Sourcing & Categories Content

IT Sourcing in 2018: Best Practices That Companies Need to Know

VMS

Organizations will spend $3.7 trillion on IT in 2018, marking a 6.2% increase over last year’s spend. Moreover, IT buyers spend more than they need to on purchases and renewals in more than 75% of the time. Kim Addington, chief operating officer at NPI, provided these statistics as context during a webinar she co-hosted last Thursday with Pierre Mitchell, chief research officer at Spend Matters. The webinar provided a look at today’s IT sourcing landscape, key challenges and how cutting-edge IT sourcing organizations are handling these challenges.

U.S. Apparel Industry Scrambles to Diversify Sourcing Strategy in Wake of Escalating U.S.-China Trade War

apparel

For many U.S. companies in the apparel industry, the old sourcing strategy of “made in China” is turning into “China plus Vietnam plus many,” with emphasis on the many. As Washington and Beijing continue to one-up each other’s tariff threats, the prospect of a looming trade war is driving U.S. apparel companies to further diversify their sourcing strategy and shift production away from China. While China remains the top sourcing destination for the U.S. apparel industry, the country now accounts for 11%–30% of companies’ total sourcing volume, compared to 30%–50% in the past.

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.

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Procurement Begins with Sourcing: The myConnXion Story

To understand procurement and sourcing as a buyer, we must start with the supplier. Small and diverse businesses are often cited as being more nimble, innovative and cost effective, but are often most strained in resources. Suppliers have to register their profiles with many different buyers (sometimes paying to do so, for buyers who adopt the pay-to-play model) and may not even get a contract as a result of their efforts. On the other side, many buyers end up with outdated supplier information and expired diversity certifications, contaminating their supplier database with inaccurate data. Sourcing with unreliable information hampers the abilities of procurement professionals and negatively impacts bottom line.

GAO: Majority of Companies Can Now Determine Origins of Their Conflict Minerals

conflict minerals

For the first time, more than half of companies filing conflict minerals reports are able to determine the source of these minerals, according to a Government Accountability Office report on conflict minerals disclosures filed with the U.S. Securities and Exchange Commission (SEC) in 2017. Last year, 53% of the companies were able to report whether their conflict minerals — tin, tungsten, tantalum and gold — came from the Democratic Republic of the Congo or one of the nine neighboring countries.

Thomas CEO Tony Uphoff on Sourcing Alternatives to Plastic Drinking Straws, Regulations and Consumer Sentiment

The year 2018 seems to be the beginning of the end of the plastic straw, and sourcing data from Thomasnet.com indicate that procurement professionals are scrambling to identify alternatives. One of the top marine polluters, plastic straws have been banned in various countries, cities and royal estates around the world, including Scotland, Taiwan, Vancouver and Buckingham Palace. Data from supplier discovery platform Thomasnet.com shows that sourcing activity for drinking straws and paper bags has increased significantly compared with the historical average. Spend Matters recently spoke with Tony Uphoff, president and chief executive at Thomas, to learn more about the industries behind this spike, the roles played by regulations and consumer sentiment, and those iconic red-and-yellow straws.

MBO Partners’ 8th Annual State of Independence Report: What’s In It For Contingent Workforce Managers?

Coworks

MBO Partners has released its latest State of Independence in America report, which examines the size, trends, demographics and other information about the population of U.S. workers that, in effect, “work on their own” and earn income outside of traditional employment. The report, which was first published in 2011, provides a broad range of data and insights pertaining to this population that MBO estimates at nearly 42 million workers.

Sole Sourcing and Lack of Weapon Design Experience to Blame for Pentagon’s Munitions Procurement Woes

The U.S. government is facing considerable challenges with its munitions procurement, as reported by Defense News in an article memorably headlined “The U.S. is Running Out of Bombs — And It May Struggle to Make More.” According to the latest annual Industrial Capabilities report from the Pentagon's Office of Manufacturing and Industrial Base Policy, sole sourcing and a lack of weapon design experience are crippling the U.S. industrial base.

Fiverr Delivers A New Slant on Independent, Specialized Knowledge Workers

Coworks

Fiverr, a marketplace for creative and digital services, recently published a unique study focused on independent, specialized knowledge workers (ISKWs). The study, conducted in collaboration with the market research firm Rockbridge Associates, seeks to provide a better understanding of ISKWs — “where [they] live, what kind of work they do and how much they’re growing as a population and in terms of revenue earned.” From our perspective, the study is unique in its sharp focus on ISKWs and its sophisticated, transparent methodology. 

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5 Tips and Considerations for Your Next Spend Analysis RFP

spend analytics

In a rapidly changing market of technology and service delivery providers, it has become increasingly challenging for many of today’s procurement leaders to both keep up with the pace of change to find true differentiation across the evolving vendor community. Most of the leading procurement organizations we have worked with in the past 12 months are focused on the following strategies: fold more spend under management, more quickly identify and tackle savings opportunities, and drive more value to internal stakeholders. Spend analysis is core to meeting these strategic goals. 

Procurement with Purpose: Easy to Say, Hard to Do

hidden workers

One of the big themes at last week's SAP Ariba Live was “procurement with purpose” — the idea that procurement organizations, with their collective spending power, can use their clout to do good. When you consider that the annual transaction volume through the Ariba Network exceeds the combined annual commerce of Alibaba, Amazon and eBay — and dwarfs that of many nations— it seems quite feasible that procurement can drive change, especially since money talks. But just as only the squeaky wheel gets the grease, only the loudest money is heard above the din.

Hospitals Can No Longer Afford to Pay the Bill for Increased Manufacturer Profitability

locum tenens

I recently read a Forbes piece penned by my friend Paul Martyn. Essentially, it took hospitals to the woodshed, pointing out how many of them remain victims of Stockholm syndrome. It’s an unfortunate analogy meant to describe the state of mind of far too many acute care supply chain practitioners. The implication here is that hospital purchasing staffers tend to identify with the goals and objectives of their “captors.” In this case, the captors are the major pharmaceutical and device manufacturers (OEMs).