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

Capt. Sully Sullenberger on Crisis Leadership (Revisited)

“There’s a false dichotomy between cost and safety. Are we willing and able to account for the many costs of not having a quality operation: lack of cooperation, poor leadership, waste, and incidents and accidents? If we really and truly account for them, then safety can pay for itself. Getting it wrong is more expensive than doing it right the first time.” – Capt. ‘Sully’ Sullenberger

 

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Celebrating Procurement Excellence on a Global Scale

Procurement professionals are traditionally known for being more reserved than our colleagues in other disciplines (ahem… sales and marketing). And while there is nothing wrong with that, it does mean that we let opportunities to celebrate our colleagues and accomplishments go unrecognized.

Procurify recently announced the launch of the Global Procurement Awards (GPAs). As they say in their official press release, “The GPAs were created to recognize and celebrate those committed to excellence in the procurement profession.”

There are several awards categories and candidates can nominate themselves or another. The application is mercifully brief – leaving no reason not to throw your hat in the ring for a little recognition and an opportunity to share with colleagues.

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Procurement and SMB Suppliers: Corporate Labradoodle?

In a new effort, announced this week at ISM2016, ThomasNet is looking to put their considerable weight behind one of the trickiest cross-products in all of supply management – the attempt to align demand from corporate procurement and with the innovation and agility of small suppliers. In advance of their announcement, I interviewed Ed Edwards, Manager of Audience Outreach, and Travis Sherbine, Vice President of Marketing and Product Management, from ThomasNet about the realities of making a formal SMB program work.

Let’s face it, there is something unnatural about the fit between big (or even medium sized) corporate procurement and small businesses (hence my labradoodle reference above). But, just like lovable, low-shed labradoodles, there is huge upside for procurement AND small suppliers if they can invest the additional effort required to make their interaction a success.

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Q and A with Michael Raezler, a 30 Under 30 Rising Supply Chain Star

I recently got the opportunity to have access to the 2016 class of ThomasNet / ISM 30 Under 30 Rising Supply Chain stars. I looked through the whole list of impressive young professionals, and one individual really stood out to me. Michael Raezler is a Purchasing and Supply Management Specialist with U.S. Postal Service.

I specifically requested his insight (as captured in the following Q&A) partly because he has accomplished amazing things in his short professional tenure and partly because he is a living example of excellence in a segment of the public sector that all too often goes unrecognized and under-estimated. The procurement profession – and the U.S. Postal Service – are lucky to have him as part of our community.

If you are interested in the entire class of 30 Under 30 Rising Supply Chain stars, click here to read more.

 

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ISM-New York Takes on Procurement2020 with their Annual Conference

I had a unique opportunity yesterday to serve as the Q&A facilitator for ISM-New York’s annual meeting. What is so unique about that? I did it from Central Massachusetts! Through the magic of Google Hangouts (and with a little help from an eight hour phone call) I saw, heard, and interacted with the speakers and attendees in a meeting room overlooking Times Square.

Kudos to ISM-New York President Nancy Murray, Executive Director Julienne Ryan, and former Vice President Jim Martin for their adventurous, virtual approach to collaboration and networking.

 

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Do you have any idea how hard it is to research a legal company named Contractually online?

Last week I spoke with Donna Wilczek, Coupa’s VP of Strategy and Product Marketing, about the mid-January announcement that Coupa had acquired Contractually, described in the press release as “a cloud innovator based in Vancouver, Canada that helps reduce businesses’ reliance on antiquated processes or inadequate technology tools to version control or redline contracts.”

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Point Counterpoint: Has Procurement Caught the Social Media Virus?

Earlier this week, I joined Jon Hansen on Blog Talk Radio for the next installment in our series of ‘Point Counterpoint’ discussions. You can listen to it on demand here.

This month our topic was social media and how procurement is – or isn’t – incorporating it in our work. Professionally, I look at the potential of social media in two ways:

 

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Standing Tall Beside Amazon in Electronic Component Distribution

Note: This post originally ran on Design News.

There’s an 800-pound gorilla in the room. It’s called Amazon. Yet not everyone sees it as inevitable that the e-commerce and distribution giant will dominate electronic component distribution.

In a recent interview with Tom Galligani, global vice president of supply chain for distributor Future Electronics, I asked for his views on Amazon’s invasion of the B2B space. Given the size and power of Amazon, you might expect distributors like Future Electronics to be prepared to be put out of business, but that is not the case. In fact, Amazon’s entry into the B2B marketplace creates a unique set of opportunities for buyers as well as suppliers or distributors.

Nevertheless, like others in the electronic components distribution industry and beyond, Galligani and his team are keeping a close eye on Jeff Bezos’ $90 billion e-commerce behemoth. Amazon may have gotten its start with an unbeatable B2C experience, but it has made inroads -- both organically and through acquisition -- into the B2B market.

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Should Procurement Fear or Embrace Procurement-as-a-Service?

I recently had the opportunity to interview Phillip Ideson, the founder of ProcureChange, a new Procurement-as-a-Service (PaaS) provider. You can listen to the entire interview on BMP Radio.

My first reaction to PaaS – one that I think is quite natural – is concern about what it will mean for today’s procurement practitioners if it catches on. Will we be outsourced the same way we have outsourced so many other formerly in-house capabilities?

As it turns out, however, the news is better than I expected. PaaS, far from being a threat to procurement, may be one way for us to achieve the strategic status we crave.

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Actively Managing Procurement's Image

In September, Procurement Leaders ran an article by Tyler Chamberlain, Coupa’s global head of spend management, on the benefits of getting a solid procurement function established earlier in a company’s growth curve.

As he stated in the article’s title, “If it ain’t broke, don’t wait until it is.” The premise is that making investments in procurement talent and technology before problems arise prevents many problems from ever arising. Supplier records that are managed well from day one never need a massive clean up. Processes that have been in place as long as anyone can remember don’t have to overcome compliance hurdles. Spend that is managed centrally never has the chance to break between direct and indirect.

Perhaps more importantly, and as I had an opportunity to discuss with Chamberlain (click here to hear the conversation on BMP Radio), procurement has control of their internal image from the outset and can build their brand around positive results rather than problem resolution. When we hear Chamberlain’s message from this perspective, all organizations and procurement teams benefit from his recommendations, not just the start-ups.

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Guest Post on the Social Contracting Blog: P is for Procurement... except when it isn't

Click here to read this post on the Social Contracting blog.

The Finance team manages the finances of the enterprise. Marketing people market services and solutions to the purchaser (or customer). Human resources manages… well humans.

Given those examples, you would think that Procurement handled procurement. In an ironic twist, this is becoming less and less true—especially as technology evolves and blurs the line between Procurement as an entity and procurement as a process.

 

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Would Sales Describe Your Procurement Approach as ‘Peter Price’ or ‘Valerie Value’?

Elliot Epstein, CEO of Salient Communications, has partnered with organizations such as CIPS in the past to help sales and procurement professionals better understand each other. He has also done a series of podcasts on Sales vs Procurement with Paul Rogers – a three decade procurement professional that Epstein describes as the leading procurement coach in Australia.

He talked about the podcast series as well as the sales procurement divide in a YouTube interview titled Dealing with the Rising Power of Procurement.

For my podcast on the topic, including guest audio from YouTube, visit Blog Talk Radio or Sound Cloud.

The sales vs procurement divide has always been an interesting one. Who is really in the power position? How accurate is each side’s understanding of the actions and motives of the other?

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The Suzuki Volkswagen ‘Divorce’ – What Not to Do or a Case Against Partnerships Altogether?

Suzuki and Volkswagen have finally completed their ‘divorce’ or the breakup of their 2009 partnership that was supposed to bring market, manufacturing, and technical expertise together for the benefit of both parties. This true story sadly illustrates the dark side of collaborative business relationships – and that is the fallout for all parties if and when they fail.

For my podcast on the topic, including guest audio on the story from Reuters, visit Blog Talk Radio or Sound Cloud.

As sad as the state of the relations between these two companies is today, the partnership started with high expectations on both sides. In 2010, VW purchased a 20% stake in Suzuki, worth approximately $2B US, indicating that this deal was no informal initiative.

Unfortunately, it also started with ulterior – or at least secondary motives – that may have doomed the effort from the outset.

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Guest Post on Design News: Should Approved Vendor Lists Be More in Line with Design Cycles?

According to joint research done by Design News and Exploration and Insights in 2014, 67% of companies have design cycles of 3-12 months. The remaining 33% of survey participants are almost evenly divided between design cycles requiring longer than a year and those taking less than three months. Regardless of their length, we can be sure all of those teams are looking for ways to shorten them, without sacrificing quality or functionality, so that they can be first to market and get the greater share of customers.

CLICK HERE TO READ THIS POST ON DESIGN NEWS

While the need to speed up design cycles is top of mind today, it is not a new initiative. In fact, 20 years ago, Design News published what you might call a “multi-generational design engineering retrospective.” As stated in “Engineering Megatrends,” published on Aug. 28, 1995, “Since the first caveman decided to capitalize on his best idea for a new club, businesses have operated on the principle that the first to get to market owns the market — at least for awhile.” With increased competition from all corners of the globe, and the nearly universal consumer fascination with having the latest, most innovative products, cutting time to market is now a critical element of competitive advantage.”

Despite this pervasive emphasis on “faster, sooner, better,” the same organizations that have multiple design cycles a year only update their approved vendor lists (AVLs) on an annual basis.

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Three Things ‘Rock Star’ CPOs Know About Procurement Influence

Last month I had the opportunity to speak with Dave Bowen, Xchanging’s US Country Manager and CEO of MM4. Xchanging has now released two parts of the research they conducted into procurement and supply chain. You can read my coverage of the first two parts here and here.

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Procurement Perspectives Podcast: Where should procurement report?

This week's guest audio comes from Dustin Mattison. His Future of Supply Chain podcast series offers weekly interviews with leading supply chain thought leaders. The podcasts can be seen on YouTube and his blog is part of the Kinaxis Supply Chain Expert Community.

In this podcast Mattison interviews Julio Franca, a Director at the global, boutique management consulting firm Spin Consulting. The excerpt we are about to hear is the first question of the podcast and in it Franca addresses where procurement should report in the organization relative to supply chain. The full interview can be heard on YouTube.

You can hear the full podcast on Blog Talk Radio or on Sound Cloud.

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The Good, the Bad, and the Ugly of the CEO Pay Ratio

In August the SEC adopted a measure that will require public companies to publish a CEO pay ratio in their financial statements. The ratio, which compares median worker pay to the CEO’s salary, is a provision of the 2010 Dodd-Frank act and it takes effect in January 2017.

Some of the early, albeit unofficial, CEO pay ratios seem to demonstrate an enormous pay disparity between the leadership and workers in a company. In other cases, it calls attention to CEOs with strikingly low compensation for the position they hold. For instance, Apple’s Tim Cook has a CEO pay ratio of 43:1, Ford’s Alan Mulally has a 113:1, and Goodyear’s Richard Kramer has a whopping 323:1 ratio. IBM and Intel have ratios of 25:1 and 30:1 respectively.

Any time procurement is evaluating a publicly traded company, we naturally make use of their financial statements and annual reports, which are valuable sources of information. But is this new ratio relevant to the evaluation of a supplier for financial stability, risk, and collaborative potential? Should procurement take this information into consideration when ranking and selecting suppliers?

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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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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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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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