May 16, 2022

The Power of Data Aggregation

Are you paying more than your competitors or peers for the same component? If so, which negotiation strategies—or alternative sourcing decisions—might reduce the gap? Does a proliferation of component stock-keeping units provide an opportunity for component aggregation and consequent price reduction? And does your supplier base have inherently greater risk exposure than those of your competitors or peers?

For procurement organizations, such questions are both troubling and difficult to answer.

But there is a way—once procurement and sourcing move away from enterprise-specific systems and onto multi-enterprise shared marketplaces that connect buyers and sellers and against which smart data analytics and AI can be thrown.

Take, for example, pricing. With multiple buyers purchasing the same component from the same supplier, seeing which buyers are achieving the lowest prices is straightforward. With all that common data, it’s very easy to see how buyers’ annual demand and the procurement lot size have a bearing on price, providing insight into negotiating strategies. Nor is it solely about price negotiation: once you move away from measuring demand in terms of annual consumption, it’s possible to explore the combined impact on both working capital and purchase costs by intelligently matching dynamic consumption to dynamic procurement.

So too with component aggregation, of course. If the buyer’s bills-of-material resides with both the marketplace and an AI-driven aggregation engine, buying organizations can easily identify aggregation opportunities and their impact on both purchase costs and supplier selection. 

The same goes for risk. It’s not just about obtaining greater visibility into risks; it’s about being able to make intelligent and better-informed choices between those risks. Price discovery through data aggregation ia a good example of a capability that wasn’t available 10 years ago.

Pooling data at scale makes obvious good sense. As technology becomes more ubiquitous and cheaper, it’s possible for more and more companies to access the value it offers meaningfully. Of course, there are privacy and data security issues to address, but a trusted provider should be able to accomplish that. 

LevaData's AI-powered Integrated Supply Management platform offers value by providing market intelligence that delivers in terms of price discovery, sourcing, and risk mitigation. Learn more about our integrated platform to uncover how you can utilize the power of AI for your enterprise today.

April 26, 2022

The Role of Data in Sourcing Success

It's difficult to source and buy direct materials at scale. While simple transacting may seem easy enough to understand, the process leading up to these decisions is extremely complex. For example, you have to make sure the supplier you're dealing with makes sense from both a cost and risk perspective. There's also the consideration of buying the right part or material; for instance, would purchasing more of an equivalent part or material found in other products deliver greater savings? Also, would it be more effective to buy from a distributor rather than the manufacturer; if so, which distributor? And would real-time marketplace pricing provide more negotiating power than depending on backward-looking "should-cost" data when negotiating with suppliers?

The Challenges Businesses Face

It's challenging to solve such problems on a large scale. However, most companies haven't even attempted to do so in the past. Instead, they've narrowed their focus to a particular set of issues. Due to resource constraints, procurement organizations are forced to concentrate on a few main categories: items that are either incredibly risk-prone or of significant strategic importance. But this type of tunnel-vision focus often leads to a lot of unrealized potential and ignored concerns. Organizations end up saving cents and calling it a success; meanwhile, there are dollars to be saved elsewhere. All the while, they’re addressing a few specific risks but ignoring others altogether.

What Can Be Done

Data is available now, more than ever, to considerably widen sourcing's remit, bringing in these under-addressed purchased items and hazards. The availability of digital data has exploded in recent years. Capabilities such as strategic sourcing, component aggregation over fewer stock-keeping units, and supplier risk analysis aren't new. But what has been lacking is sufficiently granular data with which to do it—and do it dynamically, in as close to real-time as possible, augmented by AI and smart analytics as much as possible.

Similarly, the amount of near-realtime data on global logistics networks, costs, infrastructure, and supplier locations has increased dramatically. As a result, suppliers can see their logistics costs, shipment status, and whether or not their production and logistics operations are working well in the case of natural disasters or political upheaval.

Things to Consider

The downside? External data doesn't—and usually can't—fit into typical enterprise systems. You have the data for a real-time window into global trade, but you still need to combine it with data from your enterprise systems and put it in a context that can be studied with advanced analytics. Although it's frequently claimed that sourcing is more of an art than a science, data can help—and it's now more accessible than ever.

To discover how LevaData’s integrated supply management platform can help you capitalize on the power of real-time, AI-driven insights and analytics, schedule a consultation today

  • The Power of Data Aggregation
    Are you paying more than your competitors or peers for the same component? If so, which negotiation strategies—or alternative sourcing decisions—might reduce the gap? Does […]
  • The Role of Data in Sourcing Success
    It's difficult to source and buy direct materials at scale. While simple transacting may seem easy enough to understand, the process leading up to these […]
  • Protecting BOM Health & NPI With Portfolio Monitoring
    Organizations are experiencing an increase in unplanned product redesigns, leading to missed product launches and missed shipments of sustaining products. Product redesigns are driven by […]
  • Lessons for Navigating a Post-Pandemic Supply Chain
    Two years ago, I wrote about what I had learned from supply chain executives trying to manage business continuity in the early days of the pandemic. In […]

April 12, 2022

Protecting BOM Health & NPI With Portfolio Monitoring

Organizations are experiencing an increase in unplanned product redesigns, leading to missed product launches and missed shipments of sustaining products. Product redesigns are driven by unforeseen End-of-Life (EOL) of key components and component shortages from sole- and single-source suppliers. Product managers, engineers, and category managers cannot thoroughly vet components in their bill of materials (BOM) against timely market intelligence. This results in exposure to EOL, Part Change Notifications (PCN), component availability, and import restrictions. Additionally, NPI teams are limited in their ability to quickly identify alternative components and suppliers earlier in the process.

How LevaData Protects Your Product Launches & Associated BOMs

Acting as a single source of truth, LevaData integrates with PLM and design systems to break down silos of information. The platform continuously monitors BOM health, attributes, and project history. Built-in communication tools, project management, task assignment functionalities further allow professionals to collaborate seamlessly, significantly decreasing how long it takes to get new products to market by matching parts to identify comparable Form Fit and Function (FFF) parts and quickly find alternatives for qualification, rapidly improving turnaround time for qualifications.

LevaData’s AI-driven advisor explores all relevant sources of information to predict risks, identify savings opportunities, and suggest the best course of action. It compares alternate BOMs side-by-side for a real-time view of how any changes impact you from a price and risk perspective.

Additionally, LevaData acts as a single source of market lead time data within the component and sub-component categories. This allows customers to triangulate their quoted lead times against market lead times and leverage this to negotiate with their key suppliers in a competitive and successful manner. 

LevaData's integrated supply management platform offers access to revolutionary solutions like NPA, which applies AI to marketplace and supplier intelligence, allowing you to select the most profitable and reliable supply of materials for new products. Get in touch with us today to find out what we can do for your enterprise.

  • The Power of Data Aggregation
    Are you paying more than your competitors or peers for the same component? If so, which negotiation strategies—or alternative sourcing decisions—might reduce the gap? Does […]
  • The Role of Data in Sourcing Success
    It's difficult to source and buy direct materials at scale. While simple transacting may seem easy enough to understand, the process leading up to these […]
  • Protecting BOM Health & NPI With Portfolio Monitoring
    Organizations are experiencing an increase in unplanned product redesigns, leading to missed product launches and missed shipments of sustaining products. Product redesigns are driven by […]
  • Lessons for Navigating a Post-Pandemic Supply Chain
    Two years ago, I wrote about what I had learned from supply chain executives trying to manage business continuity in the early days of the pandemic. In […]

March 30, 2022

Lessons for Navigating a Post-Pandemic Supply Chain

Two years ago, I wrote about what I had learned from supply chain executives trying to manage business continuity in the early days of the pandemic. In the last few weeks, I've had the opportunity to speak, once again, with several supply chain leaders. During our conversations, they've shared what they have learned and which strategies they are adopting to ensure success in the new post-pandemic reality. Here, I summarize our key takeaways.

The Top 5 Supply Chain Pain Points

1. Shortages

Companies are seeing massive component shortages. They have been in an ongoing firefighting mode with new shortages occurring every few days; Covid, the Russia-Ukraine crisis, and the recent earthquake in Japan are just a few top-of-mind examples. Now, instead of the MRP process being delivered from planning professionals to sourcing professionals, the planning team needs to find out from the sourcing team which materials they can get before they can plan accordingly. Against this crisis backdrop, executives have acknowledged that the relationship between supply chain and sourcing requires significant improvement across the boards.

2. Timely Visibility of Disruptions & Impacts

In many cases, shortages are found only after the MRP is run. Multiple interviewees indicated that when shortages hit, sourcing teams cannot easily identify impacts, discover alternatives, identify suppliers, and start sourcing processes. The pain point is not just finding alternatives but also being able to perform simulations of alternate allocation scenarios to see the impact on the integrated business plan. Some lead times have shot up very quickly, leaving companies unprepared. Increasing lead times impact routine supply continuity for sustaining products and can also delay new product launches.

3. Collaboration with Contract Manufacturers & Suppliers

You can outsource the supply chain but not supply chain management. Many companies have most of their products built in an outsourcing model—all with largely manual processes. Collaboration with contract manufacturers remains a broad pain point across many processes. There is minimal visibility and control over how the contract manufacturers manage their sourcing strategies—even for components that companies manage on their own.

4. Brittle Supply Chains

Pre-pandemic, many companies maintained large fractions of their components as sole sourced because the costs of qualifying and tooling second sources were considered prohibitive. However, the pandemic has taught us that the cost of not doing so is far higher.

supply chain
5. Paper Processes & Islands of Information

It is said that when the water level drops in a creek, you expose the rocks. This is what happened during global lockdowns in the two years of Covid. Companies realized that any processes that still relied on paper broke down—in this case, you need a person in the office to move the paper. Companies that are household names and perceived to be the flag-bearers of the technology revolution realized they had paper steps left in mission-critical business processes and scrambled to digitize. Others that do have digital processes in place still struggle with analytics. The problem is not the lack of information but the speed of analysis because of heterogeneous and isolated systems that hold pieces of information that are neither harmonized nor integrated.

The Top 5 Strategies

1. Integrated Continuity Planning

Several executives stated that shortages are forcing supply chain, product, engineering, and sourcing teams to work together to resolve shortages by doing design changes to qualify substitute components and get them sourced rapidly.

2. Outside-In Intelligence

The last three years have made manifest the interdependencies of global value chains. Companies are launching initiatives to extend visibility into their suppliers and their sub-tier suppliers—and in some cases—all the way to raw materials.

3. Diversification of Sources

Some executives have acknowledged a clear shift away from specialized single-sourced components to diversifying sourcing. Now, they have OKRs in place to drive dual sourcing. To our knowledge, almost all companies we spoke to have similar initiatives in place.

4. Digital Networks

Many of us have pointed out for years that supply chains are not chains but networks of partners interacting to deliver products and services to the end consumers. Network problems require network solutions. Companies are now investing in joining cloud-based SaaS networks that connect them to their contract manufacturers and suppliers. Networks bring shared visibility and lock-step orchestration in times of high volatility. When combined with proper business processes, networks can cut out information latency and increase collaboration.

5. Preparation

Louis Pasteur once said, "Chance favors only the prepared mind." Forward-thinking companies are also investing to be better prepared for once we come out of the current flurry of shortages. Companies are realizing that even though cost considerations are being overlooked in a scramble to secure supplies, this is not sustainable. Sourcing teams will need to balance cost and risk going forward. These companies are now setting up new functions for cost analysis, tear down analysis, and risk assessment. In addition, many companies had already set up cross-functional resiliency councils.

In Closing

Some things never change. Panic is bringing back the bullwhip with a vengeance. Some executives acknowledged that they see the bullwhip even inside their company. The product business units hedge their forecasts to try to get more share in the allocations. Then the sourcing teams add their own padding. Speculating that this is already happening, the suppliers and manufacturers judge their customers' forecasts down on their own and decide how much supply to allocate to them.

Things may get worse before they get better. However, companies that are better prepared, have diversified their sources, and have built outside-in digital processes where they can collaborate across supply chain, sourcing, product, and engineering functions, as well as between buyers, contract manufacturers, and sellers will be the ones that not only survive but thrive in this new reality.

  • The Power of Data Aggregation
    Are you paying more than your competitors or peers for the same component? If so, which negotiation strategies—or alternative sourcing decisions—might reduce the gap? Does […]
  • The Role of Data in Sourcing Success
    It's difficult to source and buy direct materials at scale. While simple transacting may seem easy enough to understand, the process leading up to these […]
  • Protecting BOM Health & NPI With Portfolio Monitoring
    Organizations are experiencing an increase in unplanned product redesigns, leading to missed product launches and missed shipments of sustaining products. Product redesigns are driven by […]
  • Lessons for Navigating a Post-Pandemic Supply Chain
    Two years ago, I wrote about what I had learned from supply chain executives trying to manage business continuity in the early days of the pandemic. In […]

March 10, 2022

Supply Chain Risks Brought on by the Russia-Ukraine Crisis

Since the end of February, all eyes have been on Russia and Ukraine. The effects of Russia's invasion and subsequent attacks on Ukraine have been devastating – from both a humanitarian and business perspective. Sourcing and procurement professionals, in particular, should brace for inevitable supply chain risks. While it's impossible to predict how, exactly, it all will play out, LevaData does have the data needed to offer some timely and helpful insights.

Direct vs. Indirect Risks

Direct risks involve supply disruptions directly resulting from the impact of the war in Ukraine. This means sites of product, component, or raw material production that could be shut down either by destruction or the inability to operate during a conflict (shut down due to lack of labor, lack of power, lack of inputs).

Indirect risks derive from supply disruptions due to the collateral impact of the war in Ukraine, namely, the extensive economic sanctions being imposed on Russia (including Russian banks and companies), limiting its ability to sell goods and raw materials into the world market.  

Categorizing the Effects of This Crisis

In terms of direct or indirect supply chain risks, three key raw materials from Ukraine or Russia may affect global supply chains: neon gas, C4F6 (Hexafluoro-1,3-butadiene), and palladium. All three are used in semiconductor production.

For all three materials, the Taiwanese government, which represents companies that comprise the highest overall foundry capacity globally (including TSMC and UMC), released a statement on February 26th stating that the impact of the war in Ukraine would be minimal for semiconductor supply.

According to the statement by the Cabinet, Taiwanese chip makers use minimal palladium, and neither Ukraine nor Russia is a major source for the little palladium the island does use. Domestic companies also have the ability to refine and "remanufacture" palladium, so there should be no impact, it said.

For neon and C4F6, there are already stocks on the island, and supply chains are diversified, so "the near-term impact is not big," the Cabinet said.

In addition, John Neuffer, Chief Executive of the Semiconductor Industry Association, said in a statement that he, “...doesn't believe there are immediate supply chain risks related to Russia and Ukraine.” But the longer the conflict continues, the more the risk increases, analysts said.

In terms of broader indirect risks, Russia is a major supplier of many raw materials, most notably crude and refined oil. Russia is the world’s third-largest oil producer, supplying 11% of worldwide crude oil in 2020, according to the US Energy Information Administration (chart below):

The threat of potential sanctions on Russian crude and refined oil drove oil prices 30% higher in one week, with Brent crude oil hitting $123/barrel on March 7th. Since then, pricing has eased, but the market remains volatile, reacting to any news on supply – and there is some speculation that it could even hit $200/barrel if the situation worsens.

Higher oil prices have ripple effects throughout the global economy, affecting everything from manufacturing due to higher energy costs, transportation from fuel cost, and input costs (from chemicals that are derived from oil). Worldwide ability to replace the Russian oil supply is limited, especially since the balance between demand and supply was already tight in 2021. Abhi Rajendran of Energy Intelligence, an industry publisher, believes the oil market was undersupplied by some 1M barrels per day (B/D) before the war in Ukraine. The situation is difficult enough that the US is now working on diplomatic solutions to release Venezuelan and Iranian crude into world markets again to mitigate the impact of oil sanctions on the global oil supply. However, whatever is achieved will not bring new supply in the immediate term.

Regarding other raw materials, in 2021, Russia was the 2nd largest world producer of cobalt, platinum, and palladium; 3rd largest world producer of gold, nickel, and aluminum; 4th largest world producer of silver; 5th largest world producer of iron ore; 6th largest world producer of lead; and 9th largest world producer of copper. For instance, since the Ukrainian invasion, the world price of nickel has risen 19% – to a 14-year high of $29,800/metric ton. And for the year so far, it's already up 37%. Palladium is up 57% for the year, and other metals are also experiencing significant price spikes.

Recommended Supply Chain Actions

Clearly, the impact on global supply chains from the Ukrainian war is dynamic and, in many ways, unprecedented given the scale, or potential scale, of economic sanctions on Russia, the world’s 11th largest economy. This issue only adds to an already-stressed situation – coming out of a global pandemic. As such, there is no doubt the additional strains coming from higher material costs/limited supply and disrupted trade routes will further extend lead times and strain margins for specific components and products. This will especially affect those directly impacted by the oil and metals markets. Impact currently seems like it will be more severe for European operations due to reliance on Russian oil and proximity to disrupted trade routes.

For supply chain professionals, Levadata recommends taking the following actions:

  1. Assess direct and indirect supplier impacts, including downstream impacts from raw material supply that might be coming directly or indirectly from Russia. Assessment includes understanding the current inventory/buffer levels available.
  2. Ensure suppliers have alternative materials sources identified or already activated and that those suppliers are booking capacity/supply with those sources.
  3. Focus first on supply assurance, then on pricing. Don’t let pricing derail the supply assurance efforts. Avoid reactive price negotiations – given the fluidity of the situation, tell suppliers you will have those discussions once supply is assured. 
  4. Closely track global events and markets for any sudden developments that could dramatically shift the situation (i.e., expanded sanctions or new sources of supply coming online).

If you need help navigating the complexities and supply chain risks of disruptions like the Russian-Ukrainian crisis, consider working with us. LevaData's integrated supply management platform features revolutionary, AI-powered solutions like Supply Risk Navigator. Our offerings provide the insights and recommendations needed to mitigate and manage unexpected disruptions at all times. Learn more about our platform here, and then get in touch with us to see what we can do for your enterprise.

  • The Power of Data Aggregation
    Are you paying more than your competitors or peers for the same component? If so, which negotiation strategies—or alternative sourcing decisions—might reduce the gap? Does […]
  • The Role of Data in Sourcing Success
    It's difficult to source and buy direct materials at scale. While simple transacting may seem easy enough to understand, the process leading up to these […]
  • Protecting BOM Health & NPI With Portfolio Monitoring
    Organizations are experiencing an increase in unplanned product redesigns, leading to missed product launches and missed shipments of sustaining products. Product redesigns are driven by […]
  • Lessons for Navigating a Post-Pandemic Supply Chain
    Two years ago, I wrote about what I had learned from supply chain executives trying to manage business continuity in the early days of the pandemic. In […]

March 2, 2022

Semiconductor Lead Time Updates: the Forecast for 2022

Back at the end of Q3 2021, LevaData shared insights as part of our ongoing series highlighting the latest trends and changes regarding semiconductor lead times. Today, we're sharing the latest updates to help your organization manage the disruptions and challenges posed by the industry's current state.

Before we can understand where we are currently, though, we need to look back. So, let's look back at what we saw for semiconductor lead times back in early Q4'2021.

Previous Trends

Around this time, we reviewed a basket of 20 different semiconductor types commonly used in the market. Upon review, the data suggested some dips in a few trends, which could have been regarded as early signs of lead time increase momentum starting to weaken. 

semiconductor lead times

Fast forward a few months to January 2022, and the data was far less promising. While it looked like lead times could have started leveling off or even begin declining in early Q4, the Omicron surge worldwide led to additional factory and regional shutdowns. This affected the semiconductor backend supply in particular, with a reaction from manufacturers to continue to raise lead times. The fact that lead time increases are continuing to climb is likely due to what we’re calling the continuing supply chain trifecta: decreasing inventory, supply that can’t catch up, and increasing demand. 

Evaluating the Data

When reviewing these trends through a holistic lens, one might feel hopeful in suggesting that there could be an arc of stability approaching. Unfortunately, the data as of today does not yet show this leveling-off trend in lead times.

The current outlook continues to suggest shortages for semiconductors into Q3'2022. Most semiconductor manufacturers are sold out on key product lines based on current production levels, with commitments from larger customers out past 52 weeks. Given that dynamic, there is less incentive for them to lower lead times at this time. Although we do expect lead times to level off and slowly decline from here, we’d advise against expecting any dramatic inflections. In fact, given the recent events in Ukraine and the potential impact on the global supply of raw materials used in semiconductor production coming from either Russia or Ukraine, such as neon gas, hexaflurocyclobutene, and palladium, we could expect further pressure on lead time trends remaining at the current elevated levels for some time.  

The largest increases are those found in Programmable Logic and MCU/MPUs. The lead times for Integrated Circuits aren’t quite as steep but are still continuing to climb. Even highly commoditized passive components like Resistors and Capacitors cannot escape the pull of the market to extend lead times.

But it’s not all entirely bleak. For example, even though Diodes have had problems, lead times have stabilized over the past several months. 

Looking Ahead

Even still, the overall takeaway seems clear: lead time relief that we had hoped to see in Q4 has been delayed, and it will likely take most of 2022 to moderate. We expect to see continued fluctuations in semiconductor lead times over the next months as supply and demand strive for better balance and as unexpected shocks continue to affect the market (such as the just-mentioned situation in eastern Europe). But the hope is that lead times will begin to achieve that "arc of stability" in the latter part of 2022. The key question is, which levels will they stabilize around?

Lead times are now anywhere from two to four times longer than they were a year and a half ago. Integrated Circuit lead time averages have quadrupled, while Non-Integrated Circuit lead times have doubled. The average? An increase of three times as much.

semiconductor lead times

The above graph, while not a true forecast, offers a compelling perspective on the potential timeline ahead. If lead times decrease the same way they increased, our best-case scenario to return to our previous “normal’ suggests we’ll be waiting for at least a couple of years. With new foundry capacity coming online in later 2022 and 2023, we expect lead times to begin to moderate in 2023, heading towards more historical norms in 2024. However, to some extent, the overall market shifts with increased demand from EVs and the continued drive to digitization may mean lead times may not revert fully back to past norms. It is very possible they may level off at higher averages for some time. 

Maintaining a Competitive Edge

As previously stated, there are two key requirements you must meet to stay ahead of the game and safeguard your supply chain. The first is getting access to and using reliable, up-to-date lead time averages and insights. The second step is to invest in a reputable, always-on risk navigation platform. LevaData's Supply Risk Navigator solution does just that, providing companies with the visibility and recommendations they need to protect their supply chains while maintaining agility. Contact us today to learn more about our AI-powered platform and what we can do to help you manage these and other risks.

  • The Power of Data Aggregation
    Are you paying more than your competitors or peers for the same component? If so, which negotiation strategies—or alternative sourcing decisions—might reduce the gap? Does […]
  • The Role of Data in Sourcing Success
    It's difficult to source and buy direct materials at scale. While simple transacting may seem easy enough to understand, the process leading up to these […]
  • Protecting BOM Health & NPI With Portfolio Monitoring
    Organizations are experiencing an increase in unplanned product redesigns, leading to missed product launches and missed shipments of sustaining products. Product redesigns are driven by […]
  • Lessons for Navigating a Post-Pandemic Supply Chain
    Two years ago, I wrote about what I had learned from supply chain executives trying to manage business continuity in the early days of the pandemic. In […]

February 14, 2022

The Effects of Climate Change on Sourcing and Procurement

Even as businesses try to deal with what many believe to be the end of the pandemic, a host of other social and economic issues loom large; specifically, climate change. The discussion around the state of the environment has been ongoing for quite some time. But these days, it's top-of-mind for sourcing and procurement professionals like never before.

sourcing and procurement

Sourcing- and Procurement-Specific Challenges

So how, exactly, does this issue impact our industry? To start, an increase in natural disasters (both in severity and consistency). Issues like torrential flooding to devastating hurricanes can (and will) affect environments in which materials are sourced, leading to decreased supply and price increases. They'll also undoubtedly hinder production timelines and capabilities, as well as the transportation of said supplies and products.

Managing the Mayhem

So, which techniques should sourcing and procurement leaders employ to manage these challenges?

First, we must use a new lens to view supply chain design. Climate change impacts are a new stress test for all supply chain firms, even those with advanced risk management techniques.

We must also assess our supply chain's geographic distribution to allow for flexibility; it's like some of our supply chain nodes are in high-risk areas. As a result, the long-term availability of critical ingredients may be in jeopardy. This will necessitate inventory assurance and planning with significantly longer time horizons.

Implementing relevant legislation through industry collaborations and public-private partnerships will undoubtedly be crucial. The goal is not to let this be something that just happens to you. Instead, it should be something we can plan for and (hopefully) influence.

The Key to Success

In the interim, investing in powerful sourcing and procurement solutions is key. Specifically, ones that allow you to fast-track new product introduction, save money, and mitigate risks. Simply reacting to the challenges posed by climate change will leave your organization vulnerable to devastating disruptions. However, if you're able to predict, analyze, and plan around these roadblocks, you'll maintain a competitive advantage.

Are you equipped to deal with the effects of global warming? If not, turn to LevaData. Our AI-powered integrated supply management platform streamlines the actions-to-insights process and takes the guesswork out of spend decisions, risk mitigation, and new product integration. Learn more about the power of our platform, and then contact us to see what we can do for you.

  • The Power of Data Aggregation
    Are you paying more than your competitors or peers for the same component? If so, which negotiation strategies—or alternative sourcing decisions—might reduce the gap? Does […]
  • The Role of Data in Sourcing Success
    It's difficult to source and buy direct materials at scale. While simple transacting may seem easy enough to understand, the process leading up to these […]
  • Protecting BOM Health & NPI With Portfolio Monitoring
    Organizations are experiencing an increase in unplanned product redesigns, leading to missed product launches and missed shipments of sustaining products. Product redesigns are driven by […]
  • Lessons for Navigating a Post-Pandemic Supply Chain
    Two years ago, I wrote about what I had learned from supply chain executives trying to manage business continuity in the early days of the pandemic. In […]

February 2, 2022

The Impact of Accelerating Digital Transformation

Over the last year and a half, numerous organizations have been forced to carry out business transformations that would have otherwise taken years to complete. But now that they've emerged from crisis mode, what kinds of problems are being created by this lightning-fast digital transformation? What new or accelerated hazards populate the enterprise risk management matrix's "urgent/critical" quadrant?

A Digital Reliance

We now work and live in a state of perpetual digital reliance. We cannot perform our job obligations or carry out the essential functions of daily living unless we operate inside a system of systems. We "fire up" a plethora of programs on a minute-by-minute basis, and those applications rely on other applications and a cloud infrastructure to function.

digital transformation
Considering Cyber Security Risks

This widespread reliance throughout the digital spectrum provides fertile ground for malicious actors attempting to destabilize information technology infrastructures. Cyber security dangers are expanding, as indicated by broad attacks on firms such as Microsoft and the growing number of ransomware cases. Additionally, we've expanded the risk to a myriad of networks, ranging from homes and coffee shops to any number of "work from anywhere" sites. This compels boards, top management, auditors, and governments to pay much closer attention and develop countermeasures to mitigate risks. We are all perpetually engaged in "goalkeeping." Given all of this, along with the increased reliance on supply chain applications and orchestration systems, cyber threats should now be at the top of every supply chain leader's priority list.

Don't Forget Instability

Second, all of this instability and disruption also provides commercial opportunities. With cloud services' costs declining and the tools for developing applications becoming more accessible, new firms can swiftly attract and monetize consumers. Disruptive competition is pervasive. Simply look at the quantity of "unicorns" popping up worldwide.

Repeat Disruptions

While a variety of factors influences valuations, one thing is certain: investors recognize the return potential of these disruptive entities. This indicates that "incumbency" is transient. Regardless of its age or scale, each organization will suffer severe competitive disruption. This means that supply chain leaders will need to devote significantly more attention to innovation support, adding another stress point to an already overburdened execution agenda.

Embracing Digital Transformation the Right Way

Even with these risks and disruptions, one thing has become clear: no matter the speed at which it occurs, digital transformation is unavoidable for those enterprises that wish to remain competitive in their fields. The solution is not to forgo adopting the technologies and solutions made available. Instead, organizations must execute discernment when deciding which investments they should move forward with. Executives must opt for platforms that prioritize security and reliability and expanded capabilities that create a "one-stop-shop" in which organizations can operate; this will undoubtedly sidestep some of these concerns while providing the support needed to get ahead of the curve.

Are you ready to embark on a digital transformation with an integrated supply management platform? If so, LevaData is here to help. Our AI-powered solutions are proven to help mitigate risks and reduce costs, all while analyzing your procurement objectives alongside real-time market activity to generate predictions and customized recommendations. Get in touch with us today to learn more about what we can do for you.

  • The Power of Data Aggregation
    Are you paying more than your competitors or peers for the same component? If so, which negotiation strategies—or alternative sourcing decisions—might reduce the gap? Does […]
  • The Role of Data in Sourcing Success
    It's difficult to source and buy direct materials at scale. While simple transacting may seem easy enough to understand, the process leading up to these […]
  • Protecting BOM Health & NPI With Portfolio Monitoring
    Organizations are experiencing an increase in unplanned product redesigns, leading to missed product launches and missed shipments of sustaining products. Product redesigns are driven by […]
  • Lessons for Navigating a Post-Pandemic Supply Chain
    Two years ago, I wrote about what I had learned from supply chain executives trying to manage business continuity in the early days of the pandemic. In […]

January 20, 2022

The Skinny on Inflation

It's fair to say that issues like COVID-19 and the semiconductor shortage have been top of mind for many over the last year. But other issues are looming, and they necessitate ample attention. More specifically: how should the procurement industry respond to inflation caused by supply chain challenges and labor shortages?

Some Shocking Numbers

According to the U.S. Bureau of Labor Statistics, the Consumer Price Index in the United States increased 5.4% in the 12 months leading up to June 2021, reaching its highest level since August 2008. For many current procurement professionals, this is their first encounter with this level of inflation. Additionally, 6.6% of jobs in the United States were unfilled in September 2021, marking the first time we've experienced labor shortages to that degree in over two decades.

shortage
Look to the Past to Get to the Future

While some cost components are likely to return to normal, it is safe to say that we will continue to operate in an inflationary environment for some time. However, procurement professionals who have been through this process before would do well to remember that there is a playbook to follow. Seasoned professionals understand that there is no reason to panic. Instead, buyers must pay close attention to underlying cost factors that may contribute to price inflation.

Buyers, Be Wary

Given the current state of the supply chain, many suppliers will view this as an opportunity to justify price increases that are, well…unjustified. To manage this, buyers need to implement tactics like ongoing cost drivers analyses, setting should-cost targets, leveraging future markets, and managing commitment horizons. At least for the foreseeable future, the primary objective is to ensure supply while maintaining price stability, which necessitates aggressive bargaining. 

Do you have the tools needed to manage the effects of challenges like these and those to come? If not, LevaData has the perfect solution. Our revolutionary, AI-powered integrated supply management platform features one-of-a-kind solutions like Cost Optimizer, with capabilities like eBenchmark that are designed to take the guesswork out of supplier negotiations. Learn more about the power of our solutions here, and then schedule a demo to see what we can do to safeguard your sourcing and procurement strategies. 

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January 12, 2022

Supply Chain Disruptions & the Pace of Change

Anyone who has spent any amount of time in the supply chain profession is well experienced in dealing with constant changes. Supply chain disruptions are, after all, an unavoidable part of the territory. Even with this rule in mind, there’s no denying that the breakneck speed of evolution and adaptation we’ve endured over the last 24 months has been, in a word, revolutionary. By now, it’s become clear that the ramifications COVID-19 has had on global supply chains will be felt for some time to come. Many of the coping mechanisms implemented during this period will likely be seen as permanent fixtures in supply management, rather than stopgaps.

However, it’s crucial to avoid viewing the pandemic through a siloed lens. We need to put the pandemic into context for an accurate understanding and analysis of what we've experienced and the resulting turn of events. At the end of the day, we are still living in what can—and should—be considered a black swan event. Even more importantly, we must remember that this event is one that will eventually subside; it will come to an end, just as all other seemingly insurmountable supply chain disruptions have.

Don’t Be So Quick to Say Goodbye

But even though it will one day be in our rearview mirror, that doesn’t mean we should leave it behind completely. After all, it would be foolish not to carry the lessons we've learned from it into the future; for example, the importance of maintaining an agile and innovative company culture, as well as an eagerness to implement cutting-edge technologies.

supply chain disruptions

One of the most important learnings to take away from this experience is the fact that supply chain disruptions and hazards are unavoidable—no matter what else may be going on in the world. Even throughout the pandemic, there were a number of other challenging events that took place: Brexit, trade tariff wars, the closure of the Suez Canal, and a number of extreme weather occurrences, to name a few.

It is critical to acknowledge that disruptions will continue to be a part of the picture, even after what has seemed like the most impactful two years in recent history is in our rearview. At the end of the day, we live in a turbulent world; data from McKinsey supports this stance, with findings that indicate we’ll likely experience serious disruptive events every three to four years.

Making the Most of Supply Chain Disruptions

Disruptions are, if nothing else, a catalyst for growth. Over the last 12 to 14 months, it’s been proven time and again that those organizations that are nimble and adaptive are the most well-positioned to deal with the world as we see it today—and as we will undoubtedly see it in the years to come. 

So, what’s the key to success? Based on what we’ve seen, it all boils down to implementing and adopting technologies that allow you to react quickly. Embracing a best-in-class digital strategy, with tools that streamline the insights-to-action process is the most effective way to anticipate and react to the unavoidable disruptions you’re bound to encounter.

LevaData’s revolutionary, AI-powered platform offers the tools, recommendations, and insights needed to successfully manage supply chain disruptions. Learn more about our Supply Risk Navigator solution here. Then, schedule a demo with us to discover how we can help transform your company’s risk management strategies.

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