BMPweblogo2015

Keep current with BMP linkedin twitter scribd btn red 24x24blogtalkradio 24x24youtube24x24soundcloud 24x24

  • Book Review: Strategic Sourcing and Category Management: Lessons Learned in IKEA

      Category Management The first question that might come to mind is ‘how does the author suggest we segment our spend or supply base to get the best results from category management?’ He advocates segmentation by manufacturing process – and yet he introduces the idea that the processes he is accustomed to are different than the ones most commonly seen. The steps in any process must be allowed to influence each other – not just downstream, but back and forth. This philosophy brings the entire process to life and pushes those managing it to emphasize agility and flexibility. Several of the take-aways I detail below provide examples of where learning something or changing a requirement must be allowed to affect the trajectory of the project no matter how far through the process it is. That being said, Carlsson does not suggest that processes should be ‘loose’. In fact, he explains that the difference is in the details – the difference between mostly getting a process right and ...

    by Kelly Barner
    Monday, 27 July 2015
  • Webinar Recommendations for July 27 - 31, 2015: Digital marketing spend, Selecting a spend analysis solution, and Early engagement in sourcing projects

      The digital disconnect (Proxima Group) 7/28, 11am EDT If there is a category of spend that has only most completely evaded procurement management it is legal. If there is ANOTHER category of spend that has eluded us it is marketing. In this week’s event. Proxima Group and a panel including members form Warburtons and Transform UK will take on digital marketing spend. According to Proxima, digital marketing budgets are on the rise, and yet, companies have had difficulty pinning down the return on that investment – just ask Twitter and Facebook. The combination of rising budget and minimal governance is good news for procurement teams looking to break into marketing spend.   Spend Analysis Solution Selection: What to Look for in Software and Services (NLPA) 7/28, 11:30am EDT Although I don’t usually think of the Next Level Purchasing Association hosting technology-analyst style webinars, this event promises to be a line drive out of the park. As they point out in the ...

    by Kelly Barner
    Saturday, 25 July 2015
  • Guest Post on Design News: Your Supplier is Not Your Friend

    Companies should never confuse a supply relationship with friendship. In fact, part of the role of any good provider is to challenge its clients in a productive way. Many times, companies outsource in order to transfer the majority of risk to suppliers. In June, Design News hosted a webcast on product lifecycle management presented by team members at Sparton, a firm that handles the both design and manufacturing efforts for low/medium-volume, high-complexity components. Their presentation, “Why Product Lifecycle Management Is an Emerging Trend,” included all of the cost, timing, and supply chain implications of PLM.   During the webcast, Sparton presenters spoke about the importance of building relationships with key suppliers. That emphasis makes sense because, in Sparton’s role as an outsourcing provider to manufacturing companies, the company sees advantages realized with those that they are able to partner with versus those that hold them at arm’s length or push back on ...

    by Kelly Barner
    Thursday, 23 July 2015
  • Keeping Procurement Moving at the Speed of Modern Communications

      In fact, recent research found that instant communication channels are both feeding our need for ‘in the moment’ action and also making the problem worse. As reported in the Telegraph, “Researchers surveyed 2,000 participants in Canada and studied the brain activity of 112 others using electroencephalograms. The results showed the average human attention span has fallen from 12 seconds in 2000, or around the time the mobile revolution began, to eight seconds.”   Now, whether or not you know what an electroencephalogram is, the message is clear. In 15 years, we’ve lost a third of the length of our attention span. To put today’s available focus period in perspective, the Telegraph also offered up that “goldfish .... are believed to have an attention span of nine seconds.” Unless you are in the business of buying goods and services from goldfish, it is wise to consider the speed of the overall sourcing process and all of the activities that are a part of it.   The ...

    by Kelly Barner
    Wednesday, 22 July 2015
  • How much should a procurement process vary by company or category?

    (A) Barnes and Ayars: Strikes me as being very demand management conscious. All of the investment in understanding root and alternative causes after identifying the need but before making a decision suggests to me that if the need is proven to be justified, it is less important who is selected as the supplier. (B) Bunn: Feels more like an ongoing or long term category management strategy than a process that would lead to the selection of a supplier and the signing of a contract. (C) Cardozo: This process is interesting because it results in a test cycle rather than a contract. It might be appropriate in a capital equipment purchase that is for one need or location but which might be repeated in the future at another site. (D) Choffray and Lilien: Reads like the process I might use if I were selecting a third party service provider for a strategic outsourcing deal. The up front, detailed investment in understanding constraints and requirements sounds like a self-discovery process, ...

    by Kelly Barner
    Wednesday, 22 July 2015
  • Guest Post on the Social Contracting Blog: Contract Management: Yours, Mine, and Ours

    In his recent book Global Supply Chain Ecosystems, Mark Millar wrote, "…today's supply chains encompass complex webs of interdependencies, frequently spanning the globe, designed and deployed to optimize critical attributes – such as speed, agility, and resilience – that drive competitive advantage." His point plays out on a daily basis through the contract management strategies and practices in many organizations. Because our supply chains are no longer linear or consecutive, we may be buying from and selling to the same company at the same time. This puts our organization in the role of being simultaneously both buyer and supplier. While there is no problem with this, it does raise complexities for the procurement and sales teams if one or the other is unaware of something going on. I can honestly say I have seen this happen firsthand. CLICK HERE TO READ THE REST OF THIS POST ON THE SOCIAL CONTRACTING BLOG ...

    by Kelly Barner
    Tuesday, 21 July 2015
View more featured blog entries
  • HP ATKPAS
  • HP COTTRILL
  • HP COUPA1
  • HP DG
  • HP DIRECTWORKS
  • HP EBS
  • HP FB 2014
  • HP GEP
  • HP IVALUA
  • HP MD
  • HP NLPA
  • HP Nipendo
  • HP PROACT
  • HP PAPP
  • HP PROCACAD
  • HP PURID
  • HP RM
  • HP ROSS
  • HP SC
  • HP SELIAS lg
  • HP SMARTbyGEP
  • HP SO
  • HP TNET 82013
  • HP Verian2

“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.

 

Featured Publication

© 2015 Buyers Meeting Point.   Please provide your feedback by filling out our contact form.