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"The Point" is written by BMP Editor Kelly Barner as well as a diverse group of guest contributors.

Procurement Perspectives Podcast: Panel Discussion on The Politics of Procurement

Procurement Perspectives Podcast: Panel Discussion on The Politics of Procurement

This week's guest audio comes from a panel discussion moderated by Code for America. They create open source solutions and facilitate a collaborative community around their use. Code for America also hosts an annual summit that brings together public sector innovators and the organizations that collaborate with them – and that is where this particular recording was made: at a 2014 summit panel on public sector procurement.

In this exchange, the panel responds to an audience question about the politics of procurement and facilitating cross-functional communication for the sake of gaining buy in.

The full video – Procurement for the 21st Century - is available on their YouTube channel. You can listen to the podcast on Blog Talk Radio or on our Sound Cloud page.

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Best Procurement and Supply Chain Webinars August 24-28

Best Procurement and Supply Chain Webinars August 24-28

This week’s calendar filled up last week with some new additions. I’m leaning towards the first three as this week’s best bets for thought leadership and professional development. Click on the title of each event below to view the full description in our events calendar and connect to their registration pages.

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Webinar Notes: The End of Outsourcing? RPA is Here to Stay

Webinar Notes: The End of Outsourcing? RPA is Here to Stay

These notes are from an August 18th webinar by the Institute for Robotic Process Automation (IRPA). The primary speakers were Barry Matthews Managing Director at Alsbridge, and Eric Shander, Vice President of Global Technology Services at IBM Global Services.

I’ve been covering all of the Robotis Process Automation (RPA) events based on IRPA’s recently released ebook meant to educate people about RPA. The most important things to know are that RPA is best suited to logic-based, repeatable tasks currently performed by in house employees or third party outsourcers. In some cases, robots can even provide governance or oversight of other robots. The other thing to know is that these aren’t mechanical robots – they are software robots: programs designed to handle tasks and learn over time.

The piece of this particular event that I found the most compelling was the potential for negative impact, or the ‘bad and ugly’ as they put it in the webinar. Let’s face it, as much as people decry the impact of offshoring, RPA’s cost structure and scalability raises a significantly larger concern about job loss. The honest truth is that RPA will have an effect on jobs, but it may not be quite what people think.

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Book Review: The Lean Supply Chain: Managing the Challenge at Tesco

Book Review: The Lean Supply Chain: Managing the Challenge at Tesco

The supply chain may be the best organized in the world, but if trust and transparency are not there the commercial results will not materialize.

- The Lean Supply Chain, p. xxiv

The Lean Supply Chain: Managing the Challenge at Tesco (September 3, 2015, Kogan Page) by Robert Mason and Barry Evans is fascinating – for its timing as much as the overview it provides into one of the world’s most prominent retailers. The book’s timing is impressive (and critical) given the turbulent few years Tesco has had: including the horsemeat scandal in 2013, and an accounting scandal in 2014.

While this book is not solely about the scandals and their exact aftermath, it acknowledges them right up front and includes as many details as the publication timeline would allow – and probably a few more than that. The Preface is an absolute must-read and would stand as a B-school case study in its own right.

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Procurement Perspectives Podcast: Trusting Internal Team Members and What That Should Teach Us About Supplier Partnerships

Procurement Perspectives Podcast: Trusting Internal Team Members and What That Should Teach Us About Supplier Partnerships

This week our audio comes from Acquire Procurement Services, a consultancy based in Australia specializing in establishing and re-negotiating contracts across sectors. Their video is titled 'Why do we treat employees and suppliers differently?' and is available on their YouTube channel. In it, they draw a contrast between the information companies share with their employees and how they handle sharing with suppliers who might perform the same or similar functions on their behalf.

You can listen to the podcast on the PI Window on Business Blog Talk Radio channel or on our Sound Cloud page.

 

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Webinar Recommendations for August 17 - 21, 2015: RPA is Here to Stay, Supply Chain Index Update, Why Due Diligence Matters

Webinar Recommendations for August 17 - 21, 2015: RPA is Here to Stay, Supply Chain Index Update, Why Due Diligence Matters

This week there are seven webinars being run, and I’ve taken the opportunity to recommend three on topics that are very different from each other while all still providing access to compelling thought leadership. Click on the title of each event below to view the full description in our events calendar and connect to their registration pages.

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Guest Post on Procurement Insights: Rome Wasn’t Built in a Day, and Neither Was its Supply Chain

Guest Post on Procurement Insights: Rome Wasn’t Built in a Day, and Neither Was its Supply Chain

Note: This post oritinally ran on the Procurement Insights blog.

“Without a good mental model you won’t survive in business for long.” – M. Hugos, SCM Globe

At the end of 2014, I came across an extremely interesting use of modern supply chain modeling. Michael Hugos, author of Essentials of Supply Chain Management and co-founder of SCM Globe, applied interactive supply chain modeling and simulation to the supply chains of ancient Rome – the olive oil supply chain to be specific.

I’m a history buff, so this was right up my alley, but trust me – it is worth your time to read the three part series. The case study is set in the Roman Empire in 300 A.D. Olive oil is in high demand because it can be used for cooking, light, cosmetics, and healthcare. Its value is second only to gold. Between demand and value, the conditions are right for exporters in the remote corners of the Empire to innovate, and they do not disappoint. Using the Romans’ expertise in water management, they alter the conditions of previously unfarmable terrain and make it both productive and profitable.

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Webinar Notes: The Dawn of Risk Management: Harnessing the Power of Watson

Webinar Notes: The Dawn of Risk Management: Harnessing the Power of Watson

These notes are from a June 23, 2015 webinar hosted by Sourcing Industry Group and presented by Louis Ferretti, a Project Executive at IBM. While only SIG members can view the recording on demand, you can catch Ferretti at their Global Executive Summit in October.

I knew I wanted to attend this event as soon as I heard Watson, the artificial intelligence computer that competed against two of the best ever Jeopardy! contestants in 2011 and won, would be featured. If that kind of AI could be applied to supply chain risk management, just think of what might be possible! In this case, IBM presented from the buy side perspective, although many companies are familiar with them on the sell side. Watson was applied in the management of IBM’s own spend.

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Procurement Perspectives Podcast: Procurement Career Development - Is MBA vs. Certification a False Choice?

Procurement Perspectives Podcast: Procurement Career Development - Is MBA vs. Certification a False Choice?

This week our audio comes from a Financial Times conversation with Ian Clark, Dean of the University of Edinburgh Business School.

The core question behind their conversation is whether MBA programs provide professionals with the skills and knowledge they need to have competitive careers in today’s business environment. The full video is available on YouTube.

You can listen to the podcast on the PI Window on Business Blog Talk Radio channel.

 

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Webinar Recommendations for August 10 - 14, 2015: The Internet of Things and Talent Mapping

Webinar Recommendations for August 10 - 14, 2015: The Internet of Things and Talent Mapping

After a drought last week, the procurement and supply chain calendar of events returns to normal this week with six webinars. Click on the title of each event below to view the full description in our events calendar and connect to their registration pages.

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Webinar Notes: The Digital Disconnect

Webinar Notes: The Digital Disconnect

These notes are from an event that originally ran on July 28th. If you are interested in viewing the entire webinar on demand, it is available on the Proxima Group’s site here. The panelists were Mark Simester, Marketing Director at Warburtons, Charles Ping, Chief Executive at Fuel, and John Butcher, Marketing Specialist at Proxima and the moderator was Jonathan Cooper-Bagnall, Proxima’s Commercial Director.

While the focus of this event was how procurement can play a role in better managing digital marketing spend, the insights shared during the panel discussion provided plenty of insight about how procurement can improve our dealings with marketing in general. Since marketing is often one of the last hold out functions, we can use all the advice we can get.

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Book Review: Category Management in Purchasing (3rd Edition)

Book Review: Category Management in Purchasing (3rd Edition)

Just over 18 months ago I reviewed the second edition of Category Management in Purchasing by Jonathan O’Brien. (You can read my original review here). When I recently learned there was to be a third edition, I was unsure what I would be able to say in a new review that would add to my earlier observations.

I found it interesting to read O’Brien’s commentary, not only on the progression of this title, but on how he sees it fitting in with his other work. I don’t personally know of anyone who has written more substantial procurement books than O’Brien, and knowing that he sees a subset of them as being connected is an interesting idea. Category Management in Purchasing, along with SRM and Negotiation for Purchasing are seen by the author as his ‘trilogy’. Knowing that changes how I would approach any of the books in the group.

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Guest Post on the Ivalua Blog: The Annual Budget Process as a Contact Sport

Guest Post on the Ivalua Blog: The Annual Budget Process as a Contact Sport

If your company closes its books with the calendar year, there is a good chance the budget review process is quickly approaching. With it come the games departments play – and they are not child’s play by any means. The annual Budget Games are at minimum a contact sport, and at their most extreme a blood sport.

The rules are timeless and well known:

  • The largest budget carries with it the most influence in the organization. We are expensive, so therefore we are valuable.
  • Requests for increases indicate big plans and are intended to communicate vision, while a group that can do the same or more with less lacks ambition and imagination.
  • Perhaps the most dangerous rule for procurement is: if you don’t spend it, you lose it. This unfortunately equates realized savings with a loss of influence, a frustrating indication of how our efforts are often perceived.

Procurement’s role in the process varies greatly from company to company. As cutthroat as the Games can be, there is no such thing as a bystander and each role has its own advantages and liabilities.

CLICK HERE TO READ THE FULL POST ON IVALUA'S BLOG

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Webinar notes: Taking Charge of Your Career

Webinar notes: Taking Charge of Your Career

These event notes are based on a webinar presented by Supply Chain Insights on June 25, 2015. The webinar can be viewed on demand without any registration requirements here. I advocate seeing it for a look into some of Supply Chain Insights’ research on trends in supply chain talent development as well as to hear the stories shared by the panelists.

Along with moderator (Supply Chain Insights founder and CEO) Lora Cecere, the event panelists were Andrew Byer, P&G’s Associate Director of Supply Network, and Fran O’Sullivan, IBM’s General Manager of Systems, Strategy, and Operations.

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A Deep Dive into the Cost Drivers of a Direct Mail Program – Part 1

A Deep Dive into the Cost Drivers of a Direct Mail Program – Part 1

While some may believe that direct mail programs have gone out of style similar to print advertising, industry trends indicate quite the opposite. According to the Direct Marketing Association (DMA) Statistical Fact Book, the spend associated with direct mail has been increasing over the past few years from approximately $44.3B in 2012 to $44.8B in 2013, and a decent leap to $46.0B in 2014 – and for good reason. The average response rate for a campaign targeting recurring customers was 3.4 percent for direct mail, compared to 0.12 percent with email. In addition, the average cost per lead for a campaign targeting new customers was $51.40 for direct mail; whereas email was $55.24, meaning that the cost to generate a qualified sales lead or order was about $4 less with direct mail than email.

Recent comment in this post
Guest — Michael
Great post! I really enjoyed all the stats you included in this blog. This isn't that bad: "the average cost per lead for a campai... Read More
Wednesday, 05 August 2015 17:01
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Book Review: Strategic Sourcing and Category Management: Lessons Learned at IKEA

Book Review: Strategic Sourcing and Category Management: Lessons Learned at IKEA

Strategic Sourcing and Category Management: Lessons Learned at IKEA by Magnus Carlsson (KoganPage, August 2015) is not a case study, although I didn’t need the note from the author in the introduction to know that. The author may have spent 25 years at IKEA, working in strategic sourcing, but this is less a story of one company and more the learnings gained by one professional over 2.5 decades in a competitive environment.

Like any other book I review or event I attend, my focus in reading this book was to cull out the important ideas: what are the few take aways that really stand out as unique? There are quite a few in this book, any of which will improve the maturity and results of your procurement organization. I think this book is fantastic – full of great new ideas and ways to implement them.

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Webinar Recommendations for July 27 - 31, 2015: Digital marketing spend, Selecting a spend analysis solution, and Early engagement in sourcing projects

Webinar Recommendations for July 27 - 31, 2015: Digital marketing spend, Selecting a spend analysis solution, and Early engagement in sourcing projects

With eight events in three days, webinar hosts must see this as a week that most people are back in the office from early July vacations. Click on the title of each event below to view the full description in our events calendar and connect to their registration pages.

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Guest Post on Design News: Your Supplier is Not Your Friend

Guest Post on Design News: Your Supplier is Not Your Friend

Companies should never confuse a supply relationship with friendship. In fact, part of the role of any good provider is to challenge its clients in a productive way. Many times, companies outsource in order to transfer the majority of risk to suppliers.

In June, Design News hosted a webcast on product lifecycle management presented by team members at Sparton, a firm that handles the both design and manufacturing efforts for low/medium-volume, high-complexity components. Their presentation, “Why Product Lifecycle Management Is an Emerging Trend,” included all of the cost, timing, and supply chain implications of PLM.  

During the webcast, Sparton presenters spoke about the importance of building relationships with key suppliers. That emphasis makes sense because, in Sparton’s role as an outsourcing provider to manufacturing companies, the company sees advantages realized with those that they are able to partner with versus those that hold them at arm’s length or push back on project recommendations.

Good suppliers will bring their interests into alignment with those of their clients and make sure that the risks they are being asked to bear do not come back to bite their clients in the end. They understand that there are costs associated with each risk and, in order to service their customers efficiently, suppliers need to help them root out the causes of those risks.

CLICK HERE TO READ THE REST OF THIS POST ON DESIGN NEWS

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Keeping Procurement Moving at the Speed of Modern Communications

Keeping Procurement Moving at the Speed of Modern Communications

Many thanks to the Market Dojo team for their cooperation and collaboration on this post - proof that they have attention spans longer than goldfish. 

 

Everywhere you look, there is evidence that the pace of the world is picking up. We share our status instantly in 140 characters or less. Meetings are routinely scheduled for 30 minutes rather than an hour. We check email, make phone calls, catch up on the news, etc. while walking from one place to another so we are fully informed when we arrive. Saying, “Oh, I hadn’t seen that yet...” is likely to be received with skeptical looks and rolled eyes.

 

As an active part of this constantly updating, clipped environment, procurement professionals need to be aware of the general pace of interaction between people and organizations. We have to be both purposeful and accurate if we are going to hold people’s attention long enough to get from them what we need.

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How much should a procurement process vary by company or category?

How much should a procurement process vary by company or category?

Last week I shared six B2B buying processes being compared by Wake Forest University in North Carolina. You can learn more about their research here.

I looked at the processes, and can see where each of them would have a place in the right scenario. You would expect processes to be different by company or industry, but do you ever vary your process by category? Feel free to share you comments below or join the conversation on Twitter: @BuyersMeetPoint.

I think (E) Robinson, Faris, and Wind most closely resembles the standard strategic sourcing process that most organizations follow. A typical process usually 6-8 steps, starting with internal and historical data collection and leading to either supplier performance management or a hand-off to the internal stakeholders who will manage the relationship for the duration of the contract.

That being said, the other models match different (and maybe less typical but no less common in the grand scheme of things) procurement situations...

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