Sourcing and Categories Content

Often, it’s all about how quickly one can digest something. No, I’m not talking about Joey Chestnut’s eating-champ prowess. I’m talking about market intelligence. In a procurement professional’s day-to-day, that sentiment has certainly become more widespread than ever. In fact, with time at a premium, the majority of procurement pros — from junior buyers all the way up to CPOs — are faced with this issue every day. However, it can pay dividends to approach supply market intelligence in a strategic way.

Today’s Ask Spend Matters question came from Piyush Shah, a PhD student of supply chain management at Arizona State University: “Centralized, decentralized or hybrid sourcing structure? How do we decide?” This is a classic question and one that has sparked decades of passionate debate. Proponents of centralization point to the potential for higher savings. Defenders of decentralization argue that regional procurement teams can bring about better supplier relationships.

The easy answer is “It depends” or “A hybrid of the two.” But what does a hybrid structure look like? And how do factors like purchasing category, industry and stakeholders play into the assessment?

That procurement is shedding its origins as a back-office function is old news. As organizations become more advanced, their role in the overall company is evolving into a more strategic one compared with its tactical past. And a crucial component of this strategic transformation is taking responsibility for mitigating supplier and supply chain risk. But how many procurement organizations actually have a comprehensive risk management strategy in place? RapidRatings and ProcureCon Indirect East teamed up to conduct a risk-focused benchmark survey of 88 procurement executives, the results of which are published in a report titled “The State of Risk.”

Procurement functions can play a big role in supporting women-owned businesses, argues a new report produced by UN Women. The report points out that corporations are in a powerful position to help close the gender gap through their procurement and sourcing departments. Even though corporate spend accounts for trillions of dollars every year, only 1% of that sum goes to women-owned businesses.

Switzerland has again taken the top spot on the FM Global Resilience Index, which ranks 130 countries and territories according to their resilience to supply chain disruptions. This fourth annual report, released alongside an interactive graphic, cites cyber attacks, natural hazards and supply chain failure among businesses’ most urgent risks today. The no. 1 country may have stayed the same as 2016, but a bit of shuffling took place throughout the list.

I rarely pimp things I'm participating in, but I'm really excited to go back to my FreeMarkets roots tomorrow (May 31) at this breakfast and morning session in Chicago on the future of strategic sourcing and e-sourcing. The event is free, and it’s open to procurement practitioners and consultants.

Keelvar is hosting the event and the topic is about the massive transformation (thanks to artificial intelligence [AI], robotics, optimization and more) starting to take shape in strategic sourcing and e-sourcing. Alan Holland (Keelvar) and Josh Brogan (A.T. Kearney) are speaking as well.

Emmanuel Macron’s win in the French presidential election was a temporary boon for geopolitical stability, as was Moon Jae-in’s election as the new president of South Korea. U.S. president Donald Trump, however, has managed to become even more of a wildcard. In addition to the above, many emerging markets are at risk of growing instability, according to global risk research firm Verisk Maplecroft, which recently released its 2017 Geopolitical Risk Outlook.

Last Friday, the U.S. Securities and Exchange Commission announced that it is scaling back the more costly parts of its conflict minerals rule. As indicated in Section 1502 of the Dodd-Frank Act, companies are required to disclose whether their products contain tin, tungsten, tantalum and gold (3TG) sourced from the eastern regions of the Democratic Republic of Congo, where large shares of mining profits go to various armed rebel groups.

Apple’s responsible sourcing efforts now include tracking cobalt as well as conflict minerals, according to the company’s 11th annual Supplier Responsibility Progress Report released Monday. Last year, Apple announced it had achieved 100% third-party auditing of conflict mineral suppliers. This year, Apple was able to publish a complete list of its cobalt smelters, all of which have participated in third-party auditing. In another milestone, Apple’s suppliers have also achieved 100% UL 2799 Zero Waste to Fill validation for all final assembly sites in China.

Recently I talked to Mike Bassi, director of partnerships at Runzheimer, a provider of mobile workforce solutions that works with more than 1,300 companies. One of Runzheimer’s areas of expertise is mileage spend, and I was curious to hear about technological advances in expense management from a provider’s point of view — as well as ask about how common low-level expense fraud is.

Last Friday, Spend Matters Founder Jason Busch and Chief Research Officer Pierre Mitchell teamed up to present the webinar Risk and Compliance Management: Embedding Risk Management in Procurement and Supply Chain. Busch and Mitchell began with a segmentation of the types of supplier and supply chain risk and compliance management technologies out there, before moving into the topics of how to embed these technologies throughout your procurement and supply chain functions. They discussed the best ways to create linkages with other areas of procurement technologies, as well as how to create a procurement culture that is risk-aware.

Last month, I came across an article on Medium about Ivanka Trump’s fashion line and a group of six researchers’ attempt to unravel the supply chain behind the apparel. Sure, the fact that she is the daughter of President Donald Trump may have given the matter its newsworthiness — after all, plenty of celebrities lend their names to clothing lines — but I was curious whether Ivanka’s “women who work” platform extended to employees farther down the supply chain. Do women’s rights to, say, maternity leave, apply to the female factory worker sewing dresses in China or Indonesia — or just to the women buying those dresses?