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Inside the Executive Suite with Jose Varela, CPO of 3M: More Sunny Days in St. Paul Ahead?

As he looked out his window at the sunny spring day in the suburbs of St. Paul, Minnesota, Jose Varela seemed upbeat and rather excited about where sourcing operations are headed for what was once known as the Minnesota Mining and Manufacturing Company — better known today as 3M. Perhaps that’s because he’s somewhat of a newbie. “I’m new to sourcing,” Varela said. “I’ve been in this position less than a year.” He’d previously been a managing director with 3M Brazil, where there were undoubtedly many more sunny days outside his window than he encounters in the Great White North.

How Stanford University is Bringing the Future of Work into Sharper Focus

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There has been so much discussion for so long about the so-called “future of work” that many of us — after several years — have had to take a deep breath and ask ourselves, “Is it here yet?” But while “the future of work” has become largely a platitude, some organizations (both private companies and public entities) and researchers (both industry analysts and academics) have devoted time and resources to tackle the problem head-on through real-world research and pilot projects (or in the case of crowdsourcing, serious adoption). Stanford University’s Human-Computer Interaction Group is one such example.

The Collective Intelligence of Supply (Part 1): Introduction

As you may have guessed by the title, this blog series is not going to be a tactical how-to guide for implementing low-level procurement techniques or comparing software providers. Rather, I’m writing this as the supply strategist’s guide to digital business.

There is a lot of content out there on digital “disruption,” including for procurement, but I personally find most of it laden with jargon, and not very instructive on what to do about it. This is a shame, because the fundamental transformation and evolution of value chains offers so many opportunities that supply professionals can seize upon if they understand the changes and how to harness them.

This series will be written as a series of short essays that will (hopefully) help readers understand these detailed drivers behind this digital evolution and what that means from a supply chain and supply management standpoint. Most important, I’ll try to give some practical insights and recommendations on how to best tap these innovations as we all evolve toward higher levels of machine intelligence.

Before we dive in, it’s important to realize that the “collective intelligence” story isn’t about artificial intelligence (AI) per se but really about a convergence of methodologies, strategies, techniques and technologies that are converging.

Read on to see this series’ outline on the successful supply professional’s journey to this collective intelligence that’s being built in the supply chain and how to begin preparing for it.

The Impending Slow Death of “Empty Apps” in Procurement (Part 1)

The cloud computing inflection point has arrived for business applications. Of course, there have been other inflection points, from mainframes to PCs to clients/servers. But, multi-tenant cloud applications now allow for scalable solutions delivered via flexible deployment models across multiple devices.

So, is this the last major inflection point other than some machine learning capabilities embedded into the products? Will success now simply hinge upon functionality, adoption and customer counts using increasingly commoditized application products? For procurement apps, is it now the battle of cloud-based Source to Pay (S2P) suites?

Answer: Not so much.

Let me explain. Think of business application suites as software versions of a machine-tool. Contract manufacturers can use those tools to sell the manufacturing from those tools as a service, but the tool is still basically the same. For procurement applications, this is a problem. First of all, the massively diverse requirements for various spend categories are simply not well supported in the data models of existing procurement applications. There simply is no single procurement application on the market today that meets the needs of all spending such as direct materials, contingent labor, complex assets and complex services.

Now add in the multi-tier supply chain requirements (see here for more on this) and industry-specific requirements, and it gets even worse. Now consider the fact that even basic master data modeling is inadequate. For example, it is folly to think that a single spend taxonomy hierarchy will meet the needs of modern category management (i.e., categories are highly multidimensional, a topic you can read more about here). So, it becomes clear that we’re still pretty early in the “supply tech” market. (I think procurement needs a cool moniker like “Fin Tech” or “Reg Tech” — what do you think?)

Yet, this is not the main subject of this discussion. The main point that I want to make is that when you buy applications, you are buying empty apps. In other words, you are buying a data model and some application logic, but you’re not really buying a solution that more holistically helps procurement organizations deliver outcomes. You know the old adage: “Technology is just an enabler — it's just a tool!” But in the age of digital and “cognitive,” can’t we expect more?

The answer is yes, but it requires some new approaches and mindsets from both buyers and technology providers. Let me give some examples, and I’ll mention firms such as SAP Ariba, Coupa, Salesforce, Tradeshift, Dell Boomi and Rapid Ratings.

IBM to Sunset Emptoris, Transition Customers to SAP Ariba as Part of Broader Partnership Agreement

SAP Ariba and IBM Emptoris announced this morning at Sapphire 2017 that they were creating a strategic partnership. The deal represents a significant commitment by both organizations that spans applications, cognitive collaboration (SAP Leonardo and IBM Watson) and professional services. The combination of efforts is not, however, an acquisition of IBM Emptoris by SAP Ariba, which had been a rumor in the market for a number of weeks. Earlier today, I had the chance to speak to Alex Atzberger, president of SAP Ariba, and Michael O’Leary, director of procurement solutions and supply chain insights at IBM Watson Customer Engagement, to learn more about the partnership.

Navigating Uncertainty: Pool4Tool’s Roger Blumberg on Where Manufacturing Procurement Technology is Headed

Toyota supply chain

Last week we featured a new interview series focused on the technology renaissance coming to direct materials procurement. In collaboration with our sister site MetalMiner, Spend Matters Founder Jason Busch questioned procurement technology leaders and experts on the reasons this renaissance has begun, as well as how procurement and supply chain professionals are using technology to navigate volatile global trade trends. This interview features Roger Blumberg, chief commercial officer at Pool4Tool, which works with leading manufacturers such as Miele, Swiss Steel and Tower Automotive.

Ethiopia’s Apparel Sector Beset By Land Disputes and Labor Risks, New Research Finds

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As a sourcing destination for apparel companies, Ethiopia can hardly be called up-and-coming anymore. Since 2013, East Africa — and Ethiopia in particular — has been on the radar of apparel companies seeking low-cost manufacturing labor. New research from global risk consulting firm Verisk Maplecroft, however, suggests that Ethiopia’s apparel sector is likely to face significant risks in the near future, from land disputes to human rights concerns to political protests and instability.

New Study Dissects Organizations’ Ongoing and Future Use of Contingent Workforce

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Brandon Hall Group’s recently released “2017 Contingent Workforce Study” provides probing insights into organizations’ increasing use of contingent workforce. The study survey yielded a sample of “200 usable responses from the United States and Canada (75%) and 22 other countries and 30 industries,” according to a press release. The sample consisted of organizations of different size categories (60% under 1,000 employees, 38% between 1,000–9,999 employees and 44% at more than 10,000). Here, we highlight and comment on some of the key, publicly available findings that will be of interest to Spend Matters readers.

Contractor Insurance Innovator Bunker Raises $6M in Series A Round

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Bunker, a San Francisco-based “digital business insurance platform” startup, announced a $6 million Series A funding round in addition to the full commercial launch of its services platform. The round was led by Omidyar Network and included Comcast Ventures and Route 66 Ventures. Bunker raised $2 million of seed funding less than a year ago. Bunker, founded in 2015 to deliver an entirely new small business insurance buying experience, is a licensed insurance broker in all 50 states and works closely leading insurance carriers in building new and unique products, according to the press release.

DCR Workforce Provides an Entry Ramp for Mid-Sized Organizations with Smart Track NOW

For some time now, we have held DCR Workforce in high regard as a VMS solution provider that punches above its weight, especially in terms of services procurement capabilities, technology and innovation. (For more details on DCR, see Part 1, Part 2 and Part 3 of our PRO Vendor Snapshot.)

It is perhaps not surprising to us, then, that earlier this spring DCR quietly rolled out capabilities to enable mid-sized organization to access the full depth and breadth of its Smart Track VMS solutions. The new offering, Smart Track Now, puts DCR on the map as the second mainstream VMS provider to bring to market capabilities targeting the middle market, the first provider being SAP Fieldglass in December 2016. With the penetration curve for VMS at large enterprises flattening, the middle market appears to be worth trying.

We recently had the opportunity to discuss, and receive a demo of, Smart Track NOW. What follows is an overview of what we learned.

Bringing Supply Chain to 100,000+ Students by 2020: Talking to APICS’ Cheryl Dalsin (Part 2)

This is Part 2 in a two-part interview with Cheryl Dalsin, director of APICS’ Supply Chain STEM Educational Outreach Program. In the first half of the interview, we spoke with Dalsin about how the program began with a simple activity on lemonade she did in 2011 with her daughter’s first grade class. The program then expanded, rather serendipitously, through word-of-mouth, while Dalsin was working at Intel. Now she's at APICS, which sponsors the program.

Supply Chain Management for the K-12 Crowd: Talking to APICS’ Cheryl Dalsin (Part 1)

Ask children what they want to be when they grow up, and you’ll get answers ranging from astronaut to teacher to president — but, let’s be frank, it’s not that wide of a range. You probably haven’t heard a child say, “I want to be a supply chain manager when I grow up!” As APICS Director of Academic Outreach Cheryl Dalsin points out, part of the reason is that many adults haven’t heard of supply chain careers either, and it may be more a matter of name recognition than understanding what the profession does.