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  • A Deep Dive into the Cost Drivers of a Direct Mail Program – Part 2

    Postage is one of, if not the most, significant cost driver for a direct mail program. Industry trends indicate that postage costs can represent an estimated 40 to 70 percent of the overall program costs. Despite knowing that postage encompasses such a large portion of the total program budget, many consider it to be non-negotiable. One of the main reasons for this assumption is because postage rates are controlled by the US Postal Service. However, as we saw with mail lists, there are ways of managing the costs associated with postage to achieve cost savings. First, let’s discuss the factors that influence postage costs. The type of mailing – postcard, letter, large envelope, etc. – will have an impact on the cost of postage. Of these mail types, postcards have the least expensive postage costs. There are a number of different classes of postage with the USPS that can be used to send a direct mail piece: priority, first class, standard, every door direct, etc. First class mail (or ...

    by Megan Connell
    Thursday, 03 September 2015
  • Three Things ‘Rock Star’ CPOs Know About Procurement Influence

    In Procurement at a Crossroads, the book I co-authored with Jon Hansen (coming out this fall), we took a hard look at procurement’s longstanding desire for a greater presence in the C-suite. For many ambitious procurement professionals, the fact that CPO is not a standard executive level position is an indication that we have not ‘made it’ yet. For me, it is proof that we have been seeking the wrong thing. Rather than chasing status, something awarded by others and affected by a number of factors outside of our control, procurement should invest in influence – and no, the two are not synonymous. It is possible to be influential without rank. There is always room for strategic movers and shakers between the traditional lines of a corporate org chart. Since Xchanging’s research was based on responses from over 800 CPOs, I took the opportunity to ask Bowen about influence. How are the leaders Xchanging spoke with, building it and maintaining it? Here are some things that procurement ...

    by Kelly Barner
    Wednesday, 02 September 2015
  • Procurement Perspectives Podcast: Where should procurement report?

      It comes as no surprise that there is not one definitive answer to where procurement and supply chain should report relative to each other. What I find interesting are the variables and criteria Franca shared that help an organization make sure they have the proper reporting alignment and hierarchy. The three variables I came away with after listening to Franca’s response are: The role of cost cutting in enterprise strategy The role of suppliers in the core business The line between internal operations and external services/supply The role of cost cutting is not necessarily consistent. While in small margin businesses and industries, cost cutting is procurement’s bread and butter, for other companies or industries this approach only comes up in the face of external downturns such as the ones we saw in 2008. When cost cutting is key in the long term, procurement is likely to have a higher visibility position in the enterprise. The close tie between the need to aggress ...

    by Kelly Barner
    Tuesday, 01 September 2015
  • My Recommendations for Procurement and Supply Chain Webinars August 31 – September 4

      Key Trends of Advanced Analytics (Gartner) September 2, 8:00am EDT and 11am EDT You have two shots at this week’s first recommended event as Gartner looks at current and expected future trends in analytics. Since knowledge – or as we more commonly call it today, data – is power, procurement should be prepared to do anything we get the opportunity to with analytics. In this webinar, Gartner will take us beyond the basics of analytics to look at advanced capabilities in technology and skill sets. I actually think it is an advantage that this is not a procurement analytics event – the more generalist the better. Looking at analytics as a broad approach will help widen our horizons about what is possible and what we need to know to harness the power.   Enhanced supplier due diligence: the implications for supplier risk management (Supply Management) September 3, 8:00am EDT While we don’t have a lot of information on this webinar, I’m giving it the benefit of the doubt ...

    by Kelly Barner
    Sunday, 30 August 2015
  • The Good, the Bad, and the Ugly of the CEO Pay Ratio

      The Good The CEO pay ratio is being touted as a source of valuable information to investors as well as consumers. In a time when the minimum wage is a regular part of the public discourse, there is interest in having a single figure that represents the difference in compensation at the highest and median levels. When procurement represents a company that is B2C, they have to be very careful about the risk of negative public sentiment. Companies may be held responsible for the negative reputation of their suppliers, especially when the partnership is high visibility. In cases such as these, procurement may want to look at the CEO pay ratio as a way of staving off potential sources of negative publicity or reputational risk.   The Bad Although there is a lot of interest in the new ratio, it is not without its detractors. Some claim that at best the ratio misrepresents how companies feels about employees, and at worst creates negative press without actually offering any ...

    by Kelly Barner
    Wednesday, 26 August 2015
  • Procurement Perspectives Podcast: Panel Discussion on The Politics of Procurement

      One of the points that was made earlier in the discussion was the idea that public sector procurement is not about cutting costs or building competitive advantage. It is about solving social problems, and the first step to solving problems is identifying them. The fact that these teams start by bringing everyone together around a problem – something we heard in the audio excerpt just now – strikes me as really smart. There is no shying away from the fact that there is a problem or concern that defining the problem up front starts the project in a negative place. The group captures the problem and then works together to become part of the solution. I think this is an approach more private sector procurement organizations can get behind as well. And in particular, we should put a methodology in place for finding problems. Although private sector procurement often feels chained to savings and spend under management metrics, when we start to feel pressure to create greater val ...

    by Kelly Barner
    Monday, 24 August 2015
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“There is no shortage of challenges in procurement, which means there is no shortage of opportunities to be heroes.” – Charles Dominick

Throughout the month of May, Buyers Meeting Point has covered ‘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.

charlesdominickOur review of the book is available on our Endorsed Publication page, and over the last few weeks we have done a Q&A with both authors about the book and an interview with Soheila Lunney (Part 1 and Part 2).  This week we wrap up the series with a look at Charles Dominick’s view on the procurement profession.

Buyers Meeting Point: The Next Level Purchasing Association (of which Charles is the President and CPO) is a global organization. How does this perspective allow you to perceive trends in the spread of procurement competencies around the globe?

Charles Dominick: The Internet has enabled us all to make connections that were not possible before. The result is a global community forming and best practices being shared across borders. The surveys we conduct among our members reveal how things are changing and different, and which countries are the leading growth areas. The United Arab Emirates and Saudi Arabia both have strong enrollment bases. One interesting statistic - India has the second greatest number of SPSM’s (Senior Professional in Supply Management) after the United States.

BMP: Since the Next Level Purchasing Association uses an eLearning model, how often and in what way do you get to have contact with your students and other procurement practitioners?

Charles Dominick: We have an instructor access feature that allows for interaction with current students, as well as a forum on the association website. I believe in active networking through many channels – social media networking like Twitter and LinkedIn as well as in-person networking through the Institute for Supply Management and conferences. About half of the Next Level Purchasing Association’s of business is with clients and large groups, which allows us to travel and meet with them in person.

BMP: How do you make sure your forward vision for procurement is represented by your training courses?

Charles Dominick: We do formal updates of all of our courses annually and spot updates as they are needed. We are also always adding new courses. For instance, we recently added inventory management and control.  I believe that the procurement function is being added to more than it is changing. There are still core components of the function that don’t change rapidly – managing purchase orders, following up with suppliers, and managing contract terms. We have built the training to cover tactical, strategic, management, and global perspectives. We are also placing an increased emphasis on enterprise integration – procurement is a ‘gear’ that needs to spin synchronously with the others in the organization like finance and inventory management.

BMP: As a procurement educator/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?

Charles Dominick: There is no one mold that every procurement professional fits into. Some are good analysts, some are good at relationship building, and some are good with technology. Ultimately, we need to have all of those aspects as part of our skill set. We have a ways to go to become more well-rounded, particularly in the face of the broad array of skills we need.

BMP: How do you stay motivated and connected to procurement life 'in the trenches' but also objective from your position as a third party educator and industry thought leader? Where does the content come from for your blog posts and other publications?

CD: My ideas come from the challenges I discuss with my network, and with students. Often when someone asks about the challenges they are facing one of two things happens – either we have material on that issue already or we are surprised because we have experienced the same thing but never realized it had value for anyone else. Based on the maturity curve all organizations follow, one client will be facing a challenge that another just solved.

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