Tag Archives: procurement future

Four Work-Life Questions To Ponder On Vacation This Summer




But clarity about what, exactly?






2. Where am I headed?






3. Who don’t I know





4. What’s Missing?








The Impact Of Blockchain On Procurement

Blockchain won’t wait for you to be ready for it, which means it’s time to brush up on your knowledge and understanding right here, right now! 

Vadim Sadovski/Shutterstock.com

Blockchain technology will not only impact procurement and procurement professionals but is expected to be more pervasive in our business and personal lives than the internet itself. To put the enormity of impact on procurement and procurement professionals in perspective picture yourself twenty years ago trying to explain how the Internet is going to change things. Where would you even begin?

Like the Internet the Blockchain is a network. In the case of Blockchain comprised of decentralized “ ledgers”, many are referring to it as Internet 2 or more commonly the Internet of Value or Internet of Trust.

The benefits

The most important thing to understand is that Blockchain addresses many of the most critical problems we’ve encountered doing business on the internet.

1)  Security: Practically speaking the Blockchain is unhackable.

2)  Transactions are verified by network participants (consensus), eliminating the need for third-party intermediaries’ (banks) costly, time-consuming and predominantly manual settlement processes. In addition to slowing down our supply chains banks alone have estimated these processes are costing them more than $20 billion annually.

3)  Eliminating high transaction processing costs for high volume/low margin retailers who accept credit cards could significantly add to their bottom line.

4)  Once transactions are verified they are secure and immutable. (unchangeable)

5)  The immutability of the Blockchain means that supply chain provenance can be assured. This is particularly important for conflict minerals, pharmaceuticals, food and many other supply categories where provable chain of custody is critical.

6)  Payments can be made directly from buying entity to selling entity “ledgers” by-passing intermediaries (banks, brokerage, clearing houses, title companies, etc.)

7)  Payments can be automatically triggered based on the codified terms of “ Smart Contracts” stored in transaction blocks.

8)  Blockchain capabilities will change, if not eliminate the role of accounts payable and accounts receivable departments.

9)  Blockchain enables the concept of micro-units and micro-payments. It is estimated that approximately one -third of the world’s economic opportunity exists for products and services such as energy or digital rights where backend settlement costs currently constrain those markets.

10) It is also estimated that 25 per cent of the global population does not participate in the global economy because they have no bank accounts and/or credit cards. Without these tools they cannot participate in the Internet economy. The primary reason they do not have these economic tools is because they cannot prove their identities. Immutability of the Blockchain can enable these people.

What do I need to understand?

The capabilities I’ve outlined just scratch the surface on how Blockchain impact all of us. Aside from the aforementioned, as a procurement professional are several important things to understand.

1)  Blockchain is a much wider and more pervasive concept than Advanced Cognitive Systems, Big Data, Predictive Analytics, Robotics, 3-D Printing or even the Internet of Things. In fact these technologies will become infinitely more practical and secure because of Blockchain.

2)  Do not think of Blockchain and BitCoin, FinTech or Crypto Currencies as synonymous. They are not.

3)  Do not think that it will take 20 years to mature and be mainstream. The estimate is 5-7 years for full maturity.

4)  Do not assess progress by the US/Euro FinTech Community. While they were the first to recognise Blockchain’s inherent value and arguably have the most to gain by adopting it, they also have the biggest hurdles to overcome and could very well be last to cross the finish line.

5)  Don’t make the mistake of waiting to become knowledgeable about Blockchain; it is the most highly disruptive technology we’ve seen since the Internet and it won’t wait until you are ready for it.


IBM & SAP Ariba Join Forces To Transform Procurement


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What does the future hold for IBM & SAP Ariba?






What’s the media saying?






In other procurement news this week…

The Future Belongs to AI


Read more at The Hustle 

Slavery Referrals On The Up


Read more on Supply Management 

Amazon to Open First Store in New York


Read more on UK Business Insider

What’s The Catch-22 In Procurement Technology?

From here to eternity: what does the future of procurement technology  look like? Download Wax Digital’s Procurement 2020 report here

Procurement technology has undergone a long road of change that has consequently altered procurement functions, processes and the very nature of the business itself. But while we spend much of the time understanding how technology is governing what we do today, it’s how technology is shaping the procurement role in the future that should be our focus.

There is a widespread belief that procurement ‘intelligence’ could significantly change the goalposts for the profession, and go beyond informing and processing data, to predicting, learning and deciding.

Procurement technology’s Catch 22

With analytics and intelligence comes a dilemma. Do you outline the questions you need to answer before you perform analysis, or use the data to work out the answers to ‘what you didn’t know, you didn’t know’? It’s a catch 22 scenario.

Thanks to big data and artificial intelligence (AI), this dilemma is becoming easier to manage. A procurement system using intelligence exhibited by machines can learn from users’ mouse clicks, purchases, and line of information to make its own choices, rather than requiring approval from users.

That doesn’t necessarily mean that procurement skills and knowledge will become any less sought-after. But those in demand are likely to change, perhaps even for the better, if cognitive technologies allow experts to think, consult and use their human skills more wisely.

Our panel’s three key intelligence priorities were:

  1. Anticipating supply and demand decisions

    The power of big data enables procurement systems to foresee the needs of the business, such as anticipating demand based on historical spending or seasonal demands. And the data that systems are based on will only expand as new internal and external dimensions are added to the mix, such as social media and newsfeeds, assessing demand more accurately. Intelligent systems may then begin to question human decisions, such as the validity and need for supplier orders and assessing the risk and ongoing performance of suppliers. Supercomputer IBM Watson’s ability to answer questions shows AI’s and sophisticated analytical software’s ability to surpass a human’s ability to answer high-functioning questions, and to work as an instructor to human processes.

  1. Uber-personalisation

    From marketing to IT, departments across the organisation use purchasing systems, meaning that there are different roles and backgrounds to accommodate. Through machine learning, procurement could lead the way in uber-personalisation, in which its systems are integrated with others such as ERP and CRM to determine and define each users’ preferences and needs.

  1. Intelligent supply relationships

With the introduction of AI comes a potential new landscape of supplier management, as eTendering, eSourcing and contract management have the potential to become more automated. This could see systems monitoring supplier behaviours and performance based on buyer feedback, or keeping a close check on adherence to contract terms; and possibly even interpreting eAuction behaviours and leading negotiations to make sourcing decisions on the procurement professional’s behalf. 

Even with vast use of intelligence, the procurement department will still require human involvement. While intelligence can be used to purchase everyday office products such as paper, strategic projects like building a new office will require procurement’s involvement in business planning and meetings, meaning that procurement professionals should strengthen their strategic skills in this area to ensure that they’re indispensable. But a new type of ‘colleague’, which is highly efficient and has extreme attention to detail, could well be on the way. Combining intelligence with vital people skills is how you can make procurement a strong and effective force in the business.

Learn more in Wax Digital’s Procurement 2020 report, a set of future gazing in-depth interviews with global senior procurement professionals and experts.  Integration of procurement technology in the wider business was the first topic. 

Resistance Is Futile, Disruption Is Coming!



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How The Space Elevator Could Open Up Interplanetary Supply Chains

The prohibitive cost of lifting payloads out of the Earth’s atmosphere is hamstringing humanity’s conquest of the solar system. The space elevator may soon make chemical rockets a thing of the past.  

At the Coupa Inspire conference in May this year, keynote speaker Richard Branson announced plans to have Virgin Hotels orbiting the planet within 40 years.

Branson’s famous “anything is possible” attitude was on display, as he breezily talked of shuttle trips between his space hotels and the surface of the moon, and observatory domes where guests can marvel at the Earth from above.

Branson’s audience predominantly consisted of procurement professionals, many of whom were turning their minds to the challenge of maintaining a supply chain in space.

Considering the vast amount of goods and services that flow through any mere terrestrial hotel, the prospect of supplying a space hotel, or any other off-planet settlement, is daunting.

The Payload Challenge

It’s unbelievably expensive to send cargo into space. These days, all eyes are on SpaceX. Elon Musk’s company is leading the way in reducing the cost of payload delivery through lean operations, integrated engine production and reusable spacecraft.

At full capacity, the Falcon 9 rocket can lift cargo to low-earth orbit at US$1233 per pound ($2719 per kg). NASA is paying SpaceX $133 million per mission to resupply the International Space Station. This equates to $27,000 per pound ($59,500 per kg) of cargo delivered.

Reducing the cost of payload delivery is one of the highest priorities for Musk, who has stated that $500 per pound ($1100 per kg) or less is an achievable goal.

Even with payload cost being driven ever-lower, the expense still makes the prospect of a regular delivery service (such as a space hotel supply chain) prohibitively expensive.

Tech Insider recently published a playful article working out the hair-raising costs of some of the unnecessary items NASA has launched into space. They calculated that astronaut Kjell Lindgren’s bagpipes, for example, would have cost anywhere from $54,600 to $259,000 to deliver.

The International Space Station’s espresso machine weighs 44 pounds (20kg), and would have cost between $400,400 and $1.9 million to deliver.

The Space Elevator – A Better Way to Lift Cargo into Space

Arthur C. Clarke predicted that the space elevator would be built “about 10 years after everyone stops laughing”. That’s because at first glance, it seems like pure science-fiction. The thing to understand about how the space elevator would work is that it isn’t a tower or ladder to space, but rather a tether.

Space elevator structural diagram

The Earth-end of the tether would be attached to the surface near the equator, while the other end would be anchored to an object in space (most likely a space-station) beyond geostationary orbit, or 35,800km in altitude. The tether would therefore be held stationary under tension as the space station tried to “pull away” from the planet.

At present, no material exists with the tensile properties required to construct the tether, but teams all over the world are working on the challenge.

Recently, carbon nanotubes, boron nitride nanotubes, and diamond nanothreads have all been considered viable new materials, enabling scientists to inch ever closer to the required tensile strength.

There are many other challenges involved, but commentators agree that once the tether question has been solved, the other components of the elevator will be relatively simple to design and construct.  

A Freight Train to Space

Once constructed, laser or solar-powered ‘climbers’ would ascend and descend the tether, taking materials and passengers to geostationary orbit. Payload prices could be as low as $100 per pound ($220 per kg), with two added advantages.

Firstly, proponents predict a working elevator would be significantly safer than chemical rocket technology. And secondly, the climbers would operate continuously.

Journalists often write about the space elevator in the singular, but there is no reason why the planet would only have one. In fact, it’s likely that multiple competitive nations (and private enterprises) would insist on having their own.

Opening Up Space

With working space elevators, the enormous expenditure of fuel used in boosting chemical step-rockets up through our atmosphere will become a thing of the past.

Spacecraft will no longer be needed for surface-to-space lifts or descents. Instead they will only be needed to move from point to point in space. After an initial boost, a craft in space simply falls freely along its trajectory, with only short-term adjustments and deceleration required.

Space elevators need not be limited to Earth. Within the next century, we may “drop” shorter tethers to the surface of the moon and Mars, with regular cargo and passenger services plying their way between the space stations at the top of the elevators. The complex task of keeping a Moon or Mars colony supplied would become much more feasible.

But that’s thinking a long way ahead. In the medium-term future, Branson’s luxury space hotel may well sit atop a space elevator, supplying its every need.

In the short-term, any day now we may read that scientists have discovered materials strong enough to construct the tether. At which point – as Arthur C. Clarke predicted – everyone will stop laughing.