Landry Giardina, Sanofi’s Global Head of Clinical Supply Chain Operations Innovation & Technology talks data-driven performance, resilience, agility and operational excellence within the clinical supply chain area…
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It’s a packed issue this month. Here’s a roll call of just some of this month’s exclusive content…
Landry Giardina, Sanofi’s Global Head of Clinical Supply Chain Operations Innovation & Technology talks data-driven performance, resilience, agility and operational excellence within the clinical supply chain area…
Sanofi has a mission: to chase the miracles of science to improve people’s lives, and sometimes that means starting over with Plan B, Plan C, or even Plan Z. To do so means to work across the most complex disciplines to solve problems, to push the boundaries and not be afraid to take smart risks, and to dedicate everything to making life better for people everywhere. None of that happens without continuous and groundbreaking R&D and clinical trials to prove the medicines and vaccines it creates are safe and efficient for millions of people around the world. Which makes Landry Giardina and his colleagues’ jobs absolutely essential.
Werfen: Procurement and supply chain excellence through teamwork
Don Perigny, Director Supply Chain, at Werfen, a Specialised Diagnostics developer, manufacturer and distributor, reveals how a strong work culture can achieve incredible success during challenging times.
“It takes a village to raise a child,’ purports a famous African saying. It’s certainly a phrase that has struck a note with Don Perigny, Director Supply Chain at Werfen. For Perigny, the ‘village’ is Werfen’s supply-chain and procurement team, although he does extend the sentiment to Werfen’s wider network, including its suppliers and partners, who have kept the former professional sportsman busy at the company for over 21 years.
Werfen is a worldwide leader in the area Specialised Diagnostics for Hemostasis, Acute Care, Transfusion, Autoimmunity and Transplant. The Company also has an OEM division, focused on customised diagnostics. Werfen’s annual revenue exceeds $2bn with a worldwide workforce of 7,000, operating in approx. 35 countries and more than 100 territories through its network of distributors.
We join Perigny at his office in Bedford, Massachusetts. He’s just back from a week at Werfen’s San Diego offices, where he spent some quality time with his extended (work) family. And it’s soon clear that the people, the culture and what Werfen does for the world is crucial to Perigny and the wider workforce at the company.
Plus, we have expert-driven analysis on hot topics such as AI in supply chain, tackling global regulations and how to encourage more women into supply chain and procurement.
This month’s exclusive cover story features a fascinating discussion with Dhaval Desai, Principal Group Engineering Manager at Microsoft, regarding a massive and sustainable supply chain transformation at the tech giant…
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This month’s exclusive cover story features a fascinating discussion with Dhaval Desai, Principal Group Engineering Manager at Microsoft, regarding a massive and sustainable supply chain transformation at the tech giant…
In the past four years, Microsoft has gained more than 80,000 productivity hours and avoided hundreds of millions in costs. Did you miss that? That’s probably because these massive improvements took place behind the scenes as the technology giant moved to turn SC management into a major force driving efficiencies, enabling growth, and bringing the company closer to its sustainability goals.
Expect changes and outcomes to continue as Dhaval Desai continues to apply the learnings from the Devices Supply Chain transformation – think Xbox, Surface, VR and PC accessories and cross-industry experiences and another to the fast-growing Cloud supply chain where demand for Azure is surging. As the Principal Group Software Engineering Manager, Desai is part of the Supply Chain Engineering organisation, the global team of architects, managers, and engineers in the US, Europe, and India tasked with developing a platform and capabilities to power supply chains across Microsoft. It’s an exciting time. Desai’s staff has already quadrupled since he joined Microsoft in 2021, and it’s still growing. Within the company, he’s on the cutting edge of technology innovation testing generative AI solutions. “We are actively learning how to improve it and move forward,” he tells us.
We also have some inspiring and informative content from supply chain leaders and experts at Schneider Electric, Smart Cube, Protokol, Red Helix and Astrocast. Plus, expert predictions for 2024 from leading supply chain leaders, as well as a round-up of the best events this year has to offer!
This month’s cover story features Fiona Adams, Director of Client Value Realization at ProcurementIQ, to hear how the market leader in providing sourcing intelligence is changing the very face of procurement…
And below are just some of this month’s exclusives…
ProcurementIQ: Smart sourcing through people power
We speak to Fiona Adams, Director of Client Value Realization at ProcurementIQ, to hear how the market leader in providing sourcing intelligence is changing the very face of procurement…
The industry leader in emboldening procurement practitioners in making intelligent purchases is ProcurementIQ. ProcurementIQ provides its clients with pricing data, supplier intelligence and contract strategies right at their fingertips. Its users are working smarter and more swiftly with trustworthy market intelligence on more than 1,000 categories globally.
Fiona Adams joined ProcurementIQ in August this year as its Director of Client Value Realization. Out of all the companies vying for her attention, it was ProcurementIQ’s focus on ‘people power’ that attracted her, coupled with her positive experience utilising the platform during her time as a consultant.
Although ProcurementIQ remains on the cutting edge of technology, it is a platform driven by the expertise and passion of its people and this appealed greatly to Adams. “I want to expand my own reach and I’m excited to be problem-solving for corporate America across industries, clients and procurement organizations and teams (internal & external). I know ProcurementIQ can make a difference combined with my approach and experience. Because that passion and that drive, powered by knowledge, is where the real magic happens,” she tells us.
ASM Global: Putting people first in change management
Ama F. Erbynn, Vice President of Strategic Sourcing and Procurement at ASM Global, discusses her mission for driving a people-centric approach to change management in procurement…
Ripping up the carpet and starting again when entering a new organisation isn’t a sure-fire way for success.
Effective change management takes time and careful planning. It requires evaluating current processes and questioning why things are done in a certain way. Indeed, not everything needs to be changed, especially not for the sake of it, and employees used to operating in a familiar workflow or silo will naturally be fearful of disruptions to their methods. However, if done in the correct way and with a people-centric mindset, delivering change that drives significant value could hold the key to unleashing transformation.
Ama F. Erbynn, Vice President of Strategic Sourcing and Procurement at ASM Global, aligns herself with that mantra. Her mentality of being agile and responsive to change has proven to be an advantage during a turbulent past few years. For Erbynn, she thrives on leading transformations and leveraging new tools to deliver even better results. “I love change because it allows you to think outside the box,” she discusses. “I have a son and before COVID I used to hear him say, ‘I don’t want to go to school.’ He stayed home for a year and now he begs to go to school, so we adapt and it makes us stronger. COVID was a unique situation but there’s always been adversity and disruptions within supply chain and procurement, so I try and see the silver lining in things.”
SpendHQ: Realising the possible in spend management software
Pierre Laprée, Chief Product Officer at SpendHQ, discusses how customers can benefit from leveraging spend management technology to bring tangible value in procurement today…
Turning vision and strategy into highly effective action. This mantra is behind everything SpendHQ does to empower procurement teams.
The organisation is a leading best-in-class provider of enterprise Spend Intelligence (SI) and Procurement Performance Management (PPM) solutions. These products fill an important gap that has left strategic procurement out of the solution landscape. Through these solutions, customers get actionable spend insights that drive new initiatives, goals, and clear measurements of procurement’s overall value. SpendHQ exists to ultimately help procurement generate and demonstrate better financial and non-financial outcomes.
Spearheading this strategic vision is Pierre Laprée, long-time procurement veteran and SpendHQ’s Chief Product Officer since July 2022. However, despite his deep understanding of procurement teams’ needs, he wasn’t always a procurement professional. Like many in the space, his path into the industry was a complete surprise.
But that’s not all… Earlier this month, we travelled to the Netherlands to cover the first HICX Supplier Experience Live, as well as DPW Amsterdam 2023. Featured inside is our exclusive overview from each event, alongside this edition’s big question – does procurement need a rebrand? Plus, we feature a fascinating interview with Georg Rosch, Vice President Direct Procurement Strategy at JAGGAER, who discusses his organisation’s approach amid significant transformation and evolution.
We look into the need for a supply chain reset amidst inflation concerns, supply uncertainty, geopolitical issues and sustainability drives.
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Today’s supply chains are under pressure like never before.
Amidst inflation concerns, supply uncertainty, geopolitical issues and sustainability drives, the modern supply chain is having to think twice about the way it operates. It means companies are rethinking their supply chain strategy as well as the materials they source and the suppliers they work with. But such significant change doesn’t come easy and isn’t necessarily cheap either. Indeed, these factors have led to the necessity of a great supply chain reset. But this is no easy fix. It impacts the entire business model, from strategy, marketing and design all the way through packaging, storage and transportation.
Supply Chain Revolution
The first part of a supply chain overhaul is rationalising the portfolio. A major review of the product portfolio could reveal what is profitable to make or sell. In many industries, the combined effect of the rising cost of products, logistics, carbon charges for border crossings and frequent supply disruptions is increasing the cost-to-serve, reducing gross margins and making it unprofitable to hold inventory as a buffer.
Leading companies look for ways to improve communications among the supply chain, leadership, sales, and other commercial teams so that supply chain leaders clearly understand the trade-offs required to win in the market. The most successful companies are also involving other key stakeholders in the supply chain balance equation discussion, including finance, R&D, regulatory, sustainability, and procurement. This ensures everyone understands all the implications of the proposed overhaul, particularly what can actually happen.
COVID-19 disruptions pushed companies to reorient their supply chains around resilience. According to Bain & Company, management at one global apparel firm recognised early on that this would require a transformation that would have ripple effects across other parts of the business. In order to make the correct decision, it pulled together a cross-functional strategy team that included the heads of supply chain, finance, sustainability, consumer insights, and the product’s business unit. The team saw the supply chain redesign as an opening to not only boost resilience but also responsiveness and sustainability. It found reducing reliance on any one location would provide insulation from supply disruptions, and making its products closer to customers would speed up delivery and shrink the supply chain’s carbon footprint.
Design to delivery and beyond
Taking a detailed view of the entire product journey, from design to delivery and beyond, can also help to simplify sourcing, by standardising as many elements as possible, reducing the range and specification of materials used for production and packaging. This means fewer suppliers and components, which lowers the exposure to disruption. Companies should investigate whether it’s possible to use less material and/or more recycled content, and whether this can reduce total cost of manufacture.
Today, chief supply chain officers balance multiple conflicting needs of cost, service, sustainability, agility and resilience. As a result of increasingly international trade complexity and the need to manage a widening range of risks, it’s difficult to determine where products should be manufactured and sold. While the onshoring versus offshoring versus friendshoring debate remains, it is further complicated by issues such as sustainability, trade wars, agility and, increasingly, visibility.
In the era of mass offshoring, manufacturers have enjoyed the huge scale efficiencies of large manufacturing centres in low-wage countries. For a wide range of products, there is a now a considerable and visible shift to get closer to the end customer, to ensure a faster response to changing consumer demands, while avoiding tariffs, cutting logistics costs and reducing carbon footprint.
Looking ahead, supply chain has little choice. It can’t stand still and wait for the next black swan event to unfold – companies must be more resilient and fluid. A great supply chain reset may not just be a “nice to have” anymore.
We look into the supply chain production process of Easter Eggs and the journey to their final destinations in supermarkets
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Chocolate is arguably the world’s most popular sweet treat. Depending on who you ask, of course.
After, perhaps Christmas, it is the most common time for people to indulge in chocolate if they don’t do so anyway throughout the year.
And synonymous with Easter are the eggs themselves which are loved by children and adults alike all over the world.
The journey to Easter Eggs
The supply chain process is split into eight stages of production: cultivating, harvesting, splitting, fermentation, drying, winnowing, roasting and grinding. Following production, the supply chain process is extended further with logistics which is the final step to providing customers with their favourite seasonal sweet treat.
The journey actually begins with cocoa tree plantations being established which is done by scattering young cocoa trees amongst new shade trees or by planting the cocoa trees between established trees. These are planted in humid tropical climates, with temperatures between 21 and 23 degrees Celsius. This is consistent rainfall periods and a short dry season because these conditions provide good quality cocoa.
Each tree produces 20-30 cocoa pods a year which grows straight from the tree’s trunk and main branches. With this tree also yielding fruit, the crop is carefully pruned, and as a result, it is easier to harvest the cocoa pods. The next step is the labour-intensive task of harvesting the crop.
The harvest is a whole community affair on small West African farms. Large knives are then used to detach the pods from the trees and placed in large baskets on workers’ heads. The pods are then manually split open to remove the beans so they are ready for the two-step curing process. Each pod consists of between 20-40 purple cocoa beans.
The curing process consists of fermenting and drying the beans to develop the chocolate flavour. There are several fermentation methods but the most traditional is the heap method. This requires placing mounds of wet cocoa beans in between layers of banana leaves on the ground for between five to six days. Following this, the drying stage begins. This involves the wet bunch of beans being spread out in the sun or using a more advanced method of special dying equipment.
From plant to factory
Often, a lot of large chocolate brands then buy the cocoa through intermediaries. The beans are then packed into sacks ready to be exported to the brands processing facilities in other locations globally.
After arrival, the beans are cleaned and quality inspected before the winnowing stage takes place. The dried beans are cracked to separate the shell from the nib which is where the small chunks are used to produce chocolate. Afterwards, the roasting phase begins in which the nibs are baked at high temperatures reaching 120 degrees Celsius in special ovens. This is where the colour and flavour is acquired.
Subsequently, the next stage is grinding which creates the basis of all chocolate products. The roasted nibs are grounded in stone mills until a thick liquid chocolate consistency is achieved.
Chocolate to egg
The final step is creating the chocolate egg masterpiece by using highly efficient computer-operated technology which has been used since the mid-20th century. The molten chocolate is placed in heated egg molds which are rotated so there is an even thickness. Following this, the eggs are left to cool and then removed from the molds. Once cooled, the eggs are wrapped in coloured foil and packaged into individual boxes before being sent out for retail. The transportation and exportation throughout the various supply chain stages is vital being a seasonal product. This means they are heavily relied upon for their timings to deliver to large supermarkets and independent stores.
The second issue of SupplyChain Strategy is live! Features exclusive articles on TTI and McPherson’s
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Our exclusive cover story this month sees us speaking to Heath Nunnemacher, VP of Global Electronics Sourcing at TTI, who details the streamlining of its procurement function into a more efficient and effective value-unlocking enabler of business.
Techtronic Industries (TTI) is among the world’s largest manufacturers of mostly cordless power tools, outdoor power equipment, and floorcare products for both professional users and do-it-yourself (DIY) consumers.
TTI’s growth has been extraordinary – 13 years of consecutive double-digit gross margin improvement, in fact. In 2021 the company set a new revenue growth record just shy of 35%, more than twice that of its closest global competitor.
A significant driver of that growth is a strategic focus on disrupting industries through leadership in cordless technology. To do so, it requires advanced electronics and collaboration with the most innovative and biggest players in the industry. But with the chip shortage crisis looming on the horizon in late 2020, the organisation found itself challenged by a severe lack of visibility in the electronics procurement function. Enter Heath Nunnemacher, the man charged with transforming electronics procurement for the overall betterment of the business.
Not only that, but we also have a fascinating discussion with McPherson’s Supply Chain Director Mark Brady. The health, wellness, and beauty giant McPherson’s has a rich history of agile procurement through resilience and collaboration and Brady reveals its secret sauce.
Plus, we detail the important supply chain trends to look out for in 2023 as well as five top supply chain events coming up!
How can businesses cope with persistent, global supply chain issues and what are the concerns looming on the horizon?
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The Digital Insight speaks to Nirav Patel, CEO of Bristlecone (a supply chain company of the $19bn Mahindra group), who discusses how businesses can cope with persistent, global supply chain issues – and outlines the concerns looming on the horizon.
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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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.
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.”
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!
The right time to digitalise the supply chain and reap the multiple benefits is now.
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As the global components shortage continues to challenge businesses, the value of a digitalised supply chain becomes increasingly clear. As the return to normal supply levels is still some way off and the situation is not expected to recover until 2023, the time to digitalise the supply chain and reap the multiple benefits is now. Whereas once supply chain digitalisation provided a competitive edge, it has since become an industry standard required to keep pace in an evolving industry with unpredictable challenges.
The benefits of digitalisation
Make no mistake, digitalising a business’ supply chain is not an easy task and is by no means a quick fix. It takes extensive research and planning before any updates can be made and once the transformation is underway, businesses are constantly learning and improving their operations based on feedback and data collected.
However, the business benefits of a digitalised supply chain validate the time and effort required to undergo a digital transformation of supply chain management.
Improved accuracy and efficiency are two of the most impactful factors of supply chain digitalisation. With real-time tracking and the removal of human error through software-led processes, businesses gain complete transparency of operations at every stage of the supply chain.
Software-led processes and the introduction of automation can also result in reduced processing time, greater operational productivity and maximised ROI. If the old saying rings true and ‘time is money’, then improved efficiency with greater accuracy can only be a good thing for business.
Greater flexibility and agility in responding to change is another valuable benefit brought by a digitalised supply chain. As many businesses have already experienced, supply and demand fluctuations can be rapid and circumstances outside of a business’ control can also affect supply chain management.
Though there will always be some element of the unexpected, technology such as automated stock management and predictive analytics support in the identification and handling of upcoming challenges. Armed with both big data and data specifics at a more granular level, businesses can make better-informed decisions, manage a crisis more effectively and identify areas of improvement and opportunity, at all times.
Making it happen
Every digital transformation requires a strategy and there are multiple achievements to celebrate on the way to reaching the end goal of holistic supply chain digitalisation. Identifying the areas which need priority attention will help structure your strategy. Your digitalisation plan should be a series of incremental improvements, as opposed to a sudden and radical change.
Auditing your existing supply chain is a sensible starting point for discovering opportunities for improvement, establishing strengths and weaknesses, and honing in on risk factors and threats to your operations.
Using the knowledge and expertise of IT professionals within your business and operations management staff who are familiar with the everyday running of each stage of the supply chain is the best way to gain a clear insight into which aspects of the chain are strong and which are letting you down.
Your operation management team will also be the ones using your new digitalised supply chain so gaining their insight, expertise and buy-in from the start of the project is highly valuable for future success.
Software Implementation
Software is at the heart of supply chain digitalisation and businesses are spoilt for choice when it comes to selecting digital logistics and supply-chain-management software (SCMS) that can oversee transactions, manage relationships with suppliers and streamline your processes.
There is a challenge however when it comes to deciding whether to build or buy your software solution.
Though ready-made software is the quicker and more simple option, out-of-the-box solutions may not meet the exact needs of your business and customised plugins or add-ons may be required to tailor your solution exactly as you require.
The alternative would be to build your own software in-house, which takes a huge chunk of existing resources, adding pressure to already busy teams.
Arguably outsourcing a custom-built solution from a reputable partner, who fully understands your pain points, risk factors and overall transformation strategy is the best way to gain a tailor-made software solution whilst keeping everyday operations running smoothly.
Harnessing the power of real-time data, automation and AI
Real-time data should be gathered at numerous points in the supply chain and can be gathered through a range of methods. From IoT devices to Radio Frequency Identification (RFID) and GPS, the data gathered by these technologies improves your supply chain connectivity at every step.
This data also facilitates increased visibility, improved security, cost analysis insights and accountability. From production to distribution to retail, IoT, RFID and GPS provide efficiency, transparency and data-driven insights to help businesses maximize ROI and continue to improve operations.
Automation and AI also support in the processing of payments, the rapid sharing of information, inventory updates, tracking information, omnichannel retail sales, email automation and setting new cost goals.
Although these technologies will never entirely replace the human touch, they can assist with repetitive, manual tasks and be the first point of contact for customers which can direct customers to the correct individual or department.
SCMS systems can integrate real-time data, automation and AI into supply chains on each level, streamlining processes to be more efficient, making more accurate predictions and protecting a business should something unforeseeable occur.
Realising Industry 4.0
Ultimately, digitalising the supply chain, however, your business chooses to do so is the realisation of the Industry 4.0 vision which hinges on leveraging digital technology without siloed data, processes and systems.
The pillars of Industry 4.0 namely IoT, big data and data analytics are the main aspects to be updated in any supply chain digitalisation and taking a comprehensive approach to digitalising the supply chain means data is no longer siloed and useless but is integrated into every business decision, under any circumstance.
A supply chain digital twin is also a helpful tool which provides a detailed simulation of an actual supply chain using real-time data and snapshots to forecast supply chain dynamics. From this, businesses can understand their supply chain’s behaviour, predict abnormal situations, and work out an action plan. The most effective supply chain management sees digitalisation throughout and can also call upon the use of digital twins to simulate the supply chain and enable the whole ecosystem to enjoy the same level of visibility and forecasting to inform every stage of the supply chain.
Though investment in time and money, the benefits of digitalisation are evident not only in reacting to unexpected challenges but also in the day-to-day running of a business which wants to keep pace and remain competitive in the digital age.
Author: Rasheed Mohamad, Executive Vice President of Global Operations and Business Technology, Alcatel-Lucent Enterprise
The list of drivers to better understand global supply chains grows every day.
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The list of drivers to better understand global supply chains grows every day. Motivations range from increasing operational efficiencies, the ability to better respond to supply chain shocks, managing potential reputational risks through the exposure of unexpected issues with suppliers, as well as preparing for the wave of in-coming supply chain legislation.
So how can better quality supply chain data help with these challenges?
At Open Supply Hub, we begin our work from a clear starting point: if there’s no shared understanding of where global facilities are located, there’s certainly no understanding of the environmental or social conditions at those facilities. Historically, supply chain data has been hidden behind a lock and key which has benefited very few. In addition to this, at even as basic a level as name and address information for global production facilities, the quality of data has been surprisingly poor. What this means is that bad practices can lurk in the shadows undetected – practices which contribute to some of the fundamental issues of our time, such as deforestation, child and forced labour and the impacts of climate change.
To break it down, supply chains today have:
Untrustworthy data: where data does exist, it’s riddled with errors and duplications and is not standardised. To put it bluntly: it’s a mess.
Inaccessible information: as alluded to above, data is locked away in private databases, instead of being made available to all. This presents a huge hurdle to collaboration.
Fee-based facility IDs: without freely available facility IDs, access to information is inequitable, which prevents truly seamless exchange between systems and stakeholders.
Gaps in coverage: when data lives in silos like this, it creates difficulties in gaining a clear understanding of global supply chains.
The key to addressing this is high-quality, open supply chain data. This term “open data” is a precise one, with a technical definition: according to the Open Knowledge Foundation, “Open data is data that can be freely used, shared and built on by anyone, anywhere, for any purpose”. There are two key elements to openness:
Legal openness: you must be allowed to get the data legally, to build on it and to share it
Technical openness: there should be no technical barriers to using that data.
Through this seemingly simple mechanism of opening up supply chain data, many of the challenges described above are quickly addressed. Launching in late 2022, Open Supply Hub will be an accessible, collaborative, supply chain mapping platform, used and populated by stakeholders across sectors and supply chains.
It will provide:
One common registry: cross-sector supply chain data collected in a single place, accessible to all.
Reliable, current data: all data contributed to the platform will be cleaned and deduplicated by a matching algorithm, with each facility assigned an industry-standard ID. Continuously gathering and refreshing data from industry has the added benefit of keeping that data current which, in turn, leads to…
Global collaboration: the user-generated dataset gives visibility into which organisations are connected to which facilities, accelerating collaboration.
We know this approach works from our experience of building the Open Apparel Registry (OAR). One compelling example of how the dataset has been used to highlight risks to investors came in the immediate aftermath of global production reopening after the pandemic lockdowns.
As India sought to re-open its economy and kickstart production, many labour laws were relaxed in the state of Uttar Pradesh, removing basic protections for workers relating to mandatory overtime, work breaks and more. Investors with holdings in major global fashion brands were able to run combination searches in the OAR to understand their exposure to risk in this area and adjust their investment strategies accordingly. Without access to this open data set, the ability to understand and divest from this investment risk would have been much more challenging during a time when global supply chains were in a constant state of flux.
As we look ahead to the raft of in-coming supply chain disclosure legislation, uncertainty remains high about what exact format these various reporting requirements will take. However, one thing that will not change is that data format and standardisation will be key to ensuring that the data being gathered and shared is of practical use to create change. If data is locked away in PDFs, tables embedded in websites or scattered between disparate databases, it becomes totally impractical to work with. The power of a centralised, open data repository lies in making data comparable, actionable and usable. That’s where creating change begins.
Author: Katie Shaw, Chief Programme Officer of Open Supply Hub
We list five vital books in procurement and supply chain strategy that are reshaping the way we work.
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We list 5 essential procurement/supply chain management books that are reshaping the way we work today.
Trade Wars, Pandemics and Chaos
How digital procurement enables business success in a disordered world
Dr. Elouise Epstein
Foreword by Len DeCandia
In our conversation with procurement leaders, this book comes up time and time again. Dr. Epstein is a digital futurist and Kearney partner with over two decades of experience working as a trusted adviser with major clients to develop digital procurement and supply chain strategies.
An in-depth look at how to strategise, evaluate and approach the fast-changing realm of digital procurement, Epstein’s book identifies how, more than any other enterprise function, procurement has grown from back-office cost control to strategic business partner. Of course, today’s procurement practitioners are also at the forefront of innovation, sustainability, and social responsibility, and so making changes by directing where and how enterprises spend their money is proving increasingly vital.
This book is a hugely trusted partner in establishing a blueprint for approaching the complexities of modern procurement and how and where to make smart technology investments.
Sustainability, Innovation and Procurement
Edited by Sachin Kumar Mangla and Sunil Luthra
The world is in a constant state of unprecedented change with rising inflation and costs, geo-political and energy crises plus the effect of climate change upon our lives and businesses. Sustainable procurement is the hot topic right now. Indeed, the pursuit of sustainable objectives through the purchasing and supply process, while balancing environmental, social, and economic objectives is a common challenge facing procurement and supply chain leaders. But worry not, as this book will help readers develop new contemporary knowledge about frameworks, innovative tools and techniques to achieve sustainability in public as well as private procurement practices. The book will enable scholars and practitioners working in the domain of sustainable procurement to improve the overall performance of the supply chain and further achieve UN SDGs, by making various decisionsat the planning and strategic phase of the business.
E-Logistics – Managing Digital Supply Chains For Competitive Advantage
Edited by Yingli Wang and Stephen Pettit
Unlocking value and streamlining processes is proving to be a driver for supply chain professionals with E-Logistics fast becoming a burgeoning function. Serving as the central nervous system for the whole supply chain enabling smooth information flow within, and between, organisations, E-Logistics offers myriad benefits and value. This new and updated edition provides the latest and most comprehensive coverage on digitalisation in logistics and supply chain and covers all transport modes, plus the role of ICT in supporting an integrated freight and supply chain network.
Buying technology is easy. Buying the right technology is much harder. While buying the wrong technology can be disastrous. With the rise of cloud services and the digitisation of all business units, procurement managers need to understand how to buy technology services in order to generate revenue, drive innovation and retain customers. The Technology Procurement Handbook provides a structured and logical view of the digital buying process, including invaluable advice on how to manage digital demand, prepare sourcing strategies, analyse the cost and benefits of proposed solutions and negotiate and implement comprehensive agreements.
The Technology Procurement Handbook examines the multiple streams of data that feed into the technology procurement process and includes case studies and extensive practical advice based on the authors experience from recent procurement projects.
Disruptive Procurement Winning in a Digital World
Edited by Michael F. Strohmer, Stephen Easton, Martin Eisenhut, Dr. Elouise Epstein, Robert Kromoser, Erik R. Peterson, Enrico Rizzon
There is no doubt that procurement has undergone a major revolution in recent years and one of the most fascinating off-shoots from this change has been Disruptive Procurement; a radical new approach to creating value and innovation by challenging the status quo in the entire product and service line. It requires going far beyond conventional desktop procurement to understand the value the company brings to its customers as well as the value that suppliers bring to the company. Disruptive Procurement Winning in a Digital World boasts a strong raft of contributors, with a wealth of experience across the procurement sphere.
To move toward Disruptive Procurement, companies need a holistic view and a complete new set of capabilities for staff in marketing, sales, R&D, manufacturing, innovation, and, of course, procurement. This will only happen if procurement is fully backed by the Chief Executive Officer and companies embrace digital tools that will help make procurement slimmer and smarter.
Disruption and uncertainty mean a myriad challenges face organisations ad the weakest link in the supply chain can appear quickly and unexpectedly.
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We live in unprecedented times and such disruption and uncertainty mean myriad challenges facing organisations. And the weakest link in the supply chain can appear quickly and unexpectedly.
Over the last two years, supply chain professionals have been hit by an unprecedented raft of disruptions. As we fast forward into the future, this trend shows no sign of abating. The chaos caused by the lockdown of the world’s busiest port – Shanghai – shows that the impact of COVID on global supply chains is far from a thing of the past. The Suez Canal blockage in March 2021 and the ongoing crisis in semiconductor availability are two other examples of how macroeconomic events can impact supply chains. Now, the Russian invasion of Ukraine and the sanctions it has triggered, have caused further major global trade disruptions. High global fuel prices and accessibility of other components are also affecting production and transport in many industries.
In Germany, Porsche, Volkswagen and BMW have all reduced output due to problems with the supply of wire harnesses from Ukraine, which are vital to the manufacture of cars. Russia is also an important source of many metals used in the aerospace industry and others in hi-tech and electronics.
Given all this disruption, it is little surprise that the concept of VUCA – which stands for Volatility, Uncertainty, Complexity and Ambiguity – has rocketed up the agenda for businesses determined to ensure products arrive with customers in the right place at the right time.
This is no trivial matter. The interruption of Ukrainian agricultural processes, for example, threatens the supply of wheat to several countries, and the production lines of many consumer goods companies. In extreme cases with political consequences.
Planning and execution
The myriad challenges facing organisations means that the weakest link in the supply chain can appear quickly and from unexpected areas. This gives organisations precious little time to pivot and build a blend of resilience and agility. It makes the need to shrink the time between planning and execution crucial as volatility continues, particularly in order to meet relentlessly high consumer expectations.
This is where supporting technologies come into play. As they look to strengthen their supply chains and make them more resilient, businesses should consider solutions using artificial intelligence (AI) to improve forecasting. AI can look at patterns across huge datasets that go far beyond human capability to write intelligent algorithms or analytics. Organisations are then able to proactively identify gaps or issues with more accurate demand forecasts, sales orders, material, capacity, shipments, and other elements of supply; with automatic alerts for any exceptions. This can then augment human expertise to help plan for the unexpected.
Organisations can go a stage further and better identify any weak or potentially weak links in supply by creating a digital twin of their end-to-end business flow. This is a virtual model that accurately represents the lifecycle of a physical supply chain using live and up-to-date data. Within a virtual environment where numerous scenarios and changes can be simulated without consequence, organisations are able to strengthen the physical supply chain’s agility and speed with tried and tested improvements.
The supply chain links at greatest risk of disruption are not the only ones that should be considered potentially weak and in need of attention.
Linear supply chain models need to give way to circularity, which allows for waste reduction and reusing and recycling of resources.
Putting sustainability at the centre of supply chain planning and decision making will add further resilience across all links, but also reduce reliance on hard-to-access and more scarcely available raw materials. It is a complex issue. However, ensuring sustainable practices would provide the resilience needed to help navigate all the challenges past, present and future.
Addressing weak spots
Supply chains are today going through major transformational change, which has been driven by a range of external challenges and emerging trends. There’s little doubt that 2022 and the years beyond will bring further hurdles. Organisations need to take action now to be best prepared for the unexpected. Particularly when you consider the increasingly interconnected nature of 21st century supply chains.
As circumstances change around organisations, they need to ensure that their supply chains continue to provide the goods and services to the end consumers that rely on them. Applying supporting technologies can enable them to shine a light on any weak spots and move quickly to rectify these, keeping the flow of products moving. Organisations can then ensure that every link is as strong as the other, future-proofing supply chain operations.
For CEOs, the importance of supply chains to their business has never been clearer. They are a key engine to business, so it is critical that they remain well-funded and at the top of the business agenda.
It’s an open secret: enterprises that want to effectively reduce their CO2 emissions need to first and foremost address their supply chain.
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It’s an open secret: enterprises that want to effectively reduce their CO2 emissions need to first and foremost address their supply chain. Up to 90% of a company’s greenhouse gas emissions originate from here. A new software-driven approach to tackle these emissions is developed in cooperation of O2 Telefónica and the startup The Climate Choice – with first results and breakthrough learnings.
It’s an open secret: enterprises that want to effectively reduce their CO2 emissions need to first and foremost address their supply chain. Up to 90% of a company’s greenhouse gas emissions originate from here. A new software-driven approach to tackle these emissions is developed in cooperation of O2 Telefónica and the startup The Climate Choice – with first results and breakthrough learnings.
O2 Telefónica aims to be net CO2 neutral by 2025 at the latest. The company has already reduced the CO2 emitted directly, in Scope 1, and indirectly through electricity purchases, in Scope 2, by 97 % since 2015. Now, the aim is to discover climate-related risks and find potential solutions in collaboration with their suppliers. This leads to the biggest corporate challenge of today: a structured climate transformation process along the supply chain needs structured climate data management. However, obtaining climate-relevant data along the supply chain and successfully engaging suppliers in decarbonisation efforts is not easy. Many questions arise: what are the challenges and risks, best practices, and opportunities to collect, validate and report this data?
A pioneering collaboration to collect climate-relevant data
To find an answer to all these questions, O2 Telefónica and climate tech startup The Climate Choice have set out to launch a joint climate data program. For this purpose, the telecommunications provider uses The Climate Choice’s software platform, to facilitate the efficient and effortless collection of climate-focused data from around 1,000 suppliers. The top 40 suppliers are also invited to carry out a software-driven climate rating in order to uncover potential for decarbonisation and to identify tailor-made fields of action. The qualitative and quantitative data resulting from this serves as the basis for a Scope 3 decarbonisation strategy for O2 Telefónica. The collaboration preceded a pilot project in which the individual climate maturity of selected suppliers was recorded and validated.
Using The Climate Choice’s new solution approach and software tool, O2 Telefónica was able to develop a transparent, scalable process for collecting comparable data on the climate maturity of its suppliers.
This data fuels The Climate Choice’s intelligent data platform and allows to obtain supply chain specific benchmarks, year-to-year comparisons and actionable reporting through dashboards, which ensures ongoing control of engagement results, core KPIs and aggregated metrics. This way one can shed light on the status of its supply chain decarbonisation journey. Find in the following our exclusive insights on this process.
From past performance to forward-looking metrics
To fully understand the decarbonisation processes of companies such as O2 Telefónica in Scope 3, we must first take a look at the data that companies need in order to fully align suppliers with their climate strategy. Typically, if you think about climate KPIs and metrics for climate action, you might think of CO2 emissions. Of course, this is not wrong, since the carbon footprint is among the most important indicators for measuring a company’s climate impact. However, its exclusive use for supplier decarbonisation is problematic for three reasons:
Availability is very limited.
Comparability is hard due to a lack of calculation standards.
Measured CO2 emissions are backward looking, so-called lagging KPIs, and only indicate what happened last year.
That is why it is crucial to look at forward-looking metrics, so-called leading KPIs. These metrics draw a picture of the direction the company will move towards over the next few years. Thus, they reveal if a company’s climate transformation is already happening and if yes, to what degree. It is therefore important to look at whether climate targets of your suppliers are being seriously pursued and if they are compatible with your own goals. Furthermore, you must know what governance processes are in place within the company, whether the company is managing climate-related risks and opportunities, and what data is already disclosed supporting this.
Author: Lara Obst, Chief Climate Office, The Climate Choice
