Afternoon Coffee: Services sector contracts, NMI report says; Trade deficit rises, GDP falls; Coupa-ConnXus deal analyzed; ’50/50′ video for Suplari

BillionPhotos.com/ Adobe Stock

The Institute for Supply Management has released the April 2020 Report on Business, showing a contraction in economic activity in the non-manufacturing sector. ISM's non-manufacturing report registered 41.8% for April, down from the March reading of 52.5%. Meanwhile, the Supplier Deliveries Index rose to an all-time high of 78.3%, the report said.

Public administration and finance/insurance were the only two industries that reported growth in April, according to the report. The other 16 industries measured all reported decreases for the month, including real estate, construction and utilities.

One telling quote from the report came from a healthcare procurement executive:

“COVID-19 has halted much of our standard work to procure items for our organization. It’s halted much of the world, except for healthcare. Distributors were woefully unprepared for the spread of this pandemic, and many healthcare systems/providers depend on them for inventory planning and availability. Combine that with the global [surgical] gown recall* ... and you had a perfect storm for chaos across the supply chain. It will be very hard for major medical distributors who did not manage their core customers well to recover from both the gown recall and the pandemic. It also provided some insight into whether or not the distributor partners were actually skilled at inventory planning and movement. I believe that the healthcare supply chain landscape will change dramatically after this.”

* The recent surgical gown recall involved contamination concerns and the use of an outside contractor in China that wasn't registered with the FDA.

U.S. trade deficit rises, GDP decreases

The U.S. trade deficit increased by the highest amount in over a year during March as exports dropped to record levels due to the coronavirus, Reuters reports. The Commerce Department reports that the trade deficit increased to $44 billion in March, while the U.S. GDP decreased at a 4.8% rate in the first-quarter. It’s the steepest contraction to the economy since the fourth quarter of 2008.

Exports dropped 9.6% in March, to $187.7 billion, while imports dropped 6.2% to $232.2 billion, the report said.

Why Coupa would acquire ConnXus

After Coupa's acquisition of ConnXus was announced Monday, Spend Matters' Nick Heinzmann analyzed why Coupa wanted to add the specialist in supplier diversity to its business spend management suite of solutions. "Coupa views diversity as part of an effort to infuse CSR and sustainability into all organizational spending, which Coupa calls BSM-Powered Sustainability. What has prevented diversity solutions from making an impact in the past, the provider argues, is a segmentation of diversity programs and teams into silos, rather than involving them from the full spend management cycle at the outset of sourcing engagements," Heinzmann wrote in a PRO brief for subscribers that detailed SXM products for Coupa and ConnXus.

Analyst videos highlight Suplari on new ‘50/50’ lists

Spend Matters’ analysts chose 2020's top procurement technology vendors for the “50 to Know” and the “50 to Watch” lists that were recently published, and our analysts also have done videos about some of the providers that will attend the digital SIG Procurement Technology Summit, which begins May 11. The videos are out now, and Afternoon Coffee will feature one of them each day.

Suplari, a spend analytics provider:

Pierre Mitchell, Chief Research Officer of Spend Matters, says of Suplari: “One of the things they do well is that they bring a traditional spend analysis where you can look at your spend by contracts, p-card spend or any other kind of spend compliance, and they tie that up to process analytics and process compliance. It allows you to monitor spend compliance through the lens of process compliance.” See our full Suplari video here.

The 50/50 lists are part of Spend Matters Almanac, a directory of more than 500 providers that offers deep insights on the players in the procurement technology market.

Tariffs exemptions sought for robots, drones, elevators

Some U.S. firms and trade groups are asking the U.S. Trade Representative’s Office for tariff exemptions for a number of Chinese-made items, including robots, drones, 3-D printers and personal computers, Reuters reports. The Consumer Technology Association (CTA) asked for the exemptions on these technologies as part of a push for expanded coronavirus medical care, such as sensors and cameras used by doctors, UV sterilizing robots and wireless hotspots.

The National Elevator Industry also asked for exemptions on elevator and escalator parts that are an essential part of healthcare facility functions.

Lufthansa will not buy rivals during COVID-19 crisis

Lufthansa, one of the world's largest airline groups, has announced that it will not buy its rivals during the coronavirus crisis, Reuters reports. The German-based airline giant was forced to ground 700 aircraft earlier this year due to the pandemic and saw a 99% drop in passenger numbers. However, Lufthansa is planning to begin restarting some passenger flights in June.

In a statement, Chief Executive Carsten Spohr told shareholders, “Our focus is on stabilizing Lufthansa in its current form and not on acquiring other airlines. We are not planning a takeover at this time.”

Spend Matters PRO offer extended for May

Now through May, 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.

Share on Procurious

Discuss this:

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.