Monthly Archives: February 2024

2023 was the year of Intake. Will 2024 be the Year of Orchestration?

Orchestrate the feeds
Pave the way for meeting needs
Phase one is initiated,
there’s no more paper chase, eh?
Set the space ablaze
Case closed, we did rephrase
Workflows for phase by phase
Gets you through the hard days

To the tune of “Orchestrate” by Eliozie
(Outtro NSFW)

2023 may have been the year of Intake with Zip raising 100M to do Procurement intake management for the layperson, but 2024 will be the year of Orchestration. The reason is that while it’s great to manage intake and give the organizational end-users and stakeholders insight into where their request is in the process at all times, allowing them to interact with Sourcing and Procurement where needed, it’s even greater to give Sourcing and Procurement the orchestration engine they need to get their job done and fulfill those organizational requests efficiently and effectively – across people, processes, and platforms.

With so many challenges for an average buyer to fulfill a request from an organizational employee or stakeholder:

  • identify potential suppliers
  • identify potential products
  • verify products
  • for suppliers not onboarded, verify supplier eligibility for onboarding
  • onboard the required suppliers for the sourcing event
  • conduct the sourcing event
  • identify the winner
  • conduct negotiations and …
  • collaboratively develop a contract for signature
  • (e-)sign the contract
  • identify and track the performance obligations
  • identify and track the compliance obligations
  • import the pricing into the e-Procurement system
  • send out the (first) PO
  • track the order acknowledgement and the shipment
  • ensure and record delivery
  • etc. etc. etc.

Doing all of this often involves

  • using a third party supplier discovery service to identify potential solutions
  • searching product specs in a third party marketplace that integrates with your catalog management application
  • using a TPRM (third party risk management) to make sure the supplier doesn’t have any obvious red flags
  • onboarding the supplier in your supplier management solution to collect organizational specific data requirements in order for you to potentially transact with the supplier
  • switching to an e-Sourcing tool to do the RFP/RFQ (as appropriate)
  • running a (weighted) analysis on the bids to select a winner …
    possibly in an analytics solution
  • conducting negotiations in a negotiation management tool (that may or may not be integrated with the CLM)
  • managing the contract drafting processing in the CLM
  • … and the signing in the e-Signature tool
  • and then run the the contract through a contract analysis solution to push the performance and compliance obligations into the governance module
  • … and extract and push the pricing into the e-Procurement system(‘s integrated catalog)
  • … where the PO is cut and the Ack received before …
  • they have to manage the invoice in the I2P (Invoice to Pay) / AP (Accounts Payable) system as well as verify the goods receipt
  • etc. etc. etc.

Furthermore, even if the organization has a “suite”, chances are it’s not that “sweet” and many of the core modules aren’t tightly integrated (as most of today’s S2P “suites” were assembled through acquisition and while the UX has been cleaned up to look consistent at first glance and there is some “endpoint” integration, chances are that it’s minimal data push and pull between process endpoints). It’s also often the case that if the required workflow doesn’t exactly match a very specific use case, the integration just doesn’t work seamlessly and it’s a lot of effort. That’s for the modules in the suite. Not all modules are in the suite. Most suites don’t have full TPRM, extensive compliance management, negotiation support, inventory management, etc. and that is through non-integrated third party solutions. A simple process that should take a few hours of effort to check all the boxes can take days of effort as buyers have to switch between multiple systems, check status, re-enter data, switch back to the intake platform to update the requester, make changes, and so on. Just like the introduction of “modern solutions” has taken onboarding from a 2-day fax and email process to a 2-week gated process with multiple, disjointed, approvals, the proliferation of disjoint, specialized, Source-to-Pay-Plus solutions has taken simple processes that take hours of person-work and days in real-time to complex processes that take days of person-work and weeks in real-time.

The solution? Procurement orchestration. Something that integrates, to the extent possible, all of the modules together in the right process with the right steps in the right seamless flow that requires any piece of data to be entered once and only once in a consistent user interface … and works for all parties, the requester, the buyer, and any stakeholder involved in the process.

“Shovelling Anthem”

If Redfoo grew up in the North and only did his songwriting in winter …

Shovelling
Yeah
Woo!
Let’s go!

Shovelling is what we do today
Everybody just have a good time (Yeah)
And we gonna go get cold outside (Woo!)
Everybody just have a good time
Shovelling’s what we do ev’ryday (Oh!)
Everybody just have a good time (Come and move it, baby!)
And we gonna go get cold outside (Yeah)
We just wanna see you
Shovel!

In the street: Shovelling
Looking for your girl? She stuck in snow (Huh?)
Neck high ’cause the winds did blow
Booty moving weight when we on the block (Woo!)
Where the road? I gots to know!
Snow pants, warm toques, ’cause I’m oh so cold
Half-fluff, half-packed: it must go
Snowblower jammed, shovels, ho!

I’m shovelling through these drifts in slow mo
I got that backbreaking twist, knee high drifts, snow halo
We shovelling!, yeah, that’s the crew that I’m reppin’
In the search for the road, no Led in our Zeppelin (Hey!)

Shovelling is what we do today (Woo!)
Everybody just have a good time (Yeah)
And we gonna go get cold outside
Everybody just have a good time (Let’s go!)
Shovelling’s what we do ev’ryday
Everybody just have a good time (Come and move it, baby!)
And we gonna go get cold outside
We just wanna see you
Shovel!

Every day I’m Shovelin’ (Shovel)
Shovelin’, Shovelin’ (Shovel)

Get out fast and be the first one to clear your driveway bare
We get shovels, out we go, there’s a – chill in the air
One more lift for us (Another scoop!)
Hope our knees hold up (Another stoop!)
We just want the sight (It’s only fair!)
Black asphalt tonight (We know it’s there!)

Stand up, knees down, point your shovels to the ground
Stand up, knees down, point your shovels to the ground
Stand up, knees down, point your shovels to the ground (Woo!)
Point your shovels to the ground
Point your shovels to the ground (Let’s go!)
Stand up, stand up, stand up
Stand up, stand up, stand up
Stand up, stand up, stand up
Point your shovels to the ground
To the ground
Swing your shovels (Woo!)
Swing your shovels
Swing your shovels
Swing your shovels

Shovelling is what we do today (Swing your shovels, woo!)
Everybody just have a good time (Swing your shovels)
And we gonna go get cold outside (Swing your shovels)
Everybody just have a good, good, good time

Oh-oh-oh-oh-oh (Swing your shovels)
Oh-oh-oh-oh-oh (Come and move it, baby!)
Oh-oh-oh-oh-oh (Swing your shovels)
Oh-oh-oh-oh-oh (Swing your shovels)
Shovel!

Every day I’m shov-shovelin’
Lift them (shovels)
Lift them (yeah)
Lift them (woo!)
(Hands up)
Lift them (shovels)
Swing your shovels
Swing your shovels
Swing your shovels

Only Half Of Organizations are Concerned They’re At Risk of Greenwashing. What are the other half smoking?

A recent press release from Ivalua over on the Supply Chain Quarterly site stated that nearly half of organization are concerned they’re at risk of unintentional greenwashing and that 48% of US organizations are very confident they can accurately report on Scope 3 emissions.

This falls into the same category as half of Procurement leaders expect their budgets to increase and 9% of companies claim to be ready to manage risks posed by AI … ridiculous.

The 52% that feel that Scope 3 reporting is a ‘best-guess’ measurement have it right. There isn’t a single carbon calculator (service) offering that is accurate. Some aren’t bad, and a subset of these will meet the baseline requirements for carbon reporting, but even those that make the baseline cut for reporting aren’t as good as you think. The majority of these work by using country-industry averages computed by third party institutes and agencies, which are then multiplied by the estimated total volume of product coming from the country-industry average adjusted. It could be totally accurate, or it could be totally inaccurate if your supplier is using a significantly older production line technology and using dirtier energy than its peers or, in the best case, was the first supplier in the region to update its production line, switched to primarily renewable energy sources, and found a way to recycle water and minimize fresh water usage.

Plus, with no clear guidance on how to properly calculate your e-Liability, how do you know that you are truly accounting for all of the carbon you are responsible for (in terms of products, logistics, services, etc.) while not taking on carbon that belongs to your supplier (that they are trying to pass on to you).

Also, if you’re passing on your calculation to a third party, or even worse, to a supplier, how do you know that, if there are multiple potential third party region-industry estimates to choose from, that the third party isn’t choosing the absolute worst (so you will believe you need their carbon reduction consulting services) or that the supplier isn’t choosing the absolute best when answering your RFX (when neither of these estimates are correct).

The reality is that, even if you use a third party, your scope 3 calculations are acceptable (but not necessarily accurate) approximations at best, but likely of little value the majority of the time and your true knowledge of whether or not your supplier:

  • uses renewable energy
  • recycles or minimizes (fresh) water usage
  • uses efficient production processes that minimize direct (production) and indirect (energy and [fresh]water) carbon
  • actively looks for ways to be sustainable

doesn’t exist unless they have been audited on-site by you or a third party service that you trust. And accepting anything less is accepting greenwashing (or some variant of) to some degree.

And the only way you are truly going to reduce your Scope 3 is to:

  • minimize demand for consumables, and use as many renewables as you can
  • focus on renewable, or at least recyclable, content in your products
  • work with suppliers to optimize processes
  • invest in suppliers (possibly through long-term contractual commitments) to upgrade to modern processes that will minimize their carbon production
  • etc.

The Prophet‘s 2024 Procurement Prediction Number 6

Get Ready to Make BIG Supply Chain Decisions A

The Prophet says we will make far more BIG decisions in 2024 in Procurement and Supply Chain and possibly more than we have ever done.

the doctor will actually go one step further here — there will be NO little decisions. Every decision you make will lead you down further down a path that will inevitably branch or disappear in an unexpected way and you’ll need to make a BIG decision, and that decision will be limited by prior decisions, which are actually the starting points of the BIG decisions you might not even see coming!

And, as The Prophet says,

1) you need better data than your competitors. Let’s be clear here. That is data that you should have had yesterday! This means you need to clean up your data and enrich it. And this is an effort. But more on this in the next article in our discussion of Prediction #7.

2) you need frameworks for decision making and framing — what do you even need to consider, and who needs to be consulted before the decision is made and included in the decision making team

3a) you need tech for planning and forecasting as well as
b) tech to identify confidence, or lack thereof, in data, models, and predictions
c) tech to support a deep dive into models and predictions with high confidence when the answers are unexpected so that an explanation, or root cause, can be identified and addressed (because sometimes the right response to a situation will be completely unexpected; and you can’t risk brushing off a right response that feels false)

4) you need the scenario analysis and [multi-objective] optimization that should have been in use since the day it became available! [the doctor hasn’t been publicly promoting multi-objective strategic sourcing decision optimization [SSDO] since SI started in 2006 just because he’s a contrarian!] Not only has the lack of use contributed to a consistent loss year after year after year (as companies paid as much as 10% more on total COGS than needed), but it contributed to lack of balance in decisions (as these models allow you to balance cost and risk, cost and carbon, cost and carbon and risk, etc; if you can quantify it, these tools can help you balance it), which is becoming more and more critical. There’s no savings if there’s no purchase … and without supply, who cases what the spend was supposed to be?

5) you need the best “decisioning” team, which MUST be multi-disciplinary and multi-departmental; with so much hitting you from so many angles, it’s virtually impossible for one person to see everything

but you have to go beyond this and

6) a) identify the short-term results expected from your decisions which can be monitored and tracked,
b) implement solutions that allow you to monitor and track toward measurable results, and
c) track progress against those expected short-term results

7) if the actual results start to diverge significantly in the short-term, be prepared to bring the team back together, revisit the data, frameworks, technology, models, and decision factors; find the assumptions, etc. that are no longer valid; and make a new decision, even if there is a short-term drawback (or contract penalty).