Monthly Archives: October 2014

So, Why Are “Futurists” Still Stuck in the Past?

And driving poor LOLCat to drink?

There are a few reasons.

  1. They Have No Knowledge as they come from different backgrounds which offer them no education or experience in Supply Management.
    Just because you can get high, have psychedelic visions, white them down, and spin a good yarn doesn’t mean you can be a futurist. A poet, sure, but not a futurist …
  2. They Have No Vision beyond what the rear view mirror (or the hydrocarbon gas from the bituminous limestone) offers them.
    When Meatloaf said “it was long ago and far away and it was so much better than it is today“, he was referring to newly discovered young love, not business processes identified 30 years ago …
  3. They See Too Many Organizations Stuck in the Past and a few organizations (in the Hackett top 8%) ahead of the pack and they think they can peddle these best practices as future vision.
    This is not 1914 (which was 12 years before the first transatlantic telephone call) where good ideas take years to spread (and the first person to bring a new idea or technology from a different continent can make millions on someone else’s work) and a career can be built on one single improvement — this is 2014 where it only takes a few seconds for a story to be spread around the world. But I guess if you can’t look beyond the rear-view mirror …

So, why are so many organizations still stuck in the past (and fuelling the flame that powers these fantasy futurists)? There’s a few reasons, and they include:

  • Lack of Education
    Many Supply Managers were simply thrust into the role, with no training or background for the role. And despite the fact that they have some competence or experience in other areas, they are so ill-equipped and ill-prepared for the role that they might as well have been dropped in The Lost World*.
  • Lack of Resources
    Most Supply Managers are overworked (and underpaid, but who isn’t these days) and resource-constrained, with no time for training and no budget even if they had the time (or would sacrifice their few remaining free hours to get better and more efficient so that maybe someday they can take a whole weekend off).
  • Lack of Clarity
    With no formal education, no training, and no resources to make sense of the barrage of BS being thrown at them by futurists and analysts alike, how can they differentiate between current and past processes and technologies and what they need to embark on a path that will ready them for what comes next?

And the third reason is the most crucial. Until they get some clarity, Supply Managers are going to continue to be taken in by modern con-men (who include 2nd rate analysts, consultants, and salesmen of outdated technology) selling them silicon snake oil when they just need modern sourcing and procurement tools that fit their workflow and daily needs.

So, to this end, now that we’ve explained why thirty (30) of the thirty-three (33) future-trends are, at best, last decade’s future trends, we’re going to explain why futurists (and the organizations they preach too) are still stuck in the past, what’s relevant, and what it means to you and your organization.

And we’re going to do it one trend at a time. Starting tomorrow, with “future” trend #33 on governmental regulations, we’re going to illuminate the old news and ongoing blues trends one by one until we’ve laid them all bare. It will take a while, but if you stick with it, it will be worth the effort.

What do you think, LOLCat?

"Futurists" Drive Me Bananas!"

Me too, LOLCat. Me too.

* I’m referring to the original here, so if you’re thinking Michael Crichton, then the problem is even bigger than you realize.

Procurement Needs to Expand its Horizons

On Friday, Pierre Mitchell published a great piece over on Spend Matters on how “Procurement Needs to Stop Benchmarking Itself Against Procurement”. According to the post, most procurement organizations know to benchmark themselves against others outside of their own industry, but they often don’t look to completely different functions, processes, technologies, techniques and even cultures to help them find and deliver new sources of value, of which there are many.

Some of the best ideas presented in the post are to:

  • use knowledge management to gather/store intelligence, catalog transformation projects for storyboarding, and model skill supply for resource planning like management consultants
  • get a grip on supply chain network design
  • master competitive intelligence and content/intelligence tools
  • predict model building using all data available to you
  • transition from quality control to supplier enablement and
  • manage the Procurement brand .

Taking these one by one, Procurement can definitely improve by:

  • documenting what it learns from every project and using that to define improved processes and transition management,
  • looking at the entire supply chain before defining the category and the bid,
  • making use of all of the market data available to it to determine how well it is doing and how well it could be doing,
  • building predictive trend models to understand likely order volumes for seasonal / limited life span products,
  • find new potential sources of innovation, and
  • improve the Procurement brand and the reach of Procurement.

We’ll discuss a few of these in upcoming posts, but for now check out Pierre’s post and remember, as we’ll also discuss in an upcoming paper series later this fall, improvement comes from reaching beyond Procurement’s current limited boundary.

Forty Five Years Ago Today

A mere 148 days after the troupe formed, the first episode of Monty Python’s Flying Circus airs on BBC One!

This is a historic day for Canadians everywhere as it was the Monty Python Comedy Troupe that first exposed the world to the inner mind of a Canadian lumberjack! 😉

Follow the link for the Monty Python Lumberjack Song.

It may not have been the image Canadians wanted to project, but at least the world knew that there were Canadian lumberjacks after its release! (Better to have a message with some impurity than to fade into obscurity.)

Now That We’re Done with The “Future” of Procurement …

I asked LOLCat if, in the end, our series on the “future” of Procurement was worth the effort.

However, he side-stepped the question and just told me that, no matter how horrendous they are, never, ever, flush analyst reports of any kind down the loo, no matter how tempted you may be to use them as toilet paper in a pinch.


DisIsWhatIGets
From now on, I guess we’ll just use them as fire-starter material*.

Don’t worry, we aren’t pyromaniacs. the doctor still uses a wood-stove for heat during the cold Canadian winter months.

When it Comes to an Event, How Big is Too Big?

1 Category?
5 Categories?
25 Categories?

10 Commodities?
50 Commodities?
100 Commodities?

50 Lanes?
500 Lanes?
5000 Lanes?

It depends. How much can you handle at one time?

If you’re sourcing with optimization, the bigger the better. Tackle as many categories at a time that overlap with at least one other category, especially if you are dealing with physical goods that are coming from common locations. The way you save on logistics costs is to minimize the number of trucks, which occurs when you can combine as many shipments as possible as to minimize the number of LTL shipments.

Or if you are dealing with multiple service categories that can sometimes be provided by the same contract or temporary labour agencies. For example, engineers and software developers are often offered by the same specialist agencies; warehouse, janitorial, security and other unskilled labour are often obtainable from the same agency; and certain others specialize in legal, accounting, and similar trade professions.

Tackling them all as one mega-project doesn’t mean that you have to negotiate with them all simultaneously or that you have to create massive RFXs, Auctions, or bid-sheets. There’s nothing stopping you from organizing your sourcing events so that each category is being sourced simultaneously by a different team member, co-ordinated so that all of the bids come in simultaneously for a round of global optimizations to determine if there is any overlap in transportation or supply base that would suggest a (temporary) combination of categories or a splitting of transportation into a separate project.

Optimization isn’t just doing the best job you can on the event, it’s defining the right event in the first place. Sometimes the best way to do this is to look at a number of categories simultaneously when they are each in the middle of a sourcing project and see if the definition and split really is the right one. If the mega-optimization suggests something different, re-define the categories and events and continue the right way.

Just make sure that, when the event notice goes out, that you inform suppliers / carriers that the bids will be multi-round and that the scope of the transportation requirements might be increased or decreased after initial bid analysis and further category definition; or, in the services case, that this is a preliminary request for information and rate cards and that the suppliers should inform you of other services they can offer and standard rates for those as you may, if the option exists, expand your requests during the final RFQ / negotiation phase (as you want to be above board during the entire process).

In other words, a project is only too big when it exceeds the ability of your current team to manage it simultaneously. If the numbers involved makes someone fidgety, then it’s time they shape up or you find someone with a stronger backbone. If the tool you are using says it’s too big, then it’s time to get a new tool. It’s not too big if it doesn’t exceed your current potential, which for many leading sourcing organizations is well beyond what they think it is (as a result of sourcing providers with limited skill sets assuming that just because they can’t handle it that their client can’t handle it). There are teams out there that can handle Billion Dollar sourcing projects and tools that supper them. That’s about as big as it gets.

So, as Big Data Promoters like to say, Think Big!