As I hinted at yesterday, the notion of a truly open supplier network doesn’t exist today. My first contribution – and request of you – has to deal with the best ways of overcoming the notion of closed supplier search, ratings, rankings and connectivity. Instead of pointing fingers at the effect of closed systems (e.g., supplier network fees for transactions, business credit rating agencies “double-dipping” on fees, etc.), let’s together come up with solutions. Together. This is the first installment of a crowdsourcing series where Spend Matters analysts will offer up an “open call” to the market for a B2B problem that exists in the value chain. It’s easy to complain generically about broad problems, but we thought we’d provide a more granular specification for a crowdsourced solution that we feel is needed in the market. There’s no cash prizes here other than bragging rights…and world domination (maybe).
Imagine a new world, where the concept of a ‘supplier network’ becomes a set of discoverable and available web services and associated data that has persisted in trusted/distributed registries that buyers can access directly or through authorized channel providers. The data is written once by the supplier and accessed flexibly by the buyers and other value chain participants as needed. Let me say I’m certain Ariba, Basware and D&B will continue to provide value to customers. The ROI of e-procurement and P2P is undeniable. They won’t die — but Blockchain does have the potential to be a revolutionary disruptor in supplier networks, procurement technology, and supply risk ratings.
Supply risk is almost always at the top of the CPO agenda (and if it’s not, it should be). Most organizations focus on supplier risk elements that are relatively easy to implement, such as supplier financial risk management, which is a good start. It essentially helps monitor supplier viability through the lens of the financial statements (assuming you can get them from your private suppliers too). But, supplier financial risk management only goes so far. It does provide an "assurance of supplier,” but it doesn’t necessarily protect your assurance of supply from that supplier. We have a handy diagram that illustrates this concept.
The latest version of ISO9001 (called ISO9001:2015) is a “quality system” that is really a business management system customers might ask you to get certified in — and that you may in turn ask your suppliers to get certified. The beauty of ISO9001:2015 is that it can actually help you do both of these things simultaneously while also using the power of a customer-required certification as a way to drive internal change management. In the previous two installments that I wrote on ISO9001, I focused on using ISO9001 for such transformation, specifically on how to align risk and compliance, and to build a business case for supply risk management.
In this two-part Spend Matters Plus brief, I highlight how to use ISO9001:2015 to not just run the business but more specifically the business of procurement. This will illustrate how to make a quality management system that is more than just a transformative business management system — a transformational supply management system.
More important, this brief delivers deeper dive into ISO9001:2015 and shows procurement professionals how exactly how to use it to drive 100% spend influence in strategic sourcing and supplier management. People often forget that spend/supply influence also includes supplier management, when, in fact, the leader of ISO9001:2015 described the capabilities from ISO9001 simply as “confidence that customers around the world right through the supply chain — business-to-business and business-to-consumer — right down to us as individuals, can have confidence in the products and services they’re receiving from their certified suppliers”
It makes complete sense, and the certification can help procurement drive a case for change on this simple idea.
Procurement organizations almost always say, “We can’t mandate anything around here.” Well, now you have a mandate. So, use it to your advantage. We’ll show you how.
An n-step chevron process is a siloed procurement-centered sourcing methodology geared towards supplier rationalization. It’s a fine start for procurement hitting cost savings goals, but it’s not a great way to align to the broader organization as procurement evolves. So, we’re proposing DMAIC as an emerging, superior approach, but it’s far beyond the DMAIC that you usually think of. The n-step sourcing process has had a good run, but let’s not try to make it do unholy things. Read on to see how other companies have used DMAIC.
I’m excited to announce a new relationship with Accenture that I know our Spend Matters Plus+ readers will be excited about. Accenture currently publishes a broad set of category intelligence and analysis to its community of procurement clients. These Spend Trends insights offer some of the latest thinking, from strategies for third-party management to optimizing MRO spend and risk management approaches in critical categories like energy.
This is the fifth and final installment of our supplier innovation case study series where we help answer the question, “What are other procurement organizations doing in supplier innovation?” We’ve curated a “Top 50” list of some of the best case studies highlighting supplier innovation from a select group of major firms. We looked at the innovations in question, the results, the related suppliers and some key takeaway lessons. In this installment, we’ll look at Softbank, Toyota, Vodafone, Whirlpool, Xerox and more.
I know what you’re thinking: How can ISO9001 be transformative rather than a hindrance? Of course, you might also be asking, “What the heck is ISO9001?” Let me explain. ISO9001 is a standard that spells out the requirements for a “quality management system” that companies use to show their customers that they can systematically meet their requirements. A quality system is basically about saying what you do and doing what you say.
So, you’re stuck in the supply risk swamp and bogged down by compliance regimes. And you know there is waste everywhere and opportunity all around. So, as a supply professional, what should you do? You need to align risk management and compliance management with not just each other but with performance management (including continuous improvement) — and tie them all into your value chain processes. As those processes go upstream and external, this is where procurement and supply chain groups feel this problem — and need for alignment — more than anyone in the enterprise.
As recent events such as Hanjin Shipping’s bankruptcy, the Zika virus and the East Coast oil disruptions have demonstrated, supply risk management is more important than ever. Yet trying to implement supply risk management as a standalone program is often a tough affair for companies where the modus operandi is unprotected “supply reward management.” All too often, organizations view risk management as a glorified insurance policy instead of as a strategy integrated with the rest of the business.
This is a mistake. Risk and reward can work together to create true win-win situations for both suppliers and the business. In this Spend Matters PRO analysis, we share seven strategies that leading supply chain organizations have found to be successful.
This is the fourth installment of our supplier innovation case study series where we help answer the question, “What are other procurement organizations doing in supplier innovation?” We’ve curated a “Top 50” list of some of the best case studies highlighting supplier innovation from a select group of major firms. We looked at the innovations in question, the results, the related suppliers and some key takeaway lessons. In this installment, we’ll look at P&G, Pratt & Whitney, Proxiumus, Roche, Samsung and more.
As an old Zen Buddhist riddle goes, “If you seek it, you can not find it.” To paraphrase, you'll be miserable if you seek happiness only through specific outcomes rather than attaining happiness merely as a byproduct of living life fully. The same concept applies to cost savings. Procurement groups that only focus on finding purchased cost savings as their raison d’être will not be happy, nor will the stakeholders who own the spending where savings are generated.