What Boeing, SAP Ariba and Cannabis Have in Common: Spend Matters Best of Direct Materials in 2017

Eric Limon/Adobe Stock

As always, the direct materials supply chain was a hotbed of activity over the past year, and Spend Matters held the front lines on much of it for what matters to procurement practitioners and their technology options.

In Focus: Manufacturing Organizations and their Direct Materials Supply Chains

Most recently, we took a look at how a procurement practitioner, a veteran of one of the world’s most advanced OEMs when it comes to a broad and deep supply chain, turned things around (Former Boeing VP John Byrne on How the OEM Optimized its Direct Materials Supply Chain Visibility).

“The most difficult place to find yourself as an OEM is when you’re actually competing with key parts of your supply chain for precious capacity — and we didn’t want to do that,” Byrne said. “So began a journey of aggregation and consolidating our metallic purchases. First and foremost was to bring order to that part of our business.”

Back in May, Spend Matters Founder Jason Busch interviewed a current mover and shaker in the direct materials space, part of series which “centered on the technology renaissance which is in its early days of taking shape.” (Where is Manufacturing Procurement Technology Headed? An Interview with Keith Baranowski, Global Vice President and GM, Direct Materials Sourcing, SAP Ariba.) Baranowski touched on various challenges his firm’s customers — including Ford, Microsoft and Johnson & Johnson — face, and pointed up machine learning and AI as crucial elements driving intelligent sourcing in 2018 and beyond.

And what about the solution providers that the Boeings and Johnson & Johnsons should be scrutinizing closely? A big shakeup in this corner of the industry sector took place in June, when Jaggaer (formerly SciQuest) and Pool4Tool agreed to come together as one (Jaggaer and Pool4Tool to Merge: The Start of a Trend in Direct Materials Solutions).

“In our view, the critical takeaway for this transaction is that it puts direct materials procurement on the map in North America,” Busch wrote. “This is the ‘elephant’ in the tool crib, so to speak.” What does the link-up mean for manufacturers using this type of technology? Check out the full article for a 13-point checklist! (Disclosure: Pool4Tool and Jaggaer are past or current clients of Spend Matters and Azul Partners Inc.)

Hot Commodities — and Commodity Theories — of the Year

Our close and valued partner in commodities intelligence and analysis, Mintec, covers the highs and lows of key commodities markets throughout the year. With commodity price volatility and risk a mainstay in procurement practitioners’ list of concerns, there’s never a dull moment.

US Propylene Prices Up Over 100%. Back in February, one particular form of plastic peaked. The steepest price increase in recent years hit in January 2017. At the start of Q4 2016, Spend Matters reported on propylene prices rising due to factory closures in the U.S. Five months later, prices had risen for similar reasons.

Cashew Nut Prices Soar on Tight Supply. In perhaps my favorite commodity story — not just of 2017, but of the past several years — cashew nut supply forced a spike in prices (and a few mind-in-the-gutter jokes to boot). The main culprit: Vietnam. If you missed this one, check out the full story to find out why.

Game Theory: Changing the Way You Think About Commodities. In a thought-provoking piece piggybacking on his 2014 mini-treatise on chaos theory, Mintec’s Nick Peksa dove into how practitioners could apply game theory to plan their strategies.

“Game theory prompts you to think about other players in the game,” he writes. “What are their motivations and how might they react in a given situation? Answering these questions may give you a competitive advantage.”

Hottest Commodity Supply Chain of the Year: Cannabis?

For a breath of fresh air (or air of a different, hazier sort), Spend Matters decided to follow the relatively new and growing cannabis supply chain in 2017.

Check out how big this (still federally illegal) industry is getting, what practitioners’ challenges and concerns are, and what types of procurement technology solutions they’re coming around to using:

As always, thank you for reading, Spend Matters readers — here’s to burning one in 2018!

Share on Procurious

Discuss this:

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.