Direct Global Procurement: Worth The Plunge?

A Boost from Tech

How will ever-developing technology aid in direct international sourcing?

Tech is everywhere in our society, and though many aspects of produce lag behind more innovative sectors, industry experts point to tech applications to help facilitate global sourcing.

Brian Miller, vice president, managed services at Proactis in Phoenix reports technology is already playing a large role in produce sourcing. “I-Trade has done a fantastic job of automating processes and providing information in order to maximize efficiencies in the produce supply chain,” he says. “As mobile connections get faster and devices get more powerful, these efficiencies should only continue to grow.”

Wayne McKnight of McKnight Insights & Solutions in Niagara-on-the-Lake, Ontario, Canada, says technology’s role is totally underestimated. “The internal systems and current work processes allowing one to engage within North America totally change once you go outside the continent unless you are using service providers,” he says. “From forecasting to currency to logistics it is a huge leap. Integration of systems that truly ‘talk, measure and report exceptions’ need to be in place. Most retailers know produce is key for their business, but investing in information systems to manage that capability is just one of the battlegrounds.”

According to the Accenture report, Procurement’s Next Frontier by Kai Nowosel, Abigail Terrill, and Kris Timermans, forward-thinking companies see the promise of the “Industrial Internet of Things” to reshape procurement in the next five to 10 years in three fundamental ways: through its ability to substantially increase traceability of products and materials across the entire supply chain; to enhance a company’s use of analytics to improve decision-making; and to enable a company to challenge the status quo for key processes, both procurement processes and those specific to the company’s industry.

Mayda Sotomayor, chief executive of Seald Sweet in Vero Beach, FL, agrees retailers are using technology to their advantage to better understand their sales and how to set some of these programs based on what their customers are buying. “Growers are also getting more technologically advanced to where they have high-density growing and precision agriculture,” she says.

The Accenture report further speculates from a procurement standpoint vast opportunities exist to use traditional mobile devices, as well as the emerging Industrial Internet of Things to transform the procurement function.

Seald Sweet marketing director Kim Flores says the industry is on the cusp of some exciting times. “Simple things like microchips have tremendous implications for tracking,” she says. “Since that type of technology is becoming more affordable, it gives us more opportunity for traceability tools and an advantage in our logistics processes.”

The Accenture report further states, “traceability could have significant implications for procurement, not the least of which would be an insight into an organization’s commitments to corporate social responsibility. With so much information about suppliers at the product level available via the internet, procurement could much more easily know if suppliers are, for example, truly engaged in claimed sustainability efforts.”

Yet, international sages caution against putting too much confidence in what the internet yields.

“The internet is the modern bathroom wall,” says John Pandol, director of special projects for Pandol Bros. in Delano, CA. “There’s a lot of stuff out there that isn’t true or credible. You can use it to find leads, but to figure out who is operationally capable and philosophically disposed to program business, you still need to go there and be sure of who you’re dealing with. Though technology can be a useful tool, it’s still ‘trust BUT verify’.”

Buyers and sellers need to develop relationships built upon trust and confidence, agrees McKnight. “This is still a people-first business,” he says. “We need to make sure enabling technologies and efficiencies don’t totally displace the human factor. Like social media, we are having more B2B with systems and computers, and less true human interaction, understanding and knowledge transfer. We need to make sure those remain in somewhat of a balance appropriate between the buyer and seller. Let’s not ‘dummy down’ the whole process or real value will never be reached.”