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procurement

Transforming Supply Chains: Insights from the Source-to-Pay Automation Webinar with Esker

by Editorial Team November 17, 2024

Embrace Automation and Strategic Sourcing to Thrive in a Competitive Market

The future of supply chains in the Asia-Pacific (APAC) region is being reshaped by Source-to-Pay (S2P) automation. On June 20, the Global Supply Chain Council, in partnership with Esker, hosted a highly interactive webinar to discuss how S2P automation can align supply chain strategies in APAC. With 100 professionals in attendance, the session featured industry experts sharing valuable insights and real-world examples.

Key Highlights from the Webinar

The webinar, “How Source-to-Pay Automation Helps Align Supply Chain Strategies in APAC,” brought together industry leaders to discuss market trends, challenges, and the strategic importance of S2P automation. The speakers included:

Charlie Cheah, Managing Director, Asia, Esker
Jessie Kok, Director of Finance and Business Analysis, Swinburne University of Technology
Jonathan Pole, Enterprise Sales & Account Specialist, Market Dojo

Understanding Market Trends and Challenges

Charlie Cheah kicked off the webinar with an overview of the current market situation. He highlighted key challenges such as inflation and talent shortages that procurement professionals face. According to Cheah, “Inflation remains a significant concern, particularly in the Americas and Europe, while talent shortages continue to impact sourcing activities.”

He noted a trend where procurement professionals increasingly report to finance departments, creating a shift in roles and responsibilities. This integration aims to enhance efficiency and strategic alignment within organizations.

The Shift Towards Strategic Sourcing

Cheah emphasized the transition from traditional Procure-to-Pay (P2P) processes to more comprehensive S2P automation. He explained, “The focus now is on strategic sourcing, building stronger supplier relationships, and integrating procurement with finance for better decision-making.” This shift is particularly relevant in APAC, where sourcing activities are concentrated due to geopolitical factors and economic growth.

Real-World Examples: Case Studies on S2P Automation

Imperial Brands

Jonathan Pole shared a compelling case study on Imperial Brands, a global FMCG company that transformed its procurement process with S2P automation. “Imperial Brands faced visibility issues in their sourcing process, leading to inefficiencies,” Pole explained. By implementing Market Dojo’s solution, they achieved a five-fold increase in tool usage and a 6,000x ROI. This change allowed the company to focus on strategic tasks rather than manual data entry.

Swinburne University of Technology

Jessie Kok discussed Swinburne University’s journey with Esker, highlighting significant improvements in efficiency and cost savings. Before automation, their procurement process was entirely manual, leading to delays and high administrative costs. “We reduced process time by 75% and achieved 80% cost savings,” Kok noted. The automation also transformed the roles within the procurement team, allowing them to focus on strategic initiatives and governance.

Implementing S2P Automation: Key Considerations

Cheah outlined several steps for assessing organizational readiness for S2P automation:

Standardize Processes: Identify current processes, what works, and what needs change.
Engage Stakeholders: Secure buy-in from management and align process changes with strategic goals.
Manage Change: Implement effective change management strategies to ensure smooth transitions.
Leverage AI: Utilize AI for transactional tasks, allowing professionals to focus on strategy.

The Role of AI in S2P Automation

AI plays a crucial role in modern S2P solutions. Cheah explained, “AI handles transactional work, allowing valuable resources to focus on analytical and strategic tasks.” Esker’s solutions, embedded with AI, provide transparency and efficiency, ensuring accurate data processing and insightful analysis.

Interactive Q&A Session

The webinar featured an engaging Q&A session where participants asked about automation, supplier management, and compliance. A notable question addressed the integration of procurement and finance. Jessie Kok shared her perspective: “By integrating procurement with finance, organizations can proactively manage costs and activities, improving overall efficiency.”

Conclusion and Key Takeaways

The webinar underscored the transformative potential of S2P automation in aligning supply chain strategies. Key takeaways include:

Embrace Strategic Sourcing: Shift from transactional tasks to strategic initiatives to build stronger supplier relationships.
Leverage Technology: Utilize AI and automation tools to enhance efficiency and decision-making.
Engage Stakeholders: Secure support from management and implement effective change management strategies.

Engage with Us

What challenges have you faced in your procurement processes? How do you see S2P automation transforming your supply chain strategies? Share your thoughts and experiences in the comments below. We look forward to hearing from you!

Stay tuned for more events and updates from the Global Supply Chain Council. Together, we can navigate the complexities of supply chain management and drive innovation in the industry.

This blog post is brought to you by the Global Supply Chain Council in partnership with Esker. For more information on our events and initiatives, visit our website.

November 17, 2024

ESG-Compliant Firms are More Profitable, Says Bain and Ecovadis

by Editorial Team November 17, 2024

A recent report from consulting firm Bain & Company and sustainability ratings provider EcoVadis has found that companies that prioritize environmental, social, and governance (ESG) factors are more profitable than those that do not.

The report analyzed data from over 3,900 companies across the globe and found that ESG-compliant firms had an average profit margin that was 4.7% higher than non-compliant firms. Additionally, ESG-compliant firms also had a lower cost of debt and were less likely to experience negative financial events, such as bankruptcies and fraud.

The report also found that ESG compliance was correlated with stronger brand value and customer loyalty. Companies that prioritized ESG factors were more likely to have a positive brand reputation and a loyal customer base.

ESG factors refer to a company’s performance in areas such as environmental sustainability, social responsibility, and corporate governance. These factors are becoming increasingly important to investors and customers, as they seek to align their investments and purchases with their values.

The report from Bain and EcoVadis highlights the business case for prioritizing ESG factors, showing that companies that do so are not only doing the right thing for society and the environment but are also more profitable in the long run.

However, the report also notes that many companies still face challenges in implementing effective ESG strategies. One major challenge is the lack of standardization in ESG reporting and measurement, which can make it difficult for investors and customers to compare and evaluate companies’ ESG performance.

To address this challenge, the report recommends that companies work towards standardizing ESG reporting and measurement, in order to increase transparency and comparability. Additionally, the report recommends that companies develop robust ESG strategies that are aligned with their business goals and values.

Overall, the report from Bain and EcoVadis underscores the importance of ESG factors for companies’ long-term success. As investors and customers increasingly prioritize sustainability and social responsibility, companies that prioritize ESG factors will be better positioned to attract investment and customers, while also achieving long-term profitability.

November 17, 2024

Chinese Companies Move Supply Chains Out of China to Manage Risks, Boosting India, Malaysia, and Indonesia

by Editorial Team November 14, 2024

Chinese companies are increasingly moving their supply chains out of China to manage risks and reduce exposure to geopolitical tensions, trade disputes, and other challenges. This shift is benefiting countries such as India, Malaysia, and Indonesia, which are emerging as attractive destinations for Chinese companies looking to diversify their supply chains.

According to a recent report by the Hong Kong Trade Development Council, Chinese companies are particularly interested in relocating their supply chains to Southeast Asia, where wages are relatively low, and labor costs are competitive. The report notes that Chinese companies are increasingly investing in countries such as Vietnam, Indonesia, and Malaysia, which offer favorable business environments and infrastructure.

India is also emerging as an attractive destination for Chinese companies looking to relocate their supply chains. In recent years, India has taken steps to improve its business environment and attract foreign investment, including Chinese investment. This has led to a significant increase in Chinese investment in India, particularly in the technology sector.

The shift in supply chains is driven in part by the ongoing trade tensions between China and the United States, as well as other geopolitical challenges such as the tension between China and Taiwan. As a result, Chinese companies are seeking to reduce their exposure to these risks by diversifying their supply chains and investing in new markets.

The shift in supply chains is also driven by the need to manage risks related to climate change and other environmental factors. As companies become increasingly aware of the risks associated with climate change, they are seeking to reduce their exposure by diversifying their supply chains and investing in countries that are more resilient to these risks.

However, the shift in supply chains is not without its challenges. Chinese companies that are relocating their supply chains must navigate complex regulatory environments, cultural differences, and other challenges in their new markets. Additionally, they must also balance the need to manage risks with the need to maintain profitability and competitiveness.

Despite these challenges, the trend of Chinese companies relocating their supply chains is expected to continue in the coming years, as companies seek to manage risks and capitalize on new opportunities. This is likely to benefit countries such as India, Malaysia, and Indonesia, which are well-positioned to attract Chinese investment and diversify their economies.

November 14, 2024

Orchestrators of Value: Unveiling the 2023 Global Chief Procurement Officer (CPO) Survey

by Editorial Team November 13, 2024

Delving into the Future of Procurement: Insights from the 2023 Global CPO Survey

Discover how the role of procurement is evolving in the face of global challenges and opportunities. This article delves into the 2023 Global CPO Survey, revealing how procurement leaders are becoming Orchestrators of Value, driving cost savings, managing risks, and contributing to sustainability and diversity initiatives.

The 2023 Global Chief Procurement Officer (CPO) Survey, titled “Orchestrators of Value,” provides a comprehensive analysis of the current state and future trends of the procurement sector. The survey, conducted by Deloitte, gathered responses from nearly 350 senior procurement leaders across more than 40 countries. This article aims to summarize the key findings of the survey and provide insights into how procurement is evolving to meet the demands of a rapidly changing global market.

The survey reveals that procurement has become a key player in addressing the top risks and issues faced by businesses. With the global economy still reeling from the impacts of the COVID-19 pandemic, procurement-related risks and supply chain disruptions have increased significantly. In fact, more than 70% of the survey respondents indicated that these risks have increased in the past 12 months. This trend is expected to continue, with 43% of CPOs citing an overall increase in procurement risk in the 2023 study, compared to 20% in the 2021 study.

One of the key challenges identified by the survey is the issue of cost savings. The study showed a slight de-prioritization of enterprise margin improvement via cost reduction as a top issue compared to the last study. However, it was the most cited “strong priority” (43% of firms), reflecting a response to the number one organizational risk by far: inflation. This headwind contributed to a 22% relative drop in CPOs’ “performance-to-plan” on cost savings. Only 30% achieved their targets, and nearly 20% had to reduce savings targets.

The survey also highlights the importance of environmental, social, and governance (ESG) initiatives in procurement. One key focus has been supplier diversity, equity, and inclusion (DEI). Regulatory and geopolitical compliance is the top CPO-cited area to which procurement is contributing in the broader ESG topic. However, regulations around DEI and supplier diversity vary across nations, leading to different focuses and challenges in different regions.

The survey introduces the concept of “Orchestrators of Value,” referring to top-quartile orchestrators who deliver top-quartile performance. These Orchestrators of Value have a 25% performance advantage over their peers. They are characterized by their focus on operating model design, talent strategy, and digitization maturity. These areas allow them to successfully deliver on their commitments while addressing challenges and constraints.

In conclusion, the 2023 Global CPO Survey reveals a procurement sector that is evolving to meet the demands of a rapidly changing global market. Procurement leaders are becoming Orchestrators of Value, driving cost savings, managing risks, and contributing to sustainability and diversity initiatives. However, challenges remain, particularly in the areas of cost savings and ESG initiatives.

As the role of procurement continues to evolve, what strategies are your organization implementing to stay ahead? How are you addressing the challenges of cost savings and ESG initiatives? We invite you to share your thoughts and experiences in the comments below.

November 13, 2024

Unleashing the Power of Procurement: A CEO’s Secret Weapon for Growth and Resilience

by Editorial Team November 13, 2024

Procurement in the Spotlight: Driving Business Growth and Resilience in Uncertain Times

In a world marked by uncertainty and disruptions, procurement emerges as a secret weapon for CEOs. This article delves into a recent Forrester Consulting report commissioned by Ivalua, revealing how procurement is becoming a critical function for achieving growth and resilience.

In today’s complex and dynamic business environment, organizations face challenges that extend beyond conventional economic, monetary, and financial risks. They also grapple with mega threats such as inflation, recession, geopolitical risk, and supply chain disruptions, which can significantly impact their performance and survival. A recent Forrester Consulting report commissioned by Ivalua, titled “Procurement: A CEO’s Secret Weapon for Growth and Resilience in Turbulent Times,” explores how the procurement function can become more agile and help organizations adapt to market or business environment changes.

The report emphasizes the expanded mandate of procurement, which now entails value orchestration. It discusses the role of procurement in resolving disruptions for businesses and how supplier strategies have become more digitized and collaborative. The report also highlights the hindrances to procurement agility, such as a lack of leadership, data, and outdated systems.

The study found that improving procurement initiatives helps meet business objectives, allows procurement leaders to discover hidden gems and slash costs, increases operational resilience, and reduces overall business risk due to transparent communication. The report concludes with key recommendations for chief procurement officers (CPOs) and procurement teams to navigate their organizations in an uncertain environment.

Takeaways:

“Redefine the procurement function so that it is fit for purpose. Invest in modern technology and train a new generation of strategic buyers.”
“Take a holistic view of technology. Ensure that investments improve data quality and access, rather than creating further siloes.”
“Ally with your firm’s suppliers to meet ESG imperatives. Adjust sourcing strategies for low-carbon business and work with suppliers to deliver ESG standards.”
“Boost your organization’s supply chain resilience by adopting just-in-case thinking. Stabilize your firm’s supply chains at the first indication of a crisis and codevelop long-term strategies with your suppliers to make your company more resilient and future fit.”

We’d love to hear your thoughts on the evolving role of procurement in today’s business landscape. How do you see procurement driving growth and resilience in your organization? Share your insights and join the conversation in the comments section below.

Please read the full report here:

Procurement-A-CEOs-Secret-Weapon-for-Growth-and-Resilience-in-Turbulent-Times-Forrester Download

November 13, 2024

Ethical Sourcing’s Economic Benefits And Best Practices

by Editorial Team November 12, 2024

Purchasing decisions are based on these criteria, and businesses are increasingly aware of the need to make ethical sourcing decisions.

The Chartered Institute of Procurement & Supply (CIPS) defines ethical sourcing as ensuring that products are sourced responsibly and sustainably, that workers involved in making them are treated fairly and that environmental and social impacts are taken into consideration during the sourcing process, according to Spend Matters and CIPS.

The Covid pandemic and its effect on supply chains helped cement this ethos, according to a survey of approximately 27,000 global consumers published in September 2021.

About 88% of the participants expressed prioritizing purchases from companies that implement ethical sourcing practices. Around 83% are willing to pay more for an ethically sourced product. In addition, 64% of 18 to 24-year-olds, representing almost two-thirds of the smallest adult buyers, said they would never buy from a company if it was accused of working with unethical suppliers again.

Social media is erasing corporate grandstanding and greenwashing. Consumers want to feel good about their consumerism today, which has led to more scrutiny of how products are made (if child labor or unsafe conditions were involved), how food is produced (the use of pesticides and the effects of deforestation) and how corporate decisions affect our environment.

Benefits to the economy

Supply chain-driven brands, manufacturers, and retailers are discovering the economic benefits when they act ethically and profitably.

With brand-sensitive buyers willing to support marginally higher retail prices, ethical sourcing can reduce costs in other ways besides money-saving green initiatives like efficient lighting. According to a report published in 2015 by the World Economic Forum, sustainable and ethical sourcing practices can decrease supply chain costs by 9% to 16% while increasing revenues by 20% and brand value by 15% to 30%.

Additionally, I have seen companies benefit from easier recruitment, increased employee morale and engagement, increased customer satisfaction and market share as a result of brand image enhancement. Some even take the step of becoming certified as a B Corporation, which requires them to meet higher sustainability, environmental and accountability standards. It is possible to gain greater exposure and attract investors when the top echelons of business are portrayed as a force for good.

Requirements for regulatory compliance

Government regulations are increasingly driving ethical sourcing, even though there are numerous organizations that set industry standards and award labels that help influence consumer choice.

In 2010, California, the largest sub-national economy in the world, passed the California Transparency in Supply Chains Act, requiring large manufacturers and retailers to publicly disclose their “efforts to eradicate slavery and human trafficking from [their] direct supply chain for tangible goods offered for sale.”

It has become commonplace for similar regulations to emerge across the U.S. and around the world. The Modern Slavery Act, enacted in 2015, requires large companies doing business in the United Kingdom to publish an annual “slavery and human trafficking statement” that demonstrates the steps they have taken to ensure a free and fair supply chain. Consumers learn about the products they buy through these and other regulations.

Ethical Sourcing Tips

The narrow strait between government regulation and public surveillance requires more than good intentions. Here are some key guidelines for ethical sourcing:

Engage reputable manufacturers and farmers.

Develop a code of conduct for partners that is mutually agreed upon.

Evaluate whether partners uphold standards such as safe working conditions, fair pay, and eco-friendliness.

Set measurable goals and deadlines for corrective and preventive actions in areas that need improvement.

In case remedial actions fail, identify backup partners.

There will always be a need for humans in many industries, but technology can help digitize the supply chain, centralize data collection and communication, and facilitate ethical sourcing programs.

November 12, 2024

Procurement in 2024: Navigating Through a Maze of Challenges and Opportunities

by Editorial Team November 10, 2024

As we transition from the tumultuous year of 2023 into 2024, procurement professionals find themselves at a critical juncture. The landscape they navigate is riddled with complexities stemming from economic uncertainties, geopolitical shifts, and technological advancements. This article delves into the key issues that shaped procurement in 2023 and offers a forward-looking perspective on the challenges and opportunities awaiting in 2024.

2023: A Year of Procurement Challenges

Economic Uncertainty: The aftermath of the global pandemic, coupled with inflationary pressures and material shortages, created a volatile economic environment. Procurement professionals faced the daunting task of developing strategies to manage cost increases and supply risks.
Political Shifts and Trade Dynamics: Geopolitical tensions significantly disrupted supply chains, necessitating a close watch on global developments and the formulation of contingency plans.
Supply Chain Risk: The pandemic exposed vulnerabilities in supply chains, pushing organizations to strengthen their sourcing strategies and focus on building resilience.
Sustainability and ESG Compliance: Environmental, Social, and Governance considerations became integral to procurement strategies, aligning with global sustainability initiatives despite some political pressures to abandon these efforts.

Looking Ahead: Procurement Priorities for 2024

Supply Chain Resilience: Continues to be a top priority. Emphasis will be on diversifying suppliers, mitigating risks, and adopting advanced technologies for better visibility.
Technological Advancements: The integration of AI, machine learning, and blockchain will revolutionize procurement processes. However, there’s a need to ensure smaller vendors are not left behind in the automation race.
Global Market Volatility: Managing global inflation and supply chain stability will remain a challenge. Procurement professionals must stay informed and adaptable to global economic and geopolitical changes.
Advanced Analytics and Predictive Modeling: These tools will become more prevalent, enabling data-driven decisions and optimization of procurement processes.
Talent Shortages: The demand for skilled professionals with digital and analytical skills will intensify. Companies must focus on talent development and retention to bridge the skills gap.

Conclusion:
As we look towards 2024, the role of procurement professionals becomes increasingly complex and crucial. Balancing economic volatility, technological advancements, and sustainability goals, they must navigate through a landscape that is constantly evolving. The ability to adapt, innovate, and strategize will be key to overcoming these challenges and seizing the opportunities that lie ahead.

Join the Discussion
What do you think are the biggest challenges and opportunities for procurement in 2024? How can organizations best prepare for these evolving dynamics? Share your thoughts and insights below.

November 10, 2024