Economic Sustentation 04: Gen X, Gen Y, and Gen Z

Talent is supposed to be Procurement’s salvation, so why are:

  • Generation X, born between the early 1960s and the early 1980s,
  • Generation Y, born between the early 1980s and the early 2000s, and the
  • Generation Z, born between the early 2000s and the present day

an economic damnation? As was discussed in societal damnation 50 on talent, talent is required to keep your supply chains moving. People are required to enter the data to keep the information chain moving, to move the money to keep the financial chain moving, and to move the goods that keep the physical chain moving. And the majority of this talent is a workforce between the ages of 20 and 55, who will have been born between 1960 and 1995, and thus will primarily be composed of Generation X and the Generation Y Millennials, and, as Generation X begins to retire en-masse, Generation Z will begin to enter the workforce. So, not only is talent a damnation, its a damnation that comes in three different flavours.

Generation X

Generation X wants stability, fair pay, a great pension plan, flexible hours, time-off to help good causes, good healthcare, and career development.

It’s a tall order if you’re working for a multi-national organization with fixed benefit programs defined in the 1990s — focussed primarily on privately managed pensions, healthcare, and ten year old pay-scales. This is good for a small percentage of the workforce — but if they have kids or grand-kids, fixed 9 to 5 hours every day, no exception, doesn’t work. If the organization believes the best way to help the community is to just donate cash, and the workforce can’t volunteer their time as well, they’re out. And so on. And some of these requirements are at odds with:

Generation Y

Generation Y wants unique opportunities, work-life balance (and more vacation than the mandatory 2 weeks), social responsibility, and mentoring.

The organization probably has decent unique opportunities for those it feels can handle them, as well as some mentoring for people on the fast-track, but that’s it. Generation Y wants responsibility and trust, and wants the mentoring and education so that it will be worth of the responsibility and trust.

Generation Z

The beginnings of generation Z are just beginning high-school. And whereas Generation Y grew up in the information age, Generation Z is growing up in the communication age where not only is technology ubiquitous, but communication technology is ubiquitous and just about every Generation Z is growing up with a smartphone were they can call, text, and e-mail 24/7. And while we don’t know what they will want from a job perspective, we do know that they will want to be connected to their friends and colleagues 24/7 — just not necessarily for work purposes.

So how do you balance all of these competing requirements? You adapt. And you focus on commitment, not fixed hours. Results, not process. Team, not silos.

And then understand the costs of what your employees are asking for vs. the opportunity costs of not offering a few extra benefits to your employees. For example, how much does an extra week of vacation cost versus the results a top Procurement Pro can bring through additional organization cost savings. Does it really matter if the employee works 9 to 5, especially if they need to negotiate with a supplier half a world away at 11 pm. How much does better healthcare really cost? And what about an extra week to allow your employees to volunteer for good causes? The energy and pride could inspire them to work even harder and achieve even more lofty goals when they return to work.

The reality is, most of what talent will ask for costs very little relative to the value that talent can bring your organization. Especially when a top employee can push a hard 3% savings straight to the bottom line on 10M, 100M, or even 1B of spend. And if we didn’t have the situation where only 1 in 7 American adults were competent in math (as per societal damnation 45 on lack of math competency), the math would be obvious. Give in to every reasonable request, make them happy, and realize savings of 3X to 30X their total fully burdened cost.

FusionOps, Supply Chain Intelligence in the Cloud

FusionOps, a supply chain intelligence company that recently raised 25M, was founded in 2005 in Sunnyvale, California (the birthplace of Ariba) to automate ERP-based business processes (like direct materials Procurement and supplier collaboration) that could not be effectively accomplished using the stand-alone sourcing and procurement solutions of the day. However, around 2009, they switched directions and started amalgamating “big data” from ERP, MRP, and other Supply Chain and Supply Management systems in an effort to extract actionable intelligence for their clients.

As part of this evolution, they realized that in order to amalgamate the data that was required to compute metrics that would lead to useful, actionable insights that would guide enterprises in cost reduction, efficiency improvements, and customer service improvements, they would have to extract “big data” from a MDM solution. But most companies do not have a MDM (master data management) solution, “big data” scientists to work on the data, or the know how. As a result, FusionOps realized that they had to focus on “big data as a service” though a “supply chain intelligence cloud” which provided their clients with the metrics and models they need for diagnostic, predictive, and even prescriptive analytics.

The FusionOps solution s a pure SaaS-based solution with an open API that can be used to integrate with any supply chain / supply management solution that can import or export data. Out-of-the-Box it can integrate with over a dozen platforms including SAP, Oracle, Infor, JDA, Microsoft Dynamics, IBM, IFS, Kinaxis, and QAD. The solution is implemented as an application suite that combines S&OP, Procurement, Finance, Inventory, Quality, Production Planning, Sales, and Customer Service data into a cohesive whole across 50+ built-in models that cover over 1,000 KPIs across the inbound, internal, and outbound supply chains.

From this data, the platform can create customized reports, dashboards, and even infographics, which can be easily extended, modified, and enhanced by the user. This makes it easy for the system to be used for day to day tactical operations planning, reporting, executive briefings, and strategic planning. Many of their larger clients use the system in C-Suite briefings and Board briefings, as the reports and graphics can be configured to use company colours and templates.

For a deep-dive on the solution — including the three-main dashboard, report builder, and reporting solutions — check out the doctor and the prophet‘s deep dive over on Spend Matters Pro (membership required) which will dive into the strengths, weaknesses, and unique capabilities.

Geopolitical Sustentation 31: China and the New Silk Road

As per our damnation post last year, as part of it’s Grand Strategy, China has recreated the Silk Road, which has been active since November 18, 2015 when the first train left the city of Yiwu in Zhejiang province for a warehouse complex in Madrid, which it reached on December 9th. And it’s not going to stop until it crosses all of China and connects the entirety of Europe and Asia.

And when we say it’s not going to stop, we mean it. As per an article on Forbes on January 21, 2016 on how China is Moving Mountains for the New Silk Road – Literally, they won’t even let mountains get in the way. Four years ago, the entirety of the downtown Lanzhou New Area (LNA) was hundreds of mountaintops, which have been removed to make flat land for development. That’s right, they cut down mountains. In North America, it’s sometimes a massive undertaking just to flatten a few hills for a flat highway. They brought in the equipment and manpower to flatten mountains! If that doesn’t show you how serious they are about trade domination, I don’t know what will.

China is in the midst of implementing its OBOR (One-Belt, One-Road) initiative that will facilitate the creation of a gargantuan network of new highways, rail lines, logistics and industrial zones, pipelines, power plants, sea ports, and even entirely new cities that will stretch from East Asia to Western Europe, span over 60 countries, and impact over half of the world’s GDP, putting an end to US dominance once and for all. (The OBOR initiative also has a sea route, the 21st Century Maritime Silk Road, that goes through the Western Pacific and Indian Ocean, which also connects China to all of Africa (and the Middle East), giving them access to the entirety of 3 of the 6 populated continents and 6/7ths of the world’s population!

China is not only an emerging economy, it is the emerging economy that will soon be powering, directly or indirectly, almost 2/3rds of GDP when the silk road is completed and it has it’s hooks across 3 continents.

And, as we said in our damnation post, China is about to become your upstream as well as your downstream supply chain. You have to abandon your old view of the world, accept this reality, and start preparing for it. It doesn’t have to be the damnation that causes your undoing. It can be your salvation. Your choice.

So how do you prepare for it?

1. Learn Mandarin

Chances are your China partners will speak better English than you will speak Mandarin, but any attempt to seriously learn their language will be seen as a sign of respect and good faith and go a long way in negotiations. And even if you aren’t the negotiator, you will be able to communicate with almost 1 Billion native speakers. (That’s roughly twice as many native English speakers.)

2. Model your source-to-sink Euro-Asiatic supply chain.

Don’t just model the inbound supply chain, model the outbound too – and when you do your network design, strategic sourcing, and logistics models, try to find the best locations for storing inbound and outbound materials and products, for manufacturing to take advantage of a strong network design, and to minimize import/export/FTZ requirements and logistics network length. Long gone are the days when you are sourcing from China to sell in the US. Now you are sourcing from China to sell to the world, China included, so why manufacture in Malaysia to ship back to China. You need to take your supply chain and sourcing optimization to the next level. (Which is something the Six Samurai can help you with from a sourcing perspective.)

3. Treat your Big China Suppliers as Strategic Partners

Even if you are convinced they don’t understand your business model, the American marketplace, and the global consumer and even if you are convinced that their only goal is to rip you off at every turn (because you are paranoid or your golf course buddy found one of the scammers, which there are in every country), they know their local market and their own preferences better than you. And even if China is not a market today, if your company needs growth, chances are it will have to be tomorrow and you will need their guidance, and possibly even their innovation capability. So get ahead of your competition in their books.

Now, more will be required, but this should put you on the right track, er, road. The silk road. Which will again be the centre of global trade.

Cap Gemini IBX – Closing the Loop on Source to Pay

Cap Gemini is a one of the world’s largest multi-national consulting companies headquartered in Paris, France that focusses on management, outsourcing, and technology-based consulting and specializes in strategy, digital transformation, finance, marketing, IT strategy, solutions design, big data / analytics, and supply chain management consulting. Of course, we are primarily interested in the latter and, in particular, any technology underpinnings.

As part of their technology underpinnings, Cap Gemini has three primary offerings. Spend Analysis, powered by Spend Radar; Procurement Intelligence, powered by Microsoft’s Strategy Companion; and the IBX Business Network that implements their Source-to-Pay platform with e-Sourcing, e-Procurement, and supplier (portal) support. This is what we’re going to cover briefly in this post.

The solution is a seamlessly integrated Source to Pay Solution with a global supplier network, where suppliers can self-register, manage their customer interactions through a portal with a single integrated view, and even manage their invoices that originate outside of the IBX platform (which is a unique capability that will be discussed later on). If you consider the classic Sourcing and Procurement lifecycle, first diagramed by the doctor on SI back in the doctor wants to remind you it’s Sourcing and Procurement, a good S2P solution needs a lot of capability, especially if you want to capture low-volume purchases and spot-buys (and, in particular, catalog management needs to underlie the requisition through the approval process). The IBX platform contains, to some degree, almost everything indicated in this diagram (with the exception of true strategic sourcing decision optimization, which we know is currently limited to the six samurai) plus a lot of cool supplier network, catalog management, and spot-buy features, including a few that you will not find in any other (best-of-breed) platform on the planet.

In this post, we’re going to focus on spot-buy and the invoice management dashboard, as they are the most unique offerings in the platform. The new spot-buy functionality allows a requisitioner to create a requisition for anything they need, fill out as much information as possible (including expected pricing), suggest one or more suppliers on the network, and route it to Sourcing for identification of the proper products and/or services. A (senior) buyer in Sourcing will validate the request, choose the appropriate sourcing process (RFX, auction, third-party catalog offering), make a selection, and return it to the buyer for final acceptance and submission, at which time it will be routed to the appropriate approvers. Note that we say Sourcing, not a buyer, as it contains rule-based workflow management that allow it to be routed to the buyer with the proper authority with the smallest workload to minimize processing time.

The new invoice management dashboard, designed for the supplier, allows a supplier to sign in and see on one screen the status of every invoice sent to every customer on, and off, of the IBX network as well as drill in and get as much related information as there is for IBX platform invoices (including, but not limited to, conversations, buyer requested corrections, goods receipts, purchase orders, etc.). The system supports uploads from standard AP and ERP systems for suppliers to get this information in the system. Being able to log into one portal and service all their IBX customers through one login and one interface is great, but being able to manage all of their invoices, which is something that is always top of mind for a supplier, is even better still.

There’s a lot of other cool and powerful features in the IBX system, and they are covered in detail in the recent piece by the doctor and the prophet over on Spend Matters Pro (Part 1 of 2, membership required) which gives one of the most in-depth and balanced reviews of the system that you are going to find anywhere.

One Hundred and Sixty Five Years Ago Today …

The Great Exhibition of the Works of Industry of All Nations, the very first World’s Fair, opened in Hyde Park in London (England).

Organized by Henry Cole and Prince Albert, it was attended by numerous notable world figures of the time and contained exhibits from Britain, its ‘colonies and dependencies’, and 44 ‘foreign states’ in Europe and the Americas. With over 13,000 exhibits, it was a tremendous undertaking for the time and inspired a series of world fairs that followed (which still continue to this day, with the next world fair being Expo 2017, taking place in Astana, Kazakhstan [as sanctioned by the Bureau International des Expositions, which has served as the international sanctioning body for world’s fairs of the universal, international, and specialized variety since 1928]).

A special building, The Crystal Palace, designed by Joseph Paxton and which took the form of a massive glass house 1851 feet long and 454 feet high, was built specifically to house the show. After the exhibition, the building was rebuilt in an enlarged form on Penge Common, and stood until its destruction by fire in 1936. However, its legacy lived on as the site was used as the Crystal Palace motor racing circuit between 1927 and 1974 and inspired the Crystal Palace Garden Parties between 1971 and 1980.

And over six million people attended the fair. One has to remember that in 1851, the population of Great Britain and Ireland combined was only 29M-ish (and Britain itself only 19M-ish) and the world population was only slightly over 1 Billion. This contributed to a profit of £186,000 (£18,370,000 in 2015), and that surplus funded the Victoria and Albert Museum, the Science Museum, and the National History Museum as well as an educational trust for scholarships and industrial research which still provides funds today.