Commodities Content

CORONAVIRUS RESPONSE: Sourcing and Commodity Management — Securing direct materials during the crisis and recovery phases [PRO]

In this installment of our “Coronavirus Response” series, Spend Matters will explore sourcing and commodity management, with a focus on direct materials. With COVID-19 impacting logistics and existing supply bases, in China (even though China seems to be recovering), the rest of Asia and Europe (thus far), there will be numerous emerging needs for companies across manufacturing. This PRO brief will focus on the first three solution providers that we’ll profile in this category: Allocation Network, Coupa and Jaggaer.

The mission of this series is to examine categories of relevant solutions and example providers that professionals in procurement, finance and supply chain organizations should investigate to reduce, and even mitigate, coronavirus supply risk. And even if the solutions are only addressing a subset of the issues, the ability to respond intelligently in the short term can also help set organizations up for the future when sanity returns to the world.

Today’s brief focuses on the second of the seven solution categories that we’re covering:

1. Supply risk management solutions that include supply chain risk, CSR risk, supplier financial risk, etc.
2. Sourcing and commodity management, including advanced sourcing, direct sourcing, automated supplier discovery, and commodity management to help dynamically plan and source.
3. Advanced procurement analytics to enable direct procurement and/or to perform “spend planning” when demand drops out or spikes.(Its profile for this series is here.)
4. Procure to Pay (P2P) that emphasizes working capital, dynamic discounting, payment control and related finance priorities to help inject cash into the P2P process — especially for many cash-starved suppliers. (This category is discussed in-depth here.)
5. Fraud, P2P and vendor management safeguards when new suppliers need to be set up quickly, and also when lowlife fraudsters try to use the pandemic as a way to steal money and IP.
6. Providers with deep contract analytics that can analyze a contract portfolio for affected contracts from suppliers (and customers) for not just force majeure clauses, but other related clauses that tie to the multiple risks popping up at once in the pandemic.
7. Contingent Workforce and Services solutions that are able to, at a minimum, help rapidly ramp up on-demand workers to deal with massive resource shortfalls. We are looking at four categories of solutions for sourcing remote/online work; solutions for sourcing and managing contract workers at geo-specific capabilities; solutions to “direct source” and manage contract workers; solutions for data management and analytics. (The first PRO brief from this category, about sourcing remote/online work, can be read here.)

Owing to the magnitude of the crisis, Spend Matters recently made the series introduction available for free to all readers. PRO subscribers can see our follow-up pieces that profile the other categories and their solutions in that market. We will include a lot of information on each category PRO brief that readers can see without hitting a paywall, but since we also draw heavily from our existing deep-dive analysis of the providers from our SolutionMap database, some information will be available only to our PRO subscribers.

For sourcing and commodity management, the emerging needs for companies across manufacturing will include rapidly identifying new sources of supply, conducting complex sourcing events for materials, parts and components (which may be tied to broader bills of material), qualifying suppliers based on targeted requirements (e.g., for a specific line), and managing and tracking suppliers based on custom scorecarding.

After the pause button is lifted on production — in cases where one is put into place — these needs will become especially acute during the recovery phase in specific regions (which may be different from the recovery phase in other geographies).

The initial three solutions — from Allocation Network, Coupa and Jaggaer — all have capabilities in advanced sourcing for direct materials and/or strong support for scenario modeling and optimization. We will likely add providers with similar and other strengths in sourcing and commodity management at a later stage.

Each category-specific PRO piece in this series has three sections:

1. Problems and Use Cases. We’ll highlight the problems in force (which will vary through different phases of the crisis) and the various scenarios where solutions can provide deeper insights, intelligence and scalable workflows.
2. Solution Rationale and Value. We’ll outline how various solutions can help solve the problems and the specific questions that they’ll help answer.
3. Example Providers. We’ll highlight the solution providers that can support the problems and deliver value.

Some providers are offering coronavirus-specific programs and “freemium” commercial offers, and we’ll note those whenever we update this piece. We’ll also start the series with providers that we already have deep knowledge on, but we’ve been seeking information from other vendors too.

Let’s jump into how sourcing and commodity management can help.

Through April 2020, a special PRO Expert Survival Pack is available to procurement practitioners only* at up to 50% off — Learn more

Commodities Roundup, coronavirus edition: Shares vs. commodities; China’s aluminum production; Detroit automakers go idle

For the buyers and category managers out there, especially those of you deep in the weeds of buying and managing commodities, here’s a quick rundown of news and thoughts from particular commodity markets. MetalMiner, a sister site of ours, scours the landscape for what matters. This week:

Commodities Roundup: Coronavirus pressures metals prices; oil price crashes; Tesla’s cobalt substitution

For the buyers and category managers out there, especially those of you deep in the weeds of buying and managing commodities, here’s a quick rundown of news and thoughts from particular commodity markets. MetalMiner, a sister site of ours, scours the landscape for what matters. This week:

Commodities Roundup: Tesla’s battery shift hurts cobalt, nickel; coronavirus strains supply chains; zinc market posts 2019 deficit

Here’s a quick rundown of news and thoughts from particular commodity markets. MetalMiner, a sister site of ours, scours the landscape for what matters. This week: Tesla is switching away from cobalt and nickel batteries for its less expensive electric cars in China. In other news, the coronavirus continues to upset supply chains and concern companies and countries around the globe. Also, catch up on zinc and copper shortfalls for 2019.

Commodities Roundup: Geely, Volvo to merge; E.U. opens anti-dumping probe for aluminum extrusions; iron ore rises despite headwinds

For the buyers and category managers out there, especially those of you deep in the weeds of buying and managing commodities, here’s a quick rundown of news and thoughts from particular commodity markets. MetalMiner, a sister site of ours, scours the landscape for what matters. This week:

Commodities Roundup: Coronavirus outbreak weighs on metals prices; copper buyers call force majeure; U.S. steel prices flatten

For the buyers and category managers out there, especially those of you deep in the weeds of buying and managing commodities, here’s a quick rundown of news and thoughts from particular commodity markets. MetalMiner, a sister site of ours, scours the landscape for what matters. This week:

Commodities Roundup: European steel consumption weak; France objects to China firm’s British Steel bid; strong dollar and coronavirus pressure commodities

For the buyers and category managers out there, especially those of you deep in the weeds of buying and managing commodities, here’s a quick rundown of news and thoughts from particular commodity markets. MetalMiner, a sister site of ours, scours the landscape for what matters. This week:

Commodities Roundup: Aluminum production rises; tariffs to extend to steel, aluminum derivatives; coronavirus fallout; USMCA now law

For the buyers and category managers out there, especially those of you deep in the weeds of buying and managing commodities, here’s a quick rundown of news and thoughts from particular commodity markets. MetalMiner, a sister site of ours, scours the landscape for what matters. This week:

Commodities Roundup: Steel prices; commodities bear market; U.S.-China trade deal keeps tariffs for next phase

MetalMiner, a sister site of ours, scours the landscape for what matters. As MetalMiner’s Belinda Fuller noted this week, U.S. steel prices made gains in the first half of December. In other news, rare earths miner Lynas awaits a license to mine the material in Malaysia. And a look at the commodities market shows that it's not benefitting like the stock market and could be hurt if the dollar weakens. Also, the tariffs on China stay until phase two of the U.S.-China trade deal can be hammered out.