Standing Tall Beside Amazon in Electronic Component Distribution

Note: This post originally ran on Design News.

There’s an 800-pound gorilla in the room. It’s called Amazon. Yet not everyone sees it as inevitable that the e-commerce and distribution giant will dominate electronic component distribution.

In a recent interview with Tom Galligani, global vice president of supply chain for distributor Future Electronics, I asked for his views on Amazon’s invasion of the B2B space. Given the size and power of Amazon, you might expect distributors like Future Electronics to be prepared to be put out of business, but that is not the case. In fact, Amazon’s entry into the B2B marketplace creates a unique set of opportunities for buyers as well as suppliers or distributors.

Nevertheless, like others in the electronic components distribution industry and beyond, Galligani and his team are keeping a close eye on Jeff Bezos’ $90 billion e-commerce behemoth. Amazon may have gotten its start with an unbeatable B2C experience, but it has made inroads -- both organically and through acquisition -- into the B2B market.

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Webinar Notes: Three Foundations for Best Practice Procurement

These webinar notes are from a November 5th event co-presented by Peter Smith from Spend Matters UK/EU and Daniel Ball from Wax Digital. The webinar is available on demand on Wax Digital’s site.

Peter Smith opened this event by offering up a powerful statistic from Wax Digital's own research: when asked, 44% of procurement teams said they have a close working relationship with the business. Unfortunately, only 18% of those business stakeholders agree. This amounts to a 25% ‘relationship leakage’ – or as Smith said in the event, self delusional procurement organizations. And that doesn't even touch on the 56% of procurement teams that DON'T think they have good relationships with stakeholders...

The idea of this event was to look at multiple kinds of integration that procurement has responsibility for. When Smith talked about the three models for procurement (see below), the focus was decidedly on information and communications flows rather than data and technology. In my opinion, that is fantastic because it expands the role and potential impact of procurement through our understanding of our own way of working.

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Best Practices to “Futureproof” Telecom Services

With the increased pressure to offer viable advantages over their competition, telecom giants like AT&T and Verizon have recently placed greater emphasis on how well equipped their networks are fo...

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Techniques for Accurately and Efficiently Forecasting Demand

This post was written by Michael Hinkley, an intern at Source One Management Services. If you are interesting in hearing his perspective on procurement as a career and as a part of the larger business...

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Should Procurement Fear or Embrace Procurement-as-a-Service?

I recently had the opportunity to interview Phillip Ideson, the founder of ProcureChange, a new Procurement-as-a-Service (PaaS) provider. You can listen to the entire interview on BMP Radio.

My first reaction to PaaS – one that I think is quite natural – is concern about what it will mean for today’s procurement practitioners if it catches on. Will we be outsourced the same way we have outsourced so many other formerly in-house capabilities?

As it turns out, however, the news is better than I expected. PaaS, far from being a threat to procurement, may be one way for us to achieve the strategic status we crave.

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The Power Triangle in Electronic Component Specifying and Purchasing

This post was originally run on Design News.

I recently had the opportunity to interview Mark Larson, the vice chairman of electronic component distributor Digi-Key Electronics. The company was founded in 1972, and Larson joined only four years later to what is now one of the largest such companies not only in North America but the world. He led the company as president for an astounding 39 years, just recently stepping down in July.

In the four decades during which Larson ran Digi-Key, there was considerable change -- in the electronics being sold, in whom the products were sold to, and in the supply chains the products traveled through. The other thing that has changed is the way Digi-Key interacts with different points of contact at each customer. Although it has always aimed its marketing efforts at design engineers -- and continues to do so -- it has had to adapt to the growing role of centralized procurement in managing purchases.

Since the interactions between engineering and procurement have not always been naturally easy, the insertion of a third party into the electronic component purchasing process has brought some benefits. When looked at from an outsider’s point of view, the two teams may have more in common than they realize.

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Conversation with the Author: Jonathan O'Brien on Why His Revised Editions Add but Don't Remove Information

Jonathan O’Brien, CEO at Positive Purchasing, has written a number of weighty books for procurement and supply chain professionals: Category Management in Purchasing, Negotiating for Purchasing Profes...

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Guest Post on the Social Contracting Blog: P is for Procurement... except when it isn't

Click here to read this post on the Social Contracting blog.

The Finance team manages the finances of the enterprise. Marketing people market services and solutions to the purchaser (or customer). Human resources manages… well humans.

Given those examples, you would think that Procurement handled procurement. In an ironic twist, this is becoming less and less true—especially as technology evolves and blurs the line between Procurement as an entity and procurement as a process.

 

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Three Unexpected Topics That Should Make You Think of Contract Management

Last week I attended the IACCM/Exari webinar on ‘Converting Your CEO into a Contract Management Champion in 3 Simple Steps.’ I came away with three topics, but they weren’t the ones I was expecting to get. Rather than ways to sell the CEO on contract management, I was surprised by the broad range of connections back to contract management that were offered up by Exari’s Founder and Chief Product Officer Jamie Wodetzki.

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Webinar Notes: The Pulse of Procurement 2015

These notes are from an August 25th webinar hosted by Sourcing Industry Group and presented by Zycus. The two speakers were Ian Hinke, Vice President of Sourcing and Vendor Management at PHH Mortgage, and Richard Waugh, Vice President of Corporate Development at Zycus.

This event showcased the results of Zycus’ annual Pulse of Procurement study. This year, the participants included 400 respondents, 80% of which were from large companies (<$500M in annual revenue) in North America (68%). Three quarters of the respondents were in procurement management positions.

Although most of the questions were the standard ones about performance metrics, maturity, and technology adoption, there were some very interesting findings between the lines…

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

Direct marketing is not a new advertising strategy, but the associated tactics often change with the latest trends and technologies. Direct mail is one tactic under the direct marketing umbrella that ...

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Procurement Perspectives Podcast: Panel Discussion on The Politics of Procurement

This week's guest audio comes from a panel discussion moderated by Code for America. They create open source solutions and facilitate a collaborative community around their use. Code for America also hosts an annual summit that brings together public sector innovators and the organizations that collaborate with them – and that is where this particular recording was made: at a 2014 summit panel on public sector procurement.

In this exchange, the panel responds to an audience question about the politics of procurement and facilitating cross-functional communication for the sake of gaining buy in.

The full video – Procurement for the 21st Century - is available on their YouTube channel. You can listen to the podcast on Blog Talk Radio or on our Sound Cloud page.

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Book Review: Category Management in Purchasing (3rd Edition)

Just over 18 months ago I reviewed the second edition of Category Management in Purchasing by Jonathan O’Brien. (You can read my original review here). When I recently learned there was to be a third ...

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Webinar notes: Taking Charge of Your Career

These event notes are based on a webinar presented by Supply Chain Insights on June 25, 2015. The webinar can be viewed on demand without any registration requirements here. I advocate seeing it for a look into some of Supply Chain Insights’ research on trends in supply chain talent development as well as to hear the stories shared by the panelists.

Along with moderator (Supply Chain Insights founder and CEO) Lora Cecere, the event panelists were Andrew Byer, P&G’s Associate Director of Supply Network, and Fran O’Sullivan, IBM’s General Manager of Systems, Strategy, and Operations.

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A Deep Dive into the Cost Drivers of a Direct Mail Program – Part 1

While some may believe that direct mail programs have gone out of style similar to print advertising, industry trends indicate quite the opposite. According to the Direct Marketing Association (DMA) S...

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Book Review: Strategic Sourcing and Category Management: Lessons Learned at IKEA

 Strategic Sourcing and Category Management: Lessons Learned at IKEA by Magnus Carlsson (KoganPage, August 2015) is not a case study, although I didn’t need the note from the author in the introd...

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How much should a procurement process vary by company or category?

Last week I shared six B2B buying processes being compared by Wake Forest University in North Carolina. You can learn more about their research here.

I looked at the processes, and can see where each of them would have a place in the right scenario. You would expect processes to be different by company or industry, but do you ever vary your process by category? Feel free to share you comments below or join the conversation on Twitter: @BuyersMeetPoint.

I think (E) Robinson, Faris, and Wind most closely resembles the standard strategic sourcing process that most organizations follow. A typical process usually 6-8 steps, starting with internal and historical data collection and leading to either supplier performance management or a hand-off to the internal stakeholders who will manage the relationship for the duration of the contract.

That being said, the other models match different (and maybe less typical but no less common in the grand scheme of things) procurement situations...

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Which sequence best represents your buying process?

Professors Michelle Steward and Jim Narus at Wake Forest University in North Carolina are learning about the B2B buying process. In particular, they are interested in the buying process that you find fits your current job. Please select one of the six models (below) that best fits your buying process. Feel free to note any differences or customized aspects if what you see does not match your job exactly. The collective findings from the study will be used for academic journal articles that are aimed at explaining how the buying process has changed over time. All participants will be sent a copy of the final paper. No names (personal nor company) will be used in the publication, only general findings will be reported.

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Telecom Contracts: Know What You’re Paying For

 Over the past few years, the Federal Trade Commission (FTC) has been cracking down on unethical billing practices at major telecom carriers like Verizon and AT&T. This past October, Verizon ...

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Guest Post on Design News: Understanding the Differences between Strategic Sourcing Goals, Objectives, and Requirements

Early in the course of a product design and manufacturing organization’s strategic sourcing project it is common to have a kickoff meeting that includes the engineering team. It is the opportunity for...

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