Daily Archives: May 22, 2007

Tough Times for the Oompa Loompas

Hershey is closing its last Canadian Factory, laying off 580 workers before year’s end, as well as plants in Reading, PA, Naugatuck, CT, and Oakdale, CA. At least in the latter case, maybe a few of the more energetic can go back to school and learn to sling code.

Times must be tough for The Hershey Co., especially since they are launching a suit against Kenneth Affolter for selling marijuana-laced chocolate candy, with names like Stoney Rancher, Rasta Reese’s, and Keef Kat whose packaging was similar to their own, for a mere $100,000 in damages. I find this laughable. I don’t think any one is going to confuse marijuana munchies with plain old candy bars – unless Hershey is planning on launching their own brand of Jamaican Jollies.

More kudos to The Cynical Sourcerer for his enduring efforts to make sure these sugary stories don’t get overlooked!

Aberdeen Takes a Tip from Madonna (with their Direct Materials Sourcing Study)

According to a recent brief from Aberdeen, at least when it comes to Direct Materials Sourcing, we are all Living in a Material World. The rest of us have known this since 1984 … so what’s the word?

Well, they are currently working on a Direct Materials Sourcing Study (and interested enterprises can take the survey. It seems that even though previous research found that over half of the enterprises indicated that an automated and standardized company-wide direct materials sourcing process is required, only 17% of enterprises have achieved such a level of standardization.

Aberdeen’s current hypothesis is that effective direct materials sourcing should include the following business processes:

  • Standardized Strategic Sourcing Initiatives Company Wide
  • Cross-Functional Procurement Teams
  • E-Sourcing and E-Procurement Solutions
  • Procurement Involvement in Product Development
  • Leverage of Outsourcing

And I have to agree. It also posits that Low-Cost Country Sourcing (LCCS) is a key strategy for effective direct materials sourcing. Here I have to disagree. I could be persuaded to accept Best-Cost Country Sourcing (BCCS), but since there are risks and disadvantages to low-cost country sourcing, and since some low-cost countries are not all that low cost, I believe a more objective, well-rounded total cost of ownership vs. value calculation is required.

Still, it will be interesting to see what they find out.