Monthly Archives: March 2015

In Commemoration of the One Hundred and Thirtieth Anniversary

A wandering minstrel I –
A thing of shreds and patches
Of ballads, songs, and snatches
And dreamy lullaby
And dreamy lullaby

My catalogue is long,
Through every passion ranging,
And to your humours changing
I tune my supple song!
I tune my supple song!

Are you in sentimental mood?
I’ll sigh with you,
Oh, sorrow!
On market’s coldness do you brood?
I’ll do so, too
Oh, sorrow, sorrow!
I’ll charm your willing ears
With songs of buyers’ fears,
While sympathetic tears
My cheeks bedew!
Oh, sorrow, sorrow!

But if patriotic sentiment is wanted,
I’ve patriotic ballads cut and dried;
For where’er our buyer’s banner may be planted,
All other local banners are defied!

Our warriors, in serried ranks assembled,
Never quail – or they conceal it if they do
And I shouldn’t be surprised if nations trembled
Before the mighty troops, the troops of …

 

If One Wants to Avoid Cost, Then One Should Avoid Cost At All Costs

One would think this would be obvious by now, but it’s not. Most organizations still talk about savings, savings, savings long after there are no savings left to be had instead of cost avoidance (and the successor topic of value generation). The best way to save money is not to spend any in the first place.

More specifically, it’s great if you negotiate the cost of a case of paper from $50 down to $40 but it’s even better if you don’t buy the case in the first place! That’s a 100% savings instead of a 20%! Now, it’s probably safe to say that paper spend can’t be eliminated, but most printing goes into the recycling at most companies the day it is printed, and that certainly can. How? Look at why people feel the need to print reports, articles, invoices, etc? Is it because they are in AP and they have to manually enter data coming in on a scanned PDF that can’t be properly parsed with OCR into the AP system, and they only have one monitor? Is it because the sales team / executives only have a small laptop screen and can’t see the report details adequately? In the first situation another standard monitor for $150 will eliminate the need for the AP staff to print out paper every day and save you cases on a monthly basis for years to come! In the second, spending $300 to $500 on a large screen will save the executives from having to print.

And SI is really glad to see it’s not the only blog taking up the cost avoidance cause. In a recent post by the maverick on the new CPO site (in which the doctor is currently doing a lot of collaboration to define what a CPO is, what she needs to know, what she needs to do, and what no other site will tell you) in which he addresses how “Most Firms Ignore Cost Avoidance [And] Destroy Economic Value”, we find out that it is just important, if not more so, because, to be blunt, cost savings is just a special cast of cost avoidance where you avoid paying the supplier more than you need to in order to acquire the product (while insuring the supplier is still sustainable).

At the end of the day, it’s all about spending as little as possible to get what you need in a sustainable manner. This essentially says it’s all about avoiding as much spend as possible while still getting what you need in a sustainable manner. Cost Avoidance is key, regardless of what your definition is.

Societal Damnation 45: Lack of Math Competency

Back in 2010, SI ran a post on how This is Scary! We Have To Fix This that referenced a MSNBC article on Why American Consumers Can’t Add that reported on a recent study that found:

  • Only 2 in 5 Americans can pick out two items on a menu, add them, and calculate a tip,
  • Only 1 in 5 Americans can reliably calculate mortgage interest, and, most importantly
  • Only 13% of Americans were deemed “proficient”. That meansless than 1 in 7 American adults are “proficient” at math.

Ouch!

And while Procurement needs to be able to deal from a full deck of skills (and SI has compiled a list of 52 unique IQ, EQ, and TQ skills a CPO will need to succeed which will be explored in future posts over on the new Spend Matters CPO site where the doctor and the maverick are co-authoring a number of series on the CPO job description and the requirements therefore, starting with “The CPO Job Description: An Overview”), many of them rely on math. In fact, with so many C-Suites demanding savings, if a Procurement Pro can’t adequately, and accurately, compute a cost savings number that the C-Suite will accept, one will be tossed out the door faster than Jazzy Jeff gets tossed out of the Banks manner.

However, the United States is not the only country with a numeracy issue. If you review the recent OECD Skills Outlook report that presented the initial results of the global Survey of Adult Skills (that focussed on reading, X, and numeracy), you see that of the 23 countries listed, Australia, Canada, UK, and France, all of which are home to head-offices of global multi-nationals with big Procurement budgets and bigger need for top talent, are all below average with the United States. While over 60% of Japanese adults have a higher level of Math proficiency, in Australia and Canada, it’s slightly over 40% and in the US it’s barely over 30%. However, this still doesn’t meant that these people can do basic calculations required for tips, mortgages, or savings calculations. For example, higher starts at Level 3 (where the survey respondent scored 276 to 326 points) and the description of level 3 is “tasks at this level require the respondent to understand mathematical information that may be less explicit, embedded in contexts that are not always familiar and represented in more complex ways“. Tasks involving multiple steps and problem solving are level 4, and the percentages here are dismal. Less than 10% in the US and barely over 10% in Australia and Canada. (In Japan, it’s around 20%!) This means that less than 1 in 10 adults in many countries have the basic math skills necessary to do mathematically intensive jobs which include the majority of the sciences, economics and finance, and Supply Management!

And performance seems to be getting worse every year. This is not a good sign in an inflationary economy with restricted demand where advanced analysis, modelling, and optimization is required to find efficiency and savings. We need more math, and less electro-mechanical devices that purport to do it for us. (Otherwise, we won’t even be able to compute just how damned we are!)

Technology Damnation 82: The Secret Seven

We all think the internet, with its distributed design, open and thoroughly tested encryption and security technologies, and its foundation of our modern public, private, government, and academic culture is, despite regular security breaches (which are often a result of improperly applied security procedures and technologies of corporations that should know better), relatively secure and reliable and will remain outside of any one organization’s control for years to come. Especially since our global business functions, and global procurement functions in particular, rely on it.

And while that is the expected future, as no one corporation, nation, or conglomerate owns the internet, the reality is that ICANN, the Internet Corporation for Assigned Names and Numbers, which is a private corporation, has an awful lot of power over the internet as it manages the Internet’s Domain Name System (DNS) that links your domain to the right IP address. In order for a registrar to sell you a domain (to link to an IP that is typically made available to you by your ISP), the registrar has to be accredited by ICANN. In addition, IANA, the Internet Assigned Numbers Authority, which is another private corporation, is responsible for the Internet Protocol Addressing System and allocates IP blocks to the Regional Internet Registries (that allocate, in turn, to National Internet Registries, that allocate, in turn, to the Local Internet Registries that, in turn, allocate IP address to the local ISPs).

This says that if a body managed to gain control of IANA, they control your IP address, and, even worse, if a body managed to gain control of ICANN, they control the mappings, and since everyone uses domain names, and not IPs, they would essentially control who goes where on the information superhighway. This couldn’t really happen, right? Wrong. While not likely, all a villainous/terrorist organization of Bond proportions needs to do is gain control of, or replace, the seven key holders that control the core ICANN DNS system. That’s right. The vault that controls the entire global internet only takes seven keys to open.

And even though the key holders hold traditional safety box keys, the keys that control the internet aren’t regular keys you find on a key ring and are, in fact, smart cards, that can only be accessed by the key holder (with the safety box key) after going though traditional and biometric security screenings that are likely tighter than they have in place at Fort Knox (and the process required to complete the ceremony and gain access to the machine that generates the new master key has over 100 steps). And no key on its own can make changes to the master DNS. All seven keys are required to activate the machine that generates the master key that allows the DNS to be updated. (And whoever holds the master key, just like whoever holds a traditional master key, has access to the entire internet just like a traditional master key gives you access to an entire building.)

But at the end of the day, it only takes the keys and biometrics of 7 people to get the smart cards that activate the machine that generates the new master key for the internet which allows whomever holds it to redirect domains at will. It is true that these 7 people, who are some of the greatest minds in internet security and who are as trustworthy as they come, are spread all over the world, but still, at the end of the day, it would only take 7 samurai to slay the internet.

In other words, no matter how far we progress with technology and security, it all comes down to the trust and nobility of a select few to keep our global supply chains humming.

And if you start to think about this too deeply, you might really believe we’re all damned in the end!