The latest Supply Chain Digital Show on LinkedIn features an interview with Dawn Tiura, President and CEO of the Sourcing Industry Group. SIG is a global association for sourcing, procurement and risk professionals. This is an edited version of that interview.
What does SIG do?
We serve the top global 1,000 companies. Our members typically have over US$1bn of spend under management. Many of our members work in highly regulated industries, so we spend a lot of time on third-party risk, regulators and issues like that.
There is also a huge focus on ESG right now, which has really taken over from sustainability in the United States as a scoring mechanism. So that's truly our focus. We concentrate on upfront sourcing, outsourcing and third-party risk and sourcing mechanisms.
What did the pandemic change for SIG?
It has changed what we offer members, especially around third-party risk. This has become a top priority for procurement. It's been a huge change in the past few years, and comes from all the supply chain disruption we’ve seen. We offer certification on third-party risk management.
We are also teaching more around modern sourcing. Today's sourcing professionals need deep sourcing expertise. Today, you have to understand artificial intelligence (AI), robotic process automation (RPA) and many other technical aspects. This is very different to 20 years ago. We teach certified sourcing professionals, and have a trainer called Kate Vitasek, who is a world-renowned expert on sourcing and sourcing models. But people also need soft skills, so we teach these too.
Sourcing, procurement. How do they differ?
Procurement is the transactional side; it's about buying from a commodity list. Sourcing is strategic. It can be about rationalising the supply chain, the total cost of ownership, and also about supplier risk - in terms of their financial state, and whether they are ESG compliant. We're typically talking about multi-year, multi-million dollar agreements, so you go deep into your suppliers, and bring in stakeholders to make sure you’re making the correct decision for your organisation.
Covid gave procurement kudos. How?
Because procurement people were superheroes during the pandemic. They pivoted on a dime and began sourcing things they'd never sourced before. They didn't even have commodity codes for most of the companies selling personal protection equipment (PPE) and testing kits.
We saw one of the world's largest testing organisations faced with a worldwide shortage of cotton swabs and cardboard sticks that you need for these tests. So they went out and worked with suppliers to use bamboo instead of the normal cardboard and also found new sources of cotton. It literally created a manufacturing organisation to create bamboo-stick cotton swabs. That all came out of procurement.
Is procurement key to ESG compliance?
Very. Procurement, sees everything, right across an entire company. So we see the stupidity, the redundancy, the waste - and we can change it in real time. We are the pivot point for ESG, sustainability, diversity, equity, and inclusion.
We can drive all of that, for the company’s good and the good its shareholders. We can mitigate risk before it happens. We can identify risk events, and introduce safety measures into the supply chain.
That's why so many of us are in love with sourcing and procurement.
What can procurement do better?
Unfortunately, one thing we don't do well is to understand who our second- and third-tier suppliers are. That's where we have to go as a profession now, and you can't do this without technology.
In manufacturing, it’s not the same as in, say, food. Food sources can be tracked right down to the field a crop was grown in. We don't do that in manufacturing. We know componentry - we know what we buy from the first tier, but we don't go all the way down to the raw materials and trace those. And that's really where we have to go as an industry, if we are to drive sustainability.