Buyers Meeting Point procurement by Kelly Barner

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Recommended Procurement Webinars for Dec 12 – 16: The Year All Comes Down to This…

Recommended Procurement Webinars for Dec 12 – 16: The Year All Comes Down to This…

Where did 2016 go? This is officially our last week of covering webinars for the year – partly because everyone needs to rest sometime and partly because there are no more events to cover! We’ll be back starting January 9 to kick off a new year of webinar recommendations. If you haven’t already, sign up for our mailing list to be sure you get the weekly recommendations in your Inbox each Monday.

Click on the title of each webinar below to view the full description and register.

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Book Review: Introduction to Global Logistics, 2nd Ed.

Book Review: Introduction to Global Logistics, 2nd Ed.

 If you feel surprised that you missed the first edition of Introduction to Global Logistics: Delivering the Goods 2nd Ed., by John Manners-Bell, you’re not alone. I was puzzled by the same thing. If the first edition came out in 2014, how could I possibly have missed it? I didn’t - and maybe you didn’t either. The title of the first edition book was Global Logistics Strategies: Delivering the Goods.

Title and edition questions notwithstanding, this book provides considerable updates and new content. There are three completely new chapters, as well as an updated preface. Since I reviewed Global Logistics Strategies (you can read it here) I focused my time with the 2nd Ed. on the three new chapters:

Chapter 12: Supply Chain Technologies

Chapter 16: Supply Chain Innovation and Disruption

Chapter 17: Ethical and Sustainable Supply Chain Strategies

 

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Nearshoring: Why Now? - Warnings

Nearshoring: Why Now? - Warnings

As we covered in Nearshoring: Why Now?, outsourcing production operations to Mexico (or nearshoring) offers a number of tangible and intangible benefits over traditional “low-cost” country sourcing. Take China as a prime example: with labor rates in China, on average, exceeding those in Mexico since approximately 2013 and holding an advantage in productivity per worker, Mexico is increasingly becoming a hub for U.S.-based companies looking to transplant their supply chain operations. In moving operations closer to home, many companies are either fully or partially outsourcing manufacturing to suppliers in Mexico and in some cases, even placing full production facilities in that country. Sourcing suppliers in Mexico, however, is not without its obstacles: challenges that can quickly halt nearshoring operations for unprepared companies.

 

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Best Procurement and Supply Chain Webinars 3/14-18

Best Procurement and Supply Chain Webinars 3/14-18

This week combines virtual and in person events. Monday through Thursday is #ProcureTech2016 hosted by Spend Matters. If you’re there, go see BuyerQuest at booth #13 and enter to win a copy of Procurement at a Crossroads. I’ll be serving as the virtual facilitator for ISM-New York’s annual meeting on Wednesday. If you’re looking for something a bit more virtual… we have you covered there, too. Click on the title of each event below to view the full description in our events calendar and to connect to their registration pages.

 

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Book Review: Food Supply Chain Management and Logistics

Book Review: Food Supply Chain Management and Logistics

Supply chains that are governed well will also protect the environment and create ethical behaviour not only between the transacting partners but hopefully across the network. However, developing the supply chain and the relationships requires effort and commitment from partners and help and support from governments. (p. 93)

Food Supply Chain Management and Logistics: From Farm to Fork by Professor Samir Dani is an eye-opening look at the complexity and criticality associated with feeding people the world over. Right from the outset, the book considers each topic in the context of a balance between advancements and opportunities and the consequences of failure, corruption, and manipulation.

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Book Review: Leading Procurement Strategy

Book Review: Leading Procurement Strategy

“Procurement’s role shines particularly when strategic cost management receives the highest priority for many executives.” (p. 197)

 

Leading Procurement Strategy (Kogan Page, 2014) is a group study of the ‘brave new world’ of procurement. The three primary authors, Carlos Mena, Remko van Hoek, and Martin Christopher (and three guest authors), address an ambitious list of trending procurement and supply chain subjects. Rather than causing problems with voice or style continuity, this large group of contributors makes it possible for the book to cover a wide range of information in depth without losing momentum or focus.

 

Although the authors have decades of experience in procurement, they are not mired the ways of the past. In fact, they discuss many of the new approaches being considered by procurement (e.g. agility, supplier collaboration, non-savings performance metrics). They also acknowledge the objections procurement is likely to face in response to attempts at evolution and provide methods to constructively overcome them.

 

According to Martin Christopher, who wrote the chapter on Global Sourcing, procurement can expect an increased emphasis on agility. This translates into a shift in how supplier relationships are built and how contract management strategies are executed. In fact, agility may provide an escape route from the savings trap that confine many procurement organizations. When operational agility is prioritized over cost savings, supplier selection and agreement terms must change. “The guiding principle should be that the best sourcing decisions are those that keep the most options open. There will usually be a price to be paid for these options but that price should be seen as an investment in supply chain flexibility.” (p. 90) In other words, if the entire organization can see (and quantify) the opportunity associated with agility, they will not only request for procurement to change their priorities, they will demand it.

 

Helping other functions focus on total cost rather than price elevates the perspective of the entire organization and brings the internal implications of supply decisions into greater focus. For instance, procurement may want to start initiatives by demonstrating the relative costs associated with non-flexibility or lost opportunities in research and development or new product introduction. “Strategic cost management should be part of new produce and service design, so that the most cost effective highest-value products and services are introduced in the marketplace.” (p. 104)

 

If procurement expects to expand the perspective of their internal stakeholders, they must be willing to do the same themselves. More procurement activities should be tied to consumer and market demand. Just as wanting to collaborate with a supplier is not enough to make the effort a success, wanting to bring procurement into closer contact with the consumer side of the business will not make it so. The organization must be open to the idea and positioned to benefit from the resulting changes.

 

In my opinion, the best quote from the book is a definition of complexity, found in the chapter on Supply Chain Risk Management:

“‘Complexity’ describes a condition of inter-connectedness and interdependencies across a network where a change in one element can have an effect on other elements – often in unforeseen ways.” (p. 134)

 

The role of complexity, and procurement’s ability to make positive contributions to how the organization handles it, will be a primary driver of how much access procurement will be given to customers and whether or not it therefore makes sense to take a less cost reduction focused approach.

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Global Business is just like Marco Polo

Global Business is just like Marco Polo

Over 900 years ago, Marco Polo, his father and uncle began their 24 year journey from Europe to Asia and back. It was very much an unknown and they were often learning as they went. Communicating back home was impossible. The languages are all different along the way as well.

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Getting started with an export business

Getting started with an export business

I am sure many of you have heard the shoe salesman story which is classic in having a positive attitude and a determined spirit. Two shoe salesmen are in an undeveloped area. The first one calls home and says “Let me come home, no one here is wearing shoes”. The second one calls home and says “Send more shoes, no one here is wearing them!” Clearly the second one is primed for an export business!

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Global business is everywhere you look

Global business is everywhere you look

We were on vacation a few years ago in San Francisco. As we sat on the beach, we could not get over how many container ships were arriving and passing under the Golden Gate Bridge. It was certainly a testimony to our global economy and how the business world is getting smaller all the time.

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Flash Forward: A #FutureBuy Perspective from The Mill Girl at Blue Heron Journal

Flash Forward: A #FutureBuy Perspective from The Mill Girl at Blue Heron Journal

Editor's Note: On May 1st, Buyers Meeting Point issued an Open Call for predictions about the future of procurement as part of the #FutreBuy project I am working on with Jon Hansen (Procurement Insights, PI Window on the World). We welcome all predictions, either as comments to our posts on the subject, guest submissions, or posts on Twitter flagged with our #FutureBuy hashtag.

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Book Review: Can China Lead?

Book Review: Can China Lead?

Can China Lead?

Reaching the Limits of Power and Growth

 

Can China Lead?, by Regina M. Abrami, William Kirby, and F. Warren McFarlan, asks a question that can not be definitively answered but is well worth asking. The authors seamlessly combine their knowledge of China’s history, people, and politics to advise companies looking to engage in commercial interactions with one the world’s second largest economy (As ranked by GDP by the United Nations, 2012). As the authors state in their Introduction, “Chinese businesses compete globally, now going head-to-head with North American and European corporations in telecommunications, heavy machinery, and renewable forms of energy.” (p. x)

 

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Webinar Notes: From Good to Great....Global Sourcing Governance

Webinar Notes: From Good to Great....Global Sourcing Governance

This week’s featured webinar was hosted by Sourcing Interests Group and presented by Neo Group, a services firm focused on gaining efficiencies through low-cost country providers and outsourcing in general. The focus of the event was global sourcing governance, and how, when leveraged appropriately, it can help companies go ‘from good to great’.

 

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Webinar Notes: Webinar Notes: Take Your Sourcing Down to the Component Level: The Kimberly Clark Case Study

This week’s SIG webinar (sponsored by MFG.com) gave us an interesting look inside the procurement, product design, and engineering teams at Kimberly-Clark (NYSE: KMB). There is a good chance that you have a number of K-C products in your home right now: Kleenex, Scott, Huggies, and Cottonelle are just a few of their brands. Unless you are a SIG member you can’t listen to the event on demand, but there is a case study overview available from MFG.com.

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Blog Pick of the Week: The China Sourcing Blog

There is so much interest and activity in global sourcing, and more especially what is happening in China, I think this will be a terrific resource for procurement professionals.

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