Etosha Thurman: 0:04

There's no perfect path to a digital outcome. I really believe that the first step is taking an internal look at your processes today. Let's start from source to pay and really map out how do we decide our sources of supply? What processes do we have? And start to see where is it that we have email interventions, or interactions, that cloud visibility. Can I see what's happening here? And if the answer is no, that's a great place to look at digitization

Tom Raftery: 0:32

Good morning, good afternoon, or good evening, wherever you are in the world. This is the digital supply chain podcast. The number one podcast, focusing on the digitization of supply chain. And I'm your host global vice-president at SAP Tom Raftery. Hi everyone. Welcome to the digital supply chain podcast. My name is Tom Raftery with SAP and with me on the show today, I have my special guest Etosha. Etosha, welcome to the podcast. Would you like to introduce yourself?

Etosha Thurman: 1:00

I would love to introduce myself. Thank you, Tom. I am Etosha Thurman. I'm the Chief Marketing Solutions Officer for SAP's intelligence spend in business network line of business.

Tom Raftery: 1:11

Nice. What's an intelligent spend and what's that all about?

Etosha Thurman: 1:17

That's what I've been trying to figure out, Tom. Uh, so Intelligent Spend is really, the way that we look at spend management, how companies manage the resources they have to buy the things that they need to function. And then the business network is the way to extend the collaboration of your supply chain outside of your four walls. We have the largest B2B network and we really look to, be able to bring value to buyers, suppliers, logistics, providers, service providers, in collaborating in those essential business processes that help make businesses run.

Tom Raftery: 1:51

Okay. And this is essentially procurement, right? Is this just a fancy name for procurement or is there a difference between what we're calling Intelligent Spend and procurement?

Etosha Thurman: 2:02

Oh, it's interesting that you asked that question. I think procurement is a key function, but you also have supply chain in the mix you have. HR in a mix of Intelligent Spend because they source things like contingent labor. So, when we talk about Intelligent Spend, we're talking about end to end spend management, whether that's your direct materials, indirect materials, contingent workforce, travel and expense processes. It's how do you get compliance, the processes across all spend management. How do you get insight to be able to intelligently make decisions on how and where you spend, and then how do you drive the collaboration to bring in efficiency and effectiveness in those spending and transaction patterns?

Tom Raftery: 2:44

Okay. Interesting. And we're in a kind of a weird time at the moment where we've just come through a pandemic. We had things like Brexit before that. We have a war in Europe. We're heading into more disruption down the line. Supply chain has come very much to the fore in people's minds. It used to be seen as a cost center somewhere where you could cut costs very much, but that's changed, right?

Etosha Thurman: 3:10

Absolutely. I don't think we could have predicted such a disruptive period of time. What's crazy is as soon as you think, okay, we got a handle on COVID, we know how to behave in an environment that COVID exists, you start to have labor challenges, people redefining, re- thinking how they choose to work, and then you start to get over some of the labor challenges, but you have the backup create a specialty in supply chain with ports and trucks. Then you think, okay, we're starting to see ease from that impact. And it may be, I should say, it's not just the labor challenges that happen with people rethinking how they want to work. But guess what consumer patterns changed? I'm at home, I'm ordering everything to come to my house. I'm not going to pick up what you already have in the store, right? And how I respond to that? And so it just created this amazing thing. And then we think, okay, we're finally starting to ease up on the unthinkable. We have a war in Europe. That's impacting, not just the people that's being significantly impacted, but the fallout from that, from supply chains, that depend on materials and food source from that area. It's been pretty incredible if you think about it. You see the results, that procurement and supply chain though already strategic have elevated even further. In terms of importance and guidance in the boardrooms of companies across the world. It's fascinating. I started my career as a practitioner in procurement, for Procter and Gamble many, many years ago. Our main focus was supply insurance and cost savings. With cost savings, probably be a number one. And how do we strategically source, how do we ensure that our plants never go down from lack of materials, right? But if you think about the job today it's so much more complex; it's so much more integrated into the overall success of business. It's really fascinating to watch. and I tell you, I feel pretty honored to be able to help bring solutions to those, chief supply chain officers, chief procurement officers, chief finance officers that's trying to figure out this crazy world we're living in today.

Tom Raftery: 5:17

And for me, procurement is really a black box. It's not an area I've ever worked in. I want to think that if I am a procurement officer, the way I get costs down is I give big orders to companies. So I get reductions based on the size of the order. But the flip side of that is, if I do that, then you are going to a single supplier often, and that's a risk in its own, right? Because if that supplier has an issue, if maybe that country is blockaded, if they go into a lockdown, how, do you manage that? Or is there a lot more to procurement than doing that?

Etosha Thurman: 5:54

First, yes, a lot more than. And I would say that's a strategy for getting costs down. Well, let me just give you a little bit of all that procurement desire. I think I could talk for hours about what it does, but I'll try to consolidate a few key points.

One: 6:09

procurement isn't really just about cost savings. That's a benefit of being really good at what you do. It's really about, supply assurance. I need to have the right supply, whether that's direct, indirect labor, services. I need to have the right supply in place to support the creation. Let's call it creation a function of my organization, whether that's creating goods or whether that's being able to provide services. But I need to be sure that I have the right supporting supply to do that. And I also want to do that. If I'm smart in procurement, I want to do that in a differentiated way, which is where cost savings come into place. I want to be smarter than my competition and getting cost savings isn't just about bulk buying and getting a price discount. There's many things that you can do. One is like location strategy. If I'm closer, if I can get my supply close to where I need it, I am going to save money. Because my logistics costs are reduced. If I can develop and innovate with my supply base, I can develop, innovate any efficiencies out of the manufacturing process. So, I can save money in that way, even if I'm not buying in bulk, because my tolerances are such that the supplier can be more efficient, they can charge me less. They have less waste. I pay less. It's a differentiated approach. Some of what I'm talking about strategic procurement professionals do in a process called category management. It's looking at, what sources of supply do I need? Where can I get them? Who are the strategic sources of supply? Should I innovate there? Which places do I allow these different sources of supply to fulfill and then how do we develop the market together? And the category management is really looking at the overall business picture of the relationship versus just the transaction of selecting and buying from a supplier. Now you don't do that for everyone. You're not going to do that to buy, like, as an example, office chairs, unless that's your service and that's a key critical part of your business. But for those critical materials, that's part of what procurement does. So, think about the complexity that's happened today, I've had my, vendor base, my supplier base. Now if, how do I know one, do they have what they need to supply me? And can they supply me at the volumes that we've agreed to? What's changed in terms of logistics before? Maybe it was feasible for me to ship things through ocean liner over to where I need them. Does that make sense , if we have ports shutting down because of COVID even now in parts of the world? Do I need to start thinking about, even though I may pay a little bit more on a per unit price, I'm paying a lot less from a freight price if I move something closer in? How do I start to have those thoughts, those conversations? Then of course there's the geopolitical issues. That's also causing thoughts of how do I assure supply that I have what I need when I need it to keep my critical business processes operating, so that can meet the expectations of my customers. In my opinion, and I'm very biased, I find it fascinating function.

Tom Raftery: 9:17

Sure. Sure. obviously it is, like I say, it's a bit of a black box to me. I mean, how do you, do you manage your supplier base then?

Etosha Thurman: 9:24

This is one of the critical things that companies come to all. I hear often from CPOs and chief supply chain officers I need better tools for supplier management. I mean, just the tactical of who are they? I need to know my supplier, how do I verify who they are, and then how do I collaborate with them? How do I know what their capacity is? How can I share what my forecast is? How can I send orders to them? How can I get clean invoices back? All of these are supplier management challenges, but let's just stick with knowing your suppliers. and being able to do that when it's not on spreadsheets and paper. SAP has solutions like supplier management, where you can create tools that allow you to have efficient ways for suppliers to tell who they are for you to bring that into your master vendor data, and then be able to clean transactions through that knowledge of who the suppliers are. And then we offer solutions like supplier risk that helps you understand, hey, is this supplier financially healthy? Is this supplier reputationally healthy? Because in this day and age, you're not just responsible for the actions of your company. If your supply chain does things that's untoward or against what your company stands for, it's a black eye on you as well. And then most recently, and I say most recently, let's say last 10 years, another consideration is I want to be a good corporate citizen. I have sustainability goals out here. How do I start to understand the carbon impact of my full value chain? What's these individual suppliers impact to my carbon footprint and is it acceptable? Cause I want to source green. I want to create green. And so I'm starting to become aware of, who am I leveraging in my supply chain? We're continuing at SAP, you know, we, feel like we are being leaders in how we help our customers understand their carbon footprint across their entire supply chain. And where we are today, we can help do that and we're consistently innovating on easier ways to have that be a quick key criteria in how you source, where you source. So it's exciting to see, not only what's available, but think about it. This then moves your chief procurement officer as a key executive to drive very large initiatives for the company, not just keeping supply assured but also how can we meet our sustainability goals. How can we meet our ESG goals? How we source, where we choose to invest, that intelligent spending can be a differentiator and have huge impact on the company's abilities to do that.

Tom Raftery: 12:38

And if I want to be investing in minority owned businesses, for example?

Etosha Thurman: 12:44

Absolutely. We have this solution called SAP Ariba Discovery. It allows you to find suppliers that are outside of your current supplier community? So, if you're looking for a woman owned business, if you're looking for a veteran owned business, this is a tool that you can say, hey, I'm looking for someone in this category to help me go and, supply these things. But I want diverse sources of supply within my supplier community. And it's hard to do on your own. When I was at Procter & Gamble more than once I had to bring in new sources of supply and it is a chore. So, to be able to leverage a tool like Discovery to help find supply that you're unaware of, it's a great benefit and it's exactly why we have the solution available for our customers.

Tom Raftery: 13:27

Okay. Interesting. And I mean, we mentioned disruption at the start, but there's more disruption coming down the line. We know that, for example, there's likely to be food shortages in north Africa and the middle east in the coming months, which will lead likely to civil disruption. And there's going to be more we can't anticipate happen next year, the year after. How can we help with that?

Etosha Thurman: 13:51

It's a great question. I think the first thing is, different companies are on different paths to driving transformation and procurement. And when I talked to CPOs in particular, you know, they're always talking about the continued journey, on digital transformation and procurement processes. And what we found since COVID is the acceleration of that. How do I get manual processes out because I need to be agile. I need visibility into my supply chain. I need to be able to adapt and absorb supply chain disruption. And the only way that you do that efficiently is through technology and through digital collaboration with your supplier base, with your supply chain community. The way you do that is I would hope everyone is sort of, I would love for the entire world to leverage SAP, but it's really digitizing those processes. Do you have a way to share, like I said earlier. Are you connected digitally to your suppliers or your logistics providers through things like the SAP Business Network where you can share, here's what's happening for me from my customer demand, which means I need these things from you and be able to, again, write in your ERP, get a response that says I can confirm half of this order, but the other half you got to get somewhere else. And then are you able to still from a digital standpoint, find that second source or third source or fourth source of supply to be able to meet the demand that you have? So the way we're helping is by providing solutions like the SAP Business Network that allows you to find sources of supply when you need it, that allows you to share that information, whether that's orders, forecasts, ship notices, to know what's really coming and when. It's being able to insert transparency and collaboration into those processes through technology. For SAP, I really feel we're uniquely positioned to be able to do end to end collaboration. So all the way from your forecast down through payment. Being able to bring in that collaboration and visibility, transparency, agility. Through every step of that, those processes, that source to pay process with your trading partners.

Tom Raftery: 16:07

Okay. And a lot of people have gone down the. single-source route, which has more recently been shown to be a little bit riskier than had been anticipated. Are people starting to reduce risk and how do they do so? Is it by multi-sourcing or? What's what's the, what's the best. I'll try that again. What's the best tactic or strategy there?

Etosha Thurman: 16:30

It's a good question. You know, when COVID first started and everything shut down, there was speculation that people, that globalization will be dead. Right. And we're really going to have to pull it out of globalization in order to achieve that supply assurance which is top of mind. But I don't believe that to be true. I think they're always going to be an element of globalization, in the market and in how we interact. Because we are globalized world today. Right. But what I do think we are seeing, and I think we'll continue to see is this, multi-sourcing. So, I may still have some parts of my supply that comes from far reaches of the world from where I may be situated, but then how do I develop sources of supply in other areas closer to home, further away. And maybe they're not my preferred supply, but they're part of, my supply web, right? It's like, there's an article in the Wall Street Journal that says the supply chain is morphing into a supplier web, right? Supply web, where it's not really about that linear one source, one source, one source all the way down, but it's really the connecting the web that connects multiple sources of supply to give that agility and that adaptability to companies, as they're looking at, how do I continue to maintain supply assurance. The thing that's going to be most interesting about it, Tom, is that if you think about just going from a supply chain to a supply web, how do I have that visibility? How do I have that efficiency? If that's my reality, when what I'm normally used to is that one-to-one connection to drive my supply chain. If you're not thinking about digitizing your processes today, you're really at a disadvantage.

Tom Raftery: 18:12

Okay. And for people who might be listening, what's the best first step, our first two or three steps to digitize their supply chain?

Etosha Thurman: 18:22

It's a great question. I get asked this all the time and you know, there's no, perfect path to a digital outcome. I really believe that the first step is taking an internal look at what's you know your processes today. Let's start from source to pay and really map out. How do we decide our sources of supply? What processes do we have and start to see where is it that we have email interventions, or interactions that cloud visibility? Can I see what's happening here? And if the answer is no, that's a great place to look at digitization. And so if you go from source to pay and look at that process, map it out internally, it makes it a lot easier for you to approach a vendor as a software provider and say here's my process and here are the points where I really am missing collaboration, where I'm really missing transparency. And then, SAP can come in and say, awesome. You know what? You're having a hard time getting into a multi-source solution. Maybe your first path to digitization is looking at a source to pay or our sourcing suite, let's just start at the beginning. Or maybe you have an excellent process for getting sources of supply in, but you're really struggling on the execution part and having visibility and efficiency on the execution part. So, then we could come in and say, well, it looks like what you need is a procure to pay solution for us to help be sure that you, what you've sourced is what's getting on a purchase order what's going to come and back on the invoice. So, you're capturing those negotiated rates and you're also bringing that transparency and efficiency in the collaboration that happens between the

time you say: 19:59

I need this material. Can you supply this volume at this price? When will I receive it? I received it and the invoice matches everything I was expecting. So, there's no one way to go about digitization. It's really looking at your process and understanding where it's most occluded, and where you have the most difficulty in the handoffs. SAP will meet you where you are, and we will help work with you to drive what you need to get to the outcomes that will help you better differentiate, better succeed in the market.

Tom Raftery: 20:31

Fantastic. Etosha we're coming towards the end of the podcast now. Is there any question I have not asked that you wish I had, or is there, is there any aspect of this that we've not brought up that you think it's important for people to think about?

Etosha Thurman: 20:44

You know, there's one piece I didn't touch on. And it's one that may be a lot of times, chief supply chain officers and chief procurement officers don't necessarily see in their sphere of influence. But I would argue that it's becoming more important. And that's labor. It's really being aware of the shift, the impact that the shift of labor to more gig economy, more contingent workforce will have on our ability to have suppliers shorts.

Tom Raftery: 21:12

Right.

Etosha Thurman: 21:12

We see it impacting us today. Not having enough truck drivers, not having enough workers on ports. And So, if I think about where the key competency of how to deliver assurance of supply lies is the procurement. I would challenge the procurement professionals out there to start thinking about what assistance, what skillset can you help deliver to your company, to the HR function of your company, to really marry that strategic spend and that strategic spending competency with, employee management in particular contingent spend management. It's a topic that I think we talk about in HR that, and sometimes we separate, we silo that conversation from HR to procurement, and I believe if we blend those two together, there's some power there. There's opportunities for procurement to help assure that the labor is where it needs to be, to continue those critical functions that businesses need to drive supply chain. That's the one thing that I don't think we talk about in collaboration or together as we couldn't just from what we've learned in the last two years as we move forward, I think there's some power there to really start looking at, supply assurance to include what do I also need in terms of external workforce contingent labor, non full-time employees in our overall value chain.

Tom Raftery: 22:36

Fabulous. Really interesting. Etosha that's been great. If people want to know more about yourself, Etosha Thurman, or about sourcing strategies or any of the things we discussed in the podcast today, where would you have me direct them?

Etosha Thurman: 22:50

LinkedIn is a great way to find me. I think it's linkedin.com/EtoshaThurman. E T O S H A easy to find.

Tom Raftery: 22:57

Cool. I'll put a link to that in the show notes. Great. And Etosha, that's been fantastic. Thanks a million for coming on the podcast today.

Etosha Thurman: 23:03

Thank you for having me, Tom. I've enjoyed it.

Tom Raftery: 23:07

Okay, we've come to the end of the show. Thanks everyone for listening. If you'd like to know more about digital supply chains, head on over to sap.com/digital supply chain, or, or simply drop me an email to Tom dot Raftery @sap.com. If you'd like to show, please, don't forget to subscribe to it in your podcast application at choice to get new episodes, as soon as they are published. Also, please don't forget to rate and review the podcast. It really does help new people to find the show. Thanks catch you all next time.