Vanguard Magazine

T TecHnOLOGY WATch 44 ocToBER/NoVEMBER 2016 www.vanguardcanada.com Risk is most amplified in situations where there are aggressive and inflexible schedules. supplier in the ecosystem. We will also be moving towards providing internal ratings of suppliers by other users, and feel that the more information is readily available on companies, the more risk will be miti- gated. This process is much harder in some emerging economies that don't have such a robust manufacturing sector for gov- ernment contractors and OEMs to draw from, especially when online data tends to be less trustworthy. These are the econo- mies where offset programs aren't meant to sustain an existing industry, but are in place to fully kickstart a new industry or sub-sector of one. In these instances, it is often much harder for foreign OEMs to discover suppliers and significantly more difficult to assess their quality and ability to deliver without flying half-way around the world to see their facilities. This dif- ficulty can add significant cost to the bid itself and increases the risk further. I also asked Jon Hansen, the author behind the blog Procurement Insights and the host of the radio show PI Win- dow on Business Blog Talk Radio, about his thoughts on supply chain risk and procurement technologies. Jon believes that "Technology becomes ineffective the more people become dependent on it. We must look beyond the technology to the people working behind the technology. Historically, 80 per cent of e-procurement initiatives in the public and private sector have failed to achieve the result because they pass off the role of the people to the software." Jon explained further. "Tech- nology has advanced and the determining factor of the success of these online plat- forms is in the end, users coming together and using them. The collaboration is what makes it worthwhile." Jon and I further discussed the importance of these technologies in the coming age where millennials begin to move ahead in the workforce. For this generation, technology is a natural exten- sion of who they are, and it is ultimately the future of managing procurement and supply chain. Procure-to-pay solutions Cloud-based platforms such as Coupa and Ariba provide procure-to-pay solutions that streamline procurement management processes and allow for greater visibility as well as reducing costs and time. These sup- ply chain management platforms are main- stream, do not accommodate for some of the specifics around "local regional invest- ments" and other specific needs from the offset and defence/aerospace community. Further, at the end of the day, it all comes down to user adoption and needing good data to be entered in to extract good data out. As I mentioned earlier, OMX has begun tackling the issue of supplier quality and risk by layering additional features that allow companies to "Verify" other organizations in the platform that they have worked with. This feature serves as a way for companies that are proven and trusted in the industry (those that have been verified themselves) to anonymously endorse the reliable suppli- ers that they have worked with. A more robust ratings and rankings sys- tem, similar to what we have already seen with platforms such as Yelp, are another solution to this common supply chain problem. However, this is going to require a degree of openness from an industry that is notoriously guarded about revealing de- tails about its suppliers. Essentially, OEMs/Primes/Tier 1s are going to have to be open and honest about their experiences with suppliers - which ones worked and which ones didn't. Here, the issue for OEMs is balancing the value and usefulness of the reviews between what is for the good of the industry and their own competitive advantage by not exposing their supply chain weaknesses. OEMs will have to consider the benefit of the industry as a whole when taking part in ratings that po- tential competitors will be able to see. If successful, this type of system will ul- timately help the entire industry separate out the great suppliers from the not so great. From what I can see, it would have the potential to have two positive effects: 1. Encouraging greater effort on the part of suppliers to get into the 'great' rankings which will have a positive effect on over- all quality and delivery, and 2. Reducing risk for the OEMs on supplier failure by allowing them to choose the best overall supplier for their need based on previously tested and proven recommendations. OMX is tackling this challenge in 2016/2017 and is opening the door to software integrations with major players to help OEMs gain greater insight into the visibility of their supply chain. One way that we intend to achieve this goal is by in- troducing additional anonymous supplier rating and ranking features to help OEMs reduce risk. Linking with other apps like AirDesign and SAP will allow companies to have a true end-to-end visibility into their supply chains on programs. B2B net- works will allow OEMs to map their entire supply chain through gaining visibility into their tier 1's suppliers and all the way down the supply chain to the source of materials. Any company is only as strong as the weakest link in its supply chain and thus companies need to recognize that de- veloping and using better data on lower supply chain tiers can aid in reducing risk and developing a more productive supply chain. Leading technologies, when fully adopt- ed, will prove to be a determining factor in limiting these risks. It is the combination of user adoption and the right technology itself that it is the winning answer, and for me, it is this idea of bringing best in breed from other sectors to the specific needs of the defence and offset community to re- duce supply chain risk. The risks are too high to be ignored and there is often too much at stake for it to ever be worth it. nicole Verkindt is founder and president of oMX. She is a board member of the canadian commercial corporation and was recently appointed to the board of the peter Munk School of Global Affairs. She is also the technology editor of Vanguard Magazine. Jon Hansen

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