Daily Archives: April 22, 2009

How Internal Pressures Cause Supply Chain Fraud

The recent Katzscan newsletter had a good article on how internal pressures cause fraud. Noting that the failure of executive management to properly staff for key positions, train employees, enable employees to ask for (and receive!) help when they really do need it, and the creation unattainable benchmarks all contribute to pressures that can force an otherwise honest employee to commit fraud, it concludes that powerless to ask for help, because it is seen as a sign of weakness and could jeopardize their job, too many people are left to toil and are forced to commit fraud to satisfy outlandish demands out of fear of reprisal.

Well said. There’s pushing your employees to be their best and setting stretch goals … and then there’s just being unrealistically stupid. A 10% savings on raw material heavy categories where the market price of those raw materials has increased 30% since the last contract? Inspect 10% of inbound raw materials when the average is 7% and you won’t replace the two staff members who just left? Faster clearance at the ports when you won’t spring for the costs associated with C-TPAT certification? Dream on. Your employees have two choices: tell the truth and risk termination, or lie. And it only gets worse from there.

So think about what you’re doing the next time you ask for the unreasonable. Otherwise, you might unwittingly join Fox in Sox with Knox in stripes.

A FieldGlass Update

Those of you who followed the travels of the Sourcing Maniacs on their 2008 Vendor Tour may recall that one of their stops was FieldGlass (in Chicago), a provider of an on-demand contingent workforce management solution.

A well-designed contingent workforce management solution will streamline the contingent labor requisition process, simplify the identification of qualified resources, automate the distribution of requests, standardize resource rates, automate the collection of quotes, track contracts, and insure that staffing companies and contractors always bill at the approved rate, and only for approved hours on approved projects. The solution will reduce recruitment costs, processing costs, and payment costs as well as prevent overcharges and overpayments, which can often total 20% or more at companies with a large contingent workforce and no solution to manage the process.

FieldGlass has taken the SaaS approach to application development, and instead of one big release every year or two, they’ve moved to a quarterly release cycle where they package smaller, but useful updates every quarter. Their latest release adds or improves on four areas functionality:

  • fine-grained service control
    More granular cost allocation, rate card flexibility and tracking down to GL accounts.
  • time-sheet review process
    The ability to have suppliers and local program managers review time-sheets as part of the approval process so that errors are caught, and corrected, earlier (or, in the worst case, supply managers cannot claim lack of knowledge of deceptive billing as they have to sign off).
  • improved ad-hoc approval support
    Sometimes there’s an emergency where you need someone right away and can’t follow the usual process.
  • decision wizard
    That can be used to guide you through the the process.

It was the last capability that caught my attention. With so many options to choose from in a large company: current approved staffing vendor, new recruiter, direct hire … statement of work, position advertisement, RFX … hourly rate, salary, fixed price contract … it can be hard for someone outside of HR and new to their position to make the right decision. The ability to create company specific decision trees for staffing and hiring allows a manager to walk through a series of Y/N or multiple-choice questions and quickly figure out the route they should be taking, the partner (if any) they should be using, the type of position they should be filling, and how they should be classifying it. This, in turn, allows a manager to focus on finding the right resource, instead of wasting time fiddling with processes, which is what workforce management should be all about.