Monthly Archives: February 2015

Technological Damnation 81: Social Media

While there may be a dirty dozen of risk categories that we need to address in order to adequately address the Procurement Damnation we have willingly placed ourselves in as we try to collectively forge a new frontier, the largest category of risk that we need to address is that of Technology. Almost one fifth of all damnations that plague us fall into the technology category. Mobility, e-Currency, and Social Media are just the tip of the technology iceberg.

However, social media might be the most damning of all. Besides the obvious facts that we collectively as a society waste enough time on a single video to double the size of Wikipedia (Source), that social media is literally making us stupid (Source), and that every marketer and their dog is doing their best to convince you that your company has to be on every social network in existence (including the dozen that are literally here today and gone tomorrow as Facebook and Twitter have pretty much won the social media war in the English speaking world for the time being), there is the simple fact that social media takes more than it gives.

Social Media is called social media for a reason. It was designed for people to be social with each other, not for businesses to sell wares to consumers, certainly not for businesses to sell goods to each other, and definitely not for businesses to conduct important, strategic, operations. But yet you are constantly bombarded with requests from marketing for information about your supply chain efficiency, corporate social responsibility, sustainability, or other operations and practices that can be used to boost corporate image, brand reputation, or product differentiation on these outlets. You’re working hard to define and implement proper category management techniques on dozens of strategic and high-value categories but all marketing cares about is which supplier will get the organization the most free press, whether the “in vogue” corporate social responsibility practice of the day is getting enough attention, or if the new product being sourced will have enough bell-and-whistle features to allow for one dozen unique messages for each social media channel of interest. Is it insane or is it inane? Or is it both?

And then, to make matters worse, rather than use your supplier portal, your suppliers want to message you on the social network they are signed into 24/7, your partners are checking the never updated Facebook company page instead of the official contact directory, and eliminated vendors keep messaging your organization’s Facebook and Twitter accounts asking marketing why they are no longer being considered, rather than read the detailed explanation in the vendor management portal you provided them.

Where Procurement is concerned, social media is a menace that puts poor old Dennis to shame. And now even the “don’t be evil” Google, as per yesterday’s post on who wins and loses in the Twitter/Google deal, is going to index the biggest trove of inanity that exists on the internet. When will the chaos cease?

Who Wins, Who Loses in the Twitter/Google Deal?

A recent post over on VentureBeat on who wins, who loses in the Twitter/Google deal attempted to analyze the Twitter/Google deal to make sense of it. In the deal, Google is allowed to index all tweets and Twitter gets revenue in addition to more traffic from Google. According to the author, Google is getting really valuable time-sensitive content to put ads against which will help it super-serve its users and, as such, acquires a real-time pulse of the world because Twitter remains the only place you can connect with smart, influential people on things you care about.

At this point SI has to say WTF? While there are some smart, influential people on Twitter, there are a number of fallacies to this statement. First of all, not every smart, influential person is on Twitter. Not even close. And many of the smartest, most influential people on Twitter barely tweet, and if they do, due to the 140 character limit, they aren’t saying much. Secondly, what kind of idiot do you have to be to believe that Twitter remains the only place you can connect with smart, influential people? Not only are Facebook and LinkedIn still mega-big (unlike Google Plus), but there is one location that trumps them all when it comes to connecting with smart, influential people. The Real World. (And not the MTV show. I mean offline where you’ve been able to, in the right forums, find smart, influential people for tens of thousands of years.)

As a result, since SI assumes that any conclusions made by the author are all hogwash as the assumptions from the get-go are wrong, SI is going to tell you who really wins, who really loses — and why.

Biggest Winner: Sentiment Analysis Companies

Social media marketers have corporate marketers convinced social media marketing and, more importantly, social media reputation is the most important thing and that these corporate marketers have to track that daily. And how are these corporate marketers supposed to do this? By way of sentiment analysis which can, of course, only be done by web-scouring sentiment analysis software offered by a handful of companies. And once they can get real-time data through Google, their analysis will, of course, be more current and relative than ever (and, as such, their prices will justifiably go up). Or at least that’s what they’ll claim.

Next Biggest Winner: Twitter

Twitter has struggled to monetize it’s network since the beginning. A regular, big, check from Google is a really good thing. First of all, it’s money in the bank. Secondly, in Twitter’s view, it’s verification to investors that it is the social network of choice because Google has deemed it worthy of payment for its data. And it’s likely that its investors will believe this spin, praise Twitter’s executive team, and continue to support its growth.

Biggest Loser: US!

When we do a search, Google will now be inundating us with useless Tweets in our search result. Twitter decreases our IQ and makes a twit out of all of us (proof). Twitter may even be downfall of the western world. (There’s a reason why SI hails the fail whale.) At the end of the day, we all lose.

American Bar Association to Fortune 500: Clean Up Your Supply Chain

Today’s guest post is from Dick Locke, President of Global Supply Training Company, author of the classic book on Global Supply Management, and a seasoned expert with international experience in Supply Management (having run global supply chains from around the globe).

The Minneapolis Star Tribune published an article titled “Bar Association Warns Corporations: Clean up supply chains.” The author says that the president of the American Bar Association will be sending a letter to the CEOs of all the Fortune 500 companies. He goes on to say that the letter will ask the CEOs to “commit to ending human-rights abuses in their supply chains.”

Chris Johnson, who heads the American Bar Association’s (ABA) business section’s supply-chain initiative makes some provocative statements in the article:

  • “Regulation is increasing. Litigation is increasing. It’s astounding to me that companies don’t get out ahead of this. It’s a time bomb.”
  • “Companies remain reactive and not pre-emptive in handling possible human-rights abuses in their supply chains.”
  • “Why would you want to wait to have your products found in the rubble along with 1,100 bodies of dead workers?”
That last statement was about the April 2013 collapse of Rana Plaza in Bangladesh. More than 1100 clothing workers died when the multistory factory building collapsed. Investigators found several European and U.S. companies’ products in the wreckage.

This was a tragedy for the workers, their families, and their communities. It is an ongoing embarrassment to the purchasing profession. Some of the companies involved had no idea their product was being produced in a manifestly unsafe building.

Collapsed Rana Plaza

I believe it’s also a wakeup call. There are signs that the clothing industry is banding together to change their purchasing practices on an industry-wide basis to improve their supplier selection techniques.

The article focuses on human rights violations going on in company supply chains. Those violations can involve coerced labor of adults and children, any kind of labor by children, safety issues, wage and hour violations and a host of other issues. Here are two issues many of you are facing now:

  • Is your company a retailer or manufacturer? Do you sell more than $100 million per year? Do you do business in California? If so, is your company making a public statement on its web site about what it is doing to remove coerced labor from its supply chain? If it isn’t, it’s violating California law.
  • Do you work for a publicly held US company? Do your company report to the SEC about the origin of any tin, tungsten, tantalum or gold in the products you sell? It needs to or it’s in violation of Federal law. If you have any electronics in your products, you have one or more of those metals. That’s the obvious example. Here’s a list of 22 other products that contain the metals.

However, a good Supply Chain Social Responsibility (S)CSR program needs to go beyond just following the law. I was surprised to find that U.S. law allows children as young as 12 to work on farms. Does your company have a cafeteria or food vending machines? If so, you probably have 12 year olds working in your supply chain. And it’s legal. It’s just not ethical.

Social Responsibility goes beyond labor issues. It includes prevention of giving and receiving bribes. It includes treatment of animals. It includes preserving the environment. The last topic applies to every organization that buys paper, for example. That’s just about everyone. Does your paper supplier use sustainable forestry techniques?

Want to learn more about what’s involved and how to develop and execute an (S)CSR program? While I don’t usually plug my own work quite so blatantly, Next Level Purchasing’s “Exemplary Supply Chain Social Responsibility” is the only training course I have found that goes into this topic in great detail. In eight on line training hours, on your own schedule, you will get a thorough and practical understanding of the issues and the solutions. To build on Chris Johnson’s statements (above), it’s much better to be preemptive when there’s a threat of time bombs.

Thanks, Dick!

All Hail the CPO. Wait, what?

You want to be a CPO. But do you know what are the requirements for the job? Especially when the number of companies with CPO positions is still few and far between? (Recent stats from a CapGemini study found that only 9% of Procurement organizations have a CPO that sits at the C-Suite table. In SI’s view, unless the head of Procurement sits at the C-Suite table, it’s not a real CPO position.)

Chances are you don’t, especially since a search for CPO job descriptions yields few and not all are consistent (since each organization has their own view on what a CPO is and what the CPO needs to do during the first year or so). But more importantly, chances are you don’t know what is required to fulfill both the written, and more importantly, the unwritten requirements of the job.

But you don’t need to be in the dark. the doctor and the maverick, in their latest collaboration, have assembled a typical CPO job description and a multi-part series explaining the written and unwritten requirements, in detail, so that you, an aspiring Procurement professional, know exactly what is required to be a CPO. The first four parts of this series are now online on the new CPO site (in addition to the first parts of the Agenda series and the Lean / Six Sigma series). Check them out! They will be worth your time. (Part I: The Job Description and Part II: Examining the Job Description, Part I, Examining the Job Description, Part II, and Examining the Job Description, Part III.)