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Over the past few years, supply chain professionals and procurement leaders have been searching for ways to add resiliency to their business processes and overcome disruptions in the wake of numerous globe-spanning events that had massive ripple effects across the supply chain. Whether it was lockdowns causing production delays, shifts in demand causing component shortages, or geopolitical conflict limiting availability of raw materials, risk has become more of a focus now than ever before.
On a recent episode of the Supply Chain Matters podcast, host Bob Ferrari sat down with industry leader Graham Scott, Vice President of Global Procurement at Jabil, to discuss the current state of the supply chain and how businesses can optimize their operations moving forward. Join us as we explore some key takeaways from the podcast, and how these insights translate into actionable steps supply chain and procurement leaders can take today.
4 Key Takeaways From Episode 18 of The Supply Chain Matters Podcast
In his interview with Supply Chain Matters, Scott, who leads global commodity and supplier relationship management at Jabil, shared valuable advice for procurement and supply chain leaders, in a time where supply chain resilience is more important than ever.
1) Embrace a 4C Strategy
In order to build lasting relationships with suppliers, procurement leaders must utilize a 4C strategy, a term coined by Jabil to illustrate their approach to these types of business relationships.
The first C is communication, which outlines the need for clear, direct communication across both suppliers and customers. Part of this echoes Supplyframe’s own focus on cross-functional collaboration, and breaking down traditional silos to ensure that communication happens across departments and functions.
“Longer-term thinking is better than being reactive to an issue that you face today.”– Graham Scott, VP of Global Procurement, Jabil
Next is consistency. As an example, Scott ensures that Jabil always puts forth highly qualified, knowledgeable supplier relationship managers (SRMs) who implement thoughtful, long-term strategies. This type of consistency requires access to a source of intelligence and information that is both accurate and reliable.
Credibility is the third C, and this involves following through on commitments to suppliers and never over-promising. This is a task easier said than done, but it provides a stark reminder of the need for transparency with suppliers.
Finally, Scott emphasized collaboration with suppliers, particularly when facing adverse circumstances like chip shortages. Even small shifts like envisioning a situation from a supplier’s perspective can make a difference in fostering long-term, mutually beneficial relationships.
2) Focus on The Right Technology
Amid geopolitical tensions, the lingering effects of the pandemic, and the increasingly urgent need to prioritize sustainability, Scott discussed how businesses can “future-proof” new product designs.
Supplyframe’s own data has shown that 80% of a product’s lifetime risk is “locked in” during the design phase. To truly future-proof a product, a long-term focus should begin at the earliest stages of production.
Moreover, Scott recommended businesses take a multifaceted approach, investing in people, processes, and technology. Specifically, he emphasized the importance of providing manufacturers, suppliers, and procurement professionals with comprehensive, up-to-date information.
This shared vision is part of what makes Supplyframe’s partnership with Jabil so valuable to both our organizations and our customers. Today’s industry leaders are beginning to understand the value of intelligence from outside the four walls of the organization.
“One of the things that we have been very focused on from a procurement perspective is making sure that we can arm our experts with as much information as possible. Provide them with a 360-degree view of parts, of commodities, and of suppliers. Really help them be as informed as the supplier that they are talking to, or perhaps a customer that they are having to answer to.”– Graham Scott, VP of Global Procurement, Jabil
As supply chain leaders work to ensure resiliency and agility for their businesses, it is essential that they have access to the best intelligence to inform decision-making.
3) Combat Shortages With Intelligence
Having experienced, well-informed SRMs and procurement professionals is perhaps the greatest weapon organizations can have to fight shortages across component and commodity categories.
When dealing with complex, multi-layered issues like ongoing semiconductor shortages, it is essential that commodity managers have a solid understanding of the industry and the manufacturing process so that they can focus on finding solutions rather than spending time trying to understand the fundamentals of the situation.
“Having a commodity manager that knows how those components are manufactured, knows those suppliers, understands that industry, knows where we are heading, and becomes vital when you are talking to your supplier about how to fix a problem.”– Graham Scott, VP of Global Procurement, Jabil
Our most recent solution at Supplyframe, Commodity IQ, was created with this in mind. Too often, commodity managers in today’s modern enterprises are flying blind with either static or outdated information on the state of the market.
Without an immediate solution to challenges like this, teams must have some recourse to understand where opportunities lie, so they can navigate challenges in both the short-term and the long-term.
4) The Procurement Role is Evolving
The role of procurement is evolving to meet the shifting landscape of today’s global supply chains. This transformation has been happening slowly in the last decade, but recent years have accelerated the change exponentially.
Scott highlighted the emerging role of procurement leaders in the early stages of product development. This approach allows businesses to mitigate and prevent production delays due to raw material and component shortages.
“Having that seat at the table and being able to portray what we believe is going to happen in the component market to me is going to be vital going forward.”– Graham Scott, VP of Global Procurement, Jabil
Moreover, Scott has observed that more high-level procurement and supply chain leaders are reporting directly to the CEO, increasing visibility across all levels of the company. Overall, this evolution has contributed to strengthening and adding flexibility to supply chains.
We saw this sentiment echoed in a recent Supplyframe-sponsored Supply Chain Brain webinar, where industry leader Gartner discussed how procurement’s role is evolving in 2022 and beyond.
Giving Teams The Technology and Intelligence They Need
Today’s supply chain and procurement leaders understand the need for resilience better than anyone. They also know that “resilience” looks different for each organization, though it always begins with the right technology, capabilities, and intelligence to inform better decision-making.
A clear thread throughout the Supply Chain Matters podcast episode was one that discussed the critical capabilities teams and commodity managers need to ensure they can paint a picture of what’s coming in the market. Without this, organization’s risk loss of time, money, and talent due to burnout from near-constant disruption.
Supplyframe’s CommodityIQ delivers cutting-edge, forward-looking insights to help businesses stay ahead of the curve, foster mutually beneficial relationships with suppliers, and withstand disruption. Discover Commodity IQ today, and how it can empower your teams with the intelligence and insights they need.