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

Between the Lines: More from the ISM-New York January 2013 Report on Business

The ISM-New York Report on Business is released on the second business day of each month at 9:45 AM Eastern. Buyers Meeting Point has been following the ISM reports on business for two years, helping you apply information from the indexes (which is collected from procurement professionals) to your own work. The most important thing to keep in mind when reading this report is that no one number represents the findings of the report; each piece of data only has value when considered as part of a trend - relative to the month(s) or year before.

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All for One and One for All

The motto of the Three Musketeers was "All for One and One for All". What was good for one of them had to be good for all and vice versa. Successful buying groups act in the same fashion - the majority of the time. Not everyone every time but most of the time.

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Procurement Podcast: Negotiating with Tough Guys

Clive Rich and Simon Horton, two experienced negotiators from the UK, have a series of podcasts called ‘Negotiation Natters’. Now, this is not a typo on my part. Although negotiation most definitely MATTERS, these podcasts feature Clive and Simon chatting about negotiation. While their style is casual, their content is not.

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Transportation Procurement with buytruckload.com - 'We're gonna do what they say can't be done'

“Atlanta to Texarkana and back in twenty eight hours? That ain't never been done before.”

-- Cledus Snow, Smokey and the Bandit

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As always - Buyer Beware

There are many benefits to working as a team and therefore, a buying group is that for the procurement world. Just like anything else, examine the buying group in detail before you join. They will do the same to your organization before allowing you to join.

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Procurement: Yup, there’s an App for that

As procurement professionals make increasing use of social media and online collaboration, the associations we belong to are doing the same. Search for procurement in your Apple or Android app store and you’ll come up with more results than you might expect. Some of the best uses of the app format are companions to the conferences that take place throughout the year. Angry Birds they are not, but they provide access to location information and (more importantly) presentation materials whether you attended the event or not.

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Car Pooling or Hitchhiking

Parents are often very busy with car pooling children to various activities - sports, school. friends, music lessons and so on. It can be quite helpful to have a large group in your car pool to balance all the schedules and maintain some sanity - hopefully!

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Procurement on YouTube: Climbing to the Procurement Summit

In this week’s Procurement on YouTube post, we we'll see Jamie Clarke: a Canadian adventurer, author, filmmaker, entrepreneur, and inspirational speaker who has summited Mt. Everest twice in four attempts. At first pass, you might not think that being able to climb Mount Everest would qualify him to work with procurement professionals, but in April of this year he will do just that – at Coupa’s INSPIRE event in San Francisco. I wanted to learn a little more about him, so I looked for and found a clip that shares a bit of his perspective on overcoming adversity, and, as you are about to hear, he understands the kind of challenges we face better than you would think.

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Strength in Numbers

As a young child, my parents would always say "Safety in Numbers". In procurement buying groups there is some truth to that but "Strength in Numbers" is more the case.

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Procurement on YouTube: Lessons Learned in the World of Indirect Procurement

In this week’s Procurement on YouTube post, we will see a recent post by ISM. Jason Kwan, an ISM board member and CEO of Landmark Investment Limited, a private equity company in mining, resource and infrastructure businesses in Africa, shares some thoughts on achieving success in indirect spend categories. We will hear him describe one of the main disconnects between procurement and internal stakeholders, and that is the definition of success.

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Everyone needs a Script

Every sports team needs a playbook. Every movie or play needs a script. So why should procurement be any different?

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Procurement on YouTube: Opportunities in a Challenging Economy

2012 saw some of the best known supply management analysts move into the solutions sector: Constantine Limberakis left Aberdeen’s Global Supply Management practice to become the Director of Marketing for HICX Solutions and Mickey North-Rizza left Gartner Group (where she landed after they acquired AMR Research) to become BravoSolutions’ Vice President of Strategic Services.

 

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How to Choose

So here we are in 2013. Happy New Year. I know my resolution is to live a healthier lifestyle with diet and exercise. I am sure that sounds familiar to many others!!

In that same light, what are we going to do differently to move our respective organizations forward to a healthier place? The competitive environment is such that controlling costs has never been more important.

Today’s eSourcing Wiki-Wednesday topic is Selecting Categories for Outsourcing.In order to contain costs, the article talks about using another organization to source indirect spend. This will save you time, money and resources. The question is how to choose which categories to outsource. 

Certainly that begins with a spend analysis project to understand where you DO spend the money in that space. I also found this article from Accenture that will help gain more understanding of the importance of controlling your indirect spend.

Setting up a process for controlling indirect spend is vital. Utilizing an outside resource enables your internal team to focus on YOUR core competencies.

This does take time and effort but it is incredibly valuable. What have you done to control indirect spend? Did you outsource or build this expertise internally? What did you find for savings in costs and efficiencies?

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Procurement on YouTube: Ideas for Saving Money

In this year-opening Procurement on YouTube feature, we'd like to kick off the year on a lighthearted note. The team at Market Dojo has put together a series of six very entertaining videos on how to save your company money.

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Procurement on YouTube: What is Crowdsourcing?

Each Monday, Buyers Meeting Point covers the coming week in Supply Management for the PI Window on Business Blog Talk Radio Program, with host Jon Hansen. We cover the coming conferences and webinars and help you decide how to allocate your professional development time for the coming week.

In addition to that review of the calendar, we present a guest sound bite – a timely excerpt that gives us an opportunity to further explore a topic of importance based on the time of year or the events being held. Most of our sound bites come from YouTube, where we comb through funny cat videos to bring you two minutes of high value multi-media procurement thought leadership.

In this week’s guest sound bite, we’re taking on one of the new ideas that we may get to hear more about in the Aberdeen Group CPO Summit recap webinar on Thursday this week – CrowdSourcing. In this video, Brian Bednarek, CEO of Mesh 01 and an Industry Analyst, speaks with CBS News Online about crowdsourcing and how it's changing the way companies work.

 

After watching the video, I did what Brian suggested – I put crowdsourcing and procurement into Google. I came up with a number of blog posts by the usual suspects, and their reactions were mixed. On the upside, crowdsourcing allows buyers access to the collective genius of a large group of resources they don’t have to target. The purchasing is done at will, on demand, and a la carte. On the other hand, quality may come into question, as do loyalty and continuity between projects. It’s really a question of value – you may spend less by taking the crowdsourced approach, but something beyond margin is being sacrificed to bring you those lower prices. No judgment here on good or bad – simply make sure you understand what you get for what you are paying.

 

Of course, that all assumes that procurement professionals will be using crowdsourcing as a way of getting the services their organization. The other possibility is that companies start crowdsourcing for solutions to their procurement challenges. We could find ourselves reaching out to the community at large in a more formal way than we do with social media sites today.

 

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Procurement on YouTube: Procurement Transformation at the 2012 Olympics

In this week’s procurement YouTube video, we hear a new clip from Matthew Hattersley, Commercial Partner at Clarion, as he talks about Transformational Procurement. Clarion recently hosted a seminar at which Paul Dickinson from the Olympic Delivery Authority and head of procurement for the Olympic Park shared his experiences.

 

In our August 6th Weekly Procurement Update on the PI Window on Business Blog Talk Radio program we heard from Jan Matthews, the Head of Catering, Cleaning & Waste for the London Organizing Committee as she outlined the requirements for the overall catering services program.

 

Now that the 2012 London Olympics are done, and were by all accounts an overwhelming success, those involved are getting an opportunity to reflect on what they learned. This includes procurement, and the transformational efforts that were attempted.

 

According to what Paul Dickinson shared at the seminar, there are two primary reasons why attempts at procurement transformation fail:

 

  1. The strategy in place must be clear at the executive and end user levels and be connected by clear plans that drive the implementation of the strategy.
  2. Document supplier requirements, including outputs and timetables, and use objective, measurable milestones so all parties involved can track how the effort is progressing.

Click on the video below to view it for yourself (or click here to view it on YouTube if your browser does not support Flash) and then join the conversation here.

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Procurement on YouTube: WBENC's Pamela Eason on Holding Procurement Teams Accountable for Diversity Results

Each Monday, Buyers Meeting Point covers the coming week in Supply Management for the PI Window on Business Blog Talk Radio Program, with host Jon Hansen. We cover the coming conferences and webinars and help you decide how to allocate your professional development time for the coming week.

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Procurement on YouTube: Who is Responsible for Cost Management in an Organization?

Each Monday, Buyers Meeting Point covers the coming week in Supply Management for the PI Window on Business Blog Talk Radio Program, with host Jon Hansen. We cover the coming conferences and webinars and help you decide how to allocate your professional development time for the coming week.

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Procurement Decision Making - Who Empowers Who?

This week’s Wiki-Wednesday article is part of the series on Next Generation Sourcing: Empowerment. As a strategy in procurement, empowerment has the potential to change the course of a project at many points:

Which suppliers are invited?

How will we structure the RFP or RFQ?

What negotiation strategy will be the most effective?

But no other decision in a project has more of an impact than the supplier award. Which suppliers will be awarded contracts, for how much, and what will the terms be?

Depending upon the organizational structure in place, and the model of the procurement organization, their role in that decision can vary from decision maker to observer. The model may also vary from project to project, and between direct and indirect spend.

Procurement as Decision Maker

In categories where cost is the primary factor affecting a decision, the project is to get a specified good or service for the total lowest cost, procurement will work the sourcing process and notify the business which supplier(s) offered the lowest pricing. Procurement is positioned to suppliers as the process owner and the ultimate authority for the category. If there is an executive approval process for this award, it is usually an administrative sign off on the decision before a contract is signed.

Procurement as Facilitator

In direct categories where there is an active business owner, procurement manages the sourcing process (with frequent involvement of the business owner) and then presents all qualified options so the owner can make an award decision. Procurement can present themselves to suppliers as an objective party, open to their ideas, taking care not to appear as though they have no influence and allow suppliers to bypass them. Executive approval for the award will ensure that the business owner does not give inappropriate advantage to the incumbent or miss out on opportunities to innovate based on aversion to change.

Procurement as Collaborator

In strategic categories of spend, procurement and business owners may take equal roles in the sourcing process. Procurement owns the sourcing process and technology use in the project and the business owner is responsible for category knowledge. Each party is able to leverage their strengths, collaborating on the structure of the RFP, negotiation strategy, and execution. Both will have input on the award decision, with executive approval of the recommended award made by the combined team.

If you are interested in reading more about decision making in procurement, Charles Dominick of the Next Level Purchasing Association published a three part blog series on the topic on the eSourcing Forum in 2008 that still holds true. In these three posts, he looks at basic, advanced, and expert decision making capabilities across cost, support performance, and innovation.

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Use the Magnifying Glass

How is your vision? Is it 20-20 or do you need lenses or a magnifying glass? How about your supplier and spend visibility?

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