Unlocked Procurement: Flexible Global Sourcing Strategies

It’s a fact: China’s factory wages are rising – they have more than tripled in the past decade – making its products less competitive and raising the price of manufacturing in the region. In March, The Economist noted: “Since 2001, hourly manufacturing wages in China have risen by an average of 12 percent a year.”

Once the world’s largest manufacturing hub due to its cheap labor, China is waning as a component of global production strategies, and companies are looking for other manufacturing hubs to keep costs low. This calls into question many current global sourcing strategies and their flexibility to reap more by shifting all or some of their supply networks to lower cost countries. Unlocked procurement organizations are on top of it with flexible global sourcing strategies. Continue reading

Deutsche Post DHL Group Partners with BravoSolution to Create Fully Integrated eProcurement Ecosystem

World’s leading postal and logistics services provider looks to BravoSolution to streamline sourcing operations worldwide.

CHICAGO – August 19, 2015: Deutsche Post DHL Group, the largest postal and logistics service provider in the world, has chosen BravoSolution, a leading strategic procurement company, as its partner in implementing a fully integrated eProcurement platform to connect and optimize its sourcing activity across the globe.

With its next-generation procurement platform, BravoAdvantage, BravoSolution provides Deutsche Post DHL Group a best in class, standardized and singular eProcurement platform that integrates five key areas of strategic sourcing: savings management, spend analysis, supplier relationship management, sourcing and contract management. BravoAdvantage replaces Deutsche Post DHL Group’s previous toolsets with a platform that integrates and connects local, regional and global procurement activities. The fully integrated SaaS platform promises to increase efficiency and provide more transparency into global procurement operations worldwide.

“In choosing a new procurement platform, we needed a provider that offered a flexible and powerful technology and a team that truly understood our business and the unique challenges of being a large, global organization,” said Dr. Stefan Zeisel, head of regional procurement at Deutsche Post DHL Group. “BravoSolution combines the resources and proven technology of a large, global organization with the support and expertise of local procurement professionals all around the world. The team has worked with us every step of the way to ensure our success.”

Deutsche Post DHL Group has a workforce of more than 480,000 and a presence in over 220 countries and territories around the world. Deutsche Post is Germany’s primary postal service, delivering approximately 64 million letters every working day. The other half of the brand, DHL, provides worldwide parcel and e-commerce solutions including international express deliveries and global freight forwarding and supply chain management services.

“Relying on one integrated platform for all eProcurement activities will transform the connectivity, efficiency and speed of Deutsche Post DHL Group’s supply chain, ultimately providing the company with more procurement value and an edge over the competition,” said Florian Winterstein, chief strategy officer and managing director at BravoSolution.

For more information on how BravoSolution helps its customers outperform, watch the new video: Unlock the Real Power of Procurement.

About BravoSolution

BravoSolution is a leading global strategic procurement solution provider. Our procurement technology platform and practitioner experience help more than 600 companies and 65,000 purchasing professionals in over 70 countries unlock the power of procurement to drive financial performance, develop procurement organizational excellence, manage risk and influence innovation.

BravoSolution’s approach to strategic procurement consistently delivers business outcomes to enable customers to outperform their market. BravoSolution has direct operations in 18 offices located in 12 countries across four continents, employing more than 600 procurement experts. To learn more, see http://bravosolution.com, read our blog Strategic Sourcing, follow us on Twitter @BravoSolution and connect with us on LinkedIn.

About Deutsch Post DHL Group

Deutsche Post DHL Group is the world’s leading logistics and mail communications company. The Group is focused on being the first choice for customers, employees and investors in its core business areas worldwide. It makes a positive contribution to the world by connecting people and enabling global trade while being committed to responsible business practices and corporate citizenship.

Deutsche Post DHL Group operates under two brands: Deutsche Post is Europe’s leading postal service provider. DHL is uniquely positioned in the world’s growth markets, with a comprehensive range of international express, freight transportation, e-Commerce and supply chain management services.

Deutsche Post DHL Group employs about 480,000 people in over 220 countries and territories worldwide. The Group generated revenues of more than 56 billion euros in 2014.

 

Media Contact:

Abigail Holmes

Corporate Ink for BravoSolution

BravoSolution@corporateink.com

617-969-9192

Procurement: A Strategic Asset That MUST Be Unlocked

If you were to ask the president or CEO of your company to rank different business functions in terms of importance, where would procurement fall? If this question alone makes you nervous, it’s time for a change.

For years procurement measured success by looking at tactical metrics and, consequently, was categorized as a back-room function – undermining the true value procurement creates every day.

Leading procurement teams are improving profitability and company valuation; effectively communicating success throughout the organization that procurement is a critical business driver. Continue reading

Supply Chain Compliance is about to Get Tougher

As we all know managing a supply chain isn’t as easy as it sounds. Sourcing, planning, manufacturing, distribution and customer service are all important aspects of it. Each has their own business processes and issues to contend with daily. If orchestrated correctly the supply chain delivers goods that bring more revenue for the company, at a decent profit and customer satisfaction. If not, businesses can take a hit in some or all areas such as the business brand and reputation, products, and revenue and profitability.

New Legislation

With the introduction of new legislation by U.S. Representatives Carolyn Maloney (D., N.Y.) and Chris Smith (R., N.J.), businesses with over $100 million in global gross receipts are required to report to the SEC as part of their annual filings what policies they have in place to ensure their supply chains are free of slavery and human trafficking. Disclosures will need to be prominently posted on SEC and company websites for public access.
The bill was introduced following the publication of the State Department’s 2015 Trafficking in Persons report, which stressed the need for governments to “set clear expectations for businesses on human rights issues and adopt policies that promote greater transparency and better reporting on anti-trafficking efforts in supply chains.” The Wall Street Journal reported , “the bill came hours after the release of the State Department report, which upgraded Cuba and Malaysia’s status but left Thailand at the lowest level after it received a downgrade last year. Governments in the lowest tier could see the U.S. government withhold non-humanitarian, non-trade-related foreign assistance. These countries could also see the U.S. oppose giving them aid through international financial institutions like the World Bank.”

Representatives Rationale

Representative Maloney noted “there is no question that many goods being sold to American consumers are produced with slave labor, and we have a moral obligation to do something about it. This legislation simply requires businesses to publicly disclose what actions they have voluntarily undertaken to remove labor abuses from their supply chains. It is a good first step we can take to improve reporting and transparency so that we can enforce existing laws against labor abuses and allow consumers to make more informed decisions.” Representative Smith noted “some companies may participate knowingly in human trafficking to pad the bottom line; others are willfully ignorant of where and how their inexpensive products are made; and still others simply do not know.”

What It Means

Supply chains will now have to prove they have preventative measures for human trafficking, slavery and child labor in their supply chains. The law does not dictate how companies do business but does require disclosure. The disclosure requires outlining practices employed to avoid use of slavery in supply chains in the annual report to SEC. Supply chains must be transparent and maintain internal accountability standards, supply chain management and procurement systems, and procedures for employees or contractors failing to meet the company standards regarding forced labor, slavery, human trafficking and the worst forms of child labor.

A Collaboration Economy: Business and Presidential Candidates

It’s that time again! Presidential hopefuls are announcing their desires to run for the President of the United States. At present there are 22 candidates running for the US Presidency, five Democrats and 17 Republicans. Stay tuned, this could, of course, change tomorrow.

Depending upon what media station is your choice for election information your view can be enhanced, skewed or ignored. Regardless of party, even those that I didn’t list, everyone has an opinion on the candidates, what the country needs and what works and doesn’t work. Becoming the President of the US is about a collective voice, gaining momentum and setting the nation on a course for action. If this sounds like a business marketing campaign, to convince the public on the best candidate it may very well be that the winner is akin to the business sales effort.

Business is the purchase and sale of goods or services to make a profit. Profitability is critical to running a successful business as are sales and procurement. But just because you have a business doesn’t mean it has staying power. The buyers must be aware of it, must understand why it is better than other available options and ‘buy’ into the product and company.

Commonalities

The shared characteristics of Presidential candidates and business include (and are certainly not limited to):

Product: Both have or can be considered a product. The candidates themselves or a product/service may or may not be of value or use to the buyer, the end user. Both have features and functionality that will advance the product in a direction, and may also have features and functionality that may hold back or side line the product over the short and long term depending upon the direction and courses of action for each.

In the case of the Presidential candidate the product may be good for our country depending upon the issue that you want resolved, delivering a better outcome than what is in place today. Think of a selected candidate (or product) impacting budget, defense spending, economy, energy and climate change, foreign policy, immigration, internet reform, national security, tax reform, terrorism, or trade. In the business case the product is to satisfy a specific need or sometimes a multitude of needs.

Price: Both have a price – the business designates a price on their product that the market will bear. The Presidential candidate has a price on what they can bring to the market, how the market perceives their product and at what price they will continue to be a candidate. Both have tradeoffs associated with their selection including product strategy and execution, product integrity, product quality, price, and the authentic brand of the product are just some of the aspects that are all part of the price.

Data: Both have data to help identify buyers and their demographics, the reasons for interest or purchase, and even the polls or studies that highlight the concerns the buyers have that need to be resolved. Competitive data is used in both cases to strengthen the product story and outsmart the competition to win.

Support: Businesses have support functions that provide various services to keep afloat and profitable. Presidential candidates have support from their donors, followers, party affiliates and camps, news media, social media plus discussions among voters.

Marketing: Businesses and Presidential candidates utilize extensive marketing efforts to build sales by developing awareness, informing the buyers/constituents, and creating campaigns.

Finance: Businesses can’t run without sales and profitability. Presidential candidates need sales in terms of votes and donations to run their campaigns to get the votes. Money and staying afloat are critical to both.

Spending: Our country spends billions, perhaps trillions on our Presidential campaign so we can have the best leader to accomplish a grand list of actions that is important to the country. Business spends to get their product out and purchased.

Buyers: Both businesses and Presidential candidates will not survive without buyers/voters. And the latter may falter anyway because of the terms of engagement defined by the US Constitution regarding one President at a time; therefore many candidates, products, will be eliminated and only one will be elected.

So what?
Ok, so they have something in common, so what? The so what is perhaps our nation isn’t just about the best candidate for the position, but also the best running business behind the candidate so the candidate is elected. It may be more like an assortment of Presidential candidate products with a successful business behind the product to position it through to the final sale, the Presidency.

Final Thought
Welcome to the collaborative economy – sharing the best of the business and products to select a President for the US. The only thing standing in our way is a command of the issues, the population of voters and their stances on the issues, the data behind it and of course the media’s viewpoint to ‘help’ us decide on our choice.

Oh and of course the election. I guess the part’y’ing line (excuse the pun) “It’s just politics” is appropriate.

Procurement Basics: Data Is King

How much data does your organization generate?

Have you ever looked at your organization in terms of your data? This is a great place to start so you can see your spend and supply base information. Seeing is believing. The data gives you something tangible to review. Spend and supply base data can help you answer some very basic questions like:

- What is my organization spending?
- Who are we spending with?
- How much money is addressable spend?
- How much spend is under Procurement control?
- How much spend is under contract?
- How many suppliers do you have in each of the areas of spend?
- How many categories of spend are in each area noted above?
- What is uncontrolled spend and uncontrolled suppliers?

These are just a few questions you can ask to start extracting valuable information from your data. The information you are seeking provides the baseline value you need to optimize your Procurement organization.

What Does Data Provide?
Data is the key you need to zero in on the facts specific to your organization’s current health and growth potential. Data erases perception and doubt creating fact-based awareness. Without data Procurement is reacting to perceptions and noise painted by the organization. Data is the baseline to measure your work and value. It can show you inefficient and non-existent processes, force you to question and answer issues that you never really thought about and help you understand the facts so you can make better informed decisions.

Getting the Data
Finding, pulling and viewing data can be a nightmare, especially if you do it manually. Technology tools can help you quickly pull, streamline and manage the data so you can quickly find information you need and start answering the multitude of questions on spend and your supply base. Spend analysis tools are the easiest tools to identify, collect, cleanse, aggregate, enrich, categorize and analyze spend. Supply base tools are similar, however they are even more powerful when combined with spend data because they segment, show at risk, performance and compliance concerns that need to be addressed immediately.

Using the Data
Data is just data unless it is understood. Part of understanding is the process to get it and then use it. If you only grab pieces of the data you have only a small portion of the big picture which can leave you exposed to risk issues and reduce or eliminate additional value that can be derived.

After full visibility, you can zero in on facts and trends within the data to start understanding what your spend and supply base is telling you. A few questions to help you sort through it are:

- How much of our addressable spend is not tracked through Procurement?
- How much of our supply base do we not touch?
- What areas are we at risk of not meeting our stakeholders or customer’s requests?
- What areas lack proper processes to ensure compliance?
- How do we measure how well we are doing if we only see pieces of the data?

Data is a key component to solving organization issues but you need to get it, see it and use it in a defined repeatable process.

Procurement Basics: Listen, Understand and Connect

I recently enjoyed a conversation with a new Procurement Manager. This was their first managerial job and they reached out asking for some thoughts on the requirements of a great Procurement Manager. The conversation was more about me asking questions on the role, expectations, business direction, strategy, plans for current year and what thoughts the new manager had regarding role definition and direction required to succeed
The new manager is really eager, wants to perform their job well and knows if they succeed, there will be future career advancement. After my many questions I was asked why I needed so much information to help with the profile of a great Procurement Manager. To me it was simple. I could provide the individual a list of what makes a great Procurement Manager or I could help them realize that being great requires listening and understanding of the job requirements and details. It also requires he gain information on the role business expectations. And he must tie the team direction to strategy and plans so the business is positively impacted. After my explanation, this new manager was quiet and said to me, “wow this has been an eye opener for me. I thought I was just going to do all I did before by fulfilling requests, sourcing where possible and monitoring the supply base.” He told me he learned three things he hadn’t thought about: Listen, understand and connect.
Here are the three key points to success we discussed.

Listen
The manager told me he realized he shut down with the news of his promotion> He decided if he just did more of the same he would continue to do well. He hadn’t taken the time to ask what was needed by the business from the role, when it was needed and the expectations of his new role. My line of questioning helped him realize he needed to ask more questions and listen to the responses. Ernest Hemingway put it well when he said, “I like to listen. I have learned a great deal from listening carefully. Most people never listen.”

Understand
This new Procurement Manager also told me he recognized he needed to understand what was said not just hear it. He had to take time not only to listen, but to connect with his new manager, his team and stakeholders. It is important to recognize that you will lose value without connecting with your colleagues and stakeholders, and replaying back to them what you think you heard and then applying it in the way that it satisfies their needs. . Part of understanding is making sure you clarify their needs and then apply the details to what it means to you and to your role within the business. Steven Covey noted: “Seek first to understand, and then to be understood.”

Connect
The new manager thought he connected because he was selected for the job. He didn’t think about listening and understanding to make a better connection and to be understood. The solution to your business requirements will come from the creativity you use to connect to business needs. Connecting is the way to bring meaning that can make a difference to your business and your career. It reminds me of another quote by Kenneth Leithwood “Great leaders build trust and collaboration while focusing on developing people’s capacities rather than focusing on limitations.” Herein lies the path towards becoming a great Procurement Manager.

The Secret of Unlocked Procurement

Conventional procurement is a tail dragger. It brings down the organization because it exists to satisfy needs verses seeking opportunities to secure unlimited value. Unlimited value is the secret of Unlocked Procurement. Unlocked Procurement recognizes the power within procurement as it realizes unlimited value from the supply base, the organization and customers.

Sounds simple, doesn’t it? Not necessarily true. You can’t secure unlimited value without the definition of value. Value equates to worth and importance. Value is something that is desired by the organization and in this case from procurement. Procurement value may be defined as any number of the following:
• Monetary – Savings, profitability, revenue, earnings per share
• Opportunistic - Growth, market share, brand awareness
• New Product – Time to market, respect of product, differentiator
• Paradigm Shift – New application of current model, conversion to new service or product with greater offering and less money
• Relationship – Customer, suppliers, employees
• Governance – Compliance, risk, CSR

However you define procurement’s value, its significance may be for only one moment in time; it might grow, sustain, diminish or even change its attributes. It is imperative procurement’s value is captured, from its baseline through its lifecycle, monitoring the progress and providing visibility for the organization, customers and suppliers to realize unlimited value.

Click on this link for more information on ten steps to Unlock the Power of Procurement

Grabbing the Keys and Moving from Conventional to Unlocked Procurement

Last week BravoSolution rolled out Unlocked Procurement and with it came a myriad of questions. The first and most important was how do I give my organization the keys, manage the outcomes and reap the benefits of Unlocked Procurement?

Conventional Procurement is in the past. What’s changed? While a view of spend is required to gain visibility of external purchases within the organization and make plans for improvements, it isn’t the end all be all. Candidly, the process forgets the supplier or better yet, it promotes the buyer to leverage spend and become the power over the supplier. While that might be great to get the first deals for simple items like office products it doesn’t do much to promote collaboration, innovation or bring sustainable value to your more strategic suppliers.

Unlocked Procurement utilizes spend management practices where needed but puts more focus on the supplier – the reason procurement exists. It provides an avenue to grow the relationships, revenue and profitability. Moving from conventional procurement to unlocked isn’t just as easy as inserting the key and turning the lock, it also requires a prominent shift in the resources utilized, resource optimization and developing a more opportunistic attitude verses conciliatory. The key to moving to unlocked procurement is developing, acquiring and optimizing the resources within a forward driving business that hinges upon the success of value from all resources including the customers and suppliers.

Obviously the keys to success vary based upon your organization. Keep an eye out on our blog over the next few weeks and months when we will share with you important keys to move from Conventional to Unlocked Procurement.

Everything You Need to Know About BravoAdvantage

There’s big news coming from BravoSolution this week: We have officially released BravoAdvantage, our next-generation procurement platform. This platform will help take your procurement operations to the next level by enabling your procurement team to generate more value, influence innovation and reduce risk across the supply chain. Making BravoAdvantage stand out, is that unlike traditional spend management and procure-to-pay solutions, suppliers are at the core of BravoAdvantage. The platform integrates supplier lifetime value throughout the entire strategic procurement process, providing organizations with unmatched visibility into their supply base.

Most solution providers have channeled their efforts into spend management, but the fact remains that procurement covers so much more than that. Unfortunately, in other solutions, the supplier often gets lost. Yet it has been proven over and over again that by working collaboratively, buyers and suppliers can increase innovation, remove waste from business processes and reap more collective value. In fact, the best procurement teams in the world help drive growth and profitability for their organizations, which in turn creates a financial competitive advantage over competitors. Driving this growth, profitability and competitive advantage requires a platform that prioritizes supplier life time visibility and is built off strategic spend and supplier relationship management disciplines.

In talking with procurement executives across the industry, it’s clear that most procurement teams are ready to take a step forward and move beyond the conventional practices of spend management and toward a more collaborative, supplier focused path. They recognize that by increasing supplier visibility in their spend management practices, they can unlock the power of procurement and reap greater rewards for both themselves and suppliers. Are you ready to transform your procurement organization? Learn more about BravoAdvantage at www.BravoAdvantage.com