Daily Archives: May 14, 2007

Expert Purchasing Management, A Review, Part I

Recently, I reviewed the on-line course Expert Purchasing Management, the latest offering from Next Level Purchasing. The course, designed for new and existing purchasing managers struggling to balance the many demands of their leadership role and get the most out of their department, is designed to teach a purchasing manager evolving best practices, new technologies, and the policies and procedures they’ll need to take their purchasing department to a new level of success.

According to NLP‘s website, those who take the course will learn

  • How to report purchasing performance metrics to senior management
  • Four things about the purchasing environment that you need to assess right away
  • How to develop a purchasing customer service survey
  • Tips for improving purchasing staff productivity
  • The secrets for involving internal customers and establishing a successful Purchasing Advisory Board
  • The most important things to consider when naming your purchasing department
  • Five common purchasing department structures and their advantages and disadvantages
  • How to prioritize commodities that the purchasing department will source
  • Four indicators that you should look for to identify non-traditional areas for potential savings
  • Three different ways to assign buyer responsibilities
  • The types of various purchasing profit center models and the dangers of choosing the wrong one
  • How to staff your purchasing department with the right people
  • How to create a Purchasing Dashboard
  • How to set the perfect purchasing department goals
  • How to develop purchasing policies and procedures
  • How to establish a standard sourcing process
  • Strategies for using templates to improve productivity and reduce problems
  • Best practices for making recommendations to senior management
  • Three ways to reduce the tactical purchasing activity under your management
  • Five steps to take to ensure that you don’t do buyers’ work
  • How to improve compliance with purchasing initiatives
  • The essentials of launching a purchasing department Web site
  • How to assess the available purchasing technology by watching video demonstrations of leading software from Ariba and Zycus
  • Ten keys to eSourcing success

But of course, like the four courses I previously reviewed here on Sourcing Innovation (links below), it not only lived up to its promises, but also:

  • Covered the basic performance measurements and how to differentiate good metrics from bad
  • Discussed the five common organizational structures for purchasing departments as well as the associated advantages and disadvantages
  • Included a three-stage plan for long term purchasing development
  • Discussed eight types of policies and four types of procedures you should consider defining and implementing if you haven’t already
  • Discussed best practices for creating RFX, Contract, and Analysis templates
  • Highlighted the point that while ERP systems are very strong in terms of their database functionality and integration of data across the enterprise, they tend to be very inept when it comes to supporting world-class purchasing practices.
  • Provided some basic patterns for successful spend analysis.
  • Compared the traditional RFX process with the eSourcing RFX process step-by-step to ensure the advantages and efficiencies of best practice eRFX use are crisp and clear
  • Highlighted that when it comes to eSourcing applications, sometimes less is more and that its best to figure out the basic capabilities you need and simply compare such systems to a capabilities checklist because companies often reap great results when using less expensive eSourcing systems.
  • Discussed and differentiated the different types of pricing models being used by eSourcing providers as well as the advantages and disadvantages of each model.

Thus, I’d have to say that this course is definitely worth it. However, unlike the previous courses, which have been under continuous improvement for a couple of years now (since NLP collects all feedback and questions and makes it a point to update each course at least once a year), I did find two minor issues. Not that anything was wrong, just that I disagree.

The first issue is that NLP defines eSourcing as as the use of the Internet to automate several tasks associated with an RFP process. As regular readers know, I define eSourcing as the full eSourcing cycle from spend analysis through contract creation and management, following the spend analysis, supplier qualification, RFX, auction and/or negotiation, decision optimization, award and contract creation and subsequent management process that is currently outlined in Strategic e-Sourcing Best Practices over on the eSourcing Wiki. As far as I’m concerned, Charles definition is that of the executable eSourcing Cycle which starts with the pre-RFX supplier qualification and ends with the post-RFX auction phase. That being said, everything the course covers about RFPs and related activities is correct.

The second issue is that the course does not devote a section to explaining the differences between traditional installed behind-the-firewall enterprise applications and on-demand applications, and the various models for on-demand delivery as well as the advantages and disadvantages of each. Although this is partially covered in the section on pricing models, there’s a lot to be said on each side of the fence and I feel that a good understanding of the issues can make the difference between selecting an eSourcing suite that’s good for the organization and an eSourcing suite that’s great for the organization. Of course, this wasn’t designed to be a technology course, so my point might not be valid. But you should know by now I am picky.

Of course, knowing the perfectionist that Charles Dominick is (the President of Next Level Purchasing), I’m sure these qualms will be addressed in spades in the very near future.

So if you’re looking for a professional certification, I still believe that the Senior Professional in Supply Management is likely the certification for you, and that if you have the SPSM and are looking to maintain it, then this course is worth your time and dollars. But if you still don’t believe me, be sure to read part II where I dive into three topics of interest.