The Operations Category

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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.

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May Resilience Be With You, Because Risk Sure Is

Like all great adventure stories, every one of the “Star Wars” movies is full of risk. The heroes and heroines of the series must overcome seemingly insurmountable odds to ensure that good prevails in the face of evil. Of course, the Jedi have the force on their side. Even a long time ago in a galaxy far, far away, however, success depended on many of the same practices that apply on Earth today.

SAP Ariba Procurement Desk: Shared Services and Center of Excellence (CoE) Enablement [PRO]

category management

Procurement shared services groups can take different shapes and can add different sources of value. Shared services tend to focus on procure-to-pay (P2P) and accounts payable support, including supplier enablement, supplier master data maintenance, transactional purchasing, transaction processing, invoice automation and exception management. CoEs focus on both a classic shared services model (i.e., supporting processes on behalf of the business units) or a more transformational CoE model (i.e., giving business units tools, training and focused resources like third-party services). 

The former tends to focus on tactical buying like spot buying and tail spend management, and the latter tends to focus on strategic procurement areas such as analytics, sourcing, category and supply market intelligence, and contract management support. Increasingly, a number of CoEs are focused on both areas, whether run and administered internally or in an outsourced manner — sometimes only in part — by a business process outsourcing (BPO) partner such as Accenture or GEP.

Yet even with the help of these outsourced partners, procurement shared services teams and CoEs have not had up to this point a purpose-built technology solution to manage their own operations. SAP Ariba is hoping to change this with its new Procurement Desk product. Available in March to limited release customers and in the summer months to all SAP Ariba customers, Procurement Desk has big plans to improve the capability of shared services teams and CoEs to deliver value and drive continuous improvement.

Based on demonstration sessions, presentations and analyst discussions at SAP Ariba Live in March 2018, this Spend Matters PRO research brief introduces the initial release of Procurement Desk, explores some of SAP Ariba’s ambitions for future releases based on the product roadmap and offers our initial analysis of the new offering, along with recommendations for SAP Ariba customers. A subsequent PRO research brief will provide a generalized CoE operating framework spanning all areas that procurement shared services groups can address with SAP Ariba’s current and planned capabilities for targeting this market.

U.S. Companies are Rethinking Risk Management Strategy After the 2017 Hurricanes

For many large U.S.-based companies, last year’s hurricanes and the damage they brought have been a wake-up call. A survey of senior financial executives at U.S.-based companies with revenues of more than $1 billion, commissioned by FM Global, revealed that the hurricanes have prompted 68% to adapt their risk management strategy for the future.

51% of C-Suite Executives are Dissatisfied with Their Procurement Operating Model

There is a lot of hype in the procurement world around digital technology and talent, but a report from consultancy Ayming put the focus on something more elemental: the procurement operating model. Ayming’s survey of C-suite executives from across the globe revealed a mixed picture. More than half of respondents said that they do not consider their procurement operating model to be effective.

Supply Chain Visibility (SCV): Market and Solution Provider Overview [PRO]

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This Spend Matters PRO brief provides a high-level review of the supply chain visibility (SCV) solution market. SCV is an acronym often used to describe the inventory “track and trace” capability that shippers are rapidly implementing to help manage their logistics, even though SCV also has a broader context for inventory visibility across the supply chain (e.g., within the plant or at a supplier). Logistics providers are all doing so to meet a service level expectation that is coalescing around real-time, track and trace information flows. For example, whether it’s a Wal-Mart store awaiting a shipment or a consumer anticipating a package from Amazon, they both want to know delivery status — and they want that information at their fingertips. 

However, while consumers may only want to know “when,” the shippers want to know all of the surrounding details, including any and all performance and risk information that could support a better inventory management practice, capacity planning and transportation sourcing.

The carriers are also along for the ride (pardon the pun), not just because they’re obliged but also, because it will soon be in their business interest (from a load matching perspective). The more information they share (i.e., the more visible and transparent their hour-to-hour status is), the more likely it is their trucks will stay full — with the right kinds of loads, on preferred lanes.

Along with several shippers and other trade practitioners, we interviewed the following SCV solution providers:

  • FourKites
  • 10-4 Systems
  • project44
  • MacroPoint
Note: While there are many more SCV solution providers, and while they are typically distinguished by transport mode specialization or their target audience (shippers, carriers, LSPs), their ideas, techniques and raisons d’etre are all strikingly similar.

On the Amazon Robotics Challenge, Warehouse Automation and Expired Oatmega Bars

Recently I was on the phone with a Target customer service supervisor, explaining that for the third time in a row, the Oatmega nutrition bars I ordered online had arrived past their expiration dates. If you haven’t heard of Oatmega bars, their nutritional content is thoroughly impressive, and the taste is pretty good, too (after all, it took three shipments of expired bars for me to stop buying them). But there’s one catch: The bars become progressively harder to bite into as the expiration date approaches. And so I was explaining all of this to the supervisor, who blamed it on the warehouses’ robots.

“Buy Online, Pick Up in Store” Services Increasingly Popular Among Consumers

JDA Software Inc. released Monday its 2017 survey on U.S. consumer attitudes toward in-store shopping and e-commerce. With no one batting an eye over free two-day shipping anymore and drone deliveries on the horizon, it’s no wonder that only 54% of the 1,000 consumers JDA surveyed said they prefer to shop in a physical store. In other words, nearly half of shoppers prefer to make purchases online or through a retailer’s mobile app. Interestingly, this pattern was consistent across age groups.

‘Best of the Best’ 10 Years On: APICS CEO Abe Eshkenazi on the Past, Present and Future of the Procurement Profession

Sales and operations planning hardly seems sexy on paper. Yet as more than 200 cross-functional professionals poured into the grand ballroom of the Chicago Marriott O’Hare for the 10th annual Best of the Best S&OP Conference Thursday, the participants seemed excited to tackle this essential business process, as well as learn from an impressive lineup of senior supply chain leaders. To learn more about the topics the presenters chose to speak on this year, I sat down with APICS CEO Abe Eshkenazi, who provided a fascinating perspective on how the conference has developed over the last decade.

Strategies Every Procurement Professional Should Know to Reduce Inventory Levels and Cost

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Spend Matters welcomes this guest post from Ana Sofia Gómez, a manager at GEP.

In an organization, the challenge for optimizing costs goes beyond getting the best prices in the market through the procurement function. The challenge also involves implementing strategies, or acquiring added values and services that allow the organization to improve their process administration and get benefits from those improvements. With manufacturing companies, one area of opportunity is inventory management.