CIPS and Spend Matters launch ‘Spend Friends’ monthly podcast — with a list of Top 10 challenges for 2021

Spend Matters and CIPS

As part of a new partnership, the Chartered Institute of Procurement and Supply (CIPS) and Spend Matters launched a video podcast this week called “Spend Friends” to discuss all things spend management, supply chain, risk and everything else under the procurement umbrella.

The podcast is hosted by Bill Michels, the VP of Operations — Americas at CIPS USA, and Pierre Mitchell, Spend Matters’ Chief Research Officer. With their years of experience, they plan to impart some wisdom and ideas for procurement practitioners of all ages and skills in each monthly video podcast.

In the first episode, Michels and Mitchell shared their insights into what they think will be the top supply chain trends of 2021. A lot of things are changing, and if 2020 taught us anything it’s that you can only prepare so much. However, Michels and Mitchell do envision some trends taking hold into the new year.

Spend Friends' Top 10 list

Michels’ and Mitchell’s Top 10 list of what’s keeping CEOs and CPOs up at night, and other supply chain challenges of 2021:

  1. What is normal in a post-COVID-19 world?
  2. Fragility to agility: getting deeper insight into our supply chains
  3. Finally getting real with diversity and inclusion, sustainability, and corporate social responsibility (CSR)
  4. Supply chain globalization: China, Brexit, regional supply chains, governmental role
  5. From crisis mode to resiliency — Planning!
  6. Developing integrated, automated supply chains
  7. Moving from a cost-reduction to a value-based decision framework
  8. Moving away from legacy thinking, old models to create supply chain resilience and agility
  9. Digital: packaged apps, analytics, MDM, intelligence, innovation/enablement and ecosystems
  10. Creating strong supplier relationships to create value

Michels anticipated that most of the pandemic-related hurdles and supply chain disruptions will come at the end of June or July, but he remains cautious.

He said that 30% of small businesses in the supply chain won’t be able to survive the pandemic as they continue to run out of cash. The issue remains: There is really no way to map out the supply chain for the coming months.

“When I go out to new clients, and I’m sitting there and talking to them about the map of their supply chain, they don’t have it,” Michels said. “One electronic chip maker, we got them to map a few tiers down. When they got to Tier 3, they found there was one supplier giving to the whole industry this critical component.

“People are trying to do diversity and inclusion, that’s a big area. But, they don’t have a map so they don’t know what’s going on with the supply base. And you can’t do corporate social responsibility in the meantime. Even though we say we’re educating suppliers and auditing, not many people even have the map to tell them how to do that.”

The state of the supply chain

Michels said the supply chain won’t ever come back to the capacity it once had. Mitchell echoed that thought by pointing out that the speed in which supply chains have to keep up with stakeholders also poses new challenges and opportunities.

Mitchell proposed that supply chains will become more well-balanced machines — considering more than just cost reduction. Now, it will be more about category management and tracking speed, resilience and agility. Supply chains will become much more visible to companies and execs.

“It’s not just the cost of the spend of the category, but also the criticality around when you have that Tier 2 or 3 supplier and making sure that you’re managing those extended suppliers,” Mitchell said. “Also making sure that your Tier 1’s are managing the Tier 2, 3 to manage risk and do business continuity planning. Not just getting that initial mapping, but how can we use that on an ongoing basis and getting real-time intelligence of what really matters? … Really get smart and deep and selective about the suppliers you want to be monitoring and for what. That’s where the technology can help.”

Diversity and inclusion

Another rising challenge and opportunity for supply chains is the role of diversity and inclusion.

Michels and Mitchell theorize it will become a key measurement of success for supply chains. However, Michels argues that although there is pressure to find a standard policy on diversity/inclusion, it’s hard to find one answer to that.

“Across the globe regionally, diversity and inclusion means different things,” Michels said. “I’m finding the balance of working through those problems will take a while. But I think it’s a No. 1 priority for most companies.”

Other key trends for the year include considering the role of automation or robotics in supply chain management. Mitchell expects there to be more digitization of supply chain management as well.

What is ‘cost value’?

Finally, there will likely be a shift away from cost reduction to cost value.

“That is kind of the guiding light for sure: The more we can do with stakeholder management and then outcome management and what they’re trying to do,” Mitchell said. “Then we can go to spend management, like getting bang for the buck for those outcomes based on the limited budgets that they have.

“Then, we can go to the categories and suppliers and make sure we can really make that happen for them. We’re starting with their objectives and working backward vs. ‘Hey, I’m just running a bunch of sourcing deals to consolidate the supplier base and have a cheaper substitute.”

Although it’s nearly impossible to do after the last year, a lot of the supply chain trends for the next year will come down to planning. More companies are realizing the need to make better plans. In turn, that better continuity planning will help companies think about their futures better and have much better outcomes in 2021 and beyond.

Next up for the Spend Friends

The Spend Friends monthly podcast will recap what Michels and Mitchell are seeing with their clients. It also will feature special guests.

To listen to the second episode on Jan. 12, please register here.

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