Future of Sourcing - Suppliers https://www.futureofsourcing.com/tags/suppliers en Uncovering Hidden Opportunities and Mitigating the Impacts of Inflation in Indirect Procurement https://www.futureofsourcing.com/uncovering-hidden-opportunities-and-mitigating-the-impacts-of-inflation-in-indirect-procurement <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://www.futureofsourcing.com/sites/default/files/articles/September%202022%20Article%20Graphics.png"><a href="https://www.futureofsourcing.com/sites/default/files/articles/September%202022%20Article%20Graphics.png" title="Mitigating the Impacts of Inflation in Indirect Procurement" class="colorbox" rel="gallery-node-2217-0Mhhomq4k7Y"><img typeof="foaf:Image" src="https://www.futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/September%202022%20Article%20Graphics.png?itok=1xhSvM77" width="624" height="325" alt="Mitigating the Impacts of Inflation in Indirect Procurement" title="" /></a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p><span data-preserver-spaces="true">Indirect procurement isn&rsquo;t a new field. It&rsquo;s been around for decades, helping to control spending and reliably source the goods and resources internal teams need to do their jobs and keep the business operational.&nbsp;</span></p> <p><span data-preserver-spaces="true">But, today, it still finds itself in the same position that direct procurement was in up until a few years ago. Perceptions of indirect procurement as a cost-saving, enabling function have caused many organizations to overlook the potential value it can deliver.&nbsp;</span></p> <p><span data-preserver-spaces="true">It&rsquo;s an area of massive opportunity. And right now, with ongoing supply shortages, long supply chain delays, and inflation hitting a 30-year high, no organization can afford to overlook opportunities to optimize spend.</span></p> <h1 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;; font-weight: normal;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">Four Big Opportunities That Many Organizations are Missing</span></h1> <p><span data-preserver-spaces="true">During a recent webinar conducted by The Smart Cube in collaboration with CASME, all four speakers shared what they see as the biggest opportunities available across indirect procurement teams today that many organizations aren&rsquo;t taking advantage of:</span></p> <ul> <li>Sharing best practices and optimizing resource use across the business</li> </ul> <p><span data-preserver-spaces="true">Stepping up to offer his insight first, Mike shared how the indirect procurement team at Newell Brands has effectively become a pollinator of best practices across diverse lines of business. Using its complete view of indirect purchasing habits and spending, the team can find commonalities in needs, guide domains towards using the same or similar tooling and learn from each other to improve and optimize how they&rsquo;re using resources.</span></p> <ul> <li>Looking beyond basic spend KPIs to drive business value</li> </ul> <p><span data-preserver-spaces="true">Following Mike, Klaids shared a valuable anecdote from Schneider Electric, where his indirect procurement team had worked closely with production staff buying metal cutting tools. The engineering team convinced them to pay for premium tools, negatively impacting procurement&rsquo;s spend KPIs but delivering huge value to the business.&nbsp;</span></p> <p><span data-preserver-spaces="true">The premium equipment accelerated production and output, and lasted far longer than the cheaper alternatives. If you look solely at procurement&rsquo;s KPIs, that was a wrong move. But it was certainly the right move for the business &mdash; generating massive value and building enterprise confidence in procurement&rsquo;s commitment to providing them with everything they need to do the best job possible.</span></p> <ul> <li><span data-preserver-spaces="true">Leveraging indirect procurement as an internal crisis response resource</span></li> </ul> <p><span data-preserver-spaces="true">At the start of 2019, very few people would have predicted that in under a year&rsquo;s time, Personal Protective Equipment (PPE) like face masks and hand sanitizer would become a strategy category for tens of millions of businesses around the world.&nbsp;</span></p> <p><span data-preserver-spaces="true">Once the pandemic hit, indirect procurement&rsquo;s ability to source PPE directly impacted every organization&rsquo;s ability to return to business. Prices may have been high, but the teams that reliably source PPE at the right time delivered immeasurable value to their businesses &mdash; and their people.&nbsp;</span></p> <p><span data-preserver-spaces="true">With the frequency and severity of crisis events increasing globally, that&rsquo;s a key source of value for indirect procurement moving forward. When uncertainty and global events hit, highly responsive indirect procurement teams are a massive asset, helping to minimize the impacts those events have on businesses.</span></p> <ul> <li><span data-preserver-spaces="true">Looking at data beyond spend analytics</span></li> </ul> <p><span data-preserver-spaces="true">Indirect procurement teams have a wealth of data available to them today. They&rsquo;re used to closely monitoring and analyzing spend across the business, but if that&rsquo;s all they&rsquo;re looking at, they&rsquo;re missing some powerful opportunities to create value.</span></p> <p><span data-preserver-spaces="true">During the webinar, Klaids highlighted the internal data available to help indirect procurement understand how it could better serve the business. By diving into its processes and performance, indirect procurement can uncover opportunities to improve and accelerate buying &mdash; moving towards delivering B2C levels of convenience and speed to internal customers.</span></p> <h1 style="color: rgb(14, 16, 26); background: transparent; margin-top:0pt; margin-bottom:0pt;; font-weight: normal;"><span data-preserver-spaces="true" style="background: transparent; margin-top: 0pt; margin-bottom: 0pt;">What&rsquo;s the Impact of Inflation?</span></h1> <p><span data-preserver-spaces="true">Global inflation has dominated headlines recently. So, it&rsquo;s no surprise that the conversation quickly turned to its impact during our webinar. Together, the team shared three valuable tips to help indirect procurement professionals respond to, and manage today&rsquo;s hugely inflated pricing landscape.</span></p> <ul> <li><span data-preserver-spaces="true">Understand the data first, so you know what you&rsquo;re dealing with</span></li> </ul> <p><span data-preserver-spaces="true">With inflation hitting a 3-year high in some countries, Graham pointed out that many professionals working in indirect procurement today won&rsquo;t have to deal with inflationary conditions like these. So, the first step towards making good decisions on mitigating inflation impacts is to understand exactly what you&rsquo;re dealing with.</span></p> <p><span data-preserver-spaces="true">Fortunately, all of the data available to us today can help. Teams can look at their cost models and start to break them down to understand all of the individual drivers influencing them. Then, they can even begin to forecast what the short-term future of those drivers might look like &mdash; bringing some much-needed control and predictability to today&rsquo;s environment.</span></p> <ul> <li><span data-preserver-spaces="true">Spend your time focusing on the things you&nbsp;</span><em>can</em><span data-preserver-spaces="true">&nbsp;control</span></li> </ul> <p><span data-preserver-spaces="true">You can&rsquo;t influence the price of oil. But you can optimize the amount you use &mdash; the same is true for virtually every category and service your business spends money on.</span></p> <p><span data-preserver-spaces="true">This period of intense inflation should be a watershed moment for resource allocation and utilization. By looking closely at how well you&rsquo;re using the things you&rsquo;re spending money on, you can not only save money and mitigate the short-term impacts of inflation. You can build more efficient processes and operations that deliver value and support sustainability efforts for decades to come.</span></p> <ul> <li><span data-preserver-spaces="true">Look at new levers to relieve short-term pressure</span></li> </ul> <p><span data-preserver-spaces="true">Businesses can&rsquo;t stop buying the things they need just because of inflated prices. So, rather than bringing those prices down, indirect procurement needs to start looking at other levers it can influence to relieve some of the pressure caused by high prices.</span></p> <p><span data-preserver-spaces="true">Working capital is a great place to start. By collaborating closely with suppliers, indirect procurement teams can negotiate better payment terms, for example, which can help them get through the constrained conditions we&rsquo;re seeing today. Keep in mind that suppliers don&rsquo;t want to squeeze every dollar from your team. Your mutual survival is in their best interests, so most will be very happy to work with you in a way that helps to continue thriving and buying.</span></p> <p><span data-preserver-spaces="true">Kickstart a new era of indirect value creation</span></p> <p><span data-preserver-spaces="true">Strategically managing indirect spend is now more essential than ever.&nbsp;</span></p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/inflation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Inflation</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/supply-chain" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supply Chain</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/procurement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Procurement</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/indirect-procurement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">indirect procurement</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/suppliers" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Suppliers</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Uncovering Hidden Opportunities and Mitigating the Impacts of Inflation in Indirect Procurement - Future of Sourcing" addthis:url="https://www.futureofsourcing.com/uncovering-hidden-opportunities-and-mitigating-the-impacts-of-inflation-in-indirect-procurement"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div> Fri, 09 Sep 2022 17:02:10 +0000 Omer Abdullah 2217 at https://www.futureofsourcing.com https://www.futureofsourcing.com/uncovering-hidden-opportunities-and-mitigating-the-impacts-of-inflation-in-indirect-procurement#comments COVID-19: Where is your supply disruption? https://www.futureofsourcing.com/covid-19-where-is-your-supply-disruption <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://www.futureofsourcing.com/sites/default/files/articles/Copy%20of%20FoS%20Header%20Images%20%2821%29.png"><a href="https://www.futureofsourcing.com/sites/default/files/articles/Copy%20of%20FoS%20Header%20Images%20%2821%29.png" title="Coronavirus map" class="colorbox" rel="gallery-node-1737-0Mhhomq4k7Y"><img typeof="foaf:Image" src="https://www.futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Copy%20of%20FoS%20Header%20Images%20%2821%29.png?itok=19pm3Tia" width="624" height="325" alt="Coronavirus map" title="" /></a></div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/reduce-supply-chain-vulnerabilities-with-strategic-sourcing">Reduce Supply Chain Vulnerabilities with Strategic Sourcing</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>When the first few cases of Coronavirus (COVID-19) were detected just four short months ago, few could have expected what has now become our new reality. We are in the midst of a global pandemic outbreak that tragically continues to claim the lives of thousands and disrupt the livelihoods of countless others. On top of that, it&rsquo;s also causing serious business, supply chain and economic disruptions worldwide. From shortages in supply and talent, to quarantine and border closures, the impact is increasing by the day, continuing to wreak havoc on businesses and supply chains.</p> <h1>Coronavirus Impacts on the Supply Chain</h1> <p>The effects of coronavirus are trickling throughout entire end-to-end supply chains. Quarantines, travel bans, social distancing measures and other restrictions are resulting in production slowdowns, delayed land pick-up and slowed seaport and air operations. On top of that, these travel bans and logistic hurdles make it even more difficult for procurement to properly identify alternate routes and bring new suppliers onboard.</p> <p>According to riskmethods&rsquo; customer supply chain intelligence, 81% of manufacturing companies are currently experiencing supply problems due to the Coronavirus. Additionally, their customers have experienced more than 46,000 supplier sites affected in China. Perhaps even more alarming, there&rsquo;s been a 44% rise in force majeure risk and a 38% increase in production shutdowns. When suppliers can&rsquo;t fulfill contracts, it has a trickle-down effect across the supply chain and globalized economy. And as the crisis persists, expect to see a spike in financial risks relating to the viability of suppliers and manufacturers. In fact, of all related cases of riskmethods&rsquo; customers&rsquo; supply chains, more than half of coronavirus-related threats indicate financial distress and instability (56%), which accounts for a 45x increase since January 22, 2020.</p> <p>Decreased consumer spending is also further complicating global supply and demand. Not only are certain products simply not available in many stores &ndash; like the &ldquo;<a href="https://www.forbes.com/sites/carlieporterfield/2020/03/20/heres-why-the-toilet-paper-shortage-is-only-temporary/#289cf5e42672" target="_blank">toilet paper shortage</a>&rdquo; in the U.S. &ndash; but consumer behavior is changing dramatically. With many areas around the world facing quarantines and shelter in place orders, consumers are focused on necessity items &ndash; food, beverages, medicine, toiletries, etc. &ndash; rather than keeping up with the latest fashion trends, for example. As the decrease in spending due to fear continues, it will slow top-line growth, impacting the upstream supply chain.</p> <h1>What Can Procurement Leaders Do?</h1> <p>In the short term, organizations should actively assess where they have additional capacity in unaffected areas and redeploy that capacity to cover shortages elsewhere. But in order to understand the impact on the production and delivery of goods, enterprises need enhanced monitoring and better visibility into their supply chain. The sooner organizations can increase their visibility, the more quickly they can respond and mitigate the exposure.</p> <p>There are four critical questions supply chain and procurement leaders must answer right now:</p> <ol> <li>Which of your parts and products are affected?</li> <li>Which of your suppliers are impacted?</li> <li>How will the interruption affect lead times and pricing?</li> <li>Which customers are affected?</li> </ol> <p>Understanding the current state of your supply chain and factoring in unfolding events can be a difficult process, but it is an essential element of successful mitigation efforts. Visibility into your organization&rsquo;s risk exposure enables you to be better equipped to identify, assess and mitigate threats to the end-to-end supply chain.</p> <p>If there&rsquo;s two supply chain takeaways we can learn from this crisis, it&rsquo;s the importance of monitoring risk and diversifying your supply base. As we&rsquo;ve seen unfold, organizations that have been overly reliant on a small set of suppliers or a single country from a sourcing perspective, and those that are failing to continuously monitor and respond to rapidly evolving supplier risk across the globe, are facing severe supply disruptions. The other lesson: organizations should always be preparing for the next unpredictable event by prioritizing contingency plans for disruption and non-compliance scenarios.</p> <p>The effects of COVID-19 aren&rsquo;t going to disappear anytime soon. But we will overcome it &ndash; we always do. The question is will we learn our lesson? It&rsquo;s not a matter of &ldquo;if&rdquo; the next crisis will hit, it&rsquo;s a matter of &ldquo;when,&rdquo; and we need to be prepared.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/global-supply-chain" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global Supply Chain</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/supply-chain-management" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supply Chain Management</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/suppliers" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Suppliers</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/global-sourcing-procurement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global Sourcing Procurement</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="COVID-19: Where is your supply disruption? - Future of Sourcing" addthis:url="https://www.futureofsourcing.com/covid-19-where-is-your-supply-disruption"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Sun, 12 Apr 2020 18:06:12 +0000 Bill DeMartino 1737 at https://www.futureofsourcing.com https://www.futureofsourcing.com/covid-19-where-is-your-supply-disruption#comments The Shift to a Seller’s Market https://www.futureofsourcing.com/the-shift-to-a-sellers-market <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://www.futureofsourcing.com/sites/default/files/articles/Shift_Seller_Market.jpg"><a href="https://www.futureofsourcing.com/sites/default/files/articles/Shift_Seller_Market.jpg" title="The Shift to a Seller’s Market " class="colorbox" rel="gallery-node-1556-0Mhhomq4k7Y"><img typeof="foaf:Image" src="https://www.futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Shift_Seller_Market.jpg?itok=XydKl0xd" width="624" height="325" alt="" title="" /></a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <div>Everyone is talking about change. Transformation. Millennials. Digital. Continuous Improvement. There are likely many more words that are tossed around to explain the change everyone is either experiencing or are being told we need to do. A lot of time and effort has been spent on transforming procurement &ndash; but what about the change occurring within your supply base?&nbsp;</div> <div>&nbsp;</div> <div>The small, medium and even large suppliers in your supply chain are changing in massive ways, whether you are aware of it or not, as the world around us becomes more sophisticated and yet more complex. &nbsp;&nbsp;</div> <div>&nbsp;</div> <div>Think about the once and largely current adversarial procurement and supplier relationship, defined by price negotiation, leverage, and supplier real or perceived dependency on your business. That &ldquo;relationship&rdquo; is quickly being replaced by necessity. The same market factors impacting your organizations are also impacting and enabling suppliers&rsquo; work in new and improved ways. These market factors include technology, competition for the suppliers&rsquo; scarce capabilities with your market competitors, social media and a new generation of more inclusive <a href="https://futureofsourcing.com/how-millennials-are-changing-the-procurement-landscape" target="_blank">millennial leaders</a>. All of these factors are leading to a world growing more collaborative and strategic every day.&nbsp;</div> <div>&nbsp;</div> <div>In the not too distant future, suppliers will be selecting you vs. procurement selecting suppliers. It is the evolutionary nature of transactional business relationships when the power moves (from time to time) to those once less powerful. Some of the realizations that suppliers are coming to recognize include : &nbsp;</div> <div>&nbsp;</div> <ul> <li>They know they hold the keys to the kingdom given that they offer something needed and valuable to a larger entity;&nbsp;</li> <li>They have a marketplace that is nearly limitless due to new-found marketing abilities through the internet and social media;&nbsp;</li> <li>They honor relationships that are highly collaborative and encourage innovative solutioning.&nbsp;</li> </ul> <div>All of these realizations will dramatically alter suppliers&rsquo; relationships with the biggest companies around the world. &nbsp;</div> <div>&nbsp;</div> <div>Imagine what this means for you, a procurement professional. If you want to add maximum value, get the best total cost of ownership and create a competitive advantage through your supply chain, gone are the days of price-only negotiations. In many markets now, if you just want to obtain sources of supply, one cannot compete solely on price. What happens when supply is scarce &ndash; which company will a supplier choose to supply? The company that is adversarial and has a low price point where no margins are earned? Nope. The supplier has a choice and they will choose the companies where there is a mutual investment in success, a trusted relationship andan understanding that the supplier is an extension of the supply chain team. &nbsp;</div> <div>&nbsp;</div> <div>After spending 16 years in the world of procurement and the last year working with companies in a number of supply chains, I&rsquo;ve had an opportunity to see what I believe will be the future state of supply chain relationships, not in 10 or 20 years but in one to three years. &nbsp;This future will drastically change how procurement operates and ultimately provides value. &nbsp;&nbsp;</div> <div>&nbsp;</div> <div>Relationships with your suppliers will begin to look like relationships within your own teams. &nbsp;Think about this &ndash; are you willing to pay a little more for a super talented employee who is in high demand? Typically, the answer is yes, as you know full well an &ldquo;A player&rdquo; will return value in droves compared to the rest. What would happen if you only focused on the salary negotiation with that &ldquo;A player&rdquo; and did nothing else? Likely, you will not see their value and they will choose to leave. Sounds crazy, doesn&rsquo;t it? And, yet, we do this with suppliers all the time. That has been largely the procurement world for the last 25 years. &nbsp;&nbsp;</div> <div>&nbsp;</div> <div>To shift to value providers from price-focused organizations, procurement will have to do the following:&nbsp;</div> <div>&nbsp;</div> <ul> <li>Understand that if their suppliers are performing at their best, then everyone wins.</li> <li>Provide learning and deployment opportunities to their suppliers.</li> <li>Offer exposure to top-performing suppliers internally and externally via social media and other outlets.</li> <li>Look to suppliers as a way to differentiate in the marketplace.&nbsp;</li> <li>Extend vital aspects of their culture into the suppliers&rsquo; cultures.&nbsp;</li> <li>Focus on retaining top suppliers as the cost of change is too significant.</li> <li>Look to suppliers to collaborate and provide unique solutions to solve business problems or market opportunities.&nbsp;</li> </ul> <div>Through this type of relationship, procurement will become a customer of choice as well as becoming a destination of choice when hiring employees. Doing so requires treating your suppliers as a strategic capability to your supply chains, not merely external vendors. This new-found relationship has to be more than talk and must be supported by a culture of real care in supplier success, programs to help your suppliers grow more capable and platforms for communicating with your suppliers. &nbsp;</div> <div>&nbsp;</div> <div>The future is bright for those procurement organizations that grasp the changes that have already begun. They are the ones who are excelling in becoming value providers to their organizations, delivering on innovation, and yet are lowering the total cost of ownership in their supplier relationships.</div> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/suppliers" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Suppliers</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/procurement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Procurement</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/negotiation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Negotiation</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/cost" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Cost</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/transformation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Transformation</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="The Shift to a Seller&amp;rsquo;s Market - Future of Sourcing" addthis:url="https://www.futureofsourcing.com/the-shift-to-a-sellers-market"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Wed, 21 Aug 2019 23:49:53 +0000 Amanda Prochaska 1556 at https://www.futureofsourcing.com https://www.futureofsourcing.com/the-shift-to-a-sellers-market#comments How Artificial Intelligence is Transforming Business https://www.futureofsourcing.com/how-artificial-intelligence-is-transforming-business <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://www.futureofsourcing.com/sites/default/files/articles/How_AI_Transforming.jpg"><a href="https://www.futureofsourcing.com/sites/default/files/articles/How_AI_Transforming.jpg" title="How Artificial Intelligence is Transforming Business" class="colorbox" rel="gallery-node-1360-0Mhhomq4k7Y"><img typeof="foaf:Image" src="https://www.futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/How_AI_Transforming.jpg?itok=_ujcEz79" width="624" height="325" alt="" title="" /></a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <div><a href="https://futureofsourcing.com/artificial-intelligence-adopt-or-surrender" target="_blank">Artificial Intelligence (AI)</a>, is a much used and abused term, potentially at the top of its hype cycle. &nbsp;In one of her recent speeches Theresa May identified AI as a major growth area for British businesses and Juniper research estimated that AI will save businesses $8 billion a year by 2020. AI is predicted to disrupt business and procurement over the next five years through the use of robotic process automation, machine learning and cognitive procurement.&nbsp;</div> <div>&nbsp;</div> <div>So, will AI help us or will it destroy us? &nbsp;We don&rsquo;t need to look very far for prophets of doom predicting the end of mankind because AI has decided that the best way of optimising resources is to get rid of wasteful humans. Alternatively, AI will help as an enabler tackling mundane tasks, freeing up time for people to do the things they do best. Humans will undertake the creative tasks like strategic planning and AI handles the number crunching and data analysis. This is deemed to be AI&rsquo;s biggest potential application &ndash; cutting the time that people spend on complex repetitive tasks. &nbsp;&nbsp;</div> <div>&nbsp;</div> <div>This has been a long time coming. In 1960, the computer scientist known as J.C.R. Licklider wrote a paper called &quot;<a href="http://worrydream.com/refs/Licklider%20-%20Man-Computer%20Symbiosis.pdf" target="_blank">Man-Computer Symbiosis</a>,&quot; which explained how humans and computers could work together in partnership and enhance human problem solving. Humans would set the goals, supply the motivation and ask the questions, and the computers would test models against the data and answer questions. Now, almost 60 years later, we can see some of these predictions beginning to bear fruit with a more balanced perspective on what AI will achieve for us, chatbots being a good example. A <a href="https://www.gartnerinfo.com/apacemergingtechtaipei/TheBusinessImpactandUseCasesforAI_TracyTsai.pdf" target="_blank">Gartner survey</a> asking what organisations were planning to use AI for showed the biggest areas were smart advisors and assistants, and the survey predicted that this year 20% of smartphone interactions will be through a virtual assistant.&nbsp;</div> <div>&nbsp;</div> <div>After the top of the hype cycle comes disillusionment - there is so much promise, but the reality is falling short. 2019 is the year that the original Blade Runner film is set &ndash; so where are our flying cars? The best we seem to have is flying drones that we can&rsquo;t prevent closing down airports. So, in the immediate future we need to use AI for what AI is good at, to have a collaborative approach and complement people to free them up from chores, so they can focus on the key issues. We do have machine learning where a computer is programmed with lots of data patterns so that it can match that arrangement elsewhere. Pattern recognition AI is now more skilled at recognising skin cancer than leading dermatologists. The biggest impact of AI is unlikely to be destroying jobs but more likely changing what we do in our existing jobs with expectations that AI will be wide ranging but will not replace people. The success of Google&rsquo;s Deep Mind at defeating the human world champion at &lsquo;Go&rsquo; demonstrates the progress made in self-teaching programmes. But very few jobs can be fully automated. Having built a technology that can speak to customers or interact with colleagues we could envision a future of unaided automation. However, the reality will be that actual people will be needed to refine the products and put just as much effort into the task. &nbsp;</div> <div>&nbsp;</div> <div>Focusing closer to home, just how is AI expected to disrupt procurement? The purpose of procurement within organisations is to fulfil the internal users&rsquo; requirements at the best value and procurement departments look to technology to help with this. &nbsp;Before jumping on the AI bandwagon to make sense of unstructured data, make sure that you have dealt well with your structured data first, the best of which is, of course, your spend data. Most organisations are still using legacy systems for analysis and Excel sheets keep many procurement functions alive and kicking. Much progress can be achieved using Business Intelligence (BI) tools to analyse spend data. &nbsp;BI is often included within the remit of AI because AI is a much more exciting buzzword. Big data is all very well, but what is needed is insight - marrying data and creativity. Data is junk unless it is analysed properly to gain insights by applying BI and AI tools to observe, learn and optimise outcomes. &nbsp;A good example of an AI technique is &lsquo;Bayesian Inference,&rsquo; a statistical technique to update a hypothesis as more data becomes available.&nbsp;</div> <div>&nbsp;</div> <div>But, as a recent report from A.T. Kearney makes plain, the procurement technology that people currently use at work is constrained and inadequate. We know what &lsquo;good&rsquo; looks like &ndash; the most usual description being given is Amazon. But day after day, users go to their jobs and must put up with rigid ill-thought through systems that don&rsquo;t serve their needs. This is because the existing technology and best practice advice has favored suppliers of technology providing services across the complete source-to-pay range of solutions. What we have ended up with is &lsquo;Jacks of all trade and masters of none.&rsquo; &nbsp;The future could be different because of the development in cloud computing technology that allows small discrete applications to interconnect with each other without the need for specialist programming. Once these interconnections become easy enough for organisations to embrace fully, it is feasible for them to choose the best procurement technology for each task and intelligently plug them together, making use of an AI dashboard interface. A potential future route map would see the large-vendor solutions co-existing alongside specialist apps and the complete system evolving through technology improvements to favour the specialists.&nbsp;</div> <div>&nbsp;</div> <div>When it comes to implementing AI technology, organisations will need to take on board some recent learnings. For machine learning it would be best best to avoid the mistake that Amazon made when it had to dump an automated recruitment system that was found to discriminate against women because most of the curricula vitarum (CVs) it learnt on came from men. And people may have genuine issues with the way a new technology functions. Google had not foreseen the backlash it received when it went out to market with Duplex, its virtual assistant that makes phone calls on behalf of the user. Duplex&rsquo;s phone manner was so human-like that there were reports of people being &ldquo;horrified&rdquo; at the &ldquo;deliberate deception&rdquo; and calls for the need to flag up computer simulations, with Google expected to modify Duplex to make it less creepy.&nbsp;</div> <div>&nbsp;</div> <div>Once we have better AI-enhanced procurement technology, or &lsquo;cognitive procurement,&rsquo; what could that mean for the business? We could have users with requirements flowing through automated buying with chatbots fulfilling the Frequently Asked Questions (FAQs) function. Suppliers with invoice enquiries could similarly have their own chatbot, which may still not actually pay them but could at least tell them that their invoice was correctly matched and in the payment queue. The procurement staff will need different skills because they will be interfacing with a number of AI inputs and they will need to assess the information feeds and the automated recommendations and then make a judgement. Market analysis systems could provide category knowledge insight for procurement plans and risk assessments on potential suppliers. &quot;Supplier Discovery&quot; AI could enable you to get an extra fifteen percent savings on your average tender by adding two extra bidding suppliers. Process automation could operate in the creation of the tender event and compilation of specifications, and for e-auctions a chatbot could test drive the invited suppliers through the selected auction methodology.</div> <div>&nbsp;</div> <div>In negotiations with indirect suppliers you might have complete transparency of total spend with different cuts by time period, business division, operational budget holders and geography at the touch of a button. Negotiating with direct suppliers could be facilitated by margin analysis so you could investigate profitability by product line, category, or supplier, again at a touch of the mouse. For contracted suppliers your AI might provide risk monitoring using syntax parsing to analyse natural language text into logical components and discover and flag up linkages between events that can point out hidden connections. With better supply risk intelligence, your supply base could be expanded, going against the usual reduction trends. Last but not least, businesses could protect themselves from internal organisational fraud. AI could look at transactional data to detect vendor fraud schemes which could for example involve shell companies.&nbsp;</div> <div>&nbsp;</div> <div>The scope for using AI technology for improvement is vast and is already being implemented in ways we don&rsquo;t always notice. As the science fiction writer William Gibson said, &ldquo;The future is already here, it&rsquo;s just not very evenly distributed.&rdquo;</div> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/artificial-intelligence-ai" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Artificial Intelligence (AI)</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/digital-transformation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Digital Transformation</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/procurement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Procurement</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/suppliers" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Suppliers</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="How Artificial Intelligence is Transforming Business - Future of Sourcing" addthis:url="https://www.futureofsourcing.com/how-artificial-intelligence-is-transforming-business"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Fri, 01 Feb 2019 22:32:12 +0000 Steven Sargent 1360 at https://www.futureofsourcing.com https://www.futureofsourcing.com/how-artificial-intelligence-is-transforming-business#comments Women in Global Sourcing: Karina Swette https://www.futureofsourcing.com/women-in-global-sourcing-karina-swette <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://www.futureofsourcing.com/sites/default/files/articles/Women%20in%20Global%20Sourcing_Karina%20624x325.png"><a href="https://www.futureofsourcing.com/sites/default/files/articles/Women%20in%20Global%20Sourcing_Karina%20624x325.png" title="Women in Global Sourcing: Karina Swette" class="colorbox" rel="gallery-node-1353-0Mhhomq4k7Y"><img typeof="foaf:Image" src="https://www.futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Women%20in%20Global%20Sourcing_Karina%20624x325.png?itok=7U-noih2" width="624" height="325" alt="" title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <p>Future of Sourcing Digital is thrilled to launch a new series titled &ldquo;Women Global in Sourcing.&rdquo; This series strives to highlight, celebrate and acknowledge women who are pioneers and leaders in the industry and who have been influential in moving the industry forward. Future of Sourcing welcomes Karina Swette to the series.</p> <p>Karina is a Partner in Oliver Wyman&rsquo;s Operations Practice. &nbsp;With 14 years of consulting and investment banking experience, she specializes is in value sourcing, supply chain, operational improvements, capital deployment, due diligence and post-merger integration.</p> </div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <div><em>Tell us about your career path. How did you get into this field? Was it purposeful or by accident?&nbsp;</em></div> <div>&nbsp;</div> <div>I started management consulting at Oliver Wyman after graduation. With both marketing and finance internships, it was the best fit for my skill set and opportunity to make the biggest impact. I quickly gravitated toward our operations and procurement teams where I found the utilization of complex (and incomplete!) data to solve business-critical issues fascinating and rewarding. My first big project was helping a major airline renegotiate all its maintenance contracts as part of a bankruptcy exit and I was hooked. &nbsp;&nbsp;</div> <div>&nbsp;</div> <div><em>Would you follow that same path again if you had the choice?&nbsp;</em></div> <div>&nbsp;</div> <div>Absolutely. Working within procurement in professional services has allowed me to learn and apply best practices from a wide range of industries, companies and categories from all over the globe. &nbsp;&nbsp;</div> <div>&nbsp;</div> <div><em>What has been the single most significant development to impact your profession or area of business during your career and why? &nbsp;</em></div> <div>&nbsp;</div> <div>The biggest impact on my career has been sponsorship -- having the right sponsors, getting them early in my career and having several of them. It was critical not just for guidance and pushing me but also for helping me get great opportunities and singing my praises (something I am not as good about). It was harder to find great female sponsors as all my managers have been men and people tend to sponsor those that remind them of themselves. But with a little extra effort to connect and ask for help, I am always surprised by how supportive everyone is. &nbsp;</div> <div>&nbsp;</div> <div><em>What do you think are the best characteristics of a strong leader?&nbsp;</em></div> <div>&nbsp;</div> <div>The most effective leaders I have worked with have genuine passion for their area of expertise. They are invested in the success of their teams. They lead by example, especially around values. They have positive demeanors and inspire those around them to be their best &ndash; and then they give appropriate credit and reward when they succeed. &nbsp;&nbsp;</div> <div>&nbsp;</div> <div><em>What&rsquo;s the biggest mistake, workwise, you&rsquo;ve ever seen &ndash; and what were the consequences? &nbsp;</em></div> <div>&nbsp;</div> <div>The biggest mistake I have seen is when people approach a negotiation as a battle. I hate the phrase &ldquo;beat up suppliers.&rdquo; &nbsp;By the time I am pulled in, often the easy stuff is already done and I am pushing the envelope in creativity. I am building strategic partnerships with new approaches that should benefit all parties. Don&rsquo;t get me wrong, I am tough as nails, but you catch more flies with honey (aka, strong analytics, a robust process and strategic thinking). &nbsp;</div> <div>&nbsp;</div> <div><em>What three words do you think your colleagues and peers would use to describe you?&nbsp;</em></div> <div>&nbsp;</div> <ol> <li>Results-driven &ndash; I am very high energy, organized and focused on getting it done. &nbsp;</li> <li>Competitive &ndash; if it is not a game, I find a way to make it one and always aim to win. I was an athlete when I was younger, and have applied many parallels to my career. Aim for first place, working as a team, and always sprint to the finish line.</li> <li>Generous &ndash; I am very focused on the development of my teams. It is important that everyone participates, shows off their skills and learns something new. I care about their professional and personal happiness. I also give a lot of energy to charity, utilizing my business skills to help further the efforts of non-profits. &nbsp;</li> </ol> <div><em>Do you think it&rsquo;s possible to &ldquo;have it all&rdquo;&mdash; e.g., career, family &mdash; and be successful everywhere? How do you make it work?&nbsp;</em></div> <div>&nbsp;</div> <div>I plan to do my best to find out. I had my two biggest promotions this year &ndash; to a Partner at Oliver Wyman and to Mommy. My darling eight-month-old has changed my whole world (for the better!).&nbsp;It is certainly a balancing act but it is all worth it. I am making it with work by 1) having the perfect partner who is proud of all that I do and shares in the responsibilities at home; 2) working somewhere I love with people who are supportive and understanding; and 3) saying no sometimes.&nbsp;</div> <div>&nbsp;</div> <div><em>Finally, what piece of advice would you give to young women starting their careers in the field of sourcing, outsourcing and procurement?&nbsp;</em></div> <div>&nbsp;</div> <div>Find a great mentor (someone that gives you good advice) but also make sure you have a great sponsor (someone who advocates for you and helps find you opportunities). It can be hard to ask for help but frankly you need to do it to maximize your career potential. Assuming if you work hard that good opportunities will just come your way (which I did for many years!) is misleading. &nbsp;&nbsp;</div> <div>&nbsp;</div> <div>Don&rsquo;t forget to sing your praises&mdash;and use your sponsors to help you. I find that women are more likely to credit the team and don&rsquo;t often speak of their own successes.</div> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/partner" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Partner</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/suppliers" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Suppliers</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/negotiation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Negotiation</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/contract" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Contract</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/leadership" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Leadership</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Women in Global Sourcing: Karina Swette - Future of Sourcing" addthis:url="https://www.futureofsourcing.com/women-in-global-sourcing-karina-swette"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Tue, 22 Jan 2019 18:19:05 +0000 Karina Swette 1353 at https://www.futureofsourcing.com https://www.futureofsourcing.com/women-in-global-sourcing-karina-swette#comments