Jeff Collier

At Procurement and Supply Chain LIVE London 2024, the final main stage session saw Jeff Collier, Chief Revenue Officer at SAP Intelligent Spend & Business Network, join Neil Perry, Stage Host and Group Broadcast Director at BizClik Media.

Concluding our flagship event back in September, the fireside chat with Jeff explored the pressing challenges facing modern supply chains and procurement functions. Jeff shared insights into the strategies organisations are deploying to mitigate disruptions, with a focus on the growing role of AI in procurement and supply chain operations.

What are the current challenges that you see organisations facing, particularly when it comes to their supply chains? 

A topic that we've all been a part of for the last five years – we don't need to go back to Covid. Since that time we've seen a lot of more isolated cases of massive supply chain disruptions, where if you're in the automotive industry, you dealt with the cable harnesses that only came from Ukraine. A surprising tier three or tier four level problem.

From Israel, now we see a lack of items for electronic components and fertiliser, and so these very specialised areas that cause big impacts. You look at that and you say, well, how can technology help with that? Many of the people in this room are part of their organisations trying to say, let's prevent that. Let's predict what the next disruptions will be so that we can maybe prevent them in the first place.

Which involves not just knowing who your suppliers are, but who your suppliers' suppliers are. It's a question as I travel around the world being with our customers, probably 80% of them come back to this very question of that challenge of how do you know who your third tier suppliers are and what the risks are. At SAP we've been doing a lot in this space to try and help share information up the stack, but sometimes not everyone's willing and it can be a tough maths problem. One of our Canadian manufacturers took their 11 significant suppliers and did some analysis on how many of their suppliers mattered and it was 300. Then when they went to the next question, ‘let's see if we can do the maths on how many of their suppliers’. So now we're down three tiers matter and it was 12,000, which is a significant challenge for humans to keep track of.

When you're hearing those challenges, how does that help you shape the technology in that situation? 

I walk out of a lot of those meetings and I go back to our Head of Project Engineering and I say, I've just come back from Australia, I've just come back from Singapore and in 70% of those, they were asking this very specific question about how to identify who the suppliers were locally in Australia, they're trying to really direct sources to their local indigenous suppliers. So whether it's a regulatory or geographic goal or something about that material in the chain, that's what we can take back and try to build.

How much work and testing goes into being able to solve that? 

As any technology company will tell you, you can't do everything. That's where I like an event like this where you get to know some of the other providers that are out there. Just yesterday at the Global Procurement and Supply Chain Awards we saw some of the upstart technology providers who are focused on supply chain risk. 

It's really about the ecosystem of providers.

In the sustainability space EcoVadis is a player that came up quickly to solve a need. In our world we have a network of five million suppliers, so the question is how do we change the technology to be able to import from EcoVadis for example.

Are there any key strategies that you've seen or come across where companies are leveraging your technology to solve those problems? 

What I hear as much as anything is trying to do more with less. 

If it's trying to get your hands on 12,000 bits of data about 12,000 suppliers, that's too large a task for humans to do. So you get to the question of how technology or how can AI help? I'm seeing companies all over the world pilot various ways of using AI. 

The other has been change management. Much of what involves technology involves the users within an organisation, but for supply chain or for procurement it's a two-sided model. You're asking them to do things differently. Your internal stakeholders and employees, but also these suppliers and maybe their suppliers who don't necessarily have an interest or don't need to because they have many buyers they could sell to.

Those that are the most successful are those that spend the most amount of money on change – on managing and educating the why. Why are we asking you to use this technology? What's in it for you as a supplier or a logistics provider? That's probably number one. 

It's a phenomenally exciting time to be working in this particular space, solving these challenges. What's the future of it? 

You can look at the stock market and see the multiples on some of these software, hardware companies, but for good reason, supply chain's unique because it was one of the original areas where complex maths really showed itself.

The original availability to promise transportation or inventory optimisation involved linear algebra, which is constraint based and ultimately required software to do calculations. So in the supply chain, we've seen the power of maths can have, and now we're talking about taking the next leap forward. In the SAP world, we're doing things as simple as trying to help suppliers generate catalogues automatically and write descriptions that are more effective to help them promote themselves to the buyers, which is good for their business.

On the buying side, the sourcing side with category managers, we've added some AI to generate cost breakdown structures by categories to pull in some of the third party data to generate a market dynamics view just to do some of the difficult time consuming work, which can be in most cases more accurate. Then where it really gets interesting is what a lot of us have seen as consumers is more of a chat based copilot that exists. SAP has one, many other organisations are going down this path where you can ask questions and its systems can be asking questions, and we truly do get this productivity lift going back to doing more with less.

Let's look at some of the future challenges. Where do you see them coming from? 

A lot of people would agree we see sub-geographic challenges where there are borders. The de-globalisation that's happening has a large impact, it can cause significant disruptions to the supply chain and can cause different boundaries and costs to go up. Inflation is honestly one of the hardest factors in the equation. You look at central banks that are often lowering interest rates around the world, understandably so because of some labour concerns. But you see inflation and FedEx just raised their package prices by 6% starting in January, just last week, I'm sure for good reason. That's the wild card. 

I don't see companies going off and hiring significantly. We have a view of contingent labour. One of our solutions called Fieldglass gives us a view into the world's use of contingent labour. It surged for the two years after Covid, especially in life sciences, high tech and banking. But more recently, as the economy has risen, the contingent labour usage hasn't as much. So I think we're going to have to use technology to respond to all of these.

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