“The Grocery Code of Conduct is a significant step toward improving the resiliency and efficiency of the grocery supply chain. The primary objective is not to directly rebalance market power, regulate fair dealing, or set the level of retail fees, but rather to improve supply chain relationships through principles of predictability, transparency and fair dealing.” – DH Canada (January 17, 2023)
It wasn't that long ago that I wrote an article regarding the largest Canadian grocer – Loblaws, and their headline-grabbing stare-down price dispute with the global brand Frito-Lay. Here is the link to that post titled The Inflated Supply Chain: How To Navigate The Complexity Of Doing Business During A Period Of Rising Inflation.
The primary focus of the piece was – as the article’s title suggests, understanding the impact of inflation on supply chains. However, beyond the big picture story in which inflation takes center stage, there is an underlying theme. The theme I refer to is how buyer-supplier relationships affect inflation and other supply chain disruptions.
The buyer-supplier relationship's impact on inflation, not the other way around, is not a typo. As the age-old saying goes, it is not what happens to you but how you react to it that matters.
For the sake of expedience, the following high-level bullet points should provide a solid understanding of the Loblaws and Frito-Lay situation at the time and the government’s intervention to resolve the dispute. This overview will help you better understand why the government is introducing the grocery conduct code.
Whenever we face a crisis, our attention is understandably focused on finding a solution as quickly as possible. We, in essence, become "locked in the moment" because the fallout of inaction is usually significant.
However, in our hasted energy to resolve a problem, we tend to lose sight of why we are in this situation in the first place. In other words, there is a bigger picture beyond our narrow scope of immediate impact, and we need to recognize its importance.
I like to think of it as the slow-leak tire syndrome. You have a tire with a slow leak and must repeatedly pull into a service station to fill it to the proper inflation rate. Is it an inconvenience-absolutely, but is our frequent station stops enough of a hassle to prompt us to either repair or replace the tire?
When I was originally asked to write this article on the disruptive impact a potential West Coast port workers' strike would have on supply chains, the slow-leak tire analogy immediately came to mind.
A Long Time in The Making
The contentious situation we are now facing at this and other ports in North America has been brewing for some time, pre-dating the COVID-19 pandemic.
“The path to gender equality does not involve stickers pointing out that a product has been made by a female entrepreneur. Women are not a charity group. If we want to help women in business, let’s close the pay gap and remove the glass ceiling – and then let products designed by women rise or fall on their own merits, by the realities of business.” – Diana Sz
The above quote is an excerpt from an article I read regarding Walmart’s “commitment to source $20 billion of goods by 2016 from women-owned businesses in the U.S.”
The program or initiative, launched with much fanfare in 2011, achieved the $20 billion objective within the expected five-year period. One would think that this would be a cause for celebrating the progressive practices on the part of corporate procurement departments.
Facilitated by the inclusion of product labels informing the consumer that a woman owns the company behind the product they are buying, Pamela Prince-Eason was a champion of the Walmart initiative. The Women’s Business Enterprise National Council CEO, Prince-Eason, believed that the “new labeling will give people a reason to feel good about the company they’re buying from.”
In short, it was a noble plan to achieve meaningful results for everyone to feel good. I know you are waiting for the other shoe to drop in the form of a but – and there is a but,
The Bigger Picture
Don’t get me wrong when I say things like a drop in the bucket regarding the achievement of the $20 billion goal. Such a lofty amount isn’t exactly pocket change.
Learning isn’t just about knowing something but also about knowing what to do with new knowledge once it is acquired.
However, turning "educational dialogues that generate actionable takeaways" can be challenging within a traditional extended learning framework because of busy schedules and increasing workday demands. Because of this new reality, SIG University’s Microlearning sessions deliver tangible and measurable insights that you can use immediately within the convenience of a two-hour session format.
In today's post, I will briefly talk about the May Microlearning Session in which one CPO shared her experiences in leading her organization’s digital transformation journey beyond the Maginot Line.
Beyond The Maginot Line?
"Like France's 1930's Maginot Line, 'digital washing' of old ideas and lack of forward-thinking has the potential to create strategic disaster in a highly competitive world where speed to market and agility are key." - 'Digital washing' can wreck your strategic business planning, ZDNET
“Like the Maginot Line?”
Here is the link to the above article that delves deeper into the historical significance of the Maginot Line and its relation to a digital transformation strategy. In the context of the May Microlearning session, the "digital washing of old ideas” and the “lack of forward-thinking” statements stood out to me from the article.
According to May’s session expert Canda Rozier, Green Washing – when you tick a box for purportedly achieving a broad or vague sustainability target, is now happening with digital automation initiatives.
In this fourth and final installment in this Keynote Series, we talk about the "judicious deployment" of emerging technology without losing sight of the human side of digital transformation.
To achieve this "balance," Mattress Firm's VP of Indirect Procurement, Quave Burton, discusses the importance of motivation through employee recognition while challenging her team to "stretch themselves" to learn new and better ways to achieve strategic objectives.
For Quave, the journey of transforming procurement at Mattress Firm started at ground zero.
When I say ground zero, there wasn't a procurement department when she started working with the company. As she explains it, she was immediately on a transformation journey, starting with getting the right people to do the right things.
Fortunately, and with the full support of senior leadership, the organization was ready and willing to make changes.
At this point, I think it is essential to stop and stress the benefits of having to build the foundation for procurement transformation, starting with people before introducing technology. As anyone who has been in our industry for some time will tell you, in the past traditional ERP-based procurement initiatives have generally failed to achieve the expected results. Many studies estimate that the failure rate is between 50% and 75% - some even put that number higher.
The three main reasons for this less than stellar performance are poor User Experience, data inaccuracy, and analytics.
Despite introducing more advanced and intuitive "by-the-drink" technology solutions, CPO's dissatisfaction with digital initiatives remains high.
At the heart of that urgency is assessing and then mobilizing your procurement team’s digital capabilities throughout the extended organization.
How do you mobilize your procurement team’s digital capabilities?
With this third article from the 2022 SIG Procurement Technology Summit Keynote Series, I will share with you the "key insights" from Chris Kee (VP, Sourcing and Procurement at Northwestern Mutual) and Colin Frazier (VP – Solutions at ZIP) keynote on creating the right digital experience.
To better understand what creating the right digital experience around your team's procurement process involves, you must first understand your organization’s procurement workflow.
What Is The “Procurement Workflow?”
When asked, "what does the term procurement workflow really mean to you,” Northwestern’s Kee indicated that it does more than encompass the process for supplier onboarding. Kee believes the workflow process involves all critical end-to-end touchpoints, including reviews and signoffs. It also provides total stakeholder transparency to address company risk and privacy, legal, and data security requirements.
Furthermore, procurement professionals can't only be involved in the transactional process, which has traditionally been the case. Beyond managing the process from start to finish, procurement professionals also need to be capturing stakeholder engagement feedback to best manage the supplier relationship post-contract.
There are no shortages of headlines such as the one above linking supply chain disruption to inflation. While I don't want to oversimplify the current situation, when supply can't meet demand for various reasons, inflation is the end result. External forces such as the above reference to the war in Ukraine and the now seemingly endless COVID-19 pandemic are the most notable contributing factors. And let’s not forget the Suez Canal blockage and its extended impact around the globe.
Undoubtedly, the “interconnectedness of global supply chains” means that these events have far-reaching implications impacting “labor, energy and transport costs.” As a result, the consumer price index (CPI) - which has been somewhat stable for the past few decades, has seen a significant rise in prices.
In December 2021, reports indicate that the CPI was “5.4% higher than a year previously in December 2020.” In other words, even though supply chain disruption and its link to inflation are not new, the breadth of its impact globally has created a sense of urgency like never before – at least not in the 21st century. Nor are there any signs of relief on the near horizon, as a recent New York Times article proclaims that we are not likely to see the return to a “normal supply chain” in 2022 (or anytime soon.)
Along with senior buy-side executives, joining SIG’s Stephani McGarry on the call was the Everest Group. In what I can only refer to as a “captivating session,” the discussion focused on what we as an industry have and will continue to face during these inflationary times.
In the last article, we heard from Senior Vice President & Global Chief Procurement Officer at Cigna Express Scripts, Tony Abate, regarding his steps for dealing with inflation.
In this article, we hear takeaways from a recent CPO Roundtable discussion from Michael Koontz, VP, Strategic Sourcing & Business Leader for American Tire Distributors (ATD) Sourcing Solutions. I think you will find his approach to battling inflation innovative and unique.
Before we get to Michael’s fight-inflation strategy, let’s first provide some background information on his company. ATD operates more than 130 distribution centers, including 24 in Canada, serving close to 80,000 customers across North America. Employing 4,000 associates in the U.S. and 600 north of the 49th, ATD offers an “unsurpassed breadth and depth of inventory, frequent delivery and value-added services to tire and automotive service customers.”
Their selection as one of Forbes’ 2021 America's Best Mid-Sized Employers and the reception of a Gold Stevie® Award in the Transportation Company of the Year category of the American Business Awards® provides testimony to their high level of service and success as a company.
An Innovative Model
According to Michael, inflation is “five times more difficult for small businesses.
In this second article from the 2022 SIG Procurement Technology Summit Keynote Series, we will tap into the expertise of an esteemed panel of industry leaders who will share their experiences with mobilizing their respective organizations' ESG initiatives to achieve progressive outcomes. Make particular note of the words progressive outcomes because implementing and maintaining an ESG strategy is not a destination but an ongoing journey that requires commitment and the agility to respond to ever-changing marketplace realities.
Rather than just a generalized or conceptual discussion on ESG, these individuals delivered personal and detailed accounts regarding the successful transformation of their supply chains to align with social imperatives and financial objectives. In other words, during the discussion, they effectively "blazed" a trail of understanding that can serve as a helpful roadmap for the successful implementation of your organization's ESG strategy.
No Longer An Option
In the recent Oliver Wyman article, Powering Your Sustainability Strategy Through Procurement, it is clear that the proactive implementation of a successful ESG strategy is not an option for organizations – not that it ever was.
The authors specifically talk about how "For many years, calls have been getting louder for business leaders to pay more attention to their organization's environmental, societal, and governance (ESG) strategy."
Fueled by "intensifying pressure" from all directions, including customers, employees, investors, and governments, good intentions must now materialize into tangible outcomes sooner rather than later.
In what will be the first of several articles on the 2022 SIG Procurement Technology Summit Keynote Series, I will share with you the insights from each session, starting with today's post on my discussion with Shashank Saxena, General Manager for VNDLY - A Workday Company.
In the session - aptly titled "Closing The Digital Acceleration Gap In Procurement," Shashank and I talk about the disruptive approaches and new innovations that will reshape how procurement leaders can satisfy their most pressing strategic imperatives.
A little background information is in order before getting into the above specifics.
The New Digital Imperative
"Everyone wants to do digital transformation – think of all the board level priorities you have this is probably the most and biggest."
The above words by Shashank resonated with me on many levels.
They are a reminder of how far we have come over the past few years and how we still have a way to go before we achieve or realize the full potential of the digital promise.
What do I mean when I say "the full potential" of the digital promise?
A December 2019 Forbes article reported that "70% of companies either have a digital transformation strategy in place or are working on one." However, recognizing the importance of having a digital strategy is not the same as realizing the anticipated return as "only 7% of companies have fully implemented their digital transformations." As you can see, there is a notable difference between having a strategy and the ability to implement it successfully, and it is quite a gap to bridge.