Dun & Bradstreet, which measures risk and business credit scores, recently introduced its COVID-19 Impact Index, a resource to help business leaders see and understand the current impacts and potential business disruptions on companies, their customers and supply chains due to the pandemic.
By looking at an integrated assessment of locations and industries, companies can see a deeper picture of how the coronavirus has disrupted operations in certain areas.
The coronavirus disruption has put the spotlight on procurement departments. CEOs are skipping IT and CFOs to go directly to Chief Procurement Officers (CPOs) for answers. Executives are getting insight from procurement — like the state of a company’s supply chain, risks from suppliers and visibility into spend.
Companies of all sizes now realize that they need procurement with more agility. To find out more about that capability, we talked with Joe Payne, Senior Vice President of Source-to-Pay at Corcentric, a leading global provider of source-to-pay, order-to-cash and fleet solutions.
“A lot of our customers are really recognizing that through this crisis, procurement can lead,” Payne said in discussing how pre-COVID thinking about the digital transformation of business has been altered. “It's an interesting time to be in procurement.”
The last several weeks of the COVID disruption has laid bare just how little companies sometimes know about their suppliers. It has become evident that truly knowing your suppliers goes beyond which one has passed their certifications or which one is hitting their KPIs. Your teams probably keep tabs on that, or soon will. But who is keeping tabs on what’s happening outside of your organization, giving your business visibility into the things that are outside of their sphere of vision?
“As organizations seek to become faster, more resilient and more agile, the modern procurement professional needs to know, in real time, what is happening in the suppliers’ world,” said Tim Czerwonka, COO of CatalyticsHub, a newly launched supplier intelligence tool from procurement consulting firm Proxima. “For example, it should influence your thinking if your supplier (or a prospective one) has had poor financial results, made an acquisition or divestment, made a key hire, announced a new innovation or is facing litigation.”
Companies surveyed by The Hackett Group reduced their working capital as a percentage of revenue by 2% in recent years, according to the Hackett 1000 Cost and Cash Optimization survey. Although the survey was published prior to the outbreak of the coronavirus pandemic, the findings are beneficial to companies looking to make the most of their working capital.
Fueled by faster receivables payments and inventory optimizations, businesses are trying harder to optimize working capital after several years of pushing suppliers to extend payment terms. The survey found inventory levels fell by 2.8%, the first decrease in six years. In total, working capital of the Hackett 1000 is equal to 6.2% of U.S. GDP.
As the coronavirus disruption affects nations around the world, the insurance firm FM Global recently released its 2020 Resilience Index, examining economic indicators, risk factors and supply chain issues in 130 countries around the world — ranking the nations by the resilience of their business environments.
“The pandemic of 2020 has tested the resilience of businesses across the world,” the company said in its executive summary. “While pandemic risk is not explicitly measured in the 2020 FM Global Resilience Index, the resilience of a country’s business environment is a reliable platform for businesses trying to rebound from the impact of the coronavirus.”
See which nations do well and those that don't.
Businesses that lead the way in innovation and technological implementation are reaping much greater rewards than those that take a less-focused approach across a wide range of industries, according to Accenture’s Future Systems Report.
While the research was done before the coronavirus disruption changed the business landscape, the report has lessons for C-suites now that companies’ top leaders are relying on procurement more than ever to stabilize supply chains, improve insight into spend and automate processes if staffing levels can’t be maintained.
Companies around the world face corruption and need technology, training and insights into the varied legislation to strengthen countermeasures, according to The Global Anticorruption Survey conducted by the consulting firm AlixPartners.
The biggest concerns by far surrounded procuring and effectively using digital tools in the fight against corruption, where 81% of respondents said they lacked the appropriate IT systems and software to properly address corruption risks.
Continuing with coverage of the digital SIG Procurement Technology Summit this week, I attended session No. 18: “Procurement with a Purpose in the COVID-19 Era.” Moderated by our own Sheena Smith, Managing Director of North America for Spend Matters, the session included three panelists: Paul Polizzotto of Givewith, Adam Vasallo of Big Brothers Big Sisters and Sushmita Banerjee of Boston Consulting Group.
As supply chains touch essentially everything every day, not just in this era of COVID-19, procurement is becoming increasingly human and personal — people are being furloughed, companies are actually consulting their force majeure clauses and asking for concessions, etc. While procurement departments are impacted and have gone back into cost-cutting mode, communities are also incredibly impacted. As such, how can you, as procurement, make your spend count in a way that benefits buyers, sellers and nonprofits?
As part of this week’s digital SIG Procurement Technology Summit, I attended Breakout Session No. 9: “Becoming a Customer of Choice or How to Avoid Hearing ‘You're Fired!' ” In the online panel discussion moderated by Mike Morsch, Vice President of Procurement & Supply Chain at CDK Global, representatives from both the customer and supplier worlds discuss what customers should be doing when working in today’s COVID-19 environment — and what they are doing to support and encourage suppliers, especially startups with limited time and resources.
In these uncertain times, business leaders must get ready to help others overcome fear, create a new future, and get through the death, social change and business disruption that the coronavirus pandemic has wrought, said Dawn Tiura, the President and CEO of Sourcing Industry Group (SIG), at the Ivalua NOW 2020 online conference Tuesday.
In her keynote address about leadership, change and digital transformation in the coronavirus era, she painted an ominous picture that there will be no return to normal — but she offered an optimistic outlook for people who are willing to embrace change.
We’ve asked organizations of all stripes to contribute to our Coronavirus Response series, which highlights solutions that can help in a crisis. (See the intro piece here for an overview). The responses from providers have been extremely diverse (and we’re still accepting input via our survey.)
But the response from the procurement consultancy Insight Sourcing Group (ISG) that we received is so thorough and thoughtful that I’ve decided to simply publish it in its entirety in the Q&A style format that we used.
Spend Matters welcomes this guest post from Nick Lazzara, Practice Director at MRA Global Sourcing.
In so many ways, the COVID-19 pandemic of 2020 has turned our world upside down. We are in uncharted waters from an economic, social and employment perspective. As such, it felt appropriate to share some interesting things we have observed on the procurement front during these past couple of months.