Inbound Logistics | January 2022

co-founder and CEOwith Pipsticks, a monthly stickers subscription service. While Pipsticks used to get products two to three weeks before they needed to be turned around, they’re now striving to get them two months ahead of time. This allows for transportation delays and cuts the risk of late shipments and unhappy customers. “As painful as it is to hold more inventory, we have to,” Vazquez says. “There’s a shift away from just-in- time because it becomes so uncertain if a company can get the right stock when they need it,” Raman says. This shift may be temporary. “JIT is too powerful for it not to come back,” Derry says, given the potential cost savings. Technology and communication advances continue to make JIT more feasible. For instance, a decade ago, a customer might not know for weeks that a supplier abroad had to temporarily shut down, Derry says. With today’s social media and communication tools, they’ll likely know within hours.

The internet has made it easy for everyone to go direct to the source of whatever they need. But procurement’s relevance as an intermediary isn’t going down. For decades, procurement teams have been connecting people across their organizations with suppliers capable of delivering what those people need, when they need it, at the right price. And for a very long time, that was enough to see the department deliver strong, consistent value to the business. But with the rise of the internet and e-commerce came new abilities and total empowerment for individuals. The veil was lifted on suppliers, and consumers and employees gained the power to source what they need direct from global suppliers. It looked like the end of an era for the procurement function. And to a certain extent, it was. With direct buying options available to everyone, issues like maverick buying have rocketed, creating challenges for procurement teams to navigate. But despite this newfound power now resting in the hands of business teams for many years, procurement’s relevance hasn’t declined—far from it in fact. Just when it looked like the days of intermediaries were numbered, procurement teams leaned into their role as connectors across multiple departments, and used their unique position in the business to drive more value and become more strategically relevant than ever before. The procurement department of today is still an intermediary, just not as we knew it before. Sourcing the resources that teams need to succeed still makes up a huge part of what procurement teams do. But today, leading procurement teams are assuming a new role as a strategic intermediary between product, sales, finance, and supply chain teams. Procurement is the only function that works closely with all of those teams, making it uniquely positioned to drive value across them. As each department becomes more data-driven in its operations and operationalizes data in new ways, procurement teams are exposed to those insights and can use them in their engagements with other teams. The result is a whole new kind of intermediary—one that translates insights from silos into wider business actions as part of its day-to-day activities. It’s still the procurement team we always knew, but it’s also a powerful driver of strategic value through this new role. CONTINUED ON PAGE 128

Consider your entire supply chain ecosystem. Companies need to look outside their four walls and even their immediate suppliers, and instead consider their entire supply chain ecosystem. “Think globally and holistically,” Gupta says. For example, if a supplier’s supplier is disrupted, what is the likely impact to your operations?

Interact with customers. For most of the 25 years he has been in supply chain, Billy Duty, head of global supply with BYK, a division of Altana, seldom met with customers. Now, he spends about half his time with them.

126 Inbound Logistics • January 2022

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