Monthly Archives: July 2015

Seventeen Hundred and Fifty Years Ago Today

What may have been the deadliest tsunami of all time devastated the city of Alexandria, Egypt. The tsunami, caused by the Crete earthquake (which was estimated to be an 8.0 on the Richter scale), killed over 5,000 people in the city and more than 45,000 outside the city. However, the damage from the tsunami (which was estimated to be more than 100 feet high) was not limited to Alexandria and affected the entire eastern and southern shores of the Mediterranean and also devastated a number of cities (in what is now Libya and Tunisia) and almost wiped out Greco-Roman civilization in North Africa. The death toll is estimated to be somewhere between 300,000 and 500,000!

And yet, way too many people are still surprised when massive tsunamis, such as last year’s Chile Tsunami, 2013’s Solomon’s Tsunami, or significant 2011 Japan Tsunami strike, devastate cities, and cause major disruptions to our supply chains.

These events have been recorded for over 2,441 years, ever since Thucydides described how the tsunami of 426 in the Malian Gulf affected the Peloponnesian War, and we know the exact date for major historical tsunamis all the way back to 79 AD (when the eruption of Mount Vesuvius, which buried Pompeii and Herculaneum)! Every time a major earthquake or volcanic eruption occurs along the coast, which is where most occur because that’s where most of the fault lines between tectonic plates are, they happen. And massive damage and disruption results. We should not be surprised and we should be prepared.

And even though SI usually restricts its history lessons for the weekend, this event was so significant, and so overlooked, it had to make an exception.

And while this has little relevance for Supply Management, a very historical event in American history happened 150 years ago today. At 6 pm in the town square of Springfield, Missouri, “Wild” Bill Hickok shot, and killed, Davis Tutt in what is, on record, the first “quick draw gunfight” that is commonly portrayed in western movies. (For this act he was arrested with murder, which was reduced to manslaughter before the trial, which resulted in his acquittal under the unwritten law of the “fair fight”.

Contract Lifecycle Management II: Do You Know Where It Starts and Ends?

In our last post, we introduced you to CLM, short for Contract Lifecycle Management, which is arguably one of the most uninspiring acronyms in the Supply Management space, but also one of the most important as it overlaps S2C (Source-to-Contract), P2P (Procure-to-Pay), and, as a result, S2S/S2P (Source-to-Settle/Source-to-Pay) as well as intersecting with risk management, performance management, change management, and supplier (relationship) management. In other words, CLM touches almost every aspect of Supply Management and is taking a central place in your Supply Management organization. But where exactly does it start and where exactly does it end?

The short answer is that it starts with data and ends with data. For example, in order to identify contract opportunities, spend, product, and service data is needed. To create good specifications, good data is needed. Authoring requires contract clauses in a clause data library. Contract Management requires term and obligation data. Performance management requires performance data. Risk Management requires event data. And so on.

However, in between, it includes the usage of that data in various obligatory, performance, organizational, and strategic processes designed to extract value from the contract. These processes make use of an extensive data repository and support organizational commercial performance management (that takes CLM to the next level).

The repository will contain clauses, templates, contracts, supporting documents, amendments, and metadata. This will support the authoring, negotiation, signing, and implementation of the contract, where the implementation will require monitoring, management, and corrective action. It will also track, and support expiry, closure, review, and, where appropriate, renewal. And, collectively, each of these activities will be seamlessly blended together to support Commercial Performance Management.

How? That’s what the first-of-its-kind co-authored CLM series by the doctor, the prophet, and the maverick will answer over on Spend Matters Pro [membership required], after it presents The CLM Wheel, which is the first accurate graphical representation of the continuous CLM process at a high level. Go check it out and then we can begin to address the question, which will involve first going back to the beginning in our next post.

One Hundred and Fifteen Years Ago Today

The first line of the Paris Metro, which was only the fifth subway in the world at the time, opens for operation during the Exposition Universelle. And one hundred and fifteen years later it is the second busiest subway system in Europe (after Moscow).

While not critical from the perspective of moving goods in the supply chain, it is important to remember that the information, finance, and physical supply chains all run on people, who have to get to work, get around, and get things done. Something tough to do in a big, dense, city with well over 10 million people.

Ten Commandments, err, Precepts of Procurement, Buddhist Style

A couple of weeks ago, on Canada Day, while LOLCat was proactively learning the pledge of allegiance (which LOLCat will need if Canadians re-elect Harper), Mr. Smith asked what were The Ten Commandments of Procurement that you adhered to that were absolutely, unarguably, true under all conditions.

To get your creative juices flowing, last week, Sourcing Innovation gave you Ten Commandments of Procurement, Christian Style. However, since the statistics say only 30% of you are Christian, SI is going to tackle a few other styles as well because everyone deserves equal opportunity. Today, we’re going to jump to the fifth most followed religion on the planet and give you five commandments, err, precepts, of Procurement, Buddhist Style.

5. I will abstain from being socially irresponsible.

Not only do I respect all people, but I respect the right of all living things to live and I will do my best to make sure that I do not endanger their lives in any way. Not only do I respect my coworkers and their rights and treat them fairly, but I will ensure all suppliers in my supply chain treat their workers the way I treat my coworkers. And I will make extra effort to ensure safe working conditions. I will also focus on minimizing harm to the environment, using renewable materials whenever possible, and doing my best to insure that those renewable materials are protected.

4. I will abstain from being driven by greed.

I realize that a business exists to make money and that my job is to find savings wherever possible, but I will not pursue savings at the expense of harm to my supplier, customers, or partners. Everyone deserves a fair profit. Suppliers should not be at risk of financial insolvency or have to borrow from the local mafia, putting themselves at risk of not only financial, but physical, harm to make payroll. I realize that there are other ways to extract value from the supply chain, such as joint innovation, bundled services, etc. and will pursue these instead of pursuing savings that are not sustainable.

3. I will abstain from collusion or back-room negotiations.

I will not collude with my competitors and form cartels with the intent of keeping prices down in my supply chain, nor will I mislead the supply base by holding an (e-)Auction when the intent is to simply collect market intelligence to renegotiate with the incumbent supplier regardless of the outcome of the auction. I will be open and transparent in my dealings with suppliers and partners at all time.

2. I will abstain from speaking falsely about any supplier or customer.

Even if a supplier performed poorly and cost the organization hard dollars, I will not overstate the poor performance, and be fair and factual in my discussions. Similarly, even if a supplier performs well and saves the organization more dollars than expected, I will not overstate the performance. And I will definitely not talk ill of a good performing supplier or good of a poor performing supplier. Integrity is integral to good procurement and I will aspire to be the best person I can be.

1. I will abstain from ego and vanity and be objective at all times.

While I know more about Procurement than my peers, because that’s my job and expertise, I respect that my peers know more about Marketing, Design, Sales, Risk Management, Compliance, etc. because that is their job and expertise. I will work with them and take into account all of their input when designing and executing an event, using the best ideas and data presented to me. In a true cross-cultural collaboration, the whole is greater than the part and the wisdom of the many will exceed the wisdom of the few, or one.