Our aim is to bring you the latest actionable insights into every issue relating to supply chain management from the world’s leading exponents. Each issue will lift the lid on the supply chain transformations taking place, right now, at enterprises across every sector and territory.

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Thiago Braga, Director of Supply Chain Management at the City of Edmonton

Our cover story this month, features Thiago Braga, Director of Supply Chain Management at the City of Edmonton, Canada who discusses how improved operations are keeping the City healthy amid a range of challenges…

When Braga accepted his current role with the City of Edmonton in January 2019, a supply chain transformation program was envisioned that would evolve, and streamline, operations, while bringing in leading practices, standard practices, and best practices.  

Read the first issue here!

Upon his appointment, the workplace culture and environment were decentralised, more fragmented and so Braga got to work on creating a more unified approach. “Basically, my role is to support City operations,” Braga reveals. “My job is to keep buses and trains running as well as other rolling assets, like police or fire truck vehicles. Keeping the operations running and adding value while doing so would be the core.”  

Karon Evanoff, Vice President, Global Supply Chain at QSC

We also hook up with Karon Evanoff, Vice President, Global Supply Chain at QSC, to discuss supply chain transformation at the audio manufacturer. “I don’t think anyone – especially when you get to the senior management level – wants to sit in an office and just do spreadsheets every day,” Karon Evanoff says, when describing why continual learning is the number one driver for her.”

Elsewhere, we look at sustainability in the supply chain and why third-party risk should be a number one priority for businesses and chief supply chain officers.

We hope you enjoy the issue and tell your friends and colleagues!

Governments around the world have highlighted supply chains as an area for urgent attention in tackling cyber risk in the coming years…

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Business ecosystems have expanded over the years owing to the many benefits of diverse, interconnected supply chains, prompting organizations to pursue close, collaborative relationships with their suppliers. However, this has led to increased cyber threats when organizations expose their networks to their supply chain and it only takes one supplier to have cybersecurity vulnerabilities to bring a business to its knees. To this point governments around the world have highlighted supply chains as an area for urgent attention in tackling cyber risk in the coming years.

Looking beyond your own perimeter

Over the last few years, many organizations have worked hard to improve their cyber defenses and are increasingly “harder targets”.  However, for these well-defended organizations, now the greatest weaknesses in their defenses are their suppliers, who are typically less well-defended but with whom they are highly interconnected. 

At the same time, the cyber threat landscape has intensified, and events of the past year have meant that security professionals are not only having to manage security in a remote working set up and ensure employees have good accessibility, they are also having to handle a multitude of issues from a distance whilst defending a much broader attack surface.  As a result, points of vulnerability have become even more numerous, providing an attractive space for bad actors to disrupt and extort enterprises.  Threats have escalated, including phishing and new variants of known threats, such as ransomware and Denial of Service (DDoS) attacks, as well as increases in supply chain attacks.

But where supply chains are concerned, it is nearly impossible to effectively manage this risk unless you know the state of your suppliers’ defences and continually ensure that they are comparable to your own.  Organizations must deeply understand the cyber risks associated with the relationship and try to mitigate those risks to the degree possible.

However, that’s easier said than done. With the sending and receiving of information essential for the supply chain to function, the only option is to better identify and manage the risks presented.  This requires organizations to overhaul existing risk monitoring programs, technology investments and also to prioritize cyber and data security governance.

Ensuring the basics are in place

At the very least organizations should ensure that both they and their suppliers have the basic controls in place such as Cyber Essentials, NIST and ISO 27001, coupled with good data management controls. They should thoroughly vet and continuously monitor supply chain partners. They need to understand what data partners will need access to and why, and ultimately what level of risk this poses. Likewise, they need to understand what controls suppliers have in place to safeguard data and protect against incoming and outgoing cyber threats. This needs to be monitored, logged, and regularly reviewed and a baseline of normal activities between the organization and the supplier should be established.

As well as effective processes, people play a key role in helping to minimize risk. Cybersecurity training should be given so that employees are aware of the dangers and know how to spot suspicious activity. They should be aware of data regulation requirements and understand what data can be shared with whom. And they should also know exactly what to do in the event of a breach, so a detailed incident response plan should be shared and regularly reviewed.

IT best practices should be applied to minimize these risks. IT used effectively can automatically protect sensitive data so that when employees inevitably make mistakes, technology is there to safeguard the organization.

Securely transferring information between suppliers

So how do organizations transfer information between suppliers securely and how do they ensure that only authorized suppliers receive sensitive data? Here data classification tools are critical to ensure that sensitive data is appropriately treated, stored, and disposed of during its lifetime in accordance with its importance to the organization. Through appropriate classification, using visual labelling and metadata application to emails and documents, this protects the organization from the risk of sensitive data being exposed to unauthorized organizations further down the line through the supply chain.

Likewise, data that isn’t properly encrypted in transit can be at risk of compromise, so using a secure and compliant mechanism for transferring data within the supply chain will significantly reduce risks. Managed File Transfer (MFT) software facilitates the automated sharing of data with suppliers. This secure channel provides a central platform for information exchanges and offers audit trails, user access controls, and other file transfer protections.

Layering security defenses

Organizations should also layer security defences to neutralize any threats coming from a supplier.  Due to its ubiquity, email is a particularly vulnerable channel and one that’s often exploited by cybercriminals posing as a trusted partner. Therefore, it is essential that organizations are adequately protected from incoming malware, embedded Advanced Persistent Threats, or any other threat that could pose a risk to the business.

And finally, organizations need to ensure that documents uploaded and downloaded from the web are thoroughly analyzed, even if they are coming from a trusted source. To do this effectively, they need a solution that can remove risks from email, web and endpoints, yet still allows the transfer of information to occur.

Adaptive DLP allows the flow of information to continue while removing threats, protecting critical data, and ensuring compliance. It doesn’t become a barrier to business or impose a heavy management burden. This is important because traditional DLP ‘stop and block’ approaches have often resulted in too many delays to legitimate business communications and high management overheads associated with false positives.

Cyber criminal attacks set to rise

Many of the recent well publicized attacks have been nation state orchestrated. Going forward this is going to turn into criminal syndicate attacks. Cybercriminals already have the ransomware capabilities and now all they need to do is tie this up with targeting the supply chain.  Therefore, making sure you have the right technologies, policies and training programs in place should be a top priority for organizations in 2021. If you are interested in finding out more about protecting your supply chain, why not download our eGuide: Managing Cybersecurity Risk in the Supply Chain.”

According to Accenture, 94% of Fortune 1000 companies experienced supply chain disruption owing to the pandemic…

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Last year, the COVID-19 pandemic changed the future of supply chains indefinitely. When compared to overall business impact, most senior leaders said their supply chain was more susceptible to disruption from COVID-19 than their workforce, systems, or operations. According to Accenture, 94% of Fortune 1000 companies experienced supply chain disruption owing to the pandemic. Amidst the ongoing impact of COVID-19, as countries move in and out of lockdowns and vaccines are rolled out, this will continue to be felt worldwide throughout 2021 and beyond as organisations look to recover from the disruption to their supply chains.

Written by Mark Perera, CEO, Vizibl

Transforming supply chain models – for good

However, the unprecedented nature of COVID-19 has forced companies, and industries, to rethink and transform their supply chain models – for good. Many are now looking at how they can move away from linear supply chains to a more holistic, robust and sustainable supplier ecosystem.

It is interesting because since humans began making and distributing products to one another, the structure of the supply chain has remained predominantly untouched. Raw materials flow in, they are changed into a product and distributed and used until finally they are thrown away. This linear – take, make, throw away – supply chain has been sufficient to keep economies churning for decades, but now organisations are seeking out more robust, more profitable, more sustainable, circular supply chain ecosystems.

Adopting a circular approach 

The circular supply chain is a model that encourages manufacturers and sellers of products to take discarded materials and remake them for resale. To remain competitive and relevant linear supply chain entities must be willing to transition to a circular supply chain, which includes the entire reverse logistics process, in order to continue to grow and become sustainable in a future without an unlimited supply of resources.

The demand for some organisations to move to a circular supply chain is driven by government and limitations on what products can go to waste and what must be reclaimed. That said, consumers stand out as the key driving force towards greener and more ethical, sustainable approaches.

Additionally, COVID-19 has exposed the fragility of long-distance, international supply chains. Building-in a level of resilience will see organisations seeking to work with a much wider range of suppliers – building out that ecosystem – from global corporations to smaller, regional start-ups to ensure business continuity, diversity and circularity in the supply chain. 

Building a purpose-led ecosystem

The step-change that organisations must undertake to deliver against these sustainable and circular demands is now all about building purpose-led ecosystems. This means that organisations need to move beyond looking at their supply chain in a linear way, to actively collaborating with suppliers on initiatives to improve environmental, social and economic performance. They need to move towards a purpose-led procurement approach that includes a circular supply chain, and we will see adoption accelerate in 2021.

But what do we mean by a circular supply chain?

This is based on the principles of the circular economy, which is about designing waste out, circulating materials and resources and regenerating natural systems. The underlying premise behind the circular economy is that businesses will be more sustainable, more profitable and as a result add trillions to the global economy by 2030. The idea is that they are no longer reliant on the limited natural resources they required for growth. For businesses adopting a circular economy approach to be successful, their supply chains must also support these principles. According to Deborah Dull, who leads digital product management at GE Digital for Operations Performance Management, Supply Chain, Digital Kaizen, and Circular Economy: “Ultimately the circular economy is about inventory and extending its life, reusing it, repurposing it or eliminating the need for it altogether. Supply chain is responsible for inventory, and a global, circular economy requires supply chain innovation beyond its current scope which is very linear.”

How being lean helps

Deborah advocates that organisations should move to a lean supply chain approach because this moves inventory and decisions closer to the customer. This is important because proximity reduces the time between inventory decisions and actual customer need and because more inventory is typically required to buffer against uncertainty. Decreasing the time decreases the uncertainty, which decreases the need for an oversupply of inventory. Additionally, technology and data are key. Therefore, having a supply chain collaboration and innovation technology platform in place is important to facilitate collaboration in the supply chain, build in resilience and to give that all-important visibility into demand, supply, capacity and data. 

In particular, data about inventory helps organisations make the best use of their existing inventory and reuse items as many times as possible. If the organisation cannot see their inventory, or if they lack the ability to easily move it around, they often end up duplicating inventory in different locations and buying an oversupply to prevent shortages.

Resilience and responsibility – watchwords for 2021

Going forward, it is entirely feasible that similar worldwide events to COVID-19 will cause major problems for organisations getting goods and products through traditional supply chain models, that are deemed too linear and don’t take a flexible, collaborative, diverse and a circular approach. Likewise, as government regulation and legislation increase, organisations will be forced to think about circular supply chains and more ethical approaches to how they dispose of raw and waste materials. 

Therefore, repurposed supply chains of the future must have resilience and responsibility at their heart. Likewise, organisations must not only accelerate their agility, but also value chain transformation to help outmanoeuvre the ongoing uncertainty we face in 2021 and beyond. 

Lack of digitalisation preventing UK businesses from identifying new sources of revenue and opportunities to collaborate and innovate

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Research from Ivalua, a leading provider of global spend management cloud solutions, has found that almost half (46%) of UK businesses are frustrated by a lack of procurement process digitalisation. According to the study, 43% of respondents believe that the rate of digitalisation within procurement is low, while a third (33%) claim that procurement digitalisation is stagnant and hasn’t progressed in the last 12 months.

The research, conducted by Vanson Bourne on behalf of Ivalua, surveyed 200 UK-based procurement, supply chain and finance professionals to examine digitalisation in procurement. Eight-in-ten (81%) UK businesses say a lack of digitalisation is preventing them from collaborating with suppliers and internal stakeholders, while 83% believe it is preventing them from innovating and executing on new revenue streams and opportunities. Additionally, two-thirds (67%) of UK businesses say a lack of digitalisation reduces their ability to gain insights into spend and suppliers.

“As organizations look to restore growth post Covid-19 and ensure resilience for the next crisis, procurement can play a major role, helping identify opportunities to innovate and new sources of revenue. Procurement digitalisation is essential to enable unique business processes and improve collaboration with suppliers and internal stakeholder,” commented Alex Saric, smart procurement expert at Ivalua. “However, the current state of transformation in procurement is underwhelming. The risk in the future is that many businesses will be outstripped by more digitally-savvy rivals and find themselves at a significant competitive disadvantage. Over the coming years, UK businesses need to move quickly to digitally transform procurement and ensure they are not left behind.”

Digitalising processes still has a long way to go

While businesses recognise the need to digitally transform, the report found that on average, UK businesses have digitalised less than half (43%) of their procurement processes. The most digitalised tasks were transactional processes such as invoicing (55%), purchasing (42%) and budget management (33%). 

UK businesses have also failed to digitalise strategic processes such as spend analysis (32%) and risk management (26%). Identifying and bringing on new suppliers is also critical for businesses looking to identify new opportunities to collaborate and innovate, but worryingly, most businesses have not digitalised supplier onboarding (89%) or sourcing (84%) processes. When it comes to digitalising procurement and these processes, UK businesses face a number of challenges, with the most common obstacles to digital transformation being their suppliers (29%), their technology (20%) and their processes (18%). 

“Procurement has become a much more strategic part of every business, but a lack of digitalisation is preventing many teams from realising the potential value of their spend and suppliers. UK businesses need to take a smarter approach to procurement and move away from managing processes over email, phone, or paper, to instead capture everything digitally. This will help businesses identify opportunities to innovate, collaborate and grow revenues, giving them the chance to build better products and services that will differentiate them from the competition. Digitalising procurement creates an all-encompassing view for businesses, helping to create a competitive advantage that will see them soar past digital laggard competitors,” concludes Saric.

To download the full report, “Gaining the advantage in challenging times – why businesses need to digitally transform procurement now more than ever”, please visit: https://info.ivalua.com/uk/report-competitive-advantage

Leading U.K. retailer selects Blue Yonder’s end-to-end Luminate platform to power its supply chain strategy

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Blue Yonder Tech, today announced that Sainsbury’s, one of the United Kingdom’s leading multi brand, multi-channel retailers across food, clothing, general merchandise and financial services, has selected its end-to-end supply chain platform as the foundation of its supply chain transformation.

Sainsbury’s will deploy Blue Yonder to power its end-to-end supply chain strategy, on a single artificial intelligence (AI)-powered platform. To support the business’s future supply chain program, Sainsbury’s will benefit from extending its current Blue Yonder solutions footprint, with powerful new capabilities. These current and new capabilities will now span AI-powered demand forecasting and replenishment, digital control tower, space management, macro space planning, range management, warehouse management, labor management and yard management.

Sainsbury’s is a leading multi brand, multi-channel retailer based in the U.K., operating more than 2,000 stores across its Sainsbury’s, Argos and Habitat brands. Sainsbury’s also operates a number of wholesale partnerships globally.

By partnering with the in-house engineering expertise of Sainsbury’s Tech, together the two businesses will create an autonomous self-learning supply chain platform with advanced machine learning capabilities. This step forward will enable Sainsbury’s colleagues to spend more time on the store floor and serving customers. Sainsbury’s chose Blue Yonder for its leading machine learning (ML) capabilities and SaaS-based solutions that uniquely power an end-to-end supply chain experience.

“We relentlessly seek to improve the way we serve the needs of our customers. Having a predictive, autonomous and adaptive supply chain powered by world class technology products and Sainsbury’s Tech engineering means we can show up for our customers whenever and however they shop with us,” said John Elliott, chief technology officer – Retail at Sainsbury’s. “Blue Yonder provided a strong balance of advanced capabilities, ML experience and a culture and value set closely aligned to our own, including a commitment to sustainability.”

By implementing Blue Yonder’s solutions, Sainsbury’s will further enhance its ability to monitor and respond to ever-changing customer needs, predicting and preventing potential supply chain disruptions. Blue Yonder’s Luminate platform includes ML-based forecasting and ordering solutions that help stores better manage fresh and perishable products. It also includes Blue Yonder’s crisis control center – Luminate Control Tower – which provides complete supply chain visibility, orchestration, and collaboration across the end-to-end supply chain and prescribing more automated, profitable business decisions.

“We are thrilled to expand upon our long-standing partnership with Sainsbury’s by offering iconic, game-changing, and customer-centric solutions that meet consumers’ daily and ever-changing needs, particularly in the critical environment in which we are all living today,” said Mark Morgan, executive vice president and chief revenue officer, Blue Yonder. “We know how important Sainsbury’s supply chain is to the company’s rich history of success and the loyalty of its customers. Our innovative AI and ML capabilities have a proven track record of real results, and our end-to-end platform is unmatched in the market. Our goal is to make AI and ML become key enablers of Sainsbury’s future digital transformation as the company expands its remarkable, trusted, multi brand, multi channel business.”

Additional Resources:

By Axel Schmidt With increasing regulation across all industries, from data privacy legislation to technical specifications and product certification requirements,…

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By Axel Schmidt

With increasing regulation across all industries, from data privacy legislation to technical specifications and product certification requirements, consistent traceability within often large and complex supply chains has never been more important for businesses to achieve. This is not only for compliance reasons, but also to ensure accurate forecasting so companies can deliver on promises made to customers. 

Traceability ensures a stringent flow of data so that suppliers and manufacturers can provide detailed information about what happened to a product, by whom and at what time. This is essential for industries such as the automotive industry, that may have to recall a model due to a defect, or in the food industry where traceability is vital to ensure food safety standards are upheld. But as industries move towards longer and more fragmented supply chains, how can businesses keep up with increasing demand for faster product turnaround combined with a growing need for traceability? Axel Schmidt, Senior Communications Manager, ProGlove, explains how wearable technology such as barcode scanners can help to streamline supply chain processes and keep quality at optimum levels – not only addressing the need for traceability, but also transforming worker efficiency levels. 

Increasing complexity

With new legislation coming into effect, along with consumer demands for a wider range of products, manufacturers will be required to handle and process an increasing number of parts and components for assembly. This can present increasing challenges for businesses, especially those that operate with complex product variants and short product life cycles which can block the possibility of a fully automated facility.  

In addition, the rapid growth of e-commerce business models may have simplified the retail world for consumers, but in turn has increased the volume of work for vendors – by as much as five times according to research. As businesses move closer towards Just-in-Time supply chains, the focus and pressure is firmly placed on logistics operations to deliver efficiency within the supply chain. Moreover, the number of shipping formats available creates an added roadblock to automation and the surge in demand for rapid fulfilment that comes hand in hand with peak periods only adds further complexity.

Consequently, there is an increasing need for organisations to seamlessly document what they do and how they do it to meet compliance requirements. But this must not be at the cost of adding any additional time to the already tight schedules organisations need to adhere to in order to remain efficient and competitive.  

Augmenting the workforce

In order to meet compliance needs and unlock crucial efficiencies that can help businesses to meet fluctuations in increased demand, organisations need to be able to access and capitalise on real time data. Research from IDC predicts that more than a quarter of data created will be real-time in nature by 2025, and this is where barcode scanning plays a fundamental role. 

The concept of barcode scanning within the supply chain has been around for some time, enabling companies to increase visibility by tracking items along the product journey from manufacturer to the end point. Yet, the use of a conventional pistol scanner is fraught with challenges, such as the significant time lost for each worker due to the repetitive nature of picking up, using and holstering the scanner for each individual item. 

Given the format of the traditional pistol scanner, the devices are also liable to breakages as they are easily dropped to the floor. And as the devices are not ruggedised, replacements are regularly required. This unreliability can be frustrating for workers as well as the organisation, as workers cannot operate with optimum efficiency. 

Another drawback of the pistol scanner is that it can be easily lost by workers. This could be around the warehouse or factory but it’s also possible that a worker may leave the scanner inside one of the boxes that they are packing. This is an unexpected surprise for the customer, to say the least, but results in economic losses for the company and further replacement scanners required. 

Instead, wearable technology with in-built scan functionality can deliver a number of benefits to address these challenges. Minimising unnecessary and tiring repetitive actions and improving accuracy significantly increases the volume of work undertaken by each worker. With adjustable feedback options, such as acoustic signals, vibration and LEDs on the back of the hand, a worker receives immediate confirmation of correct product selection. This feedback not only minimises delays and errors, improving productivity, but also avoids worker frustration. 

Display screens can also be connected to wearable terminals to provide workers with additional information, such as the location of the next pick. Unnecessary activity is removed as every movement is directly related to the task at hand. Through this augmentation of the workforce, efficiency can be rapidly transformed. 

Conclusion

Legislation, technical evolution and customer demand create an urgent necessity for accurate and efficient barcode scanning to deliver traceability and efficiencies within the supply chain. Organisations must therefore consider the need to implement solutions that streamline these processes whilst keeping quality at optimum levels. 

Supply chains will continue to get longer and more complex, and many retailers face the challenge of fulfilling their promises to their customers. In addition, fragmentation of supply chains is also on the rise, with a number of suppliers and components relied upon to work in harmony to make the entire supply chain function. Wearable technology can be a critical link to deliver productivity and efficiency and allow organisations to quickly adapt to fluctuations in demand, giving them a much needed competitive edge.

Ivalua, a global leader in spend management, today announced the release of an enhanced third-party risk module, called Risk Center,…

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Ivalua, a global leader in spend management, today announced the release of an enhanced third-party risk module, called Risk Center, available as part of its latest product release. The latest innovations extend the existing strength of Ivalua’s Supplier Management solution, which had already been recognised as a Leader by Forrester Research Inc. in the most recent The Forrester Wave™: Supplier Risk And Performance Management (SRPM) Platforms, Q1 2018.

Ivalua’s Risk Center offers customers a holistic solution to actively monitor and mitigate third-party risk and compliance. Customers are able to consolidate real-time information spanning supplier performance evaluations, transactional data, spend data, contractual information and external risk information from major third-party data providers.  This combined picture is visible in actionable dashboards to provide a comprehensive and timely picture of risk and the potential impact on the business.

“Organisations are increasingly dependent on their suppliers, who can be sources of tremendous value but also increased risk,” said Pascal Bensoussan, Ivalua Chief Product Officer at Ivalua. “Ivalua’s Risk Center brings actionable data and insights from across the supplier lifecycle together with complimentary external data so our customers can effectively manage supplier risk. When combined with the extensive supplier collaboration capabilities embedded in Ivalua’s platform, our customers can unlock the full potential of their supply chains.”

Risk Center’s ability to integrate with third party data providers in real time allows it to meet the unique needs associated with various regulatory environments, industries, and customer compliance models, in an automated fashion. For example, Risk Center can aggregate data on supplier financial health, sustainability, adverse media, sanctions lists, supply chain disruptions and more. Ivalua maintains an open and rapidly expanding ecosystem, including new and updated out of the box integrations with leading providers such as:  EcoVadis – A long-time partner of Ivalua and leading provider of sustainability risk and performance ratings for global supply chains. Backed by a powerful technology platform, the industry’s most-trusted methodology and a global team of domain experts, EcoVadis sustainability scorecards provide insight and engagement tools to mitigate risk, drive improvements and create value across 198 purchasing categories globally.

EcoVadis – A long-time partner of Ivalua and leading provider of sustainability risk and performance ratings for global supply chains. Backed by a powerful technology platform, the industry’s most-trusted methodology and a global team of domain experts, EcoVadis sustainability scorecards provide insight and engagement tools to mitigate risk, drive improvements and create value across 198 purchasing categories globally.

“The global supply chain is a breeding ground for hidden sustainability and CSR risks. Our  partnership with Ivalua enables procurement to see where they are exposed and the steps they need to take to reduce their risk,” said Pierre-Francois Thaler, Co-CEO of EcoVadis. “The integration of EcoVadis Sustainability Ratings with Ivalua Risk Center brings our mutual customers a powerful combination of insights to optimise procurement decisions, improve supply chain performance and create value.”

  • riskmethods – A leader in supply chain risk management, riskmethods empowers businesses to identify, assess and mitigate supply chain risk. By using artificial intelligence, riskmethods helps customers automate and accelerate threat detection, enabling them to gain competitive advantage with a well-managed approach to meeting customer demands, protecting reputation and reducing total cost of risk.

“The integration of holistic supplier risk information within the Ivalua platform is a great opportunity for Ivalua customers,” says Heiko Schwarz, founder and managing director of riskmethods. “With riskmethods available via the Ivalua Risk Center, customers will be able to get a complete view of all types of risk, giving them the tools, they need to avoid the cost of disruptions and respond faster to risk events than their competition.”

  • Global Risk Management Solutions (GRMS) – In an upcoming release, GRMS, a recognised leader providing innovative supplier risk management solutions, will also be available. GRMS combines highly configurable software, premium data streams, and continuous human interventions to reduce exposure to global risk and liability.  GRMS delivers risk-management-as-an-integrated-service on fully private networks and serves clientele covering suppliers across more than 120 countries. 

Part four of a six-part supply chain masterclass with Frank Vorrath, Executive Partner of supply chain at Gartner. Frank explains…

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Part four of a six-part supply chain masterclass with Frank Vorrath, Executive Partner of supply chain at Gartner. Frank explains how to build a supply chain excellence operating system, enabled by a centre of excellence.

Prefer this in an audio format? Listen to the Digital Insight podcast!

Frank Vorrath, Executive Partner of Supply Chain at Gartner
Frank Vorrath, Executive Partner of Supply Chain at Gartner

One of the key things identified within your concept of a supply chain excellence operating system is two-directional thinking, where you’ve got people working in the business and people working on the business – could you elaborate on that, please?

Transformations are really driven by future growth ambitions of those organisations, or if they are looking and expanding into new areas and new business models. Lots of things are changing very fast and exponentially. If you look at that, that sets limitations for organisations to actually do the same things as they did in the past. From a structural point of view, your current capabilities won’t allow you to compete in the future. You have to think about how you are going to approach that.

There’s also a limitation in terms of resources. The concept of perform and transform is simple to understand, which means you still have to focus on your core business and create results and good performance, while at the same time transforming. The concept is almost like running a sprint and a marathon at the same time. If you think about what you can do with the same setup and structure you have without investing, and potentially a different set of excellences, then it’s probably stretching your current resources to a limit.

If you think about the transform activity you have to do as an organisation, you think more about what you need to do to be successful in the future. If you think about the sprints, you still have to focus on your core business and on day-to-day good performance, and you also need to think about what enables you to perform day to day, running these sprints, making sure you keep and stay focused on delivering performance end results to your business and to your customers as well meeting their objectives and needs, but also transforming the organisation at the same time and building the new muscles you need in the future related to the capabilities.

What sort of challenge does this balancing act, between the two areas, present?

If you do that with your current resources you have available in your business you may find yourself in a position that is too much a stretch for your resources: to be able to deliver on your expectations. Somewhere, you need to balance it. The question is can you balance that with your existing resources and the existing structure you have, or perhaps you have to set up a different structure – where you have people working in the business and people working on the transformation. Both are equally important to you as a business because one is really keeping the lights on and delivering the performance you need today, which is finding the capabilities you have to build for the future. That needs to be balanced. Is it easy? Probably not. But is it required? Absolutely.

Where does change management come into the equation?

With change management and transformations, it’s really shifting the mindset and the behaviour and actions towards generating more an improved and sustainable business performance and results. It’s about having clarity of the destination, and a clear understanding of why are you doing this, and what you want and need in order to transform.

The next important part of change management is role modelling. Your leadership plays such an important role here in championing the transformation with clear and defined specific communication and milestones. Taking people along with you on this journey and having an understanding of ‘walk the talk’, and being visible and aligned on a leadership level creates the pull in an organisation.

There’s also organisational capabilities, the resources I need, the financial commitment that an organisation has to make to transform, because it can be dependent on the maturity of that organisation. Sometimes you have to be able to invest first to generate the benefits later on. You have to be able to have governance in that model, which is strictly focused on priorities for the business as an outcome and is steering the organisation through that transformation. The culture and the mindset of the people, the knowledge and skills have to be in place, and it has to be somewhere measured and sustained.

Also, you have to be able to reinforce. How do you align your goals and objectives and your incentives structures on the two important activities, perform and transform, in a balanced way? Not just incentivising generating results today, but also incentivising transforming the organisation to be able to compete in the future. It’s not just continuous improvement. It’s building an operating system, considering what drives change, creating push and pull in an organisation, and really with the mindset of the future to improve, as well as building muscle, creating sustainable business performance and end results, and meeting the never-ending customer expectations in future.

How does a role model approach help overcome the challenges in change?

It has to start at the top of an organisation, which means you have to be very clear, very concise and compelling. People need to understand why you are doing this, and be very clear about the outcome, when you want to do certain things, and what it’s actually going to do for the organisation. Take people along the journey and bring them in a way in that they have a stake in the game, so they are able to participate and provide their input into the transformation. That’s really important when you start your change management and transformation.

You also have to somewhere create an excitement factor for your people to believe that the future you’re going to create for them is a future where they want to be part of, where they want to be proud of, so they are excited to actually take you as an organization forward into that future.

How do you bring the customer into the conversation?

It’s key to incorporate customers into it. Don’t be shy in asking your customer how can you serve them better. How can you create more a collaborative joint partnership together? It’s no longer about vendor and supply and customer relationship, it’s about a partnership on a more strategic level. As a business, if you’re able to figure that out and bring your key customers in, listen to them and make them part of it, or even make them a joint development in terms of building an operating system, even better. You may want to consider joint investments into building the capabilities you need in future, especially in areas when it comes to looking into talent related to emerging technologies, data, data scientists, etc.

You really have a scarcity and you have to build and think about how you want to build these kinds of talents in your organisation from a different perspective and different ways. You may want to do this jointly together with your customers, because they probably have the same needs like you have in their own business, and the same kind of limitation and challenges to find the right talents. Instead of just doing it on your own and being completely internally focused, combine the inside out with the outside in. The key in that is your customer or your customers.

How important is it to develop an end to end supply chain IT strategy and technology roadmap so that the technology and the procurement transformation are aligned?

You have to have an end-to-end view of your technology. Technology can’t be seen in isolation with what you are trying to accomplish with the strategic objectives of your business related to the value proposition you have. Technology and digitalisation, you can be taken from two angles and that’s what I’m seeing currently happening in the marketplace. On the one side, you see companies focusing and creating new business models through digitalisation related to their products and services, selling outcomes and solutions instead of selling products and devices.

On the other side, you see a lot of activity in terms of digitalisation in the supply chain. These two things are connected, but we also know that 70% of the initiatives currently in the marketplace are disconnected. Technology is creating new business models, using data to access and provide insights to your business for better and informed decision making. Data could also mean monetising that data and creating new business models. Technology, from your business process optimisation point of view, can create a new level of maturity in terms of efficiency.

That’s where a lot of companies are focusing on and deploying new technologies because they want to figure out if there are business benefits they can introduce to the business and to harness new capabilities and with automated processes that reduce time, errors, cost, and also increase the efficiencies they have in their business. To be able to do that, you need to have a blueprint and an understanding of where you are at currently with your technology landscape and your applications, and also where you want to grow in the future.

What is the overall journey of this centre of excellence system, where it starts with developing infrastructure, building supply chain excellence capabilities, and then reaching a stage where that supply chain excellence is woven within the organisation’s DNA?

The ideas of transform and perform, and the resource constraints that organisations are having by using the same resources has been recognised in the market widely and you have seen over the last couple of years more and more organisations actually building a centre of excellence. With a centre of excellence, you have to consider that there are different centres of excellence. Now you have to have a functional centre of excellence where you just focus on building the maturity in certain areas of your supply chain.

You could also have a logistics centre of excellence. You could have other centres of excellence, like a manufacturing centre of excellence. The goal is to design your centre of excellence and be aligned with the main activity across your whole value chain, which means if you are a manufacturing organisation and a supply chain organisation or procurement, you would organise your centre of excellence in a way that would incorporate the strategy element into that. There are different ways of structuring a supply chain centre of excellence.

My recommendation, if a business can afford it, would be to focus on end to end, rather than just functional, because if you just focus on functional excellence, again, your integration and collaboration across the different functions might be a bit of a challenge.

Is excellence an ever-moving target?

You always have to work on that. You’re never done.  If you really think about your plan of a transformation, does it stop after three years? No, it’s not going to stop.

What you’re hoping for when you had enough momentum, excitement and generated the results, is the building of a culture and a DNA. That is probably the longest part of a transformation which is never-ending, because if you think about it from a leadership point of view, when you build it with your team and operating system, you want to build something which is sustainable and not dependent on you as a leader or your team. It should be there, even if you move on. It should be part of the culture so that people and generations after can still build from what was built, to make it better.

Read August’s issue of CPOstrategy!

By Kevin Davies Listen to the podcast here! In your career you’ve identified some serious unlocked strategic potential in the…

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By Kevin Davies

Listen to the podcast here!

In your career you’ve identified some serious unlocked strategic potential in the supply chain, what first alerted you to this?

I have been working for some time with Dr Bram Desmet and he wrote for me, one of the most profound and excellent business and supply chain strategy books called “Supply Chain Strategy and Financial Metrics”. Now, while I was actually in contact with him, I had the privilege to contribute to the book with the forward, and also with a business case study on my previous work with a company called Johnson Controls.

That encouraged me to look into the concept of everything involved in business transformation and supply chain and the idea of taking a more strategic approach to it. Leading up to Bram and myself, working on a concept called “Strategy Driven Supply Chain” and also the “Strategy Driven Value Planning and Execution” model.

In your white paper, The Concept of the Strategy Driven Supply Chain,  you explore the current trend of businesses putting their supply chain front and forward It highlights some of the issues that companies are going through…

There’s an enormous amount of change. We know that probably 63% conform, but their CEOs are going through a business model change over the next couple of years. Now, what we are also highlighting is that lots of companies are overly focusing on gross and margin improvement, and have a somewhat  lack in focus on shareholder value. That’s measured in a metrics called Return on Capital Employed (ROCE). Another problem is that companies don’t have enough understanding of the true complexity of their supply chain and how to balance service costs, and capital employed within what Bram calls the ‘supply chain triangle’.

Having a better understanding would lead to sharper strategies and stronger execution. This would lead to more sustainable performance and results. So it’s really that sustainable performance and results aspect which comes through, and we believe that it looks like a perfect storm. Supply chain is at the front of it. A supply chain that is seen from an entity point of view, and not just a functional point of view, is really important to companies. Companies have different supply chains and each of the supply chains needs to be strategy driven. Then, different strategies lead to different supply chains with different targets and different trade-off, for service cost and capital employed. There’s also a belief that supply chain strategy is simply following a business strategy or from the business strategy. We do believe that, but it is not a sequential process and the value proposition, and the supply chain are the ying and the yang of the business strategy. Only together can they define how business generates shareholder value and is measured by ROCE.

So, it’s about looking into supply chain from the perspective of driving value for customers, and for the business. Supply chain delivers on the promise that businesses are making through their value proposition.

Does this represent an evolution from the traditional operational back-end supply chain function?

Absolutely! It’s an evolution defined by asking the question as to what supply chain management actually is. We believe that supply chain management is more about balancing the supply chain triangle of service cost and cash. It is also about facilitating the internal debate between sales operations and finance. It somehow takes on the role of balancing these kind of trade off decisions.

Now that also proves that the supply chain is coming from the back room into the front room. It is becoming an equal partner around the C-suite, hence we are also talking about putting the supply chain or Chief Supply Chain Officers (CSCOs) into a more strategic role. That would require people operating on that level with more financial and strategic skills instead of in the past, having just operational skills. They will be measured on their operational skills and their execution.


Are you seeing examples of that in action now?

Companies are now taking a more strategic approach. We also see companies promoting people who have lead the supply chain become the Chief Executive Officer. You’ve seen other companies in the US like Apple. Tim Cook, who had been leading the supply chain for Apple for many years under Steve Jobs, is now the one leading the organisation. Now that’s a very good example when you look into how supply chain becomes a more competitive advantage for an organisation that has and understands the importance of having a great supply chain. It also shows how important it is to have somebody leading the organisation that he has an operational, financial and strategic skillset. The future skills requirements of the CSCOs in many companies will follow this path.


Would this require quite a substantial cultural shift? How important is change management to an evolution of this kind?

Yeah, absolutely. We say that it takes a bit of a leap in terms of maturity of organisations, and also changing and shifting the paradigms from where they are today to where they need to be in the future. Now that requires a value creation and that is why we actually started to work on the concept of the strategy driven supply chain. Even knowing that this is maybe five to ten years out. But starting the debate and starting the value creation really helps to facilitate and move the needle up. It’s enabling organisations to have  a more serious look into their strategic supply chain and what it means to them as well as what it means to the overall strategy employment process in the organisation.

Some organisations took the approach of being driven by gross initiatives, without truly understanding the strategy behind them or the value proposition and even the complexity of the business. How do they want to differentiate themselves in the marketplace and what does it mean in terms of the service they have to deliver, the corresponding cost as well as the capital employed in their environment? We are looking at how we can help organisations by highlighting the problem or the potential issue. More importantly, it’s about finding a solution and an approach, and taking a different more strategic approach in future. We’re highlighting how the supply chain triangle can be balanced differently by promoting the CSCO into a more strategic role.

Would that result in the CSCO reporting on a peer-to-peer basis to a CEO?

It’s an equal partner in the business, and with the same level of importance  as the C-suite, (CFOs, CEOs etc.) The CSCO becomes the ring man. They will help the CEO, and the entire leadership of the company, including board of directors, make more informed decisions, or as I would call it ‘deliberate choices’.


So the key to this is that the supply chain function has a wealth of data and knowledge and insight readily available to use?

It’s also about the reality of balancing the triangle. When you think about a supply chain, and the mission of a supply chain, it’s often about delivering the right product at the right time, at the lowest cost, at the lowest inventory. There is conflict in the triangle all the time. It’s about a service you want to give to your customers. When you talk about service, it’s not only how you move your products and deliver them but it’s also the complexity of the product. It’s about the order flexibility you want in order to give you the product portfolio as such, but also having an understanding of what it means in terms of cost you’re going to have in the organisation and the capital employed.

When we talk about the capital employed, it’s really about two elements: a working capital (the decision you have to make to strategically keep a certain inventory level in your organisation) or it’s how you deploy your assets in a fixed asset structure. How this applies to the conflicts and the triangle and the critical stakeholders in your business. The VPO of sales, as an example,  what does he really care about? It’s probably the sales top line and market share. The COO or Head of Production? The primary concern is probably efficiency, as efficiency drives cost. But if you think about the VPO sourcing of purchasing, it’s the spend and how the company can buy more volume at a lower cost. That’s conflict. 

So the question then becomes;  who is best positioned in a company to balance that? Decisions and people being driven differently in terms of service cost and cash and the best positioned person to do that would be the CSCO. Now that’s the best thing for organisations to understand and if they do so, it can really set them up for a very successful future or operating on a new competitive level.

Do you envision a situation where a CSCO could evolve and transition
into a successful CEO?

Yeah, absolutely. That’s a prediction Dr Bram Desmet and myself are making and we believe you will see it happening more and more in the future, and in organisations where successful CSCOs who have those operational skills, financial skills and strategic skills are the best people for taking the job at the top of the house.

If a supply chain function is evolving in this way it would have to shed some of its traditional operations, is it true to say that some of this could be liberated through technology?

Yes you are right. You see the merge between the physical worlds and the digitalisation of the digital world, and enabling technologies. Companies are not only selling products and services, they sell solutions and outcomes. That is a new complexity that organisations are dealing with that requires certain changes and like I said before, be crystal clear about the value proposition you’re going to have or want to have as a business, and what it means in terms of the corresponding supply chain, and now your supply chain or different supply chains are delivering on the promise you made. The question is now about how you deploy your resources in your organisation more efficiently and effectively. That’s what we are talking about.

Do you think this would affect, going forward, the training of supply chain officers?

I believe it goes deeper than that. I believe if affects structures, it affects roles and it affects your whole recruiting process in terms of the discourse you would need as an organisation. It would also impact talent development.  Going back to the example of the CSCO, in the past he has probably been promoted based on his ability to bring in results based on how the organisation performs. Now in the future I think it would be more about the balance between how he is actually contributing to the overall results of that organisation based on a strong operational performance. It’s also about financial results of an organisation being top line, bottom line and results or returns and what kind of strategic skills he has in terms of taking the organisation forward.

So that’s what we are talking about and that requires a new skillset and new talents in the organisation. There will need to be new training which needs to be provided and opportunities for people to move into these kind of roles.


What would you say are some of the obstacles to the evolution of this role?

Probably mindset and the culture of an organisations where they have traditionally rewarded their people differently in the past. They need to overcome that and look at what that change means for them. They need to be ready with their maturity and company culture to move and shift the paradigm to a more strategy-driven supply chain and value planning and execution model. So culture probably is the key obstacle in the evolution of the role.

In your vast knowledge, do you see any industry sectors where it’s accelerating more than it is in others?

Well that’s a very good question. I would say, from my own perspective it is that you see some of industries a little bit ahead.  Technology companies for example would be ahead in terms of looking at that from more of a strategic point of view. Overall I would say that more and more companies are at the starting point of truly understanding that change needs to happen.

Digital transformation is making it easier for procurement organisations to “do more with less,” according to newly-released Procurement Key Issues research from  The Hackett…

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Digital transformation is making it easier for procurement organisations to “do more with less,” according to newly-released Procurement Key Issues research from  The Hackett Group, Inc. (NASDAQ: HCKT). But there is still significant need for procurement to address its critical development priorities for 2019, including: improving analytical capabilities, aligning skills and talent with business needs, leveraging supplier relationships, enhancing agility, and achieving true customer-centricity.

Digital transformation is beginning to have a significant impact on procurement organisations, The Hackett Group’s research found, with 30-40 percent saying it has had a high impact in achieving enterprise objectives, enhancing performance, optimising the service delivery model, and addressing roles, skills profiles, and needs. Over the next two to three years, procurement organisations expect the impact of digital transformation to dramatically increase, with key areas like robotic process automation and advanced analytics seeing particularly high adoption growth rates (2.3x and 60 percent, respectively). Broad adoption of e-procurement technologies is also expected to grow by nearly 2x.

Procurement expects its budget to grow at a much slower pace this year than in 2018 (1.3 percent, versus 2.7 percent last year). Procurement staffing shows a similar trend, with 0.9 percent growth expected, versus 2.8 percent in 2018. With revenue growth expected to increase from 5 percent in 2018 to 5.7 percent for 2019, this creates significant productivity and efficiency gaps that procurement organizations must overcome.

A complimentary version of the research is available for download, following registration, at this link:http://go.poweredbyhackett.com/keyissuespro1902sm. Note – The full research piece includes 7 charts containing more than 60 complete metrics.

Procurement has aggressive plans to increase its use of digital tools and procurement-specific technologies over the next two years, the research found. Procurement will invest heavily in cloud-based business applications along with several data management technologies: data visualization (where adoption rates will rise by 24 percent), master data management (57 percent adoption growth), and advanced analytics (60 percent adoption growth). Spend optimization analytics and dashboarding adoption rates are expected to grow by 61 percent. Broad-based adoption of e-procurement technology is expected to grow by nearly 2x.

Use of mobile computing and robotic process automation (RPA) are also expected to rise dramatically, indicating a focus on more efficient, agile processes across the procurement lifecycle. RPA sees the highest adoption growth rate among digital technologies, at 2.3x. While RPA is primarily being used for procure-to-pay processes at present, there are a range of other procurement areas that can benefit from automation of repetitive work, including updating of vendor master files and electronic auction setup.

Procurement-specific technologies are expected to become far more broadly adopted over the next two years, with nearly universal adoption of e-procurement, spend optimization analytics, and supplier relationship management systems, and just slightly lower adoption rates for e-invoicing and contract lifecycle management. This represents a major shift toward customer-centricity, designed to enable organizations to simplify and streamline processes, and improve agility.

The research found that procurement’s 2019 actual transformation focus is poorly aligned with what should be its critical development priorities; i.e. areas identified as of critical importance, but with very limited ability to address. Among those, development of analytical capabilities is a transformation focus for about half of procurement organisations. Modernising application platforms is another top transformation focus, and is a key way to achieve simplification due to the complexity of many legacy environments. Consolidating multiple legacy systems is also a critical step towards to improving data management and analytics.

But of the other critical development areas, less than a third of all procurement organizations have a major initiative in place to improve skills and talent with business needs, and even fewer said they intend to work on agility or focus on improving customer-centricity and supplier relationship management capabilities.

Procurement is also focused on its role enabling the enterprise in 2019, with an array of priorities that include elevating their role as a trusted advisor, continuing to reduce purchase costs, improving stakeholder satisfaction, and enhancing agility.

“Procurement organizations are clearly making investments in digital transformation and are seeing real benefits. The focus on improving analytics for 2019 is particularly encouraging. But the laundry list of critical areas where they have very limited ability to make improvements is very disconcerting,” said The Hackett Group Principal & Global Procurement Advisory Practice Leader Chris Sawchuk. “Despite the fact that procurement knows what it needs to do, it’s simply not fully translating into an effective plan of action. Procurement must become fully dedicated to advancing its capabilities in analytics, customer-centricity, agility and more, while also investing in the right talent to help lead those changes.”

According to The Hackett Group Research Director Laura Gibbons, “Failing to address the five critical development areas poses a significant risk. For example, we see skills & talent as a particularly critical risk factor. Procurement has begun to truly invest in digital transformation, but if it doesn’t have the right people in place, digital tools could end up being misused or wasted. You need the right people, with the right skills in place, to take full advantage of what digital transformation can offer.”

This same issue holds true in several other of these critical development areas,” explained Gibbons. “Agility is critical if procurement is to be able to respond to market changes. Without a focus on customer-centricity, procurement can miss significant opportunities for improving efficiency, simply because they don’t effectively know what the business needs. And without supplier relationship management, opportunities for innovation can be missed.”

Sawchuk explained that the potential impact of digital transformation in procurement is powerful. “Advanced analytics can enable companies to become less reactive and more predictive, more quickly and accurately identifying and avoiding risks. It can drive dashboards where anyone can log in and get real-time data.  Dynamic discounting is another area that can be very challenging for many companies, but can be easily enabled by digital transformation.”

“Smart automation can reduce operating costs, and eliminate transactional work, freeing up staff time for more value-added efforts,” said Sawchuk. “Even if procurement can simply focus on a larger percentage of the spend base, the value is very significant.  And digital tools can streamline and improve the experience of internal customers and suppliers.”

The Hackett Group’s 2019 Procurement Key Issues research, “2019 CPO Agenda: Building Next-Generation Capabilities,” is based on results gathered from about 150 executives in the US and abroad, most at large companies with annual revenue of $1 billion or greater.

Dr. Sandra Bell, Head of Resilience, Sungard Availability Services Organisations are built upon complex and diverse networks of interconnected players;…

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Dr. Sandra Bell, Head of Resilience, Sungard Availability Services

Organisations are built upon complex and diverse networks of interconnected players; no business is an Island. However, the technology that has enabled these players to work together can also make them vulnerable. On one hand the globalisation of information systems has provided the means for organisational growth and economic prosperity through the easy access of highly available information. On the other it has facilitated the democratisation of the cyber threat by making the skills and knowledge to exploit information systems widely available. Likewise, disruption, of any type, at one end of the chain can reverberate throughout the entire network. For example, the so-called ‘NotPetya’ attack originated from a single implementation targeted at Ukraine, but ultimately spread well beyond its borders along supply chains to affect numerous companies globally, causing hundreds of millions of dollars of damages.

But organisations do not have a monopoly on these communication structures and social media has enabled highly public two-way conversations between those at the root of the disruption and those impacted by it, providing a platform for the latter to voice their grievances. Unfortunately for organisations, this can have potentially devastating consequences for their relationships with stakeholders and the reputations on which they are built. Competition is fierce, and these stakeholders can, and will, take action to cut businesses out of their global supply chain if they are considered a risk.

Mitigating supply chain risk

Business Continuity teaches us to minimise our supply chain risk by having multiple suppliers for key products and services. It has also become common practice to try to further reduce risk by arms-length contracting and “incentivising” supplier performance with hefty fines for non-delivery. These are both excellent strategies if all you want to do is “survive” a disruption. However, the modern consumer, who has access to the global marketplace, is no longer satisfied to wait for an organisation to execute a heroic recovery and will vote with their feet at the first sign of trouble.

Organisations therefore need to be able to “thrive” despite uncertainty and disruption. To do this, they need friends.

Best practice for networked operations

There are three key ingredients to being able to thrive. First, businesses need to be adaptive, knowing when to change and optimising operations according to the outside environment. Leadership is also crucial – with leaders instilling in people the will to succeed during challenging times. The third and final area – one which is frequently neglected by organisations – is their network. Forging and maintaining effective relationships with stakeholders, customers and suppliers is a key component not simply to being able to maintain successful operations, but also to maintaining a competitive advantage and achieving profit and growth. This is where an IT can really help. We saw earlier that globalised IT systems facilitated growth and how it has been used against us to create a vulnerability. But if organisations have resilient IT both internally and with their partners, they can also use it to ensure that relationships do not crack under pressure.

Using IT resilience to promote trust agility and collaboration

How can organisations move from arms-length adversarial relationships to one where they are mutually supportive without placing themselves at undue risk? The first thing to do will be assess the value of each relationship. For example, if value is measured simply by the commercial contribution that each person makes, the relationship will only be safe when hard value is being provided.

In contrast, closely coupled networks – where parties help each other out when things go wrong – will be more resilient. Highly collaborative relationships where knowledge and insights are shared mean that people will think twice about dropping you like a stone when things go wrong.

Here are five ways organisations can use IT resilience to create collaborative relationships and boost resilience:

  1. Aim for flexible business relationships – Flexible relationships facilitated by regular information exchanges are mutually beneficial and supportive rather than adversarial. The marker of a resilient organisation is one that is not totally averse to taking risks, and look instead at how the risks of the entire value chain can be best shared among its players
  2. Build strong communications – Shared resilient IT will provide multiple channels through which you can have a constant dialogue with your suppliers, vendors and customers. It will also allow you to talk to them at the earliest stage possible when something goes wrong demonstrating foresight, agility and integrity which will help businesses to avoid grievances being shared on social media
  3. Show commitment to the relationship – Work together to build resilient connections. Businesses that have a vested interest in working on joint future products and services signal to the rest of the network that they are investing for the future rather than just in it for the profit
  4. Ensure that relationships are a strategic issue – IT resilience is often seen as a cost or an insurance for when something goes wrong. However, relationships can be existential. Therefore, if you want the attention of the board make corporate resilience your driver for IT resilience
  5. Practice as a team – When multiple organisations respond together, things get complex. A football team wouldn’t enter into a tournament where the first time the players meet is on the pitch. Organisations should therefore use their IT infrastructure connection to wargame their responses to different scenarios and learn how each other responds before it has to be done for real

Weathering the storm

A simple software glitch somewhere in your supply chain is all it takes for you to experience disruption. While most organisations will invest time and money drawing up contingency plans to get the business back on its feet in as short a time as possible, attention must also be paid to the impact a disruption can have on the networks in which they are embedded. A robust and agile IT infrastructure can not only be used for transactional purposes between customer and supplier but can also be used to ensure that key relationships with other components of the supply chain are nurtured. A truly resilient organisation will invest in building strong relationships “while the sun shines” so they can draw on goodwill when it rains.

As the pressure to create the perfect supply chain continues, it has become apparent that human processing alone won’t be…

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As the pressure to create the perfect supply chain continues, it has become apparent that human processing alone won’t be able to keep up with greater complexities and a high volume of orders. Businesses must ensure their establishing a strong relationship with their suppliers, manufacturers and consumers, and are driving continual improvements.

Supply chains used to be very siloed meaning organisations would have different systems and reports for each supplier. Unfortunately, this approach provided no real visibility of what was happening behind the curtain, or between the siloes, and caused confusion for all involved. As more firms have recognised that suppliers are an extension of their in-house teams and should be treated as such, closer relationships have been forming. Technology has helped this process as it’s enabled improved communication and transparency.

To stay ahead of the competition, having excellent supplier relationships that are supported by the right technology will be key. Over the next decade concerns around sustainability are set to drive consumer behaviour, therefore organisations need to keep a close eye on their supply chain, as well as their internal practices to establish a sustainable platform. Establishing a strong relationship with suppliers will make them more willing to give companies improved levels of visibility, helping to refine their end-to-end supply chain processes. Through providing one central location of information, businesses can ensure cross-functional supply teams are using the most up-to-date information to guarantee that they are only placing businesses with approved suppliers. This strategy enables organisations to plan and manage all of their interactions with the suppliers to mitigate the risk of poor collaborative practice and identify opportunities for growth.

The role of Artificial Intelligence (AI) and Blockchain technology in the supply chain is growing. The introduction of blockchain will provide companies with the ability to fulfil vital parts of a product’s journey; this will give them a competitive edge, as they have the insight needed to deliver an immutable, reliable record. And with the addition of AI, these businesses will also be able to process the large volumes of data available, quickly and intelligently. All these factors will be key to unveiling even more essential information about operational performance, providing the opportunity for organisations to reconsider supply chains both tactically and strategically. The extended insights can also drastically reduce the risk associated with embracing new suppliers, while providing businesses with the details they need to reassure consumers that they’re embracing ethical, valuable practices.

With procurement undergoing nothing short of a revolution right now, the brand-new CPOstrategy will keep you up to speed with…

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With procurement undergoing nothing short of a revolution right now, the brand-new CPOstrategy will keep you up to speed with all the latest insights and stories from the biggest names in this space. Each month, we will cover all aspects of procurement strategy and transformation as well as supply chain digitisation and management. CPOstrategy is from executive, for executive. Read the launch issue now!

Procurement is being transformed by new technologies, but people are the secret to success according to LEO Pharma’s Head of Operational Procurement, Martin Starcke in our cover story this month. Drug developer LEO Pharma is seeking to revolutionise its procurement right now through the deployment of a decentralised system. However, Starcke, believes that the digital transformation of procurement is about a lot more than software or computer services. “It’s fundamentally about people. I think implementing software, implementing the technology is around 10% of your effort,” he says.

We also have an exclusive interview with Frank Vorrath, Executive Partner for the Gartner CSCO and COO Service who talks about the importance of delivering real value to its clients.

Elsewhere, we speak to procurement consultancy Efficio who prompts the question: “Are procurement leaders feeling let down by technology?” We also detail the barriers to smart procurement technology and list the five top reasons why supply chain strategies fail and what to do about it. Plus, lots, lots more.

We hope you enjoy the issue!

The Retail Industry Leaders Association (RILA) awarded first place in the 2019 RTech Supply Chain Innovation Awards to Onfleet, a…

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The Retail Industry Leaders Association (RILA) awarded first place in the 2019 RTech Supply Chain Innovation Awards to Onfleet, a cloud-based software company that helps organisations refine last mile delivery operations. Lisa LaBruno, RILA’s executive vice president of retail operations and innovation said: “This year’s RTech winners not only embody the spirit of innovation propelling the retail industry forward today, but they have developed tangible solutions to some of retail’s biggest supply chain challenges as well.”

Pepperfry, a furniture and home products marketplace, has announced its intention to strengthen its supply chain operations to ensure improved customer reach. The announcement comes alongside the company’s expansion plans as it sets up more than 100 offline stores.

Singapore and US-based startup StaTwig has revealed its plans to streamline the vaccine supply chain using its blockchain-powered solution. The company is working with UNICEF – the company distributes around four billion doses of vaccines globally – and is in talks to continue with its expansion into new markets.

Agriculture retail sellers with a worldwide gross income of more than $US 200 million may be required to disclose employment violations if proposed legislation goes through in Washington. The Senate Bill 5693 is directly targeted at removing slavery, peonage, working to pay back debt and human trafficking.

IBM has announced that its hatches are being battened as the risk of a no-deal Brexit looms every closer. The company is preparing for the loss of the four freedoms of the EU – movement of goods, services and data, labour and capital across borders.

Zebra Technologies has released a report entitled ‘The Future of Fulfilment Vision Study’ that examines the logistics challenges in an omnichannel shopping landscape. The report takes a global look at how manufacturers, retails and logistics firms are meeting the growing needs of the on-demand economy.

Ocado lost its flagship distribution centre in Hampshire in the last week of February in a blaze that lasted for more then two days. It struck a blow for the company as it was the prototype for its robotic plans for the future and the loss from the fire is estimated at around £100 million.

Also in the news: Retailers are asking congress to pass tariff relief legislation; a study by Alix Partners examines the 2019 Global Container Shipping Outlook; and Revolut – the bank plagued by misconduct and toxic working environment claims – is fighting back.