How can those overseeing direct procurement show value with the disruption of automation/digitization?
Ask Joanna
The CPO's Corner
Question:
How can those overseeing direct
procurement show value with the
disruption of automation/digitization?
Joanna's Answer:
Once we’ve organized the supplier support for the brands on which we work, we feel comfortable that we’ve chosen well and that the appropriate quality, delivery, and cost parameters are being met. The factory is happy and we’re in the “continuous improvement” part of the category management process.
But suddenly there’s a change. Your company wants to enter a new market, one that your existing supplier base is inadequate to support. Or their competitors come forward with better capabilities than your supplier has. Blockchain, AI, Digitization, Robotics - maybe your current supplier is lagging behind the automation that you keep hearing about in conferences.
Disruption is a freight train that is bearing down on you and your supply relationships. You need to buy a ticket on that train. What’s the best way?
- Liaise with Marketing, Sales, and R&D. Where do they think the business is headed? What new products do they foresee? What will your suppliers have to do differently as a result? Where is there a gap in their manufacturing capabilities?
- Does your company have other Burning Platforms? Maybe profits are low and there are big cost reduction needs, where a supplier’s investment in automation may be a key enabler. Or speed to market requirements where capacity, warehouse automation and logistics improvements are needed. Can your key suppliers effectively contribute, or are they constrained by investment limitations or their own strategy to go in a different direction?
- Educate yourself so you’re aware of the latest automation trends, and can speak intelligently enough to be able to assess what your suppliers are telling you they are doing – or be humble enough to grab someone in your company who can.
- Your existing suppliers deserve a chance. They get first shot at closing any gap. But…
- Understand that every supplier relationship is a finite one. Packaging switches from plastic to glass, flavor trends change, miniaturization capabilities increase. You may need an RPA solution, while your supplier’s larger customers may best be served by investments in AI. As great as they may be, with investment limitations your best suppliers just may not be capable of contributing to your company’s needs of the future.
- It can be hard to remain objective, because over time you build trust and start to appreciate each other’s abilities. But in the end, no relationship lasts forever and you cannot let personal feelings get in the way.
We all want our key suppliers to weather the storms of change with us. But if your supplier can’t help you create the disruption that your company needs, at some point you need to find another one. For that day, you need a process for quickly identifying new suppliers. Even that’s a field where disruption has occurred: in the last few years, good point solutions have arisen in the form of supplier discovery tools to make that task easier.
About Joanna

Joanna Martinez is a global procurement / supply chain leader and the founder of Supply Chain Advisors LLC. She is a frequent lecturer and blogger on procurement topics and also provides coaching, strategy development, training, and cost reduction opportunity assessment. Her clients range from Fortune 100 companies to technology startups.
As either regional or global CPO, Joanna has led transformation initiatives for companies in many different sectors: among them Johnson & Johnson (consumer products), Diageo (beverage), AllianceBernstein LP (financial services) and Cushman & Wakefield (real estate services, property management). She has also held client-facing roles, effectively giving her the opportunity to “sit on both sides of the table”.