Monthly Archives: August 2011

It’s a Knowledge Economy – Are You Ready?

Today’s economy is a knowledge (driven) economy, “one in which the generation and the exploitation of knowledge has come to play the predominant part in the creation of wealth. It is not simply about pushing back the frontiers of knowledge; it is also about the more effective use and exploitation of all types of knowledge in all manner of economic activity“. Very little has changed since the Department of Trade and Industry of Great Britain penned these words in 1998.

In fact, the importance of knowledge in wealth creation is accelerating by the day now that global trade, information technology, new media, and, in particular, the social web is increasing in innovation, size, and market penetration on an exponential basis. Leading organizations now “follow the sun” and operate core business processes 24/7/365 on a global basis. Product and service pricing are increasingly being driven by value first and cost second. Organizations have to either accept the new economic reality created by the knowledge economy or fall further behind their peers in sales and market size.

From a supply chain vantage point, not only have the last twenty-five years produced an explosion in the application and availability of computing and communications technology in all aspects of life and business, which was only hastened by the wide-spread adoption of the internet, but they have also produced a revolution in supply chain theory and best practices. In lockstep we’ve gone from MRP to MRP II to ERP to a mix of Best-of-Breed Supply Chain and Global Trade solutions on the technology side to decentralized tactical buys based on hardball price negotiation to centralized global strategic supply negotiations on the process side.

In today’s fast-paced knowledge economy, only the strong survive, where the strong are those organizations with modern processes and technology and the wherewithal to use them. The question is, does your organization belong to this group?

To find out more, download the latest white paper by the doctor of Sourcing Innovation, sponsored by BravoSolution.

So, What Might a Good Job Advertisement Look Like?

A good advertisement is very job specific, but as per yesterday’s post on how you have to start with a good advertisement if you want to attract talent because carbon-copy blah-blah-blah indicates you have a talent management problem. In this post, we’ll give you a sample job advertisement that is much better than the carbon-copy blah-blah-blah referenced in last Friday’s post. The advertisement is in italics. For a comparison, we include the carbon-copy blah-blah-blah in code font. While this advertisement is not perfect in any aspect, it does illustrate some of the concepts outlined in yesterday’s post.


Senior Technology Sourcing Manager


Here’s an exciting opportunity for an experienced sourcing manager or CTO in the technology domain to join ABC Bank in its downtown Manhattan (New York) location in a permanent role. The successful candidate will enjoy a base salary of up to 200K, which will be augmented by an uncapped performance-based bonus (using our corporate cost reduction and avoidance formula), a first-rate health plan, 401K matching, gym membership, and an annual training allowance.

Here's a superb opportunity for an experienced sourcing manager within the hardware and software domains looking to join a top tier investment bank. This is a permanent position based out of New York City that will pay a base salary of 150K plus a competitive bonus and benefits package.


The Senior Technology Sourcing manager will be responsible for all hardware and software buys and leases, corporate data centers, application hosting, and shared sourcing initiatives. In addition to negotiating favourable awards that benefit the company and the stakeholders, the successful candidate will be responsible for supplier relationship management and development initiatives. Our company is planning to transition from multiple discrete data centers that host its different divisions to a small number of data centers that will support our entire global operation in a shared infrastructure setup. One of your first tasks will be to manage the sourcing of our service provider and the multi-year, eight-figure outsourcing contract that will result. This is a challenge worthy of a superstar.


In this role you will manage Hardware and Shared Infrastructure Software sourcing initiatives, support the post contract supplier management of critical suppliers, and liaise with the legal department to ensure favourable commercial terms. In addition you will constantly interact with senior management to relay critical information about vendor relations and contracts. This is an excellent opportunity for a qualified candidate who has had strategic sourcing experience looking to manage a high visibility, multi-million dollar project for a leading investment bank.


This is a Senior position and we expect that successful candidates will have 10 years of combined experience, with at least 3 in a technology sourcing or CTO role, and either experience in, or considerable exposure or education in finance and financial services. A Bachelor’s degree is preferred, but candidates with equivalent experience and an ISM CPSM or equivalent certification will be considered.

In order to be considered for this position, you must have worked as a hardware and software sourcing manager on a global scale within the financial services industry for several years.


ABC Bank is top-tier international investment bank that is in the Fortune 500 in the US and the Global 1000. ABC encourages a culture of open communication, teamwork, and innovation and believes its results, and not hours, location, or overtime that counts. Employees can work flex hours and telecommute when needed, and take advantage of leading processes and tools to get results. Each sourcing manager is given access to a complete sourcing suite that includes an analysis engine, an optimization engine, and an end-to-end negotiation and contract management engine to make the sourcing process as smooth and efficient as possible.

A top tier investment bank.

Complete information on the role, our company, and our culture can be found on our corporate website, www.abcbank.com. The corporate job ID is 647862, and the complete description can be used by searching for this job ID in the careers portal. Applications can be submitted on our site, e-mailed to career-647862@abcbank.com, or faxed to 866 555 5555. If you have any questions, you can e-mail questions-647862@abcbank.com, speak to one of our HR professionals in an on-line chat between 9 and 5 ET, Monday to Friday, by way of the career chat feature in the careers portal, or call 888 555 5555. If no one is available to take your call, leave a voice mail and we will get back to you within 1 business day. All applications will be acknowledged when received, and all applicants who apply by the closing date of August 31, 2011 will be notified of whether or not they were selected for an interview by September 15, 2011. Those candidates selected for an interview will be contacted within one week of notification to set up a time. ABC Bank appreciates your interest and hopes we can exceed your expectations.

E-mail careers@recruiter.com

Unlike the carbon-copy blah-blah-blah, this advertisement is specific, focussed on the role, educationally and experientially defined, clear on corporate culture and benefit information, and complete in contact information. It could use some work, but considering the doctor banged it out in 30 minutes, it’s not bad. And it makes a point. It’s not hard to write a good job advertisement if you want to. So if you really want talent, you’ll do it.

Your Browser Matters

While using Internet Explorer will not make you dumb, if you are using it, you probably are. That’s what a recent study by AptiQuant, that a gave more than 100,000 participants an IQ test while monitoring which browser they used to take the test, found. The results, nicely summarized in this CNN article that asks if Internet Explorer Users [are] Dumb, found that users of IE6 scored the lowest on the tests, with a score of just over 80, while users of Opera (the doctor‘s preferred browser by the way, using it since, believe it or not, 1997 when Opera 3.0 was released) scored the highest at well over 120. In other words, IE Users were at the bottom of the “dullness” range while Opera Users have “very superior intelligence” or, for the more technical, in order to include IE users, you have to go two standard deviations from the mean down, and in order to include Opera users, you have to go two standard deviations from the mean up.

Cheap shot at IE users? Oh yeah. Do they deserve it? Probably. There’s no excuse to be using IE, the most non-standards compliant browser on the market, when Firefox, Chrome, and even Safari are leagues ahead and cross-platform. Consider the recent HTML5 Browser Scorecard. IE9 Beta supports a mere 96 HTML 5 features, while Safari 5, Chrome 8, and Firefox 5 support over 200 features. So drop IE. Even if it doesn’t raise your IQ (as the doctor understands that correlation is not causation), at least no one will think you’re dumb.

If You Want to Attract Talent, Start with a Good Advertisement

As per SI’s blog on Friday that noted that you have a talent management problem if your job advertisement reads like carbon copy blah-blah-blah, if you want to attract talent your have to have an interesting job, an exciting career path, and an advertisement that conveys both.

So what makes a good advertisement? There are various theories out there, but, at a minimum, it must:

  • Be Specific
    From a clear and simple title or headline to a detailed job description to details of the company, specificity helps. “Sourcing Manager IV” means nothing outside your company, “buy goods and services” is part of every Sourcing Manager’s job, and “at a top tier CPG company” doesn’t differentiate you from Discount Dave’s trying to pretend they are bigger than they are.
  • Focus on the Role
    Remember, you are focussed on recruiting Gen-Y and they want a challenge, excitement, and an opportunity to advance their career. Not an opportunity to be stuck in a paper-based back office faxing POs to suppliers who haven’t heard of the internet yet. And if you don’t go into details, they are going to assume that your organization is a Supply Management laggard. Also, be sure to list the top five to 10 duties as well as normal working hours. If you expect the Sourcing Manager to be on the phone with China for 2 hours every day during normal working hours in Beijing, that better be clear.
  • Clearly Specify Minimum Experience and Education
    If you will not interview anyone with less than 3 years of relevant experience (which should include experience with the product or service in question and not just a Sourcing Role — who better to source a product than an engineer who used to make it who has had some financial and sourcing training), state that. Also, if your policies demand a bachelor’s degree or a professional certification, state that too. But don’t make ridiculous requests, especially if the pay is not on the high end or the locale is expensive. No Sourcing Manager with a Masters, 2 professional certifications, and 10 years of experience is going to accept a position for 90K in downtown Manhattan.
  • Sell the Culture
    Remember, Gen-Y is the most social, hooked-in, “hip” generation yet. They want a constantly communicating culture. (But don’t promise what you can’t deliver.)
  • Advertise the Benefits
    “Great Benefits Package” sounds like Used Car Larry’s “Solid as a Brick” sales pitch. Sure the frame is solid, but so is the engine. (And an engine that doesn’t turn doesn’t run.) Advertise the benefits. Health Plan. 401-K (or RRSP) matching. Gym membership. Show you put some thought into what prospective employees need.
  • Include FULL Contact Information
    Specifically, the company web-site and a link to a more detailed job description, the mailing address and fax number, and a contact number of someone to contact with questions.
  • Guarantee a Response
    And follow up. Guarantee receipt of application. Guarantee a time by which applicants will be notified of whether or not they will be interviewed. Guarantee a time by which selected applicants will be contacted to set up an interview. To find someone who will work hard and respect you, show that you respect them and their time.

Time to Shorten those Payment Cycles

If you want a sustained recovery, it’s time to start shortening those payment cycles. During the recession, the average payment cycle time in many companies shot up due to “cash flow issues”, and it’s already coming back to bite them in the rear end. As SI has said before, this is not the solution to cash flow and any “cost savings” that the business appears to benefit from (by having more cash in the bank that can potentially earn interest on short 60 or 90 day notes) is more than eaten up by the higher costs the suppliers have to charge to make up for the high interest rates they have to pay to obtain working capital.

It’s important to remember that late payments put extraordinary pressure on suppliers, especially small and medium sized suppliers, which often desperately need cash to purchase equipment, raw materials, and, most importantly, meet their payroll. Furthermore, in addition to cash flow problems caused by late payments, many firms incur significantly extra costs for the time and money spent chasing payments and securing interim financing, usually at exorbitantly high rates – which can often exceed 20% compared to your rate of borrowing, which can be as low as 5%.

All these costs do nothing but drive up the supplier’s cost of operation, and effectively, the price they will need to charge to maintain enough profitability to survive. That’s why many prices for components are rising faster than the raw commodity costs. The lack of prompt payments has cut many suppliers to the bone. Extending payment terms doesn’t help with cash flow or “cost savings”. Extending payment terms only drives up the price in the long term while increasing the risk of a major supply disruption as a supplier could go out of business if all its customers take too long to pay.

So instead of extending Days Payable Outstanding, consider looking at other strategies that can lower your cost of operations – such as improving forecast accuracy, balanced just in time (JIT) production, and low cost financing options that are available to you, as a large company, and not your supplier. Better forecasts lead to less missed opportunities and a reduced need to clear inventory at significant markdowns, balanced just in time (JIT) production reduces inventory costs, which is much better than just shifting them to a third party, and financing your purchase at prime or less will cost everyone less in the long run that forcing a supplier to take out short term financing at 20% to 40% per annum.