April 28, 2020

CEO’s Take Heed: You Are Now Supply Chain Risk Managers

I could write another blog post on supply chain risk management, but Angel Mendez, COO at HERE Technologies already nailed it. I encourage everyone within a global manufacturing company, starting with the CEO, to give it a read:

CEO’s Take Heed: You Are Now Supply Chain Risk Managers

From my perspective, this quote sums it up:

To be successful in mitigating these events, one has to install and operate a formal, data-centric, technology-enabled process that can be immediately deployed. The process must be inextricably linked to a broader Enterprise Risk Management framework, which must be regularly rehearsed and stress tested.”

Angel Mendez

Find out more about how LevaData’s AI-powered, community-driven technology can help you uncover and act on saving opportunities to help you automate the mundane and allow you to focus on what matters, contact us today.

Rajesh Kalidindi
Founder & CEO

March 27, 2020

Winning the “New Normal” with Resilient Operations

Although the linguistic debate continues, the two characters within the simplified Chinese word for “crisis” (危机) are often interpreted as signifying danger and opportunity. Everyone would agree that there is plenty of “danger” right now - to our health, families and jobs - but the organizations with resilient operations that create an opportunity will be the quickest to recover and the most competitive in the long run.

McKinsey calls these organizations the “Resilients.” In their analysis of the 2008 recession, they found the companies that thrived had two attributes: speed and discipline. “Speed” in being more decisive in implementing change in response to triggering events, and “discipline” in using data to guide those decisions.

When it comes to speed and discipline, there are actions companies can take now that won’t just help them get through the crisis, but accelerate their recovery and improve their long-term competitiveness.

These include:

  • Anticipating risks before they consume cash and resources
  • Evaluating markets and locking in pricing now, before demand and allocation dictate costs
  • Democratizing data by bringing insights to the professionals who can make the decisions and have the tools needed to take action.

In reality, there is no one simple answer. There are however, simple ways to act that doesn’t just minimize damage, but creates opportunities. We’ve learned in our personal lives that flattening the curve minimizes the depth and longevity of a crisis. Why not apply we the same logic to our operations?

Rajesh Kalidindi

Founder & CEO

March 27, 2020

Introducing the Supply Management Manifesto

Right now, global manufacturers are purely (and understandably) in reaction mode to a pandemic that’s swept the world with unprecedented speed. Addressing emergency supply shortages and figuring out how to manage an entirely remote team are appropriate responses to this fluid situation.

It’s also time to recognize that the coronavirus is not a stand-alone event, but the continuation of a trend towards volatility, complexity and uncertainty. Consider that in the span of a few months we’ve gone from the brink of US-China trade war, to a global pandemic, to the start of an economic downturn. The coronavirus is an emergency, but it’s also an example of a systemic shock that will likely be repeated with increasing frequency.

This crisis can serve as a wake-up call for supply management to develop a new approach that’s agile and resilient. If we don’t go beyond war rooms and tiger teams to develop a system that detects risk events and recommends actions, we’ll inevitably face another emergency with limited options.

The New Role for Supply Management: Margin Protectors

The greatest opportunity for supply management isn’t becoming better at managing inherent supply risk, but in redefining their role and relevance to the company’s future. In addition to giving teams a better foundation for controlling costs, a new approach would give supply management a greater opportunity to protect and grow margins.

In volatile times and economic downturns, increasing product margins will be critical to driving growth for global manufacturers.

Although this is never an easy task, my experience as a sourcing operator and tech company founder suggests that with the help of cognitive technologies, many enterprises have room to lift margins by one to three percent.

A New Approach

A full, digital transformation of sourcing, procurement and NPI is required to build an agile supply management system, but issues surrounding culture, perception and organizational structure also need to be addressed. That’s why I’d like to present the opportunity facing supply management not as a process to adopt, but a set of beliefs to embrace: Supply Management In The Age of Volatility: A Manifesto

Supply Management as an Engine for Growth

While no one welcomes the coronavirus or risk events that’ll follow, supply management has a unique opportunity to showcase their value by driving growth despite an economic downturn.

Sourcing and NPI teams will face an incredible amount of pressure, but the technology to help them drive their company’s next stage of growth is available now.

Rajesh Kalidindi

Founder & CEO

March 26, 2020

Vulnerability is Exposed in Volatile Markets

Every day, we wake up to a new event disrupting businesses. In 2020, those disruptions are flowing into our personal and professional lives at a scale unlike anything we have seen before. As we deal with personal safety, it is also clear that our professional lives are also under siege with the economic impact that has been triggered with Covid-19 . This will truly test our resiliency in many ways.

As companies and customers brace for the impact from Covid-19 , there is one simple truth. It will end and when it does, those that have prepared now will be in the prime spot to lead the market. These topics are discussed on a daily basis, with everyone asking how to:

  • Keep employees safe
  • Protect jobs
  • Keep margins intact
  • Achieve growth

The reality is that these critical aspects of business are being tested. Those that optimize and improve resiliency now, leveraging the power of global data and insights, will fare 10x better than those who do what has worked before. The world has changed, and if we aren’t considering how to change, then we know how evolution plays out.

What is clear to us, as we talk to our clients and leaders around the world is that there is a massive and immediate need to reduce risk, improve supply visibility, reduce costs and help employees be productive remotely. We need to build the agility and resilience into our organizational DNA, so the next time around, we react faster and better.

LevaData has an important part to play with our customers and industries in reducing material costs rapidly and building resiliency to protect jobs as a result. We are committed to make these turbulent times not just manageable but less impactful.

However, we can help, please let us know.

Rajesh Kalidindi
Founder & CEO

January 23, 2020

Supply Management Predictions for 2020

Although there’s no shortage of annual predictions at this time of the year, we wanted to share some trends that consistently come up on our platform, across our customers and in the news.

The world promises to be increasingly volatile and uncertain in 2020

Geo-political and geo-economic tensions are going to continue driving turmoil in the marketplace. Some key events that supply chain professionals will need to keep an eye on:

  • Brexit: Boris Johnson’s government has a clear mandate to execute Brexit in 2020 - an impossibly short time frame in which to negotiate a comprehensive trade deal. While LevaData’s research shows that manufacturing executives aren’t especially concerned about Brexit’s implications, even a “soft landing” will have supply chain repercussions well beyond the auto industry.
  • China: Tariffs aside, there are other growing concerns amongst companies whose supply chains run through China. Labour costs have been rising and environmental restrictions have been tightening. Intellectual property and cybersecurity concerns are drawing increasing scrutiny. There’s also a potential flashpoint as the standards war surrounding 5G heats up and the potential for export controls on ZTE and Huawei become points of contention. China has shown itself more than willing to retaliate both politically and economically when challenged.
  • WTO: The handicapping of the WTO’s disputes adjudication process risks a breakdown of the global trade system.

These risks occur against a background of standard risk sources and new areas of concern, in particular, the creeping risks of climate change, and cyber attacks from state and non-state actors.

Risk management will evolve into a core strategic sourcing discipline

The industry is slowly accepting that we’ve entered a new stage of VUCA and contingency planning is becoming a regular practice. To manage, sourcing professionals will have to find ways to adapt. 

Unfortunately, risk management is a complex, time-consuming process that most commodity managers and procurement teams are ill-equipped for. Witnessing these concerns across its client portfolio, we improved on our platform’s ability to identify risk events and recommend alternatives.

As organizations rise to the challenge, more sophisticated approaches to risk management will grow in popularity and many companies will make initial investments in technologies that provide improved visibility, AI-enabled prediction, automated event monitoring and scenario planning.

Data explosion fuels digital transformation

When we conducted the research for our Cognitive Sourcing Study in 2019, we found that 74% of respondents considered data-driven procurement somewhat or very important. That’s unlikely to change anytime soon.

As the world becomes increasingly digital and the internet of things (IoT) becomes a reality, the amount of data available will continue to explode, as will expectations that recommendations are based on data-driven research. As this becomes the norm within leading supply management teams, data skills will be required of not just engineers but sourcing managers and others. 

This will prompt a move towards easy to use, “no-code” technology that will result in a huge rise in the number of data use cases. New ways of interacting with the data will come into wider use (RPA, chatbots). In turn, the improved transparency will spur more cross-functional collaboration throughout the organization.

To manage and make use of this data, organizations will rely on advanced analytics and AI to produce insights and make predictions. As a result “digital transformation” will continue to be a popular theme. 

Among the leaders surveyed in LevaData’s 2019 Cognitive Sourcing Study, 75 percent said their organizations had a digital transformation initiative underway.

  • Launched in the past year: 22%
  • Initiative active for 1-2 years: 26%
  • Initiative in place for 2+ years: 19%
  • An additional 14% are planning an initiative
  • Only 20% have no plans to start

Despite a steady march towards digital transformation, there are some concerns about whether sourcing teams are currently up to the challenge. Leaders surveyed in LevaData’s 2019 Cognitive Sourcing Study, found that only 40% considered their sourcing team to be somewhat or very ready for digital transformation, down from 46% in 2018, and 52% in 2017. 

An Elevated Role for Sourcing Professionals

As technology provides sourcing professionals with more accurate information and improved insight into supply chains, they will begin to take on an increasingly strategic role within the organization. And as rising volatility inevitably leads to high-profile losses or missed opportunities for global manufacturers, executives will see their supply chain as a potential competitive advantage rather than a cost-cutting department. 

Our Cognitive Sourcing Study 2019 indicates, however, sourcing teams are stretched thin and largely consumed with fighting the latest fires.

As digital transformation and the adoption of AI tools take on more routine tasks, sourcing professionals will find more time to focus on risk reduction and other strategic opportunities.

August 21, 2019

Supply Chain Brain Q&A: Future of AI Technology for Strategic Sourcing

LevaData sat down with Supply Chain Brain to discuss AI's growing role in strategic sourcing. Supply Chain Brain has the full interview, which covered a variety of sourcing-related technology topics:

  • A growing role for AI suggests that managers will be forced to either adopt cognitive sourcing technology, or find themselves left behind.
  • Companies are generating a competitive edge by incorporating cognitive sourcing in their supply chain management. The capability to identify risks and opportunities that would otherwise be invisible is far too valuable to pass up on.
  • A common challenge among sourcing teams is meeting savings goals that are borderline unattainable without the help of AI. As pressure increases on these teams, more and more of them will shift from excel spreadsheets to a cognitive sourcing platform. This is especially true with the current uncertainty in the market and trade agreements.
  • Those who are successful will be the ones who adopt the most agile sourcing strategy, allowing them to rapidly sense and act upon opportunities.

Visit Supply Chain Brain for the video interview - which is part of a series on the impact of AI on supply chains.

July 9, 2019

Moving to Continuous Sourcing: Real-Time Opportunity Sensing

For the past 20 years, businesses have been weathering what could be described as a “data explosion.” This explosion has rippled through supply chain and sourcing as access to useable data sources has increased. This data has the potential to revolutionize the way continuous sourcing is conducted.

With proper analysis, organizations can get unprecedented insight into their larger operating environments, allowing them to reduce risks and improve margins. Opportunities that would have been all but invisible before are now revealed.

Unfortunately, lean teams and limited resources mean a lot of sourcing teams struggle to manage this data effectively and so don’t reap the benefits of their digital bounty as a result.

Increasing Agility With Cognitive Sourcing

Being able to react quickly to changing circumstances is an important factor in determining whether an organization is competitive or not. That puts a lot of pressure on sourcing teams. To make use of the data available to them, organizations have to invest in the right analytical platforms and software applications. They need applications that can integrate data and analyze it immediately.

This would help them in sensing real threats, comprehending them and quickly taking appropriate action.  This always on, data-driven approach, designed to enable professionals is what is known as cognitive computing.

This is more than a software iteration, it’s a paradigm shift. One can only expect to achieve a continuous sourcing process through intelligent automation of the underlying monitoring, sensing and action steps. Innovation in direct materials sourcing starts with a recognition that direct sourcing talent must be redeployed in a constant sensing paradigm.

So that means cognitive computing-born intelligent agents must be deployed in parallel. Solving for uncertainty must mirror efforts to identify and act on opportunities (i.e., continuous assessment of market drivers, not just potential threats).

These solutions should have the ability to:

  • Manage and analyze both structured and unstructured data
  • Simultaneously apply objective and preference-based reasoning
  • Learn as they encounter feedback (more data, preferred scenarios)
  • Take action (self configure market interventions, sourcing events, etc.)
  • Communicate with their human counterparts in natural ways.

What this means is that they must not only understand but think, learn and stay dedicated to answering the questions and achieving the objectives presented by sourcing professionals.

Direct materials sourcing professionals needed a way to move past prescriptive, reactionary approaches based on warehoused data histories. They have have taken a path where their actions can be modeled on real-time information. Cognitive sourcing has demonstrated that path.

May 24, 2019

Managing Threats And Opportunities With Cognitive Sourcing

A Changing Competitive Environment

As digital innovation takes the forefront when it comes to customer experience and engagement, new connections between brand managers, manufacturing, and sources of supply are rapidly emerging. There's still plenty of uncertainty surrounding this, but one thing is sure - as markets grow more volatile, companies will have to innovate to stay ahead of the game. There will be a push to find new ways to assess risk and anticipate opportunities faster and more accurately. Organizations will begin to move away from calendar-based sourcing events to an as-needed process that allows for more agile management of their supply chain.

This shift won’t be painless. First of all, the search for socially responsible, regulatory compliant sources of supply is already daunting. On top of that, there’s the challenge of finding high-quality, reliable capacity, which is especially difficult on the direct materials front. In short, dealing with the impacts of globalization on direct spend management requires more than just an informed approach. Making use of the new technologies becoming available will be essential.

Geopolitical Uncertainty and New Sources of Volatility

In the late 1980s, vertical integration of the supply chain was a common strategy for larger companies seeking a competitive advantage. While that approach still makes sense in certain traditional, domestic supply chains, for companies that rely directly or indirectly on low-cost global supply networks, it’s no longer a practical consideration.

The past few years have seen an increase in geopolitical uncertainty.  The US has recently withdrawn from the TPP, which has moved on without it, and the future of NAFTA (now the USMCA) is uncertain. Tariffs have roiled trade relationships, most notably between the US and China, and the final effects remain to be seen. The WTO is facing pressure on several fronts. All of these bring with them potential supply disruptors that need managing.

Weakening international agreements and institutions are hardly the only potential sources of potential trouble. Cyber security is growing in importance as threats multiply. It is no longer a matter of "if" you will be hacked, but "when." World weather patterns are changing, increasing the frequency off extreme events. Corporate Social Responsibility (CSR) and matters of sustainability are no longer back-burner issues, particularly in a social media world where damage to a brand can occur in an instant. Distressingly, we’ve learned that unexpected events don’t necessarily appear as obvious threats. It’s far more likely that the culprit will be a sequence of smaller events whose pattern goes undetected.

All this makes it necessary for supply chain leaders to have the ability to sense real threats, comprehend them, and quickly take appropriate action. The key is to figure out how to derive a competitive advantage in spite of the volatility, especially on the direct materials sourcing front. With more than a third of all manufacturing being outsourced to interdependent third parties spread out across the globe, managing a supply chain requires collaboration and transparency that can only come from a more technologically sophisticated approach.

LevaData acts as your cognitive sourcing advisor, applying AI to a range of data sources to serve up the most relevant recommendations, insights and predictions.

May 2, 2019

Strategic Control and Agility Drive Real Dollar Value

It is not difficult to differentiate a best-in-class organization from an average one in the sourcing and procurement industry. The results of our 2018 Cognitive Sourcing Survey, demonstrate that while an average organization engages with only 40% of their supplier base annually, those ahead in the agility race can reach 80% effortlessly.

This kind of leadership is possible because these organizations are digitally ready and have the right talent and mindset, with access to a cognitive sourcing platform to drive value.

This kind of digital readiness allows organizations to scale their strategic sourcing and procurement functions, providing them with dramatically greater agility. It is these two factors that are increasingly crucial in driving value for these organizations.

Scaling Strategic Control

Organizations can effectively drive value if they engage with their suppliers frequently and strategically, opening up new opportunities and allowing them to identify risks sooner.

Supplier Engagement

In our study, two dimensions of supplier engagement help organizations take the lead against their competition. They not only cover a more significant portion of their supplier base but also engage with them more frequently and in more depth.

The general workflow in procurement is similar for most organizations. It primarily involves conducting sourcing events from time to time with suppliers. Often, it also involves “fighting fires,” that is addressing risks and challenges that arise quickly. In this case, sourcing is conducted on an ad-hoc basis. Examples include chasing parts, addressing internal requests for cost assumptions, dealing with organizational churn, overcoming quality issues, and other related quality incursion events.

The maturity level of a sourcing organization decides the frequency of these sourcing events. Only the best-in-class organizations can conduct these events with agility on a regular or even continuous basis. Our study revealed that only 4% of organizations are capable of holding sourcing events weekly.

A majority of the pack (32%) still conducts them annually, and a smaller portion (15%) leads them quarterly. What’s more, 16% of the organizations don’t have a fixed schedule for sourcing events, essentially conduct them on an entirely ad-hoc basis. Lastly, 10% of sourcing teams don’t even track the frequency of their engagements with suppliers. These events are more often than not held solely for essential commodities and suppliers. This lack of agility hampers a team’s ability to act strategically.

For leaders, frequent engagement allows organizations to scale strategically and intelligently. They can be proactive and, by spending less time fighting fires, are able to capitalize on opportunities. This allows them to gain an edge over their competition. And that is a key part of what makes them best-in-class.

Scale Strategically, Scale Intelligently

In today’s lean team environment, it is impossible for sourcing teams to scale with the same level of strategic control across the entire direct materials spend profile. There simply isn’t the time or bandwidth to manage all suppliers in this way. So, sourcing teams have to strategically choose when to engage in negotiation or when to directly collaborate with suppliers on new sourcing of capacity and lead time risks.

In organizations with a shortened cycle time,more frequent engagement with suppliers, and improved information, allows greater oversight of suppliers who would otherwise go unmanaged. Bringing a wider set of cost drivers under control has a direct effect on product margins.

But to do this with a lean team requires more than working hard or even smart. By leveraging a cognitive sourcing platform, leading organizations have scaled their strategic coverage to 80% of supplier-related spend on at least an annual, if not more frequent, basis.

Continuous Sourcing

Proactive engagement with suppliers regularly allows organizations to mitigate risks and seize opportunities more effectively. Industry leaders are using cognitive platforms to engage with suppliers on an as needed-basis instead of on a fixed calendar basis. That means when a shift in the market happens, or when raw material costs change, they can immediately interact with the suppliers. These teams are scaling with access to new intelligence that allows them to engage more appropriately in terms of relative spend, strategic importance and potential opportunities.

Strategic Sourcing

Unlike the majority of the pack, teams who spend over a quarter of their productive time “fighting fires,” best-in-class organizations spend well under 15% of their time on the same reactive tasks. Not surprisingly, there's a high correlation between those organizations and the adoption of purpose-built AI or analytics systems to leverage for their job processes.


Naturally, organizations which have access to agility can respond to external influences and changes in the marketplace faster, giving them a competitive advantage. This is possible because of the following factors.

Reduced Cycle Time

It was evident in our research that best-in-class organizations engage with their suppliers and react to external events quickly. This is because they have collapsed the time required for RFQs and RFIs while enabling a parallel negotiation cycle. As a result, they can prepare, negotiate and award an astounding seven times faster than average organizations.

Best-in-class organizations can sense a risk or opportunity before it happens, giving them time to evaluate it, make a strategy, plan a negotiation, engage with all stakeholders including suppliers, come up with a better answer, lock it in, and move forward faster than their competitors.

On the contrary, in average organizations, preparation for a sourcing event involves receiving data from suppliers, along with that inherent bias, or else manually extracting it from other sources in a labour-intensive process. Before a sourcing event can begin, fine-tuning data, scrubbing the analytics, and getting stakeholder buy-in is required. Developing negotiation materials means extracting data from sourcing tools to feed into BI tools, or else working with data independently in a spreadsheet. The final analysis is done outside of the system and requires stakeholder and other internal approvals to validate disconnected data points.

Meanwhile, leading teams have an AI-enabled platform that cleans data continually and generates baseline analysis automatically. Because of this continuous, always-on nature, these platforms can identify negotiation opportunities and even automatically reach out to suppliers with whom they share an open-book relationship. Before awarding a bid, Category Managers receive aggregate bid data with relevant insights and recommendations attached. And this is what allows them to prepare, negotiate and award in 4 days, unlike average organizations which take 31 days to the same task leading to a massive performance gain.

It is evident why that such frequent supplier engagement, strategic sourcing, and agile workflow allows leaders to get ahead of the pack. And this is possible predominantly because of the AI and analytics that allow for cognitive sourcing.

April 24, 2019

Digital Readiness: The Importance of Being Prepared

The sourcing and procurement industry is facing a daunting challenge. According to our Cognitive Sourcing Survey 2018, a substantial majority (85%) of senior executives involved in direct material spend agree that companies must devise a data-driven, digitally-assisted procurement strategy to match the competition and compete in the industry. Currently, a majority of these executives feel that their teams are not ready for this digital transformation.

One of the leading factors separating industry leaders from average performers is digital readiness. Digital readiness describes how prepared an organization is for a widespread digital transformation. Many factors contribute to whether or not an organization is ready to adapt to a digital change. Organizational structure, corporate culture, available skills and talent, and the digital environment are some of the most important.

Based on our research, there are three primary reasons why organizations are unprepared for this change:

Skills And Talent

A primary concern held by many executives is whether existing teams have the right talents and skill sets to adapt to new technologies. More than half (54%) of the executives we surveyed are not confident their teams are ready for the coming change. Companies can overcome this challenge, but it requires investing more in the assessment, training, and preparation of their professionals.

Sources of Insight

In an industry where the primary focus of investment (approximately 80%) is still enterprise sources of insight, many organizations have difficulty getting and interpreting data about their external environment. Even in cases where they have the necessary insight, they find it challenging to take concrete action on it.

Ideally, a world-class sourcing and procurement organization monitors at least 1.5 million data points affecting the supply chain annually. However, it is not usually access to data that holds struggling organizations back. What they lack is a system to generate insights from the available information.

Supplier insights and market intelligence are readily available, but they are fragmented, incomplete, or out-of-date. Organizations need to have a system in place that can turn this data into information to provide them with a 360-degree perspective of their operating environment.

90% of organizations are leaving valuable sources underused. These sources include:

  • Market intelligence on sub-commodities from third-party research, analysts and published indices.
  • Benchmark pricing for standard parts from distributors or third parties.
  • Community insights from peer companies engaged with similar commodity groups or strategic suppliers.
  • Contextual insights into supplier financial health, raw material input costs, foreign exchange, and news sources.

Tapping these sources is a big step for organizations moving ahead in their digital transformation.


Another factor preventing digital readiness is the use of outdated procurement toolsets. Excel continues to be the go-to tool for 61% of the organizations. Not just that, organizations are still using Excel-based data warehouses to aggregate enterprise spend history. While Excel was a transformational tool back in the 1990s, it has limitations and can’t compare to purpose-made sourcing software.

The usage of Excel leads to the proliferation of “silos of data and analysis.” These silos are challenging to integrate, impede collaboration, and require time and effort to manage. What’s needed is a comprehensive platform, a dynamic environment where information is on-demand and models can be created to test strategies and assumptions.

Digital readiness is an essential consideration in an organization’s overall digital transformation strategy.  Achieving readiness requires investing in training, managing sources of insight, and integrating systems holistically. Only then will they would be able to match up with best-in-class organizations that have already pulled ahead in the race.

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