Vroozi is a name to add to the list of those appearing to start in a very targeted area (which they’ve since branched out from), but could in fact shake up the broader sector if they get things right. Vroozi's roots seem simple: providing a lightweight, easy-to-use alternative P2P shopping and requisitioning experience with significant focus on integration into supplier catalogs and general catalog management (i.e., think about P2P built around managing supplier data and you’ll get the point). But Vroozi is more than this – much more.
Yesterday, we included in our news round-up a story from the San Francisco Chronicle about California’s attempt to weed out forced labor from the supply chains of companies based in the state. It’s a massive undertaking, no doubt, and passed two years ago, the California Transparency in Supply Chains Act is just beginning to make strides. The legislation requires that companies with at least $100 million in sales disclose how they’re monitoring the working conditions throughout their supply chain and how their suppliers are obeying codes of conduct. So far, some 600 California companies have at least minimally complied.
“What can I do to negate these cost increases?” is a critical question shippers should be asking themselves now. Waiting for the sticker shock of first quarter’s shipping expenses is a costly alternative. It’s important that shippers create a cost reduction plan that will optimize rates and service levels to ensure they’re shipping at the lowest cost possible next year.
Innovative supply chain practices have allowed Intelligentsia Coffee to cut the time it takes for coffee beans to go from field to cup from months down to as little as six weeks—and produce a better cup of coffee. And H&M is temporarily ceasing production of items containing Angora wool, following the release of video footage showing inhumane treatment of rabbits in China, where much of the global supply of Angora is produced. Afternoon Coffee brings you the latest news in supply chain, procurement, and the lowdown on what all the cool kids are buying.
As markets get bigger (such as banking), the regulators tend to come in – and even dominate the chatter and defining what constitutes reasonable business practices. But in procurement technology, especially in the nascent world of supplier networks, we have no such protections. Just like the Wild West of old, it’s up to each company to sling its own revolver to enforce justice.
Once you’ve decided on an overall supply strategy and taken into account demand expectations for a specific category, it’s important to start examining the risk associated with project execution. Even if a company sets the right supply management strategy for a given commodity, it’s still possible to have a poor market result from factors like negotiation format, having enough suppliers participating, and technology or security concerns. Lastly, market timing—taking into account the balance of supply and demand—is an issue supply managers also need to consider. Setting a contract one month instead of the next might result in drastically different outcomes.
Developing capable suppliers of any kind is one of the tasks assigned to procurement. And in regards to finding and working with suppliers who are SMWBEs (Small, Minority, Woman Owned Business Enterprises), that chore falls on the supplier diversity team, assuming there is one. Supporting SMWBEs and corporate supplier diversity professionals is what many diversity-focused advocacy organizations do. There are many of them out there. In addition to the “big” names like NMSDC, WBENC, WBOC, MBDA, SBA, and ISM, there are several hundred others, although most are fairly tiny and only active locally (such as city-owned utilities). There are two big questions to address regarding their work – how is this work carried out, and why is it relevant to companies and their procurement organizations?
It’s human nature: Nobody likes to be surprised by change. Yet many large, enterprise-wide supply management programs are planned and developed more or less during the early planning and research stages. Let’s take a strategic sourcing opportunity analysis as an example. In our first scenario, a dedicated sourcing team spends several weeks gathering and analyzing spend data across an organization to produce a comprehensive report recommending five commodities for strategic sourcing.
Acquiring federal contracts through the government is a great way to increase business revenue. In 2009, the government spent a cumulative $96.8 billion in federal contracts for small businesses. That was a record in 2009 and remains the record today. Since then, our economy has gone through some financial hardships. In response, the government has been tightening its belt, so less money is being spent on contracting with small businesses.
World wheat production is expected to reach 709m tons in 2013/14, a new record and up 8% from last season. While US production will fall, production in Canada, Australia, the EU, Russia, and Ukraine will all rise significantly. Despite the increase in production, the availability of high quality wheat is a concern, as a number of major exporters including Russia and Ukraine have suffered from poor weather, harming wheat quality. The concern over high quality wheat led to the recent increase in prices.
SAC Capital Advisors has agreed to plead guilty to insider trading and pay a $1.2 billion penalty. It is the first time in over a decade that a major Wall Street firm has pleaded guilty to criminal wrongdoings. Afternoon Coffee brings you the day's news in procurement, spending, and supply chain.
As we continue this analysis in the wake of the PwC and Booz combination, we’ll transition our attention to project delivery, measurement/performance, and due diligence. One recommendation which we explore in this area includes holding firms accountable based on a scorecard but not just any scorecard. Pick one that is not generic to consultancy work, instead, it should be specific to the type of work they’re doing. This may include using non-price factors and conducting an overall value scoring approach to measure the overall effectiveness, value, and cost of a given engagement. Such an effort may also include using granular performance outcomes to measure consultant performance -- which we explore in detail in this Spend Matters PRO analysis.