Category Archives: Best Practices

Don’t Get Sucked in By Impressive Words!

It’s conference season, and that means marketing overload for many vendors. And there’s a few words the doctor is hearing a bit too much and he’s NOT impressed! So what are these words?


Digital. Digital Procurement. Digitized. Digitized Procurement. Digitization. Ugh. They’ve been using variations of the same word for almost 20 years — and despite claims to the contrary, the meaning hasn’t really changed. You’re analog, or you’re digital. There’s no degrees to digital.

Look at the dictionary definition for crying out loud! Of, relating to, or using data in the form of numerical digits. What’s new, or even enticing, about this? ABSOLUTELY NOTHING!

Internet of Things

The internet has ALWAYS been an internet of things. Computers are not people. They are computers. The only difference today is that we are sticking computers in more things to collect and transmit sensor data automatically rather than reading it, and entering it into the computer. It’s not the big whoop most companies are making it out to be as most companies haven’t developed much that uses that near real-time in a truly useful way.


It’s not artificially intelligent. It’s cognitive. And the bull crap has reached a whole new level. Let’s look at the definition.

Of or relating to the mental process of perception, memory, judgment, and reasoning.

Yes computers can perceive through sensors, store data in memory, use algorithms to assign, or judge, and use very advanced automated algorithms to reason, but we’re overlooking one key word here. Mental. Computers don’t have a mind, and they are not intelligent. The implication here is that which is cognitive is intelligent, and they are not intelligent.

We haven’t even reached true AI yet in any field and we are supposed to believe that a little Sourcing or Procurement vendor has reached the next, cognitive level of AI development? While a best in class vendor may have a few algorithms that are almost cognitive for a few, select, situations, considering the billions going into AI research and the limited progress most specialist vendors are making, you know we’re not ready to be throwing this term around.

And, an honorable mention (because, while not common in our space yet, it’s coming):


the doctor‘s been seeing this word a lot on social media in marketing and commentary, and, unfortunately, it seems like it’s starting to creep into our space. For those of us that actually went to a real University and have a sound (classical) education, we know that Postmodernism is a rather broad intellectual movement across the arts and fields with applied arts (like architecture and archaeology) based on a philosophy that takes us from the literary-influenced philosophy of modernism to a post-modern way of thinking that developed in the middle of the last century and reached wide acceptance in the 1980s, when it was a Land of Confusion.

This was the time of the MRPs (and not the ERPs). Do we really want to be associating our new and innovative solutions with that era?

So please, please, please don’t get sucked in by the the impressive words. Instead look for impressive, time-saving, value-adding functions (and forget the feature lists). (But that’s another rant.)

Ninety Five Years Ago Today …

TIME magazine was published for the first time, and, to date, has stood the test of time. It was the first weekly news magazine in the US and today has the world’s largest circulation for a weekly news magazine (with three quarters of its readers in the US).

The idea behind the magazine was brevity, with the original intent that a busy man could read it in an hour. The original slogan was Take Time — It’s Brief. Maybe that’s why it’s still around today, since it seems all the younger generation has time to read are short LinkedIn articles and Facebook Posts, and if they are on the go, you’re lucky if they get through the new, double length, tweet.

But it teaches us something … if you want to be widely read, or at least widely acknowledged, get to the point … fast. Add more in depth later when you have attention, bur brevity sells. Advertising revenue may be down (but it’s down in print across the board), but TIME is still surviving, and looks like if it does go down in the future, it will be among the last major print publications to fall. It’s a communication lesson for all of us, so let’s take time to understand it.

When Managing Supply, Don’t Forget …

… sometimes supply comes from within the four (virtual) walls of your business. This is one fact that is overlooked by many S2P suites which are setup to acquire external goods and services (and, specifically, finished goods and services that typically fall into indirect categories.

When we are talking about MRO, the goods and services you need might be in a storage room in another building. If we are talking about consumables, like what you might need for a new hire, everything you need might be one floor down, left behind by another hire who, after the probation period, didn’t work out.

Inventory and Asset Management are key to successful Supply Management, and to successful Procurement. One should NOT buy what one does not need. This is the other form of demand management — which is two parts. The curbing of need for consumables (less paper for the printer, less usb drives when there are secure network share folders, etc.), and the re-use of what you have. Laptops or cell phones less than 6 months old should never go unused or reassigned. Expensive MRO replacement parts can often be couriered from site to site for $40 — why spend $5000 ordering another 4-pack to fix the production line and have your minimum “3″ on hand when another facility still has 8 in storage.

When you are upgrading your e-Pro / P2P / S2P system, keep this in mind. Either find one that includes inventory management or integrates with an inventory management system, and you’ll save a lot.

But to truly win, make sure it supports end-to-end asset management. It’s not just expensive hardware that often collects dust in storage closets, is also expensive assets. Like expensive snowblowers that are bought, put in the basement, forgot about when the business gets a new, better, facilities contractor and the internal maintenance team doesn’t have to do it anymore instead of being sold or sent to another facility. Expensive 3-D software licenses that are not transferred to another engineer, and then bought again 6 months later when a new hire needs them. Patent or other IP library that could be licensed by sales to a partner for extra revenue. Etc. This last part is key. Not only are unused assets costing the company money (because thy were bought to fulfill a need, which is not being met by them, but costing the company money if they can be licensed, rented, or, in the case their value becomes limited, sold.

So when you are upgrading your e-Pro / P2P / S2P system, keep this in mind too. Make sure it’s inventory and asset management or integrates with an inventory and asset management, and you will not only save a lot, but help the organization generate value.

Supply Market Intelligence … Harder than it Looks Part II

In yesterday’s post, we turned our attention to supply market intelligence which, as the maverick points out, is critical as much for supply risk as it is for value creation. But, as we also pointed out in yesterday’s post, despite the plethora of options, finding the intelligence you need can be difficult. All sources have strengths and weaknesses, so you need to be selective to achieve success. Where should you start?


      • financial statements: if the company is public, they must release a reasonably sufficient level of information for a sound financial assessment
      • customer interviews: if you really want to find out how good a supplier is at providing a product or service, ask a customer!

Internal Sources

      • performance reporting: gather all the hard metrics you can!
      • internal stakeholder interviews: any data they have is real company intelligence data

External Sources

      • price index data: and roll your own forecasting!
      • research services: which collect data relevant to your needs
      • blogs and social media: which offer unsolicited third party opinions and reviews
      • public consumption data: from government contracts and import registries which allow you to understand supply vs demand dynamics

This data will give you a mostly factual, relatively unbiased third party picture of the market and supplier performance in the market. All you need is a platform that can automatically gather, consolidate, project, and advise on it all.

Supply Market Intelligence … Harder than it Looks Part I

Building on our recent risk focus, we turn our attention to supply market intelligence which, as the maverick points out, is critical as much for supply risk as it is for value creation.

It’s critically important, but where do you find the intelligence you need? As pointed out in a Spend Matters (main site) post, there are a number of sources that might yield intelligence, including:


  • company websites
  • financial statements / reports
  • request for information
  • supplier interviews

Internal Sources

  • internal stakeholder interviews
  • performance reporting
  • supplier relationship management (SRM) programs

External Sources

  • news feeds and alerts
  • price index forecasts
  • blog and social media
  • peer companies
  • research services
  • advisory programs

But what’s the right source?

Consider the following downsides:


  • company websites display only what the supplier wants you to see
  • financial statements / reports only display high level summaries, they don’t allow you to identify high spend or high risk suppliers or categories
  • request for information only capture what you ask for, and only what the supplier shares
  • supplier interviews again only capture what you ask for, and only what the supplier representative shares

Internal Sources

  • internal stakeholder interviews capture their expertise and bias
  • performance reporting captures hard metrics, but only what you take the time to capture
  • supplier relationship management (SRM) programs vary by company and supplier

External Sources

  • news feeds and alerts – cover the angles exposed or available to journalists
  • price index forecasts – use in-house algorithms that may or may not be right
  • blog and social media – cover the angles seen by bloggers
  • peer companies – may cover the views of the peers, or may cover the perceptions they want to pass on
  • research services – tend to provide hard data, but on the areas they cover
  • advisory programs – are limited to the expertise of the advisors

So what’s right?