Earlier this month, Spend Matters published a story highlighting Auto News’ coverage of supply chain and procurement localization at Magna International. On the surface, supply chain localization seems simple – work with local suppliers in the areas where you do business globally. Supply chain localization is far from easy – in fact, its requirements and practices are often incongruous with some procurement and supply chain trends leading to greater centralization of efforts and management.
Moreover, without the right structure and design – not to mention technology – the supplier localization efforts can overwhelm individuals (e.g., category managers) tasked with global oversight of specific sourcing and related supplier management efforts.
So what enablers can procurement and supply chain organizations turn to as they move toward localization given this context? There's a bunch. Read the full post to find out what they are.more ▸
Auto News recently reported that Magna International, one of the top three auto suppliers based in Canada, has been rethinking its supply chain of late, noting that “local strategy and efficiency improvements as key cost-saving measures within its supply chain.” In particular, supply chain localization was one of three trends within Magna’s supply chain identified by Carrie Van Ess, vice president of procurement for the Americas, at a recent industry briefing. Van Ess said a new supply chain model is emerging in which “goods are produced, sold and consumed in the same geographic region,” according to the article.more ▸
Regardless of whether it’s public or private sector, I would argue that the basics of strategic sourcing (i.e., aggregate and consolidate spending with fewer suppliers to create leverage in negotiations and more strategic relationships overall) are in conflict with the drive to encourage supplier diversity. But they don’t have to be. Here’s why: strategic sourcing does not only have to focus on demand aggregation and sourcing strategies based on driving down price with tier one suppliers.more ▸
En estos días se dio a conocer la firman convenio de colaboración Inadem y Ternium mediante el cual Ternium fortalecerá sus cadenas de valor a través del desarrollo de sus proveedores. Esta noticia lleva a dos reflexiones, el suministro como motor de desarrollo nacional y la colaboración gobierno - empresas.
English translation: Inadem and Ternium just signed a collaboration agreement to strengthen their value chain by developing their suppliers. This news leads to two reflections -- the supply as an engine for national development and the collaboration between government and companies.more ▸
Define Keelvar. Nope, it is not an Australian animal. Nor a tool used in advanced woodworking. Rather, it is a European company (headquartered in Ireland with an office in London) with a really clever approach to comparing and analyzing supplier responses – qualitative and quantitative.
This firm deserves a look whether you are just sending a survey to a group of suppliers (incumbent, hot prospects, cold calls, or mere phonebook leads) and you need to somehow assess their responses in a way that is better than a chaotic pass-the-spreadsheet around fashion, or if you go deep in analyzing the detailed breakdown of items, shipping lanes etc., while considering award impact on your existing suppliers (might not be wise to change spend and quantity too rapidly), as well as what you can do to drive more participation from local suppliers, reduce capital tied up in goods in transit etc.
Notice that I’ve avoided the O-word: optimization. This can and will scare many off. But it’s really nothing different than what you already do – likely much of it in your head if you’re an experienced buyer, and the category and items are relatively uncomplicated. In this Spend Matters PRO analysis, Thomas Kase, vice president, research, takes a closer look at Keelvar and how procurement organizations can begin to apply more advanced sourcing approaches to basic markets.more ▸
In Part 1 of this series, Peter Smith, managing director of Spend Matters UK/Europe, discussed the new Proxima graphic e-book titled "Drowning not waving – how Corporate Virtualization has got business leaders out of their depth... And where the real opportunities lie." Peter believes that the empowerment of the budget holder and business stakeholder, giving them a greater role in the overall procurement process, and the emergence of a consequent stronger commercial capability across the organisation, will be the most significant development in the procurement world over the next 10 years (in terms of strategy and organization at least). That of course will have some major implications for procurement functions and people - but it's a topic for another day. In this Spend Matters Plus research brief, Peter gives four reasons why he is confident in his prediction.more ▸
In our discussions with Beeline and their customers earlier this summer, we learned about and explored a number of emerging priorities in global services procurement. A number of these customer requirements are already being partially or fully supported by Beeline and other leading VMS providers – other requirements are still on the roadmap or in their early days on the product release schedule. In the first installment in this series, we considered the increased scrutiny that companies are giving to specific geographies where they will or will not host technology, as well as related access permission issues. In the second installment of this Spend Matters PRO series, Jason Busch, Spend Matters founder and managing director, and Thomas Kase, VP of research, turn their attention to the following areas of emerging interest in global services procurement efforts: deeper technical integration between VMS and others systems; security in a mobile world; emerging audited processes and control mechanisms; regional requirements; and cultural observations.more ▸
Procurement outsourcing specialist Proxima deservedly received a lot of coverage with its Corporate Virtualization study that was published last year. As you may remember, it analysed the accounts of large firms and discovered that on average 70 percent of their revenues were spent with third-party suppliers. That was more than most of us steeped in the industry expected, and compared with just 13 percent going on staff costs. Given those statistics, that raised a whole host of interesting questions about why procurement doesn't have a higher profile. Surely senior executives can see how vital it is for that 70 percent to be spent well? Now Proxima has produced a “graphic e-book” titled “Drowning not waving – how Corporate Virtualization has got business leaders out of their depth... And where the real opportunities lie.”
Spend Matters UK/Europe managing director Peter Smith was CPO for three large organisations covering both private and government sectors before he moved into advisory work and – eventually – running the UK/Europe site. In a new series for Spend Matters Plus, he will be writing regularly about key strategic – but non-technology related - issues of interest to the CPO, procurement director or other senior people in the profession. If you're a CPO but not a Plus subscriber, contact us to inquire about a free trialmore ▸
There is hope for changing how we think about sourcing and designing supply chains and supply networks in a world of increasing complexity. And Trade Extensions, whose technology is often used in a narrow manner as a best of breed solutions for logistics sourcing, is perhaps the one provider that is ideally suited to help companies embrace this complexity far beyond just the movement of goods. Indeed, Trade Extensions have an exceptional list of truly radical sourcing customer stories already that will stop seasoned experts dead in their tracks by showing what is possible.more ▸
Did you miss last week’s webinar, “Signing the Dotted Line: Digital Signatures ARE that Important”? Fear not because the replay is here! Join Jason Busch (founder and managing director, Spend Matters) as he reinforces the importance of maintaining a 100% digital transaction, even when it comes to something as long-standing and traditional as the signature.more ▸
Right around the time that the Spend Matters analyst tasked with covering the intersection of purchase-to-pay, order-to-cash, trade financing, and payments left the country for a few weeks, President Obama and his team had the nerve to fast-track what is perhaps the most important thing to happen to procurement in decades in terms of government guidance. Earlier this month, the White House unveiled SupplierPay, a corporate program designed to get cash flowing more effectively throughout the supply chain. It's not a technology or mandate. Rather, it is a non-binding private/public partnership to encourage industry to improve the speed with which actual dollars move from big companies to small.more ▸
Are we becoming a victim of our own supply chain policing, in that regulatory requirements are driving us to make sub-optimal decisions? In a must-read column in Sourcing Journal Online, Stephan Lamar, executive vice president at the American Apparel & Footwear Association (AAFA), presents the case for how the avoidance of one material in shoes and apparel led to potential non-compliance in another areas.more ▸