Few companies have digitalized the way they purchase business-to-business (B2B) services, leaving considerable room to improve profitability and reach internal and external business goals, according to research from the trade association Sourcing Industry Group (SIG) and sourcing technology company Globality.
The groups surveyed more than 120 procurement leaders from around the world, the majority of which were director-level or higher in their organizations, for the report titled The Future of Procurement, Today: How Leaders Can Seize the Moment by Digitizing Procurement. They found that just 6% of organizations have “fully embraced” digital transformation in the way they buy services in the $16 trillion global services market. More than half of respondents said they are responsible for procurement spend in North America, and more than 40% said they are accountable for global spending, according to the report.
The study also found that just 15% of organizations believe they are either “best in class” or “industry leaders” when it comes to digital transformation of their procurement processes and operating models, and that 50% of global procurement leaders admit their companies are “laggards” when it comes to the digital transformation of their B2B sourcing processes and operating models.
The bottom line: Companies are leaving money on the table and failing to develop competitive strategies for the future, according to the authors.
“Organizations who take proactive measures to transform their current procurement processes and operating models will enjoy considerable competitive advantage in a rapidly changing market, both now and well into the future,” SIG Chief Executive Officer Dawn Tiura said in a statement detailing the survey results. “This study illustrates how companies further along that journey are able to focus on high-profile goals and initiatives such as supplier diversity and corporate social responsibility.”
Digital transformation in procurement can streamline operations and improve performance on many levels, the authors also said.
“The average Global 2000 company spends over $4 billion a year on services, and all of it can be spent smarter and better,” Globality’s Chief Revenue Officer Keith Hausmann said in the statement. “These findings highlight the need for companies to utilize the sophisticated, AI-powered technology that now exists to enable fair, competitive, and sustainable self-serve sourcing.
“Through digital transformation, procurement can create far more impact on a company’s profitability, as well as help enable its ESG agenda.”
National nonprofit Wreaths Across America (WAA) kicked off its 2024 season this week with a call for volunteers. The group, which honors U.S. military veterans through a range of civic outreach programs, is seeking trucking companies and professional drivers to help deliver wreaths to cemeteries across the country for its annual wreath-laying ceremony, December 14.
“Wreaths Across America relies on the transportation industry to move the mission. The Honor Fleet, composed of dedicated carriers, professional drivers, and other transportation partners, guarantees the delivery of millions of sponsored veterans’ wreaths to their destination each year,” Courtney George, WAA’s director of trucking and industry relations, said in a statement Tuesday. “Transportation partners benefit from driver retention and recruitment, employee engagement, positive brand exposure, and the opportunity to give back to their community’s veterans and military families.”
WAA delivers wreaths to more than 4,500 locations nationwide, and as of this week had added more than 20 loads to be delivered this season. The wreaths are donated by sponsors from across the country, delivered by truckers, and laid at the graves of veterans by WAA volunteers.
Wreaths Across America
Transportation companies interested in joining the Honor Fleet can visit the WAA website to find an open lane or contact the WAA transportation team at trucking@wreathsacrossamerica.org for more information.
Krish Nathan is the Americas CEO for SDI Element Logic, a provider of turnkey automation solutions and sortation systems. Nathan joined SDI Industries in 2000 and honed his project management and engineering expertise in developing and delivering complex material handling solutions. In 2014, he was appointed CEO, and in 2022, he led the search for a strategic partner that could expand SDI’s capabilities. This culminated in the acquisition of SDI by Element Logic, with SDI becoming the Americas branch of the company.
A native of the U.K., Nathan received his bachelor’s degree in manufacturing engineering from Coventry University and has studied executive leadership at Cranfield University.
Q: How would you describe the current state of the supply chain industry?
A: We see the supply chain industry as very dynamic and exciting, both from a growth perspective and from an innovation perspective. The pandemic hangover is still impacting decisions to nearshore, and that has resulted in a spike in business for us in both the USA and Mexico. Adding new technology to our portfolio has been a significant contributor to our continued expansion.
Q: Distributors were making huge tech investments during the pandemic simply to keep up with soaring consumer demand. How have things changed since then?
A: The consumer demand for e-commerce certainly appears to have cooled since the pandemic high, but our clients continue to see steady growth. Growth, combined with low unemployment and high labor costs, continues to make automation a good investment for many companies.
Q: Robotics are still in high demand for material handling applications. What are some of the benefits of these systems?
A: As an organization, we are investing heavily in software that will allow Element Logic to offer solutions for robotic picking that are hardware-agnostic. We have had success deploying unit picking for order fulfillment solutions and unit placing of items onto tray-based sorters.
From a benefit point of view, we’ve seen the consistency of a given operation improve. For example, the placement accuracy of a product onto a tray is far higher from a robotic arm than from a person. In order fulfillment applications, two of the biggest benefits are reliability and hours of operation. The robots don't call in sick, and they are happy to work 22 hours a day!
Q: SDI Element Logic offers a wide range of automated solutions, including automated storage and sortation equipment. What criteria should distributors use to determine what type of system is right for them?
A: There are a significant number of factors to consider when thinking about automation. In my experience, automation pays for itself in three key ways: It saves space, it increases the efficiency of labor, and it improves accuracy. So evaluating which of these will be [most] beneficial and quantifying the associated savings will lead to a “right sized” investment in technology.
Another important factor to consider is product mix. With a small SKU (stock-keeping unit) base, often automation doesn’t make sense. And with a huge SKU base, there will be products that don’t lend themselves to automation.
With any significant investment, you need to partner with an organization that has deep experience with the technologies that are being considered and … in-depth knowledge of the process that is being automated.
Q: How can a goods-to-person system reduce the amount of labor needed to fill orders?
A: In most order picking operations, there is a considerable amount of walking between pick faces to find the SKUs associated with a given order or set of orders. Goods-to-person eliminates the walking and allows the operator to just pick. I have seen studies that [show] that 75% of the time [required] to assemble an order in a manual picking environment is walking or “non-picking” time. So eliminating walking will reduce the amount of labor needed.
The goods-to-person approach also fits perfectly with robotic picking, so even the actual picking aspect of order assembly can be automated in some instances. For these reasons, [automation offers] a significant opportunity to reduce the labor needed to fulfill a customer order.
Q: If you could pick one thing a company should do to improve its distribution center operations, what would it be?
A: Evaluate. Evaluate the opportunities for improving by considering automation. In my experience, the challenge most companies have is recognizing that automation is an alternative. The barrier to entry is far lower than most people think!
Toyota Material Handling and its nationwide network of dealers showcased their commitment to improving their local communities during the company’s annual “Lift the Community Day.” Since 2021, Toyota associates have participated in an annual day-long philanthropic event held near Toyota’s Columbus, Indiana, headquarters. This year, the initiative expanded to include participation from Toyota’s dealers, increasing the impact on communities throughout the U.S. A total of 324 Toyota associates completed 2,300 hours of community service during this year’s event.
The PMMI Foundation, the charitable arm of PMMI, The Association for Packaging and Processing Technologies, awarded nearly $200,000 in scholarships to students pursuing careers in the packaging and processing industry. Each year, the PMMI Foundation provides academic scholarships to students studying packaging, food processing, and engineering to underscore its commitment to the future of the packaging and processing industry.
Truck leasing and fleet management services provider Fleet Advantage hosted its “Kids Around the Corner Foundation” back-to-school backpack drive in July. During the event, company associates assembled 200 backpacks filled with essential school supplies for high school-age students. The backpacks were then delivered to Henderson Behavioral Health’s Youth & Family Services location in Tamarac, Florida.
For the past seven years, third-party logistics service specialist ODW Logistics has provided logistics support for the Pelotonia Ride Weekend, a campaign to raise funds for cancer research at The Ohio State University’s Comprehensive Cancer Center–Arthur G. James Cancer Hospital and Richard J. Solove Research Institute. As in the past, ODW provided inventory management services and transportation for the riders’ bicycles at this year’s event. In all, some 7,000 riders and 3,000 volunteers participated in the ride weekend.
After years in the military, service members and their spouses can find the transition to civilian life difficult. For many, a valuable support on that journey is the U.S. Department of Defense (DOD) SkillBridge program. During their final 180 days of service, participants in the program are connected with companies that provide them with civilian work experience and training. There is no cost to those companies while the service member continues receiving military compensation and benefits.
Both sides benefit from the program. “We’re proud to work with SkillBridge to give back to our military veterans for the bravery and sacrifices they’ve made for all of us,” Troy Pederson, director of training and development at LiftOne, a Hyster-Yale dealer and established SkillBridge employer, said in a release. “In the last year, we’ve helped 10 SkillBridge interns transition from military to civilian life, and the value and positive impact of the program can’t be overstated. At LiftOne, we’ve gained so much from the experience and diverse mix of technical and leadership skills of our SkillBridge candidates.”
Raise your hand if you think you’re a pretty good driver. Now put your hand back down, because we’re about to introduce you to someone who has set the bar much higher than you can ever dream of reaching.
Meet Greg Swift, a longtime driver for Schneider National Inc. who has driven 5 million miles without a preventable accident. The Green Bay, Wisconsin-based carrier boasts a notable safety record: More than 6,500 of its drivers have traveled at least 1 million safe driving miles with the company. Swift, however, stands out from that crowd, joining only two other drivers in Schneider’s nearly 90-year history in reaching the 5 million-mile mark.
Swift’s achievement was recognized with a parade, a “Sound the Horn” celebration—a long-standing tradition of sounding a truck horn inside the headquarters building to celebrate achievements—and a $10,000 bonus.
And if you’re wondering how long it takes to motor 5 million miles, that’s the equivalent of driving to the moon and back 10 times. Swift began that odyssey 33 years ago when he started his career with Schneider after leaving his teaching job. He now runs a dedicated route for Schneider customer Georgia-Pacific.
In his time as a driver, Swift has witnessed the evolution of trucking technology from paper maps to advanced GPS and collision-mitigation systems, but his advice to new drivers is simple and technology-free: Plan ahead and manage your time efficiently.