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.
Best Procurement Solution Persona? Configurator!
Pierre Mitchell, Spend Matters, 5/20/2019
Admitting he believes comparing Procurement Solution Personas is like comparing a an introvert and an extrovert: each has its purpose and one is not necessarily better than the other, unless put in a particular context, Pierre Mitchell poses a new question: "which type of solution is generally most appealing to the most buying personas," to which he answers, "configurator."
They key to a successful firm, according to Will Harper, is a leader or leadership style that can successfully manage the interconnected web of relationships that the firm has, both internal and external. Harper displays diagrams of Integrated versus Technical Leadership styles as they related to human technical factors and goes into detail about the "Human Ecosystem," and the four steps to implement active management in your organization. Refresh your views on leadership and visit the article for more.
Top 6 Benefits Of Local Sourcing
Team Thomas, ThomasNet, 5/13/2019
It's so popular to go global at this day and age, however, Thomas Net takes the liberty to highlight six of the main reasons procurement professionals might rather source locally from flexibility, reduced costs/more revenue, and being more eco-friendly. Take a look and maybe you'll rethink the next sourcing strategy.
Happy Monday! We've got a treat for you this week. We spend our Mentorship Mondays hoping to reach young aspiring procurement professionals to help guide them to the right path and choices. One of our own Analyst Interns, Nicole O'Connell as shared a bit of her own experience with us and what is helping her as she arrives at the inevitable crossroads of life, post graduation.
Nicole O'Connell is graduating from St. Joeseph's University as an Accounting and Business Intelligence and Analytics double major (pause for applause), and has decided to begin her professional career with us, here at Source One, a Corcentric company, as a Data Analyst Intern.
At the start of her education Nicole was sold on becoming an accountant, however, in her studies she developed an interest in the data anylitcs and consulting aspects of Business Intelligence and Analytics and decided to make that her second major. As O'Connell faces graduation she admits that she is at a bit of a crossroads between the two and is using this first position to help her make that big decision as to what path she'll take. When asked what she has learned thus far on her journey as an early professional, she responds:
"Everyone tells you to ask questions, and they're right. You really don't know until you ask. Whether it's for advice, about a project, or even why someone decided to transition into or out of a field or position--you can learn from someone else's experiences, even if you don't have a ton for yourself already."
Finally, as these posts are meant to motivate and guide are younger professionals, Nicole would like to leave a message to her peers at the brink of their next chapters: "Do what you enjoy! Don't be intimidated by that overwhelming feeling. Be confident that you know what's best for you."
From Cracker Barrel to Olive Garden, catering is a service that more and more restaurant chains are providing for their customer base, one that requires a well-maintained supply chain to pull off successfully. And it appears as though it was a fruitful amenity for the companies that offered it in 2018.
As reported by Restaurant Dive, the rate at which dining establishments participated in catering last year jumped 6%, Technomic principal Melissa Wilson noted at a recently held conference. Growth was so impressive, in fact, that it outpaced the industry as a whole by more than 50%.
"As brands and independent operators look for ways to increase same-store sales or generate incremental revenue, catering is definitely a conduit," Wilson explained, according to Restaurant Dive.
The uptick in catering doesn't appear to be a flash in the pan, either. To the contrary, 90% of restaurateurs consider it to be an important component to their business structure, based on a report that was released at the conference held April 30.
Although catering as a service is expected to level off somewhat in 2019, sales as a whole are projected to intensify potentially reaching $863 billion combined by year end, according to estimates from the National Restaurant Association. Supply chain optimization may help make this projection a reality.
Like Procurement, Accounts Payable has seen its reputation and influence improve considerably over the last several years. More and more, executives are recognizing that AP has the potential to serve as an essential strategic asset.
In their recent eBook, Ardent Partners and Corcentric report that 52% of organizations consider their AP function "very" or "exceptionally" important to their operations. That doesn't mean it's smooth sailing for Accounts Payable. In Ardent Partners' Accounts Payable Metrics that Matter in 2019, the research firm goes on to identify a number of challenges still facing the function.
Here's a look at where Source One's cost reduction experts have been featured this week!
New Whitepaper: Building an Effective Procurement Organization
Discover how Source One has helped countless companies over the years build an effective procurement organization with our series including a comprehensive list of the methodologies our experts have used time and time again. Explore the insights from our experts that will help you optimize your procurement department. Topics covered thus far include People, Metrics, and Processes in the first three parts of our whitepaper. Learn how to inspire your team to purpose, move beyond simple cost-cutting and become a strategic advisor based on the metrics of your procurement team, and how to develop the right procurement processes for your organization. Stay tuned for Part 4: Tools!
New Blogs: Every Link is Vital: Avoid Age Discrimination in Supply Chain
Bennett Glace, EBN, 5/15/2019
Editorial lead of Strategic Sourceror, Bennett Glace, highlights another complaint of age discrimination by IBM and offers a new solution to the age gap in Procurement. Other than a complete overhaul, Glace suggests a well organized hand-off. There's no denying the issue of executing digital tranformation with employees that are "stuck in their ways," or fresh faces that are unable to innovate with outdated processes and a lack of veteraned support. Glace argues that "organizations cannot afford to let years of knowledge and experience walk out the door," but to rather leverage these veterans to guide the new talent as they develop skills and eventually mature into leadership roles. Visit the article for more on Glace's compelling arguement and IBM's latest age discrimination scandal.
Maintenance Repair and Operations (MRO) has an unpredictable nature, and Mike Croasdale presents an approach that can help us prepare for and hopefully avoid some of those sourcing challenges that could arise. A Market Basket approach ofen employs the Pareto prinicple, otherwise known as the 80/20 rule, and can help analyze the competitiveness of the supplybase and otherwise prepare for you for what may come. Croasdale explains the 80/20 rule and how it will be of help in preparation for an unexpected turn in the MRO process. Visit the article so you can better be prepared for your next MRO assignment.
How Do I Develop A Marketing RFP?
Megan Connell, Thomas Net, 5/16/2019
Marketing Requests for Proposals are often complex and Megan Connell recognizes the importance in the exchange of information and goes over some detailed tips to get you writing the perfect Markeitng RFP. Beginning with your company information and background, Connell explains why it is important to include information about your company in addition to the research the agencies conduct. Connell continues with what else to include from the background of the sourcing event, the scope of the work you want done, how to evaluate the agencies capabilities, requirements for pitches if presentations are necessary, questionnaires, and finally, pricing. Visit this article to get all the details on these categories for drafting your next Marketing RFP!
Procurement and Supply Management professionals recognize that their business unit has the potential to make a game-changing impact. How could they not? Blogs like the Strategic Sourceror have emphatically made this argument for more than a decade now. Sometimes, however, other business units feel differently.
Finance, Marketing, IT, and executive leadership aren't likely to take Procurement at its word. Simply reminding them that Procurement can (and has) made an impact won't inspire them to collaborate with the function or place their confidence in it. Procurement needs to make a more persuasive argument, one that's supported by accurate, compelling data.
A dashboard might tell a story, but a data report delivered directly to stakeholders has the potential to do much more. Presented effectively, it could inspire stakeholders to look at Procurement differently and join them in composing the story's next chapter. Looking to make an impact and foster a new sense of collaboration? Check out some best (and worst) practices for presenting Procurement's data.
Do: Speak Your Audience's Language
It's no secret that Procurement sometimes gets a bad rap. The function has long contended with a reputation for taking a 'my way or the highway' stance and pursuing cost savings at the expense of service levels and product quality. These misconceptions often come down to misaligned priorities. While a Procurement professional's ears might perk up at the word savings, someone from Marketing's hackles might rise instead.
Before putting a together a report, Procurement needs to make an effort to learn which metrics are mostly likely to inspire its audience. It's never enough to simply point to data. Procurement needs to present its findings or results in such a way that other stakeholders are eager to join them as partners. Ironically enough, this could mean tossing out the metrics that Procurement values most.
Don't: Overdo It
There's a fine line between a presentation that's eye-catching and a presentation that's an eyesore. With all the fancy tools out there, it can get tempting to load a presentation with colors and effects. Resist the urge. A presentation like this might be fun to make, but it'll prove exhausting to sit through. Instead of retaining information on Procurement's recent successes, your audience will likely find themselves shielding their eyes or looking at the clock.
Take the same approach to the data itself. Too many numbers is often as bad as too many colors and effects. If you're doubtful of the impact a chart or graph will make, don't hesitate to leave it out. Still unsure? You can always conduct a test presentation with a few colleagues to ensure your findings have the desired effect.
Do: Be Prepared to Back Up Your Findings
Any good report or presentation will lend itself to a discussion. Without inviting conflict, Procurement should come prepared to address push-back from stakeholders and support its claims. After all, you probably wouldn't have to present this data if everyone was already on board.
Addressing questions and concerns with honest, insightful answers will help build the sense of trust and mutual investment that Procurement needs to meet its objectives.
Procurement loves to talk about how important it is to build contingency plans and consider every possible risk factor. This isn't just something to do before going to market. The function should exercise the same care and take the same precautions before delivering a report on its performance.
Don't: Expect too Much
In an ideal world, Procurement's data would effectively speak for itself. The function would rely on simple charts and graphs and enjoy instant recognition from its audience. We don't live in an ideal world. Sometimes, more complex representations are unavoidable and stakeholders won't quickly connect the dots.
You can't afford to leave your audience to draw connections or conclusions on their own. Without insulting their intelligence, be prepared to do some explaining (maybe more explaining than you'd like to). When putting together reports and delivering presentations, try to reach the perfect balance between showing and telling.
Like many students this time of year, you're probably getting ready to start your summer internship. If you're headed into a role within Procurement, chances are this is an entirely new experience for you. Let's face it, Procurement is a very niche function. It's not exactly glamorized like positions within Marketing or Information Technology, but Supply Management is a unique business function that collaborates with a variety of business units in a wide range of categories, and has the potential to make a major impact within their organizations. As a Procurement Consulting firm, our analysts and consultants are constantly solving interesting supply base challenges for our clients- from sourcing unique products and services, supporting companies in their reaching sustainability goals, to re-shoring entire supply chain operations. Everyday can be something entirely different. So, how does one prepare for an internship experience in a field that's both broad and specific like Procurement? As with any internship experience, come to the role ready to learn and absorb as much as possible. An open mind will be helpful in hitting the ground running and getting the most value from your experience. As you're gearing up for your Procurement internship, here are a couple of ways to prepare:
1. Ask the right questions during the interview:
Just as the interview is a way for the employer to vet candidates and their skillsets, it's also an opportunity for you to learn more about your potential internship experience. Be sure to treat the interview process as such by asking the right questions to gauge whether this experience will ultimately help you grow. Consider asking:
What does the day-to-day look like?
What projects will you be supporting?
What skillsets does your potential employer recommend for success?
Use this conversation as a way of learning if the experience is going to support your goal of landing your ideal job when you graduate.
2. Check out Industry Publications:
Mitigating supply chain risks, managing supplier negotiations, enabling supplier-introduced innovation, there's no shortage of responsibilities for supply management professionals. Luckily, there's also plenty of knowledge sharing happening within the space. Understand different categories and learn procurement best practices by reviewing industry publications:
3. Familiarize Yourself with Industry Associations:
Whether you're looking to secure a certification, network with other professionals in your field, or pursue continuous learning opportunities, professional associations are fantastic career development opportunities. While there are costs associated with joining, many of these groups host networking happy hours which are a great way to learn more about their programs and meet other professionals in the space. Procurement and supply chain professionals have a number to choose from, here are a few:
Check out their calendar of events to see free and/or low cost ways to get involved. Often, they offer discounts to students. Take advantage of these associations to get a better understanding of the profession and the career opportunities. Internships are a great way to test the waters of a potential career path, but they're not the only outlet for learning the profession. Take advantage of this time to really immerse yourself in the field, learn more about the career options, and absorb the information necessary to set you up for success.
Another day, another major announcement from e-commerce giant Amazon. In what will likely come as good news for the Denver economy, the e-retailer said it intends to create 400 new high-tech jobs in the city in various subdivisions under the tech industry umbrella, including hardware engineering, cloud computing, advertising and software.
Additionally, Amazon stated that it's doubling down on its investments in the Mile High City by doubling its tech force in the metro area and opening a new office space in downtown Denver.
Dave Wood, site lead for Amazon Denver's Tech Hub, said that the Denver community has welcomed the company with open arms ever since it arrived in 2016 and couldn't be more thrilled about what the future holds.
"We're excited to continue to grow and invest in the Denver area," Wood explained in a press release. "Our new office will offer our teams the convenience of a downtown location with an array of outdoor adventures just up the road."
While the actual building process has not yet begun, Amazon says the new office space will span approximately 98,000 square feet and be located in the heart of Denver's lower downtown neighborhood.
17 tech development centers in US and Canada
It's nothing short of remarkable the extent to which Amazon has increased development, after beginning as a relatively little-known startup online bookstore in Seattle back in 1994. Twenty-five years later, Amazon operates 17 North American tech development centers - which the company refers to as "Hubs," including the one in downtown Denver.
Colorado Governor Jared Polis said he too is delighted by the investments Amazon has made in the Centennial State, with the expected 400 new high-tech jobs representing just the tip of the iceberg.
"We have a terrific workforce that continues to attract the ideas and businesses that thrive in a knowledge-based economy and we are a great place to do business," Polis exclaimed. "Amazon's current Colorado presence spans from distribution centers to robotics, corporate and operations. It's wonderful to see their continued investment in our community." Roll out of one-day delivery for Prime members
Now the largest internet company by revenue the world over, Amazon continues to raise the stakes in its bid to grow even further and compete with other multinational retail corporations, such as Target, Walmart and Costco. Its success wouldn't be possible without effective supply chain management and optimization. In what many describe as a game changer, Amazon is doing away with its two-day shipping guarantee for Prime members, and in its stead, promising one-day delivery. The company's massive footprint and rapid installation of distribution centers has helped make this once-unthinkable capability possible. In the past seven years alone, the e-tailer has spent north of $160 billion in development, research and order fulfillment infrastructure.
Alex Valdez, who represents Denver's 5th district in the Colorado House of Representatives, said there's a lot to love about the Mile High City.
"As a growing, thriving tech city, it's no surprise Amazon has chosen to expand their Denver workforce," Valdez intoned. "Our people and quality of life are second to none. We're excited to see more quality tech jobs coming to our great city."
Organizations with facilities spread out across the country often struggle with the concept and/or execution of supplier consolidation. In many instances, facilities are utilizing identical items at multiple locations while purchasing them from different sources. Left unaddressed, this lack of cohesion and standardization often creates a negative impact on the bottom line. The bullet points below will help highlight the benefits of supplier consolidation from both a monetary and operational standpoint: Savings Opportunity: The value of savings found within supplier consolidation cannot be stressed enough, especially for companies with a large footprint across the USA. Let your data do the negotiating for you here – presenting a potential sole supplier with information highlighting your overall company-wide usage from both a quantity and spend standpoint will pave the way for deep category discounts and rebates. Use this information to your advantage to help secure the best deal possible! Ad-Hoc Spend Control: In today’s world of Amazon Prime and “same-day delivery” many employees at the plant level tend to search Google for their needs and make purchases with their corporate card. Once again, this can prove costly if left unaddressed. Consider on-boarding a supplier capable of implementing a punch-out system, this will restrict facility purchasing to pre-approved sources and help control rogue spend. In addition, each time an order is placed with your pre-approved supplier that additional spend contributes to the rebate savings referenced earlier. Consistent Pricing: Many variables influence how items are priced by suppliers. Consolidating spend to one supplier within a set category helps limit these through leverage gained via negotiations. Most importantly, the utilization of one supplier will now eliminate pricing inconsistencies within your organization when the same items are purchased from different suppliers. Additionally, this price will be competitive in terms of savings due to the additional category discounts built within the supplier contract. Centralized Account Management: Supplier consolidation creates a positive ripple effect with benefits well beyond cost savings. Other departments within your organization - from Accounting, to safety officers and plant managers - will benefit greatly from this decision. Accounting will now work with one central group for invoice reconciliation between all locations, as opposed to numerous, disparate suppliers. At the local level, safety officers and plant managers can work together with a sole supplier to create company-wide safety and fulfillment initiatives for all facilities to follow. What’s more, the high spend being funneled to the supplier will create greater visibility which will lead to dedicated account managers assigned to your organization to assist with tracking and reporting. Change from incumbent local suppliers to new sources can be intimidating, but if executed properly implementation and compliance across all facilities can be quite manageable. Properly vetting a supplier with an account management team capable of properly servicing each facility is vital for the success of this initiative. Secondly, buy-in at each local facility is important for the overall long-term sustainability. This will mean maintaining consistent, clear communication. With the right amount of effort, you’ll succeed in building a strong relationship with a capable supplier. Ultimately, the benefits produced through this initiative will be far greater than improvements to your organization’s bottom line.
Source One is introducing a new series of
blogs focused on logistics and transportation and covering a variety of themes.
This blog will address LTL data collection and how specific data points are
used to determine cost.
A common first step in any traditional
sourcing exercise is to collect data. Less-than-truckload (LTL) is no
different. But it can’t just be data; it needs to be quality data capable of
representing the true freight profile of a shipper. LTL transportation is
generally perceived as complex compared to other shipping modes.
LTL’s reputation for complexity persists for
a number of reasons:
Shipping characteristics like cargo weight,
pallet count, and freight classification affect pricing.
Each shipper is unique. Benchmarking the mode
can be challenging because it is not easy to make direct comparisons between
different shippers’ operations.
There is a tendency to accept LTL for what it
is, and not take the time to gain a deeper understanding of its cost drivers. Freight
networks are constantly changing and shippers need to keep up with shifting
patterns of supply and demand.
Traditionally, LTL shipments are rated
according to tariffs. Carriers normally publish tariffs – also known as rate
bases – on an annual basis. A tariff is a rate matrix that defines hundred
weight (CWT) rates for all classes and weights for all zip code combinations.
When rating an LTL shipment, you need to know
the origin and destination zip codes as well as the shipment’s weight and the classification
for each product it includes. Classifications, or classes, are published by the
NMFC (the National Motor Freight Classification is a standard that provides a
comparison of commodities moving in interstate, intrastate and foreign
What are the 18 Different Types of Freight Class?
The NMFC issues an item number for each
commodity. This number is assigned for the purpose of applying class along with
governing rules and regulations. There are 18 different classes, ranging from
class 50 to class 500. Classes are based
on a number of factors including product density, liability, handling,
packaging, value, and stowability. Lower classes are less expensive,
representing very dense and/or low-risk freight. A high class indicates lighter freight that
typically takes up more space. The higher the class of the freight, the higher
the rate charged.
Until the LTL industry decides to convert to dimensional
pricing instead of the classification system, LTL
pricing will continue to depend to be based on using the National Motor Freight Classification (NMFC) system.
So, how does a carrier determine what a LTL
Origin Zip = 60654
Destination Zip = 33140
Class = 75
Weight = 2000 lbs or 20 CWT
Tariff rate for class 75, 2000 lbs = 79.86
20 x 79.86 = $1,597.20 (the full freight rate
Rates for the same lane can vary from tariff
to tariff. For example, the tariff
published by a regional carrier may reflect better rates on short haul lanes
than long haul. Likewise, a national
carrier’s tariff may reflect better rates on long haul lanes than short
haul. Large carriers often use the Czar
Lite® tariff because it is a neutral nationwide rate base that does not favor either
long or short haul lanes.
LTL carriers offer discounts off of tariffs.
These discounts are negotiable, and often correlate directly with the amount of
freight volume/revenue tendered to the carrier.
In addition to discounts, minimums are also negotiable. Minimums
represent the absolute lowest amount charged per
The calculation set out above is a basic
representation; when determining a line haul rate other factors such as
shipping FAK (Freight All Kinds), deficit weight rating, and lane specific
strategies, can add layers of complexity.
very important to capture the actual class when computing an LTL price.
Often shippers are given an FAK cargo designation on invoices, a blanket
classification that obscures the actual classes –there may be multiple types of
goods involved – and introduces inaccuracies that can have a significant impact
on price. The shipper has no way of knowing which specific classes of cargo are
being shipped if everything is lumped under the FAK designation.
The most common obstacle to performing
accurate LTL analyses, running procurement initiatives, or introducing new
carriers, is missing or incomplete data – particularly the data elements that
are critical to tariff calculations (such as the actual freight class). If
these data elements are captured correctly, all parties involved will avoid
having to make flawed assumptions throughout the process.
As a helpful tool, here is a list of the
essential data fields required when collecting LTL data:
Origin city, state, and zip code
Destination city, state, and zip code
Historical costs (line haul, accessorials,
Length of haul (mileage)
In conclusion, when working with LTL data,
class is king. The ability for a carrier to gain clear insight into an accurate
shipping profile is critical for vendor relations and proper pricing.
For retailers, supply chain optimization isn't just important, it's pivotal, a make-or-break task that often entails an entire team devoted to the job's execution. Its with this reality as a backdrop that the nation's second-largest pharmacy store franchise has appointed a new point person to head up the
company's supply chain optimization efforts.
Walgreens recently hired Colin Nelson to the position of global chief supply chain officer, a role that is a first for the wellness products, prescriptions and over-the-counter medicine chain, Supply Chain Dive reported.
Formerly serving as head of industrial operations for Bunge Global, a food processing and agribusiness headquartered in White Plains, New York, Nelson's main responsibility will be end-to-end supply chain optimization, Walgreens told Supply Chain Dive via email. Known as E2E for short, end-to-end supply chain management refers to each component of the chain seamlessly flowing to the next through enhanced interoperability. Company acquired 1,600-plus Rites Aids in 2018 Walgreens has been in the news lately, as the company recently expanded its footprint in the pharmacy store retail space through the acquisition of over 1,600 Rite Aid locations. Perhaps in light of the chain's expansion, Walgreens has not only increased its hiring of store clerks and associates, but made moves in the front office as well. In a recent earnings call, Walgreens CEO Stefano Pessina said the company made four executive hires earlier this year.
"We are acting quickly to address select areas of operational weakness with a number of senior appointments, choosing new talent with new ideas and new approaches to drive more rapid change in a number of areas of our business," Pessina explained. "We are also strengthening and refocusing our operational management to ensure the increased focus on driving operational excellence."
The newly appointed positions include a global controller and chief accounting officer. A chief digital officer and global chief marketing officer were also announced in early 2019.
As to the company's most recent appointment, that of global chief supply chain officer, a Walgreens spokesperson said the hire will serve as the foundational element to building a single global supply chain leadership team to help further improve day-to-day operations and provide more options for customers, whether in store, drive-thru or online. Macy's hired supply chain officer in April Walgreens is only the latest to enhance its focus on supply chain management through personnel moves. In April, Macy's hired its own chief supply chain officer. Dennis Mullahy, who formerly worked as executive vice president of supply chain management and IT at Michaels Stores, is charged with overseeing the product development and transportation process, including direct and indirect procurement, sustainability and supplier diversity.
"Dennis is an exceptional leader with more than 30 years of experience in retail operations and supply chain management," Lawton noted at the time in a press release. "I am confident that he is the right person to lead the newly formed supply chain organization at this pivotal time."
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.
Go Deep or Go Home: A personal essay on my favorite SolutionMap persona
Jason Busch, Spend Matters, 5/13/2019
Spend Matters has identified seven personas in their SolutionsMap, including "Nimble, Deep, Turn-Key, Configurator, CIO Friendly as well as Optimizer for sourcing providers and Global for CWS vendors." Jason Busch defends his choice of Deep for his personal favorite persona group. Busch admittingly notes that the Deep persona is "going in the way of the compact disc," but goes on to explain the importance of this persona, as he sees it. The Deep Pesona is a continuous learner, someone willing to dive deep and push the boundaries for the sake of improvement, and in comparison to the masses yearning "instant gratification," the results speak for themselves, accoridng to Busch. Visit for the details on his argument.
The final episode! Michel Janssen and Pierre Mitchell have covered every inch of where digital tranformation is today, over the first four episodes. In the fifth and final episode, chief resarch guru of Everest Group, Michel Janssen, and chief research officer at Spend Matters, Pierre Mitchell, discuss how to drive business value from the innovative ecosystem they've been talking about through getting a deep knowledge of the intelligence and leveraging that infromation. Visit the article to get access to the final video.
The April ISM-New York Report on Business: Lofty Long-term Expectations
Kelly Barner, Buyers Meeting Point, 5/2/2019
Barner gives a report rundown covering Current Business Conditions, Six-Month Outlook, Employment, Quantity of Purchases, Prices Paid, and Revenues of April for New York. She continues with further considerations about the report and what this means for business. Visit her article for more about the April ISM-New York Report and to view the report for yourself.
For Amazon, the year 2013 may as well be an eternity ago. The last several years have seen the eCommerce giant establish a second North American headquarters, offer 1-day free shipping to Prime subscribers, and make its CEO the wealthiest person in modern history.
They've still failed, however, to reach one key milestone. Though Jeff Bezos promised an imminent move to drone-based deliveries back in 2013, the company's ambitious plan as yet to leave the ground.
Here's what we know about the program (and what's still mysterious) more than half a decade later.
Here's a look at where Source One's cost reduction experts have been featured this week!
New Whitepaper: Building an Effective Procurement Organization
Discover how Source One has helped countless companies over the years build an effective procurement organization with the comprehensive list our experts have pulled together of the methodologies used over time. Explore the insights from our experts as they list tips, tools and best practices to help you optimize your procurement department. Part I of Building an Effective Procurement Organization is about the people and purpose of your organization, including key considerations for structuring and ultimately inspiring your team to meet the challenges of spend and supply. It's available for download today! Part II of Building an Effective Procurement Organization is about the utilizing metrics in your procurement operations to move beyond just cost-cutting and into strategic advising for the entire enterprise! Part II on Metrics is also available for download today!
Stay tuned for Part 3 Processes!
New Blogs: Job Burn Out
Jaisheela Setty, Future of Sourcing, 5/7/2019
Our jobs have the possibility of stressing us out to the point we not only feel it emotionally, but physically as well. Setty describes to us in great detail "Job Burn Out" so we can identify it in ourselves and how it started. She then lists a few solutions to fix this prolonged exhaustion including making use of your vacation days and switching up your routine. Feeling exhausted or on your way? Be sure to visit the article for useful remedies and support.
Supply Chain Management Strategies These Women Used to Rise Up the Ranks
Alexandra Levit, American Express, 4/30/2019
There has been a healthy representation of women Supply Chain leaders, and Alexandra Levit took the time to ask a few of them what they are doing to advance their profession. Jill Keto, CMO of Easy Metrics, speaks about leveraging the interplay of smart analytic tools like Big Data and the Internet of Things. Melanie DiSalvio, founder of virtue + vice, describes her sourcing methodologies from now and before when she managed product development and production for major fashion brands. Visit the article for insights from these and more influential women in Supply Chain Management, find out how you too can rise in the ranks.
Imagine you’re in London and you head to your favorite pub for
Unfortunately,you find that it’s out of stock. The bar is out of
their shipment is stuck at the border in Dover after being exported from
Germany. Most would find this to be a minor annoyance.
Now, imagine you’re a chronically ill person in the same city
and you can’t access your medication because a shipment from Aesch, Switzerland
is delayed at the border. This carries far more weight. For someone who suffers from epilepsy, it
might be a matter of life and death.
These complications could be a daily reality for many if the United Kingdom departs
from the European Union (EU) on October 31, 2019 without a trade agreement deal.
Right now, the EU is made up of 28 member states and allows them to trade
interchangeably within the EU.
To simplify further, it is the equivalent of a strawberry
farm in Georgia sending their crops to a produce wholesaler in Oregon without
the need for customs agents to get involved. This type of transaction takes
place every day and barely any thought is given to it at all. We just assume
our goods will be available when we need them to be. It is also, remarkably the
premise that has shaped the UK’s trade economy since the inception of the
European Union in 1993.
The logistical complexities associated with the UK’s
departure are merely the tip of a supply chain iceberg. Perhaps one of the most
enormous problems that has yet to be fully addressed is the process of actually
importing pharmaceuticals into the UK.
Long wait times at ports of entry will leave temperature-controlled
vaccines susceptible to expiration before ever making it into the country for distribution.
According to the UK’s Parliament, the country risks becoming a ‘second tier’ state
for pharmaceutical imports (Commons, 2018). This poses a vast public health
concern and many are fearing a medication shortage. Some have already reached
out to the European Medicines Agency (EMA) for assistance. The EMA was previously
headquartered in London, but it was forced to relocate to Amsterdam because of
the imminent departure from the EU. This resulted in many employees leaving the
agency after refusing to relocate. The agency is diligently attempting to stay
operational in its full capacity but has had to abandon key initiatives due to
So, what exactly will happen in October when the UK finally,
officially leaves? Right now – it seems that no one really knows for sure, but
the consequences could be costly.
The following guest blog comes to us from Kate Began of Polycase.com
industries, the electronics field struggles when it comes to creating and maintaining sustainable practices.
One of the problems that the industry is facing is developing a consistent standard
that all companies agree on and adhere to every day.
primary reason for this is the level of competition between corporations.
Juggernauts like IBM, General Motors and General Electric not only vie for
their share in the market, but they also compete with innovators like Kano,
Dolby and EERO, as well as household names like Microsoft, Apple and Google.
of these companies operate under a cloud of creating the next big thing, hoping to set trends that quickly run their course.
Sustainability: No Longer an Option
Technology companies create the devices with electronic
enclosures that billions of people use every day; consumer spending
topped an excess of a trillion
dollars from 2012-2017. That figure could double over the next five
years. With this influx of technology, the need for sustainable solutions for manufacturing
is greater than ever.
question, however, is how to create
sustainable models and which standards need to be established to get everyone
on board. For a little inspiration, let’s take a look at what some companies
are already doing to become more sustainable.
Recycled Biodegradable Materials
should come as no surprise that material waste is the leading environmental
issue in electronics. In 2017, The
Atlantic reported that of the $206 billion spent on consumer
electronics in 2012, only 29 percent of the waste was recycled. The rest was
disposed of in landfills.
electronics companies are facing an uphill climb in using sustainable
materials, there is light at the end of the tunnel. For example, Nokia
publishes annual reports that outline their environmental initiatives. Key
performance indicators (KPI) point back to the company sourcing raw materials
that are either biodegradable or made from recycled materials.
reports go all the way back to 2007 when they started altering their supply chain
and manufacturing methods. Since then, the company makes sustainable devices
that can be recycled time and again. One hundred percent of the materials in
the majority of their products is sustainable.
one of the largest household and commercial appliance manufacturers, has also
developed programs and initiatives that change how they utilize raw materials.
Where they have excelled the greatest is implementing electronic waste
programs offer viable solutions for sustainability and the disposal of
recyclable materials. As the product life cycle becomes shorter, Whirlpool
offers incentives for trade-in and take-backs to keep consumers from throwing
away their old appliances. By returning products to the manufacture, consumers
can help offset the environmental impacts of product waste.
prime example of this is Sony’s development of SoRPlas–its proprietary recycled
plastic. SoRPlas is made from leftover transparent sheets, optical discs and
used water bottles. The used materials are crushed, washed and then converted
to sustainable plastic that Sony utilizes on a wide range of devices.
most plastic contains 30 percent recycled content, Sony uses materials that
include as much as 99 percent recycled materials. The other one percent
contains Sony’s brominated-free flame retardant. Together, Sony engineers use
the material in almost all of their products, like cameras, media players and
Reusable Source Packaging Materials
companies are focusing on manufacturing, they’re also considering how they
package their products.
instance, Dell now packages all of its products using boxes and bags made from materials
like wheat straw, mushrooms and bamboo. It ships more than 75 percent of its
computers, printers and other products in recyclable packages. Dell sources
bamboo from China to make cushions and trays that keep computers safe in
transit. Not only is it renewable and efficient, bamboo can grow at a rate of 1
inch per hour.
companies are now using paper and cardboard products to package and ship their
products. Many packaging manufacturing companies such as Amcor, Ball and Crown
Holdings have discovered cornstarch for making “peanut” packaging. Another
favorite item for shipping products–bubble wrap–can now be derived from
polythene, which is completely degradable.
The Case for Sustainability
consumers become more environmentally-conscious, industries are adapting their
manufacturing processes. Whether these changes are motivated by marketing and
revenue or a sincere desire to play a part in cleaning up the planet, companies
are discovering a variety of benefits in embracing sustainability:
●A Competitive Edge. Eighty-six percent of consumers
worldwide want to purchase products from companies that demonstrate an interest
in environmental issues. Manufacturers that want to compete in the market need
to create sustainable solutions when building their products.
●Hiring Top Talent. Sixty-seven percent of prospective employees surveyed
stated that they prefer to work for an environmentally responsible company. Eighty
percent of millennials want to work for a company that contributes to society
and is sensitive to social issues.
●Economic Impact. Manufacturers are now paying the price for irresponsible
business practices. Since the early 2000s, major players in the electronics
industry have suffered financial losses due to reckless business practices such
as pollution, child labor and wasteful resource consumption.
●Reducing Operational Costs. By lowering energy usage and finding
sustainable solutions, companies are benefiting from a significant reduction in
operating costs. The ROI in becoming more sustainable is much higher than
wasting money on conventional methods.
●Higher Revenue and Profit Margins. Sustainable and socially responsible
supply chains can result in average revenue increases between 5 and 20 percent,
cost reductions between 9 and 20 percent and a boost in brand value between 15
and 30 percent.
have a sizable role to play in reducing electronic waste. Many companies are
now taking the lead in creating sustainable products while reducing energy
consumption and cutting costs. They’re also providing consumers with the
opportunity to return products that would otherwise end up in a landfill.
of these efforts will make a difference over the next decade. Innovation insustainability will set the pace for a cleaner world for decades to come.
For consumers, the hard work of purchasing comes down to little more than supplier selection. A savvy shopper might break out their calculator to compare unit prices or scour their weekly circulars for "cost reduction opportunities" like coupons and vouchers, but that's about as complicated as things get.
Companies run into trouble when they bring this mindset into professional purchasing. Delivering on cost reduction opportunities is rarely (if ever) as simple as selecting a supplier and reaping the benefits. Procurement's work isn'tover when the ink dries on their new contract. In fact, a handshake and a signature on the dotted line means it's time for the real effort to begin.
Many organizations have yet to realize this. That's a big part of why so many savings initiatives result in failure. To take cost reduction from a goal to a reality, Procurement needs to stop expecting suppliers to do all the heavy lifting. The function should enter each engagement with a full understanding of the workload ahead and ensure its practitioners recognize the value of effective change management.
Implementing a cost reduction strategy always presents unique challenges. These will vary based on the spend category as well as the organization's goals and unique personalities. Whatever form these obstacles take, a few best practices should help guide any organization. Here are a few that Source One has shared with clients over the years.
1. Be a Savings Cheerleader
Procurement should answer every argument from end users and internal stakeholders the same way - by reiterating the potential benefits that are on the table. There are times when the facts won't speak for themselves. Quite often, as hurdles pile up, internal stakeholders decide that maintaining the status quo is preferable to seeing an initiative through. In these instances, it's up to Procurement's people to remind everyone what a successful initiative will mean for the organization.
Procurement should remember, however, that dollar savings won't motivate everyone. To engage these folks, Procurement will need to do some digging to identify the potential value adds that'll successfully inspire action. Instead of emphasizing that a project will save $60,000, for example, they might emphasize what it will mean in terms of process improvement.
2. Maintain Focus
Throughout cost reduction initiatives, few things are dangerous as misinformation. Even the most well-staffed and experienced Procurement team can run into trouble when end users start to challenge a premise.
For example, imagine you've just executed a a project to reduce freight costs. You've settled on a supplier who offers a 10% discount. On paper, however, their fuel surcharge appears 10% higher than the incumbent's. You know that the discount is taken out of your gross price and the fuel surcharge is a factor of the net price. In other words, the impact of the discount is still greater than that of the additional charges. Unfortunately, end users aren't familiar with all the details of the agreement. They see the additional surcharge and begin to doubt the savings numbers you've presented. Things could quickly get out of hand if they share their misgivings with other individuals across the organization. In time, you might even begin to doubt your own analysis.
When end users challenge recommendations, project timelines can quickly grow unmanageable. Getting a project back on track starts with addressing concerns and outlining next steps in writing. Next, Procurement should schedule a meeting to establish due dates for answering additional questions and taking strategic action. Getting a meeting on the calendar ensures your end users won't drag their feet on addressing concerns. Throughout this meeting (or meetings) Procurement should continually emphasize the end user's accountability and ensure they never lose focus. Keeping everyone on a schedule and coming to each meeting prepared will keep Procurement's initiatives from dragging on and on until they ultimately fail.
3. Secure and Maintain Support from Leadership
There are a number of reasons a Procurement team might lack for high-level support. Most often, it's a symptom of a decentralized company culture. When executives leave business units and end users to their own devices, they often create a situation in which successful cost reduction is all but impossible. Without executive support, Procurement will have no answer to push-back. In time, initiatives will stall and ultimately fail.
Fortunately, Procurement has options for securing and maintaining the support it needs. Written status reports or brief, regularly scheduled meetings are often enough to ensure Procurement's voice is heard. These meetings will allow the executive suite to offer their feedback and identify potential obstacles before they've had a chance to stand in the way of savings.
Over the next few weeks, offices everywhere will open their doors to recent and future grads looking to gain a jump start on their career. Source One is among them. Throughout the summer, we'll welcome a handful of bright, young students to our Chicago and Philadelphia offices for our Analyst Internship Program.
The beauty of an internship is the ability to try out a career path without a significant commitment. It's a win-win for students and employers. Interns can learn what a full-time role in that job function would look like while the employer can see how the intern's skillsets could support their organization.
Whether your internship is just a semester or a year-long program, here are 5 things you can do to optimize your experience and maximize your impact:
1. Ask Questions!
Throughout school I'm sure at one point or another you've heard a teacher or mentor say "There's no such thing as a dumb question." It's usually said with a tone of encouragement. Teaches hope it'll inspire reluctant students to ask clarifying questions or, to some degree, challenge the subject of discussion. This doesn't change when you exit the classroom and enter the workforce. If you don't understand the project or are unsure of the relevant terminology, ask. Don't assume. [Insert here the quote about what happens when you assume.] Your questions will allow you to complete the assignment better or even uncover flaws in a process that can lead to improvements.
2. Learn the Language
Each organization has their own set of vernacular. That's not to mention individual business units. Procurement is no exception. When our interns first get started, we're typically explaining what we mean by Spend and Cost Savings. For us, spend is more than a verb. It's a noun and it's core to what we do as a company. While asking the necessary questions, be sure to get an understanding of the company's colloquialisms. It'll help you better learn the business and more effectively communicate with your coworkers.
3. Set Up Informational Interviews
The purpose of an internship is to explore a potential profession. You do this by executing the work related to that job role. Take that a step farther by learning more about what your co-workers do. Learn more about what they do, how their teams collaborate, and the direction they'd like to take their careers. This additional perspective could help shape your career path and even empower you to make more of an impact in your role. Understanding your company's organizational structure and your place within it is the first step in moving upward and evolving in your role.
At Source One, we have subject matter experts in a variety of categories. During the on-boarding process, interns are given an overview of our various business and are encouraged to engage with different team members to learn more about different spend categories or industries. Analyst interns are encouraged to meet with these different team members to not only understand the Procurement process better, but also see where they might land if they join full time.
4. Participate in Company Events
Between your class and work schedule, the last thing you might feel like doing is staying at the office late for an event or giving up your Saturday off. That's understandable, but attending these extra-curricular events could present prime networking opportunities. Depending on the setting, (Source One hosts happy hours, team building, and community give-back activities) these events are great for getting to know your coworkers more personally. You may be able to meet people outside of your department and identify the folks with whom you'd want to set up the informal interviews mentioned above. Take advantage of this time to immerse yourself in the company culture and start building your network.
5. Have Defined Goals
Don't just accept an internship to cross it off your list of must-have's before graduation. Pursue an internship experience that is going to land you the role you want when you graduate. With that in mind, you can start to build the resume that speaks to your skills and paints you as a fit for that dream position. This all starts with asking the right questions during the interview process to understand the internship. Continue these conversations by talking to your manager about accepting responsibilities and joining projects that will support your professional development overtime.
At Source One, we take career development pretty seriously. Our internship program is designed to provide interns with an introduction to the role of a full-time analyst and consultant. Throughout your experience, keep your professional development goals in mind and communicate them to your manager. Together, you can construct a plan that will enable you to crush the internship project work and equip you for future roles.