Back in November, when I was smelling that sweet, sweet Bay Area air, I told you that Scott Adams, also recognized as a genius by the SpendFool (in comments on Spend Matters), was a Supply Management Guru and pointed out numerous examples of the great advice that he’s been giving away for free every day on his blog.

As you may have guessed, the advice just keeps on flowing. Sometimes you have to read between the lines, but it is there, and the effort is worth the reward. For those of you who may have missed it, here’s a small sampling of the great advice he’s given us all since my blog entry in November.

November 27, 2006 The One Problem with the World
“Genius looks just like stupidity to the observer.”

Is the last recommendation from your underling really the dumbest idea you’ve ever heard, or has your oyster coughed up a pearl? Sometimes a radical idea may sound moronic on the surface, but actually be a damn good business idea when explored in depth. Remember, once- upon-a-time outsourcing to China, Software as a Service, and long-term hedge contracts were all considered idiotic by big business who had always not done business that way.

“My magical solution is to give humans the power to tell the difference between a super genius and a moron. I think this would solve every problem in the world because chances are that the smartest super genius in each field has a good idea how to fix that field. But the only solutions being considered are the ones coming from tall guys with good hair.”

It’s not the cover … but the contents … of the book that count.

November 30, 2006 Bill Gates for President
“In an earlier post I said Bill Gates would make an excellent president because he’s a successful businessman, makes decisions based on reason instead of superstition, and has a track record of trying to help the poor through his foundation.”

In other words, it’s not cool to shoot from the hip, do it the way you’ve always done it, use hearsay, or pluck the petals from a flower when making a multi-million or multi-billion dollar decision – every decision you make should be be based on a rational analysis of the situation, using logic and whatever mathematical or scientifically based decision support tools are at your disposal. Don’t blindly compare bids just on quoted unit costs, put them through an apples-to-apples comparison in a cost modeling tool to find out what the overall cost is.

“I’ve always felt that you should pick a president the same way you’d pick an attorney to help you out of a dangerous legal problem. Do you want the attorney who dresses nicely and belongs to your church? Or do you want the attorney who can rip out your opponent’s heart and put it on the hibachi before he dies? Maybe it’s just me, but I want an attorney who is part demon. And I want a president who isn’t afraid to make rational decisions.”

Don’t just hire someone who can talk the talk when hiring your leader, hire someone who can walk the walk and get down and dirty in the details when the need arises. Make sure the person is confident, able to hold her own, and not afraid to back away from a fight when it’s the right thing to do.

December 7, 2006 Acting Smarter Than You Are
“.. you must learn to stop talking so much. Talking is the surest way to inadvertently showcase profound ignorance.”

Don’t speak just to hear the sound of your own voice. Speak when you have something intelligent to say, and make sure what you say is intelligible. Furthermore, make sure you take the culture of your audience into account when speaking. If you’re a Texan talking to a potential outsourcing partner in China, telling them you want to switch suppliers because “your last supplier was greasy as fried lard and you’re just waiting for the day they open up a worm farm” and “you’re hoping that you can get down to the lick-log without burning daylight” will not mean a thing to them and, furthermore, they might think you’re nuts.

“It’s important to agree with people if you want them to think you are a genius.”

Now, you certainly cannot do this if they are irrational, uninformed, or otherwise wrong, but it doesn’t mean you can’t find examples of them being right, point them out, and incorporate their more useful suggestions into your own decisions. After all, if you just tell your people that they’re wrong all the time, they probably won’t stick around very long. And then you’ll have to give Eric Jackson a call, and I’m calculatingly confident that will cost you a pretty penny.

December 9, 2006 Thinking Fast Makes You Happy
“I recommend coffee and exciting books.”

An alert mind is an effective mind. ‘Nuff said.

December 11, 2006 How to Know that Your Presentation isn’t Going Well
” I think you can conclude it’s time to end your presentation if anyone in the audience is:

1. Giving himself a sponge bath with saliva and a balled-up piece of paper
2. Turning a long sleeved shirt into a vest by removing the threads that hold the arms on
3. Pretending to be a mime in a glass box
4. Engaging in any form of self-gratification
5. Creating prison themed origami”

A good presentation is important. Really important. Extremely important.

December 14, 2006 Those Darned Voting Machines
“Voters simply aren’t that good at predicting the future. Every bad president we’ve ever had managed to get a majority of the votes. Sometimes twice.”

When it comes to running a company, democracy isn’t always right. The only people voting on an issue should be people who understand the issue, both the pros and cons, are affected by the issue, and are responsible for the issue and the consequences. Bob might want it blue, but if the blue die costs an extra 2M and adds no real marketing value, then he should be forced to accept it metallic. Besides – the MacBooks are metallic, and they’re selling like hot cakes.

December 17, 2006 My Donut Theory of the Universe
“I think the real reason anyone believes anything is because uncertainty hurts. So we pick a side and rationalize it later. … Personally, I’m totally comfortable with a state of eternal confusion. It’s practically a lifestyle.”

We don’t always know all the answers. We’re only human. And that’s okay. It’s much better than making up an answer, which is likely to be wrong, treating it like gospel, and failing miserably in the end.

It's too bad Scott Adams had to take these classic posts down on request of Portfolio Hardcover when they published Stick to Drawing Comics, Monkey Brain that was a collection of his blog posts through part of 2007.

To drive home my point that I believe the online course “Mastering Purchasing Fundamentals” from “Next Level Purchasing” (now the Certitrek NLPA) is worth the time and investment for a purchasing professional looking to advance her knowledge and career with a training program that can lead to an industry certification, with kind permission, I am going to dive into a few topics covered in the course that represent some of the basic purchasing fundamentals that every professional buyer needs to master.

In the first lesson, which reviews the nine (tactical) steps of the purchasing process from need determination to closing out of the transaction, the course not only indicates why well written specifications are important, since they can force suppliers to quote in a standardized way that enables apples-to-apples comparisons and maximizes the probability that a product or service will meet organizational needs, but overviews different common types of specification pitfalls that decrease your chances of success. In particular, the course outlines the following six pitfalls:

Absence of Standards

Failure to make use of standard parts whenever possible, which allows for spend leverage and reduced inventory requirements.

Over-Specification

Specifications that are unnecessarily strict add cost. For example, specifying a cord length of 15.5″, which is only supplied by one supplier at a rate higher than the 15″ and 16″ cords supplied by other suppliers. In this case, a small range of 15″ to 17″ could be used.

Under-Specification

This usually results in continual quality problems since the delivered products, although they do meet the specifications, do not work with the products they were intended to be integrated with.

Slanted/slanting specs

Specifications written in such a way that they only allow one supplier, often results when the writer wants a specific supplier to be chosen or product literature from one supplier is heavily relied on in specification construction.

Out of date/obsolete specs

Re-use of old specifications can lead to numerous problems in addition to integration issues if the product has evolved – there could now be new government regulations from an environmental or regulatory perspective that would invalidate the materials or components identified in the old specification.

Standards differences between countries

An American gallon is not the same as a British gallon. Make sure that all measurements are using a well-defined international standard whenever possible.

The fourth lesson on conducting bidding and / or negotiation events describes a number of factors that should be considered when deciding between a bidding event and a negotiation. These include:

Market Competitiveness

Highly competitive markets often lend themselves to successful auctions while restrictive markets are often best served by negotiations.

Time Sensitivity

Bidding only makes sense if you have adequate time to prepare a complete bid package.

Purchase Value

The potential savings has to justify the effort.

Specification Clarity

Bidding requires clear specifications that will permit “apples-to-apples” comparisons of supplier offers.

Contract Type

Bidding is often better suited for fixed price / quantity events.

Selection Procedure Clarity

Bidding often requires supplier pre-qualification, which in turn requires clear criteria for supplier selection.

Ramp-Up Costs

Negotiation can be more successful if the ramp-up or set-up costs for one particular supplier is substantially less than the other suppliers.

Specification Change Likelihood

If there is a strong likelihood that the requirements will change before an event is finished, then negotiation is likely the better option.

In addition, the fifth lesson gives a detailed definition of the three primary methodologies currently used to analyze the financial aspects of a selecting a particular supplier for an award: price analysis, cost analysis, and total cost of ownership. Briefly, price analysis is the simplest methodology which compares the suppliers bids to a set of benchmark prices taken from either other competing bids, published or previously paid prices, and should cost models; cost analysis compares bids by breaking them down into their cost components; and total cost of ownership compares bids by looking at not only all of the required expenditures, but the costs incurred in acquiring, using, and disposing of the product.

Of course, this is only a sampling of the knowledge contained in the course, but I hope that this gives you some more insight into the value of continuing education and why I believe that “Mastering Purchasing Fundamentals” from “Next Level Purchasing” (now the Certitrek NLPA) is certainly worth your consideration if you are going to take the next step and embark upon achieving industry certification.

Recently I audited the online course “Mastering Purchasing Fundamentals” from Next Level Purchasing (now the Certitrek NLPA), a course designed to introduce you to the basics of purchasing and sourcing.

According to their website, this course is designed to prepare you for the many changes you will face in the months and years ahead by walking you through a full and proper purchasing process step by step. In addition, you will learn how to make the many decisions necessary to identify the best potential suppliers, plus

• How to most effectively prioritize requisitions
• How to decide when to use competitive bidding, negotiation, or both
• How to successfully conduct competitive bidding using solicitation tools such as RFP’s and RFQ’s
• How to use financial and operational analysis to select suppliers with not only the best monetary offer, but also the least risk of failure
• How to determine whether a contract, purchase order, or other method of ordering is best for a certain purchase
• How to use follow up techniques to ensure supplier compliance
• How to close out a transaction with confidence
• How to think like a purchasing manager
• How to prepare for the future of purchasing

Like the last two courses I reviewed, it also lived up to its promises. In addition, it:

• overviews the types of budgets purchasing effects and the methods organizations use to control those budgets
• details the different types of specifications you need to deal with as a purchasing manager and where they are required
• discusses the importance of contracts and Statements of Work (SOWs) and how you put together a basic Statement of Work for services contracts
• overviews the many different resources you have at your disposal to find and assess potential suppliers
• discuss the various factors your firm needs to consider when evaluating a make-vs-buy decision
• discusses, in detail, the challenges of the competitive bidding process and how to minimize the risks associated with the process
• provides the criteria for good supplier selection, five methodologies to qualify suppliers, and an ideal supplier checklist
• discusses the applicable laws you need to keep in mind when putting together a contract template and a statement of work
• outlines the outset requirements for that need to be communicated upon award and tracked to ensure purchasing success

And like the last two courses, this course is also worth it. Covering the full breadth of the basic purchasing process, it also amalgamates a considerable amount of information into a single package that would take you weeks of research to replicate on your own. Furthermore, everything is organized in a logical format, and clearly explained with real-world examples.