Monthly Archives: July 2009

Corpedia’s Top Five Compliance Measures for Surviving Tough Economic Times

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Corpedia, a consulting and e-learning provider of compliance and ethics solutions and training, recently released its recommendations on what compliance measures companies can take to weather the storm, as reported in a recent article in Supply and Demand Chain Executive.

Since the Justice Department is already investigating 120 companies for violations of the FPCA (Foreign Corrupt Practices Act), up from 100 last year, and the year is only half over, you should make sure you are heeding these points. The government needs money too … and if they think they can fine you millions, or billions, of dollars … now is the time they’re going to be banging on your door.

The five measures, which are very common-sense and easy to implement, are the following:

  • don’t wait until it’s too late
    even if you don’t have the budget for everything you’d like to do, you can start designing your program now and identify process improvements to improve your state of operations and implement your program incrementally (and if you happen to be unknowingly violating an act, the government will be a lot more lenient if they see you were taking measures to prevent accidental violations)
  • articulate expectations
    unless you effectively communicate a clear, comprehensive code of conduct, and reinforce desired behavior from time to time, you can’t expect that your employees will always know what to do
  • you can’t run or hide … so don’t try
    you must be organized, transparent, and accountable … because even if you have nothing to hide, you’ll look like you do … and that alone could trigger a costly investigation
  • work out the old, bring in the new
    review and modify existing policies and procedures as necessary and create new controls to insure they are followed
  • utilize available knowledge
    Take advantage of available research that sheds light on others’ successes and failures and outlines the framework for a bulletproof compliance program

We thought Global Warming Would Be Good? Were We Wrong?

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Back before we knew it was an inconvenient truth, we Canadians were all for global warming … thinking it would skyrocket our property values and help us take over the world. But now, after a summer of miserable wet, dank, allergy and asthma inducing weather … we have to ask “were we wrong”?

I don’t know. So watch the video and find out!

Speculation is Fun … But You Should Get the Facts

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Speculation, a favorite pass-time of many bloggers, is fun, but you should get the facts before you sponsor any blog.

That being said, it never hurts to latch on to a winner early (especially if a sponsorship is being priced competitively), and there are a few up-and coming winners out there, particularly if your focus is narrower or broader than supply chain innovation, education, and best practices. So, if you are a forward-thinking marketer who knows your traffic is going to the blogs (after all, the only traditional publication that appears to get more regular web traffic than this blog is Purchasing), I’d highly recommend that you consider putting your logo on multiple, complimentary blogs and make your brand #1 in the eyes of your prospective, and discerning, customers.

First off, in the supply chain space, I’d recommend taking a close look at Bob Ferrari’s Supply Chain Matters. While still on the low end of the middle ground in the rankings (between Procurement Insights and Supply Excellence), Bob has been churning out high quality content since day one. If Bob decided to make Supply Chain Matters a daily blog, stepping up from his sporadic posting schedule of about every three days on average, I think Supply Chain Matters could shoot up the charts and quickly become, without question, the third most visited blog in supply and spend management space.

Secondly, in the related Metals space, I’d highly recommend Aptium Global‘s Metal Miner. Now augmented with it’s MetalMiner IndX service, Metal Miner, which now claims to be the fourth largest online metals publication (and the traffic engines appear to support this claim), has been bringing you quality information on the metals market since it’s launch in December of 2007. It’s no-nonsense approach to quality information day-in and day-out, coupled with it’s metal pricing index that is updated daily, has allowed it to climb to the point where it is now also the third most trafficked supply chain blog (which you can verify through external triangulation across the five major traffic ranking sites). Quite impressive.

Thirdly, in the broader enterprise solutions space, I’d recommend Vinnie Mirchandani‘s Deal Architect. While Vinnie doesn’t tend to do deep dives into particular solution offerings very often, he offers a myriad of insights on a regular basis that can help you get a very strong understanding of the enterprise software space if you read it regularly. And that is one heck of a useful service … especially since you’d have to subscribe to Gartner or Forrester to get the same quality of insight, and they’re certainly not free!

Well, those are my recommendations if you’re on the market for (multiple) blog sponsorships as an innovative, thought-leading organization.

Why Are You Negotiating The Wrong Terms?

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At the beginning of every year, the IACCM does a survey of the top negotiated terms of the previous year. And for the last three years, the top negotiated terms haven’t changed much. This is not a good thing, because the top terms are not what you should be focussed on. As of today, the top negotiated terms are the following:

  1. Limitation of Liability
  2. Indemnification
  3. Price / Charge / Price Changes
  4. Intellectual Property
  5. Confidential Information / Data Protection
  6. Service Levels and Warranties
  7. Delivery / Acceptance
  8. Payment
  9. Liquidated Damages
  10. Applicable Law / Jurisdiction

This is nuts. The most important things are:

  • what products / services do you need,
  • what quality and service levels are required,
  • what quantities do you need,
  • when and how do you need the products / services delivered, and
  • how much can you / are you willing to pay?

And if you look at the top ten list, only three of these five key points make the top ten. Furthermore, if you examine the top thirty list of the negotiated terms, we see that

  • scope and goals is 14,
  • freight / shipping is 23, and
  • information access and management is 29.

This is absurd. If you can’t verbally agree up front in the first five minutes that

  • you’re liable for your actions (and your supplier is only liable for theirs),
  • your IP is your IP (and your supplier’s is your supplier’s),
  • you’ll take the utmost care to protect your supplier’s confidential information (in exchange for your supplier taking the utmost care to protect yours),
  • each party will respect the laws in each country where they do business and the jurisdiction will be that of the buyer (or destination), and
  • you’ll each respect all of the applicable import and export regulations,

trust each other on these points, and just go with standard clauses in the final agreement, then should you be negotiating in the first place? Because if you can’t get right down to what’s important, I’d argue that maybe you don’t trust each other enough to be doing business in the first place. It’s not about how many billable hours your lawyers can wrangle out of you on administrivia, it’s about getting down to business and making sure you can each profit on the transaction. I’m not saying these clauses aren’t important … I myself insure they are included in every contract I draft and / or sign … just that they’ve been written thousands of times, there are standards that capture reciprocal protections, and it’s not worth sacrificing your goals to try and wrangle out provisions that may be unfair to one party and inevitably destroy the trust that is needed for a successful relationship.

Package Diversity May Combat A Sales Slump …

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… but it may also lock you into single source relationships, which could be bad for business if your supplier is on, or is close to, shaky ground.

While it’s always nice to stand out from the crowd, I have to wonder if Coca-Cola’s recent decision to shake up its packaging is the right decision from a supply chain viewpoint. I’ll admit that the 16-ounce bottle might give it a key price point, but it could come at a cost. There’s a reason most soft-drinks come in standard package sizes (2 L, 20 oz bottle, and 12 oz can) … that’s the sizes that most manufacturers have standardized on. Every time you change a size, you change a production line. That requires investment. A manufacturer is not going to do that without a significant commitment on your part. This locks you in … and even if it insures a stable supplier, it also takes away any negotiating leverage you might have as a buyer if your sources are limited. This may not matter if your product sells like mad at a decent profit point … but if the sales campaign backfires, it could cost you.

I’ll admit that Coca Cola most likely has the brand, the marketing prowess, and the supply chain optimization capabilities to pull it off (as a very early adopter of strategic sourcing decision optimization and supply network optimization technologies), but I don’t think there are many companies that could pull this off in today’s economy. Anyone have a different viewpoint?