Procurement

GEP Spend Category Outlook Report For 2022: The Industry’s Most Comprehensive Guide For Navigating An Uncertain World

Spend Category Outlook

Coming in at 130 pages, you might immediately think that this isn't a paper or a report; it's a book.

I know that was my first thought when I began reading the GEP Spend Category Outlook Report For 2022. Just as an aside, did you know that between 2011 and 2017, the average length of a bestselling book fell by 42%? Since then, and with the demand on our time becoming greater, I am sure that the length reduction has continued its downward trend.

By the way, a 2022 report indicates that the same downward trend applied to white papers, which, on average, are now 6 to 8 pages.

So, why am I with this latest paper talking about the number of pages versus the actual content – which is amazing?

My reason is that reviewing this report shouldn’t be a “read once and done” exercise.

The Ultimate Nightstand Guide

In today's Zettabyte digital reality, we are bombarded with content so much so that if you read a book or a paper, you are likely to gather what you can and then move on to the next resource – which is fair.

However, sometimes the information you receive is so on the mark that it is worth setting aside to a special place so that you can easily access its insights any day, every day. What I am talking about is a guidebook. And this latest GEP release is just that – it is a handy guidebook that you will want to keep at your fingertips to understand better the challenges you have or are facing today and the ones you will be facing tomorrow.

Having read it in its entirety, I can confidently say that it will help you get ahead of the curve of future challenging events before they unfold. Through the agility of its timely insights and the practical adaptability of its direction, you will quickly move from a reactive to a proactive position. It is the epitome of turning information into actionable knowledge.  

Mary Zampino, Vice President – Content, Research & Analytics

Utilizing Team Engagement in Procurement

Image of Team Engagement

SIG University Certified Sourcing Professional (CSP) program graduate Shawnie Albritton shares how category management can help with cross-team engagement and its usefulness in procurement.

Shawnie Albritton, Sr. Procurement Operations Analyst, Raymond James

Creating The Right Digital Experience Is Key To Your Procurement Team’s Success (A SIG Summit Keynote Review)

Digital Transformation procurement

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.

Dawn Tiura, President and CEO, SIG

Dealing With Inflation And The Disrupted Supply Chain

Disrupted Supply Chain

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.

How significant?

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.   

Dawn Tiura, President and CEO, SIG

Using A GPO Model To Fight Inflation? Insights From Our Second Interview With A Senior Procurement Executive

How to Use A GPO Model To Fight Inflation

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.

Dawn Tiura, President and CEO, SIG

This Month at SIG – May 2022

Here's your monthly update on the latest thought leadership, networking events and training with SIG.

As the first half of 2022 comes to a close, procurement faces the reality of inflation and what that means for their supply chains. We have a host of resources, insights and events to get you prepared.


May CPO & Executive Virtual Series

SIG's CPO & Executive Virtual Series is an opportunity for the most senior procurement executives to gather with their peers in an interactive virtual environment to discuss their most pressing issues. On May 4 Brian Roche, CPO from Westfield Insurance, will deliver an exciting keynote session on the potential for AI in procurement at the May CPO & Executive Virtual Series. He will be followed by Karen Coker, Director of Third Party Risk & Vendor Management at LendingPoint for A Day in the Life presentation.

Join us for this executive-level conversation with actionable takeaways!

 

May Microlearning by SIG University

On May 18, Canda Rozier CIAP, Sourcing Executive & former CPO, will share her digitization journey as a CPO. That session will be followed by Daryl Hammett, Global Head of Demand and Operations at Amazon Web Services (AWS), who will lead an exciting deep-dive discussion on the importance of professional development in sourcing. 

Join your sourcing, procurement, and risk management colleagues in this two-hour interactive virtual environment to be challenged with topics related to our industries!

Desmond Williams, Digital Marketing Manager

Is Your Supply Chain ESG Ready? (A SIG Summit 2022 Keynote Review)

esg in supply chain

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.

Dawn Tiura, President and CEO, SIG

Closing The Digital Acceleration Gap In Procurement

digital procurement

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.

Dawn Tiura, President and CEO, SIG

How Procurement Has Bridged The Gap With Finance

Procurement and Finance

Let's start with a bit of a history lesson. Have you heard of Robert Rudzki?

As the co-author of the 2005 book Straight to the Bottom Line®: An Executive's Roadmap to World Class Supply Management, Rudzki knows a thing or two about the subject matter about which he confidently writes. Between 1977 and 2005 – 28 years, he was SVP and CPO for notable brands Bayer Corp. and Bethlehem Steel Corp. Be sure to note his dual finance and procurement role.

Based on his expertise – which includes an MBA in Finance from the world’s oldest and most prestigious business school, Rudzki identified the five critical finance terms every purchaser should know. In short, his bridge between finance and procurement was to have the latter refocus on areas such as ROIC, Cost of Capital, and P/E Ratio.

His reasoning was supported by a 2006 article that asserted, “Too often, finance executives in Corporate America simply don’t believe that purchasing departments are really bringing in the savings they claim" because “financing and purchasing don’t speak the same language.”

This linguistic disconnect was further emphasized in a 2007 news report indicating the following:

  • Less than 20% of CFOs consider the work of CPOs and their staffs as having a very positive impact on competitiveness.

Additional insights from an excerpt of the research paper referenced in the same news report also indicate that:

Mary Zampino, Vice President – Content, Research & Analytics

Two Senior Procurement Executives Weigh In On The Best Way To Deal With Inflation

procurement inflation

One of the significant advantages of the Sourcing Industry Group (SIG) is that members have unparalleled access to industry insights and expertise through our vast and diverse community of practitioners and thought leaders.

Recently we conducted interviews with two senior procurement executives regarding their innovatively practical approach to dealing with inflation and its impact on supply chains.

In the first instance, we talked with Tony Abate - Senior Vice President & Global Chief Procurement Officer at Cigna Express Scripts.

When Cigna closed its $67 billion acquisition of Express Scripts in December 2018 to become what the media called a “$140 billion revenue healthcare colossus,” Tony’s responsibilities expanded considerably.

Responsible for “transforming and integrating two procurement departments into a global, world-class international team, he is accountable for the CIGNA taxonomy research, analysis, and development, including identifying 8000 suppliers with an annual spend of $4.5 billion.

Our second executive is Michael Koontz. Michael is the VP Strategic Sourcing & Business Leader for ATD Sourcing Solutions, whose unique approach to battling inflation we will discuss in a follow-up post.

Creeping Into Supply Chains

Shortly before his interview with SIG, Tony gave a speech to 1500 employees at Cigna on inflation and its impact on supply chains.

Dawn Tiura, President and CEO, SIG

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