Afternoon Coffee: Coronavirus crisis tips … from Tradeshift; Icertis integrates contract solution with SAP Ariba; COVID-19 may even reshape diversified supply chains

Christian Lanng, CEO of the spend management platform Tradeshift, spoke with Spend Matters Europe Editor Nancy Clinton about procurement in the time of the coronavirus pandemic. Lanng, who sits on the COVID-19 World Health Organization business response task force, believes liquidity is key to the health of supply chains during a time of extraordinary strain, such as this.

Liquidity, he said, is the priority at the moment, because “it means we can protect as much of the infrastructure of companies as possible so that businesses will be able to pick up again and return to profitability.”

In the past few weeks, Tradeshift has seen its customers making moves to add digital procurement capabilities, he said.

“Many firms are opting to go fully digital, even for the short to medium term, as investment in digital is moving from being a tactical and cost issue to a strategic one,” Lanng said. “Correspondingly, on the seller side, we have also witnessed a massive move toward supplier invoice onboarding, because liquidity continuity cannot be guaranteed if you are transacting in paper invoices that never reach the system.”

Read the full article for more details on Tradeshift’s view of liquidity and procurement, as well as eliminating risk in tactical and strategic operations.

Icertis integrates contract solution with SAP Ariba

Icertis announced it is adding its contract management offering to SAP Ariba’s spend management solutions “to help transform the source-to-contract process,” Icertis said in a press release.

The goal is for customers of SAP Ariba solutions to be able to streamline procurement processes, reduce supply chain risk and optimize supplier relationships, Icertis said.

Icertis’ Chief Alliances Officer Peter Boit said that joining SAP Ariba will help customers in today’s fast and dynamic market.

“Leading companies are looking to more effectively connect their commercial opportunities with their supply chain by building speed and agility into procurement,” Boit said. “To achieve this, companies must reinvent their commercial foundation and put contracts at the center of their supplier relationships.”

Spend Matters Chief Research Officer Pierre Mitchell said Icertis’ integration with SAP Ariba is an important development in CLM.

“Contracts are the ultimate form of master data that underpins enterprise commerce, and given that contract data is scattered across multiple systems — even within SAP Ariba’s own intelligent spend management suite of applications, the imperative is clear for a single contract management system to manage this commercial repository of knowledge,” Mitchell said. “We applaud SAP Ariba’s customer focus to offer up a market leading solution such as Icertis ICM to manage ALL contracts on the sell-side, buy-side, and any process where commercial value flows.”

Diversified supply chains will be forced to ‘rethink’ sourcing due to coronavirus disruption: report

As global supply chains continue to endure mass disruption from COVID-19, a new report predicts that companies will continue to rethink their sourcing strategies.

Supply Chain Dive reports that the Reshoring Index by Kearney shows that the U.S.-China trade war forced supply chains to move away from China. This pushed the manufacturing import ratio (MIR) to “unprecedented” levels in 2019 (98%), a stark increase from 2018’s levels ( -32 %).

Despite this increase, most companies are not coming back to the U.S., according to the report. Instead, imports have increased from other Asian countries and Mexico. Meanwhile, U.S. manufacturing output was reported as “virtually unchanged” from 2018 levels.

Next month will be real crunch time for U.S. auto suppliers

Like most other sectors, the coronavirus pandemic has hit the automobile supply chain, severely. Suppliers of auto ancillaries say major automakers are still paying bills, while suppliers are getting checks for goods shipped in February and March before the auto manufacturing lines slowed down or ground to a halt because of COVID-19.

Experts predict that the real crunch for suppliers will come sometime in mid-May. That is when the cash backlog runs out unless automakers are able to restart assembly lines, reports Reuters.

FedEx teams up with U.S. government to ship protective gear

FedEx Express said it is helping the U.S. Government accelerate shipments of protective equipment and other needed supplies across the country. The partnership is part of an attempt to distribute personal protective equipment (PPE) to healthcare facilities and workers.

The Memphis-based FedEx Express said Wednesday it had already delivered its first shipments via FedEx aircraft. The equipment will become part of the U.S. Strategic National Stockpile, according to the report.

Test kit maker Solgent chosen as supplier for U.S. agency

Medical test kit maker Solgent, an affiliate of Eone Diagnomics Genome Center (EDGC), has been registered as the first Korean company for stockpile procurement by the U.S. Federal Emergency Management Agency (FEMA).

Solgent’s initial export as a procurement supplier for the U.S. government will include 150,000 new coronavirus test kits, as well as 40 other diagnostic kits. Solgent also submitted for official approval for permanent use in the U.S. from the Food and Drug Administration for its COVID-19 diagnostic kit.

Spend Matters PRO offer extended a month

Through this month, a Spend Matters' special PRO Expert Survival Pack is available to procurement practitioners only* at up to 50% off. The discount applies to PRO subscription content from our analysts and other services. — Learn more

Read all of Spend Matters’ coronavirus coverage here.

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