Strategic Sourcing Pulse

  As the U.S. braces for an Arctic outbreak expected to bring catastrophic cold weather across much of the country in the next two weeks, it is imperative for supply chain professionals and businesses to prepare. The forecasted temperatures—20 to 30 degrees below average—could rival the historic Texas freeze of February 2021, which caused widespread power outages, halted resin production, and triggered force majeure declarations across multiple industries. Here’s a detailed guide on what we can learn from past events, the current weather situation, and actionable steps to safeguard operations during this critical time. 1. Lessons from the 2021 Texas Freeze In February 2021, an unexpected deep freeze paralyzed Texas, exposing vulnerabilities in the energy grid and supply chains. Here's what happened and what we can learn: Energy Infrastructure Failure : Texas experienced massive power outages as the state’s grid, operated by ERCOT, failed to withstand the surge in demand and cold-re...

 Managing suppliers for each commodity can significantly impact a company's costs, risks, quality, and relationships. In this blog, we'll explore strategic approaches to maintaining different numbers of suppliers in an intuitive and engaging way. This guide aims to help purchasing managers develop long-term strategies, complete with real-world examples for easy understanding. Single Sourcing Strategy: Leveraging the Power of One Supplier A Single Sourcing strategy involves contracting with just one supplier for a specific commodity. This approach is ideal for situations where building a strong, close relationship with a supplier can enhance quality and technical capabilities. It is particularly suitable in the following cases: When high-level technology or patented products are required When a long-term trust relationship with the supplier is important When expecting cost reductions through large-volume purchases For example, Tesla collaborates closely with Panasonic for i...

Logistics automation is the holy grail for many companies looking to cut costs and boost operational efficiency, but the road to success is often paved with challenges. Today, let's dive into the reasons why logistics automation fails, the lessons learned from these failures, and how companies can overcome these obstacles. We'll also explore global leaders in logistics automation, analyze their strengths and weaknesses, and finally, provide a practical roadmap for companies to achieve successful logistics automation. The Pitfalls of Logistics Automation: Why It Often Goes Wrong Companies often struggle to automate their logistics processes, and the reasons behind these challenges can be broadly categorized into four key areas: Initial Investment Costs : Automation is costly—installing and maintaining automated systems can be a heavy burden, particularly for small and medium-sized businesses. Lack of Adequate Planning : Without a thorough understanding of current processes and w...