Monthly Archives: April 2013

Sourcing Innovation Welcomes Back Next Level Purchasing!

Sourcing Innovation is thrilled to welcome back Next Level Purchasing (NLP) as a lead sponsor. Next Level Purchasing, which has been offering on-line purchasing training since 2001, and purchasing / supply management certifications since 2004, is one of the few companies that shares SI’s passion for the continued education of Supply Management Professionals everywhere and that’s why it’s great to see NLP back on SI.

Plus, it’s SPSM (Senior Professional in Supply Management) certification is a groundbreaking offering in the Supply Management space. While the original SPSM certification, launched nine years ago, is fairly basic by today’s standards, it still defines the baseline skill set required by every Supply Management professional, a skill set that is not taught in most business programs and a skill set that didn’t even exist in the curriculums of the big Purchasing Associations, including the ISM, until five years ago (as the ISM did not launch it’s CPSM certification until 2008, four years after NLP introduced the SPSM)! Furthermore, since then, Next Level Purchasing, which recognizes that the Supply Management function has been in continuous change over the last two decades, has launched the SPSM2 and SPSM3 certifications (which are still unmatched in the big associations) which are designed to help a Supply Management Professional advance in her knowledge, skill sets, and career once she has mastered the basics. (And even though the SPSM3 was just launched, they are already in the early planning phases for the SPSM4 and when the need is there, they will be ready.)

Today is a great day to be welcoming back Next Level Purchasing as a lead sponsor. Today, Next Level Purchasing launches its 3rd annual salary survey. The survey, which is sponsored by Sourcing Innovation and which can be downloaded for free on Next Level Purchasing’s website, contains a lot of useful data on salaries by continent, education, years of experience, and certification for everyone in the purchasing profession. Some key findings include:

  • Managers in North America make almost 30% more than Buyers,
  • Purchasing Professionals with Bachelor’s or Master’s Degrees make, on average, 45% more than those with an Associate’s Degree or less, and
  • Purchasing Professionals WITH a certification make $12,250 more than those without a certification, and Purchasing Professionals with a SPSM certification make $15,549 than those without a certification!

In other words, when SI told you to train thyself because it would be worth it, if you train thyself (and get certified), you’re adding, on average, another $1,000 a month to your salary! (Considering that the basic SPSM Certification is only $1,149, this is definitely worth your time!)

To download the Free Salary Survey, log into the Next Level Purchasing Association (NLPA) member’s area and download the report from the What’s New tab. (Membership is free for all Supply Management professionals, so sign up if you are not a member!)

Plus, this year Next Level Purchasing, always looking to add to their educational offerings, launches the first Next Level Purchasing Association Conference. Being held this September, this conference, which will feature keynotes by leading analysts (including Andrew Bartolini of Ardent Partners and CPO Rising and Chris Provines of Value Vantage Partners and, will be centered around a number of workshops designed to increase your Supply Management skills. Instead of the same-old same-old conference where you sit around all day listening to the same people speak over and over, this conference will focus on teaching you, which should put it on your short list as not many conferences these days seem to have that objective.*

Welcome back Next Level Purchasing!

That’s why you don’t find the doctor at many conferences these days!

Talented Professional, Train Thyself!

Earlier this month, in our Procurement Key Issue 2013 post, we noted that CXO’s still don’t get the disconnect and that the average CFO, COO, and CEO still does not understand the value of the Procurement Organization. Furthermore, despite the ever increasing need for Procurement Training, from what we’re seeing, for the fifth year in a row, as part of the continued drop in operating budgets for the Procurement function, Procurement training budgets are (again) being slashed, if they exist at all!

In order to achieve the objectives being put before you, which include:

  • the acquisition of game-changing innovation and technology,
  • the increase in purchasing’s scope and influence,
  • the increase in value of the organization’s product and service offerings

and, SI’s favourite,

  • a further decrease in organizational spending

(even though inflationary times are back with a vengeance and the pursuit of cost reductions is a lost cause in this market where food reserves are at an all time low, China has a monopoly on rare earths, oil (and energy) demands are skyrocketing around the world, and metal prices are shooting off of the charts), you need training. The skill sets and knowledge you need to keep up with today’s supply markets is almost overwhelming!

Right now, you’re probably asking why you should front the time and money to train yourself. Especially when it looks like the organization will get all of the benefit. Well, the organization will get a lot of benefit, but so will you. At the end of the day, the fact of the matter is that you will be more skilled and you will be worth more. If you are unable to negotiate a pay raise with your current employer that at least reimburses you for the effort and money that you spent getting yourself trained within three months, then another Procurement organization will be happy to give you a significant raise. The reality is that many companies would rather pay more for already trained talent than pay to train the talent themselves. While the exact amount that training will boost your salary is hard to quantify, some institutes claim that the acquisition of a purchasing management certification can boost your salary by 30% to 40% and Next Level Purchasing knows of at least one case where an individual obtained a 67% salary increase! While increases of this magnitude are atypical, salary increases in the 10% to 20% range are not!

So train thyself. It will be worth it!

The Strategic Category Management Lifecycle: Getting it Right; Part III

In our first post, we noted that 30% to 40% of negotiated savings never materialize during strategic category sourcing and this is because the “strategic” element is usually forgotten once the sourcing exercise is over. Strategic category sourcing is not enough to realize results, an end-to-end strategic category management lifecycle, which consists of at least nine phases, needs to be followed. In our second post, we defined each of the phases and the key activities in each phase.

In this post, we’re going to present some tips to getting the most out of each phase.

Phase 1: Rationalization

When analyzing a category, be sure to analyze it from multiple perspectives. Look at the products, the (potential) suppliers, the (potential) customers, and the level of spend. As per our last post, when looked at from a product perspective, you might put printers in with computers, but when looked at from a supplier perspective, pairing it with toner in an office suppliers (sub) category can sometimes get you a better deal.

Phase 2: Supplier Identification

Don’t just look at the major competitors to your current suppliers, or at (potential) suppliers who have called you, but open up an RFP to see who might be able to service your needs.

Phase 3: Sourcing

If you’re not sure of the best approach, call in a category expert. As per our last post, the best approach will depend on the category, market conditions, and specific organizational needs and might change from one sourcing event to the next for the category.

Phase 4: Contract Award

Once the negotiations are complete, the next step is to make sure that all of the terms and conditions are defined, not just price and delivery. It’s important to also define return and recovery, (satisfactory) performance metrics, and other factors critical to success.

Phase 5: Supplier Management

Supplier Management is not just an up-front meeting and an annual site-visit, it’s regular communication and joint problem solving. It’s working together to find ways to improve product quality and service delivery. It’s building a strong relationship that will insure quick recovery in the face of a significant supply disruption.

Phase 6: Procurement

Make sure to send a purchase order, issue a goods receipt, and demand an invoice for every shipment and do an-way match. In order to make sure savings are captured, it’s critical to make sure you are not overcharged. Also, track every return and require a credit memo from the supplier on a monthly or quarterly basis.

Phase 7: Inventory and Distribution

Optimize the warehouse layout for inventory management. It should be easy to locate, count, pick, package, and re-ship available inventory as required. Use the services of a 3PL to optimize distribution if that is not your specialty.

Phase 8: Returns Management

Implement a returns management solution to insure returns are appropriately managed.

Phase 9: Recovery Management

Implement a Supply Chain Finance solution that can accurately track returns, refurbished goods, and credit recovery.

Poor Working Conditions in the Supply Chain Start at Home!

Last month, we told you that new estimates put the driver shortage at 240,000 drivers and that it’s all our fault. Why? Despite the fact that 40,000 new commercial licenses are granted annually by the DOT (Department of Transportation), turnover is 100+ percent per year due to poor working conditions.

But it seems that poor working conditions aren’t limited to our drivers. It seems that our dock and warehouse workers are also getting the short end of the shaft when it comes to working conditions (to the point where the high salaries commanded by the dock workers, which can exceed $120,000 in the Port of LA for example, might not be worth it). As per this article in the National Business Review on why we should stop hurting our container opening dock and warehouse workers,

  • imported sea containers increasingly have toxic substances in them
    such as glues (from shoes), emitted gasses (from wood or MDF), and residue from fumigants,
  • unprotected workers who enter these containers can die
    and those who don’t typically get very sick and some develop long term health issues, including cancer, and
  • up to 30% of shipping containers contain dangerous levels of toxins
    with 18% of containers containing toxins at a level legally reportable as unsafe and almost 90% contain some toxic fumigant or volatile organic compound. WTF?

Kind of puts the salary demands in perspective when you consider that their jobs contain more potential dangers than a coal mine!

And if this isn’t bad enough, we also have the warehouse workers who, according to this recent infographic on Warehouse Safety and BLS data,

  • have a 14% of being injured on the job,
  • have a 3% chance of being seriously injured in a forklift accident on the job, and
  • have a 0.02% chance of being killed, most likely from a forklift accident!

Ouch! Our dock workers have it bad. Our drivers have it bad. And our warehouse workers have it bad. I think it’s time to stop focussing exclusively on the outsourced supply chain in a search for poor working conditions. There’s plenty of poor working conditions to fix here at home!