September 2019

It has been 7 weeks since Popeyes released its new Spicy Chicken Sandwich and still no information on the when the controversial sandwich will be made available again.

For those without a social media presence, the release of Popeye’s new Spicy Chicken Sandwich has spurred a massive social media debate (now called “the chicken wars”) over which fast-food giant - Chick-fil-A or Popeyes has the superior spicy chicken sandwich. The chicken wars debate has even created a secondary market for the Spicy Chicken Sandwich – listings for the Popeyes sandwich were found on Craigslist and eBay for up to $500 per sandwich.

Apex Marketing Group estimates that Popeyes reaped $65 million in equivalent media value as a result of the social media Chicken Sandwich Wars. This led to passionate fast-food fans on both sides of the argument to restaurants - eventually making Popeyes sell out of its sandwich within just two weeks of the launch date.

Popeyes has since made a statement claiming the sandwich will return but provided no other details. The lack of details surrounding the return makes me question if this is a supply chain issue or a marketing tactic.

Marketing Tactic: Consumers love what they can’t have or what isn’t readily available to them.

The use of product scarcity has long been a promotional tool utilized by the restaurant industry with the use of “limited time offers” such as Starbucks’ Pumpkin Spice coffees to McDonald’s one-day-only Szechuan sauce inspired by the TV show “Rick & Morty”. Now with each product potentially going viral on social media – it’s not out of the question that Popeyes may be dragging their feet with the sandwich relaunch only to capitalize on the consumer’s suspense when the product is released as a full-time menu item.

Supply Chain Issue: How does a chicken restaurant run out of chicken?

It seems that Popeyes’s management team drastically underestimated the power of social media and the popularity of the new chicken sandwich. While the general public may think Popeyes missed out on several million dollars of revenue due to its product shortage, it is the lesser of two evils. Consider that the majority of the 2,500 Popeyes locations are franchisees, they are generally against new products as they exposes a franchise owner to the financial risk of keeping perishable excess inventory and ultimately forces the owner to take a loss. While the management team may have temporary lost potential revenue, the revenue will be made up on re-release and they have gained the trust of their franchisees with their new product.

Another argument for the Spicy Chicken Sandwich shortage is a potential supply chain issue – the hype and craze of these social media “chicken wars” have strained the supply of chicken. Poultry companies are expected to process a record-setting 43.3 billion pounds of chicken this year. To add that strain, almost every single one of Popeyes competitors has since launched a spicy chicken-focused marketing campaign, which has the consumer’s flocking to these restaurants.

Considering it takes 7- 9 weeks for a broiler, a chicken raised to be harvested for its meat - I expect Popeyes to resume selling the chicken sandwich by mid-Q4 2019. As someone who has yet to try the sandwich – I certainly won’t miss it the next time it is released.

Whether you agree with the cause and effects of climate change or not, there is no doubt that organizations across the world play a large role in our environment and society. The idea of "Social Responsibility" has become more and more prevalent and impossible for consumers to ignore.

As it relates to a corporation, Social Responsibility implies that a corporation has a duty to act in the best interest of their environment or society. Examples include reducing their carbon footprints, improving labor policies by embracing fair trade, and changing certain corporate policies to benefit the environment.

The four types of Corporate Social Responsibility fall into these categories:
  • Environmental
  • Ethical business practices
  • Direct philanthropic giving
  • Economic responsibilities
In this post, learn how your organization's Procurement department can accelerate the impact of your corporate social responsibilities

Get creative with your tactics!

When most people think sustainability, they think directly sourcing sustainable goods or products. But what if this isn't possible? What if your organization simply doesn't make enough purchases to have a measurable impact on the environment?

Well, one of the methods companies are turning to is looking at indirect methods of reducing their environmental impacts. A few examples are only ordering products that can be delivered using electric vehicles. Or, contract with a facilities management company who uses energy-efficient and electric power tools and/or mowers. Perhaps your cleaning crew can switch to environmentally friendly cleaning products. The combination of these efforts truly makes a large impact.

Understand your sources
The introduction of blockchain allows for procurement organizations to effectively manage and track the origin of the products and materials they purchase. This directly contributes to the impact of ethical business practices rating. For example, purchasing raw materials such as wood or steel from a country for very cheap may seem harmless on the surface. However, if the source harms the local population or environment, then that could reflect poorly on the business's social responsibility. If that wood purchase contributes to massive deforestation and habitat destruction, many people and communities could face harsh results.

For those that don't know, to define blockchain: "originally blockchain, a growing list of records, called blocks, that are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. By design, a blockchain is resistant to modification of the data."
Lumachain is a company focused on making strides in this area. Learn more here:

Give to causes that support your mission
One of the growing behavioral epidemics amongst teens is car theft and vandalism. This has always been a problem, but the crime has started to grow at an alarming rate. By nature, this is a great opportunity for insurance companies to get involved. When a child steals a car or spray paints a building, more than often, insurance companies will see some losses when they must replace or repair the property. But how would they tackle this issue?

Once again, creativity and looking at the root cause could contribute to the solution. Insurance companies that invest in youth programs that help educate and improve youth opportunities understand the larger impacts that these problems have to their bottom line, and more importantly, society.

Organizations should take a holistic view on society and determine philanthropic methods of influencing change as it relates to their own mission.

Economic responsibilities

Economic responsibility relates to growing the business in a sustainable and responsible manner. Typical examples of this are manufacturing companies that incorporate recycled materials.

Governmental policies are often introduced to make significant changes to business practices. For example, straws and single-use plastics have been banned in some cities. To combat this policy and remain responsible, some companies have adopted biodegradable straws or metal reusable straws. Both get the job done while contributing to the bottom line of growing profits and remaining competitive.

This is another opportunity for innovation and creativity. Not all companies have the opportunity or need to change materials that are crucial to their process. Some changes are direct sources of what is being sold. For example, harvesting caviar often involves slicing the fish open to remove the delicacy. Obviously, the fish does not live using these methods. Through innovation, some companies have developed a no-kill method to harvest caviar, leading to a sustainable and economically responsible process.

Get creative

The human race will forever be a society of innovators and problem-solvers. No matter the issue, we can find a solution. Not all problems can be solved through better procurement practices, but there is no doubt that the sourcing organization of your company can play a key strategic role in contributing to your social responsibility goals.

I was recently given an interesting assignment – produce a document assessing the skills and capabilities of a department based on feedback gathered from our delivery team. To put this in context we were mainly evaluating category managers and how they performed in their roles. This task required precise planning and deliberate thought on how to gather feedback in an efficient yet meaningful way. There were three components that were especially important to ensure a holistic deliverable:
  1. Quantitative feedback – scoring each individual on a list of criteria
  2. Qualitative feedback – gathering general comments and insight from firsthand accounts
  3. Content Delivery – ensuring that a concise yet comprehensive message is conveyed 
Before we look at the three key components it is important to address one thing – we wanted to create an assessment based on interactions and aimed to minimize all subjectivity that could creep in. It is paramount to always back assertions up with evidence and paint the fullest picture you can. This picture may have some inherent bias, but will be more compelling if supported by concrete facts.

Quantitative Feedback – It is important to have some type of numerical scoring when assessing capabilities. The purpose of these scores is to help understand where someone falls on a scale, helping to compare overall performance to a benchmark. Things that are important to consider when looking at a full spectrum range from analytical skills to negotiation capabilities to contracting. A key part of impactful quantitative feedback is having multiple evaluators review a certain individual’s capabilities. This allows for more data points and a clearer, less one sided story. It is important to understand every evaluators relationship with the individual being evaluated (are they a direct report, boss, colleague or external party) and how much interaction they have on a daily basis. Scores will inherently be varied across the board even with a methodology of how to score – this is due to the fact that everyone has different perceptions and evaluations styles. When looking at final scores across the board it is important to understand deviations between different evaluators. If a 1-5 score methodology is applied, anything above a 2 deviation should be reviewed to gain more clarity into why there was such a gap. Additional conversations should be conducted with the evaluators to gain more insight.

Qualitative Feedback – This helps paint the contextual story, without this important observations may be overlooked. It is important when soliciting qualitative feedback that factual examples are given to back up a certain assertion or claim. Simply saying that John Doe does not communicate well is not helpful. This needs to be backed up with an example such as John Doe struggles to communicate and get his point across succinctly in large group settings. Additionally it is important when noting a strength or a weakness to follow that up with a plan for growth or mitigation. The thoughts conveyed should be clear enough to translate to a bullet format later on with the main essence of the thought still intact. Overall the most important part of the qualitative piece is telling a compelling story about the individual’s profile, highlighting both strengths and weaknesses.

Content Delivery – Delivering the message to an end audience is perhaps the most important piece of the entire process. This requires skillful decision making regarding what is important from the discovery phase and what is just noise or a one off occurrence. Balancing both the quantitative and qualitative feedback is also key in this exercise. The same key metrics should be highlighted for each individual being evaluated in addition to a level (beginner, proficient, expert or any other hierarchy system you deem suitable) being assigned. The most thematic feedback from each stakeholder should be captured in the qualitative feedback section – highlighting the 4-5 key statements that truly embody the individual whose capabilities are being assessed. Following these guidelines will ensure a thoughtful yet concise and targeted approach will be delivered to the end audience. In the case of our capabilities assessment the output was being shared with an executive group, as is the case most times in these situations. It is important to make the most effective use of the limited time they have while giving the most impactful narrative possible. Often times these outputs are used to influence revamped organizational design and organizational change. This is why it is even more key to paint a clear and accurate picture that is actionable ensuring minimal interpretation from the end audience.

All in all, the key to conducting a successful capabilities assessment of your procurement organization or any organization for that matter is following a methodical process for discovery and conveying the findings in a concise and clear manner tailored to the end audience. This may feel like a tricky task to accomplish especially given you will in an essence be evaluating an individual’s capabilities and indirectly their performance. Realize that the most important thing is to keep an objective approach always trying to cite fact based examples when possible. The key goal for any organization embarking on this journey should be how can we reposition and retrain existing talent to be more effective in their current or future role.

Brazil is not only battling fires throughout the Amazon, they are now battling with retailers. VF Corporation, whose portfolio includes brands such as Vans, Timberland, and the North Face, has decided to temporarily stop doing purchasing products sourced from the Amazon. They are not the only company to do this. H&M, another eco-conscious retailer, made a similar pledge several weeks ago.

The fires in the Amazon are up 84% compared to the summer 2018 months. These fires are believed to have originated from real estate speculators and ranchers who are clearing out the land. The reason for clearing out the land is to make more space in order to heard cattle. Brazil is known for exporting leather and beef. In 2018, they exported $1.4 billion of leather hides and skins and generated over 19% of the world's total beef supply. Both of these industries require enormous amounts of land, hence all the land clearing. Between the years of 1993-2013, cattle head has increased 200%. Obviously, the practice has grown more and more controversial

VF Corporation grosses over $13.5 billion annually. It's no small company, and this boycott could have real ripple effects for Brazil's bovine economy.  The corporation has stated that they will wait to source leather from Brazil until it has "confidence and assurance that the materials used in the products do not contribute to environmental harm in the country." Due to VF Corporation's footprint in retail, their actions and statements are meant to send a message to the Brazilian government and leather industry to take environmental action seriously.

H&M is another retail giant who spoken out against Brazil's government, expressed concern around the fires, and committed to boycotting Amazon-sourced leather. The company has temporarily placed a ban on purchasing Brazilian leather over their concern that cattle ranching is contributing to rampant deforestation throughout the Amazon. They too, do not plan to do business in Brazil until there are "credible assurance systems in place that can verify that leather does not contribute to environmental harm in the Amazon."

VF Corporation and H&M are standing up against poor environmental standards. Many people are hopeful that other companies will follow these two industry giants lead, for the sake of protecting not only the Amazon, but the planet as a whole.

The easiest way for a company to get in over their head and lose control over processes and procedures is to grow too quickly. More specifically, to grow too quickly without the proper foundation to build upon. This plays a major role in what outside partners, vendors, suppliers or other 3rd parties are willing to do within the relationship. Costs can spiral out of control as decisions are made at a reactive level instead of proactive approach. A major business unit often effected the most by this kind of chaotic way of doing business is the Supply Chain. One of the biggest concerns a company has is any disruption to the supply chain. A common area where disruption can take place is within the logistics/transportation network

So how can a company help to prevent disruption within their network?

A relationship with a carrier is a two way street. A company wants to be able to ship their products in a timely manner, for the lowest cost possible resulting in a secure, damage-free delivery. A carrier wants a shipper to set them up in the best way possible to achieve those goals. Becoming a shipper of choice is becoming an increasingly important part of the logistics practice. The days of just beating down carriers to get the lowest price possible, whether its LTL, FTL, Parcel, Ocean or Air Freight, are long gone. The transportation industry hasn’t always taken advantage of what it is they truly offer but they are slowly coming around to the times. They now understand that what they have is a valuable commodity and finding the best shipper to partner with to utilize that commodity is very important for maintaining a good operating ratio.

What is the commodity a carrier possesses?

Space. They have the space in a container, in a truck, in a trailer, in an airplane to move your freight from one place to the next. Their goal is to be as efficient as possible with that freight. Think of that space as a 3D puzzle. How does your freight fit into that puzzle? If a shipper has developed bad habits over time and does not take the time to think about how their freight is going to enter the transportation network, carriers will begin to do one of two things; either drop you as a client or raise your prices to accommodate the ineptitude.

This idea needs to be transmitted throughout an entire organization. Procurement and finance will tend to only look at the numbers. What can be done to drive down cost? Sometimes it requires a look from within. A carrier will be more willing to reduce cost if a shipper pays more attention to detail when freight enters the supply chain network. If a company’s internal resources are properly trained in how to effectively label freight, safely and adequately package freight, provide accurate descriptions of the freight, use standardized dimensions when possible, use quality pallets, provide ample lead-time when possible, be flexible on your end while remaining consistent in your process, and provide a clean, safe and overall attractive driver facility, carriers will be fighting over the ability to pick up your freight. 

Relationships with carriers are critical. In order to help reduce the risk of supply chain disruption, companies should be looking at as many ways as possible to be considered a shipper of choice. Carriers will appreciate the consideration and will be more likely to work with a company on the cost element. Expecting to pay less simply because it’s been 12 months and it’s time to release a RFP is a dangerous approach. Using properly timed-out RFPs to help build relationships with the carriers and to gain more knowledge of how you can improve as a shipper in order to achieve the best price is a better foundation from which to build upon.

Procurement professionals are tasked with not only identifying but also securing savings. Many times this means that people will take the easy way out and take minimal savings with the incumbent supplier just because they know implementing a new supplier is risky and challenging. However, if proper savings goals are put into place you can’t always take the easy route. If high enough savings can’t be secured through direct negotiations with incumbent suppliers this means you will be going out to market via a formal RFP process and identifying a lower cost, alternate supplier. The problem now is you need to manage an implementation process and timeline. This is when procurement gets caught between a rock and a hard place. Why? Well usually there are stipulations around those savings you need to capture. The most important being the dollar amount of savings you need to capture in year. Which means time is of the essence. This causes procurement professionals to shortcut important steps that hamper implementation, impact savings, frustrate stakeholders and can ultimately lead to a failed initiative. So how do we avoid these issues and ensure that we are setting ourselves up for success?

Step One is properly understanding the category and developing a comprehensive baseline before even taking the category out to market. This of course means defining current price. But a well-developed baseline shouldn’t just be about the numbers. It should also be about understanding the supplier relationship, the stakeholder requirements, issues and/or challenges within the category, and how the stakeholders are going to go about evaluating a new supplier. You should also gain a high level understanding of what the stakeholders will need to do in order to implement a new supplier. Will the stakeholders require samples for testing? Are their VMI requirements or on-site resources needed? How much time will need to be dedicated by the stakeholder team in order to get the new supplier implemented? Answers to questions like this will help you develop not only your RFP but also your timeline for implementation.

Next is asking the right questions in your RFP. Ensure that there are at least a few questions that focus on implementation. Make sure the supplier has the right experience. Have they completed large scale implementations before? With similar sized customers? Within the same industry? Etc. Questions should also be asked around if there is a dedicated Account Manager focused on implementation and transition. What does the typical implementation plan look like and how long do they anticipate implementation to take? Questions like this are imperative since it’s not only your job to ensure that the supplier has a competitively priced offering but can actually get the job done. There’s nothing worse than recommending and moving forward with a low cost supplier that can’t deliver to the business.

Lastly, realize that you will need to physically manage the implementation and stay involved. Hold the supplier and stakeholders accountable and manage to an implementation timeline. Ensure that there is an open communication flow with all stakeholders and the supplier.
Many companies require their new hires to enter the company with previous experience in their field. By this standard, many recent graduates are overlooked. Though, there are actually benefits of having a recent college graduate join your company even if they have no field experience at all.

To start with the more obvious reasoning, recent graduates are eager and therefore usually willing to work for lower wages than the more experienced hires. Furthermore, since they were so recently in school their mind is still apt to comprehend new information at a high rate. According to ERE: Recruiting Intelligence, recent graduates are, "self-motivated, 'continuous learners' (which) may actually be the most important competency". A big aspect of being a continuous learner is questioning existing processes. Though, recent graduates may simply be asking for educational purposes, this can result in companies reevaluating and improving upon their existing approaches and methodologies. Colleges teach students to think differently so they bring this same skill of a diverse mindset to help enrich teams.

Since recent graduates are so early in their careers they are more accepting of change. Post graduate life is a new chapter for them so they are often very open-minded. This level of excitement sparks agility and makes them more willing to accept change. Academic research indicates that great innovators experience their peak while still in their youth. This shows that young, college graduates are likely to bring very innovative insights.

Young workers typically carry energy and enthusiasm with them throughout the workday. They're less likely to experience mental or physical fatigue. Furthermore, the excitement of entering a new chapter will make them especially willing to serve the business in whatever way possible. For example, their willingness to learn will make them more receptive to so-called 'thankless assignments'. Instead of grumbling, they'll accept these as valuable learning experiences. Also, being early in their career, they'll generally feel they have something to prove. This will lead many to volunteer for just about anything. Recent graduates are also less likely to have family commitments that might keep them from traveling or relocating. Lastly, being less experienced can result in more boldness so recent graduates may be more willing to take on high-risk assignments.

Regardless of the industry -  technology, health care, procurement or anywhere in between  - companies look for hires that have strong collaboration and communication skills. Many colleges instill these skills in their students through projects and presentations. Often, students even have to develop a diverse, cross-functional skill set. Students learn to communicate with diverse team members and embrace new technologies and approaches.

Inexperienced college graduates can make for great hires because they have a fresh mind. They're not burdened by the biases that create office politics and lead many veteran employees to suffer through the workday. Also, going to school in the era of technology has made them savvy multi-taskers capable of handling large amounts of information. Lastly, they are often a lot easier to manage. Being the least experienced creates a level of humility and submission. They will work hard and welcome opportunities to learn. Why not bring them aboard? 

ICYMIM: September 30th, 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.

Hackett Finds Stark Differences in Typical Digital Procurement Use vs. World-class Digital Transformation
Alex Behrens, Spend Matters, 9/26/2019
The Hackett Group, an IT service management company hosted a study comparing sample peer groups of procurement with world-class procurement groups. They found a significant gap between the two in terms of processes and efficiency. Alex Behrens draws several important conclusions from the Hackett Group's findings.

U.S. VS. U.K.: Will Employees "Fight or Flight" when Facing Economic Uncertainty? 
Gary Jones, Future of Sourcing, 9/27/2019
Job security becomes more and more of a pipe dream for American workers as the labor market reflects an uneasy future. Even workers in the U.K. are feeling the pressure as Brexit changes approach the country. Gary Jones gives his insight into how workers will react to job anxiety. 

Harnessing Workforce Intelligence for Strategic and Holistic Decision-Making
Neha Goel, Future of Sourcing, 9/24/2019
Procurement teams need to be able to utilize the data they are collecting and make informed decisions based on those metrics. Relying on guesswork is a sure waste of time and resources for any company. Neha Goel discusses the importance of knowing the ins-and-outs of your data and putting that knowledge to the best use.

Monthly Round Up: September 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.

The Best Academic Supply Chain Management Programs
Are you a supply chain management recruiter feeling the burn of the talent gap? It’s possible that you aren’t looking in the right places. If you want to find the right young talent, this list of top-notch SCM programs could be the perfect place to start. Siara Singleton lists the 5 best SCM programs in the nation. Boasting a wealth of degree programs and cutting-edge curricula, they're molding a new generation of Supply Chain innovators.

More Being Done to Make Supply Chains Eco-Friendly
Eco-friendly supply chains are no longer just a "nice to have." Corporations across the country are ramping up their sustainability efforts to meet a new global standard. Some companies have elected to do so proactively, while others are clearly responding to controversies and social outcry. Let's talk about what comes next.

How Do Pigs in China Affect Pharmaceuticals in the United States?
China's pork supply chain has been decimated to do an outbreak of African Swine Fever. The industry is obviously feeling the burn as prices surge, imports ramp up, and storage space dwindles. But how do this affect Big Pharma? One word: Heparin. Heparin is a powerful anti-coagulant that's produced as a by-product of pork farming. What do China's porcine problems mean for this life-saving drug?

Delivery Delays Abound Due to Hurricane Dorian
Hurricane Dorian is over, but it's devastating effects are still being felt. Houses and roadways have been destroyed and residents throughout the affected regions are struggling. The storm was a problem for businesses as well. Supply chains have slowed to a crawl organizations are scrambling to repair operations. What's next?

The Efficacy of Postal Optimization in Print and Mail Services
Even in our age of digital evolution, digital mail still plays an important role in Marketing. That's why organizations looking to reach and engage the right consumers should focus on postal optimization. Michael Vu offers several strategies for analyzing postal costs, identifying cost reduction opportunities, and taking an optimal approach to the category. 

Here at Source One, we love to serve as your resource for the latest in procurement’s best practices, strategic sourcing case studies, and industry news. One of our favorite ways to deliver this content to you is through our podcasts.

If you didn’t already hear, today is International Podcast Day! Listeners and creators around the world use this opportunity to celebrate the podcast community. Why not take a moment out of your day to check out some highlights from the Source One Podcast?

“You can’t measure what you don’t know” remarks senior analyst, Jennifer Engel. Too many companies are missing an effective system for measuring their performance. If they aren’t keeping track of this data, how can they know what is and isn’t working? They can't. Engel explains five key procurement metrics that, when measured correctly, can help to promote procurement excellence for businesses in any industry.

Telecom can sometimes take longer than usual to catch on to new tech trends. But for these next few years, it’s extra critical for telecom companies to stay up to date, avoid data breaches, and continue building their competitive advantages. David Pastore, a telecom procurement expert here at Source One, shares his expectations for the next wave of telecom advancements. 

Building strong stakeholder relationships is well worth the effort. This episode offers suggestions for maintaining a clear, consistent dialogue and approaching each stakeholder interaction with both empathy and respect. 

To identify and deliver on cost-saving strategies, your team needs visibility into its spend profile. A spend analysis will answer the bulk of these questions and ensure you aren’t leading a blind procurement initiative. There are a few basic questions to ask before conducting a company’s spend analysis. In this episode, Jennifer Ulrich and Brian Seipel share what you need to know before conducting a spend analysis as well as some do’s and don’ts.

The go-to spend taxonomy for procurement professionals tends to be UNSPSC, otherwise known as the United Nations Standard Products and Services Code. But can we be sure that this classification structure will help every unique project meet its goals?  While he doesn’t completely dismiss the UNSPSC, Brian Seipel shares his expert opinion on why this system may not be the best one to use for every procurement initiative.

If you liked these, you can check out more of episodes on our YouTube Channel. Here, you can listen to our episodes at your desktop, stream them to your team, or even pass the time during your morning commute.

Happy Listening!

With the amount of accessible data growing exponentially each day, there is a rising need to leverage the right data management solution. Doing so helps companies translate data into information and plan their future business strategies. Today in this ever-growing market of Analytics and Machine Learning, a BI solution can be of immense help and can act as a foundation to all your data organizational needs. It helps to summarize the data into meaningful, real-time, and fact-based information that both expedites and improves the decision-making process

There have always been conflicts between suppliers and their customers. The strategic sourcing team has the tough job of determining how well each vendor is meeting their requirements. These requirements include not only goods and services, but the information necessary to address evolving  business concerns. This need for information is mutual. Whenever there is any change in the customer business structure, suppliers also want to understand what implications it can have on their business. This exchange is made simpler with Business Intelligence

Here are 5 more of the benefits Business Intelligence brings to procurement:

1. Get Relevant Information

One of the most important aspects of making decisions is to have relevant, accurate information. Because reports contain relevant data from different Business operations, business are able to act better based on the information available in these reports. Most of these visualization tools are easily understandable and easy to use as well. As they evolve, they provide for increasingly proactive and strategic decisions.

2. Visualize important Information

We always trust our eyes when it comes to making critical decisions because anything that is visually evident gives better clarity as compared to something that requires cognitive thinking. The same goes for business. The operational reports can be difficult to interpret and can hamper the ability to identify key metrics. BI enables us to view important information through charts, graphs, videos, animation, etc.

3. Data Mining

BI analytical tools are well suited for data mining. Data mining can be categorized into five main steps: collection, warehousing and storage, organization, analysis, and presentation. Some BI platforms can perform all these steps while others require help from other business analytics tool or data warehousing platforms. In general, BI enables us to analyze huge amount of both structured and unstructured data.

4. Identify Important Criteria

Companies traditionally have used price, quality and on-time delivery as major metrics to evaluate suppliers. But these metrics were mostly based out of subjective judgment rather than on facts because of the data necessary for evaluation were often unavailable or out of date.

With BI you can provide verifiable, real-time metrics. Additionally, a company can also define its own criteria for the evaluation of suppliers. With BI, a business can understand the relative importance of one or more factors over the other depending on the supplier.

5. Better Resource Management

Procurement professionals have the most difficult job. They must be subject matter experts,  well-versed in Procurement's rules, as well as skilled negotiators. BI can help skilled professionals to focus on larger or more difficult projects. With the help of an automated established taxonomy, the suppliers are evaluated through different BI metrics and scorecards. The top suppliers in each category is contacted then for further business. This helps in automated purchasing and can handle up to 80 percent buys in a company

The Strategic Sourceror has served as a resource for supply chain professionals since 2008 and covers everything from cost reduction to change management. In this series, we're reflecting on the last decade-plus by sharing some of our most popular blogs.  you a list of our top blogs of all time and we're going to give them to you per area of expertise. 

This time around, we're sharing our top blogs on Procurement Transformation.

If you’re a purchasing manager looking to double down on your skills, getting a certification might be a good option for you. But to avoid wasting time or resources, you should find the right certification for your unique career path. Whatever your industry, company, or level of expertise, this blog gives a breakdown of the most popular purchasing and supply management certifications.

The relationship between a purchaser and a supplier can go one of two ways. The supplier could hold most of the power because they know you need them. Or you could hold the power as the buyer because you’re not just any purchaser, you’re a strategic purchaser. Strategic buying teams make for attractive customers. Here are seven steps to put you in this favorable position.

SRM programs are growing in popularity. By fostering more purposeful supplier relationships, SRM programs create a competitive advantage. Strong connections with your supply base creates more effective partnerships and can lead to more opportunities down the road. Diego De la Garza discusses how SRM programs and Preferred Supplier Programs (PSP) can complement your company’s existing procurement efforts.

More and more consumers are flying and, as a result, aircraft orders are rising exponentially. Supply chains are being faced with the challenge of sourcing as the market grows. The largest airlines, Airbus and Boeing, are already rethinking SRM programs to handle the new load. Matt Chabanon discusses how engine manufacturers and suppliers might respond to this impactful market trend.  

McDonald’s was criticized for serving expired meats in 2015 and, unsurprisingly, their sales dropped dramatically. After trying to fix it by firing the guilty parties, consumers are still wondering what preventative measures they’ll take to stop scandals like this from happening in the future. This entry provides an interesting take on how McDonald’s should fix this issue and build a safer supply chain moving forward. 

Women only make up 4% of Chief Supply Chain Officers(CSCO) at Fortune 500 companies. That puts Kathryn E. Wengel in the minority as the CSCO at Johnson & Johnson, a massive, multinational corporation. Wengel speaks to the importance of women rising up in companies and taking on leadership positions in supply chain management. She tells her incredible story of how she took a chance, broke the glass ceiling, and built her prosperous career.  

2017 wasn't so different from 2019. Professionals were focused on driving down risk and developing new competitive advantages. Here's a recap of what we discussed back then. See how these trends compare to your current concerns. 

Unfortunately for strategic sourcing professionals, the spend categories with the most potential for savings tend to be those with the least clarity. We get it-- it can be hard to let procurement teams into departments that don’t generally engage the function. Nevertheless, it’s imperative that strategic sourcing teams bring about necessary change in every layer of the organization. Joe Payne, a seasoned strategic sourcing expert, shares five key roles of Strategic Sourcing professionals and why we’re equipped to handle every corner of spend.

A healthy supplier relationship begins and ends with strong communication. Failing to sustain a strong supplier relationship management system could impair your business. Nicholas Hamner presents a story of how Nintendo and a third party supplier were both burned by the former's sub-par supplier management system. 

Advanced technology is providing the opportunity for tedious human tasks to be delegated to machines and more perceptive soft skills to be exercised. Procurement teams especially benefit from this phenomenon. Joe Payne shares some trends he’s noticed in the evolution of Procurement and how he sees the role changing for the better as AI makes its entry into the field.

Want to learn more about Procurement Transformation? Check our latest whitepaper: Busting Procurement Transformation Myths. We address the misconceptions that often keep business from pursuing Transformation and sending their business into a new era.

You can also take a look at some of our other "Greatest Hits" lists: 

The following blog comes to us from Megan Ray Nichols of Schooled By Science.

Running a warehouse is never easy. Keeping everything moving is a major logistical task that requires good planning, foresight and skill managing people. Some warehouses run more efficiently than others. It may be how the floor is planned or how the operation is managed, but there is always room for improvement when it comes to efficiency.

Here are nine tips you need to know to make your warehouse as efficient as possible.

1. Schedule Regular Upkeep and Counts

If you're not already, you should be scheduling regular counts of the goods you have and inspect for damage.

Partial-count techniques like cycle counting can also be used if it's not possible or practical to count your entire inventory at regular intervals. You should also perform additional tallies of high-value and high-risk stock.

2. Optimize Your Layout

Maximize the square footage you have. Consider how products will flow through the warehouse floor. Go vertical if there is enough ceiling clearance. If possible, you can also bring in professionals to help you make your use of space more efficient. Another set of eyes on the floor will always be helpful. Their experience may pick out some unoptimized section of the warehouse where traffic isn't flowing as well as it could.

3. Regulate Floor Traffic

Even if your warehouse's floor layout is already optimized for the flow of goods, traffic can still be interrupted if you don't plan correctly.

Try to keep people who don't need to be on the floor off it. When organizing the traffic flow and layout of the warehouse, make sure you're not sending anyone out that doesn't need to be there. From receiving to shipping, keep business transactions and staff away from the flow of goods through the warehouse.

4. Use a Warehouse Management System (WMS)

You don't need to be the only one figuring out how to make your warehouse as efficient as it can be. Use technology like a warehouse management system (or WMS) to help you manage internal logistics. A WMS can help you with floor layout, analyze current stocks, and demand and assist with inter-facility communication.

If you're not currently using a WMS, integrating one may take some time. The benefits, however, are almost certain to outweigh the short-term adjustments.

5. Go Digital

Paper counts work well enough, but require reproduction and bulky physical storage. A lot of time you're just going to be scanning them in anyway. Switch from paper to digital. Making this process paperless will save on record space and make the analysis easier. Without paper records to digitize, a lot less data entry and scanning will be required.

6. Label Everything

One of the easiest ways to streamline the picking process is through meticulous labeling. Proper labels will help workers find and stock or deliver the correct items without having to ask supervisors or other workers for directions or help. A good labeling system will also make counting easier — no mystery items to account for. To get the most out of your labels with the least increase in labor, include tag checks in regular counts. This will help weed out any mislabeled or unlabeled items.

7. Stock Based on Demand

Avoid overstocking certain items by stocking based on current demands, rather than hoarding inventory or guessing what you'll need in the future. Back up any intuition about how much to stock a given item with hard numbers. You can also implement demand planning so you can adjust your stocks based on patterns in demand.

8. Implement Better Safety Standards

Mistakes and injuries are costly, require work stoppages and make employees feel less safe. According to OSHA, injuries are more common in warehouses than other facilities. Relaxing safety standards may seem more efficient in the moment, but it won't benefit you in the long run. It can even be a violation of OSHA guidelines. Better safety standards and training comes with short-term costs, but preventing mistakes is much cheaper than paying for them.

9. Add Quality Control Measures

A good way to avoid having to double back and fix your errors is to catch them in the process. Adding additional quality control steps to your warehouse workflow will prevent costly mistakes and do-overs. You don't want to be in a situation where you're on the hook for a damaged or incorrectly picked item. Quality control can prevent that.

Warehouse Management for Better Efficiency

Running a warehouse is always going to be a major logistical task. Good management requires making things organized for both you and your workers. You can also optimize things further by adding technology like digital counting or a WMS. Even simple fixes to layout, or the addition of steps like quality control, can save huge amounts of time and resources at any warehouse.

When it comes to ensuring dining guests get everything they expect when patronizing a restaurant, a few key considerations come to mind. Perhaps topping them all is delicious food. In a not-too-distant second is great service, with affordable prices another core component to success.

However, a new survey suggests that if restaurateurs' websites aren't up to par, patrons may not bother to seek a table for two.

Approximately 80% of Americans attest to the fact that they usually turn to the internet to see if a potential dining location has an online presence before paying a visit, according to a recent poll conducted by MGH, a marketing communications agency. Of those who do or have, more than two-thirds say they've reconsidered trying a place because they viewed the website as poor or substandard.
"45% of respondents said they look for pictures of food on websites."
Photographs are crucial
What makes or breaks a website is largely in the eye of the beholder, but one thing that is a must-have is photographs. Indeed, 45% of respondents said they go out of their way to look for pictures of food to gain context about what various dishes look like, giving credence to the notion that people first eat with their eyes. It's these same photos that have turned some diners off, as 36% indicated images were more detracting than attracting.

Andy Malis, MGH CEO, said pictures are truly worth a thousand words in the restaurant biz, especially when they're viewed from a computer screen or mobile device.

"A website is the centerpiece of any business - no matter the industry," Malis explained. "So it's no surprise that photography places a huge role in encouraging or discouraging diners.  Additionally, consumers are becoming more web savvy and have high expectations and short attention spans when it comes to the user experience."

The MGH survey also revealed that restaurant website users place a premium on mobile-friendliness, meaning pages that are geared for smartphones and tablets. Roughly the same percentage - 36% - said the lack thereof was a turnoff and prevented them from placing an order or reservation.

8 in 10 Americans own a smartphone
Smartphones and mobile devices are as ubiquitous as ever. According to the Pew Research Center, an estimated 96% of Americans own a cell phone and 81% are smartphone users. That's up from 35% when Pew conducted a similar poll in 2011.

"Restaurateurs should take note of these key findings and evaluate their current website to determine if their website needs a refresh or confirm that what exists is working," Malis advised.

Of course, the quality of a website - or lack thereof - isn't the only pet peeve for restaurant goers, which may ultimately compromise eateries' production supply chain with fewer people to serve. First impressions are everything in the food and hospitality industry, as 82% of respondents in a separate study done by  Zoro said poor service was a major culinary offense. A slightly smaller percentage said dirty bathrooms were a significant no-no and 80% cited lengthy wait times.

Corie Collilton, project manager at Zoro, told FSR Magazine that restaurant staff members all have their roles. Just a single person slacking can lead to unsatisfied customer consequences.

"These findings show that every member of a restaurant's staff, from the owner to the valet driver, needs to prioritize cleanliness and professionalism," Collilton cautioned. "Even one mistake in either of these areas can affect your restaurant's bottom line and turn a loyal customer into someone who puts your restaurant on blast via Twitter or Yelp."
<editor's note: This post has nothing to do with pumpkins or spice. The whole pumpkin spice thing has been overdone, to be frank. Except for this, which is great.> 

Where has the time gone? As we push toward the end of the third quarter of 2019  we are inundated with pumpkin spiced everything, left to wonder if the Philadelphia Eagles have anyone on their team who can catch a football, and for the procurement professional, it's that time to start drafting category management plans for the upcoming year. 

Information Technology Category Management, which is the focus of today’s post, can be particularly challenging for a number of reasons. Most IT teams have a dual mandate of balancing the day to day support of their businesses while looking to optimize and automate operations, create efficiencies, and of course, reduce costs. IT Procurement can go a long way to leading that mandate to success but it takes a lot of work building relationships, having solid insight to technology, and the ability to overcome obstacles with obstreperous stakeholders and resource limitations. 

I see IT Category Management falling into three primary areas: Stakeholder Engagement, Contract Management, and Long-Term Strategies.

Stakeholder Engagement

In some companies, Procurement has successfully become a member of the IT leadership team. In other companies, Procurement is still held at bay by CIO’s and Director level leads. IT Procurement will be far more effective if they are working with IT at the leadership level. If, as a Procurement professional, you cannot get the level of access you need to be effective, you should work with your management to get that message to your CFO to see if they can advocate for your department. 

The benefits of having access to IT leadership will allow procurement to:

Obtain visibility of new projects and ideas as they emerge and develop

Become involved in project and budget planning

Begin market research and technology evaluations of potential future suppliers

Optimize its network and overview across the business, to identify requirements and suggest them as potential projects to the IT team. 

From my view and experiences, the amount of resources that a company will dedicate to IT Procurement is very limited and this influences the extent to which it can apply a strategic approach to projects.  Many IT stakeholders would prefer Procurement to be involved in all contract negotiations and procurement activities, but in practice, it is only possible for projects representing spend above a defined threshold, such as $100k.  However, Procurement's involvement in projects and contracts with lower spend values may be justified when:

They concern suppliers with which the company may place additional business. For example, a supplier is engaged for an evaluation trial. If the trial is successful, the outcome may lead to a complex, expensive deployment. Procurement can begin to build a relationship and complete preliminary reviews of licensing and data processing agreements

The requirements are for IT solutions that are considered to be critical to the business

There are specific risks and/or liabilities associated with issues such as data security.

That said, procurement may encourage the IT stakeholders to perform a level of self-service purchasing for some types of low-value services. 

In talking to client’s IT stakeholders, they see the value that Procurement provides beyond cost saving is as being difficult. A couple of Procurement's activities that are recognized as being important is providing market intelligence and facilitating the delivery of innovation by suppliers. To emphasize this benefit, Procurement can host “Innovation Days” with key suppliers. The suppliers love having the ability to get to showcase their new solutions and in getting facetime with IT leadership.  Procurement can also use feedback surveys and post-project reviews to objectively measure the value it provides; although this is not common practice.

Supplier relationship management (SRM) is typically Procurement's responsibility, even when the operational responsibility is placed with IT.  However, if Procurement does not have sufficient resources, SRM may be conducted by the IT team.

In some areas of IT, like infrastructure and software, the company may have two dozen significant suppliers, for which it is impractical to fully apply SRM.  The suppliers that are selected for SRM programs are typically only the top 10% of the supply base, and your company’s vendor management office should be able to provide the list of vendors who meet this threshold.

Improving IT Contracts

Source One is a respected source of benchmarking information (click here to download our benchmarking whitepaper) regarding the IT industry, and is being used by many of our client’s Procurement teams to obtain supplier and market information, as well as analysis and strategic guidance. 
In improving IT Contracts, there are several best practices:

Outcome-based key performance indicators (KPIs) and metrics are recognized as being useful but are difficult to apply.  

Application deployment, system enhancement, and development contracts should apply milestones linked to business requirements within contracts, in order to monitor the performance and service delivery.

Where possible, use your organization’s paper. This is nearly impossible with license agreements or SaaS subscriptions, but relying on suppliers’ contracts and in particular, performance measurements may result in your company missing valuable opportunities.

If your company hasn’t had suppliers refresh their rate cards recently, have them provide an updated card. This should be a collaborative effort in which they learn of the types of resources and services they may need to provide in the next 12 months.

An 'obligation tracker' tool may be used to monitor the compliance of suppliers with the contractual requirements.  This is a useful tool for recording and regularly updating supplier performance against the contract, as well as factors such as scope and price changes.  The overview an obligation tracker provides reduces the need to refer back to the contract to check details; and is also valuable during merger and acquisition activities.

Future Strategies

Future IT procurement strategies are expected to be focused on consolidation, standardization and simplification.  The trend for implementing software, platform and infrastructure as a service (SaaS, PaaS and IaaS) has not yet changed this centralized approach to IT strategies; but there is a preference for innovative solutions requiring minimal customization.

Companies are at varying levels of maturity in the implementation of cloud-based solutions.  The lack of control and ownership of data are issues still to be addressed by some; but there is a general acceptance of the move towards cloud-based computing solutions. As such, Procurement needs to become close with their company’s data privacy and security officer. Having a solid understanding of GDPR and your organization’s policies will allow you to move contracts through the evaluation, compliance assessment, and negotiation processes more quickly.

Technological trends that are expected to have an impact on IT procurement but are not significantly influencing strategy development and execution include:

The Internet of Things (IoT)


Digital twinning

Robotic process automation (RPA)

IT procurement professionals should continue to anticipate challenges regarding the solutions that are being promoted by suppliers as not needing involvement, approval or control by the IT team. CIO’s are struggling to eliminate Shadow IT (technology applications and services used in a business but not owned by IT) and suppliers are going directly to business stakeholders and trying to sell cloud-based services that they say can be easily implemented, integrated and operated.  This will result in the fragmentation of IT applications, as well as disruptive changes or redundancy within the IT function.  When standalone solutions are being used, IT still needs to control the quality standards and security, and have oversight of the architecture; for which governance policies and procedures must remain current.

The Bottom Line

IT category strategies are being focused on standardization, consolidation and simplification.

IT Procurement not may not have sufficient resources to meet the demand for its services from IT stakeholders. Project prioritization is critical.

Look for creative way to obtain feedback from IT stakeholders to learn Procurement’s value.

Using an obligation tracker for contract management and SRM.

Recognizing that only a limited number of suppliers can be actively engaged in an SRM program, usually the tier-one suppliers that may be regarded as being business partners, for which regular meetings and senior-level communications are justified.

From increasing salary and benefit offerings to expanding their recruitment net, motor carriers continue to use a number of different strategies to resolve the ongoing driver shortage affecting the trucking industry. While these approaches have worked to varying degrees of success, the fallout from the shortfall has proven too much to bear for some companies - forcing many of them to close, new data shows.

According to Brought Capital statistics obtained by Supply Chain Dive, the number of trucking companies that folded in the first half of 2019 reached 640. That's a three-fold increase from 2018 during the corresponding period.
"640 motor carriers have gone out of business so far in 2019."

Donald Broughton, principal and managing partner at Broughton Capital, told Supply Chain Dive that another issue carriers face is operating expenses; cost reduction hasn't come easily, with the decline in spot market prices adding insult to injury.

"So when your costs increase and the spot prices go down, to the extent that you're exposed to spot, you can go from being profitable to unprofitable very quickly," Broughton explained.

He further noted how several trucking firms upgraded their equipment in 2018 to replace the wear and tear of what they had previously. The spot market was in better shape 12 months ago so many companies had the money to spend. Their strategic investments came at an inopportune time, as it turns out, because spot rates have since slipped.

Meanwhile, operating ratios (ORs) throughout much of 2019 haven't gone particularly well for motor carriers either, averaging 100% since the year began, according to FreightWaves. This means for every dollar trucking firms earn in revenue, virtually the entirety of that total goes toward the day-to-day expenses of keeping the company afloat. This further explains why the number of motor carriers going out of business rose so dramatically over such a short period of time. OR ratio conditions were slightly better in 2017 at 99%.

Revenues up sharply
None of this is to suggest that the trucking industry is on the verge of collapse. Far from it. Indeed, according to newly published figures from the American Trucking Associations' American Trucking Trends Report, revenues reached just shy of $797 billion in 2018, a 14% increase from $700 billion in 2017.

Bob Costello, chief economist at ATA, noted that a lot of things went well for carriers last year, and the earnings data reflects that.

"2018 was a year of dynamic growth for the trucking industry," Costello explained.

What explains the disconnect, where some companies are doing well, while others are suffering? The apparent paradox may be attributable to the composition of the firms going under. Smaller companies with six trucks or fewer - which accounts for 91.3% of fleets in the U.S. - are doing well overall, while larger firms have experienced adversity. Through the first half of 2019, the average size of firms that ceased operations was 30 trucks. In 2018, the average was nine.

Early indications are positive
As for what the short-term future holds, no one knows for certain. However, there are signs of encouragement, as demand for delivery services is expected to pick up steam with the all-important holiday season just around the corner. Retail - one of the trucking industry's most active sectors in terms of freight tonnage and orders - has experienced growth over much of 2019 thanks to healthy consumer spending and optimism about the country's economy. In July, retail sales rose 1% on a seasonally adjusted basis from June and 5.6% unadjusted from 12 months earlier, the National Retail Federation reported.

NRF Chief Economist Jack Kleinhenz noted that so long as the labor market remains healthy and unemployment low, robust consumer spending is poised to maintain its momentum.