Afternoon Coffee: Did digitization help NMI see uptick in May?; Vizibl Resilience debuts; Amazon receives blockchain patent; Alibaba starts freight services


The Institute for Supply Chain Management (ISM) reported the NMI for May at 45.4%, reflecting a sector that has contracted for the second straight month following 122 consecutive months of expansion (but a modest increase over the April NMI of 41.8%). The May index value is consistent with the continued economic slump associated with the COVID-19 pandemic, though it is too early to say if it is indicative of some kind of inflection point.

Other sub-indices reflected a similarly mixed picture. For example, the Business Activity/Production Index was 41% (up from 26% in April), while the Supplier Deliveries Index was 67% (down from 78.3% in April). Other sub-indices are reported in the ISM announcement. 

The Non-Manufacturing Sector is predominantly comprised of what we would consider service industries, including (in order of size) Finance & Insurance; Professional and Business Services; Government; Education; Healthcare; Wholesale and Retail Trade and Information. In May, according to ISM, the only “service industries” that reported increased Business Activity were Finance & Insurance and Retail Trade, while most other “service industries” reported decline. These included: Educational Services; Construction; Utilities; Professional, Scientific & Technical Services; Health Care & Social Assistance; Accommodation & Food Services; Wholesale Trade; Management of Companies & Support Services; Transportation & Warehousing; and Information.

Spend Matters’ Director of Labor and Services Procurement Research, Andrew Karpie, commented: “There was not much unexpected in the numbers this month, except perhaps for a few rays of hope suggesting that the economic free fall may have ended. The services sector comprises the bulk of GDP today, and it also comprises — in the aggregate — the bulk of non-payroll spend by large and midsize businesses.

“As intangible outputs, services are not simple to source and manage,” Karpie said. “And, as we have noted previously, are becoming increasingly digitized. It’s noteworthy that the two industries that expanded were Financial and Insurance and Retail Trade. Certainly, it’s because people need money and goods, but there may be an underlying digital resilience in these areas that is a factor. While services’ demand and supply contract and expand, the increasing digitization of the service sector is a longer-term trend that should not escape procurement practitioners.”

Vizibl launches Vizibl Resilience

Vizibl, the SaaS-based supplier collaboration platform, has launched a new offering to help businesses solve supply chain issues called Vizibl Resilience. The new offering is an enhancement that draws off Vizibl’s core Supplier Collaboration and Innovation solution to help companies problem solve throughout the supply chain with greater visibility.

The new platform offers rapid deployment, reporting functionality, analysis of SLA targets and it will be free for suppliers of “essential services” during the coronavirus crisis.

Spend Matters UK has more on the announcement, which can be found here.

Amazon receives blockchain patent

Amazon has received a patent from the U.S. Patent and Trademark Office for a new blockchain system, the site FreightWaves reports. The patent allows for “verifiable tracking of an item through a supply chain using a distributed electronic ledger.” The blockchain patent aims to increase transparency on the e-commerce site and ensure the authenticity of consumer goods sold on the site.

This new solution would allow manufacturers, couriers, distributors and end-users to have clearer visibility of items in the supply chain, and give consumers access to data certifying that the items ordered are what is eventually received.

Buyers Meeting Point acquires MyPurchasingCenter

Buyers Meeting Point, a resource for procurement professionals, has acquired MyPurchasingCenter, a defunct procurement media website founded in 2011, the companies announced in a press release. The acquisition will allow Buyers Meeting Point to expand the amount of information on its blog and increase its social media following.

MyPurchasingCenter’s former Editorial Director Susan Avery said of the acquisition: “Bringing together the content of MyPurchasingCenter with the valuable resources of Buyers Meeting Point creates the one source of news and information for procurement and supply chain professionals going forward.”

Alibaba introduces Alibaba Freight to platform

Alibaba, the Chinese online retail giant, is integrating freight procurement, called Alibaba Freight, into its B2B e-commerce platform, Supply Chain Dive reports. Alibaba Freight will allow shippers utilizing Alibaba to manage and track ocean and air freight in real-time, as well as compare prices for containers and pallets.

Ocean and air freight will be offered from Australia, China, Germany, the UK and the U.S. on the platform. Shippers can choose carriers, type of freight and the port of arrival for bulk orders.

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