Monthly Archives: February 2019

It’s 2019. This is What QuickStart Sourcing Should Look Like!

As we mentioned in yesterday’s post, a decade ago the Oompa Loompas at Coupa announced the availability of Coupa QuickStart which was simply a setup wizard that visually guides purchasing mangers through the setup process for users, approval rules, payment and shipping terms, billing information, chart of accounts, suppliers, and other basic information that was required to get a purchasing system up and running in less than an hour.

But just being able to order a product from a catalogue or send out a simple RFP is not very strategic, especially for 2019. And these days, any event that is not strategic is not going to generate much value when savings are drying up, brands are falling, and spending is falling as GDP growth stagnates and we return to depression era economics.

Needless to say, not only should every system have the capabilities that Coupa had 10 years ago, and the capabilities that we outlined in yesterday’s post on what QuickStart Procurement should look like, but that’s not enough. Not for 2019. Ten years ago we were promised semi-cognitive systems, and most systems can’t even automate basic invoice processing. It’s sad, sad, sad.

So, what should a modern system have? One built this decade?

  • smart RFI creation
    that, as per yesterday’s article, can be generated purpose built for the products in question using templates and organizational data in the ERP
  • smart RFI monitoring
    that can monitor the event, send out reminders, automatically check inputs against public data, organizational data, and expected data, and send out alerts to buyers when suppliers are late, inputs are off, or bids are outliers
  • smart bid analysis
    that can compare bids to past bids, market averages, and expected costs from reasonable should cost models
  • smart award recommendations
    based on bids, delivery times, availability, and supplier preferences
  • automatic auctions
    that can auto-populate from RFIs, auto-run, auto-monitor, auto-enforce rules, and auto-award and notify winners when the auction is over (as they won’t be invited to the auction if they don’t agree to the necessary terms and conditions to be offered an award beforehand)
  • automatic default contract creation
    that uses the organizational boilerplate, terms and conditions, default category clauses, awards, and associated obligations to generate a default contract
  • automatic document comparison and change tracking
    even if the supplier sends back a signed PDF that looks like the one you sent, every character will be analyzed
  • automatic performance monitoring plan generation
    that will track, based on the contract, when orders should go out, when goods should be received, when documents should be received, when reports should be received, when other deliverables should be received, when assessments should occur, etc.
  • real-time performance monitoring
    that monitors a plan, sends out alerts to buyers when deliverables are missed, sends out alerts to suppliers when they have not submitted a document or a shipment notification on time, automatically sends out pre-defined performance assessment surveys, etc.

Quick Setup is more than a wizard, it’s an assisted intelligence platform backed by sophisticated algorithms community and market data, and all organizational data and processes to mitigate the need for the buyer to do pointless tactical data processing in the first place and focus purely on the strategic analysis of RFX responses, when the relevant data and insights have already been generated by the platform.

But how many platforms have that today? The same umber of platforms that have assisted intelligence for Procurement. Zero.

In other words, just like Procurement Leaders are stuck in 2009 (as per yesterday’s article, but so are the vast majority of technology providers. So when looking for a new solution, find one of the few technology providers on this path. Otherwise, your solution capability will be nought, and that’s the decade you will return to. Not something anyone wants.

It’s 2019. This is What QuickStart Procurement Should Look Like!

A decade ago, Coupa announced the availability of Coupa QuickStart, which was a setup wizard that visually guides purchasing mangers through the setup process for users, approval rules, payment and shipping terms, billing information, chart of accounts, suppliers, and other basic information that was required to get a purchasing system up and running in less than an hour.

Needless to say, every system should have that capability today (even though a number still don’t), but given that this was on the market 10 years ago, systems should have advanced considerably since then.

What should they have? More than we can cover in one short article, but at a minimum:

  • AI-powered normalized supplier network with community intelligence
    and out-of-the-box plugins to allow for quick import of your vendor master(s) from all standard ERP and S2P systems (as well as support for complete XML and CSV exports) and AI to allow for quick de-duplication of suppliers between the network and your enterprise vendor master(s)
  • Powerful search capability for quick supplier discovery that can take advantage of detailed product descriptions, community intelligence, and organizational profiles to find intelligent, well-rounded matches
  • HR system / standards support
    to allow for a quick import of employee profiles and organizational hierarchy direct from major systems or standard export files
  • AP/Budget system / standards support
    to allow for quick importation of budgets, approvers, and where possible, budget rules
  • ERP/IMS integration or standard export file support
    to allow for quick importation of categories and products purchased regularly, as well as demand for the past 3 years and current category suppliers and prices
  • ERP/TMS integration or standard export file support
    to allow for identification of current carriers, the categories/products they currently export, and standard LTL/FTL rates
  • AI for profile completion
    that imports the relevant organizational profile data from each of the above systems or exports to build the necessary profile that can be shared with suppliers for shipping, invoicing, etc.
  • standard category templates for RFPs that can be tailored as needed by an AI that uses past event data in the ERP and current product data in the IMS to tailor the template as appropriate

In other words, it’s 2019 and

  • an admin user should not have to define users, the platform should be able to do that automatically given a HR system (export)
  • an admin should not have to define approval rules, the platform should be able to identify the most appropriate rules given budgets, approvers, and payment thresholds defined in the AP system
  • an admin should not have to define payment and shipping terms, the platform should be able to export that information from the AP, ERP, and/or IMS systems
  • an admin should not have to define billing information, that should be automatically extracted from the AP system
  • an admin should not have to define a chart of accounts, that should be automatically extracted from the AP/Finance system
  • an admin should not have to define/import suppliers manually, those should be pulled in from organizational systems automatically, normalized, and vetted against networks the buyer has access to
  • a buyer should not have to create an RFP template from scratch, the platform should present an appropriate one for the category and products based on community and organizational intelligence
  • a buyer should not have to do an extensive, time-intensive discovery process to identify new, suitable, suppliers, an AI-backed discovery engine that runs on a community intelligence backed network should identify suitable suppliers in minutes (and support the construction of qualification scenarios in just a few more minutes)
  • a buyer should not have to manually manage the invitation, send out, monitoring, and reminders of the RFP, nor manually verify all data for reasonability and completeness, the AI should do that automatically, and automatically alert suppliers to complete missing data, check values that might be outliers, etc. and automatically alert the buyer of suspicious / missing data upon supplier submission

Quick Setup is more than a wizard – it’s using assisted intelligence backed by sophisticated algorithms, community data, and all organizational data to mitigate the need for the organization to do pointless repetitive setup in the first place! But how many platforms have that today? Unfortunately, when the holistic picture is taken into account, the answer is zero.

So, not only are Procurement Leaders still stuck in 2009 (as per yesterday’s article), but so are the majority of technology providers. So when looking for one, find one on this path, unless you want to return to the decade where a lot happened, but little is remembered. Or do you want to do something where you’ll be remembered? Like selecting a platform that could not only modernize Procurement but open it up to the entire organization. Your call.

We’re Still Stuck in 2009 … Why?

Five years ago, the doctor wrote a post about how the doctor’s 2014 Procurement Prediction is Going to Come True and that 2014 was going to be 2009 Part VI and

  • the focus will continue to be on cost-cutting and not value-creation,
  • valuable, high-ROI, technology will continue to be ignored, and
  • the training and new talent budgets will remain empty.

And it was a sad state of affairs. And he’d hoped that, by now, things would have changed. But if you check the latest Deloitte Global CPO Survey, 78% of CPOS are still PRIMARILY FOCUSSED on Cost Reduction!

Unless they’re Procurement team has been totally incompetent for the last five year, that’s not going to happen. We’re about to return to Depression Era Economics. We’re heading for a downturn a result of a global slowdown in GDP growth. China can’t keep building empty cities. The US can’t continue to build (defence) debt and grow without an immigrant workforce that will do the jobs Americans don’t want. Goods can’t continue to get cheaper when labour costs are rising and materials are becoming scarce. Outsourcing is not going to get cheaper when transportation costs have to rise as energy (oil) costs rise. And so on.

Also, the study found that, even in 2018, only one third of Procurement Leaders use modern technologies such as predictive analytics and collaboration networks.

And over half of Procurement Leaders believe that their current teams do not have sufficient levels of skills and capabilities to deliver on their procurement strategy … proving that they have, as expected, not been investing in training like they should have been.

Eleven years ago, Hackett published a vision of Procurement in 2020 where it predicted that, through a year-over-year evolutionary strategy, it would reach the point where it was harnessing the power of supply markets to maximize the value it is getting from its spend, enabling business strategy, and optimizing its tactical execution. But, in an average organization, Procurement is, at least for now, still overspending, still divorced from business strategy, and unable to react to unexpected disruptions or opportunities in the supply chain.

And it looks like 2020 is, not as everyone predicted in the noughts, going to be 2009 Part XI. Who will take the lead and change it?

Sixty Five Years Ago Today …

…when Russia, not Mexico, was the enemy, the United States and Canada agreed to construct the Distant Early Warning Line (and, unknowingly, inspire one of Canada’s classic rock anthems that would be released thirty years later).

Thus began a system of radar systems in the far northern Arctic region of Canada with additional stations along the North Coast and Aleutian Islands of Alaska, as well as placements on, or near, the Faroe Islands, Greenland, and Iceland. There was no way Soviet Bombers were going to sneak up on us over the pole or send a land and/or sea invasion using the arctic route!

And while the application was defence, it spurred a lot of investment in radar technology, that our modern control towers rely on, as the project was given a priority rush status and completed in less than 3 years, at a latitude that could only be reached by ships during the summer months, which also resulted in advancements in cross-border and joint logistical operations.

Still No Love for the Oompa Loompas this Valentine’s Day

It seems the days of the oompa loompas are long past … as they have been on hard times for over a decade now. Not much has changed in the last ten years. They got no love then, they get no love now.

Just look at some of the headlines from the past year:

  • Feb 9, 2019 Child Slave Labor Rampant in Chocolate Supply Chain
    Sixty percent or more of the world’s cocoa is produced in the Ivory Coast and Ghana in West Africa. These countries are notorious for the worst forms of child slavery. An estimated 1.9 million children are engaged in forced labor on the Ivory Coast alone.
  • Jan 21, 2019
    Do you want slavery with that chocolate?

    Most chocolate has been through two separate supply chains before you buy it. The second chain is where a confectioner … buys bulk finished chocolate or chocolate components from one of the huge global companies that make these.
    The first chain is where these huge global companies buy cacao from farmers and make it into finished chocolate and components (cocoa powder, chocolate liquor, cocoa butter, etc.). It’s mainly the market in this first chain where the problem lies. Almost all of the sellers of cacao are little more than subsistence operations … the buyers can set the price. This extremely uneven market and other capitalist pressures have created a situation where the world has a huge demand for cacao, and yet the farmers who produce it cannot possibly pay
    (or earn) a fair wage at the prices …
  • Jan 9, 2019 Chocolates, caramels might be contaminated with hepatitis A, FDA warns
    Candy sold by a Kentucky company and QVC is being voluntarily recalled for fear that it might be contaminated with hepatitis A, according to a U.S. Food and Drug recall notice.
  • Nov 30, 2018 Global chocolate supply chain tainted by abuses in Brazil
    The global chocolate supply chain is tainted by the use of cocoa from Brazilian farms where human rights violations are common, a report released Friday said. Among the abuses detailed are farmers forced to work off debts to landowners or in degrading conditions, as well as thousands of instances of child labor.
  • Nov 06, 2018 Taiwan finds pesticide in organic chocolate from France
    Taiwan stopped a batch of organic chocolate from France at the border because it contained an excessive level of the pesticide Piperonyl butoxide. The substance was listed as a low-to-medium-level toxic material, likely to raise the possibility of liver cancer in animals.
  • Feb 15, 2018 Cadbury Caramilk chocolate comeback tainted by product recall
    A “limited number” of Cadbury Caramilk chocolate blocks have been recalled just two weeks after the retro treat made a popular comeback to Australian stores earlier this month. All Caramilk 190-gram blocks … have been recalled due to a number of products found to contain small pieces of plastic.

The continued plight of the oompa loompas is very unfortunate considering that many studies have found that (dark) chocolate is good for you. Now, ten years ago we said you should be rewarding the oompa loompas for their hard work, but considering that even if they are working hard and not using slave (child) labour or tainted chocolate, we can’t be sure that the producers they are buying the raw cocoa from are even remotely ethical.

They still deserve a a little love, but they also deserve some new job opportunities. They work hard, and it’s not their fault everyone else is less ethical than them.