Coming in at 130 pages, you might immediately think that this isn't a paper or a report; it's a book.
I know that was my first thought when I began reading the GEP Spend Category Outlook Report For 2022. Just as an aside, did you know that between 2011 and 2017, the average length of a bestselling book fell by 42%? Since then, and with the demand on our time becoming greater, I am sure that the length reduction has continued its downward trend.
By the way, a 2022 report indicates that the same downward trend applied to white papers, which, on average, are now 6 to 8 pages.
So, why am I with this latest paper talking about the number of pages versus the actual content – which is amazing?
My reason is that reviewing this report shouldn’t be a “read once and done” exercise.
The Ultimate Nightstand Guide
In today's Zettabyte digital reality, we are bombarded with content so much so that if you read a book or a paper, you are likely to gather what you can and then move on to the next resource – which is fair.
However, sometimes the information you receive is so on the mark that it is worth setting aside to a special place so that you can easily access its insights any day, every day. What I am talking about is a guidebook. And this latest GEP release is just that – it is a handy guidebook that you will want to keep at your fingertips to understand better the challenges you have or are facing today and the ones you will be facing tomorrow.
Having read it in its entirety, I can confidently say that it will help you get ahead of the curve of future challenging events before they unfold. Through the agility of its timely insights and the practical adaptability of its direction, you will quickly move from a reactive to a proactive position. It is the epitome of turning information into actionable knowledge.
Mary Zampino, Vice President – Content, Research & Analytics
There are no shortages of headlines such as the one above linking supply chain disruption to inflation. While I don't want to oversimplify the current situation, when supply can't meet demand for various reasons, inflation is the end result. External forces such as the above reference to the war in Ukraine and the now seemingly endless COVID-19 pandemic are the most notable contributing factors. And let’s not forget the Suez Canal blockage and its extended impact around the globe.
Undoubtedly, the “interconnectedness of global supply chains” means that these events have far-reaching implications impacting “labor, energy and transport costs.” As a result, the consumer price index (CPI) - which has been somewhat stable for the past few decades, has seen a significant rise in prices.
How significant?
In December 2021, reports indicate that the CPI was “5.4% higher than a year previously in December 2020.” In other words, even though supply chain disruption and its link to inflation are not new, the breadth of its impact globally has created a sense of urgency like never before – at least not in the 21st century. Nor are there any signs of relief on the near horizon, as a recent New York Times article proclaims that we are not likely to see the return to a “normal supply chain” in 2022 (or anytime soon.)
Along with senior buy-side executives, joining SIG’s Stephani McGarry on the call was the Everest Group. In what I can only refer to as a “captivating session,” the discussion focused on what we as an industry have and will continue to face during these inflationary times.
Thrust into the spotlight due to the pandemic and now the war in Ukraine, the demand for sourcing professionals to deliver maximum value has never been greater.
To start, "maximum value" is no longer about getting something at the best price – if it ever was. I base the "ever was" on the words of a 20-plus-year industry veteran who has held senior executive positions with a major global brand and stressed that it has never really been about cost savings alone. If it were, they added, they would have left the industry a year and a half after they started.
So, if it isn't about cost savings, what is it about?
It is about agility, resilience, and being strategic. It is also about breaking through existing barriers to achieve optimal outcomes through digital transformation. In other words, the merger of people skills with emerging digital tools such as Life Cycle Contract Management (CLM) solutions.
The Seven Steps to Success in Sourcing paper was written with the above objectives in mind.
Beyond providing an outline of the challenges with which sourcing professionals are now contending, in this article, I will review the paper's "seven steps" within the context of a CLM framework. Included will be a deeper dive into one of the steps – Improving transparency.
Barriers To Agility
The paper talks about the challenges of "cumbersome siloed data" and points out that sourcing professionals are weighed down (and slowed down) by "outdated traditional systems" and "complex, often manual" processes.
While these have been significant issues, they take on new meaning in a post-pandemic world, a new meaning in which supply chain resiliency is being stretched to the breaking point.
As a result, the risk of "slow, inflexible sourcing processes" reduces agility and, with it, the ability to adapt to the at times, unpredictable changes in the marketplace.
Mary Zampino, Vice President – Content, Research & Analytics
A timeless saying is that "life is 10 percent what happens to you, and 90 percent how you react to it."
I was reminded of these words when I recently read the PBS News Hour articleHow the supply chain caused current inflation, and why it might be here to stay.
According to reports, the 6.2 percent increase in prices over last year was unexpected and, therefore, a shocking turn of events to many experts. Even more troubling is that there is a growing belief that higher consumer prices will become the "new normal." In short, while the rate of inflation may nominally fluctuate over the coming months, its fastest rate of increase in "more than three decades" is a trend that will likely continue in the coming years.
I intend to understand the "why" of what is happening and highlight the consequences of the current crisis - including the means and tools at your disposal to deal with it.
Supply Chain Mess
While there is no single reason for the inflation we are experiencing today, it seems that the catch-all reason given by experts is that our supply chains are a mess.
Starting with the "severe shortages of goods and labor in supply chains," pundits point to a dramatic increase in people buying online due to the pandemic as an exacerbating factor.
For example, industry projections that orders would hit 4.7 million packages a day during this recent holiday go well "beyond what the system can possibly absorb or deliver." However, that is just one part of the story, which brings us back to my opening comments about our reaction.
When The Chips Are Down
The strained relationships between buyers and sellers due to inflation are making headlines around the globe.
In what was traditionally a siloed function, separate from overall executive and organizational strategy, procurement professionals have more recently become integral to company operations and resilience. This prominence grew during the COVID pandemic, which broke down barriers between departments and raised attention to the importance of Chief Procurement Officers (CPOs) and other procurement personnel, and the work they do.
The Power of Procurement
The procurement team is at the interface between the enterprise and the extended enterprise: the organization and its suppliers. Procurement professionals are in the position to understand the risks and the wider ecosystems their suppliers operate in. They, like no other function, can make predictive connections and be able to quickly identify risks specific to one supplier or those endemic to the wider ecosystem, and quickly pivot alongside the business accordingly. And it’s not just risk, but opportunity and innovation for the enterprise, such as identifying new products, materials, capabilities and offerings.
With this greater inclusion of procurement professionals into organizational strategy, CPOs and similar roles need to begin to reframe how the function can best serve the organization, and how other departments can serve them. One key to this new way of thinking is framing procurement around holistic risk management, particularly when it comes to managing third parties, suppliers and the supply chain.
Best Practices for Taking a Holistic Approach to Procurement
While not everything in this shift can be implemented immediately, there are general aspects of agility that should be on procurement’s agenda, including:
Recently, SIG had the pleasure of hosting Nitin Khorana, Vice President from Icertis for the September CPO & Executive Virtual Series. It was a very engaging discussion that lasted nearly two hours with tons of excellent takeaways. Let’s get into it!
Contract Intelligence Driving Visibility into Supply Chain
Nitin kicked off the day discussing the impact that COVID-19 has had on supply chains and bottom lines. As Nitin highlighted from one particular study, 97% of supply chains reported that their workforce was impacted by COVID-19. The resulting question from organizations became "how do I manage risk and how do I react quickly to maintain supply chain performance post-pandemic".
This is where Chief Supply chain officers have come to the forefront. These key players for the business have become increasingly recognized for their ability to deliver profitability & long-term business objectives. What helps these supply chain leaders elevate this supply chain performance? Visibility into their supply chains.
As Nitin points out, contract management plays a vital role in supply chain performance. Contract intelligence is able to set qualification benchmarks and processes for existing and new suppliers. By using blockchain framework delivers visibility into tier 2 and tier 3 suppliers by quickly being able to identify contracts that don't align with risk & category strategies.
A More Resilient & Efficient Supply Chain Starts with Contracts
Corporations are increasingly using their financial strength to address supply chain performance through contract-driven supply chain visibility and diversification. There are three ways that contract lifecycle management (CLM) can drive this visibility.
As we close out the first half of 2021, we prepare for the future of procurement with a host of exciting industry research and webinars to make your role easier.
July CPO & Executive Virtual Series
SIG's CPO & Executive Virtual Series is an opportunity for the most senior procurement executives to gather with their peers in an interactive virtual environment to discuss their most pressing issues. On July 21, A panel of experts from Everest Group will explore maximizing savings and innovation from IT and BPO Service Providers, followed by topic-based discussions on contracting models and cost savings in 2021.
Join us for this executive-level conversation with actionable takeaways.
As a 40-year Procurement leader, Steve Kesinger knows a thing or two about the daily struggles of procurement departments. The former Nordstrom Chief Procurement Officer and LogicSource Procurement Council member has hands-on experience managing large, complex teams responsible for managing over $2B+ in annual spend, resulting in a unique perspective on what Procurement teams need to succeed.
In this session, Steve will be joined by LogicSource Managing Partner, Sam Vail, and Sourcing Industry Group President and CEO, Dawn Tiura, to share the insights he has harvested from his decades of experience both as a CPO and also in his current advisory role helping early-stage technology companies build business models that will resonate with Fortune 1000 procurement leaders.
Just last month, when thousands of people took time away from their day-to-day, to gather to focus on Sustainable Procurement at the 2021 Sustain event. There was an air of anticipation, with a whiff of panic. The 5000+ registrants and 3000+ attendees (over twice the number from last year and ten times the number just five years ago) are a testament to how Covid and all the calamity of 2020 has moved the supply chain into a very bright spotlight. A year as disastrous as 2020 demands a deep strategic rethink of how we approach, value, build and optimize our value chains, with an ESG/Sustainability lens.
Procurement, supply chain and sustainability leaders alike are groping for guidance on how they can rebuild better and more resilient supply chains in the face of such massive uncertainty. There is a visceral passion and ambition by the sustainable procurement community to reinvent. But along with this spirit was an unsettling mix of uncertainty, anxiety, and trepidation about HOW to do it right.
Four Ways we Must RETHINK Supply Chain
We see four key factors that we must RETHINK about supply chain sustainability, which sets a framework and direction for launching or accelerating a sustainable procurement program to meet the needs of the New Normal.
2020 created a unique situation for businesses and significant learnings from the unforeseen circumstances of the pandemic. 2021 will be the year these learnings are put into action. Internally, this may mean updates to standard operating procedures, workflows and other processes to better prepare for the unforeseen. The explosion in online training and the expected increase in budgets will offer more opportunities. Businesses with a well-trained workforce will have a competitive advantage.
Training is perhaps more critical in 2021 than in years’ past. It is well known that a comprehensive training and development program empowers employees and improves retention. According to LinkedIn’s 2020 Workplace Learning report, 51% of learning and development experts will be launching upskilling programs while 43% will be reskilling their teams. So much has been learned across industries, disciplines, etc, that it will be critical for not only the Procurement organization to be an active participant in training but Marketing, Accounting, Manufacturing, Supply chain, etc.
Streamlined Procurement can be Part of the Solution
Across organizations, departments are being challenged to do more with fewer resources. As a result, finding the time to participate in training sessions becomes more difficult. Establishing a priority for what training is most important becomes a challenge. Finding ways to make company-wide processes easier lowers the burden on the individual department in 2 ways. First, simpler technology or processes eliminates the need for formal training sessions, and an easier process saves time and encourages user engagement.
Career procurement professional turned author Peter Smith, MA, FCIPS, FRSA, recently joined the Sourcing Industry Landscape Podcast to lift the lid on some of the worst procurement scams in history, offers practical advice on avoiding embarrassing mistakes, and shares how to make sound, strategic procurement decisions.
If you're going back to 2019 is when you wrote the book, can you share some of their global disasters or the big stories that you included in the book back then?
When it comes to procurement failures, there are many areas, and some of them do not really understand what you're buying. And that can be something very simple, like the printing equipment the Irish government bought that didn't actually fit into the building they were putting it in. Or much more complex technology failures and so on.
But then, there are some interesting areas we perhaps don't think about so much in supply chain procurement, and I believe getting incentives wrong is a fascinating one. So, how do you incentivize suppliers to do the right thing?
And some of the failures there are clearly failures, but when you ask the question, "Well, how would you have done it, so it wasn't a failure?" those answers are not simple. Just something as straightforward as, "How do you get the incentives right for somebody running an outsourced call center for you? They're handling customer queries, doing inquiries or complaints. How do you incentivize them to work efficiently but give excellent customer service to the people calling in?
 (1).png?vWEDpN6_l51Qid4r4nfYuoQQvL5YHLyY= "Dealing With Inflation And The Disrupted Supply Chain")
 (1).png?_ZiBPfArAkofEli0Pp5JipM_xXSV_G4D= "One Source Of Truth: Tearing Down The Silos Of Sourcing Inefficiencies")
 (1).png "The Inflated Supply Chain: How To Navigate The Complexity Of Doing Business During A Period Of Rising Inflation")
 (1).png "It’s Time to Take a Holistic Approach to Managing Procurement Risks")
 (1).png "CPO & Executive Virtual Series Recap: Maximizing Supply Chain Potential with Contract Intelligence")
.png "This Month at SIG – July 2021")
 (1).png "Rethink and Rebuild for the New Normal")
 (1).png "How Streamlined Purchasing Supports Training and Development Programs")
 (1).png "An Exposé from Procurement Insider Peter Smith")
GEP Spend Category Outlook Report For 2022: The Industry’s Most Comprehensive Guide For Navigating An Uncertain World
Coming in at 130 pages, you might immediately think that this isn't a paper or a report; it's a book.
I know that was my first thought when I began reading the GEP Spend Category Outlook Report For 2022. Just as an aside, did you know that between 2011 and 2017, the average length of a bestselling book fell by 42%? Since then, and with the demand on our time becoming greater, I am sure that the length reduction has continued its downward trend.
By the way, a 2022 report indicates that the same downward trend applied to white papers, which, on average, are now 6 to 8 pages.
So, why am I with this latest paper talking about the number of pages versus the actual content – which is amazing?
My reason is that reviewing this report shouldn’t be a “read once and done” exercise.
The Ultimate Nightstand Guide
In today's Zettabyte digital reality, we are bombarded with content so much so that if you read a book or a paper, you are likely to gather what you can and then move on to the next resource – which is fair.
However, sometimes the information you receive is so on the mark that it is worth setting aside to a special place so that you can easily access its insights any day, every day. What I am talking about is a guidebook. And this latest GEP release is just that – it is a handy guidebook that you will want to keep at your fingertips to understand better the challenges you have or are facing today and the ones you will be facing tomorrow.
Having read it in its entirety, I can confidently say that it will help you get ahead of the curve of future challenging events before they unfold. Through the agility of its timely insights and the practical adaptability of its direction, you will quickly move from a reactive to a proactive position. It is the epitome of turning information into actionable knowledge.