Recently, SIG had the pleasure of hosting Nitin Khorana, Vice President from Icertis for the September CPO & Executive Virtual Series. It was a very engaging discussion that lasted nearly two hours with tons of excellent takeaways. Let’s get into it!
Contract Intelligence Driving Visibility into Supply Chain
Nitin kicked off the day discussing the impact that COVID-19 has had on supply chains and bottom lines. As Nitin highlighted from one particular study, 97% of supply chains reported that their workforce was impacted by COVID-19. The resulting question from organizations became "how do I manage risk and how do I react quickly to maintain supply chain performance post-pandemic".
This is where Chief Supply chain officers have come to the forefront. These key players for the business have become increasingly recognized for their ability to deliver profitability & long-term business objectives. What helps these supply chain leaders elevate this supply chain performance? Visibility into their supply chains.
As Nitin points out, contract management plays a vital role in supply chain performance. Contract intelligence is able to set qualification benchmarks and processes for existing and new suppliers. By using blockchain framework delivers visibility into tier 2 and tier 3 suppliers by quickly being able to identify contracts that don't align with risk & category strategies.
A More Resilient & Efficient Supply Chain Starts with Contracts
Corporations are increasingly using their financial strength to address supply chain performance through contract-driven supply chain visibility and diversification. There are three ways that contract lifecycle management (CLM) can drive this visibility.
As we close out the first half of 2021, we prepare for the future of procurement with a host of exciting industry research and webinars to make your role easier.
July 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 July 21, A panel of experts from Everest Group will explore maximizing savings and innovation from IT and BPO Service Providers, followed by topic-based discussions on contracting models and cost savings in 2021.
Join us for this executive-level conversation with actionable takeaways.
As a 40-year Procurement leader, Steve Kesinger knows a thing or two about the daily struggles of procurement departments. The former Nordstrom Chief Procurement Officer and LogicSource Procurement Council member has hands-on experience managing large, complex teams responsible for managing over $2B+ in annual spend, resulting in a unique perspective on what Procurement teams need to succeed.
In this session, Steve will be joined by LogicSource Managing Partner, Sam Vail, and Sourcing Industry Group President and CEO, Dawn Tiura, to share the insights he has harvested from his decades of experience both as a CPO and also in his current advisory role helping early-stage technology companies build business models that will resonate with Fortune 1000 procurement leaders.
Just last month, when thousands of people took time away from their day-to-day, to gather to focus on Sustainable Procurement at the 2021 Sustain event. There was an air of anticipation, with a whiff of panic. The 5000+ registrants and 3000+ attendees (over twice the number from last year and ten times the number just five years ago) are a testament to how Covid and all the calamity of 2020 has moved the supply chain into a very bright spotlight. A year as disastrous as 2020 demands a deep strategic rethink of how we approach, value, build and optimize our value chains, with an ESG/Sustainability lens.
Procurement, supply chain and sustainability leaders alike are groping for guidance on how they can rebuild better and more resilient supply chains in the face of such massive uncertainty. There is a visceral passion and ambition by the sustainable procurement community to reinvent. But along with this spirit was an unsettling mix of uncertainty, anxiety, and trepidation about HOW to do it right.
Four Ways we Must RETHINK Supply Chain
We see four key factors that we must RETHINK about supply chain sustainability, which sets a framework and direction for launching or accelerating a sustainable procurement program to meet the needs of the New Normal.
2020 created a unique situation for businesses and significant learnings from the unforeseen circumstances of the pandemic. 2021 will be the year these learnings are put into action. Internally, this may mean updates to standard operating procedures, workflows and other processes to better prepare for the unforeseen. The explosion in online training and the expected increase in budgets will offer more opportunities. Businesses with a well-trained workforce will have a competitive advantage.
Training is perhaps more critical in 2021 than in years’ past. It is well known that a comprehensive training and development program empowers employees and improves retention. According to LinkedIn’s 2020 Workplace Learning report, 51% of learning and development experts will be launching upskilling programs while 43% will be reskilling their teams. So much has been learned across industries, disciplines, etc, that it will be critical for not only the Procurement organization to be an active participant in training but Marketing, Accounting, Manufacturing, Supply chain, etc.
Streamlined Procurement can be Part of the Solution
Across organizations, departments are being challenged to do more with fewer resources. As a result, finding the time to participate in training sessions becomes more difficult. Establishing a priority for what training is most important becomes a challenge. Finding ways to make company-wide processes easier lowers the burden on the individual department in 2 ways. First, simpler technology or processes eliminates the need for formal training sessions, and an easier process saves time and encourages user engagement.
Career procurement professional turned author Peter Smith, MA, FCIPS, FRSA, recently joined the Sourcing Industry Landscape Podcast to lift the lid on some of the worst procurement scams in history, offers practical advice on avoiding embarrassing mistakes, and shares how to make sound, strategic procurement decisions.
If you're going back to 2019 is when you wrote the book, can you share some of their global disasters or the big stories that you included in the book back then?
When it comes to procurement failures, there are many areas, and some of them do not really understand what you're buying. And that can be something very simple, like the printing equipment the Irish government bought that didn't actually fit into the building they were putting it in. Or much more complex technology failures and so on.
But then, there are some interesting areas we perhaps don't think about so much in supply chain procurement, and I believe getting incentives wrong is a fascinating one. So, how do you incentivize suppliers to do the right thing?
And some of the failures there are clearly failures, but when you ask the question, "Well, how would you have done it, so it wasn't a failure?" those answers are not simple. Just something as straightforward as, "How do you get the incentives right for somebody running an outsourced call center for you? They're handling customer queries, doing inquiries or complaints. How do you incentivize them to work efficiently but give excellent customer service to the people calling in?
With the passing of the year, 2020 became more than a hindsight. We saw the emergence of human resilience and world leaders stepping up to shape a sense of leadership in young minds – be it in the area of politics, entrepreneurship or grassroots movements.
Many equate the COVID-19 pandemic to the 1918 Spanish flu. I see the similarities, but the impact today is much larger. Some basic statistics: Worldwide population in 1918 was ~1.8b, compared to ~7.8b in 2020 (4x larger). On mobility, estimates place ~23.5m travelers arriving on U.S. shores in 1918-19, compared to ~79.3m in 2020. Travel and military embankments were at close quarters in 1918, with distancing, tracing and lockdowns more the norm in 2020. On communication, wireless communication was the novel technology in World War I, limiting civilian communication to letters, postcards, newspapers, and some telephone and radio. Today, social media and the internet are primary communication modes today, with hand-held devices now reaching the farthest corners of the world.
With all this evolution in the area of mobility and communications, one would expect the mobilization of essential goods and services, inter- and intrastate communications, interlaced with the very basic of humanity, would be the norm of trade policies and corporate goals.
Padmini Ranganathan, Global Vice President, Product Strategy, SAP Procurement
I recently had the privilege of joining SIG’s podcast with Dawn Tiura. We had so much fun talking about diversity and inclusion (D&I) strategies, and why now is the time for organizations to start thinking about and acting on total talent diversity. Specifically, diversity across all of their workers, full-time and contingent (contractors, freelancers, and shift workers). Dawn and I are both super passionate about this topic so if you are too, take a listen.
Maybe you’re thinking, “I’ve got diversity suppliers and that’s what I’m measured on.” That’s great if you do, and the truth is diversity suppliers are absolutely critical and shouldn’t be overlooked. However, just because you use diversity suppliers doesn’t mean you are getting diverse candidates.
Many organizations spend as much as 42% of their entire workforce budget on contingent labor, and most CFO’s expect that number to increase in the coming years. In fact, by 2023, over 52% of the workforce will be made up of freelancers. So if such a significant portion of your workforce is contingent, shouldn’t you consider diversity and inclusion across all workers?
Certainly, we know it’s good for the bottom line, as evidenced by the Boston Consulting Group finding that diverse companies have higher revenue. Who can deny that revenue isn’t important? It’s what keeps everybody employed! Here are some essential points to consider:
It’s so easy to do the right thing to do for people and business. Diversity and inclusion across all worker categories can so easily be implemented. It brings value to your community, to your current and future workers and your company brand.
COVID-19 has created a ripple effect of disruption through supply chains across the world, causing many companies to assess their weak spots and reevaluate their operations to ensure future resiliency and continuity.
Rebounding from the current crisis with more solid resilience is itself creating immense value. Forward-thinking companies are looking a step further, perhaps with the climate crisis clearly in view. They are leveraging sustainability and purpose – with an upside creating long-term value across a wide range of business levers, from competitive differentiation, grow sales revenue, supplier innovation to support future circular business models, talent recruitment and retention.
Procurement’s Key Role in Turning Purpose into Profit
With momentum growing toward stakeholder capitalism, businesses have made a greater commitment to sustainable purpose through reducing emissions of greenhouse gas, limiting plastic use, providing decent working conditions and more. The recent COVID-19 pandemic has brought risk mitigation and resiliency top-of-mind – and we’re seeing clear proof points that sustainable procurement is the answer.
SIG is always asking our event attendees, current and future members, and readers about their current issues and concerns. I have been tracking and analyzing their responses for almost 10 years now. While cost savings and value-add remain consistent and strong priorities, there's no doubt many are very concerned about meeting pandemic-related needs.
We are blessed to have a community of thought leaders and generous, experienced professionals who are willing to share their experiences and describe their wins.
We offer the following resources in your quest for COVID-19 related items specific to sourcing, procurement, and workforce management. SIG members can continue to search for related articles here.
In the resources listed here, you can learn how to set up crow's nest and a war chest, hear how Sprint/T-Mobile are managing the crisis using AI for their spend analytics, specific procurement best practices for today's market, how technology enhances continuity in your workforce and what happens if and when this is "all over." Plus, so much more.
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, Vice President – Content, Research & Analytics