January 2019
Simply put, tail spend is one of Procurement's least favorite topics. More often than not, organizations let it fall through the cracks and devote their attention to obviously strategic spend.

They're potentially missing out!

While tail spend's value will vary from organization to organization, many Procurement teams stand to gain quite a bit from taking a closer look. Want to turn this afterthought into a source of strategic value? Check out these tips from Source One's spend analysis specialists.

Digging through historical spend data is often a tall order. Brian Seipel kicks off this week's episode of the Source One Podcast by describing a particularly taxing initiative. "By the end," he remarks, "we analyzed roughly one million transactions from dozens of disparate systems."

The hard work payed off. Now, the client is poised to act on cost reduction opportunities that could potentially lead to millions in savings. Not all heavy lifting, however, is warranted. In "an age where analytics reign supreme," Seipel suggests that organizations often find themselves conducting (and paying for) far more analysis than they actually need. What do they get for their troubles? Stalled initiatives and a heap of data points they'll never actually interact with.

How can Procurement tell which spend analysis efforts are worth their time and effort? Seipel identifies four questions that should help organizations make this decision.

1. What Impact are We Trying to Make?
"If you can look at a report," Seipel says, "and not know what specific challenge it helps solve, odds are good the answer is none." He advises Procurement professionals to check-in with end users to confirm that their reports are actually providing the value they're intended to.

2. How Much of an Impact Can We Expect?
Some spend simply doesn't warrant a lot of attention. While sometimes challenging to estimate value before digging into the numbers, Seipel cautions organizations against moving forward without at least some number in mind.

3. How Much Buy-In Can We Expect?
"I've seen plenty of projects die on the vine because of hesitation or outright hostility on the part of key stakeholders." Before investing in analytics, he encourages Procurement to ensure it has secured the enthusiasm of all relevant parties.

4. How Deep Does our Dive Need to Be? 
Seipel uses office supplies purchasing to illustrate the value of this consideration. He suggests the category is the perfect example of an area where ultra-granular detail is not necessary. He asks, "Will knowing how many black ballpoints versus blue felt tips make project identification easier?" Certainly not.

Subscribe on iTunes today to learn more about devoting resources efficiently and carrying out impactful initiatives.

January 18, 2019

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

New Whitepaper: 
Procurement in 2019 
Source One's spend management experts share their predictions for the year ahead. Topics of discussion include Procurement's ever-present talent gap, the perils of low visibility, and the numerous challenges associated with America's trade war. What's next for Supply Chain Management? Download today to find out.

New Blog:
How Supply Chains Should Adapt to the Trade War Truce
Michael Vu, Future of Sourcing, 1/16/2019
Source One Analyst Michael Vu comments on recent developments in the trade war between China and the United States. He focuses, in particular, on the temporary 'truce' announced over the holidays. Unfortunately, he suggests the reprieve will have little positive impact for the manufacturers and distributors affected by last year's string of tariffs. The soy bean supply chain, for example, will still contend with 25% tariffs.

New Podcast:
Stop Paying for More Spend Analysis Than You Need
In an era where data reigns supreme, organizations often devote considerable time and resources to the collecting, categorizing, and cleansing their historical spend. Often, this hard works pays off. In other instances, however, organizations are overenthusiastic about the potential benefit of data science. As a result, they find themselves working hard to collect data points and run reports they'll never actually leverage. How can Procurement decide which analysis is worth the effort? Subscribe on iTunes to hear Seipel's advice.

Upcoming Event:
Corcentric Symposium | February 13 - 15 | Orlando, FL
Designed to spark exciting conversations and bring out the visionary in you, Corcentric's annual Symposium features a packed agenda of presentations and workshops. Reserve your spot today.

This year marks the 101st anniversary of the 20th century's deadliest pandemic. Between 1918 and 1920, the Spanish flu infected an estimated 500 million across the globe and killed at least 50 million. A new study, published in the medical journal PLOS ONE, suggests that problems with the vaccine supply chain could make the next pandemic even deadlier.

Credited to a trio of researchers, the study examines the potential value of increased visibility into inventory levels. Throughout the 2009-2010 flu pandemic, state governments were encouraged to collect and report on data related to vaccine distribution. Few states, however, "collected detailed information on how many vaccines were administered in each location (e.g., a county or a census tract)." This meant poor visibility into both inventory levels and uptake rates. Without insights into the supply chain, certain areas were burdened with excess inventory and others were woefully under-served.

Vaccine supplies are often limited. This is especially true during pandemic periods. The most recent saw the Center for Disease Control and Prevention (CDC) develop an emergency distribution system based around population. "As new batches of the vaccine became available," the report reads, "they were allocated to each state proportional to the state's population."

At a glance, the approach looks like a fair and effective plan. In practice, however, it contributed to a slew of inventory-related issues throughout the 2009-2010 pandemic. Areas with high populations and low vaccination rates found themselves paying to store and dispose of unneeded vaccines and low-population, high-demand areas watched infection spread.

The study proposes an alternative approach where vaccines are distributed based on both population and demand. Its various experiments suggest the plan would both reduce the number of infections and cut leftover inventory by around 20% without sacrificing fairness.

Unfortunately, putting the plan into effect would require access to data that simply is not available at present. While certain state governments (Oregon's, for example) collect immunization data in detailed registries, the practice is far from standard. The report concludes, "our results indicate the need for greater vaccine inventory visibility in public health supply chains, especially when supply is limited, and uptake rates vary geographically." More effective cataloging and sharing has the potential to reduce infections and identify areas that might require additional public awareness campaigns.

Poor visibility plagues supply chains in all industries and across all regions, but vaccine distribution represents the rare instance where it's actually a matter of life and death.

I wrote about disrupting procurement last month, specifically in terms of MRO spend. I wanted to continue that discussion, but this time in the Marketing space.

As a refresher from last month, I have a bone to pick with the tried and true strategic sourcing toolbox we’ve all grown reliant on. Going to market with an RFP to aid supplier consolidation and direct negotiations is one example. The longer we rely on that toolbox, the smaller and more incremental our cost savings will become year after year. Thinking differently and creating disruptive change is what we need moving forward.

Disrupting Product Photography 

First, let’s outline some challenges organizations face.

Specialization Limits Options

Many products require highly specialized skills to produce impactful images. Jewelry, with highly reflective metals and stones, makes for a lighting challenge. Not every photographer can play with this light in just the right way. A limited number of experts creates a risk:

  • Fewer suppliers means a wider net. This increases time tables and costs as we factor in product shipments and makes in-person relationships difficult to maintain.
  • Negotiation leverage is on the supplier’s side. Scarce skills are expensive skills. Expect such photographers to command pricing and SLA negotiation leverage to your disadvantage.

Suppliers May Be Small

Unless you’re working with a big agency that staffs in-house photographers (or if you’re in the process of decoupling your marketing services), you may be working with some small studios. This can cause a few headaches:

  • Volume shifts can be a pain. Fluctuations in volume are hard to handle when you have only one or two photographers. Such small shops may not be able to handle large volume increases from you or another customer… Either occurring could spell trouble.
  • Lack of workflow support. There are plenty of ancillary services that support the photography workflow. Your relationship will sink or swim depending on customer service, inventory management, IT-based services for online portal management, and many other factors. Small studios may have an ineffective workflow if they don’t have resources to help here.

Traditional Solutions

Traditional solutions to the challenges above start with a specification review. Depending on how shots are used (consider hi-res magazine versus website images), lower specs could produce big savings without sacrificing image quality. Better SOP can be put in place: setting up process that minimizes expensive reshoots or post-shoot product changes could be very impactful.

Next, going to market will help in a couple ways. Including more studios in an RFP increases our chance of finding the right skillset we need. More competitors also moves negotiation leverage back to us, and helps to establish backup studios in the event of volume spikes.

Sounds good. But are we really solving our problems?

Disruptive Solutions

Everything we discussed boils down to a temporary solution. Errant stakeholders will eventually ignore SOP, and any market knowledge gained from an RFP will get dated as the market shifts. We’ll have to keep reinforcing SOP and keep going back to market every so often to keep up. Meanwhile, we’re still at the mercy of logistical problems and supplier workflow shortcomings.

Longer-term solutions could involve avoiding these challenges. Disrupting product photography means considering digital rendering as a replacement. Renderings are computer generated images with a few key benefits:

  • Digital renderings mean no more reshoot costs – renderings can be saved and edited without the traditional setup/breakdown costs of a photography set.
  • Logistics issues disappear since we’re working all digitally – no physical product.
  • Photography costs may go up or down depending on the market. However, as with all technologies, rendering costs are only getting more competitive thanks to technological advances.
  • Renderings go where photographs simply can’t. Renderings give customers the ability to move around and through tiny products to see every detail, and allow those intricate parts to be seen in an exploded view, highlighting them individually before coming back together again. Rendering also gives us entrée to Augmented Reality applications for more interactive customer experiences.

Should You Consider Rendering?

Is now the right time for you to cut ties with photography in favor of rendering? The answer depends on how challenging the photography process is for your organization and how you end up using product imagery in marketing campaigns. That said, if you haven’t explored rendering yet, it may be worth investigating.

Let’s end on a higher-level note. Forget the benefits or detriments to photography or rendering for a moment: Many teams have never considered cutting out photography services to begin with. We need to make sure our eyes open to new possibilities, or else we’d never consider a move like this at all. Put another way, don’t be so focused on diving into the traditional toolbox that novel (and potentially game changing) alternatives go by the wayside.

Of the new roles Procurement has embraced over the last decade, its role as a force for ethics and responsibility is among the most essential. Whether we look at ethics through the lens of environmental sustainability, human rights, or another one altogether, it's a consideration that more and more Procurement groups own.

Like its talent development efforts, however, Procurement's work to promote ethical behavior suggests a function that 'talks the talk' without always 'walking the walk.

Few professionals would dispute the idea that ethics are an increasingly vital concern. Last year, Supply Chain Management Review found that only 5% consider the issue unimportant. Despite their convictions, organizations are unlikely to emphasize their commitment by tracking and reporting on ethics metrics. A recent survey conducted by EcoVadis revealed that just 1 in 10 companies actually track ethics KPIs.

Supply chain ethics is just one of the evolving issues discussed in Source One's latest whitepaper: Procurement in 2019. Let's take a closer look.

Why Should Procurement Care?

Businesses that behave unethically not only leave themselves open to legal repurcussions, but also risk alienating (even losing) their customers. Young consumers, in particular, are eager to do business with brands they consider ethical, responsible, and purpose-driven.

A 2016 report by Nielsen even suggests that a majority will pay more for that guarantee. Other studies have also refuted the notion that ethical behavior is inherently costly for businesses. Quite the contrary. Loyola University Chicago's Supply and Value Chain Center asserts, "CSR will drive more revenue, profitability, and be a competitive advantage."

What Are Businesses Doing?

Ethical sourcing was an exceedingly hot topic throughout 2018. Dozens of fashion leaders joined forces to combat climate change, Mars announced sweeping plans to reform the cocoa supply chain, and consumers everywhere continued to express their evolving values. Though we're just a few weeks into the new year, several organizations have already taken similarly newsworthy steps to improve their own ethical standards.

Promoting Supply Chain Visibility

Legendary jeweler Tiffany & Co. last week announced its Diamond Source Initiative. Aimed at improving transparency and visibility, the initiative will see the luxury retailer offer new information to consumers.

This quarter, they will begin adding the country of origin to each jewel's Tiffany Diamond Certificate. Over the next year, they'll also add information related to the full "craftsmanship journey." They suggest the initiative will go far beyond ensuring consumers that their new diamond ring is conflict free. "Tiffany believes," a press release reads, "that knowing provenance is critical to ensuring its diamonds are among the most responsibly sourced in the world." 

The diamond supply chain is among the world's most controversial. Since the late 1990s, when the terms "blood diamond" and "conflict diamond" entered the lexicon, it's attracted attention for rampant human rights abuses. Tiffany's decision to provide consumers with additional visibility comes shortly after De Beers' establishment of the industry's first blockchain-powered tracking platform. Tracr, unveiled last year, attaches a unique identification number to each diamond and intends to provide mine-to-consumer tracking.

Addressing Human Rights Concerns

Last week also saw the perils of doing business in China reach the headlines once again. Badger Sportswear, a North Carolina-based apparel company, announced it would to cut ties with a particularly controversial supplier.

Badger's move follows a sweeping Associated Press investigation into Hetian Taida Apparel. The factory, they write, is staffed by unpaid detainees who work under intense supervision. Their report serves as a cautionary tale and a reminder that traditional auditing methods are not always effective. Hetian Taida had previously passed investigations by Worldwide Responsible Accredited Production. The organization, which only performs audits upon request, was not aware of the internment facility.

Badger has announced it will not merely sever its relationship with Hetian Taida, but cease to do business in China's Xinjiang region altogether. The supplier, for their part, has flatly denied the accusations. Lu Kang, a spokesperson for the Chinese Foreign Ministry laments that "misinformation" has forced Badger's hand.

With the affected products removed from shelves, Badger has taken pains to ensure its customers that Hetian Taida accounted for just a tiny portion of its sales. It remains to be seen, however, what legal action they might face. U.S. Customs and Border Protection was investigating the case prior to the ongoing government shutdown.

ICYMIM: January 14, 2019

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.

Art of Procurement: E Pluribus Unum
Philip Ideson, Art of Procurement, 1/6/2019
Since 2015, Phil Ideson has offered insights and support to Procurement professionals through a number of outlets. Kicking the new year off with some big news, he has announced his intention to consolidate these brands as a single entity: Art of Procurement. While the goals of Palambridge, CatalystCo, and the Art of Procurement podcast have not changed, they should prove even more effective as a united resource.

The U.S. State Department recently advised professionals and tourists to exercise extreme caution when traveling to China. Quoting from riskmethods, Morris reports that China rates as a particularly risky area to establish supply chain operations. While consumers increasingly expect their preferred brands to behave ethically and responsibly, Chinese supply chains score poorly on the Corruption Perception Index as well. He also casts doubt on the widely-held idea that China and its leadership have grown increasingly liberal and progressive in recent years.

Ad Hoc Working Capital and Diversification of Liquidity
Helen Castor, Future of Sourcing, 1/9/2019
"Digital transformation," Castor writes, "is front and center of the C-level agenda." Skills gaps, however, still stand in the way of most organization's digital efforts. That's the bad news. Castor suggests the good news is that emerging technologies are beginning to automate the process of identifying and assessing critical talent. Freeing up recruiters to engage face-to-face with candidates, these tools make it easier to aggressively and successfully make strategic hiring decisions. 

The federal government shutdown, now in its third week, means a dry season for craft beer producers across the nation. Without formal approval for new packaging and recipes, organizations are finding themselves burdened with excess inventory and rampant inefficiency.

President Trump's feud with congressional Democrats has stalled many activities associated with the Alcohol and Tobacco Tax and Trade Bureau (TTB). Affiliated with the Treasury Department, the Bureau not only approves labels and formulas, but also oversees any mergers and acquisitions within the growing industry. Since the beginning of 2018, TTB has received nearly 200,00 applications for new labels. Though the approval process is generally quick, the shutdown will undoubtedly lead to a crowded backlog and slower-than-usual progress even after the government reopens.

According to the Brewers Association, the number of craft breweries has more than doubled since the last protracted government shutdown. To make matters worse, a saturated marketplace has forced these organizations to rely on seasonal releases and specialty products to set themselves apart. Without the means to do so, it's likely many fledgling organizations will have to close up shop.

It's not just the scrappy up-starts struggling. The Boston Beer Company, a giant among craft brewers, has had to put several key initiatives on hold. The Wall Street Journal reports that the makers of Sam Adams cannot move forward with plans to update their Summer Ale formula or introduce a new beer brewed with Himalayan sea salt. That's not to mention the heap of logistical hiccups the situation has created. "Some experimental beers," the Journal writes, "can't be moved out of their tanks because the company doesn't have approval for the labels on keg covers."

Boston Beer Co. co-founder Jim Koch estimates his organization is missing out on "tens of millions of dollars of sales." Worse still, he continues, "That number goes up every day the shutdown continues."

Certain organizations have managed to identify workarounds. Austin's Jester King Brewery, for example, has shuttered plans to distribute five new beers nationwide. Since in-state sales do not require TTB approval, the company has managed to mitigate the shutdown's damage by keeping the new formulas in Texas. The strategy, however, has put a definite ceiling on potential earnings. Co-founder Jeffry Stuffings remarks, "It hasn't cost us any money yet, but it's basically taken the pool we can sell to and shrunk it."

With no end in sight, the shutdown could soon impact the bottom line for craft breweries and major corporations alike. Speaking to NPR, the president of the National Beer Wholesalers Association expressed his concern. "It doesn't matter," he says, "what the size of the company is; when nobody's answering the phone, the work stops and it really puts the beer industry at a disadvantage."

Source One's internship program looks to identify and empower the next generation of Procurement leaders. Many of our most successful teams members got their start as interns, and we're constantly looking out for new young professionals to join their ranks.

Providing interns with a diverse set of hands-on experiences, Source One intends for its internship program to familiarize participants with the ever-evolving duties of an effective Supply Chain professional.

Say hello to some of the interns joining Source One's spend management team this spring.

Hello! I’m Katie Fandozzi and I’m a senior at Clark University. After growing up in South Jersey, I decided to move to Massachusetts to pursue a bachelor’s degree in economics and management. When I’m not studying or working, I’m usually doing Sudokus, trying new restaurants in town, or watching too much television. Some of my favorites are The Bachelor, Breaking Bad, and Avatar the Last Airbender.

Before joining Source One, most of my work experience has involved sales and marketing. Most recently I was a business development intern at a start-up video game company called Petricore. That internship taught me how a start-up operates and how a company can grow from very little. Most importantly, interning at Petricore allowed me to pursue my love for numbers and even gave me an interest in project management and consulting.

I am so excited to be a Source One intern! I cannot wait to learn more things about procurement, sourcing, consulting, and even business in general that I would never be able to learn in a classroom. I do not know what the future holds, but I am grateful to have the support from the Source One team!

Hello! My name is Christina Ling. I am currently a graduate student at Syracuse University pursuing my MS in Applied Data Science. I completed my BBA majoring in Actuarial Science at Temple University. I am 26-years-old and spent most of my life in a small town called Holland, PA in Bucks County. Recently, however, I relocated to Bensalem. When not working or studying, I am either playing video games, taking pictures, cooking/baking or hiking.

Prior to Source One, I worked at SOFWERX as a remote data science intern. I assisted on machine learning projects including deep speech and object detection. The deep speech project involved lip-syncing facial movement to audio to create a fake believable video. While the object detection project’s goal was to identify cameras in a given city based on its Google Street Map View. Additionally, I am working as a poker dealer at Parx Casino on the weekends – where I am one of the top dealers (in terms of hands per hour).

I’m a Business Intelligence Intern and am excited to be joining the Source One team! Everyone has been extremely welcoming. This internship help me gain hands-on experience in the data science field. I look forward to learning about data science’s application and knowledge. 

On last week's episode of the Source One Podcast, Brian Seipel addressed a wildly unpopular topic: tail spend. While it's typically ignored, Seipel suggests the spend area is often a source of surprising value for Procurement. He joins the Podcast once again to provide additional insights and outline his five-step approach for approaching tail spend more strategically. 

Though the value of tail spend management will vary based on an organization's unique goals and objectives, Seipel encourages all listeners to consider carrying out the following process.

1. Conduct a Spend Analysis

"I spend enough time in the world of spend analysis," Seipel remarks, "that it is usually a go-to recommendation when tackling a procurement problem." While acknowledging this bias, he reminds listeners that there's no overstating the value of a thorough, strategic spend analysis. Even a quick clean-up can bring serious inefficiencies to light and help an organization get its tail spend under control

2. Prepare Internally

If an organization has historically taken a hands-off approach to tail spend, it's unlikely they'll have a wealth of subject matter experts ready to address it. What's more, Procurement will need to work against the misconception that tail spend is low-value if they want to encourage action. Leveraging the findings from its spend analysis, the function has to engage experts from across the organization and build a compelling business case.

3. Integrate into Core Spend Where Possible

"Is there enough aggregated spend to move the needle with bigger suppliers?" Now is the time to find out. Rather than simply consolidating spend to its largest incumbents, Procurement can use this opportunity to go to market and identify alternatives. The effort could arm the unit with both a carrot and a stick. "Incumbents," Seipel says, "can renegotiate our agreement to earn more of our business or lose it all to a hungry competitor."

4. Reduce Transaction Costs Everywhere

In addition to consolidation, Procurement should take time to identify opportunities to automate or otherwise streamline its processes. Taking these steps to minimize the resource impact of tail spend purchases will keep these agreements from growing more costly than they're worth.

5. Monitor Results

Procurement's work isn't over yet. It's entirely possible that buyers will fall back into bad habits if they're not monitored and managed. Seipel takes care to remind listeners that consistent check-ins and audits are key if an organization hopes to realize the value of better tail spend management in the long-term.

Want to learn more about tackling tail spend? Subscribe on iTunes to hear the full episode. 

January 11, 2019

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

New Whitepaper: 
Procurement in 2019 
Source One's experts are sharing reflections and predictions once again. This time around, topics of discussion include cybersecurity, business ethics, and Procurement's ever-pervasive skills gap. What's next for Supply Chain Management? Download Procurement in 2019 today to find out.

New Blog:
Savings Rationalization: What Would You Sacrifice to Maximize Savings
Leigh Merz, Future of Sourcing, 1/3/2019
In the office supplies category, Merz suggests, successful sourcing comes to down to "balancing end-user experience with product viability." Despite the category's universal and critical nature, however, many organizations have little or no policy in place for managing it. As a result, usage is often wildly inconsistent and vendor relationships are anything but strategic. Likening office supplies sourcing to holiday shopping, she offers several tips for finding a competitive price without sacrificing quality.

Ocean Freight and the Great Unknown
Joe Lazzerini, ThomasNet, 1/9/2019
With new tariffs and regulations introduced on an almost daily basis, it's an uncertain time for ocean freight shippers and carriers. To make matters more complicated, shifts in the market have meant big changes for capacity. Though Lazzerini acknowledges the future of ocean freight is impossible to predict, he expects to see organizations continue shifting operations out of China and into neighboring countries like Vietnam and Cambodia.

New Podcast:
Start Tackling Tail Spend Today (Part 2) 
Spend Analysis Lead Brian Seipel returns to outline his five-step plan for effective tail spend management. Beginning with a thorough spend analysis, he suggests, organizations can turn this neglected spend area into a source of considerable strategic value. He reminds listeners, however, that it's not enough to carry out the process once. Establishing and maintaining a standard operating procedure is essential to ensure Procurement doesn't fall back into its old bad habits.

Upcoming Event:
Corcentric Symposium | February 13 - 15 | Orlando, FL
Designed to bring out the innovator in you, Corcentric's annual symposium welcomes thought leaders to Florida to network and absorb thought leadership. Reserve your spot today.

Conducting reference checks is often a great way to look past the sales pitch and get to the root of what a supplier can really offer your organization. I say 'often' and not 'always' because many organizations treat this process like a simple formality. Moving forward without enthusiasm or a clear sense of purpose, they waste time and resources conducting reference checks that don't get them any closer to an objective assessment.

Want to make the most of the reference check process? Check out these tips for determining if, when, and how to dig into supplier references and uncover actionable insights.

Want to learn more about effectively assessing a supplier's references? Listen to Brian Seipel share tips and best practices on a recent episode of the Source One Podcast
New autonomous Segway robot enters last-mile delivery market

If you remember the considerable media hype that surrounded the initial launch of the Segway in late 2001, then you know just how wide the chasm between expectations and reality proved to be for the electric, self-balancing human transporter. The device that some speculated would "revolutionize human civilization" ended up as a novelty, and was used as cultural shorthand for dorkiness in everything from Weird Al's "White and Nerdy" music video to the Kevin James movie "Paul Blart: Mall Cop."

Yet over 17 years after its debut, and nearly four years after Segway was acquired by Chinese robotics and artificial intelligence technology firm Ninebot, the company has set its sights on a new ambition: owning the burgeoning future of the short distance transportation market.
Segway-Ninebot's new focus on "last mile solutions" will be on full display in Las Vegas, as the company debuts its autonomous delivery robot at this year's Consumer Electronics Show.

Autonomous Loomo Delivery robot debuting at CES 2019

After promoting its $1,700 Segway Loomo hoverboard at last year's CES 2018, Segway-Ninebot is back this year with a new Loomo device designed not for personal transportation, but for autonomous delivery.

The Loomo Delivery robot being unveiled at this year's CES has been built by the company's Segway Robotics division to "provide a comprehensive autonomous delivery solution for office buildings, shopping malls, and other destinations," according to a press release from Segway-Ninebot. Imbued with AI technology, the autonomous vehicle is essentially a smart cabinet on wheels, with built-in drawers that can be used to carry take-out, parcels and goods over short distances, with the ability to navigate obstacles and crowded environments.

Segway-Ninebot sees the Loomo Delivery as its opportunity to "revolutionize" the short distance delivery industry, noting that delivery service is a multibillion-dollar industry in the United States alone.
Segway-Ninebot designed the autonomous Loomo to 'revolutionize the short distance delivery industry for take-outs, parcels, and goods.'
The company will also be debuting its next-generation shared scooter, Shared Scooter Model Max, Powered by Segway, at CES this week.

"As we continue to expand our portfolio of products, it's with an eye towards true innovation that will enable individuals to move around their cities in a greener, more efficient and time-saving way, while also providing businesses with solutions that help them deliver goods and services more speedily over short distances," said Luke Gao, CEO of Segway-Ninebot. "The debut of the Loomo Delivery and new scooter will offer brand new options within the realm of last mile transportation, as cities continue to become more and more populated."

Could Loomo Delivery revolutionize the supply chain?

At this time, it's unclear whether the Delivery Loomo could succeed in its goal of revolutionizing the delivery service industry, or whether it will fall as flat as the initial Segway human transporter did in the early part of the twenty-first century.

As of now, it's unknown whether any retailers or any of their logistics partners are evaluating the new Loomo's potential for package delivery. As Supply Chain Dive notes, there are similar autonomous products that are also being developed for short-distance delivery applications, including a driverless six-wheeled delivery device from Starship Technologies and a walking two-legged robot named "Cassie" designed by Agility Robotics.

While it's difficult to assess Segway-Ninebot's individual potential, perhaps the best way to interpret the Loomo Delivery's debut is as a sign of the increasing inevitability of autonomous technology as a whole coming to dominate the delivery stage of the supply chain. Between delivery drones, self-driving vehicles and autonomous transporter devices, it seems that the last-mile delivery market is poised for some disruption from the world of AI.
Restaurants still winning with customers by modifying their menus

The beginning of the year can be a stressful time for restaurant owners - not because they're extra busy with customers, but just the opposite. It's New Year's resolution season, and one of the more common goals among Americans with each passing year is to eat out less and to prepare their own meals more. They do this to get in better shape physically and to save money.

But if history is any guide, restaurateurs shouldn't be too worried their food supply chain will get backlogged, as takeout is something Americans seek out on a regular basis, according to the results of a recent poll.

Among individuals who self-profess to eating at restaurants routinely - defined as once a month at a minimum - nearly 70 percent order food between three and four times per month. That's the equivalent of between 36 and 50 times in the typical year. The findings derive from Technomic's 2018 Takeout and Off-Premise Consumer Trend Report, which queried approximately 1,450 consumers throughout the U.S.
"One of the reasons why more Americans are having their food made to order is its simplicity."

One of the reasons why more Americans are having their food made to order - in spite of their intentions to do less - is its simplicity. In addition to restaurants offering delivery, several third-parties specialize in delivery service, such as GrubHub, Foodler, Uber Eats and DoorDash.

Bret Yonke, Technomic manager of consumer insights, said the convenience era has never been more apparent."Among those who have increased their usage of takeout since 2016, ease of use with regards to mobile apps and websites is increasingly cited as a driving force behind this," Yonke explained.

This trend would seem to run counter to the aims many Americans hope to accomplish when the year begins anew. According to the Better Sleep Council, four of the five most popular resolutions include establishing an exercise regimen, maintaining fitness, losing weight and spending less money.

Restaurants more health conscious 

Perhaps in light of this, restaurants are modifying their menus by including options that are more in line with their guests' nutritional goals. For example, instead of including French fries with each sandwich or hamburger, eateries also make salads available at no additional charge or for a few dollars extra. They also have dressings on the side, as salads already coated in them can make otherwise healthy dishes calorie-laden. Fast-food restaurants, such as McDonald's and Wendy's, have been doing this as well for many years, which has allowed them to adapt and maintain their positions as leading quick serve chains. Restaurateurs are also more receptive to food sensitivities, such as peanuts or gluten intolerances, specifying which items are free of these potential allergens on the menu.
"Of the top five industries in the eyes of consumers, three of them are food related."
Adaptability and listening to their customer base has allowed restaurants to remain very highly rated among the American public. In a recent Gallup poll, 58 percent of respondents had a positive view of the restaurant sector, behind only the computer industry at 60 percent. In fact, of the top five industries in the eyes of consumers, three of them are food related, the others being farming and agriculture (56 percent) and grocery (53 percent).

Eateries' increased focus on more nutritious menu items isn't a flash in the pan, either. In the National Restaurant Association's "What's Hot for 2019" culinary survey, plant-based proteins, locally sourced meats and seafood and veggie-carb substitutes - such as zucchini spirals and riced cauliflower - are among the dishes chefs expect to offer more of in the new year because customers are requesting them.

Keeping accurate inventory more important than ever

The only problem with guests being more health conscious is shelf life. Farm fresh produce and local meats are popular because they're nutrient dense but also because they're usually void of synthetic chemicals, such as dyes and preservatives. This makes it even more important for owners to keep track of their food supply chain, maintaining accurate inventory data to help reduce spoilage, waste and operational expenses.

By being mindful of their customers' expectations and consumer trends, restaurants can maintain their strong positions in the eyes of the public. For now, they appear to be hitting all the right notes.

A shocking number of Procurement groups are operating in the dark. Last year's Deloitte CPO survey found that 65% of leaders have limited (if any) visibility past their first tier of suppliers. Companies that fail to improve visibility and gain new insights aren't just hampering their potential "Many organizations," the report reads, "are leaving themselves exposed to potential supply chain disruption and margin erosion by having limited visibility past their first tier."

Now more than ever, organizations need to address the issue of poor visibility and work to build clearer, more communicative connections across their supply chains.

Low visibility is just one of the trending topics discussed in Source One's latest whitepaper: Procurement in 2019. Let's take a closer look.

Why is Visibility So Important?

Without visibility into its own operations, an organization cannot hope to engage honestly with its customers. This is an increasingly pressing issue. In just about every industry, customers are more discerning and more socially active than in previous generations. They expect their preferred brands to behave ethically and provide proof of their responsible practices. It's not enough for an organization to simply suggest its products are ethically sourced. 

The engaged consumer expects a full report of where components came from, how products were assembled, and what sort of third parties might have played a role. Recent research from Accenture Strategy has found this is particularly true for Generation Z and Millennial consumers. 6 out of 10, they say, will seriously consider a company's ethical values and authenticity before making a purchase.

Even the suspicion that a company has acted irresponsibly or aligned itself with an unethical partner can leave Procurement scrambling to perform damage control. Thanks to the advent of social media, scandals tied to poor visibility can quickly move beyond visibility and into cultural ubiquity. Just ask any of the dozens of companies that weathered critical headlines in 2018.

Increasing visibility to improve business ethics isn't just about avoiding a scandal. In 2017, Unilever found that ethics and sustainability represent a $1.2 trillion dollar opportunity for those businesses that communicate their efforts to consumers.

Why is Visibility Lacking?

Attaining accurate and timely insights becomes more and more difficult as supply chains expand across the globe. Joann de Zegher, an assistant professor at MIT's Sloane School of Management, writes, "Global supply chains often consist of three or more layers. This makes makes the problem exponentially more difficult, as different tiers of the supply chain are farther removed from each other and their commercial ties become more and more diluted." This is all the more true when an organization experiences shifts related to supply chain disruptions or M&A activity.

The issue is further compounded when organizations neglect to communicate freely and exchange information with one another. Keeping valuable data in closed-off silos, they often leave their peers guessing and inadvertently promote irresponsible and inefficient practices. Problems arise, too, when growing organizations don't allow their processes to grow alongside them. When they remain loyal to outdated, low-tech processes they not limit their visibility, but tend to find themselves slipping behind their more tech-savvy competitors.

What Can Procurement Do?

Now for the good news. Emerging Procurement technologies promise to make enforcing compliance and tracking sourcing activities easier than ever. This year alone saw retailer, grocers, and other international organizations turn to blockchain-powered solutions to gain real-time insights into the happenings across their supply chain. 

Even organizations without the funds to invest in cutting-edge tools begin to eliminate blind spots by mapping out their supply chain and conducting thorough audits at each link. By establishing an ethical code of conduct and regularly assessing partners to ensure compliance, organizations can ensure their network remain responsible in the long-term.

As in all things Supply Chain Management, adaptability is key. In all likelihood, Procurement finds itself suffering with low visibility because it has resisted change in the past. Moving forward, organizations cannot afford to accept 'good enough' or rely on legacy practices 'just because.' Serving today's consumers and standing apart from today's competitors means working tirelessly and adapting constantly to maintain visibility.

Source One, a Corcentric company is an advocate for paper-less Procurement and Finance processes. In this guest blog, Container Exchanger's David Madden looks at some organizations that said goodbye to paper in 2018. 

For many offices around the world, paper is an inexpensive and easy solution for note-taking, sharing information, and communicating. However, more offices are finding cause to move away from this accepted resource and find ways to work without the ubiquitous piece of paper. 

Why go paperless? For one thing, it saves a lot on shipping concerns. A reusable bulk container is not enough — the practice of documenting and communicating digitally instead of via sheets of paper can take a massive bite out of a company’s carbon footprint. Also, it demonstrates concern for the environment and helps customers feel better about doing business with certain verticals or companies.

These companies are working without paper and proud of it. Some started implementing the concept a few years ago, but 2018 is the year when these enterprises really began working almost completely digitally.

1Bank of America
Most banks offer their clients e-statements, paper-free transfers, and a chance to communicate with professionals online as opposed to in the bank and on paper, but Bank of America put the environment into considering with their policies. 

After recognizing the high cost and impact of their paper use, they began to look for suppliers with sound environmental practices back in the ‘90s. They spent the past five years cutting back on every day, in-house paper use, and reduced their consumption by 32 percent.

The bank continues to look for innovative ways to be environmentally friendly. Some of their staff members belong to a documentation management team that tracks how paper is used and where it’s wasted. This way they can look for patterns and start to find solutions to repeat wastage.  

They also pushed hard for more efforts to recycle and oversaw 30,000 tons of paper being reused. That’s the same as saving 200,000 trees! 

2. Idea Rebel
This Canadian digital agency works with designers and clients on all kinds of projects, but they refuse to work with anyone who relies on paper.

Jamie Garratt started the agency back in 2008 and felt a premonition about the overuse of paper when it came time to buy a printer. He realized he didn’t want a printer, the reams of paper, or the ink that came with it. In fact, he didn’t want any extra paper in his office.

He made it his goal to waste as little as possible. That meant no notepads, no paper coffee cups, and no big sketch pads for designers. He helped his employees transition away from hard copies by giving them better computers with larger screens as well as tablets they can carry into meetings.

Garratt wanted to do this for a lot of reasons, but mostly because the move reflected his company’s culture. Idea Rebel is all about digital products, so why rely on paper? By bringing potential clients into their office, the company could show them how reliable and streamlined a digital workflow can be. 

3. Minute
Cloud-based tech company Minute has made the switch to an office of no waste through a series of aggressive moves towards a green classification. They waste no sheets of paper throughout their day.

One of the more powerful techniques implemented at Minute was the removal of trash cans. Most offices have a small trash can tucked under each desk, giving employees a place to waste. The heads of the business decided no trash cans could mean no trash. They even went so far as to asking 
employees to grab and carry out any stray piece of paper they saw sitting around at the end of each workday. This meant any important reports or quickly jotted down phone numbers could disappear, and employees had to find other ways to save that information.

Other moves the company made included putting their only printer in the least accessible room in the office, which led to less printing.

Minute also has a ban on business cards and notebooks, only checks their paper mail once every few weeks (they send most of it back) and replaced their traditional toilets with bidets. Paperless indeed.

4. Sabi Sand Wildtuin
Game Reserve and safari tour company, Sabi Sand Wildtuin of South Africa, was originally paper-dependent as they documented all their travels and observations. Going paperless provided them an unexpected advantage: the opportunity to stop poachers in their tracks. 

Because companies in South Asia market and sell rhino horn to wealthy buyers, the endangered African rhino has become a big target for poachers. Sabi Sands reported more than 1,000 illegal rhino kills in 2013. 

By documenting the details on paper, they slowed the process and gave the poachers the advantage, so they had to consider other methods for documentation.  

Using Android devices out in the field helped Sabi Sands workers photograph and geotag poached rhinos immediately. The information was shared in a cloud, and poaching activity became much easier to track. Illegal poachers could be found quicker and brought to justice. 

5. The Austin Company
Another company that found an unexpected bonus in the switch from paper to digital documentation was The Austin Company, an international firm of construction management services. 

The Austin Company puts a big emphasis on safety and quality inspections. Doing these on paper took over two hours per building. Also, having them written out on paper meant a lot of human error, issues with handwriting, and additional time to mail the data to where it needed to be.

Now the firm uses online documentation on tablets and phones. What used to take two hours now only needs 15 minutes. That means happier employees and clients with faster turn around and time for more visits to each of their buildings. 

ICYMIM: January 7, 2019

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.

5 Areas for Services Procurement Professionals to Watch in 2019
Andrew Karpie, Spend Matters, 1/3/2019
Though he doesn't go so far as to offer predictions, Karpie points out several areas that practitioners "would be advised to keep their eyes on." For example, he expects Independent Contract Workers and Services Micro-Providers to repeatedly find themselves in the conversation. This year could see organizations begin to formalize their processes for leveraging these resources. He also anticipates continual developments to the digital network of services providers in Procurement.

Source One recently published their predictions for the year ahead in Procurement in 2019. Among the trending topics they discuss is the troubling lack of visibility within today's organizations. Though poor visibility leave businesses open to disruption and lets inefficiency run rampant, a shocking number of organizations cannot see past their tier-1 suppliers. In this blog, ThomasNet's team examines some of the reasons an organization might experience this issue. When reporting methods fail to evolve alongside tools, for example, they leave organizations without the insights they need to reach peak performance.

Ad Hoc Working Capital and Diversification of Liquidity
David Gustin, Spend Matters, 1/3/2018
Nearly every organization, Gustin writes, possesses some form of permanent capital to fund their ongoing operations. Even small organizations typically operate a line of credit or an overdraft facility. Recently new options for ad hoc working capital have begun to emerge. Organizations have a number of opportunities to supplement their permanent capital. New options for early payment make it possible liquidity either at regular intervals or on an as-needed basis. What was once a Hobson's choice - one with just an illusion of variety - is now a world of possibility.

Supply Chain professionals have a lot to worry about these days. Cyber threats, trade restrictions, extreme weather, provide for just a small share of their daily headaches. The biggest threat to Procurement as we know it, however, might be something that doesn't look at all sinister: Low unemployment.

Organizations around the country are looking to fill a record number of open positions and many are poaching talent from competitors to do it.

How can organizations keep their top performers from joining a competitor?  Here are few tips from our talent development experts for keeping employees engaged, productive, and happy. Check them out.


Procurement is changing and its practitioners have to change with it. Source One's team has been saying as much for some time now.

They make this argument once again in their latest whitepaper: Procurement in 2019. Offering reflections and predictions, the document explores the function's talent concerns from several angles. While Procurement's influence continues to grow, many organizations find themselves facing a wall. They've earned executive buy-in, they've started to drive strategic initiatives, but their teams are still lacking when it to comes to critical skill sets.

Just how wide is Procurement's skills gap? With only 49% of CPOs expressing confidence in their teams, last year's Deloitte CPO Survey suggests it's really more of a gulf.

Procurement in 2019 calls on organizations to bring experts in Data Science and Cyber Security into the fold. These are not, however, the only skills they advocate for. Source One's spend management team also makes an impassioned argument in favor of so-called 'soft skills.' "There's nothing soft," they write, about the impact these uniquely human skills will have on business outcomes.

What Are Soft Skills? 

Soft skills are the qualities that enable a person to interact, collaborate, and lead effectively. While it's become increasingly fashionable to sing their praises (LinkedIn's Workplace Learning Report found that developing them was the top priority in 2018), soft skills still carry a stigma of sorts.

It's right there in the name. Maybe it's the English major in me, but the term seems to suggest that these skills are somehow less essential, less impactful than others. One might assume they can't be tied to a 'hard ROI' or 'hard dollar savings.'

Look no further than another recent LinkedIn publication. On the first day of the new year, the professional social network shared their list of the year's most in-demand skills. At first, I was frustrated to see that the blog breaks these important skills into hard and soft groups. Unnecessary silos are anathema to successful business operations. They shouldn't stand between Procurement and other business units and they certainly shouldn't figure into how Procurement discusses talent development.

If the list's structure frustrated me, its content went several steps further. While it includes 25 'hard skills' from Cloud Computing to Corporate Communications, it identifies only five sought after soft skills. Maybe I'm reading into things again, but the implication seems to be that Creativity, Collaboration, and Adaptability are only 20% as important as other, 'harder' skills. 

Why Do We Need Them? 

To perform effectively, a Procurement professional must act as a relationship manager, a negotiator, a leader, and a trusted strategic partner.  It's these areas where the hard value of soft skills becomes especially evident. No amount of analytical or technological know-how can make someone better at handling difficult conversations or persevering through a protracted initiative. 

In an increasingly unpredictable world, two of the soft skills LinkedIn identifies stand out as particularly indispensable: Creativity and Adaptability. Think back on 2018. Like the preceding years, it was a characterized by unexpected new regulations, extreme weather, and global political unrest. These disruptive forces have become the new normal for Supply Chain Managers, and they've compelled organizations to act fast with creative solutions. Far from low-value, Creativity and Adaptability could ultimately decide which businesses thrive, or even survive, in the coming years.

Though they're arguably condescending in their treatment of soft skills, LinkedIn successfully identifies one of the reasons they've become so important. With AI adoption on the rise, they suggest, organizations need to develop those skills that computers cannot replace.

Conversations around AI and automation tend toward the fatalistic. Professionals in just about every industry find themselves wondering not if, but when they'll find themselves replaced. Developing skills that a machine can't replicate could prove an excellent defense. The process will also prepare employees to transition into new roles as we move into an increasingly automated future. 

Download Procurement in 2019 today to learn more about the growing value of soft skills and other ongoing Supply Chain trends. 

Want Supply Chain news and insights every week? Subscribe to the Source One Podcast today. 

On this week's episode of the Source One Podcast, Spend Analysis lead Brian Seipel kicks off a two-part series on one of Procurement's least favorite topics: Tail spend.

"Many organizations," Seipel says, "let this spend fall through the cracks" and elect to focus on more obviously valuable initiatives. This thinking makes some sense. Seipel acknowledges that, by its very definition, tail spend is relatively small in scope and strategic significance.

He goes on to contend, however, that tail spend often deserves more attention than it gets. For many organizations, it represents an untapped opportunity to drive considerable savings.  Before addressing tail spend's hidden value, Seipel backtracks slightly to define the term. "What is tail spend exactly?" The answer is complicated.

"Every organization," he remarks, "has its own way of splitting spend into the logical units of 'core' and 'tail.'" While certain organizations draw a very particular distinction, others consider use the term 'tail spend' to define all of their indirect purchases.

However organizations choose to define tail spend, Seipel suggests that just about any organization can benefit from taking a closer look. He offers several examples of how poor visibility and a hands-off approach can lead lost savings to pile up.

While tail spend is most often associated with large numbers of small-scale purchases, Seipel points out that sometimes expensive, infrequently purchased items wind up in this realm. In these instances, "scopes have a habit of creeping and costs have a habit of ballooning." With time, these facts will come to light and Procurement will be left scrambling to explain how such an insignificant spend area got so out of hand.

Check out the full episode today to hear more. Next week, Seipel returns to offer more insights and outline his five-step plan for effectively tackling tail spend. 

January 4, 2019

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

New Whitepaper: 
Procurement in 2019 
In what's become an annual tradition, Source One's experts are sharing their predictions for the year ahead. This year, they discuss cybersecurity, data science, and the importance of ethics in Supply Chain Management. What other trends and topics will define Procurement in 2019? Download it today to find out.

New Blog:
Why Wait to Start Your Tech Implementation? 
Benjamin Duffy, Future of Sourcing, 12/27/2018
Though every organization is unique, Duffy suggests they all follow a fairly similar process fro selecting and implementing their Procurement tools. One troubling similarity? Nearly every organization waits until kick-off to start talking about implementation. Throughout his blog, Duffy argues that the longer businesses wait to think seriously about implementation, the less likely they are to deliver on their strategic objectives.

New Podcast:
Start Tackling Tail Spend Today (Part 1) 
This week, Spend Analysis Lead Brian Seipel kicks off a new two-part series on one of Procurement's least favorite topics: Tail spend. Though its often dismissed as inessential, Seipel contends that organizations could be letting significant opportunity pass them by. In Part 1, he provides a working definition for tail spend and examines some of the consequences of a hands-off approach. If you like what you hear, don't forget to tune in next week.

New minimum wages now in effect in 19 states

It's 2019, and businesses in virtually every industry are back to work, aiming to make good on the goals they've established and preparing for the challenges that are sure to develop. But this year, employers in over a dozen states will be doing so with new minimum wages in place, forcing companies to evaluate how pay increases will affect the supply chain.

Although the federal minimum wage remains at $7.25 - a rate that hasn't changed for 10 years running - employers in 19 states are increasing how much they spend for entry-level employees. As documented by Fisher Phillips, these states include California, Delaware, Florida, Massachusetts, Ohio, New York and Oregon, among others.
"The federal minimum wage has remained at $7.25 since 2009."
Minimum wage earnings vary widely
Even though the federal minimum hasn't budged since 2009, many of these same states had higher minimums already in place; this year, they'll be a few cents - or dollars - higher. The Buckeye State's minimum wage moves to $8.55 from $8.30 and in the Golden State, minimum wage workers will earn $12 per hour for businesses with 26 or more employees and $11 among companies with 25 staff members or fewer.
The previous hourly rates were $11 and $10.50, respectively.

Paul Sonn, state program policy director at the National Employment Law Project, told NBC News that these pay increases are a long time coming, as the cost of living continues to rise regardless of income.

"Right now, in an expensive state like California, a single worker needs about $20 an hour to afford the basics," Sonn explained. "Whereas $15 is what a single worker needs in a less expensive state such as Alabama, Florida or Texas."

All told, at least 17 million workers will see their pay levels rise as of Jan. 1, according to the NELP's calculations.

Does raising the minimum create or dissolve jobs?
While higher earnings no doubt come as great news to employees, there's some question as to whether raising the minimum wage will adversely impact businesses, and in so doing, the supply chain. Some studies suggest that it does, because in order to compensate, employers wind up cutting workers' hours or eliminating positions altogether.

However, other analyses come to opposite conclusions. Arindrajit Dube of the University of Massachusetts presented his finding recently at the American Economic Association's annual conference.

As reported by The Washington Post, Dube discovered that since 1979, raising the minimum wage wound up eliminating jobs that paid below the newly established minimums, but actually created positions that paid at or higher than the new amount.
"The decline in jobs paying less than the new minimum wage is offset by an increase in those paying more," the Post reported. "Jobs further up the pay scale are largely unaffected, as economists would expect - the minor fluctuations beyond $4 above the new minimum wage are not statistically significant."

As for how minimum wages rising will affect businesses' operating expenses, a Mercer survey of approximately 1,500 organizations found that budgets are poised to rise by approximately 3.4 percent after taking into account promotional and merit pay.

Karen Crone, chief human resources officer at Paycor, noted on behalf of HR Dive that businesses may want to offer performance-based incentives alongside their minimum wage adjustments. This may prompt workers to produce more of a quality product or service, thereby positively influencing the supply chain.