The document discusses how big data is transforming purchasing and supply chain management. It notes that the volume, velocity, and variety of available data is immense and growing exponentially. By 2020, 40% of all data may come from internet-connected sensors. This data can provide new insights if analyzed properly using basic tools like Microsoft Office or specialized big data analytics platforms. The document recommends that purchasing professionals start small by analyzing internal supplier spend data to better understand spending patterns and identify areas for improvement and cost savings. If value is found, more advanced big data tools could be pursued. Overall, big data is leading to a transformation in purchasing where skills in categories, data, value creation, and system integration will be most important.

1. Big Data Impact on Purchasing and SCM
PASIA World Conference
November 2014
Marriott
Manila Philippines
Bill Kohnen

2. Discussion
• Big Data what’s the big deal?
• Big Data and Purchasing
– Where Data comes from
– Formats
– What you can do now
• How Purchasing and Supply Chain profession will
be transformed

3. The volume, velocity and variety of data
available is almost unthinkable.
90%
10%
All Data
Less than 2 Years
More than 2 Years
• 80% of what people are
looking at is less than 6
weeks old.
• We can 5% of Data
• $50 Billion Big Data
Industry

5. Text Buddies?

6. Trillions of Internet-connected sensors will produce as much as
40 percent of all data in the world by 2020
Great for Philippines Technology

7. Simplified Corporate Data Structure
Structured
Data
Enterprise
Data
Warehouse
BI
Analytics
Un
Structured
Data
Open Source
Non
Relational File
System
Big Data
APs
Data Creation Data Storage Data Action
Traditional
Enterprise
System
Big Data
Non
Traditional

8. Purchasing Is a Data Rich Enviornment
• Using analytics to tackle big data challenges,
CPOs can benefit from new insights into
internal and external business operations.
• They can reduce the risk of vulnerabilities and
add greater strategic value to the Enterprise
• Marry customer trends and insights with
supply base capabilities and opportunities

9. Strategic Sourcing Defined Information that Drives
Improvement
Bill Kohnen July 2014

10. Take Action
• Using Fairly basic Microsoft office functions you
can conduct valuable analysis of lots of data
• You can do this without expensive specialized
software that requires lots of training, support
and on going cost
• Using this basic process may ultimately make you
decide to pursue a specialized analytic tool set
but by then you will understand very well what
your needs and expectations are
Bill Kohnen July 2014

11. Get Basic Data From AP or ERP System
Have a Senior level person with broad knowledge review and add other data as
needed. A Senior person will save time as they will know the data and be able to
make educated guess’s about any gaps on their own
Sample End Format For Illustration
Supplier
2012
Spend
2013
Spend
2014 YTD
Grand
Total
Category Owner Business
Payment
Schedule
Demand
Acme Spend $ 3,500,000 $ 1,500,000 $ 5,000,000 Direct Alex Aerospace N30
MRP
Demand
Beta $ 5,000,000 $ 3,000,000 $ 300,000 $ 8,300,000 IT Ben Corporate N90 Capital Plan
Food
Services
$ 120,000 $ 120,000 $ 70,000 $ 310,000 HR Kate Corporate N30
Monthly
Recurring
Delta $ 300,000 $ 310,000 $ - $ 610,000 Facilities Kate Corporate N30
Annual
Recurring
X Tron $ 850,000 $ 1,850,000 $ 1,250,000 $ 3,950,000 Indirect Jane Medical As Needed
As Needed
Approval
Bill Kohnen July 2014

12. Chose What You Want To Review
Choose
Fields You
Want To
Review
Bill Kohnen July 2014

13. Example of Top Suppliers
Bill Kohnen July 2014

14. Advantages of Big Data BI Tools
• Data from all sources
• Ability to move seamlessly up and down data
• Intuitive use
• Still Requires Business Knowledge to set up
and apply

15. From 1887 to recently …………

16. B2B Purchasing Transformation
B2BPurchasingTransformation
Big Data
Cloud
XaaS
Mobile
Open
IoT & M2M +
Bill Kohnen July 2014 16

17. SalespersonBuyer
Purchasing Machine to Machine Interface
Not likely anthropomorphic Buyers and Sellers
However the Internet of Things will result in 50 Billion
Connected Devices soon which will enable efficiency way
beyond common present linear notion of supply chains

18. 2015 to 2020 Transformation
• Open Application (AP) based purchasing operating systems in use
• This common standard will drive unprecedented efficiencies
• Skills Valued
– Category Expertise
– Data Expertise
– Value creation by linking Supply Chain to Customer
– System and Process Integration
– Ability to embed in other organizations
• Pool of purchasing professionals is global
• Expanded backgrounds in Computer Science, Engineering, and Science
that are needed and might be more attracted to purchasing and supply
chain.