Daily Archives: March 25, 2009

Optimizing Your Procurement Technology Investments

The Sourcing Interests Group recently ran an interesting article on optimizing your procurement technology investments in 2009. Although it had some good suggestions, my top five suggestions would be the following:

  1. Get Visibility Into Your Spend (Spend Analysis)
    If you don’t know how much you’re spending on each category, sub-category, product, and service, who you’re spending it on, in what amount, by unit, you need to get this visibility. Get a good spend analysis solution and dive in!
  2. Take Your Strategic Sourcing up a Notch (with e-Sourcing)
    Start with the most attractive savings opportunities that were outlined in step 1. This is your best bet to negotiate big savings in this downturn.
  3. Focus on Contract Compliance (adopt Contract Management)
    You need to enforce hard-won savings by insuring that internal staff and suppliers are compliant with contractual agreements.
  4. Implement e-Procurement
    Done right, this will make it easy for your buyers to buy on contract.
  5. Get a Grip on Global Trade (adopt Trade Visibility solutions)
    Chances are your global sourcing endeavors are needlessly costing you more than you think! As per my recent Illumination on why you need trade visibility, you’re probably paying more than you need to on duty, using costly inefficient processes, paying unnecessary document preparation costs, and making costly errors that are costing you million of dollars a year.

Dispute Resolution: Adjicate, Arbitrate, Mediate, or Litigate?

That’s the way to do it, at least according to a recent article by Paul Carter Hemlin on Supply Management . com. In the article, he covered the four (primary) methods of dispute resolution that you can use to resolve disputes with your supply chain partners along with their advantages and disadvantages.


The parties agree on a single adjucator, who will be an expert in a particular sector, who will review evidence and arguments and make a decision without the need for a hearing.


  • Confidential
  • Quick Resolution
  • Cost-Effective


  • Immediately Enforceable
  • No Case Law
  • Can Be Used as an “Ambush” by a Party Who Spends Months Preparing a Case in Secret
  • Does Not Permit Counter-Claims


Disputes are heard by a lone arbitrator or a panel from an approved body, such as the Chartered Institute of Arbitrators, often using a mini-trial format, and are resolved according to agreed upon law(s) outside the court.


  • Confidential
  • Unlikely to be Overturned by a Court
  • Option for a Panel-decision


  • Lengthy and Expensive
  • Arbitrators Do Not Have to Give a Reason for a Decision
  • Limited Grounds for Appeal
  • All Matters Must be Concluded Before a Decision Can be Made


A third party mediator can help the parties avoid legal action.


  • Quick, Cheap, and Less Adversarial
  • Confidential Outcome
  • “Without Prejudice” Process


  • Not Binding
  • Will Not Work When Parties are Entrenched
    (and Only Add Time and Cost)
  • Settlement is Voluntary


The ‘traditional’ process for resolving legal disputes on civil matters where the party starting an action (the plaintiff), seeks a legal or equitable remedy.


  • Tried, Tested, and a Vast Body of Case Law
  • Final Decision that Parties are Obligated to Respect
  • Institutionalized


  • Lengthy and Expensive
  • Significant Management Overhead
  • Very Adversarial

Whichever method you choose, you should make sure it is specified up-front in the contract, which should also specify the dispute escalation process and timeframes in which both parties must take action or respond to a claim or counter-claim.