This article was originally published in the Spring 2020 edition of The Procurement and Spend Management Insider report.
Most organisations have faced challenges they just haven’t seen before in recent weeks. Many have relied on their procurement and supply chain teams to act quickly and decisively to address those challenges, whether it be urgent cost saving activity or managing supply chain risks and stresses they might never have imagined.
The stories that we are about to share demonstrate how companies have been relying on their digital procurement and supply chain solutions partners to deal with some of the challenges they face. They also demonstrate the value of having adopted these solutions in better economic circumstances and perhaps send a message to those that had yet to truly embrace the era of digital transformation.
SAP Ariba was possibly the first solution provider to make a high profile move by opening-up Ariba Discovery by giving free use to customers and suppliers. They advertised this via their website and social media as soon it became clear that Covid19 was developing into a global supply chain crisis.
“We are witnessing unprecedented disruption to global supply chains as the effects of the Coronavirus continue to unfold,” said President of SAP Procurement Solutions Chris Haydon. “By removing barriers we aim to help accelerate connections between buyers and suppliers so they can quickly fulfil immediate supply needs during this time.”
Here’s a real life example of how this is helping out in the current crisis:
In March of 2020, ViaQuest Home Hospice was in short supply of personal protective equipment (PPE). In less than a day, SAP partner Premikati got ViaQuest ready to use SAP Ariba Spot Buy via the Premikati Marketplace.
By 4:00 p.m., ViaQuest had placed their first order for safety glasses. By 8:00 p.m. the much-needed glasses were shipped.
In addition to this SAP told us that: “To help buyers proactively analyze the overall risk associated with potential disruptions in their supply chains, SAP Ariba and Qualtrics created Qualtrics Supply Continuity Pulse. This offer is valid to new Qualtrics accounts for up to three months.”
The Qualtrics solution “combines procurement and experience management expertise from SAP Ariba and Qualtrics to deliver a pre-configured solution to help procurement and supply chain leaders quickly gain visibility into the health of their suppliers”.
SAP recognised that during this time of uncertainty and high stakes, active listening, visibility and collaboration are more critical than ever. To help buyers proactively analyze the overall risk associated with potential disruptions in their supply chains, SAP Ariba and Qualtrics created Qualtrics Supply Continuity Pulse.
Procurement and supply chain leaders can quickly launch this pre-configured solution, which issues a questionnaire to suppliers and reverts results immediately after suppliers respond. This supplier feedback can be used to help identify:
- potential supply constraints and jeopardized delivery timelines;
- areas to optimize business continuity and recovery plans; and ways to collaborate with and assist suppliers to help them meet demand.
As part of the launch of this initiative, Chris Haydon said: “We are trying to do what we can right now to help companies navigate this new world of unprecedented disruption. With Qualtrics Supply Continuity Pulse, we aim to help buyers gain the visibility they need to understand the operational status of their suppliers in near-realtime so they can better manage risks and disruptions.”
SAP has created a landing page with all available offers designed to help clients manage disruptions caused by Covid-19. As more offers are rolled out, you’ll find them here.
To us, this is just the sort of response that was required from one of the sector’s long standing leaders. We know from speaking to some of our long standing contacts in the SAP Ariba business that they are as busy as ever, working from home, doing all they can to support their customers and strengthening their business relationships in the process.
ROSSLYN DATA TECHNOLOGIES
Rosslyn was very quick to react on behalf of its existing customers, immediately recognising that global supply chains were facing unprecedented challenges and risks.
Their initial communication to customers outlined that “the ever-changing landscape of countries affected and the knock on effect on global supply chains will need to be closely monitored by procurement and supply chain teams.”
To help existing customers with this business critical issue Rosslyn told them: “We have built a Covid-19 Supply Chain Risk dashboard for you. This dashboard will be provided on your RAPid home page as a separate Business Application titled GeoPolitical Risk Dashboard.
“This dashboard will be refreshed on a daily basis to help you with your efforts to stay on top of the changes within your supply chain. We will be providing this information free of charge to all of our valued clients. We will be fine tuning and updating this dashboard as quickly as we can. All updates will be provided free of charge to existing customers.
The dashboards will reflect your current data held within RAPid as of your last data refresh. As with all of your dashboards you can select and view data by category, supplier, country etc.”
One customer commented: “I appreciate that you have created this free for us, great customer service, this will no doubt be very useful as we plan our emergency supply chain process.”
This quick, effective response from Rosslyn has been greatly valued by customers across multiple industry sectors and helped identify many cost saving opportunities to particularly short time frames. We’ve all heard about the power of data for procurement, this is a great example of how companies that have embraced it are benefiting.
HICX – FOR BAE SYSTEMS, ACCURATE SUPPLIER DATA PROVES ITS WORTH
Here HICX tell us a great story about what they’ve done with one of their key customers:
There are many reasons why a single source of truth for supplier data is essential for large enterprises, and much emphasis is rightly placed on the strategic benefits associated with supplier collaboration, joint innovation, risk and performance management and seamless integration of supplier data across multiple systems. But during times of crisis, such as we’re seeing with Covid-19, an even more fundamental benefit quickly re-surfaces: who are our suppliers, and how do we effectively communicate with them all?
For large organisations with tens of thousands of suppliers, having supplier data spread across multiple systems, with duplicates, gaps and errors makes even answering these apparently simple questions something of a nightmare.
There are three steps which look simple, but without perfect supplier data, will seriously hamper a business as it responds to a crisis.
Firstly, where are our suppliers located? With the timing, magnitude and response to the Covid-19 impact varying so significantly, not just by region but by country, an accurate picture of risk has to be based on precise information about where suppliers are located.
Secondly, once you know where the suppliers are, do you have accurate and up to date contact information in order to be able to communicate with the right people?
And thirdly, even if you have accurate company and contact data, how exactly will the business communicate efficiently and quickly with the supplier community?
A single supplier information management system, designed to manage the end-to-end lifecycle of the supplier relationship, and built on sound supplier data management foundations, will enable very rapid and highly efficient communication to the right contacts at the right supplier unit, and in a way that delivers genuine business intelligence to support the critical decisions Boards need to be taking.
As a long-term customer of the HICX Supplier Management Platform, BAE Systems is already feeling the benefit of having this foundation in place. “We sometimes take it for granted but, without HICX, in a situation like this I don’t know how we would manage to contact 30,000 suppliers and build a picture of supplier readiness to support our continuity planning,” said Jerry Grable, Director, eBusiness at BAE Systems, Inc. “It would take a whole team of people pounding the phones for days or even weeks to do something I’ve been able to do on my own in a matter of hours.”
In response to the crisis, HICX is also providing a free-of-charge add-on module to its Supplier Management Platform that will enable companies like BAE to take the next step in understanding their potential supplier impact. Firstly, by mapping real-time and continuously changing Covid-19 outbreak and response data to a company’s own unique supplier footprint, and secondly by enabling fast and comprehensive surveys of supplier readiness without the need to email and then collate thousands of responses.
HICX estimates that the majority of businesses over $1B in revenue already rely on third parties to generate 50% or more of their total economic value, making it more important than ever that companies treat their supplier relationships as a board-level concern, and that starts with accurate supplier data.
C2FO – WALMART AND DANONE SUPPORT THEIR SUPPLIERS
On a normal day, C2FO runs 250+ cash flow optimisation programmes for large corporates (including 25 of the 100 largest companies in the world) which spend $trillions with their suppliers every year. Due to the unique way that our platform works, we not only see which suppliers are interested in getting paid early (by the corporates or their banks) but precisely how much each individual supplier wants that capital to thrive or survive. As a result, we’ve seen the strain on supply chains and the increase in suppliers’ need for cash match the inexorable spread of Covid-19 across the globe.
We watched as demand from suppliers in China exploded in the run up to Chinese New Year. As the virus spread, we saw similar supplier behavior in EMEA and The Americas with demand for accelerated payment from SMEs increase more than tenfold.
Fortunately, our customers could map the impact on their suppliers from the near real-time data the technology provides and assess the damage that breaks in their supply chain could have on their business, now and when the health impact of the crisis subsides. As everyone knows, good suppliers are hard to find and harder to replace.
Here are a few of the heartening ways in which customers have helped their suppliers to survive and in other cases, have made it more likely that some of us will survive:
Walmart – dedicated cash flow for the most vulnerable suppliers
Walmart didn’t get to be the largest retailer in the world (> 2.2m employees, turnover > $500bn) by ignoring the needs of their suppliers. Before the crisis could bite chunks out of their supplier chains they concluded that the most efficient and effective way to get liquidity to their SMBs, which make up more than two-thirds of their suppliers, was to create a dedicated section of the C2FO platform for them and automatically focus support at especially low rates of finance exactly where it was most needed. As a result, the uptake has been extraordinary with thousands of suppliers that have never used the platform before signing up in just a few weeks.
Danone – rapid deployment of new technologyAs a top 10 global food manufacturer that sells its products in more than 120 countries, Danone has experienced disruption to its operations as well as unprecedented, localised spikes in demand for its products, as customers raced to the shops to prepare for the worst. To help address this, it slashed weeks off the deployment of its supplier early payment technology.
“It is imperative for Danone to support its suppliers in their financing needs. Fortunately, C2FO allows us to make the most of our customer-supplier relationships, by implementing a flexible solution for us and personalised financing for them. The use of a digital solution is an advantage that will strengthen our links with our partners in a secure and efficient environment,” explains Yves Pellegrino, SVP Corporate Finance, Control and Services at Danone. You can read more here.
European top five medical device company – ramping up production of ventilators
While this company has been using C2FO for a couple of years the challenge for their supply chain was somewhat different: how to pay for the prodigious increase in resources required to satisfy the global demand for ventilators. The solution, was at their fingertips, allocated dedicated liquidity to those supplier partners at the tightest pinch points in supply.
We are currently supporting procurement and supply chain professionals with a variety of tools and sources of information.
We offer non-customers a special Coronavirus Supply Chain Visibility Kit which we designed just in time for this current crisis and is available until May 31 for special conditions. It gives organisations immediate insights into how their suppliers and supply chains are affected by various factors, for example, lockdowns, transportation barriers such as closing of borders, ports and airports, Force Majeure or bankruptcy.
We are providing a Coronavirus daily update summary by email which helps people understand the impact on their businesses.
- Status Quo
- What to expect with regards to global supply chains
- Short and long-term actions
We have also organised a series of helpful webinars with industry experts and customers. Earlier in April we had a webinar entitled How to Protect Your Supply Chain During Times of Crisis with TIm Mishchiara, VP of Global Sourcing at Chamberlain Group. In May we have one with Forrester entitled Beyond Coronavirus: Finding the Right Balance for the Next Normal. All our webinars can be found here.
The riskmethods Solution helps customers to identify risk early, assess the impact and mitigate. This is particularly helpful in the Coronavirus crisis. Here is our customer Swiss Steel talking about how The riskmethods Solution supported them.
Another procurement analytics business that was quick to recognise its ability to support its customers was Sievo. They told us that: “Understanding the supplier base to be able to mitigate risks is crucial and that’s what we can provide to our clients. On top of the standard procurement analytics offering, we developed Corona Response Analytics a few weeks ago and that has been a really popular subject. There have been about 800 registrants in our webinars about that topic.”
They consider building the Corona Response Analytics dashboard to be “our biggest effort in supporting customers during this period. It combines customer spend and supplier data in Sievo with external data sources on the spread of the epidemic (Johns Hopkins University data) and supplier risk (including data from RiskMatters). Customers can also bring in updates from their suppliers, as they work to build an understanding of their spend-at-risk, status of suppliers etc. In crisis times, having a single source of truth for procurement spend is increasingly important.”
Sievo offered these observations from their customer base:
- Some customers are shifting from a monthly to weekly refresh cycle with their spend data to track their situation more closely. Many customers are already on a weekly cycle, but we’re moving quickly to set it up for those that would like to switch
- Primary questions for many have been: are a) my suppliers ok / financially stable? and b) what are my alternative suppliers for (single-sourced) categories or components.
So some great examples of how technology vendors are really making a difference at such a difficult time for their customers.
We’ve heard several other stories about vendors really making a difference for their customers, most notably the likes of Jaggaer and Proactis supporting the sterling work being done by their public sector clients in areas of critical, high demand like PPE.
What’s clear to us is that procurement and supply chain professionals are really reaping the reward for having invested in these solutions and training their people to use them. It’s giving people great career opportunities (more of that later in the report) and reinforcing the case for the digital transformation of the procurement and supply chain.
Many people believe this could be a catalyst for accelerated digital transformation in several industry verticals. We’ll be observing that closely over the coming months. Further information about Sievo can be found here. sievo.com
You can download the full version of our Insider report here.