Monthly Archives: March 2015

Regulatory Damnation 36: Labelling

While the subject of labelling sounds harmless enough, it can still pose a nightmare for your supply chain. Products that are not properly labelled can be held up or seized at the border, seized for violation of state or federal labelling regulations from your warehouses or shelves, or result in massive fines and trade embargoes until the problem is corrected.

Labelling can be a nightmare, regardless of what industry you are in. In food and beverage, many jurisdictions require not only that all products contain nutritional information but also indicate whether or not the products are derived from GMO (Genetically Modified Organisms). In the tobacco industry, despite continuous threats of lawsuits from the tobacco companies (see this recent expose from the John Oliver show), countries are starting to impose plain packaging laws and third parties dictate what packaging can and can not contain. In electronics, some countries are considering imposing laws that force a company to indicate the expected lifespan of the product being produced and how long it will be supported (as this is very important to a consumer spending hundreds, or thousands, on a new electronic device with the belief that the manufacturer is going to support the hardware and software for at least a few years). And different countries require different units, warnings, languages, etc.

Not that any of this is necessarily a bad thing, but if multiple jurisdictions require different labelling requirements, it can be difficult to produce a label that satisfies all of the jurisdictions that operate under the same language. And if the company needs to produce a multi-lingual label that satisfies multiple jurisdictions in multiple countries, it can be a nightmare.

There are steps a company can take to make it easier.

First of all, the company can implement a Global Trade Management (GTM) solution that tracks all of the labelling requirements in each country the organization plans to sell products in.

The company can review each label or proposed update before it is sent to the packaging supplier to make sure it is in full compliance.

Finally, the company can set up alerts and each time a labelling requirement changes, and check that all labels are in compliance. If not, packaging production runs can be halted until an updated label design is prepared and approved. This will save the organization a lot of time, money, and headaches, and, as indicated above, prevent the organization from experiencing problems with customs, legislative authorities, and even retailers.

But, like every other endeavour that needs to be undertaken, this will require time, resources and money to get done.

How Many Procurement Myths Have You Fallen For?

As a Senior Buyer or Procurement Leader, you probably feel you’re doing almost everything right, or at least right enough to get great results. Maybe that’s true, but maybe you’ve fallen for a handful, or two handfuls, of the procurement myths that still plague even leading Procurement organizations to this very day.

If you think you’re at the top of your game, I urge you to follow the new series on Procurement Myths that the maverick is running over on the new Spend Matters CPO site. While the doctor isn’t co-authoring this particular series, he did work with the maverick to identify the most common myths and outlined what he saw as the most common symptoms, and these inputs are shaping the 25-part series to come.

Myth I and Myth II are already up! Check them out and see if you’ve fallen for any of them. (And if you have, as you are the leader, there’s still plenty of time to fix your perspective and lead the organization into a new era as they will never figure it out without you.)

Blast From the Past: Good Advice for CEOs, Good Advice for CPOs

SI originally ran this post six years ago today. It’s as relevant now as it was then!

Chief Executive posted a good article on why you should simplify and clarify your business. According to the article, knowing where to concentrate the effort is critical. A business should focus on where it earns money now and, even more importantly (in the doctor‘s view), where it will earn money in the future (as business, and demand, is constantly changing). To help you do just that, the article presented an approach to Keep it Short and Simple (KiSS) that it believes will help a CEO do just that:

  1. Clarify and communicate what the business is, does, and delegate down the line.
  2. As CEO, aim to remove yourself as much as you can from the dayt-to-day operational business and concentrate on strategic areas.
  3. Aim to reduce meetings and have a clear (and simple) outcome for those that do take place.
  4. Reduce the number of people involved in those meetings.
  5. Communicate, communicate, communicate.

This is also great advice for CPOs.

  1. A good CPO clarifies what procurement does for the business and how it meets the strategic objectives.
  2. A good CPO empowers her people to do their jobs and focuses on the big picture.
  3. A good CPO doesn’t waste her days in meetings … she spends them charting paths to procurement success.
  4. A good CPO only includes people who need to be there in meetings … and empowers those who are there to disseminate the information as required.
  5. Not only does a good CPO communicate, communicate, communicate, she also collaborates, collaborates, collaborates.

Organizational Damnation 54: Marketing

So far we’ve tackled the organizational damnations of Logistics and Legal, but these are just the beginning. Today we’re going to tackle one of the biggest organizational damnations of all: Marketing. Like Legal, Marketing is one of those evils that the organization can’t live without, but Supply Management often can’t live with.

While it’s true that marketing is usually necessary to create demand for the products and services the organization produces, which in turn necessitates the demand for the raw materials, components, and services that Supply Management exists to source, it’s also true that sometimes when marketing creates that demand they use advertisements that are misleading as to the capabilities of what is being sold or promises that are unrealistic and, sometimes, those advertisements are outright lies and those promises are impossible to keep.

For example, let’s say the organization is selling a new phone. Marketing might claim it runs on a faster network (when, in reality, none of the carriers that support your phone support the faster network protocols), has a processor that is 30% faster (even though every independent benchmark only has it 10% faster and the design specifications indicated that the expected performance improvement was only 20%), and uses next generation RAM because it supports a faster MHz (even though it’s current generation RAM).

In this example, marketing is being almost realistic by stretching the truth with only a few small lies. If the organization is not as lucky, marketing might have the gall to say that your organization’s product is an effective cure for the common cold (because no one in the study caught a cold during the one year preventative trial), even though there is no evidence to that effect. (If the control group happened to be in an isolated community and were selected because they were the fittest of the group, it’s a biased study.) This is an example where marketing did not even attempt to be realistic in their claims.

But it might not stop there. Marketing might promise functions that are full of bugs, features that are still in development, and delivery schedules that would be unrealistic even if the design was complete, all the R&D was done, the team was fully staffed, and all of the resources that are required are available. As a result, Engineering will be freaking out and demanding that Supply Management find it better materials, new suppliers that can complete the work that is required in the time-frame that is available, and more talent to fill its ranks. This could be a very tall order on a very short notice.

Moreover, it’s an order Supply Management will have to fulfill for the organization to meet its obligations, maintain its brand integrity, and stay profitable. As if Supply Management’s job wasn’t hard enough to begin with.