From Rainer den Ouden

Life as a consultant 20 years ago was fundamentally different from today, and customers‘ expectations of a consultant were also different. If you had to portray the term „consultant“ in charades, would you still tighten your tie, close your jacket and pull your rolling suitcase imaginary behind you? Would you still be thinking of the business clown, the delightful skit from the bullyparade, the hotel permanent residents like George Clooney in „up in the air“, the funny consultant lexicons, the rows of dark suits in the fastlane at the airport?

A nice client request published in a recent pitch was „less glitz more substance“ as a requirement for external consulting services. Nearly 10 years ago, renowned Harvard professor Clayton Christensen predicted a fundamental shift in the consulting industry. And today?

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From Oliver Kreienbrink

If you leave Mumbai to the north via National Highway 8, you will come to the city of Vapi after about 150 km. Situated on the Daman River, many industries have settled in this old trading town. In the past, many of them were in the textile industry, but today 70 % of them are in the chemical and healthcare industries.
However, Vapi is not famous for its more than 1,400 industrial companies; in recent years, Vapi has regularly made it onto the list of the 10 dirtiest cities in the world. It has long been the dirtiest city in India. I had the dubious pleasure of working just north of Vapi around 2010 and will never forget the stench of the air and streets in the greater Vapi area.

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From Rainer den Ouden

At present, we hardly encounter any companies that do not consider the topic of sustainability important and want to address this issue. The political discussions and a possible new federal government with a clear focus on the topic, which also clearly places the economy under an obligation, increase the pressure on companies to deal with this topic.

Unfortunately, it is particularly noticeable among our medium-sized customers that orientation in the jungle of the many influences of sustainability is difficult. This jungle is constantly in motion and above all so diverse, be it customer and competitive requirements, political and legal framework conditions, changing societal and social norms and environmental requirements as well as internal influences of one‘s own organization and employees.

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From Gregor van Ackeren

Modern risk management is not an abstract instrument exclusively for companies listed on the stock exchange and exposed to the capital market. In fact, it has become the order of the day for most market participants in view of increasing global supply chains in the last few quarters. With today’s uncertainties, risk management is becoming an increasingly important management tool for entrepreneurs operating sustainably – also and especially in the SME sector. Supply chain disruptions due to the effects of pandemics or extreme weather phenomena make it more necessary than ever.

The events as such are not fundamentally predictable in individual cases – especially with regard to the exact time of a possible occurrence. However, it is a fact that due to the strong interconnectedness of global value chains, vulnerability to unforeseen events has increased exponentially in recent decades. Sustainable risk management takes into account a differentiated view of possible loss occurrences, taking into account global and regional developments.

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From Gregor van Ackeren

The trends we found in our survey of over 100 SMEs in July and August 2021 has a „new“ KPI that seems to be taking root: carbon footprint. Was this overdue? The fact is that in Germany in particular, but also in many EU countries, the rapidly increasing pricing by the state regarding to CO₂ emissions is turning this into a significant business factor. At the same time, products, services and thus also companies as such are perceived in the market and by consumers as being responsible.

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From Rainer den Ouden

No matter how much one may support or be critical of the legal regulations to promote plug-in hybrid and electric vehicles, one has to admit that the incentives seem to be working, at least in the company car environment. On the one hand, procurement and fleet managers are happy because they receive a significantly lower finance lease rate thanks to the subsidies, and on the other hand, they even have a more favorable full-service rate. In addition, the company car user is thrilled by the at least halved taxation, because he has a lower monthly charge for the same performance.

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From Tim Rohweder

It is obvious how the Covid 19 pandemic is fundamentally changing our business life and that of most of our customers. The current situation has led many of our customers to explore new avenues. And to make process optimization an integral part of their overall strategic planning.

It is primarily these companies that are mastering the crisis comparatively well with the help of intelligent process optimization. The stringent digitization of relevant and, above all, previously audited business processes is now showing its benefits. Even in difficult environments, processes can be maintained in a stable manner.

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From Oliver Kreienbrink

People tend to focus on things that don’t work. „The supplier does not deliver good quality.“ or „we only have complaints with the delivery“ or „but the savings were planned higher“ are daily feedback to the procurement department. No one will pick up the phone for feedback such as: „We were able to produce today as we had planned, there was enough material“. Therefore, as a purchaser or procurement manager, you quickly get caught up in the day-to-day business.

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From Tim Rohweder

In the past, Chief Procurement Officers were measured primarily by their ability to deliver value chain savings. Without question, cost reduction will remain critical in the future. But with the advent of digital networking at all levels, procurement and supply chain officers are in a position to generate significantly greater business value.

With networking and innovation within the rapidly evolving ‚Artificial Intelligence‘ (AI) and the ‚Internet of Things‘, CPOs can gain insights from a multitude of seemingly unrelated data and focus on strategic priorities such as strengthening supply chain resilience, protecting the brand from third-party risk and tapping into new sources of innovation.

From Gregor van Ackeren

Sustainability and ethics are no longer a trendy topic in business life and consumer behaviour but are increasingly anchored in the reality of consumers. This anchoring in consumer behaviour is forcing industry – across all sectors – to act if it has not yet addressed this in its own value chain.

It is no longer enough to act sustainably and ethically in the company’s own value creation, but also in the management of the supply chain, i.e. purchased value creation.

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From Tim Rohweder

The past year has presented us all with enormous challenges – whether private or professional. Those who were able to master them can count themselves lucky. We have witnessed historic moments when the future changes direction. So-called deep crises. The world as we knew it until February 2020 is dissolving. Behind it, a new world is coming together. The task for today’s leaders is to anticipate its formation.

The focus must therefore be on the challenges and tasks immediately ahead. But what will these be in the areas of procurement and supply chain?

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From Rainer den Ouden

The fact that resources are becoming increasingly scarce and material is not infinitely available is neither a secret nor a revelation. The changeover to sustainable materials and renewable resources is therefore logical and sensible. However, this is often associated with significant restrictions in design and function or even technically impossible. The UN warns that the annual global consumption of resources will double by 2060 and that greenhouse gas emissions will continue to rise dramatically. At the same time, the World Bank estimates that global annual municipal waste will have increased by 70 percent by 2050.

In 2016, on average only 12 percent of the material resources used in the EU came from recycled products and recovered materials. But have we picked up speed here in the last five years?

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From Gregor van Ackeren

The vulnerability of global supply chains has been clearly visible not only since the Covid19 pandemic. Regional conflicts, trade wars, protectionism, etc. repeatedly put supply chains, which are very complex in many areas of industry, to the test. The effort to keep them stable for the own company is increasing. The associated risks can under certain circumstances assume existential dimensions.

Global sourcing, which has been propagated in all areas of the economy since the beginning of the 1990s, initially had one goal – cost efficiency. By including new production markets, which could and wanted to supply at first at low cost and then in terms of capacity and increasingly also quality, this was a strategic focus in order to maintain or expand one’s own competitiveness.

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From Oliver Kreienbrink

If one takes the basic concept of game theory, procurement and sales achieve a positive result for both sides when both close to their own goals for a negotiation. This only works if the zone for an agreement (in which min/max ideas from both sides overlap) is large enough and still contains a margin (negotiation measures) for both sides.

Incited by bonuses, etc., both sides have the goal of achieving more through intransparency, of being smarter than the other side, of playing out their position of power. Everybody wants to make money, max. Either by better purchase prices or still higher selling prices. Often both parties see negotiations as a fight.

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From Tim Rohweder

Our publications regularly deal with how successful procurement organizations tackle and master challenges and what resources are needed to do so. In this context, we repeatedly point out the considerable importance and the essential contribution that efficient supplier management makes in this context.

Mastering the dynamics of the legal framework (most recently e.g. DSGVO, currently the German Supply Chain Act) is currently only one of the major challenges facing modern procurement organizations. The identification and management of the relevant economic, ecological and social business risks is another permanent challenge.

Last but not least, the permanent pressure to succeed on procurement is also evident in the day-to-day race for the value contribution of procurement to corporate success.

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From Tim Rohweder

For some time now, we have accompanied the developments and discussions surrounding the introduction of the Supply Chain Act for you in our publications. In this special issue of our „Insight“ series we would like to promote an offensive approach to this challenge. To this end, we outline and concretise a management approach for practice that meets the emerging requirements, the corresponding cornerstones and also the necessary instruments.

In 2016, the German government adopted a „National Action Plan“ (NAP) to implement the „UN Guiding Principles on Business and Human Rights“, which were established in 2011. The logical consequence of this is the law that is now also being sought at the European level to ensure consistent compliance with human rights at every stage of global supply chains. This is particularly logical because the shortcomings of the majority of German companies in dealing with the voluntary self-commitment to date are considerable and obvious^1,2 – as are fear of contact and helplessness.

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From Rainer den Ouden

In the current edition of Harvard Business Manager (July 2020), authors Rita McGrath and Ryan McManus discuss in their strategy paper „Starting small and letting it grow“ the challenge for established companies to face the digital challengers. According to the authors‘ experience and underlined with some examples, the reaction is usually to question the entire business model and invest millions of dollars to become the ruler of new ecosystems. The authors‘ solution is a step-by-step and experimental approach by adopting digital change as a learning process. The adopted learning process should not lose sight of the customer and not forgetting one’s own talents on the journey.

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From Rainer den Ouden

The past few weeks have presented us all with a variety of challenges, be it workplace and working time organization with home office, video conferencing, home schooling and other childcare. But also, the financial burden on our companies, short-time work and unstable global supply chains. Creative solutions were sought and found, and companies with good crisis management were particularly successful. Now that we are enjoying the first loosening up and a feeling creeps in as if „Corona is over now“, and everything returns to normal. But from our experience there will be no return to the old normality. There are historical moments when the future changes direction. We call them bifurcations. Or deep crises. Those times are now.

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From Oliver Kreienbrink

During the first phase of the SARS-COV2 crisis we had contact with many of our current and former customers and discussed the issue with them: How well has their procurement come through the crisis and what are the challenges for the post-crisis period, the ramp-up? The colleagues of ADCONIA always discussed the categories satisfaction, communication, responsibility and motivation in relation to the procurement department and the buyers.

For us, the basis of the consideration was the question of whether and how different types of leadership or project management influence the performance of a team in a crisis.

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From Gregor van Ackeren

The crisis triggered by COVID-19 globally, and thus also in Germany, is affecting the supply chain, i.e. the supply chains of medium-sized businesses, to an increasing extent. The fact that this becomes particularly obvious in the crisis is a painful awakening for many entrepreneurs.

To be honest, it is an awakening from a self-chosen sleep or a widespread lethargy with regard to the stringent and professional management of their own supply chains and suppliers through supply chain management and procurement.

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From Oliver Kreienbrink and Gregor van Ackeren

In every crisis there is an opportunity. How often has this statement been heard in the past, both in private and professional life. However, none of us in our generation has ever experienced a crisis like the one currently being experienced due to the corona virus, in human interaction and also in the economy.

However, as with every crisis, there is a certain master plan. In the beginning there is always first aid. Once an emergency has become known, the necessary staff members organize themselves, make an initial diagnosis and provide first aid. This is followed by stabilisation and, if necessary, the combating and treatment of symptoms. This sequence of a paramedic intervention can be adopted as a blueprint for dealing with crises in companies.

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From Tim Rohweder

In recent years, the importance and opportunities of digitization for procurement and supply chain management have been repeated almost like a prayer wheel. Procurement is no longer seen exclusively as a cost-cutting or even ordering office, but rather as a strategic unit with its own value contribution to the corporate result.

In our view, however, traditional reflexes still stand in the way of fully exploiting the effects of digitization. Too often, new solution concepts and technologies are judged primarily by their short-term cost-cutting potential – and not by the long-term efficiency effects of a systematically digitized supply chain.

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From Oliver Kreienbrink

Changes have always frightened people at first. „Why change when everything is going well?“ is a universal statement. It starts with the little things in everyday life, a new cereal for the children, a new construction site on the way to work, a new instruction at work. For many, it breaks routines that people have become accustomed to. And without giving reasons, such changes are difficult to accept. This is where change management from a business perspective is called for.

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From Oliver Kreienbrink

The demographic change and the increasing number of retired employees are not only a capacity problem for companies, but also the danger of losing experience and knowledge. This is where a structured succession plan for retirement is needed. Recruiting specialists from abroad and qualifying your own employees or career changers are important and correct steps. But how are they qualified at the specific workplace, if the experience and knowledge have already been retired. And this does not mean the already documented instructions or process descriptions, here it is rather about unique knowledge about the special circumstances („the behavior of a plant“, „the evaluation of an analysis“ or „the order of a certain person“), about experience-based qualifications.

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From Gregor van Ackeren

The times in which global sourcing was an exotic specialty for companies and was often reserved for large corporations are long gone. No medium-sized, industrially producing company has been able to assert itself successfully in the past 25 years if it had not optimized its procurement processes and supply chain as part of a global sourcing strategy. Whether this is done directly by an independent sourcing organization or indirectly via service providers varies depending on the industry and size of the company. It is a fact that global sourcing has become a constant factor in the strategic planning of almost all companies in order to ensure optimal, competitive development and use of raw materials, products and production capacities worldwide.

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From Tim Rohweder

The goal of every buyer is to increase the value contribution from procurement to the company result. The main cost levers and drivers are generally known. In most procurement departments, specialists work on optimizing or using individual levers – e.g. the expert for digitization issues or the colleague who has many years of operational experience with alternative supply concepts.

But who can ensure that all cost levers – e.g. the design of financial flows, the increase of (process) compliance or the possibilities of active cost control – are considered and drawn with sufficient efficiency and competence?

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From Oliver Kreienbrink

Significant optimization in the context of restructuring can be achieved through procurement and supply chain management – regardless of the triggering event. Whether it’s the need to restructure a company in case of financial difficulties, to reduce complexity after a merger or to remove historically grown structures from the supply chain, supply chain management can set the right and important course. And with many possible KPIs, whether to reduce costs, free up capital or reduce time-to-market times. The options in the restructuring process are manifold.

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From Gregor van Ackeren

The famous first 100 days in a new position are formative. Expectations, uncertainties, hopes, dynamics, concepts, goals, plans, etc., from the point of view of the new employee on the one hand and the various stakeholders on the other.

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From Gregor van Ackeren

Over the past three years, the topic of „sustainability“ has become a determining factor in all areas of society. Sustainability is now part of the considerations of consumers, manufacturers and politicians. A future-oriented corporate strategy either already contains „sustainability“ as a central component or has to include it in the short term.

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From Rainer den Ouden

To describe sustainability in the supply chain as an innovation or a current topic would somehow be misplaced in view of the large number of publications and years of discussion. And yet those responsible for supply and value chains have often seen sustainability as a requirement or even a challenge and not as an opportunity for an entire company to strategically realign itself.

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From Rainer den Ouden

Ideas for necessary changes and optimizations are often quickly identified, the great danger of failure often lies in the question of how to get the people affected by these changes to accept the change. A central role in these change processes takes over the executive. Every manager will now say „of course“, but the path is the most important thing here. „Leaders don’t force people to follow – they invite them to a journey“ Charles S. Lauer once said aptly.  Changes can only be enforced to a certain degree or enforced through sanctions. In such cases, however, ways out of the changed situation are sought at the first opportunity, especially if the affected person does not see any personal advantage or even a disadvantage in the change.

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From Oliver Kreienbrink

One thing will not change for procurement managers in the future: the annual cost targets set by the management. And these not only relate to external costs and expenses, but also to internal efficiency. For almost 20 years I have accompanied the supply chain and procurement department on projects and have got to know three types of procurement managers on this issue: the doubter, the tactician and the visionary.

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From Oliver Kreienbrink

The increasing number of rather pessimistic forecasts for economic growth (e.g. OECD, IMF, Wirtschaftsweisen, IDW) are seen by many companies as the first warning signs that they will have to do more of their own homework again. In times of growth, the signs regularly point to order fulfillment and revenue generation. This usually involves investments in sales, administration and production.

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From Tim Rohweder

The shortage of skilled personnel in procurement currently accompanies us almost permanently as a challenge in our consulting activities. There is hardly a customer with whom we do not discuss not only the issues of digitization but also how his team can be qualitatively and quantitatively improved and above all made fit for the future. And there is hardly a customer, especially in medium-sized businesses outside the economic centers, who has problems with the qualitative adequate filling of positions in strategic procurement.

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