Pay Procurement and Supply Chain Professionals by Multiple Market Basket Focus Areas

Jack Welch once noted that the only two departments that drive revenue directly to the bottom line are sales and procurement.  He noted that the other departments were basically overhead. I would also include supply chain professionals in this revenue generating group.

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Recommended Procurement Webinars for March 27 - 31: RPA, Millennials, Annual NLPA Salary Survey

This is a busy week - 13 webinars in 3 days – with webinars covering a wide range of topics. If the events below don’t match your interests, check our calendar for webinars on warehousing, analysis, DPO, and Pharmacy. Click on the title of each webinar below to view the full description and register.

BTW: If you haven’t already, sign up for our mailing list to be sure you get my weekly recommendations in your Inbox each Monday.

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2016 Nobel Prize for Economics Goes to: Contract Theory

I live in the Boston area, so when the 2016 Nobel Prize for Economics was awarded to Dr. Bengt Holmstrom, a professor at the Massachusetts Institute of Technology, and Dr. Oliver Hart, a professor at Harvard, it made a considerable splash in the local news. I love economics in action, so I started reading more - but I never expected to find contracts as the center of their work.

Each of the newly selected Nobel laureates has a different area of focus, but both are relevant to procurement and supply chain professionals.

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Should procurement be paid commission?

It is not uncommon for procurement to receive a bonus payment based on the savings the department has achieved. In this post we discuss if procurement would benefit more from being on a salary plus commission payment structure.

AFTER READING, TAKE OUR TWITTER POLL: Should procurement be paid commission?

The traditional approach for calculating pre-contract savings is to obtain a minimum of three supplier quotes, select the mean as the base point then count the additional savings achieved above the base point. The challenge for the CFO is because the savings are subjective, they are unable to truly identify tangible and quantifiable savings from procurement’s impact, therefore the level of bonus they might apportion directly to procurement is limited.

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