Supply Chain Management Articles and Publications

Time to Tell Your CPOs to Collaborate with Suppliers
By Mike Hales, Hendrik Disteldorf and Oliver Zeranski
Over the past 20 years, most companies have used strategic sourcing to restructure their supply bases and reduce costs. At times, the approach not only required confrontational relationships with suppliers—deemed necessary collateral damage in the quest for lower costs—but also enabled some suppliers to become so embedded that they were immune to future competitive sourcing efforts. Indeed, it is not unusual for 20 to 30 percent or more of a company's external spend to be dominated by these embedded suppliers. Today, reducing costs is no longer enough. Companies want value, and they want their chief procurement officers (CPOs) to deliver it. How can CPOs get the job done? By first identifying and then collaborating with their key suppliers.
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Follow the Procurement Leaders: Seven Ways to Lasting Results
By John Blascovich, Alejandro Ferrer, Bill Markham
Value chains are bending so rapidly that procurement professionals are more important to business strategies than ever before. It's not only volatility in commodities but also dramatically new ways of working that are creating challenges. That's what 185 leading companies told us in this year's Assessment of Excellence in Procurement (AEP) study. But if there is one place we all know we can drive real money to the bottom line, and value to the top line, it's through procurement—and the AEP results show seven ways the leaders produce results. It's not just business as usual, it's business as unbelievable. There is another wave of new thinking on the way.
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Procurement: The Last Best Place for Results Improvement
By Joseph Raudabaugh, John Blascovich, Rosanna Yang, Christian Schuh, Stephen Easton, and Enrico Rizzon
A.T. Kearney's ROSMA©, Return on Supply Management Assets, uses "hard" financial data to measure procurement's value-add to a company's overall strategic performance. ROSMA© is fast becoming the tool for CFOs.
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Stop the Roller Coaster, A smarter approach to apparel sourcing
By Sanjay Srikanth, Esteban Bowles, Chris Callieri, Deepa Neary
Apparel retailers have been on a sourcing roller coaster for nearly 30 years. The 1980s brought a significant shift of manufacturing to China, where labor and raw materials cost less and were readily available. A few years later, quotas, labor practices and technological advancements spurred a need to find new low-cost countries, new sourcing partners, and new ways of designing and producing garments. Today, as factory capacity declines and raw-material costs and wages rise, retailers are looking for a smarter approach to apparel sourcing.
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GRDI: A 10-Year Retrospective
By Hana Ben-Shabat, Mike Moriarty and Deepa Neary
The 2011 A.T. Kearney Global Retail Development Index™ (GRDI) marks the 10th publication of the annual report that highlights the top emerging markets for global retail expansion. Since the first report in 2002, international retailers have made significant progress—and suffered some setbacks—as they moved into developing markets. To mark the anniversary, we look back at a decade of change for global retail development, reviewing lessons learned from the successes and the failures.

Procurement Outsourcing, Navigating the Risks to Reap the Rewards
By Christine Ahn, Richardo Ruiz-Huidobro and Rodrigo Slelatt
Procurement is not as easily outsourced as many transactional or non-strategic functions. The best way to eliminate "buyer's caution" in procurement outsourcing is for a group of vendors to improve efficiencies and deliver solid results—and do so deal after deal.

Offshoring Opportunities Amid Economic Turbulence
By The A.T. Kearney Global Services Location Index™, 2011
A.T. Kearney's 2011 Global Services Location Index finds that wage changes and currency shifts from the financial crisis have led to major changes in rankings within the Index. However, the top three countries have demonstrated remarkable staying power. Thanks to their deep talent pools and cost advantages, India, China and Malaysia have been first, second and third, respectively, since the inception of the Index. Formerly lower ranked states with highly qualified labor once again became viable options amid currency devaluation.

Carbon Disclosure Project Supply Chain Report 2011
By A.T. Kearney for the Carbon Disclosure Project
The Carbon Disclosure Project's Supply Chain program is a unique collaboration of 57 global corporations who are members of CDP Supply Chain. These companies recognize the significance of the supply chain in carbon management. They are actively engaged in working with their suppliers to manage carbon and have the power and influence to really make a difference. This report is based on this work and is the most significant study of how business is managing supply chain emissions. The insights are informed by detailed data and research conducted with 1,000 participating suppliers across industries all over the world.

Three "Chess" Moves to Restructure Supply Markets
By Christian Schuh, Michael F. Strohmer, Joseph Raudabaugh, Alenka Triplat, and Robert Kromoser
A.T. Kearney's Purchasing Chessboard® helps companies identify procurement strategies that meet any market situation. This paper discusses three strategic moves that can help buying companies create win-win situations with their suppliers.

Outsourcing (But Not as We Know It)
By Arjun Sethi and Olivier Aries
In the next five years, outsourcing as we know it will disappear as the new leaders—Google and Amazon.com, brands that we associate with search and retail—become better known for outsourcing.

Supply Chain Risks in Remote Locations
By Wim Plaizier, Michael McCool, Guillaume Crétenot
Assess supply chain risks early when making offshore investment decisions.

China 2015: Transportation and Logistics Strategies
By Mui-Fong Goh, Tina Wang, Chee Wee Gan, Jian Li and Zhanfu Yu
As China's economy grows, so grows its transportation and logistics industry. How can Chinese companies improve the country's transportation and logistics environment? Leadership in this industry requires innovation, expansion and redesigned networks.

The Race is On, Who will be the next Rockefeller of energy supply?
By Thomas Rings, Dr. Otto Schulz and Ingo Schröter
As the global economy continues to gain strength, the chemical industry has begun its comeback from the beating it took when business bottomed out. But as chemical companies focus on managing renewed growth in their core businesses, it is also important to turn an eye toward strategic new business areas being created by the growing trend in "cleantech" energy products technologies and services-including solar, biofuels and batteries. These will form the basis of future success.

Measurement Revisited and Procurement's Role in Merger Integration
By Joe Raudabaugh
Advanced metrics are helping procurement demonstrate its value to the business. Meanwhile, more executives see procurement as a major source of value during mergers and acquisitions. These were among the main topics as procurement leaders gathered at A.T. Kearney's spring roundtable.

The Real Cost of Risk
By Andrew Green, Randy Garber and Jim Hanna
Cost and schedule overruns are common problems at the U.S. Department of Defense. Advanced risk management can help resolve these problems, especially as tighter budgets and increased congressional oversight require a more accurate understanding of where technical and schedule risks are likely to occur—and the probable costs.

Steel's Challenge
By Wim Plaizier and Benoit Nachtergaele
The future market for iron ore—the main raw material in steel production—will be marked by higher, more volatile prices. To stay competitive, steel producers must be vigilant in managing the steel price-volume equation, while continuing to work closely with their suppliers and customers.

Closing Procurement Loopholes
By Falyne Chave, Carrie Ericson, and Tejal Thakkar
Why do chief procurement officers still have trouble getting people to comply with processes and strategies that can generate major bottom-line savings? A recent A.T. Kearney study examines best practices in compliance, highlighting companies that have achieved their compliance goals.

JumpStarting Your eSourcing Initiative
By Carrie Ericson and Gregg Brandyberry
As delivery tools such as software-as-a-service (SaaS) have become more popular, so has eSourcing. Yet the technological advances and positive results have not led to widespread implementation by most global companies. How can companies JumpStart their eSourcing initiatives?

Higher Visibility, Greater Expectations – A.T. Kearney Indirect Procurement Study, 2010
By Jan-Fokke van de Bosch, Alec Bounds, Simon Rycraft, and Julia Trampel
Today far more people recognize the importance of indirect procurement as it now includes purchasing complex goods and services such as IT, marketing and advertising, facilities management, professional services, and maintenance, repair and operations (MRO), but few companies manage complex indirect spend categories with the level of attention necessary to reap the potential benefits.

Driving Down the Cost of Raw Materials
By Bill Windle, Michael Mazur, David Lamb, Eric Gierahn, and Kevin Krot
For companies that use steel in their manufacturing processes, success depends on smart pricing and materials management strategies—recovering materials costs, improving sourcing, and utilizing steel scrap throughout their value chains.

Digging Out of the Software Trap
By Sumit Chandra and Genkat Tummalapalli
Buying a software license is becoming a costly and complex process. A typical purchase means paying upfront for the license and then paying regular maintenance fees to cover software patches, upgrades and help desk support. Advances in hardware technologies have increased the license and maintenance fees-usually because of the underlying software licensing metric on which the software procurement contract is based.

Bracing For The Fall
By Doug Harvey, Sudipta Ghosh, Andreas Liedtke, & Andre Hendriksen
As many U.S. automakers teeter on the edge of bankruptcy, and tier 2 and 3 automotive suppliers grapple with their own financial problems, tier 1 auto suppliers are caught in the middle. A recent A.T. Kearney study indicates that more than 50 percent of tier 1 suppliers could go bankrupt. Despite this difficult environment, however, there are steps that smart companies can take...

Managing a Global Supply Chain in a Globally Challenged World
By Paul Laudicina
In a world that is simultaneously enabled, imperiled and empowered, supply management professionals have a key role to play in maintaining the successes of globalization, while also addressing the challenges. Speaking at the Institute for Supply Management’s 94th international conference, A.T. Kearney Chairman and Managing Officer Paul Laudicina called the global supply chain the “canary in the mine of shifting business conditions.”

Aligning a Misaligned Supply Chain
By Joachim Ebert & Joan Gelpi
Manufacturers know that a fluid supply chain keeps their products moving from the beginning stages of production all the way to their customers’ hands. A misaligned supply chain can lead to higher costs, lower quality and poor customer service. Companies that gain a deeper understanding of their suppliers’ capabilities and their own needs….

New Supply Realities
GlaxoSmithKline, Procter & Gamble and Royal Bank of Scotland are among the top-performing procurement organizations recognized in A.T. Kearney’s 2008 Assessment of Excellence in Procurement (AEP) study, the sixth in a series that dates back nearly two decades. The research identifies emerging trends in procurement and highlights the leaders...

The Purchasing Chessboard
By Christian Schuh, Robert Kromoser, Michael F. Strohmer, Ramon Romero Perex, Alenka Triplat
Consolidating supplier markets, rising energy prices and the growing demand for raw materials in emerging markets have fundamentally changed the purchasing framework. Suppliers are more powerful than ever, which means buyers must adjust quickly to a new playing field. A.T. Kearney developed The Purchasing Chessboard — a compilation of insights and experience from thousands...

Restoring Cost Transparency
By Daniel Mahler, Sven Massen, John Wang, & Ramón Romero Pérez
Consumer packaged goods companies are facing a paradox: an abundance of increasingly individualized products is driving top line growth, while the complexity of such products is obscuring cost transparency. Adding a new product size, formulation or line extension adds cost—but exactly how much? Companies have introduced an unprecedented level of raw material and...

Supply Chain Globalization: Global Strategies That Go Beyond the Basics
By Mirko Martich, Sean Monathan, & Sumit Chandra
Supply chain globalization is the natural outcome of today’s expanding consumer markets as companies struggle to meet the dynamic needs of growing markets and new consumer segments. Despite the risks caused by economic and political uncertainties, global supply chains are the wave of the future. Companies that make key decisions early...

Managing Transportation
By Randy Garber, Rajeev Karmacharya, & P.S. Subramaniam
Across industries, companies are dealing with ever-increasing transportation costs due to rising energy costs, complex supply chains, and a competitive marketplace where customers are becoming more demanding and therefore shipments are becoming more fragmented. With costs that approach 5 percent of total sales and 15 percent of the cost of goods sold, reducing...

The Indian and Chinese Auto Component Markets
By Manish Mathur, Jian Sun, Ram Kidambi, Stephen Dyer
Margin pressures are driving auto manufacturers in developing markets to source components for low-cost countries. This, coupled with the growing demand for automobiles in India and China, is expected to fuel the soaring prospects of their domestic auto component industry. Although global tier-one suppliers have not yet established a measurable manufactiuring footprint...

Key Supply Strategies for Tomorrow: Perpective on the Future of Purchasing & Supply
Supply chain globalization is the natural outcome of today’s expanding consumer markets as companies struggle to meet the dynamic needs of growing markets and new consumer segments. Despite the risks caused by economic and political uncertainties, global supply chains are the wave of the future. Companies that make key decisions early...

Capturing Sourcing Savings
By Randy Watson, Suman Sarkar
The power of strategic sourcing cannot be denied. For some companies, reducing costs by 10 percent on goods and services purchased is equivalent to a 25 percent increase in revenue and overall profits. But as powerful a tool as sourcing is, many of its anticipated benefits don't reach the bottom line because employees and suppliers fail to comply with pricing and terms laid out...

Destination Latin America: A Near-Shore Alternative
Latin America has arrived front and center as a desirable offshore destination. As a “near-shore” destination, Latin America has what many U.S. and some European companies want: low-cost Spanish-language capability and a growing, relatively low-cost, skilled bilingual workforce.

Unlocking Value from E-Supply Management
By John Blascovish & Jules Goffe
A.T. Kearney Executive Agenda article, in which the authors draw on their experience working with leading companies worldwide and on A.T. Kearney research to identify five essential keys to unlocking the full potential of your organization's e-supply management strategies.

What Is an Auction, Anyway?
By A.T. Kearney Procurement & Analytic Solutions
Auctions are unmistakably among the hottest eSourcing technologies on the Internet today. But what exactly is an auction, anyway?

You can auction almost anything!
By A.T. Kearney Procurement & Analytic Solutions
You can auction almost anything. Anything that doesn't have a fixed price associated with it, that is. Why? Because auctions are fundamentally about competition driving prices up or down.

Supply Advantage: A New Mindset for Procurement
By Jose Morales, Tom O'Neill, Niul Burton
Just when smart companies thought they had squeezed the last ounce of savings from their supply bases, enlightened procurement organizations are focusing more on process than on function. Strategic players have learned that they can do much more than drive down costs.