One year ago today, I brought you The Wit and Wisdom of the SpendFool, culled from all of the foolish comments I could find over on SpendMatters. The SpendFool was also kind enough to leave some very juicy tidbits again this year, but in case you missed them, here are the highlights.
In MY next guest article, I will play an Aberdeen analyst and argue that the conventional wisdom of “cross-functional teams are a waste of time” is indeed false by proving that “Leading CPOs are 2X more likely to emphasize procurement team management”.
No amount of Tiger Woods commercials will be able to save the design-by-committee Rendevous. That is one “Coyote Ugly” vehicle. They ought to make it even uglier and turn it into the new version of the old VW “The Thing”.
“Hello, pot? Yeah, this is kettle, you’re black!”
Captain, it’s not logical to attack the Borg and the cling-ons. It’s not worth your tribbles. Focus on the enterprise.
– and –
In the beginning was the Plan.
And then came the Savings Targets.
And the Targets were without form.
And the Forecasts and the Budget were without substance.
And darkness was upon the face of Procurement.
And the purchasing agents spoke among themselves, saying, “This is crock of sh*&, and it stinks.”
And the purchasing agents went unto their Senior Buyers and said, “It is a pail of dung, and we can’t live with the smell.”
And the Senior Buyers went unto their Commodity Managers, saying, “It is a container of excrement, and it is very strong, such that none may abide by it.”
And the Commodity Managers went unto their Regional Directors, saying, “It is a vessel of fertilizer, and none may abide its strength.”
And at the annual global Procurement conference, the Regional Directors said to the CPO, “It contains that which aids plant growth, and it is very strong.”
And the CPO went to the CFO, saying unto her, “It promotes growth, and it is very powerful..”
And the CFO went to the President, saying unto him, “This new Procurement plan will actively promote the growth and vigor of the company and in these areas in particular.”
And the President looked upon the Plan and saw that it was good.
And the Plan became Policy.
And that, my friends, is how sh%& happens.
From Why 80% is not Enough … :
“Do a mega-lot with both basic and advanced requirements, and you’ll indeed get the 80% solution which does leave money on the table (payback is indeed usually after 1-5 events). So, break up the market basket between analytics, RFX, contracts, scorecards, portals, yada yada and then build humpty dumpty up. Worst case, you get a good discount on the 80% solution (which ain’t cheap and certainly doesn’t come often). Best case, you get the right tool for the job, take the money on the table, and then re-bid in 3 years when SAP/Oracle have their next-gen polyrazzmatazz suites. The money you’ll save on hundreds of events during that time will make everything else noise (except for maybe the ERP upgrade costs). Why do you think BoB (aka “Bondo”) vendors are filling those holes so well these days. Buyers are generally not stupid and markets are generally efficient. Generally. With 0.7 probability for those reading in Stamford. “
When supplier performance increases, you get the right stuff at the right place at the right time at the right quality, etc. Seems like risk goes down when all is right, no?
As the good Dr. said … “The better performing suppliers also had the lowest risk level as measured by our model”. Makes sense, what you measure is what you get, and since firms measure pretty much along these categories, that’s what they indeed do get. So, the conventional wisdom is indeed wise and now empirically proven. Q.E.D.
On the topic of contract management:
They’ve been subsumed as a component of a BoB spend management suite. That’s fine, but let’s not delude ourselves into thinking that these vendors are really going to be viable, long-term players in enterprise contract management. Yes, it’s a dessert topping AND a floor wax! Puh-lease. They don’t have even the horsepower to invest in decent integration to the back office for the Procurement stuff. Ask for references and enjoy the ensuing tap dance.
Supply Management is about harvesting the power of supply markets, not catering to stale incumbants who are chummy with the top brass. …
When I look for innovation in supply management these days, it’s more likely to come from technology vendors and niche consultants than the flip charts from the last elk lodge session in Boca Raton.
Why does a good discussion on the impact of Procurement devolve into vendor CMOs strutting their little peacock feathers on niche (albeit important) sourcing techniques. Did you know that Flavia coffee systems were used at 70% of these firms versus 40% adoption at low-performers? Clearly, using Flavia (winner of the Tweedleman award for worker caffeination) is a key predictor of supply chain excellence. I think there’s a pending Aberdeen report on it – Jamie will make it say whatever you want it to. Also, did you know cocaine users are 10x more prone to using caffeine than non-cocaine users (even more in Rome). So is caffeine a SCM best practice or a gateway drug to hell?
A better discussion is talking about how supply management (the process – not the renamed Purchasing department) supports the operational excellence capabilities that allows AMR’s named firms to excel: lower inventory via supplier consignment/VMI and lower cycle-times; reduced price and non-price factors; faster NPI processes, better products through supplier innovation, etc. Also use it to reduce trade-offs between cash, cost, delivery, etc. Read AMRs heirarchy of supply chain metrics if you haven’t.
From Why I’m Not a Poet:
On the topic of the doctor‘s literary genius
The student has indeed become the master. You are truly foolish.I lay my bells at your feet.
I hope that this means that the SpendFool will stop lurking and start offering up some of his wisdom on this blog. (Comments may require an e-mail, but there’s no reason it can’t be an anonymous e-mail account on a free server.)