Art van Bodegraven was, among other roles, chief design officer for the DES Leadership Academy. He passed away on June 18, 2017. He will be greatly missed.
Fans from the innocent earlier days of pop music might remember the monster hit "Joy to the World" by Three Dog Night. But an earlier Jeremiah was a prophet in the Kingdom of Judah, the "weeping prophet" who urged reform and repentance. He is recognized in Judaism, Islam, Christianity, and Baha'i. Some think that I might be modeling Jeremiah, but my own views are not quite as pessimistic.
TILTING AT THE WINDMILL DU JOUR
As we navigate the tortuous pathways of contemporary sourcing and procurement, hands, tendrils, and teeth reach out for us, much like the underwater creatures—grindylows, merpeople, and such—who sought to ensnare Harry Potter. One hand that might be judged as either harming or helping belongs to the corporate legal function. Sometimes, the appendage is a talon that captures and cuts; sometimes, it's a hand that reaches out and offers a pull toward safety and away from disaster.
Finding a positive balance in the relationship between legal and the sourcing/procurement functions can be challenging. On the one hand, we are charged with finding reliable, sustainable, high-quality, cost/value-effective, and easy-to-work-with sources, suppliers, providers, manufacturers, and distributors of products, components, materials, technology, software, consulting, project solutions, paper clips, and other elements that make our businesses possible—and profitable.
On the other hand, we must accomplish our mission in ways that do not jeopardize the enterprise or leave it open to failure, litigation, business interruption, or scandal. And here is where legal peeks over our transom to—legitimately—make sure we are playing by the right rules.
LAWYERS RUN AMOK
In some organizations, the legal function has taken control of, or exercises universal veto power over, contracts, agreements, RFx (requests for information, proposals, or quotations), and foundational qualifications for any provider of goods or services to the enterprise. In the immediate environment, the consequences might include fights to the death between the supply chain or procurement functions and legal over all issues, both trivial and game-changing; delay; wasted energy; diminished attention to the really important issues; and the unnecessary involvement of senior leadership in schoolyard brawls.
In others, legal is a trusted and valued ally in crafting appropriate contracts with prudent corporate safeguards in place. To be blunt, it is procurement's responsibility to: 1) take the lead in building productive collaborative relationships with legal; and 2) build, acquire, and demonstrate capability in the fundamentals of contracting and provider management.
FIRST STEPS IN SOLVING THE RIDDLE
Here are some questions to ask, if you lead the sourcing and procurement functions in your organization. Your answers may lead to a revelation of what you might consider next:
Are there clear thresholds and classifications that define when and how to use RFPs, RFIs, RFQs, and other instruments? Have these been defined by you or by legal (or another function)?
Does legal hold sway over all bidding and contracting processes? Does this delay or confuse selection and award processes and timelines?
Do you use one contract template, with universal language, to control all goods and services provisions? Does this cause confusion—say, in holding HR consultants to the same bonding, licensure, and insurance provisions as those who build nuclear power operations?
Is legal attempting to guard against all risks of all types and all sizes in all contracts? Does legal work with you to tailor individual contracts to manage reasonable risk in the activity, material, product, or service involved—and does that process include definition of a specific supplier's profile and history?
Do you find it difficult to find disadvantaged business enterprises (DBEs) willing to bid in your environment? Are you falling short of DBE contracting goals?
Are your "requirements" eliminating DBEs from the acceptable bidding pool? Do they also discourage all but the largest providers from proposing services or providing goods and materials?
Do your internal customers' traditions and preferences along with legal's demands erect barriers to entry for smaller, less traditional, and possibly disadvantaged enterprises?
Has your working relationship with legal affected your internal interactions with other functions, e.g., HR, IT, real estate, field operations, manufacturing, finance, and accounting? What have you done to mitigate these impacts?
How have you categorized and classified the goods, services, and suppliers that make your business operate? Do you distinguish among levels of business criticality, product complexity, corporate mission impacts, and the like?
How do you manage supplier/provider performance—to contract, on specific goods or services—to both achieve performance targets and to demonstrate capability to your peers and superiors? How do you publicize the results of these efforts?
THE NEVER-ENDING QUEST
The question-and-answer drill can go on and on. At core, though, is a frightening reality. How well you partner with peers, such as legal and others, will, to an extent not always understood, define how successfully your end-to-end supply chain operates.
With legal as a permanent adversary, you are guaranteed to lose. With legal as a flexible and knowledgeable ally, you have a fighting chance at supply chain success.
Wars have losers; we all know that. But it is not important that you might win and legal (or another function) lose. In war, even the victor loses. Loses support, loses resources, loses credibility, loses focus—all very real possibilities with very real consequences.
Perhaps in a geopolitical arena, wars are sometimes necessary and unavoidable. In our world of integrated supply chain management, peace, teamwork, and collaboration can make winners of us all—our function, our supply chain, our peers, our customers (both internal and external), and our supplier/provider bases.
And then, we will not have to face the I-told-you-so specter of Nebuchadnezzar beating our brains out and throwing us in jail, or worse.
Note: A version of this column may appear on the Spend Matters blog site.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.