June 2020

The phrase “survival of the fittest” originated from Charles Darwin’s evolutionary theory which highlights the concept that adaptation will lead to eventual long-term survival and success.  This theory holds value more so than ever as over the span of just a few weeks the entire global economy has been interrupted by the COVID-19 pandemic. Many organization went from record breaking revenue volumes to a seismic downturn once COVID-19 wreaked havoc across the globe.

This article will help highlight how entire industries have been practicing Charles Darwin’s theory as organizations have adapted and evolved from their standard offerings in order to survive and thrive during these challenging times.

From Vodka to Hand Sanitizer

When distilleries across America were forced to shut their doors indefinitely as a result of the COVID-19 pandemic, a shortage arose within a completely different marketplace that needed to be resolved.  As citizens began purchasing PPE and other vital supplies to keep themselves safe while sheltering in place, hand sanitizer quickly became a hot commodity.  Many distilleries identified this need and immediately pivoted their operation to answer the call for their local communities.  Across the nation in just a matter of days distilleries halted their production of grain alcohol and began producing hand sanitizer from 55 gallon drums to pints, liters and any other kind of containers they could get their hands on.  Many distilleries also provided high quality products by utilizing the exact ingredients, standards and guidelines required by WHO (World Health Organization) to establish complete transparency and trust with consumers.

From Trade Shows to Field Hospitals

Many event planning organizations that design and build custom structures for trade shows found themselves without a market to service indefinitely due social distancing in place.  In addition, facilities such as Convention Centers these organizations often utilized were being transformed into temporary field hospitals in order to support the surge of patients forecasted for COVID-19.  These event planning agencies identified an immediate need to help support the development and construction of these temporary hospitals.  As a result, they pivoted their services to provide labor, walls, tables, tents and other miscellaneous furniture and structural needs to help build a fully operational hospital.  This rapid response from event agencies large inventory of product offerings played a crucial part in providing their communities with an immediate need for creating temporary structures overnight.

From Clothing to Facemasks 

Clothing retailers across the country were forced to close their doors indefinitely in response to mandated social distancing orders.  As a result, many clothing manufacturers were left with an excess of raw materials and a lack of shelving space to sell their goods.  As citizens began taking their own measures of protecting themselves from the virus, one PPE product that became a hot commodity were facemasks.  Clothing manufacturers immediately identified this need and began pivoting their operations to meet this demand overnight.  Raw materials immediately transitioned to facemask production and any overstocked inventory was taken off the shelves and altered to help meet the need of bulk orders.  Retailers also shifted their operation to drive facemask sales through online ordering and shipping in order to continue practicing social distancing while still providing an essential service for the community.

While each of these industries noted above are very different in terms of product offerings, one thing that remains constant is the ability to identify and pivot their operations to survive.  Identifying and satisfying a new market need enabled these organizations to keep their revenue stream flowing during times of economic uncertainty in order to stay afloat.  The global economy is still facing much uncertainty in the coming months, but one concept that will remain true is the fact that only the strongest organizations will survive.

Efficiency is the name of the game in the supply chain, and that's a principle that should apply to all aspects of your business, not just shipping and receiving. One area where you might be able to make some considerable gains on this front is the purchasing department, and even a few small changes could go a long way toward ensuring long-term success.

Perhaps the most effective way to do this is to simply work to improve your company's relationships with its various suppliers, through openness and clear efforts to build a long-term relationship that doesn't need to be reconsidered on a regular basis, according to Concord. That way, you trust them to deliver the goods your company needs, and they trust you to keep up your ordering patterns and stay in regular contact about how things are going. In these cases, paying a little bit of a premium on some items may be worth that extra peace of mind.

Building the right relationships is critical to effective purchasing.Building the right relationships is critical to effective purchasing.
At the same time, though, it's also critical to ensure you also have a larger network to draw from in times of need, so that if your purchasing efforts from a preferred partner experience an unexpected hiccup (or even an anticipated problem), other sources can be tapped, the report said. That way, you always have a fallback position available and will be more likely to stay in a good spot no matter what issues other partners experience.

Utilize technology
While a lot of building and maintaining relationships with partners is relatively reliant on centuries-old practices, it's also important to make sure you're using the latest technology to manage the aspects that undergird those connections, according to Fraxion. For instance, many companies still rely on a mix of paper and electronic files in their purchasing departments, and doing what you can to eliminate as much of the physical documents as you can is a great way to move forward.
That may be particularly true when it comes to ensuring there's a clear course for every order you take, and that no data goes missing at a time when it's absolutely critical, the site said. With an all-electronic purchasing process in place, you will never lose the all-important details of a given order, and can be more confident in proceeding with other aspects of your company's work.

Look inward
As much as purchasing is certainly an outward-facing portion of your business, it's also important to solicit feedback from people within your company to see how the current or planned purchasing processes are or will affect them, according to River Star. That way, everyone working in procurement can get together and figure out how to make sure what they do makes things easier for their coworkers in different departments, such as right-sizing orders, figuring out when replacement parts need to be shipped and so on.
Generally speaking, when your purchasing department does more to reconsider both its inter- and intra-office processes on an ongoing basis, it will typically have more success in finding the efficiency needed to take your whole company to the next level.

No company - big or small - is fully insulated from risk with the supply chain, and the novel coronavirus pandemic has made that fact obvious to just about everyone in the business world. While you are not untouchable on this front, you can certainly do more to insulate yourself from the risk of supply chain disruptions of any size.
The following tips should help you prepare to weather the storm in short order:

1) Make as much as your data real-time as possible
The more you can do to make sure you have an understanding of where all your shipments are in the real world at any given time, the better off you will be when it comes to being able to dodge the obstacles that occasionally arise even in the best of times, according to Fast Company. This may require working with shippers, supply chain partners and more to fully achieve.

2) Always be preparing
While real-time data is important, it's not just the present you should be worried about, Fast Company said. Any strategies you have for stocking and shipping should be made months in advance so that you can react to potential changes - even previously unforeseeable ones - with plenty of time to reconsider your moves.

Getting a better handle on your data can go a long way.Getting a better handle on your data can go a long way.
3) Increase visibility
In much the same way it's important to get real-time data, it's also critical to make sure you get it from as many sources as possible, according to Thomas. The difference between being able to get more insight into the operations of 25% of your supply chain partners and even 50% of them can be a huge boon for your long-term planning efforts.

4) Have a contingency plan in place
It's one thing to have a long-term plan for how you manage your inventory in place, but it's quite another to be able to react whenever a hiccup arises that's outside your control, Thomas noted. Being able to quickly pivot from your Plan A to that all-important Plan B or even C as needed, to keep your operations running as smoothly as possible, is critical.
5) Review your overall supply chain
Over the years, you have likely generated reams of data about all your supply chain partners; that could tell you a lot about where you stand right now and in the future, according to Industry Star. If you can identify past instances where you have found significant success, and those where you have struggled, you may identify patterns that allow you to be more responsive going forward.
6) Find more suppliers
While you may have plenty of preferred partners cultivated over the years, no one bats 1.000, Industry Star added. For those reasons, it might be wise to have a roster of backup suppliers that can be tapped as needed.
7) Stockpile some key inventory
If you find over time that some aspects of your inventory may be particularly vulnerable to supply chain fluctuations, it can be wise to stock up and have some reserve on hand, Industry Star further advised. That way, you'll always have something to fall back on, no matter what happens.

It has been months since the first wave of the novel coronavirus pandemic first took hold in the U.S., and rocked numerous industries, including the supply chain. Now, many sectors have shifted to accommodate the "new normal," even as the number of diagnosed cases nationwide continues to rise, but the supply chain itself is still very much in recovery mode.
Often, these problems arise at the point of production; meat-packing plants in the U.S., Ireland and Australia have had to shut down due to outbreaks among workers, and many factories the world over had to at least alter their production schedules, according to the Financial Times. These may seem like isolated incidents, but even the most resilient supply chains can be knocked off kilter by disruptions of this type.

Supply chains may be backing up at the point of production these days.Supply chains may be backing up at the point of production these days.
Transit an issue
At the same time, many goods that are typically shipped alongside passenger cargo on commercial airline flights have been held up in many parts of the world because air traffic has slowed considerably, the report said. Often, items can still get from Point A to Point B in relatively short order, but certainly not on their normal schedules, leading to congestion that makes shipping perishable goods in particular a true struggle. This may force some companies to change their approaches to shipping and receiving altogether.

Impacted industries
Extreme inefficiency in the food and perishable goods supply chains has been the most obvious casualty in all this, but another sector is also at risk these days, according to Johns Hopkins University Hub. Many pharmaceuticals used all over the world are produced in China and India, where lockdowns have slowed processes. That could create some problems for many companies - and consumers - the world over, even as producers correct course and strive to get back on track.
Indeed, the World Economic Forum estimates that in January and February, industrial production in China slipped 13.5% on an annual basis. While that put the global giant basically on par with production levels seen in 2015, it was still a sharp decline unseen in the 21st century. Pretty much every type of major good produced there - from tech components to clothing and raw materials - declined at least somewhat in terms of both imports and exports during those months.
With all this in mind, it's important to note that a lot of the data compiled in recent weeks is still lagging months behind reality and the real-world picture of the situation is evolving more rapidly than statistics suggest. As a consequence, those in the supply chain may have to be more proactive about staying in touch with their partners and monitoring as much of the situation as they can in real time. That kind of attention to detail will only serve to increase the resilience of their supply chain and help them more effectively weather the storm.

In business, just about everything you do boils down to one simple question: How does it affect the bottom line? That is certainly true when it comes to your purchasing processes, and often the price you pay for anything you order can be a matter of negotiation.
If you can cut even a few cents from your per-item costs, the savings can be dramatic over time, so getting this aspect of your business right is critical to ongoing success. The following steps could help you find those savings and move toward greater success:

1) Do your homework
When you're negotiating with a supplier, you have to understand that they know the products you intend to purchase inside and out; you should be on that level as well, according to Purchase Control. The more you know about a given product, as well as similar offerings that could be more affordable, the better off you will be when it comes to finding a potential point of negotiation.

Don't let yourself get bogged down in an unfavorable negotiation.Don't let yourself get bogged down in an unfavorable negotiation.
2) Shop around
Along similar lines, it's certainly a good idea to make sure you check with other suppliers for a given product to get the best possible price, Purchase Control said. Even if this is a partner with which you have worked successfully for years, your primary concern should be saving money whenever you can, or at least leveraging other opportunities to get more out of an existing relationship.

3) Provide value on your end
Suppliers may be more apt to give you a better deal on a product they offer if there's something in it for them beyond the monetary transaction, according to the Harvard Business Review. Particularly if you are new to working with them, your ability to give them a new market to break into or otherwise expand their horizons, provide a steady ongoing partnership and so on could be seen as a huge advantage that fetches you a better price.

4) Consolidate your orders
As you do more business with a supplier, your ability to "buy in bulk" - whether for one product or many - can be invaluable, the Harvard Business Review added. If you can crunch the numbers and see if you can combine a number of smaller orders made with a handful of suppliers into one big one with a single option, you may find more wiggle room than you expect.

5) Look for an exact price
Often, when working with a supplier, they might give you a price range (for instance $1-2 per item) rather than a hard and fast number, according to Zycus. That can create an unpredictable and potentially unappealing scenario, making your cost per order dependent on potentially a number of factors. But if you can get a supplier to agree to a single price, a lot of that guesswork comes out of the process.

6) Know when to walk away
Finally, it's a good idea to go into a negotiation knowing what constitutes a "deal breaker," Zycus said. When negotiations hit that point, you should be fully prepared to take your business elsewhere rather than get roped into an unfavorable deal.

When you're working in the supply chain, perhaps the most important thing to keep in mind is that there's a huge demand for workers in the sector and only so many people who are both willing and qualified to fill those open positions. For that reason, you need to do all you can as an organization to both attract and retain talent on an ongoing basis.

1) Compare with what others provide
If you're trying to do a little more to stand out from the competition in terms of your hiring and compensation plans, you first need to know where you stand, according to Inc. The good news is that there are many resources where you can look up general salary information for your industry, and even specific competitors, online. Moreover, you may be able to share such information with your supply chain partners.

There are many considerations that go into setting salaries.There are many considerations that go into setting salaries.
2) Make it a range
Generally speaking, it's not a good idea to apply a hard and fast salary to a given role, Inc., said. For instance, if you say a person holding a certain position in your business makes $40,000 per year, that might not be adequate to draw in new hires or keep them around because it's so anchored to one specific number. However, if you say it's a range of $38,000 to $42,000, that might give you a little more wiggle room to land that next great hire.

3) Think about whether you want to make it hourly or salary
Another thing that shouldn't be hard and fast: How you pay your employees, according to Entrepreneur. For roles where a person's productivity is tied to their time on the job, an hourly wage is appropriate, but for those who can get their work done within a broader time frame, it might be wiser to go with a salaried approach.

4) Provide bonuses for added incentive
Sometimes, you may want to do more to reward your best workers but they could be at the max of your salary range for that role, Entrepreneur noted. Building bonus structures into your salary offerings could end up being a net positive, by giving everyone something to strive for. This may increases productivity as a result.

5) Give people room to move up the corporate ladder
Finally, if people feel they're stuck in their roles at your company, they may want to look for new opportunities elsewhere rather than stay in the same old job, according to the Dixon Pilot. As such, it's a good idea to give people the opportunity to take that next step in their careers - potentially including paying for the necessary training or certifications - so they always see a future.
The more your company can do to consistently review where it stands when it comes to these issues and work to address workers' needs on an ongoing basis, the better off you will be when it comes to keeping up with the competition in the ever-evolving supply chain industry.

Part 2: How to Assess the Current State of the Category

As a result of the new economic reality, profit, and cash-flow improvements are a top priority across companies in every industry. The dynamics of the current climate shifts week to week and organizations are presented with the challenge of doing more with less. By assessing the current state of the category, or baseline assessment, organizations can identify, quantify, and prioritize initiatives to drive cost reduction opportunities. Opportunities that are usually missed because of fragmented spend across suppliers, under-resourced teams and reactionary management.

Though this approach is far from the cries of a new concept, oftentimes these assessments are conducted during budgeting and the financial planning season by most companies. Meanwhile, organizations are currently working feverishly to navigate the wake of the COVID-19 pandemic and may be taking a reactionary rather than a structured approach to decision making given the impacts. Taking a step back and using a methodical approach to identify where to target first and where the greatest savings opportunities lie

By following the steps below organizations can identify the cost-reduction and improvement possibilities, and proactively determine how to achieve them.

1.       Data Collection and Category Analysis
2.       Opportunity Identification/Validation
3.       Implementation Roadmap

Data Collection and Category Analysis
The initial phase is critical as it lays the framework for the entire assessment and ultimately a successful sourcing engagement. Missing data sets or contractual documents will not only delay the exercise but depict an incomplete picture for the assessment team to analyze. It's important to understand the qualitative details related to the category such as the incumbent supplier partnerships including the history, value-adds, and pain points of the relationship.

Opportunity Identification/Validation
The fully developed spend profile creates a baseline to calculate savings projections for each opportunity. It's important to have buy-in from the stakeholder groups and ensure everyone, including finance, agrees on the savings methodology for each opportunity before proceeding to the final stage.

Implementation Roadmap
The implementation process for each opportunity should be planned out and will vary with available resources playing a key role. Today organizations are running lean as a result of the current COVID-19 climate and it may be unrealistic to expect teams to expedite identified programs. SourceOne's experienced consultants can support your organization's existing team in driving the identified initiatives, responding to the current economic challenges, and increase realized savings that impact the bottom line.

Be sure to look-out next week for part 3 of the Strategic Recovery in the Marketing Category mini-series where we will discuss why NOW is the time to be negotiating with suppliers.

Covid-19 has had many impacts on businesses and people and some of these impacts may become the new normal.  As stay at home orders were mandated and retail stores were forced to close, e-commerce saw exponential growth.  Although many companies over the years have implemented e-commerce into their operations, the shift from brick-and-mortar to e-commerce is expected to increase.  This shift to e-commerce will drive the demand of warehouse space.

An increase in investment in warehouse space is projected to occur as e-commerce retailers grow.  MasterCard stated that e-commerce spending grew 93% year over year this May.   According to a new report from Prologis, e-commerce requires three times the logistics space of traditional storefronts.  The reason for this is because 100% of the retailers' inventory is now in a warehouse, rather than spaced out between a warehouse and stores.  Also, online retailers tend to have a larger array of products in their inventory, thus increasing their storage needs. 

Due to the rising demand of warehouse space, DB Schenker, a global leader in supply chain management and logistics solutions is providing a new service.  This new service screens almost 9 million square meters of storage space daily.  It identifies and assesses available idle space in their almost 800 logistic warehouses in more than 60 countries.  Areas that are typically used for dedicated customers are being transformed into temporary storage areas for companies that urgently need additional capacity.  With Covid-19, industries such as food and healthcare are experiencing out of the ordinary demand rates, thus affecting their production levels and storage abilities.  Although this service was reactive to Covid-19, the ability and use of storage scanners will continue in the future, as the need for warehouses increase.

Warehouses have recently been and will continue to be in high demand.  The expansion of e-commerce and the shift from brick-and-mortar to e-commerce due to Covid-19 has drastically impacted the need for storage space.  The demand for warehouses will continue to rise.

The following article comes to the Strategic Sourceror courtesy of Naseem Malik and MRA Global 

Part I of this article, I discussed some of the overarching supply chain topics that have been commanding most of the oxygen. Everything supply chain related from risk to resiliency and transparencies and how broad sectors of our economy were being impacted and the stern counsel being provided from experts help us never be caught short ever again. If you bought all that, I have some beachfront property to sell you in Kansas.

‘The Great Supply Chain Disentanglement’
As the current administration continues to harden their hawkish stance towards China, there is another issue fraught with peril that continues to alternatively simmer and somewhat boil over. This is what I like to call the coming ‘supply chain disentanglement’. As our relations fray with the Middle Kingdom, we must be ready to accept the significant cost to competitiveness at play here too. For clarity purposes, goal isn’t to diminish the potential security considerations at play with this key rival and trading partner of ours. When it comes to network equipment for national defense or critical medical supplies - we do share a certain level of interdependence that must be balanced.

From the US perspective, we are dependent on China for pharmaceutical ingredients and that requires us to solidify and diversify (hopefully soon) our pharmaceutical supply chain prior to worsening relations. According to the FDA, in 2019 an estimated 40% of finished medications and 80% of active pharmaceutical ingredients were manufactured overseas, with the bulk of those coming China and India. Lest we think they have all the power, China too is dependent on US drugs, particularly our cancer drugs. And yes, we are still the world’s leading source of pharma innovation, so we have that going for us too. From a strictly risk mitigation perspective, it’s all the more important for both partners to ensure there aren’t any supply disruptions for these critical drugs and treatments as we learn to co-exist with growing uneasiness while still being co-dependent. Sounds like a lot of fun for those eager negotiators out there.

This decoupling also affects educational linkages between the two nations. With the ensuing Chinese brain drain here, the US will have to invest more in STEM at home and let up on its immigration policies with other countries like India to bridge the gap. This will also require us to deepen our economic and political ties with friends and allies across the pond and the world. Of course, this too sounds like academician-speak as they’re good at touting these lofty ambitions worth pursuing, but in actuality much harder to implement in real life.

The Vaccinated Supply Chain
What really caught my fancy in the recent past relates to none other than the one and only Amazon. They have certainly earned some goodwill during the pandemic as the country was dependent on their supply chain infrastructure and by the massive hiring they undertook. Where they really stunned their shareholders was in their last quarterly earnings call when Bezos told them all that they may want to take a seat…because Amazon is now trying to create the first ever vaccinated supply chain. They will take the entirety of their $4B quarterly profit and dedicate it to this cause. Imagine any other CEO doing this and their stock and company would get skewered. But if there’s anyone that can back their big talk, it’s the biggest of them all.

This vaccinated supply chain will cover PPE/safety protocols, enhanced cleaning, hiring new workers and increasing compensation. Their goal is to have COVID-free supply chain that can handle all of their goods safely from supplier to customer. It’s a brilliantly audacious move because others can’t even come close to this. FedEx can’t do it as they don’t control the front end. Walmart can’t do it because they don’t control the last mile and still have to use 3rd party delivery firms. How powerful a narrative is it to tell your suppliers, customers, partners, and workers that we will have an interruption and COVID free supply chain and oh by the way, no one else can even come close. It helps them that they’re fully vertical and have access to cheap capital to pull off this very expensive feat.

The Hottest Product Around
And of course, the icing on the cake is that they are also feverishly working to develop what will probably make the world’s biggest consumer product – testing for the coronavirus. Coming soon to a delivery near you – fresh food and your own home testing kit. With apologies to all other successful supply chain companies and models out there, how soon before it’s just the Amazon supply chain and everybody else when we refer to continuous evolution/results when it comes to the ubiquities of the supply chain?

MRA Global Sourcing is a specialized recruiting solutions firm, placing top talent in the supply management arena including procurement, strategic sourcing, supply chain and logistics.
In recent years, there has been a major shift in how business leverage technology to automate and streamline procurement processes. Once regarded as a “nice to have”, technology implementations are now seen as a vital solution companies need to transform their business for the future. An unfortunate side effect of this thinking is that technology, specifically Procure to Pay technology is the silver bullet that can miraculously fix underlying gaps and inefficiencies in current business processes. This is where the role of a consultant comes into play, as the software and tools that will best support your existing P2P processes are often the most challenging to build and successfully implement. It can be normal for organizations to initially balk at the idea of bringing in a consultant to assist with new tech implementation or a digital transformation project.  There may be doubt that the consultant will fully understand their nuanced policies, or they may have had negative experiences with consultants in the past. However, a consultant with the right knowledge and skills can not only enhance your tech implementation initiative, but also save you time and money in the process. Below we will explore 6 ways consultants add value to your P2P tech implementation projects:

Experience with the entire Source-to-Pay life-cycle
A good consultant will bring a wealth of knowledge to the table, including a holistic understanding of the entire procurement life-cycle. This knowledge gives a consultant a good understanding of how an organization’s Sourcing, Procurement and Accounts Payable teams should interface and how technology can best support that. A tenured consultant also understands industry benchmarks, best practices and how your organization measures up.

Provide tailored solutions to nuanced business processes and challenges
An unfortunate trend we often see is companies purchasing and implementing expensive out of the box Procure to pay solutions. Many of these projects either fail or do no live up to initial expectations, as organizations often lack the experience needed to implement P2P software and adapt its functionalities around existing policy and procure. Involving a consulting team at the beginning of any implementation ensures that business policies are defined, understood, and documented. Software should then be configured around these processes allowing for tools to work in a way that business users understand and expect.

Set expectations and help realize expected benefits   
A good consultant will help define and measure expectations and benefits before implementation of technology even begins. This is done by establishing a baseline strategy, identifying, and communicating with key stakeholders and documenting the objectives of the end users who will be using the technology daily. An aggregation of feedback from these decisions should allow consultants to communicate what benefits can be realized from implementation and how realistic achieving these benefits will be within the scope of the project.

Establish effective change management strategies
There are three factors that must always be considered in a successful software implementation: People, Process, and Technology. As mentioned earlier, many organizations fall for the trap of solely focusing on the technology piece sometimes without considering, process or most importantly, the people who will be using the software. A fully functional software implementation is just as much of a failure if there has been no change management strategy in place to support the end user’s understanding and embracement of new technology. A part of a consultant’s role is helping to determine how change should be communicated, and who are they key people who need to understand these changes.

Identify problem areas or gaps in processes
It is rare to not run into a business process or established policy that and out-of-box, or customized solution cannot fix. This can often lead to difficult or challenging discussions, but it is the job of a consultant to be transparent when your organization runs into such cases. Often these discussions can lead into identify gaps in processes or inefficiencies in ways of working the organizations have simply adapted to. A consultant’s knowledge of industry best practices and lessons learned from previous clients.

Gauge maturity and assist with future growth
What we have frequently seen in implementation projects with no consultative engagement is that once these projects finish, the client is often left hanging. They have invested time, energy, resources and most importantly, money into a large technology overhaul but are left in the dark when determining next steps. How can they measure the ROI of this implementation? How can they determine the success of the project not only at its conclusion, but two, five, or even ten years down the line? A consultant can help determine your procurement and AP maturity before and post implement. A great consultant establishes a relationship with their clients and help them establish and ongoing road map for continuous improvement of the technology and the processes that drive it.

For more information about digital transportation with a consultative approach, please contact Corcentric’s Advisory team at our website.

It should come as no surprise that most businesses in the supply chain were at least somewhat impacted by the novel coronavirus pandemic, and the impact of the first slowdowns that took place months ago are still being felt across the industry. For obvious reasons, that includes companies' purchasing and procurement efforts, and it's expected that the effects of this slowdown will continue for some time to come.

While only 21% of companies said the pandemic would definitely change their purchasing plans - and 26% said it would not - nearly half of all respondents were simply unsure what kind of impact it would have, according to a Peerless Research Group poll conducted in April. Some aspects of the supply chain, such as those in the food and beverage space, continued to boom, while other companies were forced into temporary shutdowns or significant scaling back of their operations. However, the uncertainty the industry felt at the time of the poll has likely lingered, at least to some extent, over the past few months.

Companies may need to do more to find purchasing success these days.Companies may need to do more to find purchasing success these days.
Indeed, nearly 3 in 5 companies polled said they expected to shift their purchasing strategies either immediately or by the end of July, with another 1 in 10 saying those changes would occur within six months of the outbreak, the poll showed. The remaining respondents were predominantly the 1 in 5 who said they knew changes would occur, but it was unclear when that would happen.

Was the industry ready?
It may be fair to say that much of that uncertainty comes because the pandemic's fallout was both sudden and significant, but at the same time, many supply chain industry veterans also think the sector itself may not have been set up to absorb such an impact, according to new research from AIMMS, published by DC Velocity. For instance, 54% of those polled said they believe their own companies' supply chain planning processes are just "somewhat effective," with another 17% saying their in-house strategies were either "not at all effective" or "not so effective." Altogether, that represents more than 7 in 10 businesses in the industry feeling at least some negative feelings about how they handle the supply chain.

Figuring it out
Of course, many of these issues existed even before the COVID-19 outbreak, which led to many companies scrambling to correct course, according to Supply Chain Dive. Included in those emergency efforts were canceled orders, of which fewer than half of purchasers in the clothing supply chain said they canceled 25% of theirs or less. In other cases, companies sought to reduce the cost of their orders, with 1 in 5 companies saying they got discounts of 25% or less on their previously completed orders.
The latter case shows a potential path to success in these uncertain times: Strategizing alongside your supply chain partners will likely go a long way toward ensuring you get through these challenges - and those in the future - effectively.

The following article comes to the Strategic Sourceror courtesy of Naseem Malik and MRA Global 

There has been no shortage of discussions, opinions, warnings, and recommendations around what was usually referred to as stodgy old supply chain. Post-pandemic, that surely won’t be the case as now it seems we can’t get enough news when it comes to all things supply chain.

From my vantage point, here are all major themes around supply chain that are being assessed and discussed:
  • Transparency 
  • Resiliency 
  • Agility 
  • Vulnerability 
  • Planning 
  • Disruption 
  • Efficiency 
  • Risk 
  • Exposure 
  • ...and probably a few more to really make things mind-numbing! 
We have experts from McKinsey, HBR, The Economist, ISM, WSJ, Supply Chain Review, etc. that are espousing all the things that companies should have done and should do now to prepare for an eventuality akin to what we are currently experiencing. Personally, I like to jest by saying that all supply chain risk professionals should be taken to task for their abject failure to predict this once in a hundred-year pandemic, but that’s just me.

While we can dwell over what appears to be fairly obvious advice for companies, I think there are more interesting developments worth keeping on the radar. Lest I give it too short a shrift, let’s cover some of the more compelling issues:

Risk & Resiliency 
When it comes to the risk and resiliency part, the pundits are advising to start thinking ahead to discontinuous shifts and the next normal as they move beyond the recovery phase. Some of these pedagogical assessments start with not so flowery depictions of how supply chain risk can be found at the corner of exposure and vulnerability. As heart-warming as that sounds, it doesn’t help us understand how exactly to deal with the phenomenon of risk experts underestimating the probability of such catastrophic events in the future. Needless to say, if you really want a world-class and risk-aware environment, all you need to do is build, implement and embed a strong culture of ownership within your organization that should be able to predict all types of doomsday scenarios.

Of course, you will be better served by utilizing their services as they help you figure out all these interconnected systems and navigate through global supply shocks. Since they all predict this will inevitably transpire again, best start preparing now. I know, genius.

Global & Local Sourcing
Another facet that’s been embedded in this discussion pertains to the supply crisis due to weak global and local sourcing strategies. An example cited is how almost a decade ago we had the chance to learn from the earthquake/tsunami that struck Japan. Expectation was that companies would learn and not be exposed to such weaknesses in their supply chain. Not just that, but they would also have a better plan in place for their second and third tier global suppliers. Instead, we’ve been reduced to handwringing over why we were so heavily invested in China and why the risk/benefit analysis of single sourcing didn’t help avoid this problem. Again, it wouldn’t be too much of a stretch to imagine that most of these contingencies were probably sacrificed at the altar of securing products and/or to meet competitive cost targets.

A particular example of sourcing and supplier extortion run amok came from one of our global clients, Ansell. In an interview with WSJ (4/29/2020), the CEO of this supplier of PPE described how their company will have very long memories once things subside in the next quarter or so. This Australian company was aghast to learn their supplier were marking up their regular product from 2,3 4 to all the way up to 500% in the middle of the pandemic While they immediately scrambled to find alternative sources, when they couldn’t, they had to swallow hard and reluctantly agreed. As if this wasn’t enough, they also had certain distributors they typically sold to that also added on a 100% markup to their products. That warrants them being cut off and business being diverted to their competitors. According to their info, there were 25K new companies in China producing masks. Good luck vetting that greenfield supply base – no, thanks.

Suppliers & Deliveries
There was some positive news in that the ISM Manufacturing Index had climbed slightly in May. It is noteworthy that there is a hint of distortion in the reported component delivery times. Usually this happens when suppliers are inundated with orders and cannot meet demand with business uptick. But in this case, the supply chain disruptions around the world are obviously Covid-19 related. And when it comes to inventories, instead of rising when manufacturing is hurting and orders are cratering, it did the opposite also because of the pandemic.

In Part II of this article, I’ll conclude with my favorite supply chain story of the past few months. Hint: it’s where healthcare meets the ultimate disruptor.

MRA Global Sourcing is a specialized recruiting solutions firm, placing top talent in the supply management arena including procurement, strategic sourcing, supply chain and logistics.

Just as with most other things in life, getting ahead as a company in the supply chain requires quite a bit of help. For that reason, as your operations grow, shift, change course and improve, you need to make sure your supply chain partners come along for the ride. Moreover, you have to be able to play that kind of support role for them when they need to do the same.

As you might imagine, there's a lot that goes into that kind of nimble approach, on all sides of your professional relationships - and especially now, with so many companies changing course amid the novel coronavirus pandemic, according to Lou Longo, a partner at Plante Moran and leader of its International Consulting Practice, writing for Industry Week. In times like these, that means companies should look both inwardly and to their partners to figure out what they need to do to get back to full operational capacity at as many steps of the supply chain as they can.

As you re-open your operations, or re-expand them, assess how ready your partners are to do the same, and what you can do for one another to collectively get back to full capacity, the report said. If you can all proceed on a similar path at the same time, it may be easier to avoid shortfalls in inventory or misaligned shipping needs.

Making connections with supply chain partners is a must.Making connections with supply chain partners is a must.

What can you do?
While you might be able to quickly and easily determine your own in-house concerns for growing - either in normal times or as you recover from the COVID-19 shutdowns - it's not always easy to do the same when it comes to your partners, according to Vend. It may as a result be wise to put together an in-house team to regularly assess your needs, and then also collaborate with your partners to have similar efforts under their roofs. That way, you can all choose one or two representatives to come together and discuss your shared or unique needs on an ongoing basis.

These discussions - whether internal or outward-facing - could include decisions on staffing, technology investment and implementation, how to foster better relationships beyond your immediate council members, sourcing and so on, the report said. Regularly reviewing your efforts to determine how effective they have been could also be a major help.

Getting it right
With all this having been said, companies have a few things that could become important guiding principles that they can keep in mind, according to Strategy & Business. The need to develop strategies with a clear end-goal in mind is a big one, but so too are analyzing potential pluses and minuses - for all involved - as well as making sure these efforts are supported both within and outside your company.

When there's more collaboration, data sharing and transparency, everyone involved in these efforts will have a far better idea of what everyone else is doing. When this happens, the odds of all those partners finding success may increase dramatically.

Everyone within your organization is held to a high standard and your vendors should be no exception to this rule. For business relationships to thrive both parties mustn't get complacent and actively participate in the relationship. No matter how many vendors your organization is working with, accountability is key. Once your vendor understands the level of accountability expected their performance and your relationship will grow.

Establishing a Service Level Agreement or "SLA" with your supplier is one of the best ways to ensure accountability. SLAs will help to eliminate any expectation gaps by constituting acceptable service in quantifiable and measurable terms, where applicable.

To ensure everything in your power runs like a well-oiled machine, we've developed a set of components, both service, and management related, that should be included in a merchandising Service Level Agreement. While the expectations below should act as the framework for your service level agreement Procurement professionals can formalize service expectations that build onto this framework based on SLA best practices and experience within the merchandising space to create a culture of high-quality service and accountability within your organization.
  • Specifics regarding the services provided
  • Timing related to each provided service
  • Remedies/penalties for each of the performance expectations
  • Termination proceedings for failure to comply with expectations
  • Quality control plan, including resources and assurance details
  • Reporting Process, including content and frequency
  • Ongoing communication expectations, including meeting iteration and context details
  • Key contacts/responsible parties of both the organization and vendor

As mentioned previously, complacency is detrimental to relationship growth and overall success. Keep in mind that SLAs act as a measuring tool and bring uniformity and consistency to vendor performance allowing your organization to compare similar services across vendors within your space. To ensure consistency from an accountability perspective a service level agreement must be actively monitored to determine compliance and reviewed periodically to determine if modifications are needed.

In any business, bringing in more than you spend is the name of the game, and in the supply chain, it's not always easy. One of the simplest ways to get a better handle on these efforts is to find ways to cut costs in-house, because it's often a lot easier and quicker to find ways to reduce spending by even 1% than to potentially forge new partnerships or find new sources of revenue.
One of the most straightforward way to tackle this problem is to look at your current operations and re-examine your strategies, either in-house or when dealing with your partners, according to Supply Chain Quarterly. As businesses grow, change or shift their focus over time, it is important to remember what the core mission of the company is, and readjust strategies to hone back in on them. This can, and perhaps should, involve conversations with your partners to see if you're meeting their needs.

That kind of examination of existing processes and collaboration can help you find ways in which your efforts are, maybe, falling short of expectations or otherwise inefficient, and help you identify areas where you need to readjust, the report said. After all, if you haven't nailed down what's lagging in the first place, it's basically impossible to address those underlying issues.

Slightly changing even a few of your processes could unlock hidden potential.Slightly changing even a few of your processes could unlock hidden potential.
Think about storage
Among of the biggest areas where supply chain businesses may run into inefficiency is in their ordering and shipping efforts, according to Lean Supply Solutions. For instance, if your business routinely orders 100 widgets per month from a supplier, but only ships out 98 per month, the number of widgets you have in-house is generally going to grow to a point where you have too many on your shelves. What's the fix? Examining long-term data and right-sizing your ordering on a month-to-month basis.

Along similar lines, it might be wise to reconsider your shipping and receiving processes, because if you can reduce the amount of time every item spends under your roof, that can have a major ripple effect on the company as a whole, the report said. While you might be more or less satisfied with your current processes, here is another area where even a 1% improvement can have positive effects throughout your operations over time.

Consider your workers
Another area where in-house costs can add up quickly is, of course, labor, according to Floship. While you may not want or need to cut staff - especially during an economic crisis - there are still plenty of things you can do to make sure you get the most out of each worker on each shift. Something as simple as more clearly communicating expectations or reconsidering picking and packing strategies in their entirety could help unlock efficiency you didn't even realize was possible.
With all this in mind, it's certainly important to look at every one of your in-house processes to see if there are little hiccups or kinks that can be smoothed over. These are simple ways to cut operational inefficiency and, therefore, reduce your cost of operation.

Part 1: The Benefits of Marketing Procurement in the Current Economy 

We are all feeling the strain of the current climate and reacting to the panic. As firms are cutting "non-essential" spend during this period of economic and financial uncertainty, marketing is traditionally one of the first areas to be considered. However, it's critical to remember that indirect spend suppliers are looking for ways to not only maintain but increase their business, resulting in a buyers' market.

Meanwhile, due to staff cutbacks, your company workforce may be shrinking with increased responsibilities being assumed. This means individuals with limited procurement sourcing and negotiation experience may now be managing entirely foreign areas. This approach is potentially leaving dollars on the table to drive savings and identify efficiencies across both the category and the company holistically.

Our consultant's at Corcentric have built their reputation by leveraging category expertise and sourcing best practices to produce savings. Trust the sourcing specialists to gain negotiation leverage and provide strategic support through these otherwise uncertain times by;

  1. Assessing the current state of the category
  2. Negotiating with existing suppliers
  3. Addressing the service/capability gaps within the category

In the coming weeks we will be discussing the steps above required for strategic recovery following the impact of the COVID-19 pandemic as it relates to the marketing category. This 4-part series will shed some light on the strategies and details involved in regards to the right approach and the true value procurement experts offer, helping to take full advantage of the current market conditions.

Now that the weather is getting warmer, there are new shortages among hot commodity items.  One of the hottest items on the market right now are pools, along with other outdoor items such as swing sets, trampolines, fire pits, and more.  The high demand for these products paired with manufacturers still battling shorter hours and less production from Covid-19, has negatively impacted people's ability to purchase these items.

Due to Covid-19, many summer vacations and camps have been  cancelled.  People are putting the money they are saving on these cancelled activities into their homes, particularly their backyards.  In addition to these cancelled activities, strict guidelines for community pools and beaches are another motivating factor for people to invest in a pool.  Backyard pools can serve as a safety factor in regards to social distancing guidelines, while providing entertainment for the family.  mom of four said she invested in an in-ground pool after finding out her kids' sleep-away camps were cancelled.  Many other families are investing in pools, particularly above ground pools, due to their relative affordability and ease of installation.

Popular stores who offer pools are having limited supplies or are sold out already.  Amazon, Walmart, and Home Depot are among the many stores experiencing limited stock of above ground pools.  People who were early to the rush are re-selling above ground pools with a massive markup.  An Intex brand pool that was selling on Walmart for $370 was being resold on eBay from $1,000-$1,500, while a Bestway pool that was selling on Walmart for $31.56 was being resold on eBay for $95.  Steven Metz, the owner of Central Jersey Pools in NJ, stated how his sales have tripled this season.  He also mentioned that for the first time ever, he is completely sold out of above ground pools until at least mid-July.  Other pool store owners have said they sold their last above ground pool as early as the end of May.

In addition to pool stores seeing a drive in demand, landscapers and retailers of gardening soil, mulch, and firewood to be used for fire pits are soaring.  In addition, trampolines and swing sets are hard to come by.  A large swing set distributor on Long Island has been taking orders via phone and online, causing them to be out of stock since March.  Hardware stores have also seen an increase in sales, as their tools are needed for home improvements and the assembly of these hot commodity items.  The VP of the North American Retail Hardware Association said nearly three quarters of its members reported an increase in sales during the pandemic.

Various businesses are continuing to have difficulties with their supply chains due to Covid-19.  These issues have translated into smaller inventories and marked up prices.  While many companies have tried to find new manufactures, it is simply not enough in terms of keeping up with demand.  As the season is changing, new items are entering a shortage.