The Operations Category

Beyond Supplier Risk Management: How Procurement Can Take a Leadership Role in Enterprise Risk Management (Part 2) — Aligning Enterprise Risk to Supply Risk [PRO]

risk

In Part 1 of this series, we described the process that most progressive procurement organizations use to relate enterprise risk to supply risk. Throughout such transformations, a single theme pervades: alignment. The premise here is that while value chains are, in fact, a chain of value that flows across multiple stakeholders, the “signal” often gets lost as the components of that value go across organizational and functional boundaries. We’ve written before about this concept of “supply performance management” (i.e., where the definition of supply and the supply scorecard gets translated from the customer-facing value chain all the way down to a supplier/contract level) in terms of measuring and managing supply value, but this same concept also inherently applies to risk management.

Risk management is about protecting those value streams, and therefore the commensurate investment in risk mitigation should align with the value streams themselves. Unfortunately, they often don’t, because stakeholders are not typically measured on risk management explicitly (although they can be measured on it implicitly).

Procurement itself faces this problem. Based on our research, only 8% of procurement organizations are formally measured on supply risk reduction. Instead, they’re measured on overt reward (vis a vis savings) but not on protecting those improved supply outcomes. So, if procurement wants to protect supply outcomes, it will need help and resources from the natural risk owners (i.e., those who are measured on the business outcomes affected by those risks) — and that help will not come unless there is visibility, commitment and action. As such, in this installment of this series, we’ll discuss two critical frameworks that organizations can use to gain alignment.

Supplier Management: Dozens of Markets in One (Market Introduction) [PRO]

supplier management

The supplier management technology and services market is one of the broadest, most complex and mysterious to those who try to make sense of it — and take advantage of the many solutions that it offers. Spend Matters tracks well over 100 providers in this market, and they fall into more than a dozen individual areas. Some vendors and services firms offer solutions that address multiple components, but not a single provider comes close to offering a comprehensive solution.

This Spend Matters PRO Research brief explains and segments the supplier management market into five solution categories: core supplier process and data enablement; supplier and supply chain risk; community/network; supplier and worker/contractor; and disruptive enablement.

So You Want to Build a B2B Marketplace: 8 Business Scenarios & Case Examples (Part 2) [PRO]

Just what is a B2B marketplace and, most important, why would you, as a procurement organization or distribution/business intermediary, want to build one? This Spend Matters PRO series provides insight into these and other questions. Part 1 and today’s installment begin by segmenting the market into (and defining) eight business scenarios they can enable that go beyond standard procure-to-pay or storefront/e-commerce enablement, which include “private” and “public” marketplace models.

Thus far, we have explored four models: Digital Trading Company (“buy/sell” models), Extended Bill of Material Orchestration, Group Purchasing Organization (GPO) and Distributor “Value Add.” Today, we turn our attention to four additional B2B marketplace concepts: Procure-to-Pay (P2P) Innovator, New Business Intermediary, Industry Captain and Supply Chain Steward.

For each of the eight areas we provide a summary description of the marketplace concept, technologies (off-the-shelf) that can enable it, selected vendor shortlists, best-fit industries that it can support and best-fit spend categories (if applicable). Later installments in the series will provider deeper insight into the following: what you’ll need to build one, technology vendors to consider capable of providing marketplace technology/infrastructure (based on SolutionMap benchmark data), and whether a marketplace, for procurement organizations, is a substitute (or not) for traditional cloud-based source-to-pay applications.

Spend Matters is involved in technology strategy and RFI projects for organizations building — or evaluating building — marketplaces using “off-the-shelf” technologies. Contact us to learn more.

Number of High-Earning Independent Workers Is Rising, MBO Report Says

workers

A select group of high-earning workers has been increasing, according to a recent research brief from MBO Partners, stemming from the firm’s eighth-annual 2018 State of Independence in America report. The report estimates that of the more than 15 million full-time independent workers, 3.3 million are high earners — defined as earning $100,000 per year or more. This group has grown nearly 70% since 2011, despite that the overall number of full-time independents in total actually declined over that same period.

Key to Supply Chain Innovation? Early Adopters of Technology Do Well, Study Says

SciQuest

With disruption upending every segment of business over the past decade, it may not be surprising that new research ties technological innovation to high supply chain performance. A 2018 web survey by Adelante SCM and BluJay Solutions found that over 80% of companies that identified as “innovators” or “early adopters” of new technologies also ranked their organization’s performance as slightly or significantly above average.

Veraction Merges With Trax Technologies: A Q&A with CEO Chris Connell (Part 2)

webinar

The transportation management industry is big, fragmented and ripe for disruption. In Part 1 of this interview with Chris Connell, CEO of Trax Group and former CEO of Veraction, we discussed the June merger of the two companies into a combined transportation spend management, freight audit and payments solution. Today, in Part 2, we conclude the conversation with a forecast of where the transportation and logistics markets are going, the potential asteroid that could disturb the whole ecosystem (hint: it involves Amazon) and how Trax fits into that future.

Veraction Merges With Trax Technologies: A Q&A with CEO Chris Connell (Part 1)

Earlier this summer, Veraction, a provider of transportation spend management and freight audit software, announced it would merge with Trax technologies, a provider of global freight audit and payments solutions. The combined company, which is retaining the Trax name, manages more than $10 billion in logistics spending across all transportation modes for more than 300 enterprise customers, according to a press release. To learn more about the transaction, as well as what companies like Trax can offer to procurement and supply chain organizations, we sat down with Chris Connell, former CEO of Veraction and now CEO of the combined Trax Group.

The Amazon Prime Effect: Rising Expectations for E-Commerce Delivery and Fulfillment

If the 100 million-plus shoppers who pay $119 a year for fast shipping via Amazon Prime are any indication, a smooth and expedient delivery and fulfillment process is crucial to e-commerce success. And expectations are rising. According to a recent survey of 3,000 online shoppers from Canada, the U.K. and the U.S., younger generations are particularly critical, with less than half of respondents between the ages of 18 and 34 saying that they receive their orders on time and in perfect condition. These findings are published in a new report from Radial, “The Everyday Essentials of Successful E-Commerce Fulfillment.”

A.T. Kearney’s 2018 Reshoring Index: Has the Reshoring Trend Reversed?

Toyota supply chain

Harley-Davidson was in the news last month when it announced that it would be shifting some production overseas as a result of the E.U.’s planned retaliatory tariffs on the U.S. The American motorcycle manufacturer is also closing its Kansas City factory and opening a plant in Thailand, decisions that were spurred by sluggish domestic sales and the U.S.’s withdrawal from the Trans-Pacific Partnership (TPP). As it turns out, Harley-Davidson is hardly alone. Since 2013, A.T. Kearney has been tracking reshoring, and its 2018 Reshoring Index shows that the practice has not taken hold.

Sponsored Article

5 Things Procurement Can Do to Stay Ahead of Software License Audits

Enterprises are undergoing vendor-initiated software license audits at an alarming rate. Gartner estimates that 70% of enterprises get at least one audit notification a year. It’s not uncommon for penalties to surpass $1 million, $10 million or more. Audits have become an unspoken part of the routine conversation between procurement and vendors. In that regard, IT sourcing teams represent a first line of defense against noncompliance and audit risk.

Auburn University’s Beth Davis-Sramek on How the Logistics Sector is Changing and Why the UPS Strike Was Unlikely

Late Thursday, the Teamsters Union and UPS reached agreement on a new five-year contract, averting what would have been the largest strike in the U.S. in decades. The International Brotherhood of Teamsters, the union representing UPS workers, had authorized a strike if the two sides do not come to an agreement before the current contract expires July 31. Before the two sides came to an agreement, Spend Matters talked to Beth Davis Sramek, associate professor of supply chain management at Auburn University, who made the prescient prediction that the strike would not go through. Read on for her thoughts on what the supply chain consequences would have been, potential contingency plans and what changes are in store for the logistics sector.

Why E-Commerce Trends Necessitate the Adoption of Automation and Analytics Tools in the Retail Industry

In November 2017, the popular online retailer ASOS introduced a new “try before you buy” service. The scheme, as the name suggests, allows customers to order multiple items — say, the same shirt in different sizes, or different items altogether — and try them on. Then customers can return the items they do not want, and ASOS charges only for the items they keep. This flexibility may be helping e-commerce businesses win market share, but for many retailers, the inevitable flood of returns make for a growing risk, a report from Brightpearl finds.