How an organization manages its money is critical. That is nothing new. However, there are trends in procurement influencing how that is done.
“Great procurement professionals are not born, they are bred…"
- Dawn Evans, President and CEO, Sourcing Interests Group, July 2014 'Letter from the President'
I place a great deal of value in the fact that I have been able to work well and productively with all of the professional associations in our space. Each one is a little different and meets a specific need for a particular subset of the procurement professional community. I am not an active member of any professional association – including Sourcing Interests Group (SIG). My comments here have less to do with advocating for them in particular than being concerned about the resources available to the procurement community as a whole. I would have made the same argument on behalf of Spend Matters PRO or Procurement Leaders if they were the subject of some budgetary misclassification.
The entire professional community, procurement included, is bracing for the impact of the Millennial generation. Managers and executives want to position their company or department as a team that will appeal to the brightest, best upcoming achievers. ISM and ThomasNet recently joined forces specifically for the purpose of gathering nominations for their ’30 Under 30’ Supply Chain Rising Stars program. Corporate leadership teams are concerned about being flexible enough, mobile enough, and ‘sexy’ enough to compete for young talent. Professional associations are scrambling to make sure they demonstrate their relevance on an ongoing basis.
When new software is being implemented, so much of the focus is negotiating the price of the software itself. There are many components to an implementation and associated costs. One that is often overlooked is training. How will your organization get trained on this new process and technology? Will you hire someone to train? How much will that cost and how will it be handled ongoing?
This is (probably) the last in what became an impromptu three-part series on The Point about the value of storytelling for procurement. Part 1 considered applications of the idea in general. In part 2, Dr. Tom DePaoli provided a real world example and some further guidance. The post that started it all, on Executive Presence by Chip Scholz, can be found here.
I was involved in a project many years ago documenting the current procurement process across many divisions within a large international company. It was tedious and detailed work. I was frequently surprised by the various ways stuff was purchased. I was also surprised at what needed approval and what did not. For example, a cell phone needed Senior VP approval but a multi-million dollar purchase order for a For-Resale item did not.
I am not a fan of the term best practices. I mean who says it is really ‘best’ and there is always room for something better. I feel it is a little presumptuous to think YOUR way is the BEST way. I also think others can be offended by being told how to implement a best practice. However, there are ‘better’ practices that could improve your current situation. Some like to call it a process for continuous improvement.
In a July 14th article on NewsDay, NYASHA CHIZU asked ‘Is Procurement an Art or a Science?’
In the article, he makes the following statement:
“There is definitely an art to good procurement but on the other hand, taking a scientific approach to options analysis, requirements development and the procurement evaluation process can facilitate a more successful procurement project.”
I am not a shopper (which is an extreme understatement). I would pretty much like to spend my time doing almost anything else. Much to my teenage daughter’s chagrin, we went to the mall only once or twice a year. It was usually to get back-to-school clothes and to do Christmas shopping. When my mother took me shopping for clothes as a youngster, she claims that she could tell when my eye color turned from green to ‘grey’ that she was done and we had to leave and come back another time. While we may have been tempted to just grab anything and go, most of the time we did not.
When we are planning our vacation, there are so many options to choose from. What activities are available, what is the cost, when should we go, for how long, and what should we pack? It is exciting and can be overwhelming as well. How do we narrow it down to the best trip for us this year?
The World Cup in Brazil has everyone cheering for their country and their team. Football (or soccer in the US) is the globe’s transcendent sport. This year, for the first time, many of the United States televisions were tuned into the various matches. It has gained popularity for Americans in a big way. Obviously we are lagging behind the passion that this sport has carried for many others for decades, but in 2014 the U.S. was rising and falling as one with every touch of the ball.
As we prepare to celebrate the 4th of July in the United States, we have a lot to be grateful for. We are grateful for the simple things like peak of summer traditions: fireworks, grilling, and parades. We are also grateful that in the many years since the Declaration of Independence was signed our relationship with Britain has improved. We’d be awfully sorry not to be able to work with our British colleagues and partners.
All that being said, is the 4th of July a reason to be grateful for procurement? Absolutely. Procurement played more of a role in the American Revolutionary War than most people probably realize.
In September 2011, Wal-Mart announced a plan to spend $20B with woman-owned businesses by 2016. More recently, they expanded their Women’s Economic Empowerment program to include a ‘women-owned’ labeling program. Products that meet company ownership requirements will start appearing on Wal-Mart shelves this September1. Qualified companies can apply to be a part of the program through WBENC and WEConnect International.
Despite the company’s apparent good intentions, the program has not been warmly received by all, including some critics who feel calling additional attention to these products simply because of female company ownership does little to advance equality. As one commenter posted in response to a BusinessWeek article on the program, “The path to gender equality does not involve stickers pointing out that a product has been made by a female entrepreneur.”2
There are a lot of options available to organizations for a req-to-check system. A common mistake with many software selection processes is not taking the time to define the requirements. That is a critical step in order to ensure a successful implementation. It is not just about the technology, it is mostly about the business process.
In the fall of 2013, Stephen Ashcroft, a specialist in procurement risk at Brian Farrington, wrote a post for Supply Management about the fact that procurement practitioners have been hesitant to embrace social media in general, and twitter more specifically.
When we were first married, we would occasionally make a purchase without measuring. For example, we bought a beautiful cherry wall unit for our television only to find out the opening for the TV was too small for the set we had. Another time, we purchased a couch and could not get it in the apartment no matter what we did. I would say our procurement cycle had gone astray!
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.
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!
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.
We have a local farm stand nearby and we frequent them in the summer. They sell local eggs, produce and flowers. One unique aspect is that people will return their egg cartons to them and the farm refills them for the next customer. It is a great system and in a small way, they are practicing their own version of CSR.