After taking 2012 off, the series “CPO Shop Talk” is back.

This is the series where, from time to time, we will attempt to share some of the less-formal conversations that we have with Chief Procurement Officers and CPO-types through the course of my research, travels, and our growing analyst/advisory business on the pages of CPO Rising. CPO Shop Talk is not intended to be the final word on a given topic. Ideally, I hope these posts can serve as a quick way to share issues that procurement leaders are currently focused on and draw out insights and views from our collective experiences. Please email me your comments and suggestions about today’s topics…. And, don’t forget to register for our Featured Webinar by clicking here -> The Five Technologies that Will Disrupt Procurement’s World.

Supply Risk

Where’s the Beef?

Much has been made of the “horseburgers” recently discovered around the world, and fairly so…. Unfortunately we think this is the tip of the iceberg.

In a shocking admission by an unnamed Chief Procurement Officer of a Large Global CPG in Ardent Partners’ latest research report CPO Rising: Keeping Score (available here, here, here, or here – registration required), the real truth about supply risk in many food supply chains was exposed –

“The truth is that there is almost no conceivable way to provide ourselves with assurances through our international distributors and suppliers that they are actually following protocols and procedures and presenting you with zero risk. In all honesty, we rely on being lucky rather than being good. That is literally the state of the art in our industry.” 

I don’t mean to alarm our readers but a majority of you have the branded foodstuffs from this company in your refrigerator right now.

It is not surprising that procurement groups, which struggle for internal visibility and internal engagement, fall down when it comes to managing external relationships and achieving external visibility. Of course, many of the factors that have drawn procurement to the center of business activity in recent years are complex issues (i.e. globalization and supply risk) that require nuance, deft skills, and yes, sometimes, luck.

Clearly, luck is not an effective supply risk strategy.

More Supply Risk

Discussion this week with a Director of Supply Chain for a food manufacturer based on the East Coast…. This director had recently begun using eSourcing and was excited by the recent results from several pilot events they had run as well as the prospects of a few planned events. The director noted that the ability to use an eSourcing tool to run the same event each Friday (sourcing the next week’s produce) will save one of his managers five hours each week –  simply by automating this one weekly bid.

The director plans to take that time savings and have his manager develop a dual source strategy for several key commodities. The driver of this initiative is explained by a critical disruption that was almost caused by Hurricane Sandy in 2012. This company relies on poultry and eggs from New Jersey farmers that are based in the region that was impacted by Sandy. When Sandy hit, production slowed and only one egg farm was able to ship – its delivery arrived less than six hours before production would have been halted. The sourcing/supply chain team plans to be more aggressive in mitigating the risks of sole sourcing.

Sometimes, luck is a successful supply risk strategy.

The Five Technologies That Will Disrupt Procurement’s World

Ardent Partners is putting on a show, a virtual show, with our first fully-hosted webinar. We’re providing the research AND the infrastructure and we’d love to have you attend.

If you’ve enjoyed any of our webinars in the past, please make sure to mark 3/26 @ 2pm ET on your calenders. Here’s the webinar description:

From our cars to our homes to our computers, new and innovative technologies are changing the way we do almost everything. That change is coming to procurement and the impact will be extraordinary.

• Imagine a world where changes in supplier pricing are instantly captured in your own pricing.
• Imagine a world where smart analytics are used to predict future pricing and avoid supply risk.
• Imagine a world where every internal need is quickly matched to a purchase order that optimizes value.
• Imagine a world where procurement staffers operate seamlessly from any location or time zone.

That world is closer than you think!

Join Andrew Bartolini and Christopher Dwyer of Ardent Partners & Suresh Visvanathan of GEP on a journey into the future of procurement technology as they present:

The Five Technologies that Will Disrupt Procurement’s World

• Date: Tuesday, March 26, 2013
• Time: 2:00 PM – 3:00 PM ET

Webinar sponsored by GEP

REGISTER HERE

https://cporising.com/featured-webinar/

Tagged in: Ardent Partners Research, Chief Procurement Officer, CPO, CPO Shop Talk, Spend Under Management, Supply Risk