At the end of the first day of Emptoris' International User Conference, Patrick Byrne, who heads Accenture's supply chain practice, began his presentation on the intersection of globalization and supply chain trends by telling the audience that only "3-4" solution partners fell into what he described as the "A" partner tier for Accenture. And Emptoris was one of them. For a vendor that long ago decided to embrace the partner ecosystem rather than trying to compete against it for revenue, these words I'm sure meant quite a lot to the Emptoris employees in the room. As an aside, I recently heard through the grapevine that Ariba has been doing a much better job building closer ties to partners of late, reversing its fee-hoarding services reputation that plagued it with even current partners (who have told me so off-the-record) these past few years.
Byrne quickly dove into his presentation and gave the usual spiel about how procurement and supply chain is rising in importance. Nothing we all didn't know there already. But his next insights were certainly timely -- namely that risk management and risk mitigation have become the number one issue for CEOs according to a recent Accenture study. He then went onto refer to a number of recent and historical cases of where supply disruptions or quality issues (e.g., Mattel) have wrecked havoc with a company's image and financial performance.
Accenture's perspective on risk did not strike me as holistic or expert as that presented by D&B's Jim Lawton -- a frequent pundit on the risk management stage. Still, it's good to see such an influential firm presenting supply risk as a top area of focus for both procurement and supply chain practitioners. And on the subject of procurement and supply chain, Byrne noted how different executives view the ideal reporting structure of the functions in divergent ways. For example, Larry Bossidy, a well known executive in the manufacturing world, believes that sourcing and procurement should report separately from supply chain directly to the CFO or another senior executive. But Byrne believes that procurement should report into supply chain.
Next on the list of topics that Byrne addressed was the importance of developing economies to overall global GDP. In 1990, developing markets represented 39% of GDP. Today, this number is 49%. But by 2030, Accenture forecasts that the majority of world GDP will be in the developing market. This has huge implications not only for global sourcing, but also global sales and distribution as well -- and how companies will stitch together their end-to-end supply chains. As a current example of the interconnectivity of supply, Byrne brought up the case of the Boeing 787, which has major components and assemblies coming in from around the globe to be assembled in Seattle in only 3-4 days. Unfortunately for Byrne, just a few hours before he began contrasting Airbus' failure with Boeing's global supply chain successes, a story hit the wire noting a significant production delay for the 787 thanks to supply related issues. I mentioned this to him in as polite a way as possible. But more important, Boeing's supply availability issues support one of his main arguments that access to the right sets of information can reduce supply chain risk and help overcome the challenges of doing business globally.