up In-Store (BOPIS) has been an increasingly popular product acquisition trend for consumers. The BOPIS model allows stores to use their inventory to meet consumer purchase needs, while eliminating shipping costs and wait time for consumers. Some downsides to this model are that it makes in-store operations less efficient by increasing labor costs (people have to pick out and package orders), could involve pulling merchandise that has already been placed on the floor, and is dependent on in-store product availability.

A new model retailers are toying with this holiday season is Buy Online, Ship-to-Store (BOSS). The BOSS model allows consumers to purchase online, just like the BOPIS model. The key difference is the merchandise fulfillment is managed directly by a warehouse and shipped to the store’s physical location, rather than in-store retail staff picking and packing. This new model augurs to reduce the out-of-stock scenarios encountered in the BOPIS model, while still drawing consumers into the store. The BOSS model also gives consumers access to a larger product selection than the BOPIS model.

This holiday season is predicted to be incredibly busy and retailers are having to experiment with new ways to engage consumers. The buy online, consumer pick-up models encourage consumers to come to a physical location and increase the chances that the consumer will snag a few extra goodies not included in their online order. Consumers benefit from these models by eliminating extra shipping charges and making the holiday shopping season a bit simpler. The new BOSS model may prove to more efficient than BOPIS, but only time will tell. Have you had a good experience buying online and picking up in-store? What were your reasons for opting to pick up rather than to receive shipments at your residence?

Unemployment is at a near-record low. While this is generally great news, it creates a tough situation for employers. Across the country, they're wading through an increasingly shallow talent pool to fill a near-record number of open positions. The conundrum has forced many organizations to rethink their approach to hiring. Many are casting a much wider net and opening their doors to applicants who might've historically found themselves on the outside looking in.

Even in this candidate's market, however, applicants without a Bachelor's degree are often dismissed outright. A college education is certainly valuable, but should it prove a deal breaker in the hiring process? Source One's supply chain staffing and recruiting specialists don't think so. In the infographic below, they share 5 attributes that are far more telling than a Bachelor's degree.