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  • Webinar Recommendations for July 6 - 10, 2015: Townhall on Risk, the End of SAP’s eSoD, and Contract Playbooks

      Risk...Not Just Your Risk Officer's Job (Sig Town Hall Teleconference) 7/8, 1pm EDT I’ll start my recommendations for the week with Sourcing Industry Group’s July town hall teleconference. These events are member-side only, non-promotional, and not recorded. One of the unique things this allows is an open floor audio exchange, where questions are asked live on the phone rather than being submitted via a Q&A panel. This month’s town hall leader is Dawn Evans, SIG’s CEO. Just as purchasing activity is more distributed in the enterprise than ever, so too is risk management being taken on by all employees in all functions. The challenge facing the risk officer is, therefore, something we can easily understand. Attend this event to learn about risk governance throughout the enterprise.   Asserting your Rights to SAP eSourcing on Demand and CLM in the Cloud. No Pain and Plenty to Gain (Hubwoo) 7/9, 10am EDT SAP has announced that they plan to discontinue their eSourc ...

    by Kelly Barner
    Monday, 06 July 2015
  • Guest Post on the Social Contracting Blog: Is there “Tough Love” Embedded in Your Budget Process?

    It is the worst question Procurement ever faces. C'mon – you know what question I'm talking about. That horrible, terrible question from Finance for which there is no good answer… If Procurement worked so hard and saved all of this money, WHERE IS IT? Ugh. The problem is that the space between negotiated and realized savings is full of pitfalls: unexpected requirements, inaccurate demand, and budget holders who see an opportunity to unofficially reallocate savings elsewhere. Even when additional value is created, many times by the end of the year the savings have all but evaporated. This is a problem that has to be handled by the top level of the organization. If the strategic vision of the leadership team requires that all uncommitted funds be returned to a central account, they have to be willing to support Procurement by issuing a mandate. Declaring that all funds saved by Procurement are to be removed from line of business budgets is a tough love decision. But all that really m ...

    by Kelly Barner
    Wednesday, 01 July 2015
  • Procurement Perspectives Podcast: Hear from the 30 Under 30 Supply Chain Stars

    This week our audio comes from the ThomasNet and ISM 30 Under 30 Supply Chain Rising Stars program. They hosted a panel-style interview and discussion with some of the 2014 award recipients at this year’s ISM conference. The full hour-long conversation is available on Sound Cloud if you want to hear it. The podcast starts with each of the participating recipients and program mentors introducing themselves and then moves on to a press-conference style question and answer session with some of the most recognizable names in procurement media – including the Hackett Group, Manufacturing Talk Radio, and Spend Matters. The excerpt I selected to share starts with a question from Supply Chain Management Review’s Editorial Director, Bob Trebilcock, as he asks how these rising stars ended up in supply chain. You can listen to the podcast on the PI Window on Business Blog Talk Radio channel or on our Sound Cloud page. ...

    by Kelly Barner
    Tuesday, 30 June 2015
  • Webinar Notes: Collaborative Procurement: Using Relationships to Drive Influence and Results

    For starters, and as Bartolini stated in the event, you can’t have influence without collaboration - because no function is an island. This has its roots in the timing of procurement’s engagement with the business. Influence is not an on-again, off-again quality, which means that while it is important to engage as soon as possible, it is probably better not to disengage in the first place. Not only does staying connected take care of the lead time problem procurement so often faces, it also changes the role procurement plays and how we are regarded by the business. For instance, if we come in at the last minute, we are ‘order takers.’ If we are constantly present, we are partners. Agility, the focus of the overall CPO Rising 2015 Agenda, plays an important role in influence building as well. There are plenty of reasons for procurement to want to be agile, but wanting to have influence requires that we be agile – almost by definition. Being at the center of the action requires agili ...

    by Kelly Barner
    Friday, 26 June 2015
  • Guest Post on Design News: Understanding the Differences between Strategic Sourcing Goals, Objectives, and Requirements

    Early in the course of a product design and manufacturing organization’s strategic sourcing project it is common to have a kickoff meeting that includes the engineering team. It is the opportunity for the sourcing project team to lay the groundwork for the rest of the effort. One of the most critical discussions that should be a part of the kickoff is around the goals, objectives, and requirements for the project. This is an effort to be taken seriously by both procurement, which should facilitate the discussion, and engineering, which provides critical inputs. Unlike a mission statement, which is often dismissed as being an overly soft (and largely meaningless) feel-good expression of early-stage enthusiasm, goals, objectives, and requirements are tools that will be used actively in the sourcing project once it reaches the decision-making stage. When I worked as a consultant at a procurement solutions provider, I held workshops on kickoffs for the procurement teams I coached, as par ...

    by Kelly Barner
    Thursday, 25 June 2015
  • How Procurement Saved the American Revolution

    Generally speaking, the Colonies (as we were known back then) were a key point in the British commercial supply chain. The mercantile system was based on having colonies that would become exclusive trading partners. The Colonies sent materials such as fish, grain, and lumber to the West Indies in exchange for sugar, molasses, and rum, which were sent to Britain.1 Whether it was for materials made or grown in the Colonies, or the other markets we afforded them access to, there is no doubting that we were worth fighting for. When tensions started to rise because the British were exacting more in trade and taxes than the colonists felt they received in return, tensions hit a boiling point. And we think we have supply chain risk today… When it comes to the fighting itself, George Washington’s army only stood as long as he could procure enough supplies to feed, clothe, and house it. He barely managed to do so in the hard winter of 1776 but somehow came through. “He successfully procured ...

    by Kelly Barner
    Friday, 04 July 2014
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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 this week we’ll share the second half of our interview with Soheila Lunney. You can also read the first half of our interview, or a Q&A with both authors.

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: Risk management is an area where many supply management teams are seeing increased attention and responsibility. Is risk management (or assessment) a specialized skill set or is it something that any well trained procurement professional can learn with the right tools and processes?

Soheila Lunney: Any well-trained procurement professional can assess risks and take the necessary steps to mitigate them.  Additionally, procurement professionals need to team up with their counterparts in other functions such as Finance, Taxes, Treasury, Legal, … to address risk management. Procurement professionals often forget about their internal resources!

BMP: Obviously, procurement understands the rationale behind preserving their role as the gate-keeper to the organization, putting themselves between business users/stakeholders and suppliers. If a supplier sees procurement as more of a wall rather than a gate, they may be willing to bypass procurement in pursuit of a sale. Do you have any recommendations for getting (and keeping) internal stakeholders on board?

Soheila Lunney: Educating the stakeholders is the key.  Members of sales force are trained on “back door selling” concept.  This is a practice that hurts the buying organization if the end-users/stakeholders are not educated.  Procurement professionals need to raise awareness and educate their counterparts in various functions about this practice and the harms that it brings to the organization.  Speaking with one voice should be the motto of every employee.

BMP: With regard to consciously developing relationships in the organization to increase respect, much thought has been given recently to the need for better dynamics between procurement and finance. What other less covered functions benefit from procurement making an active relationship investment in?

Soheila Lunney: Legal dept, Taxes, Engineering, Treasury, HR, ………..

BMP: You have mentioned that procurement often forgets to leverage internal resources. Can you give us an example or illustration?

Soheila Lunney: This is a lesson that many procurement groups learn the hard way; they put a contract in place for the organization that represents good savings but still get criticized by of other stakeholders such as the controller. Usually the cause of this is bringing stakeholders into the process late or not at all. For example: one Lunney Advisory Group client negotiated a new contract for copiers. They negotiated savings for the organization but did not bring finance into the loop until after the contract was signed. When finance finally got involved, they questioned not only the cost analysis but also the negotiated results. Further consideration revealed that the contract offered a short-term impact but created longer-term issues. 

Procurement should try to address all projects in a cross functional manner from the earliest stages so other departments can provide input and have the opportunity to ask questions and provide solutions. As a result, the final contract will be accepted by larger part of organization, positively impacting implementation and compliance. Even when stakeholders in other departments are not interested in taking an active role in an ongoing project, it is important to keep communicating so they stay in the loop.

When I am working with a company, I always ask for other departments to be included in discussions. It is important to see the interaction between procurement and other departments in order to understand the culture of the company. If it is evident that they don’t get along, then a lot of additional work needs to be done. It is important for companies to act as one and speak with one voice in order to realize the full benefit. This requires not only top down communication and support, but also training for anyone who will come into contact with suppliers. This extends beyond the sourcing teams to top level management, administrative assistants, and even building security personnel.

On May 31st we will finish up our series on ‘The Procurement Game Plan’ with our interview of Charles Dominick.

 

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