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  • No Decision is a Decision

    The Northeastern area of the United States has had a very harsh winter with heavy snow and very cold temperatures. Buildings and homes have been in danger of roof collapses due to the weight of the snow. There was a lot of communication about the issue for over a week about protecting your property and prevention activities. Two schools about 100 miles apart were in danger of the roof collapsing. The official policy is to get three bids to select a contractor. One school followed that procedure and by the time that happened, another storm had occurred and the roof collapsed. The second school knew they did not have time to waste on the bidding process and used volunteers to get the job done. Obviously no decision became decision. Now there is a much larger, more complex and expensive problem to solve in renovating the school. In our professions we are often required to make difficult decisions, sometimes stretching the rules for the better good of the company. This article from Grea ...

    by Cindy Allen-Murphy
    Wednesday, 04 March 2015
  • 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
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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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