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 come out 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 only 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.

partopp

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.

References:

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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IoT: How will it change the Management World in Manufacturing

The solution necessary in the manufacturing sector derives from maximum access to information in the face of rising costs. Hyper connectivity, analytics, robotics, and device-to-device communication are making news and significantly changing how management nightmares were perceived.

Information, detail, and intelligence: the entire world survives on them and more access to data will lead directly to improved outcomes for business personnel (if they can process it). IoT enables an environment for better productivity by improving how easily one accesses information, makes sense of it, and calls for action. Thus, automation is also a vital component of the business ecosystem of the future.

Getting a grasp of the change

For most sectors, the near future has a global data-processing environment, where device connectivity and projection-based simulation will remain dominant.

Business leaders have to not just understand, but predict. Inputs come from machine behavior, employee data, market data, and cloud-connected devices; something simply unmanageable unless it’s all in real time. IoT will help intuitive decision making and plug loopholes irrespective of scale seamlessly.

An IoT landscape comes with superior data flow. Devices will be able to recognize trends, leading to research-equipped teams delivering on time. In the manufacturing sector, it is important to conduct processes according to a large number of data points. That, alone, is making machine-to-machine analytics a pervasive idea in the sector.

The positive Domino effect

A Domino effect usually triggers feelings of fear and negativity. But IoT is known to “do things differently”.

Previously, the only way companies would find product-related details was through customer-facing units. It was transactional, delayed, and rendered managers unready for best-fit planning. But with data sensors, information can be accessed in real time. It speeds up customer service and translates into corrections for product lifecycle management feasibly.

Key points for manufacturers to note about IoT implementation:

  • The entire manufacturing process runs the risk of defects and delays due to hidden causes. Thus, a data-intensive setup is always inevitable at some stage. Without an easily scalable information and communication infrastructure, profits will be affected significantly.
  • Transporting and making sense of complex data globally has become easy, but for organizations, the required transformation will make sense with handheld devices and a sophisticated setup of algorithms.
  • The systems stays connected over a WSN (Wireless Sensor Network). Robotics, decision-making interfaces, and internet connectivity are the key elements, where your assets need to be managed independently and securely.
  • Industry facts
    Customers demand better quality each time. Besides improving your grip on suppliers and pricing, analytics can minimize risk. Thanks to cloud, you can also forge better relationships through transparency across the value chain. A check on every step of the manufacturing process, globally, will result in happy workers and high-quality products.

    The idea is to connect as many devices as possible and automate your processes. But they need synchronization, so that outcomes do not fail the environment at any cost. The staff’s experience has to be simple, with sophisticated algorithms synched between devices. Single-avenue deliverables, assisted decision making, and smoothly operable teams will return dividends significantly.

    electronicsnew

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5 Reasons Why You must Align Change Management to Supply Chain Implementation, Right Now!!

Do you know what’s the worst part about change? It changes your daily work schedules. Suddenly, you no longer like the new things. It’s like waking up to a whole new world, out of the blue, one morning. Except that this change happens over a period, without you realizing the small-but-consequential steps till suddenly, you’ve transformed to a new routine.

“Change is inevitable”. Of course, it is. Of course, with dynamic process changes and systems automating administrative activities, it is imperative to change. However, the key trick is “How to manage the change” You can either make it exciting or harrowing for the users because, hey “lets shut the current system” and enforce employees to use a NEW System cannot guarantee transition. Here’s why organizations must look at benefits for aligning change management to Supply Chain implementations.

1. Reality Check – Conducting Change Readiness Assessment
The first step for implementing a change management approach for Supply Chain projects is assessing the current state of your business and its processes. This phase is often termed as “getting-ready” period. During this phase:

  • Assess the scope of the change, including: how big is this change? How many people are being affected or radical changing?
  • Assess the readiness of the organization impacted by the change, including the value systems? How much change is already going on?

Change Management strategy is direct result of these assessments and degree of risk your organization is or likely to face. For eg. For a large change project, organization will entail more risk in comparison to a smaller project. These assessments provide you change management efforts.

2. Do you have people by your side? – Get BUY-IN

To have successful ERP implementation, there needs to be complete buy-in, especially for business transformation projects which may require significant cultural changes. This includes both leadership team and users/employees.

Leadership Team

First and foremost, step is to establish the project goals and what are its key impacts. Without your entire management team aligned to the idea of NEW System/process, don’t even think about an implementation. Supply Chain transformation impacts an organization’s buying way and no way would the leadership move a step without knowing its impact and how it fosters savings, etc. to name a few benefits.

Employees

For a moment let’s assume a new system went live today and there were zero technical failures encountered on the first day. Successfully implemented, right? However, on the other hand few employees used it on first day. Mixed emotions about the situation eh? It is believed that the success of any project is measured by the adoption rate but how much attention was given to this area? Minimal? Employee buy-in is most crucial because if your employees aren’t going to end up using a new system, then there’s absolutely no reason to implement it. Will people utilize the system? Would this be of any benefit to their current working? If the answer to any of these questions is no, then influence/persuade the masses. You can try following these steps:

  • Show the system benefits, step by step
  • Highlight any time-saving features
  • How it reduces their efforts

3. Don’t Drop the Ball: Have a Consistent Communication Plan

You may have heard that messages need to be repeated five to seven times before they are cemented into the mind of employees. This is because each employee carries a variant readiness to understand change. Therefore, effective communicators: the audience, what is said and when it is said need to be crafted. For e.g. benefits of the new process/system and how it will improve their daily work management. The element of “What’s In for Me” is critical for employee understanding. In case your understanding of communication is limited to emails as a medium then you must look at alternative options for reaching out to employees. Change management uses more than 100 techniques like posters, webinars, online videos, etc. to reach out to employees. These mediums are interactive and hold onto their interest. Formalizing a communication plan has helped in boosting employee adoption process.

4. Collaborative Learning: Training
For a moment think, all your employees write from right hand and one day they are asked to ONLY use left hand for writing. How would they feel? Discomforted? Slow on productivity, right? Now consider following a new process/system for buying? Employees will be LOST. They require handholding, consistent training to adapt the new way of working. Remember, having one classroom training will NOT be enough for their learning curve.
Change Management suggests following methods for devising a training methodology:

1. Instructor Lead Training Workshops
2. Activity Walkthroughs
3. Live Demos
4. FAQs
5. Access to Test scenarios or online trails
6. Live Q&A

MOST IMPORTANTLY, be open and honest about employee feedback. Talk to them over coffee for instance and keep gauging their review(s) to measure success/failure.

5. Don’t react without listening: Assessment and Evaluation

Listening is an Art. But, do we listen to understand or we listen to react? In the final step, we look at evaluating the efforts and lessons learnt during implementation. While surveys are the easiest way of reaching to employees to assess, this phase also includes celebrating early success, conducting after-action review and transferring ownership of the change. How are employees responding to the change, has their work output been positively affected? At this point change management stands back from the entire program, evaluates success and failures, and identifies learnings for improvements. After all, change is a journey, isn’t it?

To summarize, change management emerged from wings and has now occupied center stage for not just implementation of large/medium/small size Supplier Chain project(s) but also simplifying what’s changing, categorizing target audience, their communication and training plans and most importantly in ensuring a seamless user adoption after implementation.

References:
1. Quote by Benjamin Disraeli
2. http://www.workwisellc.com/erp-organizational-change-management/
3. Change Management by Jeffery M. Hiatt

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Hari the mBot-Robotics in Supply Chain

What do you do when you cannot step out of office to visit a warehouse or factory for inspection? What do you do when the area of inspection is hazardous? What do you do if your presence was needed at two places but at the same time?

An invention coming straight out of the Bristlecone Labs, Hari the mBot, helps address these issues and a lot more! Hari is indigenously built using refurbished robots and comes equipped with features, such as remote navigation, auto-dock & charging, and obstacle detection. Hari can be instructed using web and mobile applications, and thanks to its integration with Alexa & Google, Hari now also understands voice commands!

Today, professionals find it really difficult to improve visibility and efficiency across their Supply Chain. And this is where Hari plays a pivotal role. With the help of Hari, it is now possible to remotely tour or monitor factories, floors, warehouses, and field offices. Attending events and meetings at site from a place of convenience is also made possible with Hari.

Apart from its role in Telepresence, Hari stands out in Teleoperations too. Site inspection, thermal imaging, remote monitoring, condition monitoring, compliance monitoring, and hazardous area inspections are some of the other critical operations where Hari plays a crucial function. Further, Hari would help in real-time data ingestion to Bristlecone’s cloud data platform (NEO?) for various IoE-Analytics use cases across the Supply Chain.

As per the latest developments, Hari is undergoing a physical transformation with a 3D printed body. Hari 2.0 dones a conical form printed using MAKERBOT Z18 and the creators at Bristlecone Labs are entrusted with the responsibility of giving Hari a body.

“Team Bristlecone was involved right from the ideation till commissioning and collecting feedback from the end customers. Key differentiator of the team was their ability to quickly adapt to the situation and customer needs,” said Ravindra Dhawan (Sr. GM Corporate IT-Mahindra & Mahindra)

Bristlecone Labs works extensively towards developing solutions that enable seamless flow of data and goods across global Supply Chains. They partner with retail brands, process industries, discrete manufacturers, and logistics service providers to bring quality into Supply Chain through predictive analytics and actionable insights. At their state-of-the-art research center in Silicon Valley, California, USA, Bristlecone Labs builds exception-based platforms that offer on-demand visibility and modular scalability to better manage orders, inventory, and shipments in distributed environments.

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Mantra for successful procurement transformation

Organizations are increasingly becoming complex due to globalization and accelerated growth-organic and inorganic. While this growth is important for business, if it is not managed well, it impairs business agility thereby increasing strategic risk for the organization. Successful organizations that have mitigated this risk well have business processes that are EFFECTIVE, EFFICIENT, and COMPLIANT. The question is “How to make business process lean that are efficiently executed and are complying to organizational policies, procedures and trade laws?”.

Based on decades of experience in driving procurement transformation initiatives, I am recommending the following framework for making processes better.

reengineer-process

The framework is elaborated in the following sections:

A. Re-engineering Procurement Processes

Comprehensive analysis of existing business processes is vital before re-engineering them. The key is to understand what the key pain areas are, what challenges are faced by business users, and what are the non-value added tasks. Review of process maps, procurement policies, stakeholder interviews, and conducting business user surveys are commonly used for this analysis. The deep dive should include processes, supporting applications, analytics, business users, and business data.

The next step is to identify gaps in existing processes as compared to Best-In-Class processes; both cross industry and industry specific best practices should be considered. The key metrics like lead times, compliance percentage, cost per transaction, and procurement spend per FTE should be compared with benchmarks to measure the gaps.

Based on the above two steps and considering industry specific processes and legal requirements, the procurement processes should be re-engineered to make them lean, value added, and effective.

reengineered-process

B. e-Enabling Procurement Processes

Having re-engineered processes, the key is to ensure that these processes are efficiently executed in compliance to the expected processes. This is best achieved by digitizing these processes by using procurement business applications. Key considerations should be to deploy applications that are providing high fit to the re-engineered business processes and have lowest total cost of ownership.
e-enabling

Once processes are digitized, right process effectiveness measurements need to be put in place. They need to be periodically reviewed and variance should be analyzed to initiate appropriate remedial actions. This will ensure continuous improvement and efficiency in the processes.

C. Driving Adoption Of Processes

The key to get right business benefits is to ensure that the effective and efficient processes are uniformly adopted by all business users. Due to differences in skill, competency, education, and experience, there is wide variance in maturity of business users. This makes the adoption process difficult and change management challenging.

To derive a tailored user adoption approach, it is recommended to do Skill & Competency evaluation of business users, segment them, and define specific training approach for each of the user segment. This will ensure that users are aware of and build expertise in revised business processes and accompanying applications. Organizations typically adopt multi-channel (class room, virtual, and self-learning) user training approach supported by many artifacts like user manuals, day in life of purchaser, quick reference guides, recorded webinars, et al.

To further drive adoption, it is recommended to form “Business Support Group” (BSG) of process and applications experts who will provide role specific support to the users. BSG is typically tasked to provide business services like sourcing event support, large contract management, and managing catalog content.

process-graph

While the procurement transformation framework is not revolutionary, it is amazing to see the results if all facets of the framework are executed well.

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Address these pitfalls pro-actively to have a successful Ariba procurement transformation

Although Ariba is a cloud solution, its deployment involves lot of efforts from the customer’s business and IT teams. I have seen many engagements where customer’s team struggles to proactively address and prioritize its tasks and thereby creating a risk on project scope, timelines and user adoption of the deployed solution.

The intention of my blog is to highlight key areas which need to be focused on, for a successful Ariba procurement transformation engagement. Here are the top four:

1. Master Data: Ensure that master data management is an integral part of your procurement transformation initiative. Following guidelines can be followed:

  • Supplier master data in the ERP system(s) should be standardized, de-duplicated and enriched before loading into Ariba.
  • Ariba provides 21K commodity codes as default for users to choose from during the supplier on-boarding, sourcing & contracts process. Invest efforts to come-up with a curtailed list of commodity codes based on your business needs so that your team has a better user experience.
  • Design a material group structure for your ERP and Ariba solution that addresses direct as well as indirect procurement. This will ensure that appropriate material groups are available in Ariba during creation of transaction data (requisition, PO, etc.) and they are synced seamlessly with backend ERP systems(s).
  • Design a custom classification taxonomy as per your industry vertical and company-specific procurement (direct & indirect) to categorize your spend rather than adopting industry standards like – UNSPSC, eCl@ss, etc.
  • Spend classification is an ever-improving process and 100% accuracy in this process is a dream. Invest time in creating business rules to classify spend as accurately as possible. Keep reviewing and revising these business rules on a periodic-basis to reflect the change in your business over-time.

2. Legacy Contracts Data Migration: It is recommended to use Ariba as the single repository for all your contracts – procurement as well as sales. To ensure that all legacy contracts are loaded into Ariba, business team should invest time in locating all the contracts (residing in legacy solutions, SharePoint and people’s desk drawers) that need to be loaded into Ariba. Use following guidelines to ensure that legacy contracts are loaded correctly in Ariba:

  • Check the contract validity
  • Check past invoice data to see if the contract is still active
  • Ensure that hierarchy (master and sub agreements) of the contracts are established appropriately in the legacy contracts data load template
  • Follow a naming convention for the legacy contracts
  • Create a legacy repository template to load one-off missed contracts
  • Assign accurate commodity code, department and owner to the contracts

3. Supplier Enablement: Enablement of key suppliers is critical to achieve the benefits factored-in the Ariba business case. In a typical Ariba deployment, Ariba team takes care of on-boarding the suppliers onto the Ariba Network, however the customer is responsible for selecting the suppliers that need to be on-boarded and create waves/phases for the on-boarding. This takes a significant amount of efforts from the customer’s IT and business team. It is recommended to initiate building supplier flight plan early during deployment project to provide adequate time for Ariba Supplier Enablement team to on-board suppliers. Key considerations for prioritizing suppliers in flight plan are:

  • Exclude spend categories that will not be transacted in Ariba. Example: donations/charitable contributions, medical care, intercompany purchases, legal & litigation, gifts & grants, etc.
  • Analyze suppliers with high transaction count – high number of POs and invoices
  • Analyze suppliers with high spend value
  • Analyze strategic suppliers
  • Exclude suppliers that have been either marked for deletion or blocked in the ERP system(s)

4. Catalog Enablement: Catalog enablement is an integral part of Ariba deployments. Ariba supports local and punch-out catalogs, however, the onus of selecting which items/services should be part of each of these catalog types, lies with the consumer. If proper thought is not given to this process, organizations end up under utilizing the catalog’s capability and thus not being able to enforce their user community to procure goods/services from contracted suppliers. Use following guidelines to choose between a local and punch-out catalog:

bcone_blog_img

In addition to the above pitfalls, customers should also focus on – stakeholder involvement, identifying top 5 goals that need to be met by the deployment, measuring progress against these identified goals, comprehensive user training and support mechanism post go-live.

My intention with this blog was to bring to your focus some key Ariba deployment-specific pitfalls that in my experience are typically overlooked by organizations – only to realize it too late.

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Three Golden rules for SAP Ariba solutions deployment

In the last few years we have seen a massive growth in the deployment of cloud based procurement solutions across the globe. This can be the result of several factors – lower TCO, quick ROI, shorter deployment cycles – to name a few. However, what not all people realize is that it is not only the application that will provide these benefits – the manner in which the application is deployed more often than not is the barometer of success. Keeping this in mind let us look at 3 of the key prerequisites that one should always follow while deploying any solution from within SAP Ariba’s comprehensive procurement application suite:

Rule No. 1: Establish clear and measurable goals before starting the deployment

It is very easy to assume that since we are dealing with a cloud solution, we can just start the deployment and define the goals as we go along with the deployment. However, the reality cannot be farther from this assumption – the absence of clear goals and communication of these goals is a sure shot recipe for failure. Every Ariba cloud application has a plethora of features which we have seen end up confusing users if they don’t have clarity on what is expected of the system. By establishing even a simple high level goal like ‘increase compliance for all tender activities’ allows one to select the appropriate team members that will be involved in the design workshops and thereby ensure that all the key pain areas are covered. Most importantly, the success of a project becomes easy to measure once the pain areas that need to be removed have been identified right at the beginning of the deployment.

Rule No. 2: Focus on procurement processes rather than digitization

How often have we heard people say, very incorrectly, that by deploying an Ariba cloud solution they are going to automate all their processes? Yes, a cloud solution allows you to automate a lot of your processes but at the same time there are quite a few processes that still need to be out of the system. We all should be wary of this trap of oversimplifying the utility of a cloud application. It is very counterproductive to try and fit all existing processes into the new cloud solution as it only serves to disrupt the overall process flow. This in turn has a very negative impact on the overall user adoption. Every cloud solution, Ariba is no exception, has a set limit on the custom configurations that can be done and therefore fitting every process into the system will never be possible. The sooner people realize this fact the more they will appreciate the benefits of the deployed solution.

Rule No. 3: Any system is only as good as the people who use it

Imagine buying the latest iPhone and using it as your office desk phone. The same applies to any Ariba procurement solution deployment. It is absolutely essential to identify the right people to use the system and train them on the host of available features. We have seen numerous cases of people using the Ariba Sourcing modules merely to exchange MS Word and Excel documents with their Suppliers. We are not saying that what they are doing is incorrect as this process ensures that they have a complete audit trail of all supplier communications. However, they are missing out on the powerful Content Management and Analysis features of the Sourcing module that will really allow them to optimize the Supplier award decision. Many more such examples can be cited to press upon the point that instead of being a byproduct of the deployment, training needs to be given adequate focus to ensure that one gets the most out the deployed system.

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Disruption and the Antifragile Supply Chain

Bristlecone’s second annual Pulse event concluded a week ago – a platform for leaders in supply chain and visionaries in technology to design their future strategies.  I’m looking through the presentations, videos and social media posts from our conference, delighted to share more content with those of you who were unable to join us in person.  (We’ll be updating our website, bcone.com, over the coming weeks.)

Irfan A. Khan, President and CEO of Bristlecone, opened the sessions with a discussion on disruption.  He shared examples of business and technology disruption, the value of a digitized supply chain and the potential of the platform economy.  Later speakers addressed these topics in relation to supply chain, Internet of Things, Advanced Planning Systems, Analytics and Procurement.

One idea Irfan discussed was the antifragile supply chain.  A concept defined by popular economic thinker Nassim Taleb, an antifragile system is a system that, instead of breaking under stress and change, thrives under it.  The antifragile grow and improve from external shocks.  As supply chain leaders, we are better set to deal with risk factors if we can make our supply chains robust rather than fragile.

An antifragile supply chain would have:

  • End-to-end visibility, making it possible to detect, understand, and endure the changes affecting the supply chain
  • Real-time adjustment, to react while there is still a chance to influence positive change
  • Benchmarking against both industry peers and one’s own internal needs and goals
  • A network approach instead of a pipeline, avoiding single points of failure

The headline speaker at Pulse was John Rossman, former Director of Enterprise Services at Amazon.com.  His leadership lessons on disruptive innovation weaved together management advice with examples of newer technologies.  Rossman urged leaders to have elastic capabilities in their businesses.  In describing Amazon strategies, he recommended to “create your own disruption, else someone else will do it for you.”  As Managing Director of Alvarez & Marsal, Rossman has found it important to “never let a good crisis go to waste” – to learn from disruption and plan how to be more effective in the future.

We are better set to deal with business risk factors if we can make our supply chains “antifragile”.  Surviving disruption will rely on investment in digital transformation – proactively and strategically.  The value will be cumulative and the benefits long-term.  By introducing resilience and flexibility into the system, businesses can maximize profitability, obtain real-time insights, and improve customer relationships.

The Bristlecone Pulse event gave its attendees the opportunity to look beyond daily operational activities – beyond integration, short-term technology ROI and functionality.  It challenged supply chain leaders to plan for future disruption and to not rest on traditional views of competition.  Per Taleb: “There is an Irish revolutionary song that encapsulates the [antifragile] effect: ‘The higher you build your barricades, the stronger we become.’”  It’s time to prepare our supply chains for the coming disruptions, so our businesses can thrive in the future.

Reference: Taleb, Nassim N. (2014) Antifragile: Things That Gain from Disorder.  Random House

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Blockchain and Distributed Ledgers: Business Imperatives for a Supply Chain

Ever since Bitcoin – a cryptocurrency and online payment system using virtual currency – made inroads in 2013, Blockchain (the technology behind the Bitcoin platform), has grabbed attention of all. This is because Blockchain technology is extendable across industries, and is not restricted to Finance. In fact, it will be prudent to say that Blockchain technology can be extended to any transaction that has value – money, property, and goods.

I think that Blockchain technology is going to create a remarkable impact on the way we do business in the future.

What exactly is Blockchain technology?

A Blockchain is a distributed ledger of records that is tamper-proof. It is a decentralized database, which can be viewed by everyone who has access to the Blockchain network. How does this work? All stakeholders connected with a transaction or “block” can see it. Once all concerned stakeholders arrive at a consensus and approve the transaction, the block is updated cryptographically, after which it cannot be deleted or modified in any way. The next block simply sits on top of the previous block, thus creating a chain of records that is shared with all stakeholders.

Eliminating middlemen

Every transaction requires only the concerned parties, and does not need any intermediary, resulting in saving precious time and cost. For example, smart contracts using Blockchain technology can automate contract execution for terms of agreement between two or more parties. Besides financial transactions, identity management, electronic voting, supply chains, royalty payments are just some of the areas that Blockchain technology can facilitate and disrupt.

Blockchain technology with distributed networks represent a true peer-to-peer exchange of everything. This explains why it has generated so much of interest and investment.

Blockchain in Supply Chain

Supply chain networks will derive tremendous benefits from Blockchain technology, and I believe that it’s just a matter of time that we see huge strides in this space. IT and Retail majors are already looking at applying Blockchain technology to Supply Chains very closely. According to a Wall Street Journal Report, Wal-Mart is running a Blockchain technology pilot in the first quarter of 2017 to track and trace pork in China and produce in US – two of the high-volume product categories in the largest markets. Closer home, our parent company – The Mahindra Group – has piloted Blockchain technology to improve its supply chain finance business. We expect that use of Blockchain will significantly reduce time taken for invoice discounting.

Typically Supply Chains speed and agility is impacted due to lack of transparency, trust and gaps in technology. Blockchain technology has the potential to disrupt supply chains by providing this open, yet secure ledger leading to a transparent chain with reduced risk and increased trust.

Add Transparency to your Supply Chain

Blockchain technology can be used to add transparency at every stage in the Supply Chain. Product movement can be tracked across every node in the Supply Chain, till it reaches its final destination, providing real-time visibility into the supply network. At every stage, only the concerned parties are signing-off on the transaction. You could also track high-value items, verify product authenticity and automatic certifications. The possibilities are endless.

Become Agile and Efficient with Smart Contracts

Smart Contracting will let two partners sign a contract by approving each other’s terms. A seller can publish the pricing, terms and conditions, discounting and any other relevant information, and any buyer on the Blockchain can find a suitable contract, and sign off on it. The network becomes more efficient, and there are no process overheads since there are no intermediaries. I think Smart Contracts will completely disrupt Supply Chain networks in the near future, and change the way people do business.

Build Trust and Opportunity

Supply Chain networks that use Blockchain technology will build trust amongst all parties involved. Since the chain is transparent, all parties can see previous transactions. This means that sellers will know which buyers will pay on time. Consequently, new business deals become easier, the chain improves in efficiency, and reputations are built based on transaction history.

Improve Quality and Get Proactive with Smart Products

As Supply Chains become more dynamic and alive with IoT integration, adding Blockchain technology to your network will more than double the benefits. Imagine IoT-enabled products sending information directly to the blockchain, which in turn lets manufacturers see real-time product performance. The information is authentic, in real-time, and will let manufacturers see faults as they occur. Not just that, they can also be proactive, improve service levels and product quality.

Blockchain technology can help build agile, trustworthy and cost-effective Supply Chains.

Are we witnessing a technological revolution in progress?

In my opinion, we’ve just touched the tip of the iceberg – much has been happening, and will happen with Blockchain technology. A gamechanger that may unfold slowly, albeit surely over the next decade or so, Blockchain technology is likely to have far reaching implications on every digital transaction we make in the future.

That being said, the Blockchain concept is really new – so both the technology and model will need a lot of work. Tech majors or edgy startups – everybody believes that Blockchain technology has real potential – and if it goes the right way, it will cause more than a minor upheaval in business in the years to come. Blockchain technology is likely to change both business-to-business and business-to-consumer interactions.

The Supply Chain industry definitely stands to benefit from Blockchain technology. As I see it, we must adopt, adapt and deliver the best possible value to our customers.

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FEEL THE PULSE OF YOUR SUPPLY CHAIN

Every business aims to be the best, but the changing demands of the global marketplace makes it difficult for them to stay relevant. That’s when business firms look out in the open to find an answer, to find companies with similar pain points and the solutions used to overcome them. Hence businesses, especially those in the field of supply chain, crave for a platform where CIOs from across industries can come together and discuss their strategies and industry best-practices. Having helped over 250 customers around the world to address their procurement, supply chain, and analytics needs, Bristlecone—a leading supply chain advisory and analytics SaaS+ firm—understands the need of the hour and what it takes to optimize one’s supply chain and operations. That is why at Bristlecone Pulse 2017, a premier supply chain customer-facing event, thought leaders from the field of supply chain management will gather under one roof to share insights on actionable technologies that will give your business a competitive edge in the market.

John Rossman, an industry leader on Disruptive Innovation and author of ‘The Amazon Way’, is a featured speaker at Bristlecone Pulse 2017. A former Director of Enterprise Services at Amazon, he comes with over two decades of guiding and helping businesses transform their business models—across a wide range of industries including retail, insurance, education, forest products, industrial products, and transportation. In his talk ‘Leadership Lessons on Disruptive Innovation’ he discusses the importance of creating strategies around Internet of Things (IoT) that can help businesses to improve customer experiences, drive operational improvements, and build new business models.

Lora Cecere, founder of the research firm Supply Chain Insights, and author of the enterprise software blog Supply Chain Shaman, and a LinkedIn Influencer, will be a part of Bristlecone Pulse 2017, as well. With over four decades of varied supply chain experience, Lora offers a fresh perspective on the evolution of enterprise technologies. Her profound understanding of supply chain has also resulted in her co-authoring two books, namely Bricks Matter and Metrics That Matter. Her insights and profound views are often sought out by renowned publications, such as The Wall Street Journal, Business Week, Fortune, Forbes, ComputerWorld, and Financial Times. At Bristlecone Pulse 2017, Lora’s session—Network of Networks—will throw light on the importance of driving interoperability between the networks of technology providers and businesses.

Amber Salley, a Research Director on the Gartner Supply Chain Technology Research Team, in her research primarily focuses on supply chain planning technologies across industries. Her area of expertise includes Large-scale Cost and Culture Transformations, Business Process Re-engineering, Shared-services Development, and Large-scale ERP Implementations. At Bristlecone Pulse 2017, she will lead a panel discussion on How BPaas is Driving Value Beyond Traditional Approaches. The session will also discuss how the performance of one’s supply chain can be improved through better asset utilization, automated replenishment, minimal transshipment, and cross-border regulatory compliance.

The ever evolving digital landscape has made life simpler for everyone around us, especially when it comes to the way we connect with everybody or everything else. But this digital evolution also has an unsafe side to it that neither individuals nor businesses should overlook. The onset of cybercrime, as a result of the digital evolution, has made the connected world vulnerable to digital threats, such as cyber-terrorism, malware, data theft, and the advanced persistent threat (APT). And these threats are impacting the security within the supply chain in a huge way. Jeff Klaben, Chief Security Officer at SRI International, will focus his session in Bristlecone Pulse 2017 on The Future of Cyber Security and How it Relates to the Supply Chain.

Bristlecone Pulse 2017, held from February 8 to 10, 2017 at The Meritage Resort and Spa in Napa will be a splendid opportunity to learn more about the intricacies of supply chain and how to get the maximum out of it.

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