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Kelly Barner is the Owner and Managing Director of Buyers Meeting Point. She has a unique perspective on procurement from the numerous roles she has held during her 15 years in procurement. Kelly worked for Ahold USA (parent company of grocery chains Stop & Shop, Hannaford, Giant Landover, and more) on their not for resale sourcing team, specia...lizing in systems implementation and hired services category sourcing. She spent three years as the Associate Director of consulting services at Emptoris before it was acquired by IBM in 2011.Since 2009 she has covered procurement news, events, publications, solutions, trends, and relevant economics at Buyers Meeting Point. Buyers Meeting Point provides the procurement industry with an events calendar, blog, active social media network, and podcast, all of which are trusted sources of information for practitioners and solution providers alike. Kelly has several regular columns throughout the industry, and in the summer of 2016 was appointed to become the Business Survey Chair for the ISM-New York Report on Business.Kelly has her MBA from Babson College as well as an MS in Library and Information Science from Simmons College. Kelly has co-authored three books: ‘Supply Market Intelligence for Procurement Professionals: Research, Process, and Resources’ (2014), ‘Procurement at a Crossroads: Career Impacting Insights into a Rapidly Changing Industry’ (2016), and 'Finance Unleashed: Leveraging the CFO for Innovation' (2017). In 2017, Kelly co-founded Palambridge with Phil Ideson (Art of Procurement). More

Blog Pick of the Week: Marriott's Ultimate Customer Service

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When have you been WOW'd by Customer Service? Why is it so unusual and it often is a simple gesture and something quite small that makes all the difference.

This week I had to call one of the BIG insurance companies about a personnel issue and a claim issue. I thought I was going to have to speak to multiple individuals and tell my story over and over again. That is such a frustrating process.

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Challenge, Choices and Consequences: Sustainability and Risk Round Table

Buyers Meeting Point would like to thank Stephen Ashcroft and the team at Procurisk for sharing what they learned at this week's Sustainability and Risk round table. For more details please contact Stephen Ashcroft directly at This email address is being protected from spambots. You need JavaScript enabled to view it., on Twitter @ProcureChange or by calling 01744 20698. In addition, the Sustainability and Risk in Procurement group on Linkedin is accepting members.

 

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Book Review: The Dip

I can tell you that windsurfing is very easy – except for the wind. The wind makes it tricky, of course. It’s not particularly difficult to find and rent great equipment, and the techniques are fairly straightforward. What messes the whole plan up is that the wind is unpredictable. It’ll change exactly when you don’t want it to. The same thing is true about customer service (it would be a lot easier if it weren’t for the customers). In fact, every single function of an organization has a wind problem.

– Seth Godin, The Dip

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Webinar Notes: Introduction to Quality Management in Procurement

qualityProcesses will always have some variations in output despite the best controls. Constant measurement is the best approach, tracking variations on a sampling of product. The key measurement technique is sigma, a measurement of standard deviation. A small sigma (or deviation) is most desirable, with the expectation that supplier quality will be within six sigmas (or 2 parts per billion) of the center.

 

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Procurement Problem Solving

TRIZI won’t rehash the full approach here, for that you can read today’s excerpt on our site or on the eSourcing Wiki, but there are three key take-aways worth calling out, and giving more thought to.

1. You can’t solve a problem until you know what it is.

Since TRIZ is a scientific method, the expectation is that all problems will be stated with a very high level of detail and specificity. If you are facing a challenge in a category of spend, being able to drill down to the very smallest and most measurable level best positions you to resolve the issue.

Even if you are facing a tough project objective, this approach may be useful. If you set out with an objective no more specific than to ‘reduce spend’ your actions are likely to miss their mark. How much spend? Over what period? On what categories/items/services? Make sure that whatever project reporting or documentation you put together forces you – and your stakeholders – to clearly articulate challenges and objectives in such a way that everyone will know if goals have been met by the solution put in place.

2. Over 90% of all problems have been solved before.

The ‘father’ of TRIZ, Genrich Altshuller, originally came up with the approach by screening patent applications to see how many were truly innovative. What he found is that only 20% of all patents had somewhat innovative ideas in them. When he took his examination further, ranking the somewhat innovative ideas by just how innovative they were, just 4% contained new concepts and only 1% were truly revolutionary.

As difficult as your particular problem seems, the probability that someone else has already solved it is incredibly high. Start working through ever-widening circles of contacts looking for someone with the information that can at least jump you ahead in your project. Start with procurement team members and then extend your inquiry to suppliers, solution providers, former co-workers, and members of your professional associations. You may even find that it is helpful to post a question on LinkedIn or start a discussion in a relevant forum.

3. Look across multiple disciplines looking for possible solutions.

One of the findings from Altshuller’s work is that the reason solutions are not apparent to us is because the answer best answer comes from another discipline. What we see as a difficult procurement challenge may be easily solved by someone in accounting or AP. Realistically, we may need to look even further than that. Maybe we are looking for a new pricing model and have to jump industries to find one that fits our needs.

Think of the first company to formally market a “software as a service” or SAAS cost and delivery model. They needed a way to communicate that you will not really OWN anything, which means that your cost equation changes and your payment structure is altered, but without really changing the functionality you receive. They needed to position it in such a way that it drew on something familiar – like services pricing – to instill confidence.

Questions:

What approaches do you find best when facing a difficult challenge? Who in your organization to you go to looking for a solution or a brainstorming partner? Have you been part of a team where a truly new solution was needed – and found?

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Webinar Notes: How GE is Taming the Supplier Information Management Complexity Beast

Stop me if you’ve heard this one… an analyst, a practitioner, and a provider walk into a bar…  okay, not exactly…

This week’s featured webinar was hosted by Aravo with speakers from Spend Matters and General Electric. The combination of speakers gave a nice balance of practitioner, analyst and provider perspectives on one central theme: supplier information management, or SIM. All three addressed how to manage incumbent and prospective supplier information to improve decision-making and relationship building.

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Flip Side Webinar on ‘The 10 Minute Guide to Income Statements’

Last week’s webinar on reading income statements, hosted by The Executive Conversation, provided a great overview of one of the most common financial statements. You can watch an on-demand version of the audio and video without registering by clicking here.

 

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Webinar Notes: 'Becoming a Chief Procurement Officer’

This week’s featured webinar was hosted by BravoSolution with main speaker Andrew Bartolini of Ardent Partners. In addition to being the Managing Partner and Chief Research Officer at Ardent Partners, Andrew also does most of the writing for their blog, CPO Rising. If you are interested in the movement of major corporate CPOs in and out of their roles, that is a great place to track them.

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My Procurement is Your Beschaffung and Their Approvisionnement

"A rose by any other name would smell as sweet."

 -- William Shakespeare, Romeo and Juliet

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**UPDATED** SAP Purchases Ariba - Now what?

SAP announced an agreement to acquire Ariba for $4.3 Billion dollars. SAP will pay about a 20% premium per share to buy Ariba, and the transaction is expected to be completed by this August. Whether you were surprised by the news or not, there is no question that we haven’t heard the last of it, and the rest of the market has just started to react.

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Flip Side Notes: Satisfying Other People’s Needs

Of the many causes of communication breakdown between procurement and suppliers, one of the most contentious is the statement of requirements. Before an RFP or RFQ is issued, procurement spends considerable time with internal stakeholders understanding category requirements as they stand and then probing deeper to determine what are really requirements and what the stakeholder just wants.

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Webinar Notes: ERP Procurement Modules: The Outrageous Cost of Free

This week’s featured event was hosted by Coupa and Forrester Research with an appearance by Coupa customer Adidas Latin America. The main topic was deciding when it makes sense to purchase a specialized/dedicated solution v. leveraging the ‘free’ capabilities of an in-place ERP system.

If you are interested in viewing the event on demand, click here.

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Book Review: Lean TCO

We often talk about how procurement and supply management professionals need to focus less on negotiating savings and more on creating value. But the actually process we are supposed to follow to accomplish that can be unclear. The first challenge is how to go about creating value, and the second is how to make sure the value created is recognized by other departments in the organization – like finance or operations. ‘Lean TCO’, written by Tim O’Meara, presents an approach to facing both.

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Webinar Notes: Sourcing for Value: Using Non-Price Attributes to Find the Best Suppliers

This week Zycus and Ardent Partners presented ‘Sourcing for Value: Using Non-Price Attributes to Find the Best Suppliers’. Historically, not making an award decision based predominantly on price has been a reason stakeholders give for not wanting to follow the strategic sourcing process. Today, procurement professionals and the technology they use are accustomed to incorporating quantitative and qualitative measures of value into optimization scenarios and award decisions.

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Flip Side Webinar Notes: Social Media and the Sales Organization

Last week I attended a webinar run by the Sales Management Association on the topic of social media and sales operations. This event gives us a second look at the topic we first considered last week with the TAS Group’s ‘Enabling Social Enterprise through Sales’.

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Have you Considered ‘Laundering’ Your Savings?

This week’s Wiki-Wednesday article is about the challenges of capturing savings due to cost reduction and avoidance. One of the sections addresses Total Cost of Ownership (TCO), and the difficulties of calculating and reporting on those costs.

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Webinar Notes: Getting the Most From Strategic Sourcing

This week’s featured webinar was presented by the Next Level Purchasing Association and featured Joe Payne and Bill Dorn from Source One Management Services as the main speakers. You may also know them as the co-authors of ‘Managing Indirect Spend’, a relatively new publication that walks through the challenges and opportunities associated with indirect spend as well as a few category-based case studies.

Like their book, the guys from Source One kept their speaking points to the practical learnings from their extensive combined procurement consulting experience.

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Flip Side Webinar Notes: Social Media Darwinism for Sales?

Last week I attended a webinar run by the TAS Group called ‘Enabling Social Enterprise Through Sales’. The focus of the event was to look at how much time sales professionals are spending on various social media sites and what kinds of activities they are engaged in.  If you are interested in experiencing the content for yourself, you can view the webinar on demand (registration required) or view the slides on slideshare (no registration).

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Webinar Notes: Reaching New Heights: The Dividends of Collaboration Between Finance and Procurement

This week’s featured webinar was presented by ISM, Ariba, and CFO Research Services. It was based on a recent study of 263 finance executives from North America, Europe and Asia about their perceptions of procurement. The study was originally conducted in 2007, so this can also be considered a five-year revisit.  If you are interested in reading the full report, you can download it for free (without registration) from CFO.com.

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A Vision for Procurement Compensation Structures

Note: This post by Kelly Barner originally appeared in the March 2012 PSD Group Procurement & Supply Chain Newsletter.

In this week's eSourcing Wiki-Wednesday excerpt on Seven Facets of Cost Reduction and Avoidance, compensation structures are brought into question as they incent procurement professionals to behave a certain way, 'Like all employees, a supply manager will engage in behaviors rewarded by the company. This will create a problem if cost avoidance or cost reduction efforts beyond hard savings do not count toward a supply manager’s compensation and performance.'

As organizational expectations of procurement increase, many practitioners are questioning the structure of their compensation plans. Traditionally, procurement professionals received a straight salary. If there was a bonus structure in place, the bonus was typically based on corporate performance against stated goals and qualitative individual performance rather than savings targets.

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