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  • Webinar Notes: Collaborative Contract Management: Procurement’s Role in Enhancing Compliance and Mitigating Risk

    When you combine the speaking points of Bartolini and Selectca’s VP of Strategy Bill DeMartino, you get a full how and why on collaborative contract management. The first part of the webinar, presented by Bartolini, aimed at putting new approaches to contract management in the context of leading CPO’s plans for 2015. Savings targets have not diminished as a focus of procurement’s attention, but the pressure may be ebbing somewhat as overall effectiveness – namely better decision-making and execution – increases in importance. Procurement needs to collaborate well with the CFO, the C-suite, and suppliers. And as Bartolini pointed out, in many cases, companies are now competing with each other throughout their entire supply or value chain rather than just as a single entity. When you drill down and look at the expected trends in 2015, contract management looms large as a representation of the commercial commitments made by supply partners. Contracts are at the center of where procu ...

    by Kelly Barner
    Friday, 27 February 2015
  • Strategic Sourcing in Higher Education

    Everyone knows that cost of college education is escalating and becoming quite a burden for families and students. Determining how to get that piece of parchment can be an economic challenge that many are finding it difficult to achieve. Several years ago I had the opportunity to speak with someone in the procurement area at a large university. They were putting a strategic sourcing team together and implementing the supporting technology. It was refreshing to hear that the goal was to reduce overall costs and try to mitigate some of the tuition increases for students. When I did a search on “strategic sourcing in universities “, it was encouraging to see how many had teams and processes in place. For example, Boston University has posted almost $6M in savings since 2012. They have information publicly available on who are the current suppliers, what are the procedures used in procurement and who to contact on their procurement team. The blog this week is from Strategic Sourceror ...

    by Cindy Allen-Murphy
    Wednesday, 25 February 2015
  • Webinar Notes: Driving Excellence - Global Auction Trends & Best Practices

    In all the webinars I have attended (over 200, but who’s counting?), I have never heard a provider describe themselves as ‘fanatical’ about anything. And yet the Scanmarket team – represented in this event by SVP Ed Mathews and Director Henrik Balslev – introduced the company as being “fanatical about measuring customer results for the sake of benchmarking.” The array of data they have collected is amazing and is no doubt invaluable to their customer base and other followers. I was most impressed by the fact that their 2014 data crunching is already done. According to Mathews, they provide quarterly updates to their auction stats in the Scanmarket LinkedIn group and on their Blog. The information they are collecting and analyzing covers over 20K auctions in 47 countries. The root purpose of their analysis is to find a correlation between the type of auction used, number of suppliers, region, timing, and results. At a very high level, you will get the best results from an auction run ...

    by Kelly Barner
    Friday, 20 February 2015
  • Global warming and your supply chain

    I think my neighborhood is beginning to look like this! The Boston area has had two blizzards and two major snow storms in 3 weeks. The snow accumulation is record breaking and reached over 100 inches (254 cm). That was followed by high winds and bitter cold. And we still have a lot of winter to go. Weather like this causes all kinds of delays in the supply chain. Flights are cancelled, businesses are closed, and governors declare states of emergencies. There was a multi-car accident that included a FedEx truck and packages ended up all over the roadway. Not sure if those will get to their final destination! Some people are commenting that global warming is not happening. However, this is exactly what global warming looks like. Since the oceans are warmer, there is more moisture available to become snow with cold temperatures. This article from Climate Central, What A Warming World Means for Major Snowstorms explains in layman’s terms what we are experiencing. It also discusses that ...

    by Cindy Allen-Murphy
    Wednesday, 18 February 2015
  • Webinar Notes: ePayments: Big Trends & Predictions for 2015

    There is far more exciting change going on in Accounts Payable than most procurement professionals probably know. We’re so used to dealing with them that AP has become like a cousin to procurement – but based on this week’s webinar, it is time that we give them a fresh look. There is a lot of evolution taking place, including automation and more. In fact, I don’t think Bartolini stopped to take more than two breaths during the entire 30 minute presentation. I’m amazed he didn’t lose consciousness during the Q&A. Use of ePayments is on the rise in AP, which is not a surprise once you learn that it costs the average organization $14 to process each invoice. (Quick math: $14 x the total number of invoices processed = way too much to continue that mode of operation.) There is still a significant amount of paper being used in AP, both incoming (invoices) and outgoing (checks). Sometimes, for reasons that have more to do with supplier capabilities than their own, poor AP gets a bad r ...

    by Kelly Barner
    Friday, 13 February 2015
  • A Penny Saved is a Penny Earned

    That statement could also be a mission statement for most procurement organizations. Cost containment has been the main focus for many years. Performance measures such as cost savings are consistently used to demonstrate effectiveness of the procurement team. However, many executives are now looking for additional value from that area of their organization. The blog pick of the week is from the Supply Chain Brain, “Why Procurement is No longer Just a Numbers Game”. The article reviews a survey that IBM performed with over 1000 respondents from companies with revenues over $1B. It discusses that in order for things to move beyond numbers, the procurement department would ideally report to someone other than the CFO. While some are reporting to the COO, the majority still report up to the financial executives. For those that are making a shift, innovation is an aspect that procurement can provide to their team. Through relationships with their supplier community, they have access to ...

    by Cindy Allen-Murphy
    Wednesday, 11 February 2015
  • Predictive Analytics in Procurement: The Logic Behind The Hype

    Without channeling the fearful Ben Stiller risk assessor character in Along Came Polly, predictive analytics facilitate risk judgments that are quick and favorable towards a full-picture view of the best-case scenario. As organizations face off in increasingly competitive environments, this provides the active approach necessary to form strategy around multiple potential outcomes. Patricia Dreghorn summed up the overall impact predictive analytics can have in an article on Supply Management: “Procurement no longer requires someone to bang their fists on the table and demand a better deal from suppliers. It can now be founded on intelligent forecasting, understanding the market trends and knowing when is the right time to take risks and seize opportunities. This ability to make better decisions is made possible by a combination of very insightful data and the ability to interrogate it.” To clarify things in terms of hard numbers, according to a 2011 article on SAPInsider, “benchm ...

    by Heather Grossmuller
    Tuesday, 10 February 2015
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“When you are open to share what you know with other people, good things will happen for you.” –Soheila Lunney 

Throughout the month of May, Buyers Meeting Point is covering ‘The Procurement Game Plan’ through a series of interviews with Charles Dominick and Soheila Lunney – both about our questions in response to the book and the trends they observe in supply management as a whole. Our original intent was to interview them about the book, but as we got further into conversation, we found that it was impossible to separate the content of The Procurement Game Plan from their ‘day jobs’. This book is not a retrospective look back or an encapsulation of their careers, but a snapshot from two very dynamic contributors to the procurement community. I highly recommend it as an addition to your professional library.

Our review of the book is available, and last week we shared a Q&A with both authors specifically related to our questions about the book. This week we’ll share the first half of our interview with Soheila Lunney.

SLunneyIn addition to being an author, Soheila is president of the Lunney Advisory Group, a provider of coaching and mentoring for procurement professionals in various industries to improve their processes and practices, to significantly reduce the cost of acquiring products and services, and to contribute to the bottom line profitability of their organizations.

Buyers Meeting Point: As a procurement educator and coach, what is your perspective on the typical character or personality of purchasing/procurement professionals and how well that is suited to the future requirements of the role?

Soheila Lunney: As more and more universities are offering Procurement and Supply Management courses and degrees, I see the character of procurement professionals is changing with much higher caliber individuals in various industries.  Procurement employees are truly becoming a group of professionals who are gaining the respect of top-level management.  Leaders of the organizations must support creating an environment that their procurement staff can grow, learn new and emerging best practices, and expand their horizon.  As economy is improving allocating funds to provide training for procurement staff should become a high priority for management.

 

BMP: How did a background in the pharmaceuticals industry prepare you to help procurement professionals in other industries learn to manage supply chain risk?

Soheila Lunney: While it is true that pharma may be ahead of other industries in their assessment and handling of risk potential (due in part to government regulation), industry does not matter. What matters is interaction with the outside world, while includes the health and safety of customers and associates as well as the reputation of the organization.  Whenever possible, tap into tax, legal, and treasury (for example) for their guidance. Come up with approaches that bring safety, security, and contingency plans to the organization. Keep abreast of what other organizations are doing, benchmark against them, and implement practices that can safeguard your organization against unexpected events.

 

BMP: It seems that one of the barriers to procurement having an established seat at the executive table stems from a lack of financial knowledge. Do you see that in the companies that you work with?

SL: Yes – I do see groups and individuals struggling with their lack of comfort with finance. I think it breaks down to two issues: the first is a genuine weakness with financial topics. If this is your situation, you need to acknowledge the weakness and take a class that  can satisfy your needs. The other issue looks at negotiating cost savings v. reporting those savings to the rest of the organization. The most common mistake procurement makes is reporting project savings in one big number. It is critical to itemize results as much as possible to establish procurement’s credibility by creating opportunities for explanation and demonstrating knowledge of the product/service in question.

It is also important to understand the methodologies that your finance group or controller will buy into and structure results reporting to match them. Each company or industry is different, and contract results may change over time due to M&A activity or leadership’s decisions. It is also important to make sure that multi-year contract savings hit the budget for all applicable years. This will require a joint internal effort, but will bolster procurement’s relationships with other departments.

Next Thursday we will share the rest of our interview with Soheila, and on May 31st we will finish up our series on ‘The Procurement Game Plan’ with our interview of Charles Dominick.

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