Ken Bradley at Lytica on Driving Business Success

As a trailblazer and thought leader in the digital transformation of supply chains, Ken Bradley,  Lytica Chairman & Chief Strategy Officer, stands out as a prominent figure in the industry, advocating for the advantages of digital transformation to guide organisations through the dynamic procurement landscape. 

He frequently highlights how digital transformation simplifies focus by using data and analytics. Through the utilisation of digital tools to access data such as component pricing, competitiveness, or consumer trends, organisations can pinpoint areas for enhancement, risk mitigation, and resource allocation.

As the world’s only provider of electronic component spend analytics and risk intelligence enabled by real customer data, Lytica continues to move the needle and make a difference with tools driven by AI and smart data.

Q. How could effective procurement strategies really make a difference in driving business success and competitiveness?

We've seen what happens with  less than effective business strategies during Covid and the shortages when people ran out of components and prices went extremely high.

Companies that had more effective strategies did much better. 

You can go on ChatGPT and you can type in, ‘what are the business strategies to make a company drive business success and competitiveness’. It comes back with things like a good cost reduction strategy and a good supplier relationship strategy, risk management and quality assurance, but really the devil's in the details of how it's implemented that make the big difference.

When I look at procurement and procurement strategies, I tend to think of procurement as having three spheres in a Venn diagram. One is the total cost and price, one is security of supply and the other piece is compliance. Are you getting a price that's effective for you? Do you get the parts when you need them? Are you getting the stuff you need that meets all the requirements of your market, of your product, of your stakeholders and shareholders and government regulations? 

Really, to have an effective strategy, you really have to understand the goals of the business and the goals of the individuals running the business.

If you have divisional presidents, it's really important that you understand how they can make the business more effective. All of them are going to be slightly different and you'll have to have strategies that address those three spheres uniquely for each of the things you're trying to achieve. It's really in the details, in getting procurement to step out of the role of being just a service group into a role of actually influencing what happens within the business. Making an effective procurement strategy contributes and secondly, it's in the details of how you actually implement it and make sure what you're implementing is actually valued by other parts of your company.

Q. What were the strategies or plans that really stood up to the stress caused by the pandemic and which were the ones that really fell by the wayside?

We deal with a number of companies at Lytica and we were able to see which ones have our strategies for better pricing. We're able to see which ones ran into problems with supply. It seemed to me that the companies that had really thought through their business processes and had those in place in an effective way not only did better on pricing during that period of time, but also did better on the risk side of it and were able to get components. Probably the paramount thing that got the more successful companies through was having good, strong supplier relationships and good strong supplier relationship management. 

That was one element that really stood out. The other one gives your supplier some insight into your true demand and working with them in terms of trying to secure the supply and being reasonable in terms of recognising what they were doing for you and how hard these companies were working to try and get you supply. Maintaining a positive relationship through very difficult times I saw as attributes of the customers that were more successful.

Those companies that  treated their suppliers more brutally didn't fare quite as well. Companies that treated their customers poorly during the pandemic are also suffering compared to those that had good customer relationships.

Q. How do you analyse strategy and make sure that you have those key details which are sure your strategy is effective? 

Business process is critical to us getting through the next few years. If I look at a procurement organisation and look at how people communicate what they're trying to do, hey say, let's have an effective cost reduction strategy, let's have a good supplier relationship strategy. 

I think everyone has had situations where they have had difficulty explaining something relatively simple to some people and everybody comes away with a slightly different understanding of what it was you were trying to tell them. 

When you talk about the devil in the detail, you really need to analyse your process and see if everything that's being done there adds value to that activity and if there are things in there that allow variations to enter into your business process that don't need to be there. 

An effective strategy is kind of what happened with the Lean and Six Sigma initiatives. People really started to look at what they were doing, where there was waste, where there was variation that they could eliminate and they had techniques to get rid of that. 

Q. How vital is it that your tech is strong enough to maximise your procurement efforts?

It's very critical. Don't just use technology to take something that you're not doing well and automate it. All that's going to do is get something done faster that's being poorly done. You have to have your strategy to start with that's the right one for your company and what your company objectives are. 

You need to consider time to market, price, sustainability before working outwhere would automation help getting things that I need, like cleaner data. 

I have all of this data coming in from all of the procurement activities and purchase orders that I put out. I need to be able to get a better idea of my demand. I need to get a better understanding of my inventory. I need better analytics. You should be looking for areas in your process where some level of automation and consolidation could help you get data faster, analyse it faster, make sure it's cleaner and give you better insights into how well your strategies are working and how effective your results are. 

They have to be the ones that fit your strategy and make you more effective in those areas where you're less effective and free up people that you can put their talents into higher value areas.

Q. How do you go about working with people to make sure they're using technology to the best of its ability?

I think before you put it in, you had some business case use case that said, this is what I expect to achieve. You should have KPIs and other metrics in placeto see whether or not the thing that you've done or the tool that you've put in is actually achieving the level of effectiveness that you need. The other thing is the level of effectiveness that you thought is optimal for you. You should actually be actively benchmarking as best you can to see how you're performing with or without the tool or the application compared to others in the industry. 

As you take a look at your business from a cost, security, supply and compliance perspective, say, am I really achieving the level that I need to achieve in order to help my company move ahead?

Maybe the most critical thing you could be doing is getting competitive pricing, making sure your lines never go down. Accelerating time to market with, with new designs and new products. If you're always focusing on a traditional purchasing mindset and you're not saying, how do I actually take the skills of these people that I have and apply them across the whole company, not just the organisation you're in, so that the whole company can do better.

If the tool you applied isn't supporting you in doing that, then take a look at how it was implemented, take a look at the training that you've had in the use of the tool and learn to use it more effectively. If once you've learned it effectively it's not giving you what you need, then move on to another tool.

Q. Do you see risk management as a particularly exciting area for the future?

We’re in an area where we're doing a significant amount of investment in analysing risk, not only current risk with projections of three, six, nine months ahead to give people some idea of what might be coming.

You need to have the ability to take all this data and turn it into useful information. Many companies have created analytics departments and groups, some have war rooms and control centres trying to analyse it all. It is critically important. A lot of the information into what's happening is contained in the data you have now, but getting at that insight requires some special talent. Companies that solve the problem are going to do extremely well. Companies that don't solve the problem will lose their customers' patience and won't succeed.

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