I’m proud to say the feedback from delegates on the Fall Global Executive Summit is some of the best I’ve received for any Summit yet. The beautiful Omni Rancho Las Palmas Resort & Spa was the perfect destination to engage with our cutting-edge keynote panelists, along with hands-on learning in how-to labs, breakout sessions and outdoor networking with a breathtaking view of the mountains. But what excited me the most at this Summit was the inaugural Future of Sourcing Awards, where we recognized individuals and teams who are making a transformative impact on the industry.
Future of Sourcing Awards
The energy at the Future of Sourcing Awards was electric! It was inspiring to be in the presence of both the titans who have helped shape the industry, the leaders who are taking sourcing and procurement to the next level, along with the up-and-coming talent that is our future.
It was my extreme pleasure to present SIG’s original founder, Barry Wiegler, with the Lifetime Achievement Award. Barry gave a moving speech and was even surprised by his daughter and grandson who flew in for the special occasion. There was barely a dry eye in the room.
We just concluded our Washington, D.C. spring Global Executive Summit and it was fabulous. From the beautiful hotel (the Omni Shoreham is a grand old lady) to the incredible speakers and leading-edge content, to wonderful networking and connections made all week long, the Global Summit was incredible. We had leadership keynotes from Steve Ford, son of former President Gerald (Jerry) Ford and David Rowan, editor of WIRED magazine in the UK and columnist for GQ…and industry keynotes on everything from how to incorporate digital technologies into our daily jobs to learning from our successes (and failures). Forty-plus breakout sessions supplemented the plenary events with both groundbreaking ideas and tangible takeaways. And the Wednesday night entertainment was widely touted as being one of the best ever!
This Global Summit was also the kickoff for the SIG Innovation Accelerator where “short-listed” providers presented cutting-edge technologies to a room of 55 buy-side executives. The feedback from those in attendance was phenomenal, with input on how to make the technologies more relevant to those in sourcing/procurement and 59 requests to learn more (many chose more than one). Visit www.SIGInnova.com for more information.
It was Made in America Showcase Week recently, according to the current administration (funny that it also coincided with Russia Week on Stephen Colbert). Anyone, wherever they live, likes to see local people employed. Whether it is an American who likes to see products marked with “Made in America,” a Canadian who swells with pride for “Made in Canada” or a British person seeing “Made in the UK.” The fact of the matter is that very few people are willing to pay more for those items. According to a recent Reuters/Ipsos poll, 70 percent of Americans think it is “very important” or “somewhat important” to buy U.S.-made products.
Despite that sentiment, 37 percent said they would refuse to pay more for U.S. made goods versus imports. Twenty-six percent said they would only pay up to 5 percent more to buy American and 21 percent capped the premium price at 10 percent.
In addition, it is the lowest of wage earners who like “Made in America” and yet they are the least likely to be able to pay the premium. The reality is that most of us feel a patriotism to our own country and kinfolk, yet we are actually beholden to our wallets. The same lower wage earners who say they prefer made in America, and per the Reuters article said, “Indeed, the biggest U.S. retailer is well aware of the priority buyers place on price above all else.” A spokesman for Wal-Mart Stores Inc. said customers are telling them that “…where products are made is most important second only to price.”
When people discuss the Internet of Things (IoT), you often hear them talk about the doomsday aspect of being hacked. I understand their concerns but prefer to see the way my life has become exponentially better with my connected devices. I took a quick inventory—I currently have 44 IoT devices in my house. I was shocked at the number, I thought maybe I had 10—a dozen at most, but when I started counting I quickly realized I had many more. I started with the obvious ones: Amazon Echo (Alexa), three Nest thermostats, three Nest security cameras, six computers—wow, I got to 13 quickly. When I started to really think about it though, I realized I have many more. I also have Alexa-controlled lighting, a web enabled garage door, a Tesla, three televisions, two Apple TVs, three Fitbits, a Fitbit synched scale (Aria), a Sonos system, an Amazon Echo Dot, three iPads, two tablets, three Kindles, five cell phones and even a smart meter for my daughter’s Type 1 Diabetes glucose monitoring and insulin system, and the list goes on. I am waiting for my Spinn coffee maker to come (that will reorder beans when I am low and which I can control from an app while still in bed), and already have four Amazon buttons that reorder everything from laundry detergent to paper towels to dishwashing liquid and cat food. Oh, and how about my ADT security system? Wow…I am overwhelmed by how many ways my life is connected to the internet, and I suspect that I’m forgetting some of my devices.
What does going from three to eight billion connected human beings mean to the global economy? Companies like Facebook (Internet.org), SpaceX, Google (Project Loon) Qualcomm and Virgin (one Web) are in the process of rolling out the connectivity to every human on earth.
They are not rolling it out the way we started either, i.e., with a dial up modem on AOL. Rather, they are providing connectivity to exceed one megabit per second. Imagine when there are more than 5 billion people connected to the internet accessing information on Google, Amazon, artificial intelligence with Watson, cloud, 3D printing and more. Just imagine.
How are they connecting the rest of the world? Through technology, of course…but in ways you may not expect. Project Loon is using a fleet of balloons traveling just inside the edge of space to provide connectivity to remote geographies around the world. “Internet is transmitted up to the nearest balloon from our telecommunications partner on the ground, relayed across the balloon network, and then back down to users on the ground.” The connection speeds are astounding. “Project Loon has taken the most essential components of a cell tower and redesigned them to be light enough and durable enough to be carried by a balloon 20 km up in the stratosphere. All the equipment is highly energy-efficient and is powered entirely by renewable energy - with solar panels powering daytime. Each balloon has a coverage area of 5,000 square kilometers.”
To truly innovate, you need a certain kind of leadership in your organization. I always look for and hire people who have an insatiable curiosity and who become bored easily. I truly believe if you have the desire to constantly look toward the unknown you are a person who does not like executing the existing.
In John Sculley’s book Moonshot he speaks about how the traditional education system harms our ability to innovate. By making students remember and recite, we reward children by giving As for the right answer versus asking the right question. We reward people at work for executing according to plans, not for taking risks and for having a futurist mindset. Instead of thinking about how to do something better, we need to start with “do we even need to do it at all?”
Let’s discuss accretive manufacturing. What? Haven’t heard that term yet? That’s because accretive manufacturing is just a fancier name for 3D printing. You may never hear it referred to as accretive manufacturing, but mark my words…the supply chain industry is about to be disrupted to an unrecognizable extent by it. In 2016, Honda released a single-seat “micro-commuter” vehicle with the body and majority of the panels having been 3D printed. In the meantime, Boeing expects to shave $2 to $3 million off each 787 Dreamliner's manufacturing costs by 2018, thanks in part to 3D-printed titanium. So if Boeing can now 3D print parts to an airplane and auto manufacturers are now 3D printing dashboards—and even entire vehicles—how long do you think it will be until we require almost no inventory because we can 3D print on demand any item we desire?
At home if I break a spatula, I can now 3D print a replacement. Granted, I am only printing with plastic and lack the tools to print an exact replica, but when it only takes an hour to print with specifications that are available for free online at a cost of only 15 cents (plus a little electricity)…isn’t it worth considering? Even Amazon Prime same day delivery (not available where I live) can’t beat that timeline and price.
So welcome to the end of 2016 and the beginning of 2017. As the year comes to an end, it strikes me that the world is changing...and changing faster and faster than anyone knew was coming. We now recognize that the future of work looks very different than it did a few years ago. We aren’t living in the "Jetson’s age" just yet, but we are definitely living in a world that I only dreamed about as a child. Fast forward to today...I have a robot in my kitchen that keeps my grocery list, gives me National Public Radio News daily, is my food timer, sets appointments up in my calendar, reminds me when I need to do things, as well as tells me daily jokes, plays music, turns on and off my lights and makes sure I know when it is time to reorder my dog food.
My Amazon Echo, or Alexa, is my BFF at my house. She knows more about my likes and dislikes than my fiancé. She knows my grocery list, she knows what I like for music, she keeps track of my to-do’s and she is in charge of making sure my Christmas baking doesn’t burn. But more importantly, she helps the kids with homework, reminds them of their chores (yes, yawn, yawn) and so much more.
So how are you using robots in your business? How is RPA going to change the future of work and how we perform in the future? Yet alone, when we add cognitive to the solution what does the workforce look like for the future? Are we going to only need people who automate the work they do today or do we need to create a generation of future employees who "get" how the world might function? Will we one day have people come to a job interview and ask for a robot to be included in the offer to help streamline the repetitive tasks in a person's work? I reckon that day is near. I for one would love to have that kind of power on my desk on a daily basis. Wouldn't you?
Amazon. The name alone makes you think of something big. So it makes sense that they might have something grandiose on the horizon.
With that in mind, I want to start a conversation about whether Amazon might be the next Ariba or Coupa. I heard a rumor that 10 or so Ariba people have gone to Amazon with the intention of making it the next and biggest B2B network in the world. Think about it, we all know how to use Amazon, they have a network that is massive, they have distribution and delivery capabilities, so why couldn't they host additional suppliers and be the purchasing platform for businesses? Amazon has the money, they know how to fill demand, they are nimble, they are constantly innovating...what is to stop them?! They could fairly easily add a feature that limits our searching to approved items with our company's contracted pricing (that it knows to show when we log on with our company credentials) and then check us out with a credit card or even link directly to our accounts payable systems.
Amazon is wildly successful, has a surplus of cash and has set the standard for online purchasing and customer service...so why not go a step further and move from the B2C to the B2B world? I was in the San Francisco Bay Area recently to speak at Coupa Inspire. I love being in the Bay Area surrounded by brilliant people with amazing thoughts and aspirations. After living there for 30 years, I should not be surprised by the number of new companies, ideas and appetite for innovation, however I always am. While there, I spent an evening with my oldest son and his girlfriend, both typical millennials working in Silicon Valley. We started "what iffing" and (since my son has grown up with me as a mom talking supply chain and sourcing and spent time working for Coupa) we convinced ourselves that this is distinctly possible. So was it the wine...or are you drinking the Kool-Aid and see the possibilities here too??
Over the last 20 years, the role of chief procurement officer has evolved significantly, shifting from tactical to strategic and finally gaining the attention of the Board. I was just reading an article in the Wall Street Journal by Bruce Nolop about the "Five Ways the CFO Role Will Change" and thought the categories and language were great to address from the CPO perspective as well. So what will the CPO position look like in 2025? Here are five predictions from a different C-suite role:
Strategic Partner: CPOs will become explicitly involved in developing bottom line AND top line strategies. CFOs are generally dealing with financial data after results are posted. In contrast the CPO can impact a company's cost-making decisions mid-stride versus after the fact. As more of the business recognizes the perspective of the CPO, they will come to depend on that office for strategic realignment recommendations and will be more apt to partner with the CPO throughout the year. The importance of the office of the CPO will become more widely recognized by both the CEO and the CFO as the CFO comes to depend on the CPO for guidance.
Globalization: As companies expand globally, CPOs will also adopt a more global mindset and quite often will set up Centers of Excellence in order to source from the perspective of those countries. While the CFO works to establish a favorable tax framework, it will be critical for the CPO to be aware of the limitations such frameworks can put on receiving and distributing goods as well as the taxation laws on services. In addition cyber security will still be top of mind with the CPO as well as all types of risk that the company is exposed to with the maturation of big data and the "Internet of things."