Key to Successful eCommerce Logistics: Innovation

By Ramesh Narayanaswamy, CIO, SingPost

Ramesh Narayanaswamy, CIO, SingPost

Information technology has reshaped the way business is done.Information technology is a key to firm competitiveness. Technology through mass networks of computers, internet and mobile devices has created zero distance with the users. Once every device is wired up and connected through internet, it creates opportunity for individual who dare to think outofthebox and dream to discoverunmet customer needs. Accordingly to Wikipedia, Amazon.com went online in 1995 selling books, and Jack Ma found the website Alibaba.com in 1999. Amazon issued its initial public offering on May 15, 1997 trading in NASDAQ as AMZN at a price of USD18 per share. In 2014, Alibaba Group Holding Ltd.’s initial public offering poised for a record stock market debut with shares priced at USD 68 that valued at USD 25 billion. These companies are made news because of somebody dream, someone see it happens, make it happens and that’s whywe are experiencing it now.

As a six sigma practitioner, I look at the “As-Is” and “To Be” of Future Procurement. It is extremely important to build new enhancements or make business process improvement that measure the three variables. They are productivity, quality and timeliness captures the essence of group performance.

What is “As-Is” Today Procurement?

We have many roles. We are an order management expert of ‘procure to pay’ system. We partner with legal and sales leaders in contract management of back to back requirement. We lead internal matrices on supplier performance. We source the right suppliers that meet our engineering specification. We use data transparency of the organization spend and demand of 3^rd party products and services to strategize, rationalize the supplier base and manage the supplier relationship etc.

We are being measured by cost savings, cost optimization, on time delivery, quality of products and services receipt, internal customer satisfaction and time to market from getting quotes, generate purchase order from purchase requisition raised. Today, procurement is known as a cost centre, we engage in dialogue rich discussion to enable all of the above and more.

“Web based technologies enable and match buyers order to sellers offer, delivery and service receipt, and payments are all done in cloud”

In the future, perhaps, artificial intelligence willcategorize and classify requestor free text demand in emailwith ease into categories, maybe voice recognition system where requestor purchases are converted automatically into a RFQ, and save many man hours of work in getting an order into the Procure to Pay system. Web based technologies enable and match buyers order to sellers offer, delivery and service receipt, and payments are all done in cloud. All these are done real-time 24/7 by software defined networking. Technology enables both buyers and sellers to use a standard rating system to rate each other performance. It is no longer the buyers having the right to rate the sellers. It is no longer true that customer is always right. This resulted in more collaboration where buyers and sellers will pool their talents together on products, services, manpower, expertise and new ideas offer. This raise innovation and productivity to a new level for imagination. This is very possible. According to A.T. Kearney (2015), retail e-commerce has grown nearly to USD 840 billions in 2015 surpassing the sales of USD 695 billions in year 2013 and it was estimated to increase to USD 1506 billions in 2018, as online retailers continued expanding to new geographies and physical retailers entered new markets through e-commerce².

What is my Dream of the Future Procurement?

“The future procurement professional sits on a myriad of data connecting the organization to external. We are the data scientists that draw business intelligence out from the mass amount of data. We architect the business processesfor software defined networking. We train our internal stakeholders to be smart buyers. Buying smartly rest with the organization and not with a function. We become a professional problem solver across departmentand lead business improvement as a champion. We influence the buyer decision, and the seller behaviour. We are influencers. No matter how we change. We have to quantify our efforts with Balanced Scorecard,and financial accounting methodology, to translate the strategy into operational terms, make the strategy everyone’s everyday behaviour, make the strategy a continual process and mobilize change through strong, effective leadership,” quoted by Kaplan and Norton. Perhaps then, Procurement will become a profit centre and drive innovative initiatives from portion of the quantified saving that we optimize.

Quoted from our founding Prime Minister Lee Kuan Yew, "There is a glorious rainbow that beckons those with a spirit of adventure...To the young and not too old, I say, look at the horizon, find that rainbow, go ride it."