The acquisition allows FourCentric to expand its procurement and supply chain expertise in the defence and security sector
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FourCentric, a leader in procurement, supply chain and operations improvement services, has announced the acquisition of Evolve Commercial Ltd, a UK specialist in Commercial as a Service (CaaS). Evolve provides technology procurement and supply-chain support across both public and private sectors.
Effective 31 October 2025, Evolve Commercial joined the FourCentric group, enhancing the company’s capability to help UK government departments and private organisations efficiently optimise contracting for high-value and complex projects.
Evolve’s consultants bring extensive experience in areas such as complex tender transactions, post-contract management and commercial due diligence, helping clients unlock full supplier capability and enhance commercial outcomes.
“We’re thrilled to welcome Evolve to the group,” said Simon Terry, Group CEO of FourCentric. “This acquisition perfectly aligns with our strategy to deliver commercial services in support of complex technology transactions throughout the commercial lifecycle. Evolve’s specialists bring deep government procurement experience and a strong focus on delivering powerful outcomes in the defence and security sector. Backed by a highly secure infrastructure, clients are assured of secure, seamless integration and trusted, high-quality delivery.”
The addition of Evolve enhances FourCentric’s ability to build long-term partnerships with clients by offering new ways to drive value and improve operational performance.
“We are delighted to be part of the FourCentric group,” said Alan Riordan, Director of Evolve. “FourCentric is the ideal fit for us. Not so large that we get lost in the crowd, and not so small that it limits investment and growth opportunities for us and our clients. The FourCentric model provides a fantastic platform to enable the continued development of our business and our team for the future. This, coupled with the group’s clear vision: To be known as the leading procurement, supply chain and operations firm, recognised for creating significant, positive impact for our clients, people, and society, was a real compelling reason to join.”
Exiger has been awarded a huge contract to help modernise the detection of transshipment for the US government
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Exiger, the market-leading supply chain AI company, announced today that it has been awarded an exclusive, multi-million dollar contract by US Customs and Border Protection (CBP) to modernise the detection of illicit transshipment across global supply chains. Designed to evade tariffs, trade restrictions and sanctions, illicit transshipment is the practice of manipulating supply chains to disguise a product’s true country of origin. Exiger’s Trade AI will be adopted and deployed across CBP, serving as an additional tool for the US government’s transshipment detection capability.
Transshipment identification and enforcement are critical priorities for the Department of Homeland Security (DHS) and CBP. Convergent Solutions, Inc., DBA Exiger Government Solutions, will equip CBP enforcement offices and personnel across the US with access to Exiger’s AI platform and data to identify illicit transshipment at-scale and in real-time.
“Billions of dollars worth of global trade move through illegal transshipment channels that seek to bypass US restrictions,” said Exiger CEO Brandon Daniels. “A core CBP mission is to enforce US trade and forced labor laws, thereby helping ensure that American manufacturers and workers are competing on a level playing field. Exiger is proud to support this mission, bringing to bear the world’s largest proprietary supply chain database and the market’s most sophisticated AI.”
Exiger’s AI will be an additional resource available to CBP personnel to:
Detect illegal transshipment across global supply chains
Monitor and enforce tariff and trade regulations
Leverage Exiger’s proprietary AI models and trade intelligence data to enrich data in CBP systems and enhance decision making
Deploy AI-enabled validations of tariff classification, value and country of origin
Create automated bills of material for products and sub-components
Map the flow of raw materials and sub-components through global supply chains
Risk-score shipments in-real time
Collect tariff revenues earlier
Trace global supply chains to enhance import visibility and risk segmentation
Exiger’s proven AI solutions have been deployed across 60+ US Government agencies, including the Department of War, Department of State, Department of Energy, DHS, the intelligence community, and armed forces.
Exiger’s technology continues to earn top recognition. In April, Exiger was named an awardee on the Government Services Administration’s Supply Chain Risk Illumination Professional Tools and Services (SCRIPTS) Blanket Purchase Agreement, and was the highest-ranked unrestricted vendor awardee of the 10-year, $919 million contract. This year, Exiger was named a Leader in the 2025 Gartner® Magic Quadrant™ for Supplier Risk Management Solutions, a Best-of-Breed Solution and three-time Value Leader in Spend Matters’ SolutionMap, and a Leader in Omdia’s Market Radar: Firmware and Software Supply Chain Security. Exiger also won a 2025 STEVIE® Award for AI Company of the Year.
Que Tran, VP Technology – Ports and Terminals, Europe, DP World, discusses how innovation is addressing the challenges of transporting perishables
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From Romanian blueberries to Turkish figs, Europe’s fresh produce economy depends on one thing above all else: temperature integrity. In the world of perishables, it doesn’t take much to turn a successful delivery into a costly loss. A few degrees of fluctuation can spell the difference between a market-ready shipment and a complete write-off.
As demand for fresh food increases and expectations around quality, provenance and sustainability continue to grow, the pressure on Europe’s cold chain has never been greater.
According to recent forecasts, the European cold chain market is expected to grow by $76.8 billion between 2024 and 2028, propelled by rising e-commerce, growing health consciousness and increased cross-border trade in fresh food products. For businesses shipping perishables across the continent, or around the world, that growth represents both opportunity and risk.
If we are to meet this moment, we must move beyond capacity and invest in capability: infrastructure that is smarter, more connected and fundamentally more resilient.
The perishables challenge
The logistics of perishable goods are complex by nature. Seasonal spikes, short shelf lives and exacting customer requirements all place extraordinary demands on cold chain infrastructure. Add growing geopolitical uncertainty and climate volatility such as flash floods, heatwaves and disrupted harvests, then even the most robust systems are put to the test.
Traditional cold chain facilities, especially inland, often lack the visibility and flexibility required to respond in real time to issues like route changes, power fluctuations or handling delays. And as regulators and retailers raise the bar on food waste, traceability and carbon emissions, businesses are under pressure to find solutions that go beyond compliance and deliver competitive advantage.
Smarter, cooler infrastructure
At DP World, we believe that cold chain should be as dynamic as the markets it serves. That’s why we’re investing in next-generation infrastructure, tailored specifically to the needs of perishable goods. In Türkiye and Romania, we’ve partnered with agribusiness exporters to enhance reefer handling capacity and cold storage performance across our terminals. These facilities are designed with food security and product integrity in mind, and incorporate climate-controlled chambers, smart insulation systems and modal connectivity to ensure perishable cargo arrives in prime condition.
For example, at our Constanta terminal in Romania, we’ve built new roll-on roll-off (RO-RO) facilities as part of a €130 million investment. These investments are streamlining vehicle and container flows for perishable goods and connect directly to regional rail and inland hubs. The terminal now provides direct multimodal access from Romania’s agricultural heartlands to European retailers and Middle Eastern markets, making it a vital link in the region’s evolving cold chain.
Visibility means viability
Perhaps the greatest breakthrough for Europe’s cold chain lies not in hardware, but in software. While new storage facilities and transport infrastructure are essential, it is the digital systems behind them that unlock real efficiency, visibility and control. Real-time tracking and predictive analytics are enabling logistics providers to manage complexity, respond faster to disruption and ensure temperature-sensitive goods arrive exactly as expected.
These digital solutions now available provide full visibility across the cold chain journey. With IoT-enabled sensors and real-time tracking tools, we can monitor container conditions in transit. This ensures that goods stay within their temperature thresholds and provide us with data that can be shared with shippers, regulators and retailers.
These digital tools also enable route optimisation based on weather, emissions and congestion data, crucial for avoiding delays and maintaining freshness across multimodal networks. In Türkiye, for example, these systems are supporting fruit exporters by combining predictive analytics with satellite-tracked containers, giving shippers live insights into humidity, CO2 levels and location status.
Smart solutions also make inspections faster and safer. Remote cargo inspection apps reduce the risks for surveyors and cut inspection time significantly, helping perishable shipments clear ports faster and avoid spoilage.
Greener from the ground up
Cold chain logistics have historically been carbon-intensive, but that’s changing fast. At DP World, sustainability is ingrained into the infrastructure we’re building, and the modes we prioritise.
In Antwerp, where we deal with significant volumes of perishable shipments, our terminal is powered by on-site wind turbines and a biogas plant. Our fully electric automated stacking cranes (ASCs) operate with near-zero emissions. This is at the heart of our value proposition. We’ve taken steps to reduce terminal emissions across our European network by investing in electrification, renewable energy, and more sustainable transport solutions.
We’re also rethinking how the cold chain itself operates. Through the industry-wide “The Move to Minus 15” initiative, we are working with partners across the logistics and food sectors to adopt a new global temperature standard for frozen food storage, raising it from -18°C to -15°C. This seemingly small change has the potential to reduce energy consumption and emissions at scale, without compromising food safety. By aligning temperature protocols across the industry, we can significantly reduce the carbon footprint of frozen logistics and create a more sustainable future for food distribution worldwide.
Regional focus, global impact
Europe’s cold chain is not one network: it’s many, each with its own regional characteristics. But common themes are emerging. Producers want to reach more markets, retailers want greater predictability, and consumers want freshness.
In Eastern Europe, nearshoring and agricultural investment are creating new supply centres in places like Romania, Türkiye, and Serbia. These regions need modern logistics ecosystems to match their production capacity.
At the same time, congestion and emissions are driving modal shifts in Western Europe, with countries like Belgium and the Netherlands investing heavily in inland waterways and rail. The supply chain industry is aligning its infrastructure to support these goals, offering barge-ready and rail-integrated cold storage as standard in most new terminals.
Whether it’s figs from the Aegean or citrus from the Danube, Europe’s perishables need a cold chain that’s fast, flexible and ready for the future.
The road ahead
The future of fresh trade in Europe will be defined by data, design and decarbonisation. Retrofitting old warehouses won’t be enough; we need to remodel the system entirely. That can’t be done in isolation.
To deliver a future-ready cold chain, collaboration is critical. Logistics providers, retailers, regulators and tech players must co-create solutions that make sustainable perishable trade the norm. It’s now about creating confidence as well as keeping products cold for customers.
If we get it right, the benefits go far beyond logistics. A smarter cold chain strengthens Europe’s food security, supports farmers, reduces waste and unlocks trade that truly works for everyone.
Scott Parsons, Senior Manager, Transport and Logistics Sector at Menzies, discusses beating the reactivity cycle
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The return of reciprocal US trade tariffs in August after months of delays shows how quickly global trade can shift. For companies reliant on trading with the world’s largest importer, this presents a complex reality. While newfound levy stabilities offer a more predictable planning environment, they continue to raise costs and add complexity to already strained global supply chains.
But the real danger isn’t just the tariffs themselves, but how the industry responds. Absorbing costs to stay competitive, pushing them down the chain, or scrambling to renegotiate contracts are all short-term fixes. The deeper challenge lies in the ripple effects that tariffs create: disrupted sourcing patterns, longer lead times, inventory strain and price volatility.
Years of supply chain chocks like Brexit, COVID-19, the Panama Canal drought, and ongoing geopolitical tensions, have kept UK logistics in a constant cycle of firefighting.
This period of permacrisis prevents firms from innovating and increases financial risk. To thrive, the industry must break away from short-term thinking and build future-ready, tech-enabled, and geographically adaptable supply chains. The current window of tariff stability provides an opportunity to act – and to finally break free from the reactive cycle.
Make time for strategy
The first step starts with making time for strategy. For many transport and logistics firms, the biggest obstacle to long-term planning isn’t a lack of awareness, it’s a lack of time. Our research shows that 44% of UK business leaders struggle to focus on strategic priorities, becoming absorbed in day-to-day operational demands. Without deliberate action, immediate concerns inevitably push strategy aside.
The challenge then is not recognising the value of strategy but creating the conditions for it to thrive. This means freeing up leadership capacity, delegating routine tasks, and using external support where possible to ease pressure points.
Independent challenge is also crucial to planning success. Too often, firms rely solely on internal perspectives, creating blind spots that may result in overlooked opportunities and underestimated threats. Engaging external advisers, whether for financial modelling, business restructuring, or investment planning, can provide a vital second opinion and spark the shift that turns strategy into sustained advantage.
Find growth in tariff gaps
Alongside these challenges lies opportunity. The return of tariffs brings cost and complexity, but also a chance for agile firms to gain a competitive edge. Shifts in trade policy, supply chain restructuring, and international rate disparities can present new routes to growth.
Higher levies on Chinese imports, for example, are expected to lead to reduced transatlantic shipping volumes of Chinese-origin goods, indirectly lowering freight demand for UK-based firms tied to US-Chinese trade. In turn, this may accelerate supply chain diversification and boost direct trade with the UK, or alternative Asian markets.
Notably, UK tariffs are more favourable than those of many other major trading partners. As of August 1, the UK harbours a general 10% levy, lower than the EU’s 15% and China’s 30% rate. For steel, the UK rate sits at 25%, much lower than the 50% flat rate imposed on most US trading partners. For automobiles, the UK benefits from a 10% rate on up to 100,000 vehicles exported annually to the US, compared to the EU’s 15% rate without volume caps.
These tariff imbalances offer UK firms a potential market edge. Firms that realign their sourcing strategies can strengthen their position, while freight forwarders and customs brokers may see a rise in demand for advisory services like tariff mitigation and origin planning to help navigate increasingly complex tariff structures.
Flexible warehousing, bonded storage, and multi-modal solutions are also likely to grow as businesses look to reroute goods, with providers like Clipper Logistics already expanding their offering here to meet demand.
Think beyond immediate costs
Strategic discipline matters just as much when deciding where and when to invest in technology. Tools like Automation, AI, and digital fleet management tools can cut costs and boost efficiency, but they require an upfront investment. Competitors that take the leap here gain a competitive advantage, leaving late adopters struggling to keep up.
Too often, investment decisions hinge on immediate affordability, instead of forecasting how costs and revenues will evolve. This short-term view can expose firms to sudden price increases or revenue shortfalls. Instead, firms should regularly stress test their strategies against different scenarios and risks. This helps leaders prepare for scenarios from fuel price swings to changing customer demands or new regulatory changes.
Developing a robust financial model is critical too. Tracking cashflow projections, operational costs and the impact of external market factors can further protect against risk. Building in additional tools like customs and duty optimisation software can help identify cost-saving import or export structures and even leverage free trade zones through route optimisation.
Taken together, these strategies can help position firms to seize opportunities, whether that is through expanding their fleet, adopting new technology, or exploring new markets, rather than shielding against risk.
Lead through change
Tariffs are no longer a temporary disruption – they’re becoming a defining feature of global trade. For UK transport and logistics firms, long-term success depends on moving beyond reactive crisis management and embedding resilience into every part of the supply chain. This starts with making time for deliberate strategic planning, supported by financial modelling, stress testing, and scenario analysis.
Firms that diversify sourcing, invest in automation, and leverage the UK’s relative tariff advantages will be better positioned to adapt and compete. Just as importantly, making space for long-term thinking through leadership focus, structured planning, and external insight will allow companies to turn policy shifts like tariffs into sources of stability and opportunity. The businesses that act now to future-proof their operations won’t just survive the next trade shock they’ll lead through it.
Strategic partnership enables 3PLs to access all-electric delivery capacity through integrated end-to-end platform
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TEG, the leading fintech-enabled platform serving transport and logistics, today announces a new partnership with HIVED, the UK’s first fully electric parcel delivery company operating a fleet of electric HGVs, enabling logistics providers to seamlessly access tailpipe emission-free delivery solutions as demand for sustainable transport accelerates.
Through TEG’s end-to-end platform, logistics providers can now seamlessly access HIVED’s 100% electric fleet, including 44 tonne electric HGVs operating seven days a week, which deliver up to 76% emission reductions per parcel and maintain a 99% on-time delivery rate across same-day, next-day and two-day services.
Key partnership benefits include:
Instant access to sustainable capacity: TEG platform members can immediately source electric vehicle capacity from HIVED without lengthy onboarding processes
Seamless settlement: TEG’s SmartPay system enables automated payments and invoicing for HIVED services
Data-driven insights: Real-time carbon tracking and analytics help 3PLs demonstrate sustainability impact to customers
Meeting growing sustainability demands
The new partnership addresses growing market demand for sustainable logistics solutions. Research from TEG’s recent 3PL whitepaper reveals that 67% of 3PLs identify sustainability as a pressing procurement challenge as new emissions regulations reshape carrier requirements.
Luke Austin, Operations Project Manager at HIVED, said: “Through our partnership with TEG, we can now offer our fully electric delivery network to their entire platform of logistics providers. TEG’s integrated compliance and payment systems make it seamless for 3PLs to access our all-electric services, enabling them to significantly reduce supply chain emissions while moving closer to their sustainability goals. With electric vans saving up to 260g of CO₂eq per kilometre, this partnership unlocks substantial carbon savings across TEG’s network.”
Technology-enabled collaboration
TEG’s platform eliminates traditional barriers to carrier collaboration by providing instant compliance verification, automated onboarding, and integrated payment solutions. The partnership with HIVED exemplifies how technology can accelerate adoption of sustainable transport solutions.
Lyall Cresswell, founder & CEO of TEG, said: “As the logistics industry faces mounting pressure to decarbonise, partnerships like this demonstrate how technology platforms can accelerate the transition to sustainable transport. By making it effortless for 3PLs to access HIVED’s fully electric network, we’re removing the friction that traditionally slows adoption of innovative, sustainable solutions.”
The new partnership comes as both companies experience rapid growth. HIVED’s rapid expansion has seen it become recognised as one of the fastest-growing startups in Europe, whilst TEG supports over 9,000 businesses and manages 2.5 million loads annually.
Camilla Gilone and Fabrice Lebecq of Heidrick & Struggles
Published
3 October 2025
Estimated Read time
4Mins
Recent global challenges have elevated the supply chain leader to the executive suite, reflecting a fundamental shift
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Over recent years, the chief supply chain officer (CSCO) role has undergone a profound transformation, particularly in sectors where supply chains are mission critical such as consumer goods, industrials, healthcare, and pharmaceuticals. What was once considered a technical or operational function has evolved into a driving force behind enterprise strategy.
This evolution has been accelerated by a series of global disruptions, most notably with the COVID-19 pandemic. Nobody needs to be reminded of the deep vulnerabilities the crisis exposed across supply chains worldwide; practically overnight, a rapid reconfiguration of how supply chain leadership was structured and empowered became critical. Combined with ongoing geopolitical instability, regulatory pressures, and rising stakeholder expectations, the signs are clear: the CSCO is now essential to competitive advantage.
In response, companies are recalibrating how they staff and support their supply chain leadership. Since January 2023, 36% of the world’s largest publicly listed firms have appointed new CSCOs. These changes signal a broader rethinking of what the role entails, and who is best positioned to lead it.
From functional specialist to strategic architect
The growing scope and complexity of the CSCO role is matched by a corresponding rise in enterprise influence. Once focused primarily on cost and efficiency, today’s CSCOs must also navigate a broader landscape that includes sustainability, digital transformation, risk mitigation, and resilience.
Through conversations with seasoned supply chain executives worldwide, it is evident that the CSCO role has been evolving for some time, predating the pandemic, and has accelerated significantly in recent years. Whereas the role previously encompassed a limited set of priorities, it now spans a broader spectrum, including sustainability, digital transformation, and agility.
Within this expanded context, CSCOs are increasingly redefining their role – not as operational enablers or as executional support, but as strategic architects of enterprise value. They now sit on executive committees, report directly to CEOs, and maintain regular access to the board. In other words, boards are now much more open to the transformative power of a CSCO.
Why elevating the CSCO role matters
· Strategic alignment and faster execution The CSCO serves as a vital link between business strategy and operational delivery. With many peers on the leadership team coming from commercial backgrounds, the CSCO’s operational acumen offers a crucial balance, ensuring initiatives translate into results.
· Increased agility in a volatile world CSCOs are typically first responders when crises strike. Their ability to make rapid decisions—on everything from product line adjustments to supplier realignments—is enhanced when they have a seat at the top table.
· Talent magnetism
Elevating the CSCO position boosts its attractiveness to emerging leaders. By investing in career paths, leadership development, and visibility, some organisations are turning supply chain functions into high-potential talent pipelines.
The enterprise-centric CSCO
Today’s CSCOs must operate as business leaders first, and functional experts second. While many still come from traditional supply chain backgrounds, companies are increasingly prioritising broader business acumen, seeking candidates with commercial, P&L, or transformation experience. This shift reflects the growing need for CSCOs who can contribute strategically, anticipate regulatory and geopolitical risks, and lead complex, enterprise-wide transformations.
Equally important is the CSCO’s ability to manage a widening network of stakeholders. From peers and boards to regulators and suppliers, today’s supply chain leaders must translate operational complexity into strategic clarity. Their success now depends as much on influencing and communication as on technical mastery, marking a decisive evolution from the function’s historically executional role.
Rethinking succession and talent pipelines
Despite the strategic elevation of the role, there will always be turnover at the top, and many organisations still lack robust succession plans for CSCOs. This is especially concerning given the relatively short average tenure of a little over four years and a high rate of first-time appointments: in 2024, 65% of external CSCO hires in 2024 were step-ups.
To avoid setbacks caused by a gap in the CSCO function, succession planning must be reimagined across three key dimensions:
Future-focused profiles: Companies must define the CSCO role based on future needs.
Tailored development programs: Internal talent development is increasingly crucial.
Detailed, proactive planning: Organisations must develop data-driven, scenario-based succession plans.
The road ahead
The COVID-19 pandemic may have accelerated the shift, but the strategic ascent of the CSCO is not a short-term response – it is a long-term evolution. As companies face continued disruption, increasing complexity, and stakeholder scrutiny, the CSCO is emerging as one of the most consequential roles in the C-suite.
It’s all about flexibility and resilience. Speed of change has massively increased, and the size of those changes is becoming bigger. Organisations that invest in the right leadership, redefine the capabilities required, and reimagine succession planning will be best positioned to not only manage uncertainty, but to turn it into a strategic advantage.
Our exclusive cover story this month centres around procurement evolution at ORO Labs, with CEO and co-founder Sudhir Bhojwani, Shachi…
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Our exclusive cover story this month centres around procurement evolution at ORO Labs, with CEO and co-founder Sudhir Bhojwani, Shachi Rai Gupta, Vice President of Strategy and Innovation at ORO, and Lance Younger, EVP, EMEA GM and Global Partnerships – the trio having a proven track record in procurement transformation. And together, they explore the rise of the digital procurement ecosystem and how technology-led, strategic partnerships are transforming procurement.
Inside ORO Labs
In September, ORO launched the ORO Partner Enterprise Network (OPEN). OPEN cultivates deep, lasting relationships with consulting and technology partners who share a commitment to innovation and customer success.
“An ecosystem isn’t just a collection of digital solutions. It’s consulting partners, specialised tech providers, and human expertise all working together,” explains Lance Younger, EVP, EMEA GM and Global Partnerships at ORO Labs. “Each contributor brings unique value, whether it’s cutting-edge technology, research, or individual knowledge. By combining them, you unlock outcomes that no single solution could achieve: greater efficiency, stronger effectiveness, a far better experience, and stronger economics.”
Leading ORO is CEO and co-founder Sudhir Bhojwani. Since founding ORO, his mindset of how no one single tool can do it all has never shifted. He affirms large enterprises need an ecosystem instead of just one solution, and ORO was built with that philosophy from the ground up. “Our architecture reflects that,” he explains. “For example, ORO included an embedded Integration Platform as a Service (iPaaS) layer from the very beginning, not as an afterthought, but as a core principle because we knew integration was essential”…
Elsewhere, we have a fascinating interview with Diageo’s Marisa Schoeman, VP of Planning & Logistics for Africa who talks about the beverage giant’s expansion across the region. And, we pay a visit to the Exiger Executive Forum to see how supply chains should prepare for war. And we grab some time with Brenda Spoonemore, VP at Amazon Business, to learn more about shifting procurement priorities, digitally-driven innovation, and overcoming the challenges of today’s economy…
The proof, as they say, is in the pudding – and the evidence of TealBook’s increasingly-successful evolution lies in its client relationships
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We talked endlessly about data and AI at DPW New York 2025. A universal truth is that the successful implementation of AI requires clean data; it doesn’t have to be perfect, but businesses certainly need to have a decent handle on their data before adopting AI tools successfully.
To help make this a reality, North American data and software company TealBook has recently announced a legal entity-based data model. It’s designed to resolve supplier records to the correct legal entities, map parent-child relationships, and enrich profiles with verifiable attributes, enabling accurate supplier data to flow seamlessly into procurement systems and AI applications. “This is part of a 12-year journey for TealBook,” says Stephany Lapierre, the company’s Founder and CEO. “Our vision has always been to build a way to enable procurement organisations to have high quality data with a lot of integrity, in order to give them the trust they need to put data directly into their systems.
“Twelve years ago, we underestimated the complexity of getting large enterprises to trust a third-party data solution. As part of our journey, we started using AI early on to find information where it exists on supplier websites and databases, and start creating digital profiles in a structured way for procurement to access it, match it to their vendor master, and use it.”
TealBook’s evolution
But, again, at the beginning, TealBook couldn’t be sure whether the data was high enough quality. In 2017, the company was primarily known as a supplier discovery application, positioned as a pre-sourcing engine to help procurement teams identify alternative suppliers. At the time, TealBook’s data and models enabled it to determine which companies were similar to others, allowing users to search and find comparable suppliers to expand their sourcing options.
“But that was just a way for us to deliver something that was underserved in the market,” Lapierre continues. “Then our customers started asking for certificates, which are hard to collect and match. They needed cleaner data. They felt they were under-reporting. So in 2018, we started to see whether our technology could refine the data more, and focused on certificates and supplier diversity. We collected great use cases along this journey, and the vision never wavered.
“Just last year we released a new technology – completely different, really sophisticated – allowing us to pull from a lot more data sources, and we have provenance so our customers can actually verify where the data’s coming from. We can match it to vendor masters. And now, we also have this new model that includes 230 million verifiable global legal entities from across 145 countries’ registries. We marry this with global parent and child hierarchy, which is really hard for our customers to match themselves.”
Partnership with Kraft Heinz
Now, after 12 years of that vision, TealBook is deeply proud of what it’s achieved. Part of its ability to get to this point is due to early adoption from key customers. Kraft Heinz is a business which Lapierre describes as a “co-innovation partner”, and has been invaluable in helping TealBook achieve its recent goals.
From the perspective of Stefanie Fink, Head of Global Data and Digital Procurement at Kraft Heinz, the partnership has been an immediately valuable one. “It really started with having a visionary, like-minded relationship,” she says. “That’s an important piece of it, because my vision for procurement is that we are partners in our enterprise.
“In order for us to do our jobs, we have to bring in the right data for use. This is where Stephany’s partnership and vision really resonated. We were really looking for diversity and we could make things easier for our partners, while making sure we had the right people in our ecosystem. We also had to lift up the hood and see what was underneath everything we’ve got. Stephany brought our vision to life. TealBook has evolved too, as we’ve seen; it’s more about orchestration and software-as-a-service. It has been a partnership of need and we cannot continue to do other things without this kind of partnership around data.”
When initially dabbling with this relationship, Fink was clear that Kraft Heinz had no desire to be taking care of more stuff. What she wanted from TealBook was a strong focus on good quality data. After last year’s product release from TealBook, Kraft Heinz already saw its data enriched by 25%. The recently-announced new data model gives the business and TealBook’s other customers the right structure tied to a legal entity, which is a highly credible anchor. “We’re able to do entity resolution – all automated – remove all the duplicates, and then you start with a clean, digitised vendor master,” says Lapierre. “That’s what brings further enrichment.”
The challenge of assessing data quality
Assessing its data before involving TealBook was important for Kraft Heinz, but challenging for such a large organisation. “We had to fail first and fail fast,” says Fink. “We tried some AI around fixing things early, but that didn’t work for us. It was a real eye-opener, realising where this next evolution could take us regarding focusing on AI and agents for the right things, not the meaningless things. Before, we were asking agents to tell us if things were duplicates, when we should have been asking: what do these suppliers offer? Where is the innovation? Where is the value?”
What surprised Fink most when looking under Kraft Heinz’s hood was the lack of attention that was being paid to what the business was doing. “It was amazing that nobody had questioned it sooner,” she says. “So I said, let’s take this as a crawl, walk, run approach, and I have a wonderful CPO who really understands where we want procurement to go as a function. She was excited about us just getting it done and getting people involved, and that’s what it takes: real pride in ownership of the data.”
Getting engrossed in GenAI
True partnership and an all-in approach has enabled Kraft Heinz to work successfully with AI – something some businesses are struggling with as the conversation around artificial intelligence grows louder. For Lapierre, as the CEO of a tech company, adopting AI successfully has meant trying and failing and being fully entrenched in AI as it has evolved.
“We’ve been using AI in our technology since 2016,” she states. “We’re an early adopter. We’d be talking about scraping data, and data in the cloud, and AI models, and our customers’ pupils would widen in surprise. We’ve come a long way and the market has come a long way.
“The technology we deliver today wouldn’t be possible without the AI tools now at our disposal. We used to build models; we don’t do that anymore. We spend a lot of time investing in engineers to build and test models, and that’s made us so much more efficient. I use GenAI every day for so many things now, and I’m encouraging my team to be so involved in AI. That’s how you build expertise, and you need really strong expertise to use GenAI well.
“Getting good with AI is about taking risks and having a leadership team that pushes for new things, and suddenly the successful use of AI becomes a habit.”
Fraser Robinson discusses the challenges threatening supply chain planning, why visibility isn’t enough, and what being future-ready means
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It’s safe to say it’s been a particularly turbulent time for the global shipping and logistics industry. Disruption is ever more frequent and unpredictable. Geopolitical conflicts, tariffs, major climate events, and economic uncertainty all require constant attention and adaptation.
In just one week, the US and Japan struck a trade deal at the same time as the EU set out plans to match the US’s tariffs of 30% – the latest in a wave of rapid policy changes that continue to reshape global trade. Between October 2023 and October 2024, G20 countries introduced 91 new trade restrictions affecting over $828 billion in goods, more than triple the value seen the year before. These frequent tariff changes, with some being as large as they are too, will impact anything from freight costs to route selection and sourcing strategies.
Regarding sustainability, regulations to limit Scope 3 greenhouse gas emissions and safeguard marine ecosystems can require adapted routes to increase efficiency and avoid protected areas. In April, for example, the International Maritime Organisation approved new net-zero regulations for global emissions, aiming to reach the target by 2050.
All of this shows how quickly tides can change – and why having real-time visibility over carrier shipping routes, freight rates and logistics is integral to being able to adapt just as fast. But visibility alone isn’t enough. When disruption strikes, teams need to act quickly – and relying on back and forth emails and spreadsheets won’t cut it.
Supply chain managers are in real need of digital tools that not only unify their data, but also enable real-time collaboration and seamless communication with partners across the network. Improving the speed and the accuracy of the decision making process.
The unpredictability of the modern supply chain
Tariffs can bring major changes to shipping trends and patterns. But they’re far from the only source of unpredictability. The climate crisis is triggering more damaging and widescale events that can cause disruption in the blink of an eye. A recent NASA study left researchers “amazed and alarmed” at just how sharply the rise in the frequency, length and severity of extreme weather events like floods and droughts has been in the last two years. So, it’s integral to build and evolve supply chains that are able to withstand these unprecedented changes.
Then you have a range of other factors like port congestion, labour disruption and emerging tech risks, which can all heighten unpredictability. For example, the number of parties involved in a shipment leaves the supply chain susceptible to cyberattacks such as ransomware, where cybercriminals lock down systems until they are paid a ransom.
If just one supplier suddenly can’t make a delivery as their internal systems are frozen, then shipping carriers, ports and warehouses all need to adapt to new schedules and orders to maintain operational efficiency. Not to mention the impact of cashflow from stock outs.
The (massive) need to go digital
Naturally, trying to coordinate across a global network of carriers, suppliers, warehouses and customers can be time consuming and chaotic. Spreadsheets and emails are still widely used in supply chains to organise shipments and communicate – but this creates fragmented processes, a sea of data silos and a lack of real-time coordination. No wonder 86% of operations leaders in a PwC survey said their company needed to invest in better tech to track and measure supply chain risk.
With disruption never far from shore, every partner in a supply chain needs access to the same real-time picture of moving goods. By tracking freight and providing automated alerts for any shipment disruptions or delays that take place, the latest digital platforms can display all relevant logistics data and shipping documents on a live tracking dashboard, and these dashboards are easily shareable via a link to every stakeholder.
Not only does this allow stakeholders to view and spot risk sooner, but it brings together every supply chain partner into one location. In turn, this makes it easier to triage issues and coordinate action plans to maintain the flow of goods. For example, it makes it simple for parties to confirm and share cargo ready dates with suppliers and forwarders, or resolve issues in an embedded chat. And by receiving timely notifications, supply chain professionals can act quicker to mitigate the negative impact of delays and disruptions.
Weathering future storms
The unification of data and communication is not only about firefighting immediate disruption. These capabilities are integral to taking a wider view and forming resilient supply chains that can weather the unpredictable and changeable nature of the industry. We need more advanced methods for measuring metrics like carrier performance and emissions and then using this data to optimise routes and reduce factors like demurrage and detention costs.
Are there ways to understand the frequency and severity of delays by carriers? How about understanding which carriers and forwarders are delivering the quickest, most reliable service? The monitoring of data over time can provide the answer to such questions. Supply chain managers can build ETA accuracy reports, for instance, that compare initial ETAs against ATAs. They can benchmark transit times and accrue objective performance insights that inform decisions about choosing suppliers and routes and ports. It all comes down to having data in one place that can be analysed by AI and provide key, and complex insights.
Of course, there is also an increasing onus on balancing performance with sustainability.
Carbon reports can analyse crucial metrics like distance, vessel and carrier to paint a clear picture of the carbon impact of each shipment. By understanding this impact for different routes and carriers, supply chain managers can make much more informed and sustainable choices when planning their routes. And with consumer and regulatory scrutiny set to intensify, the ability to be transparent through carbon reporting can increase trust and brand reputation.
Disruption is becoming more of a normality in supply chains – it’s something that is predictable. What supply chain professionals can’t predict is what that disruption will look like and where it might come from. As with anything in the modern world, data and communication are crucial to responding quickly to these events as well as implementing changes that improve the overall resilience of supply chains – and choosing sustainable options is generally choosing more reliable ones too.
More turbulence will come, and digital solutions offer the best route for keeping goods and shipments sailing through the storm.
From automating decisions to redefining procurement talent, AlixPartners lays out why risk-takers lead the way.
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The use of artificial intelligence (AI) in procurement is gaining traction with many organisations already looking at how the technology can improve processes. However, there’s scope to go beyond efficiency and instead focus on transforming value delivery.
At DPW New York, we spoke to Amit Mahajan and Aaron Addicoat from AlixPartners, a management consultancy firm doing things a little differently. The organisation is advising its clients on how to implement AI to drive value, but it’s also using AI internally, too.
“AlixPartners has a unique business model,” explains Addicoat. “We have a very senior model, very few junior resources. So now you imagine taking people with 10 or 15 years experience and now you equip them with AI… For us, it’s a huge unlock.”
This is about more than just productivity gains. AlixPartners focuses on using AI to transform the way procurement teams work, while crucially, maintaining the human touch.
How procurement professionals are using AI
With the support of technology, it’s possible to shift procurement from a cost-saving exercise to a potential revenue driver. Procurement teams are already looking for these opportunities, as Mahajan explains. “They’re starting to think about new ways of doing things,” he says. “It’s not just automation, but asking how do I leapfrog and do something differently?”
There are plenty of use cases where AI is helping with automation. This is a great place to start as it frees up human workers to do more valuable jobs that need a personal touch. “I have a client who’s using AI every day,” says Addicoat. “This allows them to review documents and contracts rapidly, to find key clauses and termination dates. They’re also using it in spend control processes to identify which things need to be reviewed more thoroughly.”
Many organisations are also using AI agentically to create their own bots. This gives teams a more accessible way to review information. “One example is a client who’s using AI for their business to help with acronyms,” says Addicoat. “They built it as an acronym tool to help break down the language barrier between different functions using different terms. This led to better engagement.”
This empowers employees across an organisation to be more autonomous while still getting the full picture. Agentic AI, especially, allows them to interact with information in a way that previously would’ve required specialist technical knowledge. Now, it’s possible to query information within a contract directly.
“It’s about using agents and AI to look at anomalies within your procurement contracts,” explains Mahajan, “and be able to help the category analysts, the category specialists, and others to get more of those insights.”
While generative AI might be a hot topic, it’s not the only way to use the technology. In combining several sources of data and using AI to spot trends, it’s possible to create workflows tailored to the current environment. Addicoat explains: “We take a series of data inputs, such as weather patterns, lead times, contractual terms, inventory, and forecast. Then the AI generates the purchase order, queues it for review, and upon approval, places the order.”
This can help an organisation to place orders with the right supplier in the most timely fashion to avoid delays, and optimise for cost, for example. This fully automates the end-to-end process, using AI to interpret those important data signals.
While this is useful for procurement teams, it’s only the start. “Using AI in this way is really cool,” says Addicoat, “but what I found most fascinating is that you’re building a data model, and with AI layered into it, that over time can tell you how to optimise itself.”
This has huge implications for procurement teams looking to save money and drive revenue. “For example, it could tell us the commodity price at a certain point in time was low,” says Addicoat, “but because inventory capacity to hold resin was maxed out the client could only buy so much at that low price. So now investing in a new storage unit at a cost of a few hundred thousand dollars could, under the same scenario in the future, save millions of dollars..Data quality challenges
A roadblock that can stop procurement teams from fully embracing AI is a lack of quality data. With so many sources of information, often including paper-based documents, some might think it’s difficult to get the data AI needs to be truly useful.
“Don’t wait for everything to be perfect before you get started,” says Addicoat.
This is a sentiment echoed by Mahajan: “Use AI to solve your data problem before solving your business problems.”
This requires a mindset shift. While AI can help cleanse, enrich, and structure existing unstructured data, it’s important to take the right approach. Shift from asking ‘what can we do with our data?’ to ‘what value do we need to create?’ and work backwards from there.
With this approach, the questions are less about the data and more about the business problem. This then allows you to use AI to work with the information you have to help answer those questions.
“Start with the value proposition in mind and work backwards,” explains Addicoat. “You can get data from anywhere — it has to serve a purpose.”
Bringing back the human touch
AI can free up procurement teams to focus on tasks that need more nuance and expertise. Using technology to automate workflows and make information more accessible has a huge impact on employee productivity. “It’s fundamentally transforming the way they work, the amount of work they can do, and the type of work they’re able to do,” says Addicoat.
There’s always the worry that with any new technology, the human element will be forgotten. “With every new advancement that comes in,” says Mahajan, “whether that was a steam engine or when computers came along, everybody wondered what they were going to do. But as humans, we always find ways to start doing higher-level work.”
This means that many professionals will find new ways of doing things. “Imagine all the mundane tasks you have to do in your daily job now,” Addicoat continues. “With these new ways of working, imagine the speed with which you can turn an idea into something real. All that time you free up allows you to go talk to people and build relationships that mean something.”
On the other side of things, the sheer volume of AI-generated content out there is going to drive people towards those more meaningful interactions. “You don’t know what to trust and what to believe anymore,” Addicoat says. “That’s going to lead to a resurgence in face-to-face content, being at the office, and being at events.”
AI’s impact on procurement talent
The talent landscape is changing. With technology playing a larger part than ever before, organisations don’t just need procurement professionals, they need adaptable, tech-savvy people. The nature of the job means that those in procurement need a wide range of skills.
“We do everything,” says Addicoat, “legal, operations, supply chain, negotiation, analytics. Procurement professionals are generalists.”
Tech plays into every element of that skillset, which means tech skills are becoming even more important for candidates applying for procurement roles. “Nobody goes to college thinking they’ll be a procurement professional,” says Mahajan, “but with AI and tech, that’s changing.”
With procurement often seen as a proving ground for leadership, embedding these tech-minded generalists could have a huge impact on the future. “We have a shortage of talent,” explains Addicoat. “But with more and more CEOs and COOs coming from procurement, that speaks volumes to what procurement does and the value it brings, as well as what the future holds.”
At AlixPartners, the passion for procurement is very clear with Addicoat saying: “There are only two kinds of people in the world: those who love procurement and those who don’t know it yet.”
Change is coming
With AI of all forms steadily gaining traction, procurement could change dramatically in the coming years. It’s the organisations that are willing to take risks and embrace change that will come out on top.
“AI has the potential to disrupt the whole management consulting world,” says Mahajan. “Firms focused on transformation will thrive.”
With AI’s capabilities increasing rapidly, it’s difficult to predict what comes next. However, adaptability is key. “Hold onto your hat. In a year and a half, the world’s going to look very different,” concludes Addicoat.
Moving the supply chain can often be a knee-jerk reaction, but it’s important to think strategically about whether relocating is the best idea
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1. Why do you think moving the supply chain tends to be a knee-jerk reaction when tariffs rise or trade tensions flare?
It’s a reaction that comes from a place of urgency. Tariffs go up, or trade tensions escalate, and there’s a natural impulse to act quickly – especially when there’s pressure from leadership or shareholders. On the surface, moving a supply chain seems like a strong, decisive move. But in reality, it’s rarely that simple.
More often than not, relocating is a reaction to symptoms rather than strategy. Companies that take a step back and model the full impact – including the hidden costs – usually find the situation is more nuanced. As I’ve seen firsthand, staying put can often be the smarter call when you factor in the broader operational picture.
2. What’s the best way to assess total landed cost when considering a relocation?
You really need to go beyond tariffs and labor rates. A solid total landed cost analysis should include freight costs, customs duties, inventory holding, quality risks, and the cost of time – how long it’ll take to requalify a new supplier or ramp up a new site.
You also want to include softer but very real risks: supplier reliability, logistics infrastructure, responsiveness, and even talent availability. In my work, we use a scenario-based approach that models different outcomes – best case, most likely, worst case – because it’s rarely a linear comparison. You’re not just swapping one cost center for another; you’re rebuilding an ecosystem.
3. What’s the potential cost of relocating too quickly? Is there anything companies tend to overlook?
Yes – and quite a few things, actually. A big one is requalification, especially in regulated sectors. That process can take months and delay your go-to-market timeline significantly. Another is supplier know-how. Longtime partners often bring embedded knowledge – whether that’s tooling nuances, production techniques, or troubleshooting expertise – that’s hard to replicate elsewhere.
Companies also tend to overlook the operational strain. Transitioning a supply chain can drain resources internally – procurement, quality, engineering – and if you’re already stretched, that can be a real problem. Rushing into a move without a proper risk buffer can end up being far more expensive than the tariff you were trying to avoid in the first place.
4. How should companies weigh short-term political or economic incentives against long-term resilience?
It’s a balance. Short-term gains – like avoiding a specific tariff – can be compelling. But the question we often pose to clients is: Will this decision still hold up two or three years from now? Because trade policies change, political winds shift, and if your new setup is fragile, you’re simply moving from one kind of exposure to another.
Resilience is about building supply chains that can absorb shocks. That might mean sticking with a higher-cost geography because of consistency, or diversifying – not relocating – to mitigate risk. If you can model both short-term and long-term impact, and stay aligned to your strategic goals, that’s where smart decisions emerge.
5. What should companies look at when evaluating whether a country’s infrastructure or labor pool can support their supply chain needs?
There are a few core questions to ask: Can the region support the technical complexity of your product? Is the infrastructure – ports, roads, utilities – reliable? Is the labor market deep enough, and are the right skills available? And what’s the regulatory environment like – predictable, or prone to sudden shifts?
We always advise talking to companies already operating in the region. That real-world feedback – on logistics bottlenecks, compliance challenges, or workforce availability – can often highlight issues that aren’t immediately visible from data alone.
6. In your experience, what are the signs it’s time to seriously consider relocating sourcing or manufacturing?
When the risks become structural – not just a one-off disruption or a temporary cost spike. If your supplier can’t meet compliance or ESG standards, if you’re consistently seeing quality or delivery issues, or if the geopolitical environment starts affecting your ability to operate with confidence – that’s when a relocation conversation becomes necessary.
It’s also important to remember that “relocating” doesn’t always mean a full exit. Sometimes it means adding a secondary source, or shifting one tier of the supply chain, while keeping core capabilities in place.
7. How long should companies expect a country-to-country shift to take, realistically?
If we’re talking about a full shift – from decision to full production ramp-up – it’s usually 12 to 36 months. That depends on the industry, of course. A low-complexity product in a lightly regulated sector can move faster. But high-spec manufacturing? With quality controls, tooling transfer, compliance certification? That takes time – and trying to compress that timeline often leads to serious issues down the line.
8. What technologies or tools are helping companies make better sourcing location decisions now than in the past?
We’re seeing a lot of progress here. Companies are using AI and predictive analytics to model risk exposure and simulate cost scenarios. Digital twins are gaining traction – they let you map your supply chain virtually and test what would happen under different disruptions. Supplier risk platforms are also far more sophisticated, incorporating ESG data, political risk scores, and even weather patterns.
Five years ago, this kind of real-time scenario planning wasn’t widely available. Now it’s increasingly essential.
9. Given current conditions—tariffs, geopolitical risk, ESG pressure—how much more complex do you expect supply chains to become by 2030?
Significantly more complex. We’re already seeing how global trade isn’t just about economics anymore – it’s about national security, sustainability, and data sovereignty. And that’s driving more regulation, more reporting requirements, and more pressure to be agile. Add in climate volatility and changing consumer expectations, and you’re looking at a supply chain environment that’s constantly in motion.
The companies that thrive will be the ones that build optionality into their supply chains – and invest in visibility, partnerships, and technology to stay ahead of the curve.
10. Anything else to add?
Yes – just that sometimes, the smartest move is to stay where you are and optimise. It may not feel as bold as a relocation, but doubling down on what’s working – while building in resilience and flexibility – can be just as strategic. It’s not about reacting to headlines. It’s about making decisions that hold up in the long run.
Frank Baldrighi, Business Development Manager at Getac, explains why digital transformation across the supply chain overdue.
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Digital transformation is driving significant change across the global supply chain, leading to the adoption of new, innovative business models and cutting-edge technologies. The ability to adapt to these changes is crucial for companies aiming to remain competitive and deliver exceptional value to their customers.
Technology plays a pivotal role in accelerating change, helping companies to automate operations and enhance productivity. The modern workplace is evolving, with a growing emphasis on flexibility, sustainability, and employee well-being. Companies must navigate the challenges of integrating new systems and processes, a reality that requires a cultural shift towards innovation, experimentation, and continuous learning.
The benefits of embracing change are substantial, including improved quality, increased efficiency, and enhanced customer experiences. To successfully manage change, companies must measure its impact using data and insights to inform decision-making. Leadership plays a critical role, with a clear vision and strategy essential for success. By fostering a culture of adaptability and continuous improvement, companies can thrive in the dynamic landscape of digital transformation.
The case for (rebooting) digital transformation
Since the early days of the COVID-19 pandemic, industry has learnt several key lessons:
Employees are critical talent and need to be deployed strategically
Asset-based industries like transport & logistics can benefit from remote monitoring and operation
These same industries also need the ability to make decisions in the field, on the edge
As organisations embrace digital transformation, many face significant challenges stemming from outdated technology and processes, which can hinder their ability to initiate this critical transformation effectively.
The goal of digital transformation is to move businesses along a customised path, from adding automation process steps to fully autonomous operations. Along the way, enterprises will pass various milestones that reduce the fraction of human involvement and orchestration into the process: from done by humans, through done with humans, to done for humans.
The key forasset-driven industries is to begin with the desired goals in mind, and establish key performance indicators (KPIs) to measure progress toward those goals. The work of digital transformation involves breaking down business operations into manageable processes that can be orchestrated or automated with the help of technology.
Technology drivers of digital transformation
Data, the currency of digital transformation, enables several technologies to build new capabilities and deliver enterprises’ desired results.
Some of the technologies that can propel digital transformation include:
Artificial intelligence and machine learning, which enable autonomous decision-making at the data source.
Robotics, which performs routine, monotonous tasks independently or in collaboration with workers.
Extended reality-XR (augmented reality-AR / virtual reality-VR / mixed reality/MR), which empowers workers to collaborate remotely without being physically on site.
Internet of Things (IoT) / Industrial Internet of Things (IIoT), which include sensors embedded in assets that transmit data about the health of machines. This data enables predictive maintenance to maximise uptime, asset life, and capital payback.
Digital twins, a simulation of all physical assets and their interdependencies, enable enterprises to proactively predict system functions before changes are made.
Cloud computing, which enables infinite computing scale while increasing resiliency, and security.
Selecting which of these technologies best fits depends on the digital maturity of the company in question and the KPIs they intend to measure.
Digital transformation isn’t always smooth sailing
According to a 2020McKinsey research report, 70% of enterprises who pursue digital transformation find their momentum stalls at some point. It is worth understanding the reasons – e.g cultural or scalability issues – causing the slowdown because payoffs for successful transformation can be impressive; leading to more efficient operations, with enterprises enjoying autonomy beyond their operations. An entire ecosystem with data transparency functions more smoothly as inefficiencies are easier to pinpoint and fix.
Businesses must also watch market trends and shifts in consumer behaviour to adapt and thrive in the evolving landscape. The 2024 update to McKinsey’s tech trends focused on generative AI, coupling with electrification and renewables in terms of interest and investment. Gen AI is the next step in digital transformation, with the potential to enhance nearly all performance metrics.
Rugged mobile devices (especially AI-capable) contribute an invaluable benefit to the digital ecosystem. They connect workers to vital information necessary to keep operations running in harsh environments, often where and when workers need the data most.
Employees can use a rugged mobile device forasset management software or enterprise resource planning systems to troubleshoot problems quickly and efficiently whenever worker intervention is called for. Using rugged mobile devices also allows for the easier digitised recording of processes, so the enterprise always has a record related to every machine.
Limitless potential
Looking to leverage advanced technologies, organisations throughout the supply chain are taking a careful view of business operational workflows and finding ways to improve the bottom line. Expect AI-fuelled digital transformation to quickly become a mindset for companies as they move toward autonomy in their digital transformation. Rugged mobile devices will be essential today and even more so tomorrow to future-proof technology fleets. Their secure and open architecture enables enterprises to use it as a communications platform now and into the future.
Charles Crossland, Managing Director at Goodman UK, discusses the unique challenges the food supply chain is facing.
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The food supply chain operates under unique pressures. With short product life cycles and a complex journey from source to shelf, it must navigate strict regulatory demands, price volatility, and increasing consumer expectations – all while maintaining speed, freshness, and traceability.
In recent years, global disruptions have exposed vulnerabilities. From reduced access to imported goods to increased transport costs, the sector has had to rapidly adapt. In response, many businesses are turning to technology and data-driven strategies to build resilience and agility into their supply chain operations.
Building resilience in a volatile market
Stock shortages are no longer unusual, and customers are increasingly aware of the fragility of food supply systems. There’s now greater scrutiny on how food moves through the supply chain and growing pressure on businesses to deliver consistency and transparency.
Businesses are adopting new technologies such as artificial intelligence (AI), predictive analytics, and automation to improve supply chain visibility and performance. AI-powered forecasting tools, for example, can help businesses respond faster to demand fluctuations, minimising waste and reducing risk.
At the same time, many have moved away from “just-in-time” approaches for non-perishable goods and are reassessing their sourcing strategies. Dual sourcing, diversified supplier bases, and increased inventory holding are helping to minimise risk and prevent single points of failure.
Smart logistics and strategic warehousing
The transport and distribution stages of the supply chain are also evolving. Soaring fuel prices, labour shortages, and carbon targets are forcing businesses to review delivery routes and optimise their warehouse networks. Proximity to customers is now more important than ever.
By investing in strategically located distribution hubs — close to major infrastructure and consumer populations — businesses can reduce lead times, optimise last-mile logistics, and cut transport-related emissions.
All logistics operations, from warehousing to transport, are increasingly equipped with smart systems for real-time tracking, allowing for greater control over stock movement and condition. For temperature-sensitive goods in particular, the use of tracking sensors helps monitor freshness, reduce spoilage, and maintain product quality throughout transit.
Extending freshness through technology
Warehousing is undergoing a quiet revolution. Robotics and automated systems are now performing tasks such as picking, sorting, and packing with improved accuracy and speed. This is especially valuable in the food sector, where shelf life and freshness are key.
Technologies being deployed include:
Grading visibility systems which assess produce quality and reduce manual handling
Advanced freshness testing which pinpoints stages of ripeness with precision
Specialised climate control systems, including zoned heating and cooling, to maintain product quality
By reducing errors, extending shelf life, and improving product flow, these innovations contribute directly to reduced food waste.
Sustainability as a supply chain driver
Sustainability is no longer a nice to have — it’s becoming central to how supply chains are designed and operated. The environmental impact of food production and distribution is under growing scrutiny from regulators, retailers, and consumers alike.
Businesses are now expected to track and report on carbon outputs across their operations. Efficient route planning, electrified fleets, and eco-friendly packaging are just some of the areas seeing rapid investment.
Data is critical here too. By using detailed analytics, organisations can identify hotspots for energy use or waste and adjust operations accordingly. Many are now measuring not only emissions but also transport efficiency in a bid to reduce their environmental footprint.
Looking ahead: A tech-enabled, resilient future
Incorporating smart technologies into warehouse workflows and logistics strategies is already delivering benefits — from productivity gains to improved safety and fewer errors. But this is just the beginning.
As food supply chains grow more connected and responsive, businesses will need to continually adapt. The future will be shaped by those able to combine agility with long-term planning — embracing innovation, forming deeper supplier relationships, and keeping sustainability at the core.
We spoke to Chief Product Officer Prerna Dhawan about what it takes to move from experimentation to execution.
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As AI continues to dominate conference stages and boardroom discussions, the pressure to use it is everywhere. As this technology becomes further embedded in enterprise strategy, many organisations are still grappling with how to apply it in a way that delivers real, measurable value.
Rather than focusing on AI for the sake of innovation, the question is how to align new tools with real business problems. That means looking beyond dashboards and pilots to deploy AI where it can simplify decision-making and improve processes.
At Beroe, this principle is central to how AI solutions are developed, deployed, and scaled. As the company behind the world’s leading procurement intelligence platform, Beroe provides real-time market data, cost analysis, and supplier risk assessments, empowering thousands of organisations globally to streamline operations and mitigate risks. Its latest advances in autonomous negotiation, supplier discovery, and predictive analytics show what it means to align AI with business objectives.
We spoke with Prerna Dhawan, Chief Product Officer at Beroe, during this year’s DPW New York conference. The discussion explored how procurement leaders can move beyond hype and start unlocking the full potential of AI.
Misalignment with business needs
There are plenty of real-world examples of how AI can improve efficiency within a business, from automating manual tasks like invoice processing to identifying new suppliers based on complex sourcing criteria. Accessing this technology is easier than ever with a wide range of tools available to procurement professionals. It can be tempting to jump on the bandwagon and integrate AI across every area of an organisation, but success requires a more nuanced approach.
The key is to ask the right questions, Dhawan explains: “We talk about all the latest and greatest technology out there, but what does it mean in practical terms? We need to ask, ‘How can I apply it today in the work I am doing as a head of product or as a procurement professional?’”
The allure of generative AI is especially strong, but business leaders should ask whether that’s the right solution for their needs. As with any decision, it’s important to consider the business problem. “It starts with a little bit of knowledge about what you’re looking for,” says Dhawan. “What are some of your biggest challenges, and which of those challenges could AI technology solve?”
Matching the right tool to the job
Once an organisation has identified a specific problem, it’s possible to find the AI solution that fits. While generative AI gets a lot of attention, other AI technologies and machine learning based systems might be more appropriate.
In some cases, prescriptive, rule-based, or predictive AI could be a better choice to solve a problem without the need for a large language model. For example, forecasting commodity prices doesn’t require generative AI, just strong, contextual machine learning.
“We are looking at AI across two dimensions,” says Dhawan. “Firstly, what is our offering to customers, in terms of procurement intelligence and autonomous negotiation technology. Second, we are looking at AI internally. Let’s say in product development, how do we use the latest AI solutions to accelerate our product development cycles so we can release new modules and capabilities more quickly.”
Regardless of the type of tool chosen, it should cover a high-impact use case. Integrating AI to solve a problem that only surfaces for a small group of people a couple of times a year won’t have a great return on investment. Instead, look for regularly occurring problems that, if fixed, could have a huge impact on productivity or quality.
Reducing the cognitive load
We’re already bombarded by information, and the use of AI to add to this doesn’t make sense. “I don’t need another dashboard in my life,” says Dhawan.
When implemented correctly, AI can make data more accessible while reducing cognitive load for users. The result is increased productivity and faster decision-making.
“I think the power of AI is to simplify access to data. This is why ChatGPT has been a success: it democratises access to information. That’s what our B2B technology world is waiting for. It gives me something simple that allows me to talk to my data. Then I can focus on what insights I need to make a decision or take action.”
For most B2B users, the key is intelligent simplification. Look for ways to simplify access to data through agent AI tools and conversational interfaces. This brings the focus back to action rather than dashboards.
Inside Beroe
While many procurement teams are still exploring AI’s potential, Beroe has already embedded it across both its platform and internal operations. The company, founded in 2006, provides procurement intelligence to thousands of organisations worldwide. Its platform delivers the critical data that professionals need to make informed sourcing decisions, from commodity prices and risk indicators to ESG scores and supplier intelligence.
“We provide all data that procurement needs for decision making, whether it’s cost data, risk data, ESG data or price data,” says Dhawan. “Our reimagination of the future is not just giving access to more data but creating that layer of recommendations that help you make decisions at speed and scale.”
One of the clearest examples of this in action is Beroe’s new ‘autonomous negotiations’ platform resulting from its recent acquisition of negotiation technology business, nnamu. Delivering a significant evolution in the procurement technology landscape the platform enhances the foundational elements of AI and game theory with Beroe’s industry-leading market intelligence and, according to Dhawan, it’s being deployed successfully in live sourcing scenarios.
“This is a technology that is being used for multilateral negotiations,” Dhawan explained. “It’s no longer just a POC or prototype, it’s live and being used at scale.” These new tools reflect Beroe’s core mission: to help procurement professionals minimise surprises and maximise margins.
Crucially, Beroe isn’t waiting for perfect data to apply these technologies. Instead, the company is using AI to work with what’s available — cleansing, interpreting, and extracting value from both structured and unstructured sources.
“You can use AI for cleansing data – even paper contracts,” Dhawan says. “Historically, we thought data had to be structured. But now, with vision models and image analytics, that’s no longer the case.”
Rather than striving for 100% accuracy before taking action, Beroe embraces a more agile mindset that balances speed and precision.
Is mindset holding procurement back?
The technology is ready. The use cases are proven. So why do so many procurement teams still hesitate to embrace AI? “There’s this subconscious fear that I think is a barrier to adoption,” she said. “And to some extent, it’s to do with our friends in Hollywood.”
There’s the myth that AI is a job-threatening black box, especially in industries where trust and experience are the backbone of good decision-making. For procurement, where professional judgement and business context are critical, the idea of handing over tasks to AI can feel risky.
But Dhawan believes this fear is misplaced. At Beroe, AI isn’t replacing procurement professionals, it’s augmenting them. Whether it’s surfacing new suppliers, automating elements of negotiation, or flagging risks earlier in the sourcing cycle, the aim is to enhance human decision-making. She says: “I think with the new kinds of AI technology that’s available to us, it is an opportunity for us in B2B tech to embrace more human-centred design with higher focus on UX.”
Looking ahead
Looking ahead to 2026 and beyond, Dhawan sees procurement evolving into a more personalised and responsive function – one where AI plays a critical role in both strategy and execution.
“We see hyper-personalisation coming, both in supplier relationships and internal stakeholder engagement,” she explains. “AI will be at the centre of that.”
Rather than one-size-fits-all sourcing strategies, AI will enable procurement teams to tailor their approaches to specific business units, categories, or even individual suppliers. This means smarter segmentation, more relevant insights, and stronger commercial outcomes.
Another key shift is the growing ability to connect macro events, such as geopolitical shocks or regulatory changes, with micro actions inside the business. AI can help procurement teams identify these signals earlier, respond faster, and still align with long-term goals such as cost efficiency or sustainability.
“It’s about balancing your fire-fighting reactions to market events with your long term goals and strategy,” says Dhawan. “Procurement needs visibility and flexibility at the same time.”
Beroe is already moving in this direction. Alongside its growing AI capabilities, the company is refining how it delivers intelligence, building agents and recommendation layers. These not only inform decisions, but also help teams take action on them. Whether that means automating routine negotiations or proactively flagging supply risks, Beroe is evolving to meet the needs of a procurement function that’s more dynamic than ever.
As Dhawan points out, the goal isn’t to overwhelm teams with more tools, it’s to make their lives easier. “It’s about reducing complexity and giving procurement professionals confidence in what to do next,” she concludes.
For many procurement leaders, AI still feels like a long-term ambition. But the solutions are already here, and through companies like Beroe, they’re already in use. The challenge now is not whether AI can deliver value. It’s whether teams are ready to adopt the mindset and cultural shift that will allow them to unlock that value.
AI’s rapid evolution is creating both opportunity and urgency. AlixPartners lays out what needs to change — and why risk-takers will lead the way.
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The use of artificial intelligence (AI) in procurement is gaining traction with many organisations already looking at how the technology can improve processes. However, there’s scope to go beyond efficiency and instead focus on transforming value delivery.
At DPW New York, we spoke to Amit Mahajan and Aaron Addicoat from AlixPartners, a management consultancy firm doing things a little differently. The organisation is advising its clients on how to implement AI to drive value, but it’s also using AI internally, too.
“AlixPartners has a unique business model,” explains Addicoat. “We have a very senior model, very few junior resources. So now you imagine taking people with 10 or 15 years experience and now you equip them with AI… for us, it’s a huge unlock.”
This is about more than just productivity gains. AlixPartners focuses on using AI to transform the way procurement teams work, while crucially, maintaining the human touch.
How procurement professionals are using AI
With the support of technology, it’s possible to shift procurement from a cost-saving exercise to a potential revenue driver. Procurement teams are already looking for these opportunities, as Mahajan explains. “They’re starting to think about new ways of doing things,” he says. “It’s not just automation, but asking how do I leapfrog and do something differently?”
There are plenty of use cases where AI is helping with automation. This is a great place to start as it frees up human workers to do more valuable jobs that need a personal touch. “I have a client who’s using AI every day,” says Addicoat. “This allows them to review documents and contracts rapidly, to find key clauses and termination dates. They’re also using it in spend control processes to identify which things need to be reviewed more thoroughly.”
Many organisations are also using AI agentically to create their own bots. This gives teams a more accessible way to review information. “One example is a client who’s using AI for their business to help with acronyms,” says Addicoat. “They built it as an acronym tool to help break down the language barrier between different functions using different terms. This led to better engagement.”
This empowers employees across an organisation to be more autonomous while still getting the full picture. Agentic AI, especially, allows them to interact with information in a way that previously would’ve required specialist technical knowledge. Now, it’s possible to query information within a contract directly.
“It’s about using agents and AI to look at anomalies within your procurement contracts,” explains Mahajan, “and be able to help the category analysts, the category specialists, and others to get more of those insights.”
While generative AI might be a hot topic, it’s not the only way to use the technology. In combining several sources of data and using AI to spot trends, it’s possible to create workflows tailored to the current environment. Addicoat explains: “We take a series of data inputs, such as weather patterns, lead times, contractual terms, inventory, and forecast. Then the AI generates the purchase order, queues it for review, and upon approval, places the order.”
This can help an organisation to place orders with the right supplier in the most timely fashion to avoid delays, and optimise for cost, for example. This fully automates the end-to-end process, using AI to interpret those important data signals.
While this is useful for procurement teams, it’s only the start. “Using AI in this way is really cool,” says Addicoat, “but what I found most fascinating is that you’re building a data model, and with AI layered into it, that over time can tell you how to optimise itself.”
This has huge implications for procurement teams looking to save money and drive revenue. “For example, it could tell us the commodity price at a certain point in time was low,” says Addicoat, “but because inventory capacity to hold resin was maxed out the client could only buy so much at that low price. So now investing in a new storage unit at a cost of a few hundred thousand dollars could, under the same scenario in the future, save millions of dollars..Data quality challenges
A roadblock that can stop procurement teams from fully embracing AI is a lack of quality data. With so many sources of information, often including paper-based documents, some might think it’s difficult to get the data AI needs to be truly useful.
“Don’t wait for everything to be perfect before you get started,” says Addicoat.
This is a sentiment echoed by Mahajan: “Use AI to solve your data problem before solving your business problems.”
This requires a mindset shift. While AI can help cleanse, enrich, and structure existing unstructured data, it’s important to take the right approach. Shift from asking ‘what can we do with our data?’ to ‘what value do we need to create?’ and work backwards from there.
With this approach, the questions are less about the data and more about the business problem. This then allows you to use AI to work with the information you have to help answer those questions.
“Start with the value proposition in mind and work backwards,” explains Addicoat. “You can get data from anywhere — it has to serve a purpose.”
Bringing back the human touch
AI can free up procurement teams to focus on tasks that need more nuance and expertise. Using technology to automate workflows and make information more accessible has a huge impact on employee productivity. “It’s fundamentally transforming the way they work, the amount of work they can do, and the type of work they’re able to do,” says Addicoat.
There’s always the worry that with any new technology, the human element will be forgotten. “With every new advancement that comes in,” says Mahajan, “whether that was a steam engine or when computers came along, everybody wondered what they were going to do. But as humans, we always find ways to start doing higher-level work.”
This means that many professionals will find new ways of doing things. “Imagine all the mundane tasks you have to do in your daily job now,” Addicoat continues. “With these new ways of working, imagine the speed with which you can turn an idea into something real. All that time you free up allows you to go talk to people and build relationships that mean something.”
On the other side of things, the sheer volume of AI-generated content out there is going to drive people towards those more meaningful interactions. “You don’t know what to trust and what to believe anymore,” Addicoat says. “That’s going to lead to a resurgence in face-to-face content, being at the office, and being at events.”
AI’s impact on procurement talent
The talent landscape is changing. With technology playing a larger part than ever before, organisations don’t just need procurement professionals, they need adaptable, tech-savvy people. The nature of the job means that those in procurement need a wide range of skills.
“We do everything,” says Addicoat, “legal, operations, supply chain, negotiation, analytics. Procurement professionals are generalists.”
Tech plays into every element of that skillset, which means tech skills are becoming even more important for candidates applying for procurement roles. “Nobody goes to college thinking they’ll be a procurement professional,” says Mahajan, “but with AI and tech, that’s changing.”
With procurement often seen as a proving ground for leadership, embedding these tech-minded generalists could have a huge impact on the future. “We have a shortage of talent,” explains Addicoat. “But with more and more CEOs and COOs coming from procurement, that speaks volumes to what procurement does and the value it brings, as well as what the future holds.”
At AlixPartners, the passion for procurement is very clear with Addicoat saying: “There are only two kinds of people in the world: those who love procurement and those who don’t know it yet.”
Change is coming
With AI of all forms steadily gaining traction, procurement could change dramatically in the coming years. It’s the organisations that are willing to take risks and embrace change that will come out on top.
“AI has the potential to disrupt the whole management consulting world,” says Mahajan. “Firms focused on transformation will thrive.”
With AI’s capabilities increasing rapidly, it’s difficult to predict what comes next. However, adaptability is key. “Hold onto your hat. In a year and a half, the world’s going to look very different,” concludes Addicoat.
We caught up with Valdera’s Co-Founders to find out why chemical procurement comes with its own challenges.
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Chemical procurement is one of the most complex and overlooked categories in the supply chain. Between navigating regulatory constraints, aligning on technical specifications, and finding qualified suppliers, even the most experienced procurement teams face major hurdles. That’s exactly the gap Valdera was built to solve.
Founded by sister-brother duo Sruti Arulmani (CEO) and Dheev Arulmani (COO), Valdera is an AI-native sourcing platform purpose-built for chemicals and raw materials. Rather than applying generic technology to a specialised industry, the team set out to reimagine chemical procurement from the ground up.
“Chemicals are one of the most complex sourcing categories,” says Dheev. “In order for a company to gain leverage from AI in this space, it must build the data infrastructure and the AI specific to this industry. That was the inspiration behind Valdera. Our vision was to partner directly with procurement organisations and help digitise that entire sourcing workflow all the way from supplier discovery to market intelligence to qualification.”
“Direct procurement is really at the core of your product’s margin,” adds Sruti. “In today’s economy, business leaders are focused on staying profitable, and that starts with ensuring the materials behind your products deliver on both margin and performance. Most of the physical products we touch and interact with every day come down to what they’re made of. That’s why we’re so passionate about chemicals and raw materials.”
The power of vertical AI models
While general-purpose LLMs are powerful, they fall short when it comes to industries like chemical procurement where context, precision, and deep domain expertise are crucial. Valdera has taken a different approach: building vertical AI specifically trained to understand the language, data, and complexity of chemicals and raw materials.
“In procurement, especially for chemicals, one-size-fits-all AI doesn’t cut it,” says Sruti. “You need models that can interpret highly technical specifications, normalize data across formats and suppliers, and understand the nuances that determine whether a supplier can actually meet a request.”
That’s exactly what Valdera has built. “We will continue to layer the specificity of the chemical industry on top of an LLM that’s already good at structuring information and returning information in a useful way,” Sruti adds.
Dheev continues: “If you look at the generic LLMs available today, the challenge with these is that they fundamentally don’t work in this industry. The reason for that is that there are no LLMs that are trained on chemical specs. So what we’ve done is take those models and fine-tune them using our own proprietary dataset of chemical specs and properties, built over the last five years. That’s what positions us to drive real value for our users.”
Prioritising privacy
In the chemicals industry, data is sensitive. Trust is everything. Buyers are protective of their proprietary formulations, and understandably do not want their data used to train models that could benefit competitors. On the other side, suppliers are cautious about publicly listing their full product catalogs, especially when it comes to custom or high-value materials. Valdera was built with these realities in mind, and its platform is designed to protect both sides.
“In chemicals, suppliers are very protective of their proprietary catalogs,” Dheev adds. “And buyers are equally cautious about sharing proprietary formulations that go into their products. So there needs to be an independent third party that both sides can trust—someone who can facilitate discovery and sourcing without compromising confidentiality.”
“For us, it’s about protecting the interests of both buyers and suppliers,” Sruti explains. “We only use customer data to drive outcomes for that customer. We’re not here to train on anyone’s inputs or share information across the ecosystem. We’re here to help our customers get the best results for their business. That’s core to how we think about data privacy and partnership.”
The humanity of procurement
Even as AI becomes more powerful, procurement remains deeply human. Trust, context, and judgement are critical to strong buyer-supplier relationships, and no model can replace that. Instead, AI can enable teams to work faster, focus on strategy, and unlock new value across the supply chain.
“Procurement is a human business,” says Sruti. “At the end of the day, it’s two people coming together and making an agreement. We believe that’s never going to change.”
Rather than add complexity or replace roles, Valdera’s AI helps teams do more with the resources they already have. That means less time spent on manual tasks like gathering supplier documentation or comparing specs and more time spent on strategic decision-making, relationship-building, and growing the business.
“Our customers don’t want to be buried in paperwork. They want to focus on the work that actually drives outcomes,” Sruti adds. “We’re here to take the most repetitive parts of the job off their plate so they can do that.”
“The chemicals industry is inherently relationship-driven,” says Dheev. “But today’s procurement teams are stretched thin. With Valdera, one person can now manage a broader scope: sourcing faster, accessing a wider network of qualified suppliers, and making smarter decisions in less time. That’s what’s getting our customers excited.”
Driving impact beyond cost
In chemical procurement, cost will always matter but it’s only part of the equation. The organizations leading the way are the ones thinking strategically: securing supply, expanding their supplier base, improving agility, and driving long-term value. That’s why more teams are turning to Valdera not just to cut costs, but to unlock a new level of visibility, access, and control.
“Our vision is to enable procurement professionals to leverage this data in order to give them market intelligence, expand their supplier network, and enable margin expansion,” Dheev concludes. “If you ask any of our customers, they’ll tell you savings are just table stakes when using Valdera. The real impact comes from levers like security of supply, innovation and sustainability. Those levers are harder to quantify, but they’re critical to the long-term success of the business.”
Implementing an outcome-based approach
In a crowded and fast-evolving tech landscape, it’s easy to get distracted by the promise of sweeping, all-in-one solutions. But the most effective procurement teams stay focused, starting with a clear understanding of their business goals and choosing technology that’s purpose-built to achieve them.
“Success starts with knowing the outcomes you’re trying to drive,” says Sruti. “Whether it’s sourcing the right chemicals, improving security of supply, unlocking savings, or advancing sustainability and innovation. Being clear about those goals is what helps you identify the right tools and partners to get there.”
That kind of clarity leads to faster wins and less wasted effort. “We always encourage customers to start where the impact matters most,” Dheev adds. “Don’t spread yourself too thin. Be specific about the problem you’re solving, define the KPI that matters, and test any solution against that. Just because a tool is popular doesn’t mean it’s the right fit. The best results come from targeted solutions that align with your most pressing priorities.”
Candex exists to solve tail spend by removing friction and giving procurement leaders time to focus on what truly drives value.
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Candex isn’t chasing trends for the sake of innovation. Instead, the company is focused on solving one of the oldest and most persistent challenges in enterprise procurement: getting rid of the noise.
Most in procurement will be familiar with Candex. Co-founded by Shani Vaza, Chief R&D Officer, and Jeremy Lappin, CEO, Candex is a technology-based master vendor that simplifies onboarding and payments to small and one-time vendors. It delivers a fast, compliant, and easy buying experience for requisitioners, while procurement gains automation, visibility, and control, reducing the vendor master by up to 80%.
For years, procurement teams have battled fragmented data, manual onboarding processes, and administrative bottlenecks. This results in time and resources spent on tasks that add little value, while strategic initiatives suffer from a lack of focus.
For many organisations, 70% of vendors account for just 5% of spend. With Candex, procurement can manage that long tail of spend without adding operational burden. This frees up teams to focus on strategic priorities, redirect spend to preferred suppliers, and drive more value across the business. At this year’s DPW New York conference, Jeremy Lappin and Chief Customer Officer Danielle McQuiston shared how their platform is helping procurement evolve beyond compliance and cost savings into something far more valuable: clarity.
Addressing the core problem
While many conversations at the event kept coming back to the use of AI, Candex is doing things differently. “AI will transform procurement by uncovering better, more innovative vendors,” says Lappin. “But every new vendor comes with the burden of onboarding and compliance. That’s where Candex makes a real difference—we streamline that process by enabling fast, compliant purchasing without the heavy lift of onboarding. As companies adopt AI, they’ll need a system like ours to truly benefit from what it reveals.”
It’s about bringing the conversation back to the core problem. Lappin continues: “Candex makes it possible to onboard and pay new vendors in minutes, and without setup delays, while keeping procurement firmly in control. That’s where we unlock both agility and compliance.”
Solving procurement’s data problem
After speaking to many procurement leaders at events such as DPW New York 2025, one topic of conversation stood out: that messy data can be a major hurdle to overcome before successful AI adoption can occur. Companies dealing with multiple affiliates for a single vendor can find their data ends up split, duplicated, and difficult to work with at scale.
“The fragmentation of data is a very old problem,” says Lappin. “One of the reasons it occurs is because the data is organised by affiliates and isn’t aggregated properly. This creates enormous processes.”
A dedicated platform can take on the heavy lifting of sorting through this data, without the use of complex AI models. Lappin continues: “One thing that Candex does to help this problem with smaller vendors is auto-aggregating affiliates under one corporate umbrella. It’s going to massively reduce the data problem by directing that small spend through us.”
McQuiston adds: “Data is the foundation of all the decisions that procurement makes. And the fact that they can consolidate that data within Candex, and look at it only when it’s relevant to what actions they have to take, is a huge contribution to the space for procurement.”
The right data at the right time
Candex isn’t trying to flood procurement teams with dashboards. Instead, it delivers data when and where it’s needed, stripping away the noise to surface what’s important.
“Our customers tell us we filter out 95% of the noise and highlight just the actions that matter. It’s not just visibility, it’s visibility at the right moment,” says McQuiston. “We have amazing reporting that has hundreds of lines of precision data in there, but it’s also aggregated in a way that it calls out to the things that need attention rather than being bogged down with the rest.”
“Oftentimes the stuff that goes through us is the stuff that procurement doesn’t have the time to give its attention to,” explains Lappin. “I think one of the most powerful things we do is get rid of the things they shouldn’t care about so that it’s very easy to see what they should.”
Simplicity wins
Some procurement tools are complex, slow to adopt, and full of friction, but Candex takes a different approach. “The users just want to be able to operate and do the work that they need to do to serve their objectives,” says McQuiston. “Procurement doesn’t have enough resources to deal with all of the small things.”
Bringing the focus back to the core function of procurement simplifies processes and reduces noise. When working with a lot of small vendors, procurement teams can get bogged down with admin and data. This is where Candex takes on the weight of that burden, and allows the business to move forward.
“At the end of the day, Candex is a tool that is so simple from a user perspective, but still has the confidence of the procurement organisation,” McQuiston continues. “It also shines a better light on the procurement function, which often gets a black eye for being in the way of things.”
Real people
For Lappin, the hype around AI isn’t what makes a product great; it’s real-world validation from customers. “There’s only one way to get through the hype,” he says, “and that’s to find other companies that are using the products and loving them. I think that’s one of the things that has made us successful.”
It’s one of the strengths of DPW; these events showcase real use cases, not just demonstrations. This enables attendees to see the impact of new technologies for themselves, and connect with the people behind them. “DPW has the ambition to use real use cases rather than just relying on demos,” says McQuiston. “That’s what’s a little bit different about DPW compared to some other conferences; the proof is in the pudding.”
Lappin and McQuiston also highlighted the importance of customer-led innovation through Candex Connects – roundtables all over the world that allow procurement peers to meet, discuss the challenges affecting them, and learn from one another, as well as sharing their own inspirational use cases. “We’re not just providing a solution. We’re providing a space where our customers get together, discuss best practices,” McQuiston adds. “And I think we’ve done that really well.”
Procurement, repositioned
Ultimately, Candex is about more than just a tool. It’s about reshaping the perception and potential of procurement teams, giving them the freedom and focus to lead strategically. By removing some of the friction of dealing with myriad small vendors, procurement teams are empowered to drive deeper value.
“Our whole business is focused on agility and value creation,” says McQuiston. “We have to be compliant because our customers demand it, but it’s not really about cost savings when you talk about tail spend. Procurement has always been in a position where they believe they can squeeze something out of every purchase. We’ve gotten to a point in the evolution of the function where they realise there’s a portion they can’t squeeze anything out of. It’s powerful to be able to let that go.”
“Procurement needs to be involved in decisions around spend,” adds Lappin. “They help negotiate. They figure out the right vendors. They really are needed in this process, which is why it exists.”
Candex isn’t just solving tail spend, it’s redefining how procurement operates at scale. With built-in controls, full audit trails, and seamless integration with existing systems, Candex empowers procurement to lead strategically, reduce supplier bloat, and stay agile in a complex world.
Candex is proving that the biggest transformation comes from helping procurement teams reduce the noise and get back to the work that matters.
Evan Shelley, Co-Founder and CEO of Truck Parking Club, digs into the issues caused by the truck parking problem.
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When people talk about the most pressing issues in the US supply chain, they mostly focus on port congestion, labour shortages, or last-mile delivery challenges. Rarely do they mention truck parking. But as someone who works at the intersection of transportation and real estate, I can tell you that without a doubt: the lack of safe, accessible truck parking is one of the most overlooked threats to supply chain efficiency today.
At Truck Parking Club, we’ve spoken with tens of thousands of truckers and have seen the mounting frustration they experience trying to find legal, reliable parking near their routes.
In fact, on average, truck drivers lose nearly an hour each day searching for a spot to park. That may not sound like a huge issue – until you multiply it by hundreds of thousands of drivers, every day, across the country.
The result: an estimated $7,000 in annual lost income per driver. These delays impact everything from delivery timelines to detention costs and warehouse coordination. In short: they affect the supply chain.
A crisis hidden in plain sight
For every 11 trucks on the road, there’s only one available parking space. This imbalance leads to a ripple effect: drivers park in unsafe or unauthorized areas, are forced to shut down early to secure a spot, or violate hours-of-service rules trying to find parking closer to their destinations. In turn, this leads to supply chain slowdowns, missed delivery windows, and added costs for manufacturers and logistics providers alike.
The truth is, truck parking isn’t just a driver inconvenience – it’s a logistics bottleneck that affects everything downstream. For manufacturers dependent on ‘on-time delivery’, even a small parking-related delay can throw off timelines and impact inventory flow.
Why it matters to supply chain leaders
Manufacturers and supply chain executives might not think about truck parking when evaluating risk and resilience, but they should.
Every inefficiency in freight movement adds cost, and right now, we’re paying the price for decades of underinvestment in infrastructure that supports the flow of goods.
And – you probably guessed it, because it’s obvious: the challenge isn’t going away. With new construction of truck parking spaces costing $100,000–$200,000 per spot and often taking years to develop, there’s no fast fix on the horizon. This means the burden of solving this issue is increasingly falling on the private sector and logistics decision-makers themselves.
What can be done
Innovative solutions are emerging. For example, at Truck Parking Club, we’re addressing the issue by helping landowners and businesses monetize underutilized real estate as truck parking, turning extra space at trucking companies, tow truck companies, truck repair shops, self storage facilities , and other properties into bookable parking spaces that truckers can reserve instantly. This model rapidly increases parking availability without the multi-year construction timelines.
For carriers, logistics companies, and fleet operators, partnering with solutions like ours can yield measurable benefits: more efficient hours driven, reliable scheduling, improved driver retention, and safer working conditions for the drivers you depend on.
A call to action for industry decision-makers
As the supply chain continues to evolve in the wake of e-commerce growth and shifting demand patterns, we can’t afford to ignore foundational infrastructure gaps like truck parking. Leaders in transportation and logistics need to include parking in their budgeting, risk assessments and strategic planning.
That might mean advocating for policy changes, or exploring alternative parking solutions like Truck Parking Club to complement existing facilities. But at a minimum, it means recognizing that your delivery network doesn’t just rely on trucks – it relies on a place for those trucks to stop, rest, and refuel along the way.
Truck parking is no longer a fringe issue. It’s a strategic vulnerability that deserves a seat at the supply chain strategy table. And the sooner we treat it as such, the better equipped we’ll be to build a supply chain that’s not only faster, but stronger, safer, and more reliable for everyone involved.
Eelco van der Zande, Managing Director of ReBound Returns, helps navigate the issues caused by tariffs.
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Rapid changes in global trade policy are creating serious challenges for businesses operating across borders. With tariffs soaring one day and easing the next, retailers are being forced to rethink how they handle international returns in real time.
Fluctuating import duties imposed by the US have at times exceeded 145%, and retaliatory measures from key trade partners have thrown global supply chains off balance. Even with the most recent truce reducing US tariffs on China to 30%, there’s no guarantee these figures will hold. As of June, 2025, US trade policy remains fluid, with ongoing negotiations reshaping tariff structures across multiple regions, including Europe and Asia. President Trump has noted that some levies have been suspended- not cancelled – and may rise again within months.
Adding to the uncertainty, twelve US states have filed a lawsuit in the Court of International Trade, seeking to halt to the “Liberation Day” tariffs. A US appeals court has allowed the tariffs to remain in effect while it reviews their legality.
The new risks of cross-border returns
Amongst the ambiguity, international returns are now under intense scrutiny. With each item crossing a border potentially attracting new tariffs, returning products for restocking has become costly. When an item crosses a border twice- first for sale, then for return- and possibly a third time for resale, retailers face multiple layers of duties and fees. A t-shirt sold internationally could now incur fees exceeding its original retail value. This makes it more important than ever to evaluate every return for cost-efficiency and logistical feasibility.
Volatility also makes forward planning difficult. Retailers can’t afford to be reactive; returns systems must be agile, localised, and data-driven to navigate the shifting conditions. Strategic returns management is key to future-proofing reverse logistics against unpredictable tariffs.
Localising and consolidating returns to minimise costs
One of the most effective ways to reduce tariffs exposure is to localise returns processing. Keeping returns in the country where they were purchased allows retailers to avoid costly re-importation. Processing and storing products at local returns centres and re-fulfilling them to new customers in the same region can save on shipping and duties. Repurposing items through alternative channels can also reduce costs.
Consolidating returns into fewer, larger shipments rather than handling them individually can significantly cut logistics expenses. Using regional return hubs to group items before further processing or redistribution reduces transportation spend and carbon footprint. This local-first approach not only limits fuel consumption and emissions, but also supports a circular economy by keeping goods in-region. As ESG expectations rise, aligning reverse logistics with sustainability goals becomes a competitive differentiator. This optimised, local approach enhances efficiency and makes cross-border returns more sustainable and financially viable at scale.
Faster returns to reduce inventory lag
With tariffs driving up inventory costs, time has become a critical cost factor in returns management. Every day a returned item sits idle or in transit is a day of lost revenue and tied-up capital. Slow processing delays resale and undermines profitability in an already margin-sensitive environment.
Retailers must accelerate returns processing to reduce inventory lag. That means quickly assessing, sorting, and restocking products. Fast triaging, localised warehousing and agile reverse logistics can shave days or even weeks off the cycle, improving inventory turnover and unlocking working capital. In practice, faster processing can significantly increase recovered revenue from returned goods.
Smarter and fewer returns through better data
As tariffs raise the cost of goods, each return, especially the avoidable ones, become more expensive. Retailers that harness return data across their operations can turn unpredictability into strategic insight. This requires integrating data from multiple sources into a unified view, enabling more accurate demand forecasting, better inventory planning, and identification of products that are driving unnecessary returns.
Leading retailers are also using AI-powered platforms to anticipate which items are most likely to be returned and to automatically route them to the most efficient return locations. These systems integrate seamlessly with order and warehouse management tools, reducing cycle time and cost.
Data insights can also reveal deeper patterns, such as size discrepancies, product quality issues, or customer behaviour trends, that are contributing to high return rates. Addressing these issues through refined product descriptions, size guidance, and customer education expectations better can lead to measurable reductions in returns.
Even modest drops in return rates can yield significant savings when margins are tight. Smarter use of data enables faster, more informed decisions, and stronger profitability.
Seamless returns to build customer loyalty
The increasing complexity of cross-border returns hasn’t slowed rising customer expectations. Shoppers are less forgiving of a clunky or slow returns process, especially when tariffs mean they have paid more or waited longer for their purchase. A seamless experience with fast, easy, and transparent return options is crucial.
Retailers that offer convenient local drop-off points, clear communication, and flexible refund or exchange options are far more likely to retain customers and drive repeat purchases. Quick refunds help preserve brand loyalty, even amid pricing pressures and economic uncertainty.
Retailers that prioritise returns optimisation have seen measurable improvements in customer retention and the frequency of repeat purchases. A great returns experience doesn’t just mitigate risk, it builds trust, strengthens brand reputation, and turns a potential point of friction into a loyalty driver.
Adapting returns strategies for a shifting tariff landscape
When tariffs can rise or fall overnight, international returns must be treated as a strategic function, not just a back-end process. They directly impact margins, sustainability, and customer loyalty.
Retailers that embrace smarter returns management with localised, streamlined processing, better data insight, and seamless customer experiences will be best positioned to weather ongoing volatility. To get ahead, retailers should consider conducting a full audit of their current returns operations, identifying gaps in localisation, speed, and tech adoption. Investing in smart logistics infrastructure today can unlock major savings and build long-term resilience.
The proof, as they say, is in the pudding – and the evidence of TealBook’s increasingly-successful evolution lies in its client relationships.
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We talked endlessly about data and AI at DPW New York 2025. A universal truth is that the successful implementation of AI requires clean data. It doesn’t have to be perfect, but businesses certainly need to have a decent handle on their data before adopting AI tools successfully.
To help make this a reality, North American data and software company TealBook has recently announced a legal entity-based data model. It’s designed to resolve supplier records to the correct legal entities, map parent-child relationships, and enrich profiles with verifiable attributes, enabling accurate supplier data to flow seamlessly into procurement systems and AI applications. “This is part of a 12-year journey for TealBook,” says Stephany Lapierre, the company’s Founder and CEO. “Our vision has always been to build a way to enable procurement organisations to have high quality data with a lot of integrity. That way, you give them the trust they need to put data directly into their systems.
“Twelve years ago, we underestimated the complexity of getting large enterprises to trust a third-party data solution. As part of our journey, we started using AI early on to find information where it exists on supplier websites and databases. We also started creating digital profiles in a structured way for procurement to access it, match it to their vendor master, and use it.”
TealBook’s data evolution
But, again, at the beginning, TealBook couldn’t be sure whether the data was high enough quality. In 2017, the company was primarily known as a supplier discovery application. It was positioned as a pre-sourcing engine to help procurement teams identify alternative suppliers. At the time, TealBook’s data and models enabled it to determine which companies were similar to others. This meant users could search and find comparable suppliers to expand their sourcing options.
“But that was just a way for us to deliver something that was underserved in the market,” Lapierre continues. “Then our customers started asking for certificates, which are hard to collect and match. They needed cleaner data. They felt they were under-reporting. So in 2018, we started to see whether our technology could refine the data more. We focused on certificates and supplier diversity. We collected great use cases along this journey, and the vision never wavered.
“Just last year we released a new technology – completely different, really sophisticated – allowing us to pull from a lot more data sources. We have provenance so our customers can actually verify where the data’s coming from. We can match it to vendor masters. And now, we also have this new model that includes 230 million verifiable global legal entities from across 145 countries’ registries. We marry this with global parent and child hierarchy, which is really hard for our customers to match themselves.”
Partnership with Kraft Heinz
Now, after 12 years of that vision, TealBook is deeply proud of what it’s achieved. Part of its ability to get to this point is due to early adoption from key customers. Kraft Heinz is a business which Lapierre describes as a “co-innovation partner”, and has been invaluable in helping TealBook achieve its recent goals.
From the perspective of Stefanie Fink, Head of Global Data and Digital Procurement at Kraft Heinz, the partnership has been an immediately valuable one. “It really started with having a visionary, like-minded relationship,” she says. “That’s an important piece of it, because my vision for procurement is that we are partners in our enterprise.
“In order for us to do our jobs, we have to bring in the right data for use. This is where Stephany’s partnership and vision really resonated. We were really looking for diversity and we could make things easier for our partners, while making sure we had the right people in our ecosystem. We also had to lift up the hood and see what was underneath everything we’ve got. Stephany brought our vision to life. TealBook has evolved too, as we’ve seen; it’s more about orchestration and software-as-a-service. It has been a partnership of need and we cannot continue to do other things without this kind of partnership around data.”
When initially dabbling with this relationship, Fink was clear that Kraft Heinz had no desire to be taking care of more stuff. What she wanted from TealBook was a strong focus on good quality data. After last year’s product release from TealBook, Kraft Heinz already saw its data enriched by 25%. The recently-announced new data model gives the business and TealBook’s other customers the right structure tied to a legal entity, which is a highly credible anchor. “We’re able to do entity resolution – all automated – remove all the duplicates, and then you start with a clean, digitised vendor master,” says Lapierre. “That’s what brings further enrichment.”
The challenge of assessing data quality
Assessing its data before involving TealBook was important for Kraft Heinz, but challenging for such a large organisation. “We had to fail first and fail fast,” says Fink. “We tried some AI around fixing things early, but that didn’t work for us. It was a real eye-opener, realising where this next evolution could take us. Particularly regarding focusing on AI and agents for the right things, not the meaningless things. Before, we were asking agents to tell us if things were duplicates, when we should have been asking: what do these suppliers offer? Where is the innovation? Where is the value?”
What surprised Fink most when looking under Kraft Heinz’s hood was the lack of attention that was being paid to what the business was doing. “It was amazing that nobody had questioned it sooner,” she says. “So I said, let’s take this as a crawl, walk, run approach. I have a wonderful CPO who really understands where we want procurement to go as a function. She was excited about us just getting it done and getting people involved, and that’s what it takes: real pride in ownership of the data.”
Getting engrossed in GenAI
True partnership and an all-in approach has enabled Kraft Heinz to work successfully with AI. This is something some businesses are struggling with as the conversation around artificial intelligence grows louder. For Lapierre, as the CEO of a tech company, adopting AI successfully has meant trying and failing and being fully entrenched in AI as it has evolved.
“We’ve been using AI in our technology since 2016,” she states. “We’re an early adopter. We’d be talking about scraping data, and data in the cloud, and AI models, and our customers’ pupils would widen in surprise. We’ve come a long way and the market has come a long way.
“The technology we deliver today wouldn’t be possible without the AI tools now at our disposal. We used to build models; we don’t do that anymore. We spend a lot of time investing in engineers to build and test models. That’s made us so much more efficient. I use GenAI every day for so many things now. I’m encouraging my team to be so involved in AI. That’s how you build expertise. You need really strong expertise to use GenAI well.
“Getting good with AI is about taking risks and having a leadership team that pushes for new things. Suddenly, the successful use of AI becomes a habit.”
Why businesses should prepare themselves for AI by not getting lost in the whirlwind of hype and focusing only on what works for their needs.
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With AI being the topic of conversation for procurement professionals right now, it’s easy to get lost in the maze of conflicting information. Vroozi is a procure-to-pay platform powered by robust AI capabilities to deliver meaningful use cases. CEO and Co-Founder, Shaz Khan, takes approaching AI the right way very seriously.
For Vroozi, the use of AI is a two-sided coin. It’s an organisation that talks about AI both in production and consumption. AI is a tool that has been a game-changer, because it has enabled Vroozi’s software and technology engineers to be able to rapidly prototype and develop code. And that code is beneficial for creating feature sets and capabilities that the company wants to introduce to the market.
“Similarly, we take steps to look at how a customer interacts with our software for the first time,” Khan explains. “The implementation process is also ripe for consuming and producing great results with AI. Imagine you go through some type of interview wizard where you prompt the system based on your region and industry. The system will self-configure according to your business unit. This is real intelligence that understands your business at a different level, as well as the competitive landscape, and brings in best practices to deliver incredible results.”
Getting the approach right
Having said that, Khan freely admits that we’re in the early innings of AI adoption. For him, leaders should adopt a multi-pronged approach to implement AI. The first move is to assemble a team. “One key area with AI is that a lot of companies are relying on outside experts that don’t know the business and the goals that they’re trying to achieve,” he explains.
“You should invest in your own people before you invite outside parties in. Bring that education and assemble a use case, before assessing the problems you’re trying to solve and determining whether AI is a good tool set or capability to solve the problem. If these things match up, execute the game plan, bring in the right technologies and the right expertise, and only then bring AI capabilities into your workforce.”
The challenges
With this being the “early innings”, there are also barriers and challenges. The main issue, from Khan’s perspective, is security. “There’s a trust aspect that has to be looked at,” he explains. “There’s also an ethics aspect. Are you delivering the right results? And how much autonomy are you giving AI and its agents to go out and deliver those results for you without any human interaction? I think the companies that get it right will strike a balance between the trifecta of automation, really great AI technologies, and a balance of human interaction to create an overall output.”
There’s also the question of data. If the data isn’t clean, output will be compromised and lead to poor results. We haven’t seen the worst of what can happen, Khan believes, and AI has the potential to create scenarios that are hard to recover from, if used poorly. “We need to prepare ourselves now to prevent those types of potential calamities from happening,” says Khan. Which is the entire point of DPW: for procurement and technology leaders to educate and learn about best AI practice.
This allows people to cut through the, as Khan puts it, “hysteria” around AI that can cause problems for businesses. They’re rushing to solve problems, and while leveraging AI can be a component of a complete holistic toolkit, it can’t be the only answer. “A lot of companies today still struggle with getting their businesses off spreadsheets,” he states. “AI should be an equaliser and enabler to get it right.”
Structuring unstructured data
For Khan, in order to ready themselves for AI, procurement professionals and practitioners need to be absolutely committed to data management and governance. “What companies often forget is that much of today’s data is unstructured. It’s not neatly stored in databases – it might be a chat, an image of a spec sheet, or a contract never digitised. This unstructured data often can’t be used by AI models today, so companies risk only addressing a small part of the challenge. Data governance has to be an ongoing exercise.”
Having said that, Khan is keen to differentiate between clean data and perfect data. In fact, many procurement professionals we spoke to at DPW New York 2025 said the same. The message is: don’t wait around for everything to be perfect, or you’ll never start.
“Good enough data is just fine,” Khan says. “But if you’re going to continue to feed your AI engines and algorithms bad data, your outputs will be compromised. Companies need to have data governance strategies and upfront policies in place so that they can manage this, independent of the people that offer them.”
AI creating a complete picture
While treading carefully is important, Khan is equally keen to extoll the many virtues of AI for procurement professionals. There are many incredible use cases already, and AI tool sets and algorithms can effectively interrogate a company’s data and give them the answers they require. AI enables these users to have a complete picture of their buying cycle, and allows them to get additional information for where they can pivot.
“This is where the true power of agentic AI will come into play,” says Khan. “When you can fully trust the system inputs, AI will be able to orchestrate those processes autonomously, and present that information to an end user for final decision.”
Khan is very excited about what Vroozi is doing within its own AI layer. The business looks at AI and intelligence as a pervasive thread across its entire tech stack. Every aspect of its platform has some kind of AI enablement, although it’s not an AI-first company.
“We follow three distinct areas where we are thriving on the AI front,” says Khan. “First is intelligent document processing. Can we take structured and unstructured data such as contracts, quotes, work orders, and invoices, and populate them automatically onto a screen without any human touch? Processing invoices might require an army of people typing in data, and they might not capture it all. But an AI toolset can take millions of records and process them simultaneously. That’s the power of AI.”
The power of hyper-personalisation
The second area is what Vroozi calls hyper-personalisation, where it intensely personalises the platform to meet a company’s preferences and needs. It’s about how AI can find trends and not only predict the user’s needs, but also help take the next steps. This includes finding suppliers and ordering things that are needed, so that workflows aren’t disrupted.
“Then we also have what we call the push economy,” says Khan. “AI’s power is in pushing and giving people head starts. So when you talk about AI algorithms and look at analytics, it’s about how AI can present to companies in the procurement space when they need to lock in favourable pricing on products and services, and predict when you are seeing potential fraud scenarios based on trends and patterns. You need a lot of data for those AI models to train on, which is why I say we’re in the early innings. It takes time, but it’s incredibly powerful when you get to that point.”
The benefits ahead
At such an exciting time for procurement, 2025 and 2026 look bright for leaders in this space. Not only procurement, but also supply chain and FinTech, are set to benefit from what AI can do with data.
“There’s going to be a focus on how to capture and harness data, and feed it into AI in a way that produces results,” says Khan. “What we’ll see in the next two years is that AI has now learned from the data that’s been fed into it. You’re going to see higher-quality results and better outcomes. Again, I would caution companies to define the problem first. Then determine if AI is an absolute enabler and game changer. We believe AI can be an influencer and supercharger in terms of productivity. However, there needs to be specific use cases that make sense for corporations.
“In 2025 and beyond, you’re going to see great technologies embedded into organisations that really work.”
Jorge Aguilar and Andy Prinz, supply chain experts at PA Consulting, discuss shapers vs. stallers.
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Volatility isn’t a shock to the system anymore – it is the system. Supply chains are absorbing more disruption than at any point in modern history, yet still expected to deliver flawlessly. Logistics lanes are being re-routed by international conflicts, cyber incidents, climate shocks, and policy shifts. The US tariffs and UK retail cyber-attacks are just some of the latest stand-out examples.
WTW’s recent Global Supply Chain Risk Survey reports that fewer than 8% of leaders believe they have complete control over their supply chain risks, and nearly two thirds continue to experience higher-than-expected supply chain losses. But against this backdrop, customers expect greater performance – instant service, total transparency, and zero excuses.
In this respect, dependable delivery isn’t a nice-to-have. It’s not even a differentiator. It’s the baseline for trust and growth. And in a world where so much is outside of businesses’ control, building systems that can still deliver when nothing else is stable is the new definition of good leadership.
Shapers vs. stallers
PA Consulting’s 2025 Brand Impact Index supports this. It found that the most successful brands – those with stronger growth, loyalty, and pricing power – are actively building the muscle to deliver dependably in the face of new shocks.
The study of 7,000 consumers and 360 major brands revealed these brands are ‘shapers’. Rather than just investing in front-end experiences, they’re transforming their operational back-end systems, re-engineering networks, and re-thinking supply chain models. These brands prioritise dependable delivery as the top investment area for growth in volatile markets.
At the other end of spectrum are ‘stallers’: brands stuck in reactive cycles, making quick fixes, and clinging to old supply chain assumptions. Notably, stallers are 1.6x less likely to plan for disruption and minimise the impact on customers.
Ask the right questions
So, how do businesses know where they fall? There are a few key questions companies should ask, starting with: is your planning designed to adapt or just explain what already went wrong? Sales and operations planning (S&OP) that can’t respond in real-time is a delay, rather than a decision-making tool.
More broadly, are you solving for yesterday’s world? If your network is still built on historic cost curves and old demand centres, what risks are you carrying forward without realising it? Do your suppliers extend your resilience or expose your gaps? And finally, is your automation unlocking flexibility, or scaling the wrong process? Technology is only useful if it makes you faster, smarter, or more stable.
These questions aren’t just philosophical; they’re what separate the leaders from the laggards in today’s market. The good news is that those falling behind don’t need to blindly guess the way forward. Rather, shapers are following a proven playbook, leveraging five clear levers to hardwire resilience, agility, and reliability into their supply chains.
Network design
First, it’s important to engineer multi-location networks that balance cost, service, and risk. The focus needs to be on proximity to demand, redundancy in key nodes, and the flexibility to shift under pressure.
BMW illustrates this well. During COVID-19, BMW redesigned its production footprint to manufacture closer to customers, reducing its exposure and increasing control at a time of global disruption. Its strategy focused on lowering risk in the upstream supply chain while increasing manufacturing in the countries where it sells cars.
In 2022, Oliver Zipse, BMW’s Chairman, shared that the company was producing over 430,000 cars in the US, 60% of which stayed in the market, alongside retaining a footprint in Central Europe and building up its presence in China. He claimed that this proximity to key markets, as well as flexibly increasing or decreasing production according to customer needs, was key to the company’s production success. This approach highlights that it isn’t about a perfect footprint, but rather having one that adapts when the map changes.
Dynamic planning
The monthly S&OP cycle can’t keep up, with Gartner research indicating that it is becoming ‘obsolete.’ Instead, shapers are treating planning as a continuous discipline, integrating signals, data, and cross-functional coordination to respond in real time. This isn’t about perfect predictions. It’s about responsive, multi-layered planning that sees around corners.
For example, Unilever has advanced its planning capabilities through an ‘always-on’ AI-powered forecasting model. It integrates market intelligence, sustainability constraints, forecast and actual sales data between Unilever and the customer to improve forecasting accuracy. Notably, the initial pilot with Walmart in Mexico increased product availability at point of sale to 98%. This approach has ultimately enabled Unilever to dynamically reallocate supply, adjust demand forecasts, and make financial and environmental trade-offs with speed and precision.
Design-to-value
‘Shapers’ are also surgical with cost, investing where it creates value and cutting where it doesn’t. This may sound simple, but in practice, it means design-to-value models aligned with what customers actually care about.
Just look at Hershey, which unlocked $35 million in hidden capacity using automation. This breakthrough came from applying advanced analytics and AI to its KitKat production network, which consists of six lines. Hershey discovered that simple changes in production scheduling and product mix could dramatically increase throughput, without much investment.
This kind of design-to-value mindset requires deep operational data, cross-functional visibility, and the discipline to say no to unnecessary complexity.
Supplier collaboration
Beyond this, traditional procurement models are increasingly shown to break under stress. Shapers build supplier ecosystems that share risk, diversify sourcing, and enable upstream visibility.
Procter & Gamble is a good example, as it has focused on supply chain transparency and agility by creating a digital control tower across its vast network of suppliers and partners. This connected infrastructure enables real-time monitoring, rapid risk response, and collaborative problem-solving when disruptions hit. It’s not just about oversight – it’s about coordinated resilience being built into the ecosystem. This stands the business in good stead to assess and respond to new shocks, such as the impact of the US tariffs.
Digital technology and automation
Finally, digitisation must do more than display data. It needs to enable control, speed, and adaptation.
Zillow is a case in point, having built an ecosystem that weaves AI and automation into every step of a consumer’s housing journey. It brings together a huge range of products and services under one umbrella through its ‘super app’, which enables renters, buyers, sellers, and real estate professionals to search, tour, finance, negotiate, and close on their housing journeys.
While not a traditional supply chain, it shows how tech-enabled orchestration can help bring consistency, speed, and reliability out of complexity. For operations leaders, the lesson is that automation matters when it makes the system stronger – not just faster.
Adapt to disruption
Disruption isn’t slowing down. But too many supply chains are still built for a world that no longer exists – optimised for predictability, driven by cost, and dependent on fragile assumptions. For supply chain leaders, the takeaway is simple: in a high-risk environment, the most strategic move isn’t to stabilise, it’s to reshape guided by a clear playbook.
Dependable delivery isn’t just about the physical movement of goods, but rather building in network flexibility, digital visibility, supplier transparency, dynamic planning, and resilience at every layer of the operation. More than ever, delivering reliably – under pressure, across borders – is what keeps businesses trusted and in motion.
Sylvain Rottier, General Manager at Tennant Company, explores how supply chain professionals are shoring up against labour shortages.
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Europe is facing an ongoing workforce crisis that demands major solutions, meaning business leaders can’t really afford to wait. The numbers are disconcerting: labour shortages across the European Union have grown from 1.7% in 2014 to 2.6% in the first quarter of 2024—a 53% increase that shows no signs of slowing.
Indeed, Europe’s demographic crisis seems to be accelerating, with projections indicating the continent will lose 95 million working-age people by 2050 compared to 2015 levels. For supply chain executives, this threatens operational continuity and competitive positioning.
The impact may vary dramatically across sectors, but few industries will feel the pressure more acutely than essential services like cleaning and facilities management. Annual turnover rates in janitorial services have reached 200-400%, creating a revolving door that diminishes institutional knowledge and operational effectiveness.
The impact beyond empty positions
Twenty-five percent of EU businesses now report production problems directly attributable to labour shortages, transforming what was once a staffing inconvenience into an operational constraint.
The financial implications are potentially severe. Companies experiencing 200% annual turnovers —unfortunately common in labour-intensive sectors—spend six-figure sums annually just on replacement hiring. This figure encompasses recruitment costs, training expenses, and the hidden price of reduced productivity during onboarding periods. However, these costs represent a small part of the problem.
Quality degradation becomes inevitable when organisations rely heavily on inexperienced workers. Higher error rates, missed cleaning protocols, equipment damage, and inconsistent service delivery damage customer satisfaction and brand reputation. In supply chain environments where precision and reliability are paramount, these quality issues can trigger costly disruptions throughout the entire network.
Perhaps most concerning is the competitive disadvantage that emerges when labour shortages force companies to reject new business opportunities. Constrained order books and inflated production costs create a vicious cycle where struggling organisations become less attractive employers, further exacerbating their staffing challenges.
From automation to intelligence
Traditional automation offered limited relief because it required extensive programming for specific tasks and was often an awkward-at-best fit for changing conditions. Today’s AI-enabled robotic systems represent a huge leap forward, delivering true operational intelligence that can learn and adapt, and also optimise performance in real-time.
Modern robotic platforms (such as BrainOS, which power Tennant AMR Machines) leverage machine learning algorithms to improve their performance based on environmental feedback and operational data. Unlike their predecessors, these systems can navigate complex, dynamic environments while avoiding obstacles, adjusting cleaning patterns based on usage data, and even predicting maintenance needs before equipment failures occur.
Integration capabilities have also come a long way. Contemporary AI-powered robots connect with existing warehouse management systems, inventory tracking platforms, and facility management software. This connectivity enables centralised monitoring, performance optimisation, and data-driven decision-making that extends far beyond the robots’ immediate task purpose.
The technology’s greatest advantage lies in its ability to maintain consistent performance standards. While human workers may struggle with fatigue, illness, or high turnover, AI-enabled robots deliver consistent results that enable accurate capacity planning and service level guarantees.
Implementation strategy
Successful AI-robotics deployment requires a shift in thinking from replacement to augmentation. The most effective implementations complement human capabilities rather than eliminate human roles entirely. This approach not only addresses practical concerns about workforce displacement but also maximises return on investment by leveraging the unique strengths of both human intelligence and artificial intelligence.
Smart organisations begin with pilot programmes that target specific, well-defined tasks within controlled environments. This approach allows teams to understand integration challenges, optimise workflows, and build internal expertise before scaling to full deployment. Critical success factors include ensuring compatibility with existing systems, establishing clear performance metrics, and maintaining open communication with affected workers throughout the transition.
The skills landscape is evolving rapidly, creating new job categories in real time. Rather than eliminating careers, thoughtful implementation transforms traditional roles into technology-empowered positions that offer greater career advancement potential and higher compensation. For sectors like cleaning services, which have long struggled with “dead-end job” perceptions, this transformation can meet turnover rates with higher-calibre talent.
Training programmes should prepare workers for collaborative environments where human judgment combines with robotic precision. These hybrid roles often prove more engaging and rewarding than traditional positions, creating career pathways that retain institutional knowledge while embracing technological advancement.
Building tomorrow’s competitive advantage
The demographic trends driving current labour shortages will intensify over the coming decades. Organisations that delay AI-robotics adoption risk falling behind competitors who embrace these technologies early and develop operational expertise while the market is still developing.
However, successful transformation requires more than technology acquisition. Companies must strike a balance between technological capabilities and the human touches that drive innovation, customer relationships, and adaptive problem-solving. The goal isn’t to create fully automated facilities but to build resilient, flexible operations that can weather demographic headwinds.
Leadership teams must think beyond immediate cost savings to consider long-term strategic positioning. AI-enabled robotics offers the foundation for sustained growth in an environment where traditional staffing models look increasingly untenable. Early adopters will develop competitive advantages that compound over time, while late movers may find themselves perpetually disadvantaged in both talent acquisition and operational efficiency.
The question isn’t whether AI-enabled robots will reshape supply chain operations—that transformation is already underway. The critical decision facing business leaders is whether they’ll proactively shape this evolution or reactively respond to competitive pressures once their options become more limited and expensive.
Europe’s demographic winter demands timely action. For forward-thinking supply chain executives, AI-enabled robotics represents not just a solution to current staffing challenges, but a strategic foundation for long-term competitive success in a potentially shaky marketplace.
Nigel Pekenc, Partner at Kearney, gives us insights provide insights on current key trends in supply chain, as well as his thoughts on nearshoring and reshoring.
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How are global supply chains evolving to become more resilient in the face of ongoing disruption, such as geopolitical shifts, raw material shortages, and logistics volatility?
“Supply chains are undergoing a fundamental shift from static, efficiency-led structures to adaptive, digitally managed ecosystems. Companies have moved beyond simply adding redundancy or diversifying suppliers. Instead, they are building globally distributed and closely connected networks, using real-time visibility and predictive analytics to spot vulnerabilities early and respond flexibly. Strong supplier partnerships in key locations and centralised digital control towers that compile multi-tier insights are now essential to manage disruptions ranging from geopolitical unrest to material shortages and transport breakdowns. The aim is no longer just resilience but adaptive responsiveness, enabling businesses to adjust their supply chains dynamically and in real time.”
Nearshoring continues to gain attention but rarely replaces full-scale global operations. How do you see companies striking the right balance between proximity, efficiency, and cost?
“Nearshoring has gained prominence, especially amid recent trade disruptions, but companies increasingly see it as part of a strategic mix rather than a full replacement. They strike the right balance by regionalising the most critical parts of the supply chain, particularly those sensitive to lead times, geopolitical risks, or local market demands, while continuing to source globally to maintain flexibility, secure essential inputs, and benefit from specialised production. This hybrid approach often takes the form of multi-node regional hubs connected by digitally coordinated networks. The key is segmenting the supply chain by disruption sensitivity, customer proximity and value-added stages, ensuring nearshoring delivers strategic value without adding unnecessary cost. This balance enhances responsiveness, optimises costs and mitigates risks.”
What role are technologies such as AI, automation, and digital twins playing in enabling smarter, more adaptive supply chain networks?
“AI, automation and digital twins have moved from buzzwords to essential pillars of responsive supply chains. AI-driven analytics process vast, complex data to provide predictive insights, enabling proactive action amid market shifts. Digital twins offer virtual replicas of supply networks for scenario testing and stress simulation before disruptions occur. Automation enables the rapid execution of these strategies through intelligent robotics, dynamic inventory control and agile manufacturing. Together, these technologies let supply chains anticipate and adapt to disruptions, turning agility from aspiration into reality.”
With supply chains becoming increasingly multi-tiered and complex, what strategies are proving most effective in maintaining control, visibility, and risk mitigation across networks?
“Complex, multi-tier supply chains demand more than standard digitisation; they require fully orchestrated digital ecosystems. Effective companies are establishing integrated digital control towers that deliver real-time transparency and decision-making clarity across all supply chain tiers, from raw materials to end-consumer distribution. Advanced data governance protocols ensure quality information flows seamlessly through well-defined channels. Moreover, clearly established risk categories aligned to decision-making tiers within organisations empower rapid, informed decision-making. In short, the combination of robust digital infrastructure, clear governance and aligned organisational structures is proving indispensable to maintain visibility, manage risk and achieve operational responsiveness at scale.”
Looking ahead, what long-term trends do you believe will define the future of supply chain strategy, and how can companies prepare to capitalize on them?
“The future of supply chain strategy will be defined by the interplay of continuous geopolitical fragmentation, accelerated regionalisation and persistent economic volatility. Companies must architect globally distributed, digitally empowered supply ecosystems that embed flexibility and optionality by design. AI-driven predictive tools and digitally enabled scenario planning will move to the centre of strategic supply chain management, allowing businesses to anticipate disruptions and shift resources dynamically and swiftly. Preparing for this future requires immediate investment in digital capabilities, organisational readiness for decentralised decision-making and development of flexible supplier ecosystems. Companies that proactively build these capabilities today will emerge with significant competitive advantages, able to thrive and seize market share in volatile global conditions while competitors falter.”
Lorenzo Romano, CEO of GCX Managed Services, explains the ways in which supply chain professionals can work around current challenges.
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The turbulence of 2025 has brought significant disruption to global supply chains, amplifying existing complexities and introducing new challenges. From a network management perspective, businesses are grappling with regional compliance standards, the security of third-party data and applications and the logistical difficulty of tracking assets worldwide, including in remote ‘dark spots’. These are no longer isolated technical concerns; they are central to business continuity and operational resilience.
Ongoing challenges, intensified by recent volatility, should prompt businesses to reassess their strategies. As cross-border operations become more critical, agility – both technological and strategic – will be essential to navigate shifting economic conditions. Those unable to adapt may find themselves facing further obstacles, especially those unable to differentiate or scale effectively. Reinforcing this point, research shows that 70% of businesses are planning to increase their investment in supply chain technology, driven by the promise of enhanced reporting, advanced analytics, improved system uptime and more seamless integration capabilities.
The role of MSPs in business resilience
Managed Service Providers (MSPs) are playing a pivotal role in helping businesses navigate this uncertainty. Their value extends beyond technical support to encompass strategic guidance and operational transformation. A recent Gartner study reveals that 61% of executives view technology as a key competitive advantage in supply chain operations, while 20% highlight the importance of emerging technologies in driving supply chain innovation. The report also emphasises the need to strengthen supplier relationships as a strategic priority.
In this context, MSPs are playing a pivotal role in helping organisations reassess and realign their supply chain strategies. They support efforts to diversify supplier networks, facilitate scalable technology adoption and cultivate strategic partnerships, all of which are essential for building resilience in the face of ongoing market volatility.
Securing the supply chain with Zero Trust
A key component of supply chain resilience is the adoption of a global Zero Trust framework. When supply chains span multiple jurisdictions and involve numerous third parties, traditional perimeter-based security models are no longer fit for purpose. Zero Trust continuously verifies every user, device and application, regardless of location, thereby minimising the risk of breaches and ensuring secure access to critical systems and data.
MSPs play a crucial role in implementing and maintaining these architectures, leveraging their established relationships with regional suppliers and vendors worldwide. This enables businesses to more effectively deploy Zero Trust frameworks and strengthen their defences against increasingly sophisticated threats.
Building ecosystems for long-term success
Success depends not only on technological infrastructure but also on the strength of a business’s vendor and partner ecosystem. MSPs contribute to building these by focusing on value-added services that go beyond traditional IT support. By cultivating collaborative relationships and aligning with partners who share a commitment to innovation and agility, businesses can better withstand disruption and maintain operational continuity.
While supply chain volatility is inevitable, it does not have to be debilitating. With the right blend of innovative technology, Zero Trust security and resilient partner ecosystems, businesses can remain agile and competitive. MSPs are central to this effort, helping organisations build the operational strength and adaptability needed to thrive. As 2025 continues to unfold, it will be the capacity for rapid adjustment and strategic foresight that defines long-term success.
SupplyChain Strategy sits down with Ronald Kleijwegt, CEO at Vinturas, to explore the impact of recent tariff changes and geopolitical disruptions on global supply chains.
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Donald Trump’s global trade war seems to be in a lull right now. Reciprocal tariffs between the US and China have paused, the US auto industry managed to compel the Trump administration to ease its levies on cars and vehicle components, and a successful trade deal between the UK and US has de-escalated transatlantic tensions somewhat. Friction between the US and EU, as well as with Canada to the north, remain high, however, and if there’s one thing the last four months have taught supply chain leaders, it’s that when it comes to the current US government, it’s unwise to take any amount of stability for granted.
To take stock — as well as to try and understand what supply chain leaders can do to navigate periods of intense disruption — SupplyChain Strategy sat down with Ronald Kleijwegt, CEO at Vinturas, a Netherlands-based company that develops supply chain network software intended to provide real-time end-to-end visibility for supply chain and logistics teams. While our discussion focused on the impact of recent tariff changes and geopolitical disruptions on supply chains Kleijwegt was keen to highlight the fact that supply chains have always dealt with unpredictability and pain points of one kind or another. Citing examples like the Fukushima earthquake and the Eyjafjallajökull ash cloud, Kleijwegt emphasised the importance of accurate data and technology for resilience to ensure that the supply chains of today survive to become tomorrow’s success stories.
SupplyChain Strategy: Ronald, could you help us set the stage a bit? I think it’s important to recognise that we’re operating in an increasingly unpredictable environment with a lot of pressures and headwinds. Then there’s always some specific context defining the exact moment we’re having these conversations. For example, in the last couple of days, we’ve seen restructuring in the US–China tariff relationship.
Still, uncertainty remains very high. Things are changing all the time. Could you give us a sense of where things currently stand with the latest tariff developments and what that means for organisations trying to stabilise their supply chains?
Ronald Kleijwegt: “Happy to. First of all, welcome to the world of supply chain! Maybe I’m getting a bit older, but like you said, today it’s about tariffs and trade relations with China. Tomorrow, it might be an earthquake somewhere in the world or another ash cloud grounding flights.
“Although I now run an IT software company, I spent most of my career managing large, complex supply chain operations globally. For example, I was deeply involved during the Fukushima earthquake, which had a massive impact due to sole sourcing of components in Japan. The same happened with the Icelandic ash cloud that shut down airspace.
“Now, we’re dealing with tariff changes in North America. There’s a 90-day grace period, but from a long-term supply chain management perspective, 90 days means very little. You’re still in reactive mode.
“Since COVID, the dynamics of global supply chains have intensified. Crises are no longer isolated—they’re overlapping and constant. To respond effectively, organisations need the right data and information, fast. With that, you can be agile and resilient.”
Ronald Kleijwegt, Vinturas CEO
SupplyChain Strategy:Absolutely. One other point is that these disruptions often bring ripple effects, like new regulatory hurdles or customs red tape. Could you speak to how organisations can deal with that increasing level of administrative complexity?
Ronald Kleijwegt: “It’s a good question, and the answer often depends on how governments choose to respond.
“In North America, for example, tariffs have been increased across the board. In my experience, it’s more effective when governments try to attract companies by offering incentives—like tax breaks or subsidies—not by creating blanket penalties.
“When I worked closely with governments, we had to educate them on how supply chains function. If you want to localise production, you need to lower duties on components and raise them on finished goods. That sounds obvious, but many countries still get it wrong.
“The US is now imposing tariffs across the board—including on components—which can be counterproductive. Then there’s the customs infrastructure. In some countries, like Germany, it’s still quite archaic, and delays in implementation disrupt supply chains even further. Policy decisions might be made at a boardroom level, but the operational side often lags far behind.
“A good example of a country doing things right is Morocco. They’ve successfully built a manufacturing ecosystem where over 65% of sourcing is local. This makes them highly competitive, especially with shipping access to South America and the US East Coast.
“Ultimately, companies can adapt to tariffs and regulatory shifts, but they need stability. You can’t build strategy around constantly shifting policies.
“At the end of the day, companies make decisions based on total landed cost, not just the price of production.
“Adidas, for example, adopted what they called Smart Manufacturing. Fast-moving products were produced closer to demand markets, while slower-moving items remained centralized, even if it meant slightly higher costs. It worked because the overall cost-efficiency improved.
“The problem isn’t just tariffs; it’s the constant change. You can’t build a company or strategy when the rules shift every 90 days.”
SupplyChain Strategy:Do you think we’ve entered a phase where economic policy is more deeply politicised?
Ronald Kleijwegt: “What we’re seeing in the US right now is pretty unprecedented.
“Historically, trade barriers and subsidies have always existed. Offshoring to China, for instance, was largely driven by subsidies that made manufacturing cheaper. Even the US took advantage of that.
“But politics and trade are now more openly intertwined. Still, even with sanctions—take Russia as an example—trade finds a way. Goods flow through Dubai, Turkey, Kazakhstan, and so on. You can’t stop trade entirely.”
SupplyChain Strategy: What do the next 12 to 18 months look like for supply chain organisations that want to improve visibility and resilience?
Ronald Kleijwegt: “We’re in an ongoing crisis environment—COVID, wars, trade issues. But one positive is that supply chain now has a seat at the boardroom table. That recognition is growing.
“Companies are also realising that visibility alone isn’t enough. They’re shifting from simple dashboards to full-scale network solutions that connect their entire ecosystem. That’s how you get high-quality data, and that’s how you make AI and automation work effectively.
“More companies are coming around. It’s not just about having the latest tech; it’s about transforming how supply chains operate.
“Change is coming. And, for those that embrace it, there’s a big opportunity.”
Koray Köse, Founder and Chief Analyst for Kose Advisory and Senior Fellow at GlobSEC’s GeoTech Research Center, discusses how to navigate a complex, chaotic world amid a disruptive and tumultuous geopolitical landscape
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35 years ago, the end of the Cold War in 1989 unleashed a wave of globalisation that fuelled unprecedented economic growth through trade, innovation, and economic imbalances. The US led this era, orchestrating a global order where Western economies pivoted to services and innovation, outsourcing manufacturing to Asia and the Global South.
Today, that order is unravelling. As we transition from the fifth Kondratiev Cycle’s digital revolution to the sixth cycle—powered by AI, quantum computing, space, and biotech—we face a profound recalibration of global power. At Kose Advisory, we call this the “Multipolar Resilience Recalibration Framework,” a strategic lens for navigating a world where new power blocs—China, Russia, BRICS, the Turkic belt, and a newly assertive European Union—challenge US dominance in trade, technology, and ideology.
This is not a mere transition; it’s a seismic reset. Governments struggle to regulate AI’s transformative potential, corporations grapple with fragmented supply chains, and nations slide into proxy and direct conflicts. Supranational institutions like the WTO and UN are losing relevance, undermined by bureaucracy and shifting priorities. In this multipolar chaos, data-driven insights—drawn from proprietary supply chain analytics and geopolitical foresight—reveal opportunities for those bold enough to act.
As we navigate this fractured landscape, one truth emerges: in chaos, we must create.
A changing world order: Power blocs and technological divergence
The emergence of assertive leaders—Donald Trump, Xi Jinping, Vladimir Putin, Recep Tayyip Erdoğan—reflects a deeper struggle: no major power, especially one with a divergent ideology, willingly cedes control over global trade or technology. China’s rise is stark. It controls 69% of global rare earth production and refining (US: 1%, Europe: 15%, USGS 2024) and leads in robotics, with 470 robots per 10,000 workers compared to the US’s 295 and Europe’s 219 (Germany: 429, IFR 2024). South Korea, with 1,012 robots per 10,000 employees, sets the global benchmark.
Meanwhile, China’s AI advancements—evident in Huawei’s Ascend chips and Baidu’s Ernie models—threaten US technological primacy, forcing a strategic recalibration. The US-China trade war exemplifies this shift. By April 21, 2025, US tariffs on Chinese imports hit 145%, with China retaliating at 125%. A fragile 90-day truce, effective May 14, 2025, reduced US tariffs to 30% and Chinese tariffs to 10%, with average rates at 51.1% (US on China) and 32.6% (China on US, PIIE 2025). Yet, legal challenges, including a May 28, 2025, US Court of International Trade ruling against tariff authority, signal ongoing volatility. China’s response—curtailing rare earth exports and imposing visa restrictions on US students—underscores the stakes.
Economic warfare, though less visible, is warfare.
The same principle applies at the corporate level: navigating both macro and micro shifts requires sharp insight and unbiased, sophisticated analytics utilising AI and advanced scenario planning and supply chain risk management technology (think of leading solutions like Exiger, apexanalytix, and few more). Kose Advisory’s Multipolar Resilience Recalibration Framework advises leaders to anticipate these shifts.
In a deeply interconnected world, even minor miscalculations can escalate into major disruptions—making strategic, informed decision-making not merely advantageous, but essential for resilience and relevance.
I believe the current US administration sees this moment as a last exit ramp. Miss that, and the US might lose its ability to shape its future. Ever since the World Wars, the US has dominated global trade rules, in part because European economies haven’t been strong enough to play that role. But now, China’s not just catching up—they’re launching AI breakthroughs, chip advancements and trigger market disruptions that challenge US dominance.
Consequently, these tariffs are more than short-term wins. They’re intended to reset the entire global framework—how we trade, how we build supply chains and how we think about technology, labor and social fabrics.
A blunt approach: Strategic adaptation in a tariff-driven world
If Biden’s Uyghur Forced Labor Prevention Act (UFLPA) was surgical by targeting China’s textiles, aluminum, and solar panel sectors with principled precision, Trump’s tariff strategy is a shock and awe therapy: it’s blunt, radical and it assumes collateral damage.
Supply chain leaders, in particular, must prepare for significant upheaval. First, that means moving past the shock. Too many companies are still waiting to “see where the chips fall.” That’s dangerous. Approaches like friendshoring must move quickly: Everyone wants to go to the “safe” zones, but if you wait too long, you’re at the back of the line. Mexico and Canada look like relative winners in this situation for anyone trading with the US. Trump knows Mexico is critical for manufacturing, and Mexico isn’t trying to dominate AI or control strategic assets like the Panama Canal.
Companies need to recalibrate quickly, even if it appears impossible. If your entire model is based on sourcing from China and selling in the US, you shouldn’t wait for tariffs to become permanent disruptors before adjusting. Yes, you’ll take short-term losses—but if you wait, you might not be able to find the capacity elsewhere, or you might not be able to afford the transition when capital becomes more expensive. Assume transformation pain and losses while you still can.
Right now, there’s still financing available, and interest rates—while high(er) than in the previous decade—are manageable. But that window may close quickly. Market manipulations can spike US bond yields overnight—done so by China which, in 2024, held an average of $772.5 billion in Treasury bonds, and is the second-largest foreign US debt holder, just behind Japan. If the Fed sees inflation and low unemployment, they won’t lower rates—no matter what Trump wants. That makes financing tougher.
Supply chain leaders must not panic, but they do need to act decisively. Assertive, educated and risk managing leaders will be positioned best. Identify the core driver of your business—whether it’s people, processes or technology—and rebuild around that in a region that offers stability for the next five or so years. Assume temporary losses, but protect yourself from catastrophic ones. Once this recalibration settles, we’ll enter a normalisation period. We will eventually enter the summer of the Kondratiev Cycle — a period of economic maturity and peak growth, where the core technologies of the cycle reach widespread adoption, driving productivity and profitability. AI and quantum computing are expected to drive growth through the 2030s, based on current technological trends.
But eventually, autumn will follow—a season of readjustment, where growth slows, financial cracks appear, and confidence begins to wane, possibly prompting renewed cooperation with former rivals to extend stability. By that point, you want to be in a strong position.
A new business triangle: Geopolitics, economics, technology
The traditional “people, process, technology” triangle no longer suffices. Success in a multipolar world demands a second triangle—geopolitics, economics, technology—with technology as the linchpin driving the sixth Kondratiev Cycle (AI, quantum computing, 2030s growth). Kose Advisory’s Multipolar Resilience Recalibration Framework integrates these triangles, enabling clients to balance operational excellence with strategic foresight.
Value chains succeed when they lead in both triangles—balancing operational excellence with strategic foresight—and keep their eyes on the day after tomorrow.
It’s no longer enough to optimise for efficiency alone. You need to understand which geopolitical blocs you’re operating in. There’s the US-anchored bloc, the emancipating North Atlantic/European bloc including the UK, the Eurasian axis led by Russia, the China-led bloc, the Turkic belt, and the BRICS nations, just to name a few of the most powerful and are diverging.
If you aim to operate across multiple blocs, your supply chain must be architected to handle that complexity and not all blocs are compatible. Some are fundamentally at odds.
Companies need to identify those blocs and build supply chains that align accordingly. And it’s no longer purely about geography—it’s also about technological and ideological compatibility. There’s a growing phenomenon known as the ‘balkanisation of technology.’ Think of it like electrical adapters in different countries… even though coding standards might be similar globally, the rules around how and where you run your tech are diverging. For instance, China strongly discourages state-run companies from running on US cloud infrastructure. They have to use a Chinese cloud provider, like Alibaba. So if you want to do business in China, you’re not just dealing with different regulations—you’re potentially rebuilding your entire tech stack. Another recent example, such as US restrictions on AI chip exports to China (reported in May 2025) or China’s retaliatory visa restrictions for US students, illustrate ongoing decoupling.
Economically, different blocs are entering divergent growth and recession cycles. If you’re operating across multiple regions, your supply chain must be elastic, adaptive, and agile enough to respond to each environment’s unique dynamics. In some cases, this may require decoupling your business operations entirely. A global tech firm, for instance, may find it necessary to develop parallel manufacturing, compliance, and data infrastructures—one for Western markets and another for China—just to maintain market access. In an increasingly fractured landscape, some countries may even say: “If you’re operating in one bloc, you’re not welcome in ours.” Tech transfer restrictions and IP risks are no longer hypothetical—they’re strategic realities. As a result, companies are being forced to choose sides and rearchitect their business models accordingly. Risk management must become your core competency.
The end of an era: Seizing opportunity in chaos
Globalisation, as we knew it, is over. The mantra of “people, process, technology” has given way to raw, lean effectiveness: what you produce, where you produce it, and how you secure it, with efficiency as a critical but secondary factor.
Kose Advisory’s Multipolar Resilience Recalibration Framework equips leaders to thrive in this chaos by prioritizing agility and foresight. Capital is critical. If you have access to it now, use it to make the necessary structural changes. In a recession, forecasting revenue becomes increasingly difficult, and the risk of failure escalates significantly – so will financing your business and investments into the day after tomorrow.
In the end, you’ve got two choices: You may die trying, or certainly die not trying. As the Turkish saying goes, “Cesurlar bir kez ölür, korkaklar her gün ölür”—the brave die once, but cowards die every day.
The future favours those bold enough to shape it.
By Koray Kose, Founder and Chief Analyst for Kose Advisory and Senior Fellow at GlobSEC’s GeoTech Research Center.
Dave Howorth, Executive Director at global supply chain and logistics consultancy, SCALA, discusses the ways in which food scarcity can be adjusted to.
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Empty supermarket shelves are becoming increasingly common in the UK; they act as an unsettling reminder of just how fragile our food supply has become. From climate-driven crop failures abroad to shifting political alliances and trade tariffs, the systems we rely on to stock our fridges are under increasing pressure. Once optimised for speed and cost-efficiency, today’s global food supply chains are straining under the weight of unpredictable and often overlapping crises.
The UK is heavily reliant on food imports, which renders it particularly vulnerable. Disruptions abroad can lead to ripple effects on domestic prices, availability, and consumer confidence. It’s imperative for retailers, food manufacturers, and logistics providers to reassess sourcing, transportation, and forecasting strategies to ensure food security for the long-term.
Climate and trade disruptions
Recent research underscores the vulnerability of specific crops. For example, a report by Christian Aid warns that climate change poses a severe threat to bananas, the world’s most consumed fruit and a dietary staple for over 400 million people. Alarmingly, by 2080, nearly two-thirds of banana-growing areas in Latin America and the Caribbean may become unsuitable. This is due to rising temperatures, extreme weather, and climate-induced pests. And this is not the first crop which is vanishing from UK shelves; recent reports highlight that oranges, grapes, and even tinned sardines have all been in short supply, demonstrating the very real threat of food scarcity.
Simultaneously, Trump’s tariffs could exacerbate the UK’s challenges when it comes to accessing affordable imports. Whilst the recent US-UK trade agreement has introduced certain concessions, significant challenges persist. Crucially, tariffs can lead to higher prices for imported goods, affecting both producers and their consumers in turn. Combined, these factors contribute to a volatile food system which could struggle to deliver consistent, affordable supply.
Building resilience: strategic imperatives
The good news is that a strategic, long-term approach to sourcing can help cultivate food security. The following approaches can make all the difference when it comes to building this resilience.
1. Data-driven forecasting
Advanced analytics and scenario planning are critical tools in navigating changing circumstances. AI-powered forecasting models can assess historical sales trends, climate patterns, political risk indicators, and market signals, enabling supply chain leaders to anticipate potential shortages and make informed sourcing and stocking decisions. However, accurate forecasting depends on quality data, necessitating transparency and collaboration across the entire supply chain to ensure everyone is working from the same point of ‘truth’.
2. Diversified sourcing
Relying on a single region or supplier for essential goods is a recipe for future disruption. Developing multi-sourcing strategies that include a mix of global, regional, and local providers can enhance resilience – ensuring that if one supplier can’t provide, a contingency is already in place to meet demand. While this approach introduces a level of complexity, it enables agility in responding to disruptions – whether by shifting to alternate trade partners or tapping into contingency inventories.
3. Collaborative resilience
The pandemic only underlined the necessity of supply chain collaboration and agility. Joint planning between manufacturers, retailers, and logistics providers can enable smarter demand sensing, shared transport solutions, and strategic stockholding that protect availability and the flow of product during turbulent times. Initiatives like shared visibility platforms and collaborative planning forums facilitate a shift from reactive to proactive resilience-building.
4. Nearshoring considerations
Interest in nearshoring or reshoring food production is growing as businesses seek to reduce reliance on vulnerable global trade routes. While challenges such as higher labour and land costs exist, nearshoring can offer greater control, shorter lead times, and reduced exposure to geopolitical risk. However, its feasibility depends on product type, resource availability, and long-term infrastructure investment. As such, nearshoring needs to considered as one component of a broader resilience strategy that is unique to each business.
Strengthening the foundations of food supply
To navigate the road ahead, businesses should shift from an efficiency-first mindset to one that equally prioritises endurance and adaptability. This entails investing in forecasting tools, diversifying sourcing strategies, embracing collaboration, and considering structural changes like nearshoring. Food scarcity is not inevitable – but avoiding it requires rethinking the supply chain.
There were many inspiring themes on peoples’ lips at DPW Amsterdam 2024, including collaboration. One of the major reasons procurement…
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There were many inspiring themes on peoples’ lips at DPW Amsterdam 2024, including collaboration. One of the major reasons procurement professionals flock to DPW is the opportunity to learn from their peers, strategise with them, and make connections in order to partner up and grow. We sat down with Dr Matthias Dohrn and Sudhir Bhojwani, business collaborators of several years who prove the benefits of coming together for growth.
Dohrn is the CPO of BASF, a global chemical company, making him responsible for direct, indirect, and traded goods. Prior to this role he headed up a business unit – and things weren’t going well. It got to the point where the question of how to drive performance became a priority. The business needed to consistently drive value, not just be, in Dohrn’s words, a “one-hit wonder”.
“I’ve been in a lot of meetings where people come together and say, ‘we should do something’ – but the next month, you have the same meeting and nothing has changed,” Dohrn explains. “Structuring an organisation in a manner that really drives and extracts value, that’s key.”
This eventually led to meeting with ORO Labs and asking how it could help BASF build a solution that enabled the growth it needed. Sudhir Bhojwani, CEO and Co-Founder of ORO Labs, knew Dohrn already from his SAP Ariba days He even credits him with explaining what ‘supplier management’ means. When he co-founded ORO Labs, his team wanted to focus on being a procurement orchestration platform and build smart workflows.
“When Matthias was running his business unit, as he mentioned, he had this Excel-based process where he was running thousands of measures,” Bhojwani explains. “It was an interesting process. We let him know that our workflow could solve his problems way more efficiently. So we worked with this business unit at that time and saw some positive results. Roughly a year later, Matthias took over as CPO and wanted to bring in the same structure that we’d implemented at the business unit, but on a bigger scale.”
Kicking off the project
Getting this project off the ground meant having a business case, first and foremost. This required actually sitting down with the people who do the ordering, because procurement needed to understand the options it had. “So, with every plant in BASF – all approximately 150 of them – we had to talk to them, and look at the individual spend of each plant,” Dohrn explains. “This included direct procurement of raw materials, energy, logistics, indirect spend for services, and so on. Then we had brainstorming workshops, generating between 30 and 50 improvement measures per workshop.
“Then, because it’s bottom-up, you bring in the performance management tool to prioritise the measures. Then you go through the business case and confirm the value. As these measures go through the implementation levels, it’s very satisfying because you can see how you’re making progress in driving value every day. The people who own the measures set the timeline themselves, and there are incentive schemes behind the best ideas.”
Driving value to motivate people was a priority from the start, and something BASF discussed with ORO Labs early on. People are able to see the status of their measures thanks to ORO Labs, which means they’re able to see the results and also see other peoples’ great ideas. “You create a wave of people who are driving value, much faster,” Dohrn adds.
Addressing the challenges
From Bhojwani’s perspective, there were multiple challenges when approaching BASF’s requirements. Fundamentally, ORO Labs was building a brand new workflow, as BASF required a very different take on what that means. ORO understanding how that translated to what BASF needed was the first challenge.
“We needed to understand the structure Matthias has, and what the work streams should look like,” Bhojwani explains. “We had to figure out how to model these work streams within our tool in a way that made sense. An indirect work stream is not the same as something in direct material; those things are very different. So here’s where our workflow tool worked quite well. We could customise how direct material work streams should behave, compared to indirect work streams, how country A should behave compared to country B, and so on.
“It was important that we could bring flexibility, and that we could solve workflow problems in innovative ways. Another challenge was the user experience part. We had to make sure that the system worked for everybody, otherwise nobody would participate in the system. We had to keep working on it, keep fixing it, and that took a good 18 months of tweaking. The biggest thing has been understanding how BASF actually generates value, and how a workflow can help. It’s been very interesting.”
Identifying the value
Collaborating with ORO Labs has unlocked an enormous amount of value for BASF. Dohrn has seen the business come together thanks to the work that was put into communicating and collaborating with every site across businesses and functions, and BASF is continuing to conduct workshops for further improvement. There’s also, of course, the EBIT being gained from the business cases, putting BASF on track to generate sustainable savings.
“There’s been a real mindset change,” Dohrn states. “We’re now really focused on value, and we’re using this ORO Labs tool to hold each other accountable. You can see the progress every day. We call it the iceberg because you can see below the implementation levels. Everything starts off below the water line – no value created yet, just potential. Then you see it moving beyond the zero line into the positives, and every day I can see the difference between now and yesterday with just a click. It’s so fulfilling to see what we have created.
“We’re able to see the interaction with the plants, the interaction between people, and interaction with the requisitioners, and we can create something positive together. I think that’s huge. It’s only going to bring more and more value over the next few years. People are used to the tool now, they find it easy. It has created value and everyone’s happy because the cost pressure on the plants has gone down.”
Tonkean is built differently. Tonkean is a first-of-its-kind intake and orchestration platform. Powered by AI, Tonkean helps enterprise internal service…
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Tonkean is built differently.
Tonkean is a first-of-its-kind intake and orchestration platform. Powered by AI, Tonkean helps enterprise internal service teams like procurement and legal create process experiences that transform how businesses operate. The transformation hinges on four key functionalities, intake, AI-powered orchestration, visibility, and business-led configuration (no-code), which internal teams leverage to use existing tools better together, automate complex processes across teams and tools, and empower employees to do better, higher-value work.
Jennifer O’Gara is the Senior Director of Marketing, Director People and Talent at Tonkean. O’Gara’s route into procurement came when Tonkean became active within the space. “While we initially focused on solving complex process challenges across entire enterprises, we quickly realised how much procurement could benefit from this approach,” she explains. “Procurement processes are inherently complex and collaborative and cross-functional, making them a perfect fit for Tonkean’s orchestration capabilities. We were right. Since we entered the market, we’ve been blown away by how enthusiastically process orchestration has been received. That’s keeping us excited about procurement.”
This year, DPW Amsterdam 2024’s theme was 10X, with a focus on the importance of companies aiming for a moonshot mindset instead of an incremental approach. As far as O’Gara is concerned, achieving 10X improvements in performance is within reach for procurement, but it requires a shift in how the function thinks about growth. “It’s not just about doing more of the same faster—it’s about fundamentally rethinking the processes that drive your business,” reveals O’Gara. “Your processes are like your company’s infrastructure. When you optimise at the process level, you don’t just create incremental gains; you can fundamentally transform the way you operate at scale. You can remove bottlenecks permanently, facilitate easier collaboration org-wide, and drive true, reliable automation across all your teams and systems. The result is exponential performance improvements that can be sustained over time. Aiming for 10X isn’t just a lofty goal—it’s achievable. The key is focusing your improvement efforts at the process level.”
However, the journey to 10X isn’t straightforward. Some organisations believe they can just layer new technology on top of old processes. According to O’Gara, this won’t unlock 10X growth and will still leave your company lagging behind. “Getting to 10X starts, instead, with building better processes—and moving away from the idea that any one technology will do the trick,” she says. “For example, AI. AI is powerful, but it’s just a tool, and it’s only valuable if used strategically. To truly unlock 10X improvements in performance, you need to integrate technologies like AI into your core processes in a way that’s structured, strategic, and scalable. You will only ever be as innovative or adaptive or as effective as your processes are dynamic, dexterous and dependable. How do you build better processes? That’s where process orchestration comes in.”
Process orchestration refers to the strategy — enabled by process orchestration platforms — of coordinating automated business processes across teams and existing, integrated systems. These processes can facilitate all procurement-related activities. Importantly, they can also accommodate employees’ many different working preferences and styles.
Instead of simply adding to an organisation’s existing tech stack, process orchestration allows companies to use their existing mix of people, data, and tech better together. One promise of process orchestration is to finally put internal shared service teams like procurement in charge of the tools they deploy.
This goes a long way towards solving one of the enterprise’s most vexing operational challenges: the inefficiency of over-complexity born of too much new technology. It also allows procurement teams to truly make their technology work for them and the employees they serve. As opposed to making people work for technology. Process orchestration breaks down the silos that typically separate working environments. No longer do stakeholders have to log in to an ERP or P2P platform to submit or approve intake requests, just for example. The technology will meet them wherever they are.
“It helps you create and scale processes that can seamlessly connect with all of your existing systems, databases, and teams, while accommodating the individual needs of your employees and meeting them in the tools they already use,” adds O’Gara. “Orchestration allows you to automate processes across existing systems—like ERP, P2P, and messaging apps—so data flows automatically between them. It allows you to surface technologies like AI when and where they’re most impactful for stakeholders.”
Speaking of AI, it remains one of the biggest buzzwords in procurement. Indeed, anything that offers Chief Procurement Officers cost savings and efficiency will prick their ears, but the question remains: can the industry fully trust it? O’Gara believes it is ‘overhyped.’ “When it first emerged, it wasn’t just seen as a new tool—it was almost treated like magic,” she explains. “The hype still hasn’t died down, and that’s been a problem. It’s created unrealistic expectations and skewed perceptions of what innovation with this sort of technology actually entails; I can’t tell you how many procurement leaders have admitted to us that they’re getting pressure from the C-suite to invest in AI-powered tools just because they have ‘AI’ in the name.”
While clear with her scepticism regarding generative AI’s current place in the market, O’Gara recognises its potential. “Generative AI’s potential is huge—especially if it’s deployed strategically at the process level,” she reveals. “It could truly transform procurement, shifting teams from transactional roles to strategic partners who are involved early in the buying process and appreciated for their unique expertise—and for the unique business value procurement alone can deliver. But AI on its own isn’t going to save procurement. The reality is, many organisations jumped into the AI hype without a real strategy, and that’s why they haven’t seen its full value yet. The key is integrating AI thoughtfully into core processes—that’s when we’ll start seeing its real potential.”
With an eye on the future, O’Gara expects the next year to continue to revolve around AI adoption, but in ways that deliver real value. “I think we’ll see procurement truly stepping into a more strategic role, with businesses recognising procurement as a key partner, not just a back-office function,” she says. “This shift will be driven in part by new technology, especially process orchestration and AI, helping procurement bridge gaps in communication and collaboration across teams. Another big trend will be the rise of personalised, consumer-like experiences in procurement—making buying and approval processes smoother, more intuitive, and better tailored to the needs of individual users. It’s an exciting time, and we’re just scratching the surface of what’s possible.”
It’s impossible not to be inspired by the energy at a DPW event. DPW Amsterdam 2024 was buzzing with that…
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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.”
When we’re talking about technology in procurement, the importance of partnership is a major component for success. No business is…
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When we’re talking about technology in procurement, the importance of partnership is a major component for success. No business is an island, and joining forces with experts is, increasingly, the direction many move in for the sake of growth.
At DPW Amsterdam 2024, we met many businesses who were looking around at the procurement sector in search of either what direction to move in next, or who they can help. The event is one that brings people together to learn, to teach, to discover the cutting edge of procurement, and be inspired by it. So when we sat down with the CEO of Fairmarkit, Kevin Frechette, it wasn’t surprising that he brought Nick Wright, who leads bp’s Procurement Digital Garage, into the conversation.
For Frechette, one of the best things about working in the advanced procurement technology sphere is joining forces with other businesses to help them keep improving, and vice versa. “Having the chance to work with people like Nick, who are pushing the envelope when it comes to autonomous sourcing, is amazing,” he explains. “We’re fired up to be at DPW, absorbing this atmosphere.”
While it’s something of a running joke in the procurement world that most professionals in the sector don’t deliberately choose it, Wright actually did. “I went to university and thought ‘wow, I fancy a career in procurement or vendor management’. I know a lot of people don’t have that story, but I’ve been doing something I’m passionate about from the beginning. I love making deals, whether I’m buying a car, a house, or something for BP.” The Procurement Digital Garage he leads exists to look at problems being faced across procurement, and figuring out possible solutions.
For Frechette, the intention wasn’t to start a company in the procurement space, but his team quickly saw the opportunities within it. “We had this ‘aha’ moment,” he says. “It was a tough pivot. There was a lot of debate, a lot of late nights. I’m super glad we made it because we got to be in a space where people can be forgotten about, and we’re able to give them centre stage.”
The realistic approach to 10X
DPW itself exists to put procurement under the limelight. Each event is themed in a way that gets conversations flowing around the next big thing in procurement. For Amsterdam 2024, this theme was 10X – something Frechette believes isn’t achievable right off the bat.
“It’s something to strive towards,” he says. “It’s something where you work on getting a little better every single month, every quarter. You keep getting those small wins, and you build credibility. There’s no silver bullet. You just have to start the journey and learn as you go.”
For Wright, it’s about not getting caught up in the hype, but figuring out what’s realistic. “There’s a lot of hype out there, and the beauty of something like my team at the Procurement Digital Garage is to weed out that hype, because what’s right for us might not be right for someone else. Having a team that’s out there in the market, testing and figuring out what’s real, will put you in good stead.”
“There’s a leap of faith element that can be challenging to achieve, before you can really strive for 10X,” Frechette adds. “It’s like Amara’s Law: humans typically overestimate the value of technology in the short term, but underestimate it in the long term. So the hype is needed. We have to help people on that journey and sometimes, a leap of faith is needed. For the people that risk it, it’s exciting, and they’re then well positioned for the future.”
However, again, managing expectations is important. “People might be on the sidelines expecting a 10X solution,” says Wright. “But the reality is, you’re going to get 5% here, 10% – smaller pockets of improvement.”
The benefits of advanced technology are absolutely being seen at this stage, but being realistic about the future outcomes is important. “The benefits are there – not at the scale of 10X – but if you just make a start, you’ll achieve wins,” says Frechette. “You broadcast those wins across the organisation. That generates excitement, and then you can work on the next thing because you have ground swell.”
How ‘the future’ has changed
What’s interesting is that this 10X focus, this drive towards incremental wins, has reframed the way businesses plan for the road ahead. ‘The future’ used to mean having a three or five-year plan. Now, the future is only 12 months away.
“The thought process right now is ‘what can we do that’s super optimistic in just 12 months’?” says Frechette. “Then you can put in realistic time frames and set off on a sprint to get there. You have to be able to move fast. We have launches every two weeks now, and we have to be flexible with our roadmap along the way. But we always know where we’re going – we have a north star.”
“To me, that’s the only way to do it,” Wright adds. “I don’t have a crystal ball. Nobody knows what’s going to happen in two or three years. So what’s the point of creating a plan that’s going to get you to a certain point in those two or three years? You have to work on small iterations, make adjustments, change direction as necessary.”
It’s part of what makes Fairmarkit and BP an active partnership – the ability to be flexible and open up discussions at every point. It’s all about real-time feedback and trust-building, to the extent that both parties feel like they’re on the same team.
The right people in the right places
Because ultimately, it’s the human element that makes transformation happen. Having the right people in place is one of the elements that’s key to making sure implementing advanced tech for the sake of business strategy works at all. “It’s about access to talent and making sure you’ve got a capable user group that can make the most of that technology,” says Wright. “You don’t need to be a data scientist, but you do need to have the right mindset to take advantage of the tools you’ve got.”
“I agree – you have to get the right people on the bus,” adds Frechette. “You all have to be committed to going on the journey together. Prioritise where you start and where you’re going to have the most value with the lowest risk, and have people on your side who can give suggestions and ideas.”
While the much-discussed talent shortage can create challenges there, DPW as an entity proves that not only does procurement keep becoming more appealing and exciting, but where there are gaps, there are digital tools. “I’ve noticed a lot of folks under 30 who are here at DPW Amsterdam, and they’re genuinely interested in procurement,” says Wright. “We’re at a tipping point that makes me really excited about the profession I’m in.”
‘Digitalisation is just the beginning’ according to Crowdfox, a business which aims to improve procurement by bettering the ordering process…
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‘Digitalisation is just the beginning’ according to Crowdfox, a business which aims to improve procurement by bettering the ordering process while lowering costs. That tagline speaks to Crowdfox’s dedication to advancing procurement using the exciting tools the sector now has at its disposal, and this push to innovate is being driven, in part, by Martin Rademacher, Crowdfox’s CSO. We sat down with Rademacher at DPW Amsterdam 2024, the exciting vibe of the event spreading far and wide around us.
Rademacher is responsible for everything to do with Crowdfox’s customers. From sales, to marketing, to customer onboarding and success, and everything in between – that’s Rademacher’s wheelhouse. His background is in management consulting, with a focus on procurement and supply chain. So, while he started out in sales, he soon decided that procurement was the direction to move in.
“During my time as a consultant, I found procurement very interesting because it’s so versatile,” explains Rademacher. “Of course, it’s about the transactional phase with suppliers – but also you’re so connected with R&D, production, logistics, and so on. You have so many fields of application.”
10X thinking
At DPW Amsterdam, the overall theme of the two-day event was 10X. The concept of the 10X rule is around taking a goal you’ve set for yourself and multiplying it by 10. It’s an aspirational tool, coaxing all of us to aim higher. In procurement, that means innovating.
“In the last two years we’ve seen tools like ChatGPT trigger some big adaptations in the procurement world,” says Rademacher. “I think there is the opportunity now to achieve 10X in terms of efficiency gains. Especially when it comes to making better decisions, more quickly, in order to analyse data. We’re now finding out what AI can really do, and focusing on how that can help with strategy.”
For Rademacher, he believes people have the right tools to achieve 10X – it’s now about implementing those tools properly, and having the right culture.
“In the last couple of years, implementing tools has become much easier than it was a decade ago,” Rademacher continues. “They’re so well designed that they fit into large procurement systems, and can connect with other best-of-breed tools. I’d say implementation should be the focus, but it’s not that complicated anymore. AI tools especially are really intuitive. As a result, you don’t need much in the way of change management. People just intuitively cooperate with AI.”
The question of security
The big challenge, Rademacher believes, is data protection. When it comes to barriers preventing a 10X approach, concerns around data privacy are among the biggest issues. As a result, organisations have to take the necessary precautions before plunging into making major technological changes, or risk falling at the first hurdle.
“In the EU, it’s all about data protection,” says Rademacher. These concerns led to the Artificial Intelligence Act (AI Act) coming into force in the EU in August 2024. It was created in response to the rise in generative AI systems, and ensures that there’s a common regulatory framework for AI within the European Union. “Companies are very concerned about their data, but I wouldn’t call this an obstacle – more like a challenge.
“The key is making sure you have a protected environment. Start with a pilot in a limited space, for instance, and then make sure you can find a solution you can control in a safe environment that suits your operations.”
Shooting for the stars
With these measures in mind, it’s never been easier to implement new technologies and aim for that ambitious 10X goal. Certainly, advanced tools have never been more accessible, or more straightforward for businesses to educate themselves about. Even as recently as two years ago, integrating multiple elements of advanced tech – like genAI – wasn’t really possible.
“It definitely wasn’t easy to combine sources the way we can now,” says Rademacher. “Now, you can provide a much better user experience experience not only for procurement professionals, but for anyone who takes advantage of what procurement introduces to the company. Finding the supply to fulfil your demand is so much easier now. You no longer have to have difficult conversations starting with an email to your procurement professional to identify whether you’re allowed to purchase from a certain vendor, and whether they’re vetted or not. Streamlining processes like that makes that information quick and easy to identify.”
Additionally, we’re at a point with advanced technology where the tools we have access to are capable of handling more and more volumes of data at an extremely fast pace. “In consulting, for example, every project started with an analysis of the status quo of a firm,” says Rademacher. “We’d figure out who the vendors are, the categories, and the spend. Depending on the workforce, this could take one or two weeks. Now, with the tools we have access to, you can gather this information in 24 hours.”
The evolution continues
While we’re seeing many of the benefits that come with genAI and other advanced technologies already, it’s only the beginning of what we can achieve using these tools. GenAI is at a peak right now, but according to Rademacher, it might take another five years to achieve its full productivity level. “There’s also this ambitious idea going around of fully autonomous procurement, and it’ll likely take a good 10 years to reach that level of productivity,” he adds. “On the other hand, nobody is talking about robotic process automation anymore because we’re almost there with that already.”
Another challenge is data quality. The cleanliness of an organisation’s data can make or break its use of advanced technology, which is where making the right connections with service providers comes in. “It’s a good example of when to find the right partner,” says Rademacher. “Find someone from the innovative tech space who you think you can rely on. Don’t try to do it all on your own – that’ll just hold you back more and more. Be bold; find the right partner to make the most of your data and that helps you constantly improve. There’s a lot of talent out there, a lot of solutions that are really helpful for organisations of all sizes. You’ll improve step by step.”
There’s no doubt that it’s an exciting time for procurement. The atmosphere at DPW Amsterdam 2024 was electric for that exact reason. The event, in Rademacher’s words, has “a really strong influence on the sector and enables attendees to learn about how the landscape is developing in real time”.
“The AI-driven future is already a reality for us,” he states. “We’re beyond the pilot phase with our AI tool, ChatCFX, and now we really want to drive market share. 2024 going into 2025 sees us in a good position with high user visibility, and now we’re adding ChatCFX to the game, pushing it into the European market. We’re at DPW Amsterdam to meet the players who are looking for a solution exactly like ours, making it an invaluable place to be.”
The buzz of DPW Amsterdam draws in the most innovative minds across the industry. They’re there to have riveting conversations…
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The buzz of DPW Amsterdam draws in the most innovative minds across the industry. They’re there to have riveting conversations with their peers, to inspire, to teach and learn in kind. And they’re there to keep an eye on an industry that doesn’t stop changing for the better.
This is a big part of the appeal for Fraser Woodhouse. Woodhouse leads the digital procurement team within Deloitte in the UK. His team historically focused on large-scale transformations, providing a backbone for suite implementation. Increasingly, however, it’s turning its attention to helping clients navigate a plethora of technology solutions. The goal is to help them build and scale, and take advantage of some of the more niche functionalities available. These are things that can be highly daunting for many customers, which is why Deloitte is there for support.
“We’re helping clients ask the big questions,” Woodhouse explains as he sits down with us at DPW Amsterdam 2024. “How do you connect the technology in a way that allows data to flow from one system to another? How do you deal with processes that are connected to solutions which all have their own release cycles? How do you approach change management? That underpins so much of where the value is going to be achieved, and a lot of the providers will be focusing on it. They just might not have the same capability that Deloitte can provide.”
For Woodhouse, getting involved with procurement was a total accident. He even left the sector at one point, but his strong foundational knowledge – and the exciting landscape procurement is enjoying right now – lured him back in. “It changes faster than I can get bored with it, that’s for sure,” he explains. “Procurement is fascinating.”
Aspiring to greatness
Especially now, with constant conversations around genAI, 10X, and beyond. Procurement is only becoming more interesting, more enticing, drawing young professionals in to fill gaps in the talent pool. 10X was actually the theme of DPW Amsterdam this year, a notion that’s on everyone’s lips. And for Woodhouse, it’s absolutely something to aspire to.
“Aiming for 10X is sensible. You just have to consider your timescale. I’d caution against running before you can walk, but a culture of experimentation is important. Running small-scale pilots can help you hone in on where you really want to see value, or where value is likely to be generated. Starting with requirements is a fundamental thing at the moment, but you shouldn’t underestimate how long that will take. And it’s a continuous consideration, because requirements change. Just keep trying to refine your solution in order to take advantage of everything that’s out there right now.”
Fotograaf: MichielTon.com
Having the wrong mindset is one of the major barriers to adopting 10X thinking. It all starts with the company’s culture, and whether that’s one of growth or not. “I imagine most of the people here at DPW Amsterdam have already made that mental shift,” says Woodhouse. “Last year, people were still trying to understand how they, as big companies, could utilise startups. That’s changed now, and it’s amazing to see companies that were startups three years ago working with all these big enterprise customers.
“They have scaled and grown in partnership with those customers. Mindset is so important, and having the wrong one will only create barriers and missed opportunities.”
Always improving, never slowing down
When it comes to the advantages that technology has brought to procurement in the last few years, the list is endless. Procurement has gone from an overlooked segment of any given organisation, to having a seat at the table and helping make major business decisions. 10X thinking – whether it goes by that name or not – has been spreading across the segment and fuelling businesses to aim higher.
“The layers of automation have really improved,” says Woodhouse. “A year or so back, there were a handful of use cases that you could truly automate, but now you can do it at a much larger scale. Another big change is around security concerns. There are more tried and tested case studies to draw upon now, and solutions are more readily available. You don’t necessarily have to be a pioneer, because someone else has already taken that first step.”
The question of data
Something else that holds businesses back, despite the innovation at their disposal, is an element that can be harder to change: poor quality data. When trying to implement advanced technology solutions, bad data can make or break their success.
“It’s always useful to focus on that and have a dedicated work stream,” Woodhouse advises. “You need someone who really understands data. I think there’s a tendency to try to boil the ocean before you even get going in your transformation, which isn’t necessarily a bad thing. Cleaning up your data before you start, and having a fresh foundation will help you make decisions on what to implement on top of that good data.
“Doing all of that is obviously hugely beneficial, but it’s going to slow you down, in many cases. There are ways around that, like embedding the cleanup of data within the new processes. Data is important – we shouldn’t underestimate that – but there are different approaches to solving the issue of poor quality data, like buying it or using genAI to restructure your data into something more powerful. Either way, you need a strategy.”
Novel thinking 101
Some businesses fall into the trap of thinking that they can’t achieve specific things because their data isn’t in the right position, but novel thinking around data can allow them to still drive forward. “You’ve just got to focus on it. You can’t assume the data’s going to fix itself,” Woodhouse adds.
Novel thinking is certainly something that can be seen at DPW events, and DPW Amsterdam 2024 was no exception. People congregated there to learn, to share stories, to inspire. For Woodhouse, the magic of the digital procurement sector right now is that everybody recognises that their journey has no end. While that may be daunting, it’s a positive thing and keeps procurement professionals striving for more.
“It’s a continuous improvement journey, and I think the best-performing organisations will recognise that, and invest in the business capability to continue that journey,” Woodhouse concludes. “That’s how you get proper value. I love hearing about how people frame problems differently, and how they approach the solutions.”
Making procurement slicker, more streamlined, is the name of the game right now – and this is precisely why Globality…
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Making procurement slicker, more streamlined, is the name of the game right now – and this is precisely why Globality exists. It’s an organisation which leverages advanced, native-built AI to make sourcing more autonomous for Fortune 500 and Global 2000 companies, meaning it has a finger on a pulse of the technology tools procurement now has access to as the industry shifts and evolves.
Keith Hausmann is the Chief Customer Officer at Globality. He has been working in procurement since the early 90s, both in industry as a service provider, and now, at a technology company. He came to Globality from Accenture, where he ran the operations business. During his first real job after college, Hausmann was also part of a training program at a major Fortune 500 company, working closely with a COO. At some point they got into a conversation about salespeople seemingly having an advantage over procurement people due to their access to information, knowledge, and training. The COO suggested that they launch a company to help support procurement. For Hausmann, it was a serendipitous entry to the industry.
“I came to Globality because I saw the business was struggling with how to scale, automate, and deliver a differentiated user experience. Ultimately, I found it really compelling, and joined about five years ago.”
Achieving 10X thinking
Hausmann admits that the concept of what procurement is has only been defined relatively recently, and he’s been in the industry long enough to have seen the shift happen and suddenly accelerate over the last few years. Now, procurement professionals are in a position where they’re able to think big, and they have the tools to support that way of thinking. One of the most-discussed topics right now is 10X, whereby businesses are setting targets for themselves that are 10 times greater than what they can realistically achieve.
“There continues to be, and always has been, so many mind-numbing manual activities that go on in procurement spaces,” says Hausmann. “We’ve built small armies of teams to handle those things. I think 10X has prompted us to take a step back and ask if there’s now technology that can uplift the role of people in the function and take on some of those automatable tasks. Whether that’s writing RFPs, discovering suppliers, or analysing proposals – these are all things that can be automated in today’s technological world. With 10X thinking, you can imagine the many, many, many things that can be automated and just go after them.
“There are barriers, of course. The biggest one is not being able to convey a compelling vision of what we want people to do in the new world. It’s not necessarily about making them go away – it’s about making their daily jobs, lives, and work more valuable. There are so many things around category thinking and strategy that don’t get done because people are spending so much time on tasks that could be automated. So I think the barrier is creating that vision and that plan to shift the operating models, roles, and the skill sets to something new and different.”
People power
Hausmann believes that if roles are reshaped and honed in response to automation, it’s less likely that there will be resistance to change because employees will know exactly what they’re doing, rather than being concerned about their future. “They have to know what they’re doing before they jump on board. It just requires a mindset change and good change management.”
Hausmann believes it’s down to the CPO to drive that change management by conveying the activities, impacts, roles, and operating model they envision. If they can paint a picture of how humans can impact things in a new way, alongside the new technology rather than against it, suddenly it’s an exciting prospect and people are keen to make a bigger impact.
CFOs and CPOs joining forces
While CPOs now have a long-deserved seat at the table to help push change business-wide, CFOs’ roles are also expanding and having an increased impact on procurement. “I think they’ve always influenced what’s going on in procurement,” says Hausmann. “CFOs are the champions of many things, but certainly improving the bottom line of the company. They’re also champions of using technology to make the organisation more resilient, more scalable, and more efficient. There was a time when people thought that the CTO or CIO would be doing that, but more often than not, the CFO is the ultimate owner of improving business impacts. More and more, we’re seeing our customers leaning on the CFO to help them make decisions about investments that have a big impact through technology and AI.
“These days, the relationship between the CFO and CPO is wildly different to what it once was, and CFOs are showing more interest in procurement as a function than ever, making a difference to the bottom line. It makes sense because, in theory, procurement controls one of the biggest cost line items in a company, besides raw headcount.”
Matching the pace of technology
The fact that we still need to focus on change management and relationships confirms that the way procurement is changing isn’t just about the technology. Far from it. However, technology is moving at an incredible pace and needs to be taken seriously. There are things that are possible now which couldn’t be done even one or two years ago.
“A few years ago, technology couldn’t write an RFX document for you,” Hausmann says. “Technology could not instantaneously bring to light the most relevant suppliers from within a customer’s supply base, or in the broader market. It couldn’t write a contract, or an SOW, or a work order. It can now. Those are things that are near and dear to my heart that were impossible 3-5 years ago.”
With these tools in mind, procurement professionals are able to think about the future in short-term stints. Five-year plans are no longer good enough when it comes to the way procurement is shifting – a year is now the maximum for putting plans in place.
“I’ve always thought that procurement, from the perspective of technological advancement and investment perspective, should sit under a broader business umbrella,” says Hausmann. “I’d guess that probably 50% of companies in the world right now have some kind of program in place to save money or improve agility by investing in technology. And speed to market is more important than ever, so sourcing can’t be a bottleneck.”
Looking ahead, Hausmann expects to see many of the unique, differentiated technology providers becoming interoperable together, because big enterprises want services that operate and scale well in combination with others.
“We’re seeing that a lot, and working with our customers on how we improve interoperability and integration,” he says. “Tools will become more seamless, more easy-to-use, more scalable. Another big thing is, and will continue to be, analytics. It’s a hot topic in procurement, and I think there are profound opportunities to be deployed. For Globality, we’ll continue to endlessly innovate on user experience, ease of use, and beyond.”
“I’m overwhelmed,” are Matthias Gutzmann’s first words when asked about DPW Amsterdam 2024. At the end of the bustling two-day…
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“I’m overwhelmed,” are Matthias Gutzmann’s first words when asked about DPW Amsterdam 2024. At the end of the bustling two-day event, we sat down with Gutzmann, the company’s founder, and Herman Knevel, DPW’s CEO, for a debrief. Gutzmann also quite rightly pointed out that the final word on summarising those 48 hours is in the hands of the sponsors and attendees, but if the countless conversations we had with said sponsors and attendees are anything to go by, it was the best DPW event yet. And Gutzmann and Knevel agree.
“I really think that’s the case,” says Gutzmann. “We almost doubled the number of exhibiting startups, we had over 120 sponsors, more startup pitches than ever, and all the feedback I’ve heard so far has been amazing. There are always things you can do better, but I’m absolutely happy.”
Across the 9th and 10th of October, DPW Amsterdam welcomed over 1,300 attendees through its doors at Beurs van Berlage, Amsterdam. Those attendees arrived from 44 countries across 32 industries, and the event itself featured 72 sessions with 140 speakers across five stages. It’s abundantly clear that people are deeply passionate about DPW.
“On day one, it was already packed at 8:30 in the morning,” Knevel states. “The energy in the room was contagious, and the numbers speak for themselves. The startups, the innovators, the corporates, the mid-market – everybody who’s here has a genuine interest in what these guys are bringing to the procurement space.”
Reconnecting with the vision
Gutzmann describes that intangible energy as “bringing a little bit of joy back to procurement”. For many years, procurement was a very ill-defined concept – almost as ill-defined as the role of CPO. The shift has been a quick one, accelerated further by the COVID-19 pandemic, and events like DPW Amsterdam are part of the reason why. CPOs having somewhere to go, to meet, to learn about the procurement landscape is vital, hence that inspiring energy that permeates every DPW event.
“A lot of people are missing that vibe,” Gutzmann continues. “It’s why I founded DPW. I was inspired by Mark Perera [Chairman of DPW], who I worked with at Vizibl, and had great technology while also being so inspiring. I realised we needed to connect founders with CPOs. I think every CPO should talk to one startup founder per week, at least. It’s important that we listen to their vision.”
Striving for 10X
The core of those visions for the 2024 event revolves around the concept of 10X, the idea being that you set targets for your business that are 10 times greater than what you think you can realistically achieve. It keeps people ambitious, always striving for greatness, and it’s especially prevalent in startup culture – hence Gutzmann’s belief that CPOs should be connecting with them more.
“Deciding on 10X for this year’s theme was serendipity,” says Knevel. “The term came along and Matthias said, ‘this is it – this is what we need in procurement’. This is what the industry needs, and we’re exploring it, diving deeper.”
“Last year’s theme was ‘Make Tech Work’, which was all about getting the basics right in order to scale,” Gutzmann continues. “This year we said, ‘how can we take it further?’ We are entering the biggest wave of AI yet. That technology is giving us the opportunity and the possibility to scale outcomes. The world around us is changing so fast, so we need to be more agile, scalable, and faster in procurement. It’s a very ambitious, maybe lofty theme, but it’s a mindset more than anything else.”
“It’s the mindset that drives innovation and speed,” Knevel adds. “That’s really important in this age of procuretech and supply chain tech.”
When it comes to honing that 10X mindset, it’s all about having a purpose in mind. A lot of the procurement professionals we spoke to at DPW Amsterdam called this a ‘north star’, which is the phase Gutzmann uses too. “That’s where it starts. There’s so much procurement can do. There are so many problems in the world, and I believe procurement can be the solution to many of those. So I think it starts with the CPO and their leadership, their vision. You also have to embrace startup innovation, be more experimental in the way you work, instigate new ways of working, and be bold in your thinking. You also have to remember it’s okay to fail.”
Growing DPW
Something that’s particularly impressive about DPW Amsterdam 2024 is that it’s actually the second of the year. Back in June, DPW ventured into the North American market with an intimate summit held in New York City, which CPOstrategy was fortunate enough to be invited to. Planning one wildly popular event a year is one thing, but venturing into a whole new part of the world with an additional one is incredibly dedicated.
“I’m a bit more conservative when planning ahead, so there probably wouldn’t be a New York event without Herman encouraging me,” says Gutzmann. “I’m glad he said ‘let’s go for it’. It was a short-term plan, but it was ultimately very successful and the right decision.”
Knevel adds: “The feedback we got from sponsors and delegates was quite impressive. They were asking for more. And it’s not just Matthias and myself – we have a great team here. This is a massive production, but we made the jump and it’s paid off.”
Inspiration for 2025
When it comes to the lessons Gutzmann and Knevel have learned in response to this event, it’s more about narrowing down the influx of ideas DPW gives them. By the time we spoke with them at the end of the Amsterdam 2024 event, their heads were spinning with inspiration.
“I have so many ideas,” says Gutzmann. “Every year we reinvent the show, so we never rest. We’re always asking what we can do better. How can we improve? I think this year we maxed out the number of sponsor stands that are possible to have. We doubled the number of under-30 attendees. There’s the potential to go a little deeper on the talent side, connecting students with the corporates and building a proper program around that.”
There was also the Tech Safari this year. The idea was to make the expo hall easier to navigate, since it was more crowded than ever this year. Members of the DPW team acted as ‘super connectors’ to help attendees find the right solutions and help startups find new customers. The aim was to simply make it easier for everyone involved to find what they’re looking for in small groups,enabling them to find who they wanted, talk to them, and ask questions. It turned out to be an amazing interactive experience for people, making sure they felt thoroughly looked after and valued.
“Plus there’s an opportunity to cater more to the corporates coming in,” Gutzmann continues. “Perhaps we will build a custom program for them around the event. Some of them are already coming in with teams and doing annual leadership meetings outside of the venue, but I think there’s scope to show them solutions and do some workshops within the event. We can also do more with day zero, where we have site events. There’s much more we can do.”
Giving CPOs what they want
As for the broader future of the event, DPW’s heart lies in Amsterdam and will continue to do so. The organisation is building its team even further and putting strategies in place for future events, allowing it to move forward. “We follow the demand of what our customers want,” Knevel says. That’s what really drives DPW and how the event is themed and set up. The organisation listens to CPOs so it can give them exactly what they need, and what will help the industry level up further and further.
“There are things we’re still developing,” says Gutzmann. “For example, the podcast studio [something introduced in its current form for 2024] is something Herman is very passionate about, so it was great to test it out here. There’s more we can do with that. We have so many ideas and it’s important to engage our amazing team on these ideas and see what they think along the way.”
“We’re ideating a lot,” Knevel adds. “And we’re asking our ecosystem what we should do more of.”
“Ultimately, we’re bringing in the voice of the customer to make sure we’re giving them what they want and need,” Gutzmann concludes. “That’s the whole purpose of DPW.”
We caught up with Shachi Rai Gupta from ORO Labs to discuss the importance of orchestration in procurement.
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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.”
We chatted with Johan-Peter Teppala from Sievo about why procurement needs to use technology wisely.
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When CPOstrategy attended the DPW NYC Summit back in June, one of the buzzwords of the day was trends. Trends in procurement, trends in technology, and how to combine the two. The event was filled with productive discussions around how procurement can benefit from data and advanced technology. This led to a hopeful vibe throughout the day, despite and because of acknowledgements of procurement’s shortfalls.
We caught up with Johan-Peter Teppala, Chief Customer Officer of Sievo, at the NYC conference. For Teppala, that hopefulness is something he took away from the event. “It is great to see so many companies out there with keen interest in adopting new securities and technologies,” he says. “Procurement has increasing demand to do more with less, which explains also the need for technology to drive efficiency and to deliver more. I think it’s just inertia that’s slowing us down.”
However, advanced technology is helping shift the inertia that’s so prevalent across procurement. “Developments in GenAI have been exceptionally fast, especially recently,” Teppala adds. “With an increasing amount of practical Gen AI use cases, this has become a topic that touches each and everyone in procurement. At Sievo, we are dedicating R&D budgets to AI innovations. We have quickly been able to ramp up many practical use cases for our clients to deliver business value in this area.”
Using data and technology wisely
Teppala continues: “Sievo strives to withhold our position as the leading Procurement Analytics partner for large enterprises. We are driven by the goal to close the data-to-action gap. We believe analytics alone has zero value, it’s the actions that we take that drive the value.” This was a topic that was repeated several times during the DPW NYC Summit.
“As a result, SIevo’s goal is to ensure our customers can use their time most efficiently. We help them make business-impacting decisions and best use their expertise, whilst Sievo automatically surfaces insights that they can take action on. First and foremost, our work is about carving out insights. And once you have those insights, how do you automate those actions to create opportunities? That’s definitely one thing we’re keen to solve.”
Sievo is also focusing its attention on gen AI – how it can be adopted and what the use cases are. “AI for data cleansing has been around for a while,” says Teppala. “Right now, Gen AI is getting really good traction from a technology point of view. It’s not just insights, but adopting AI into chat interfaces, and reaping the benefits with implementable actions. It’s amazing.”
The changing talent landscape
The increased adoption of AI is going to also change the talent landscape within procurement. Another heavily-discussed topic during DPW NYC was the talent shortage and how it has the potential to slow procurement down. However, advanced technology may be the thing that accelerates it once again.
“The talent you need is changing,” says Teppala. “The procurement mandate has widened beyond delivering cost savings. Now, it’s also about driving sustainability initiatives, emission reductions, increasing diverse spending, and preventing supply chain risks. Procurement has to be creative and resource-effective for reaching ideal outcomes. This is a big challenge but also a big opportunity and also impacts the talent needed in procurement.
“You don’t necessarily need to hire superstars who know everything. It’s about teamwork. Building a procurement team out of people who possess all these modern talents, who can support each other. I can’t know whether this is going to solve the talent shortage, but at least we’re shifting towards a different kind of talent as capabilities change.
Teppala concludes: “We need to be thinking more about what kind of team we actually want to build – not just what kind of really good, talented individual we can find.”
For a company like TealBook, data is king. The organisation helps businesses to navigate the complex supplier landscape by offering…
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For a company like TealBook, data is king. The organisation helps businesses to navigate the complex supplier landscape by offering a foundation of high-quality data. This is something that’s often sorely missing in procurement.
“We have a data problem,” Stephany Lapierre, CEO and Founder of TealBook, told us when we caught up with her at the DPW NYC Summit in June. “It’s always been my view that we don’t have a software or people problem – it’s data. If we could achieve better data – no matter the data stack, no matter the maturity, no matter the vertical – it would be truly transformative.”
Creating a data foundation
Lapierre has watched procurement’s attempt to tackle advanced technology without good data. Simply buying software is the easy part. Some have even tried to build their own architecture around that software. However, that’s often unsuccessful and highly manual. This is what led to the creation of TealBook.
“We’re in this pursuit of how we can deliver to the market,” Lapierre states. “We’ve been building a trusted data foundation for eight years.” More recently, the second version of TealBook’s service is significantly more powerful than the first. This allows it to ingest data at speed and set up new data sources within a couple of hours. “The more data sources, the more suppliers we’re covering, the more attributes per supplier. And, the more signals to improve the TrustScore and the confidence behind the quality of our data.”
Never ignore the fundamentals
The fact that quality data is all too often overlooked in procurement in favour of advanced technology was something of a theme at the DPW NYC Summit. The opinion of Lapierre is that there’s little point in implementing advanced tech without first having usable data in place. Many others at the event felt the same.
“It’s like buying a house because you love the house, but paying no attention to its foundation, plumbing, or electrics,” she explains. “Procurement has been buying up technology solutions, wanting to see the workflow, the UI, what it can do. However, people aren’t asking where that data comes from. How is it being evaluated? What about the compliance side of having suppliers populating a portal?
“Procurement has more and more requirements to get more and more data, so filling the gaps becomes more difficult. There are also increasing demands for transparency, and for regulators to have better quality information. When you’re reporting something, you have to really trust that information. That’s how you give confidence to your board or leadership team.”
A shift in focus
The upside of this disconnect is that Lapierre fully expects the pursuit of better data to be a key trend in procurement over the next few years. “I’ve found that no-one talks about the data layer in procurement,” she states. “They brush it under the rug or underestimate how critical it is to use data to feed large language models for better insights. As data becomes more accessible, the need for a trusted data foundation becomes more important. You need good data posture.”
With this very topic being discussed openly at prestigious events like the ones DPW hosts, procurement professionals and leaders are actively working towards solving this blockage. “The problems have to be solved in order to leverage the exponential value of Gen AI, automate workflows, and bring intelligence in across all these functions,” Lapierre continues.
“Consider: what would it mean to your business if you could actually solve that data problem, drive better outcomes, and truly digitise the procurement function?”
Our cover story this month features a fascinating discussion with Rebecca Howard, Head of Supplier Relationship Management at Coventry Building…
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Our cover story this month features a fascinating discussion with Rebecca Howard, Head of Supplier Relationship Management at Coventry Building Society who talks operational transformation, ESG, and procurement as a creator of social value and community engagement…
Social values
The role of procurement has changed. Today, the function has become a driver of so much more than cost reduction and business continuity. In the past few years—especially since the pandemic—procurement’s potential to not only support sustainable practice, digital transformation, and supply chain resilience, but to champion the values of the business as a whole has become increasingly evident.
Coventry Building Society touches the lives of millions of people across the UK. We help them save and borrow to support their goals and livelihoods. “We’re owned by our members and our core belief is that we put our members first,” says Rebecca Howard, Coventry Building Society’s Head of Supplier Relationship Management. “Our members want us to keep their money safe and have an impact on people’s lives. That’s why our purpose is making people better off through life.”
Elsewhere, we also have an exclusive interview with Deputy Chief Procurement Officer of IDEMIA’s Smart Identity division, Mark Janssen who discusses his procurement journey with IDEMIA. It’s a role that’s putting trust at the heart of his approach to partnership, procurement, and innovation…
For governments, trust in a company like IDEMIA to deliver reliable identity solutions is vital. Vital not only to the wellbeing of their citizens and institutions, but for national security. Mark Janssen, Deputy Chief Procurement Officer of IDEMIA’s Smart Identity division, emphasises this: “If a government runs out of identification documents, it triggers an immediate crisis.” Without valid forms of ID, he continues, citizens can’t travel, buy a house, or register a newborn child.
Shelley Salomon, VP of Global Business, Amazon Business, discusses her company’s commitment to fostering gender diversity in procurement.
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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.”
Sagi Eliyahu, Co-Founder and CEO at Tonkean and Alejandro Fernandez, Head of Global Procurement at Semrush, discuss the power of intake orchestration and procurement’s rise to the top of the agenda in the c-suite.
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In a world with almost endless possibilities, why waste time on manual or outdated processes?
Technology is an enabler in everyday and business life. It is there as a vehicle of change and a weapon of efficiency. When used correctly, AI can help people focus on higher-value and more fulfilling work – which is what an entire generation of people crave today. The problem is, technology is not leveraged as efficiently or as strategically as it could be today — especially in enterprise back-office operations, like procurement.
This is where Tonkean comes in. Tonkean is a first-of-its-kind intake orchestration platform. Powered by AI, Tonkean helps enterprise internal service teams like procurement and legal create process experiences that transform how businesses operate. In part by changing how internal teams leverage smart technology to empower the employees they serve to do better, higher value work.
Process orchestration
Process orchestration refers to the strategy — enabled by process orchestration platforms — of coordinating automated business processes across teams and existing, integrated systems. These processes can facilitate all procurement-related activities. Importantly, they can also wrap around an organisation’s existing systems and accommodate employees’ many different working preferences and styles.
Instead of simply adding to an organisation’s existing tech stack, process orchestration allows companies to use their existing mix of people, data, and tech better together. The true promise of process orchestration is to finally put internal shared service teams like procurement in charge of the tools they deploy.
This goes a long way towards solving one of the enterprise’s most vexing operational challenges: the inefficiency of over-complexity born of too much new technology. It also allows procurement teams to truly make their technology work for them and the employees they serve. As opposed to making people work for technology. Process orchestration breaks down the silos that typically separate working environments. No longer do stakeholders have to log in to an ERP or P2P platform to submit or approve intake requests. The technology will meet them wherever they are.
All in one place
Enter Sagi Eliyahu, Co-Founder and CEO at Tonkean. He explains that over the past few years, Tonkean has focused more on procurement specifically. In part because the challenges the procurement function faces day-in and day-out represent perfect orchestration use-cases. Procurement processes touch so many different teams, tools, and departments. Poor procurement performance can often be traced back to the fact that all these moving parts otherwise aren’t able to communicate easily with each other. Tonkean was built to address exactly that problem.
“We saw that our procurement customers were having great success with it, but the market started to heat up as well,” he reveals. “It made sense because it happened for us on the procurement and legal side. They are teams that are very central to an organisation and their process is never just siloed into their tools and department. You need that idea of orchestrating all the different moving parts for it to have high adoption, faster cycles, better quality and compliance.”
Tonkean and Semrush partnership
One of Tonkean’s biggest customers is Semrush. Semrush, in turn, understands the potential of orchestration in procurement well. As a result of Tonkean’s intake orchestration capabilities, they’ve almost halved cycle times for intake requests — from 19 days to just 10. Alejandro Fernandez, Head of Global Procurement at Semrush, works closely with Eliyahu and Tonkean and couldn’t be happier about the collaboration…
Supply chain 4.0 – where preparedness and opportunity meet in the digital supply chain
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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
Businesses have been forced to navigate and adapt to these challenges to ensure continuity, limit interruption and reduce risk
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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.
Recent research conducted by InterSystems highlights a critical challenge within supply chain organisations in the UK and Ireland
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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.
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.
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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.
Many people shop on Amazon. What is Amazon Business, and how is it related to procurement?
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.”
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.
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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.
What is the link between businesses collaborating with suppliers, and suppliers being able to give them helpful sustainability information?
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.”
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.”
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.”
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…
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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.
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.
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.”
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.
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…
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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.
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…
Timothy Woodcock, Director of Procurement at CordenPharma, discusses the new wave of change following acquisition and amid transformation
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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.”
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.”
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.”
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.”
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.
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…
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.
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.”
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.
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.
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…
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…
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…
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.
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.
This month’s cover story sees us speak with Brad Veech, Head of Technology Procurement at Discover Financial Services.
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.
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.”
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.
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.”
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.
Jolyon Bennett, CEO of Juice, discusses how sustainability has moved to the forefront of his organisation’s operations
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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.”
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
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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.
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…
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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…
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.
Here are 10 of the most important leadership skills that CEOs need to demonstrate in 2023.
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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
An approachable CEO who welcomes conversation and is an active listener will help employees feel at ease raising issues or concerns. This approach will help build strong relationships with staff and customers and encourage a healthy culture which is beneficial to employee retention. Leaders with strong, trusting and authentic relationships with their teams know that investing time in building these bonds which makes them more effective as a leader and creates a foundation for success.
10. Growth mindset
If a CEO arms themselves with a growth mindset it allows them to meet challenges head-on and evolve. This shines a light on improving through effort, learning and persistence. As others may back down in the face of adversity and upheaval, successful CEOs will strive to move forward with confidence. Those with a growth mindset are unlikely to be swayed as they have the tools needed to reframe challenges as opportunities to grow.
Sara Malconian, Chief Procurement Officer at Harvard University & Jim Bureau, CEO of JAGGAER explain how ESG & the Circular Economy is changing the evolution of procurement.
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We speak to Sara Malconian, Chief Procurement Officer at Harvard University and Jim Bureau, CEO of JAGGAER to see how ESG and the Circular Economy is changing the evolution of procurement…
Sara, how have you seen your role evolve as a procurement leader over the years as ESG and supplier diversity come into focus?
Procurement leaders have gone from ‘cost cutters’ to ‘problem solvers’ within their organisations. Our core mandates used to be to drive cost savings and efficiency. We were hyper-focused on getting the most out of the organisation’s spend and supplier relationships. Those priorities haven’t gone away, especially in today’s inflationary environment, but the expectations of the procurement function are significantly higher and broader today.
Procurement functions saved their companies during COVID and the confluence of disruptions that followed. We showed we are a strategic linchpin. We are now looked upon to drive value and impact and strategically guide our organisations to achieve broader goals, including diversity and environmental, social, governance (ESG). Internal stakeholders realised the benefits of procurement and sought help with advancing their department’s agendas or solving their challenges. We listen to their needs, allocate the right resources, and ultimately enable them and the overall organisation to be successful.
I’ve been in procurement for over 20 years, and I can honestly say you’d be hard-pressed to find a more rewarding and exciting career. Procurement professionals have a real opportunity to make a tangible difference within their organisations, communities, and the world through the way we source products and services.
What is Harvard doing to have a positive impact on society? Can you share some examples, Sara?
Across the Harvard community, students, alumni, faculty, and staff are advancing scholarship and teaching on the world’s most significant challenges, and everyone wants to do their part to address inequities. Supplier diversity and inclusion have been a priority for Harvard for years, but we wanted to make even more of an impact and really invest in the growth and development of diverse businesses, especially as the pandemic highlighted inequities and disparities within our communities.
In 2021, we formed the Office for Economic Inclusion & Diversity (OEID), which is dedicated to reaching out to diverse suppliers, giving them opportunities, and providing them with tools, training, and resources to be successful. The office also encourages the use of underrepresented business enterprises (UBEs) in the purchasing of all goods, services, and construction at Harvard and standardises procurement practices with these businesses across the university.
We’re proud of the work this office is doing. We’re actively training suppliers on Harvard’s policies and how they can work with us. We’re creating a central location for them to access bid and RFP opportunities. UBEs can also apply to be mentored by Harvard Business School students.
We’ve created a dashboard to track and analyse spend with diverse suppliers across all of Harvard’s schools and measure progress over time. Everything we’re doing is aimed at increasing spend with our existing diverse suppliers, as well as the number of diverse suppliers that work with Harvard, and helping these suppliers grow their businesses.
Jim, why is prioritizing ESG and supplier diversity important and what steps can companies take today to progress in their journey?
Beyond being the right thing to do, investors, boards, regulators, customers, and employees now expect organisations to prioritise ESG and diversity initiatives and walk the talk. There’s also a clear business impact. Supplier diversity drives competitive bidding processes that lead to cost savings. Working with partners who are sustainable and have different ideas and perspectives fuels innovation and creates a competitive advantage. Sourcing from a sustainable and diverse supplier pool also reduces risk by broadening organisations’ access to multiple resources for various materials, products, and services.
One of the most critical steps companies can take to progress on their ESG journey is to make it clear to suppliers that environmentalism is a priority for their organisation. They will attract suppliers with higher levels of ESG maturity and provide suppliers who are earlier on in their ESG journey with sustainability toolkits and training to help educate them on eco-friendly best practices and sustainability innovations.
This step avoids having to overhaul their supply chain to account for ESG. Strategically managing suppliers by leveraging third-party data, scorecards, and supplier audits are crucial for understanding the ESG risks that suppliers pose and minimizing disruptions by working with them to correct these issues.
Successful supplier diversity programs start with a top-down culture shift. If a company’s culture isn’t diverse, inclusive, and supportive for all its stakeholders, they won’t be able to drive supplier diversity in a meaningful way. Supplier diversity strategy should map back to company goals and include an executive-level champion to sponsor the program internally and help bring in the resources they need.
Outside of leveraging technology to identify diverse suppliers and build a program, businesses can talk with people who have been in their shoes. They can collaborate with like-minded companies at industry events, engage in relevant LinkedIn groups, and connect with organisations such as the National Minority Supplier Development Council.
Once diverse suppliers are on board, organisations can create a supplier diversity policy that clearly outlines how many diverse suppliers need to be invited to bid for each event to ensure teams are executing on the strategy. Leading supplier diversity programs go beyond simply spending with diverse suppliers to providing mentorship and training them on how to respond to RFPs correctly, as well as creating environments where it’s easier for them to engage.
Jim, what role does technology play in helping organisations achieve ESG and supplier diversity goals?
Technology is a key enabler of ESG and supplier diversity initiatives. One of the biggest obstacles to supplier diversity and ESG is a lack of reliable supplier data. Suppliers don’t always keep their information up to date in self-service portals. The data procurement teams have isn’t always enriched to the level they need, with insights on diversity status, certifications, and proof of ESG compliance.
Researching and assessing suppliers is tedious and time-consuming, which leads many organisations to skip the verification step. Without this information, organisations don’t have a true picture of the inclusivity and sustainability of their supplier network, which makes it impossible to identify the right partners to source from to meet their ESG and supplier diversity goals and make an impact.
Technology addresses this challenge by automatically collecting, enriching, validating, and integrating the supplier data needed to obtain this level of supply base visibility and make decisions that drive ESG and diversity. AI-powered tools are available to match buyers with specific diverse suppliers who also have the capabilities to help drive ESG objectives and meet broader procurement criteria.
Software that segments the supply base and helps visualise spending with small and diverse suppliers across a variety of classifications is critical for setting benchmarks and measuring progress and ROI.
Jim and Sara, how do you expect the ESG and diversity conversation to shift and where should procurement leaders focus for the future?
Sara: I expect we’ll see the conversation shift to emphasise measurement. It’s not enough anymore to say you’re committed to ESG – you need to prove it and show demonstrable progress and ROI. Maintaining the momentum on ESG initiatives is hard. Technology is key for setting benchmarks and goals, ensuring accountability for hitting key milestones, and measuring progress and return in a credible way.
Jim: In a declining economic environment, choices inevitably need to be made. I expect the conversation around ESG will center around where companies can focus to maintain progress on ESG initiatives as financial and economic pressures come to the forefront. While some companies may need to scale back in some areas to preserve cash and resources to navigate a downturn, I’d advise them to be careful about slowing ESG down too much as it will be much harder to catch up to current levels after the economy bounces back.
I’d argue that when ESG is done right it can be a strategic lever for navigating a down economy, saving organizations money and resources, driving innovation, and helping them achieve broader business objectives and resilience.
Our exclusive cover story this month features Sangram Bhosale, CPO at Xcel Energy.
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Our exclusive cover story this month features Sangram Bhosale,Vice President and Chief Supply Chain Officer at Xcel Energy. Sangram Bhosale is a highly experienced CPO with an impressive track record of delivering procurement excellence within the energy sector for some of its biggest names.
When the former TransAlta and Husky Energy CPO joined Xcel Energy as Vice President and Chief Supply Chain Officer (CSCO) in 2020, he wasted no time devising a procurement transformation plan to advance the function to the top quartile. One that would capacitate the rest of the organization to meet and overcome the many technical and tactical challenges to meet current and future needs.
What attracted Bhosale to Xcel Energy was its visionary leadership team and an opportunity to catalyze the profound shift in how energy is generated and consumed.
“One of the things that I love, and a big part of why I joined Xcel Energy, is that we are a purpose-driven organization with a bold vision of being an industry leader in clean energy. The fast-evolving and innovation-driven utility industry also attracted me,” he tells us from his Denver office.
“Today, utilities are no longer the stodgy beast of yesteryears where not much had changed for decades. New technology is being explored and adopted, with billions invested in grid expansion and strengthening to meet reliable, cleaner, and increased energy demand. To be at the forefront of and lead that clean energy transition aligns closely with my values and beliefs and makes my role at Xcel Energy very exciting.”
Elsewhere, we also feature exclusive interviews with Vice President of Procurement, Anna Barej, and Director, Procurement Center of Excellence, Shawn Calabrase from Best Buy, Alessandro Gaiati, CPO at Fedrigoni, Norian Wasch, Director Procurement at EuroFiber, David Latten, Head of Global Indirect Procurement at Logitech, as well as Heath Nunnemacher, VP Global Electronics Sourcing, TTI and Mark Brady, Global Supply Chain Director at McPherson’s. It’s a bumper issue!
The second issue of SupplyChain Strategy is live! Features exclusive articles on TTI and McPherson’s
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Our exclusive cover story this month sees us speaking to Heath Nunnemacher, VP of Global Electronics Sourcing at TTI, who details the streamlining of its procurement function into a more efficient and effective value-unlocking enabler of business.
Techtronic Industries (TTI) is among the world’s largest manufacturers of mostly cordless power tools, outdoor power equipment, and floorcare products for both professional users and do-it-yourself (DIY) consumers.
TTI’s growth has been extraordinary – 13 years of consecutive double-digit gross margin improvement, in fact. In 2021 the company set a new revenue growth record just shy of 35%, more than twice that of its closest global competitor.
A significant driver of that growth is a strategic focus on disrupting industries through leadership in cordless technology. To do so, it requires advanced electronics and collaboration with the most innovative and biggest players in the industry. But with the chip shortage crisis looming on the horizon in late 2020, the organisation found itself challenged by a severe lack of visibility in the electronics procurement function. Enter Heath Nunnemacher, the man charged with transforming electronics procurement for the overall betterment of the business.
Not only that, but we also have a fascinating discussion with McPherson’s Supply Chain Director Mark Brady. The health, wellness, and beauty giant McPherson’s has a rich history of agile procurement through resilience and collaboration and Brady reveals its secret sauce.
Plus, we detail the important supply chain trends to look out for in 2023 as well as five top supply chain events coming up!
This month’s cover story is an exclusive and compelling insight into the procurement strategy at Vodafone New Zealand.
“For me, the future of procurement is two things: digital and sustainability,” says Rajat Sarna, Chief Procurement Officer and these two themes are the thread that runs through everything he’s put into place since he took over the reins of the procurement function at Vodafone New Zealand in October 2020.
The role was a huge one to take on, too – the telco employs 2,000 people, serves 2.4m customers and is a $2bn revenue company. The scale of its operations is huge with customers consuming over 3 billion minutes, 4,500 terabytes of mobile data and 55,000 terabytes of fixed line data every month. A key part of his mandate was to transform procurement into a market-leading operating partner to the business that would “ultimately improve the value that we deliver to our customers”.
Sarna went back to basics initially, thinking about what the future capability of Vodafone New Zealand would look like, and what its procurement operation needed to be to support this. He says: “It was very critical for me to have a purpose and it cannot just be better savings or improved cost position. That’s not purpose; purpose is: what are we doing in terms of how we align with the future of procurement?”
Elsewhere, we have exclusive interviews with procurement strategists Lawrence Kane, a SIG Sourcing Supernova Hall of Fame member and Nirav Patel, CEO of Bristlecone. Plus, a ProcureTech exclusive and a guide to the best procurement events over the next 12 months and much, much more.
CPOstrategy speaks exclusively to Kathy Golding, Procurement & Supplier Ecosystem Services Leader at EY Global Services Limited, to see how a range of transformative initiatives have evolved the functions at the Big Four organization.
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This month’s cover story sees us speaking exclusively to Kathy Golding, Procurement & Supplier Ecosystem Services Leader at EY Global Services Limited, to see how a range of transformative initiatives have evolved the functions at the Big Four organisation, in a bid to benefit its operational excellence, its people experience, and the wider global community.
The global EY organization has over 350,000 employees across many countries, providing consultancy, assurance, tax and transactional services that “help solve EY clients’ toughest challenges and build a better working world for all.”
Kathy Golding is the Procurement & Supplier Ecosystem Services Leader at EY Global Services Limited and has been with the company for over 10 years, having spent her entire EY career in Supply Chain Services. Working under the guidance and leadership of Larry Phelan, Chief Supply Chain Officer at EY Global Services Limited and recognized by Procurement Magazine at no. 7 in the Top 100 Leaders in Procurement 2022, Golding helps manage the procurement and supplier relationship management of the Talent, Technology, and Brand, Marketing & Communications (BMC) categories across EY Global, with approximately US$5 billion annual spend. Golding is a highly experienced force at EY, and we were delighted to meet her at the company’s Canary Wharf office to discuss how procurement is evolving at one of the biggest enterprises on earth.
Kathy Golding, Procurement & Supplier Ecosystem Services Leader at EY Global Services Limited
Not only that, but we also catch up with Vodafone NZ’s Rajat Sarna to see how procurement is being transformed at the telco through a start-up mentality.
How can businesses cope with persistent, global supply chain issues and what are the concerns looming on the horizon?
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The Digital Insight speaks to Nirav Patel, CEO of Bristlecone (a supply chain company of the $19bn Mahindra group), who discusses how businesses can cope with persistent, global supply chain issues – and outlines the concerns looming on the horizon.
The evolution of procurement into a true strategic business enabler is fuelled by technological advances. The ability to dig deep into data with true visibility into an enterprise’s entire spend and supplier network has been provided through ever-evolving platforms, such as Coupa’s highly successful Business Spend Management (BSM) platform. In BSM, Coupa has created a digital ecosystem that brings suppliers, vendors, and partners together in the same room with a single ‘source of truth’.
Elsewhere, we discuss how strategic procurement is the way forward at a rapidly growing enterprise, with John Butcher, Group Procurement Director Just Eat Takeaway.com. Plus, we grill Maximillian Tan, Director Business Procurement Asia at FrieslandCampina, one of the largest dairy companies in the world with a cooperative tradition going back 150 years, on how he is unlocking value at the enterprise.
CPOstrategy’s cover star this month is procurement transformation expert, and CEO and Co-Founder of Tropic, David Campbell…
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Right now, procurement excellence is blooming. Experts determined to create change are coming to the fore and aligning procurement with SaaS to bring an end to the do-it-yourself way of working that decimates technology budgets. Tropic is one such game-changer, providing the tools to navigate software procurement’s complexities for competitive advantage.
The CEO and Co-Founder of Tropic is David Campbell, a born entrepreneur. He grew up on a cattle ranch in California and has always had at least one side-hustle on the go. Even as a child, he was running some form of money-making venture at any one time – but he didn’t necessarily consider that entrepreneurial pursuits were his calling until later.
CEO and Co-Founder of Tropic, David Campbell
Campbell studied English at UC Berkeley, and on graduating assumed he’d go into the arts. He’s a lifelong musician and writer, and he moved to a cabin in the woods to write the ‘next great American novel’. This venture, while it didn’t have the exact results he had hoped for, planted the seed in his mind that perhaps entrepreneurialism was for him because he loved setting his own hours and vision, creating a strategy, and executing that…
Elsewhere, we have exclusive interviews with supply chain and procurement leaders at the City of Edmonton and QSC, as well as the results of our first Sustainable Procurement Champions Index. We also have some exciting news from DPW too, ahead of its conference later this month.
Our cover story this month reveals how Sarita Singh, Regional Head & Managing Director for Stripe in Southeast Asia, and her team are driving financial inclusion across the region and supporting SMEs with end-to-end services putting users first
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This month’s cover story reveals how Stripe’s payments platform is driving financial inclusion across Asia.
Welcome to the latest issue of Interface magazine!
Opportunities for innovation and growth via the adoption of new technologies are everywhere. However, organisations are faced with a bewildering array of choices to help them transform and choosing the best option to drive positive disruption is a tough call. We take a look at some of these fascinating journeys…
Sarita Singh, Regional Head & Managing Director for Southeast Asia, Stripe
This month’s cover story explores the genesis of fast-growing payments platform Stripe. Sarita Singh, Regional Head & Managing Director for Southeast Asia, leads a team driving financial inclusion across the region, supporting SMEs with end-to-end services putting users first.
“We’re building products and the financial infrastructure to help our users go cross-border, beyond their domestic boundaries, to widen their markets and drive efficiencies within their financial services infrastructure. With Stripe under the hood, businesses are able to focus on what they do best without wasting time researching, purchasing, integrating, and maintaining dozens of payment technology point solutions because Stripe is a platform that offers all of them, and is already integrated.”
IAG: tech procurement linked to purpose
We speak with IAG’s CPO & VMO Claire Ledder, who reveals the transformative approach to technology procurement being deployed by an Australian market leader home to several leading insurance brands. “We’re now able to tackle sourcing and contracting with an end-to-end approach capable of measuring the value delivered.”
Portrait Photography
U.S. Department of State: facilitating diplomacy with tech
Todd Cheng Director of IT Customer Service at the U.S. Department of State, talks about the ever-evolving relationship between technology and diplomacy. “We’ve been through the process of updating the IT model at State to a new, more customer centric version of the Information Technology Infrastructure Library (ITIL).” By his calculations, these changes have benefited the organisation by reducing network disruption by some 400,000 hours of diplomacy every month.
Afni
Afni’s CISO Brent Deterding explains how breaking down the traditional and perceived barriers between security and the boardroom can transparently position cyber effectiveness as a critical enabler of improved business outcomes.
Afni’s CISO Brent Deterding
Also in this issue, we hear from Zoom on the future of work and report again from London Tech Week where an expert panel gave advice for businesses on anticipating and preparing for cyber risk against a backdrop of geopolitical uncertainty.
There is an urgent need for the digitalisation of the procurement function, according to a new report from leading smart sourcing solutions organisation Globality
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There is an urgent need for the digitalisation of the procurement function, according to a new report from ProcureTech and leading smart sourcing solutions organisation Globality.
The report, which can be read in full here, states that 9/10 of global procurement leaders are committed to the urgent transformation of their operations and processes to become more resilient, agile and future-proofed in these uncertain and volatile times.
The report, which surveyed 170 global procurement leaders, claims that innovative and emerging technologies are being harnessed in order to better arm CPOs as they face global inflation, COVID-19 and geo-political crises such as the war in Ukraine.
Those surveyed also cited the growing need to fully digitalise operating processes in order to improve efficiency and boost cost reduction, while enhancing agility, resilience and value. 90% expected operational transformations within the next three years.
The report covers:
Digitalisation drivers
Future procurement operating models
Digital work in the future
Procurement process digitalisation
Digital supplier management
Challenges to progress
Value of digital adoption
Change manifesto
“Everyone recognises this shift, 99% of companies plan to make changes to their operating model over the next three years,” says the Globality report. “In 2020 and 2021, change has been thrust upon us all. In 2022 and beyond companies are owning the shift. In our research, we have seen the procurement leaders outperform their peers through a focus on resilience and cost in the short term. However, to maintain this competitive advantage in the long term, they need to adopt a new digital-led operating model.”
That said, 81% cited a lack of organisational support with regards to digitalisation, indicating a need for further engagement at some enterprises. 68% say that digitalisation will continue to increase business self-service, while 50% of organisations aim to move to a business procurement-centric organisation, acting as advisors and business partners versus executing transactional processes.
EyeCare Partners works in partnership with clinicians and healthcare leaders to achieve the best patient and business outcomes and this…
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EyeCare Partners works in partnership with clinicians and healthcare leaders to achieve the best patient and business outcomes and this has had dramatic results, such as a 1,500% revenue growth since 2015.
EyeCare Partners is growing through acquisitions, by providing strategic capital and operational support to its network of partner practices in 680 locations across 18 states. In February 2020, this growth was boosted when Swiss private equity firm Partners Group acquired a controlling stake in EyeCare Partners. “They’re a very interesting group,” he says. “They’re very heavy on investment, plus they have a very, very impenetrable and robust sustainability platform too, which is very near and dear to my heart through my time at Unilever,” This level of growth is fuelled significantly by increasing demand for eye care over the longer term, driven by an ageing US population and an increased incidence rate of eye diseases. But this level of growth requires an agile and resilient operational enterprise.
Our cover story reveals a massive procurement transformation programme at Zendesk
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Procurement transformation is the hot topic this month as we speak to Rendi Miller, VP of Strategic Sourcing and Procurement at Zendesk. Miller is a procurement evangelist and transformational leader who is clearly energised as she delivers meaningful change to the function at Zendesk.
“What I’ve always enjoyed about procurement is the visibility into what the entire company is buying, from Marketing creative services to IT and Engineering technology to office furniture and everything in between.”
“Procurement has insight to trends before they become mainstream that gives us the ability to research new partners, technologies and solutions to start addressing the needs of the business early on. Being in procurement offers an awareness to nearly every aspect of the company.”
According to Miller, trust is absolutely critical to success because without that, “there is no reliability, there’s no confidence and there’s no relationship”, says Miller. “That’s something I emphasise with my team. Trust must be earned, but trust is also given. I empower them to be the leaders that I’ve hired them to be…”
Elsewhere, we sit down with Procurement Excellence Lead at Antofagasta Minerals, Christophe Le Flech, to discuss the state of procurement in the South America mining industry, and the work he’s doing to make a difference. We also talk to Convex Insurance’s Head of Procurement & Tactical Change, Vivek Pai… and discuss diversity in the workplace with Silvia Simon, LATAM Procurement Senior Manager at Mercedes-Benz Brazil. Plus, we look at 10 ways to optimise your digital procurement scouting approach with ProcureTech.
Bringing a wealth of experience to the table, Kuvesh Ayer, CPO for the New York Metropolitan Transportation Authority discusses procurement transformation and being prepared for anything…
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Bringing a wealth of experience to the table, Kuvesh Ayer, CPO for the New York Metropolitan Transportation Authority discusses procurement transformation and being prepared for anything…
Tell us about yourself and your current role… I’m currently the chief procurement officer for the New York Metropolitan Transportation Authority (MTA). The MTA embarked on a huge transformation effort across all its operating divisions to transform the organization into a more efficient, effective one.
I got a call one day asking if I’d be interested in this position and I decided, “Okay, it sounds interesting and very challenging,” and decided to throw my hat in a ring. Lo and behold, it’s two years down the line – it’s gone like a flash. Overall, my responsibilities include managing the MTAs procurement and sourcing operations, which also include the logistics, warehousing, and distribution aspects...”
What is excellence in procurement – and how we can encourage it? We chat to Olivia Brown, a Managing Consultant…
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What is excellence in procurement – and how we can encourage it? We chat to Olivia Brown, a Managing Consultant with Rowe Advisory UK…
Tell us a bit about yourself.
I spent the first 16 years of my career as an employee with oil and gas operators, both here in the UK and internationally, so I have a solid foundation in working in contracts and procurements. Later in my career, I became focused more on general management roles. Those roles combined led me to understand what good business looks like, and the things to avoid – not just within the function, but more broadly within the wider business context. I started working as a consultant with Rowe Advisory in 2017, initially working in support of clients in overseas, in Australia.
Give us some background on Rowe Advisory.
Rowe Advisory was established in 2013 by a very inspirational lady called Jody Rowe. I started to get involved with some of the Australian clients in 2017, working remotely from here in the UK to support them in redefining, updating, reviewing their procedures and their processes.
Typically, what we find is that a client will have a particular requirement for an area of concern, so we will go in and start to address that and help support them. From there, we often get involved in other areas for improvement as a consequence.
In 2020, Rowe Advisory set up a branch here in the UK. It was difficult timing because we were launching it during lockdown. We had the challenge of the pandemic which was also compounded by the oil price crash. However, it was a real opportunity for us to reestablish some individuals within our network and reconnect with previous colleagues to tell them who we are and what we do, and make them aware of how we can help as in when the need arises.
What does ‘procurement excellence’ mean to you?
For us, it’s about aligning the strategy and the delivery of third-party spend with the needs of the business. It’s really connecting the department’s activity with the business priorities. To best achieve that, we see a focus on the overall procurement operating model. As previously mentioned, often there are areas of concern already which CPOs recognise can improve.
Generally, when we get involved with a new client, we will review the whole operating model to be more holistic in the review and understand how joined-up the department can be in providing that functional excellence back to the business. It’s really about the department adding value back to the business and establishing credibility through delivery of value to the business.
We’ll look at the people, the process, the systems, and the tools to really focus on how the department can manage risk, provide clear strategic planning, align with the business objectives, be innovative, be creative, and also collaborative internally and externally.
We’re working to elevate the role of the procurement department. It has the potential to provide significant benefits to the business, and they extend far beyond the P&L impact. The events of the last 18 months have really proven the importance of procurement departments and non-financial performance incentives; those non-financial performance metrics have become more integral to the priorities for procurement. That being said, we recognise the need to get the basics right first so it’s about having clarity on rules and responsibilities, both within the department and the business.
What have you seen by way of sector differences or trends?
The most interesting thing for me, having come from a strong background in oil and gas, is that a lot of the areas of focus that I’ve talked about – specifically identifying areas of improvement and what functional excellence can look like – are very much sector agnostic. The tactical interventions do vary depending on each client, so the areas of focus will always vary – but that’s true within any sector. We’ve seen that transcend into others. The fundamentals of what good looks like in procurement are, we’ve observed, sector agnostic.
That’s been very interesting. It’s allowed us to provide diversity of thought into new sectors. If you think about demand planning and category management, we’ve seen with some clients where it works very well, and we’ve been able to translate that knowledge and experience in working with them in embedding that, sustaining it, and building on it. We’ve been able to translate that into other sectors that are less familiar with the concepts of category management and category planning, and the importance of that in the upfront strategic planning where real value can be set for procurement.
One thing we do find in some sectors more than others is that the procurement department is seen as a transactional function, and there is absolutely a strong requirement for there to be good transacting within any procurement team. But in the context of functional excellence, what we try to do is to explain the value that can be delivered through moving beyond that phase of the department into the strategic, and doing that in an appropriately segmented way so that it is differentiated based on value and risk – and other relevant factors – but ensures that both the department and the business are focused on those contracts that are key to the delivery of the business.
How do you support your clients by driving change within their procurement departments?
We work on ensuring that the focus is in the right place to deliver value, getting the transacting right and then also, of course, post-award. The contract is then executed, and it’s not about necessarily just putting it on the shelf and leaving the business to manage it. Certainly, for a number of contracts, it’s about managing those contracts for delivery and being clear on the role that the procurement department plays in that process. A further development on that is, again, how many of those need to be strategically managed? How do you strategically manage the relationship with key suppliers to, again, further leverage the value through innovation, being creative, and working together to further enhance the value that can be achieved?
The case for change is important because people’s response will be, “What’s in it for me? We’ve done it like this for years and it’s been fine, so help me understand.” And you need to kind of take people on that journey of change. Clarity on single-point decision making, understanding that when a decision is taken, that’s not the start of a conversation on the matter – it clarifies the need to move on.
Tell us about your sister company, Promitheia Procurement.
Promitheia Procurement was established 2020. It is an online platform for procurement templates and also advisory services. It’s a web-based system so anyone can go on and buy, and download the whole series of procurement templates across the whole life cycle. It ranges from demand planning, strategy setting to people and competencies, and skills matrices, development planning, and performance management, through the procurement life cycle itself, through the transacting, into post-award, and supplier relationship management. So, they’re documents which can become available to companies at the click of a button, which is fantastic. It allows us to diversify further into new sectors who may otherwise not be able to come to us for the full suite of consultancy services.
What do you enjoy most about your work?
We have that real passion for procurement and want to really be ambassadors for what good can look like – and we want the clients to feel that as well. It can never really be implemented and sustained based on a consultant coming in and telling you how to do it. It’s very much about working alongside the client in their particular environment to understand how best to do that.
Procurement transformation is at the heart of our chat with Tod Cooper, Director Procurement at the Department of Corrections in New Zealand
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This month’s exclusive cover story features Tod Cooper, Director Procurement at the Department of Corrections in New Zealand, who reveals all regarding the strategic restructure of the procurement function.
Procurement transformation is at the heart of our chat with Tod Cooper, Director Procurement at the Department of Corrections in New Zealand
Most of us like to think that if we were presented with the chance to do something positive and societally significant for our country and its indigenous people, in particular, we would.
And that’s exactly the opportunity Tod Cooper, Director Procurement at the Department of Corrections in New Zealand, has grasped with both hands, with the department’s dedication to supporting Māori.
Business transformation through leadership has been a major part of Cooper’s working life, preparing him for the challenges he’s faced at the Department of Corrections.
“It’s a big personal passion for me,” he says. “I’m not a guy who likes to sit still. Continuous improvement is a big thing. I’m always asking myself how we can make things better, looking at new ways of re-engineering, and getting good people around me who can enact my vision of things.
I’m a typical extrovert who’s easily distracted by the next thing, so it’s really important to have a good leadership team around me that understands the vision and can pull me back in.”
Elsewhere, we also speak with Dean Bennett, VP of Procurement, and Mike Cowling, VP of Global IT at BeiGene, about the benefits of a strong collaboration between procurement and technology, and what makes the company so special. Plus, we have an exclusive ‘provenance in the supply chain piece’ from IBM’s Blockchain Leader, Winston Yong.
Welcome to the first CPOstrategy of 2022! We decided to kick off the new year in style with our best…
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Welcome to the first CPOstrategy of 2022!
We decided to kick off the new year in style with our best issue yet!
Our exclusive cover story features a fascinating discussion with Sean Park, CPO of software organisation Splunk, talks us through transforming the procurement function from one that was deliberately immature, to the powerhouse of efficiency it’s now becoming.
When Splunk brought Park in to join the team, he knew it was time to make a change and get serious about the bottom line. The decision was made to put in place a more centralised procurement and sourcing function; Splunk was rapidly growing, and it didn’t want friction, but rather controls and guardrails in place to scale the company. It was very much a natural evolution for the business – a pattern Park has watched occur before. This put him in an ideal position to push the new vision forward.
“The first step was to undertake an assessment of the function,” he says. “What are our strategic objectives? How does that fit in with the corporate objectives, or those of the finance team? What are our processes and policies? How are we resourcing the organisational structure? How do we source? Do we want a category management structure or a business unit focus?”
Elsewhere, we have an incredible rollcall of equally fascinating articles on Atotech, Beeline, Delivery Hero, plus an engrossing selection of Procurement Leaders’ procurement transformation success stories. Plus, much, much more.
A major recent step for Philips has been casting aside traditional indirect procurement and implementing a new-and-exciting approach under the umbrella of Spend Management. We take an exclusive look behind the scenes…
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Our exclusive cover story this month takes an in-depth look inside the procurement function at Philips; the leading Netherlands-based health technology company, which is improving people’s health and well-being through meaningful innovation.
To achieve the company’s aim to improve 2.5 billion lives per year by 2030, Philips has been through a major transformation in the past decade. Besides overhauling the business, the functions – including indirect procurement – also needed to adapt.
A major recent step for Philips has been casting aside traditional indirect procurement and implementing a new-and-exciting approach under the umbrella of Spend Management. Alexander Visser is the Leader of Spend Management, and the architect of this change and he takes us through this incredible transformation…
Plus, we speak exclusively to CPO of Ooredoo Algeria, Saber Chrigui, who describes how he took the branch from struggling to a shining example for the entire group, through managing waste and costs, and dramatically repositioning procurement. We also catch up with Gudrun Gunnarsdottir, Procurement Manager at Vodafone Iceland, about how being based on a tiny island is no barrier to procurement excellence and keeping a finger on the pulse of technological advancement…
And another great exclusive this month, focuses on RHI Magnesita (RHIM); the global leader in refractories – its refractory products are used in all the world’s high-temperature industrial processes. The creation of RHI Magnesita (following the merger of RHI and Magnesita in 2017) saw the continuing transformation of procurement from a cost-saving function into a strategic business partner gather pace. We speak to RHI’s Michael Leitner, VP Procurement Europe & CIS & Turkey…
The Digital Insight team decided to find out more about procurement’s relationship with data, intelligence and its maturity…
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Modern procurement has undergone so much change in recent years, it is finally achieving recognition as a true strategic business enabler. Empowered by data-driven insights and digitised systems and tools, procurement occupies a unique position at the heart of an enterprise’s operations, supply chains and growth. How are leading companies creating sustainable digital capabilities and how do companies do this at scale?
The Digital Insight team decided to take a deeper dive into this fascinating area and assembled an incredible panel of digital procurement CEOs to find out more and share procurement’s relationship with data, intelligence (and its maturity), as well as the opportunities emerging from these insights and the technology that captures them too. You can watch the full video discussion here…
The panel covered…
Data in procurement
With more access to data in procurement than ever before, how does this differ from 5-10 years ago?
Where is this data coming from?
What does this mean for the role of procurement?
Evaluating and dealing with risk
Is there more risk in the supply chain now than ever before?
How has evaluating risk changed for better or for worse?
Are the risks becoming increasingly dynamic and changing?
Opportunities in procurement
With the capturing and understanding of data, is this now a unique opportunity for procurement, to act as an “intelligence hub” across multiple domains from risk to sustainability and cost to innovation?
How do we capitalise on this opportunity?
What role will ProcureTech vendors/players have in this?
How important is it for business to adopt a continuous approach with respect to the data that they gather on their vendors and how do they feed this data into their digital procurement platforms?
Joining The Digital Insight were…
Ilya Levtov (CEO Craft)
Craft serves large companies (Fortune 100, FTSE 100) and government entities with comprehensive insight and intelligence on their supply chains.
Success doesn’t happen overnight
“…the challenge and struggle that a lot of enterprises are finding themselves in is how to filter down and get to the right answers. The only thing we’ve seen reliably successful is to take a spirit of experimentation and curiosity and not to be hell bent on getting the answer or a positive ROI for the CPO next month, but to say, it’s going to take some back and forth. That’s the way we personally love to work with clients. We say: there’s a ton of stuff you know, there’s a ton of stuff we know, but we’ve got to work together and iterate with different data sets, different models, different risk models, in order to come to the right answers. It’s going to take some time, but we will make progress if you take a medium to long-term view. That’s when you’re going to get those answers and those models working… not overnight.”Ilya Levtov (CEO Craft)
Aleksandr Yampolskiy (CEO Security Scorecard)
Security Scorecard pioneered the way in which it collects all kinds of data points from all over the world and how it uses those data points to reduce them to a score representing the likelihood of a company to suffer a data breach. Security Scorecard is utilised by over 1,500 plus top enterprises all over the world to hold their suppliers and third-party vendors accountable, and to make insurance underwriting decisions.
Now is the time for procurement!
“Now is actually a great time to be in procurement. Procurement is being disrupted through the proliferation of new types of information and data that enable us to make better decisions. For the first time, it makes it possible for procurement to move from being a support function, to being a business enabler and a value creator at the forefront of the innovation. It’s a very exciting time to be in the procurement space today.” Aleksandr Yampolskiy (CEO Security Scorecard)
Cynthia Figge (CEO CSRHub)
CSRHub is a big data platform and one of the largest aggregators of structured ESG data, covering companies worldwide.
Risk in the supply chain
“…risk has gone up dramatically in the supply chain, at least from an ESG or sustainability perspective. Some of the data has been backward looking, in other words, if there is some great disruption or something bad happens, then there are news ripples and that is important. But now where I’m seeing companies shifting is they really want to know about a company’s performance across all these dimensions of environment, social and governance, so that there can be some sense of predictability and an ability to screen across actual performance issues in advance of some kind of a bad event. We’re seeing a demand for that data and that understanding of the suppliers in the value stream: are they really measuring up? Are there some risks there in terms of what we can see around performance and benchmarking?” Cynthia Figge (CEO CSRHub)
Lance Younger CEO of ProcureTech
ProcureTech are building the digital future of procurement. Solving the most pressing social, environmental and economic challenges requires new thinking and a new platform for procurement leaders, entrepreneurs and the digital procurement ecosystem.
ProcureTech is home to the ProcureTech100 – the definitive global 100 pioneering digital procurement solutions.
Together with ProcureTechSOURCE and ProcureTechEXPERTS, they will accelerate, smarter solution selection and digital procurement ecosystems that will empower procurement transformation.
The tipping point of procurement
“…We’re at a tipping point for procurement in terms of a transformation, which began at the start of this decade. Most procurement functions, if you were to assess them from a digitalisation or data perspective, will score three to four, maybe five (out of ten). You have one or two that are leading lights, but I think that procurement overall is struggling to keep up with the changes in data access and data proliferation and not because of the technology, but because of the people. We don’t have enough people with the right skills to be able to help procurement transform at the pace at which we need it to change.”
According to The News, Pakistan’s largest oil refinery – Byco – has signed an agreement to implement SAP Ariba DSN…
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According to The News, Pakistan’s largest oil refinery – Byco – has signed an agreement to implement SAP Ariba DSN (Digital Supplier Network) and Sourcing Suite – the first in its nation.
Byco stated: “The initiative will automate the procurement process enabling a paperless process, significantly eliminating errors and unnecessary delays, as encountered in traditional procurement to the payment process.”
Fayaz Ahmad Khan, Vice President Commercial Byco Petroleum, added: “Byco has always been at the forefront of innovation and implementation of processes that are in line with global best practices.
“The deployment of SAP ARIBA DSN and Sourcing Suite will be another first by Byco as an industry leader in Pakistan.”
Fayaz Ahmad Khan, Vice President Commercial Byco Petroleum
He stated that, not only will this move improve efficiency in procurement, but also create better transparency and visibility across the business for all stakeholders.
Welcome to another bumper issue of CPOstrategy magazine…
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Our cover star this issue, Willem Mutsaerts, is both the CPO and CSO of Givaudan, a global industry leader creating game-changing innovation in food and beverages, and inspiring creations in the world of scent and beauty. The duality of his role is quite unique and makes for a fascinating discussion as to how procurement makes all the difference for Givaudan’s sustainable ambition. It’s a revealing insight…
Will also dive deep into Procurement Leaders’ latest report Procurement as a Growth Engine (partnered by Ivalua), which explores how procurement can bring new opportunities for growth, as forward-thinking business leaders become increasingly aware of the huge potential that exists in the upstream supply base.
Elsewhere, we move away from what procurement can do in the private sector to what it can do for the local communities of the world, specifically, procurement in West Mercia Police. We peek behind the curtain of a major procurement transformation that will see the local UK police force empower its officers to protect and serve their local communities.
There are also fascinating insights from Lance Younger, Dr Elouise Epstein and many many more..
With 2025 deadlines looming for ambitious corporate public pledges around sustainability, this should be top of the business agenda for enterprises in 2021. However, are organisations acting fast enough?
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Worryingly, every five weeks that passes represents 1% of our decade. Aspirations of operating more sustainably at some point in the future are now becoming a much closer reality, which means organisations have targets that they need to meet over a relatively short time frame. This is especially true when it comes to ‘net zero’ emissions pledges – perhaps the most pressing climate concern the planet is facing. For example, by 2030, Unilever has committed to halving the greenhouse gas emissions of their products across the lifecycle, while Heineken has set an 80% target reduction. BP is facing an even bigger challenge as an energy company, leaning away from fossil fuels and committing to net zero carbon from their operations by 2050. Written by Mark Perera, CEO, Vizibl
Therefore, with only a few years remaining until some of those deadlines, clearly now is the time for enterprises to take decisive action.
Many organisations still don’t know how they’re going to achieve these targets. However, given the urgency of the issues, they’ve launched their efforts regardless, anticipating the discovery of further solutions along the way.
Sustainability delivers more than just the environmental benefits
Alongside the need to protect our planet, hitting these targets is actually key for the survival of some of these businesses. Strong sustainability performance pays dividends in opportunities for growth, increased returns on capital, and in managing threats to the business, with McKinsey finding that the value at stake from sustainability risks can be as high as 70% of EBITDA.
Given that 50% of the Standard & Poor’s 500 will likely be replaced within the decade, companies must look beyond business as usual towards the strategies that will shore up their own survival – especially in our post-COVID environment where many will face stiff competition. With record private equity, a robust M&A market and the growth of many startups with billion-dollar valuations, not to mention the impact of the pandemic and an economic decline, there will be plenty of turbulence in the road ahead.
We recently hosted a webinar around sustainability, which featured speakers from Unilever, Heineken and BP, where we discussed all of these issues and more. Interestingly, all three organisations were in agreement that consumer relevance will be key to organisational longevity and the ability to attract talent will also be central to business success. Consumers are very much driving the sustainability agenda, therefore setting and meeting sustainability targets will be key driver for business continuity.
Enterprises are driving towards stakeholder capitalism
This focus on doing right by consumer and employee values corresponds to a wider movement towards stakeholder capitalism. This drive advocates shifting away from a sole focus on maximising shareholder value towards a company strategy which creates value for all its stakeholders – from customers and employees, to suppliers, communities, and the environment.
Along with making themselves accountable to a broader set of stakeholders, organisations should also be drawing from these stakeholders to meet sustainability targets. Likewise, leveraging from a wider ecosystem will also help to meet these goals; partnering for value to increase the bottom line will be a key procurement trend in 2021.
Seeing as 80% of company emissions and up to 90% of their impact on biodiversity and natural resources originates in the supply chain, it is not surprising that companies are looking past internal operations when pursuing ambitious sustainability targets. Given also that 50-70% of company innovations originate externally, it makes sense to look beyond the boundaries of the organisation and to the broader ecosystems of suppliers to source new solutions.
Working with a broader ecosystem of suppliers to foster innovation
One great example of this kind of partnership is an initiative that BP is spearheading. As the company works towards net zero for its tech and IT estate, BP is moving away from high-power data infrastructure in favour of forging deep partnerships with cloud providers. The cloud providers also have net zero commitments of their own, which they can support using renewable energy sourced from BP. This partnership presents a win-win situation where both companies can hit their targets in tandem.
What we are also seeing is that this is changing the role of procurement. Instead of being viewed as a function that ‘protects’ the company from its suppliers by continuously driving down costs, procurement is now looking to collaboration and partnerships to find the innovation that will help the organisation continue to grow.
And as procurement moves away from a single-minded focus on cost-cutting, it will facilitate relationships which in turn deliver on key business strategies like sustainability and growth.
How procurement can drive initiatives to meet sustainability goals
To this point, procurement has a great role to play in helping an organisation meet its sustainability targets, given that the function has historically been curious and hyper-diligent when it comes to costs. Moving forward, enterprises need to apply that same rigour when it comes to sustainability by asking searching questions about energy and water usage, emissions impact, and how we are affecting our communities both locally and on a global scale if we bring that level of curiosity and collaborative problem-solving into supply chains, we’ll have a big impact on business longevity and help to meet those lofty sustainability goals that are closer than we all feel comfortable with right now.
New research found that 43% of UK businesses say that the rate of digitalisation within procurement is low, which is impacting agility and preventing businesses from minimising risk…
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If we’ve learned anything from 2020, it is that we cannot predict the future. The COVID-19 pandemic significantly disrupted many supply chains, as businesses became dependent on procurement teams to help mitigate the impact by identifying and onboarding new suppliers in different regions.
However, a significant number of organisations have been hindered by a lack of procurement process digitalisation. New research found that 43% of UK businesses say that the rate of digitalisation within procurement is low, which is impacting agility and preventing businesses from minimising risk.
The importance of process digitalisation goes beyond navigating the immediate effects of COVID-19. Businesses that are reliant on manual processes are not only wasting an average of £1.94m per year in staffing costs, they are also preventing procurement teams from focusing on high value tasks. Savvy businesses have digitised procurement processes as a springboard to create a competitive advantage for themselves, as they can better identify new revenue opportunities, unlock innovation and improve profitability. Over the coming years, UK businesses need to move quickly to digitally transform procurement and ensure they are not left behind.
Procurement process digitalisation remains in the slow lane
As things stand, organisations still have a long way to go, with many failing to digitalise procurement processes. Just over half (55%) of UK businesses have digitalised invoice processing, while less than half have digitalised purchasing (42%) and budget management (33%). Businesses are even further behind in digitalising strategic processes such as spend analysis (32%) and risk management (26%). Clearly, there is significant room for improvement for organisations looking to make informed decisions, identify opportunities to create revenue, or collaborate with suppliers.
Worryingly, most businesses have not digitalised supplier onboarding or sourcing processes. Identifying and bringing on new suppliers is critical for businesses searching for new opportunities to collaborate and innovate or react to a potential disruption, so digitalising the process should be a top priority. This is particularly true in times of crisis, as one of the biggest challenges UK businesses faced in reducing the impact of COVID-19 was identifying alternate suppliers.
Procurement teams are prevented from adding value
This lack of procurement process digitalisation is creating frustration for UK businesses, and holding them back from adding value. Eight-in-ten (81%) UK businesses say a lack of digitalisation is preventing them from collaborating with suppliers and internal stakeholders, while a further 83% believe it is preventing them from innovating and executing on new revenue streams and opportunities. Without the ability to collaborate or execute on opportunities to drive new revenue streams, businesses stand little chance of getting ahead of the pack.
However, when it comes to digitalisation, UK businesses face a number of challenges. The most common obstacles to digital transformation for UK businesses were their suppliers, technology, and processes. Clearly, collaborating with suppliers is still tough. But, as supplier visibility continues to be vital to innovation and identifying revenue opportunities, it is not a problem that businesses can leave unsolved.
A smarter approach to eliminate manual processes
Most businesses understand and recognise that digitalising procurement will help them gain a competitive advantage. Furthermore, UK businesses recognise the importance of digitalisation beyond this, with one of the biggest benefits being reducing their environmental impact. Sustainability continues to become a key differentiator, allowing for greater efficiency and waste reduction, while turning being ‘green’ into a competitive advantage for eco-friendly businesses.
But to reap these benefits, it is clear a new approach is needed. Organisations need to adopt a smarter approach to procurement that can enable effective digital transformation, helping them to move away from managing processes over email, phone, or paper, to instead capturing everything digitally. This can free capacity for more strategic projects, improve access to insights for better decision-making and foster better collaboration by connecting internal stakeholders and suppliers. As a result, businesses are better able to identify opportunities to innovate, collaborate and grow revenues, giving them the chance to build better products and service offerings that will differentiate them from the competition.
Digitalising procurement to combat uncertain times
n today’s uncertain and evolving landscape, procurement has become a much more strategic part of every business, but a lack of digitalisation is holding teams back. To create a competitive advantage, businesses need to digitalise manual and strategic procurement processes to provide teams with the tools they need, and give them back time to focus on creating value for the business.
Making procurement smarter can create an all-encompassing digital view of procurement and supplier management. This is increasingly important for businesses looking to restore growth post-COVID and ensure resilience for the next crisis.
Three key areas where procurement and supply chain should look to invest in 2021 and has a good business case to do so…
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The Brexit debate is over with the UK and EU finally agreeing on the trade and cooperation terms after Brexit. A lot has been mentioned about the negative impact of Brexit on the UK and EU business supply chains. However, I think it is an opportunity for businesses to review their supply chains and turn this change into a competitive advantage. In my opinion, the following are 3 key areas where procurement and supply chain should look to invest in 2021 and has a good business case to do so.
1. Sourcing capabilities
Most of the organisations I have worked with over the last several years go back to the same set of shortlisted suppliers and look to conduct negotiations and auctions to achieve short term goals. This could be working with the same pool of suppliers either in the UK or EU suppliers or in a particular global location, i.e. China. However, there have been significant changes over the last few years whether it’s in currency, new emerging supply markets, existing supply sources losing advantage, or even the overall cost of managing offshore supply chains vs. local changing dramatically. Brexit and Covid have further accelerated or exacerbated some of these changes. Having some dedicated resources now to understand market options and a full evaluation will really help understand organisations options they have and plan their future supply chains accordingly.
2. Strategic partnerships
With the unprecedented disruption in demand and supply over the last year, organisations have never more realised the need to have a different relationship with their suppliers. As the long-term changes from Brexit and Covid come into effect, organisations having close strategic partnerships with their suppliers will be the ones who will mitigate issues better or benefit from the opportunities. Strategic partnerships don’t have to be just long-term commitments but communication, transparency, and both parties working towards shared goals. Also, the key is to look at the criteria for selecting partners. While on a short-term basis, working with a supplier who can fulfil your immediate needs at the best price makes sense, unless you look at long term fit, you will never have true partnerships in place.
3. Supplier assurance and development
With Brexit, there will be significant regulatory and standard changes over the years and suppliers will need support to transition to new standards and procedures. Also, to allow the sourcing team to find new sources and locations, they need appropriate support to be able to assure and develop new suppliers. Too many businesses, see the role of supplier assurance team as limited to assurance only and have an auditor mindset, however, the key is that they are working more as a development team and helping develop suppliers to contribute to the business.
The deal agreed is described as a narrow deal as it allows the UK to gradually move away from the EU sphere of influence if that’s really what the UK wants to pursue. While the current relationship with the EU is the starting position, full changes from this deal will only be visible over the next couple of years. Businesses who will be making the right investments in their supply chain and procurement capabilities will not only mitigate issues as the changes come into immediate effect but also find themselves in a better place vs their competitors.
Lack of digitalisation preventing UK businesses from identifying new sources of revenue and opportunities to collaborate and innovate
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Research from Ivalua, a leading provider of global spend management cloud solutions, has found that almost half (46%) of UK businesses are frustrated by a lack of procurement process digitalisation. According to the study, 43% of respondents believe that the rate of digitalisation within procurement is low, while a third (33%) claim that procurement digitalisation is stagnant and hasn’t progressed in the last 12 months.
The research, conducted by Vanson Bourne on behalf of Ivalua, surveyed 200 UK-based procurement, supply chain and finance professionals to examine digitalisation in procurement. Eight-in-ten (81%) UK businesses say a lack of digitalisation is preventing them from collaborating with suppliers and internal stakeholders, while 83% believe it is preventing them from innovating and executing on new revenue streams and opportunities. Additionally, two-thirds (67%) of UK businesses say a lack of digitalisation reduces their ability to gain insights into spend and suppliers.
“As organizations look to restore growth post Covid-19 and ensure resilience for the next crisis, procurement can play a major role, helping identify opportunities to innovate and new sources of revenue. Procurement digitalisation is essential to enable unique business processes and improve collaboration with suppliers and internal stakeholder,” commented Alex Saric, smart procurement expert at Ivalua. “However, the current state of transformation in procurement is underwhelming. The risk in the future is that many businesses will be outstripped by more digitally-savvy rivals and find themselves at a significant competitive disadvantage. Over the coming years, UK businesses need to move quickly to digitally transform procurement and ensure they are not left behind.”
Digitalising processes still has a long way to go
While businesses recognise the need to digitally transform, the report found that on average, UK businesses have digitalised less than half (43%) of their procurement processes. The most digitalised tasks were transactional processes such as invoicing (55%), purchasing (42%) and budget management (33%).
UK businesses have also failed to digitalise strategic processes such as spend analysis (32%) and risk management (26%). Identifying and bringing on new suppliers is also critical for businesses looking to identify new opportunities to collaborate and innovate, but worryingly, most businesses have not digitalised supplier onboarding (89%) or sourcing (84%) processes. When it comes to digitalising procurement and these processes, UK businesses face a number of challenges, with the most common obstacles to digital transformation being their suppliers (29%), their technology (20%) and their processes (18%).
“Procurement has become a much more strategic part of every business, but a lack of digitalisation is preventing many teams from realising the potential value of their spend and suppliers. UK businesses need to take a smarter approach to procurement and move away from managing processes over email, phone, or paper, to instead capture everything digitally. This will help businesses identify opportunities to innovate, collaborate and grow revenues, giving them the chance to build better products and services that will differentiate them from the competition. Digitalising procurement creates an all-encompassing view for businesses, helping to create a competitive advantage that will see them soar past digital laggard competitors,” concludes Saric.
To download the full report, “Gaining the advantage in challenging times – why businesses need to digitally transform procurement now more than ever”, please visit: https://info.ivalua.com/uk/report-competitive-advantage
“…when you think about supplier diversity initiatives, small business procurement initiatives, it’s really about driving economic impact. And it’s really the small businesses that drive economic growth in any economy”.
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Rod Robinson is Vice President of Supplier Inclusion and Sustainability at Coupa, and the focus of that role, is to really drive inclusive procurement across the Coupa ecosystem, helping Coupa customers achieve, and even exceed, their supplier inclusion goals…
“…when you think about supplier diversity initiatives, small businessprocurement initiatives, it’s really about driving economic impact. And it’s really the small businesses that drive economic growth in any economy”.
A survey by researchers at WMG, University of Warwick saw 249 mid to large manufacturers from food and beverage to automotive, and pharmaceuticals to electronic equipment and more industries respond to the survey about their supply chain resilience in the current state and future potential…
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The COVID-19 pandemic has affected many people across the world, one particular way includes supply chains, some people found they couldn’t buy pasta or loo roll, and it was the same for manufacturers, who suddenly had to change their strategies to ensure their supply chain during the pandemic.
There have been many challenges in the past for the manufacturing supply chain, such as the 2001 recession, SARS, 2011 Tohoku earthquake, 2016 oil crisis, and Brexit. Although there have been other pandemics such as swine flu and Ebola, the COVID-19 pandemic was nothing the modern world had ever seen before.
A survey by researchers at WMG, University of Warwick saw 249 mid to large manufacturers from food and beverage to automotive, and pharmaceuticals to electronical equipment and more industries respond to the survey about their supply chain resilience in the current state and future potential.
They found several impacts from the COVID-19 pandemic, including:
· 58% of firms ae still experiences a decrease in demand 3 months post lockdown
· 66-73% of firms have been effective to responding to increases and decreases in demand
· Buffer management, multi-sourcing and visibility were favoured over agile production networks
· Cash management and securing supply were critical initial responses to the covid-19 crisis
· 84% of firms found their planning systems were effective, but still required human intervention
· The most apparent bottlenecks to their supply chain was people issues, such as warehouse staff being in quarantine at home
The researchers then assessed manufacturers supply chain resilience in three different times, business as normal, during COVID-19 and preparation for Brexit. For each time period they identified how 6 supply chain resilience practices that could be used proactively (pre-disruption), reactively (during and post disruption) or both. These included:
2. Visibility – Having access to real time data (Proactive)
3. Collaboration – Working with SC partners to deliver customer value (Proactive & reactive)
4. Buffer management – Utilising inventory and production capacity to enable material flow (Proactive and reactive)
5. Flexibility – Establishing multiple sourcing options (Proactive and reactive)
6. Adaptability – Transforming the SC in responding to dynamic business environment (Reactive
In normal operation firms found their practices to generally be effective. However, there was opportunity for improvements in visibility and collaboration to support improved supply chain planning. Firms also said they have been effective in managing buffers in normal operation.
During the Covid-19 pandemic firms utilised supply chain planning as a response to the pandemic with effective planning systems reported by 84% of manufacturers. However, this still required a high degree of human intervention. Buffer management and flexibility were found to be less effective than in normal operations. The survey found that 55% of manufacturers used inventory as their primary buffer against disruption, with only 32% utilising flexibility within the agile production systems of suppliers. Inventory buffers whilst effective if the disruption creates an upturn in demand, can be catastrophic to cash flow if demand drops.
Similarly to COVID-19 when it comes to Brexit they’ve found that an increase in collaboration has led to improved supply chain visibility and planning. However, the uncertainty of Brexit is a cause for concern in terms of supply base flexibility with firms unsure of what type of response will be required.
Professor Jan Godsell from WMG, University of Warwick comments: “It’s interesting to see that the lessons manufactures’ have learnt in developing supply chain resilience practices in response to COVID-19 pandemic are helping manufacturers to prepare for Brexit. However, the uncertainty of Brexit, particularly in terms of the impact of flow of material is challenging for developing supply base flexibility. Whilst manufacturers can proactively prepare for Brexit, a high degree of adaptability will be required to buffer against the unknown.
“All manufacturers should consider assessing their current level of supply chain resilience to identify the areas in which their current supply chain resilience practices could be developed. Working collaboratively with supply chain partners to improve supply chain visibility and planning are the key building blocks. More effective use of inventory and capacity buffers, and flexibility within the supply base can further improve resilience. Some disruptions cannot be predicted, and supply chains need to the capability to adapt.”
A shortage of digitally savvy talent, and a lack of training for technical and soft skills, hinder digital procurement initiatives
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Research from Ivalua, a leading provider of global spend management cloud solutions, has shown that a majority of UK businesses (86%) face significant barriers developing digital skills in procurement. The findings reveal that a shortage of digitally savvy talent (31%), a lack of training for technical and soft skills (28%) and a lack of understanding of the skills required (13%), are some of the main barriers preventing UK business from developing the digital skills they need. Additionally, over half (55%) of UK businesses say that digital skills in procurement are less advanced compared to other departments
The research, conducted by Vanson Bourne on behalf of Ivalua, surveyed 200 UK-based procurement, supply chain and finance professionals about the true nature of digital skills within procurement, and the challenges businesses looking to digitally transform will face. More than eight-in-ten (84%) UK businesses believe that the skill set required of procurement professionals has shifted from procurement-first to digital-first. The study also highlighted that most respondents believe that greater digitalisation (84%) and better digital skills (83%) in procurement would have enabled UK businesses to mitigate the impact of the COVID-19 outbreak more effectively.
“Over the last decade, the role of procurement has transformed from one of cost-cutter to a vital ally that can help inform and enable a business’s strategy. The global COVID-19 pandemic accelerated this trend even further, reinforcing the importance of procurement as businesses adapt to the new normal,” commented Alex Saric, smart procurement expert at Ivalua. “However, for too long, procurement has been seen as a digital laggard, with technology adoption trailing behind other departments. In order to keep its seat at the table in strategic discussions, procurement must ensure it has people with the right skills in-house, as well as easy to use technologies, or risk being unable to offer significant strategic value.”
Challenges in hiring digital skills in procurement
As part of ongoing digital transformation efforts in procurement, the report found that UK businesses have started to introduce new technologies such as data analytics (55%), cloud-based platforms (53%), automation (35%) and AI/machine learning (30%) in the last 12 months.
But when it comes to deploying these technologies, UK businesses are finding it difficult to complement them with the digital skills required. The study found that 88% find it challenging to hire the right digital skills to work with technologies such as AI, cloud-based platforms or data analytics, while 76% say they are concerned that existing procurement teams will struggle to work with new technologies. Developing digital skills is vital for businesses, as 91% of respondents say that improving digital skills can make procurement more strategic, while 94% say it will help them gain a competitive advantage.
“In a rapidly evolving business environment, digital skills are essential for procurement teams to analyse and mitigate risk, identify new opportunities and collaborate with suppliers. However, procurement teams are struggling to both attract digital talent and upskill existing teams, which puts them at risk of falling behind competitors, losing market share, and struggling to identify risk and opportunities ahead of time,” comments Saric.
“To address the digital skills gap in procurement, UK businesses need to ensure they are focusing on adopting tools that are easy to use and improve access to actionable insights. By making procurement smarter, businesses are giving teams the tools and skills needed to thrive in the new normal, allowing the business to react and proactively address the shifting sands of a post-COVID world.”
To download the full report, “Bridging the gap – how smart procurement technology can help companies overcome the digital skills shortage”, please visit: https://info.ivalua.com/uk/report-digital-skills
Mark Ellis, Managing Partner at 4C Associates, award-winning European procurement consultancy, on procurement’s role in transforming the way to post-Covid recovery.
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Over the past few months, how many times have you heard “we are living in unprecedented times” or “living in a different normality”? We are experiencing global factory labour shortages, supply chain disruptions due to travel and transport lockdowns, Force Majeure disagreements, suppliers running out of cash, realisation of our dependencies on global supply chains that we cannot control, disruption to ways of working due to lockdowns and the uncertainty over the length of current restrictions making effective forward planning extremely difficult.
Fortunately, for many, technology has enabled people to work from home and continue working and provide some normality to their day to day lives through the Covid-19 epidemic. However, even though many organisations have digitalised their customer front end services, sadly back office services have been woefully underinvested in (hardware, software and technology products) and many organisations have primarily spent time, effort and money to ensure that staff can continue to work during these difficult Covid-19 times by providing the tools and infrastructure to support home working.
Supporting the global challenge
Over the last few months, procurement as a function has stepped up to support this global challenge. Not quite like the NHS, social care staff and the millions of health workers across the world, however they have listened to the ‘call to arms’ and mobilised their teams and their supply chains. On the other hand, unfortunately, many supply chains have failed, and business continuity plans have not delivered, as the procurement function has simply not been able to cope. This is after those organisations’ procurement functions invested heavily in sophisticated systems for tracking and managing their supply chain.
When Covid-19 hit, many UK based Utility organisations found out that their business continuity plans were not resilient against the unprecedented challenges it faced e.g. accommodation changes, systems switch over and consumer interface. Furthermore, many offshore BPO organisations struggled with home working due to bandwidth challenges of everyone on the internet and fitting for connection. Whereas some ‘Challenger’ banks had invested in understanding and mapping their supply chains, and were able to instigate a quick and comprehensive review with their suppliers concerning financial viability, delivery capabilities and capacity during these challenging times.
Did the technology fail or was it the ability of individuals and teams to take the data and make valuable insights to ensure they could deliver for their organisations? As a procurement professional, I am constantly reminded that data for data sake is not enough, you need to be able to use that valuable information to move the conversation forward, to support your organisation to innovate and, in the current crisis, to save lives.
As a function, we know that technology and understanding of the organisation’s needs is powerful and that we should utilise it to drive strong bonds with the individuals that work within our organisations and how this can deliver through our supply chains. Procurement technology combined with human knowledge is the mandatory combination to an effective classification and segmentation process and ensures businesses can quickly collate, visualise and action insights from existing data sources.
Connecting procurement technology and people
Connecting people and information guided by intelligent procurement systems can fundamentally change how companies buy and sell and can open broad visibility into the interconnected operations of buyers and suppliers. This also means reduced operational uncertainty as businesses can prevent bottlenecks in the supply chain before they arise. In the long term, it also enables procurement professionals to increasingly focus on strategic priorities as automated procurement solutions can take over their day-to-day tactical activities.
What these times are showing us is that we must do more to work on building better understanding of our own organisations’ demands, build sustainable relationships and appreciate new and innovative product and service development. It will make organisations stronger and ensure continuous service and reliability within the supply chain.
Now is the launch pad for great things for the procurement and supply chain function. We need to take the technology, data and insights to build strong and long-lasting relationships that can survive through the good and bad times. We need to stress test our internal and external relationships and drive value and not cost, deliver new products and be the vanguard for change.
Ultimately, what Covid-19 is highlighting is the good that can be done, and we shine a light on the poor performances, poor process and inability to work collaboratively with people. I sincerely hope that Covid-19 can make us stronger and build on some of the great and good that has been done over the past few months – as this proves we are all human.
Trying to keep pace with new technologies is one of the biggest challenges that most businesses are currently facing. Trends…
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Trying to keep pace with new technologies is one of the biggest challenges that most businesses are currently facing. Trends in digital transformation such as AI, the Internet of Things (IoT), 5G networks and the proliferation of chatbots are impacting businesses of all shapes and sizes. Even procurement, a department traditionally found knee deep in paper-based spread sheets and contracts is embracing these innovations and are using them to automate manual, laborious processes improve supplier relationships and improve transparency over organisational wide spend.
So, as procurement takes advantage of the digital era, what’s likely to come next for the business function focused on delivering value and saving their organisations money? Will procurement finally get the business recognition it deserves? Here are my predictions on what’s to come for procurement:
Quality data
Businesses are already making key decisions based on data analytics; however, data quality remains an ongoing challenge. In the future expect to see machine learning automatically cleanse data, ensuring that any errors or anomalies are corrected. For example, it will monitor and maintain supplier master data from contracts and the data used in pay runs.
Procurement to drive competitive business advantage
Thanks to new technologies providing greater business insights, procurement will have more influence than ever before on overall business strategy, growth and competitive advantage. Procurement teams will be required to move their focus from spend and cost control and focus more heavily on facilitating innovation, business agility and continuity of supply.
A move towards more agile procurement
Are we likely to see more departmental purchasing and procurement become a more centralised business function? I think so, and as a result we are likely to see better collaboration take place across the entire business. We could even see category managers become procurement specialists in their business units and build a network of gig workers to help satisfy their operational needs.
IoT, data and stock tracking
More and more businesses are likely to take advantage of IoT to enable ‘touchless’ procurement where stock levels can be monitored automatically. It can help businesses track items in their supply chain in real time and enable asset-intensive industries to link data across the business to their suppliers. Businesses will benefit from an enhanced data platform as it informs decision-making around spend and purchasing patterns, catalogue content, supplier portfolios and contract fulfilment.
RPA to go mainstream
Taking full advantage of Robotic Process Automation (RPA) procurement will be able to completely eradicate many of its day-to-day manual, high volume repetitive tasks. The procurement team can also say goodbye to hours spent compiling manual reports and instead use their valuable time more effectively and deliver real value to the business.
Improved insights into the potential for supplier risk
Procurement teams will have better insights than ever before into their suppliers thanks to a clearer understanding of data. Internal data compiled by procurement, supplier information, market and analyst data on supplier performance will be aggregated and analysed to deliver a true 360° view of supplier performance.
Procurement best practice to include Blockchain
We’ve seen Blockchain, the technology behind digital currencies starting to find its way into the procurement space over the past few years. I think in the future we’ll see it used selectively by procurement teams as it is expensive to develop and deploy. However, I think increasingly we’ll see it used in scenarios where there’s a need to track and trace to stop counterfeiting or a need for operational integrity.
Standard Chartered, a leading international banking group, and Infor, a global leader in business cloud software specialised by industry, today…
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Standard Chartered, a leading international banking group, and Infor, a global leader in business cloud software specialised by industry, today announced a strategic agreement to introduce the Infor Nexus network to the Bank’s clients. By digitizing the financial supply chain, businesses can minimize supply chain delays and friction, while suppliers can benefit from improved access to capital.
The Infor Nexus network transforms the traditionally manual
process of data matching across multiple commercial documents including
purchase orders, invoices and transport documents. This helps to speed up trade
financing cycles, allowing suppliers to access capital faster and at more
critical points in the transaction cycle, and as a result ensure on-time
delivery of goods.
“Invoice approvals in a traditional non-automated environment
often take weeks to complete, putting a squeeze on suppliers and bringing
contention to the buyer-supplier relationship,” said Rod Johnson, General
Manager and Head of Americas at Infor. “Slow invoice matching delays the trade
financing cycle, preventing suppliers from obtaining capital they need to
deliver quality and compliant goods on time.”
Through the strategic agreement, Standard Chartered will refer
clients to Infor and its Infor Nexus network, based on specific needs, enabling
them to benefit from automated matching and digitized documentation and
processes delivered on Infor’s network of 65,000 businesses around the world.
In addition to delivering broader financial services to clients, the Infor
Nexus network provides global on-boarding and ongoing service and support to
suppliers without requiring the involvement of the anchor buyer. The agreement
also enables Standard Chartered to expand client relationships through digital
transformation solutions that address sourcing and payables inefficiencies
while enabling innovation and growth.
Michael Sugirin added: “As our client’s trusted banking partner,
our goal is to support them in their digitalisation journey through expediting
their payables acceptance and facilitating export proceeds, and as a result
improve their working capital cycles. We are excited to have this introduction agreement
in place with Infor, whose platform offering not only fits well with our
emerging markets footprint which generates significant trade documents flows,
but also shares a similar commitment in supporting the development of
sustainable, intelligent supply chains.”
By Daniel Ball, business development director, Wax Digital As a new year gets in full swing, there’s no better time…
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By Daniel Ball, business
development director, Wax Digital
As a new year gets in full swing, there’s no better time for businesses
to refine processes in need of improvement, and procurement shouldn’t
underestimate the power of bolstering its own processes. Any attempts to make buying
operations smoother, more efficient, and cost-effective are likely to play a part
in wider business success.
When it comes to achieving personal goals, the key is to break it down
into more manageable steps, and the same is true in business. Here are some targets
procurement should set itself to get 2020 off to a blinder:
Get your
contracts in order: The average organisation has 20,000-40,000
contracts, but what happens when the agreement needs to be reviewed or renewed
quickly? How easy is it to obtain files regarding these arrangements as and
when you need them? What’s more, businesses that are unaware of renewal dates or
don’t have full visibility of supplier T&Cs risk putting themselves at
serious financial and legal risk. Procurement teams should make a business case
to introduce contract management software so that they have a single, secure portal
that they can use to quickly access information such as expiry dates and service
level agreements (SLAs). Not only that, the software will alert the procurement
team when contracts are due for renewal, enabling the business to check if
prices will go up and whether alternative suppliers should be found. The
software is also crucial for verifying that contractors have the necessary
certifications in place to ensure the business remains compliant.
Stop late
payments: UK SMEs with late paying customers now have to wait on average 23
days to receive funds, doubling from early last year, according to finance
company MarketFinance. The government is cracking down on late payments to
SMEs, for example by empowering trade bodies to highlight organisations that
are good or bad at paying promptly. To ensure invoices are paid on time, businesses
should introduce a system, for example purchase-to-pay software; which
automates the procurement process from ordering products or services through to
making the payment.
Build
better relationships with suppliers: Every procurement professional knows
that supply chains can be complex and risky due to the uncertain economic
landscape we currently operate in, particularly due to Brexit. That’s why it’s
crucial to form close relationships with suppliers to mitigate the impact of
unpredictable scenarios such as financial crises, weather disasters or
political unrest. Using supplier relationship management software, the business
will have a clearer view of the supply chain and is more likely to spot
potential issues before they escalate into something catastrophic.
Bolster digital
transformation programmes: Businesses will only reap the benefits of new
procurement software if it’s underpinned by a clear digital transformation strategy.
We surveyed 200 senior figures across many businesses and found that 72% of
procurement professionals feel that the training they received after new
technologies have been implemented was insufficient. Procurement should consult
with senior managers and the IT department when new technology is introduced.
They should work together to embrace the technology and ensure all users
receive the training and guidance they need to use it effectively.
There is a lot of scope in procurement to take advantage of technologies
that digitise laborious processes and increase visibility on costs and
operations. With some clear goals that aim to improve different aspects of buying
activities, businesses can make 2020 the year they free themselves from the
shackles of paper-based spreadsheets and supplier contracts and use their time
to add greater value to the business.
Eight out of ten procurement professionals claim that in the past decade, their role has changed because of new digital…
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Eight out of ten procurement professionals claim that in the past decade, their role has changed because of new digital transformation technologies implemented within their businesses.
Research from eProcurement specialists, Wax Digital, shows that 60% of respondents claim that technologies to automate slow and labour intensive processes has enabled them to be more productive in their job role. While less than a quarter (22%) said that it had made little difference to their overall efficiency.
Over half of procurement professionals (54%) claim that digital transformation has made improvements to their businesses by eradicating or streamlining traditionally manual processes. Just under a third (30%) of those surveyed are yet to experience any benefits or consequences from the implementation of digital technologies.
Nine out of ten respondents believe that there’s room for improvement when it comes to digital transformation projects within their industries. 40% suggested a need for digital experts to help their organisations deliver training, 26% would have preferred a longer roll out time for the technology and 18% thought better communication should have taken place while the technology was being introduced.
Daniel Ball, business development director at Wax Digital said: “Procurement professionals have seen significant changes in their job role over the past ten years due to the impact of digital transformative technologies. For example, many organisations, paper-based contracts, supplier records or even invoices have been digitised, saving businesses time and man-power resource and enabling all this information to be available at their fingertips.”
“In addition, supplier auctions and tenders are now also more automated than ever before – RFPs are sent out automatically while eAuctions allow procurement professionals to extract more savings within an automated auction setting to drive savings.
“With eProcurement tools generating more data than ever before, those working in the procurement industry have seen their roles become more strategic rather than just solely operational. These professionals are now required to have strong analytical skills, negotiation abilities and excellent stakeholder management”.
Heineken, the world’s most global brewer, has been working with JDA Software, Inc., for more than five years on its…
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Heineken, the world’s most global brewer, has been working with JDA Software, Inc., for more than five years on its large-scale cloud-based digital planning transformation. HEINEKEN has recently committed to extending its JDA footprint in specific geographies, which is already live in five operating countries (Italy, Netherlands, Spain, Poland and France). With a strategy to shift from a sales & operations planning (S&OP) model to an Integrated Business Planning (IBP) model, HEINEKEN is fundamentally upgrading the way it plans its business with JDA.
HEINEKEN is the world’s most international brewer, and the number one brewer in Europe, with operations in more than 70 markets globally. It is the leading developer and marketer of premium beer and cider brands. Led by the HEINEKEN® brand, the Group has a portfolio of more than 300 international, regional, local and specialty beers and ciders. They are committed to innovation, long-term brand investment, disciplined sales execution and focused cost management. Through “Brewing a Better World”, sustainability is embedded in the business and delivers value for all stakeholders.
“We have some of
the most complex and volatile markets in the world and have been working with
JDA to make faster, more well-informed decisions, which directly impact
everyone in the value chain” said Joost Luijbregts, senior Director Global
Customer Service / Logistics / Planning, HEINEKEN. “With JDA, we have taken big
steps forward – fundamentally changing the way we plan our business in terms of
S&OP and scenario planning. As our partnership with JDA continues to
strengthen, I am looking forward to work with JDA on our journey towards IBP.”
HEINEKEN
embarked on its strategy to shift from an S&OP approach to an IBP approach,
uniting sales, marketing, finance, supply chain and procurement together to
make well-informed decisions, and plan and forecast for the future. New
scenario planning capabilities have allowed the business to make trade-offs on
costs, margins and capacity. Since deploying this strategy across Europe,
HEINEKEN has seen an increase in forecast accuracy, reduction in stock-outs and
improved inventory turns and productivity.
Moving forward,
HEINEKEN will bring the integrated JDA solution to most of its larger global
locations, signifying the largest cloud-based solution at HEINEKEN. Going
forward, HEINEKEN has its sights set up harnessing the power of artificial
intelligence (AI) and machine learning (ML) with JDA, as it begins a pilot
project using JDA Luminate Demand Edge.
“We’ve formed a
strategic relationship with HEINEKEN with a foundation built on trust and
openness, which is highly critical as we develop the next phase in their IBP
roadmap,” said Johan Reventberg, president, EMEA, JDA. “With a clear roadmap
for the future, HEINEKEN is well-positioned to continue driving a leadership
position in the market, while delivering superior customer levels across all
its 70+ markets.”
Almost three quarters (74%) of procurement professionals admit that their transition to eProcurement technologies could have been smoother if they’d…
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Almost
three quarters (74%) of procurement professionals admit that their transition
to eProcurement technologies could have been smoother if they’d had more
support from a dedicated expert according to exclusive research from Wax
Digital.
The
eProcurement specialists, surveyed over 200 senior professionals in IT, HR,
Finance and Procurement and nearly half of the buying professionals quizzed
believe that more training would have boosted their business’ digital
transformation experience. And just over a quarter think it would have been
better to introduce these new technologies over a longer period of time.
72%
of procurement professionals have received either partial training or no
training in new technologies after the digitisation of manual processes within
their businesses. Yet, 28% said they have received enough training, with one in
ten claiming that the process could not have been improved.
The
study results also suggest that procurement’s roles and responsibilities have
changed now they’re increasingly taking advantage of digital technologies.
Eight out of ten procurement professionals claimed that new technology has
changed their job role over the past decade. However, 60% believe that the
adoption of digital technologies has increased their overall productivity.
88%
of procurement professionals said that their company benchmarks either as
average or below the industry standard for digital implementation. This
viewpoint differs considerably from the responses from IT and finance as the
research shows that they believe their businesses are meeting or exceeding
standards.
Daniel
Ball, business development director at Wax Digital, said: “It’s great to the
see productivity gains being achieved by procurement through the adoption of
digital technologies. Streamlining slow, laborious manual processes will
simplify tasks such as invoicing, supplier sourcing and contract management;
freeing up time for the team to work on other projects across the business.
“Any
organisation going through the digital transformation process needs a dedicated
expert on board to help champion all things digital in the business. Their role
would be to support other employees as they get to grips with new technologies
and help them to embrace the digital transformation process by offering
first-hand experience and expertise, as well as coaching them on best practice.
This approach can help organisations make the most of their new digital
technologies and help ensure the transition is a success, improving
productivity and efficiency across the organisation”.
Ivalua, a global leader in spend management, today announced the release of an enhanced third-party risk module, called Risk Center,…
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Ivalua, a
global leader in spend
management, today announced the release of an enhanced third-party risk
module, called Risk Center, available as part of its latest product release.
The latest innovations extend the existing strength of Ivalua’s Supplier
Management solution, which had already been recognised as a Leader by
Forrester Research Inc. in the most recent The Forrester Wave™: Supplier
Risk And Performance Management (SRPM) Platforms, Q1 2018.
Ivalua’s
Risk Center offers customers a holistic solution to actively monitor and
mitigate third-party risk and compliance. Customers are able to consolidate
real-time information spanning supplier performance evaluations, transactional
data, spend data, contractual information and external risk information from
major third-party data providers. This combined picture is visible in
actionable dashboards to provide a comprehensive and timely picture of risk and
the potential impact on the business.
“Organisations
are increasingly dependent on their suppliers, who can be sources of tremendous
value but also increased risk,” said Pascal Bensoussan, Ivalua Chief Product
Officer at Ivalua. “Ivalua’s Risk Center brings actionable data and insights
from across the supplier lifecycle together with complimentary external data so
our customers can effectively manage supplier risk. When combined with the
extensive supplier collaboration capabilities embedded in Ivalua’s platform,
our customers can unlock the full potential of their supply chains.”
Risk
Center’s ability to integrate with third party data providers in real time
allows it to meet the unique needs associated with various regulatory
environments, industries, and customer compliance models, in an automated fashion.
For example, Risk Center can aggregate data on supplier financial health,
sustainability, adverse media, sanctions lists, supply chain disruptions and
more. Ivalua maintains an open and rapidly expanding ecosystem, including new
and updated out of the box integrations with leading providers such as: EcoVadis – A long-time partner of Ivalua and leading provider of sustainability risk and performance ratings for global supply chains. Backed by a powerful technology platform, the industry’s most-trusted methodology and a global team of domain experts, EcoVadis sustainability scorecards provide insight and engagement tools to mitigate risk, drive improvements and create value across 198 purchasing categories globally.
EcoVadis – A long-time partner of Ivalua and leading provider of sustainability risk and performance ratings for global supply chains. Backed by a powerful technology platform, the industry’s most-trusted methodology and a global team of domain experts, EcoVadis sustainability scorecards provide insight and engagement tools to mitigate risk, drive improvements and create value across 198 purchasing categories globally.
“The global
supply chain is a breeding ground for hidden sustainability and CSR risks.
Our partnership with Ivalua enables procurement to see where they are
exposed and the steps they need to take to reduce their risk,” said
Pierre-Francois Thaler, Co-CEO of EcoVadis. “The integration of EcoVadis
Sustainability Ratings with Ivalua Risk Center brings our mutual customers a
powerful combination of insights to optimise procurement decisions, improve
supply chain performance and create value.”
riskmethods – A leader in supply
chain risk management, riskmethods empowers businesses to identify, assess
and mitigate supply chain risk. By using artificial intelligence,
riskmethods helps customers automate and accelerate threat detection,
enabling them to gain competitive advantage with a well-managed approach
to meeting customer demands, protecting reputation and reducing total cost
of risk.
“The
integration of holistic supplier risk information within the Ivalua platform is
a great opportunity for Ivalua customers,” says Heiko Schwarz, founder and
managing director of riskmethods. “With riskmethods available via the Ivalua
Risk Center, customers will be able to get a complete view of all types of
risk, giving them the tools, they need to avoid the cost of disruptions and
respond faster to risk events than their competition.”
Global Risk Management Solutions (GRMS)
– In an upcoming release, GRMS, a recognised leader providing innovative
supplier risk management solutions, will also be available. GRMS combines
highly configurable software, premium data streams, and continuous human
interventions to reduce exposure to global risk and liability. GRMS
delivers risk-management-as-an-integrated-service on fully private
networks and serves clientele covering suppliers across more than 120
countries.
By Joonas Jantunen, CEO Cloudia Middle East & Africa, Cloudia. Former Hewlett-Packard CEO, Lew Platt, once famously said: “If HP knew…
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By Joonas Jantunen, CEO Cloudia Middle East & Africa, Cloudia.
Former Hewlett-Packard CEO, Lew Platt, once famously said: “If HP knew what HP knows, we’d be three times more productive.”
Managing
knowledge, or knowing what you know, and being able to apply it to core
decision-making is key to business success now and in the future. In
procurement, knowledge management already has the potential to drive
productivity gains across the business. And emerging technologies like AI and
RPA look set to play an outsized role.
What do we mean by knowledge management?
Every day, every
moment, organisations and their operating environments are creating, using and
sharing, huge amounts of information, or knowledge. Knowledge management, most
simply put, refers to the process of collecting, maintaining and managing
everything that a company ‘knows,’ in all
its forms. But knowledge management is also about using that knowledge to help
leaders make more informed decisions. In this article, we are considering
knowledge management in this wider sense.
In any
organisation, knowledge is power but only when it is well managed and usefully
applied. In procurement, knowledge becomes power when it’s effectively managed for the
purpose of driving decision-making. That means, identifying what information is
critical to operations, analysing it, then sharing the findings with key
decision-makers across the company.
What does this mean in practice for procurement?
In procurement
today, knowledge management typically begins with process automation, aimed at
reducing routine administrative work and freeing up procurement people to focus
on innovation and productivity. Automation also equips organisations with the
capacity to adapt and take advantage of new technologies as they develop.
The vast
majority of data management applications currently available focus on storing
and presenting historical data – telling us ‘what
happened’. Naturally,
it’s important to know
about past events to aid future management strategy, but all too often the data
analysis and interpretation itself is left entirely to humans, with our limited
capacity for processing large amounts of information. Also, it’s not possible to effectively exploit
even the most basic historical data in practice unless the organisation’s
procurement systems and processes have been digitised, and an adequate amount
of historical data accumulated.
Emerging technologies assist knowledge management in
multiple ways
When artificial
intelligence (AI) is mentioned, often the first thing that comes to mind is
robots making decisions on our behalf or undertaking roles previously performed
by humans. Indeed, it has been predicted that robots are likely to replace many
service-sector jobs, among other things. However, it’s worth remembering that predictions are based
on assumptions of what might happen in terms of
advances in AI and it’s
challenging to predict the pace at which these advances would take place.
In the short
term, the situation looks less exciting. At the moment, the most significant
strength of AI is its ability to handle huge amounts of data from various
sources and to establish links among different factors. Another remarkable
aspect of AI is the speed at which it is able to identify and produce text,
sound and image. As it stands, AI is best suited for optimising existing
processes and behavioural models on which an organisation already has plenty of
high-quality data.
AI helps manage, cultivate and discover procurement
knowledge
AI and its
various applications, especially robotic process automation (RPA), can
significantly speed up data collection and assembly. In addition to the
information that’s
entered into the system and generated during the daily procurement activities,
RPA is also able to cultivate new information. Useful information can be
gathered about various relevant factors, such as the market, operating
environments, pricing, currency fluctuations, any changes to contracts or
suppliers, as well as other operators or events within the same business
sector.
With the help of
automation, the data can be assembled, categorised according to context, and merged and stored
without human interference. As a result,
the process of data discovery will be significantly quicker and more
straightforward. Technology can also be harnessed to keep different levels of
management up-to-date with the latest information regarding, for example,
various organisational
units, or changes to contracts or consignments. As a result, management will
always have access to real-time knowledge of any breaches of contract or
disruptions in the supply chain.
The next level
of knowledge management is reached when technology is exploited to help
understand the causes of events and certain behaviours. Diagnostic analytics
examines data or content to answer the question ‘Why did this happen?’. When there is a better understanding of what
happened, information can be used to find and detect a variety of recurring
formulas and patterns, which help control and redirect operations more
accurately.
For example, if
the same suppliers always succeed or fail to fulfil the terms and conditions of
specific product categories, the valuable information provided by diagnostic
analytics can help target investment toward the most reliable suppliers.
Similarly, understanding the changes in supply and demand, under certain
conditions in different product categories, will help schedule the procurement
process more efficiently. Diverse procurement procedures and market
fluctuations have an impact on the price level of bids, but by analysing trends
and past events, it is possible to get both the procedure and the timing right.
Predictive analytics explains what’s going to
happen
Any organisation wishing to succeed needs to
have foresight. Predictive analytics is a level up from analysing the past, as
the focus is on developing and automating forecasts and probabilities based on
current events. Those in charge of procurement can use the knowledge to predict
and prepare for various outcomes and direct their actions accordingly.
Once the
analytics has discovered why something happened, it will be able to draw
conclusions and predictions about what is going to happen next. As an example,
it’s possible to
predict that when certain changes occur on the market, certain suppliers will
perform better (or worse) in relation to certain contractual terms, or if the
price or availability of a certain product category is projected to reduce.
Prescriptive analytics explains what should be
happening
A high level of
procurement knowledge management is achieved when technology can be employed to
tell what should be done next. AI and its various applications can efficiently
simulate human behaviour and learn to make draft measures and proposals based
on predictions. Even the decision-making process can be fully automated with
the help of various approval stages.
Based on facts
and probability-weighted projections, the system can give recommendations to
management about different areas of procurement. For example, it might be
advised to avoid certain suppliers at certain times of the year due to
projected shortages in supply, or to order extra goods in advance to prevent
stock from being exhausted.
Choose an experienced and competent partner
AI is a very
useful tool for optimising performance and streamlining processes where the
cost of human error can be high. In order to make the best use of technology in
procurement knowledge management, it’s essential to be able to identify and collect the type of data that
matters most to your organisation. Since the projections and recommendations are based on existing
data, the sooner the process of data collection and storage in your organisation commences, the better.
With constant innovation and marketplaces changing faster than ever before, procurement is undergoing its own transformation. Increasingly, companies are looking…
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With constant innovation and marketplaces changing faster than ever before, procurement is undergoing its own transformation. Increasingly, companies are looking to support faster, decentralised procurement functions that will in turn allow for decentralised decision making. Here we look at 5 key shifts in procurement for 2020, as detailed by Gartner.
Value Drivers: From
risk mitigation to leveraging knowledge
Businesses have been investing in new technologies in order
to better understand their operations. Data capture and analytics have allowed
companies to make informed business decisions, based on insights from data
analysis. In recent years, the focus of this analysis has been on risk
mitigation and cost reduction. Over the next year, business will begin to
leverage the knowledge it has gained on spend, suppliers and markets in order
to better identify new sources of value and eliminate inefficiencies.
The role of procurement: transactional to
strategic
The very perspective of procurement has changed radically
over the last decade. Companies have almost begun ‘waking up’ to the notion
that procurement is no longer a simple cost centre and in recent years, more
and more of them have placed procurement at the heart of their operations. Over
the next year, procurement will continue this evolutionary journey as
businesses will shift it further, taking on more high-value work and focusing
more and more on ‘top-tier’ buys. This will see experienced category managers
spending more time developing category managers throughout the business, with
the skillsets changing to include process expertise and coaching others.
Business role: business partners enter the
game
With the role of procurement becoming increasingly
strategic, the lines between traditional procurement professionals and separate
business units are blurring. More and more business units are aligning to the
procurement function, taking on more responsibility and combining their
specific expertise with that of the procurement role. As a result of this,
procurement will enhance its training and coaching capabilities to help ease
business partners into a position where they can source on their own. New tools
and processes will be defined in order for business partners to execute
sourcing events independently and mechanisms will be put in place for
evaluating sourcing discipline executed by the business.
Delivery model: a
centre of excellence
The very model of procurement will change, shifting towards
a model defined by a CPO, Category Manager and Procurement process experts.
What this ultimately means is that experienced procurement managers will
conduct the most important purchases/buys and the procurement process experts
will provide guidance to the business units. Overall, procurement will develop
a better understanding of the varying levels of business partner sourcing
discipline, meaning that the overall team will focus on process excellence and
less on specific category knowledge.
Resources: investing
in people and technology
Investing in people, skillsets and talent is nothing new, but
the way in which procurement will invest in its people and its technology will
change. Reallocating budgets from outsourcing and corporate overhead will see
procurement look towards professional and analytics skillsets. Technology
investment on the other hand will shift to include robotic process automation
software and customer experience technology. This will see greater use of
customer experience experts and an increase in professional advisory skill
sets.
In the latest episode of The Digital Insight, George Booth, Chief Procurement Officer at Lloyds Banking Group explores risk assurance and whether it’s become a top priority for the CPO of today.
George also talks about how big data, AI, and blockchain are
redefining the sourcing function and in turn, redefining the role of the
procurement professional. We also discuss how, in the digital age, balancing
the need to identify and onboard new fintechs with a need to protect the
business from inherent risks cause significant challenges, but also
opportunity.
This
month’s exclusive cover story features an interview with Joseph Lee, Vice President of Procurement and
Subcontracts at AECOM Management Services, who tells us how the company optimises
its procurement to become a strategic sourcing organisation.
Lee leads all procurement and subcontracting
for AECOM’s Management Services Group — an organisation with more than US$4 billion
in annual revenue and operations in more than 25 countries. Joining the
business in early 2017, Lee was tasked with creating a plan to transform the
procurement organisation and to assess it in its existing format. Here, he
found that procurement was still viewed as something of a cost centre.
“They received requirements and executed them.
That was it,” he explains. “There was little value-add;
no metric, performance or accountability to the team. After assessing, I
recommended we stand up a strategic organisation; one more forward-leaning that
could negotiate long-term agreements in order to create efficiencies in our
transactions…”
We
also feature an incredible article with Maytham
Al-Khairulla, VP of Business Support at OSN, while negotiation
techniques in procurement are discussed by Eman Abouzeid, Global Procurement
and Supply Chain Professional.
With constant innovation and marketplaces changing faster than ever before, procurement is undergoing its own transformation. Increasingly, companies are looking…
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With constant innovation and marketplaces changing faster than ever before, procurement is undergoing its own transformation. Increasingly, companies are looking to support faster, decentralised procurement functions that will in turn allow for decentralised decision making. Here we look at 5 key shifts in procurement for 2020, as detailed by Gartner
Value Drivers: From
risk mitigation to leveraging knowledge
Businesses have been investing in new technologies in order
to better understand their operations. Data capture and analytics have allowed
companies to make informed business decisions, based on insights from data
analysis. In recent years, the focus of this analysis has been on risk
mitigation and cost reduction. Over the next year, business will begin to
leverage the knowledge it has gained on spend, suppliers and markets in order
to better identify new sources of value and eliminate inefficiencies.
The role of procurement: transactional to
strategic
The very perspective of procurement has changed radically
over the last decade. Companies have almost begun ‘waking up’ to the notion
that procurement is no longer a simple cost centre and in recent years, more
and more of them have placed procurement at the heart of their operations. Over
the next year, procurement will continue this evolutionary journey as
businesses will shift it further, taking on more high-value work and focusing
more and more on ‘top-tier’ buys. This will see experienced category managers
spending more time developing category managers throughout the business, with
the skillsets changing to include process expertise and coaching others.
Business role: business partners enter the
game
With the role of procurement becoming increasingly
strategic, the lines between traditional procurement professionals and separate
business units are blurring. More and more business units are aligning to the
procurement function, taking on more responsibility and combining their
specific expertise with that of the procurement role. As a result of this,
procurement will enhance its training and coaching capabilities to help ease
business partners into a position where they can source on their own. New tools
and processes will be defined in order for business partners to execute
sourcing events independently and mechanisms will be put in place for
evaluating sourcing discipline executed by the business.
Delivery model: a
centre of excellence
The very model of procurement will change, shifting towards
a model defined by a CPO, Category Manager and Procurement process experts.
What this ultimately means is that experienced procurement managers will
conduct the most important purchases/buys and the procurement process experts
will provide guidance to the business units. Overall, procurement will develop
a better understanding of the varying levels of business partner sourcing
discipline, meaning that the overall team will focus on process excellence and
less on specific category knowledge.
Resources: investing
in people and technology
Investing in people, skillsets and talent is nothing new, but
the way in which procurement will invest in its people and its technology will
change. Reallocating budgets from outsourcing and corporate overhead will see
procurement look towards professional and analytics skillsets. Technology
investment on the other hand will shift to include robotic process automation
software and customer experience technology. This will see greater use of
customer experience experts and an increase in professional advisory skill
sets.
By Dale Benton In a world awash with digital transformation stories that see companies restructuring or even dispensing with old…
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By Dale Benton
In a world awash with digital transformation stories that see companies restructuring or even dispensing with old business models to usher in the new era of digitalisation, the notion of understanding and sifting through noise in the marketplace, in order to head down the right path, requires a level of expertise that even some of the world’s leading organisations do not possess. This is why they turn to consultancies such as Roland Berger. With more than 2,400 employees working across 35 countries around the world, Roland Berger is a consulting partner of choice because it boasts a deep understanding of diverse cultures and markets.
One such industry space known for its ever-changing complexity amid a radical transformation the world over, is procurement. Michael Pleuger, Senior Partner at Roland Berger is an experienced procurement professional, focusing on large scale procurement and supply chain transformation programs. Having spent his entire professional life working in the business transformation space, he has seen first-hand the shifting nature of procurement and more importantly, the shifting perspective of organisations. Getting his start in the industry as Head of Procurement in a German M-DAX listed rail technology company, Pleuger soon found himself working on a major supply chain transformation program. Here, he worked closely with a number of different consultants, looking at technology implementation and change management. His consultants convinced him to move to the other side and to advise other clients as a management consultant himself. In this new consulting role, Pleuger delivered global procurement transformation programs for large European Blue Chips.
Later Pleuger joined Vodafone to bring in his experience to help integrate their global procurement activities and to establish a corporate procurement in the telco’s HQ in Newbury, UK and subsequently in the Vodafone Procurement Company in Luxemburg. After an almost four year stint in Vodafone, Pleuger returned to Berlin and to the consulting industry. He continued to serve globally-leading companies to transform their procurement and supply chain functions into a competitive differentiator. In this role he returned to Vodafone as a consultant and it was this time with the company that opened his eyes to a new wave of digital transformation in procurement.
“I was asked to look at digitalisation within the procurement company and it was, in my humble opinion, that the company was already fully digital because they were already working with new technologies in sourcing, P2P, invoicing, contract management, supplier collaboration and supplier performance management,” he says. “With this large existing digital footprint in place, we looked at it differently together with our client and saw that through RPA for example, a lot of P2P suites and e-sourcing suites would be potentially fully automated and therefore eliminated.” Pleuger identified that procurement needed to take on a new role in the future; a move determined by the unique positioning of procurement. As the function with the most interfaces, both internally and externally with the supply base, procurement is the ‘spider in the web’. All the data coming from all the nodes within the network, pass through procurement, presenting a unique opportunity for procurement to become the primary provider for business insight and foresight. It requires procurement to being able to make meaningful information out of this avalanche of data.
“This is a completely new currency of procurement, from savings to business to business intelligence,” explains Pleuger. “Today, as a senior partner with Roland Berger, my role is working with leading procurement organisations to help them prepare for the future of procurement.” To achieve this, Roland Berger uses a framework, they have branded “the procurement endgame”. The procurement endgame describes how certain mega trends, one of the biggest being digital innovation and industry specific disruptors, are turning companies and procurement upside down. Pleuger cites the emergence of 5G technology and how it’s enabling industry 4.0 and the Internet of Things a disruptor in the telco industry. In the automotive space, the emergence of autonomous driving is clearly a disruptor.
“What we see is that our clients respond to these external challenges by defining a new corporate strategy and business model,” he says. “Procurement aligns with these new business models and is key to operationalising these by providing business insight and foresight. Procurement is buying different content, such as digital content but also needs to buy differently, e.g. in collaboration with start-ups or emerging eco-systems.”
As the spider in the web, procurement has a responsibility like no other business unit. It has to be able to break down the complexity of its function and communicate it to the wider organisation in a language that makes sense. For some, the perspective remains that procurement is simply writing purchase orders and signing off invoices, but this is shifting and new business models are now opening the doorway to new capabilities. “In order to fulfill its role, procurement has to have connectivity to all the nodes in the network. Behind the digital glue, however, is collaboration,” he says. “That digital glue is an intuitive collaborative workflow, one that brings everybody into this flow of analysing the internal demands, the external market and then developing a strategic response in the shape of a better procurement strategy or category strategy.”
As an example, Pleuger looks at artificial intelligence and its role within procurement. “If all the IOT devices and the industry 4.0 devices and the consumers online around the world are connected and capturing data and feeding it into the procurement sweet spot, that’s going to overwhelm the category managers,” he explains. “So, we look to feed AI into managing that data as it comes their way. Then, they can use this AI to prioritise, digest and summarise all of the sources available and provide an executive summary and predictions that can be used to stay ahead of the game. This is but one example of the capabilities that the category managers require in order to succeed in procurement today.”
The key component in the middle of transformation is the procurement professional and the category managers that are shifting their way of working in this new era of procurement. In order for organisations to embrace innovation, implement new digital tools and unlock greater value, the people controlling and accessing this digital glue need training to join these journeys. Roland Berger has recently released a white paper on 21st century skills in procurement, which breaks this down into two dimensions; the need for collaboration and the complexity of the task at hand.
“If the complexity and collaboration is low, then this is a task that can be automated and it requires a basic understanding of what the digital tools can do,” explains Pleuger. “If the complexity is high, but the collaboration is low, something like AI can be used to analyse that complexity and solve the problem. However, if the complexity is high and the collaboration is high, this is where we look at human intelligence and our best people. Very often I hear up-skilling is a shift from lower value tasks to higher value ones and this is correct. But I think that, unfortunately, due to it being a hard discussion, we will lose people along the way. Automation for example could reduce the overall demand for procurement professionals. It’s too hard a discussion to simply say up-skilling organisations need to break down exactly what these digital tools will bring and takeaway.”
The challenge Pleuger sees here is one that stems from something he experienced himself; what does digitalisation mean to people? This is a question that Pleuger loves to work with organisations to try and answer. Pleuger, through his career, has learned that digitalisation is different from implementing standard IT software packages, for it opens the door to innovation. “If digitalisation means what we always associate it with, being agile and disruptive, then this in itself determines that it cannot be a standard software bought from the shelf,” he says. “If you want to be super disruptive, you have to invent something completely new. You have to be bold and adopt a failing forward attitude.” He points to a quote that states that all experts are experts in what was, no one is an expert in what will be. “If you want to be an expert in these innovative technologies and digitalisation then there are three things that must replace experience: vision, leadership and collaboration,” he says. In order to achieve this, an entrepreneurial, agile and creative environment is key.
Roland Berger’s Spielfeld, located in Berlin, is such an environment. over recent years, the former mail sorting office in the central Berlin neighbourhood of Kreuzberg has been transformed into ‘Spielfeld Digital Hub’. The three-storey hub comprises 2,500 square metres of workspaces, meeting rooms, technology areas and kitchens. It is a breeding ground for collaboration, brainstorming and innovation between people from companies of all shapes and sizes, from start-ups to corporates. Spielfeld Digital Hub was founded by consultancy firm Roland Berger in conjunction with Visa. “It’s a place where tech firms, start-ups and venture capitalists come together,” explains Pleuger. “They form an ecosystem in which teams of people from different disciplines and different organisations can innovate together and where their innovations have the chance to mature. “This is the new way of working,” says Pleuger. “In an environment like our Spielfeld we can find out together with our eco-system partners what it means to collaborate in the very spirit of vision, leadership and collaboration. It will ultimately lead to innovation, as it did when Pleuger and his team have spearheaded the digitalisation of category management and thus addressed a white space in the landscape of digital procurement systems and tools. A ground-breaking innovation.
Trying to determine what digitalisation means to each and every one of us links back to Roland Berger’s concept of procurement endgame, a series of frameworks that prepare organisations for the future, whatever it might look like. The Endgame is built around an organisation’s strategic response to industry trends and industry specific disruptors and how that in turn defines new requirements for procurement. The challenge is, and ultimately always will be, navigating this future in a way that will achieve success. Pleuger points back to the idea of failing forward, being bold and collaborating. “I look at the quote again around no experts in what will be. This means that we don’t need to look at people who have done this for 10 or 20 years. We can look at young, fresh and driven individuals,” he says. “Develop these young and hungry individuals and they can bring a massive impact and change into the way procurement works. This can help create a culture that will truly enable digital transformation for any organisation.”
By Daniel Ball, business development director at waxdigital.com Ever heard the joke that the only way to be popular in…
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By Daniel Ball, business development director at waxdigital.com
Ever heard the joke that the only way to be popular in
procurement is to buy a dog and take it in to work? Well, times are changing,
and procurement’s popularity is on the ascent as it is recognised for its
positive contribution to both the environment and society. Many of today’s
savvy procurement professionals realise the advantages of adopting new
approaches to how they buy goods and services.
Once perceived as the team that simply saves the business’
money, procurement’s role is changing, as both sustainable and ethical purchasing
practices increasingly become business priorities.
Legislation such at the UK Climate Change Bill is forcing
procurement to address environmental issues such as plastic reduction and
biodiversity. And, more and more customers are now making their buying
decisions based on their suppliers’ sustainability credentials.
While sustainable procurement can make a big contribution to
an organisation’s Corporate Social Responsibility (CSR) efforts, some businesses
are making change of a different kind through their purchasing.
Ethical sourcing is a way for organisations to make positive
societal change by choosing to buy from social enterprises which support those
most marginalised from the workforce. According to Social
Enterprise UK there are over 100,000 social enterprises in the UK. They
employ two million people, contribute £60 billion to our economy and offer
their services across most sectors. Just like traditional businesses, social
enterprises work to make a profit but use it to help create positive social
change for those most in need of support.
As well as contributing to good causes, engaging with social
enterprises can also have a positive impact on the external and internal
perception of a company. According to an Ipsos Mori poll, 84% of consumers
believe that companies should do more for society. And, working with social
enterprises can have a positive impact on staff morale too with 75% of
millennials claiming they would agree to a pay cut to work for a more socially responsible
company.
From bathroom soap to recruitment services, the UK’s social
enterprises are well-equipped to support numerous business needs. Here are a
few examples of social enterprises supplying to businesses throughout the UK:
Soap Co. is an ethical
brand that creates cruelty-free body care products, including soap for office
washrooms. It provides training and work opportunities for people who are
visually impaired, or with other disabilities.
Graduate Planet,
is a recruitment business which reinvests it profits into local environmental
initiatives.
Auticon is a national IT
consultancy exclusively employing autistic adults as IT consultants.
Recycling Lives is recycling and waste management company that
supports charity programmes for ex-offenders.
Working with social
enterprises can sometimes be as easy as changing office supplies provider.
Another business dedicated to changing lives, is WildHearts Group, a leading UK B2B social enterprise. It
encourages businesses to make a positive social impact simply by coming to them
for office supplies. Providing 35,000 everyday products that businesses need to
buy anyway at competitive prices, its profits help funds the work of the
WildHearts Foundation who support struggling female entrepreneurs in Africa and
young people affected by social immobility in the UK.
One CPO who works with the
WildHearts Group, told us about the impact this approach to procurement is
having on the organisation: “Social enterprises have revolutionised the scale
of conversations procurement now has with key stakeholders in the business.
“We’ve found an effective way
of making people feel good about procurement. We now have case studies demonstrating
how we are contributing – for example, we’ve helped a Ugandan mother set up her
own business. Borrowing just £40 enabled her to set up her own fruit and
vegetable stall. It’s no longer a
conversation about a ream of paper but one about helping someone educate their
kids. What’s not to like about that?”
As well as helping facilitate
social mobility, there are many more benefits this ethical approach to
procurement can bring to the business. Working with social enterprises doesn’t
have to mean compromising on cost or quality, with many suppliers credited for
their excellent customer service, competitive pricing, and innovative products
and services.
Crucially, it’s also becoming
increasingly common for customers to only want to work with businesses who
support social enterprises. WildHearts Group say they often see organisations highlight their
association with them in tenders to help them win the business.
Both sustainable and ethical
procurement practices not only deliver both environmental and societal benefits
but contribute to the success and motivation of the wider business too. But
don’t underestimate the impact these approaches to purchasing can have on the
procurement team too.
Another CPO told us that he’d
met more senior managers at his business through working with social
enterprises than he ever would have done so previously. Perhaps now CPOs can
raise their profiles without having to buy a dog after all.
Our exclusive cover story this month features a procurement transformation at Aldar Properties, one of Abu Dhabi’s leading property developers….
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Our
exclusive cover story this month features a procurement transformation at Aldar
Properties, one of Abu Dhabi’s leading property developers. We caught up with Musbah Abu Jarad, Senior Vice President of Corporate and Assets
Management Procurement to explore how Aldar Properties utilises procurement
excellence.
Abu Jarad joined the business in late 2018 and did so at a time of
procurement transformation for Aldar. “The procurement function within the
company has evolved at Aldar from a cost function into a partnership function,”
he says. “What this means is that we no longer look at suppliers as just
suppliers to come in and provide services or goods and then leave. We look at
them as partners, and ones who share our same environmental responsibility.”
Over the last year, Aldar has invested significantly into its procurement
function to define a clear strategic function.
Elsewhere, we have a revealing interview with
Sammeli Sammalkorpi, the co-founder of Sievo, the world’s leading company
focused on procurement analytics, exploring how it achieves this through AI and
a client-focused approach.
Plus,
features on ethical procurement, AI as utilised by CPOs and a supply chain
masterclass with Gartner’s Frank Vorrath. And… our essential guide to all the
best conferences and events from around the globe.
Organisations are under more pressure than ever before to innovate at speed, ensuring they remain relevant in an increasingly competitive business environment. However, one of the barriers to achieving this is the constant drive to cut costs.
In today’s procurement landscape, cost reduction and innovation can no
longer be viewed as mutually exclusive. Instead of focusing solely on remaining
profitable, organisations need to view cost reduction as a sustainable practice
that doesn’t block innovation. This misalignment between objectives means
organisations must take more consideration when it comes to supplier management
and adopt a more collaborative approach, investing in the right tools to help
ensure innovation isn’t stifled by an overarching focus on cost reduction.
Innovation has become a top priority for organisations, but in order to
deliver ground-breaking new developments, they must take steps to ensure they
have effective supplier management that encourages and enables innovation.
Suppliers should be a key resource for organisations looking to develop
innovative ideas. According to the Institute for Supply Management
(ISM), up to 65% of organisational innovation is sourced externally
through various partners and suppliers. This means, in order to increase
innovation, organisations need to better understand their supplier capabilities
by tapping into the skills and knowledge base which will help to drive the
business forward.
Despite organisations having access to this supplier information, many don’t use it. In fact, most organisations typically don’t get out enough to explore new ideas from their suppliers. They would much rather keep the innovation and creative thinking in-house with the marketing or planning department. Capgemini’s research on Supply Relationship Management reveals 60% of procurement departments do not interact with their suppliers through any source of social medium. This signifies a considerable amount of potential for growth and shows that resource is going to waste.
The report also found a severe lack of supplier relationships within
organisations, with only 16% of Capgemini’s respondents having a corporate
strategy and process in place to manage supplier relations. These organisations
are failing to utilise the knowledge of their suppliers, resulting in missed
opportunities to discuss new strategies or possible product ideas.
Lack of scalability limiting collaboration
The barrier to working alongside suppliers and putting processes in
place is often due to a lack of scalability, with too many organisations
collaborating via email or verbally with a handful of existing, strategic
suppliers. By digitising supplier engagement, collaboration can scale across
more suppliers and products for greater overall benefit. Poor technology
adoption is a common barrier. Forrester research previously
found that over three-quarters (82%) of organisations switched or are
considering switching technology providers due to poor level of supplier
onboarding (30%) and poor user adoption (27%). This has prevented suppliers
from easily communicating with procurement teams or even bidding for contracts.
It is impossible to unlock innovation if the means are not provided to
help suppliers get involved with innovation initiatives or suggest ways to
sustainably cut costs or improve designs.
Currently, there are organisations that use recognition and
collaboration to develop highly effective supplier relation programmes. General
Motors (GM) are known forfrequently praising suppliers
who have excelled or have a successful collaboration with GM to produce
innovative technologies through their supplier programme. This system has
helped GM to promote innovation and incentivise suppliers so they can feel rewarded
and motivated to share their latest ideas and breakthrough technologies.
Organisations that have a supplier relationship management programme in place
are able to efficiently measure target outcomes, which promotes continuous
improvement in collaboration with their suppliers.
Building a supplier ecosystem to foster innovation
In order to strike a fair balance between cost savings and other
objectives such as sustainability and new product development, organisations
need to move away from their cost-focused approaches and must instead adopt an
entirely new way of managing their suppliers. It’s time for a more measured
approach to supplier management, one that will help enterprises focus on
diversity and innovation, and which will ultimately encourage sustainable cost
savings driven by the supplier rather than the buyer.
However, this will be impossible to achieve without a reliable data
foundation, to help organisations make accurate and informed decisions and
weigh up their options effectively and accurately. By implementing smart
procurement technology to clean up supplier data from multiple sources,
organisations can gain 360-degree visibility across the entire supplier base.
This will help to unlock a wealth of insights into contracts, orders, and
invoices, as well as detailed information on suppliers such as risk factors,
relationships and performance evaluation.
Organisations under pressure to innovate at speed can utilise this
visibility to build deeper, more meaningful relationships with suppliers,
allowing them to collaborate to create sustainable cost savings while also
creating new products and services to satiate demand. As the speed of
innovation increases in the future, savvy organisations must ensure that
conversations about cost don’t become a barrier; otherwise, they risk more
savvy rivals utilising their supply chain to rapidly deliver new products to
market, leaving those that don’t in their wake.
Tradeshift co-founder Gert Sylvest, and CPO Roy Anderson, reveal how their global open business platform is transforming the future for…
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Tradeshift co-founder Gert Sylvest, and CPO Roy Anderson, reveal how their global open business platform is transforming the future for buyers and sellers. By Elliot Francis
Tradeshift was founded in Denmark in 2010 by Gert
Sylvest, Mikkel Hippe Brun and Christian Lanng. The trio’s ambition was to
connect organisations across the world with an open business platform capable
of transforming the way buyers and sellers interact by digitising and
connecting every process. With over 800 staff based in 13 countries worldwide,
Tradeshift helps businesses connect with all their suppliers digitally; remove
paper and manual processes across procure-to-pay; seize early payment discounts
to save money and buy what they need while managing supplier risk.
Sylvest’s vision is clear: “Marrying social technology
with hard transactions will change the way the world thinks about business and
finance, and allow us to bridge major digital divides.”
The Tradeshift Platform
Our platform
allows you to run applications to meet the needs of what you’re doing when
you’re doing it,” explains Tradeshift’s CPO Roy Anderson. “Different roles, such
as advertising, legal services, facilities or engineering, have different
requirements, requisitioning means and connections to their suppliers. They
want a system that works for them. Tradeshift creates a user centric model – versus
a procurement centric or IT centric model – providing different tools for
different skillsets.” Tradeshift’s platform can connect the dots digitally
offering a breakthrough in use-ability. “The key element of procurement is
penetration,” he adds. “Getting all of your customers on board is a lot easier
with this user centric tool.”
Anderson’s career path included
the role of CPO at MetLife where he managed close to 20,000 suppliers. With
just a few hundred of those automated, his resources were tied to managing the
risks and costs of unconnected services tied to an IT-centric model. Today, he identifies
three areas where Tradeshift can drive transformation in procurement… The
aforementioned deep penetration of connectivity with suppliers digitises the supplier
base. Secondly, the platform allows for user centric applications. With the
penetration and platform established the third key benefit for users is access
to a growing marketplace of products and services. “It becomes something that
can work for a CPO very effectively,” he maintains. “You can tie into the
Tradeshift marketplace and be able to buy your product at your price, and use
the services without having to do the enormous work of setting up and running
through the business case and the IT resource plan and the implementation
efforts.”
Innovation
Since
2010 Tradeshift has been targeting the Fortune 5000 companies and branching out
to cover the whole Source-to-Pay cycle, moving inside organisations and
onboarding employees for accounts payable automation, and increasingly for
procurement alongside services offered via the marketplace. This innovation has
helped define the company’s strategy on AI, blockchain and IoT. “We started to
implement Machine Learning and AI back in 2012 and created CloudScan, an
industry first scan and capture for the accounts payable process. What
differentiates those who profit from Machine Learning is the ability to solve
the network layers. Being a cloud-based network platform, we have the ability
to learn from both the individual company’s best practice – procurement,
invoice approvals, product classification – and how it works across the
network. This has helped us develop automatic invoice coding and approvals
based on existing patterns.”
Challenges
“It’s always an educative journey,” believes Sylvest.
“We’ve been approaching things from a new angle since we went 100% network
first in the cloud. Customers that are successful on our platform buy into the
bigger vision… When we use apps on a phone, everything is connected by
default. Companies get that. After 40 years there is only one way to go,
greater digitisation of the supply chain and the collaboration between
companies. The challenge for them is to embrace ways of breaking down data
silos to leverage the benefits of AI. Big players like Google and Facebook are
driving this and putting out their technology as open source and using
engineering communities to develop this at breakneck speed. The issue lies in
how you adapt and use the technology, so most enterprises today are embarking
on that learning process to make sure they reap the benefits.”
Automatic success
The
automation of e-invoicing has been a resounding success for the company.
Tradeshift Pay is now utilised globally by hundreds of businesses and was
recognised in the Gartner Magic Quadrant for Procure-to-Pay Suites in 2018. “Tradeshift’s
model is to do digital by default,” confirms Anderson. “We work with suppliers
to be able to get their documents digitally ripped to start, moving away from
paper that needs to be scanned. It’s always going to be a tailored activity,
but ultimately suppliers can see that by embracing a digital network, accurate
invoices make for accurate payments. Finance teams can manage their working
capital more efficiently, suppliers can be paid faster while cash be used more
effectively…” Anderson reckons what’s good for the supplier is good for the
client. “This is an enormous value proposition to many of our customers,” he
adds. “The next step is to digitise the front end – the sourcing of the data
analysis and spend analytics; the contract requisitioning, catalogue, and all
of the services linked with that.”
Partners delivering applications
The Tradeshift platform is home to more than 300
visionary applications, like FRDM, which allow users to make purchases that
elevate both profits and people by offering supply chain transparency from
supplier down to raw materials level. “With the FRDM application, you can target the areas where slave labour is prevalent. If
the product or service you buy has the potential to be at risk, you can
mitigate that risk and aim to eliminate it.” Allied to this are sustainability
apps such as Eco and tools for a multitude of tasks from background checks and
spend analytics to requisitioning and forecasting.
Tradeshift on trend
Anderson notes that as supply chains digitise, clients
are demanding speed, ease of use and a lower cost of implementation. He recalls
that in previous roles, as CPO at MetLife and Fidelity, he would create a
marketplace inside the company of trusted suppliers with the right risk
portfolio that was sustainable, to allow internal customers to get the job
done. This could take months – even years in some cases – to set up the
suppliers and relevant content, contracts and technology. “My goal now is to be the CPO of an entire network of
companies,” says Anderson of the Tradeshift marketplace. “There are
organisations out there that separate you from your supplier. I consider that
bad business. Our platform will give companies the flexibility to have products
and services readily available to capture and curate their own solutions in a
matter of days. Now they’re going to get aggregated buying opportunities, but
still be able to have their relationship with their manufacturer or supplier.”
Predictions on Procure-to-Pay
Sylvest believes the marketplace embodies the idea of
the network, rather than the traditional one-to-one procurement model which
misses out on the economics of scale. It’s a place where Tradeshift’s app
strategy (300 and counting) will flourish. “When we founded Tradeshift, we
chose to make all of our interfaces open source for third parties to develop services,”
he explains. “B2B spending is very complex and for every category, especially
materials, third parties will bring specialism that can enhance services across
different geographies. What will set us apart in the market will be the ability
to combine the procurement process with product formation, fulfilment, payment
and the financing of the physical goods or based on the invoice.”
Sylvest is most excited about the work Tradeshift is
doing with ten of the largest banks (HSBC, CitiBank etc) to provide supply
chain financing and discounting in the App Store. “They’ve chosen to have a
presence in a competitive marketplace where it’s up to users to decide which
financial services suit them best. For me this is proof that our network
strategy is working.”
New frontiers for Tradeshift
Tradeshift Frontiers is the company’s digital
innovation arm working on two major themes: the future for FinTech and how to
connect the physical supply chain with the financial supply chain. Both of
these are looking at ways to integrate Blockchain. “Tradeshift Cash was
launched in 2018. With half a trillion dollars flowing through the network in
receivables, what if you could take those receivables and tokenise them? By
turning them into a digital asset you use the Blockchain as a marketplace where
invoice tokens are for sale amongst financers. Instead of a traditional sale of
invoice volumes over six months, we envisage a much more fluid process where
invoices are tokenised in real time and out up for sale. In this competitive
model financers compete based on their appetite for risk and knowledge of an
industry.” Tradeshift is also working on Ecosystem Finance – extending credit
for outstanding receivables between two parties down the supply chain with
further tokenisation.
Goals
Faster and friction free financing is the ultimate
goal for Tradeshift as it bids to make B2B buying as simple as using a consumer
credit card. A key part of its development over the next 12 months will be
onboarding partners to deliver critical mass with SKU development for products
on the shelf.
“Once you’re digitally connected, then you start to build
the value from there,” adds Anderson. “But suppliers don’t necessarily see that
value on day one, it takes them time to be able to turn that into an ROI… But,
if we look into the future, the only suppliers you’ll want to deal with are
those that are digitally connected; more accurate, complete, compliant and
transparent in their process. The alternative will be risks in the cost
structures.”
Over
the next 12 months, the goal for Tradeshift is to add more suppliers to its marketplace,
and grow the digital ecosystem. “We’ll build the tools and the connectivity to
be able to add a massive amount of value,” pledges Anderson. “It will open
people’s minds, just like they did with Y2K when they had to invest in new ERP
systems, and they’re investing in this digital environment. This is not an
evolution, this is a revolution in how supply chain thinking will be done.”
DCT Abu Dhabi, has achieved the Chartered Institute of Procurement and Supply, CIPS, – Corporate Platinum Award, according to state…
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DCT Abu Dhabi, has achieved the Chartered Institute of Procurement and Supply, CIPS, – Corporate Platinum Award, according to state news agency WAM.
The award is the highest certification in the procurement profession globally that can be reached by an organisation. DCT Abu Dhabi is the only organisation to have jumped from CIPS’ Standard Level, directly to CIPS’ Platinum level in a record time of only two years. Traditionally, this process takes four to six years with both Silver and Gold levels in between.
Speaking on the occasion, Saif Saeed Ghobash, Undersecretary of
DCT Abu Dhabi, said: “Undertaking the CIPS Procurement Excellence
Programme has been incredibly beneficial for DCT Abu Dhabi’s procurement
function, and by achieving its highest Platinum Award, we have proven that
through commitment, hard work and skill, great things can be achieved. The
process has been an invaluable way to assess performance, enabling us to
measure our work against the internationally recognised benchmarks set by CIPS.
This award puts DCT Abu Dhabi among rarefied company, and will boost DCT Abu
Dhabi’s reputation globally.”
The CIPS Procurement Excellence Programme is the only
independent, comprehensive, procurement-specific assessment of its kind, which
measures the procurement function against world-class standards. It is a
globally recognised award that demonstrates how well an organisation is
performing whilst building a competitive edge and driving world-class service
delivery.
The CIPS Platinum Programme covers five areas of the procurement
function and organisation, i.e, Leadership and Organisation, Strategy and
Policy, People, Process and Systems and Performance Management.
CIPS is the leading professional organisation in procurement and
supply chain management and aims to promote and develop high standards of
professional skill, ability and integrity among all those engaged in purchasing
and supply chain management globally.
In this article, Jon Hansen examines two opposing elements of the digital procurement paradox, including what organisations can do to…
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In this article, Jon Hansen examines two opposing elements of the digital procurement paradox, including what organisations can do to begin to address the stalemate…
You
are likely familiar with the phrase about irresistible force meeting an
immovable object.
When
it comes to procurement in the digital age, the same paradox applies to
technological advancement and the need for greater security. In other words,
technological advancement is the irresistible force that promises to transform
procurement and business in general.
While
there are several obstacles to the adoption of technologies such as the absence
of “clean data” within an enterprise, security is the immovable object that
executives cite as being their greatest concern.
The current lay of the
land
In my paper Digital Transformation
in Procurement, I referred to a McKinsey survey of 1,600
incumbent global companies. In the survey, 23% of the responding executives
report having a digital strategy in place. Of those, just 2% have a strategy
that includes their supply chain.
While the above numbers are in and of
themselves noteworthy, in the context of the 2%, the results of a second survey
are even more surprising. In that one, 70% of the respondents say that the
supply chain is essential to delivering on the digital promise.
Think about this revelation for a moment.
Respondents to a second survey state that the supply chain is essential to realising
their company’s digital aspirations. With the first survey, only a small number
of organisations have a strategy for digitising their supply chain.
The obvious question is, why?
The risk side of reward
Earlier
this year, I had a chance to sit down and talk with the Director, Cyber
Security for Cisco Michael Tryon. The focus of our conversation was on how
organisations must have a “sure and safe pathway” towards achieving their
digital objectives.
It
was an interesting discussion on many levels. What stood out to me the most was
Tryon’s reference to an article he had written in
which he discusses a report from North Carolina State University.
According
to Tryon, the findings from the University’s report show that the top concern
of executives in the study was an inability to manage a new risk. The risk to
which they are referring to is those associated with rapidly evolving
technological advancement.
What
is it about evolving technologies that have executives stuck in a holding
pattern between the recognition of digital’s importance and the realisation of
its promise?
The Amazonisation
effect
From
the standpoint of procurement, concerns with risk start and end with the
Amazonisation of the supply chain, including increasing decentralisation.
One
of the great things about Amazon is the ease at which someone can buy a product
online with little to no difficulty. Purchasing is a simple exercise that is
becoming progressively easier as the platform leverages RPA and AI to provide a
seamless and intuitive experience for the buyer at home.
The
Amazon experience at home raises the question; why can’t the same buying
process exist in the work environment? The answer; decentralisation and
independence and the potential risks associated with each.
Independence on the
Edge
In
another interview I did with the President of Hewlett-Packard Enterprises,
there was the suggestion that the success of a digital strategy was dependent
on going beyond the cloud to work at the edge.
HPE
President Paula Hodgins referred to a study indicating that by
2020, each person globally will have up to 10 IoT devices at their disposal. We
are no longer talking about a BYOD to work scenario. We are talking about
individuals having incredible computing power at their fingertips all the time
– buyers included.
According
to Hodgins, this personal digital capability provides tremendous opportunities
to maximise efficiency. By dealing with data (or requests) at the point of
capture as opposed to pushing everything back to the cloud for processing saves
time and money.
Like
the Amazon experience, the consumerisation of the procurement process in
business is a reality that all organisations need to recognise and embrace.
Otherwise, they may not remain competitive in a demanding global economy.
But
through the above decentralisation, the vulnerability of working on the edge,
i.e., having many access or entry points to a company’s internal information
through a myriad of personal IoT devices poses some risk. How do you control
access? How do you protect against unauthorised breaches?
Based
on the findings of the North Carolina State University report, the best way to
address these as well as other concerns regarding securing the supply chain is
to wait.
But
is this the best option?
Getting to the reward
of risk
Overcoming
the above challenges comes down to two things.
The
first is a willingness on the part of executive leadership to change their way
of thinking about how procurement “works.” The second is the development of a
viable security strategy.
A
January 18th, 2019 Clint Boulton article in CIO magazine sums
up the need for executives to align their thinking with the realities of an
emerging digital world. In the article, Boulton writes; “your digital
transformation is doomed unless you empower employees to succeed in the digital
era.” He then goes on to say you must “craft a workplace that boosts engagement
and agility.”
Engagement
and agility come with decentralisation. It is providing all buyers (not just
procurement people) with the ability to conduct transactional business at “the edge”
leveraging new technologies. The new technologies to which I am referring
include mobile devices, computers and personal analytics.
Once
executive leadership not only recognises the tremendous competitive advantages
of a digital procurement strategy but that they have to take action to make it
a reality, they can then turn their focus to securing their supply chain.
A sound strategy
Securing
the supply chain is critical. Especially in an age where with increasing
frequency organisations are already sharing more and more information with
third parties such as suppliers, business partners, and even customers.
Referring,
once again to my talk with Michael Tryon, you need to respond to the “pervasive
threats that are inherent in this exciting new world.” The best way to do that
is through “a comprehensive cybersecurity strategy. One that focuses on
prevention, detection, response and recovery.”
It
is in this area that the CIO can take the lead. Within the framework of a
collaborative environment that includes the key stakeholders, the CIO can
create a strategy that adapts to the new technologies and the way they work.
For
example, one organisation suggests using a distributed Security model in which
they deploy and interconnect security controls at “points of digital engagement,”
i.e., on “the edge.”
A final thought
When
it comes to procurement working on the digital edge, it is important to recognise
that all buyers do not have to be procurement professionals. Nor should they
be.
In
other words, people at a department level can leverage RPA and AI technology
capabilities to do direct purchasing. Procurement professionals can then focus
on the more strategic and complex supply chain acquisitions.
From
a procurement standpoint, the effective utilisation of resources both within
and external to the procurement department is how organisations will realise
the greatest return on their digital strategy.
CPOstrategy met with procurement leaders from banking, utilities, consulting, solutions providers and financial services. Taking the temperature on the latest…
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CPOstrategy met with procurement leaders from banking, utilities, consulting, solutions providers and financial services. Taking the temperature on the latest trends and predictions for the future we spoke with Barclaycard, Enel, Bain, Coupa and Legal & General.
Barclaycard
Rob
Tuckwell, Director of Partnerships & B2B
Barclaycard is building an ecosystem of
P2P software providers (including Coupa and Amadeus) with the aim of bringing
payments and procurement closer together for B2B. “We’ve got to make sure that
our payment products are embedded within those ecosystems,” says Tuckwell who
is keen for Barclaycard to tackle “horrendous inefficiencies” for its customers…
“Digital payment products work in the consumer space. Why is that not filtering
through to business? Our strategy is to go from Procure-to-Pay to
‘Procure-and-Pay’. It’s a really key difference that they’re not separate
processes anymore and the future for payments and procurement is going to be
the convergence of these areas.”
Enel
Salvatore
Bernabei, Head of Global Procurement
Enel is among the world’s leading
integrated private utilities with a presence in over 40 countries and more than
70 million retail customers. Bernabei is focused on developing relationships to
enhance flexibility, minimise time to market and add value. “We welcome
innovation by vendors,” he says. “We
say: I have a challenge here, I am not capable, with my knowledge, to solve it.
It’s a very precise case study. I invite suppliers, offer a case with one month
to provide a solution before I select the best idea. We offer the possibility
to experiment, on our plans and assets before a contract is awarded.” To
support this approach Enel has an agreement with crowdsourcing platform
Innocentive.
Consulting firm Bain & Company’s Performance Improvement
Practice advocates targeted solutions for immediate impact combined with broad
transformation programmes to redefine how work gets done. “Once we have helped
implement technology to optimise tactical processes in procurement, such as
invoicing and purchase orders, we have to address the broader digital struggles
of an organisation,” explains Mattios. “Procurement tends to be a back-office
activity linked to savings,” agrees Tramazaygues. “There’s a big opportunity
for procurement to be a real part of the business; it can play a big role in
rebuilding the supply chain to make it more agile, opening the best markets and
bringing innovation through from suppliers.” Tramazaygues and Mattios believe
new approaches are vital in the current inflationary environment.
Coupa
Rajiv
Ramachandran, Product Strategy Management
Coupa offers an all-in-one, end to end, business spend management
platform. “Coupa provides users the richness
of insights, based not just on their own data but truly normalised, and
anonymised data across all the buyer, supplier relationship that exist on our
cloud-based platform,” says Ramachandran who cites the need to be able to use
consolidated data to chart the efficiencies and risks of suppliers. It’s a
“game changer” he sees customers greatly benefiting from when analysing B2B
data on a platform holding approximately one trillion dollars of spend. Coupa
believe the ability to match your progress against the community of the
platform, and take efficiencies from it, points to the future for agile
procurement as part of an ecosystem.
Legal
& General
Maarten
Ectors, Chief Innovation Officer
Legal & General is focused on disrupting
procurement from the inside out. Ectors stresses the importance of allowing
ecosystems to generate innovative solutions for its customers. “You need to get
everybody at your organisation excited about innovation,” he advises. “You
can’t innovate on your own and if you don’t collaborate with the challengers in
the market they can only disrupt you, but not in a positive way.” Ectors
highlights an important trend, the need to optimise the cost of failure: “Our
Beta programme runs four-week trials with new companies to assess potential new
partners,” he explains of a process which allows L&G to remain agile in its
approach to innovations that can speed up claims handling from days to minutes.
In your career you’ve identified some serious unlocked strategic potential in the supply chain, what first alerted you to this?
I have
been working for some time with Dr Bram Desmet and he wrote for me, one of the most profound and excellent business and supply chain strategy books called “Supply Chain Strategy
and Financial Metrics”. Now, while I was actually in contact with him, I had
the privilege to contribute to the book
with the forward, and also with a
business case study on my previous work
with a company called Johnson
Controls.
That
encouraged me to look into the concept of everything involved in business transformation
and supply chain and the idea of taking a more strategic approach to it. Leading up to Bram and myself, working on a concept called “Strategy Driven Supply Chain” and also the “Strategy Driven Value Planning and Execution” model.
In your white paper, The Concept of the Strategy Driven Supply Chain, you explore the current trend of businesses putting their supply chain front and forward It highlights some of the issues that companies are going through…
There’s
an enormous amount of change. We know that probably 63% conform, but their CEOs
are going through a business model
change over the next couple of years. Now, what we are also highlighting is
that lots of companies are overly
focusing on gross and margin
improvement, and have a somewhat lack in focus on shareholder value. That’s
measured in a metrics called Return on
Capital Employed (ROCE). Another
problem is that companies don’t have
enough understanding of the true
complexity of their supply chain and how to balance service costs, and capital employed within what Bram calls the ‘supply chain triangle’.
Having a
better understanding would lead to sharper strategies and stronger execution. This would lead to more sustainable performance and
results. So it’s really that sustainable performance and results aspect which
comes through, and we believe that it looks like a perfect storm. Supply chain
is at the front of it. A supply chain that is
seen from an entity point of view, and not just a functional point of view, is really important to companies. Companies have different supply chains and each of the supply chains needs to be strategy driven. Then, different
strategies lead to different supply chains with different targets and different trade-off, for service cost and capital employed. There’s also a belief that supply chain strategy is simply following a business strategy or from the business strategy. We do believe
that, but it is not a sequential process and the value proposition, and the supply chain are the ying and the
yang of the business strategy. Only together can
they define how business generates
shareholder value and is measured by ROCE.
So, it’s
about looking into supply chain from
the perspective of driving value for customers, and for the business. Supply chain delivers on the promise
that businesses are making through their value proposition.
Does this represent an evolution from the traditional operational back-end supply chain function?
Absolutely!
It’s an evolution defined by asking
the question as to what supply chain
management actually is. We believe
that supply chain management is more about balancing the supply chain triangle
of service cost and cash. It is also about
facilitating the internal debate between
sales operations and finance. It somehow takes on the role of balancing these
kind of trade off decisions.
Now that
also proves that the supply chain is coming from the back room into the front
room. It is becoming an equal partner around the C-suite, hence we are also
talking about putting the supply chain or Chief Supply Chain Officers (CSCOs)
into a more strategic role. That would require people operating on that level
with more financial and strategic skills instead of in the past, having just
operational skills. They will be measured on their operational skills and their
execution.
Are you seeing examples of that in action now?
Companies
are now taking a more strategic approach. We also see companies promoting
people who have lead the supply chain become the Chief Executive Officer. You’ve seen other companies in the US like
Apple. Tim Cook, who had been leading the supply chain for Apple for
many years under Steve Jobs, is now the one leading
the organisation. Now that’s a very
good example when you look into how supply chain becomes a more competitive
advantage for an organisation that
has and understands the importance
of having a great supply chain. It also shows how important it is to have somebody leading the organisation that he has an operational,
financial and strategic skillset. The future
skills requirements of the CSCOs in many companies will follow this path.
Would this require quite a substantial cultural shift? How important is change management to an evolution of this kind?
Yeah, absolutely. We say that it takes a bit of a leap in terms of maturity of
organisations, and also changing and shifting the paradigms from where they are
today to where they need to be in the future. Now that requires a value creation and that is why we
actually started to work on the concept of the strategy driven supply chain.
Even knowing that this is maybe five to ten years out. But starting the debate
and starting the value creation really helps to facilitate and move the needle
up. It’s enabling organisations to have
a more serious look into their strategic supply chain and what it means
to them as well as what it means to the overall strategy employment process in
the organisation.
Some
organisations took the approach of
being driven by gross initiatives, without truly understanding the strategy behind them or the value proposition and even the complexity of the
business. How do they want to differentiate themselves in the marketplace and
what does it mean in terms of the service
they have to deliver, the corresponding
cost as well as the capital employed in their environment? We are looking at
how we can help organisations by highlighting the problem or the potential issue. More importantly,
it’s about finding a solution and an approach, and taking a different more
strategic approach in future. We’re
highlighting how the supply chain
triangle can be balanced differently
by promoting the CSCO into a more strategic role.
Would that result in the CSCO reporting on a peer-to-peer basis to a CEO?
It’s
an equal partner in the business, and
with the same level of importance as the
C-suite, (CFOs, CEOs etc.) The CSCO becomes the ring man. They will help the CEO, and the entire leadership of the company, including board
of directors, make more informed
decisions, or as I would call it ‘deliberate choices’.
So the key to this is that the supply chain function has a wealth of data and knowledge and insight readily available to use?
It’s also about the reality of balancing the triangle. When you think about a supply chain, and the mission of a supply chain, it’s often about delivering the right product at the right time, at the lowest cost, at the lowest inventory. There is conflict in the triangle all the time. It’s about a service you want to give to your customers. When you talk about service, it’s not only how you move your products and deliver them but it’s also the complexity of the product. It’s about the order flexibility you want in order to give you the product portfolio as such, but also having an understanding of what it means in terms of cost you’re going to have in the organisation and the capital employed.
When we talk
about the capital employed, it’s really about two elements: a working capital (the decision you have
to make to strategically keep a certain inventory level in your organisation)
or it’s how you deploy your assets in a fixed asset structure. How this applies
to the conflicts and the triangle and
the critical stakeholders in your business. The VPO of sales, as an example, what does he really care about? It’s probably
the sales top line and market share. The
COO or Head of Production? The primary concern is probably efficiency, as efficiency drives cost. But if you think
about the VPO sourcing of purchasing, it’s the spend and how the company can buy more volume at a lower cost. That’s conflict.
So the question then becomes; who is
best positioned in a company to balance that? Decisions and people being driven
differently in terms of service cost and cash and the best positioned person to
do that would be the CSCO. Now that’s the best thing for
organisations to understand and if they do so, it can really set them up for a
very successful future or operating on a new
competitive level.
Do you envision a situation where a CSCO could evolve and transition into a successful CEO?
Yeah,
absolutely. That’s a prediction
Dr Bram Desmet and myself are making and we
believe you will see it happening
more and more in the future, and in
organisations where successful CSCOs who have those operational skills,
financial skills and strategic skills are the best people for taking the job at
the top of the house.
If a supply chain function is evolving in this way it would have to shed
some of its traditional operations, is it true to say that some of this
could be liberated through technology?
Yes you are right. You see the merge between the physical worlds and the digitalisation of the digital world, and enabling technologies. Companies are not only selling products and services, they sell solutions and outcomes. That is a new complexity that organisations are dealing with that requires certain changes and like I said before, be crystal clear about the value proposition you’re going to have or want to have as a business, and what it means in terms of the corresponding supply chain, and now your supply chain or different supply chains are delivering on the promise you made. The question is now about how you deploy your resources in your organisation more efficiently and effectively. That’s what we are talking about.
Do you think this would affect, going forward, the training of supply chain officers?
I believe it goes deeper than that. I believe if affects structures, it affects roles and it affects your whole recruiting process in terms of the discourse you would need as an organisation. It would also impact talent development. Going back to the example of the CSCO, in the past he has probably been promoted based on his ability to bring in results based on how the organisation performs. Now in the future I think it would be more about the balance between how he is actually contributing to the overall results of that organisation based on a strong operational performance. It’s also about financial results of an organisation being top line, bottom line and results or returns and what kind of strategic skills he has in terms of taking the organisation forward.
So that’s
what we are talking about and that requires a new skillset and new talents in
the organisation. There will need to be new training which needs to be provided
and opportunities for people to move into these kind of roles.
What would you say are some of the obstacles to the evolution of this role?
Probably mindset and the culture of an organisations where they have traditionally rewarded their people differently in the past. They need to overcome that and look at what that change means for them. They need to be ready with their maturity and company culture to move and shift the paradigm to a more strategy-driven supply chain and value planning and execution model. So culture probably is the key obstacle in the evolution of the role.
In your vast knowledge, do you see any industry sectors where it’s accelerating more than it is in others?
Well that’s a very good question. I would say, from my own perspective it is that you see some of industries a little bit ahead. Technology companies for example would be ahead in terms of looking at that from more of a strategic point of view. Overall I would say that more and more companies are at the starting point of truly understanding that change needs to happen.
The latest issue of CPOstrategy is live and this month’s cover story features Natalia Graves, VP Head of Procurement at cloud management giant Veeam Software who discusses its recent procurement transformation. “We looked at simplifying our processes and putting systems into place that allow Veeam teams across the globe to move even faster,” she explains.
Elsewhere, we speak to Dr. Preston Butler JR, on achieving
procurement excellence at Vinnell Arabia, which provides logistics and training
to the National Guard of Saudi Arabia. We also spend time with Mahmoud Al
Alawi, Director of Procurement and Contracts at Higher Colleges Technology
(HCT), who discusses the organisation’s digital journey in procurement. While Frank
Vorrath, Executive Partner Supply Chain at Gartner
details the hidden potential of a strategy-driven supply chain. We also
provide five big takeaways from World Procurement Week and list the best
procurement events and conferences from around the globe.
Digital transformation is making it easier for procurement organisations to “do more with less,” according to newly-released Procurement Key Issues research from The Hackett…
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Digital transformation is making it easier for procurement organisations to “do more with less,” according to newly-released Procurement Key Issues research from The Hackett Group, Inc. (NASDAQ: HCKT). But there is still significant need for procurement to address its critical development priorities for 2019, including: improving analytical capabilities, aligning skills and talent with business needs, leveraging supplier relationships, enhancing agility, and achieving true customer-centricity.
Digital transformation is beginning to have a significant impact on procurement organisations, The Hackett Group’s research found, with 30-40 percent saying it has had a high impact in achieving enterprise objectives, enhancing performance, optimising the service delivery model, and addressing roles, skills profiles, and needs. Over the next two to three years, procurement organisations expect the impact of digital transformation to dramatically increase, with key areas like robotic process automation and advanced analytics seeing particularly high adoption growth rates (2.3x and 60 percent, respectively). Broad adoption of e-procurement technologies is also expected to grow by nearly 2x.
Procurement expects its budget to grow at a much slower pace this
year than in 2018 (1.3 percent, versus 2.7 percent last
year). Procurement staffing shows a similar trend, with 0.9 percent
growth expected, versus 2.8 percent in 2018. With revenue growth expected to
increase from 5 percent in 2018 to 5.7 percent for 2019, this creates
significant productivity and efficiency gaps
that procurement organizations must overcome.
A complimentary version of the research is available for download,
following registration, at this link:http://go.poweredbyhackett.com/keyissuespro1902sm.
Note – The full research piece includes 7 charts containing more than 60
complete metrics.
Procurement has aggressive plans to increase its use of digital
tools and procurement-specific technologies over the next two years, the
research found. Procurement will invest heavily in cloud-based
business applications along with several data management technologies: data
visualization (where adoption rates will rise by 24 percent), master data
management (57 percent adoption growth), and advanced analytics (60 percent
adoption growth). Spend optimization analytics and dashboarding adoption rates
are expected to grow by 61 percent. Broad-based adoption of
e-procurement technology is expected to grow by nearly 2x.
Use of mobile computing and robotic process automation (RPA) are also
expected to rise dramatically, indicating a focus on more efficient, agile
processes across the procurement lifecycle. RPA sees the highest
adoption growth rate among digital technologies, at 2.3x. While RPA is
primarily being used for procure-to-pay processes at present, there are a range
of other procurement areas that can benefit from automation of
repetitive work, including updating of vendor master files and electronic auction
setup.
Procurement-specific technologies are expected to become far more
broadly adopted over the next two years, with nearly universal adoption of
e-procurement, spend optimization analytics, and supplier relationship
management systems, and just slightly lower adoption rates for e-invoicing and
contract lifecycle management. This represents a major shift toward
customer-centricity, designed to enable organizations to simplify and
streamline processes, and improve agility.
The research found that procurement’s 2019 actual transformation focus is poorly aligned with what should be its critical development priorities; i.e. areas identified as of critical importance, but with very limited ability to address. Among those, development of analytical capabilities is a transformation focus for about half of procurement organisations. Modernising application platforms is another top transformation focus, and is a key way to achieve simplification due to the complexity of many legacy environments. Consolidating multiple legacy systems is also a critical step towards to improving data management and analytics.
But of the other critical development areas, less than a third of
all procurement organizations have a major initiative in place to
improve skills and talent with business needs, and even fewer said they intend
to work on agility or focus on improving customer-centricity and supplier
relationship management capabilities.
Procurement is also focused on its role enabling the enterprise in
2019, with an array of priorities that include elevating their role as a
trusted advisor, continuing to reduce purchase costs, improving stakeholder
satisfaction, and enhancing agility.
“Procurement organizations are clearly making investments in
digital transformation and are seeing real benefits. The focus on improving
analytics for 2019 is particularly encouraging. But the laundry list of
critical areas where they have very limited ability to make improvements is
very disconcerting,” said The Hackett Group Principal &
Global Procurement Advisory Practice Leader Chris Sawchuk. “Despite
the fact that procurement knows what it needs to do, it’s simply not
fully translating into an effective plan of action. Procurement must
become fully dedicated to advancing its capabilities in analytics,
customer-centricity, agility and more, while also investing in the right talent
to help lead those changes.”
According to The Hackett Group Research Director Laura Gibbons, “Failing
to address the five critical development areas poses a significant risk. For
example, we see skills & talent as a particularly critical risk
factor. Procurement has begun to truly invest in digital
transformation, but if it doesn’t have the right people in place, digital tools
could end up being misused or wasted. You need the right people, with the right
skills in place, to take full advantage of what digital transformation can
offer.”
This same issue holds true in several other of these critical
development areas,” explained Gibbons. “Agility is critical if procurement
is to be able to respond to market changes. Without a focus on
customer-centricity, procurement can miss significant opportunities
for improving efficiency, simply because they don’t effectively know what the
business needs. And without supplier relationship management, opportunities for
innovation can be missed.”
Sawchuk explained that the potential impact of digital transformation
in procurement is powerful. “Advanced analytics can enable companies
to become less reactive and more predictive, more quickly and accurately
identifying and avoiding risks. It can drive dashboards where anyone can log in
and get real-time data. Dynamic discounting is another area that can be
very challenging for many companies, but can be easily enabled by digital
transformation.”
“Smart automation can reduce operating costs, and eliminate
transactional work, freeing up staff time for more value-added efforts,” said
Sawchuk. “Even if procurement can simply focus on a larger percentage
of the spend base, the value is very significant. And digital tools can
streamline and improve the experience of internal customers and suppliers.”
The Hackett Group’s 2019 Procurement Key Issues research,
“2019 CPO Agenda: Building Next-Generation Capabilities,” is based on results
gathered from about 150 executives in the US and abroad, most at large
companies with annual revenue of $1 billion or greater.
The Chartered Institute for Procurement and Supply (CIPS) has released its Procurement Power List, which recognises those leaders in the…
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The Chartered Institute for Procurement and Supply (CIPS) has released its Procurement Power List, which recognises those leaders in the profession pushing the field of procurement forwards.
CIPS and Supply Management asked for nominations from a
panel of experts and created a long list of candidates, including the CPOs of
FTSE 100 organisations and significant public sector organisations. These
names were debated during a panel with leading executive search agencies and
industry experts, to create a list of 30 names, plus 10 ones to watch.
The following criteria were used for nominations:
Employment status. Candidates must be employed practitioners and not
working as interims or consultants. They must be of a significantly senior
level (CPO and above) and have a successful track record from previous roles,
as well as being their current role long enough to have achieved
significant outcomes.
Geography. CPOs based in Europe, or those who work for global
organisations but have responsibility for European procurement teams.
Internal influence. They sit in a prominent place in the company
hierarchy and are actively involved in board and ExCo level discussions in
their organisation.
External influence. They have non-executive board positions in listed,
private or public bodies.
Influencing the wider profession. They share their knowledge with the
profession via trade magazines, blogs, social media and speaking at events.
Developing others in the function. They give back to more junior
procurement and supply professionals, for example mentoring or speaking in
schools.
Depth and breadth of experience. They have responsibility for other
areas of the business beyond procurement and supply.
Their relationship with CIPS makes no difference to their inclusion, or
not, in the list and they do not have to be CIPS members.
No professional with an official connection to CIPS can be on the list,
for example, board members or committees.
The Procurement Power List will change and evolve annually.
THE LIST 2019
The
Procurement Power List for 2019 (in alphabetical order):
“Great companies need to do three things: out-think, out-compete and outperform their competitors…” Frank Vorrath, Executive Partner of Supply Chain…
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“Great companies need to do three
things: out-think, out-compete and outperform their competitors…”Frank
Vorrath, Executive Partner of Supply Chain at Gartner.
This
week, in the third episode of an exclusive six-part supply-chain masterclass,
Frank Vorrath, Executive Partner of Supply Chain at Gartner, reveals how supply
chain excellence operating systems can really help build the muscle of an
organisation, as enterprises evolve and react to volatile markets, increased competition
and rising customer expectations.
“There
are still many companies struggling to make long term commitments, and not
really addressing the balance between the uncertainty of short-term financial
performance and long-term investments, to build better capabilities. Now for
many, many years, there has been continuous improvement initiatives being
around standardisation of processes and all these good things, but we need to
take that to the next level of building truly end-to-end capabilities.
We’re
talking about building something which creates more sustainable business
performance and results… When I talk about a supply chain excellence operating
system, it’s really to build the muscle in an organisation, to be able to cope
with future requirements, from the customer side in responding to customer
expectations, but also being able to compete differently in the marketplace and
building capabilities related to people, processes, technology as an enabling
element…”
by Mike Dickinson – SMMT Industry Forum General Manager, automotive and supply chain Up until recently, supply chain managers…
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by Mike Dickinson – SMMT Industry Forum General Manager, automotive and supply chain
Up until recently, supply chain managers have called the
shots when it came to supplier relationships. Suppliers were dictated to when
it came to products and the quantity required, with contracts won or lost on price
alone.
It was also standard practice for problems with supply to
result in suppliers being reprimanded – either fined or presented with less
favourable terms or treatment. In turn, customers had prices dictated with
little negotiation on other key areas such as service, MOQs and delivery time
frames.
Nowadays, suppliers are part of the business, and that
previous management style, especially in emerging sectors or new, innovative
businesses, just isn’t conducive to a healthy supply chain.
In order to improve and maintain a good relationship with
suppliers, supply chain managers need to move away from an outdated business
culture of finding someone to blame, and towards a more modern, collaborative
approach.
Top five tips for
maintaining good relationships with suppliers
Communication:
Talk to suppliers regularly
Teamwork:
Plan for contingencies and accept accountability
Understanding:
Have a working knowledge of a supplier’s business and/ or operating procedures
Stay
flexible: Adapt to everyday issues as they arise and resolve them quickly
Feedback:
Encourage open discussions around how to work together more efficiently in the
future
How millennials will
manage suppliers
This ‘resolve and improve’ mentality looks likely to
become standard practice, as according to Relate* by 2025 75% of the workforce
will be millennials (those born between 1981- 1996). Due a shift in working
behaviours, this generation looks likely to have a greater impact on supply
chain relationships than their predecessors
A recent article
in Forbes** stated that, “millennials will only interact with brands that are
open and transparent, stand for more than their bottom line, and address
environmental and socioeconomic issues in the community.” The desire to
see suppliers as part of the team, rather than a customer and provider
relationship, will better suit a changing supply chain culture.
The management styles of previous generations – such
as Baby Boomers (1946 – 1964) and Gen- X (1965 – 1980) – tended to be more
aloof, with a focus on the bottom line and an ability to confront problems head
on. While there are benefits to that approach, it just won’t work for
millennials who have a need for social responsibility, constant communication
and teamwork.
Prices, scaled discounts, collaboration through
planning, rebates, commitment to buy, returns acceptance for new range
releases, VMI, consignment stock agreements – are already common for those who
actively manage their relationships with suppliers.
Different sectors also differ in their changing approach to supply chain relationship management. Heavy industrial areas such as Automotive, Industrial Machining and Aerospace, are lagging with the new approach to supplier management, while the more public-facing industries – particularly sectors with a strong consumer reach where their customer base demands high quality, responsible, efficient supply – such as Technology, Fashion and Fast-Moving Consumer Goods, are pushing the boundaries of what was once standard practice.
Technology is lifting limitations
These forward-facing industries are also more likely to
embrace new technology and be willing to apply it to their management
strategies. Technology which can help to lift the previous limitations of
supplier relationship management is already available. For example: Blockchain
promises to allow visibility throughout the supply chain, making it easy to
view key factors such as: current stock, production, shipping information,
quality issues and pricing of raw material data.
Transitioning from a one-sided supplier management
approach, to a joined-up partnership means that measuring a full range of services
(price, lead time, quality, customer service, environmental sustainability,
CSR) is essential if technological advancements are to be adopted.
In process crucial areas of business, such as supply chain,
good relationships are key to delivering to targets, and no supplier will sign
up to sharing data (honestly) if there is the fear of punishment as a result.
Relationships don’t break down overnight
Healthy working relationships are built on trust, mutual respect, mindfulness and communication, however, when we neglect one or more of these areas, the relationship suffers.
Usually there are a number of errors which result in
the erosion of trust and respect over time. These errors usually fall into one
of the following categories: Pre-contract mistakes, contract errors,
termination issues and the breakdown of relationships.
Businesses who rely on an efficient supply chain to remain profitable know that the relationships with those within the chain are paramount. It is essential for these businesses to build and maintain high performing relationships with customers and suppliers. The inability to maintain an effective working relationship can have a huge impact on the entire supply chain, causing issues such as:
Stock availability problems due to poor
performance
Obsolescence issues due to variability in supply
Being stuck holding excess levels of stock to
buffer the impact from suppliers
Little to no support to manage changing demand
patterns
Increasing supplier costs with no negotiation
Training is
available
Companies who feel they need support can turn to analysts such as SMMT Industry Forum, who helps global manufacturers understand, optimise and improve both manufacturing capability and business performance. SMMT Industry Forum was created by the UK government, the Society of Motor Manufacturers and Traders, and vehicle manufacturers in order to improve the competitiveness of the UK’s automotive supply chain.
Mike Dickinson has over 25 years’ experience in supply chain and manufacturing leadership roles, having worked for Nissan, General Motors and Qoros Automotive. He has managed global operations including greenfield build-ups and brownfield transitions, in Asia Pacific, Germany and Shanghai. He was trained in lean manufacturing techniques by Japanese Master engineers in the 1980s.
The latest International Data Corporation (IDC) Innovators report highlights five companies who are disrupting the procurement world with their use…
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The latest International Data Corporation (IDC) Innovators report highlights five companies who are disrupting the procurement world with their use of technology, with a particular focus on improving and streamlining supplier relationships. Here is our round-up of who they are and why you should be checking out their offerings.
Written by: Lucy Dixon
FairMarkIT
Boston-based FairMarkIT offers a tail spend management platform that uses
machine learning to take charge of procurement. In other words, it will save
time and money on the significant amount of expenditure that is not already
actively managed by procurement processes – the sourcing and buying of
low-value items that can make up the majority of an organisation’s purchases.
It is a web-based SaaS platform that offers an alternative to outsourcing and
integrates with ERP and P2P. FairMarkIT’s customers typically see between six
and 12 percent in cost savings. fairmarkit.com
LVRG
LVRG promises easier and stronger supplier relationships, and it delivers on
this by freeing up more of your time to work on those relationships rather than
supplier research or data entry. The system builds up summary snapshots of all
your suppliers using available data and integrates with existing software, from
Asana and Slack to Dropbox and Salesforce, which will help give the full
picture of your suppliers. Security is a top priority for LVRG, and it is
committed to getting the right balance between transparent communications and
privacy concerns. lvrg.ai
SirionLabs
SirionLabs is shaking up the procurement world by using technology to disrupt
how businesses think about contracts. Its contract management software offers
supplier governance, revenue assurance and enhanced visibility. It automates traditional governance
processes end-to-end and delivers real-time data-driven analytics, which will
streamline contract management and automatically generate new contracts, while
tracking the real-time performance of existing contracts. Its latest innovation
is SirionBI, which enables real-time access to big data generated during large
services engagements between organisations, including data for obligations,
service levels, invoicing, issues, actions and spend. sirionlabs.com
Tealbook This Ontario-based company is a global network of buyers and suppliers, created using software developers, machine learning engineers and procurement experts. Machine learning and analytics give the user a transparent view of every supplier, with more valuable insights produced as usage increases. Tealbook’s in-house data scientists support procurement teams with constantly evolving technology to drive change. It invests heavily in research through a partnership with the Vector Institute for Artificial Intelligence and has a growing partner community of innovative companies working together to transform procurement. tealbook.com
Vizibl
Vizibl is all about growth through supplier innovation and collaboration –
harnessing the expertise of all the organisations in your network. It is a
cloud-based system with the ability to help you manage all supplier
relationships, and at the same time bringing the benefits of enhanced
collaboration, improved speed, transparency and efficiency. Vizibl is built with
input from specialists in procurement, innovation, strategy, marketing,
manufacturing and finance, with a focus on building software that enables
companies to create more valuable relationships with their partners. vizibl.co
Written by: Eman Abouzeid, Global Procurement and Supply Chain Professional The theory of stakeholder relationships is an increasingly significant area…
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Written by: Eman Abouzeid, Global Procurement and Supply Chain Professional
The theory of stakeholder relationships is an increasingly significant area in the procurement and supply field. Identifying and defining who the stakeholders are is vitally important in any business scenario and equally so in procurement and supply, in order to perfectly understand how they are involved and what influence they can bring as a direct impact on the work and success of procurement and supply.
The theory of
stakeholder relationships is an increasingly significant area in the
procurement and supply field. Identifying and defining who the stakeholders are
is vitally important in any business scenario and equally so in procurement and
supply, in order to perfectly understand how they are involved and what
influence they can bring as a direct impact on the work and success of
procurement and supply.
A stakeholder
is an individual or groups of people who have an interest in an organisation;
these may be colleagues in other parts of the organisation, as well as people
and groups outside the organisation. Stakeholder groups can be profiled into
three different categories:
1. Internal
stakeholders group; such as directors and senior managers, the technical/design
function, manufacture/production/operations function, sales and marketing
function, finance/admin function, storage and distribution/logistics function.
2. Connected
stakeholders group; such as shareholders, end customers, intermediary customers
(e.g. agents/distributors/retail outlets), suppliers, financial
institutions/lenders.
3. External
stakeholders group; such as government and regulatory bodies, pressure
groups (e.g. Greenpeace), interest groups (e.g. consumer associations and trade
unions), community and society at large.
Why is
stakeholder profiling important?
It is worth
taking the time to profile your stakeholder groups for these reasons:
1. Decision
Making: profiling provides an insight into how much influence stakeholders have
over decisions. Moreover, it helps you to allow time for responses while
working with stakeholders who tend to be slow to act.
2. Communication:
profiling helps you to identify the best way to share the features and benefits
of your products and services. In addition, it enables you to include
stakeholders’ needs in a communication strategy.
3. Understanding:
profiling enables you to be aware of what stakeholders’ needs, wishes and
priorities are, also it makes it easier to keep track of changing needs and
requirements, and it helps you to see the market from stakeholders’ points of
view. Likewise, a clear understanding of your stakeholders can help you to
deliver more acceptable solutions that more closely fit their needs.
Approaches
followed to build rapport with internal and external stakeholders:
Effective
communication with stakeholders in any project or business relationship is
important as there needs to be an exchange of information between the parties.
People will be engaged at various stages in the process and any communication
blockages may result in incorrect assumptions and decisions.
Considerably,
it is important for the organisation and stakeholders to get to know each other
and understand each others’ motivations. This helps to build a relationship
where each party is happy to deal with the other, and then, eventually, learn
to trust one another. Trust is established when each side has shown themselves
to be reliable, consistent, and able to keep promises.
Building
rapport with internal stakeholders:
In a business,
everyone needs to feel part of the same team and that they are all working
towards achieving a common goal. If management do not communicate their
expectations to everyone then staff or whole department may go in different
directions and lose track of the organisation’s overall goals.
Internal
stakeholders feel more engaged with the business if they are kept informed of
where the business is heading and what its significant aims and achievements
are.
Building rapport
with external stakeholders:
Building
rapport with external stakeholders takes a little more effort as they are not
involved directly with what is going on in the business.
It is vitally
important to keep external stakeholders updated with the business’ products and
services, goals and achievements. They do not need to know the details of how
the business runs, but they do need to understand the aims of the business.
Key techniques
and strategies to develop, maintain, and improve relationships with your
internal and external stakeholders to promote an effective procurement and
supply function:
Having
established a connection with stakeholders, to ensure future success you must
build a trusting and lasting relationship with them. Whoever they are, whether
senior to you or outside your organisation, you can use similar key techniques
to help you strengthen these relationships:
1. Be honest
and open: being honest and open with stakeholders makes them more likely to
be the same with you. If you need help, ask for it. Stakeholders will
appreciate your honesty and value the opportunity to assist before a situation
escalates.
2. Be
proactive: dealing with risks and issues straight away helps you to spot
challenges before they become a problem. You cannot control what crops up but
you can control how to respond.
3. Be
positive: no matter the challenges in your relationship with stakeholders,
remaining confident that you will find a solution helps solutions to be found.
4. Listen to
others: make an effort to engage with your stakeholders and listen to what
they have to say. Understand others’ points of view before you try to get them
to understand yours.
5. Have
empathy: gain a clear understanding of the stakeholders’ needs and wants.
How would you react if you were in their position? – look for a solution that
will benefit all parties (win-win).
6. Set a
good example: build trust and respect and aim to be professional. It takes
a lot to build a reputation, but it can be lost very quickly.
Maintaining
relationships with stakeholders:
The better your
relationships with your stakeholders are, the more likely it is that your will
be able to overcome challenges as they arise.
– Involve
stakeholders: Do not lose sight of your stakeholders over time. You built
good relationships at the outset and it is easy, under the pressure of work, to
forget to maintain those relationships. Maintain regular contact and keep the
communication channel open so the stakeholders can also contact you.
– Keep your
word: Maintain truth and honesty throughout the relationship. You are
accountable for what you are responsible for. If you say you are going to do
something, then do it. If the stakeholder feels you are not keeping your word
they will begin to lose respect for you and feel that you do not respect them.
– Keep an
open mind: Challenges will happen so you need to consider all options when
trying to resolve an issue. Be open to the other person’s input – it may be the
solution you seek.
– Address
issues as they arise: Often issues are side-lined in the hope that they may
resolve themselves miraculously, but they usually do not! Deal with them
straight away, discuss them, agree on a course of action, learn any lessons and
move on. The relationship will be stronger as a result.
Improving
relationships with stakeholders:
Occasionally,
you will encounter stakeholders with whom you find it difficult to develop a
good relationship. There may also be times when a previously good relationship
becomes less successful. In these situations, it is important to maintain a
professional attitude toward the relationship.
Additionally,
you can make a renewed effort to get to know and understand the person. Try to
uncover what resistance there is, and why they are behaving as they are. There
may well be a simple issue that can be easily resolved.
In conclusion:
Within an
organisation, and between the organisation and its suppliers and customers,
there needs to be effective and transparent engagement and communication.
Therefore, building rapport and developing relationships with all groups of
stakeholders are considered the core of building valuable long-term business
partnerships.
This week’s exclusive podcast features SAP Ariba’s Chief Digital Officer Dr. Marcell Vollmer who examines the integral elements to a…
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This week’s exclusive podcast features SAP Ariba’s Chief Digital Officer Dr. Marcell Vollmer who examines the integral elements to a successful procurement transformation and how it aligns with, and helps steer, a company’s strategic aims
With any revolution,
there are revolutionaries, and SAP’s Chief Digital Officer, Marcell Vollmer is
one such figure. Vollmer has helped to forge a new identity for the CPO during
his time at SAP. Vollmer’s current role at SAP, the
global advisory and strategy, is helping its clients define and execute
digital transformation strategies, including the procurement and supply chain
functions. “Digital transformation is about focusing on a vision for the
future,” he explains.
So, where does a
procurement transformation begin? “I think the most important thing for digital
transformation is to focus on the structure, the organisation, the process
side, and then finally on the systems,” Vollmer tells us, from his Munich
office. “Oh, and don’t forget the people and the change
management on the journey, who are key to the overall success.” It’s no
surprise that many businesses are preparing for the future as everyone wants to
understand, learn and adapt to a constantly shifting landscape. And although
procurement is emerging into a progressive role, Vollmer is quick to point out
the volatility of technological change. Our CEO Bill McDermott says: ‘Change
has never moved as fast as now, and it will never move as slow as today.’”
“Part of my role is
helping them to cluster a little bit and structure the agenda because the
change is so fast. 50% of all the companies on the Fortune 500 list for the
year 2000 are no longer on that list. The speed (of change) is tremendous.
Change has never moved this fast, and it will never move this slowly again, and
so everyone is currently concerned a little bit and wants to prepare for the
future.”
Vollmer is passionate
regarding the massive potential of strategy-driven procurement as part of an
overall transformation and is very much engaged in client-facing work within
the procurement space. “Purchasing was not necessarily seen as a value
contributing function and was viewed as the operational side, transacting,
getting what the business needs,” he tells us. “And this has fundamentally
changed. Procurement today has a more important role in the business, to make
procurement awesome.”
The user experience
The user experience is
absolutely key amid a digital transformation. Modern procurement systems have
provided CPOs and their teams with the tools to transform the operations and
function of their department, but there’s more to making procurement than just
the tools. “Everyone expects an ‘Apple easy’ or a ‘Google fast’ experience when
you interact with a system,” Vollmer explains. “(Procurement) needs to be an
awesome experience and it needs to have a great user experience, but it also
needs to provide all the insights needed, that you can get from the spend
data,” he explains. “You have to do the demand planning and aggregation to
really get everything for the best possible price depending on the quality and
timings you need. The golden time in procurement can be optimised and is a
great experience for everyone engaging and interacting with the procurement
function.”
Many procurement and
supply chain strategists and consultants are seeing a massive sea-change in the
CPO’s role, which is seen by many as a stepping stone into the role of CEO.
This is something Vollmer also endorses. “Look at Tim Cook (CEO Apple); he was
a chief supply chain officer,” says Marcell. “Procurement was reporting into
his function, and what has he done? Not only is he now
the CEO, but he has also contributed by inventing the Gorilla Glass for the
iPhone to a great product experience. In the meantime, we have more than
2.2 billion iPhones sold. So, wow, there really is something that comes after
procurement.”
Indeed, Vollmer was a
CPO. And a chief operating officer. Currently, Vollmer is a chief digital
officer. As Vollmer has demonstrated, procurement is evolving into a talent
pool. “It’s a place where people want to work, because that’s my experience.
When I talk to other CPOs, it is the most beautiful place you can be. You
understand the business model and really know what the business is doing. You
can see areas of the business that represent opportunities. ‘Oh, that’s an area
where I want to be next in my career.’”
For procurement to
fully transform the increasingly redundant perceptions it creates, it needs to
work a little bit better on the marketing side, according to Vollmer. “Starting
as a trainee buyer, to potentially make it to a CPO, is a model which will no
longer exist in the future,” he explains. “The number one reason is that we are
tending more towards project-based work, a gig economy, to use this term.
Millennials and Generation Z want to get more experience. They are not
necessarily saying, ‘I want to work for a great company and procurement is a
good spot for me to start, and most likely end, my career.’”
Vollmer is clearly
excited about the future and sees procurement sat at the forefront of business
transformation. “We are at the very beginning of the fourth industrial
revolution. We are also at the beginning of a lot of technologies and machine
intelligence is the most disruptive technology. I believe that this is a time
of change and we need to prepare ourselves. And I believe procurement will have
a seat at the table of modern businesses. Artificial intelligence is changing
the world in the same way the steam engine or electricity did. And machine
learning is basically a part of artificial intelligence. What’s currently
becoming part of the business is internet off syncs and connected devices,
which are being implemented more and more on the business side. Everything is
related to automation in a broader sense and to analytics, including big data
and predictive analytics. But then also bridging it back to the machine
intelligence; the prescriptive guidance, using not only descriptive
information, not only predicting something based on historical data, but also
using other sources like weather forecasts. We have seen, for example, that
Ferrero was heavily impacted one year back, a little bit more than one year
back, when the hazelnut was impacted by the dry weather. And this is really
where you see the connection between the different technologies, being
absolutely key.”
When it comes to
procurement transformation it’s vital to have a vision. What is the future for
your function? Vollmer has a very distinct notion of what that vision should be
“And this is not limited to procurement,” Vollmer explains. “I would say that
this is part of all discussions regarding the future of the back office.
Therefore, the digital transformation starts with a vision. What do you really
want to do with your function? How do you want to create value? On the
procurement side, as in finance, HR, or IT, you can see what’s coming with
cloud, with the hyperscalers, and the change in IT and how we consume software
using cloud solutions. It’s a new business model. And therefore, I believe that
you need to think about how you want to define the future for your function.”
A transformation is
all well and good, but how do you create value? According to Vollmer, this
follows on from the vision. “You start with the structure,” he explains. “Start
with the organisational side. What do you want to do? Which functions might you
need? Which functions do you have already and might get impacted by automation
or by machine intelligence and other disruptive technologies? And therefore,
derive from that; think about the process side. How can you really help the
business to be faster, to have fewer hours in the different processes, to be
predictive in what is needed and also manage risk and secure a sustainable
supply chain. This will really drive value for your organisation.”
Connecting with
internet offsyncs and certain parts of the production of the supply chain is
definitely adding value. “When you see automation with robotic processes
helping your transactional processes become more automated, you can see the
next level of machine learning. So, it’s not only the robotics process
automation, which is just comparing a with b, and then if b is correct, going
to c, and then to d and so on. It is also learning, ‘Oh wow, there is a lot
that is happening when I see this in d happening. Basically, here are the root
causes and this is something that can be done, that is most likely happening,
and can be already integrated.’”
Vollmer is a big fan
of concrete use cases to get quick wins during transformative processes. “You
are not joining a journey for the next two, three, five years. In the past, big
IT implementations were lasting. I think that time is over. You need to be much
faster today as the change is very rapid and you need to prepare yourself for
it. A lot of people fear the change, the speed, and the disruption and what
might come and how their jobs might get impacted. I always say: ‘Yes, there is
a high risk that your job will be changing. But look back at the past 10 years.
How many times has your job already changed?’ At the World Economic Forum in
Davos, this January, it was reconfirmed that until 2022, artificial
intelligence will create 58 million additional jobs. Disruptive technology will
change your job, but on the other side it will also provide great new
opportunities. So many new jobs are getting created and there will also be a
big shift from task. So technical operational tasks might disappear, but
strategic value-adding tasks might show up, including everything related to
analytics.”
Change management
The biggest challenge
of any transformation involves the people. Change management represents a
massive cultural shift in the workplace and it’s vital you get it right. “I
always say, don’t forget the people. Because we all know we have limitations in
the team science we have today. Even as procurement creates hard savings for
example, more people could
potentially save more money. But is
procurement in the situation where it can get new resources or new talent? Most
likely not. Whatever you do, people are the most valuable assets in your
organisation. So be careful in how you define and drive your transformation,
because you need the people to be successful. No one is smart enough to run
everything on her or his own. It’s a team approach and so think about the
people.”
So, what makes for a
good CPO? “A really good CPO, understands the business model and can
collaborate with the right groups as a business partner to really create value
and gets a seat at the table of the business by providing everything that is
needed, including all the new innovative solutions or products the company can
use to be successful in the future. It is also about creating and developing a
great team, which can contribute and drive the value-generating activities. So,
good leadership skills are absolutely mandatory. That’s what a CPO needs, to be
successful in the future.”
Our cover star this month is SAP’s Dr. Marcell Vollmer, the global thought leader, who reveals how the ongoing transformation of procurement into a strategic value-adding role will see the function perform a pivotal role in the fourth industrial revolution…
So, where does a
procurement transformation begin? “I think the most important thing for digital
transformation, is to focus on the structure, the organisation, the process
side, and then finally on the systems,” Vollmer tells us, from his Munich
office. “Oh, and don’t forget the people at the end.” It’s no surprise that
many businesses are preparing for the future as everyone wants to understand,
learn and adapt to a constantly shifting landscape. And although procurement is
emerging into a progressive role, Vollmer is quick to point out the volatility
of technological change. “Our CEO Bill McDermott says: ‘Change has never moved
as fast as now, and it will never move as slow as today.’”
Elsewhere, we talk to CIPS
Mena’s Sam Achampong on procurement in the Middle East and North Africa and
catch up with the organisers behind World Procurement Week about how this
fast-growing series of events is establishing itself as a must-attend date in
the diary. We also have an expert
insight on keeping your stakeholders happy and list 5 top ‘procurement disruptors’
and events.
This week is part two of a six-part supply chain master class with Frank Vorrath, Executive Partner Supply Chain at…
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This week is part two of a six-part supply chain master class with Frank Vorrath, Executive Partner Supply Chain at Gartner. Frank has years of experience working on the frontline of supply chain management, and this week he’s detailing the hidden potential of a strategy-driven supply chain… Listen now!
With procurement undergoing nothing short of a revolution right now, the brand-new CPOstrategy will keep you up to speed with…
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With procurement undergoing nothing short of a revolution right now, the brand-new CPOstrategy will keep you up to speed with all the latest insights and stories from the biggest names in this space. Each month, we will cover all aspects of procurement strategy and transformation as well as supply chain digitisation and management. CPOstrategy is from executive, for executive. Read the launch issue now!
Procurement is being
transformed by new technologies, but people are the secret to success according
to LEO Pharma’s Head of Operational
Procurement, Martin Starcke in our cover story this month. Drug developer LEO
Pharma is seeking to revolutionise its procurement right now through the
deployment of a decentralised system. However, Starcke, believes that the digital
transformation of procurement is about a lot more than software or computer
services. “It’s fundamentally about people. I think implementing software,
implementing the technology is around 10% of your effort,” he says.
We also have an
exclusive interview with Frank Vorrath,
Executive Partner for the Gartner CSCO and COO Service who talks about the
importance of delivering real value to its clients.
Elsewhere, we speak to
procurement consultancy Efficio who prompts
the question: “Are procurement leaders feeling let down by technology?” We also
detail the barriers to smart procurement
technology and list the five top
reasons why supply chain strategies fail and what to do about it. Plus,
lots, lots more.
