Category Archives: Miscellaneous

Dog Bites Man

Today’s post is from Dick Locke, Sourcing Innovation’s resident expert on International Sourcing and Procurement.

News from the Department of D’Oh

Here’s a whole Wall Street Journal article saying venture capital activities are increasing in China. Not once in the article did it mention the nationality of the VC firms who are doing that investing. You don’t have to dig very deep to find that all three of the companies the article mentions are Chinese companies.

“Chinese VC firms increase investment in China.” What a surprise!

Thanks, Dick. (Global Supply Training)

Outsourcing is in Decline – But What’s the Real Reason?

A recent article in The Economist on the trouble with outsourcing noted that the latest TPI quarterly index of outsourcing suggested that the total value of contracts for the second quarter of 2011 fell by 18% compared with the second quarter of 2010. Dismal figures in the United States dragged down the average, and this can be, at least, partly explained by the economy, but is this the whole story?

According to the article, TPI suspects that part of this is due to the fact that much of what can sensibly outsourced has already been outsourced. While it’s a good theory, I disagree. Maybe most of the companies with a willingness to jump on the outsourcing bandwagon have already done so and outsourced everything they can, but there are still a lot of companies who haven’t jumped on the outsourcing bandwagon. But more importantly, with the recent rise in Global Services Organizations, it’s possible to outsource pretty much everything that a company does.

Another reason could be, as the article notes, that some of the worst business disasters in recent times have been caused, or aggravated by outsourcing. This makes sense, but it’s just as easy to screw a product or service up in-house if the right processes, checks, and balances are not in place. But it is true that, when outsourcing goes wrong, it is the devil to put right.

SI agrees with the editor and believes that companies are rethinking outsourcing. Not only are they replacing huge long-term deals with smaller, less rigid ones that are more easily managed, and terminated if things go wrong, but also considering other viable options such as setting up their own Global Services centers, if they are large enough, or taking advantage of low costs at home when the backyard is empty and incentives plentiful. There are still situations where outsourcing makes sense, but not as many, and they are not as cut and dry as they used to be. Companies have to do an analysis, and to make sure they are not the next name on the disaster list, have to be careful about the decision they make. It’s a new age of outsourcing, and it should prove to be a smarter one.

How Many Different Kinds of Pens and Paper Do You Need?

I know that any Procurement that saves £18 Million a year should be a win in any book, but I was just flabbergasted that the UK government needs 3,500 catalogue items in office supplies. Office supplies. Yes, this is much better than the 15,000 they were buying before, but come on, 3,500? One type of pen, one type of pencil, one type of paper, one type of B&W printer toner (because you standardized the printers, right?), etc. Yes, when you iterate through each type of office supplies, it adds up. But I’d have a VERY hard time coming up with 1,000 different necessary items. What’s the other 2,500+ for?

Tips on OJEU Notice Drafting for EU Public Procurement Bodies

In the EU, if you are a Public Procurement body, then, for procurements over the relevant EU threshold, you have to issue an OJEU notice, which will be placed in the Official Journal of the European Communities. This notice, which informs the public on the progress of an official competitive procurement, typically takes the form of a Prior Information Notice (PIN), Contract Notice, Contract Award Notice, or a Cancellation Notice. Each notice must meet certain requirements in addition to meeting the needs of the organization. The OGC site provides suggested content for the Contract Notice, as well as a fitness for purpose checklist, but not much advice on actual drafting.

A recent article over on SupplyManagement.com provides some good pointers on “how to draft a clear, concise notice that will leave no room for challenges” that anyone involved in EU public procurement should at least scan as challenges can significantly delay projects while costing a considerable amount of public dollars.

Some of the good pieces of advice it contains include:

  • if the length or scope of the contract may be extended during award, say so specifically in the notice (as this can be a grounds for all participants to challenge an award),
  • use clear language — SI agrees with Dick Locke (who has an entire state on his side), who did some blogging on international contracting, and recommends language that can be clearly understood by a high school student,
  • shortlisting must be specified as this is another basis for bidders to challenge an award,
  • make sure the contact person can be reached and, finally,
  • specify a realistic timeframe. If you take too long, it opens up the opportunity for legal challenges from suppliers who didn’t even bid because they might have had they known the process was going to take longer.

One Hundred Years Ago Today

The Patent Frenzy began when Francis Holton filed the millionth patent in the United States Patent Office for a tubeless vehicle tire. From 1790 (when the first patent was filed on July 31) to 1911, only one million patents were filed. In the last hundred years, almost fourteen million patents were filed, with over four million in the last ten years alone. Crazy! No wonder the software patent pirates [still] plunder away!

I wish they would follow Napolean Bonaparte’s example and retreat to the South Atlantic to live in Exile. Saint Helena still exists and I certainly won’t stop them from recreating the voyage Napolean embarked on 196 years ago today!