Tag Archives: ThomasNet

Managing Procurement in a Digital World

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5 tips for operating in a digital world

Many of you may find this hard to believe, but years ago the buyer’s best resource was the green, multi-volume set of the Thomas Register of American Manufacturers that was proudly displayed on the credenza. This was THE way to search for new suppliers. Today, you recognize ThomasNet.com and their web-based platform for supplier discovery. Things have come a long way since the hardcover green volumes, but I see many companies who, while using web-based searches, are still basically operating in the same way as the “look up a supplier for my item” process. Procurement exists in a world where social media, cloud computing, transition to mobile devices and the internet of things can simplify processes and free up valuable time to focus on more strategic, value adding work.

E&Y in its analysis of Megatrends 2015 reports that “Digital disruption is taking place across all industries and in all geographies. Enormous opportunities exist for enterprises to take advantage of connected devices enabled by the “Internet of Things” to capture vast amounts of information, enter new markets, transform existing products, and introduce new business and delivery models. However, the evolution of the digital enterprise also presents significant challenges, including new competition, changing customer engagement and business models.”

While the E&Y report highlights many megatrends, I want to focus on the digital impact on the procurement leader of the future. It’s obvious that the future for procurement will include connectivity from customer through to the lowest level supplier. It’s also not hard to envision models where computers on routine purchases have the ability to solicit quotes for business, analyze the quotes with decision-support artificial intelligence, place the order based on key rules and complete the transaction when goods and services are received. It’s also not hard to envision the costs and benefits of such systems, leaving procurement to develop longer-term strategies, supplier relationships, new products and work across the supply chain to deliver increased levels of value.

Here are five tips for managing procurement in a digital world:

  1. Align all low spend, low value categories so that they can be managed automatically.
  2. Develop order points, Kanban, blanket order releases, etc., so that they can be automated.
  3. Think about developing intelligence for timing, decision-support and rules for automating the RFX process.
  4. Automate supplier performance reporting and analysis.
  5. Reduce complexity of low spend, low value expenditure by establishing controls and removing human touch points.

These tips are just some of the things that procurement leaders should be thinking about as more and more human work is being transferred to machines and software. Automation of purchasing should be no exception!

Are you automating processes?

Back On-Line

I apologize all my followers for not writing a blog for a while. As many of you know, I have been transitioning from the position of President of ISM Services to a new role. Consequently, I am the founder of a new firm, Aripart Consulting. This firm represents collaboration with media, clients, consultants and firms looking for innovation and improvement through procurement and supply chain.

Through the move from retiring from ISM to starting the new company, my wife Linda (@SourcingChick) and I have taken a lot of time to reflect on the experiences, opportunities and rewards from the procurement and supply chain profession that have so greatly enhanced our lives. Linda was part of the ISM-ThomasNet team that designed the 30 under 30 Supply Chain Stars program (whose amazing winners were just announced). This program was created to honor and reward Millennials who have chosen our profession. I have spoken to many manufacturing company owners and senior management who have said one of their biggest risks is that the younger generation is not attracted to manufacturing. I wish I had the chance to speak to every young person to describe the feeling of knowing how dirt in the ground becomes the can from which you’re drinking. Or of travelling on 6 continents and seeing the sights and being a better citizen because of exposure to many cultures. Or of understanding the good and bad aspects of regulation. And of the ability to give back to causes dear to my heart because the salaries in the profession are very good. Yes, Linda and I owe this profession a lot.

In all, it has been a great transformation. I would like to thank Tom Derry and the Institute for Supply Management for releasing the rights of Sourcing Guy back to me. I will start regular blogs this week.

Thank you all for your patience. I look forward to challenging and calling us all to action.

Bill Michels (Sourcing Guy)