August 2019

Monthly Round Up: August 2019

Gain new Supply Management insights with these highlights from the last month. Want a monthly recap sent directly to your inbox? Subscribe to our newsletter today.

Cheesecake Factory Acquires Fox Restaurant Concepts
Cheesecake Factory, the California-based food chain, recently announced its plans to acquire Fox Restaurant Concepts (FRC), an Italian eatery headquarters. FRC has over 60 restaurants spanning across the nation, two of which Cheesecake had already previously invested in. Read about why Cheesecake Factory President, David Gordon, is excited about the partnership.

Ethical Sourcing is in Style for the High Fashion Industry
Ethical sourcing has become an imperative in countless industries; fashion is not an exception. At the end of 2018, over 40 high fashion brands signed the Fashion Industry Charter for Climate Action and pledged to build a supply chain free of emissions by 2050. Bennett Glace enlightens us on how different brands are transforming their business practices in the name of sustainability.

Is Your Procurement Team Recession-Proof
Economic stats are giving mixed messages these days. Popular metrics show the economy is thriving, but comprehensive ones show otherwise. Suplari reported that 30% of procurement and finance professionals expect a recession to hit within the year. Companies will turn to procurement teams for a plan when consumer buying power starts to plummet. Siara Singleton discloses what procurement experts have to say about it and offers some best practices to prepare for an economic depression.

Carriers, Economy Suffering from Empty Miles Glut
The trucking industry is experiencing a bad case of the “empty miles”. “Empty miles” is a term used when trucks are traveling with little to no cargo on board. The trend is a radical deviation from last year when truckers carried over 11.5 billion tons of freight. It’s bad news for drivers and any company using carriers to move materials this year. Learn more about the situation in this informative blog.

Direct Mail Best Practices for 2019 and Beyond
Even in our age of digital technology, direct mail still plays an important role in corporate marketing efforts. Statistics have even shown that consumers are more likely to respond to physical media than emails. Whether it's a poster, a flyer, or a brochure - direct mail is most effective when it's designed and distributed strategically. Here are some best practices to consider for your next direct mail campaign.

Three Data Points for Sourcing Fire Inspection and Testing Vendors

Crucial real estate investment could easily be destroyed or lost in a fire. Fortunately, proper inspection and testing work to mitigate or prevent those losses. Procuring fire inspection service providers is an important part of any industrial or manufacturing operation. Considering the risk factor for a fire to occur in a medium- to large-sized plant, companies have an incentive to find the right fire inspection and testing service providers that align to their businesses. Nonetheless, there are factors that must be considered by fire inspection service providers to propose their best quotes going forth. Companies, in considering their facility maintenance program, that have visibility into their fire systems could leverage better rates and maintain a consistent, accurate scope of work.

Fire Protection Systems Inventory

An important consideration will be understanding how much different equipment plays a role in the fire protection systems of each site. Many service providers are able to base their fire inspection services on an itemized pricing structure. By extracting the quantity by each product, buyers can present sound opportunities for fire inspection vendors such as the number of risers in a fire sprinkler system. Additional information that could be provided includes last inspection date, location of equipment, and manufacturer information. It is important to note that manufacturer information is critical in the compatibility for servicing fire alarm systems as there may be specialized technicians who can service a few manufacturer-specific systems. Moreover, it would also be important to discern the attributes between one product from another. Buyers must be knowledgeable about the differences between similar equipment in the same service line.

For example, companies must differentiate between a wet sprinkler system and a dry sprinkler system. This is an important distinction because this difference affects both the inspection scope of work and cost. Wet sprinkler systems are filled with water and connected to a water supply; water is then discharged instantaneously as the sprinkler system detect fire or heat. On the other hand, sprinkler heads in a dry sprinkler system have pipes that are filled with pressurized nitrogen gas or air which suppress water until a fire is detected. In most cases, dry sprinkler systems have higher installation and maintenance costs with the increased complexity of the sprinkler system, leading to higher inspection costs. Understanding these precise and cost-dependent aspects of one’s fire systems equipment will provide more accurate price quotes from Fire Inspection vendors.

Fire Inspection companies will assess the total amount of assets per site, and from the various assortment of systems, these companies can formulate their pricing models. Either through an a la carte price sheet or a site-specific cost model, these offerings can then be evaluated against the inventory in place.


Portfolio information must be considered in the discussions with fire inspection service providers. Buyers who need to ensure fire inspection across all of their company’s real estate must be forthright in providing vendors information such as mailing address, square footage, and types of facility. For example, National Accounts fire service providers oftentimes use numerous subcontractors to fulfill their account needs. Likewise, regional or local service providers are geographically-constrained. Therefore, hourly rates of services may be tended by site, so a labor rate in New York City may be different than one in San Francisco.

A favorable outcome of providing square footage of in-scope facilities is that Fire Inspection service providers could also provide estimates on certain service lines. For example, sprinkler systems are installed proportional to facility size, and therefore, service providers could quote out their pricing based on this information. Service providers can extrapolate that one sprinkler head must be placed by a certain number of square footages. This may be useful in cases where no further information could be provided such as in the absence of inspection reports or fire sprinkler system equipment data.

Regulatory Compliance

Local ordinances and state statutes are fundamental considerations in ensuring proper fire protection regulations. So, ensuring fire inspections are done properly is important in keeping with the law and observing statutory requirements. This could mean higher costs depending on the regulations in place by the local and state laws. Therefore, it would be important to consider regulations specific to the sites in scope. The National Fire Protection Association (NFPA) set standards that are followed across the vast majority of fire protection service providers, and these standards are meant to work alongside government regulations. The NFPA codes and standards can help set a basic standard scope of work before amending to specific local ordinances and state statutes.

Moreover, some companies must comply with their insurance requirements which may involve a higher frequency in inspections than usual. All NFPA codes and standards have a specified frequency (e.g. quarterly, annually) for each test and inspection. However, insurances may require more frequent testing or inspections to comply with their risk assessment. These, in turn, would result in higher costs that should be evident from the bids brought forth. 

Ideally, companies should provide transparency and opportunity into their fire inspection needs. Procurement plays a hand in demonstrating their company’s needs and wants in the fire inspection space. Coupled with the considerations for properly maintained service levels, this space requires extensive category management and disclosure.

Today we are hearing a lot of excitement and noise around 5G and the door it will open to the public and private sectors, many experts say this technology will revolutionize our lives, opening a world where we can benefit from increased bandwidth, massive machine to machine communication and extremely reliable and low latency service.

Every time I get bombarded by 5G latest developments I can’t shake the Déjà vu sensation from my Telecom years managing direct spend at the dawn of 4G deployment. Just the memory of the fanfare we got from some of the top Telecom Equipment Manufacturers makes me laugh in the inside.
Back in the beginning days of LTE, when network rollouts were in the horizon, we were told that LTE was going to revolutionize the future, that we would benefit from impressive speeds and over the top technology, and to be honest I believed it. If you looked at it, even the name was impressive, how could you beat Long Term Evolution, impossible not to fall for it.

As every sales pitch, road show, and factory visit took place, we were amazed as we learned what was coming; the access network for LTE had been revolutionized, intelligence was distributed across the network, the bulky RAN Controllers were gone forever, antennas and radio units had been consolidated, the promise a less cluttered network and energy consumption savings made us smile for months.

We constantly heard fancy network name changes such as Evolved Node B, leaving the classic base station and NodeB in the dust. The rise of the Evolved Packet Core was going to disintegrate the legacy CS (Voice) and PS (Data) cores, the door for VoLTE and all other exciting new services was there, we just had to open it. At this point it wasn’t unusual to see some telecom engineers rejoice and look towards the skies in praise, speaking in tongues while their eyes turned completely white from all the divinity they saw in LTE.

This festive atmosphere of massive projects, incentives, and investments was a brief reminder of the “Good–old Telecom days” that some telecom veterans out there might remember with melancholy.
Looking back I see it was mostly hype, we were a little naïve to think that this was a new beginning; yes, the technology is good, but as we deployed progressively it did not revolutionize things as much as we thought it would. Things like congestion, content demands (thank you social media) and other factors made performance acceptable but did not live up to the expectations. With the release of LTE Advanced things got a lot better, but soon realized that this technology was just another stepping stone in the search for that ground breaking technology.

This last year 5G has revived some of the same LTE expectations, many are hopefuls of a revolution, but can 5G truly revolutionize humanity this time?

Why not, 5G can enable full IoT and all the goodies that come with that. The mass deployment of services on top of 5G can help lower their acquisition costs, letting smaller and less profitable business jump on the IoT wagon; for example, just think of a small vineyard using sensors to save money on water consumption, fertilizers, and knowing the exact moment to harvest, the level of efficiency will create aggregate value that can definitely change the way things are done. In the personal front, think how it can radically change the life quality of the elderly if they had smart homes that enabled them to regain their independence by using health monitoring sensors that will detect any health issue that today might be the basis to render them to an elder community.

A lot of these ideas that we associate with science fiction can potentially come to life and today we see that they are slowly becoming a reality, things like autonomous cars, virtual surgeons, and multiple monitoring applications are being used today on a daily fashion and this is just the beginning.

There is definitely a lot of excitement around 5G, we can’t deny the technology will have an impact on our daily life and open the door for crazy innovations that will make our life amazing, but…
Before you start looking into the heavens in praise like those telecom engineers from the LTE days, let me ground your bubble so it doesn’t burst in dramatic fashion.

We have to look at the reality of 5G, it is an amazing technology, we can’t deny its potential, but like LTE this is something we are creating on the go and it is far from finished, we will continue to see 5.5G, 6G, 7G, and nG down the road, the rollout of this technology is progressive and usually never achieves the capacities from lab conditions. When we compare applications and the usage they have today with the capabilities of 5G we smile as we believe that there will be an abundance of bandwidth, but the same happened with LTE to a certain degree, the reality is that future applications will be more data demanding than today, making any jumps in data availability seem unimportant; to put this in other words, think of the Keynesian theory of consumption (I am sorry Milton), we will inherently adapt our data usage (spending) to our data availability (income).

This is a cycle that will be constant in our development of new and more efficient data transmission technologies, I find hard to think that there will be a technology explosion that will instantly revolutionize the world, for me this will be more of a technological evolution, similar to lava flow, good things will come gradually with time and patience.

My hope is that I am mistaken, but as I mentioned, I lived through this hype back when LTE promised to change everything, and to be completely honest, this is more of the same, but in the case that there is an incredible technological revolution, I will be one of the first to admit defeat and look to the skies in adulation, speaking in tongues, white eyes, and all that paraphernalia.

In his first statement as President of ISM-Chicago, Rob Mietus expresses his enthusiasm for tackling Supply Management's prevailing challenges and making his organization a "go-to" for career advancement in the space. He recently sat down with the Source One Podcast to expand on his June message, describe his professional journey, and outline his goals for the future of ISM-Chicago.

Rob found his passion early. He jokes that Procurement wooed him with the promise of a hefty salary, but it quickly offered much more. Hands-on experience driving savings and supporting strategic initiatives confirmed for Rob that he'd selected the right major and helped him enter the professional world with confidence. Gaining exposure to everything from direct material sourcing to data analysis to change management, he's spent the last decade-plus building a diverse set of expertise and experiences.

Rob's relationship with ISM-Chicago began in earnest when he met Frank Cargill. Then the organization's President, Frank opened Rob's eyes to the full scope of ISM-Chicago's mission. What had once looked like just a resource for professional certifications revealed itself to be a diverse network of like-minded professionals and valuable opportunities. Attending a strategy session soon led to a spot on the board and an increasing level of impact and responsibility.

Historically, ISM and its local chapters have committed themselves to a two-part mission. In addition to driving value and delivering a competitive advantage, the organizations "contribute to a prosperous, sustainable world." At the local level, this means telling Procurement's story, encouraging professionals to advocate for themselves, and securing the function a seat at the executive table.

Rob places particular emphasis on the second component of ISM's mission. He believes Procurement truly has the opportunity to "make the world a better place for everyone and our children." By identifying and addressing instances of labor abuse and environmental destruction, the function is already taking the lead in enforcing ethical practices.

Rob makes it clear that ISM's work is a collective effort. He thanks the host of ISM members from across the country who've helped him build his platform and rise through the organization's ranks. He also calls on emerging professionals to share their own insights. "The more engaged we are with our members," he remarks. "the better we're doing. If one word defines my presidency, I hope it's engagement."

Rather than diverting from ISM's usual mission, Rob hopes to "evolve [ISM's] existing value proposition to ensure it aligns with all the key stakeholders and make sure it's relevant to professionals at every stage in their career. He considers his career "a journey of continuous improvement" and he hopes to bring ISM and its members along for the trip.

Want to hear the rest of the conversation? Check out the latest episode of the Source One Podcast today.
Unfortunately, successful sourcing initiatives don't always lead to years of more effective spend management. It's all to easy for organizations to forget the "management" side of the equation. Many find themselves boosting visibility and driving savings only to slide back into bad habits. This "set it and forget it" approach is especially dangerous for MRO. Generating value within the category means taking a proactive approach and never settling for "good enough"

MRO is definitely a complicated category, but it's not unmanageable. Check out some of Source One's tips for ensuring you cut out maverick spending, maintain visibility, and drive value in the long term.

1.       a raw material or primary agricultural product that can be bought and sold, such as copper or coffee.
"commodities such as copper and coffee"
2.       a useful or valuable thing, such as water or time.

"water is a precious commodity"

If you walk into a Home Depot or a Walmart or decide to utilize the technology readily available and shop online at Amazon or Wayfair, the transaction tends to be a simple one. The price of the item purchased is what you pay for. Of course tax and/or shipping can also come into play but for the most part, the economics behind the sale is simple; ‘Here is an item for $40, you give $40 and then you receive that item’. You are buying a commodity by the first definition above. 

So when you spend money in logistics, what are you buying? This falls more in line with the second definition above. You are not buying time or water, but you are buying space. Depending on how much space is available and how your products fit into that space determines what you pay. No matter which mode of transportation you are shipping in, Small Parcel, LTL (Less-Than-Truckload), FTL (Full-Truckload), Ocean Freight, Air Freight or even Intermodal, there is a finite amount of space for freight to move in.

Common bargaining chips for reducing spend may not always apply.

In Small Parcel, there is greater ability to apply common cost reduction best practices (supplier consolidation, increased volumes, etc) because the amount of space is vast. UPS and FedEx are always willing to take on more business. They have a massive network in which to operate and they basically have a duopoly so they know by gaining business, it directly means the other is not getting that revenue.

In other modes like LTL and Ocean Freight, the amount of space either in the back of a truck or on a container ship is not nearly as great as in small parcel. Container ships often operate at 98-99% capacity meaning the ability to add more freight to a ship is simply not there. A willingness to pay more money to get a container on a ship could help but in most cases, a 25-50% mark-up on the container is not uncommon.

A 53 foot trailer, which is the common sized trailer for a LTL truck, contains approximately 3,500 cubic feet of space. The better the freight fits in the trailer, like a puzzle piece, the more freight a carrier is able to haul which increases their profitability. This allows them to charge you less to move your freight. The more difficult your freight is, the more a carrier needs to charge because they will need to be less efficient with their pick-ups and deliveries. Just because you have more freight for a carrier to take, does not mean it will be cheaper. Carriers need to plan the most efficient ways to move freight in their network and a large delicate sculpture will not work as well for the carrier as square tiles on a standard skid that allows other freight to be stacked on top.

It is important to understand that anytime you are doing a freight based RFP or a larger logistics sourcing event, the product you are ultimately purchasing is space. Making sure the freight you have is something the carriers are going to actually want to move for you is critical.

Category Management (CM) can make an otherwise complex and disordered supplier network into a consolidated one that's easy to navigate. CM is an initiative worth pursuing if you are looking to strategically manage your spend categories and see that your supplier relationships remain high-value in the long term. 

In Part I of this series on Category Management, we discussed what exactly category management is and how it applies to procurement. As a quick refresher, procurement teams use category management to separate each product the company produces into individual categories and see that each product category is treated as its own business unit and sourced appropriately.

Today, we will discuss how a procurement team should introduce a Category Management program to their company’s supply chain management processes. Because of CM’s company-specific structure, there is no universal approach. Each category management initiative will be designed based on the nature of the company, what they are producing, what they are buying, and so on. Here is a rough overview of what steps you should take to implement your unique CM program.

Phase 1: Training
Because of CM’s complexity, providing training for employees will prove necessary for introducing the program effectively. Understanding the definition of CM will not be enough; your employees will need to understand the ins-and-outs of the method to apply it to the company. There are online training options that provide engaging and interactive modules to help your employees become acquainted with the information and equipped to carry out the CM method.

Phase 2: Initiation 
Next, announce your plans to every internal party that is involved. Make your objectives clear and instruct each team member on how their efforts will serve these goals. Stakeholders will want to know what changes are being made and why. You will also want to establish a new communication plan for you and your cross-functional team. Remember, consistency and clarity are key.

Phase 3: Analysis
Your team should conduct a thorough data analysis to determine the financial impact of each spend category. How you conduct this research will be heavily dependent on the programs that your company utilizes. You might want to consider getting an analyst to normalize the data before you begin if you are using multiple ERPs. This is an important step to identifying which spending categories will provide the most strategic opportunity

Phase 4: Strategy Creation
The next step is designing your unique category management system. After your team has a good understanding of your spending habits, you can decide how you would like to split up product categories and figure out which are of the most immediate importance. In this phase, you’ll also want to decide the roles of the team members. You can organize category managers by unit level, have centralized category managers, or establish a hybrid of the two. Another option is outsourcing the full CM process to a consulting firm. Alternatively, you can handle some categories internally and delegate especially tricky categories to a third party using a flex system.

Phase 5: Implementation
It’s time to take action. Put all the hard prep work to use and implement your CM strategy. Because you are just getting started, it’s a good idea to keep a particularly close watch on the CM processes as they go into place. This will allow you to see the processes that are or are not working and quickly make adjustments as necessary.

Phase 6: Continuous Improvement
Last but not least, be sure that you evaluate how your CM initiative is progressing. Did you realize cost savings in the categories you predicted you would? Did you segment the product categories correctly or should the categorization method be altered? Even if everything was executed correctly, the supply market fluctuates and your CM design may need to be modified to align with stakeholder needs. It's always smart to keep a continuous overview of how your category management process is performing. 

These stages represent a tentative model, but they do not necessarily need to be accomplished sequentially. Your company might need to skip a phase, run two phases simultaneously, or have one of them operating throughout the entirety of the process. The task of deciding how to carry out the CM process is up to you and your cross-functional team.

In Part 3 of this series, we will discuss the concrete benefits of implementing a category management system.

Generally, introverts are not everyone's first choice for leadership positions in the business world. The stigma surrounding them often pushes them into corners and keeps them out of the spotlight. Research might suggest that introverts can make great procurement leaders, but harmful misconceptions still persist within many organizations.

Stereotypes hold that introverts can't take initiative, won't join in as team players, and don't make for decisive leaders. These assumptions are nothing but myths and studies including the CEO Genome Project can prove it. Introverts actually have a better chance of exceeding expectations and are known to outperform their extroverted peers when it comes to delivering dependable a ROI.

Source One Consultant Jaisheela Setty recognizes the untapped potential introverted professionals represent. She recently addressed the subject in a blog for ThomasNet. The article titled "How Can I Work More Effectively with the Introverts on My Team?" highlights the introverted professional's hidden strengths, refutes lingering misconceptions, and offers tips for bringing introverts and extroverts together.

She pays particular attention to the their active listening skills. While they might seem disengaged during meetings, Setty suggests looks can be deceiving. More often, introverts are turning ideas over in their head and looking for opportunities to make truly high-impact suggestions. Check out the full blog for more tips on empowering your organization's introverts to reach their full potential.

The ability of any company to protect its supply chain from hazards and hiccups alike is paramount to optimal business practices. However, because of the extent to which companies all over the world rely on the global supply chain, proper security is often easier said than done. To that end, two federal lawmakers recently introduced a bipartisan bill that would create a new government office to help maintain the integrity of the supply chain for products coming into the U.S.

The Manufacturing, Investment, and Controls Review for Computer Hardware, Intellectual Property and Supply (MICROCHIPS) Act was recently introduced by U.S. Sens. Mike Crapo and Mark Warner, an Idaho Republican and Virginia Democrat. According to Crapo's office, much of the discussion around the bill centers on China, but other entities that target the U.S. government and military supply chain would also receive plenty of attention.

"The MICROCHIPS Act would create a coordinated whole-of-government approach to identify and prevent these efforts and others aimed at undermining or interrupting the timely and secure provision of dual-use technologies vital to our national security," Crapo said.

The new bill aims to secure the military supply chain.The new bill aims to secure the military supply chain.
What would the bill do?
The first part of the legislation - if passed - would create a study of potential issues around international supply chain security and how that impacts the U.S., then the researchers would present their findings to Congress, Crapo's office noted. In addition, the U.S. Department of Defense, Director of National Intelligence and similar government organizations with a hand in national security would be required to develop a new plan for improving supply chain intelligence within six months. Those changes - meant to enhance security - would likely be funded through the Defense Production Act.

Perhaps most notably, the bill would create a new National Supply Chain Security Center under the Office of the Director of National Intelligence. The NSCSC would gather information about issues that could pose a threat to the national supply chain and report it to appropriate agencies.

Areas of focus
Specifically, the bill would direct considerable attention to electronics that are vital to governmental and military operations, but also on emerging issues like the tech that will be used to set up 5G networks nationwide. In the latter area, specifically, China has an established manufacturing edge on the U.S. and further interference in the supply chain would likely broaden it.

There would also be a centralized clearinghouse established to examine all government and military tech coming into the country so that it can be assessed for safety and security.

While individual businesses will never have the clout of the federal government to secure their supply chains, it should be heartening such an interest is now being taken in this issue overall. The more focus there is on supply chain security on the whole, the more likely that risks are identified and eliminated before they pose more significant problems. That, in turn, may give individual businesses more surety that the products and materials they receive from overseas will be safe for their use.

For a time, JUUL Labs (JUUL)'s biggest problem was one that every young company would love to have. Its line of aesthetically-pleasing electronic cigarettes was just too damn popular. By late 2017, less than two years into its existence, the company accounted for around 40% of the total market for e-cigarettes. Even then, however, popularity was a mixed blessing.

"When people say it's a good problem to have," JUUL's then-CEO Tyler Goldman quipped, "I think about it a little differently." Surges in demand were not a welcome complication, but a challenge for the company and its supply chain. Worse still, shortages stood in the way of JUUL's "mission" to convert adult smokers.

Out of the Frying Pan into the Vapor

JUUL's supply chain quickly evolved to meet demand, but its problems multiplied just as quickly when government organizations and consumer advocates began calling its mission into question. The Food & Drug Administration (FDA) once considered e-cigarettes a potentially useful tool for weening smokers off of cigarettes. Spikes in JUUL use among middle and high school students disabused them of this notion last fall. "E-cigs," said FDA Commissioner Scott Gottlieb, "have become an almost ubiquitous - and dangerous trend among teens." Both his organization and the Center for Disease Control (CDC) went as far as to call teen vaping "an epidemic."

Raiding JUUL's San Francisco headquarters, the FDA seized more than 50,000 pages of documents to assess the company's sales and marketing practices. This, the agency stated, was a preventative measure, one designed to keep "a new generation of kids from becoming addicted to tobacco products."

JUUL responded by reiterating its commitment to serving as an "off-ramp for adult smokers." New CEO Kevin Burns called the FDA an ally while announcing sweeping changes to JUUL's policies. In addition to deleting its Facebook and Instagram accounts, the company discontinued fruit-flavored products and committed itself to enforcing retail compliance.

None of these measures have managed to silence JUUL's critics. Throughout 2019, the FDA has announced new restrictions for flavored tobacco and opened numerous investigations into vaping's potential health implications. In June, JUUL's home city became the first in America to ban e-cigarettes altogether. JUUL, for its part, contends that these restrictions will only lure vape-users back to cigarettes and create a black market for its products.

Investors are Still Hooked? 

San Francisco's crackdown inspired JUUL to set its sites on strong, under-regulated markets abroad. This summer saw the company expand its offering into Indonesia, South Korea, and the Philippines. Statistics are still scant, but the company is bullish on its potential to transform these markets. Co-founder James Mosees called his product "a better alternative" for Korean smokers and said they represented nothing less than "a once in a century opportunity to improve public health."

Investors, it seems, are also optimistic about JUUL's continued popularity. The beleaguered company disclosed last week that it has secured an additional $325 million dollars to help speed its global expansion. 

Representatives from JUUL are quick to emphasize their stated mission when appealing to Asian consumers. Speaking at the Philippine launch in June, co-founder Adam Bowen pointed to the country's immense concentration of smokers and expressed a desire to "effect positive change" in their lives.

Americans are finding more and more reasons to question whether vaping constitutes a "positive" anything. Across 22 states, more than 150 vape-users have sought treatment for respiratory issues. Last week, an Illinois resident died following treatment for vape-induced symptoms including severe cough and shortness of breath. The news has inspired a CDC investigation and promises to make the conversation around these controversial products all the more intense. Smoking remains the nation's leading cause of preventable death. 

ICYMIM: August 26th, 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.

7 Reasons It's Great to Work in Manufacturing
Thomas Net, 7/31/2019
As one of the most colossal sectors of the U.S. economy, the manufacturing industry has endless opportunities and represents a big piece of the American workforce pie. If you're looking to start a new career or bring a new sector into your client base, there are a lot of reasons to explore manufacturing. This blog addresses some myths and provides us with seven reasons that make the manufacturing an exceptional industry.

The Amazing Back-to-School Supply Chain
Kelly Barner, Buyers Meeting Point, 8/5/2019
September is almost here. That means students are on their way back to school, and they'll be purchasing clothing, shoes, and electronics. Not a surprise that the back-to-school season is actually the second-biggest shopping season of the year. Kelly Barner provides us with a look into how this shopping frenzy affects supply chains across the relevant industries.

The Importance of Third-Party Risk Management When you Buy or Sell a Business
Paul Schrantz, Vendor Centric, 8/20/2019
Third-party risk management involves monitoring the relationship with external parties and taking action accordingly. When exiting a business, it's crucial to evaluate relationships to ensure you have a viable product to dell or purchase. Paul Schrantz speaks to the importance of mitigating risk. 

This guest blog comes to us from Sarah Scudder of Real Sourcing Network. 

Sustainability has become a strategic priority for many enterprises over the past several years, and the growing interest of business leaders is easy to understand. Increasingly stringent governmental regulations and changing customer expectations are both driving the heightened focus on sustainability.

Today’s consumers have become more aware that the production of the products they buy and use has repercussions on the environment, and they are demanding that the companies providing those products minimize environmental impacts.

Business leaders are also recognizing that their company’s reputation for sustainability is strongly affected by the practices of their suppliers. Recent research by McKinsey & Company found that the typical CPG company’s supply chain accounts for more than 80% of total greenhouse emissions, and more than 90% of the total environmental impact on air, land, water, biodiversity, and geological resources.

These circumstances have caused a growing number of companies – particularly large enterprises – to implement sustainable procurement programs. In the research for the Sustainable Procurement Barometer 2019 report by EcoVadis and NYU Stern Center for Sustainable Business, 42% of survey respondents said they have a specific clause in their supplier contracts relating to sustainability and 38% said they have a sustainable procurement policy. In addition, 39% of the respondents said their organization’s commitment to sustainable procurement had increased significantly over the past three years, and 42% said it had increased moderately.

Most companies focused their sustainable procurement efforts first on direct spend categories, but today the practice is also being applied to indirect spending.

How to Identify “Green” Print Suppliers

Spending on printed materials is a significant category of indirect spending for many large and mid-size companies. It typically covers a broad range of diverse products and involves purchases from numerous suppliers, which can make it challenging to evaluate the sustainability practices of suppliers on a case-by-case basis.

Fortunately, there are several independent organizations that provide environmental certifications for firms in the printing industry. These certifications differ in purpose and scope, but they all provide an easy way to establish the environmental “credentials” of print suppliers. Sourcing professionals can use these certifications as criteria for choosing among competing suppliers, or they can require companies to possess one or more of these certifications in order to be classified as an approved supplier.

Below is a brief description of four of the more widely-recognized environmental certifications available to printing firms. This list is not exhaustive, but it does include the certifications that sourcing professionals are most likely to encounter.

Forest Stewardship Council (FSC) – The Forest Stewardship Council is an international organization that provides two types of certifications – Forest Management and Chain-of-Custody. The FSC Forest Management certification is obtained by forest owners and managers, and confirms that a specific area of forest is being managed in an environmentally sustainable manner. The FSC Chain-of-Custody certification traces the path of products from forests through the supply chain. In the case of printed materials, FSC certification means that the products were printed on paper that was produced from FSC-certified forests. An FSC-certified printer is entitled to print the FSC logo on products produced using FSC-certified paper.

Sustainable Forestry Initiative (SFI) – SFI has promulgated three sets of standards – a Forest Management Standard, a Fiber Sourcing Standard, and a Chain-of-Custody Standard. The SFI Chain-of-Custody Standard is similar to FSC’s in that it is a system for tracking forest fiber content through production and manufacturing to end products. An SFI-certified printer is entitled to print the SFI Chain-of-Custody label on products that meet SFI standards.
Programme for the Endorsement of Forest Certification (PEFC) – PEFC is a global alliance of national forest certification systems. It provides a Chain of Custody certification similar to those offered by FSC and SFI.

Sustainable Green Printing Partnership (SGP) – The FSC, SFI, and PEFC certifications all focus on the sustainable management of forests, and in the case of printed materials, the chain-of-custody certifications they provide will confirm that the paper used in a printed product was made from trees grown in forests that are managed in a sustainable manner. The certification provided by the Sustainable Green Printing Partnership is significantly broader. The standards promulgated by SGP and used in its certification process cover practices relating to energy and other resource consumption, waste reduction, and greenhouse gas emissions, among others. Therefore, SGP certification indicates that a printing company is using a range of business practices that support environmental sustainability.

There is a clear and growing belief among consumers and business leaders that companies have a duty to minimize the impacts of their operations on the environment. In addition, there’s a growing tendency among consumers to hold large enterprises responsible for the environmental and social behaviors of their suppliers.

These circumstances are leading many companies to include sustainability criteria in their print sourcing policies. The environmental certifications issued by FSC, SFI, PEFC, and SGP give companies one mechanism for determining how “green” their print suppliers are.

Sarah Scudder is President of Real Sourcing Network (RSN), a print e-sourcing tool software company. Sarah Scudder has grit.  Sarah Scudder has spunk. Sarah Scudder is a go-getter who has gone out and got. Proof? Sarah is the youngest executive to ever serve on the board for the Print Services and Distribution Association (PSDA). Sarah is the CEO and founder of the Young Innovators Group. Sarah leads the annual Young Innovators National Conference. Sarah writes a monthly column on print and marketing services procurement for the Sourcing Industry Group (SIG) and Institute of Supply Management (ISM). Awards? Sarah is a winner of North Bay Business Journal’s Forty Under 40 award. Sarah won the Print+Promo’s Trailblazer Under 40 award. Sarah won the Print Services & Distribution Association (PSDA)’s Member of the Year award. But none of the above matters.  What matters is that Sarah Scudder treats everyone with respect, and it is her desire to make the world a better place. She is well on her way.
I'm sure you've seen the headlines. A decade removed from the last recession, we're past due for another economic downturn. Fear not. While recessions certainly present challenges and obstacles, they also present opportunities for effective organizations to set themselves apart and gain new competitive advantages. 

When the next recession hits, follow these tips from the risk mitigation experts at Source One. You'll not only survive the next recession, but thrive as a stronger, more strategic and resilient business. 

This guest blog comes to us from Matthew Clyne of VendorPanel.

Procurement professionals will need to channel their inner Dr. Frankenstein to create the tools and systems of the future. Discover why focusing on what makes us uniquely human is vital for long-term career planning. 

Technology has always been an enabler and a signal of change, whether people are ready for it or not. Good or bad, automation has been happening for centuries. The term disruptive technology describes any new kid on the block that shakes up the way things are done. Today’s “new kids”, including blockchain and artificial intelligence, will inevitably change how we work in procurement. The question is: will that change be good or bad? First, a look at the disruptors:

Blockchain is a distributed ledger that records transactions and is maintained across computers linked together through a peer-to-peer network. Its immutability means that blockchain provides a form of “digital trust”, particularly in terms of provenance. With blockchain, customers can trace their morning coffee from bean to cup, or their evening bar of chocolate back to the cacao plantation where the ingredients were first planted.
Procurement can use blockchain technology to map the true end-to-end customer journey regardless of who “owns” each part of the journey. It relies on members of the blockchain forming a network where each transaction can be viewed by all parties.

Artificial Intelligence (AI) refers to the creation of intelligent machines that work and react like humans. Also referred to as machine learning, AI has the potential to remove a great deal of manual, repetitive or tactical tasks from human workers, freeing them up for strategic and value-adding activities instead. In procurement, AI is already being used in areas such as procurement chatbots for internal customers, and algorithms that make sense of spend data and turn this information into actionable insights linked to organisational goals.

After years of media hype and dire predictions of mass job losses to automation, a picture is beginning to emerge of the types of jobs that will be replaced. Repetitive, manual tasks such as truck driving or checkout operating can (and will) be automated. Professionals whose jobs involve the stewardship of a process should consider retraining. But the good news is that for many professions, AI will not replace our current jobs, but will take away the tactical elements and help us to work better.

Developing some key human skills today will pay dividends in the  AI-enabled workforce of the future.

Three skill sets where the robots can’t win

1. Engagement
Imagine a work environment where the day is not spent glued to a computer screen. Procurement professionals often do our best work engaging with people by talking to our customers and suppliers. Genuine stakeholder engagement often comes down to social intelligence. It is the ability to read a person’s body language to work out their motivations and then subtly change your approach as the situation requires. While there has been some progress in teaching AI to read human facial expressions, our instinctive skill in this area gives humans a key advantage in face-to-face engagement.

2. Creativity
As Victor Frankenstein discovered; it takes a human to build a monster. Anyone can be creative; whether you’re an artist or an accountant, because creativity is simply a mode of discovery and questioning. The brain can be trained to default to this mode, particularly when organisations encourage creative thinking by giving their employees a safe space to try new ideas. While AI can store and access infinitely more data than humans, it lacks the creative spark or human X-Factor that leads to out-of-the-box ideas and innovative problem-solving.

3. Leadership
Leadership is an innate quality that can be difficult to teach. By nature, leadership relies heavily on soft (human) skills such as communication, decision-making, problem solving, empowerment, motivation and empathy, rather than technical skills or tasks that could be performed by AI. That being said, a manager whose idea of “leadership” is to use procurement software simply to monitor and report on KPIs of team members could very well be replaced by a piece of software.

Matt has several years of experience at the intersection of technology and procurement. As Head of Partnerships & Alliances, he works with major clients and complementary software providers to further VendorPanel's integration strategy.

Companies build competitive advantaged when they’ve got access to valuable, accurate information. What you do with this information is, of course, paramount; but it’s the process of collecting and analyzing it that will determine the effectiveness of any next steps. When you look at a company’s wins and losses, whether it be a contender or your own company, you can always trace things back to the information that got them there.

This information is called market intelligence. You don’t only want to know what your consumers are doing; you want to know why they’re doing it. You don’t just want to know how your competitors are performing; you want to know why they are performing that way.

No matter the size or nature of your business, monitoring the state of your industry is a serious prerequisite for success. Broadly defined, market intelligence is any internal or external knowledge relevant to your products or services at the current date and time. In the procurement space, market intelligence can help to cut costs, efficiently manage suppliers, and give the insight to make even the toughest decisions.

There are many different types of market intelligence and they must be collected from somewhere by somebody. The quality of the data that you collect will depend on the quality of this team. Procurement teams commonly use market intelligence to analyze costs and options for financing a particular product or service. To produce best-in-class results, you need a strong, diversified group that boasts a number of key traits. Let’s make a checklist; does your team check out?

✔ Technical skills: Whichever type of data mining initiative your company chooses to pursue, whoever is executing the strategy will need to do so skillfully. The zero-cost model is an exemplary product analysis method. The idea is that you build your product or service cost from scratch rather than working backward from the final product. To perform this task, you must have the correct industry knowledge to identify spend categories and the technical skills to account for every factor. In this a particular example, your team would potentially be able to ask suppliers to justify each price point and likely talk down the originally-communicated price.

✔Analytical skills: Data that doesn’t inspire action is useless. Your team needs to be able to break down large data sets and fully comprehend the nature of the metrics. Furthermore, proficiency in Microsoft Excel spreadsheets is essential. If your team is unable to create pivot tables or graphically plot data, slow-moving data analyses or gross manipulation of data is more likely to occur.

✔ Communication skills: Teamwork makes the dream work. Once an individual has the skills and knowledge to attain and interpret data, they must know how to communicate their findings. When the entire team contributes, connections will be made and solutions will be developed. The inferences will not work for themselves; the entire team must collaborate for market intelligence to reach its full potential.

All of these skills are necessary, but it’s important to note that most people don’t have a perfect sense of all three. When you’re building your dream team, don’t forget to diversify. Not all members will have the same skill set, and you don’t want them to. Ensure that you select a blend of different types of people and the team will be more likely to function efficiently.

There are many other factors to carefully consider when it comes to approaching market intelligence. You must establish the right criteria, ask the right questions, and act accordingly.

In Part 2 of this series, we’ll take a deeper look into how to establish the right metrics in your research.

When you attend a networking event and the business cards get passed around, "procurement specialist" isn't exactly the most eye-catching job title in the mix. Not only are people generally un-thrilled by your department, many don't even know what it is.

Even if the individuals are familiar with the profession, they aren't likely to show excitement. This is because procurement has a budget-slashing, opportunity-limiting reputation. Other departments see procurement as a one-dimensional apparatus looking for cost reduction and cost reduction alone.

This assumption is, of course, untrue. Procurement is more of a transformative entity than it is a restrictive one. While we're known for cost reduction strategies, we can also contribute valuable insight to fundamentally shift a company's approach.

Are external factors alone to blame? Not exactly. Procurement has a dark past of letting itself fit into this narrow framework and people haven't forgotten. Some Procurement teams today rely on an outdated, penny-pinching approach. We can, however, repair the function's reputation of by redefining Procurement as a process optimizing tool rather than a purely cost-cutting one.

Source One Consultant Johnathan Groda, recently shared his thoughts on the subject in a blog titled "How Can We Make Procurement More Relatable?" He discusses:
  • The common misconceptions around procurement and the mindsets that cause them. 
  • The true value of procurement and what it can bring to the table. 
  • How to make Procurement an inspiring and exciting conversation point. 
Check out the rest of his thoughts on ThomasNet. 

Early this week, NASA circulated images of a flaming woodland area. Are these the California wildfires back again? Is this the beginning of a new wildfire disaster? Nope, worse. It's an even more alarming development, and it's definitely not just beginning.

These pictures come from Brazil - home of the largest rainforest on Earth.  The Amazon, which covers around 1.2 billion acres of green, lush land, is commonly referred to as the "Planet's lungs." Producing as much as 20% of the oxygen in our atmosphere, these lungs are now in serious danger. What's most horrifying about these ongoing wildfires is that they've been raging for three whole weeks. That's right-- almost an entire month of mass ecological destruction has passed without making global news.

So, why are we just now hearing about this? The delay probably isn't a coincidence.

Did American news outlets know about the fires and de-prioritize the information? Or was this news being purposefully suppressed by Brazil? The latter looks like a plausible explanation. Seemingly, the Brazilian government has motives for keeping the disaster under wraps.

Many are pointing fingers at Brazilian President, Jair Bolsonaro. Since Bolsonaro came into office in January, he has been facilitating logging, mining, and deforestation efforts to open up land for new business. Unsurprisingly, CNN reports that Brazil has seen an 80% increase in fires this year. According to Amazon Watch, he's been consistently flippant about ecological issues and the well-being of indigenous people in the Amazon.

In the wake of recent fires, Bolsonaro has not only neglected to accept responsibility, he's shifting blame to a third party. The group he's suggesting is responsible is... environmentalists? A quote from President Bolsonaro himself illustrates his stance on the issue:

"Regarding the fires in the Amazon, I’m under the impression that it could have been set by the NGOs because they had asked for money. What was their intention? To bring about problems for Brazil." Later on, he states, "Maybe – I am not affirming it – these (NGO people) are carrying out some criminal actions to draw attention against me, against the government of Brazil”.  

Rather than attributing the disaster to his own anti-green tendencies and policies, he is firmly asserting his belief that the forest fires are a direct action against him.

While commentators are torn on the true cause of the fires, they've proposed several possibilities.

A piece by CNN  heavily suggests that the fires are caused by farming civilians. Fires have been used as a land clearing technique for ages, especially in dry seasons. Environmentalists are suggesting this is the only way the fires could have spread this quickly. While they acknowledge climate change's role in causing similar disaster, they dismiss the idea that Mother Nature is solely to blame. But Bolsonaro isn't of the hook yet.

Many believe these farmers were encouraged to do so by the President as a way of supporting "pro-business" actions. Brasil de Fato reports that the president's repeated statements regarding "exploring economic activity in the Amazon" have prompted farmers to organize a "fire day" at the beginning of August which left smoke-covered cities all over the country. As Bolsonaro lacks evidence to show NGOs are culpable, these perfectly-aligned timelines do not help his case.

Bolsnaro's actions will likely lead make the terms "pro-business" and "anti-environment" synonymous throughout Brazil. Will the U.S. begin to conflate them as well? Not if we push for businesses that are pro-environment and pro-profit simultaneously. More economic growth does not have to mean more ecological destruction and greener practices do not have to mean a negative impact to the bottom line.

Environmentally conscious companies are becoming more and more numerous as the rising generation of consumers begins to raise its voices. According to a survey by Deloitte, Millennials and Gen Z-ers are making shopping decisions based on company ethics. They regard environmental responsibility as particular crucial.

Environmental tensions aren't going anywhere any time soon. Consumer and voter awareness will only heighten and the most forward-looking politicians and companies will naturally align their efforts with eco-conscious individuals. For the Procurement space, that means ensuring your materials are sourced responsibly and that all operations are carried out in a sustainable matter.

For now, we hope Brazil can save this valuable and beloved ecosystem. This is not the first time a massively-important ecosystem like this has faced total destruction. Scientists announced last year that the Great Barrier Reef, the world's largest coral reef system, is dying and can no longer recover from the effects of climate change. What's more, Forbes reported last week that 12.5 billion tons of ice has melted in Greenland. We were not expected to reach this total until 2070.

Can Brazil save the rainforest, or will our planet soon need a lung transplant?

One of the more difficult (and common) hurdles commonly faced by procurement is the transitional process from a longstanding incumbent supplier to a new one.  The domino effect of this decision can be felt throughout your organization from all levels, and more often than not, lack of compliance from one level has the ability to derail the entire initiative.  The purpose of this article is to demonstrate how to prepare and react to these potential hurdles, and how to put your organization in the best position to handle this transitional process.

Buy-In at Management’s Level:
Obtaining approval to transition from a long-standing incumbent supplier can be difficult. Oftentimes, you’ll need to present a strong, compelling case study to your leadership group.  The phrase “if it isn’t broken don’t fix it” holds true within all tiers of business. If this transition isn’t due to poor supplier performance, be prepared to identify a clear path that can lead to significant savings and benefits to the organization’s total cost of ownership.  A positive impact to the bottom line can go a long way in obtaining approval and affirmation from this group.

Once the new supplier is approved, it’s important to provide open communication and transparency as the transition takes place.  Historically, providing management with an implementation roadmap highlighting key milestones has proven to be a key driver in keeping this group at ease.  Once presented, updates via bi-weekly (or monthly) meetings should also be considered to help share any updates to the roadmap as supplier implementation unfolds.

Buy-In at the Local Level:
This initiative will only go as far as the local plant level takes it, so it’s important to generate clear and concise messaging anytime a supplier transition is conducted.  If your local buyers and plant workers aren’t properly informed and trained on how to purchase and communicate with the new supplier, this initiative will fail immediately.

First and foremost, providing complete transparency throughout this process helps establish respect and ownership at the local level.  For instance, implementation is a complex process that often times faces many unforeseen hurdles.  Being open about these potential challenges and requesting input and solutions from the get-go will help create ownership and teamwork at the local level.

Greater transparency can also be achieved through structured communication channels to help drive compliance.   For instance, following these two steps has proven to be effective in accomplishing this task.  The first step is the distribution of internal memos highlighting this transition which leads to the second step of face-to-face meetings with account managers from the new supplier.  The face-to-face meeting will help establish relationships in addition to also establishing a clear line of communication to help reiterate the key points established within the internal memo.

While a definitive blueprint does not exist for transitioning suppliers, hopefully these steps will help guide your team and overall initiative in the right direction.  Just to reiterate, communication and transparency will be a key driver to ensure a successful implementation is accomplished.


The Strategic Sourceror has served as a resource for supply chain and procurement professionals since 2008 and covers everything from Procurement transformation to the specifics of packaging costs.

In this series, we're giving you a curated list of our all-time top blogs in key categories. This is a perfect opportunity for anyone getting an introduction to Procurement and Supply Chain Management to familiarize yourself with the field.

This time around, we're looking at our top-performing Logistics blogs.

1. The Increasing Impact of Global Warming on Supply Chain and Logistics
The melting of the West Antarctic Ice Sheet is predicted to cause a 10-to-15 foot rise in global sea levels. Scientists also assert that sea levels will continue to rise as more Antarctic ice melts. Will this environmental disaster affect supply chains globally? Absolutely. Port cities, in particular, face risks related to material costs and working conditions. Read on to learn more about how our changing climate threatens global supply chains.

2. Sourcing Specialty Courier Services
Sourcing transportation services is never easy. Things get particularly complicated when a business requires the support of a specialty provider. These couriers are capable of transporting materials that require extra care and, fittingly, relationships with them tend to require extra care. This blog provides insights for selecting a best-fit provider and optimizing each step of the sourcing process.

3. Top Four: Reasons to Leave Asia
Sourcing and manufacturing on a global scale has long meant operating facilities in Asia. Recently, the risks of doing business abroad have begun to outweigh the benefits. From rising labor costs to industrial property theft, this blog examines the emerging risks of operating in China and other Asian countries.

4. Buying vs. Leasing Your Supply Chain: Lessons Learned from Brew Masters
Craft beer is one of America's fastest-growing industries. Why not learn a lesson in strategic outsourcing from the sector? Dogfish Head is a Delaware-based brewing company that partners with a third-party logistics company rather than operating independently. Their story provides a case study in supply chain optimization.

Thanks to eCommerce giants like Amazon, consumer preferences are evolving quickly. Traditional retailers are looking for creative solutions to keep themselves afloat. For many, this means developing a hybridized shopping experience. The Buy Online, Pick-up In-Store (BOPIS) and Buy Online, Ship-to-Store (BOSS) models have so far proven popular.

6. Walmart Looks to Reduce Cost of Shipping
Walmart has multiple solutions to its shipping cost problems. Because nearly two-thirds of all US consumers live within five miles of at least one Walmart, it's a no brainer for them to jump on the BOSS train. In addition to providing a newly convenient shopping experience, the shift will mean lower shipping costs for the world's largest retailer.

7. How to Reduce Food Waste in Your Supply Chain
A whopping 14 % of Americans today regularly experience periods of food insecurity. This makes the global food waste epidemic all the more troubling. This blog calls on stakeholders throughout the food value chain to do their part to address this situation.

8. The Spend Analysis and LTL Shipping – This is How You Do It, Part I
Less than Load (LTL) freight can be a tricky spend category to operate within. Most carriers have a pricing structure that's specific to their own tariff base rate which can make a price comparison tricky. In this blog, we address these concerns to offer readers a step-by-step guide for optimizing LTL spend.

9. Blockchain: How Can it REALLY Be Applied to Supply
Blockchain isn't just about digital currency anymore. The technology promises to transform entire industries and bring a new level of security to the global value chain. Check out our comprehensive guide to the what, how, and, why of blockchain-powered solutions.

10. Feeding Modern Cities: Why Disappearing Farmland Could No Longer Matter
The demand for produce is growing exponentially, but farmland isn't. How can farmers flex to meet demand? The truth is that they might not have to. Vertical farming is on the rise as agriculturalists experiment with growing "up" rather than "out." Learn more about this intriguing phenomenon. 

Check out some of our other "Greatest Hits" collections: 

People aren't good at picking out jobs. Even with a record number of positions to choose from, more American workers feel disengaged and discouraged than engaged and enthused - many more.

Why is finding the right fit so challenging?

Tomas Chamorro-Premuzic, an organizational psychologist, has identified several reasons in a new blog for the Harvard Business Review.

Unsurprisingly, money plays a big role. While there's little correlation between salary and satisfaction, impressive paychecks still tempt countless applicants into positions they'll only grow to despise. Chamorro-Premuzic also points to poor self-awareness. He writes, "people are generally quite inept at evaluating their own talents." The same goes for their real interests. Once they've found the job they think they want, these folks tend to work on one skill more than any other: suffering in silence.

So what are professionals really looking for? According to Chamorro-Premuzic, it's not the outrageous perks and near-complete flexibility that make all the headlines. His ideal workplace provides three simple things.

A Sense of Competency and Mastery

It's thrilling to feel good at your job. Even without external recognition, the knowledge that you've persevered past obstacles and mastered once-difficult tasks presents a powerful reminder that you're where you ought to be. 

That's not to say recognition isn't important. In fact, the Society for Human Resource Management (SHRM) suggests it's absolutely essential. 89% of survey respondents credit recognition programs and "more frequent check-ins" with promoting professional growth. Managers can't count on every employee to generate feelings of competency and mastery on their own. Sometimes that extra reminder is necessary.  

Fostering feelings of competency and mastery is about more than introducing a program to send out thank-yous. Recognition works best when it's aligned to an organization's core values and serves as an integral part of culture. Effective programs provide a consistent reminder that leadership cares - not just about results, but about the happiness of the entire team.

Chamorro-Premuzic notes that employees feel especially gratified by the opportunity to "perform above the expectation of [their] role[s]." In a business unit like Procurement - one that's long existed in a silo - such opportunities aren't always available. The function's leaders have the potential to change this with rotational programs and ambitious career paths that broaden its role. When they make this investment, managers and executives receive a more invested and inspired team in return. 

A Sense of Community and Affiliation 

Recognition - from managers as well as peers - also goes a long way in stoking these feelings. When co-workers exchange feedback with one another, they begin to establish a collaborative and productive community. Many will go on to build genuine friendships that enliven their day-to-day tasks. While it's easy to make fun of water cooler small talk and the 'mandatory fun' of team building activities, workplace friendships can make a big difference. 60% of employees say they're more likely to stay with a company that's staffed with good friends. This number rises to 74% and 69% for Millennials and Gen-Zers respectively.

Even professionals who work remotely have expressed their desire for a sense of belonging.  They're also more likely to quit - or consider quitting - if they don't feel it. Experts have begun to regard loneliness and isolation as an epidemic among this growing sector of the workforce

Employers have a distinct challenge ahead of them. How do they provide flexibility and promote human connection? Writing for Reuters, Lauren Young advises managers to occasionally place the spotlight on offsite workers. Encouraging them to lead meetings, she suggests, will remind them that their perspective matters and ensure their voice is never muffled. It'll also guarantee they're accountable and always serve as an active participant in workplace conversations. 

A Sense of Meaning and Purpose

Like workplace friendship, corporate purpose is sometimes tempting (and always dangerous) to dismiss. Far more than a buzzword, 'purpose' has become an all-important factor for applicants, employees, and consumers across the globe. And it's not just young loudmouths calling on businesses to do more. 70% of all U.S. adults want to make a difference at work. They're eager to do more than earn a paycheck or advance in their careers. They're hungry to work for companies that operate with a clear mission.

This mission should result from a community effort rather than a top-down decree. Adopting a company-wide approach, one that welcomes all perspectives, will stimulate engagement while providing for a more purpose-driven business. It will also produce a far more authentic sense of purpose than an executive brainstorming session possibly could. 

Introducing a sense of purpose doesn't have to mean setting ambitious goals to fight climate change or eradicate waste in the supply chain. While organizations should always identify opportunities to serve the planet and its people, workplace purpose can come from far simpler initiatives. It's often enough to remind employees that they have a clearly-defined purpose within the office and that their efforts make a noticeable difference. 

A lot of people hate their jobs. They spend weeks, months, and years regretting their decision to let a big paycheck or exciting location woo them. Surprisingly few, however, ever regret the decision to quit. Are you providing your team with everything they're looking for?