Why companies need to benchmark and how consulting companies help

In today’s competitive supply chain world, it is always recommended to use best practices in your respective working areas/tasks to have best results within given timeframe.

This can be only achieved by following Benchmarking practices.


Benchmarking allows companies to compare themselves with similar companies working in the same area of business or geographies.

Studying best practices provides the greatest opportunity for gaining a strategic, operational, and financial benefits.

Benchmarking is not equal to copying as conditions are never identical. You can create a system, define critical values, and apply them. Benchmarking is a tool for Total Quality Management.

Benchmarking gives us the following-

  • Better Awareness of Ourselves (Us).
  • Better Awareness of the Best (Them).

One of the reason of doing Benchmarking is to create a firm that is more adaptable to change.

Benchmarking Process-


In Benchmarking process, as shown above in Fig2, structured and systematic steps are required to be followed to identify gap between actual performance and the desired best practices/results.

Benefit-Benchmarking process provides opportunities for staff to learn new skills and be involved in the transformation process from the outset.

Benchmarking can be done at different stages of Sourcing, i.e. in automotive sector while doing category management, benchmarking can be done at Costing Stage, best practice Implementation Stage and even in the Packaging Stage.

Bristlecone realized the value of Benchmarking for a client by recently doing a Cost Benchmarking for one of the OEM Automobile giants based in India. It covered the best practices of Benchmarking as well. We covered three OEMs in this Benchmarking exercise. Detailed Benchmarking of various elements of different costs in a Costing Process was done and best solutions were recommended to the client. This also included alignment of best practices of Costings in SAP from manual Excel spreadsheets.

Continuous and breakthrough improvement is possible through Benchmarking. See the graph below which shows how Benchmarking accelerates Innovation and Change, and the situation is highly competitive at that point.


Also, below mentioned are the six principles of Benchmarking:

  • Comprehensive
  • Credible
  • Comparative
  • Performance Oriented
  • Confidential
  • Continuous assessment

Most businesses are not willing to do multistep benchmarking as it takes too long—from six to nine months; it is also a costly and cumbersome process to complete.

Here comes the role of consulting firms that can perform Benchmarking for different organizations at competitive prices. Consulting firms do detailed research and do extensive data collection to provide the best Benchmarking solution. A pool of consultants from different domains study the existing process, identify gaps, and develop action plans to find the best benchmarking solution.

Consulting firms do benchmarking by following a step by step procedure. The benefits which can be obtained are streamlined work flow, opportunities for improvements by identification of gap between actual and desired best practices/result and thus making a competitive strategy to achieve best results.

Thus, consulting firms act as an extended arm for doing Benchmarking.

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Are you ready for Disruptive Innovation?

Can disruption and innovation go hand-in-hand? I often wonder about this, as I hear the word ‘disruption’ quite often. Over time, I have come to understand that disruptive innovation is characterized by two attributes. One, the new innovation is a new way of doing business within an established industry. Two, this new way of doing business is in direct conflict with traditional methods. The advent of internet banking and cab aggregators are a few common examples of disruptive innovation: for instance, cab aggregation is not just a novel way of doing the business of taking people places but is a new business model that is in direct conflict with existing modes of road transport across the world.

Extending the example to procurement, the emergence of blockchain creates a situation where every single supply transaction can be protected by the ‘influence of the many’. In other words, for any changes to be made to the data stored via this medium, consensus must be obtained. Examples of transactions include the issuance of a purchase order as a legal contract and the transfer of asset ownership.

This can be compared to the way nuclear codes work – a launch can happen only when everyone with the secret code enters it accurately.

It is perhaps safe to say that disruption in all traditional industries in general, and in procurement, in particular, is not just inevitable and something to be dealt with, but even desirable. Disruptive innovation using technology has the ability to transform the Supply Chain as we know it, be it through increased transaction security or by increased accountability at each step of the way.

“Thus, businesses will find that using innovation, they can reduce the cost of doing business, do it more efficiently and build a more sustainable solution that doesn’t bleed money and also provides long-term results.”

Are you ready? This is what disruption in procurement looks like, and we’re only skimming the surface here. Do note that most of these advancements already exist in the market.

Spend Analytics: Can you use AI to classify spend data? Products like Spend360 allows you to pinpoint every single spend on suppliers, understand why one method costs more than another and allocate spending so as to make most business sense.

Risk Management: By analyzing data from a company’s own portfolio of suppliers, as well as historical data from the industry, some products can predict the type and level of risk in procurement at each stage of product development. Such a solution can enable you to attach a premium to the risk, or to find ways to remove the risk from the system entirely.

Supply Intelligence: Churning data from millions of market sources enables products to accurately predict the price of most common supply commodities, including metals.

If this is already happening, you’d want to know what can be expected. Outrageous as the ideas themselves may be, no one ever thought blockchain could find such widespread acceptance. We can expect data to help us attach value to each sourcing operation, down to the molecular level. This can save businesses huge amounts of capital. IoT will also have a role to play in offering granular visibility across the procurement and manufacturing process by accounting for every single component digitally.

Research shows that in as less time as the next three years, traditional industry practices need to find a way to become complementary to disruptive innovation. Innovation would become the new norm around which traditional models work. Is your business disruption-ready? Here’s how to find out.

  • Do you accept that the face of the industry is about to change and that change is already underway? Every leader must look as far as ten years ahead into the future and be able to anticipate the realities of that time. Only then will the business have enough time to accept or challenge the disruption in their domain.
  • Do you have a personal impact matrix? Such analysis can help identify one or two key disruptors that would impact the business most severely. These aspects can then serve as the starting point for internal review and innovation.
  • Does your value proposition hold value down the line? Remember, disruption can make people go out of business overnight. With the advent of retail management systems and e-commerce, we are already seeing a reduction in the need for manpower. Evaluate your value proposition across a broad time period.
  • Can you disrupt the industry? If you have a revolutionary idea, it is best that you put it into practice first. This can give you an edge in the current market and put you first in the race in the future as well.
  • Are your departments integrated? Business intelligence is sourced from every single department in the business. While most manufacturers look at investment vs. output, it is time to measure the output against marketing spend, Supply Chain delays, product satisfaction and other KPIs independently and also as a consolidated result.
  • Are you willing to step out of your comfort zone? Some procurement companies find that they need to step into other industries, including but not limited to information technology and software development, in order to be able to cause a disruption or survive it. Business leaders with a pan-industry perspective are more likely to succeed in this endeavor.
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Digitizing the Supply Chain

Many Supply Chain executives still operate their Supply Chain processes as if they were linear processes that can be broken down into independent functional silos. In today’s world, an enterprise is intricately connected to a network of customers, suppliers, competitors and supply chains. The right goods and services still need to be delivered to the customer at the right time, the right place, the right price and with the right quality. To stay competitive in today’s complex world, businesses need to change the focus of the supply chain process to be outside-in, i.e., centered on the customer’s customer and focusing on the right key metrics. Being profitable while delivering on this focus requires harnessing information deeper in the enterprise’s internal supply chain and information outside the four walls of the enterprise.

Enormous amounts of such information, many being near real-time, is now available to businesses via Sensors, Third-party sources, Supply Chain partners, and mobile and social platforms. There is lot of buzz in the market about Digital Supply Chain (DSC) being the Swiss knife to harness the above information sources – touting that the adoption of Internet of Things (IoT), Machine Learning, 3D printing, e-commerce platforms and many such technologies, will help achieve DSC maturity.

In my opinion, DSC is less about the blind adoption of technology and more about the focus on delighting the customer, and adopting an “outside-in” approach, so that [relevant] information and tools can be mashed up with internal data, to create customer delight. Leveraging this information to better sense and understand customer demands, manage the supply chain, and deliver customer delight is going to be essential to a business that needs to adjust quickly to changes in market demands, technology and, most importantly, customer expectations.

What is a Digital Supply Chain?

A Digital Supply Chain (DSC) enables a customer-centric networked ecosystem that can capture and utilize customer data, sometimes in near real-time, to enable demand sensing, demand management and demand matching while adhering to strict compliance and security guidelines, and optimizing performance and risk.


DSC is often confused with adoption of technology. However, in reality, a DSC is one that has realized the benefits from the massive amounts of information available via emerging technologies; Artificial Intelligence (AI), IoT and Robotics are just enablers. In addition, none of this data and consequent analysis is useful/actionable without meaningful collaboration between various functions in the organization – from sales to development, manufacturing, delivery services as well as external stakeholders–suppliers, partners and customers.

How can digitizing Supply Chains help your business?

“The Digital Supply Chain holds the promise of real- time data to sense demand, drive innovation, reduce cost and deliver the customer the right product at the right time and price.”—Bill McDermott, CEO, SAP (Germany)

According to a survey conducted The Center for Global Enterprise (CGE) as part of the Digital Supply Chain Initiative (DSCi), digital supply chains can reduce procurement costs for all purchases of goods and services by 20% and reduce supply chain process costs by 50%. In addition to decreased costs, improvements in the DSC have the ability to increase revenue by 10%. *


DSC Networks are more agile and resilient

The DSC is no longer the traditional linear system from manufacturing to delivery. Rather, it functions like a completely transparent network of manufacturers, suppliers, distributors, partners and customers, aided by integrated systems, smart procurement, warehousing, and digitized logistics management. Whether it’s raw material at below the acceptable inventory levels, a spike in customer demand or a machine failure – all of these become visible, in near real-time, to stakeholders in the network. This enables the players “foresee” potential disruptions, giving them the ability to move quickly to fix issues. Customers get the benefit of efficient and transparent service.

DSC facilitates flexible and collaborative businesses

Rather than each function operating in its own silo, the outside-in DSC offers a transparent view to all stakeholders. Traditional supply chains have not been able to solve the problem of collaboration, largely because each stakeholder has a different set of goals. Buyers want rock-bottom prices, suppliers want to maximize their profits and keep their inventory costs and levels under check, and sales wants highest amount of products. Having technology and applications in place is not going to change any of this. However, measuring the right business metrics, for example, operational risks, inventory levels, on-time delivery, etc., and making it visible to all stakeholders can improve operational efficiency.

DSC makes the supply chain cognitive

DSCs harmonize internal and external data, near-real-time big data from IoT, sensors, mobile and social platforms. Application of automated data mining, predictive analytics and optimizations let many decisions to be taken by this smart Supply Chain, thus making the business become more proactive and efficient.

Consistent customer experience

Omni channel marketing helps companies deliver products and services in a consistent manner across all channels. This provides competitive advantage to businesses that have adopted outside-in Supply Chains. Analytical tools combined with Supply Chain strategies for demand stimulation and management will help companies deliver customer delight.

Improved risk mitigation

Early warnings from near real-time big data can help companies avoid potentially disruptive situations, set up mechanisms to handle risks and be more proactive. Predictive analytics help mitigate business performance risks, which can reduce significantly in a DSC. At the same time, this needs to be balanced out by driving compliance requirements by collaborating with various groups.

With governments across the world passing new legislations and regulations, compliance has become one of the major requirements for most companies.

The collaborative and transparent nature of DSC makes it easier for companies to communicate with stakeholders and see to it that compliance requirements are satisfied. Business contracts can be structured into pre-contract, contract and post-contract performance. Mining this data across various suppliers to evaluate performance and risk versus actual contract terms will help businesses decide which suppliers are a no-no, predict problems, and improve contract terms.

Accelerate your Digital Supply Chain journey with Bristlecone

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Bristlecone-Pulse, October 2017: Mapping the Future of Supply Chains

And it’s back! The third Bristlecone Pulse Conference is being brought to you at the world-renowned MIT campus in Cambridge, MA. Scheduled for October 25th to 27th, Pulse 2017 on the East Coast will be about ‘Your Roadmap to Antifragility’. Antifragility is the radical concept introduced by philosopher-author-financial analyst Nassim Nicholas Taleb in his book, ‘Antifragile: Things That Gain from Disorder’, that talks about systems that grow and even thrive in disruption.

What does antifragility have to do with Supply Chains? Join us at Pulse to listen to our distinguished and eminent thought-leaders speak on an assortment of topics such as Enabling Antifragility in Supply Chains and How Machine Learning Impacts the IoT network.

We’re very pleased and honored to host Prof. David Simchi-Levi, renowned Operations and Supply Chain expert and Engineering Systems Professor at MIT as well as Chairman of OPS Rules. Dr. Simchi-Levi will speak on Delivering Customer Value through Digitization, Analytics and Automation.

Dr. Federico Casalegno, Associate Professor of the Practice, is the Founder and Director of the MIT Mobile Experience Lab at MIT. He will focus on Designing Networked Digital Technologies to Foster Connections in his address.

We’re excited that Dr. Abel Sanchez, Executive Director of MIT’s Geospatial Data Center and Architect of “The Internet of Things” global network will bring Connected Intelligence for Pulse attendees.

Dr. Leonardo Bonanni is the Founder CEO of Sourcemap, a MIT start-up specializing in Supply Chain mapping and transparency. His talk will be about Transparency and Sustainability in Supply Chain.

Our President and CEO, Irfan A Khan shall deliver the keynote address. Mr. Khan will also be featured among many others in our panel of business leaders from the consumer goods industry who will talk about the huge changes sweeping across our industry and enabling the digital transformation of Supply Chains.

This prestigious event is your chance to network with the movers and shakers creating futuristic Supply Chain technologies. Be there to get your ringside view of tomorrow’s Supply Chains. Take back learnings to make your Supply Chain future-ready.

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The New Answer To ‘How To Keep Customers Happy’: Positive Disruptions In The Supply Chain

For businesses, the very idea that disorder can lead to growth and movement is unthinkable. However, could it be possible that there are business models that gain from chaos and disruption? Is this kind of positive evolution achievable by any and every business, and under all circumstances?

Think of this radical concept: An antifragile entity looks for disruption because that is where it can grow best.

Each day, as businesses strive and struggle to serve consumers better as a means of gaining market share, we are left in no doubt that we need to transform our existing processes. And positive disruption is one way to do just that with our Supply Chains.

I’ll put it this way- positive disruption is already happening. In this piece, I discuss a few ways by which the traditional idea of Supply Chain management is changing and evolving to keep up with the times.

SaaS In Retail Management

Software as a Service (Saas) has replaced nearly every software application we have known in our lifetime. The G Suite is basically all of Microsoft Office, with a few added perks. The icing on the cake is it doesn’t need installation, a key and a licensed proof of purchase. There are several advantages of running an application much like a service- it is available everywhere, it doesn’t take up disk space and it keeps the business operations transparent.

In retail management, SaaS and the availability of multiple channels to sell across have evolved alongside each other. Today, spreadsheets are no longer the go-to choice for inventory handling and calculation. Software products have the ability to track sales in real-time and adjust inventory accordingly. Being machines, they can do this every single minute of every single day.

Retailers who adapt to such retail management practices and don’t shy away from going digital gain better insights into their business and achieve higher consumer satisfaction, as they don’t run out of stock due to oversight. They hold inventory at levels that are just optimal, to prevent extreme scenarios such as stock-out or dead stock.

Take a step back in the chain, and you see some retail management products giving you the option to automate the raising of purchase orders based on sales trends across channels. In the end, the consumer benefits from speedy order processing and seamless fulfillment, thus building brand trust and loyalty.

Crowdsourcing the Warehouse

You’ve got to hand it to Amazon to do something others can only dream of. At the beginning of this decade, Amazon had what most small businessmen cannot hope for- extensive warehouse space and impeccable logistics. So it did what no other marketplace has done before, or since. It opened its doors to those retailers and gave them access to sophisticated practices. Amazon knew that small-scale retailers wouldn’t be able to do this by themselves, and so it charged them a fee for using its services.

The takeaway from this? Money spent must offer instant gratification. By using this little insight into the human mind, Amazon today truly sells products from A to Z, by crowdsourcing them from other retailers and working on what it does best- fast delivery.

I think this behemoth is the perfect example of antifragility. When it came to the question of putting all that space to use, Amazon could have chosen to invest in inventory as well. Instead, it made others invest in its inventory and even claimed a fee for this investment.

What do retailers get? The Amazon Prime advantage in some cases, and visibility in others. Consumers get the secure feeling of shopping from a known brand and, thus, drive more sales to the marketplace.

Evolving Automation

The Industrial Revolution is considered a revolution because it was the first large-scale use of automation to achieve more than humans ever could. I think the next revolution will be digital in nature. With Machine Learning and AI taking center stage, we can look forward to hitherto unknown forms of automation that can disrupt our understanding of the Supply Chain.

We already have systems that can raise automated purchase orders. On the vendor/ manufacturer side, we may have systems that can ‘read’ these orders, look to past ordering trends, and if the order in question is consistent with past data, send it into production/ dispatch.

In other words, there may be no need for human intervention for basic decision-making, which is often responsible for most of the hold-ups in a Supply Chain.

Since the manpower involvement is greatly reduced, the end product cost may be much lesser than what it is now. In a distinct advantage to consumers without loss of profit for sellers, we may see expensive products categories become more affordable and easily available.

New-Age Enterprise Resource Planning

The emergence of SaaS and APIs has given software products a chance to communicate with each other seamlessly. This is why integrations are the future of all businesses that depend on their Supply Chains.

A typical ERP system today can also be integrated with a CAD and a product lifecycle management system. An inventory management product can have accounting and shipping features integrated into it. The best part is that each of these services is never built from scratch. For example, an ERP solution can also find a way to integrate with financial service modules such as SAP S/4HANA so as to achieve complete consolidation of financial data and enable the evaluation of financial implications of a certain decision.

For a fraction of the price, businesses now have access to the best services in each domain. All of these digital personas work together with the same intuition as a human system and the efficiency that only machines can achieve.

Improved efficiency across the organization in the form of a highly robust Supply Chain directly translates to improved consumer experience- either due to the speed of processing or due to the reduction in errors and uncertainties, or both.

Now, more than ever, businesses need to consider how best they can adapt to changing conditions. It isn’t enough anymore to just do it because everyone else is, but to be the first in the line, such that with every new development, there is more scope to grow as an enterprise.

Every business that hopes to thrive in today’s market must ask the question, “Where do we go next?” Becoming antifragile may just be the answer.

Twitter – @irfantalks

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Supply Chains get smarter with Artificial Intelligence

Having missed a dear niece’s birthday and trying to make up for it, I browsed through my regular gifting site last week. Sarah greeted me, asking how she could help me. So as I said, “Hi, I forgot my niece’s birthday”, Sarah responded with “What does Khushi like?”

“Hmm, basketball and phones are her latest interests,” was my response. Sarah asked for my budget, which I stated with a slight hesitation. She then suggested that I pick up tickets for the upcoming season or a voucher for iPhone X, if I was rethinking budgets (oops! that’s way out of any budget!). I went with the former and Sarah confirmed that the tickets would be delivered directly to Khushi’s address. Impressed.

But, why am I talking about this? Isn’t this regular? The difference is that Sarah is a ‘bot’, she is enabled by Artificial Intelligence (AI) and has been ‘learning’ based on my interactions with her. The bot will further communicate with the order management system, and the order would be processed. Being a tech enthusiast, I did get thinking about how all of this is going to impact our future. Clearly, AI is here to stay and clearly modern supply chains are going to be completely disrupted by a gamut of AI solutions!

How will AI impact the Supply Chain?

AI solutions imitate human behavior. In other words, AI solutions can be used to make decisions, just like humans, and “learn” (just like humans) over a period of time. Often, human decisions are taken based on many factors such as using existing data and prior experience (intuition anyone?). Eventually, AI solutions should ideally be able to do the same.

While the Digital Supply Chain (DSC) is bombarded with real-time data coming in from various sources – social, internet, sensors and enterprise data – all of this data is useless unless it can be used to lower costs, increase revenues and improve customer delight. AI solutions can be used to do all of these, often with better accuracy and efficiency than humans. They may not yet (or never!) replace humans completely, but with every new advance in technology, we are surely getting into a living side-by-side.

What kind of transformation are we looking at with AI?

Supply Chain Management is critical to businesses. The utopian scenario is one in which planning, order management, procurement, manufacturing, warehousing, inventory and delivery all seamlessly work together to deliver unmatched customer service. This, or at least part of it, will be possible due to AI solutions.

In the last couple of years, supply chains have been increasingly using AI solutions for forecasting and demand management. However, this is only the tip of the iceberg.

According to the SCM World Future of Supply Chain Surveys, 2016, as many as 47% of supply chain leaders expect that AI / Machine Learning solutions are going to impact Supply Chain strategies.

As vast as Supply Chain is, there is no limit to how much AI can do for it. Accuracy and automation are only some of the areas where a Supply Chain can derive specific benefits, but there’s a lot more. Driverless trucks, smart warehouses, drones doing last-mile delivery are a few of the latest innovations, and there’s much more in store. Here’s what is in the works:

Complete automation of the Supply Chain: Right from Demand, to Work Order, Production and Delivery, the Supply Chain works as one smooth chain. Companies have already started to automate complete production lines using AI, which means a round-the-clock production without human intervention or supervision.

Smart Warehouses: Increasingly, robots are being looked at to supplement and, eventually, replace humans in warehouses. For example, forklifts are already being replaced by robots that can handle heavy loads, while “sensing” obstructions. Industrial robots can be trained by humans to grasp objects and move them around. As technology improves and robots become more sophisticated, warehouses may even become the training ground for completely running everything autonomously!

Better contingency management and fewer disruptions:Weather conditions such as hurricanes, flight disruptions can all lead to trouble in logistics. For example, if you know that a hurricane is expected in Florida, you would reroute your freight or postpone the delivery. AI solutions can help raise red flags and help all stakeholders manage disruptions better.

Revolutionizing logistics and transportation: Customer demands, such as same-day delivery, decentralized production and personalization, will force logistics providers to be agile and flexible. Driverless trucks are being prototyped (an Uber-owned company even delivered 50 beer cans (!) using a driverless truck recently) and unmanned aerial vehicles (UAV) are being looked at for last-mile deliveries. While these may be the future, the vast amount of data available can be used to simplify distribution networks and optimize routes using AI solutions and predictive analytics.

Automated Procurement guidance and Virtual Personal Assistants: Besides deploying AI-based applications in areas such as spend analysis and contract analysis, according to a Gartner report dated May 2017, it is expected that Cognitive Procurement Advisors (CPA) will be used to provide recommendations and advice on risk management, compliance, supplier management, etc. Virtual Personal Assistants (VPA) can improve user experience, and provide guidance to the right procurement tools, thereby increasing cost savings and efficiency.

Improved customer and supplier management: Customer queries can be answered by AI solutions. You can have an AI-based voice response system, which has knowledge of your product, which is automated to answer typical customer queries, both for customers and suppliers.

Next-gen Demand Management: Real-time visibility into business risks, opportunities, supply status, customer behavior, and sales insights can be used to create integrated AI-based demand management systems. Near real-time big data, such as from IoT devices and sensors, will make it possible to have an agile demand platform.

At Bristlecone Labs, we have been working with cutting-edge technologies that will impact the Supply Chain. One of our recent innovations is our first Monitor Bot named Hari, which enables Supply Chain teams to remotely tour, monitor, and engage with factories and facilities from a safe and convenient location. More importantly, Hari is integrated with Bristlecone’s NEO™ Platform and we learn with Hari’s every move – leveraging voice controls, remote controls, two way audio-video streaming, IoE, blockchain and automation – Hari and Bristlecone NEO™ empower Supply Chains professional with AI capabilities to execute an anti-fragile Supply Chain.

We expect that a Digital Supply Chain of the future will be a Cognitive Supply Chain – which is intelligent, self-optimizing and resilient – thereby becoming anti-fragile and thriving in the world of constant chaos.


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SAP Info Day for Procurement October 5, 2017 Sinsheim, Germany

The SAP Ariba Info Day in Sinsheim on October 5th, 2017 was another clear indication that integrated sourcing and procurement has become a core element in the digital transformation strategy of most leading companies, be it in the manufacturing, retail or financial services industry. More than 200 participants followed a versatile mixture of latest software developments and strategy, customer projects and use cases, as well as talks with potential implementation partners. It is not that more proof was needed, but the key topics presented and discussed demonstrated once more, that the times when sourcing and procurement could be regarded as hived off disciplines, are over. The future will be digital and dominated by holistic, integrated software solutions, where sales, distribution, production, sourcing and procurement are run synchronously, according to the rhythm of the market. It won’t be long until planning and execution systems will function in a truly interwoven fashion. And a big portion of IT-related issues will take place in the cloud, streamlining companies’ IT setups and shortening innovation cycles.

As always, major shifts come with risks and opportunities. Those companies that embrace this development early on and direct their strategies towards integrating and digitalizing their processes can significantly improve their competitiveness and market position. Because of the overall complexity with organizational, processual and technical aspects to be considered simultaneously for sustainable results, the right roadmap is often not easy to see. Reaching out to specialized consulting firms for support is a good plan, if the addressee has the right skill set. The related, shifting requirements pose challenges to consulting firms alike. Global presence, holistic supply chain process know-how, rather than focused expertise on one single discipline, will become the future ingredients to deliver the expected high-quality outcome.


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Procurement – How innovation can bring visibility

Fifteen years ago, when I first worked on a procurement spend analytics engagement with a big aerospace company, the stated objective in the first slide was ‘to get the spend visibility across multiple plants globally and then to rationalize it to identify potential savings.’

Last week I heard an executive from a manufacturing company asking, ‘how can I possibly use innovations like IoT, AI, Blockchain, etc., to get better and real-time spend visibility, and identify areas where I can save and then implement those strategies in sourcing?’

So in almost two decades the problem statement remains nearly the same, but the expectations from innovative and disruptive technologies to solve these problems have changed. Now the industry wants it in real-time, wants it accurate, and wants to go beyond identifying things; the industry wants to implement changes and gain benefits. It also shows the gap w.r.t developing business cases for the industry. Everybody is talking about how big the IoT industry is going to be and how Blockchain will turn your world upside down, but only a few have come up with real-world business solutions that leverage these technologies.

The Supply Chain and Procurement world is witnessing a fundamental shift due to digitization, and the convergence of both is imminent. IoT, AI, Blockchain, and Analytics are breathing life into an extended digital supply chain, where the availability of real-time information, authenticity of the information source, traceability, and monitoring plays a vital role. 

IoT brings visibility or rather gives clarity as to what is needed and what is being used. The ability to accurately predict needs will impact the sourcing strategies and contract management. It will improve procurement productivity and gain actionable intelligence through analytics.

Smart Contracts using Blockchain will bring another shift in tracking and compliance. It’s an ‘electronic’ contracts based on automated actions that are triggered by predefined events. Such agreements will be used for automatic execution of payment terms in case of an in-quality and on-time delivery. In a multi-stakeholder contracting, the fully automated order calls through smart contracts, bringing much ease to contract compliance monitoring. Blockchain will help solve some of the challenges faced until now in Supply Chain procurement like lack of transparency because of inconsistent or unavailable data, the high proportion of manual work, lack of interoperability between functions, and limited information on the product’s lifecycle journey. 

As such, machine learning was always used for automating processes of data collection, data profiling, cleansing, normalization, and classification to get the right data and spend visibility. Leveraging the massive compendiums of the historical knowledge base and patterns matching these algorithms were often successful in identifying potential savings in limited available datasets. The advancement in AI technology will accelerate this further. The ability to use and process big data, identify right categories, and parent-child relations of suppliers using AI will bring much-needed accuracy in spend visibility. To make an informed sourcing decision, all one now needs is clean and consistent data of suppliers and materials across systems, which would enable them to unearth hidden spend. In doing so, AI will help procurement as a continuous real-time process.

With more data becoming available and the number of connected devices increasing, procurement users will move towards mobility to manage things. Mobile procurement will therefore become a vital strategy. Right from requisitions, approval workflow to analysis and insights into purchasing activities, everything will be facilitated through mobility.

So will these innovative technologies bring you better spend visibility—yes. And it will be in real time, it will be more compliant, more predictive with better insights to define future strategies and be more accessible. Better technology solutions are needed though to stitch them together for the organization. Let’s talk about that some other day.


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SAP HANA Geo-Spatial Features

SAP HANA Geospatial processing feature was launched with SAP HANA SP6.This enables organizations to store their Geospatial data along with Business data in the same instance of HANA. By extending the HANA Platform capabilities customers can perform operations on spatial data like calculating the distance between geometries, determining the union or intersection of multiple objects. These calculations are performed using predicates, such as intersects, contains, and crosses.

We can illustrate the concept based on a use case on parliamentary constituencies in INDIA.


Spatial Data:

Spatial data is data that describes the position, shape, and orientation of objects in a defined space. Spatial data is represented as 2D geometries in the form of points, line strings, and polygons.

SAP HANA has brought in some new spatial data types like POINT (ST_POINT) and Geometry (ST_GEOMETRY) to store spatial information. A point is like a fixed single location in space and will be represented by X and Y co-ordinates (*can also have a Z co-ordinate in case of 3D space).

A Geometry is like a super class container and can store the below type within it.

Spatial feature in SAP HANA:

HANA Spatial delivers the ability to store and process geospatial data types like ST_POINT, ST_GEOMETRY, etc.

These data types allow application developers to associate spatial information with their data. For example, a table representing companies could store the location of the company as a point, or store the delivery area for the company as a polygon.

SAP HANA also delivers Nokia mapping services as part of the HANA Spatial features and this can be used to create apps using HANA XS engine through which Nokia mapping services can be called using the Nokia API.

Once Spatial data is loaded into HANA you can create or extend HANA models (Analytic, Calculation Views) using HANA Studio and make these models available for analysis and visualization through SAP Lumira or custom HTML5 applications. SAP HANA SQL script has been extended to support the Spatial SQL MM Standards for storing and accessing geospatial data.

Spatial Type Hierarchy:

SAP HANA has brought in some new spatial data types like POINT (ST_POINT) and Geometry (ST_GEOMETRY) to store spatial information. A point is like a fixed single location in space and will be represented by X and Y co-ordinates (*can also have a Z co-ordinate in case of 3D space).
A Geometry is like a super class container and can store the below type within it. In Geometry data type we can store any of the child types like Line, Polygon, or Point.

The following diagram illustrates the hierarchy of the ST_Geometry data types:


Below you can see how we can store and retrieve data from a Point or Geometry Type

Point Geometry
create column table spatial_geom
insert into spatial_geom values (new ST_POINT (0.0, 0.0) );
insert into spatial_geom values (new ST_POLYGON (‘POLYGON ((0.0 0.0, 4.0 0.0, 2.0 2.0, 0.0 0.0))’) );
select shape.ST_AsGeoJSON() from spatial_geom;
create column table spatial point
point ST_POINT
insert into spatial point values (new ST_POINT (0.0, 0.0));
select point.ST_AsGeoJSON () from spatial point;

So, basically in a Geometry data type we can store any of the child types like Line, Polygon, or Point. You can also see that we are querying the data as GeoJson which is a special JSON format for encoding a variety of geometrical data structures and it is easily understood by most of the MAP client APIs.

SAP HANA also provides a list of other means to extract data from geometrical data structures apart from GeoJson like Well Known Text (WKT), Well Known Binary (EKB), etc.

Now coming to the application where-in I am showing all the parliamentary constituencies of India.

So, first I had to collect the shape files for all the constituencies of INDIA. Finally, after some amount of research here and there I finally got the data of the Indian parliamentary constituency.

The data mostly often in ESRI shape and SAP HANA supported the shape file import into it.
So, in order to load shape file into HANA you need to perform the 4 simple steps stated below:-

1. Download Putty(http://www.putty.org/) and PSCP(http://www.nber.org/pscp.html)
2. Copy the shape file(zip it first) from your local machine into HANA using PSCP
3. You can login to your server using putty and unzip the files.
4. You can import the shape files in HANA by running the below command.
   IMPORT “Schema_Name”.”Table_Name” AS SHAPEFILE FROM ‘path to shape file’

So, once I imported my shape files into HANA, the data looked like below:-


So, as you can see I had the list of all the constituencies along with the following information:-

1. The state to which it belongs, the ruling party, area, and the color code(some of the fields were added later).
2. The shape information.

I can also see the shape as GeoJson and the data looked like as shown below.


So, you can see that most of the shape are really complex and are created using polygons and multipolygons with a large number of points.

In this part, I will show how the data was exposed from HANA as GeoJson using XSJS and its consumption by Leaflet Map Client.

The application basically supports two features:-

1. It displays all the parliamentary constituencies and on hovering on each of the constituency, you can see more details about the constituency.

2. You can draw a polygon or a rectangle in the MAP around the constituencies and you will get the number of seats won by each party for constituencies which comes within the area of the polygon or the rectangle.

I have created 2 XSJS service for each of the above two features.

For the 1st feature, I am selecting the constituency information along with the shape information and returning the data in GeoJson format.
The ST_AsGeoJson() is a function provided by HANA Geospatial which can be used to return the data in GeoJson format. I am fetching the data in this format and adding it to a FeatureCollection as you can see below.


The results returned by this service are shown below:-


You can add as many features(like ST_NAME, color) you want under the feature collection but the shape will be stored under the geometry section of each feature as seen above.

The second XSJS service will be triggered whenever you draw a polygon on the MAP. I get the polygon co-ordinates using the MAP APIs and call the service by passing them as input. Inside the service I try to fetch all the constituencies which lies within the polygon by using the Geo-Spatial Function ST_Within() as shown below.


The results returned from this service will look like as shown below.


I am consuming the data returned from the XSJS service in my HTML5 application using AJAX. I used Leaflet.js APIs to plot and display the MAP.

It is done by following the below steps:-

Step 1 :- In Leaflet.js you need to first create a MAP instance and linked it to your map div.

var map = L.map(‘map’, {
zoomControl : true
}).setView([ 22.527636, 78.832675 ], 4);

Step 2:- You need to add the tile layer to the map. The tile can be of anything as leaflet is open source. It can be of Openstreetmap as well as Cloudmade.

Step 3:-  Then, you can do an AJAX call to get the constituencies data in the form of GeoJson and add it to the map.

function querystates(statesData){
url: ‘../model/geodata.xsjs’,
data: statesData,
success: function (statesData) {
geojson = L.geoJson(statesData, {
style : style,
onEachFeature : onEachFeature

Step 4:-   On Each Feature which is nothing but a constituency you can perform further actions on mouseover, mouseout, etc.
function onEachFeature(feature, layer) {
mouseover : highlightFeature,
mouseout : resetHighlight,
click : zoomToFeature

And that`s it the application is up and running. For drawing shapes on MAP we need to use Leaflet Draw APIs which can be found in the link Leaflet/Leaflet.draw · GitHub.

You can also find the entire code for HTML 5 UI as well as the XSJS in the GITHUB link stated here:- https://github.com/trinoy/gisdemo.
where in you can see how I am using the Leaflet Draw APIs to create the shapes. The main file for drawing the MAP is map.js which is available under the UI/JS folder.

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How to “Talk your way out” of Negotiations!

Which TV channel to watch today with your family? Where to go out to dinner with your friends? What venue to decide to host that party with your spouse?

All these scenarios in our day to day life imply one thing. Negotiations!!

Yes, negotiations are as much a part of our daily lives as of the business. The aim or focus of these negotiations do change. The goal is always to reach a consensus among the two parties involved. The question is, how do we always emerge successful out of these negotiations? How do we make negotiations fruitful and not turn them into bickering arguments? To understand this, let us dig a little deeper into the art of negotiation.

Basically, negotiations can be of two types:

  • Positional
  • Principled

Positional negotiations are the ones where both parties take up extreme positions and then make compromises to reach a consensus. On the other hand, principled negotiations are where, the requirements of both the parties are clear, and the negotiation helps in fulfilling the needs or demands of both the parties.

In simpler words, you can either argue with your wife to go to that Iron Man movie over the Twilight that she wants, or you can discuss the needs and settle down on Wonder Woman!!

When it comes to business, both the types of negotiations are useful in different scenarios. To get into the details, let us first see different styles of negotiations. There are different ways in which you can approach a negotiation. These ways can be divided in the following ways:

  • Competing—An aggressive style, where the negotiator has to be the winner
  • Collaborating—The negotiator tries to create value and satisfy both the parties
  • Compromising—A consensus is tried to achieve by the negotiator by letting go of some demands
  • Avoiding—A passive aggressive style, where issues are skirted rather than confronted
  • Accommodating—The negotiator gives in to most of the demands to keep other party satisfied

These negotiation styles should be decided based on the style of the party in front of us. The table below shows the best and the worst set of styles, when they go against each other.

Negotiation Style Best Against Worst Against
Competing Compromising Competing
Collaborating Collaborating Competing
Compromising Accommodating Competing
Avoiding Competing Collaborating
Accommodating Collaborating/Accommodating Compromising/Competing

In personal life, these styles can be understood based on person to person. But in business, the negotiation style depends upon many other factors. Especially in procurement, negotiations with suppliers depend on factors like relationship with the supplier, dependency on supplier, supplier market positioning, product quality, etc.

To understand the position that can be taken by the supplier, we need to classify the suppliers based on the relationship we share.


Type 01 and Type 02 suppliers are not required to stay with our company for a long period. The commodities procured from them are usually easily available with many suppliers who can meet the company’s quality standards. Generally, these suppliers are included in the indirect spend of the company. Ex: Stationery, computers, janitorial services, furniture, etc.

Cost is the most important deciding factor in these cases

Type 03 suppliers are engaged for a small timeframe. They might be required to be engaged with multiple times, but the time of engagement is always limited. The cost incurred in these cases also includes the time required every time to explain the requirements and quality standards of the company. Ex: Event Management, Construction jobs, subcontractors, etc.

Continuity, along with cost, plays an important role in these cases

Type 04 and Type 05 suppliers are required for the core activities of the business. These suppliers are essential to the company’s functioning. The quality of product or services provided by these suppliers are of the utmost importance to the company. They are usually not suppliers, but long-term partners of the company. Ex: Software services, Raw Material providers, etc.

Quality and Continuity are the most important factors in these cases

If we take an example of the Automobile company, the suppliers can be broadly categorized as below.

Classification Type 01 Type 02 Type 03 Type 04 Type 05
Example Computers, Furniture, Papers, Printers, etc. Janitorial Services, Transport for workers, Security, etc. Logistics, Marketing Agencies, Event Managers, etc. Human Resources Supplier, Assembly parts supplier, etc. Steel supplier, Sheet metal supplier, ERP system provider, etc.

Based on the Supplier type and Negotiation styles, a framework for drafting negotiation strategies can be made.

Supplier Classification Type 01/Type 02 Type 03 Type 04 / Type 05
Negotiation Style Competing Collaborating/Compromising Accommodating/Collaborating/Avoiding
Important parameters for Negotiation Cost Cost, Continuity, Quality Cost, Continuity, Quality

In Type 01 and Type 02, cost is the most important factor, as the quality here is easy to meet and there are many suppliers available. Hence, competing style helps in getting best results.

In Type 03, the quality of the commodity or service matters. Best way is to use the Collaborating approach where the inputs from the supplier will also help in framing our needs. If the company standards and supplier standards differ extremely, then compromising style can be used. Using competitive style here may get us into a strained relationship with the supplier. This will make continuity difficult and cost the company in terms of efforts required in engaging with a new supplier.

In Type 04/Type 05, the supplier is more of a partner. Any negotiations would be preferred in the collaborating style. In some cases, the supplier might have a lot of leverage as the core activities of the business are dependent on him. In such cases, accommodating style is preferred. Also, the supplier might use emotional and personal issues into the negotiation to gain advantage. Avoiding style helps in skirting these issues and focusing on statistical data. As core business processes are in question, the compromising style, where we give up on some demands, would be the last resort.

The framework provided tries to give a systematic approach towards the preparation process before entering a negotiation. Keeping a script ready before entering a negotiation makes it even easier. The best way for a negotiation to succeed is to make it a discussion and not a debate. The finer aspects necessary to do so can only come through experience as it is not science but an “Art of Negotiation”.

And as an added advice, just go to whichever movie your wife wants.


Strategic Visions on Sourcing Market 2016 by KPMG – http://eoafrance.com/wp-content/uploads/KPMG-strategic-visions-sourcing-market-2016.pdf

Effective Negotiation Strategies and preparation by Jessica Long, Law Clerk, The Association of Corporate Counsel – http://www.acc.com/legalresources/quickcounsel/ensp.cfm

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