The Case Study Category

As procurement professionals know, natural disasters are a question of not “if” but “when.” Hurricanes, earthquakes, wildfires or severe weather can quickly hobble even the best-laid supply chain plans, our sister site MetalMiner reports. Just look at the research. According to Resilinc’s Supply Chain Disruption Annual Report, disruptions roughly doubled in 2017, potentially impacting 32% of S&P 500 companies’ supply chains. The supply chain risk monitoring firm’s CEO Bindiya Vakil pointed at that data as an indication that procurement leaders can no longer stay complacent about planning for events like natural disasters.  “This should be a wake-up call for business leaders around the globe,” Vakil said in the report.

When Lam Research, a U.S. maker of semiconductor equipment, began implementing Esker’s order processing automation technology, in early 2016, the decision had already been a while in the making. Founded in 1980 and headquartered in Fremont, California, Lam Research counts Samsung, Intel and IBM among its customers. The past decade has been one of impressive growth for the company, whose revenue expanded from $2.1 billion in 2010 to around $9.6 billion in 2017. But as the company grew, so too had its workforce.

Procurement organizations are beginning to catch on to robotic process automation (RPA) and the potential benefits that the technology can bring, which include cost reduction and more time for strategic, value-add activities. In fact, more than a third of procurement organizations are already piloting the technology, according to research from The Hackett Group. This was certainly the case for British multinational telecom corporation Vodafone, for which adoption of RPA quickly yielded results.

When the financial crisis struck, in 2008, Ron Wilson learned fast that his company’s approach to managing risk had become obsolete. As chief procurement officer at Wilbur Curtis, Wilson intimately knew the ups and downs of managing a global supply chain. But when it came to risk, the Montebello, California-based manufacturer saw him as the point man — and that was it. The aftermath of the Great Recession made that impossible.

What happens when a 120-year-old Danish wind energy company entrusts its contracts to a then three-year-old American solution provider? The companies in question are Vestas, which traces its lineage back to 1898, and SirionLabs, a contract management provider that goes all the way back to 2012. Last year, Jason Busch analyzed SirionLabs’ solution for Spend Matters PRO, and he concluded that the vendor would be a good fit for companies with “multi-year strategic supplier relationships encompassing complex services and solutions,” for whom “insufficient supplier governance is leading to lost savings and value creation opportunities.” This certainly sounds like Vestas’ situation before 2015, when the company implemented Sirion.

In 2012, AGCO stood at a crossroad. The agricultural equipment manufacturer faced stiff opposition from competitors, and knew that to extend its global reach, the company would need to transform the way it operated. The key to this transformation was a reimagined supply management function. The former AGCO purchasing organization ran a decentralized, regional and brand-oriented procurement model that had proven sufficient for those needs. But to become the operating company management envisioned, AGCO knew it needed to establish a single, global procurement organization, based on a global commodity management approach and setup, a strategic procurement philosophy and the technology platforms necessary for a streamlined supply chain.

Spend Matters welcomes this guest post from Suvigya Muchhal, of GEP.

For any potential customer, case studies are instrumental in providing an overview of the provider’s capabilities and in helping the client assess previous experience and scalability in a particular domain. These case studies are mostly published by service providers; some are posted on the provider’s website, while others are shared with the clients during a sales pitch. The question is, how can these case studies be validated?

Procurement's role, and a supply chain group's role more broadly, should figure into the strategy as well. Any procurement organization can have a strategy that supports an existing enterprise strategy, but only a truly strategic procurement group can actually help influence the business strategy. So, let’s consider a future case study in the making and consider the situation with office products retailer Staples.

Yesterday, we shared the first 5 of our 10 tips for getting started with a global supply chain risk management (SCRM) program. This post, based on content from a Spend Matters paper by Thomas Kase, vice president of research at Spend Matters, looks at our final recommendations. We invite all of our readers to download this analysis and our PRO subscribers to speak with our team about how to build their business case for SCRM program investment.

Our final tips for getting started with global SCRM programs include considering interoperability and integration, obtaining c-level sponsorship and tying in HR. Organizations that want an inside track on building or accelerating a business case for investment in SCRM are likely to find the Spend Matters paper, A Case Study in Global Supply Chain Risk Management: How AGCO Implemented an SCRM Solution to Save Millions, useful in their efforts.

If your organization is vested in supply chain risk management then we have the perfect example for you to follow. AGCO, a leading agricultural equipment manufacturer, uses riskmethods as a technology solution and the results have not only been successful – they've contributed to the bottom line.

Thomas Kase, VP of research at Spend Matters, has the story with A Case Study in Global Supply Chain Risk Management: How AGCO Implemented an SCRM Solution to Save Millions, now available for FREE download!

Global 2000 firms interested in the latest technology for their supply chain risk initiatives will especially benefit from this research.

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It is important to realize that supplier risk management (SRM) is still in its infancy. The solutions on the marketplace today are only scratching the surface of what is possible. Any company that has grown beyond a trivial size realistically has to be proactive about risk, not fighting fires only after emergencies strike. And it must stay on top of the latest technology and information sources capable of building visibility and awareness into incidents at all tiers in the supply base.

Organizations that want an inside track on building or accelerating a business case for investment in SRM are likely to find the Spend Matters paper, A Case Study in Global Supply Chain Risk Management: How AGCO Implemented an SCRM Solution to Save Millions, useful in their efforts.

Throughout this series exploring a case example of a services procurement transformation program aligned to overall company transformation efforts, we have centered our exploration on the program itself: its past and current state. In this final installment of the series, we explore the actual program office structure and operating model itself that the firm put in place as part of its transformation efforts.