Procurement Trends to Consider in 2020

Is your procurement strategy being impacted by global uncertainties such as tariff changes or other supply chain disruptors?

Futureofsourcing.com recently shared four major procurement trends to consider in 2020 summarized below.

  1. Increased Volatility: With shifting trade tariffs and barriers, the unpredictability of Brexit and fluctuating commodity prices, market volatility could be at an all-time high over the next 12 months.

As already complex global supply chains become even more unpredictable, finding ways to manage this risk should be at the top of your 2020 agenda. What does this mean in practice? At a bare minimum it means having processes in place to track suppliers, pre-empt problems and manage commodity-related volatility.

  1. Ongoing Digital Transformation: There’s a strong chance that we’ll be talking about digital transformation for many years to come. That’s because true digital transformation is an ongoing process.

Digital has fast become an imperative for top-performing procurement functions. Those who find themselves behind the times will need to play catchup this year, especially as the wider organization is likely to be on its own digital transformation journey.

  1. Building Deeper Supplier Relationships: At some point, you’ve almost certainly had a conversation within your department about building better supplier relationships. Everyone agrees that it’s a strategic priority for procurement organizations. However, actually putting plans into practice is easier said than done.

We often see procurement organizations implement manual processes that are inconsistent across both categories and supplier segments. In 2020, however, we expect to see a more structured and successful approach adopted by the most forward-thinking and progressive departments.

  1. Delivering Value Beyond Savings: Driving savings will always be a primary goal of procurement. It’s increasingly understood that procurement organizations can deliver value that goes way beyond cost savings, cost containment and cost avoidance.

The sophistication of the procurement function, and the available talent within the space, has increased dramatically over the last few years. There have also been greater expectations placed on SG&A functions in general. With C-level strategies demanding greater growth, faster innovation, tighter budgets and increased competitiveness, 2020 is the time for procurement to really show how it can contribute to wider strategic goals.

While these aren’t the only trends set to impact procurement over the next 12 months, Futureofsourcing.com suggests they are the most important ones for CPOs to prioritize.

At APICS Milwaukee, our mission is to help supply chain professionals and their companies establish procurement strategies that will enable them to continue to grow and reduce costs.  

Are you responsible for purchasing functions in support of your company’s broader procurement efforts? If so, you may be interested in joining us next week Tuesday (2/25) for our Purchasing Workshop. Participants will learn the following:

  • Learn about the role of Purchasing within the organization
  • Understand Purchasing’s roles with contracts
  • Explain sourcing best practices
  • Illustrate the purchasing cycle
  • Describe the process for conducting a supplier visit
  • Explain the reasons for outsourcing
  • Understand how to manage supplier relations
  • Learn how to implement product development programs
  • Explain Purchasing’s roles with sustainability and regulatory compliance

 


APICS Milwaukee is the premier professional association for supply chain management, helping over 180 Milwaukee area companies represented by our members, with educational and networking opportunities. Read more articles at https://apicsmilw.org/articles/

UWM Student Supply Chain Association Update

Looking to connect with future supply chain leaders? The University Wisconsin-Milwaukee has a wonderful Supply Chain Student Association for you to get to know!

We recently heard from Katherine Walker, the current President and Treasurer of the UWM Supply Chain Student Association. Katherine is a junior at UWM working towards a Bachelors in Business Administration majoring in Supply Chain Management and Finance. She also is currently a supply chain intern at Charter Steel.

Katherine shares below what the UWM Supply Chain Association has been up to so far this year and what they are planning for the next few months.

  • Brought in 2-3 company speakers per month including Dayton Freight, Milwaukee Tool, Rockwell Automation, Harley-Davidson, Charter Steel, and MillieporeSigma
  • Had a collaboration with UW-Milwaukee’s brand new building, the Lubar Entrepreneurship Center, where we participated in a workshop that incorporated our entrepreneurial skills with our knowledge of Supply Chain and IT
  • Hosted an APICS resume review session where board members from the APICS Milwaukee chapter came in to give one on one reviews of our members’ resumes
  • Hosted a career fair preparation night which included advice on attire, resumes, and speaking points
  • Our board traveled to South By Southwest(SXSW) to attend the interactive portion of the festival, hearing from CEOs and industry leaders to better our knowledge in business as young professionals

 

What’s next: Coming up this semester they have more company speakers such as SnapOn Tools, Briggs and Straton, MillerCoors, and Direct Supply. They also have plant tours scheduled with Rockwell Automation, MillerCoors, and MilliporeSigma. For fun, they will be attending a Bucks game!

APICS Milwaukee is the premier professional association for supply chain management and proudly supports professionals at all stages of their careers. We are excited about the great work being led by Katherine and others at the UWM Supply Chain Association. More information on the UWM Supply Chain Association and UW-Whitewater APICS Student chapters can be found on the APICS Milwaukee website

APICS Milwaukee helps over 180 Milwaukee area companies represented by our members, with educational and networking opportunities.

Want to learn more? Join us in February and March 2020 for a Supply Chain Workshop and in March for APICS globally recognized supply chain certification instructor-led courses for CPIM, CSCP and CLTD.

For additional information, contact us via our website at: http://apicsmilw.org or via email at: [email protected]

USMCA Expected to Positively Impact Wisconsin Economy

Has your supply chain been impacted by trade uncertainties in North America? Last week President Trump signed the new United States-Mexico-Canada trade Agreement (USMCA) into law.

Read more to learn what the agreement is and how it might impact your supply chain.

What is USMCA?

The new U.S.-Mexico-Canada Agreement (USMCA) replaces the North American Free Trade Agreement or Nafta.

Per the WSJ the new agreement updates the rules of trading for the three countries with the following key provisions:

  • Mexican Labor: S. labor unions and Democrats have long complained that Mexican workers can’t always form unions freely and demand fair pay, a situation they say puts pressure on U.S. manufacturing jobs. The Trump administration’s USMCA has new additional labor rules, not included in the current Nafta, as well as new enforcement procedures demanded by Democrats.
  • Auto Rules: Compared with Nafta, USMCA significantly tightens the rules that the auto industry has to follow in order to trade vehicles duty free in North America. A certain proportion of a car will have to be produced by workers with higher wages, and a greater proportion of components will have to originate in North America.
  • Digital Freedom: USMCA, unlike the current Nafta, includes rules mandating the free flow of data among the three countries. This and other novel provisions on exchange rates and other areas aren’t so crucial for Canada and Mexico but could later be applied to pacts with more restrictive countries or even China.
  • Agriculture: A deal to pass USMCA means farmers of major crops no longer have to worry about President Trump potentially pulling out of the existing Nafta and leaving them fewer major export markets. USMCA also gives dairy farmers more access to Canada.
  • Pharma: Big drugmakers are likely to be disappointed, since Democrats pushed the Trump administration to remove language that would have protected expensive biologic drugs from generic imitators for 10 years. The existing Nafta treaty has no such drug protections.

Last week, Wisconsin Manufacturers & Commerce (WMC) President and CEO Kurt Bauer shared, “WMC and our members thank President Trump for signing the USMCA into law today. This trade deal will grow Wisconsin’s economy, provide greater opportunity for Wisconsin manufacturers and farmers, and help expand the Badger State’s reach throughout North America.”

WMC went on to state that Wisconsin’s economy relies on trade, and the USMCA will ensure the state’s economic relationship with Mexico and Canada continues to grow. Key Facts About USMCA’s Impact on Wisconsin:

  1. Wisconsin exports nearly $11 billion to Canada and Mexico, and the state has a trade surplus with both countries
  2. More than 231,000 Wisconsin jobs are tied to trade with Canada and Mexico
  3. More than 44,000 manufacturing jobs are tied to trade with Canada and Mexico
  4. One out of every four manufacturers in Wisconsin rely on North American trade
  5. About half of Wisconsin’s $3.5 billion in agriculture exports – especially dairy – are exported to Canada and Mexico

Based on the facts above, clearly trade is very important to the Wisconsin economy.

APICS Milwaukee is the premier professional association for supply chain management, helping over 180 Milwaukee area companies represented by our members, with educational and networking opportunities.   

We look forward to helping you have the tools to effectively manage your supply chain. Want to learn more? Join us in February and March 2020 for a Supply Chain Workshop and in March for APICS globally recognized supply chain certification instructor-led courses for CPIM, CSCP and CLTD.

For additional information, contact us via our website at: http://apicsmilw.org or via email at: [email protected]

3 Keys to Managing Supply Chains During Uncertain Times

Image by Valdas Miskinis from Pixabay

Has your supply chain been impacted by recent changes in international policies or geopolitical changes? Do you have a plan to mitigate risks?

Gartner recently shared a study on how to prepare to win during times of uncertainty titled, “Winning in the Turns: A Supply Chain Action Guide.” Within their research, they identified three pillars highlighted below to help ensure success during times of change.

  1. Strategy: Prepare to act confidently amid uncertainty. Questions every supply chain executive should ask about strategy:

■ Do we have the ability to appropriately sense and respond to changes in the business context as they happen?

■ What steps are being taken by our top customers, and how do we partner to ensure we stay in step with their changes?

■ Can we create a minimum viable supply chain strategy that reduces the initial time and effort required and allows execution to start earlier?

■ What is our design agility — how fast can we implement common types of change?

■ Have we communicated any changes to our supply chain strategy, their impact and the reasons behind them to ensure clarity of direction is maintained across the enterprise?

  1. Cost: Implement a cost management discipline to allocate and execute resources while spurring innovation. During times of change (Gartner refers to these as “turns” in their study), companies often stop discretionary spending, lay off staff, reduce training and cut capital investments. Winners, however, think long term and forecast for the upturn. Winning enterprises have an ongoing cost management discipline and practice cost optimization, as opposed to cost-cutting. Questions every supply chain executive should ask about cost:

■ What do we need to do to achieve the right level of financial transparency to support our cost-related decisions?

■ How can we best engage business stakeholders in discussions about opportunities to shift investments during a turn?

■ How can we better utilize existing resources?

  1. Talent: Position talent to sustain progress on transformation. Questions every supply chain executive should ask:

■ What is our minimum staffing level?

■ Are our resources aligned to where the business will be investing?

■ Does leadership recognize that the quest for talent does not switch on and off as economic cycles change?

You can read more of Gartner’s insights into successfully managing supply chains during times of change in the link above. The key is to expect the unexpected and be proactive in having a strategy that can adapt, consider short and long-term cost implications and talent management.

If you and your teammates would like to learn the fundamental principles and concepts of supply chain management, we encourage you to join us in-person or via webinar on February 11th for a four-hour workshop. Participants will learn:

  1. How to strategize and, when to make the products that customers want
  2. Ways to build lasting partnerships with suppliers
  3. The difference between qualitative and quantitative performance measurements, as they relate to the supply chain
  4. How to evaluate the readiness of your internal supply chain processes

APICS Milwaukee is the premier professional association for supply chain management, helping over 180 Milwaukee area companies represented by our members, with educational and networking opportunities.   

We look forward to helping you have the tools to effectively manage your supply chain during times of change. Join us in February and March 2020 for a Supply Chain Workshop and our globally recognized supply chain certification training

For additional information, contact us via our website at: http://apicsmilw.org or via email at: [email protected]

Active Listening – Key to Effective Negotiations

Could your negotiation skills use improvement? Are you an active listener? If you have to negotiate with suppliers, being an active listener is a key skill to ensure both parties walk away feeling respected and satisfied.

Per a recent Harvard article on Negotiation Skills for Win-Win Negotiations, “One skill to cultivate that will have a positive impact on your future negotiation style is active listening. Few negotiators would argue the value of good listening skills. Skillful active listening can calm tensions, break the impasse, and get you the information you need to build creative deals. Yet most people overestimate their ability to deploy this key negotiation skill, while also lacking an accurate understanding of the concept of active listening.

Yesterday, APICS Milwaukee hosted Lawrence Kahn, J.D., B.B.A., founder and Executive Director of Strategic Resolutions, Conflict Management & Prevention who is dedicated to the effective practice and teaching of negotiation, strategic management, and dispute resolution. Lawrence spoke to the “Art of Negotiations” in our first 2020 workshop!

Lawrence shared that successful negotiations generally require a number of steps and failure to follow these steps often leads to achieving an inferior result -- achieving less than the possible. Negotiations is the art of getting others to give you what you need.

A key step in the negotiations process is to practice active listening! As Harvard suggests in the quote above, many overestimate their ability to deploy this key skill.

So what is active listening? Indeed.com defined active listening as, “The ability to focus completely on a speaker, understand their message, comprehend the information and respond thoughtfully. Unlike passive listening, which is the act of hearing a speaker without retaining their message, this highly valued interpersonal communication skill ensures you’re able to engage and later recall specific details without needing information repeated.”

Lawrence shared that 3 key skills to active listening are:

  1. Keep your mind clear – listen, don’t think
  2. Rephrase what you think you heard
  3. Ask why until you get to the root reason

If your past negotiations have not yielded the best results or have hurt relationships with your colleagues or suppliers, you may want to evaluate if you are truly being an “active listener.” In successful negotiations, you will not only get what you need, but both parties should walk away feeling respected and satisfied!

Thanks again to Lawrence for sharing his expertise in our first Supply Chain Workshop of 2020! We are looking forward to future workshops in February.


APICS Milwaukee is the premier professional association for supply chain management, helping over 180 Milwaukee area companies represented by our members, with educational and networking opportunities.   

We look forward to helping you grow with more educational opportunities in 2020 including our Supply Chain Workshops and globally recognized certification training!  For additional information, contact us via our website at: http://apicsmilw.org or via email at: [email protected]