Author

Nell Walker

Published

14 November 2024

Estimated Read time

6Mins

It’s impossible not to be inspired by the energy at a DPW event. DPW Amsterdam 2024 was buzzing with that…

It’s impossible not to be inspired by the energy at a DPW event. DPW Amsterdam 2024 was buzzing with that same energy, its attendees soaking in information and inspiration from speakers, peers, other experts. We caught up with Rujul Zaparde, Co-Founder and CEO of Zip, at the event to dive into the procurement landscape and chat about the specific qualities DPW brings to the sector.

Zaparde is the Co-Founder and CEO of Zip. At the beginning of Zip’s journey, Zaparde and his fellow founder, Lu Cheng, based the company around their own experiences as end-users of the procurement process. They took their lived confusion around having multiple intakes for a contract, for the purchase request, and all the different complicated components of the process, and created a solution.

“And so, we started Zip and created the category of intake and procurement orchestration. We’re very grateful to have been named the leader in the category,” says Zaparde, in reference to having just been named a category leader in IDC’s first ever Marketscape for Spend Orchestration.

So, as is often the case, procurement is something Zaparde fell into. In this case, he got involved with procurement specifically to solve pain points. Prior to Zip, he was a Product Manager and Cheng was an Engineering Leader, both at Airbnb; they knew very little about procurement. “We were just end-users,” he explains. The upside of this was that they were able to come into the industry fresh, without the baggage and legacy issues that can come with being in a sector for a long time.

UX first

“At Zip, we really try to take a user experience first approach,” Zaparde continues. “What we found is the highest leverage change you can make in any procurement organisation is to make it easier for your employees to actually adopt and follow whatever the right process is. If you do that, then all of finance, procurement, accounting, and even IT find that they’re suddenly swimming with the current, not against it. And you can’t do any of that unless you solve for user experience.”

Taking away problems, the way Zip does, also takes away a barrier to ambition. The theme of DPW Amsterdam 2024 was 10X, a term on the lips of many across all sectors. Once immediate issues and pain points are addressed, 10X is something businesses can aspire to, with many talks and workshops during DPW Amsterdam focusing on how to approach this.

Getting the mindset right

For Zaparde, 10X thinking is a necessity for growth. “You have to aim for 10X to even end up at something X,” he explains. “That requires ambition. I also think that when you think in terms of 10X, and your mindset is angled towards incremental change, you’re much more open to thinking of solutions that are perhaps a little more risky. It changes your perspective.” 

A mindset shift needs to happen before anything else. This involves considering the needs of procurement and the wider company, having a north star in mind, and then breaking changes down to an incremental level. 

“Then you can start to think about the steps you need to take to get there,” Zaparde explains. “A big component of this is bringing along your peers and stakeholders across every function that’s tangential and critical to the core procurement workflow and path.”

Innovating for good

The work Zip does is indicative of the shift towards continuous improvement and advanced technology that procurement has been going through in recent years. There are things that are possible now that weren’t possible even a year ago, thanks to the vast innovations being made. One of the hot topics right now is generative AI, something that’s opening up a world of possibilities.

“It’s the elephant in the room right now,” says Zaparde. “With the capabilities that gen AI unlocks, you can automate a lot more. That allows you to cut down a lot of the transactional and operational work that procurement and sourcing organisations are doing. Procurement is tired of the status quo. It’s been an underserved function for over 20 years, and I’m glad that’s finally changing. I feel privileged for myself and Zip to be part of the conversation, and that we’re seeing all these amazing changes happening.”

Zaparde believes we’re already seeing the benefits of the major changes that have occurred over the last couple of years in procurement. In fact, he knows this, because Zip has helped its customers save around $4.5bn of spend over the last two years, which is an astonishing statistic.

“One customer of ours, Snowflake, achieved over $300m in savings alone,” Zaparde continues. “We’ve seen tangible benefits already. The way procurement is evolving isn’t a hypothetical thing – it’s really happening.”

Fragmentation on fragmentation

The key, again, is overcoming base level issues for the sake of evolution. This is precisely what Zip provides, after all. But sometimes, the issue is at a data level. Unclean data is something that technology leaders are talking about a great deal right now, with some feeling that it holds them back from implementing new technology. Zaparde believes that businesses should be questioning why their data isn’t clean from the start, rather than worrying about trying to cleanse existing data.

“You don’t just clean your data – the real question is why is your data not clean in the first place?” he muses. “You have to have a clean entry point for it. I don’t think I’ve ever spoken to a Fortune 500 CPO that said they had clean data. I think it’s because of the upstream processes in intake and orchestration. If all the cross-functional teams – the IT review, the legal review, the finance – are being manually shepherded by the procurement operations organisation, then how can you possibly end up with clean data?

“People are keying the same information into multiple systems, which might mean they answer in similar – but different – ways. So you end up with fragmentation on fragmentation. But if you have one single door to that data, you’ll be able to drive only clean data, because it’s a funnel. If you let everyone have different swim lanes that never intersect, you won’t have clean data.”

As 2025 approaches, Zip has multiple product capabilities and features coming up that Zaparde and his team are very excited about. This includes leveraging gen AI, something we’re seeing incredible utilisation of across the sector.

For Zaparde, attending events like DPW Amsterdam to talk about what Zip does and interact with peers and clients alike is a joyous part of his job. “DPW is really accelerating the rate of change in the procurement industry. That’s very much needed, and it’s energising to see so many incredible people from the procurement world in one place. I love spending time with these forward-thinking procurement leaders at this event.”

Author

Nell Walker

Published

Estimated Read time

6Mins

Certain procurement pain points can prove debilitating for a business, freezing it in its tracks when it’s trying to grow…

Certain procurement pain points can prove debilitating for a business, freezing it in its tracks when it’s trying to grow and improve. This is where companies like Candex are able to step in and turn a headache into something so simple, it requires no further thought. 

Danielle McQuiston is the Chief Customer Officer at Candex. She’s been with the fintech startup for five years, spending two decades prior to that working in procurement at Sanofi. Candex is a technology-based master vendor that allows customers to engage with and pay one-off or small suppliers without setting them up in their system. This means that the system doesn’t get clogged up with suppliers that are rarely or never going to be used again. 

“We’re primarily used for what companies consider tail spend, and we typically deliver it as a punchout catalogue for a really simple user experience,” McQuiston explains. That ability to support lots of customers was what drew her to the role. “Coming to Candex, I was very excited about what they were doing and wanted to help as many companies as possible.”

Addressing tail spend

That ability to address tail spend in a unique way is the main thing that differentiates Candex. It’s an enormous problem for procurement professionals. The way Candex delivers it is through a digital plug-and-play solution, removing the need to be dependent on human intervention. “It’s a horizontal solution for any good or service, and it’s available in over 45 countries now,” says McQuiston. “It becomes part of the customer’s ecosystems and leverages the P2P process. It’s super compliant, and allows a lot of control.”

With this tool in place, Candex’s customers are able to gain much better control over their smaller purchases, defining what is allowed to be purchased. For many, this tool allows them to put tighter restrictions on purchases than their e-procurement systems are able to do. Additionally, Candex runs suppliers through screenings every day, which generally doesn’t happen for small, rarely-used suppliers.

“We run really detailed compliance and sanction screening against all those vendors, taking away a really daunting task from customers,” McQuiston states. “Customers probably check those suppliers once when they’re being set up, but then they never look at them again. Every day, we’re checking them, and keeping an eye on them when our customers can’t.”

Candex’s reporting is extremely detailed, and provides customers with the kind of real-time visibility they wouldn’t normally get – even in their own systems. Reports are generated weekly or monthly, including the diversity status of suppliers. This is data that a lot of clients then feed directly into their Power BI tools and data lakes, meaning they’re able to integrate it seamlessly into their other data.

Cleaning up the data

The whole purpose and aim of Candex’s tool is to make life easier for its customers, streamline its processes, and improve efficiencies. To that end, standardisation is key when it comes to business improvements, and that includes preparing data prior to implementing new technologies and processes. When it comes to ensuring a business’s data is healthy –  before launching into major tech changes – accepting the necessity of making foundational change is key. 

“Data cleansing processes are ugly, cumbersome, and long – and everyone has to do them,” McQuiston comments. “But you have to accept that you’re going to have to do something, if you want to get a handle on your spend. First and foremost, you need to standardise the way you name things, the way you put data in the system, and you need a really strict discipline around that. All of those things will make backend processes a lot easier.”

It’s just one of many considerations CPOs need to bear in mind when seeking out technology solutions and implementation. Modern procurement departments have a seat at the wider business table now, and what they do impacts the entire business. So when it comes to utilising solutions for the sake of the business at large, there are many factors to think about.

“As with any data or technology, it’s all about garbage in and garbage out,” says McQuiston. “Any advanced technology should be used with caution and viewed with a critical eye. You have to start with knowing what you want out of it. 

“A lot of times, people put technology in place because it looks interesting, but you need to start with the problem and work backwards. If the issue is user experience, you need to make sure that whatever you’re implementing focuses on a positive UX. If the problem is unclean data, you need to make sure you’re putting in place all the foundational elements you need to make that better. Always start from the perspective of implementing a technology based on a problem, rather than the other way around.”

Improving UX in 2025

It’s a seriously dynamic time to be involved in procurement right now, as evidenced by the intense buzz around us at DPW Amsterdam as we sit with McQuiston. As we look ahead, she envisions that procurement will have an increasingly powerful impact on user experience. This is particularly important at a time when tasks are becoming increasingly automated, with less and less direct human interaction.

“We’re also seeing a pretty big leap forward in terms of best practice sharing amongst our clients,” says McQuiston, something that events like DPW also encourage. “For Candex, a big theme of 2024 has been getting our clients together to share best practices and information, helping them to develop further expertise in the field. 2025 will have more of the same, but there’s now a higher level of maturity out there in the way customers are considering tail spend. As people continue to onboard solutions, it will be interesting to see how that impacts the UX in relation to Candex. We’re always looking for ways to make our tool more user-friendly and add better functionality.”

All of this is why Candex’s customers love the company. On a base level, Candex takes a complex pain point and makes it simple. In a broader sense, the reason Candex is becoming so popular is the way it works with people. “The most common feedback we get from customers and suppliers is that we’re great to work with because we’re so flexible,” says McQuiston. “We hired a team of procurement experts, so our team is made up of people who really understand the pain of our clients, and can anticipate their fears, their needs, and cater to those.”

Author

Andrew Woods

Published

8 October 2024

Estimated Read time

7Mins

Click here to read it! Our exclusive profiles this month include… City and County of Denver: Collaboration at the Heart…

Click here to read it!

Our exclusive profiles this month include…

City and County of Denver: Collaboration at the Heart

Denver is one of the United States’ most spectacular cities. As the largest city in Colorado, it is located at the base of the Colorado Rocky Mountains and is home to picturesque views and warm weather for a good part of the year. 

Lance Jay heads up procurement at the City and County of Denver. According to Jay, his procurement function touches most entities within the municipality which leaves little time for boredom. “From arts and venues to parks and recreation to Denver International Airport and street maintenance and everything in between, the role is certainly varied,” he explains. “We’re buying everything from airplane de-icer to road paint to golf course fertiliser; no one day is the same for us. We are constantly dealing with something new and we’re buying everything and anything.”

Scaling efficiency

It is fair to say procurement has been given a tough hand in recent times. Ultimately, standing still hasn’t been an option. The past few years have been dominated by external problems such as COVID-19, wars and inflation among other black swan events. It has meant that the importance of having a finger on the pulse of the latest problems is key to long-term success, something Jay is well aware of.

“Part of our mission and vision is being agile and efficient,” explains Jay. “And if you look at the last four or five years, things like working from home and having virtual meetings, really didn’t exist before. For us, it was going from in-person bid openings to doing virtual bid openings which was challenging at first. In the past 12 to 14 months, the use of AI has also increased and is being incorporated into a lot of different things.

“We have many vendors now using AI to submit their bids. We need to look at the bids and see if they were AI-generated versus the vendor doing the work. So, a lot of those old school procurement things are still valid, but we have to pivot a little bit and shift how we do things to be either more technology savvy with AI or be able to incorporate it into the business. Because things are now moving at such a fast pace, if you aren’t agile, you’re going to get left behind.”

For Jay, he values being open to alternative ways of working and not keeping operations the same because that is what is safe. He explains that within the City and County of Denver, the organisation is continuously searching for new ways to harness efficiency.

Read the full story here!

Microsoft: Innovation and agility in procurement 

Change is the only constant, and the changes affecting the global procurement industry seem as though they are, indeed, constant.

The shockwaves thrown out by the COVID-19 pandemic are fading, but not gone; in their wake, geopolitical tensions, environmental instability, and rapidly advancing technologies are reshaping the ways in which we source and secure the goods and services upon which modern organisations rely. From consumer expectations to cybersecurity threats and a trending shift from globalised supply chains towards nearshoring and resilience-driven sourcing, procurement in 2024 would be almost unrecognisable to someone working in the industry just a few years ago. 

There are many ways to meet new challenges and changing circumstances, however.

Jayna Bundy, the new head of Microsoft’s indirect procurement business unit, stresses the value of bringing “a broader finance perspective” to the role. Bundy moved into procurement from Microsoft’s treasury department, where she has worked for almost two decades. “My finance background has allowed me to help connect the dots between our supplier strategies and the broader financial goals of the company,” she explains. “The skill sets I developed in treasury, such as managing cash flow, cost efficiency, technology and innovation, business relationships, and risk management, translated well into the procurement space. My passion for innovation and technology, which I honed in treasury, also aligns well with the current focus on digitising procurement, especially in light of the rise of GenAI.” 

A year after taking on her role, I sat down to speak with Bundy about bringing a new perspective to procurement, cultivating agility, nurturing innovation, and harnessing the potential of Generative Artificial Intelligence (GenAI). 

Moving to procurement 

Bundy stepped into her current role in May of 2023, where she is responsible for overseeing indirect procurement at Microsoft. 

She and her team support Microsoft’s businesses with engagement and sourcing for a variety of categories including professional services, technical services, marketing, among others. They also manage business process outsourcing for enterprise programs, including a centralised employee device program, which ensures cost efficiency in device purchasing across Microsoft’s 220,000+ employees.

Additionally, Bundy’s team handles supplier relationship management, responsible procurement and compliance, focusing on supplier security, sustainability, privacy, risk management, and diversity. “We also have a Center of Excellence that oversees source-to-pay technology, innovation, and procurement-related mergers and acquisitions, such as onboarding Activision Blizzard after Microsoft finished the acquisition in October of last year,” she adds.  

Stepping into a procurement role was a noteworthy change of direction for Bundy. “I’ve been at Microsoft for 19 years as of April, and for 18 of those years I was in treasury,” she says.

Read the full story here!

Pan Pacific: The art of procurement excellence

Pan Pacific Hotels Group’s Alice Kwek on procurement in the hospitality industry, the importance of building a strategic function, and why continuous learning, training and curiosity have been instrumental to her success…

If you want to know what a consummate career in procurement and supply chain looks like, you could do worse than look at Alice Kwek’s CV. In more than 20 years in the industry, Alice has amassed the kind of skills, expertise, and experience that few can match, working her way from a first buyer role through successive positions in the marine, offshore, and oil and gas industries, before taking a series of more senior leadership roles in hospitality and travel. In 2023, she brought the breadth and depth of this experience to luxury hotel company, Pan Pacific Hotels Group. And all this, she says, having first stumbled into the profession unexpectedly. 

“I was first given the opportunity to learn about procurement when I was working at a marine offshore company,” Alice says, reflecting on an impressive career, “I rapidly developed a passion for the industry that has lasted. My first role was as a buyer, responsible for handling purchases, negotiations, and supplier relationships – it was a level of hands-on experience that gave me real, practical insights into the operational aspects of the profession and reinforced my interest in procurement.” 

Read the full story here!

Author

Andrew Woods

Published

19 September 2024

Estimated Read time

6Mins

Welcome to Issue 54 of CPOstrategy!

This month’s exclusive cover story is a big one!

We were granted access to the group procurement team at Bosch to produce an incredible insight into purchasing and supply chain at the global provider of technology and services… 

Read the new issue here!

Bosch purchasing powering pack: Teaming up governance, procurement & service 

As with any large and successful enterprise, procurement and supply chain play a vital role in the competitiveness of Bosch, whilst also aiding the company’s efforts towards a sustainable future. The company generated sales of €90bn in 2023 and its purchasing volume exceeded 50% of turnover. Keeping the purchasing and supply chain function competitive, agile, and sustainable is a huge undertaking. A mission that requires both strategic independent agility and a collaborative, community-minded culture that can draw upon its vast network of insights.  

The person overseeing the procurement functions across Bosch’s four business divisions is Thomas Schulte, Head of Governance, Supply Chain Management Purchasing. Like many of his colleagues, he was attracted by the idea that he and Bosch could change the way that people live, in a meaningful and compassionate manner. “In purchasing, you have this opportunity to meet people, to create things and to make a change,” he enthuses. “And this is something I find extremely inspiring.” 

Read the full story here!

Amazon Business: Why CPOs need a seat at the C-suite table

Stephanie Lang, Director and General Manager for Amazon Business, highlights the significance of the CPO role and provides actionable takeaways for businesses looking to leverage their product leadership effectively

The role of the Chief Procurement Officer is in the midst of seismic transformation and change.

No longer a back-office role hidden in the background, today’s CPO has risen to become one of the most important components of a company’s operations. Out of sight no longer.

Witnessing the evolution first hand is Stephanie Lang, Director and General Manager for Amazon Business. Lang speaks exclusively to CPOstrategy and shares her extensive experience and expertise, shedding light on why CPOs are integral to an organisation’s strategic and operational success. The discussion covers various facets of a CPO’s responsibilities, including driving product innovation, aligning strategies with business goals, and fostering cross-functional collaboration. 

Lang also explores how CPOs serve as the bridge between market needs and company capabilities, thus playing a crucial role in sustaining competitive advantage. 

Read the full story here!

Teamviewer: A unique approach to procurement

Alexander Pilsl, Director of Procurement at TeamViewer, talks AI, agility, and driving procurement transformation with a unique approach to leveraging the partner ecosystem…

The world is changing. New challenges, from geopolitical instability to rising fuel costs to the worsening climate crisis, are conspiring to create what a recent procurement industry report referred to as “an environment of permanent crisis”. Old value chains are no longer stable or profitable in the ways they used to be, and organisations are fighting to find new methods of tackling this new era defined by disruption. 

Alexander Pilsl, Director of Procurement at TeamViewer

In the face of this new reality, savvy companies are looking for new ways to position procurement within their organisational structures. And not only avoid the challenges posed by the modern procurement landscape, but leverage new strategies and technology to unlock value for the business. In turn, a new breed of more agile, more collaborative procurement functions is emerging, focused on leveraging technology and their partner ecosystems in equal measure. 

Modern procurement

“I think TeamViewer was exceptionally smart to recognise that the world, and therefore the expectations placed on procurement as a function, has changed,” says Alexander Pilsl, Director of Procurement at TeamViewer. Pilsl joined TeamViewer in November of 2023 with a mandate to create a modern, value-driven procurement function delivering on both the traditional goal of cost containment, but also in the ESG and risk management spaces, all the while maintaining the function’s exemplary record on compliance.

“When I arrived at TeamViewer, I found a solid procurement process built around a theme of compliance,” Pilsl recalls. TeamViewer went public in 2019, and put a lot of strategic emphasis on meeting the regulatory and compliance requirements that accompany that transition. “I arrived and found a PO compliance rate north of 95%,” says Pilsl. “That’s just incredible. I’ve never seen anything like that. The mandate, then, was to modernise to meet the new challenges posed by the procurement sector, and deliver new value without losing that level of compliance.” 

Read the full story here!

Creactives: Artificial intelligence with a human touch

Adriano Garibotto, Co-founder and Chief Sales & Marketing Officer at Creactives SpA, discusses the generation of enormous benefits for CPOs and supply chain chiefs through a unique brand of AI…

A​​rtificial intelligence has opened an ever-expanding universe of possibilities and opportunities as it continues its breathless acceleration. The genie is well and truly out of the lamp, and we must all find the most positive uses of its power. None more so than in procurement and supply chain where AI is reconfiguring the functions at every level.

Adriano Garibotto is Co-founder and Chief Sales & Marketing Officer at Creactives SpA, which creates and deploys AI solutions for procurement and supply chain digitisation. He has joined us for a discussion on just how Creactives and its unique AI tools are generating enormous benefits for CPOs and supply chain chiefs, covering spend analytics, master data governance, and procurement guidance automation.

As well as being responsible for sales and marketing at Creactives -headquartered in Verona, Italy and with offices in Spain, Germany, and France, Garibotto is also a member of the company’s board, along with fellow Co-founders Paolo Gamberoni and Francesco Bellomi, CEO and CTO respectively. Garibotto takes us back to the beginning. The very beginning.

The very beginning

According to many historians, there were three inscriptions written upon the ancient Greek Temple of Apollo at Delphi, one of which resonates with Garibotto: ‘Know thyself’. “4,000 years ago, the Greeks said everything that is needed,” he explains from his Verona office. “And we are still there. To know yourself in procurement implies answers to four questions. What I buy? From whom I buy? When and how? These are the questions you need to be able to answer if you want to set your benchmark, if you want to set your starting point, if you want to be able to answer who you are, OK? Who you could be will depend on the negotiation and other things. But what you are today is something that comes up from the analysis of the data, which is the point where everything starts.”

Read the full story here!

Author

Nell Walker

Published

28 August 2024

Estimated Read time

4Mins

We caught up with Shachi Rai Gupta from ORO Labs to discuss the importance of orchestration in procurement.

Simplifying procurement in smart ways is the ultimate goal for ORO Labs. Utilising the best of AI, ORO Labs aims to implement procurement orchestration across sectors, creating an experience that is simultaneously automated, augmented, and humanised.

Shachi Rai Gupta is VP Strategy at ORO Labs, with a wealth of transformation and technology experience behind her. Rai Gupta’s sharp eye on procurement has allowed her to witness the rise and fall of various trends, and understand what the sector needs as it – along with technology – evolves. 

We caught up with Rai Gupta at the DPW NYC Summit back in June, a special North American version of the event. Procurement trends, especially AI and orchestration, were very much the theme of the day, prompting lively conversations amongst some of the world’s most influential procurement leaders.

Procurement as a net positive experience generator

For Rai Gupta, the trends right now are guided by the fact that procurement has more of a  strategic and evolved role than ever, giving the function the opportunity to have a great impact on the enterprise bottom-line and the environment and community at large 

“Procurement is morphing into a function where one of its biggest responsibilities is to be a net positive experience generator,” she explains.

“Procurement really is a service function for the whole business stakeholders. We, as procurement professionals, need to see things through the lens of the business. This includes what issues the business is trying to solve, and meeting the business where it’s at for good collaboration.

“It’s also important to make this experience as easy as possible, rather than cumbersome and time intensive. That needs to be catered and customised to the individual business segments.”

Prioritising the planet

Another area Rai Gupta is seeing talked about a lot is sustainability. This topic has, for some, been sidelined a little in favour of advanced technology. But it’s just as important as it’s always been, and it’s vital to keep the discussion alive – especially in procurement.

“More and more, companies are realising the impact they’re having on the environment,” Rai Gupta explains. “It’s an increasing priority on all our agendas. The technology is still nascent in that space, in the sense that there aren’t good ways to do benchmarking or tracking. That’s going to be an interesting space to watch out for.”

The next generation

Another hot topic of the DPW NYC Summit was the talent shortage. We at CPOstrategy discuss this topic a lot with procurement professionals, and there’s no one answer for fixing the issue.

“There’s a dearth of good digital talent,” Rai Gupta states. “The skillset you need today in procurement is very different from what we’ve had before. To be able to leverage that, to really make use of the procurement teams you have and the operational model you want, it’s a different challenge. The structure of your team is more important than ever. 

“While that shortage is there, when you do have the right people in place in procurement, that’s where the department shines,” Rai Gupta adds. “That’s where procurement becomes a group of trusted advisors for the business, providing proactive opportunities. We wear a lot of hats in procurement, and we’re stepping up to a new level of evolution.”

Advanced tech for good

And, of course, AI and orchestration are terms on everyone’s lips right now – procurement included. AI is, in Rai Gupta’s words, “a solver”. Many of the blockages and challenges procurement is experiencing as it evolves can be solved, or at least aided, by AI and orchestration. “There’s so much tech out there,” Rai Gupta states. “AI is one such possibility. Every segment of procurement comes with its own risks and requires its own expertise and tool sets. 

“To manage that whole ecosystem is where that orchestration comes in. There’s a real beauty in this because it’s collaborative. It makes the whole bigger than its parts.”

Author

Nell Walker

Published

8 August 2024

Estimated Read time

5Mins

We caught up with Danielle McQuiston from Candex to discuss why procurement is risk-averse, and how the business can help.

Candex, a B2B fintech company, has been going through some exciting changes recently. In the five years that Danielle McQuiston – its Chief Customer Officer – has been with the business, it’s gone from its venture round to A series in 2021 and into B series, which it closed out in 2023. Its goal is to make life easier for procurement professionals across sectors. This is because having trusted services at their disposal is one step towards changing procurement’s risk-averse reputation.

Candex’s value proposition is as a tech-based master vendor that helps enterprise buyers engage and pay small and irregular vendors through an easy, quick, streamlined process. The obvious ‘low-hanging fruit’ use case at most enterprise organisations is to use Candex to avoid setting up new vendors for small, infrequent purchases. 

While tackling this low-hanging fruit demonstrates an immediate benefit, Candex is now taking it a step further. It’s helping enterprise clients understand the additional benefits and value that they can get from the solution. We caught up with McQuiston at the DPW NYC Summit in June, an event which featured innovative solutions in procurement. In particular, AI.

Creating and avoiding risk

“The companies that only go for the easy wins still have tens of thousands of suppliers that they hold in their vendor master. They don’t closely manage them and really don’t know them,” McQuiston says. “At some point, these companies have onboarded a supplier to make a small purchase. When they do, they do minimal checks on the vendors since the purchase is small or one-time only. But now that ‘small’ vendor is in the company’s system for anyone to engage with – sometimes forever. These companies are left with little-known and unmanaged vendors taking up 80% of their vendor master. This, in turn, creates risk for the enterprise.” 

Candex can mitigate this risk and empower companies to focus more on strategic relationships. It does this by helping companies offboard their non-strategic vendors, and engage vendors only as needed. Businesses can do this with the confidence that Candex applies robust compliance screening and third-party diligence to all vendors as part of its standard processes. 

As a result, Candex has started helping clients realise how they can reach their initial objectives of deriving more value by lowering risk exposure. By helping them focus on strategic suppliers, they can increase their working capital, accelerate the speed of doing business, and support their supplier diversity programs.

“All those aspects are where my focus is currently,” McQuiston explains. “Along with that, over the next few years, we will continue to make the process even more user-friendly. We’ll also further develop our solutions to meet the ever-changing commercial, compliance, and security landscapes. We can make the system even more intuitive, and help our customers streamline internal processes so things are faster and more cost-effective.”

The roadblocks

Implementing technology solutions to improve procurement is the name of the game across the sector, after all. It was talked about extensively at DPW NYC in June, where we spoke to McQuiston about Candex and trends. Unfortunately, there’s a roadblock for the sector, which is that procurement is risk-averse.

McQuiston explains. “We work primarily with Fortune 2000 companies, and I can’t tell you how many I’ve met up with who have outright told me they’re risk-averse. They all think that’s unusual, but they all say it and most of them are the same. It doesn’t matter if you’re in pharmaceuticals or consumer goods or banking – everyone is in the same boat regarding risk.”

This is because, as a function, procurement was created to ensure security of supply, controlling both quality and cost. “Procurement was born out of the supply chain world with a focus on direct spend. Out of the need to make sure prices don’t go up – and, in fact, go down,” McQuiston continues. 

“Procurement has always been the enforcer of the financial rules. That’s the only way they were able to have an impact on the business initially. Now, procurement wants a seat at the table and is able to more broadly bring value to the business. In return, businesses are asking procurement to ease their role as the enforcer in order to have that seat. This is tough for procurement because, by nature, they’re nervous about losing control since that is how they have added value in the past.”

Hope is here

This may be a challenge, but the march of change isn’t stopping. There’s hope in the air. This is thanks to companies like Candex, as well as the arrival of new technologies. For example, artificial intelligence, which the business world is increasingly looking to leverage.

“AI is the whole theme of this conference,” McQuiston said of DPW NYC. The event spawned many fascinating conversations, not to mention encouraging ones. As the business world utilises technology better, procurement is only going to get better. And AI can help support procurement teams as they look to calibrate their solutions and right-size their approach to risk, efficiency, and value-add for the business. 

“I’m very interested to see how innovative solutions like Candex, as well as AI solutions, become disruptors – in a good way,” says McQuiston. “A lot of other solutions that have tried to enter the procurement space have struggled to really break in and push for significant change. 

“However I believe that if you solve a real problem and have good technology, you will be successful. AI may be able to really help further support technology solutions in their mission to simplify the procurement stack and positively address user experience challenges,” McQuiston concludes.

Author

Andrew Woods

Published

23 July 2024

Estimated Read time

3Mins

Shelley Salomon, VP of Global Business at Amazon Business, discusses her company’s commitment to fostering gender diversity in procurement… Procurement’s…

Shelley Salomon, VP of Global Business at Amazon Business, discusses her company’s commitment to fostering gender diversity in procurement…

Procurement’s gender imbalance isn’t new.

Traditionally, the function was regarded as a male-dominated profession. But change is afoot, in more ways than one. While a digital transformation amidst technological innovation is well-publicised, another evolution is underway within the workforce.

Gender diversity has become an important component of many company strategies globally. While progress to encourage more women into procurement has already started. There still remains an imbalance, particularly among those holding leadership positions. With current statistics suggesting around one in four leadership positions are held by women, there is still room for improvement.

So, is progress happening quickly enough? Shelley Salomon, VP of Global Business at Amazon Business, discusses her organisation’s commitment to fostering gender diversity and how women can reach parity in procurement. 

In your opinion, where is procurement today in terms of women’s representation in 2024?

Shelley Salomon: “Women’s representation in procurement has seen progress these past few years, but there remains room for further improvement. Gartner’s data shows that women comprise 41% of the supply chain workforce. It’s encouraging to see greater gender diversity within the industry.

“While these statistics are encouraging, they also highlight ongoing challenges. Particularly at the leadership level. Only 25% of leadership roles are held by women. This disparity underscores the need for sustained efforts to promote gender diversity and support women’s ascension to senior positions within procurement.

“My perspective on this trend is one of cautious optimism. The progress we see is promising, reflecting a growing recognition of women’s unique contributions to procurement roles. Diverse perspectives and gender equity are vital for effective decision-making and problem-solving. Additionally, multiple credible studies show that companies with the greatest gender balance in the C-suite are likelier to achieve above average financial results. However, much work must be done to ensure these advancements translate into lasting change.”

While progress to encourage more women into the workforce seems to be underway, there is still a major disparity in the number of women leaders in procurement. What is the best way to go about rectifying this? 

Shelley Salomon: “I believe there’s a significant opportunity to welcome more women into procurement leadership roles. By establishing robust mentorship and sponsorship programmes, organisations can provide invaluable guidance, support, and networking opportunities. Thus empowering women to thrive in their careers and gain visibility within the organisation. Investing in inclusive leadership development programmes is essential. These initiatives focus on building inclusive skills and readiness for leadership roles, continuing to foster a more inclusive and dynamic workforce.

“In my opinion, implementing inclusive hiring practices that actively promote gender diversity, such as using diverse hiring panels and conducting blind recruitment processes, is essential to minimising biases. 

“Lastly, setting clear, measurable goals for increasing the number of women procurement leaders and regularly reporting on progress to hold leadership teams accountable can drive meaningful change. By taking these proactive steps, organisations can create a more equitable environment that supports the advancement of women into leadership roles within procurement.”

Read the full story here!


Author

Andrew Woods

Published

16 July 2024

Estimated Read time

7Mins

Supply chain 4.0 – where preparedness and opportunity meet in the digital supply chain 

Supply chains matter. One break in the link and manufacturers can be left with costly disruptions that bring the entire operation to a standstill – and the problem isn’t going away soon. According to McKinsey research, disruptions lasting a month or longer now happen every 3.7 years on average. Whether it is issues securing raw materials, a steep rise in shipping costs, labour shortages, geopolitical conflicts, or sustainability concerns, the pressure is mounting on manufacturers to diversify their supplier partnerships and introduce more flexible operations. For manufacturers determined to create more resilient supply chains, Andrew Newton, Business Central Consultant at Columbus UK, argues that a digital transformation of supply chains will be integral to the industry’s ongoing survival. 

Industry 4.0 has been the main driving force behind recent supply chain transformation with the introduction of IoT technologies such as cloud, data analytics, and AI throughout the manufacturing ecosystem. This includes smart factories that enhance manufacturing with Industry 4.0 tech and smart products offering internet-based services. 

It’s now time for the supply chain to step up to the 4.0 digital plate. Market leaders, particularly in the automotive and electronics sectors, have already launched digital transformation initiatives to establish flexible and high-performing supply chains. And manufacturers of all sizes can learn from their example on how to achieve sustainable change. 

When disruption is constant, an organisation’s preparation for supply chain changes will provide a significant competitive advantage. From effective data connectivity to reshoring operations, operationalising AI, and implementing a long-term sustainability agenda – successful manufacturers must be able to incorporate these factors into supply chains to drive innovation and redefine how products are created, developed, and delivered to meet evolving consumer demands. 

Unearth actionable findings within the data haystack 

Many businesses now have extensive data archives spanning several years, including substantial sales orders and operational performance records but the ability to extract maximum value from this data remains a common challenge. Manufacturers want to establish robust connections with shop floor assets to unlock enhanced operational efficiency and make more informed decisions. However, many lack the data-related skills to successfully link their machinery or manage the influx of data streams from sensors. 

This is where the introduction of business intelligence dashboards with Supply Chain 4.0 can offer real-time production insights to inform decisions, boost efficiency, cut costs, and refine product quality. 

The convergence of operational technology (OT) and information technology (IT) adds to the data challenge, particularly where legacy equipment is still in use. It is important to recognise that the solutions being implemented require tailored approaches due to the unique demands of each manufacturing organisation. Developing applications within a business can be tricky, with not every business having the in-house data skills to do this. 

Custom applications that don’t require extensive coding expertise can address this digital skills gap. Versatile solutions that combine low-code services, self-service analytics, and automation for instance, can make it easier for manufacturers to create applications that precisely align with their specific needs, boost efficiency, and innovate in the process. The establishment of a reliable data environment with Supply Chain 4.0 ensures that manufacturers can enhance decision-making and operational efficiency, all while reducing costly errors. 

Operationalise AI to stay one step ahead 

AI has left a mark on every industry and when it comes to the manufacturing landscape, the story is no different. Already many businesses are using AI tools to process real-time data from shop floor sensors to provide manufacturers with immediate insights and action, especially if quality measures breach thresholds. But the capabilities of AI don’t stop at detection. 

Manufacturers must consider many factors in production and delivery, such as demand versus capacity and how much materials cost along the supply chain – and this is where unsupervised AI can be a useful tool for risk identification and market trend forecasting. 

For instance, AI can suggest preferred suppliers to purchase from based on their supply chain history or issue alerts for impending weather events affecting supply chains. Social media analytics enabled by AI can also be used to project patterns to better understand where the market is heading but it can’t fully predict the future. Instead, the role of AI with Supply Chain 4.0 is to help manufacturers identify shifting consumer interests and trends, spot market trends relating to offerings or brand, and forecast waning or growing interest in product types. 

I want it now! Proximity sourcing can help meet customers’ changing expectations 

As supply chain disruptions become part of the new business environment, it’s time for manufacturers to end the reliance on disparate and siloed operations and instead look to nearshoring as the answer. 

Customer expectations around delivery times are changing, with 62% of UK consumers now expecting next-day delivery when ordering online – an expectation that traditional offshoring business operational models now struggle to match. Yes, regional or local supply chains can be more expensive and add another level of complexity, but they do allow for greater inventory control and bring the product closer to the end customer, which reduces overall lead times. This reduction with Supply Chain 4.0 ensures that manufacturers can promote higher customer responsiveness and allows for constant improvement and innovation based on consumer feedback. 

Nearshoring also provides an opportunity to clamp down on miles covered and will help manufacturers introduce a circular approach to operations. With over 4 in 5 UK adults recognising their role in lessening their environmental footprint, it is clear that the manufacturing industry needs to mirror this popular attitude – and technology will play a key role here. Automation techniques for instance can improve traceability and visibility over the entire product line, highlighting how businesses use and waste materials, along with how they can reuse products for better forecasting and reduce fossil fuel usage and pollution. 

Particularly in the food industry, conscious consumers will base their buying behaviour on transport miles and the environmental impact of the product’s journey. If manufacturing businesses are able to clearly share this information with transparent supply chains, they will not only open themselves up to a larger customer pool but will also play a major role in tackling environmental challenges in the industry. 

Long-term commitment to sustainability goals 

Nearshoring is certainly one way that manufacturers can become more sustainable but with customer sustainability expectations rising, companies now have to show a long-term commitment to creating greener supply chains. 

Many businesses are making efforts to report on internal sustainable efforts such as energy consumption but extending reporting down the supply chain poses challenges, such as effectively reporting on a supplier’s energy usage. To achieve a comprehensive sustainability profile, this reporting must span the entire supply chain. 

Supply Chain 4.0 brings sustainability reporting tools that provide comprehensive tracking and analysis of environmental and social impacts, which will enable manufacturers to make informed decisions, ensure regulatory compliance, and communicate sustainable practices transparently. Manufacturers are looking to achieve this connectivity, particularly in linking shopfloor equipment usage with sustainability goals. 

Leading organisations are pushing for data standardisation among their supply chain suppliers but this brings its own set of pros and cons. Increased standardisation can make the supply chain more efficient and easier to review, potentially reducing a company’s risk. However, there’s more work needed to establish this standardisation. 

As public and regulatory interest grows, having a clear view of supply chain processes will become even more important. In the short-term, expect leading companies to keep investing time and effort to better organise their supply chain data. 

Supply Chain 4.0 – where preparation and opportunity meet in the digital supply chain 

Digital transformation is a long and complex journey but preparedness plays a key role in achieving optimal outcomes. Through the process of transformation, manufacturers can more effectively adapt to ever-shifting business conditions and evolving customer demands with Supply Chain 4.0, all while maintaining a competitive edge. 

The issue remains that each manufacturer faces their own unique scaling challenges that require a calculated approach to processes, planning, and implementation to create a sustainable business model. Often companies have growth ideas but lack a clear path to achieve them. The identification of key supply chain trends will set apart the laggards from the market leaders

Read the full issue of SCS here!

Author

Andrew Woods

Published

Estimated Read time

4Mins

Businesses have been forced to navigate and adapt to these challenges to ensure continuity, limit interruption and reduce risk

From Brexit to the pandemic and the current geopolitical conflict, the supply chain industry has faced a flood of challenges in recent years. This has caused disruption to supply chains. Businesses have been forced to navigate and adapt to these challenges to ensure continuity, limit interruption and reduce risk. 

Alice Strevens, Director Human Rights and Social Impact, Mazars 

As part of this, it’s increasingly important for businesses to ensure they have robust human rights due diligence processes in place. These processes support companies in their decision-making during crises, and help them identify risks in their supply chains. This ultimately protects them in both stable and unstable times. 

Human rights and environmental due diligence provides a basis on which to address environmental, social and governance issues that impact supply chain resilience. Companies that respond to crises with an approach based on due diligence are more likely to protect their relationships with suppliers. Plus, they get to mitigate the impact on workers in their value chain. An example of this is during the Covid-19 pandemic. Many companies saw buyers abruptly cancel orders, request refunds in full and pause orders for months. With many suppliers facing reduced sales at the time, it led to questions as to whether businesses were working alongside suppliers. Or taking advantage of the circumstances to get reduced costs. 

It’s important to learn from these lessons to build strong sustainable supply chain strategies. This will help businesses remain resilient both in stable times. And in the face of significant events. There isn’t a perfect formula. However, the concept of double materiality (i.e. considering sustainability matters from both the perspective of the impact on people and the environment, and the perspective of the financial risks and opportunities to the business) is helping businesses to assess sustainability-related risk strategically.  

Supplier engagement will ensure long-term success 

Building a sustainable supply chain for the long-term requires engagement and collaboration with supply chain partners. Long-term relationships can provide a basis to share challenging risks and impacts transparently. Human rights and environmental due diligence foregrounds the importance of engagement and collaboration to mitigate identified risks and build resilience. 

The responsible supply chain strategy should be integrated into the overarching sourcing strategy and supplier engagement approach. Delivery against the strategy should be built into performance targets and incentives. Regular reviews of impacts, targets and KPIs should be conducted at board level. Making use of the latest technological developments, including assessing their risk for social/environmental concerns and measuring and tracking performance. This will help companies stay ahead and be prepared in their processes. 

An evolving regulatory landscape calls for preparedness 

Another important point to keep in mind is the legislative landscape. This is especially pertinent in the EU, as the rules will make previous voluntary standards now mandatory and will impact large companies. This includes those in their supply chain, including in the UK. 

Companies should therefore look to base their strategies on the authoritative voluntary frameworks on conducting human rights and environmental due diligence. Primarily the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct. This will set them up for meeting legislative requirements down the line. For example, Mazars and Shift co-wrote the UNGP Reporting Framework, which provides a framework for companies to adopt responsible practices, and manage human rights risks. 

The future of supply chain is now 

Ultimately, companies and suppliers should work together to ensure collaboration and a robust strategy which takes all parties into consideration. Listening to feedback and promoting good communication between stakeholders will ensure smooth sailing during the business-as-usual times. And the more tumultuous periods. 

Implementing long-lasting strategies and creating resilience to risks will increase business’ market access and promote their financial value. Thus ensuring that they deliver quality goods and gain loyalty among suppliers. 

Read the full issue of SCS here!

Author

Andrew Woods

Published

Estimated Read time

4Mins

Recent research conducted by InterSystems highlights a critical challenge within supply chain organisations in the UK and Ireland

Recent research conducted by InterSystems highlights a critical challenge within supply chain organisations in the UK and Ireland: nearly half (47%) cite their dependency on manual processes for data collection and analysis as their primary technological hurdle. This reliance not only leads to inaccuracies and delays in accessing data but is also a significant barrier to the adoption of artificial intelligence (AI) and machine learning (ML), which almost one in five (19%) anticipate will be the trend that most impacts their supply chain. 

Mark Holmes, Senior Advisor for Supply Chain, InterSystems 

For AI and ML adoption to be successful, models must be fed healthy, unified data. This requires supply chain organisations to move away from manual data collection and analysis and adopt a robust data strategy to underpin their efforts. This data strategy will sit at the heart of AI and ML initiatives but will also play a bigger role in the business’ overall operational strategy. 

Developing a smart data strategy 

A smart data strategy should encapsulate three things: data collection, analysis, and integration into organisational operations. This is where technology like the smart data fabric comes in, helping supply chain businesses to do all three things and bring their data strategy to life. 

Built on modern data platform technology, the smart data fabric creates a connective tissue by accessing, transforming, and harmonising data from multiple sources, on demand. In particular, smart data fabric technology allows supply chain businesses to leverage usable, trustworthy data to make faster, more accurate decisions. 

With a wide range of analytics capabilities, including data exploration, business intelligence, and machine learning embedded directly into the platform, supply chain businesses will also gain new insights and power intelligent predictive and prescriptive services and applications faster and easier. 

Once these solid data foundations are in place, supply chain organisations can begin to unlock the real potential of AI and ML to augment human decision-making. 

Applying AI and ML across the supply chain 

The use of AI and ML can deliver operational change across supply chain organisations, from improved demand sensing and forecasting, to optimised fulfilment. For instance, SPAR, the world’s largest food retailer consortium, has turned to ML to solve some of the difficulties it was experiencing in streamlining and optimising end-to-end fulfilment processes in stores across Austria. 

Operating in the extremely fast moving food and beverage sector, and with more than 600 merchants in Austria, SPAR Austria required a better way to help managers of local stores control their inventory. It consequently deployed ML for real-time sensing of demand shifts to optimise replenishment and strengthen its supply chain network. This has significantly improved on shelf availability (OSA), demand forecasting, productivity, and time to decision. In turn, it also helped SPAR increase revenue and efficiencies. 

ML can also be used for production planning optimisation, using different constraints including transportation cost, or component inventory allocation to improve fill rate and optimise product shelf-life, productivity, cost, and revenues. Additionally, with access to AI and ML-driven prescriptive and predictive insights, organisations will be able to reroute or resupply at the drop of a hat, helping to maintain operations, achieve on-time in-full (OTIF) metrics, and ensuring customer satisfaction. 

The automation and optimisation of these different processes also has a material impact on those working in supply chain operations. It transforms their work from reactive to proactive efforts. With less time spent on processing, more time is freed up for strategic thinking to improve fill rates and lower transportation costs, for example, making their role more rewarding and value-adding. 

A strategic approach to AI-driven transformation 

The transformative potential of AI and ML in supply chain management hinges on a smart data strategy that moves beyond manual processes to a seamless integration of robust data collection, analysis, and usage. By adopting smart data fabric technology, supply chain organisations can resolve their primary technological hurdles, transitioning from reliance on inaccurate and delayed data to leveraging real-time, actionable insights that fuel AI and ML initiatives. This strategic shift not only enhances operational efficiency and decision-making but also paves the way for predictive and prescriptive capabilities that dramatically improve demand forecasting, inventory management, and overall supply chain responsiveness. 

The success stories of companies like SPAR Austria demonstrate the profound impact of integrating AI and ML into supply chain operations. These technologies both optimise operational tasks and empower employees by shifting their roles from mundane, reactive tasks to strategic, proactive engagements that add significant value to their organisations. By adopting a smart data strategy and embracing these advanced technologies, supply chain businesses will realise benefits that extend beyond operational efficiencies to include improved customer satisfaction, increased revenue, and a stronger competitive edge. 

Read the full issue of SCS here!

Author

Andrew Woods

Published

Estimated Read time

6Mins

Without a critical supplier, entire operations for an organisation can come to a halt.

Most modern organisations rely heavily on their supply chain partners to deliver their products and services. In the case of critical suppliers, organisations might not be able to provide most of their products and services without them.  Resilience is key!

In some cases, without a critical supplier, entire operations for an organisation can come to a halt. For example, if the point-of-sale (POS) service provider is down at a retailer, they cannot bill their customers. Disruptions can strike unexpectedly, causing significant financial losses, operational challenges, and reputational damage.

Over the last few years, supply chain disruptions have gained much more executive attention due to Covid-19 and geopolitical conflicts, but they have been happening all the time even before.  

In this article, Robin Agarwal, Head of Supply Chain and Operations Services at 4C Associates explores the importance of resilience in supply chains and practical strategies to enhance it. 

Supply chain disruptions can happen due to many reasons, some of the most common are: 
 

Financial disruption 

A critical supplier suddenly going out of business is the biggest nightmare for senior supply chain executives. In most cases, the organisation should have alternate options, but it can take weeks, if not months, to ensure the return to business as usual. I have seen in many of my clients, procurement and supply chain executives spending weeks and weeks of dedicated time to resolve supplier bankruptcy issues while suffering significant disruption in their operations and financial losses.

Even smaller cash flow problems can take a toll on supplier performance, where I have seen suppliers not being able to fulfil the orders as needed as they are not able to pay on time for their operations and supply chain. 

Reputational damage 

Organisations today face intense scrutiny from the media, customers, and increased ESG regulations. A negative ethical or social incident (child labour, environment violations etc.) within your supply chain, especially when it comes out in public, has a huge reputational impact on the organisation. Executives have to react quickly in such cases and make changes to ensure integrity in their supply chain. During the horsemeat scandal I saw significant resources at my food manufacturing client going into reviewing the supply chain and marketing money going into assuring the customers. 

Geopolitical tensions and sanctions can impact suppliers’ ability to deliver goods or risk. Organisations operating with global supply chains need to assess and mitigate these risks. Complex manufacturing organisations saw massive disruptions in their supply chain in the aftermath of Ukraine-Russia war. A major area of focus for organisations today is scrutinising their supply chain for dependency on BRICS nations. 

Natural disaster 

We all know what happened during the Covid-19 pandemic and how it prompted organisations to review their supply chain strategy. However, this is not a new issue. For example I was part of a risk and resilience project for a major automotive original equipment manufacturer (OEM) that was commissioned in the aftermath of Floods in Thailand paralysing their supply chain. 

Tier –N supplier disruption 

Most of the big suppliers have complex supply chains. Any impact on these Tier 2, 3 suppliers can create a significant impact as well, depending on how mature is your supplier resilience. This is the most common issue I come across. While most organisations consider these as their supplier problem, when happen, they need to bear the impact as well. 

The list above is not exhaustive and there are many other complex issues, ranging from cyber disruptions to boats carrying goods stuck in the Suez Canal. 

The false sense of security 

Many organisations operate under the assumption that supply chain disruptions won’t happen to them. They focus on cost efficiency and day-to-day operations, neglecting proactive risk and resilience management. However, this reactive approach can be detrimental when disruptions occur as there is no framework to deal with such disruptions. In these cases, senior management has to spend a significant amount of their time while incurring higher costs. And longer time to recover than their competition. 

Risk monitoring tools: Necessary but insufficient 

There are many tools available to supply chain professionals today from getting financial assessments of their suppliers, sanctions watch, to supplier ESG ratings. These risk monitoring tools help identify potential issues, but they often lack real-time predictive capabilities. Organisations receive retrospective alerts, leaving them scrambling to respond. Additionally, false alarms can lead to decision paralysis.

At the time of Carillion’s bankruptcy, none of these tools were able to give any actionable warning to the companies. Also, most organisations have an extensive risk framework for onboarding a new supplier, but they don’t have an effective risk framework once the supplier is in operation. And dependency increases over time with warning signs, if any, ignored. 

The case for resilience 

Resilience is the antidote to vulnerability. While organisations cannot predict every risk event or control how the events unfold, it is in their gift to build adaptive capacity to withstand shocks and recover swiftly. Here are some of the basics for how organisations can enhance supply chain resilience: 
 

  1. Supply market resilience 

Overreliance on a single supplier or a geographic location affects resilience. Organisations should consciously diversify their supplier base, even if it means higher short-term costs. Also, they should know the alternate suppliers that operate in the market and have relationships with them even if they have no immediate plans to change suppliers. It would not only enhance resilience, but also help improve cost. 

  1. Know your supplier 

Understand the key dependencies with your supplier including within their supply chain. A mature organisation should know the key people to reach out to in case of disruption. And who they should even bring on board if the supplier goes bust. 

  1. Contingency Planning 

Develop clear contingency plans for various disruption scenarios. These plans should outline roles, responsibilities, and escalation procedures. Ask your suppliers about their contingency plans and how they will ensure business continuity when various risk scenario unfolds. 

  1. Operational Resilience 

Have Contingency-SOP instructions in place. Capture the specifications and know-how on what suppliers are delivering so alternate options can be switched on swiftly if needed.  

However, just having contingency plans written is not enough. Contingency plans must be stress-tested for viability and supply chain and business stakeholders ‘fire-drilled’ through those plans, so they are aligned on key steps when disruption happens, and precious time is not wasted arguing about the next steps. True resilience is an organisational culture and employees at all levels should understand their roles during disruptions. 

An ongoing process

As concluded by Christopher Jones, Procurement Director at Alstom, “Resilience planning needs to be an ongoing process, your supply base and requirements are constantly evolving.  Having stress tested plans means that when disruption lands your teams are ready to act and deal with the issues.”  

Supply chain disruptions are inevitable, but organisations can minimise their impact through resilience. By embracing proactive risk management practices and fostering a resilient culture, organisations can navigate disruptions with confidence and stay ahead of the competition. 

Read the full issue of SCS here!

Author

Andrew Woods

Published

Estimated Read time

6Mins

While environmental and climate change used to be the main topic of discussion, human rights and supply chains have taken over

In recent years, supply chains gained momentum as the leading social issue for companies to address. While environmental and climate change used to be the main topic of discussion, human rights and supply chains have taken over. This is partly due to the scandals and allegations of exploitative labour practices from multinational companies. But also due to the increased public awareness of the role companies play in determining the management of their own supply chains.

Social sustainability

The shift to focus on social issues acknowledges the profound impact that supply chains can have on our communities, labour rights, and societal well-being. Progress has been made in greening supply chains, but addressing social sustainability is a complex challenge yet to be achieved. A holistic approach that integrates social responsibility in a meaningful way into every aspect of the supply chain is the way to go. Then businesses can make a difference in the long-term.  

Understanding the social issues in supply chains 

First and foremost, we need to understand what the risks and impacts are in supply chains. These largely depend on the industry and the part of the world where a given company works. Social sustainability in supply chains encompasses fair labour practices, human rights protection, community engagement, diversity and inclusion, and ethical sourcing. Building social sustainability requires a more thorough look at these issues: 

  • Labour exploitation 

Supply chains often involve complex networks of subcontractors and suppliers. This can lead to challenges in monitoring and ensuring fair labour practices. Exploitative conditions such as low wages, long hours and unsafe working conditions can be prevalent, especially in industries like manufacturing and agriculture.  

  • Worker welfare 

Ensuring the well-being of workers throughout the supply chain is essential. This includes addressing issues around child labour, forced labour, discrimination, lack of access to essential benefits like healthcare. Issues around exploitation and worker welfare are especially troubling in the gig economy or in sectors with seasonally contracted workforce.  

  • Labour rights violations 

Encompassing the restriction on freedom of association and collective bargaining. I have had several clients whose subcontractors employed workers without employment contracts, completely violating local labour laws.  

  • Human rights risks  
  • Ethical sourcing 

Companies face challenges in ensuring that their supply chains are free from human rights abuses, modern slavery, human trafficking and exploitation. Ethical sourcing policies and enhanced due diligence can screen out suppliers who can’t comply with legislation.  

  • Conflict minerals 

Sourcing minerals from conflict-affected regions can contribute to human rights abuses and armed conflict. Companies can implement measures to trace the origin of minerals and avoid financing conflict or further contribute to human rights violations.  

  • Indigenous rights 

Many supply chains involve land acquisition for resource extraction in areas inhabited by indigenous communities. Respecting Indigenous rights, including land rights and cultural heritage is crucial to avoid access restrictions to natural resources.  

  • Community and land-related aspects  
  • Land displacement 

Though, we previously mentioned land issues in relation to indigenous people, supply chains might lead to land grabs from other communities. Proper consultation, compensation and resettlement plans are necessary to mitigate the negative impacts on affected communities.  

  • Community engagement and development 

Enterprises have the responsibility to contribute positively to the communities where they operate. In certain developing countries, these manufacturing facilities provide the only ‘good’ jobs and communities rely on them economically. Engaging with the communities and supporting local development through CSR programs is a popular way for companies to build lasting relationships.  

Strategies and Tools for Enhancing Social Sustainability  

Achieving social sustainability in supply chains requires a multifaceted approach that integrates social considerations into every stage of the supply chain lifecycle. When I work with my clients, I always look at three key pillars: legal requirements, voluntary standards, and management systems.  

The EU’s adoption of the new directives specifically targeting human rights and environmental impacts in supply chains adds to the long list of legal requirements companies need to follow to address modern slavery risks and practice corporate responsibility globally. Most of the legislation is not prescriptive in terms of what needs to be done exactly. But they do require companies to enforce corporate level standards on suppliers. Some companies have started including standard contractual clauses that require suppliers to follow legislation and adhere to the company’s policy on social topics.  

    Voluntary standards and certifications 

    There is a wide variety of voluntary standards and certifications that companies can explore on their social sustainability journey beyond legal compliance. Plus, there are certifications on Fair Trade, SA8000, Ethical Trading Initiative (ETI) Base Code and decent work. There are also some more sector specific standards and certifications such as ethical fishing for food producers. It is up to companies to decide if they want to improve their practices by updating systems in line with best practices.

      Supplier collaboration

      Supplier collaboration through the provision of capacity building and training are great tools to raise awareness on labour rights, health and safety, diversity and inclusion and support suppliers to establish their own traceability systems. Typically, the supplier code of conduct is a legal requirement, but it could be extended to include more detailed expectation. These might include labour standards, human rights, environmental practices and ethical business conduct.  

      I would consider community investment through CSR programs as a voluntary initiative that allocates resources towards community development. It is ideally driven by the needs of locals and might include a combination of paying for services and providing training or education.  

      Management systems  

      Company management systems include the collection of policies, processes and management plans. Most of the policies are legal requirements as per my previous points. However, there can be additional policies focusing on areas where the company is exposed to risks in the supply chain. For example, HR policies typically include minimum age requirements.

        Although, if the risk of child labour is relevant to the company, they might decide to have a separate policy on the prohibition of child labour. Following on from this example, a management plan would identify the risk of child labour. Whether it is for direct employees, contractors or subcontractors. This will describe a process to verify, record, audit and report on the age of workers. Supply chain specific management plans might include traceability and mapping, a supplier management plan, a supply chain risk assessment plan etc.  

        Stakeholder enagagement

        The other important aspect of a company’s management system is stakeholder engagement and complaints management. Effective stakeholder engagement can facilitate the feedback mechanism from communities and workers in the supply chain.  

        Creating socially sustainable supply chains is not just a moral imperative. It is also a strategic business imperative in today’s interconnected world. If we prioritise social responsibility by embedding it into the operations, businesses can mitigate risks, enhance reputation and create value for society. Ultimately, building social sustainability requires a collective effort involving businesses, governments, civil society and other stakeholders.

        We need to work together towards common goals to create supply chains. Not only to deliver economic value but also promote social justice, equity and dignity for all.  

        Ildiko Almasi Simsic is a social development specialist and Founder of E&S solutions which has developed the world’s first E&S specific research assistant – myESRA™.  

        Author

        Andrew Woods

        Published

        Estimated Read time

        7Mins

        Scope 3 emissions are widely considered as accounting for more than 70% of organisations’ carbon footprint. So, it comes as…

        Scope 3 emissions are widely considered as accounting for more than 70% of organisations’ carbon footprint. So, it comes as no surprise that at the heart of any businesses’ sustainability strategy is a required focus on their operations and supply chain. Choices in sourcing, production and distribution can dramatically impact a businesses’ environmental and carbon footprint.  

        The UK Retail industry is no different, growing customer awareness of ESG topics is increasing the focus on transparency and placing increasing pressure on businesses to measure, and be able to meaningfully communicate, the sustainable footprint of their products and services. An ability driven from within a businesses’ supply chain.  

        Despite the undeniable need for focus on sustainability, the effectiveness and advancement of many businesses’ sustainability strategies is unclear. In collaboration with the British Retail Consortium, BearingPoint sought to better understand the maturity of the UK Retail Industry. This provides an insight into how advancements can be achieved.  

        A structured assessment was conducted with 42 members of the British Retail Consortium across seven different business dimensions. These included Strategy; Supply Chain & Operations; Finance, Regulatory and Risk; Customer and Stakeholder Centricity; Data and Technology and Governance & Organisation. Participants were asked to self-report their maturity level against a 5-point Likert scale.  

        Indication of supply chain focus 

        Retailers are advancing sustainability efforts within their operations and supply chain. Comparison of the average maturity level for all BRC assessment participants found that operations and supply chain was the highest scoring dimension (a score of 3.37 out of 5). This indicates UK Retailers have started at the source, recognising that a more sustainable supply chain can drive benefits elsewhere. Benefits including regulatory compliance and enhanced consumer loyalty. 

        A need for data automation  

        To drive sustainable improvements, a comprehensive understanding of the as-is position is required. Accurate and reliable Scope 1,2 and 3 emissions data is thus, a critical enabler. BearingPoint found just under half (47%) of BRC survey participants were able to measure Scope 1, 2 and most Scope 3 emissions. However, retailers had not developed the capability to automate the collection of their sustainability data, with 87% reporting they manually collect data.  

        The challenges of measuring Scope 3 emissions should not be downplayed. Data availability and access across the entire value chain is dependent on the willingness and capability of suppliers to share information. Beyond this, differences in measurement methodologies present challenges of comparability and consistency.  

        Currently a reliance on industry averages, proxies and other sources address situations where primary data cannot be provided yet. This in turn compounds complexities and issues of data quality.   

        To best face these challenges automation is required with investment in a technology platform. Manually gathering Scope 3 emissions data in unfeasible, given how resource-intensive such an exercise would be where retailers typically have hundreds, if not thousands of suppliers.  

        As Retailers look to respond to increasing regulatory pressure, no doubt we will see Retailers reviewing their reporting capabilities to ensure compliance. This may in turn, drive investment in this area.  

        The power of procurement  

        Retailers are heavily reliant on their suppliers, requiring that their sustainability focus and practices are equally developed as their own ambitions.  

        Sustainable sourcing standards, considering social, economic and environmental factors as well as price and quality, should be fully incorporated into decision-making processes. Retailers have started to recognise this; almost 74% of respondents reported the presence of sustainability criteria in their sourcing proceses. Yet only 16% could say such criteria had as much weighting as price and quality.  

        To advance, equal weighting must be placed on sustainable factors in procurement. Retailers must be confident in ceasing business with those not meeting the criteria, encouraging action throughout their supplier network.  

        Improved sustainable transparency in the procurement process delivers knock-on benefits, enhancing retailers’ ability to track and communicate the sustainability of their products and services. An area retailers are struggling with as it was found that 44% did not know what percentage of their revenue was from sustainable products. This makes it harder to communicate comprehensive, and trust-worthy, information to consumers.

        It’s all about collaboration  

        Opportunities for cost savings, process optimisation and resource efficiency create a strong case for suppler collaboration. In the face of sustainability issues, aligning goals and combining resources can enable a greater impact than can be achieved individually. Retailers should adopt the mentality that ‘We’re not Net Zero until we’re all Net Zero’. They should develop partnerships to share knowledge around aspects such as origin information for raw materials and detailed sourcing information.  

        Achieving traceability through supplier collaboration can provide broader business benefits. For example, in the luxury space, traceability from source-to-make can enable product authentication, allowing for greater brand protection. For Retailers operating in the grocery sub-sector, traceability can enhance a ‘farm-to-table’ narrative supporting consumer trust.    

        Around half (52%) of participating Retailers indicated they are working with suppliers to develop new or alternative products indicating a willingness to invest in innovation. Retailers should build on the trust developed through such initiatives, considering ways to address Scope 3 data challenges. Currently, just 14% of participants stated they collaborate with their suppliers to collect primary data for Scope 3 emissions calculations.  

        Recognising risk and retaining resilience  

        Clearly, sustainable sourcing, effective emissions measurement and strong supplier collaboration are key levers to drive sustainability within a businesses’ operations and supply chain. Yet, the reality of operating in the current global environment necessitates above all, a proactive disaster recovery strategy. Without which, retailers risk paralysing delays and shortages.  

        It is no secret that as average temperatures rise, global climate hazards such as heatwaves, droughts and floods will grow in frequency and severity. This will only increase the need for supply chain resilience. One only must look at recent Black Swan events, to realise how quickly business operations can be affected. Long-term risk mitigation planning combined with data and intelligence is increasingly important for businesses.

        An understanding of risk can be effectively developed through an assessment of ESG trends, including global warming, the rise of artificial intelligence, data privacy, and cybersecurity topics. UK Retailers are yet to uniformly adopt such a strategy. Some 43% had not considered the impact of future ESG macro trends within a 10/20/30 year time horizon. While only 26% had performed a horizon scanning exercise.   

        Half of retailers (51%) have recognised sustainability-related risks and have generic mitigation plans however and such risks have not been quantified or assessed in financial terms. An inability to understand the quantitative impact of these risks limits the ability of any business to prioritise actions based on strong evidence.   

        Advancing progress  

        UK Retailers are on the journey towards establishing more sustainable supply chains. Indications are that it’s currently the business area where the most progress has been made. Four key recommendations can be made which will be crucial in accelerating sustainable maturity. All of which, have inextricable links to a businesses’ supply chain.  

        Retailers should accelerate investment in data and technology capabilities. Establishment of a supplier integrated and automated data platform will become the most effective method of closing the measurement and reporting gap for Scope 3 emissions.  

        There is a need to recognise the role of employees in driving accountability and transparency. Central to success is a retailer’s ability to cultivate a sustainable culture where individuals throughout the supply chain better understand their role in making sustainable progress. Individuals must feel empowered to lead and deliver sustainable initiatives. They need a clear understanding of how and why such action contributes to the strategic objectives of the business. Supply chain leaders should recognise their role in communicating the strategic priorities to all stakeholders.  

        Retailers should incorporate long-term risks and ESG macro trends into strategy. By incorporating long-term risks and ESG macro trends into their sustainability strategy retailers can better build resilience.  

        Finally, collaboration amongst all value chain players is required to advance transparency. Supply chains are only as sustainable as their weakest link.  

        In the highly complex and interdependent world we live in, an external mindset is critical to advancing sustainable progress. Ultimately this is how UK Retailers can develop greater confidence in their ability to face future supply chain shocks disruptions.  

        Read the full issue of SCS here!

        Author

        Andrew Woods

        Published

        Estimated Read time

        3Mins

        Soqui Calderon, Regional Director of Sustainability for Grupo Modelo and the Middle Americas Zone, reveals how the beverage giant is tackling sustainability from a procurement and supply chain perspective

        Our exclusive cover story this month is with Soqui Calderon, Regional Director of Sustainability for Grupo Modelo and the Middle Americas Zone. She reveals how the beverage giant is tackling sustainability from a procurement and supply chain perspective. 

        Grupo Modelo is a giant and a leader in the production, distribution and sale of beer in Mexico. Grupo Modelo is part of the Middle America Region (of the AB InBev Group) and boasts 17 national brands. Corona Extra is the most valuable brand in Latin America. Its other brands include: Modelo Especial, Victoria, Pacífico and Negra Modelo. The company also exports eight brands and has a presence in more than 180 countries while operating 11 brewing plants in Mexico. 

        Through more than nine decades, Grupo Modelo has invested and grown within – and with – Mexico. It has also generated more than 30,000 direct jobs in its breweries and vertical operations throughout the country. 

        Grupo Modelo, like many forward-thinking companies, is currently focused on a drive towards establishing a truly sustainable business. This endeavour is best exemplified in the Middle Americas Zone (MAZ), where sustainability efforts have been led by for the past five years by Soqui Calderon Aranibar, Regional Sustainability and ESG Director. Ambitious targets have been established for the region, but some remarkable achievements have already been made. As Calderon says: “For our team, sustainability is not just part of our business, it IS our business.” 

        Sustainability in the MAZ 

        The Middle Americas Zone is made up of several countries: Mexico, Colombia, Perú, Ecuador, Honduras, El Salvador, Dominican Republic, Panama, Guatemala + other Caribbean islands. Each territory is home to its own brands that are household names in their respective countries. However, Grupo Modelo’s Corona beer, manufactured in Mexico, is one of the top five best-selling beers globally.

        Calderon’s regional role means she travels extensively throughout the territories, engaging with all their businesses and collaborating closely with their partners and suppliers. Her job? To effectively outline their sustainability goals…

        Read the full story here!

        Elsewhere we have some incredible names imparting expert insights from companies such as Amazon Business, Source Day, DHL and Marriott International and lots, lots more! 

        Read the full issue here!

        Enjoy! 

        Author

        Sean Galea-Pace

        Published

        8 May 2024

        Estimated Read time

        7Mins

        Satya Mishra, Director, Product Management at Amazon Business, discusses how CPOs have become an important voice at the table to drive digital transformation and efficient collaboration.

        Harnessing efficiency is at the heart of any digital transformation journey.

        Digitalisation should revolve around driving efficiency and achieving cost savings. Otherwise, why do it?

        Amazon is no stranger to simplifying shopping for its customers. It is why Amazon has become a global leader in e-commerce. But, business-to-business customers can have different needs than traditional consumers, which is what led to the birth of Amazon Business in 2015. Amazon Business simplifies procurement processes, and one of the key ways it does this is by integrating with third-party systems to drive efficiencies and quickly discover insights. 

        Satya Mishra, Director, Product Management at Amazon Business, tells us all about how the organisation is helping procurement leaders to integrate their systems to lead to time and money savings.

        Satya Mishra: “More than six million customers around the world tap Amazon Business to access business-only pricing and selection, purchasing system integrations, a curated site experience, Business Prime, single or multi-user business accounts, and dedicated customer support, among other benefits.

        “I lead Amazon Business’ integrations tech team, which builds integrations with third-party e-procurement, expense management, e-sourcing and idP systems. We also build APIs for our customers that either they or the third-party system integrators can use to create solutions that meet customers’ procurement needs. Integrations can allow business buyers to create connected buying journeys, which we call smart business buying journeys. 

        “If a customer does not have existing procurement systems they’d like to integrate, they can take advantage of other native tools, like a Business Analytics dashboard, in the Amazon Business store, so they can monitor their business spend. They can also discover and use some third-party integrated apps in the new Amazon Business App Center.”

        Why would a customer choose to integrate their systems? Are CPOs leading the way?

        Satya Mishra: “By integrating systems, customers can save time and money, drive compliance, spend visibility, and gain clearer insights. I talk to CPOs frequently to learn about their pain points. I often hear from these leaders that it can be tough for procurement teams to manage or create purchasing policies. This is especially if they have a high volume of purchases coming in from employees across their whole organisation, with a small group of employees, or even one employee, manually reviewing and reconciling. Integrations can automate these processes and help create a more intuitive buying experience across systems.

        “Procurement is a strategic business function. It’s data-driven and measurable. CPOs manage the business buying, and the business buying can directly impact an organisation’s bottom line. If procurement tools don’t automatically connect to a source of supply, business buying decisions can become more complex. Properly integrated technology systems can help solve these issues for procurement leaders.”

        Satya Mishra, Director, Product Management at Amazon Business

        Beyond process complexity, what other challenges are procurement leaders facing?

        Satya Mishra: “In the Amazon Business 2024 State of Procurement Report, other top challenges respondents reported were having access to a wide range of sellers and products that meet their needs, and ensuring compliance with spend policies. 

        “The report also found that 52% of procurement decision-makers are responsible for making purchases for multiple locations. Of that group, 57% make purchases for multiple countries.

        “During my conversations with CPOs, I hear them say that having access to millions of products across many categories through Amazon Business has allowed them to streamline their supplier quantity and reduced time spent going to physical stores or trying to find products they’re looking for from a range of online websites. They’ve also shared that the ability to ship purchases from Amazon Business to multiple addresses has been very helpful in reducing complexity for both spot-buy and planned or recurring purchases. Organisations may need to buy specific products, like copy paper or snacks, in a recurring way. They may need to buy something else, like desks, only once, and in bulk, at that. Amazon Business’ ordering capabilities are agile and can lessen the purchasing complexity.”

        How should procurement leaders choose which integrations will help them the most? 

        Satya Mishra: “At Amazon Business, we work backwards from customer problems to find solutions. I recommend CPOs think about what existing systems their employees may already use, the organisation’s buying needs, and their buyers’ typical purchasing behaviors. The buying experience should be intuitive and delightful. 

        “Amazon Business integrates with more than 300 systems, like Coupa, SAP Ariba, Okta, Fairmarkit, and Intuit Quickbooks, to name just a handful. With e-procurement integrations like Punchout and Integrated Search, customers start their buying journey in their e-procurement system. With Punch-in, they start on the Amazon Business website, then punch into their e-procurement system. With SSO, customers can use their existing employee credentials. Our collection of APIs can help customers customise their procure-to-pay and source-to-settle operations. This includes automating receipts in expense management systems and track progress toward spending goals. 

        “My team recently launched an App Center where customers can discover third-party apps spanning Accounting Management, Rewards & Recognition, Expense Management, Integrated Shopping and Inventory Management categories. We’ll continue to add more apps over time to help simplify the integrated app discovery process for customers.

        “Some customers choose to stack their integrations, while others stick with one integration that serves their needs. There are many possibilities, and you don’t just have to choose one integration. You can start with Punchout and e-invoicing, for example, and then also integrate with Integrated Search, so your buyers can search the Amazon Business catalog within the e-procurement system your organisation uses.”

        Are integrations tech projects?

        Satya Mishra: “No, integrations should not be viewed as tech projects to be decided by only an IT team. Integrations open doors to greater data connectivity and business efficiencies across organisations. Instead of having disjointed data streams, you can connect those systems and centralise data, increasing spend visibility. You may be able to spot patterns and identify cost savings that may have gotten lost otherwise. 

        “It’s not uncommon for me to hear that CPOs, CFOs and CIOs are collaborating on business decisions that will save them all time and meet shared goals, and integrations are in their mix of recommendations. 

        “One of my team’s key goals has been to simplify integrations and bring in more self-service solutions. In terms of set-up, some integrations like SSO can be self-serviced by the customer. Amazon Business can help customers with the set-up process for integrations as well.”

        How has procurement transformed in recent years?

        Satya Mishra: “Procurement is no longer viewed as a back-office function. CPOs more commonly have a seat at the table for strategic cross-functional decisions with CFOs and CIOs.

        “95% of Amazon Business 2024 State of Procurement Report respondents say the purchases they make mostly fall into managed spend. Managed spending is often planned for months or years ahead of time. This can create a great opportunity to recruit other stakeholders across departments versus outsourcing purchasing responsibilities. Equipping domain experts to support routine purchasing activities allows procurement to uplevel its focus and take on higher priorities across the organisation, while still maintaining oversight of overarching buying patterns. It’s also worth noting that by connecting to e-procurement and expense management systems, integrations provide easy and secure access to products on Amazon Business and help facilitate managed spend.”

        What does the future of procurement look like?

        Satya Mishra: “Bright! By embracing digital transformation and artificial intelligence to form more agile and strategic operations, CPOs can influence the ways their organisations innovate and adapt to change.”

        Read the latest CPOstrategy here!

        Author

        Sean Galea-Pace

        Published

        Estimated Read time

        8Mins

        Anthony Payne, Chief Marketing Officer of HICX, tells us how working collaboratively with suppliers on sustainable procurement practices could act as an organisation’s competitive advantage.

        Sustainability isn’t just a ‘nice to have’ anymore – businesses don’t have much of a choice in the world of 2024.

        With ESG regulations now locked in place, organisations must comply or risk significant penalties. In order to achieve sustainability objectives more effectively and efficiently, collaborating with suppliers represents a real opportunity to get there faster.

        When businesses work with suppliers to reach sustainability goals, they need access to the most accurate supplier data possible. However, obtaining this data isn’t necessarily straightforward. Ultimately, suppliers own it and need to provide it.

        This means it is in a business’s interest to form and maintain a great working relationship with suppliers.

        Anthony Payne, Chief Marketing Officer of HICX, the supplier experience platform, discusses the benefits of being supplier-centric and how giving brands a better experience adds value to organisations.

        Anthony Payne: “There is a direct link. A good supplier experience makes it easier to communicate with suppliers because it allows for collaboration, whereas the opposite can harm communication efforts. For example, when businesses need ESG information, many will survey a broad group of suppliers even though the questions don’t apply to everyone. This is easier for the business. But it means every supplier who receives the survey must investigate whether it applies to them. The experience is more likely to frustrate suppliers than to help them offer the best information.

        “Rather, we can help suppliers to help us by communicating better. The way forward is to segment suppliers into groups and send them only relevant requests. This creates a more positive experience in which suppliers are better able to provide helpful information.”

        What about their motivation to help sustainability efforts – does this also rely on supplier experience?

        Anthony Payne: “Yes, because if the culture of the business-supplier relationship is one in which each party looks out for themselves, then suppliers won’t be terribly motivated to offer the most helpful ESG information. It’s just human nature. Whereas if a business creates an environment in which suppliers can collaborate with them, then they’re more likely to become a customer-of-choice. This is a status worth having. A recent HICX survey showed that while 49% of suppliers would go the extra mile for their biggest customer, as many as 73% would make the effort if this was a customer-of-choice.

        “Ultimately, if businesses give their suppliers a good experience, then more suppliers should be willing to provide helpful ESG information – even if it means spending a bit more effort.”

        Anthony Payne, Chief Marketing Officer of HICX

        What are some of your most effective strategies and best practices to building a future-proof ESG framework?

        Anthony Payne: “Businesses can futureproof their ESG frameworks by viewing suppliers as value-adding partners. This principle suggests three ways to engage suppliers…

        “First, have a corporate mindset in which every employee views every supplier as a valued partner. If COVID-19 taught us anything it’s how much we rely on suppliers. When the pandemic hit, non-strategic suppliers such as providers of IT equipment and protective personal equipment suddenly became as central to operations as those who supplied the main ingredients. If we take the view that ‘all suppliers matter’, then it becomes easier to treat them all as partners in the same eco-system and we can work together towards common goals.

        “Then, through this lens, we can market to suppliers. In customer marketing, a business would require a certain action from customers – such as getting them to buy a product, read a newsletter or attend an event – and so would motivate this behaviour. Similarly, in procurement, we can appeal to suppliers in a way that encourages them to participate in ESG activities, for instance, by providing helpful carbon emission information. 

        “One way to encourage the desired behaviour with suppliers is to segment them into the appropriate categories and send them only necessary messages. This is what a marketer would do with customers. By viewing suppliers as partners and introducing supplier marketing and segmentation, you can improve suppliers’ experience and get the most from them.”

        What are the biggest barriers that organisations face to delivering more sustainable practices within their organisations?

        Anthony Payne: “Once supplier data has been captured, however, the challenge continues because it must be maintained as a golden source of truth. Not having accurate supplier data is a major barrier to delivering sustainable practices because it means that businesses cannot see who all their suppliers are and what they’re doing. 

        “Thankfully, with robust onboarding and data management in place, businesses can keep their supplier data up-to-date and accurate so that it can inform good sustainability decisions.”

        What is the best way for procurement teams to assess and prioritise the suppliers they work with? How do you juggle environmental impact vs value to company?

        Anthony Payne: “The best way to assess and prioritise suppliers is to have visibility. Businesses need to know who all their suppliers are and what they’re doing, at any given time. Only once leaders are informed, can they make the best environmental decisions.

        “It’s imperative to manage environmental impact with suppliers, regardless of how much value they bring a company. Apart from the moral obligation to protect the environment, businesses also have their reputations to consider. An environmental infringement that gets exposed – no matter how deep in the supply chain it might occur – is very likely to cause reputational damage, which can have a knock-on effect on sales and share price. 

        “In addition to brand reputation, businesses can also face expensive fines, if their suppliers are found to fall short of environmental regulations.”

        Anthony Payne, Chief Marketing Officer of HICX

        What are the challenges and opportunities when it comes to supplier diversity?

        Anthony Payne: “The challenge is to source the right suppliers in the first instance and then be able to report on their activity. We know that finding diverse suppliers in the UK can be difficult. While the US market is more mature, supplier diversity is growing here. Considering this, many suppliers that could qualify as “diverse” are not yet certified. Additionally, when diverse suppliers are indeed certified, there is no guarantee that their skillsets will match your needs. 

        “Thankfully there are ways in which businesses can proactively grow their networks of diverse suppliers. For starters, leaders can equip people within the organisation who work with suppliers, to find diverse suppliers by educating them and putting policies in place. Further, there are practical steps one can follow – such as defining the criteria for what qualifies a supplier as diverse in various territories and then finding the right businesses by searching online directories, desktop research and asking for recommendations.

        “Once suppliers that are considered to be diverse are indeed found, they bring much value. Apart from being able to make a positive sustainability impact, the expectations of regulators, shareholders and consumers can be met. The by-product of this is a positive reputation which has economic benefits. 

        “The opposite logic also applies, and failing to capture supplier diversity value becomes a missed opportunity. For instance, when third-party expectations to support supplier diversity are missed, this can damage brand reputation which hurts sales figures and share price. Also, the unique offerings that diverse suppliers can offer will be missed, and with it the chance to make an impact. Therefore, it’s sensible to make the most of the diverse suppliers that you worked so hard to find.”

        Do you have any tips for readers who want to make the most of the diverse suppliers they have sourced?

        Anthony Payne: “Yes, you can start by knowing that it’s possible to make the most of the diverse suppliers you find. You can do this by following a stepped approach. 

        “Start by onboarding new suppliers who are considered ‘diverse’ with processes that reliably capture their information. This way, your diversity programmes can be well-informed. It’s hugely valuable to be able to tell, at the touch of a button, where a particular supplier might be based. Also, what qualifies them as ‘diverse’? And while they might hold diversity status today, how can we be sure it still applies tomorrow? 

        “With all the right information collected at the start of each relationship, then it’s a good idea to instill processes that drive everyone who works with suppliers to spend more with those who are considered as diverse. As more diverse suppliers join the organisation, then you need to keep their data accurate. Do this by digitally transforming the procurement landscape to make master data a priority. With robust processes, it’s possible to maximise your relationships with all suppliers.”

        How optimistic are you about the future of ESG within procurement?

        Anthony Payne: “I am very optimistic about the future of ESG within procurement, because, we’re seeing the supplier experience movement grow in the UK and the US. For instance, we’re seeing new job roles come out in this area as the principle is popularised. And we know that having good Supplier Experience Management programmes in place sets up business to procure in the most ESG-friendly way possible. 

        “And so, with Supplier Experience Management becoming increasingly popular, we believe that the future for sustainability is bright.”

        Read the latest CPOstrategy here!

        Author

        Andrew Woods

        Published

        Estimated Read time

        3Mins

        DHL Group’s Erik-Jan Ossewaarde discusses the power of partnerships in the transition towards a green supply base, and how proactively fostering supplier relationships contributes to a more sustainable ecosystem…

        It’s hard to believe we’ve reached the 50-issue landmark. It’s been such an incredible journey and thank you to every single person who has helped us along the way! And our 50th issue has a suitably fitting cover story with which to mark this moment.  

        Read the latest issue here!

        DHL: The power of sustainable partnerships 

        DHL Group’s Erik-Jan Ossewaarde discusses the power of partnerships in the transition towards a green supply base. And how proactively fostering supplier relationships contributes to a more sustainable ecosystem 

        Procurement has an important role to play in applying supplier sustainability initiatives in most organisations. We all know that. But, if you want to understand what that looks like in practice and how you transform the function to deliver on that promise, you could do a lot worse than spending time with Erik-Jan Ossewaarde and his strategy, sourcing, and procurement colleagues in his global cluster, as we were lucky enough to. Their job is to play a crucial role in delivering on the near-unmatched sustainability commitments set out by world-leading logistics company DHL Group to reach its goal of net-zero carbon emissions by 2050.  

        DHL: how proactively fostering supplier relationships contributes to a more sustainable ecosystem 

        Read the full story here!

        Aquila Group: Purposeful procurement in mind 

        We speak to Özer Ergül, Group Head of Procurement at Aquila Group, about the way the business is leveraging its position to influence suppliers and improve ESG across the board 

        Investment and asset development company, Aquila Group, is one that takes sustainability seriously. It invests in and develops clean energy and sustainable infrastructure assets, meaning a focus on ESG is baked into the business with more than 15 years’ experience focused on climate change. And for Özer Ergül, Group Head of Procurement at Aquila Group, it’s the perfect canvas for his passions and expertise to come together. 

        Ergül’s background is a mixture of aerospace, automotive, and for the last two decades, energy. He started off his career as an Air Force officer and moved into the automotive world in the 1990s, just as the sector was undergoing huge and exciting changes. “Those early roles shaped my way of working, my way of thinking,” Ergül explains. “They showed me how to solve problems collaboratively, and I still use those tools and that knowledge to this day.” 

        Read the full story here!

        Plus, we have fascinating exclusives with procurement leaders at Amazon Business Services, HICX and many, many more. Plus, all the latest news and events affecting procurement and its practitioners. 

        Here’s to the next 50 issues! 

        Author

        Andrew Woods

        Published

        5 April 2024

        Estimated Read time

        6Mins

        Tamra Pawloski, Head of Global Leveraged Procurement and Corporate Real Estate at Corteva Agriscience talks procurement excellence

        Our CPOstrategy cover story this month is…

        Corteva Agriscience: Driving digital transformation in procurement  

        Tamra Pawloski, Head of Global Leveraged Procurement and Corporate Real Estate at Corteva Agriscience, talks process automation and talent development. Plus, she reveals how to drive continuous improvement while managing more than $3bn in spend…  

        Procurement leaders in today’s procurement sector face an ever-shifting landscape fraught with new challenges and mounting responsibilities. In light of shifting geopolitical pressures, souring economic conditions, and the worsening effects of the climate crisis, staying competitive requires constant evolution and agility. The strategic value of procurement has gained greater attention too. And so the expectations placed upon the function have also increased.  

        Tamra Pawloski, Head of Global Leveraged Procurement and Corporate Real Estate at Corteva

        “When you get down to the root of it, the biggest challenge is that change is constant. If you stay still then you’re not going to be competitive,” reflects Tamra Pawloski.  

        Read the full story here!

        Orange County: Procurement is all about relationships 

        Maria Agrusa, Chief Procurement Officer at Orange County, California, emphasises the invaluable contribution of her staff, whom she regards as the cornerstone of her organisation’s success…

        Maria Agrusa, Chief Procurement Officer at Orange County

        Innovative strategies. Smart technology. Solid contracts. Every procurement manager knows these too well. “However, without  inspired and motivated procurement professionals, the procurement buzzwords are meaningless.” Maria Agrusa, the Chief Procurement Officer at Orange County, emphasises the invaluable contribution of her staff, whom she regards as the cornerstone of her organisation’s success. “Quality and engaged staff are indispensable for accomplishing our tasks”, Maria asserts. With over 25 years of experience in government contracting, Maria brings a wealth of knowledge and a strong commitment to elevating the procurement profession. Indeed, she was awarded Procurement Officer of the Year in 2020 and 2023 by the California State Association of Counties. Her diverse background spans various government procurement sectors, including healthcare and military. It’s a career that provides her with a breadth of experience that she aims to continue sharing with her procurement agents…

        Read the full story here!

        Focal Point: Empowering procurement to optimise  

        Focal Point’s Anders Lillevik and Alice Gumo discuss procurement in the digital age. And how their end-to-end solution enables the function to modernise, optimise, and drive value…

        How do you run a successful procurement department on Excel and email, or on legacy infrastructure that makes the job more challenging than it needs be? The short answer, as Anders Lillevik and Alice Gumo can unsurprisingly attest to, is you can’t. At all. And that’s truer today than ever, with procurement professionals facing increased pressure and complexity. The need to add value beyond savings, for one, and a greater need for visibility and transparency across an increasingly broad remit of activities. Activities such as ESG, diversity and inclusion, and risk mitigation.

        Read the full story here!

        Sanofi: Clinical supply chain innovation  

        Landry Giardina, Sanofi’s Global Head of Clinical Supply Chain Operations Innovation & Technology talks data-driven performance, resilience, agility and operational excellence within the clinical supply chain area… 

        Landry Giardina, Sanofi’s Global Head of Clinical Supply Chain Operations Innovation & Technology

        Sanofi has a mission: to chase the miracles of science to improve people’s lives, and sometimes that means starting over with Plan B, Plan C, or even Plan Z. Because to do so means to work across the most complex disciplines to solve problems, to push the boundaries and not be afraid to take smart risks. To dedicate everything to making life better for people everywhere. None of that happens without continuous and groundbreaking R&D and clinical trials to prove the medicines and vaccines it creates are safe and efficient for millions of people around the world. Which makes Landry Giardina and his colleagues’ jobs absolutely essential…

        Read the full story here!

        SourceDay: Delivering a higher level of performance and visibility in your supply chain  

        Tom Kieley, CEO and co-founder at SourceDay, discusses his company’s secret sauce and how it has risen to the top of the pile, delivering unified supplier collaboration for manufacturing customers.  

        Some of the best innovation is born through frustration with existing offerings.  

        Tom Kieley, CEO and co-founder at SourceDay

        Having built their careers in manufacturing, SourceDay’s founders grew tired of unnecessary costs, increased risk, and wasted time and productivity caused by ineffective supplier communication and incorrect ERP data. This led them to create a solution that would prevent direct materials inventory surprises and unnecessary costs. While also rebuilding trust between manufacturers, distributors, and their suppliers.  

        Today, SourceDay is a bi-directionally integrated platform for any ERP where the purchase order (PO) demand is generated. The company delivers 100% of purchase order demand to suppliers through the lifecycle of a PO. This is to ensure suppliers have no surprises and always have the most real-time, accurate source of truth. An ERP streamlines many of a company’s internal processes, but when it comes to keeping track of critical PO changes in a timely manner, procurement teams are still stuck in manual work. Spreadsheets, emails, and post-it notes…

        Read the full story here!

        Werfen: Procurement and supply chain excellence through teamwork  

        Don Perigny, Director Supply Chain, at Werfen, a Specialised Diagnostics developer, manufacturer and distributor, reveals how a strong work culture can achieve incredible success during challenging times…  

        It takes a village to raise a child,’ purports a famous African saying. It’s certainly a phrase that has struck a note with Don Perigny, Director Supply Chain at Werfen. For Perigny, the ‘village’ is Werfen’s supply-chain and procurement team, although he does extend the sentiment to Werfen’s wider network. It’s Werfen’s suppliers and partners who have kept the former professional sportsman busy at the company for over 21 years.  

        Don Perigny, Director Supply Chain, at Werfen

        Werfen is a worldwide leader in the area Specialised Diagnostics for Hemostasis, Acute Care, Transfusion, Autoimmunity and Transplant. The Company also has an OEM division, focused on customised diagnostics. Werfen’s annual revenue exceeds $2bn with a worldwide workforce of 7,000, operating in approx. 35 countries and more than 100 territories through its network of distributors.  

        We join Perigny at his office in Bedford, Massachusetts. He’s just back from a week at Werfen’s San Diego offices, where he spent some quality time with his extended (work) family. And it’s soon clear that the people, the culture and what Werfen does for the world is crucial to Perigny and the wider workforce at the company…

        Read the full story here!

        Author

        Harry Menear

        Published

        29 March 2024

        Estimated Read time

        3Mins

        Technology and training are working together to lighten the administrative load faced by procurement teams.

        Over the last 18 months, attitudes towards ongoing economic (and political, oh, and climate) uncertainty seem to have finally pushed past a tipping point. Discussions of a return to some pre-2020 normal baseline appear to have been replaced by a more honest interrogation not of how we get back to where we were, but how we learn to deal with how things are. 

        Geopolitical, economic, and climate instability aren’t going anywhere, and the organisations that learn to adapt to this new state of affairs will be the ones to generate real value from their functions. “Procurement and finance teams are increasingly tasked with enhancing their organisation’s spend management,” writes Ruth Orenstein, Senior Director of Product Management at Tipalti. “This is crucial to ensure financial stability and resilience against fluctuating macroeconomic conditions.” 

        The growing trend, Orenstein notes, is a shift towards a “streamlined, decentralised P2P process, emphasising the importance of employee experience and the adoption of procurement-related processes.” 

        Rather than centralising procurement decision-making within a single department, decentralised procurement takes a freer hand, allowing individuals to make purchases for their own departments, instead of pushing all purchasing through a centralised team. Procurement, even for a mid-sized organisation, can encompass a huge variety of purchases., which can range from which ergonomic mouse pad to buy for a remote contractor to sourcing thousands of tonnes of raw material weighed against cost, time to delivery, and ESG goals. 

        When different teams specialise in different product categories, or when handling smaller and less impactful purchases, decentralising the procurement process can increase the speed and agility of an organisation’s spending. 

        Decentralised procurement: risk vs reward 

        There are obviously risks to adopting a more decentralised procurement strategy. Handing over purchasing autonomy to department buyers or individual employees carries an increased risk of overspend, fraud, and more dark purchasing throughout an organisation. There is also a risk that teams will spend an outsized amount of time monitoring spend, chasing down policy violations, and generally not saving any time. 

        However, the advantages can be significant, and procurement teams that successfully create strong procurement guidelines and parameters (digital marketplaces that allow department buyers to make acquisitions from a pre-approved list of goods can be a functional halfway point between centralised and decentralised procurement), as well as effectively educate non-procurement personnel in good buying strategies can successfully lighten their load, create greater agility, and overall improve the overall process throughout the organisation. 

        If every company in 2015 was a tech company that required employees to have a basic knowledge of the IT stack, by 2025, every company might just be a procurement company. 

        Author

        Andrew Woods

        Published

        21 March 2024

        Estimated Read time

        3Mins

        Landry Giardina, Sanofi’s Global Head of Clinical Supply Chain Operations Innovation & Technology talks data-driven performance, resilience, agility and operational excellence within the clinical supply chain area…

        It’s a packed issue this month. Here’s a roll call of just some of this month’s exclusive content…

        Read the latest issue here!

        Sanofi: Clinical supply chain innovation

        Landry Giardina, Sanofi’s Global Head of Clinical Supply Chain Operations Innovation & Technology talks data-driven performance, resilience, agility and operational excellence within the clinical supply chain area…

        Sanofi has a mission: to chase the miracles of science to improve people’s lives, and sometimes that means starting over with Plan B, Plan C, or even Plan Z. To do so means to work across the most complex disciplines to solve problems, to push the boundaries and not be afraid to take smart risks, and to dedicate everything to making life better for people everywhere. None of that happens without continuous and groundbreaking R&D and clinical trials to prove the medicines and vaccines it creates are safe and efficient for millions of people around the world. Which makes Landry Giardina and his colleagues’ jobs absolutely essential. 

        Read the full story here!

        Werfen: Procurement and supply chain excellence through teamwork

        Don Perigny, Director Supply Chain, at Werfen, a Specialised Diagnostics developer, manufacturer and distributor, reveals how a strong work culture can achieve incredible success during challenging times.

        “It takes a village to raise a child,’ purports a famous African saying. It’s certainly a phrase that has struck a note with Don Perigny, Director Supply Chain at Werfen. For Perigny, the ‘village’ is Werfen’s supply-chain and procurement team, although he does extend the sentiment to Werfen’s wider network, including its suppliers and partners, who have kept the former professional sportsman busy at the company for over 21 years.

        Werfen is a worldwide leader in the area Specialised Diagnostics for Hemostasis, Acute Care, Transfusion, Autoimmunity and Transplant. The Company also has an OEM division, focused on customised diagnostics. Werfen’s annual revenue exceeds $2bn with a worldwide workforce of 7,000, operating in approx. 35 countries and more than 100 territories through its network of distributors. 

        We join Perigny at his office in Bedford, Massachusetts. He’s just back from a week at Werfen’s San Diego offices, where he spent some quality time with his extended (work) family. And it’s soon clear that the people, the culture and what Werfen does for the world is crucial to Perigny and the wider workforce at the company. 

        Read the full story here!

        Plus, we have expert-driven analysis on hot topics such as AI in supply chain, tackling global regulations and how to encourage more women into supply chain and procurement. 

        Author

        Andrew Woods

        Published

        7 March 2024

        Estimated Read time

        2Mins

        CPOstrategy cover star this month is Kristina Andric, Supplier Manager IT at Tetra Pak and recent CIPS Young Talent winner, who discusses the procurement landscape from her perspective and how Tetra Pak is nurturing young procurement leaders like her… 

        This month’s cover star is Kristina Andric, Supplier Manager IT at Tetra Pak and recent CIPS Young Talent winner, who discusses the procurement landscape from her perspective and how Tetra Pak is nurturing young procurement leaders like her… 

        As a household name in food processing and packaging, Tetra Pak stands by having a customer-centric, strong, and competent procurement function.

        As a result, it’s always working hard to evolve, which includes seeking out new procurement talent wherever possible. This is how Kristina Andric, Supplier Manager IT, became part of the team and kick-started an exciting career. 

        Read the latest issue here!

        Andric started working at Tetra Pak in 2018 via a trainee programme called Future Talent. The programme lasted two years and gave trainees the opportunity to understand Tetra Pak from multiple perspectives. Andric was rotated throughout different parts of the organisation and across different geographies, the idea being to give young people a holistic view of the company before taking on a permanent role.  

        “Embracing change marked my career since the beginning,” she reflects. “My curious nature thrives on the opportunity to engage in diverse experiences and continuous learning. Challenges motivate me and develop my potential, so every change has been to my benefit. I’ve enjoyed it all.” 

        Elsewhere, we also have fascinating insights into procurement hot topics such as optimising tail spend with Simfoni and Kearney, amplifying procurement’s influence with Arkestro, while Box looks at The Art Of Procurement As A Change Agent. Plus, we detail 5 ways of tackling procurement’s talent shortage and discuss being prepared for future pandemics…

        Enjoy! 

        Author

        Sean Galea-Pace

        Published

        14 February 2024

        Estimated Read time

        3Mins

        From compliance to being an efficiency driver, there are more benefits to sustainable procurement practices than environmental ones.

        The main obstacle cited by procurement leaders (as well as those outside the procurement and supply chain functions) to adopting sustainable procurement practices is cost.

        According to Edie’s “The Business Guide to Sustainable and Circular Procurement” report released in November 2023, “Costs and Finances” was considered one of the biggest barriers to “Improving Sustainable Procurement For Your Operation”. In a survey of procurement leaders, 76% considered cost to be one of the biggest issues, compared to the distant second and third options: “Lack of Data” (54%) and “Lack of Understanding on Sustainability (38%).

        However, in addition to the fact that the benefits of collective climate action dramatically outweigh its short term costs (existential threats are like that), there are sound arguments to be made for sustainable procurement practices from a business point of view as well.

        The sustainability benefits incurred by reducing environmental impact in the supply chain can, according to the Edie report, be a catalyst that helps respond to a plethora of issues and considerations.”

        Closing the loop to create a more circular supply chain can be driven from within the procurement function, and can do a lot to protect the S2P process from pricing volatility and supply chain disruption—something increasingly on the mind of industry leaders, as indicated by Dun & Bradstreet’s Q1 2024 Global Business Optimism Insights report, which highlighted “a downturn in global supply chain continuity due to geopolitical tensions, trade disputes, and climate-related disruptions in maritime trade causing both higher delivery costs and delayed delivery times.”

        There is also the fact that meaningful adoption of sustainable practice in the S2P value chain can have a meaningful financial benefit to brands as a whole. Sustainability is an issue on which consumers vote with their wallets. According to the World Economic Forum, “sustainable procurement practices can help deliver a 15-30% increase in measurable brand equity and value”. Consumers, suppliers, and partners all value sustainable practice as a meaningful demonstration of company quality, and—especially in terms of public opinion—consumers are becoming savvier when it comes to differentiating meaningful change from empty rhetoric.

        There’s more economic benefit than brand value adjustment that comes along with reexamining procurement practices from a sustainability perspective. The same report by the WEF noted that “embedding sustainability into procurement practices can actually help reduce departmental costs for procurement by 9-16%.” Evaluating processes for the sake of exploring green options often exposes existing inefficiencies, siloes and poor planning that can then be rectified rather than being left unexamined.

        While business leaders continue to shy away from perceived profit loss as a result of pursuing more sustainable practice in their procurement functions, when handled correctly, it can be a source of more than just emissions wins.

        By Harry Menear

        Author

        Sean Galea-Pace

        Published

        12 February 2024

        Estimated Read time

        3Mins

        Risk management has risen (almost) to the top of CPOs’ priority list for 2024. Here’s how they’re tackling it.

        If ever the world truly reached a state of “new normal”, that state is one of constant disruption.

        Even by the time the COVID-19 pandemic threw the world’s supply chains into a state of utter turmoil in March of 2020, procurement teams were already dealing with a heightened state of disruption. The US-China trade war that defined most of 2019 had barely simmered down before most of Australia was on fire and a US drone strike killed Qasem Soleimani which made an escalating war with Iran look like a very real possibility. Lockdowns, protests, earthquakes, war in Ukraine, spiking oil prices, genocide in Palestine, and both the accidental and purposeful disruption of shipping through the Gulf are just a smattering of the disruptions to which procurement professionals are becoming accustomed.

        “After the last few tumultuous years, procurement teams are still facing steep challenges in getting ahead of supplier and supply chain risks,” writes Greg Holt, Product Marketing Director at Interos. “Unfortunately, there are no signs that the heightened frequency of disruptions we’ve seen over the last few years will abate in 2024.”

        It’s clear that the procurement teams that learn to manage risk on a daily basis will be the ones that fare best in a world increasingly defined by geopolitical instability and a collapsing climate.

        Procurement risk management strategies

        Risk management is not a one-time process, nor a single overhaul of policy; managing risk requires constant oversight and frequent reevaluation to ensure you avoid disruption today and are ready for problems that will arise tomorrow.

        Streamline your data, break your silos

        Procurement departments are often repositories of some of the best risk management data in the whole organisation, gathering large amounts of information on suppliers and other external factors. Procurement departments that take a more purposeful approach to their risk data can quickly establish themselves as repositories of “data, assessments, monitoring and alerts,” becoming “trusted partners who can maintain the risk intelligence needed to support the business with insights, trends and a common view of the risks posed across the extended supplier ecosystem.”

        Automate away human error

        While there is no shortage of questions when it comes to applying automation to complex tasks (not to mention new pain points and sources of risk), correctly implementing automation can create immediate benefits when used to take repetitive, resource intensive tasks out of human hands. Repetitive, menial tasks are common in procurement systems, and are the most prone to human error. Automation tools can reduce errors and free up time for procurement workers.

        Use digital transformation to diversify your supplier ecosystem

        There’s a limit to the amount of decision making and supplier diversification achieved by human means. There’s simply too much decision making to be juggled. However, with the help of AI, procurement departments can diversify and adjust their supplier ecosystem much more effectively and to a greater degree. For example, the South Korean government has adopted AI-powered decision making to nearshore a significant portion of its procurement spend. Now, 75.6% of the government’s total procurement spend is now awarded to SMEs through the evolution of its AI platform.

        By Harry Menear

        Author

        Sean Galea-Pace

        Published

        7 February 2024

        Estimated Read time

        5Mins

        Costas Xyloyiannis, CEO of HICX, discusses why it’s time for leaders to take a fresh view of the data problem, and plan to reduce emissions.

        The start of the year is a good time for business leaders to consider their progress against net zero commitments. It also nudges us nearer to carbon-cutting milestones, the nearest of which is in 2030. By this time, businesses across the globe need to have halved their carbon emissions. So, if they haven’t already, now is the time to step up delivery.

        But first, there’s a barrier to overcome. Behind every credible net zero win, is credible carbon data. The problem is it’s in very low supply. Good data relies on good emissions information from suppliers, and securing it is notoriously difficult.

        As 2024 gets off to a start, it’s time for leaders to take a fresh view of the data problem, and plan to notably reduce emissions. To enable net zero success, we can assess supplier relations in three areas: the power play, digital processes, and a principle that works tremendously well in marketing.

        Suppliers are in the power seat

        Gone are the days when suppliers view their role as subservient. If the Covid-19 pandemic showed business leaders anything it’s just how much they depend on suppliers – and not just a strategically relevant few. In 2020, we saw non-strategic suppliers, such as PPE and IT providers, become crucial to operations overnight. Since then, businesses have continued to need a broader range of their supplier networks. When further supply chain disruptions brought continued uncertainty, that dependence deepened. Today, as businesses require increasing amounts of carbon information, the fact that we need suppliers is cemented.

        Despite this, how big businesses work with their suppliers is often outdated and counter-productive to their goal of gathering good information.

        Digital processes are in the Stone Age

        Bringing supplier relations into the 2020s will take some serious shifts. First, it’s time to assess the digital processes for managing suppliers, which frankly are not up to the task. A hybrid setup of old and new technology, often poorly integrated, stops procurement teams and their suppliers from communicating well. It causes other friction too, like logging in and out of multiple tools just to perform simple tasks, a headache for both parties.

        Additionally, the various tools are data traps. Every time a supplier uses a tool, it collects and stores their data. Siloed in this way, supplier data can quickly become duplicated and outdated, because it’s difficult to maintain. Unreliable master data is no good at fuelling automated workflows, and so procurement teams get stuck with manual processes.

        These clunky manual processes together with the frustrating communication methods are not a recipe for successful relations. Given that businesses lean so heavily upon suppliers to receive data for carbon reporting, it’s fair to say that the approach to supplier relationships must change.

        Friction is building

        When starting a business relationship, most suppliers don’t sign up for this level of friction. What they expect is to put in their first purchase order, deliver their first product, send their first invoice, and repeat. In a perfect world, they will simply transact and renew.

        In practice, however, the relationship is not so simple. Businesses need more from suppliers than just transacting – for one, they need a significant amount of information for compliance and innovation reasons and of course on carbon activity. So, businesses send their suppliers an abundance of information requests.

        Suppliers, then, who simply want to transact, must field these requests. Further bugbears such as manual processes, disparate ProcureTech setups and poor communication practices, make it difficult to respond. A recent Supplier Experience survey found that over a third of suppliers are expected to login to 10 or more systems, nearly half struggle to resolve queries with their biggest customers, and 61% find it challenging to do their best work. Yet, while suppliers don’t find the situation productive, it continues. Why? Because businesses need their carbon information.

        Suppliers want a partnership

        An important consideration is that suppliers have agency. When they have limited stock or an idea, they can choose who gets it. When it comes to making the effort to dig up vital carbon information they have a choice. This isn’t to say that suppliers purposefully hold information back. This would be unlikely because they too want the relationship to work. But when they are swamped trying to fulfil their original mandates whilst figuring out complex tech and deciphering information requests, the little time and energy they do have to provide information might well go to a customer-of-choice.

        It’s no different in the consumer world, where shoppers decide which brands to buy from. Businesses can’t force consumers to buy from them, so marketing teams get involved and work their magic. They encourage people to spend their hard-earned, limited money on products which they may or may not need, by showing them value, often in the form of an emotional appeal.

        Similarly, businesses can’t force suppliers to spend their limited time giving carbon information. But they can sweeten the experience. There’s an opportunity, therefore, for Procurement teams who manage suppliers to change things up. Rather than bombarding suppliers with information requests that they will struggle to fulfil, they can borrow the principle of ‘encouragement’ from Marketing. Procurement can show value to suppliers, according to what’s important to them, with the view to receive value in return. 

        So, as we start a new year, business leaders can take a fresh perspective on how suppliers are engaged. By understanding the dependence on suppliers, this relationship can be improved. Ultimately, by viewing suppliers as partners, simplifying digital processes and “marketing” to them, business leaders can lay the groundwork for net zero.

        By Costas Xyloyiannis, CEO of HICX

        Author

        Andrew Woods

        Published

        31 January 2024

        Estimated Read time

        7Mins

        Timothy Woodcock, Director of Procurement at CordenPharma, discusses the new wave of change following acquisition and amid transformation

        We have a bumper issue of fascinating exclusives this month!

        Corden Pharma: Powering Change

        Timothy Woodcock, Director of Procurement at CordenPharma, discusses the new wave of change following acquisition and amid transformation 

        Change is here, get busy. Indeed, some organisations are further along a transformation journey than others.
        For CordenPharma, a Contract Development and Manufacturing Organisation (CDMO) partner, they are right on track. 

        CordenPharma supports biotech and pharma innovators of complex modalities in the advancement of their drug development lifecycle. Harnessing the collective expertise of the teams across its globally integrated facility network, CordenPharma provides bespoke outsourcing services spanning the complete supply chain, from early clinical-phase development to commercialisation. Recognised as a key partner to the pharma industry, CordenPharma provides state-of-the-art know-how, an integrated product offering end-to-end capabilities from early-stage development to commercial large-scale manufacturing. 

        A closer look 

        Timothy Woodcock has been the Director of Procurement at CordenPharma since October 2022 and is based in Basel, Switzerland. He explains that since joining over a year ago, while it was a “good start”, he admits to discovering some surprises after closer inspection. “There was a lot of information to get to grips with at the start and it was spread wide and thin,” he tells us. “But the team is certainly key and they have helped me pull it together through solid collaboration and engagement. Of course, there were a few surprises in the process realm, but that’s what makes this challenge so interesting to me.”

        Read the full story here

        carbmee: Carbon management for complex supply chains

        Prof. Dr. Christian Heinrich, Co-Founder at carbmee, discusses his organisation’s journey to being the trusted solution provider for carbon management.

        ​​carbmee means carbon excellence for complex supply chains. It is the carbon management solution for automotive, manufacturing, chemical, pharmaceuticals, medtech, hi-tech, logistics, and FMCG industries. Whether to assess emissions holistically throughout the entire company, product or suppliers, carbmee EIS™ platform can create the transparency required for uncovering optimal emissions reduction potential and at the same time, stay compliant with upcoming regulations like CBAM.

        carbmee’s journey

        Christian Heinrich has been the Co-Founder at the organisation since January 2021. While some executives end up in procurement and supply chain by mistake, for Heinrich he affirms it was “always” the industry for him. As far as he’s concerned, collaboration is a big piece of the puzzle and Heinrich points to his diverse experience in a range of different industries and sectors which have helped him along the way to forming carbmee. 

        “This was actually one of the reasons my co-founder Robin Spickers asked me to leverage my supply chain knowledge,” he says. “Robin had expertise in sustainability areas like Product LifeCycle Assessments and I had that in procurement and supply chain. We connected together and created carbmee to have scope 1, 2 and 3 solutions for carbon accounting and carbon reduction, which also combines the lifecycle analysis.”

        Read the full story here!

        Hemofarm: Strength through glocal procurement

         Zorana Subasic, Director SEERU & PSCoE Cluster Procurement at Hemofarm A.D. reveals how a glocal approach is transforming procurement at the pharmaceutical… 

        Zorana Subasic is all about people. She heads up procurement for Hemofarm, the largest Serbian exporter of medicinal products, with a share of more than 70% of the total pharmaceutical. It sells pharmaceutical products on four continents in 34 states and, since 2006, has been part of the multi-national pharmaceutical giant STADA Group. 

        Meeting the challenges

        Zorana explains that her priority is focusing on people, both within her team and in the wider company, a priority that has been even more important during the last few challenging years and has impacted her leadership style.  ”These are areas that were new for me – managing people in ‘business as usual’ times is completely different to what we’ve been through in the last two or three years. It has affected people, and how it was for me to manage people in difficult times – understanding the challenges around us and making sure that people also understand the challenges.”

        Read the full story here!

        Elon: Procurement as a strategic partner

        Onur Dogay, CPO at Elon Group, reflects on a year of procurement evolution and making the function an indispensable partner to the organisation…

        A lot can happen in a year. Just ask Onur Dogay. In late summer 2022 he arrived in Sweden from his native Turkey to take the helm of a complex and evolving procurement environment at Elon Group AB, the Nordic region’s leading voluntary trade chain for home and electronic products. That he joined just a month after a significant merger that cemented the company’s market-leading position was no coincidence. Rather, Dogay was brought on board with a specific mission: use his industry experience and passion for transforming procurement to sustain the company’s market status while spearheading growth in new areas of retail and electronics. 

        And he hasn’t slowed down since. In little over 12 months, Dogay has overseen a procurement evolution that includes setting a new data strategy that’s aligned with the broader company vision, shifting procurement’s role to be less transactional and more of a strategic business partner, improving communication and partnerships both internally and externally with suppliers, and overseeing the greater use of data and technology to enhance forecasting and planning capabilities. 

        A seasoned procurement professional

        A glance at Dogay’s CV to date leaves little surprise at his success. He is a seasoned procurement professional, with more than 20 years’ experience in procurement leadership positions working across internationally dispersed teams in Europe. “My background is particularly strong in retail, consumer electronics, telecom, and IT business units,” he explains, “including at Arcelik, one of the world’s largest manufacturing companies, and also for one of the biggest retailers in Europe, MediaMarkt. At the time of the merger in 2022 here at Elon Group, this experience, as well as the good relationships I had with many of the suppliers and brands we work with now, was the perfect match for the company.” 

        Read the full story here!

        Microsoft: A sustainable supply chain transformation

        In the past four years, Microsoft has gained more than 80,000 productivity hours and avoided hundreds of millions in costs. Did you miss that? That’s probably because these massive improvements took place behind the scenes as the technology giant moved to turn SC management into a major force driving efficiencies, enabling growth, and bringing the company closer to its sustainability goals. 

        An exciting time

        Expect changes and outcomes to continue as Dhaval Desai continues to apply the learnings from the Devices Supply Chain transformation – think Xbox, Surface, VR and PC accessories and cross-industry experiences and another to the fast-growing Cloud supply chain where demand for Azure is surging. As the Principal Group Software Engineering Manager, Desai is part of the Supply Chain Engineering organisation, the global team of architects, managers, and engineers in the US, Europe, and India tasked with developing a platform and capabilities to power supply chains across Microsoft. It’s an exciting time. Desai’s staff has already quadrupled since he joined Microsoft in 2021, and it’s still growing. Within the company, he’s on the cutting edge of technology innovation testing generative AI solutions. “We are actively learning how to improve it and move forward,” he tells us. 

        Read the full story here!

        Click here to read the entire magazine!

        Author

        Sean Galea-Pace

        Published

        26 January 2024

        Estimated Read time

        4Mins

        Sapio Research found that just 48% of organisations are confident they are accurately reporting Scope 3 emissions through their P2P process.

        More than half of the 850 procurement leaders in the US, UK, and Europe surveyed earlier this year could not claim to be “very confident” in their organisation’s ability to accurately report Scope 3 emissions, according to a new study conducted by Sapio Research and commissioned by Ivalua.

        While 48% of leaders were confident in the accuracy of their companies’ reported emissions figures, nearly two-thirds (62%) of leaders surveyed admitted that “reporting on Scope 3 emissions feels like a ‘best-guess’ measurement.”

        A significant majority of the organisations were confident that they are on track to meet net zero targets. However, the report also found that many don’t have plans in place for:

        • Adopting renewable energy (78%).
        • Reducing carbon emissions (68%).
        • Adopting circular economy principles (72%).
        • Reducing air pollution (67%).
        • Reducing water pollution (63%).

        Procurement’s role

        It has long been recognised that procurement has a vital role to play in the reduction of environmental impact in organisations’ supply chains, with as much as 90% of a company’s emissions falling within the Scope 3 band.

        “Organisations are aware they must urgently address sustainability and understand the cost consequences of not doing so. But this lack of confidence paints a negative picture,” comments Jarrod McAdoo, Director of Sustainable Procurement at Ivalua.

        “A lack of perceived progress could fuel accusations and fears of greenwashing, so it’s important to remember that obtaining Scope 3 data is part of the natural maturation process. Many sustainability programs are in their infancy, and organisations need to start somewhere. Estimated data can help determine climate impact and contribute to building realistic, actionable net-zero plans. Over time, organisations will need to make significant progress on obtaining primary Scope 3 data and putting plans in place, or risk financial penalties as well as ruining reputations in the long run.”

        Regulatory and public scrutiny continues to mount against both public and private sector polluters. A report released in December highlighted the devastating annual emissions by militaries around the world, finding armed forces to not only be one of the world’s largest fossil fuel consumers (5.5% of all global emissions), but that the US military alone has a larger environmental impact than some developed countries. The scale of military contribution to the climate crisis, in addition to the lack of transparency when it comes to disclosing those figures, is a major issue that is also echoed in the private sector of the civilian world. 

        Are some companies ‘unintentionally greenwashing?’

        In the private sector, both activism and legislation continues to move (too slowly, but it’s a start) against corporations responsible for the climate crisis and pollution. In the UK, the High Court in London ruled that Nigerians affected by oil spills the corporation promised to clean up can bring legal action against the British multinational. The state of California is itself suing America’s largest oil companies for their role in exacerbating and covering up the effects of climate emissions for decades.

        More recently, corporations that rank among the world’s largest polluters have been accused of adopting environmentally friendly rhetoric in order to make themselves appear more committed to environmental sustainability than they, in actual fact, are. The practice, known as “greenwashing”, has been criticised by politicians, activists, and members of the scientific community.

        McAdoo notes that the inability to accurately report Scope 3 emissions—taking a “best-guess” approach—could be a contributor to organisations looking to avoid unintentionally greenwashing their emissions data by misrepresenting themselves.

        “Nearly two-thirds of U.S. organisations agree that an inability to measure supplier emissions accurately makes it hard to turn words into action,” McAdoo continued. “There is a clear need to adopt a smarter approach to procurement. Organisations need granular visibility into their supply chains to ensure they can measure the environmental impact of suppliers but also collaborate with suppliers to develop improvement plans. Only with this transparency can organisations showcase meaningful sustainability progress and avoid accusations of greenwashing.”

        By Harry Menear

        Author

        Andrew Woods

        Published

        18 January 2024

        Estimated Read time

        2Mins

        This month’s exclusive cover story features a fascinating discussion with Dhaval Desai, Principal Group Engineering Manager at Microsoft, regarding a massive and sustainable supply chain transformation at the tech giant… 

        This month’s exclusive cover story features a fascinating discussion with Dhaval Desai, Principal Group Engineering Manager at Microsoft, regarding a massive and sustainable supply chain transformation at the tech giant… 

        In the past four years, Microsoft has gained more than 80,000 productivity hours and avoided hundreds of millions in costs. Did you miss that? That’s probably because these massive improvements took place behind the scenes as the technology giant moved to turn SC management into a major force driving efficiencies, enabling growth, and bringing the company closer to its sustainability goals. 

        Expect changes and outcomes to continue as Dhaval Desai continues to apply the learnings from the Devices Supply Chain transformation – think Xbox, Surface, VR and PC accessories and cross-industry experiences and another to the fast-growing Cloud supply chain where demand for Azure is surging. As the Principal Group Software Engineering Manager, Desai is part of the Supply Chain Engineering organisation, the global team of architects, managers, and engineers in the US, Europe, and India tasked with developing a platform and capabilities to power supply chains across Microsoft. It’s an exciting time. Desai’s staff has already quadrupled since he joined Microsoft in 2021, and it’s still growing. Within the company, he’s on the cutting edge of technology innovation testing generative AI solutions. “We are actively learning how to improve it and move forward,” he tells us. 

        Read the full story here! 

        Plus, there’s more!

        We also have some inspiring and informative content from supply chain leaders and experts at Schneider Electric, Smart Cube, Protokol, Red Helix and Astrocast. Plus, expert predictions for 2024 from leading supply chain leaders, as well as a round-up of the best events this year has to offer! 

        Read our amazing content here!

        Enjoy! 

        Author

        Sean Galea-Pace

        Published

        11 January 2024

        Estimated Read time

        3Mins

        Next generation AI tools can offer unparalleled visibility into the sustainability of organisations’ supply chains.

        There are increasing pressures on procurement departments to be a driving force in their organisations’ sustainable goals.

        The process of buying, shipping, and generally moving physical products about is one of the larger sources of carbon emissions for the modern enterprise.

        For consumer companies, supply chain operations typically account for more than 80% of greenhouse gas emissions, creating “far greater social and environmental costs than its own operations”, according to a study by McKinsey. The environmental impact of a company’s operations, and their extent into Tier 2 and Tier 3 emissions, is also becoming a more prominent part of the conversation, making the decision of who to partner with and for what more pertinent to an enterprise’s sustainability goals than ever before—especially as T2 and T3 emissions become the target of new ESG regulation.

        The path to sustainable practice is increased visibility into procurement practices, supply chain impact, and the supply chains of ecosystem partners. Increasingly, procurement teams are artificial intelligence (AI) for these insights.

        Responsibly sourced startups

        The demand for AI-powered sustainability in the procurement sector is already driving investment in promising new tools. The Copenhagen-based startup Responsibly was founded in 2021, and in October 2023 managed to leverage its work on AI-driven sustainable procurement tools into a $2.4 million funding round, aiming to further develop its project of  “democratising access to sustainable procurement”.

        The company combines an AI model with large data sets to allow users to analyse their suppliers and potentially take action to restructure their procurement practices. The data analysed relates to suppliers’ carbon emissions and links to deforestation, but also their gender pay gap, human rights records, and more. The company has already accumulated several high profile clients, including the CERN research facility.

        Data-driven, sustainable decision making

        The success (and sustainability) of a supply chain is, first and foremost, an issue of visibility. Decision-making to reduce carbon emissions, cut costs, and improve resilience is almost universally a matter of understanding the factors affecting what has traditionally been a very murky, complex, impenetrable system. Using AI to maintain visibility into upstream manufacturing, purchasing, and logistics channels is critical in a world where supply chains are more complex, and the critical eyes of regulators and other organisations within a company’s ecosystem are more prone to scrutiny, than ever before. 

        For any organisation looking to operate more sustainably—especially in a climate of net zero commitments and increased regulatory scrutiny—the next generation of AI models, powered by advanced analytics, intelligent algorithms, natural language processing, and real-time processing of huge data sets, represents a way to understand the source to pay process on a more granular level than was previously possible, and a path to making the necessary decisions for a more sustainable supply chain.   

        By Harry Menear

        Author

        Sean Galea-Pace

        Published

        10 January 2024

        Estimated Read time

        2Mins

        Global provider of ESG performance Sphera has announced it has purchased SupplyShift.

        Sphera has confirmed it has completed an acquisition for SupplyShift in a move to enhance its supply chain offering.

        In a press release on Tuesday (January 9th), Sphera, which is a leading global provider of ESG performance and risk management software, revealed it has purchased the supply chain sustainability software firm.

        Supply chain network

        Founded in 2012 and headquartered in Santa Cruz, California, SupplyShift has built a supply chain network of over 100,000 suppliers, where buyers and suppliers engage and share information quickly in order to manage risk and facilitate supplier regulatory compliance.

        The solution provides supply chain transparency and supplier mapping at any tier as well as data analytics, supplier scoring and traceability.

        SupplyShift has customers and business partners globally, and the company’s portal is used by a variety of customers across industries, from worldwide retailers to Fortune 500 brands.

        Growth journey

        Paul Marushka, CEO and president, Sphera, said: “SupplyShift has seen tremendous growth with its software solution that allows for direct communication with suppliers and customers and enables the seamless collection of their Scope 3 emissions data, which helps suppliers improve their supply chain ESG performance.

        “As more regulations are passed that demand transparency, the SupplyShift solution will become indispensable in meeting global regulatory requirements and stakeholder expectations. Bringing SupplyShift’s portal into the Sphera family will expand our current offerings and enable us to provide unparalleled Scope 3 and ESG tracking and reporting capabilities. We are pleased to welcome SupplyShift’s customers, colleagues and solution to Sphera and look forward to helping our combined customer base accurately track and report their Scope 3 emissions and be compliant.”

        Alex Gershenson, SupplyShift’s CEO and founder, added: “SupplyShift was founded on the idea of leveraging software to drive sustainability initiatives, and for 11 years we have been empowering companies to understand their supply chain ESG risk and performance.

        “We are excited to join the Sphera family and take data availability to a new level through the combination of Sphera’s industry-leading ESG data and SupplyShift’s Scope 3 data collection abilities. Through SpheraCloud, Sphera’s SaaS platform, and its LCA solutions, we can help even more customers track their Scope 3 emissions and manage their supply chain sustainability.”

        Author

        Sean Galea-Pace

        Published

        5 January 2024

        Estimated Read time

        7Mins

        At DPW Amsterdam 2023, we chat with procurement leaders to find out why the conference is regarded as one of the most influential tech events in procurement today…

        Koray Köse, Chief Industry Officer, Everstream Analytics

        “When you go to events that are this disruptive that are actually giving you an environment like a concert where people have a very positive vibe, that’s when the best experiences are shared and people open up. If you listen, you now understand what the real challenges are. If you’re at a conference that is very formal, then you get a very different feeling. It is the casualness of DPW that helps the authenticity of every company and its challenges.

        “It’s a unique environment where you get very authentic, bold, blunt, but truthful statements of perception of actuals, desires, future vision, and also conversations about how can we as a community do things differently? How can we as potential future partners do things differently? And how can tech concatenate value and how can we actually now do that in a partnership with companies that we don’t even consider clients at this point? They’re not clients, but they share exactly what they want and those are benefits. 

        “I think it’s almost like an incubator environment because a lot of ideas are formed here. Lots of connections are made and a lot of deals for vendors are done too. You look at the floor and there are about 120 vendors all here for the same reason, it’s amazing. To get that concentrated over 48 hours, a lot of people will walk away and need to process what happened and the conversations they had. Then we look forward to next year.”

        Koray Köse, Chief Industry Officer, Everstream Analytics

        Ashwin Kumar, Vice President, GEP

        “DPW has given me some insight into what kind of options there are. Sometimes I go through the booths and I see two solutions and question how they’re different. At first, I think they’re doing the same thing. And then once they start explaining, you find out the nuance. Now I understand this may not be applicable for this client of mine that I’m working with maybe this is for a company that’s growing at 30%, not for someone who is already there and growing at 2% or 3%. 

        “I think that way DPW has helped me understand how do you stitch different things together and then take it to a client and say, ‘this is the ecosystem you need at this point in time. It could change in six months, or three months, we don’t know. Go with it for now and you don’t have to worry about being married to that solution for too long.’”

        Ashwin Kumar, Vice President, GEP

        Kathryn Thompson, Partner, Deloitte

        “I think DPW shows us the art of the possible in digital procurement. It shows us if you were unconstrained and you could do anything, what would you choose and build? You don’t have that in some of the other tech conferences that are a bit tied into an infrastructure they need to build. I love this what if idea we have here. I think it’s fabulous we have this confluence of organisations that need these tools, all the different startups and solutions to bounce ideas off and work out the future. DPW has real energy and passion like no other. You must get your message across in three minutes or it’s gone, that passion is brilliant because there’s nothing similar.”

        Kathryn Thompson, Partner, Deloitte

        Scott Mars, Global Vice President of Sales, Pactum

        “This to me, especially for Europe, is the premier procurement technology event. All the main vendors, our competition as well as our peers are here. There’s many CPOs in attendance alongside procurement and digital transformation leaders so for us as a vendor, it really is a great audience. We love having the ability to network with our peers or other vendors, potential partners and these procurement leaders and visionaries so it’s definitely a great opportunity to do that. It is certainly one of the best procurement events I’ve ever been to. They do a great job here at DPW.”

        Scott Mars, Global Vice President of Sales, Pactum

        Karin Hagen-Gierer, Chief Procurement Officer, Scoutbee

        “Whenever I go to conferences, I get to see the latest technology exhibited. I can have conversations with many people in a very short period of time. Number two, for me as a CPO, I come here as well to meet my peers and have good conversations. Amsterdam is always a good place to come and maybe combine business with pleasure.”

        Karin Hagen-Gierer, Chief Procurement Officer, Scoutbee

        Gregor Stühler, CEO, Scoutbee

        “Procurement people are incredibly busy and getting a hold of them is quite difficult. Having them all in one spot is super helpful. One key challenge for procurement software providers is that the buying centre is not the same. If you sell sales software or whatsoever, it’s usually the same buying centre. You approach the Chief Revenue Officer or something like that. In procurement, it’s not always the CPO that decides on the tech. But DPW is filtering out and attracting the talent that is making those tech decisions and it’s extremely valuable for the startups and for the tech companies as well.”

        Gregor Stühler, CEO, Scoutbee

        Alan Holland, CEO, Keelvar

        “This event has actually been a catalyst for some of the transformation we’re seeing in procurement. Matthias and his team have grown together best-of-breed vendors and they realised early on that change is afoot and legacy systems are going to become part of the history of the space. He embraced these vendors which are coming up with exciting new developments and provided us with a venue to put our best foot forward and present ourselves to other large enterprises with an appetite for understanding what innovation was required. We’re very grateful to Matthias, we’ve worked with him from day one and we think he’s done fantastic work here.”

        Alan Holland, CEO, Keelvar

        Prerna Dhawan, Digital Lead, Procurement, The Smart Cube

        “I think DPW raises the profile of procurement. DPW has elevated the function because procurement is no longer seen as the industry that thinks of digital at the end. It’s not a laggard anymore. I attended the first DPW event pre-Covid and thought it was brilliant then but it’s got bigger and better since. We talk about this in procurement, you get innovation from your suppliers but if you think about innovation when it comes to technology you have to be open to talk to vendors and that doesn’t happen in other conferences the way it does here. I think DPW has created that platform for learning from each other to happen.”

        Prerna Dhawan, Digital Lead, Procurement, The Smart Cube

        Author

        Sean Galea-Pace

        Published

        4 January 2024

        Estimated Read time

        6Mins

        CPOstrategy explores this issue’s big question and uncovers what the impact of gen AI is in procurement.

        The true possibilities of what can be achieved via AI is still being unearthed.

        Indeed, the influence of new technology will only grow from here and new digital tools are being introduced all the time.

        When it comes to generative AI, there is perhaps a misunderstanding that it is a new innovation. But the history of gen AI actually dates back to the 1960s. Among the first functioning examples was the ELIZA chatbot which was created in 1961 by British scientist Joseph Weizenbaum. It was the first talking computer program that could communicate with a human through natural language. It worked by recognising keywords in a user’s statement and then answering back through simple phrases or questions, in likeness to a conversation a human would have with a therapist. While ELIZA was seen as a parody and largely non-intelligent, its introduction has paved the way for later advancements in Natural Language Processing (NLP) and the future of generative AI.

        Fast forward to today and the gen AI conversation and wider tech landscape looks very different. In late 2022, OpenAI launched ChatGPT – technology which has shaken the procurement function and beyond. ChatGPT interacts in a conversational way with its dialogue format making it possible for users to answer follow-up questions, admit mistakes, challenge incorrect answers and reject unsuitable requests. As such, the chatbot has created quite a buzz which has been felt across the globe.

        Generative AI’s misconception

        Speaking to us exclusively at DPW Amsterdam, Gregor Stühler, CEO at Scoutbee, believes there are some misconceptions around ChatGPT and the nature of how accurate the data it provides actually is. As is the case with any new technology, these things take time. “It’s always the same. It happened with electric cars, nobody thought that would solve the battery issue,” he discusses. “I think we are right at the peak of the hype cycle when it comes to those things and people have figured out what they can use it for. With wave one of gen AI, it is fine to have hallucinations of the model and if something is spat out that is not supported by the input. 

        Gregor Stühler, CEO at Scoutbee

        “But by the second use case, hallucinations are not okay anymore because it’s working with accurate data and should not come up with some imaginary creative answers. It should be always supported by the data that is put in. This is very important that people understand that if you train the model and if you have the right setting, those hallucinations will go away and you can actually have a setting where the output of the model is 100% accurate.”

        Data security

        Michael van Keulen, Chief Procurement Officer at Coupa, agrees with Stühler and despite obvious benefits such as time and cost, he stresses caution should be used particularly when it comes to valuable tasks. “If you look at ChatGPT, it’s fine if you’re looking for recommendations for something low-risk. I need something for my wife’s birthday next week, you input three things that she loves and ask it to help. It’s great,” he tells us. “But it comes from data sources on the web that aren’t always governed, controlled or trustworthy. It’s whatever is out there. What about the algorithms that come with ChatGPT? I don’t know what’s influencing the search criteria. On Google, if you pay you are at the top of the search bar. But I don’t know what ChatGPT is governed by.”

        Michael van Keulen, Chief Procurement Officer at Coupa

        Managing data leakage

        Danny Thompson, Chief Product Officer at apexanalytix, explains that one of the biggest challenges with generative AI is being aware of a leakage of sensitive information combined with a contamination of important data. “We have a database of golden records for 90 million suppliers who are doing business with Fortune 500 companies and that is the best information we’ve been able to accumulate about the suppliers and their relationships as a supplier to large companies,” he tells us.

        Danny Thompson, Chief Product Officer at apexanalytix

        “We want to make sure we’re not loading sensitive information into a generative AI function that might allow just random people to access that data. Ultimately the customers in the space that we’re operating in are serious companies moving around large amounts of money and facing real risks that they have to manage. It’s really important that the data that they have is either highly accurate or at least they understand the degree to which it’s accurate. This means if you’re using the solution that you don’t understand the level of trust you can have in it, then you shouldn’t be using it yet.”

        Can generative AI bridge the talent shortage?

        Amid talent shortages in procurement, there are some sections of the procurement space questioning to whether AI and machine learning can plug the gap and reduce the necessity of recruitment. Naturally, this raises the debate of whether robots will replace humans. Stefan Dent, Co-Founder and Chief Strategy Officer at Simfoni, adds that while AI and machines won’t replace humans, it will mean people will need to find new forms of work and take on higher-value roles.

        Stefan Dent, Co-Founder and Chief Strategy Officer at Simfoni

        “The shape and structure of the modern procurement function will change quite dramatically and people will need to upskill,” he discusses. “A lot of the work will be taken over by the machine eventually either 20%, 50%, and then a hundred percent. But the human needs to have that in mind and then plan for that next three to five years. The procurement function of the future will be smaller, and they should purposely be doing that, to then look at solutions to find a way to enable it to happen naturally.

        Future proof procurement

        “For someone who’s joining procurement now, you’ve got this great opportunity to embrace digital. Young people can question ‘Well, why can’t it be done by a machine?’ They’re coming in with that mindset as opposed to fighting being replaced by a machine. I think for graduates coming into procurement, they’ve got the opportunity to play with digital and actually change the status quo.”

        As we look to the future, gen AI and new forms of technology will continue to change the world and the way we work. In the short term, work is expected to continue to upgrade the user experience and workflows through gen AI in order to build greater trust for the end user. As transformation continues to happen, businesses and wider society must embrace new types of AI to thrive and stay ahead of the latest trends. The potential that gen AI tools possess is expected transform the workplace of tomorrow while delivering value-add such as time and cost savings on a day-to-day basis.

        Given the speed of evolution and development, it is yet unimaginable exactly what form the digital landscape will take in years to come. However, that horizon brings with it fresh opportunity and excitement revolving around a whole new world of technology at our fingertips. The future is digital.

        Author

        Sean Galea-Pace

        Published

        3 January 2024

        Estimated Read time

        3Mins

        RPA promises increased efficiency, lower costs, and an end to staffing issues, but can procurement teams implement successfully?

        Though it’s less frequently associated with automation than its more robot-friendly cousin logistics, procurement is a discipline that’s undergoing a radical transformation.

        “Your new procurement employee will work 24/7, never call in sick, rarely make mistakes,won’t complain, and never ask for a raise. Of course, this is not your typical worker, but a procurement software robot—or bot.”

        — Automation in Procurement: Your New Workforce is Here, KPMG, 2020

        Although it reads like the opening paragraph of an abandoned Nanowrimo project started by someone who’d just finished I, Robot, I assure you this report released in 2020 by consultancy KPMG is an entirely serious endeavour. Although the global clamour to replace employees with robots may have died down a little now that a few million professionals have been dragged kicking and screaming back to the office, the benefits that automating elements of the procurement function could deliver are hard to deny.

        RPA is big business and isn’t going anywhere. In 2022, the global robotic process automation market was estimated at $2.3 billion. It’s expected to grow at a CAGR of 39.9% between this year and the end of the decade.

        From multinational corporations to the US Department of Homeland Security, robotic process automation (RPA) is emerging as a popular way to manage complexity within a large supply chain, automate repetitive tasks, and enhance the capabilities of a procurement department. The US DHS’ procurement department, for example, spent just under $24 billion across about 60,000 transactions in 2022, and is increasingly handing the responsibility for contractor responsibility determinations, as well as automating tasks for the Customs and Border Protection—allegedly cutting jobs that took an hour down to just a few minutes.

        As KPMG’s report stresses, “leveraging procurement bots is the next logical step as organisations look to benefit from advancements in digital capabilities.”

        RPA adoption in procurement—the Benefits

        • Added visibility
        • Improved efficiency
        • Reduced costs

        Large amounts of traditional procurement processes involve repetitive tasks like requisitioning, purchase order management, checking compliance, andanalysing spend, supplier onboarding, and more can be automated using an RPA bot. This is not only because RPA is getting smarter, but also because businesses’ procurement functions tend to be more consolidated within a single platform that is more closely integrated with the business in a modern enterprise. In a sufficiently digitalised system, there’s little to stop RPA from creating efficiencies by eliminating menial tasks.

        Likewise, by integrating RPA into a company’s enterprise resource management (ERP) platform, it gains access to vast amounts of data that can then be tracked, analysed, and used to draw insights faster than a human could hope to tackle the same task. Most modern supply chains comprise several different pieces of specialised software, and making each one talk to one another smoothly can create serious pain points for procurement teams, but RPA can do a great deal to smoothe over the cracks.

        RPA Risks and How to Overcome them

        • Data exposure
        • Lack of oversight
        • Misguided direction and overspend

        As mentioned above, RPA works best when fully integrated into as much of your system as possible, with access to as much data as you can feed it—especially with modern RPA using AI to make more and more intelligent decisions based on raw and unstructured data sets. Obviously, this creates a potentially huge, glowing weak point in your company’s cyber security framework. Because RPA bots replace human workers, they need access to the privileged information that humans have, and those bots are just as—if not more—vulnerable to attack.

        RPA bots can automate a great deal of tasks, but it’s easy to lose track of the fact that they’re just bots and, without proper oversight and direction, they could create inefficiencies, security flaws, and breach compliance—all costly problems, especially if the typically costly technology fails to address the original inefficiencies or issues it was bought to resolve.

        Automating procurement processes could undeniably lead to increased efficiency, lower costs, and a more resilient procurement function, but only if implemented with intentionality, and given proper oversight once up and running.

        By Harry Menear

        Author

        Sean Galea-Pace

        Published

        2 January 2024

        Estimated Read time

        2Mins

        Wary of overdependence on overseas suppliers, the South Korean government is investing heavily in increasing the resilience of its public procurement process.

        The South Korean government announced last month plans to establish a commission to oversee and coordinate plans to make the country’s procurement process more resilient. This announcement comes on the back of concerns over the vulnerability of South Korea’s “critical industrial” supply chains.

        A state-backed fund expected to exceed 5 trillion won ($3.79 billion) is being set up to “secure stockpiles of critical supplies and support investment in relevant businesses and facilities”, with a long-term goal of divesting Korean industries from overdependence on procuring materials from single country suppliers.

        Specifically, urea (like ammonium phosphate used in fertiliser manufacturing) and graphite (used in the production of batteries for electric vehicles) are both considered critical materials for Korean industrial activities, and supplies of both originate almost exclusively from China.

        An Editorial published in the Korea Times noted that a recent export restriction of urea product shipments from China has caused a spree of panic buying. “What matters is that China accounts for 95 percent of Korea’s ammonium phosphate imports. Desperate to cope with a growing sense of crisis especially among farmers and relevant industries, the [Korean] government came up with a package of measures designed to secure key materials on a stable basis.”

        The government will procure a reserve of 12,000 tonnes of urea in order to create a 130 day buffer to safeguard against future disruptions.  

        The way ahead

        At a meeting of the new commission on Monday, Korean Finance Minister Choo Kyung-ho commented that “Recently, supply chain risk factors for items directly related to core industries and people’s livelihoods—such as urea, diammonium phosphate and graphite—are increasing,” suggesting that devising a national procurement strategy less reliant on Chinese exports would be essential, given the fraught economic and political histories between the countries. 

        Moving forward, the commission said it would designate materials and items for intensive monitoring, selected from among 200 options identified as being of critical importance and potentially vulnerable to supply chain disruption by a government study conducted in 2021. Magnesium, tungsten, neodymium and lithium hydroxide were included in the previous listing. In addition to urea products, the Korean government is expected to increase its stocks of graphite, 90% of which comes from China.

        By Harry Menear

        Author

        Sean Galea-Pace

        Published

        1 January 2024

        Estimated Read time

        3Mins

        Protect your procurement function in the year ahead by avoiding the biggest risks on the industry’s radar.

        The last few years have seen unparalleled disruption to the source-to-pay process, from resource shortages and pricing hikes, to new regulatory restrictions and changes in consumer tastes. In the Amazon Business 2024 State of Procurement report released in November, researchers point out that “Many of the top risks … have the potential to disrupt procurement operations with little warning, underscoring the need for preparedness.”

        1. Rising Costs and Inflation

        The past year has been defined by runaway inflation in the US and beyond, and while it has translated into record corporate profits (researchers estimate now that corporate profits are responsible for around 60% of inflation, following a Kansas City study in 2021) it has been biting from the supplier side as well, with the price of everything from materials to labour rising over the last 18 months. Procurement teams should analyse their budgets and plan accordingly, in order to ensure they can secure the goods and services the business needs without compromising cost containment.

        2. Supply Chain Volatility

        War, genocide, unrest, and other sources of market volatility can smash a supply chain overnight. The procurement process works best when things are reliable, consistent, and predictable. The very best procurement teams know that this is a fantasy, and that geopolitical, economic, and environmental changes can all contribute to risk that needs to be met with agility and resilience.

        3. (Failed) Technology Disruption

        From self-driving cars to the metaverse, the last few years are littered with more examples of technological megatrends that failed to disrupt anything or really even materialise than a Phoenix, Arizona parking lot is littered with Waymo crash test dummies. Failing to adopt new and disruptive technology is a risk to your business, but overspending on hype is a much easier trap in which to stumble.

        4. Cybersecurity

        Data remains one of the most precious resources on the planet, and with the rise of generative AI sparking fresh debate over intellectual property and privacy, organisations will need to be more mindful of their data than ever before. This isn’t unique to procurement, but it remains a function of the business that has a lot of contact with the outside world, especially third party organisations soliciting contracts. Procurement staff should receive regular cyber security training and departments should conduct regular risk assessments in order to avoid presenting an easy target.

        5. Increased Regulatory Pressure

        Despite the lacklustre Cop28, record profits for the oil and gas industries, and all signs pointing towards a failure to prevent an era of “global boiling”, regulations got a little bit stricter for corporations in the last few years. Compliance will become an increasingly challenging target for corporations to hit as the decade continues. Procurement teams—as functions with some of the biggest sway over scope 3 emissions—will play a large role in keeping their organisations on the right side of the regulations, and could even be a big part of meaningful sustainability-focused change.

        6. The Skill Shortage

        As procurement becomes a bigger driver of innovation and profit margins for organisations, the gaps between existing skills and future requirements are showing wider and wider. Five out of six procurement leaders don’t believe they have the talent on tap to meet the challenges of the near future, and the increasingly digital-first, strategic nature of the role threatens to place demands on existing functions that they never expected to face.

        Procurement leaders who recruit, develop, and retain skilled professionals will have a profound leg up over the competition in 2024 and beyond.

        By Harry Menear

        Author

        Sean Galea-Pace

        Published

        29 December 2023

        Estimated Read time

        2Mins

        Procurement has the potential—and the responsibility—to go beyond switching out plastic straws for paper in the quest for Net Zero.

        Across the public sector—and increasingly in the private sphere as well—organisations are committing to the necessity of a net zero future. While emissions reduction efforts often begin with scope 1 and scope 2 emissions, analysis of holistic environmental impacts in supply chains often expose scope 3 emissions as being the source of as much as 90% of an organisation’s greenhouse gas emissions.

        With the majority of an organisation’s carbon impact originating outside the organisation itself, it increasingly falls to the procurement function to make intelligent, sustainability-motivated decisions in order to draw down indirect emissions and foster a culture of sustainability within their supplier ecosystem.

        However, while investment in increasingly sustainable source-to-pay processes is rising, many procurement teams describe the pursuit of net zero as a serious challenge. In Europe, companies earmarked an average of 27% of their total investment budget into improving sustainability this year, a 16% rise in sustainability investment.

        Nevertheless, more than 43% of companies surveyed in a recent report had not set a net zero goal, and, within the 32% of organisations with a net zero target of 2030, many procurement professionals reported that “limited data, complex supply chains, and limited control over supplier emissions” presented serious obstacles.

        The report notes that, while “procurement organisations firmly have net zero on their agenda,”, other factors like the need to keep costs low are impeding their efforts. Another report by the World Economic Forum—this time focusing on public institutions as drivers of sustainable procurement—also acknowledges the trepidation with which public and private sector organisations view the possible costs of pushing for net zero.

        However, the WEF notes that “Pursuing net-zero goals in public procurement will boost the green economy,” estimating that “the private investment and new jobs triggered by greener public procurement, in aggregate, will boost global GDP by around $6 trillion through 2050 – a significant proportion of the green economy’s total GDP of $70 trillion.”

        While the short term might represent an increase in costs, the long term benefits for organisations that manage to drive a successful net zero green transition, both in their own organisations, and supply chains, will be substantial. Adopting procurement practices that require green certifications from suppliers (even subsidising green activities within their ecosystems by paying higher prices for suppliers who can demonstrate their green credentials) can drive meaningful reductions in the scope 3 emissions for organisations throughout both the public and private sectors.

        By Harry Menear

        Author

        Sean Galea-Pace

        Published

        28 December 2023

        Estimated Read time

        2Mins

        Incorporating SEO techniques into your procurement strategy can empower and optimise your organisation’s source-to-pay process.

        In the wake of the COVID-19 pandemic, digital transformation has emerged as a more critical strategic goal for procurement executives than ever.

        Now, resilience, agility, and visibility have become vital qualities of the modern procurement function alongside the drive to lower costs and increase speed. Integrating a digital-first approach into more stages of the procurement process can, according to a Gartner study, lead to a 20% increase in revenue and a 50% reduction in process costs.

        However, digital transformation needs to be considered and intentional—haphazardly adopting new tools and processes for the sake of something new and shiny will cost more than it saves, and cause more problems than are solved.

        One highly effective form of digital transformation that’s often applied outside of the procurement process is search engine optimisation (SEO). Applied to the procurement function of a business, SEO techniques can help buyers reach either a wider pool of suppliers, or a more specific set of suppliers more tailored to their needs—or both, as necessity dictates.

        SEO has a lot of potential to help automate routine procurement operations, allowing for procurement staff to focus on more strategic objectives and partner relationship management. Supplier discovery, as well as other elements of sourcing, can be automated with an SEO integration, and the correctly optimised online presence can be used to attract suppliers.

        Four steps to SEO optimisation in procurement

        1. Know your terms. By identifying the key phrases and terms associated with your business and objectives, you can start to define an SEO strategy.
        2. Embed your terms. Take your chosen SEO terms and ensure they are a part of your brand identity across existing websites, social platforms, etc.
        3. Create content. White papers, blog posts, and media placements all increase your visibility and presence within the procurement sector.
        4. Assess, Adjust, Optimise. Constantly measure your engagement, work to understand your suppliers and partners, and iterate improvements of your strategy in response to results and the changing context of the marketplace.

        By implementing an SEO strategy, procurement teams move beyond the confines of their immediate ecosystem, casting a wider net that can lead to increased competition between suppliers, lower costs, and access to new goods or resources that may have significant knock-on benefits for the business at large.

        By Harry Menear

        Author

        Sean Galea-Pace

        Published

        25 December 2023

        Estimated Read time

        3Mins

        How Big Data can increase resilience, mitigate disruption, and help procurement teams spot danger before it’s too late.

        In the procurement sector, successfully managing risks while achieving your other strategic objectives is what sets a successful procurement function apart from those that can expect to experience disruption. Today, however, procurement teams face greater risk than ever before as supply chains become more complex, ESG goals become more ambitious, and the parameters for compliance get narrower. 

        Technology—powered by artificial intelligence and big data analytics—is radically digitalising the procurement process. While this has the potential to increase efficiency, revenue, and accelerate the procure-to-pay process, it has also driven complexity. Luckily, digital transformation also holds the key to managing this complexity. Digital tools, powered by artificial intelligence and machine learning, can tackle larger and more complex amounts of information than ever before. These analytical tools and their more powerful capabilities in turn have seen viable data sets balloon to include vast quantities of structured and unstructured data from throughout the supply chain, gathered together under the umbrella of Big Data.

        Data source

        Big Data, in gathering together vast amounts of information about every aspect of the source-to-pay process, in addition to broader contextual information ranging from economic instability to weather patterns, can help procurement professionals build up a more comprehensive, nuanced understanding of their procurement process than ever before. The level of visibility is unprecedented, even in a sector where supply chains are more complex than they’ve ever been.

        Complex supply chains are more prone to disruption. More moving parts and longer distances to travel mean higher likelihoods of things going wrong. Michael Higgins, founder and CEO of Clutch, wrote recently that “risk is inherent at every step of the supply chain, from moving raw materials to manufacturers and between manufacturers and the distributor,” adding that “The added value of big data analytics is predicting potential disruptions, giving procurement managers time to make intelligent decisions.”

        Procurement transformation

        Advanced analytical tools can be used to track the weather, potential disruptions to agricultural or construction operations, political unrest like demonstrations or riots, and changing legislature that may affect everything from compliance to price. Because Big Data analytics are increasingly capable of collecting and analysing all of these factors and more, procurement professionals have the capacity to counteract sources of risk that traditionally would have seemed as inevitable as an act of divine wrath.

        The risks to a supply chain are really representative of risks to your suppliers and their networks. Big Data analytics is also granting insight into the workings of—allowing a huge number of variables tied to each supplier to be tracked and used to make decisions. The result is a more agile and reactive procurement process that can analyse and respond to data analytics in real time, as opposed to trying to make best guesses based on past results and limited human judgement.

        Procurement is truly transforming from the back office to the boardroom—becoming more strategic, digitally empowered, and complex than ever before—and Big Data analytics are increasingly a vital part of the function within the modern source-to-pay process.

        By Harry Menear

        Author

        Sean Galea-Pace

        Published

        22 December 2023

        Estimated Read time

        5Mins

        Jamie Ganderton, Vice President at Proxima, examines the future of sustainable procurement going into 2024.

        As we step into a new year and inch closer to the global sustainability targets set for 2030, the spotlight on sustainable procurement will only continue to intensify. The aftermath of COP28 has placed an even greater emphasis on the role that large corporations play in global decarbonisation. This, coupled with incoming rules and legislation across Europe and the United Kingdom, such as the European Corporate Sustainability Reporting Directive (CSRD), has underscored the critical need for agile and proactive approaches to corporate sustainability action.

        The Scope 3 Benchmark, a tool developed to enable organisations to collaborate to advance progress on sustainability targets, has shown that Scope 3 still remains a challenge and 2024 will be a pivotal year in addressing some of the fundamentals as we move within just two short contract cycles away from 2030. Looking ahead, the focus will sharpen on bridging the gap between sustainability objectives and procurement strategies, with an emphasis remaining on translating lofty sustainability goals into actionable procurement strategies. As we navigate 2024, collaborative advancements, data-driven insights, and the proactive evolution of procurement practices will be critical drivers, propelling sustainable procurement into a new role of implementing purposeful action.

        Embedding sustainability targets into procurement strategies

        Whilst it seems like an obvious starting point, many procurement teams have not yet fully embraced the need to translate sustainability requirements into procurement strategy. Even for those that have, challenges remain to translate sustainability language into effective procurement strategy. There is a tendency for organisations to panic and jump straight into supplier engagement, without first planning who they are going to engage and what are they going to need from them.

        The goal for many in 2024 should be to plan out how the next six years are going to look and begin progress as soon as possible, because we know that change takes time and never happens as quickly as we intend. Sustainable procurement transformation is going to require focus and investment to get right. The core focus areas should be measuring emissions to drive action, developing the functional enablers to support the change, and developing the strategic levers for decarbonisation.

        Leveraging emissions measurement to drive action

        The primary starting point is to understand your emissions, in detail. Embrace carbon emissions measurement and start reporting them, ideally across all categories of Scope 3, but at least the core supplier-related areas. Following the GHG Protocol’s spend-based methodology is an adequate starting point, provided the outputs you develop allow you to drive insights into your emissions “hotspots” and start evolving greater accuracy as data quality and supplier maturity improves. Procurement teams can then begin to develop the strategic decarbonisation levers they will need for their categories.

        Making procurement functional enablers

        Building a sustainable procurement function requires the right support pillars, but evidence coming from the Scope 3 Benchmark suggests that some key foundations are missing. Firstly, there is a lack of directly invested resources, and there are also limited numbers of support team members. The volume of interaction with suppliers on Scope 3 is high, therefore you need someone to set the strategy and have an effective team to enact it. Even medium-sized businesses will have a reasonable number of material emitting suppliers who need engagement and management, which creates an increased workload for supplier management teams.

        Additionally, many organisations have limited Scope 3 learning and development capability plans to support team members in developing their carbon literacy and bridging the skills gap.

        At some point procurement needs to be bold and make carbon a key consideration throughout decision making, from up-front category planning, through to RFx and sourcing processes, negotiations and contracting, and post-contact supplier management. If there is no consideration given to carbon with equality to the classic cost, quality and service evaluation, then we will never make different decisions. There will never be a commercial incentive to suppliers to support decarbonisation efforts and we will inevitably fail. In 2024, we will begin to see more forward-looking CPOs begin to build carbon pricing into their decision-making, paving the way for processes to change.

        Developing policy to help suppliers face reality

        Traditional procurement policies are usually written once and then set in stone without the need to revisit them any time soon. Over the coming years, the old Procurement Policy is a tool that has the power to make a huge impact and one that needs its own evolution. This policy development will enable a blanket application of sustainability to be adopted without procurement intervention in every sourcing decision. Between now and 2030, we need to strengthen the requirements annually to allow suppliers to gradually get used to the changes and ratchet up the pressure over time. At some point in the future, there will be a decision not to trade with some companies if they have not met minimum standards. This tough line should motivate those to change or risk losing business.  

        Once procurement teams get to grips with what is driving carbon emissions in the supply chain, they then needs to develop the right approaches to motivate, encourage, and sometimes force suppliers to act. Some suppliers will be on board with the need to decarbonise and happily support the process, whereas others will need significant levels of ‘encouragement’. Some categories will be relatively straightforward to plot a pathway to decarbonisation, whereas others have more complex challenges and require more strategic levers. Category teams will need to build a comprehensive picture of their suppliers and in many cases begin the co-development of solutions to tomorrow’s problems. Research and innovation, product reengineering, and demand management can all play a significant role in reducing emissions, but release of value may be some time in the future, which places a greater emphasis on 2024 being the year to truly put weight behind the efforts.

        A green future

        As we look to 2024, a lot needs to change if we are going to meet the looming global sustainability targets. Many procurement teams are still grappling with integrating sustainability into their strategies. The next few years mark a critical juncture and demand meticulous planning and swift action. Transforming procurement practices to align with sustainability goals requires measured steps, starting emissions measurement and building a strategic decarbonisation plan from there. Whilst there is a lot to be done, with the right strategies in place, procurement teams are poised to play a pivotal role in accelerating organisations’ progress towards net-zero.

        Jamie Ganderton, Vice President at Proxima

        Author

        Sean Galea-Pace

        Published

        21 December 2023

        Estimated Read time

        0Mins

        Walmart turns to Indian suppliers to meet procurement needs, aiming to buy $10 billion worth of goods per year by 2027.

        US retail giant Walmart is shifting its procurement strategy in response to a sea change in fast moving consumer goods (FMCG) manufacturing from the Global South.

        The company recently announced a new partnership with major Indian bicycle manufacturer Hero Ecotech—part of a larger commitment to grow its annual procurement of Indian direct export goods to $10 billion per year by 2027.

        Broadly speaking, Walmart’s strategy is to accelerate its procurement of goods from “categories where India has expertise.” These include food, consumables, health and wellness, general merchandise, apparel, homewares and toys. Additionally, Walmart spokespeople have noted that India—which is home to the third largest pool of scientists and technicians in the world—“has some of the brightest minds in innovation, and we want to explore potential solutions to challenges in our value chain with these innovators and startups.” 

        Andrea Albright, Executive Vice President of Sourcing at Walmart commented: “India is well-positioned to support increased demand for products by Walmart customers, and we are excited about our partnership with Hero Ecotech. This collaboration furthers our work to strengthen resiliency in our global supply while contributing to economic growth worldwide.”

        Accelerated growth

        India’s manufacturing sector is booming. Led by the automotive, electronics, and textiles sectors, Indian manufacturing is projected to reach $1 trillion in the next three years, according to a report by Colliers. A surge of investment—both domestic and international—is driving this growth, with the state of Gujarat receiving the lion’s share of the growth as the region is “becoming India’s manufacturing powerhouse.”

        In order to support the development of its procurement network among Indian suppliers, Walmart has also announced plans for an invite-only event to be held in New Delhi this February, where “Indian export-ready suppliers are invited to apply to pitch their products to our buyers for Walmart U.S. stores and Sam’s Clubs,” and “Innovative Indian companies are invited to pitch solutions addressing sourcing challenges across apparel, general merchandise, fresh and packaged food, health and wellness, and consumables. Pitches may lead to pilot projects within Walmart’s value chain.”

        By Harry Menear

        Author

        Andrew Woods

        Published

        19 December 2023

        Estimated Read time

        8Mins

        CPOstrategy’s cover story this month features a fascinating discussion with Rick Sisk, Director of Procurement at Gen4 Dental

        CPOstrategy’s cover story this month features a fascinating discussion with Rick Sisk, Director of Procurement at Gen4 Dental, who explains how he’s revolutionising procurement for the dental industry, and why doctor-led care is so important…

        Read the new issue here!

        Gen4Dental: Changing the procurement landscape for dentistry 

        Gen4 Dental is an organisation that strives to be a true partner to dental practices. It is a truly dentist-first DSO, promoting excellence at every level and working to improve by at least one percent every day. Through mergers and acquisitions, the organisation is also growing at an incredible rate, and this expansion and ambition requires a sturdy procurement department to support it. Enter: Rick Sisk, Director of Procurement at Gen4.

        Prior to Sisk joining Gen4 Dental, the procurement landscape certainly wasn’t what it is today. The organisation has grown so quickly in its short lifetime; Sisk says that Gen4 has expanded so rapidly in a way that had the potential to cause problems. “When I came in, there was no real purchasing platform. I called my industry friends and said ‘hey, I need help’. We needed to start at ground zero. I had all these ideas and I was told that procurement was mine to shape. I was really excited about that…”

        Read the full story here!

        RBI Procurement: Success through technology, innovation and community building 

        We speak to Edzard Janssen and several of his team members at Raiffeisen Bank International (RBI) to see how the procurement function is enhancing value creation, mitigating risk and dealing with increasing regulatory requirements… 

        Now, more than ever, procurement leaders are having to harness innovation as they seek to prosper in highly uncertain times. Successful procurement teams are fostering emerging technologies and strategically aligned operating models and processes as they strive to unlock value across their enterprises. The procurement function at the Austria-based Raiffeisen Bank International AG (RBI) is such an entity, dedicated to delivering value through a future-orientated approach, at scale. 

        Edzard Janssen, Head of Group Procurement, Outsourcing & Real Estate Management at RBI, joined the Austrian bank in 2011, where he was tasked with building a state-of-the-art value-creating function. The latest strategy of RBI Procurement focuses on four strategic areas as guidance for all initiatives: value-centric procurement, state-of-the-art capabilities, mastering the data journey and safeguarding the bank. 

        1. Value-centric procurement: Focusing on value, not on price, and what truly brings value to the bank. 

        2. State-of-the-art capabilities: The procurement systems, the total procurement infrastructure landscape and the capabilities of staff. 

        3. Mastering the data journey: Harvesting and utilising the huge pools of data across the bank. 

        4. Safeguarding the bank: Covering regulatory compliance, IT and cybersecurity as well as operational and business risk. 

        Value-centric procurement 

        The ability to deliver value-centric procurement is of course directly related to strategic sourcing and Janssen and his team have made great strides in recent years, establishing an innovative category management approach at the bank. “There are two parts that cover the source-to-pay process,” Janssen tells us from his Vienna office.

        “One is the sourcing part of the process mainly fueled by the capabilities of our people and strategy formulation – the right way of approaching the market is pretty much driven by the quality of the people running the process. And then you have the second part of the process: procure-to-pay. So, doing the call-offs and executing the contracts. All that is powered by the quality of systems and efficiency of processes.”

        Read the full story here!

        Tipico Services: A single source of truth 

        We speak to Kiran Menghnani, Director, Tipico Services Ltd (part of the iGaming and Sports Betting brand Tipico Group) to see how he and his team have transformed procurement at the company… 

        Kiran Menghnani, Director Tipico Services Ltd – part of the online iGaming and Sports Betting brand Tipico Group – almost stumbled into procurement by accident. As the Malta Head-Officed enterprise Tipico Group started to experience rapid growth midway through the 2010s, combined with complicated regulatory developments, the maturity of the Group realised the tangible need for a dedicated procurement function.

        And in 2016, Gibraltar-based Kiran, who had already been with the company since 2011 building internal processes and structures, was asked to look into creating a future-ready procurement hub that could deliver a more strategic and agile business-facing function. 

        Tipico had a somewhat disjointed procurement approach to purchasing, prior to its transformation, a situation that resulted in a lack of transparency and an antiquated siloed approach. It was clear to Kiran whilst settling into his new assignment, that as the company continued to grow at pace, that this casual approach to procurement needed to change.

        “We were still a young but rapidly growing company. We needed to work fast to get the tasks done while finding our way when dealing with our suppliers. Now the responsibility was on me to better understand the pain points being faced. And so I went about asking the basic questions challenging any purchasing requests. Has the contract been reviewed internally? Is there any data processing by the supplier? Has the price been benched with the market? How can I access past/existing contracts?”

        “I soon started to realise that I wasn’t getting the answers to comfort me as Director, and that this humble piece of paper called a contract needed more attention, so I needed to protect both myself and the company as regulatory requirements had evolved. And that’s how this journey really started: someone questioning as to what we were doing and accepting that there were obvious gaps and opportunities.”

        Read the full story here!

        Richmond’s Department of Procurement Services (DPS): Leadership, relationships and the power of technology 

        We speak to Rene Almaraz, Director, Department of Procurement Services, City of Richmond, Virginia to see how public procurement is transforming at the city… 

        The values of the City of Richmond’s Department of Procurement Services (DPS) are set out on the opening page of its first ever annual report: teamwork, integrity, innovation, customer focus and leadership. The report is the work of the department’s relatively new director, Rene Almaraz, and his staff, and highlights the team’s achievements – in fiscal year 2023 – and priorities for the future, and also the guiding principles that influence how and why decisions are made.

        Almaraz says: “Our goal is to build an organisation that’s more nimble, that provides faster and higher quality service, and supports the customer to the highest degree possible, which includes explaining to them why and when they should follow a specific process.  This, in turn leads to how we can get it done better the next time.”

        It will be two years in January since Almaraz took on the role, with clear goals for creating a more agile department that delivers for internal customers and the people of Richmond…

        This brings us to two of the points on the DPS list of values: teamwork and leadership. This means within the department itself, but also with external partners, suppliers and customers. The DPS team has grown by around 40% to 28 staff since Almaraz took the reins, as he explains. “We’ve needed to grow. Before I got here, coming out of the pandemic, there wasn’t a lot of stability in terms of headcount. It’s now stabilised and we’ve built a good team here, a really focused team. Plus, I’ve received a lot of support from my leadership and my peer departments to continue improving.”

        The team has grown, but can be considered relatively small when you consider the scope of work they’re responsible for, which is why collaboration is so important for Almaraz and, above all else, trust and communication within the team. He explains: “I’m a huge believer in trust – my staff has to trust me, that I’m doing the right thing.  I need to know when to communicate and what to communicate, but they’ve got to trust me and then I must trust them.”

        This mutual trust allows everyone to feel inspired and to grow, he says, and develop the skills needed to conduct complex procurement projects. Part of this means asking for help when it’s needed and, crucially, learning from mistakes. Almaraz adds: “Be honest with me: if you need some support, let me know. This is a project I’m giving you so you can grow and so I can grow. We’re going to lead and put this department on the map, through our expertise and professionalism. That’s our objective here.”

        Read the full story here!

        Author

        Sean Galea-Pace

        Published

        Estimated Read time

        2Mins

        Ask Procurement—a generative AI procurement solution—is being developed for the market by IBM using Dun & Bradstreet’s “huge data cloud”.

        In order to develop more effective and market ready digital solutions for supply chain and procurement professionals, IBM is partnering with Dun & Bradstreet, a data-dealer with access to vast quantities of raw information gathered from a wide variety of sources, as well as cutting edge analytical tools. Together, the companies will work on expanding the capabilities of IBM’s watsonx to expand their use of generative artificial intelligence (AI).

        Through the collaboration IBM and Dun & Bradstreet intend to develop multiple offerings for clients to incorporate into their AI workflows, leveraging IBM’s AI and data platform, and fueled by Dun & Bradstreets’.

        Ask Procurement

        The leading solution in development, according to an IBM press release, is Ask Procurement, a generative AI-powered procurement solution that will “help empower procurement professionals to unlock new data and insights with a 360-degree view into all aspects of a company’s business relationships to help increase savings, reduce time, and mitigate the potential for risk.”

        Ask Procurement is expected to use Dun & Bradstreet’s platform, but feature watsonx supported models and other generative AI capabilities “fueled by Dun & Bradstreet’s vast Data Cloud.” The solution is expected to be available to procurement teams in the second half of 2024, integrated with Dun & Bradstreet solutions or an enterprises’ existing ERP or procurement solution.

        “At Dun & Bradstreet, being a trusted data partner and a responsible AI partner to organisations are synonymous,” said Ginny Gomez, President, North America, Dun & Bradstreet. “As two trusted brands that bring nearly 300 years of combined experience to the businesses we serve, Dun & Bradstreet and IBM are ideally suited to help companies responsibly navigate the rapidly evolving generative AI space because we know their business environments and processes well. And with hundreds of thousands of organisations globally relying on us every day, we believe there is no better company than Dun & Bradstreet to lead the industry and our clients into the future.”

        By Harry Menear

        Author

        Sean Galea-Pace

        Published

        11 December 2023

        Estimated Read time

        3Mins

        Efforts to address climate and social issues in the procurement process don’t have to be siloed, argues a new report from Business Fights Poverty.

        With more than 90% of a company’s environmental impact originating within its supply chain, not its internal operations, corporations are under greater pressure than ever to divest and draw down their Scope 3 emissions.

        At the same time, other Environmental Social and Governance (ESG) issues concerning gender disparity, minority representation, and workers’ rights are also more clearly in the spotlight than ever before alongside climate change. 

        However, a report published on 5th December by social impact-focused network organisation Business Fights Poverty, argues that while there is “an urgent need for transformative action on environmental and social issues such as climate change, biodiversity loss, poverty and inequality,” there exists a tendency in the corporate sector to tackle these “complex and fast-moving challenges by simplifying them and breaking them down into separate, smaller issues”.

        The result is often that solving issues of climate, social, and ecological justice becomes a zero-sum game, with one issue neglected at the expense of others, because of a siloed approach manifesting itself beneath the ESG umbrella. The report argues that, not only is this approach antithetical to the ideals of ESG initiatives, but “an integrated and systemic approach that recognises the interconnectivity of the challenges across environmental and social issues” is more effective at tackling these issues.

        The report, titled Supply Chain Decarbonisation with a Gender Lens: Practical Guidance for Global Businesses, notes that vulnerable groups, especially women, are especially vulnerable to the effects of climate change. It goes on to provide guidance for corporate procurement strategists and leaders, describing how to ensure that “women are both unharmed by decarbonisation strategies, and that their participation in any benefits generated in the process is secured.”

        Four Gender-Sensitive Routes to Procurement Process Decarbonisation

        1. Supplier incentives: Recognise and co-brand with suppliers who are emerging as leaders on decarbonisation and/or gender.
        2. Procurement policies and choices: Source from and encourage women-led businesses that are providing low carbon solutions
        3. Product and services design: Switch to renewable energy and upskill women to participate in the switch.
        4. Business model innovation: Promote a circular economy that includes women, for example decent work for waste and recycling pickers.

        The need for decarbonisation in the procurement process is pivotal. As of Q4 2023, nearly 40% of Fortune 500 companies have now set Net Zero targets. It’s not good enough, and the actual meaning of Net Zero is being eroded and worked around by corporations looking for ways to continue harming the environment and damaging the global social fabric while making record profits. But it’s a start. 

        “Whilst a growing number of companies are investing resources to better understand, account for, manage and reduce their supply chain emissions, little attention is being devoted to the role of, and impacts of interventions on, the people working in those supply chains,” urges the report. “The decarbonisation strategies of large multinational companies with complex global supply chains have impacts on workers around the world, both positive and negative.”

        By Harry Menear

        Author

        Sean Galea-Pace

        Published

        5 December 2023

        Estimated Read time

        5Mins

        Anthony Payne, chief marketing officer of HICX, tells us why we won’t reach net zero unless we fix data collection.

        As we approach COP28, large manufacturing brands are in the net zero spotlight. It’s been a year since the UN Expert Group released Integrity Matters, a report clarifying the exact metrics brands must meet if they wish to claim net zero success. Those planning to do so, account for around half of the world’s largest listed companies, according to the latest Stocktake, a number which has doubled in the last two and a half years. Despite this momentum, however, brands are slow to implement.

        Now, with the conference marking another year closer to the 2050 Paris Agreement and other deadlines, it’s time to step up delivery. What this means is that the strategies behind net zero pledges need a boost.

        As a supplier experience evangelist and a marketer, I view this challenge through a different lens. The way in which we engage suppliers to get their data needs significant improvement. And the way forward is to market to suppliers.

        A growing conundrum

        Most of today’s major brands have expensive procurement technology with which to engage suppliers, technology that has often evolved to be complex, clunky, and hard to use. As a result, supplier adoption of these tools is low, and therefore supplier engagement in projects to cut carbon and provide quality information is low. Brands have the challenge therefore of getting suppliers to adopt their expensive tech and engage in net zero efforts.

        Additionally, we’re seeing that what each party expects from the brand-supplier relationship, is misaligned.

        Anthony Payne, chief marketing officer of HICX

        Suppliers, at the start of the relationship, are highly incentivised to work with a brand and they want to get to three things: the first purchase order, delivery of that first service or product, and payment. From that point, they just want to continue transacting and renewing business. This is their “steady state.”

        A brand’s steady state, on the other hand, is more complex. In addition to transactional work, brands need a continuous flow of information around compliance, quality, performance, tax, carbon footprint and an awful lot more. Nowadays, brands also want to be efficient and automated. This brings new technology, whether it’s extensions to established technology or new specialist tools. Of course, with new tools come new processes. 

        Suppliers, as we’ve discussed, primarily want to receive orders, deliver on them and be paid. But now, they are also expected to respond to requests for a whole set of information, on a continuous basis. They’re also facing a lot of change in the form of ever-complex technology landscapes and evolving processes – and this isn’t just for one brand, it’s for all their customers and it’s leading to suppliers suffering from what we sometimes call, ‘initiative fatigue.’

        The need for brands to collect data is here to stay and it’s time to deal with the thorny issue of how we can get suppliers to adopt the necessary tools and engage in net zero requests.

        We need suppliers

        Further to this conundrum, brands face something of a basic and rather obvious truth; they need suppliers. For example, brands need suppliers to provide carbon information, ideally using the tech setups that already exist, and they need them to engage in this activity over and above “business as usual”.

        Why then, don’t more brands make their suppliers’ lives easier? We’re missing a trick. Let’s flip the way in which we work with suppliers – rather than bombarding suppliers with information requests, let’s encourage them to do what we need.

        We can learn from marketing

        Let’s turn our attention to another department, one that has had to apply the principle of encouragement rather than force. Marketing cannot force potential customers to buy or adopt a product or service, instead, it engages customers, encouraging them to adopt or buy. This is usually by appealing to a need or emotion.

        What’s obvious in the customer-facing world is customers have a choice. For example, as much as I would love to be able to require an audience to buy what we’re selling, to come to our events and read our content, I obviously can’t insist.

        This is now, more than ever, the same with suppliers. Like potential customer, suppliers have a choice. The fact that brands need suppliers in order to collect net zero data, gives suppliers more agency. Suppliers now get to exercise choice through their behaviour, and it’s this choice that is absolutely central.

        Now don’t get me wrong. It’s not that suppliers want to veto what brands need from them, it’s more that they’re facing too much noise in the form of new technology, information requests and the resulting processes. They’re overwhelmed.

        If you want suppliers to engage in your net zero efforts, think differently. Simply piling on more pressure won’t get the best of them. Rather, let’s think more about persuasion and encouragement, and how to show them value. The marketing process involves engaging customers, building strong relationships with them and offering them value, with the purpose of capturing value in return. You’ll see three-quarters of this process is about how we appeal to customers, not the other way around.

        If we apply this concept to suppliers, we get a useful way of thinking about the relationship. Why don’t we engage suppliers more, build stronger supplier relationships and create value for them? If marketing is anything to go by, the result will be that we capture value from suppliers – like getting them to complete compliance questionnaires, do forecasts, take part in quality programs and log into (and actually use) those expensive systems.

        Rather than trying, in vain, to force suppliers to engage in net zero activity, let’s market to them.

        Now, as net zero delivery dates creep closer, brands can empower themselves to step up by stepping into the shoes of suppliers and appealing to them. As we explore new ways of working with suppliers, who knows what solutions could be inspired?

        By Anthony Payne, chief marketing officer of HICX, the supplier experience platform

        Author

        Sean Galea-Pace

        Published

        29 November 2023

        Estimated Read time

        2Mins

        DPW has announced it is expanding into North America following the success of its Amsterdam offering.

        DPW has announced it is expanding into North America following the success of its Amsterdam event.

        Founders Matthias Gutzmann and Herman Knevel revealed the news via LinkedIn to confirm a move that will see significant growth into new territories.

        Gutzmann exclusively told CPOstrategy: “Marking a pivotal moment for DPW, our expansion to the US isn’t just about growing our footprint, it’s about building on our ongoing momentum over the last few years and bringing the enthusiasm and expertise of DPW.

        “We aim to bridge procurement organisations with innovative startup founders and change makers, fostering the growth of a digital procurement and supply chain ecosystem in North America.”

        Accompanied by a photo of the duo outside Google offices in Silicon Valley, California, he posted on Monday (27th November): “I am currently in #SilliconValley together with Herman Knevel, gearing up for an exciting week filled with meetings with tech giants, founders, visionary partners and future collaborators.

        “Having previously led the expansion of Procurement Leaders | A World 50 Group Community into North America, I must say I feel extra energised to bring my experience and strong relationships within the North American market for the benefit of DPW.

        “Stay tuned for more updates as we embark on this exciting phase of growth and innovation!”

        Founders Matthias Gutzmann and Herman Knevel

        ​​Since launching DPW in Amsterdam in 2019, the conference has grown from strength to strength and is now widely regarded as the biggest and most influential tech event in procurement and supply chain on the planet. The conference welcomed over 1,250 procurement professionals with more than 2,500 virtual attendees watching along at home in its 2023 edition in October.

        Last year’s event was held at the former stock exchange building, the Beurs van Berlage, with the theme called “Make Tech Work” which focused on turning digital aspirations into a reality. DPW Amsterdam has already been announced for October 9 and 10, 2024, next year.

        Further details about DPW North America will be revealed in due course.

        Author

        Sean Galea-Pace

        Published

        23 November 2023

        Estimated Read time

        5Mins

        At DPW Amsterdam 2023, Danny Thompson, Chief Product Officer at apexanalytix, tells us about the art of developing trust amid significant innovation in procurement.

        Trust.

        Apexanalytix needs to build quite a bit of it. As a company which protects $9 trillion in spend and prevents or recovers more than $9 billion in overpayments annually, its client portals actively support over eight and a half million suppliers.

        Indeed, apex has revolutionised recovery audit with advanced analytics and the introduction of first strike overpayment and fraud prevention software. Today, apex is a leading global force in supplier management innovation with apexportal and smartvm, now the most widely used supplier onboarding, compliant master data management, and comprehensive third-party risk management solution in global procure to pay. With over 250 clients in the Fortune 1000 and Global 2000, apex is dedicated to providing companies and their suppliers with the ultimate supplier management experience. A big part of that experience is based on building trusted supplier-buyer relationships.

        Danny Thompson is the Chief Product Officer at apexanalytix and has been with the organisation since July 2015. Now in his third role with the company in eight years, Thompson reflects on his journey with the organisation with positivity. “I came in as a product manager working on our portal product,” he tells us. “And after a short time, because I was a former customer, at Pfizer and International Paper Company, and was an internal voice of the customer, they ended up having me drive messaging with marketing. Recently, we hired a great new leader of marketing who has taken that over fully so I’m dedicated full time to product again. So it’s been a great experience for me.”

        Gen AI surge

        One of the hottest topics on the CPO agenda in recent months has been ChatGPT. Wherever you go within the industry, you’ll likely find a conversation being had about the technology’s possibilities, as well as perhaps its limitations or challenges – and Thompson is equally keen to explore.

        Danny Thompson speaks with CPOstrategy at DPW Amsterdam 2023

        “There is certainly a lot of attention being paid to gen AI in the industry, and within our company as well,” says Thompson. “I think it’s because of the shock value of ChatGPT hitting the world and people are really stunned by its ability to interpret natural language and come back with really good information in response to questions that are being lobbed at it. There’s a lot of excitement around what it could do as well as what other generative AI solutions can do to help solve procurement, supplier risk and supplier information problems. We are making progress, and have introduced some generative AI functions, but Generative AI presents some challenges right off the bat that we are working hard to solve as quickly as we can.”

        One of these issues is the hallucination problem that is being questioned within the space. This is where AI tools like ChatGPT lack factual support for some of the information provided. “There’s a statement at the bottom of the page which states you can’t rely on results being factual,” Thompson affirms. “When it comes to supplier information and risk management, that’s a problem.”

        Managing risk

        And it is such an important sticking point that Thompson stresses when it comes to supplier risk information, it is about being careful that the usage of generative AI, in its current state, is used for guidance rather than fact-finding. “Another challenge is around leakage of sensitive information combined with contamination of sensitive or important information,” reveals Thompson. “We have a database of golden records for 90 million suppliers who are doing business with Fortune 1000 and Global 2000 companies. That is the best information we’ve been able to accumulate about suppliers and their relationships as a supplier to large companies. Some of that data is publicly available and some of it is more sensitive. We want to make sure we’re not loading that sensitive information into a generative AI function that might allow random people to access that information. We’ve got to be careful about that leakage of data.”

        The opposite is true, as well.  Thompson reveals that his team asked the generative AI-tailored questions which they assumed would be pulled from their own database. The findings were less than ideal. “The responses had been contaminated with public information which was full of inaccurate data,” he tells us. “We’re figuring out how to draw those boundaries, as well—to protect sensitive data while also preventing contamination.”

        Trust first

        This showcases the importance of trust once again to an organisation like apex. The companies it serves are moving significant sums of money around and the potential risks are sizeable. For Thompson, there can be no greater responsibility when using AI tools. “The data must be either highly accurate or at least they understand the degree to which it’s not,” he says. “If you don’t understand that level of trust you can have in it, then you shouldn’t be using it yet.”

        With an unprecedented amount of technological innovation at procurement’s fingertips, the industry is evolving at a rapid pace. It’s placed at a unique moment with digital transformation being swept up throughout the space. While this brings obvious advantages such as time and cost savings, it also means increased cybersecurity threats. “There are more threats coming in as a result of AI,” says Thompson.

        “One of the biggest challenges our clients us our solutions to solve for is fraudsters trying to take over a supplier’s account and intercept their payments by submitting fraudulent account change requests. One of the typical ways companies catch these is very often the request is coming through very poorly formatted emails with bad grammar. But what we’re seeing is the bad guys have started using generative AI to create really convincing bank account change requests so there are increased threats to be aware of. But this increase in the availability of information is also make easier the whole process of knowing your supplier and knowing the risks associated with them. And Generative AI is going to allow you to quickly get help to understand how to mitigate a given risk much faster and easier than it’s ever been before.”

        Author

        Sean Galea-Pace

        Published

        14 November 2023

        Estimated Read time

        2Mins

        CPOstrategy explores five barriers companies are faced with in terms of sustainable procurement.

        A robust sustainability strategy isn’t only a ‘nice to have’ any longer, it is quickly becoming one of the top items on the agenda in procurement.

        Many organisations are implementing sustainability programmes with a view of helping them to cut costs, make their companies more competitive and secure a greener future for all.

        But, adopting a greener way of working isn’t necessarily straightforward. Here are five barriers companies are faced with in terms of sustainability in procurement.

        1. Acceptance from senior employees

        Change isn’t always welcomed. Executives, particularly those that have been served the industry for a significant time period, aren’t always receptive or quick to embrace new strategies. Without buy-in from senior executives, positive change is trickier to achieve. However, by informing employees of the considerable advantages by making a shift, it could lead to an easier experience with less pushback.

        2. Limited time and resources

        Time, funding, and other resources are vital in ensuring the best results from sustainability. On a busy schedule, it can be challenging to implement a sustainable procurement policy but it is important to retain the knowledge that it won’t be achieved overnight.

        3. Lack of support from suppliers

        In a similar way to senior employees, getting suppliers on side can also be a hurdle. As suppliers are separate from your company, they potentially have less resources available or a different mindset. Suppliers may not recognise the importance of sustainability in the same way which could lead to a misalignment of priorities.

        4. Higher costs

        The prospect of a higher cost is one of the biggest concerns companies have when thinking about sustainable procurement. After switching to a sustainable procurement strategy, costs do tend to rise but by not switching sooner, it could lead to organisations paying even more in the future. For companies without a sustainable strategy, they will have to question whether they can afford to watch competitors implement green strategies and the impact this will have on what their customers demand.

        5. Accessing the right technology

        Technology can be an influential tool to help drive an organisation’s sustainability goals. Sometimes, a different set of digital tools to what is already existing within a company is necessary to make more of a concerted environmentally friendly effort. However, this comes with the caveat of new tools being time-consuming and requiring training to improve skills and knowledge. But once up to speed, using technology will mean greater efficiency to scale sustainability strategies.

        Author

        Sean Galea-Pace

        Published

        13 November 2023

        Estimated Read time

        3Mins

        CPOstrategy examines why replacing legacy systems could hold the key in procurement to achieve long-term success.

        As technology evolves, modernising legacy systems in procurement becomes essential.

        Change management is never straightforward or linear. Indeed, legacy systems are familiar to an organisation and the workforce might be reluctant to embrace a new way of working, or at least at the very beginning.

        But how much damage is clinging to outdated processes doing to an organisation?

        Replacing legacy systems

        “For many organisations, legacy systems are seen as holding back the business initiatives and business processes that rely on them,” according to Stefan Van Der Zijden, VP Analyst at Gartner. “When a tipping point is reached, application leaders must look to application modernisation to help remove the obstacles.”

        People often like their routines and a preferred methodology of how something is completed. This can lead to pushback from the workforce about the purpose of ‘fixing something if it isn’t broken.’ And the point of change for the sake of change is a valid one, up until an alternative which is going to demonstrate tangible benefits. The truth is that most legacy systems don’t allow for growth with older technology often not able to interact with newer systems and processes. In ‘7 options to modernise legacy systems’, Gartner pointed out six main drivers of application modernisation with three from a business sense and three from an IT perspective.

        These are business fit, value and agility as well as cost, complexity and risk. If a legacy application isn’t meeting new requirements needed by a digital business, it needs to be modernised to fit properly and should be enhanced to offer greater value to the business. Without agility, a digital business will struggle to keep pace with the latest trends or craze and put the organisation at risk of falling behind competitors. Whereas from an IT side, if the total cost of ownership is too high or if the technology is too difficult to use, then modernising could be vital.

        Overcoming resistance to change

        Ultimately, change management is an essential component of any Chief Procurement Officer’s role. It can range from a small swap, such as a change of supplier, to wide-scale amendments such as altering the way goods and services are acquired or implementing a procurement or software transformation. According to data from group purchasing firm Una, 70% of change management efforts fail. In order to combat this, there are three key steps to overcoming resistance to change. These are engagement, managing resistance and not neglecting training.

        Market disruptions, evolving customer demands and the necessity for a digital landscape has forced businesses’ hands. They are now faced with the task of completing legacy modernisation as a matter of urgency to deliver innovative products and services quickly and efficiently. Failure to do so could lead to being reactive instead of proactive – a risk that in today’s fast paced and ever-changing world that should be taken with caution.

        Author

        Sean Galea-Pace

        Published

        10 November 2023

        Estimated Read time

        5Mins

        Erik Oberländer (DE), Manager, Procurement Advisory, PwC, discusses how to combat inflation and maximise savings through game theory.

        Material scarcity, rising inflation, exploding energy prices, and an unstable geopolitical situation pose procurement challenges like never before.

        The right negotiation strategy is not only essential for companies to achieve cost savings but is also absolutely vital for survival.

        In the current market situation, securing material availability often takes top priority. In this case, negotiations with suppliers must be based on partnership and close cooperation. On the other hand, if contract volumes have been awarded in competition between multiple suppliers with a high degree of shiftability, the use of game theory should be considered.

        But what does the game-theoretical negotiation approach look like? In a classic bilateral negotiation, the focus is on convincing the other party with the right strategy and tactics, a convincing storyline, and compelling arguments for one’s own position. In contrast, the game-theoretical approach involves developing a bidding mechanism that maximises the competitive dynamics between suppliers. The design of the bidding mechanisms is based on insights from numerous scientific theories.

        In fact, since the 1990s, several Nobel Prizes in Economics have awarded in the field of game theory. This scientific approach opens up new perspectives in complex negotiations and makes it possible to forecast how people tend to behave. In strategic procurement, many companies use game theory in bids and negotiations. After realising unimaginable savings results, procurement teams are electrified and absolutely convinced of the effectiveness of game theory.

        Game theory in procurement

        The two most relevant and commonly used bidding mechanisms in procurement auctions are the Dutch (ascending bid increments) and English auction (descending bid increments). In combination with other elements, such as qualification and ranking rounds, they can maximise competitive pressure through credible market transparency.

        However, when developing any game-theory-optimised bidding mechanism, many questions should be asked. For example: How should the lots be formed to create the greatest possible competitive pressure? What decision will a supplier make if it is assumed that they want to maximise their own benefit – and how do you optimise the bidding design to take this into account? With what bidding design can you put the best suppliers under pressure?

        These criteria are met:

        Game theory is fascinating – with demonstrable successes that cannot be achieved through classic negotiations, with the consistency and “purity” of its systematics, and with the surprising realisation that some game-theoretical approaches have been intuitively and unconsciously used to increase strategic competition and minimise risk aversion.

        Many procurement teams believe this approach only applies to certain categories of goods. This is a misconception. Generally, only three criteria will be met. We call them the 3Cs:

        •Comparability: All relevant decision parameters will be taken into account and is monetised through a bonus-malus evaluation. The offers of participating suppliers are comparable, and award decision is based on total cost of ownership.

        •Commitment: The award decision is completely open. All participating suppliers are released by the department, and all cross-functions can win the contract on their own. In addition, it is clearly communicated that there will be no renegotiations or vetoes in further procurement committees.

        •Competition: There must be more than one supplier interested in the scope of the award. Only this way can a competitive situation be created that is maximised with the help of a tailored award design. The right incentives for suppliers must be identified, and the appropriate signals set.

        Possibly, not all of these criteria are met at the beginning of the project, but they can be developed together in cross-functional teams (consisting of colleagues from procurement, engineering, quality, logistics, and sales).

        How the award is carried out:

        Once the 3Cs are met, suppliers must be prepared for the award event. In transparent communication, the mechanism and rules are explained, and any uncertainties are clarified. No supplier should be unsettled, because only if the supplier has fully understood the mechanism, can he behave optimally, and the award mechanism can achieve its full effect.

        The award day is then carried out with suppliers on-site or virtually via eAuction tools. Especially for larger award volumes, it is advantageous to have suppliers on-site, as signals are also sent to suppliers between rounds. In addition, you can literally feel the tension level and adjust the bid steps accordingly.

        Virtual implementation facilitates the scaling of the approach with multiple providers. Smaller award volumes are carried out quickly and without great coordination effort. The selection of the appropriate tool provider is crucial. Not all tools can map more complex award mechanisms and adapts to specific individual starting situations.

        Here are the first steps:

        It must always be considered that game theory is a complex science and cannot be simply applied. The preparation time for the design of award strategies is often underestimated and set too low. To become a good game theorist, it is not enough to attend a weekend course or read a book. In fact, the unprofessional application of game theory can do more harm than good. Therefore, it is strongly recommended to be accompanied by a coach during the first use – only with this expertise are amazing negotiation results possible.

        It is not always easy to delegate final decision-making authority to a mechanism, but it is worth it. Successful awards can ignite the fire in procurement teams. It is important to generate maximum enthusiasm, support cross-functional cooperation, and institutionalise negotiating skills in procurement teams.

        By Erik Oberländer (DE), Manager, Procurement Advisory, PwC

        Author

        Sean Galea-Pace

        Published

        9 November 2023

        Estimated Read time

        2Mins

        CPOstrategy compiles five ways that ChatGPT can transform procurement amid the rise of generative AI in the space.

        ChatGPT is seen by many as a catalyst for the next wave of technology transformation.

        The technology, which was developed by OpenAI, has quickly become the buzzword of the year and one of the hottest topics on the c-suite agenda.

        And its promise extends to procurement – an industry that relies heavily on the need for achieving efficiency, transparency and cost savings. Having already made its mark on a variety of industries already, procurement hopes that by embracing ChatGPT it will allow teams to make greater strategic decision-making to drive long-term value.

        Here are five ways ChatGPT can transform procurement.

        1. Rapid research

        Through ChatGPT, time-consuming and cumbersome tasks such as research can now be completed almost instantly. Generative AI tools such as ChatGPT can analyse significant amounts of data and provide insights on market fluctuations while also searching for new suppliers, products and capabilities to secure better deals.

        2. Automated procurement processes

        ChatGPT can be used to discover patterns and identify trends which will allow procurement teams to make data-driven forecasts. Through leveraging predictive analytics, organisations can anticipate demand, optimise inventory levels and manage their supply chain more effectively.

        3. Easier communication with suppliers

        Tools such as ChatGPT can improve supplier performance tracking through automating data collection and analysis. Its focus on cooperation and transparency throughout the procurement process allows for stronger supplier relationships and more innovative thinking.

        4. Enhanced risk management

        A major benefit of generative AI in procurement is improved risk management and the ability to foresee potential dangers. Through identifying potential hazards such as financial instability among suppliers or non-compliance with procurement processes, ChatGPT can help businesses manage and reduce risks.

        5. Cost savings and increased efficiency

        ChatGPT can help organisations to save costs by automating operations, increasing stakeholder participation and allowing real-time data analysis. By reducing the amount of time and effort for tasks like evaluating bids and selecting a vendor, ChatGPT could shake up the procurement process immeasurably.

        Author

        Sean Galea-Pace

        Published

        2 November 2023

        Estimated Read time

        3Mins

        ORO Labs has announced it has raised $34 million in Series B funding led by Felicis with participation from existing investors.

        ORO Labs has announced it has raised $34 million in Series B funding led by Felicis with participation from existing investors including Norwest Venture Partners, B Capital, and XYZ Venture Capital.

        The move will see increased support for ORO Labs, which is a global SaaS provider and creator of the world’s foremost smart workflow orchestration platform for procurement, as it scales international and platform growth.

        This latest round closes at the one-year milestone of ORO’s launch and the company’s November 2022 $25 million Series A, bringing total investment raised to $60 million.

        ORO orchestrates company spend and supplier management across siloed systems and data to improve procurement workflows, increases visibility and makes it easier for business users.

        ORO Labs co-founders Sudhir Bhojwani and Lalitha Rajagopalan

        Humanising the procurement experience

        The innovative platform helps companies quickly create intake workflows, build an integrated and orchestrated procurement tech stack, and dramatically simplify user engagement with purchasing throughout the organisation.

        “We’re on a mission to humanise the overall procurement experience, simplifying and guiding end-to-end supplier engagement for efficiency and compliance,” said Sudhir Bhojwani, CEO and co-founder at ORO Labs. “Our Series B financing is further validation, not only of our success in executing, but also the opportunities as we continue to develop and scale ORO for international expansion and a host of new use cases – bringing incredibly easy start-to-finish procurement to even more organisations for agile operations and happy employees.”

        “Our 2023 CFO survey identified procurement as the top pain point for CFOs and the number one spending priority,” said Victoria Treyger, general partner at Felicis Ventures. “ORO’s platform approach to orchestrating and simplifying workflows is driving adoption with global Fortune 1000 companies across a range of industries from financial services to pharma. Sudhir, Lalitha, and Yuan share a rare combination of deep procurement knowledge with the passion and insight to transform the category.”

        ORO Labs co-founder Lalitha Rajagopalan noted, “I’m personally thrilled to have a woman investor joining the ORO board. Victoria brings keen go-to-market insight and a genuine love for procurement that will help us continue to scale our business, as well as a diverse perspective that aligns with important supplier inclusivity imperatives for our enterprise customers.”

        Tackling the future

        In use by leading global Fortune 200 enterprises, ORO provides organisations with a next-generation platform that streamlines procurement and reduces supplier cycle time using workflow automation. From intake to spend control, and contract management to supplier relationships, ORO’s smart procurement workflows empower organizations to optimize efficiency and drive success.

        “Coordinating a global procurement organisation effectively and holistically with all stakeholders involved is a constant challenge for any enterprise,” noted Matthias Dohrn, President of Global Procurement for BASF. “ORO allows us to better do our part as procurement and orchestrate and scale thousands of value-generating procurement and business measures across the globe, understanding KPIs from a global perspective to streamline our processes, better engage employees and to generate EBIT. The low-hanging fruits are gone, and to manage thousands of improvement ideas, you need a tool to deliver – this for us is ORO.”

        The news comes after ORO Labs was announced as the growth stage track winner of DPW‘s DEMO 2023 competition at DPW Amsterdam last month.

        Author

        Sean Galea-Pace

        Published

        1 November 2023

        Estimated Read time

        5Mins

        At DPW Amsterdam, Ashwin Kumar, vice president at GEP, discusses procurement transformation and what tomorrow’s challenge could look like.

        Transformation. Procurement has witnessed quite a bit in recent years.

        Given the widespread adoption and acceleration of AI and data-driven processes over the past decade, change has been a necessity rather than a nice to have.

        Evolution of AI transformation

        Ashwin Kumar is not unfamiliar with change. Having worked at GEP since May 2008, he has had a front-row seat to the transformation and change procurement has overseen. Now Vice President, he tells us about the evolution of the procurement function and how the landscape is shifting to meet future market demands.

        “I think the way we see the industry evolve over time is because we started with web 1.0, simple ERPs that were fragmented with no easy way to connect systems,” he tells us. “Data was all behind firewalls and it was very expensive to manage or mine data. Then we had a big technology breakthrough in cloud systems where the people who were managing the storage said they had a solution. You can just simply push data out of the cloud and what we saw was a lot of that control that the CIOs had on data architecture and the software systems and solutions was being given to different functions.

        “A lot of that enrichment of data happened because of the cloud platform that enabled it. Back in 2010, we made the decision to move away from a SaaS platform because even then we believed the future was cloud and that’s where data is going to be which could mean a gold mine. Our CEO made a very conscious decision to basically stop a really good product that was working and move to the cloud platform.”

        Ashwin Kumar, Vice President, GEP

        The GEP difference

        Today, a global leader in AI-driven procurement and supply chain transformation, GEP helps enterprises take the lead and, using the power of data and digital technology, to stay ahead in the connected global economy. More than 1,000 engineers have spent the last 7 months to design and launch GEP’s new AI-native, low-code platform for sustainable procurement and supply chains, GEP QUANTUM. This new platform, launched last week, powers GEP SMART, the industry’s leading source-to-pay procurement application, GEP NEXXE, its next gen supply chain solution, and GEP GREEN, enabling companies to track, measure and achieve their ESG goals.

        With the transformative power of AI, GEP enables businesses to operate with greater efficiency and effectiveness, gain competitive advantage, boost profitability and maximise both business and shareholder value. GEP helps global enterprises across industries and verticals build high-performing, resilient and sustainable supply chains.

        Investing in dedicated spend analytics and solutions has become an essential part of the procurement process. Data is king and ultimately the more companies know and can predict, the better off they’ll be. However, some companies are still lagging behind when it comes to adopting digital tools created for better visibility and transparency. Kumar questions the reason for this and points to the possibility that there could be a perception that digital tools were hype or a fad – but affirms spend visibility is the real deal.

        “If you look at spend data, if I’m the business stakeholder, you’re coming and showing me things that happened six months before,” he tells us. “One of the things we actively tell customers is to understand that there is a difference between spend and cost. Spend is basically the last AP data that you get, which means it’s not even current.”

        Procurement’s greatest time?

        Given the disruptive nature of the past few years, procurement has had to stand up and be counted. For Kumar, he reflects on global challenges such as Covid, a war in Ukraine and inflation and its knock-on effect on procurement and the supply chain. He maintains that it’s a “difficult time” to be in the industry at the moment given the hurdles procurement and the wider world has faced head-on recently.

        “We started off with Covid where we went and told suppliers, sorry, I don’t have money to spend so I’m going to stop spending,” he tells us. “Two months later, you tell them there’s a supply shock and since I’m your preferred customer, can you do something for me? Make sure my products are getting to me on time. Then six months later, there was a war in Ukraine where you were testing suppliers to see which side they were on and questioning whether or not to do business with them. After that, there were inflation concerns so things are constantly changing and you’re pivoting from one problem to another.

        “It now means you need to have a platform ecosystem with multiple solution options so that there isn’t a single point of failure and avoid the need for a “transformation” every two years. Given the pace at which things are changing in the macro environment, those single points of failure are quickly going from lack of supply to resilience to risk to people to visibility. It could be something else tomorrow, it could be ESG tomorrow, we simply don’t know. I could have a really good risk assessment tool, but that might not be my focus six months from now – it could be something else. So resilience in the form of digital ecosystem housing different point solutions is paramount.”

        Author

        Sean Galea-Pace

        Published

        30 October 2023

        Estimated Read time

        5Mins

        Koray Köse, Chief Industry Officer at Everstream Analytics, speaks to us exclusively at DPW Amsterdam and discusses the importance of leading from the front in the supply chain

        Everstream Analytics sets the global supply chain standard.

        Through the application of AI and predictive analytics to its vast proprietary dataset, Everstream delivers the predictive insights and risk analytics businesses need for a smarter, more autonomous and sustainable supply chain. Everstream’s proven solution integrates with procurement, logistics and business continuity platforms generating the complete information, sharper analysis, and accurate predictions required to turn the supply chain into a business asset.

        Koray Köse is a supply chain expert, futurist and multi-lingual thought leader, CPO, researcher, and published author. He specialises in working with CSCOs, CPOs, CIOs and other c-level executives while possessing more than 20 years of success in developing global supply chain and sourcing strategies, re-engineering and transforming business processes, and maximising financial resources. Köse is experienced in designing new business frameworks, risk and governance processes and deploying full-scale ERP and procure-to-pay systems to drive efficiencies through digital transformation. He is an expert in industries such as automotive, pharma, life sciences, IT, electronics and FMCG and has served as Chief Industry Officer at Everstream Analytics since June 2023.

        Koray Köse, Chief Industry Officer, Everstream Analytics

        World’s first Slave-Free Alliance

        Recently, Everstream became the world’s first Slave-Free Alliance (SFA) validated modern slavery and forced labour technology provider. Everstream’s collaboration combines the firm’s multi-tier supplier discovery and AI-powered risk monitoring and analytics with SFA’s proprietary forced labour intelligence to expose unknown risks and protect global supply chains from modern slavery and exploitation.

        “We’ve had issues in supply chain before, like conflict minerals for instance was a big topic,” Köse tells us. “Legislation came that was rather weak, where companies can say we can’t confirm nor deny that we have conflict minerals in our products. Modern slavery takes it to a whole different level. In essence, you may get import issues the moment that you might be suspicious, or the government import controls may say, ‘this comes from a specific region that has general exposure’. You basically have a disruption in your supply chain.

        “If you forget about the business side, your business is actually promoting ethics that your own company in its statement and the way you live don’t align with and you didn’t know about it. So unknowingly you have actually incremented the issue that you are tackling on your own and within your environment. For us it was important to live up to the promise and look for an NGO that is impactful, has a mindset that is all about partnership and not blaming or shaming, it’s about changing the environment.”

        Breaking down barriers

        Around 50 million people worldwide are living in modern slavery. It remains a serious problem in nearly every region, with over 40% occurring in upper-middle to high-income countries. Due to the opacity and complexity of today’s global supply networks, companies are increasingly vulnerable to the risk of forced labour. According to a study cited by Slave-Free Alliance, 77% of companies expect to find modern slavery somewhere in their supply chain. Through this alliance, Everstream will actively contribute to enhancing capabilities and eradicating modern slavery and forced labour from global supply chains.

        “We started that partnership to transfer our knowledge and also get insights from their end and understand what the upcoming issues were in the arenas of modern-day slavery that we should keep an eye on and how to help our clients to be informed and avoid getting exposed,” says Köse. “That’s where I started to talk with Hope for Justice and have collaborated with them during my time at Gartner as well. Then legislation is pushing the matter to the forefront of supply chain issues.

        “Now, there is also financial impact and disruption and there’s the ability to do good and live up to the promise of your own vision and the way you want to conduct your business. Then I wanted to put our product to test and make sure that it lives up to the promise and if it doesn’t then we fix it. We went through a validation process and we got 90% plus accuracy in the feedback, which is important as it’s another confidence boost that we’re doing the right thing and we should continue on that path. We are the first world’s first validated modern-day slavery solution to tackle the issue – we’re very proud of that.”

        The value of due diligence

        In today’s fast-paced world, due diligence has become more important than ever. Companies must ensure they are generating the best value for money and that the product that they’re purchasing actually meets their needs. Köse believes companies almost have no choice in 2023.

        “It’s an element that is not only preserving value, but it also creates it too,” he explains. “In the past it was more like a checkbox exercise that you conducted because everyone thought it was the right thing to do. Meanwhile, you had spillovers that you didn’t know about. It’s almost like what I don’t know, I don’t care. Since transparency requirements have been augmented significantly and the realisation of transparency as a value driver has dropped through Covid almost instantaneously in the c-level boardroom, compliance has become a value driver.

        “It’s not just a checkbox exercise where you say that you are compliant. It is an affirmation of your product quality, brand and innovation that speaks to the customers and the choice they make. If you are concatenating beliefs and values to your product in that moment, you just have created a customer and that customer will be retained throughout the lifetime that you actually care about what they care about.”

        Author

        Sean Galea-Pace

        Published

        25 October 2023

        Estimated Read time

        8Mins

        Georg Rösch, Vice President Direct Procurement Strategy at JAGGAER, discusses his organisation’s approach amid significant transformation and evolution

        Procurement is at a sliding doors moment – its direction of travel could go one way or another.

        The influx of new technology makes procurement a dynamic and interesting industry in 2023. Following global challenges felt around the globe, procurement practitioners have had to step up in the face of adversity. To the industry’s credit, procurement has so far come through it but now it’s about embracing the world of today and finding ways to deal with pressing issues such as ESG and the knock-on effects of a war in Ukraine while also navigating inflation concerns. Of course, all this is on the back of COVID-19, of which the aftermath is still felt in some quarters.

        In a recent CPOstrategy Podcast, Georg Rösch, Vice President Direct Procurement Strategy at JAGGAER, tells us all about how spend management giant JAGGAER is helping procurement teams overcome the challenging backdrop and discusses digitalisation strategies within the space.

        Georg Rösch, Vice President Direct Procurement Strategy at JAGGAER
        Georg Rösch, Vice President Direct Procurement Strategy at JAGGAER

        The road in which procurement professionals end up where they do is always an interesting one. Can you tell us why procurement was the path you chose which led to your journey to JAGGAER? 

        Georg Rosch (GR): “I would say I stumbled into the procurement space. Growing up, I was always a technology person and had a very early interest in computers. When everyone was playing video games, I was playing around with software and started coding. Eventually, one thing led to another, and I found myself in a small procurement startup in Vienna in development. This is really where I found out that this is interesting stuff. 20 years later, it’s crazy to think I’m still doing it because I didn’t even know this field existed and I think that is felt industry wide. But I still love it and getting to combine procurement with technology is something I’m really interested in.” 

        In your view, how would you explain JAGGAER and sum up what differentiates it from other players in the space?

        GR: “JAGGAER has been around for more than 25 years and came together through a lot of mergers and acquisitions. I came through from a branch that was local to Austria and the company has become one of the largest procurement software vendors out there. What I really like about JAGGAER is our vision of autonomous commerce. First of all, it sounds weird for a procurement software vendor not to have the word procurement in the tagline. But that’s done on purpose, because when you think about what a procurement software firm really does, it’s about communication and collaboration between buyers and sellers.

        “For a while, JAGGAER was really good at the indirect procurement side which revolved around the whole P2P process. That’s really where a lot of our business came from. But this has evolved over the past 20 years into more of the source-to-contract process that’s being added which is proving so important. It’s not just the execution, but also the strategy of how you build everything and how you find the right sources. As part of autonomous commerce, we created four pillars. It’s networked, intelligent, comprehensive and extensible which spells NICE so it’s very easy to remember.”

        Can you expand on the NICE strategy that JAGGAER has developed? What is its true meaning?

        GR: “Networked basically means you collaborate with your suppliers, buyers, sellers, partners – everyone. It’s like the modern-day town square where the commerce happens – it’s the foundation of everything. Then it needs to be intelligent which means the question isn’t just about what data you have, but how do you intelligently use the data to drive the processes? Next, you have comprehensive. That encompasses all the functions you have starting from analytics, category management, supplier management, sourcing contracts, ePRO, supply chain management and quality management. It’s all of these beautiful things and how they work together. 

        “Finally, extensibility means a lot of different things. It means being open to communicating with other systems. With our platform, you can bring in a lot of external data – ESG and sustainability, risk, enriched supplier data, and more – from our partners into our solution. This allows you to make smarter decisions across the procurement cycle. Another aspect is that not every company is the same. Extensibility also means, ‘how can I tailor the solution to my needs?’ This completes the picture that we are working towards here at JAGGAER.”

        The procurement space itself has undergone major transformation over the past decade and suddenly, it is so much more than just a back-office function out the way of everyone else. What has been the catalyst for its transformation in your opinion?

        GR: “Procurement is really at a make-or-break moment. Supply chain and procurement have been really in the spotlight in the last couple of years. It’s been a case of ‘oh my, there aren’t any shipments coming anymore’ or ‘people are not buying the stuff that they bought before because our whole way of life changed.’ So, we were working from home, and we were not going out to restaurants or buying new clothes because we were all in our tracksuits all day. Society shifted. This meant procurement and supply chain management was really important because they needed to navigate all of this.


        “This is why expectations and visibility of these functions rose during that time. But now we’re at a critical point. Can those functions deliver the value that they should? And can they continue this momentum? This is why I’m saying we’re at the make-or-break moment and there are a lot of companies that really made this transition and change to where procurement is an advisor to the business which is so critically important. Think about everything that’s not going away such as ESG with the environmental element, human rights and the governance of those different processes. Procurement is playing such a critical role of managing all these different agendas within our board level topics today.”

        How is JAGGAER driving value to companies in a way that perhaps it didn’t before?

        GR: “At JAGGAER in procurement, you want to cater to the most mature companies but many of your potential customers are not the most mature firms. It’s a challenge and that’s the balance that you need to strike. You have to be ahead of the curve and in front of the market, so we take this very seriously. We have a dedicated team that’s only working on what we call innovation to uncover questions like how do we use these new technologies? How can we bring this into the solution? How do we drive value for our customers with these things? We did this by coming up with what we call a maturity matrix, where you can see which step of the maturity scale you are on right now.


        “It’s five steps in total but no one is at step five yet. The current technology that exists today is at step four, but the space is constantly changing. As a customer, they can measure where they are and say, ‘I might be a two at that process, but I’m a three at that’ and work out what needs attention. They can ask themselves the question, should I even do this? Does this make sense for me as an organisation? We really try to work with those maturity models because it helps us whenever we work with a customer to assess where they are and tell them this is where you can go, and this is what you can achieve by doing that. 

        “It helps us have the right conversations with our customers which was part of the vision of autonomous commerce. We have autonomous commerce as our North Star and know where we and the industry are aiming for, so it’s imperative our customers know the way too.”

        How important is it that any technology introduced actually serves a purpose instead of being introduced for technologies sake?

        GR: “People love technology, I love technology. But in business, we shouldn’t use a tool just because we like it. Tools should drive value. I won’t use something just because it sounds fancy. I’ll take whatever solution can truly solve the problem. At JAGGAER, when we evaluate solutions, we always consider what really helps us as an organisation and what drives value. At the end of the day, we are here to make our customers successful.  And how is that success measured? Each customer might have different KPIs, but in the end, it’s driving valuation and value for the company. Value can look different for your organisation, whether it’s higher customer or shareholder value. We have to be very pragmatic about the means of how we help because what works for one company potentially doesn’t work for another.”

        What does the future of procurement look like to you? How exciting/challenging does the road ahead look for the space?

        GR: “I believe it’s continuing the path that we’re on right now which is bringing more data and market intelligence into the whole procurement process. Procurement overall has to move away from gut feeling decision-making. Success stems from bringing all the information that’s needed for procurement into a solution for data-driven decision making. What I’m seeing right now is more strategic information regarding important topics such as environmental impact and human rights. All of this should make a difference and influence the decision making in procurement. This is how procurement drives the sustainability agenda of the company and reliability across the supply chain. This is really where I see procurement going. It’s about taking in all this information, being the advisor to the business, and making the right decisions to drive the company strategy. The future is exciting.”

        Author

        Sean Galea-Pace

        Published

        24 October 2023

        Estimated Read time

        5Mins

        CPOstrategy explores this issue’s big question and questions whether procurement is in need of a rebrand in order to get to the next level

        Does procurement need a rebrand?

        Procurement’s transformation in recent years has been exponential. 

        As an industry which has embraced technology at scale, there is a greater clarity in spend, expanded category coverage and increased return to shareholders. But is there enough awareness about procurement and is it doing itself a disservice? Procurement professionals aren’t often known for being great marketers. But in today’s fast-paced world, being sure an audience can understand something quickly is essential. Without strong brand potential, procurement is risking not living up to its full potential.

        For example, procurement’s brand is often left to customers to work out. To many, people think that procurement is solely about purchasing or negotiating contracts. However, they are often unaware just how innovative and exciting procurement can be. From some sections, procurement is still sometimes thought of as some back-office function tucked away out of sight. But now, particularly in the face of massive challenges over the past few years, procurement has become so much more.

        Solving talent shortages

        Shaz Khan, CEO and Co-Founder of Vroozi

        In a recent CPOstrategy Podcast, Shaz Khan, CEO of Vroozi, discussed how rebranding procurement could help solve its talent shortages. He believes the space must be more strategic than just finding themselves there one day. He told us how corporate procurement is currently in a “golden age” and that by making job roles more relatable it could encourage fresh perspectives to enter the industry on purpose instead of by accident. “When you say you work in procurement, try explaining that to your family or friends because it takes a while! In reality, we as human beings in our day-to-day lives are sourcing every single minute of every day,” he explained.

        “We are sourcing where our dry cleaning is, we’re negotiating at the farmer’s market for carrots. When we look at corporate procurement, we need to ask ourselves, do we need to be rebranding this function? We need to get more individuals not just falling into procurement by accident and make it more measured and predictive.”

        What’s holding procurement back?

        Executives “falling” into procurement has long been a common joke shared among those in the industry. But in what other line of work does such a high proportion of the workforce accidentally stumble upon their chosen industry and end up staying? It is both a compliment and an achilles heel to procurement but ultimately that method leads to periods of talent shortages which is what the industry is experiencing today. Procurement’s talent problem is not just down to one thing, given how COVID-19 impacted the industry and people’s decision to opt for a career change in the post-pandemic world. In order to address the problem, it all starts with education.

        Pauline Potter, Director of Procurement at Evri

        “I certainly didn’t know that this was a profession when I was at university and I don’t think I’m alone in that,” explains Pauline Potter, Director of Procurement at Evri.

        “It all seems crazy to me because I genuinely think this is such a fantastic career path that people can take. It’s hugely variable with loads of paths you can go down and you can apply a similar skillset to all kinds of businesses. I think the first thing procurement can do to address the talent shortage is raise the profile when recruiting.

        Nicolas Walden, Associate Principal at The Hackett Group, agrees in the importance of rebranding procurement but also believes that a lack of education could be holding procurement back. “I was talking to a CPO recently and he was saying when he looks across Europe, there’s only a small number of universities that actually offer degree level qualifications in procurement or supply chain,” he says. “I know from colleagues in the United States that there’s many more universities there that offer this level of education. This can create the entry point of a pipeline of talent for the future. This means they’ve got the skills, mindset and the training in what we need in terms of modern procurement.”

        Recruitment in procurement

        Khan highlights the opportunity procurement has to redefine how it presents itself to the workforce of tomorrow. It is his belief that getting rid of the misconceptions surrounding procurement could hold the key. “Higher education and the lack of programmes going forward after graduating is a real problem,” he adds. “Corporate procurement can be an incredible entry level area because it centres around data. You’re leveraging cutting edge toolsets and are making an impact on the company – your job isn’t boring. It’s not pushing paper back and forth or getting on phone calls with suppliers to talk about delivery schedules.”

        Fadi El Mouallem

        And procurement roles don’t just have to apply to ‘procurement people’. Global procurement executive Fadi El Mouallem affirms that people could add their valuable transferable skills from other industries and be successful within the space. “I like to attract talent from different industries, not just procurement or finance,” he discusses. “I’ve had the likes of project managers, salespeople and engineers come into procurement and they all made a career out of it.

        Success is making them feel that they belong, so they can grow into this space and make an impact. If they choose to leave procurement later, then that’s fine.”

        Procurement, like many industries, has been through a tough time. But as a sector very much at the forefront of technology innovation the future looks equally exciting and bright. By rebranding procurement, being open to people from all walks of life and empowering the talent of tomorrow to emphasise that this could be the place for them to thrive, it could bring positive change that will stand the test of time.

        Author

        Andrew Woods

        Published

        17 October 2023

        Estimated Read time

        4Mins

        This month’s cover story features Fiona Adams, Director of Client Value Realization at ProcurementIQ, to hear how the market leader in providing sourcing intelligence is changing the very face of procurement…

        It’s a bumper issue this month. Click here to access the latest issue!

        And below are just some of this month’s exclusives…

        ProcurementIQ: Smart sourcing through people power 

        We speak to Fiona Adams, Director of Client Value Realization at ProcurementIQ, to hear how the market leader in providing sourcing intelligence is changing the very face of procurement… 

        The industry leader in emboldening procurement practitioners in making intelligent purchases is ProcurementIQ. ProcurementIQ provides its clients with pricing data, supplier intelligence and contract strategies right at their fingertips. Its users are working smarter and more swiftly with trustworthy market intelligence on more than 1,000 categories globally.  

        Fiona Adams joined ProcurementIQ in August this year as its Director of Client Value Realization. Out of all the companies vying for her attention, it was ProcurementIQ’s focus on ‘people power’ that attracted her, coupled with her positive experience utilising the platform during her time as a consultant.

        Although ProcurementIQ remains on the cutting edge of technology, it is a platform driven by the expertise and passion of its people and this appealed greatly to Adams. “I want to expand my own reach and I’m excited to be problem-solving for corporate America across industries, clients and procurement organizations and teams (internal & external). I know ProcurementIQ can make a difference combined with my approach and experience. Because that passion and that drive, powered by knowledge, is where the real magic happens,” she tells us.  

        To read more click here!

        ASM Global: Putting people first in change management   

        Ama F. Erbynn, Vice President of Strategic Sourcing and Procurement at ASM Global, discusses her mission for driving a people-centric approach to change management in procurement…

        Ripping up the carpet and starting again when entering a new organisation isn’t a sure-fire way for success. 

        Effective change management takes time and careful planning. It requires evaluating current processes and questioning why things are done in a certain way. Indeed, not everything needs to be changed, especially not for the sake of it, and employees used to operating in a familiar workflow or silo will naturally be fearful of disruptions to their methods. However, if done in the correct way and with a people-centric mindset, delivering change that drives significant value could hold the key to unleashing transformation. 

        Ama F. Erbynn, Vice President of Strategic Sourcing and Procurement at ASM Global, aligns herself with that mantra. Her mentality of being agile and responsive to change has proven to be an advantage during a turbulent past few years. For Erbynn, she thrives on leading transformations and leveraging new tools to deliver even better results. “I love change because it allows you to think outside the box,” she discusses. “I have a son and before COVID I used to hear him say, ‘I don’t want to go to school.’ He stayed home for a year and now he begs to go to school, so we adapt and it makes us stronger. COVID was a unique situation but there’s always been adversity and disruptions within supply chain and procurement, so I try and see the silver lining in things.”

        To read more click here!

        SpendHQ: Realising the possible in spend management software 

        Pierre Laprée, Chief Product Officer at SpendHQ, discusses how customers can benefit from leveraging spend management technology to bring tangible value in procurement today…

        Turning vision and strategy into highly effective action. This mantra is behind everything SpendHQ does to empower procurement teams.  

        The organisation is a leading best-in-class provider of enterprise Spend Intelligence (SI) and Procurement Performance Management (PPM) solutions. These products fill an important gap that has left strategic procurement out of the solution landscape. Through these solutions, customers get actionable spend insights that drive new initiatives, goals, and clear measurements of procurement’s overall value. SpendHQ exists to ultimately help procurement generate and demonstrate better financial and non-financial outcomes. 

        Spearheading this strategic vision is Pierre Laprée, long-time procurement veteran and SpendHQ’s Chief Product Officer since July 2022. However, despite his deep understanding of procurement teams’ needs, he wasn’t always a procurement professional. Like many in the space, his path into the industry was a complete surprise.  

        To read more click here!

        But that’s not all… Earlier this month, we travelled to the Netherlands to cover the first HICX Supplier Experience Live, as well as DPW Amsterdam 2023. Featured inside is our exclusive overview from each event, alongside this edition’s big question – does procurement need a rebrand? Plus, we feature a fascinating interview with Georg Rosch, Vice President Direct Procurement Strategy at JAGGAER, who discusses his organisation’s approach amid significant transformation and evolution.

        Enjoy!

        Author

        Andrew Woods

        Published

        12 September 2023

        Estimated Read time

        4Mins

        Read in brochure format

        Welcome to issue 43 of CPOstrategy!

        Our exclusive cover story this month features a fascinating discussion with UK Procurement Director, CBRE Global Workplace Solutions (GWS), Catriona Calder to find out how procurement is helping the leader in worldwide real estate achieve its ambitious goals within ESG.

        As a worldwide leader in commercial real estate, it’s clear why CBRE GWS has a strong focus on continuous improvement in its procurement department. A business which prides itself on its ability to create bespoke solutions for clients of any size and sector has to be flexible. Delivering the superior client outcomes CBRE GWS has become known for requires an extremely well-oiled supply chain, and Catriona Calder, its UK Procurement Director, is leading the charge. 

        Procurement at CBRE had already seen some great successes before Calder came on board in 2022. She joined a team of passionate and capable procurement professionals, with a number of award-winning supply chain initiatives already in place.

        With a sturdy foundation already embedded, when Calder stepped in, her personal aim focused on implementing a long-term procurement strategy and supporting the global team on its journey to world class procurement…

        Read the full story here!

        Adam Brown: The new wave of digital procurement 

        We grab some time with Adam Brown who leads the Technology Platform for Procurement at A.P. Moller-Maersk, the global logistics giant. And when he joined, a little over a year ago, he was instantly struck by a dramatic change in culture… 

        Read the full story here!

        Government of Jersey: A procurement transformation journey 

         Maria Huggon, Former Group Director of Commercial Services at the Government of Jersey, discusses how her organisation’s procurement function has transformed with the aim of achieving a ‘flourishing’ status by 2025…

        Read the full article here!

        Government of Jersey

        Corio: A new force in offshore wind 

        The procurement team at Corio on bringing the wind of change to the offshore energy space. Founded less than two years ago, Corio Generation already packs quite the punch. Corio has built one of the world’s largest offshore wind development pipelines with projects in a diverse line-up of locations including the UK, South Korea and Brazil among others.  

        The company is a specialist offshore wind developer dedicated to harnessing renewable energy and helps countries transform their economies with clean, green and reliable offshore wind energy. Corio works in established and emerging markets, with innovative floating and fixed-bottom technologies. Its projects support local economies while meeting the energy needs of communities and customers sustainably, reliably, safely and responsibly.  

        Read the full article here!

        Becker Stahl: Green steel for Europe 

        Felix Schmitz, Head of Investor Relations & Head of Strategic Sustainability at Klöckner & Co SE explores how German company Becker Stahl-Service is leading the way towards a more sustainable steel industry with Nexigen® by Klöckner & Co. 

        Read the full article here!

        And there’s so much more!

        Enjoy!

        Author

        Sean Galea-Pace

        Published

        18 August 2023

        Estimated Read time

        1Min

        Pauline Potter, Director of Procurement at Evri, discusses her firm’s drive to delivering sustainability and offering best-in-class solutions.

        Today, Evri stands as the UK’s biggest dedicated parcel delivery firm and is armed with more than 18,000 couriers.

        It has over 8,500 local one-stop ParcelShops and lockers and a growing network of best-in-class hubs and depots. Founded in 1974, Evri has undergone significant transformation over the years, most recently a successful rebrand with Hermes UK in March 2022. And overseeing the company’s procurement function is Pauline Potter. A Cornell University graduate in the US, Potter trained as an engineer before moving into consulting at KPMG and Efficio.

        Indeed, setting the standard in procurement isn’t easy. It takes hard work, dedication and a drive to consistently deliver and meet customer demands, particularly in today’s world. However, to companies like Evri, they take challenges in their stride.

        In our recent CPOstrategy Podcast, Pauline Potter, Director of Procurement at Evri, discusses her firm’s driving sustainability while at the same time delivering best-in-class solutions while maintaining its position as the UK’s biggest dedicated parcel delivery company.

        Author

        Sean Galea-Pace

        Published

        1 August 2023

        Estimated Read time

        2Mins

        Read in brochure format

        Welcome to issue 42 of CPOstrategy!

        This month’s cover story sees us speak with Brad Veech, Head of Technology Procurement at Discover Financial Services.

        CPOstrategy - Procurement Magazine

        Having been a leader in procurement for more than 25 years, he has been responsible for over $2 billion in spend every year, negotiating software deals ranging from $75 to over $1.5 billion on a single deal. Don’t miss his exclusive insights where he tells us all about the vital importance of expertly procuring software and highlights the hidden pitfalls associated.

        “A lot of companies don’t have the resources to have technology procurement experts on staff,” Brad tells us. “I think as time goes on people and companies will realise that the technology portfolio and the spend in that portfolio is increasing so rapidly they have to find a way to manage it. Find a project that doesn’t have software in it. Everything has software embedded within it, so you’re going to have to have procurement experts that understand the unique contracts and negotiation tactics of technology.” 

        There are also features which include insights from the likes of Jake Kiernan, Manager at KPMG, Ashifa Jumani, Director of Procurement at TELUS and Shaz Khan, CEO and Co-Founder at Vroozi. 

        Enjoy the issue! 

        Author

        Andrew Woods

        Published

        23 June 2023

        Estimated Read time

        2Mins

        CPOstrategy-Magazine-41
        Read in brochure format

        Welcome to issue 41 of CPOstrategy!

        This month’s exclusive cover story features a fascinating insight into the procurement function at lighting giant, Signify.

        A forward-thinking enterprise constantly reevaluating and adapting its operations against an ever-changing landscape, Signify has recently transformed its procurement function. And so we join Luc Broussaud, Global Head of Procurement/CPO and Arnold Chatelain, Transformation Program Director for Signify’s Procurement Organization to see why, and how, they have evolved procurement at the company.

        Signify is a global organisation spread over all continents and Luc heads up the procurement function. According to Luc, he and his team no longer engage in traditional transactional procurement, but instead leverage digitalisation to deliver competitive prices as well as what they call ‘concept saving’, “Which is how we redesign or improve our product; leveraging the knowledge of our suppliers to make it cheaper, more efficient, easier to manufacture and install, and more sustainable for the planet.”

        CPOstrategy - Issue 41

        Luc joined Signify in 2018, after being the CPO of Nokia (based in Shanghai) and has always been working within procurement. He joined Signify with a broad skillset and a wealth of experience. “I joined because the people I talked to, from the COO to the CEO and CFO were all incredibly knowledgeable and passionate about procurement,” he reveals. Read the full story here!

        Not only that, but we also have some incredible insights from procurement leaders at Heijmans, Datadog, HICX, DPW, ProcureCon Asia and SourcingHaus Research! Plus, the very best procurement events of 2023.

        Enjoy the issue!

        Author

        Sean Galea-Pace

        Published

        30 May 2023

        Estimated Read time

        4Mins

        We look into the need for a supply chain reset amidst inflation concerns, supply uncertainty, geopolitical issues and sustainability drives.

        Today’s supply chains are under pressure like never before.

        Amidst inflation concerns, supply uncertainty, geopolitical issues and sustainability drives, the modern supply chain is having to think twice about the way it operates. It means companies are rethinking their supply chain strategy as well as the materials they source and the suppliers they work with. But such significant change doesn’t come easy and isn’t necessarily cheap either. Indeed, these factors have led to the necessity of a great supply chain reset. But this is no easy fix. It impacts the entire business model, from strategy, marketing and design all the way through packaging, storage and transportation.

        Supply Chain Revolution

        The first part of a supply chain overhaul is rationalising the portfolio. A major review of the product portfolio could reveal what is profitable to make or sell. In many industries, the combined effect of the rising cost of products, logistics, carbon charges for border crossings and frequent supply disruptions is increasing the cost-to-serve, reducing gross margins and making it unprofitable to hold inventory as a buffer.

        Leading companies look for ways to improve communications among the supply chain, leadership, sales, and other commercial teams so that supply chain leaders clearly understand the trade-offs required to win in the market. The most successful companies are also involving other key stakeholders in the supply chain balance equation discussion, including finance, R&D, regulatory, sustainability, and procurement. This ensures everyone understands all the implications of the proposed overhaul, particularly what can actually happen.

        COVID-19 disruptions pushed companies to reorient their supply chains around resilience. According to Bain & Company, management at one global apparel firm recognised early on that this would require a transformation that would have ripple effects across other parts of the business. In order to make the correct decision, it pulled together a cross-functional strategy team that included the heads of supply chain, finance, sustainability, consumer insights, and the product’s business unit. The team saw the supply chain redesign as an opening to not only boost resilience but also responsiveness and sustainability. It found reducing reliance on any one location would provide insulation from supply disruptions, and making its products closer to customers would speed up delivery and shrink the supply chain’s carbon footprint.

        Design to delivery and beyond

        Taking a detailed view of the entire product journey, from design to delivery and beyond, can also help to simplify sourcing, by standardising as many elements as possible, reducing the range and specification of materials used for production and packaging. This means fewer suppliers and components, which lowers the exposure to disruption. Companies should investigate whether it’s possible to use less material and/or more recycled content, and whether this can reduce total cost of manufacture.

        Today, chief supply chain officers balance multiple conflicting needs of cost, service, sustainability, agility and resilience. As a result of increasingly international trade complexity and the need to manage a widening range of risks, it’s difficult to determine where products should be manufactured and sold. While the onshoring versus offshoring versus friendshoring debate remains, it is further complicated by issues such as sustainability, trade wars, agility and, increasingly, visibility.

        In the era of mass offshoring, manufacturers have enjoyed the huge scale efficiencies of large manufacturing centres in low-wage countries. For a wide range of products, there is a now a considerable and visible shift to get closer to the end customer, to ensure a faster response to changing consumer demands, while avoiding tariffs, cutting logistics costs and reducing carbon footprint.

        Looking ahead, supply chain has little choice. It can’t stand still and wait for the next black swan event to unfold – companies must be more resilient and fluid. A great supply chain reset may not just be a “nice to have” anymore.

        Author

        Sean Galea-Pace

        Published

        22 May 2023

        Estimated Read time

        4Mins

        In EY’s January 2023 European CEO Outlook Survey, it was discovered European CEOs expect short-term challenges but have reason for optimism.

        Today’s CEO faces unprecedented challenges like never before and is tasked with navigating choppy waters.

        Amid global uncertainty caused by a potential recession and on the back of war in Ukraine and disruption caused by COVID-19, it can feel overwhelming for even the most experienced leaders.

        A positive horizon?

        Despite this, consulting giants EY has discovered reason for optimism in its January 2023 CEO Outlook Pulse survey which includes 390 responses from CEOs across Europe. While the survey found 98% of respondents are indeed expecting a global recession, the majority of European CEOs (52%) anticipate it to be temporary and not a persistent one. These figures are a greater percentage than CEOs worldwide (48%) who point to more long-term optimism for the global economy among European CEOs.

        According to the survey, 47% of European respondents believe this recession will be different from previous slowdowns. The recent crisis is more driven by myriad geopolitical challenges and an ongoing fallout from the COVID-19 pandemic compared with previous recessions primarily as a result of financial and credit market factors. Many CEOs are aware of this difference and acknowledge the necessity for new and sustainable approaches that build resilience in uncertain times.

        In EY’s last survey in October 2022, ongoing pandemic-related concerns such as supply chain issues were the most important topics. However, since then supply chain pressures have eased to some extent with data from S&P Global Purchasing Managers’ Index (PMI) showing improvement. Only 32% of European CEOs now cite supply chains as the key issue which is down from 41% in October. Given inflationary pressures and the upward movement in interest rates, European CEOs are increasingly focusing on the policies and steps they believe European governments should take to help businesses mitigate the downturn.

        About 35% of European respondents, in comparison to 32% globally, consider uncertain monetary policy and increasing cost of capital as the biggest challenge to growth. With inflation beginning to decline in November 2022 after 17 months of upward trajectory, CEOs are closely following central bank activity for potential course changes.

        A strategy change

        In response to the current recession, EU policymakers are considering more dovish economic recovery proposals instead of top-down austerity rules seen during the sovereign debt crises a decade ago. This includes rethinking debt rules to help countries navigate this downturn. Alongside this, EU governments now face pressure on how to handle the discontent of people protesting against the rising cost of living crisis and questions still remain on how extensively they will intervene. In particular, governments are reluctant to pursue austerity measures as a result of protests from the crisis 10 years ago. Meanwhile, for CEOs, financing will continue to be a challenge as a result of increased capital costs that are set to persist which disrupted growth plans.

        European CEOs have learned from previous financial crises and recognise that it is essential to think of new and sustainable strategies to capitalise on the opportunities.

        What is the way forward?

        According to EY, there are five directives which are worth exploring over the next few years.

        Investing in operations
        European CEOs identify investing internally to boost operations as extremely important. Risk isn’t only about extraordinary events; day-to-day operational failures can also lead to losses, regulatory action and reductions in share prices. Operations such as finance, accounting and supply chain have emerged as the top priority area of investment for European CEOs (41%).

        Recognising disruption and accelerating digital transformation

        Amid ongoing global pressure to embrace new technologies and a digital transformation, COVID-19 further accelerated a trend toward digitalisation. Around 38% of European CEOs (in line with 37% globally) are looking to invest in digital transformation, data and technology to emerge stronger from this downturn.

        Developing a strong environmental, social and governance (ESG) strategy

        Businesses need to ensure ESG processes are moved to the centre of business strategy. Sustainability, including net zero and other environmental issues, as well as societal priorities, is one of the key areas that European CEOs identify as a need for more investment.

        Nurturing talent

        Despite the recession, the labour market remains tight in Europe. European CEOs are weighing cost management options, with 37% considering a move to contract employment and 38% planning on reducing learning and development investments. About one third are also considering a restructuring of their workforce compared with global and Americas CEOs (36% and 42%) considering the same approach.

        Portfolio transformation

        Looking ahead, portfolio rebalancing is expected to be a key theme as CEOs will be compelled to make bold decisions regarding their business portfolio. During a recession, companies must critically assess what their core businesses are, what their focus should be and where they can create value by spinning out or selling non-core assets. Some 93% of European CEOs consider prioritising restructuring opportunities as an important initiative in the next six months.

        Author

        Andrew Woods

        Published

        3 May 2023

        Estimated Read time

        2Mins

        STADA graces the cover of CPOstrategy this month!

        Our exclusive cover story this month features Alan Rankin, Chief Procurement Officer at STADA, who discusses his company’s journey to offering a best-in-class procurement function.

        Few industries can say that statement with certainty. But for the pharmaceutical industry during the COVID-19 pandemic, finding a solution quickly was non-negotiable.  

        Indeed, Alan Rankin, Chief Procurement Officer at STADA, acknowledges the role his sector played in helping to combat one of the biggest health crises of all time. He says the COVID-19 period made him “extremely proud” to be part of the industry. “The pharmaceutical industry worked hard to come up with a solution during a time when governments struggled to cope with what happened,” he recalls. “The industry had a real impact on the world being able to handle the situation and not going into financial meltdown. That alone makes me so proud to be in this space.” 

        Read the latest issue here!

        Today, STADA stands as a renowned manufacturer of high-quality pharmaceuticals. The firm operates with a three-pillar strategy consisting of consumer healthcare products, generics and specialty pharmaceuticals. Its consumer healthcare brands such as Hedrin, Nizoral, Grippostad and Zoflora are among the top sellers in their respective product categories…

        Not only that but we also have fascinating discussions involving all the hot topics around the procurement function at the moment, with George Schutter, Former Chief Procurement Officer at the District of Columbia, Noemie Chetty, Director of Procurement of the Seychelles’ Public Utilities Corporation (PUC) and Trevor Tasker, CEO at EMCS Industries. Plus, Bob Booth Senior Partner, Finance & Supply Chain Transformation at IBM Consulting details how AI could affect the procurement function. “We are now witnessing a tipping point in the application of AI at real scale, and CPOs are wondering how this impacts them and their colleagues. This article aims to equip CPOs and their teams with some ideas to consider and some pointers on applying AI in a professional capacity to their company,” he reveals.

        All this and lots, lots more!

        Enjoy!

        Author

        Dan Brightmore

        Published

        27 April 2023

        Estimated Read time

        3Mins

        Read in brochure format

        Welcome to the launch issue of CEOstrategy where we highlight the challenges and opportunities that come with ‘the’ leadership role

        Our first cover story explores how Vodafone is leveraging strong leadership to drive the collaborations enabling businesses to champion change management and better use technology.

        Welcome to the launch issue of CEOstrategy!

        Tasked with accelerating business growth, while building the synergies across an organisation that can drive innovation to meet diverse customer needs and keep revenues on track, the modern CEO must be mentor, marshall and motivator on the journey to success.

        Read the launch issue here!

        Leadership with purpose at Vodafone

        “Leadership is purpose, it’s why do you do the things you do…”

        Our cover story throws the spotlight on Vodafone US CEO David Joosten; also Director for Americas & Partners Markets at Vodafone Business, he talks to CEOstrategy about leading from the front and setting the standards to deliver growth while keeping employees and customers happy.

        “People follow leaders that are honest about themselves. If you can reflect on what you’ve done well, but also where you need to improve it can inspire others to do the same.”

        EMCS Industries Ltd: How a CEO can navigate change management

        “Why hire talent and then tell them what do? You have so much to learn from the great people you hire. Micromanaging is not management, and it’s certainly not leadership. Let your people thrive!”

        Read our interview with EMCS Industries Ltd CEO Trevor Tasker for more thought-provoking insights on leadership from the shifting tides of the marine industry in this maiden issue.

        How to be an authentic leader

        “At the most basic human level, everyone knows what it’s like to feel heard by another person, and how that changes our behaviour. It can help anger and sadness subside and enable us to start seeing things differently. So, when employees are being listened to by their leaders, it can only help how an organisation operates.”

        Dr Andrew White, director of the Advanced Management and Leadership Programme at the University of Oxford’s Saïd Business School and host of the Leadership 2050 podcast series, explores transformative approaches to leadership for the modern CEO.

        How can CEOs drive forward culture change around diversity and inclusion?

        Diane Lightfoot, CEO of Business Disability Forum, explores the changing the narrative around diversity and inclusion in the workplace.

        “Disability is still often parked in the “too difficult” box when it comes to Diversity, Equity and Inclusion. Employers are often afraid of doing or saying the wrong thing and as a result, do or say nothing. As a CEO, the stakes feel (and often are) higher. That high profile platform can feel daunting at the best of times; when tackling an unfamiliar topic, it can feel positively overwhelming. But what we do and say as senior leaders has a huge impact. Indeed, it is critical in driving change.”

        https://www.youtube.com/watch?v=g-TRCm1dv6o

        Also in this launch issue, we get the lowdown on agile ways of working from Kubair Shirazee, CEO of Agile transformation specialists Agilitea. Elsewhere, we speak with Nirav Patel, CEO of the consultancy firm, Bristlecone – a subsidiary of Mahindra Group and a leading provider of AI powered application transformation services for the connected supply chain – who discusses the challenges facing CPOs and supply chain leaders in our uncertain times. And we analyse the latest insights for CEOs from McKinsey and Gartner.

        Enjoy the issue!

        Dan Brightmore, Editor

        Author

        Sean Galea-Pace

        Published

        14 April 2023

        Estimated Read time

        6Mins

        Jolyon Bennett, CEO of Juice, discusses how sustainability has moved to the forefront of his organisation’s operations

        A green approach is quickly transitioning away something that is ‘nice to have’ to an essential component of a company’s strategy.

        To Jolyon Bennett, who heads up UK tech accessories manufacturer Juice, being environmentally friendly is non-negotiable. Bennett has transformed the mobile phone accessories sector, having consistently introduced a series of quality, vibrant and consumer-focused products to market, ranging from portable power banks through to super-fast chargers.

        He takes us under the bonnet of his firm’s sustainability drive.

        You have recently removed all single-use plastic from your entire product range – why?

        Jolyon Bennett (JB): “Why wouldn’t you? Single-use plastic is one of the biggest polluters in manufacturing – it uses 3% of the entire planet’s oil consumption. This year, it’s forecast that there will be 50kg of plastic waste for every single one of the eight billion human beings on planet earth – that’s a lot! Consumers, manufacturers and brand owners like myself all need to get on board with the fact that we’re going to need to use and re-use plastic packaging to make different things.

        “Why have we done it? Because it’s totally the right thing to do. We need to stop making so much plastic and we need start reusing what we’ve already got. We need to stop cutting down trees in order to make paper and cardboard – let the trees grow and re-use what we’ve got. It just makes sense on a planetary level to stop consuming quite so much and start being just a bit more content with what we’ve got. Why do we need to make ‘new new new’ all the time?”

        What have you used instead of virgin plastic?

        JB: “We’re reusing, reusing, reusing. Did you know that recycled plastic – depending on its quality and density – can be recycled and re-used between seven and 200 times. Isn’t that unbelievable? It’s such an amazing material. Plastic is a vibe, and we should be re-using it. Juice is using post-consumer waste such as Evian bottles to make speakers, old milk cartons to make power banks and so much more!”

        Why do you love plastic?

        JB: “I just think we’ve got a lot of it so why not reuse it? I admire the material because it’s so durable – it’s an incredible scientific breakthrough to be able to make something that’s not only waterproof and heatproof but lasts for up to 3,000 years. There are so many different elements that make plastic a great material. I would prefer it if we didn’t have any, but that’s not going to solve the current (and ever-growing) problem of plastic waste finding its way into our oceans, and burying it isn’t the answer either. The problem is with us humans is that we just shy away from the truth – l don’t want to shy away, I want to face these problems head on and meet the challenge.”

        Has Juice taken a financial hit to make this happen?

        JB: “As an example, we sell around three million cables a year (based on last year’s figures) and each piece of packaging that we are making using post-consumer waste costs us between $0.15 and $0.25 more, so as a minimum, our increased cost for doing this is almost half a million dollars. But I still think it’s the right thing to do. Money is made up – the world could end and money would no longer matter, so let’s stop making decisions based purely on money and let’s start making decisions based on the right thing to do.”

        How do you rate the overall quality of the ‘Eco’ products compared to the ones they have superseded?

        JB: “There is absolutely no difference whatsoever, so I rate them just as highly.”

        Do customers really want these eco products or is this more for your own conscience?

        JB: “I don’t suffer from guilt so in that respect I don’t feel driven by my conscience to do this – doing the right thing has its own gravity and its own way of whisking you forward. Generally, I believe that people and businesses that do the right things will prosper. I’m a firm believer in the philosophy of ‘do the right thing and good things will happen’ so it’s a strategic choice to do something that has a positive impact because positive things attract positive things. While not every consumer or every retailer is especially interested in our sustainability drive, I do think this is shifting slightly. Maybe I do have a conscience, but the reality is that it’s the right thing to do, and the right thing gets rewarded in the end.”

        Are retailers keen to stock them?

        JB: “We haven’t given them a choice! We changed all of our products because we wanted to and we are adamant that even though the materials we are using are different, our products still perform just as well, if not better.”

        Should other tech brands follow suit?

        JB: “Of course they should, and we would happily help them do so. We’re willing to introduce other tech brands to our suppliers and guide them through the same process we’ve taken, sharing our knowledge – including the hurdles we’ve overcome – because it’s the right thing to do. I don’t understand why any brand would want to continue producing virgin plastic when they don’t have to, it just doesn’t make any sense to me.”

        What advice would you give to other brands wanting to embark on this process of removing single-use plastic from their products?

        JB: “Do it. Stop messing about – get on with it and do it. Although it may cost you a bit more in the short term, we’ve proven that consumers do generally buy more of your products if you are making the right decisions towards the environment, so you will reap this extra cost back whilst also doing the right thing.”

        What is next for Juice?

        JB: “I want Juice to be a brand that limits its impact. We’re currently doing this with our manufacturing and through our supply chain and the way that we conduct ourselves in general. I want to start releasing products that have a positive impact on humans as well as the planet – I’m a firm believer that everyone can win. There will always be a demand for technology, so I don’t believe that we should be fighting against it, however, I would very much like to see people taking their technology off grid.

        “My dream is to be able to take every mobile phone on planet earth off grid and start generating our own personal electricity. I want to create products that link to your activity – imagine if you could run 5k and the kinetic activity could generate enough energy to a charge a device such as a phone or a laptop while you do it? I’m interested in organic solutions to current chemical problems such as organic battery cells using salt water and algae as a storage method of electricity – so much so that we’re currently in discussions with a photosynthesis harvesting electronics brand about using photosynthesis as a charging capability!

        “I want to get more connected with nature and I think you can have it all – I think we can still enjoy modern technology as well as the beautiful world around us. If we can utilise our intelligence in the right way, we can all live in a perfectly harmonious symbiotic relationship with amazing technology products and a sustainable environment for all wildlife.”

        Author

        Sean Galea-Pace

        Published

        5 April 2023

        Estimated Read time

        7Mins

        Procurement is in a state of flux. Against a backdrop of economic uncertainty, the procurement landscape is volatile and requires…

        Procurement is in a state of flux.

        Against a backdrop of economic uncertainty, the procurement landscape is volatile and requires agility to navigate turbulent waters. But, despite significant disruption could there still be opportunity?

        Simon Whatson, Vice President of Efficio Consulting, is optimistic about the future of digital procurement and despite a challenging few years he is confident of a successful bounce back. He gives us the lowdown on the direction of travel for digital procurement in 2023. 

        As an executive with considerable experience in the space, we’d love to learn more about your background and how you ended up in procurement. Why was this the specialism for you and how did you get involved to begin with?

        Simon Whatson (SW): “I think the one-word answer of how I came into procurement was accidental. I studied maths at university, with a year in France, before I began looking for different roles to apply for.

        “Eventually, I was offered a position with a big plumbing and heating merchant with global operations. I worked in that supply chain team for two and a half years. Although it was called supply chain, a lot of the work was procurement, which involved negotiating with suppliers. It was after that stint there, that I discovered consulting and joined a boutique procurement consultancy. Now I am onto my third consultancy and I’m very happy here!

        “In terms of why I’ve stayed, one of the success factors in procurement is being able to work cross-functionally. Procurement doesn’t own any of the spending that it is responsible for helping to optimise. It must work with other functions and the spend owners. I quite like the people side of that, building relationships, almost selling internally to bring teams together. That really appeals to me and is a key reason why I’ve been very happy in procurement.”

        As we move into exploring procurement today in 2023. The space is filled with challenges and complexities. You only need to look at the last few years. Covid, war in Ukraine, inflation – how would you describe the world’s recent challenges and their effect on the industry and what do you feel CPOs and leaders can do to combat these issues?

        SW: “I would flip it around and say that these are not so much challenges but rather opportunities for procurement. When I started my career 18 years ago, procurement was often fighting to get a voice and there were complaints that procurement was not represented at the top table, but the war in Ukraine, inflation, COVID and ESG, these are things which are now on the C-suite agenda and procurement is ideally positioned to help companies face those challenges. If you think about COVID and the war in Ukraine, procurement is in a privileged position to help with this.

        “I see some procurement functions that prefer to do what they know, which focuses on the process and transactional side. However, there are also many forward-thinking CPOs and procurement professionals out there, that have really seized this opportunity of being on the C-suite agenda and drive the thinking and the solutions to some of these big challenges we’re seeing.”

        Although new technology in procurement has been around for well over a decade, digitalisation has become so much more of an important topic. How would you sum up where procurement and supply chain are in terms of digital transformation today?

        SW: “It’s a bit laggard, but digital transformation is difficult, and we have to recognise there are some real trailblazers. There are some firms doing some fantastic things in digital to produce better outcomes. If you contrast your experience when you’re buying something in your private life, it’s much easier than 20 years ago. You can get access to a wealth of pre-sourced things, whether it’s food, a holiday, a car, or a book. You can see reviews of what other people think of these things.

        “But when you go into your workplace as a business user and you want to buy something, it doesn’t quite work like that yet. You often have to fill in a form, send it off and wait for them to come back to you. They might come back a little bit later than you were hoping and might tell you that they don’t have that part on the supply frameworks. I think people sometimes get confused about how it can be so easy to buy something as large as a car or a holiday on their sofa at home, but when they want to buy something at work, it seems to be quite cumbersome. Digital can help a lot with that, but it is incumbent on organisations and procurement functions to figure out how to recreate that customer experience that we’ve become accustomed to in our private lives.”

        With a new generation of leaders growing up with technology, some might say that it could be a key driver in helping to speed the adoption in procurement along. Is this something you would agree with or what would you point to as a key driver?

        SW: “I do think that it will act as one of the catalysts for further digital transformation in organisations, because if procurement doesn’t manage to recreate that customer experience that the new generation expects, then they won’t use procurement going forward and will look to bypass it.

        “The analogy that I’ve used previously in this case is one of travel agents. I remember as a child, my parents were able to take us on holiday and I remember the whole process. We would walk into town to the travel agent, and look at some of the brochures of options. They often then had to phone the various airlines or resorts on our behalf. They might not be able to get through, so we’d have to come back the next day. I remember as a child being quite excited by the whole process but actually, thinking back, it was quite cumbersome. You compare that to now, with being able to review online, and you can get instant answers to your questions. It’s not a coincidence that travel agents don’t really exist anymore.”

        How much of a challenge is it to not get caught leveraging technology for technologies sake? How important is it to stay true to your approach and be strategic?

        SW: “We conducted a study of many procurement leaders and CPOs a few years ago, and one of the things that we found was that about 50% of procurement leaders admitted to having bought technology just on the basis of a fear of missing out, without any real understanding of the benefits that technology was going to bring. That was a real shock and a revealing find because technology is not cheap, and its implementation is quite disruptive. If you’re purchasing a system because everybody else is using it, then there could be some pretty costly mistakes. It is really important to make sure that when buying technology, it is because the benefits are fully understood.

        “My advice to companies when looking to digitalise is own your data, visualise that data, and manage your knowledge. If you can focus on getting those things right in that order, and make your technology decisions to support that goal, then that’s a much better way of thinking about it rather than just jumping in and buying a piece of technology.”

        It’s clear that the procurement space is an exciting, but challenging, place to be. What do you think will play a key role in the next 12 months to push the digital conversation further to take procurement to the next level?

        SW: “Looking forward, one thing that procurement needs to do and continue to do is attract the best people. Ultimately, people are what makes an organisation, and it is what makes a function successful. I think procurement has often not looked for the right skills in the people that it employs. Traditionally, it’s looked for people with procurement experience and while they are valuable and required, we also need leadership potential. People who think a bit more outside the box and aren’t so process driven. A lot of what procurement has done in previous years has been process driven, so if you’re just limiting your search of people to those that have had procurement experience, you’re inevitably going to end up with a lot of people who are process driven.

        “I think being bolder and recruiting people from different backgrounds with different skill sets is the way to go. If procurement can ‘own’ the ESG space, that will help with the younger generation see procurement make a difference. I think that’s one thing that will be key to success going forward.”

        Check out the latest issue of CPOstrategy Magazine here.

        Author

        Sean Galea-Pace

        Published

        Estimated Read time

        7Mins

        Paul Farrow, Vice President of Hilton Hotels’ Supply Management, sits down with us to discuss how his organisation’s procurement function has evolved amid disruption on a global scale

        The hospitality industry has endured a rough ride over the past few years.

        Following the COVID-19 pandemic which stopped the world in its tracks and now with millions facing a cost-of-living crisis, it’s been a period of unprecedented disruption for those involved in the space and beyond.

        But it’s a challenge met head-on by Paul Farrow, Vice President of Supply Management at Hilton Hotels, and his team who have been forced to respond as the world continues to shift before their eyes.

        Farrow gives us a closer look into the inner workings of his firm’s procurement function and how he has led the charge during his time with Hilton Hotels.

        Could we start with you introducing yourself and talking a little about your role at Hilton Hotels? 

        Paul Farrow (PF): “I’m the Vice President of Hilton’s Supply Management, or HSM as we call it. I’ve been with Hilton Hotels for 12 and a half years, and my role is to head the supply chain function for our hotels across Europe, the Middle East and Africa.

        “Over the past few years, Hilton has grown rapidly and has now got 7,000 hotels in over 125 countries globally. What is really exciting is Hilton Supply Management doesn’t just supply Hilton Hotels and the Hilton Engine because we also now supply our franchisees and competitive flags. While we have 7,000 hotels globally, Hilton Supply Management actually supplies close to 13,000 hotels. That’s an interesting business development for us, and a profit earner too.”

        You’re greatly experienced, I bet you’ve seen supply chain management and procurement change a lot in recent years? 

        PF: “The past two to three years have been tremendously challenging on so many industries but I’d argue that hospitality got hit more than most as a result of the Covid pandemic. Here at Hilton, supply management was really important just to keep the business operational throughout that tough time, but I’m delighted to say we’re fully recovered now.

        “Looking back, it was undoubtedly difficult, and you only have to look at the media to see that we’re now going through a period of truly unprecedented inflation. On top of the normal day job, it’s certainly been a very busy time.”

        Hospitality must have been under an awful lot of pressure during the pandemic… 

        PF: “Most of our teams as a business and all functions have worked together far more collaboratively than ever before through the use of technology and things like Microsoft Teams and Zoom. Trying to work remotely as effectively as possible changed the way we all had to think and the way we had to do. Now we’re back in the workplace and in our offices, we’re actually looking to take advantage of that new approach.”

        Inflation, rising costs, energy shortages, as well as drives towards a circular economy means it’s quite a challenging time for CSCOs and CPOs right now, isn’t it?

        PF: “Those headwinds have caused and created challenges of the like that we’ve not seen before. The war in Ukraine and Russia has meant significant supply chain disruption and supply shortages of some key ingredients and raw materials. China is a significant source of materials and they’re still having real challenges to get their production to keep up with demand.

        “All the local and short-term challenges are around energy and fuel pricing, so throughout the supply chain that’s been a major factor to what we’ve had to deal with. On top of that is the labour shortages. We rely heavily throughout the supply chain and within our business to utilise labour from around the world. In my region, particularly from say Eastern Europe as well as other businesses all fighting for a smaller labour pool than we had before. We are fighting with the likes of the supermarkets, Amazon’s, not just other hotel companies to capture the labour pool we need both in our properties but also within our supply chain supplies themselves.

        Hilton operates a rather unique procurement function, doesn’t it?  

        PF: “We trade off the Hilton name because our brand strength is something that we are able to utilise and we’re very proud of, but we’ve also got additional leverage by having that group procurement model.

        “We’ve got essentially two clients. We’ve got our managed estate which is when an owner chooses to partner with Hilton, they’re signing a management agreement because they want the benefit and value of the Hilton engine. That could be revenue management, how we manage onboarding clients and customers through advertising, as well as the other support we give in terms of finance, HR, marketing and sales as well as procurement.”

        HSM is a profit centre and revenue driver through its group procurement model but how does this work?

        PF: “Our secret sauce is our culture. It’s our people and that filters across all of our team members and indeed all of our functions. The key strategic pillars are the same for health and supply management around culture, maximising performance and so on as they are across the overall global business.

        “Across our 7,000 plus hotels, the majority are actually franchised hotels because that’s the legacy of what still is the model in the US. When I joined Hilton 12 and a half years ago, the reverse is true where nearly all of our hotels in Europe, Middle East and Africa, and indeed in Asia Pacific, were and are managed. In the Europe, Middle East and Africa regions right now we’re building up close to a 50/50 split between managed, leased and franchised.”

        What has pleased you most about the roll-out of the HSM?

        PF: “It’s certainly not been easy because we’ve got 70 countries that sit within our region here in EMEA and Hilton’s penetration in those individual countries is very different. We may have 100 hotels in one of those markets and only one or two in specific countries. Our scale and our ability to get logistics solutions is different by market.

        “Getting everyone on board to what we want to achieve to our guests and to our owners means we have to pull different levers. We have very effective brand standards. If you’re signing up to Hilton, you’re signing up to delivering against those brand standards that we believe are right for our organisation.”

        What kind of feedback have you had from your clients? 

        PF: “Integrity is in our DNA, and we work very closely with our suppliers who we value as partners. These are long-term relationships, and we work hand in hand because we have to see that they’re successful so that we can be successful – it’s really important to what we do and we constantly look for feedback.

        “With our internal and our external customers, we’ll have quarterly business reviews and so we’ll get that feedback through surveys where we are asking them to tell us what we do well and what we could do better. Our partners are now asking what additional value can you do to bring support to our organisation through ESG? So that’s what’s on the table now when it wasn’t before. But it’s not just that – it’s about the security of supply competitiveness, competitiveness of pricing, and a whole bunch of other very important things as well.”

        Looking to the future, what’s on the agenda for the next few years?

        PF: “We’re out there meeting and greeting people in person and there’s always new opportunities that make things exciting in what we do and how we work. Innovation’s very high on our agenda and we’re very proud of what we do in food and beverage. In non-food categories, it’s about how we support our owners and our hotel general managers to find that competitive edge and do the next big thing ahead of our competitors.”

        Anything else important to know?

        PF: “One thing we’ve been able to take full advantage of is how we’ve been able to grow our business by bolting on new customers. I think it’s fantastic that our competitors choose to use Hilton Supply Management because they benchmarked what our capabilities are and how competitive we are.

        “Another key part of the agenda is environmental, social and governance (ESG) sustainability. Responsible sourcing and everything that sits within that is front and centre of what we do. Within that you’ve got human rights, animal welfare, single use plastics as well as general responsible sourcing like managing food waste. The list is very long, but they’re all very important.”

        Check out the latest issue of CPOstrategy Magazine here.

        Author

        Andrew Woods

        Published

        Estimated Read time

        2Mins

        CPOstrategy catches up with Sam de Frates, who has been leading procurement transformation at Mars, Incorporated, to discover how one of the world’s largest enterprises has put people at the heart of its plans…

        Our exclusive cover story this month, sees us catching up with Sam de Frates, Vice President, Commercial – Europe, CIS & Turkey at Mars, Incorporated, and the leader of procurement transformation at the company, to discover how one of the world’s largest enterprises has put people at the heart of its plans…

        Read the latest issue here!

        CPOstrategy Magazine cover - Issue 39

        Talk of technological change and digital transformations often excludes the most vital tools in delivering meaningful value within an enterprise: the people. Because new tools, processes and capabilities only truly maximise their value if they are shaped by the very people that require their services. The adoption of technology without the human touch can be an expensive opportunity missed.

        An experienced procurement leader who has worked at some of the largest companies on earth, de Frates joins us for a chat from his London office to discuss how digital procurement at Mars has evolved under his guidance, whilst the company undergoes cross functional changes at scale – a hugely significant transformation with Mars Associates and its suppliers at its heart…

        Elsewhere, we also we discuss the hottest topics within the procurement function, with Paul Howard, Chief Commercial Officer at New Zealand Defence Force and Manuele Burdese, Sr Director, Head of Business Insights & Analytics Strategic Sourcing & Procurement, Bristol Myers Squibb. Plus, we have some incredible insights from Efficio, Ivalua and Hilton Supply Management.

        Enjoy the issue!

        Andrew Woods

        Author

        Sean Galea-Pace

        Published

        29 March 2023

        Estimated Read time

        6Mins

        Here are 10 of the most important leadership skills that CEOs need to demonstrate in 2023.

        In today’s world, a CEO needs to be lots of things to different people. The importance of having the leadership skill to being able to lead through unprecedented disruption was highlighted by the COVID-19 pandemic and helped to define what makes a good CEO.

        Here are 10 of the most important leadership skills that CEOs need to demonstrate in 2023.

        1. Clear communication

        Communicating effectively with employees is one of the most vital skills any leader can have. By adopting a transparent mindset, it leaves little room for miscommunication or misunderstandings. But rather than just being eloquent, CEOs should deliver meaningful content too. A CEO needs to be able to communicate the essence of the business strategy and the methodology for achieving it.

        2. Strong talent management strategy

        People are the most important component of all businesses. CEOs who are able to recruit and retain key employees have a greater chance of increasing productivity and efficiency. After recruiting good people, the key to retaining them is by harnessing a positive work environment that empowers employees to succeed.

        3. Decision-making

        As a leader, thinking strategically to make effective decisions is vital to the success of an organisation. Making decisions is a key part of leadership as well as having the conviction to stand by decisions or agility to adapt when those decisions don’t have the required outcome. While all decisions might not be favourable, making unpopular but necessary calls are important characteristics of a good leader.

        4. Negotiation

        Negotiation is a fundamental part of being a CEO. In a top leadership position, almost every business conversation will be a negotiation. Good negotiations are important to an organisation because they will ultimately result in better relationships, both with staff inside the company and externally. An effective leader will also help find the best long-term solution by finding the right balance and offering value where both parties feel like they ‘win’.

        5. Creativity and innovation

        Being quick-thinking and ready to explore new options are great skills of a CEO. Creative leadership can lead to finding innovative solutions in the face of challenging and changing situations. It means in the midst of disruption, of which it has been increasingly prevalent, leaders can still find answers for their teams. Creative CEOs are those who take risks and empower employees to drop outdated and overused practices to innovate and try new things that could lead to greater efficiency.

        6. Agility

        Without agility over the past few years, businesses would have failed. CEOs were forced to embrace remote working following the advent of the COVID-19 pandemic whether they liked it or not. Now, faced against a potential recession, these macroeconomic events are unavoidable and have to be managed carefully. Effective leaders will have their fingers on the pulse and ready to respond to changes.

        7. Strategic forecasting

        Creating a clear path forward is essential to achieving uninterrupted success. The ability to look into the future and identify trends and issues to then react to is vital. Good CEOs are able to plan strategically and make informed decisions to set goals and plan for the future easily.

        8. Delegation

        CEOs can’t do everything. A leader tends to be pulled in a number of different ways every day and it is impossible to be on top of everything. This means the importance of bringing in a team of people who are trusted and skilled in their respective areas of expertise. Successful CEOs are expert delegators because they recognise the value of teamwork and elevating those around them.

        9. Approachability