Daily Archives: September 22, 2014

The “Future” of Procurement: Old News Part V

We know that we have already pushed out four full posts since we started discussing old news, and that we should be done, but we’re still not done! Not even close! So if you were wondering why the doctor is still ranting and raving like a mad man, it’s because he is still very mad. So far we’ve exposed 12 “future trends” that are so outdated that Astroturf is revolutionary. And we’re not done! Not even close! We have three (3) more to cover today. It’s beyond insane! There’s no word for it! I’m betting, if he were still alive, even Einstein would have difficulty comprehending how so many hog manure “future trends” still see the light of day. And that’s why, once and for all, we have to bust them up — one by one — until they all fall down.

21. Increased Raw Material Scarcity

We’ve been dealing with raw material scarcity issues for centuries. Some as a result of unfettered demand. Some as a result of limited production. Some as a result of gross incompetence. For example, take the oil crises of 1973 and the rapid rise of oil prices in the 1990s. Or the gold price spikes between 1933 and 1948, 1973 and 1977, 1979 and 1981, and the almost unparalleled rise between 2001 and 2011 (somewhat balanced by the myriad of gold rushes between 1800 and 2000 around the world that, eventually, caused the price to drop significantly because of the influx of gold). Or the plethora of famines that have occurred around the world over the last few millennia since the first famine was recorded in the history books in Rome in 441 BC*. The only difference is now, thanks to computer, laptop, tablet, and cell phone proliferation, the scarcity has shifted to rare earth minerals. And when you consider that the Earth’s population is rapidly increasing, as it is now four (4) times what it was 100 years ago, and that the planet, and the resources it contains, is finite — it doesn’t take an Einstein to put 2 and 2 together and come to the conclusion that, as time goes by, more and more raw materials are going to be in scarce supply.**

20. Increased Strategic Focus

Isn’t this essentially what Drucker preached for the entire course of his academic and business career? When you get right down to it, strategy is not about numbers, it is about using what the numbers are telling you to do something right. And that something right is something that is done by your people. Drucker was all about building relationships, bringing out the best in your people, and making them an integral, happy, productive part of your community so that together they could do something better than each individual could do on their own. In other words, helping your people help you do something right, and grand, and wonderful. If this isn’t one of the best pieces of strategic advice ever, the doctor doesn’t know what is. So don’t tell me strategic focus is new. Drucker was preaching better management (which is key to organizational success) since he started working with IBM in the 1940s. That’s before most of us were even born!

19. Service Providers Excel (and surpass in-house ability)

No one in their right mind*** outsources a back-office function to an outsource provider without a reasonably strong belief that the outsource service provider can do the function at least as well as the company can at a cost that’s at most what the company is currently paying to get the job done in house. In the early days when the outsourcing craze hit full tilt back in the 1980s, this wasn’t always the case, and some providers did so bad they actually flopped. But many didn’t, and some of these got very good at what they did. Very good. And in the 1990’s you had a large number of providers who could do back office functions at least as good as their clients, if not better. And then with the introduction of e-Sourcing and e-Procurement systems in the noughts, a few of these outsource service providers really took off and became so good at transactional procurement or sourcing of select categories that they can run circles around their clients. Depending on the function, there have been service providers that have been better than the majority of their clients for at least 10, if not 20 years, in Supply Management and related functions. So, like the fourteen (14) “future trends” that precedes it, this prediction is really old news. And the doctor, for one, is tired of reading about it.

* There is biological and recorded evidence (in the form of hieroglyphs and hieratic) of famine in Egypt around 2200 BC during the collapse of the old Kingdom, but as the remaining records are few and the biological evidence minimal, it’s hard to precisely date the famine, which was a relatively rare occurrence in Egyptian history. The Egyptians were the agricultural masters of their time and only on rare occasions where the Nile flooding was considerably more or less extensive than usual was food limited and famine a real possibility (if over or under-flooding of the Nile happened multiple years in a row).

** Maybe we should be more forgiving considering that less than 1 in 7 American adults are “proficient” at math? Hell no! When we lose basic logic and reasoning skills and care only about whether or not Kim Kardashian has the same look twice in one week, the world will go to hell in a handbasket so fast that we won’t even have time to blink — so you will get no lenience or forgiveness from me. [We didn’t make this up! A headline on Daily Mail, yes, Daily Mail, was That’s unlike you! Kim Kardashian wears the same look for the THIRD time in a week ….]

*** the doctor knows being in one’s right mind is not a pre-requisite for an executive job in some countries, including the United States, but we’re going to assume it should be and move on.