The SIG Peer2Peer (P2P) program allows members to access benchmarking insights and best practices on topics specific to their needs. Using the Peer2Peer resource, members can leverage the experience of other industry professionals by posing questions to the greater SIG community on issues they are facing within their organization. Members use the forum to locate resources, source providers, seek advice on hot topics and share their lessons learned.
Below are the latest Peer2Peer inquiries. You or someone on your team may know the answer to one of the questions below. If you do, please take a moment to help a SIG member from the buy-side. You may need their help one day, too! To submit your own Peer2Peer inquiry, get in touch and we’ll pose your question to the SIG Community.
This buy-side member is re-writing their procurement policy and revamping their process for the requested addition/approval of a new supplier. They are seeking best practices for procurement policies, specifically covering the following topics:
What spend does/does not require a PO?
What are the consequences for procurement policy violations? For example: Committing company funds without a PO or contract.
How are violations to the procurement policy enforced?
What is the process for requesting a new supplier add? Who reviews/approves/denies this request?
Situated in the southernmost part of the Brazilian state of Minas Gerais, nestled among green rolling hills, coffee plantations and dairy farms is the small town of Santa Rita do Sapucaí. A cursory glance shows Santa Rita as a charming town full of farms and churches but in reality, this picturesque little city has so much more to offer. In recent years, it has become known as “Vale da Eletrônica” or Electronics Valley because it is home to the highly respected technical school, Escola Técnica de Eletrônica Francisco Moreira da Costa and is also known as a hub for technological applications, from carpool and table service apps to toothbrushes with sensors that connect to children’s games. And Santa Rita isn’t the only city in Brazil ramping up their efforts.
Plagued by years of upheaval economically, Brazil is making a comeback and relying on the IT sector to help make their triumphant return. A $200 million joint investment with chipmaker Qualcomm, was welcomed in March by the federal government to build a semiconductor factory in the state of São Paulo where other major tech companies such as Samsung and Lenovo already have operations. Their hope for the investment is that this will be the first step for Brazil in becoming a noteworthy player in the manufacturing of high density semiconductors that are used in 4G and in the future, 5G devices, as well as IoT applications. The investment from Qualcomm is expected to bring in about 1,200 new jobs which only makes a tiny dent in solving Brazil’s unemployment rates—at 11% there is still a long way to go, but it’s a step in the right direction.
Augmented reality (AR), or mixed reality, is a technology every sourcing professional should understand. It may seem tangential, but forward-thinking executives will take heed as AR will become more and more prevalent in the sourcing industry. AR differs from virtual reality in that virtual reality is a total replacement of your current reality. Augmented reality can be thought of as a digital addition, or supplement, to your current reality. A perfect example is the Snapchat face filters - which overlay illustrations on digital images, specifically faces. My Snapchat buddies send me pictures of their faces with doggie ears attached and so on. Another example is the app Pokémon Go, in which participants found digital creatures in the everyday settings of their reality - places like the park, campus, restaurants and so on. Augmented reality is a technology that can provide packaged experiences that feel real. There are two major types of applications of AR in the market today, consumer and business/industrial.
You are probably familiar with Snapchat filters and Pokémon Go, but what about the augmented reality app that helps you decide where you might place new furniture in an existing room like Ikea offers? Or how about an AR app that allows you to point your device to the night sky and interact with the stars? Or an app that helps healthcare workers find the most appropriate place to insert an IV?
Mary Zampino, Senior Director of Global Sourcing Intelligence, SIG
Disruption. Until recently that word meant something negative. It was a nuisance…a disturbance…an interruption…it meant trouble. In fact, if you look at synonyms for disruption, every one of them paints it negatively. But lately when you hear the word “disruption,” it generally means change—and even positive change. Disruptive technologies are in essence solutions that are changing the future of work. They are challenging the status quo.
I was recently reading an article about Amazon potentially purchasing Slack. (Ironically one of my colleagues sent it over in a “Slack” which we use for internal communications at SIG.) As my colleagues and I reminisced about our first use of Amazon, it made me realize what a pioneer they were in disruptive technologies. The term may not have been widely known, but they certainly paved the way for it to be put into ubiquitous use.
I can’t really remember when or how Amazon disrupted my life…but it did. Somewhere along the way I went from being skeptical about purchasing things online to almost exclusively shopping with Amazon—and Prime no less because I want the immediacy of it. Don’t get me wrong—there are certain items I will never purchase on the Internet, but if I am going to shop online, I ALWAYS check Amazon first.
With so much attention currently focused on the political arena (most obviously, of course, in the USA with the inauguration of President Trump) it’s easy to become carried away in one’s assessments of the extent to which “politics” drives actual change. Of course, there’s no doubting the scale of the significance of the Trump election, or the Brexit vote, or similar “watershed moments” – but the nature of that significance is somewhat less clear, especially when it comes to the impacts on specific aspects of our lives. It’s somewhat comforting (or perhaps not, depending on one’s affiliation) to think that the person nominally in charge of a country is indeed that – it plays to our natural human desire for order, comprehensibility, justice – but in a world as interconnected and complex as this one, is it not a serious error to overstate the ability of a President Trump, a Prime Minister May and others in similar positions around the world truly to steer a course, rather than simply to keep their ships of state upright in the storm?
Look at the sourcing and outsourcing space specifically. In a number of particular areas President Trump could well have a huge impact: a crackdown on immigration and the offshoring of work, changes to NAFTA, the reversal of the ACA and other policies would affect very substantially certain tranches of the space and those working within them. Likewise, in the UK the way Theresa May is approaching the exit from the EU and the Single Market has deep significance for businesses working in and with the United Kingdom for data protection, for accounting and a host of other areas.
Leading procurement organizations will increasingly be able to anticipate future spending patterns rather than just analyze historical spending, and will be able to prevent supply risk failures, such as supply chain disruptions, before they occur.
When it comes to analyzing historical spend data, there already exists a major divide between world class and non-world class. Looking at a "significant amount" of spend visibility company-wide, the gap is getting bigger: 23% more world class had this level of spend visibility overall in 2012, and the gap more than doubled in 2013 to 47%, when 89% of world-class organizations achieved this mark overall. Top performing organizations also have better visibility as to how their suppliers are currently performing. In 2013, 80% of world class performers were utilizing a formal, supplier scoring methodology as compared to just 50% of the total peer group, according to Hackett Group benchmarks. Going forward, these leading organizations will seek to further extend their advantage by leveraging spend and supplier analytics in more proactive and predictive ways, for example:
Richard Waugh, Vice President, Corporate Development, Zycus Inc.
Many companies understand procurement's value can extend beyond tactical buying and into strategic cost and risk management; however approaches for managing talent capable of delivering on that strategic potential has not kept pace. When talent is addressed, the focus is on changing the individual (e.g., behavior/professional skills). There is a better way to transform procurement into a talent incubator: shift procurement from the place you're from to the place to get ahead. This strategy inevitably requires investing in advanced supply management tools to enable procurement professionals to be effective and efficient. Strategic procurement organizations have unique opportunities to offer employees who demonstrate business leadership potential. Below are two key examples:
Eric Walsworth, Director of Supply Management, LexisNexis, a Reed Elsevier company