L1 Content

No, Robots Will Not Run Procurement by 2020

The motion stands thus: This house believes that robots will run (and rule) procurement by 2020.” I believe that the general direction of this argument is not in and of itself wrong. But there are a number of flaws in the nuance of how the motion has been proposed. And we are, after all, asking you to judge the merits of the proposal on its own, as it stands. Let me present you with three arguments against it.

Healthcare Needs More Mud: A Supply Chain Perspective

If ever a layman’s view of the holy war over healthcare reform had a chance to be heard, well, as a guy who’s covered the space for the better part of a decade, here goes nothing. (My disclaimer: I hold both political parties in equal contempt.) From a supply chain management perspective, there’s more fat on the healthcare bone than Arby’s latest pork belly sandwich. Origins of that old adage “doctors don’t make good businessmen” have roots in many places. But their collective decision to fully outsource their procurement and supply chain management needs (in fact, to establish healthcare’s group purchasing organization oligarchy) may be the quintessential example.

What’s the Cost of Having a Long Supply Tail, and How Do You Determine the ‘Right’ Supply Base?

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We recently put up an interactive Ask Spend Matters box so that you, our readers, can tell us about the topics you want us to investigate. One of the first questions that came in was about tail spend: “What is the cost of having a long supply tail, and how are organizations determining the ‘right’ supply base (number and percentage) as relates to spend?” As Spend Matters Chief Research Officer Pierre Mitchell put it, "This is a great question, but it’s a bit tricky to answer.” Read on to hear his reply!

3 Essential Concepts that will Enable True Workforce Transformation

As businesses gear up to enact company-wide digital transformations, many firms are realizing that these strategies must first start with their workforce. But now that the foundation for this new approach is clear, the next question is how to execute these initiatives. To craft a successful digital workforce strategy, you'll need to fully understand the tools with which you'll execute it. Here are the three essential technology concepts you need to know about — and how they're already changing the way businesses source and manage work.

E-Procurement, The Chicago Way

Chicago

Depending on whom you ask, Chicago Mayor Rahm Emanuel and his administration may not have the best track record for providing transparency to the public, even though his official communications channels — and even the Mayor himself — like talking it up. The latest stop on the Transparency Train, as it happens, is right up Spend Matters’ alley: an announcement that the City of Chicago’s Department of Procurement Services (DPS) will adopt a new e-procurement approach to do better business with its myriad vendors and suppliers.

The Gig Economy in the U.K.: Growth, Issues and Predictions

Brexit

The “gig” or “platform” economy is a worldwide phenomenon. Whether car service drivers or skilled online freelancers, it is present and growing in many countries in every region across the world. Not only is it an enormous pool of labor, the gig economy may also represent potential sourcing networks, since generally workers are connected through various digital platforms. But for now, while the gig economy is growing across the globe, labor issues and legal uncertainties are common.

Where Are Online Workers Located? — Oxford Internet Institute Tool Breaks it Down

In the first article of this series, Online Gig Economy Up 26% Over Last Year: Oxford Internet Institute, we covered the demand side of the global online work marketplace — specifically overall growth in projects posted in the aggregate and by region/country and occupational category. It bears repeating here that the subject workforce is what has been called “digitally delivered” labor (i.e., online freelancing and crowd work) consisting of “temporary and project-based work conducted remotely over digital platforms.” In this article, we summarize new iLabour Project research focused on the demand side of the marketplace, in particular the number of online workers (by region/country and occupational category).

Eaze: On-Demand Cannabis Delivery to Your Home

In the past month or so, Spend Matters has featured a number of articles about the fast-growing cannabis industry and supply chain. It’s complex, but the cannabis industry is not what it used to be. While the earlier articles have focused on procurement and supply chain processes and technology, there is another area of the business that was not covered: on-demand home delivery. Over the past two years, a number of startups have emerged to provide the platform/app-based service — think of it as a Grubhub or DoorDash for pot, instead of food. The list includes companies like Nugg, Speed Weed and grasp.it, but perhaps the most recognized — and most well funded — is Eaze.

State of Risk 2017: Procurement Needs to Be More Proactive About Supply Chain Risk Management

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That procurement is shedding its origins as a back-office function is old news. As organizations become more advanced, their role in the overall company is evolving into a more strategic one compared with its tactical past. And a crucial component of this strategic transformation is taking responsibility for mitigating supplier and supply chain risk. But how many procurement organizations actually have a comprehensive risk management strategy in place? RapidRatings and ProcureCon Indirect East teamed up to conduct a risk-focused benchmark survey of 88 procurement executives, the results of which are published in a report titled “The State of Risk.”

Leveraging is Key to Procurement and Supply Chain Success, New Report Suggests

Editor’s note: “The Eggplant” is a new series of satirical posts in the style of “The Onion.” Check out the first one in the series here.

New research published this week shows that more procurement organizations are leveraging in 2017 than ever before, while the range of activities, situations and things that can be leveraged is also expanding to historic levels.

Is the Tail Spend Problem Solved with Technology or with Managed Services?

Tail spend is a thorny problem — and an important one.

Tail spend is an amalgam of more granular spending: one time, low dollar, maverick, tactical by design. It doesn't even have a common definition understood by all, and it is generally a mess.

So, how to solve this problem? The design ideal is the concept of guided buying, where you start with the end customers (i.e., employees who need something) at the time of need and then guide them down to get what they need to accomplish their goals (but also within corporate policy). It’s an entryway to all procurement, not just the procure-to-pay (P2P), process, so you need to get it right and make the experience count.

But, who is the guide? Is it a tactical buying group in shared services or outsourced provider? Or is it a technology solution? Let’s discuss.

Procurement Agility is a Pipe Dream Without Intelligent Transformation and Procurement as a Service (PRaaS)

In a previous post, I discussed the three critical focus areas that are foundational to procurement excellence: customer/stakeholder focus, performance and transformation. They seem straightforward, and indeed they are. Unfortunately, it's hard to get them all at the same time, and get them aligned.

It’s like the old adage about buying a bike where you want it strong, light and cheap — but you can only pick two. Here’s an example to make this clearer, using tail spend management.

Take the 80% of purchases that represent 20% of your spend and you will likely find that the requestors want their stuff (or services) delivered quickly and easily. You as a category manager want that too, and don’t want maverick spending, but you’re also focused on big sourcing deals and can’t get bogged down here, nor have the time to transform your thorny tail spend problem. So, you sacrifice transformation and simply work harder within your current processes, systems and metrics.

But if you’re a more advanced firm and have sourced all of your major spend areas a few times, you may have to lower your procurement involvement spend thresholds, wean yourself off of p-cards and figure out a way to improve your stakeholder satisfaction scores when they find you and your complicated systems and policies a barrier to engaging with you more meaningfully.

So, you need to transform your processes, policies and systems to re-engineer this deceptively toxic and disparate amalgam of spending that is in the tail. More problematic, you need to revisit your procurement KPIs and SLAs (if you have them) to reflect this — especially since you also want to free yourself up to do more strategic innovation and SRM/SCM work.