This year’s ISM World Conference promised to be educational, exciting and insightful — and it did not disappoint. Hosted in Orlando, the event offered both in-person and virtual options to bring together thought leaders and practitioners in the supply chain and procurement field. And, as the organization put it,
“ISM World focuses on the key topics that impact supply management professionals today and the trends that look to change the game in the future.”
The sessions featured experts in a variety of areas. So, even if you weren’t able to make it to the conference, there’s still a lot to learn.
In this blog, we’ll share five hot topics from the event. Several speakers addressed each topic, so we’ll highlight our favorite takeaways. In addition, we’ll share a few quotes that stayed with us from the sessions.
5 hot topics from ISM World 2022
5 hot topics from ISM World 2022
Sustainability has been a much talked-about topic in procurement for a few years now. However, many feel that significant progress is slow coming. While large organizations have entire teams dedicated to figuring it all out, in medium- and small-sized organizations, the bulk of the responsibility lies with procurement.
Accordingly, supplier sustainability and sustainable sourcing were addressed several times throughout the week. The issue took center stage during the keynote address delivered by Persefoni’s chief sustainability officer, Tim Mohin.
Mohin spoke about the necessity of sustainability both as a moral issue, but increasingly as a regulatory one as well. Additionally, he discusses the subject as an organizational benefit saying,
“The environment and the economy don’t have to be at odds. We can bring them together with technology. […] and create jobs by doing so.”
Even so, prioritizing sustainability can feel like an insurmountable challenge. So, Mohin offered a list of elements needed to get started.
The foundation for successful sustainability
- Executive support — Above all else, supply chain responsibility requires buy in from the top.
- Market power — Understand the dynamics of your industry. Which vendors can you influence for good?
- Collaboration with others — Greater influence comes from partnering with others in your community, consolidating resources and buying power.
What you can do now
- Create a code of conduct (CoC) — Describe very clearly what you want your suppliers to focus on and do in terms of sustainability. Check out ISM’s guide to get started.
- Incorporate it into your contracts — Once you’ve established your code of conduct, put it into practice. Outline expectations as well as consequences for supplier non-compliance.
- Vendor risk assessment — Mohin states that 20 percent of suppliers are responsible for 80 percent of your risk. Routinely monitor incumbent suppliers and vendors. Then, make sure you also vet new suppliers using vendor risk assessments.
Getting started now is key, because bigger challenges are ahead as we face supply chain issues, conflict over resources and regulatory requirements. Engage and collaborate with organizations that are focused on the issues that challenge you and be prepared to face these issues head on.
Procurement practitioners tend to instinctively understand the value they deliver to their business. After all, it is often how they measure success. However, cost savings, value creation and risk management don’t take into account the broader economic impact and power of procurement.
Clint Grimes, the chief procurement officer at Capital One and Raul Suarez-Rodriguez, the director of global economic inclusion and supplier diversity at Merck joined forces to address this in their session, Driving economic impact through supplier diversification.
During the session, Grimes discussed recent disruptions to the supply chain that have highlighted the need to more actively engage in supplier diversification. As circumstances changed, many organizations found their primary suppliers out of commission. This opened the door to engage with more diverse, smaller, local businesses.
Suarez-Rodriguez offered his perspective and experience with the economic inclusion program at Merck. The program spans 56 countries and focuses on equipping, empowering and educating associates. Merck is frequently recognized for their ongoing dedication to diversity both in their own organization as well as their suppliers. And the program pays off. As Suarez-Rodriguez notes, it is not just the right thing to do, it also generates revenue. “Diverse suppliers are agile, innovative, and help us solve problems.”
Based on attendance at this session, it’s clear that procurement negotiation is a crucial skill. The room was packed to hear from Mary Redmond as she presented New negotiation tools and techniques for today’s supply chain challenges. From conducting research to using the best communication channels for negotiation, Redmond delivered valuable insights and practical advice for practitioners.
Tips for improving negotiation
- Build relationships and be authentic — Get to know people and treat them as humans above all else.
- Ask for concessions — Don’t wait for the supplier to make an offer. Indeed, it helps to be proactive and clear about what things would help you close the deal.
- Set your boundaries before you start — Know in advance what you’re willing to give up, hardlines, priorities and persuasive perks. Additionally, always have a plan B, and prepare a best alternative to negotiation agreement (BATNA).
- Use the right communication channels — There are pros and cons to every method of communication. Virtual negotiations are efficient, offer social cues and help build a rapport. However, they can also present challenges. For instance, virtual negotiations may be difficult due to technical difficulties or security concerns.
While procurement negotiation can feel intimidating, it also has the potential to be the first step in an ongoing, mutually-beneficial vendor relationship. Unfortunately, many practitioners don’t practice this skill often enough to build confidence. This is why continuing to invest time in learning about negotiation is crucial. The more versed you become, the more effective you will be.
‘User experience’ is a term that has historically been associated with technology. However, it can be applied more broadly to describe how procurement interacts with internal stakeholders. A perception that procurement is a necessary evil or barrier to business has plagued the industry for years. Fortunately, focusing on user experience may turn out to be the first step in changing that narrative.
In the User experience and why it’s important for procurement session, Stephen Simko offered insights about how supply chain and procurement practitioners can reframe their role to deliver value and build relationships,
Why you should care about user experience in procurement
Engagement with internal stakeholders is essential to managing spend. The last thing you want is for people to intentionally work around your team. Accordingly, it’s important to understand how users want to interact with procurement.
As technology saturates every other area of the business, it shouldn’t surprise you to know that users expect a similar experience when working with procurement. Unsurprisingly, technology will continue to be an increasingly important part of stakeholder engagement (and satisfaction). Think of it this way, the more intuitive and automated your processes are for your users, the more time you’ll have to spend on value-add tasks and projects. So, what can you do?
First, it’s important to consider your stakeholder personas. Try to apply design thinking when creating a procurement policy or process. Consider all of the reasons a stakeholder would need to engage with procurement. What does their typical day look like? Is the need preventing them from performing their work? How can you make it as easy and fast as possible?
When designing user experiences, be sure to include the right people in the conversation. For instance, you should talk with representative end users, administrators and the development team.
Whenever you can, leverage existing technology that users are familiar with to maximize value and compliance. But, when necessary, explore new procurement technology to enhance user experience.
Potential buying paths and tools to consider
- Guided buying — Empower users with resources and information to self serve
- Workflows with feedback — Create interactive workflows that provide feedback to avoid creating a procurement ‘black hole’
- User-focused data submissions — When gathering requirements, ask users how they would like to receive updates and how often
As you integrate technology with your intake or request process, consider the entire journey from the user perspective. Don’t just make requirement submission easy, explore how to streamline writing an RFP, scoring and evaluation, negotiation and so on. Finally, nurture those who express enthusiasm. With the right support, you’ll have evangelists and champions encouraging others to participate.
Everyone knows that change is hard. So, we dress it up, make it inspirational and call it transformation instead. As procurement enters a new era, the need to evolve is clear. What’s less clear is how to start.
Fortunately, Lisa Martin and Jami Bliss of GlaxoSmithKline shared their advice in the session Procurement transformation – From necessary evil to trusted partner. This duo navigated this complex topic deftly to offer helpful tips for true transformation.
When working on procurement transformation, there are three primary areas of focus: people, processes and systems. To be successful, transformation needs to be thoughtful and purposeful. Indeed, the first step should be to develop a deep understanding of needs as well as desired outcomes — and people are the key.
First step: Prioritize people
It is essential to move from a siloed, decentralized process to an integrated, matrixed approach. Consider interviewing the people within each step of your procurement journey to fully understand their perspective, impact, challenges and goals. As you talk with stakeholders, focus on identifying and defining their current state and ideal state. For example, in your current state stakeholders may express confusion about when to engage procurement. Conversely, your ideal state might be to create a clear procurement policy, enhanced accountability and a service-oriented mindset.
Transformation is about creating steady, noticeable improvements. So, focus on empowering people, optimizing processes and modernizing your systems to match.
Ultimately, the goal is to be a positive disruptor. And, through any change, it’s important to ensure that procurement objectives align with and support the greater business objectives. Bliss shares that shifting your own perspective to a “business partner mindset can differentiate how you work with stakeholders, especially on the indirect side.”
Pro tips for procurement success
While the sessions highlighted above offered a lot of advice and insights. There were countless moments worth noting, particularly during the general session featuring Jimmy Anklesaria, Sidney Johnson and Sue Spence.
These veteran procurement and supply chain professionals are the J. Shipman Gold Medal Award winners from the last three years. The trio held an incredible panel discussion that was full of wisdom to consider, remember and draw inspiration from. Here are a few quotes to consider as you pursue supply chain and procurement excellence.
On embracing innovative ideas:
“It’s a journey from leveraging volume to leveraging ideas. Ideas are inherent in the supply chain. You’ve got to create a culture where you welcome ideas.” – Jimmy Anklesaria
“You don’t have to come up with the ideas all on your own. Ask suppliers what they’re doing for their best customers that we should be doing. Be brave enough to ask the question. You have to be open to implementing the feedback, too. People will get tired of giving you ideas if you always say no.” – Sue Spence
On digital transformation and data:
“I would argue that procurement and supply chain are the most analytical functions in the business. Every decision is based on data. Those who are good are the ones with better data. Getting the data and using tech to help doesn’t have to be extremely expensive.” – Sidney Johnson
“Culturally, people are comfortable with Excel. What’s more important are the systems and understanding what systems are available, understanding you can digitize virtually anything today. Technology lowers the barrier [to data].” – Jimmy Anklesaria
“People want to work with people they liked to do business with. Focus on the relationships, technology and timing, and the right price will follow.” – Sidney Johnson
Keeping up with changes in procurement can feel like a full time job. Fortunately, whether you attended in person, remotely or are just catching up now, events like the ISM World Conference help us focus on the key issues. Additionally, hearing from procurement leaders is a great way to challenge our industry to improve, engage and innovate. We can’t wait to see what comes next.