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A Flood of Rumors Surround Apple’s Pending Product Launches with High Expectations

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Wall Street insiders and the financial press are hard at work extracting tidbits of information from elements of Apple’s supply chain. The buzz and interest centers squarely on what can be anticipated for Apple’s Fall new product introduction (NPI) pipeline. Obviously there is a lot at-stake.

We at Supply Chain Matters have featured prior commentaries related to information leaks from the Apple supply chain ecosystem. But we put that aside in this commentary. Rather, let’s focus on Apple’s new product ramp-up, overall planning and supplier management strategies that are evolving in this current phase.

The current two areas of focus are on the rumored introduction of Apple’s next iteration of the iPhone along with the so termed, iWatch, a smartwatch that is rumored to have rather mind blowing functionality and characteristics.

Earlier this week, the Wall Street Journal published an article, Can Apple Crack the Smartphone Code? (paid subscription required) The article indicates that Apple will join other consumer electronics firms, namely Samsung, Sony, Intel and a host of start-ups who have already released versions of a smartwatch into the market. We recently called Supply Chain Matters reader attention to reports that Google was ramping-up volume production for  a smartwatch product as well. According to the WSJ article authors, thus far the market has been lukewarm in sales volumes. Thus, Apple does not have its usual first-mover advantage, and is compelled to provide more attractive product innovation to differentiate from existing competitors. The publication cites one market research firm as indicating that shipments of so-termed wearable devices amounted to roughly 3 million units in the first quarter of 2014, not a lot in the context of previous Apple product releases.

Regarding supply chain related insights, the WSJ cites a source indicating that Apple’s past ability to integrate both hardware and software design concurrently give it a leg-up in the market. Another source from a component supplier is quoted as indicating that Apple is planning for 2014 shipments ranging from 10-15 million production units this year.

A separate published report by Reuters , citing a source familiar with the matter, indicates Taiwan’s Quanta Computer will begin mass smartwatch production in July, with the planned product launch coming as early as October. Thus, we can surmise that in 3 months, Apple is planning to ship three to four times the market volumes that occurred in Q1.  That’s Apple’s big bet on more attractive production innovation. The cited source further indicates that Apple expects to ship 50 million units within the first year of the product’s release, although these types of initial estimates can be subject to change or later adjustment. Further noted is that LG Display Co is the exclusive supplier of the screen for the gadget’s initial batch of production. LG Display has become Apple’s preferred go-to supplier for next generation display technology, that which requires difficult challenges in overcoming initial production yields. Two other sources of Reuters indicated that the subject smartwatch is rumored to also contain a sensor that monitors the user’s pulse. Singapore-based imaging and sensor maker Heptagon is cited as being on the supplier list for that feature, a rather new player in the Apple ecosystem.

Now let’s turn attention to the rumored new iPhone6.

A published advisory on Seeking Alpha cites Taiwan’s Economic Daily News report indicating that global contract manufacturer Foxconn is being tapped to be the prime contract manufacturer and is in the midst of hiring 100,000 workers to help ramp up iPhone 6 production. Fellow ODMPegatron is also said to be ramping iPhone-related hiring. Further noted is the rumor that Apple is targeting a price hike for carriers regarding the new phone model, which perhaps implies a bigger margin. Yesterday, a published report from Bloomberg indicates that production for the new model iPhone will begin in July and include two different models. One model will have a 4.7-inch display, compared to the 4-inch screen of the current iPhone 5s and may be available to ship to retailers around September. A 5.5-inch version is also being prepared for manufacturing and may be available at the same time according to the Bloomberg sources. The new iPhones will also be rounder and thinner than previous models, and include curved glass. Production of the 5.5-inch model is more complicated than the smaller version, resulting in lower production efficiency that must be overcome before manufacturing volume can be increased.

That news concerning Foxconn is incredibly interesting because the CMS was previously transitioning away from Apple’s volume business. Foxconn actually declared in February 2013 that it would freeze all hiring in China.  Supply Chain Matters featured a past commentary related to Foxconn’s annual meeting of shareholders that communicated that having Apple as one of your prime customers is probably both a blessing and a curse, because the Apple way requires maximum flexibility with a magnification of the principle that the customer is always right, even when that customer abuses planning norms. In that stockholder event just about one year ago, Foxconn management indicated the intent to lighten its high exposure to Apple related production contracts in favor of both moving downstream in the consumer electronics supply chain and developing its own line of devices and software. At the time we opined that we would not be at all surprised that one day, there will be a number of consumer electronics devices branded by Foxconn, probably in the China market.  If the rumors that Foxconn will be the prime manufacturer for the upcoming iPhone 6 turn out to be accurate, that would place a new or different perspective, namely that Apple is leaning on its most trusted and experienced contract manufacturer to insure that innovative design can meet high volume production requirements in a more-timely manner.

Apple is obviously deep into two major new production introduction ramp-ups with entirely new product designs, over the next several months. Notice that the windows are shorter, production start in July with possible global product launches in September or October. Usually, these NPI ramp-up phases start earlier in the year, perhaps May or June.

A brand new product area, namely a wearable device, far different iPhone design functionality (bendable glass, touch fingerprint sensor, wireless charging to name but a few rumors) blended among dynamic connections among product design, management and contract manufacturing partners. No doubt, this is an intense effort, with high stakes.  Apple’s information connections from product management to the manufacturing shop floor, its inventory positioning and overall S&OP coordination are all dynamically at-play.  We would not be all that surprised to hear that product designers are still making changes.  That is the Apple way.

Yet, if any supply chain is up to the task, it certainly will be that of Apple.

We all await the results that come over the coming months.

Bob Ferrari

© 2014 The Ferrari Consulting and Research Group LLC and the Supply Chain Matters blog.  All rights reserved.


What Comes Around: A Rating of Automotive OEM’s from Suppliers

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A posting on Supply & Demand Chain Executive highlights the results of the 14th annual North American Automotive Tier 1 Supplier Working Relations Index, which is an industry study on the major U.S. and Japanese automotive OEM’s relationships with suppliers. This annual study focuses primarily on OEM’s Chrysler, Ford, General Motors, Nissan, Honda and Toyota which currently comprise upwards of 80 percent of U.S. vehicle sales.

This ranking study is rather significant since it ranks purchasing top leadership, buyer behavior and transparency and other factors that lead to perceived positive supplier relationships.

The article highlights that both Toyota and Honda’s efforts to improve supplier innovation and relationships have, once again, gained the upper hand. Both OEM’s are ranked first and second respectively with Honda rated as “most preferred” customer among all OEM’s rated. Honda’s increase was reported to come primarily to improvements in three foundational key areas: supplier relationship, supplier communication, and supplier profit opportunity. “Honda is top-rated with Toyota in paying invoices on time and according to terms, as well as in resolving invoice payment issues. Honda is also tied with Toyota in allowing suppliers to recover material cost increases and in the confidential treatment of proprietary information and intellectual property.”

This author has personal consumer experience on the benefits of such supplier collaboration.  Our household recently purchased the latest Honda Accord and it impressed and sold us with its array of on-board technology and driver improvements. Our purchase came after evaluating and test driving most all of the automotive premium brands.

Nissan was noted as second most improved, and took over the third place rating that previously was attributed to Ford Motor Company, which slipped to the fourth position. The article notes: “Significant improvement occurred due to suppliers being given greater flexibility in meeting piece price and tooling objectives, and in Nissan covering sunk costs when programs were delayed or cancelled. Nissan, however, is the least fair, along with Chrysler, in allocating chargebacks to suppliers, but its treatment of confidential proprietary information and intellectual property is significantly higher than Chrysler or GM.”

Of far more significance, General Motors has fallen into last place among the six U.S. and Japanese OEM’s ranked. According to the Supply & Demand Chain report: “The primary reasons for the drop are a decrease in supplier trust, in supplier communication and the amount of help GM provides (or doesn’t provide) to suppliers to reduce cost and improve quality. GM is ranked lowest in protecting suppliers’ intellectual property and proprietary information. GM is also the least likely to allow recovery of material cost increases. As a result, GM is now the least preferred customer of suppliers, in spite of the efforts of the purchasing VP to improve, an example of good leadership, but poor execution by buyers who interface with suppliers on a daily basis.”

In the light of the current blitz of product recalls emanating from General Motors, 29 at last count involving upwards of 15.4 million vehicles, Supply Chain Matters could not help but conclude that the current supplier ranking at the GM recall crisis do not make for a positive mix right now, when supplier responsiveness is the most crucial.

The article further notes that if German auto brands were added to the study, BMW would likely be ranked second overall, while Mercedes would be well below Volkswagen and General Motors. That seemed even more profound.

This study’s authors noted the overall results of this recent supplier relationship survey as history repeating itself. U.S. OEM’s, under new purchasing leadership, made previous significant improvements in supplier relationships, only to once-again, fall back to prior levels. Chrysler’s deterioration has come under the leadership of Fiat, which has aspirations to increase its North American and global presence.

By our lens, the overall takeaway from this latest survey is that core standards that value suppliers in foundational and innovation focused elements remain as differentiators while old ways and practices of beating up suppliers often persist, even after an industry crisis would have provided a motivation to change.

Bob Ferrari


Supply Chain Matters Impressions from Smarter Commerce Global Summit 2014

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Supply Chain Matters was invited to attend the IBM Smarter Commerce Global Summit this week which was held in Tampa Florida.  This was our third annual attendance at this venue and by each of our encounters, we have gathered a stronger sense of IBM’s continued direction in supporting the Buy, Sell, Service and analytics needs for industry supply chains. As noted in our prelude posting last week, IBM has been following a broad strategy, primarily through strategic acquisitions to assemble a portfolio of end-to-end commerce applications and solutions that extend from online marketing and selling through customer fulfillment. In early March, IBM’s CEO, Virginia Rometty, outlined in her open letter to stockholders and customers, a crisper set of strategic priorities that now include a heavy emphasis on cloud and services based solution offerings. The open question in our mind as we traveled to Tampa remained with the timetables, urgency and overall integration progress.

Ironically, the Summit theme this year was: Moments Matter, and just about every keynote amplified the reality that the speed of change and innovation determines today’s business environments. After a packed two day agenda of activity, our overall impression of this conference was that IBM has indeed stepped-up its internal development pace, and the initial signs of cross-application integration capabilities are beginning to come to market.  However, the overall timetable is one that IBM customers will need to consider in their technology planning.

There were two significant product announcements made in conjunction with this year’s summit. Big Blue introduced IBM ExperienceOne, a new integrated portfolio of cloud-based and on premise offerings directed at helping customers to deliver deeper customer engagements by bringing marketing, sales and services business practices together in a singular information utility capability. This capability is essential an IBM consulting services service offering that leverages the company’s WebSphere Commerce, Customer Digital Experience and Enterprise Marketing Management software. That software includes elements of Sterling Commerce, Coremetrics, DemandTec and Silverpop, among others, all of which were prior acquisitions.

What should be of keen interest to our Supply Chain Matters readership was the announced launching of IBM Multi-Enterprise Relationship Management (MRM) platform that features cloud-based or on premise supplier and partner engagement capabilities directed at enabling a more adaptive end-to-end value chain.  As can be noted in the IBM announcement, MRM leverages functionality from Emptoris for quicker on-boarding of suppliers and trading partners, supplier lifecycle and contract lifecycle management. MRM leverages the IBM Sterling B2B Collaboration Network for reporting and monitoring of transactions and IBM Aspera eXtreme File Transfer and Enterprise File Sync and Share, for sending very large amounts of information across a network including use of desktop and mobile devices.

In our previous conversations with IBM executives, we often probed on the opportunities for assembling an end-end supply chain support capabilities across a contiguous business network, while integrating all of the various IBM vendor acquisition products within such a network. 

At last year’s summit, we noted that Emptoris’s senior development director Terrence (TC) Curley, was assuming a lead role in the initial integration of Emptoris suite components with those of Sterling Commerce and other IBM technology components.  The current MRM announcement is the first phase of that effort and admittedly, an initial release.  We had the opportunity to review the 12 month product roadmap for MRM and noted that beyond baseline an Enterprise Partner Engagement Foundation, the roadmap includes further adapters that integrate not only IBM Sterling B2B Collaboration Network, but also IBM B2Bi and SFG applications which can provide capabilities for quicker on-boarding of financial services, third-party logistics, business services or product management partners. The interesting aspect for MRM are the design principles that stress deeper levels of visibility, end-to-end network scale and collaboration along offering capabilities for supporting cognitive based commerce. If readers have not yet figured out what all of this implies, it means that IBM is gunning to be a viable player in offering an end-to-end business network platform.  Again, more work and time is required, but the component assembly and roadmap milestones are now underway.

We do want to mention one other vivid impression from this year’s summit. We had the opportunity to sit in on a keynote session that outlined IBM’s vision for Cognitive Commerce as well a follow-on session that outlined the vision and roadmap for IBM Commerce Solutions.  Make no mistake, IBM is indeed committed to huge investments in customer engagement, predictive analytics and machine learning capabilities tied to online commerce. One example of cognitive commerce service outlined was the ability to analyze peak selling periods and be able to predict the depth and breadth of product peaks and optimize inventory allocation to those peaks. Sales and Operations Planning teams should reflect on that type of capability.

There are plans for both enhanced B2C as well as B2B online and multi-channel stores, field sales applications that enhance mobility based applications and planned ecosystems of pre-integrated customer fulfillment partner solutions, including same-day delivery. Finally, there was an example of quickly IBM is responding to current day brick and mortar retailer needs. There are plans to be able to process an online order, by inventory checks of both fulfillment and store-level inventories.  To the surprise of some in the audience, IBM described a “dark store” which is one that can serve as a localized fulfillment entity for limited volumes, or be able to convert to a broader based customer shipment fulfillment entity after retail closing hours. In essence, IBM is prepared to support a rather innovative capability for a multi-purpose use store.

Supply Chain Matters will feature additional observations and thought commentaries  gathered from this year’s Smarter Commerce Summit in the days to come.

Bob Ferrari

© 2014, The Ferrari Consulting and Research Group LLC and the Supply Chain Matters Blog, all rights reserved.


Supply Chain Matters Interview Highlights: The Four Levels of Business Network Visibility

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This author had the opportunity to recently speak with Michael Schmitt, Chief Marketing Officer for E2open, Inc.  Our discussion reflected on clarification of the different levels of visibility within today’s global supply chain networks.

At first blush, the term “visibility” can trigger different definitions for supply chain management teams and the term is often over utilized and somewhat abused in communicating supply chain business process needs and requirements. Today, supply chains need to respond and calibrate on a daily basis as opposed to weekly or monthly. Michael Schmitt often articulates such response from the notion of four separate stages of visibility capabilities.

The goal of our interview was to communicate to our Supply Chain Matters reading audience a definition for each of these levels and to provide a basis for helping teams to be able to seek clarity in such definitions as they map out where process and technology capabilities need to be developed.

Level One- Static Visibility

According to Michael, Level One visibility equates to how much inventory you have on-hand internally or externally, based on future customer fulfillment needs and requirements. An initial viewpoint would conclude that this level of visibility should not be that difficult to achieve, yet the reality for today’s predominantly global, multi-tier supply chain networks add a far different reality to this challenge for many teams. Add in a new urgency for industry supply chains to be able to respond to requirements for supporting online and Omni-channel commerce business initiatives, and this level of visibility is even more complex.

Manufacturers with different versions of existing ERP or legacy systems or retailers with both outsourced store and online inventories that were implemented prior to major movements toward outsourcing often struggle with this Level One challenge. Add in today’s realities for outsourced logistics, customer fulfillment and transportation coupled with just-in-time strategies that postpone fulfillment to a different process stage, such as individual logistics providers and the task becomes rather frustrating. Different versions of ERP or legacy systems or supply chain planning systems that are not integrated to the external network add more complexity in achievement of this goal. Add hundreds of locations to the mix along with constant business changes including acquisitions, and basic visibility takes on a unique challenge that forces organizations to revert back to spreadsheets and other labor-intensive means as a basis of gaining forms of Level One visibility.

As Michael explains, Level One visibility transcends beyond batch Electronic Data Interchange (EDI) transactional activity because of the need for additional context as to existing product demand or alternate part numbers that need to be fulfilled along with challenges for integrating multiple master data requirements. There is the further need to be able to synchronize the data and propagate product demand signals across the Business Network. Thus, Level One visibility requires additional logic and context to the network and to fulfillment requirements across an extended timeframe.  As an example, an organization may be short 10 units today, but that requirement extends to well over 10 units in the context of multiple added days and changing order flows over a lead time window. The result often leads to a swelling of inventories to maintain customer service requirements for key customers.

Some large organizations with large-scale supply chain networks can achieve significant cost and customer service benefits at this level of visibility, particularly when the business and the Business Network are in a state of continuous change.

Level Two- Assets in Motion

Michael articulates Level Two visibility as the looking forward stage of capabilities when dealing with the realities of constant inventory in movement across the value-chain. Where is either work-in-process and finished goods inventory headed and when is going to arrive? It is a process for verifying information across the network in the context of revenue, profitability or service objectives. In includes the Level One capability with the added dimensions of assets and resource movements.

If an organization strives to perform what-if planning, information has to be in context of projecting inventory with constant movements, one-two- three weeks from now.  Nothing is static in today’s industry supply chains. Michael further pointed out the reality that the value of the projection rises exponentially the closer you get to the end of the shipping quarter when business goal fulfillment becomes a prime consideration or when key customers call with unplanned requirements. This is especially valuable to an S&OP process that is more ways than not, scrambling during the final weeks of a quarter to achieve business objectives.  In some industry supply chains, the bulk of profitability may be achieved in the immediate weeks prior to quarter end.

Level Three- Predictive Multi-Tier Inventory and Capacity Planning

This is a capability that is weighted more toward predictive or projected visibility. Michael indicates that some organizations describe this stage as “state management” while others use the term “concurrent computation.”  For fulfillment execution to be synchronized, context is critically important. For example, a specific order change involving a key customer cannot wait for multiple batch re-runs of the MRP process. Today’s reality for network based supply chains is that planning and execution must morph into a continuous, collaborative based planning and execution based process that is synchronized to specific objectives. Traditional supply chain business process provides different steps for demand commitments, network supply allocations, and production scheduling, forcing additional planning steps which increase response time and efforts while reducing demand-supply matching efficiency.

Level Three is the routing and time-slicing of projected ins and outs of inventory or capacity among specific time periods in the context of the end-to-end network. It pegs an end-item through bill-of-material and where-used context across the entire network and provides alerting to when exception management needs to occur and when.  It is synchronization of the network across its multiple tiers and provides visibility to a future projected problem, affording the organization more up-front time to address any potential problem. Michael is quick to point out that only a small handful of current Business Network network technology providers can support this Level Three capability.

 

Level Four- Prescriptive Inventory and Capacity Planning

Schmitt describes the biggest benefit of today’s industry supply chains as the ability to transition into Level Four visibility, the marriage of predictive and prescriptive planning capabilities across the end-to-end Business Network network. It is a response to the most complex challenge of most S&OP processes, namely a near-term integrated business planning capability that leverages information across tiers of the supply chain network. What-if simulation and scenario management capabilities are married to defined business rules so that various scenarios can be compared to their effect on revenue, profitability of key customer service goals. Advanced visualization tools provide the ability to spot exceptions and to drill-down to various tiers or nodes to determine where corrective activities need to take place.

In the specific case of E2open, the prior acquisition of icon-scm and the subsequent release of the newly announced E2 Planning and Response 11.2 Data Hub capability form the core of this Level Four visibility.

 

We would like to thank Michael for sharing these definitions of visibility and we trust they can help our readers to differentiate what capabilities are needed in their process and technology initiatives related to supply and value-chain networks. 

Supply Chain Matters encourages reader feedback to these articulated levels of visibility which can be shared in the Comments area associated with this posting.

Bob Ferrari

Disclosure: E2open is a current sponsor of the Supply Chain Matters blog.


Boeing Announces Q1 Delivery Performance for Commercial Aircraft: The Good and Not So Good News

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Boeing has announced the results of new commercial aircraft delivered in the first quarter, declaring the deliveries rose 18 percent from year earlier results. That headline seems to be somewhat of a misnomer.

First quarter 2014 deliveries included 161 commercial aircraft compared with 137 in Q1 of 2013.  The misnomer is that all operational and in production 787 aircraft were in a grounded condition a year ago pending FAA investigation of suspected lithium ion battery fires, thus a comparison to last year’s Q1 has little meaning. Boeing re-started 787 deliveries in early May of last year. 

Boeing delivered 18 new 787’s in Q1, a shortfall of the company’s planned 10 aircraft per month goal. That compares to 25 new 787’s delivered in Q4 and a continued sign of production and other supply-chain problems associated with the Dreamliner. On the positive side, Boeing delivered an incredible 115 new Next Generation 737 aircraft in Q1.

Supply chain glitches or issues involving the 787 have been ongoing. In early March, there were reports that inspections were being conducted for suspected hairline cracks on 43 yet to be delivered Dreamliner’s because of potential flaws in a manufacturing process concerning supplier Mitsubishi Heavy Industries. In late March, the FAA issued its fourth airworthiness directive involving the 787-8 model, ordering an immediate fix to aircraft containing certain General Electric power plants where a suspected software glitch could cause the engine to lose thrust when close to landing. There have been other reports indicating that Boeing has experienced some difficulties in ramping-up overall production volumes at its Charleston South Carolina final assembly facility, prompting a hiring surge to augment the existing workforce there.

Currently operational 787’s with GE engines are cautioned not to fly through severe thunderstorms after reports of some ice build-up incidents. In early February there was a report that Boeing was continuing to pressure suppliers for cost concessions and one major supplier, Sprit Aero Systems reported significant pretax charges for the final three months of 2013, including $385 million directly related to work performed on the 787.

Boeing’s stated goal for 2014 is to deliver 110 long overdue Dreamliner’s to airline and leasing companies, roughly 27-28 per quarter. Q1 was obviously not what the 787 supply chain ecosystem wanted in performance and bar has risen for Q2 and the remainder of the year.

In an era of high customer expectations and pay for operational performance, Boeing needs to quickly shift its 787 supply chain objectives from cost control to achieving and maintaining reliable delivery and operational performance for airline customers.


Supply Chain Matters Guest Contribution: Three Must-Dos for Procurement in 2014

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A Supply Chain Matters Guest Posting

By: Mickey North Rizza, BravoSolution

 Supply Chain Matters is thrilled to feature the following guest contribution from Mickey North Rizza, recently voted Top Female Supply Chain Executive 2013.

We’re almost through the first quarter of the year, can you believe how time flies? It seems like just yesterday we were making our new year’s resolutions and sifting through predictions of what 2014 would hold for us. I won’t ask about your commitment to the gym, but I did want to check-in on your resolutions for your procurement team.

Have you fallen back into your old habits? Maybe you’re like many of the procurement teams I work with, and you’re just not sure where to start. If so, here are three areas to focus on this year, which if done successfully, will bring about measurable improvements, move you up the maturity curve, and put you ahead of your competitors.

1. Work Hand-in-hand with CFO’s

On a scale of 1 to 10, how would you rank your business relationship with your company’s CFO? If it’s anything less than an 8, it’s time to take a step back and find out why.

According to a recent survey of CPOs and CFOs from Ernst and Young, 70 percent of CFOs say their relationship with CPOs has become more collaborative over the past three years. This alone demonstrates that finance teams see the financial impact that procurement can have, and that developing a strong tie between the two departments can only help. The same study also found that when a strong business partnership between the CFO and the supply chain leaders exists, companies report stronger alignment with the broader business strategy and improved supply chain visibility.

 Often times this “stronger alignment” doesn’t come from a sudden increase in savings, or spend under management; rather it’s a matter of finding the best way to communicate success. As procurement works closer with finance, they become more familiar with financial metrics and see that they can measure themselves against the same KPIs.

Standardizing the language used across departments makes it easier for stakeholders to get a snapshot of the company’s health, as well as dig into how each department is contributing to the company success. Of course, it’s important to remember that it’s not just the language that you’re using – it’s also what you’re telling your stakeholders, and how to communicate its importance.

2. Place equal importance on savings and sales

Too often, procurement has a narrow focus on cost savings, creating a perception that they’re a back-office function doing a tactical role.

Of course, you and I know that is far from the truth. And even though cost savings will probably always be important – it’s becoming increasingly challenging, and requires more strategic thinking than ever. In fact, last year 60 percent of procurement teams delivered 10 percent or less in savings, according to a survey from the Institute for Supply Management. Delivering marginal savings is a major red flag and a trigger for procurement teams to reevaluate the effectiveness of what they’re doing and whether they’re in need for a change.

 If you feel that it’s a lack of resources or other internal obstacles that are holding you back from realizing significant cost savings, I’d recommend developing a business case that demonstrates why savings are equally as important as sales. Look beyond the amount of money that you hope to save, and instead demonstrate how those savings will impact the business. For example, instead of just saying that with more resources you’d be able to save X amount on office supplies, explain how this money could be invested into other business initiatives like research and development or infrastructure improvements.

Once you’re confident that your organization is supporting your efforts, it’s time to look outward at your suppliers and see where there’s room for improvement.

 

3. Give control back to suppliers

Imagine if you had an industry expert at your disposal, who knew the technical aspects of your business and well as the larger initiatives that you were working towards. Now what if I told you that you already do?

There is a huge strategic opportunity available to you with each of your suppliers, and it all starts with the selection process. Rather than just going through the motions of an RFP, agreeing on a bid and contract requirements, ask them how they’d solve a problem that you’ve been facing. Doing so will provide you with more information than just product specs – it’ll tell you if they can be your partner.

Moving forward, invite your suppliers to join your planning meetings, introduce them to your R&D team and share with them the pressures that you’re facing. The suppliers that you’ll want to work with will vie to be your go-to resource. Why not let them?

Undergoing a transformation can be overwhelming and confusing. I hope that these three initiatives: developing a business relationship with your CFO, improving cost savings, and working strategically with your suppliers give you with the necessary framework for your most successful year yet. 

 

About the Author:

Mickey North Rizza is the Vice President of Strategic Services at BravoSolution. She is a key member of BravoSolution assisting companies accelerate procurement performance, increasing strategic value contribution, driving more spend under management and increasing technology adoption. Mickey has over 25 years of senior-level procurement, sourcing and supply management experience.


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