Supply Chain

Cooperative Ecosystems: Finding Suppliers That Give A Damn

supplier ecosystems

When Barry Kull was going through the recruitment process at Novo Nordisk, his son was diagnosed with diabetes. Walking into his meeting, Kull was apprehensive about mentioning his son’s diagnosis, but when the conversation went such, Kull brought up it up. He was glad he did. “When I mentioned my son’s diagnosis, the CFO’s body language and energy absolutely changed. He leaned into the conversation and was genuinely curious about my son. He told me how Novo Nordisk addresses challenges that adolescent type 1’s encounter.” Kull realized that the executives at Novo Nordisk care. He is now proud to represent a company that, throughout the organization, empathizes with its customers.

Finding Suppliers That Care

Kull doesn’t expect suppliers to care as much as Novo Nordisk, but he expects them to understand why they care so much. He expects the suppliers to lead, to anticipate and to push their thinking. Kull believes that all procurement professionals should have supply partners that are good people with strong ethics.

The Cooperative Ecosystem

A cooperative ecosystem is a combination of different partners and suppliers that bring their own set of values to the table. The partners and suppliers work together to solve a specific problem or to create an opportunity.

In the context of launching a new pharmaceutical brand, the following is Kull’s (paraphrased) list of potential partners and suppliers that might be part of a brand-viable ecosystem:

Sarah Scudder, President, Real Sourcing Network

Supplier Performance Management Saves Time and Money

Male arm holding silver pen point to a graph measuring supplier performance management

SIG University student Moath Alswaidan enrolled in the Certified Sourcing Professional (CSP) program and works at Mitsubishi Heavy Industries – MHPS Saudi Arabia. He shares what he’s learned in the program and how his team plans to implement best practices in supplier performance management.


Supplier performance management is one of the most important areas in sourcing and supply chain management and I feel fortunate to have worked on both the sell side and buy side of the table. Most of the sourcing process requires much effort from both sides until the work is awarded to the supplier. Supplier selling teams spend time and effort to prepare to negotiate a proposal that best fits the buyer. At the same time, the buyer team needs to put the same effort in searching and selecting the best proposal for their organization. It is a waste if the agreement doesn't last due to the lack of supplier performance management.

Transition Process

The supplier performance management process begins by selecting the team from both the buyer and supplier organization. The mission is to translate the contract into the operation language and identify the measurement and monitoring criteria. This task is called transition. The team should have enough knowledge of the business and the scope of work defined in the contract. The transition process requires a joint effort from the transition team and may also require the support of other teams in the organization. The transition process is considered a change from an existing state to the desired state. Therefore, it is recommended to adapt to Lewin's Change Management Model: Unfreeze, Change and Refreeze.

Moath Alswaidan, Supply Chain Manager, Mitsubishi Heavy Industries – MHPS Saudi Arabia

SIG Speaks Weekly Briefing - May 28

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

Artificial Intelligence and Its Impact on Procurement and Supply Chain

Read how GEP is breaking down some of the essential AI concepts and showcasing the game-changing applications that they believe are most relevant in procurement and the supply chain.

eBook on Artificial Intelligence Essentials

Artificial Intelligence is the topic of many business conversations where often the fantasy is of intelligent robots doing more work with less time and resources. Not all of the promises related to AI are unfounded. Read this eBook to learn how AI’s potential can transform procurement.

Ariba Live Barcelona

SIG’s CEO and President, Dawn Tiura, will be speaking at SAP Ariba Live. Join her there!

Latest Future of Sourcing Articles

Future of Sourcing continues the "Women in Global Sourcing series" with Tracy Scheid. Tracy is the Vice President of Operations at Workspend. She is a strategic and results-oriented leader with over 30 years of experience aligning business goals with talent acquisition strategies.

Hailey Corr, Content Manger

SIG Speaks to Kelly Bengston, CPO at Starbucks

Kelly Bengston is Senior Vice President, Chief Procurement Officer at Starbucks. Kelly is responsible for enhancing Starbucks enterprise-wide functional strategic sourcing and supplier relationships, creating consistent global sourcing processes, developing a sourcing talent management program and building a values-based approach to working with suppliers across all categories of the business.

Kelly has held numerous leadership positions during her 8-plus years with Starbucks. Most recently, Kelly served as Vice President of Starbucks Global Supply Chain’s Strategy & Deployment team, a new team created under Kelly to support Starbucks supply chain’s aspirations of becoming digitized, strategically aligning resources against priorities and building capabilities through long-term capacity planning and supply chain intelligence.

Prior to joining Starbucks, Kelly gained broad experience in packaging, product development, manufacturing, and project management at Macy’s, Bensussen Deutsch, Cranium and Hasbro. She enjoys running, traveling, and spending time with her family. Her favorite Starbucks beverage is Nitro Cold Brew.

Kelly will share her expertise with attendees at the Western Regional SIGnature Event in Bellevue, WA on May 16th. 

Can you share a little more about your day-to-day role and responsibilities as the Chief Procurement Officer for Starbucks?

I am fortunate to have an amazing job, working for an amazing company.  My day-to-day is filled with connecting with great partners and suppliers to deliver products and services to our stores and customers.   

Heather Schleicher, Senior Marketing Director

How to Reduce Value Leakage in Complex Contracts

According to reports authored by the International Association of Contract and Commercial Management, the Aberdeen Group, and the International Association of Outsourcing Professionals, the average contract loses approximately 17% to 40% of its value from the time of execution through to close-out. Value leakage can range from things like low adoption rates, non-value-added change orders, lack of innovation, poor governance, etc. This blog post will help contract professionals understand how customer-supplier relationships lose value and three best practices to preserve value.

Move Beyond Deal Points

Typically, negotiators think in terms of “getting the best deal”, meaning, financial and legal Terms that are favorable to the negotiator’s organization. Here is the problem: if businesspeople accept this premise, they are negotiating short-term “deals” in a complex, long-term business environment.

Focusing on the “deal” often leads to losing focus on the larger business goal(s) that a customer-supplier relationship seeks to address. For example, an overemphasis on “getting the best deal” often results in failing to fully document costly aspects of the work in the Statement of Work, failing to include adequate inspection, testing and cure processes, and failing to document and control common risk events.

Furthermore, focusing on the “deal” also precludes the inclusion of innovation in the delivery of goods and services. Buying emerging technologies like artificial intelligence, robotic process automation, cloud computing, or cognitive automation is the new norm, yet only 21% of respondents in Deloitte’s 2016 Global Outsourcing Survey reported that innovation was a key part of their contracts.

Jeanette Nyden and Lawrence Kane

Is Supply Chain Software Risky Business?

An image of a cloud that conveys cloud computing.

Keynote speakers, thought leaders and industry publications show no signs of slowing when it comes to evangelizing the benefits of the supply chain’s digital transformation. With its promises to save you time and money, the market has exploded with offerings of cloud-based solutions, IoT devices and a legion of outsourced practitioners who can make all of your spend visibility and risk management dreams come true. But for all the benefits touted, what is often left out of the conversation is the topic of security, especially as it relates to third-party vendors.

The Path of Least Resistance

As hackers become cleverer in their approaches, they’ve moved from directly attacking large organizations to exploiting vulnerabilities and penetrating third-party cloud software, apps and IoT devices to implant malware directly into the software or steal login credentials. “The challenge with supply chains is that they are multifaceted and there are many places where a hacker can enter,” says Brandon Curry, Senior Vice President with NTT Communications. Curry, who is also a Certified Ethical Hacker, frequently reports on trends in cloud and supply chain software security. He notes that the top cost of a supply chain breach is legal and reputational costs, with software supply chain attacks costing an average $1.1 million per attack globally.

Compromised software is one of the primary causes of supply chain software breaches, and the damage isn’t limited to grabbing customer credit card numbers or personally identifiable information (PII). Hackers are also looking to steal intellectual property, mine your customer base, counterfeit your product and take over your market share.

Stacy Mendoza, Digital Marketing Manager

Supply Chain Mobility: Sourcing Tomorrow’s Business

There’s a lot of talk regarding all the ways technology is going to revolutionize procurement. Blockchain can increase supply chain visibility, the Internet of Things (IoT) can change the way our business devices communicate with each other, etc…But what type of innovations are available at the sourcing level?

From paper RFPs to conferences, it seems the way we source business has largely remained the same. Procurement teams are limited to siloed, outdated supplier databases and incomplete business information when attempting to make business decisions. It’s expensive and time-consuming to get a holistic picture of a supplier’s business health and mitigate third-party risk. How can we adapt today’s technology for tomorrow’s sourcing needs? Here are a few innovative ways that your organization can source business:

Daryl Hammett, CSMP, CSP, General Manager/Chief Operating Officer, ConnXus

Interview with Kevin Nash, VP and CPO, Health Care Services Corporation

An image of the Chicago skyline.

Kevin Nash is the Vice President Chief Procurement Officer at Health Care Services Corporation, a Blue Cross Blue Shield Company. As an experienced executive in procurement, sourcing and supply chain operations, Kevin manages over 100 people who oversee a wide range of functions from sourcing and contracting to regulatory requirements. Kevin shares his tips to keep a large team organized, his outlook on the growing role of procurement in organizations, and his advice for those looking to be better procurement professionals and team leaders.

Can you talk about your background and education--how did you get involved in procurement?

Like many procurement professionals, I stumbled upon procurement early in my career and found it to be an interesting and exciting area to work. After graduating with a degree in engineering, I started my career at GE supporting a manufacturing process. While in manufacturing, I began to focus on supply chain because we were experiencing frequent supply chain and inventory issues that were significantly impacting the ability to meet the production schedule. After finishing my MBA and leaving GE, I joined a consulting firm and continued to focus on supply chain with an emphasis on procurement. While in consulting, I transitioned from focusing on the supply chain for direct material to supply chain and procurement in service-orientated companies.

Stacy Mendoza, Digital Marketing Specialist

Sustainability in Sourcing Part II: Sourcing's Role

An image of a glass globe in the forest.

In previous blogs, SIG has covered the basic concept of sustainability, including an overview of its various dimensions. In this post, I will touch on the role that sourcing professionals can have in meeting corporate sustainability goals.

Why should sourcing have a role?

Sourcing is uniquely positioned to contribute to meeting a corporation's sustainability goals because sourcing typically has expertise in:

  • Creating alignment to corporate goals
  • Building frameworks to measure success
  • Researching market conditions and supplier capabilities
  • Conducting strategic negotiations 
  • Designing innovative methods for value creation
  • Ranking the priorities of stakeholders with supplier offerings   
  • Identifying risk and mitigating responsibly

The reduction in costs after implementing a sustainability program can exceed the costs of implementation – in other words, you’re spending money up front but in the long run, you save more than you spend. For example, if an organization were to target the spend category of corporate services and facilities management (FM), capital may be invested in working with a supplier to install a new system that reduces energy consumption at the company's North American headquarters, but in the long run, the reduction in energy costs saves the company money – which of course, can then be reinvested.

In this example, procurement and sourcing are uniquely positioned to make this happen. Most likely Sourcing negotiated the original FM contract, understands the innovative capabilities of suppliers, has heard many recent pitches on new products, and is adept at performing the analysis that proves an investment can have a significant return in hard costs, and even soft costs.

Mary Zampino, Senior Director of Global Sourcing Intelligence

The Business Case for Ethical Sourcing Practices

Ethical sourcing best practices.

In my time working in the sourcing sphere I have become passionate about ethical sourcing. Mexico, where I have lived for nearly eight years, is where many companies source cheap, nearshore labor and is a resource for bilingual, cost-saving talent. I have witnessed unethical sourcing practices in my time here and I am always looking to educate myself and others on the benefits of ethical sourcing. As companies chase better costs to remain viable, the possibility of building a supply chain with poor ethical practices increases. Ensuring ethical sourcing practices in your supply chain can be labor intensive but the benefits are immense.

According to the  Chartered Institute of Purchasing & Supply (CIPS), ethical sourcing is the process of ensuring the products being sourced are obtained in a responsible and sustainable way, that the workers involved in making them are safe and treated fairly and that environmental and social impacts are taken into consideration during the sourcing process. Ethical sourcing also means the procurement process respects international standards against criminal conduct and human rights abuses and responds to these issues immediately if identified. 

The good news is that  84 percent of businesses report having a supplier code of conduct  in place to ensure ethical sourcing practices.

Hailey Corr, Junior Editor and Marketing Associate, Outsource and SIG