Daily Archives: February 28, 2014

Energy and Utility Procurement – Where Do You Stand?

Before ProcureCon released their recent State of Indirect Procurement Benchmark Report, they put out a study on Energy and Utility Procurement that summarized responses from 39 survey participants. While it was by no means an empirical study and the be-all-end-all to energy and
utility sourcing
, it does allow you to compare your own program to some extent and may inspire ideas for program enhancement.

One of the most interesting points of this report was that there doesn’t seem to be a single approach to any aspect of managing energy that respondents agreed upon. Like many other aspects of non-direct sourcing, companies are all over the board. This is likely due to the relatively new involvement of procurement, the sheer complexity of the category and variety of energy requirements on a company-by-company basis.

This is one of the many areas where, due to the varying degrees of regulation in different locales, the different types of energy (production) available, and the different views on the need for green, it helps to get with your peers and get different ideas, best practices, and perspectives — as well as the inside information on what works, and what doesn’t.

Fellow Canadians, your options for events have been limited, but now that ProcureCon has come North, you have one more option. Join the doctor at the inaugural ProcureCon Canada event (and register with code PCA14SI) and share your experiences.

The (Board) Gamer’s Guide to Supply Management Part IX: Small World Part 2

In Part V of our original series2, we introduced you to Small World, a delightful game from Days of Wonder (iOS Version available) that, in the words of Wil Wheaton, combines the military strategy of Risk with the delightful art and fantasy races of Cosmic Encounter. Except its more dynamic than Risk, and more variable than Cosmic Encounter, because while the races and powers are fixed, the combinations are not. [There are 14 races and 20 powers, or 280 different possible pairings. Plus, the pairings are ordered, and if a player does not select the pairing made available to him during his turn, he must spend 1 gold for each pairing, up to 5, that he wants to skip, which not only impacts his ability to accumulate the most victory points and win the game, but improves the selections available to the next player, who may gain one or more victory points by selecting a skipped pairing. So, if you do the math, there are P(20,14) possible power-race combination orderings, which is equal to 3,379,030,566,912,000 possible distinct games when orderings are taken into account!]

So what does this have to do with supply management? As per SI’s original post, Wil could just have easily have said Small World combines the military strategy of Risk with the marketing strategies of an MBA program. Whoever has the most money at the end of the year wins. We earn money by conquering and maintaining market territories. Empty, blue ocean, territories cost two units to conquer. Every competitor or obstacle in a territory costs one more unit to conquer. At the beginning of every game, each player will choose a primary market strategy, like brute advertising force, niche marketing, or price-undercutting, and combine it with a perceived marketing advantage such as a big war chest, coveted partnership, or new manufacturing process that allows production costs to be drastically slashed. The primary market strategy and perceived marketing advantages change every game. And therein lies the connection. Small World is a good introduction to how your supplier’s sales and marketing force is going to try and counter, and undermine, your every effort to procure and manage supply at a fair and sustainable price (as profit is the name of their game, not cost control). Today we are going to dive into the races and powers and solidify that connection.

The races1 in small world can be mapped to the different personality types in an organization that, directly or indirectly, support, or limit, the sales organization. Consider the following:

  • Amazons: A nation of all-female warriors in Greek mythology, these warriors seem to multiply in battle. They’re like the accounts receivables clerks who come out of the woodwork to descend on your deadbeat customers en-masse.
  • Dwarves: The mythical miners from the popular fairy tale, they’re the professional arbitrators who excel in dark rooms and endless negotiations.
  • Elves: The long-lived long-ears from the world of Tolkien who are almost immortal, they’re like the IRS auditors who never die.
  • Ghouls: Like the accounting trolls in Accounting popularized in Dilbert comics, they are the immortal accountants.
  • Giants: Like the feared giants of medieval times, the rich C-Suite, when they are on top, can conquer others with less effort.
  • Halflings: Like the burrowing hobbits, these 3rd party independent consultants pop-up out of nowhere and take over part of the project, and there’s nothing you can do about it.
  • Humans: Like the born-and-bred farmer who is a master of his fields, these account managers excel at up-selling your existing customers.
  • Orcs: Like the toll-extracting orcs of myth, these high-performing salesman excel at getting the big deal, by force if need be.
  • Ratmen: Think lawyers. ‘Nuff said.
  • Skeletons: Like mythical skeletons, these marketers multiply every time they conquer a new territory.
  • Sorcerors: Like real sorcerors, the members of your corporate intelligence team uses espionage and influence to convert insiders to win a deal.
  • Tritons: Like the legendary masters of the sea, these logistics managers rule the sea trade.
  • Trolls: Like the gate-keeping trolls, these on-site consultants — once they are embedded in your culture — are almost impossible to get rid of.
  • Wizards: Just like the wizards could conjure something out of nothing, these analysts can conjure actionable intelligence out of random data bits.

And the powers can be mapped to different skills that can give your race an advantage:

  • Alchemist: In the old days, these magicians turned metal into gold just like your smooth-talking salesman turn feature requests into profitable change orders.
  • Berserk: Just like these warriors sometimes gained sudden bursts of strength before every battle, your evangelists can sometimes beat the competition even when the odds aren’t in your favour.
  • Bivouacking: Just like invading armies would sometimes build encampments to fortify their defenses, your account managers are masters at placing on-site consultants to fortify yours!
  • Commando: Like the marines, your analytics team, with more training than your competition, can beat the market hands down with fewer resources (allowing you to outperform your peers).
  • Diplomat: Your customer relations are so good, no one can encroach upon your customer base! Your smooth-talking sales team should be in public office!
  • Dragon Master: One of your CXOs is a legend in the space, and never loses the one battle he chooses to engage in, just like the mythical warrior who rode the dragon never lost.
  • Flying: Your command of the air, also known as your no-limit travel pass, gives you a larger territory in which to trade.
  • Forest, Hill, Swamp: Just like certain people are suited for certain terrains, your sales team does better in certain verticals than others (and makes a lot more money from a lot less effort).
  • Fortified: Just like conquering armies would sometimes build an almost impenetrable fortress from which they could rule their newly conquered land, you can dedicate your efforts on a marquis account and become so embedded therein that the account becomes almost impossible to steal.
  • Heroic: Just like mythical heroes could’t be conquered, the efforts of your two best sales teams, and their House of Lies, are unparalleled and can’t be challenged.
  • Merchant: Like the great merchants of legend, you make more profit on every sale than the people you are trading with.
  • Mounted: Just like a mounted army was more effective than one on foot, your big data advantage crushes the uninformed competition.
  • Pillaging: Just like the Vikings would loot, when you conquer an account you always find integration and data maintenance efforts that double your profit.
  • Seafaring: Just like the most successful merchants in ancient times always rules the seas, your command of the sea allows you to trade where others can’t.
  • Spirit: Just like spirits never die, your on-site consultants are so knowledgeable in their domain that even when a competitor manages to sell their product, your consultants are still maintained for their expertise and you play on.
  • Stout: Just like the army of anubis never needed rest, neither do your sales team who can swoop from one deal to the next without need for a recharge. They live on caffeine, adrenaline, and victory!
  • Underworld: The domain of the lawyers. ‘Nuff said.
  • Wealthy: Just like the tomb raiders of old, you come into sudden wealth when that one client decides to shift all its consulting to you.

It’s a small world
But it’s the only one we’ve got
  Huey Lewis

1 For this post, we are limiting ourselves to discussion of the 2nd Edition of the original Small World and not Underworld, Realms, or the various expansions such as Cursed and Be Not Afraid!

2 The original series:
Part    I: Ticket to Ride
Part   II: The Settlers of Catan
Part  III: Munchkin
Part  IV: Castle Panic
Part   V: Small World
Part  VI: Zombie Dice, Tsuro, and Get Bit!

… and the new series to date:
Part  VII: Upon a Salty Ocean
Part VIII: Agricola