3 Classes of Technology to Support the Distance-Based Procurement Equation

Over the past few days, I’ve spent time exploring the concept that global procurement is dead – or at least the idea that global sourcing and managing global supply chains is truly par for the buying course today. I suggested thinking in terms of distance is more important when working with international vendors, rather than focusing myopically on country-specific concerns. In this final piece in our series of global procurement, I’ll share 3 different classes of technology I believe could become invaluable for addressing the distance equation when working with suppliers.

The first of these areas is what I might term “where sourcing meets supply chain network design.” The advances and case studies that clients of Trade Extensions are making on a regular basis are truly impressive. Those clients have addressed sourcing, supply alternatives, distribution, inventory and numbers tax, tariff and duty considerations often in tandem across different tiers when it comes to integration sourcing and supply chain network design elements. The complexity can be mind-boggling. Yet Trade Extensions is not alone here. Supply chain network design specialists, as well as other sourcing-centric vendors that can deliver advanced sourcing optimization capabilities, can also help address different pieces of the sourcing or supply chain network design equation.

The second area worth considering is new types of visualization and business intelligence tools that can truly show the operational supply chain for both operational and procurement audiences. For example, the infographic-centric views into supply chain activity that FusionOps offers, such as inventory and work in progress, can be a great launching pad to get all internal constituents on the same page when it comes to distance-intensive operational procurement. As distance factors more into the procurement equation, inventory becomes the true commodity – arguably magnifying as supply chains lengthen at log scale rather than linear relative to other areas. Others risk- and intelligence-centric providers, such as Resilinc and riskmethods GmbH, can be equally important here, but in different ways. (See our webinar with AGCO Corp to learn more about one case example here.)

The third area for top consideration is social and collaboration. And no, I’m not talking just about clever sourcing-meets-product-design tools from the likes of PTC Inc or Directworks Inc. What’s most important as distances lengthen in the supply chain is everyday collaboration environments. So think less in terms of the grandkids of computer-aided design and product lifecycle management tools and more about the next-generation offspring of Lotus Notes: Slack. The breakout messaging and productivity tool is one new provider that, from an intracompany perspective, is already changing the collaboration dynamic. Its fully integrated platform can truly bring teams closer together regardless of distance. I have no doubt that Slack and related solutions – perhaps embedded in core procurement technology platforms – will become as invaluable as P2P, supply chain and direct procurement solutions in addressing trade and relationships in longer supply chains in the coming years.

What do you think? As distance becomes the primary factor in the globalization of procurement – rather than the broader issues of first generation global or low-cost-country sourcing – which technologies will be key?

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