Monthly Archives: December 2007

Spend Rappin’

  To the Tune of “Christmas Rappin'” by Kurtis Blow

Don’t you get me all that JIVE about code you used before I’s alive,
Cause this ain’t 1965 – ain’t even 1999!
Now I’m the guy named Lamoureux and Spend is one thing that I know.
So every year, just about this time, I celebrate it with a rhyme!

Gonna save it, gonna shave it, gonna make it good,
Gonna take it all down through your neighborhood.
Gonna wring it, gonna sling it till it’s understood.
My rap’s about to happen, like the knee you was slappin;
Or the toe you been tappin’ on a hunk of wood.
‘Bout a two fisted dude, with a friendly attitude
and a sack full of savings for the people on the block.
He’s an old grey beard, maybe looks kind of weird,
and if you ever seen him he could give you quite a shock.

Now people let me tell ya about last year
when the dude came slicing spend through here.
Well the wit was out, the gloves on the ground,
folks stayed to watch him cut it down.
The beat was thumping on the block,
and they were glued to just one spot,
as the master cubed at a solid pace,

got a taste of the waste thrown in your face.

And this old spend slayer laid down a heavy layer
of his slicing dicing rhythm to a tree-mapped beat.
And the guy with the database started to participate,
and I could sure appreciate the spend roll up neat.

We were all in the mood so we had a little brood,
not a sound did abound, as he plowed through the mound,
then I thought I heard a gasp as he sliced through the past,
and laid our mav’rick spend bare, as I flopped into a chair.
So I went to the attic where I thought about the static
that our last spending tool was programmed to always give.
And I threw up my arms at the industry yarns,
Just a trick, a nick, and I’d let the suckers in.

He was quick, he was sharp and always on the mark,
he had a lot of success on his chinny, chin, chin.
He avowed, he was proud of the savings he allowed
from the tip of the ‘burg he found the savings within.
He’s cool for a fool throwin’ out every rule
every hour of the day when the cold winds blow.
Though the beard was-a cleared, I still have never cheered
like I did in the storm when I was in the know.

I said you’re right, my spend’s a fright,
Can you stop for a drop before you have to go?
He said “Sure, Bill, if the wine is chilled
and I’ll stake a steak down at the Monaco”.
So we went out back and discussed the stack
of invoices that had all been over-paid
and every dollar spent off of the contract
and then we laid it all bare till we made the grade.

And before he went this fine old gent,
finding gifts went to sift through his spend reports.
From the top to the bottom he reached in and got ’em,
spend trends for me, and variances from torts.

And the higher-ups got presents too,
Banned suppliers and a stale contract.
A bloated pie ’bout as clear as the sky,
the best that money couldn’t buy.
Cause money could never ever buy the feelin,
the one that comes when there’s no concealin’
of your spend by a tool that’s new
and that’s what Strovink‘s does for you.

The dude ya read’s back at the keys,
up late till all’s where it should be.
But if he were right here tonight,
he’d say Truthful Spending and to all a good night!

Happy Boxing Day Eric! I hope you enjoyed your rap song.

Christmas Rappin’

   by Curtis Blow mp3

(Since it’s difficult to find complete and well-formatted lyrics on the web.)

Don’t you get me all that JIVE about things you wrote before I’s alive,
Cause this ain’t 1823 – ain’t even 1970!
Now I’m the guy named Kurtis Blow and Christmas is one thing I know,
So every year, just about this time, I celebrate it with a rhyme!

Gonna shake it, gonna bake it, gonna make it good,
Gonna rock shock rock you through your neighborhood.
Gonna ring it, gonna sing it till it’s understood.
My rap’s about to happen, like the knee you was slappin;
Or the toe you been tappin’ on a hunk of wood.
‘Bout a red suited dude, with a friendly attitude
and a sleigh full of goodies for the people on the block.
Got a long white beard, maybe looks kind of weird,
and if you ever seen him he could give you quite a shock.

Now people let me tell ya about last year
when the dude came flying over here.
Well the hawk was out, the snow’s on the ground,
folks stayed in to party down.
The beat was thumping on the block,
and I was dancing in my sock,
and the drummer played at a solid pace,

and a taste of the base was in my face.

And the guitar player laid down a heavy layer
of the funky junky rhythm of the disco Beat.
And the guy with the 88 started to participate,
and I could sure appreciate it sound so sweet.

We were all in the mood so we had a little food,
and a joke, and a smoke, and a little bit of wine,
when I thought I heard a hoof on the top of the roof.
Could it be or was it me, I was feeling super fine.
So I went to the attic where I thought I heard the static
on a chance that the prance was somebody breaking in.
But the noise on the top was a reindeer clop,
Just a trick St. Nick, and I let the sucker in.

He was roly, he was poly and not the holy moly,
you got a lot of whiskers on your chinny, chin, chin.
He allowed, he was proud of the hairy little crowd
on the point of the door where the skin should’ve been.
Get’s cool for a fool throwin’ out every yule
for a day on the sleigh where the cold winds blow.
So the beard maybe cleared, but I never have a-cheered
’cause it’s warm in the storm when it’s ten below.

I said you’re right it’s cold tonight,
Can you stop for a drop before you go?
He said “Why not if the music’s hot
and I’ll chance a dance beneath the mistletoe”.
So he went downstairs and forgot his cares
and he rocked the spot and danced like a pro.
And every young girl tried to rock his world,
but he boogie oogie oogied till he had to go.

And before he went this fine old gent,
finding gifts went to sift through his big red bags.
In the top for the bottom he reached in and got ’em,
toys for the boys, and for the girls flat rag.

And the grown-ups got some presents too.
A new TV and a stere-u.
A new Seville ’bout as blue as the sky,
the best that money couldn’t buy.
Cause money could never ever buy the feelin,
the one that comes from not concealin’
the way you feel about your friends
and this is how the story ends.

The dude ya read’s back at the pole,
up north where everything is cold.
But if he were right here tonight,
he’d say Merry Christmas and to all a good night!

The 12 Days of X-emplification: Epilogue

On the first day of X-Emplification
my blogger gave to me
Notes on Some Bartering Tools

On the second day of X-Emplification
my blogger gave to me
Some Spending Rules
and Notes on Some Bartering Tools

On the third day of X-Emplification
my blogger gave to me
Optimized Buys
Some Spending Rules
and Notes on Some Bartering Tools

On the fourth day of X-Emplification
my blogger gave to me
A Contracts Piece
Optimized Buys
Some Spending Rules
and Notes on Some Bartering Tools

On the fifth day of X-Emplification
my blogger gave to me
e-Procurement
A Contracts Piece
Optimized Buys
Some Spending Rules
and Notes on Some Bartering Tools

On the sixth day of X-Emplification
my blogger gave to me
Supplier Networks
e-Procurement
A Contracts Piece
Optimized Buys
Some Spending Rules
and Notes on Some Bartering Tools

On the seventh day of X-Emplification
my blogger gave to me
GPOs and Markets
Supplier Networks
e-Procurement
A Contracts Piece
Optimized Buys
Some Spending Rules
and Notes on Some Bartering Tools

On the eighth day of X-Emplification
my blogger gave to me
Some Market Lessons
GPOs and Markets
Supplier Networks
e-Procurement
A Contracts Piece
Optimized Buys
Some Spending Rules
and Notes on Some Bartering Tools

On the ninth day of X-Emplification
my blogger gave to me
A Sourcing Primer
Some Market Lessons
GPOs and Markets
Supplier Networks
e-Procurement
A Contracts Piece
Optimized Buys
Some Spending Rules
and Notes on Some Bartering Tools

On the tenth day of X-Emplification
my blogger gave to me
Trade Data Insight
A Sourcing Primer
Some Market Lessons
GPOs and Markets
Supplier Networks
e-Procurement
A Contracts Piece
Optimized Buys
Some Spending Rules
and Notes on Some Bartering Tools

On the eleventh day of X-Emplification
my blogger gave to me
Optimized Supply Networks
Trade Data Insight
A Sourcing Primer
Some Market Lessons
GPOs and Markets
Supplier Networks
e-Procurement
A Contracts Piece
Optimized Buys
Some Spending Rules
and Notes on Some Bartering Tools

On the twelfth day of X-Emplification
my blogger gave to me
Rules of e-Payment
Optimized Supply Networks
Trade Data Insight
A Sourcing Primer
Some Market Lessons
GPOs and Markets
Supplier Networks
e-Procurement
A Contracts Piece
Optimized Buys
Some Spending Rules
and Notes on Some Bartering Tools

The 12 Days of X-emplification: Day 12 – e-Payment

Sooner or later you have to pay the piper, and that’s why I saved this topic for last. Although e-Payment falls under the e-Procurement umbrella, that we covered back on Day 5, most e-Procurement solutions don’t handle e-Payments, and most e-Payment solutions are actually stand alone solutions. Thus, it’s important that this topic be covered on its own.

Since the underlying concept of e-Payment is relatively simple, like the post on e-Procurement, this post is going to be a little shorter than the other posts in the series, although it actually has twice as many questions. e-Payment, in principle, is not that complex and it just boils down to whether or not the system does what you need it to do (without costing you a king’s ransom).

1. Does it integrate with your ERP and/or e-Procurement Platform?

If it doesn’t integrate, there should be an easy, well-defined methodology for getting invoice data out of your ERP and/or e-Procurement platform and the e-Payment data back in. Furthermore, if it doesn’t integrate directly, make sure to ask for a demo of the integration capability, with a test system that mimics your systems (and preferably a test system that you control), before signing on the dotted line. Remember, e-Payment, like e-Procurement is supposed to make things easier – if you have to re-key data, then it’s likely not any easier than whatever process you are using today.

2. Does it integrate with your AP system?

Your accounts payable system not only needs to track what needs to be paid, but when it was paid, how, and whether or not it was paid in full. Again, since you don’t want to re-key data, you want a clear, easy integration path. In this case, batch export and batch import using XML files is sufficient, since AP doesn’t necessarily need real time status, but you need a mechanism that is as seamless and easy as the mechanism that integrates the system with the ERP and/or e-Procurement system used by procurement on a day-to-day basis.

3. What level of volume can the system support?

If you make a lot of transactions over the course of a day, you don’t want a system that craps out if you try to put more than one transaction through a second. In particular, since you will have peaks and troughs, and since your goal is to grow your business, you want a system that can reasonably support five to ten times your peak activity today. Ask for benchmark results conducted or certified by a third party – you want to know the system is up to snuff.

4. Does it detect duplicates?

You don’t want to be paying the same invoice twice – because if it’s a less-than-reputable supplier, you might have trouble getting the payment back or getting a credit towards future purchases – and this is assuming you can even identify the duplicate payment at all! If it’s less than a certain percentage of spend, your accountants might think it less costly to write it off as a loss than try to hunt the error down. Since this will negatively affect your implemented savings metrics, you want to be sure this doesn’t happen.

5. What is the true cost of the system?

Since many e-Payment systems are priced per transaction, either a fixed rate for each transaction or a percentage of each transaction, you want to be sure you have a good handle on what a system is going to cost you before making a decision. Ask them for complete purchase, installation, operation, and maintenance quotes and a sample calculation based upon your expected throughput. Then do your own calculations.

6. How are rejected transactions managed?

Not paying the piper is generally not an option, especially since you never know what rats he might lead your way if you don’t, so you want to make sure that all rejected transactions are appropriately caught, flagged, and managed. If it was a system error, it should be retried after a small period of time has elapsed. If it was an account error, it needs to be flagged and brought to the attention of a human being to correct the information. If it was a lack of funds error, all payments in the queue need to be put on hold until the issue is resolved.

7. What types of payment are supported?

Electronic check / ACH, wire, P-card, credit card? If you’re locked into only one or two methods, and the methods aren’t right for you, it doesn’t matter how good the system is technically – it’s not the system for you.

The 12 Days of X-emplification: Day 11 – Supply Chain Optimization

On Day 2 we talked about strategic sourcing decision optimization, the technology you need to make the right buy given the myriad of constraints you have to adhere to and the large number of costs and bids you need to take into account. Today we’re going to talk about supply chain optimization – the process of optimizing your supply chain, or distribution network, to minimize costs and maximize value.

Even though the only way to truly get the optimal buy every time is to use the optimal supply chain, the reality is that you can’t transform your supply chain overnight for every bid. The realities are that it takes time to acquire, lease, or dispose of distribution centers and warehouses, that you have contracts in place with suppliers and carriers for anywhere from three months to three years in a typical organization, and that changing global distribution patterns requires time to research the regulatory, documentation, and taxation requirements of different countries and trade zones. Thus, when it comes to strategic sourcing, the best you can do is optimize the buy within the supply chain you have available to you today. However, if you can improve the supply chain, then you can reduce your costs and save even more across all of your buys.

Supply chain optimization is something you should do on a regular basis. Whereas in the past, experts would say that it is something you should do only once every five, seven, or ten years – today it is something you should do every year! Today’s optimization solutions are a lot more powerful than they were ten years ago and allow you to build much more sophisticated models, which are now usually solved in hours compared to the weeks that was once required for models of this magnitude.

Even though it probably doesn’t make sense to buy and sell manufacturing and distribution center assets every year, there’s nothing stopping you from modeling the cost associated with such a sale, or modeling the cost of breaking or failing to renew a lease, of each asset you have if new options present themselves, such as alternative low-cost distribution centers or the possibility to sell a manufacturing center to an outsourced contract manufacturer who might be able to manage it more cost effectively. Today’s solutions can model all of the costs associated with acquiring, running, and disposing of an asset in your global distribution network, and can help you truly identify what the optimal network is for you at any given time for any given period of operation. (Thus, every year you can redo the analysis and assume that the network is only going to remain stable for the next year.) You can also tell a good supply chain network optimization solution that certain aspects of the network aren’t allowed to change and that certain aspects of the network must change and have it tell you whether or not your current network is optimal or if you should consider making some changes.

So how do you identify the right supply chain modeling and optimization solution? As with any other technology, you ask the right questions. The following questions should be enough to get you started and help you identify the real solutions with the power you need from the imposters.

1. Can the solution model your supply chain as is?

This is a question you need a resounding yes to. How do you know how much a potential network redesign is going to save you if you don’t even know how much your current network design is costing you? This brings us to …

2. Can it derive a cost baseline?

Once you’ve modeled your current network, the solution should be able to run the model and tell you how much your network should be costing you. (If your current network is actually costing you significantly more, than either you have some inefficiencies in your processes to work out or you have not accurately modeled your network and need to revise or expand your model.)

3. Can the solution support the construction of a model depicting a desired state?

If you have a solution in mind, you should be able to construct that solution and derive a cost baseline for that solution. Similarly, you should be able to define your own modification of a suggested network design and derive a cost baseline for that modification. After all, it’s not the lowest cost solution, it’s the highest value solution – and that’s not necessarily the solution with the lowest cost today, but the network design with the expected lowest cost, and highest value, over the expected lifetime of the network.

4. Can it derive an estimated cost of any model you specify under a projected range of activity?

The reality is that any given solution is only optimal for the specific (set of) demand value(s) and the specific (set of) cost(s) that the model is defined on. However, you’re optimizing your network for a future period of time, where demands are only forecasts that could change. Thus, you want a solution that also has simulation capabilities and the ability to run multiple models under multiple demand scenarios and cost differentials to allow you to come up with a network plan that is robust and most likely to save you money over the range of scenarios that are most likely to occur.

5. Can it allow you to drill down into the expected cost differential between two models and determine why?

It’s not enough to know that one network design is expected to cost 2M more than another, you also need to know why, especially if the more expensive network design is the one you’d prefer. If you know that most of the costs are associated with lease payments, then you know that if you could negotiate a lower lease price, you could end up with a network design that you like and that is only slightly more than the lowest cost solution. If such a design also has lower risks, then it has a higher value and you can choose it.

6. Can it help you optimize your supply chain improvement investments?

Converting from one network design to another will occur a lot of upfront costs associated with asset acquisition, lease, and disposal as well as penalties if you have contracts in place that you need to back out of early. These up front costs need to be covered somehow, and if you only have a fixed amount of capital available for supply chain improvements, you want the model to be able to take that into account and the solution to provide you with different, near-optimal, improvement possibilities that are within your budget today.

7. Can it model the impact of fixed asset disposal or cost reduction on projected service levels? inventories? greening?

When optimizing your network, it’s not just about cost and risk, it’s also about service optimization, inventory optimization, supply chain greening, and a slew of other initiatives. It’s important that such a solution not only allow you to specify all of your constraints, but allow you to calculate whether or not you’re trading service level or inventory risk or carbon credits for that cost reduction.

8. Can the solution support sensitivity analysis?

Building on the last question, if the system tells you a certain network design is likely to reduce your projected service levels by 1%, you want to know how much money is required to bring that down to any threshold between 0 and 1%. Maybe you only have to sacrifice 25% of your maximum savings opportunity to achieve a service level decrease of only 0.1%. That could be a good trade-off – a 0.1% decrease in projected service levels is much better than a 1% service level decrease, especially when it costs you only 25% of your maximum savings potential to achieve a projected service decrease that’s ten times better than the projected service decrease that you would be stuck with if you went with the greedy solution.

The 12 Days of X-emplification: Day 10 – Trade Data Management

Trade Data Management is a broad topic, and means different things to different people. As far as I’m concerned, Trade Data Management is the process of tracking all of the data that you need to manage the global trade cycle, as defined in the Global Trade Primer on the e-Sourcing Wiki.

Global Trade is quite involved. It encompasses supplier selection and management, e-Procurement, transportation, import & export, government organizations, third parties, and a host of regulations depending on where you’re shipping from, where you’re shipping to, and where you’re passing through in between. However, since most shops already have e-Sourcing, e-Procurement, Supplier Management (SRM/SPM/SIM), and logistics solutions, when they look for a global trade management solution, they are specifically looking for a solution that can capture all of the data they need to produce the documentation needed by each organization that they interact with (government, carriers, and other third parties), produce those documents for them, and automatically submit electronic versions of the documents to those systems capable of receiving the documents automatically. Secondarily, they want a system that can help them with export classification, tax calculations, and regulatory requirement identification. Thus, we will specifically focus on those requirements in the questions that follow.

1. Does the vendor they have a software based solution, a blended software and services solution, or is it entirely services?

Although the first two choices can be equally adequate, be wary of a services only solution. Not only do you need to produce a lot of documents when trading internationally, but you need to have those documents submitted in a timely fashion, especially to government agencies that can stop, confiscate, and even destroy your goods if you don’t follow the rules. How fast can a purely services company turn these documents around, especially given the sometimes dynamic and unpredictable nature of global trade?

2. Does it address import and export classification (ETS) and corresponding tax rates (HTS)?

Let’s face it – import and export codes can be bewildering. Without the right expertise, you might find that your product apparently fits the requirements of three or four different codes, especially if there have been recent changes in the country you’re importing into or exporting from. However, given that each code might require different documentation requirements, and, more importantly, that each code might be associated with a different tax rate, it’s critical that you select the right one. Unless you have an expert on staff, you want a service provider that can provide you with that expertise.

3. Can it produce the documentation required by government agencies? Can it submit those documents directly into existing systems?

It’s one thing to track all of the data, it’s another thing to create the forms – automatically. You want a partner that not only tracks the data you need for every form you might need in the global trade cycle, but that automatically creates those forms for you and, when possible, electronically submits those forms to the appropriate government agencies. For example, those companies operating in the US need to submit their manifests to ACE before the truck reaches the border.

4. Does the solution support appropriate performance metrics?

It’s not just the services offered, but how effective those services are. You want a company that tracks its performance by customer and globally and makes a continual effort to improve its performance over time. Completeness, on-time delivery, cycle time reductions, and other meaningful metrics need to be tracked and available to you at all times.

5. Does it support all available transportation methods adequately?

If you’re global, chances are you’re shipping by land, sea, and air and using multiple carriers and methods for each transportation method. For example, you might have your own trucks for local shipments between a warehouse and your retail location, a 3PL for shipment from a supplier to your warehouses, and an agreement with Fedex for customers who shop on-line for home-delivery. You want a partner who is adept at managing all transportation methods that are available to you.

6. Does it support regulatory data requirements such as RoHS, REACH, WEE?

Let’s face it – it’s not just customs and associated regulations you have to comply with when trading globally, it’s also a slew of regulations that govern the safety and material content of your products. You want a service provider that can track all of the data required to produce the necessary documentation to show that you are in compliance with each regulatory code that can be applied to your products.

7. Does it support your vendors and partners?

If you use a 3PL, you want them to be able to access the system to print off the documents you need, and if you use contract manufacturers, you want them to be able to input the data required to demonstrate that you are in compliance with the appropriate regulations. Thus, it needs to be a web-based system that is accessible to those who need access.

8. Does it integrate with your visibility solution?

Hopefully you’ve realized that if you’re not tracking what’s going on in your supply chain, then you’re just asking for a major disruption, given that the average company is now experiencing at least one major disruption a year. (Furthermore, the frequency of disruptions to those companies not actively engage in supply chain monitoring and risk management is expected to increase significantly over the next decade.) If you have, then you’re in the process of implementing a visibility solution that lets you track the status of each order and alerts you when something does not ship or arrive at the expected time. For this type of system to be useful, it needs to track all of your supply chain data – and this includes the document submissions and information requests managed through your trade data management system. So make sure it can implement with the visibility solution you have, or the one you plan to implement (if you haven’t started yet).