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  • Webinar Notes: Why Vendor Management Must Change: 3 Most Common Dysfunctional Aspects of the Current Model

    I attended this event because there is no question that the supply base is playing an increasing role in the ability of enterprises to maintain a competitive advantage. Whether you use the label outsourcing or vertical dis-integration or corporate virtualization or just think you are fully leveraging the capabilities of your suppliers, how you work with suppliers is critical. In this event, OI’s Frank Casale and Alsbridge’s Craig Nelson took some of the existing thought leadership in this area and pushed it forward. For instance… You know you are supposed to collaborate more with your suppliers, but what if it’s a group effort? Most of the examples we hear about supply base innovation and collaboration are one to one: one buying organization and one strategic or critical supplier. What if, in order to accomplish your goals and objectives, you need to collaborate with multiple suppliers? By extension that means that in order to deliver, those suppliers need to collaborate and innov ...

    by Kelly Barner
    Friday, 27 March 2015
  • Benefits of a Supply Chain in China

    The world is getting smaller every day. We have so many ways to connect at a moment’s notice. We can reach thousands and millions of people using social media such as Facebook, Twitter and so on. Look at the firestorm that took place in 2014 with the ice bucket challenge to raise awareness and funds for ALS. Over the past twenty or so years, the desire to utilize the labor force and factories in China has grown significantly. With the better communication methods, it has been easier and provides an option for cost savings. It became quite attractive to move a significant component of your supply chain to China. However, that has come with some issues such as lead time and maintaining the expected level of quality. This week’s article, Is Sourcing in China still Competitive covers several interesting aspects to consider while looking at sourcing trends in China. Labor costs are rising in China but they are still lower relative to labor in other areas. When you look at the exports fro ...

    by Cindy Allen-Murphy
    Wednesday, 25 March 2015
  • Continuous Improvement for Procurement Leaders

    As parents, we make sure our children have regular visits to the doctor and dentist. This is a routine checkup to ensure everything is on the right track and progressing as expected. In our professional lives, it is good for an organization to have a ‘healthy checkup’ as well. This week’s article is highlighted by Pymnts. It is a study by IBM after surveying over 1000 CPO’s across 41 countries. This highlights the behaviors of strong procurement teams. New Study separates the World's Procurement Leaders from the Followers outlines 4 differentiators. Reviewing material such as this regularly is akin to having those checkups at the doctor’s office. One of the differentiators is working closely with the stakeholder. If procurement works in a vacuum or with little interaction, there is less of an opportunity to get it right or improve. In the example below, this is a classic example of the customer wanting a simple tire swing, did not explain it very well and it was designed completely w ...

    by Cindy Allen-Murphy
    Wednesday, 18 March 2015
  • Why it is Not Worth Preventing Every Disruption in Your Supply Chain

    In C.S. Tang’s article, “Robust Strategies for Mitigating Supply Chain Disruptions,” found in the International Journal of Logistics Research and Applications and cited by MIT’s Sloan Management Review in 2014, he explains the constant evaluation between supply chain efficiency and risk reduction exceptionally well. The distinguished UCLA professor writes: “Today’s managers know that they need to protect their supply chains from serious and costly disruptions, but the most obvious solutions — increasing inventory, adding capacity at different locations and having multiple suppliers — undermine efforts to improve supply chain cost efficiency. Surveys have shown that while managers understand the impact of supply chain disruptions, they have done very little to prevent such incidents or mitigate their impacts. This is because solutions to reduce risk mean little unless they are weighed against supply chain cost efficiency. After all, financial performance is what pays the bills.” Com ...

    by Evan Wolkin
    Tuesday, 17 March 2015
  • Webinar Notes: Women Networking Group Webinar - Marketing Yourself through Social Media

    It isn’t that I have anything against this specific combination of color and product, to me it is what the combination represents. When I was in college, I went to buy a pair of roller blades and my choice was pink. Bright, bubblegum, icky-sticky pink. Now, I’m as feminine as the next girl, but something about them struck me as all wrong. Just because I’m female I need to want pink rollerblades? I was planning to join a group of friends to play street hockey and I was not going to show up in skates that looked like I stole them from Barbie’s Malibu Dream House. So, with no other options, I did the only reasonable thing I could think of. I bought a pair of men’s grey rollerblades. What on earth does this have to do with IACCM and their women’s networking webinar? I signed up for the event genuinely interested in the combination of social media networking and considerations specific to professional women. I didn’t have any idea of what those considerations were, but I was curious. I ...

    by Kelly Barner
    Friday, 13 March 2015
  • Negotiation is child's play - or maybe not

    When our daughter was in elementary school, she was a tough negotiator. She wanted her independence at a very early age. When it came time for bedtime, we came up with a plan. She could go to bed anytime she wanted up until 8PM. It was her choice. She loved that freedom and the rest fell into place. From our perspective, we wanted her in bed by 8PM anyway but it was all in how it was presented. Negotiation is something we do every day – sometimes with ourselves and sometimes with others. Should I have dessert, that cookie, that extra glass of wine? Who on the team should do the analysis, the presentation, make that sales call? In procurement, this is a key skill that constantly needs to be sharp and at the ready. In this article from Harvard, 10 Hard Ball Tactics in Negotiation, it goes through scenarios and areas to avoid. One that I found interesting was “Trying to make you flinch”. In this case, the other party keeps making harder and harder demands, waiting for you to break. I r ...

    by Cindy Allen-Murphy
    Wednesday, 11 March 2015
  • Webinar Notes: Use Predictive Analytics to Help You Capitalize on Business Moments

    The business moments portion of the webinar – my reason for attending – was fascinating. The companies that have managed to prepare for and manage the opportunity presented by these moments have achieved truly amazing things. Laney provided many examples from Gartner’s ‘Art of the Possible,’ but I thought two of the best demonstrations were these: 1. Burberry wanted to take better advantage of the data they were able to collect in their retail locations, including using a customer’s past purchases to incent future purchases. Their business moment was made possible by embedding RFID tags in products so that when a customer lifted an item to look at it, dynamic displays in the area would automatically change to show that item as part of an outfit. 2. A fast food restaurant (who understandably could not be named) figured out that if they changed out the displays at the drive through when there were long lines they could emphasize items with less preparation time to keep the lines movi ...

    by Kelly Barner
    Friday, 06 March 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 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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