Category Archives: Miscellaneous

I’m Sorry, but 40% is a Long Way from 100%!

Yesterday’s post lamented the poor quality of American Education as per a recent ACT survey that found that only 25% of high school students are prepared for college graduates, which followed the results of the National Assessment of Adult Literacy by the Department of Education that found six of seven of American adults are not “proficient” at math. A recent article over on SIG on the “evolution of reverse auctions and best practice tips” that stated reverse auction capability in the Fortune 500 approaching 100 percent based on an Aberdeen study which found that 61% [of companies] responded [to a survey] in 2009 that they were using eSourcing Tools, with 65% of those using e-Auctions. In other words, 39.5% of companies were using e-Auctions in 2009. 40%, or 4/10, is a long, long way from 100%. It’s not even a majority!

It’s terrible that Aberdeen implied it. It’s horrible that the author indicated it. It’s abysmal that the SIG editor allowed it. All I can say is FAIL!

Where’s Our McClelland Report?

Given the combination of expenditure levels, complexity, vulnerability and criticality to operations, it should be expected that extremely high priority be given to procurement by the most senior levels of management and others responsible for governance within public sector undertakings.


In addition, it is obvious that those involved in the day-to-day conduct of procurement operations have an important and highly professional role to perform. The procurement function and its organisation should be regarded as one of the most important in the undertaking and its status should rank with that of other professional functions such as finance. Indeed, given its dynamism, variability and external perspective, not only should those involved have the backing of professional training and accreditation they should preferably have interpersonal skills which support their externally facing roles as the delegated legal and commercial representatives of their organisations as they place business with suppliers. Also, there is a growing requirement for knowledge of and ability to satisfy legal and other corporate and social responsibilities such as sustainability.


I believe that one of the keys to progress is the definition and pursuit of a vision of the ideal model for procurement including its optimum characteristics.

Truer words, as penned by John F. McClelland in his 2006 Review of Public Procurement in Scotland (known as the McClelland Report), could not be said.

But what I can’t understand, is how these words, spoken for over a decade, by Procurement visionaries, were taken as inspirational by the Scottish people and turned into the success story recounted in the recent CPO Agenda Executive Debate. As per Cuts from the Centre,
which documents the success of the Public Procurement Reform Board ( PPRB ) in Scotland (which is centralizing Procurement in the Public Sector), which was formed in recognition of the importance of procurement by the administration in response to the McClelland Report, In the first two years of the programme, as independently reported by Audit Scotland, there was £327 million attributed to the program itself, and there were further efficiency savings, in
terms of the way we would understand efficiencies, reported through efficient government returns of about £200 million. Given that public sector spending on goods and services across Scotland amounts to about £9 Billion, that’s a saving of over 5%, which isn’t bad at all for a new program in the private sector (which is getting compliance of almost 90% without a mandate).

The public procurement world needs more success stories like this. How do we get them?

Is “Low-Cost Country” Inflation Driving Manufacturing OnShore?

There’s a lot of noise out there about how inflation may be forcing manufacturing back on-shore (to South America, Mexico, and even the Good Ol’ USA), but how much of it is noise and how much of it is (about to become) reality. Leaders want to know, and so does the Hackett Group.

As a result, the Hackett Group has just launched a new complimentary study designed to assess whether inflationary pressures are driving manufacturing out of China, India, and other low-cost countries. It is trying to answer the relevant questions, which include:

  • What impact are rapidly changing cost drivers having on manufacturers?
  • What strategies are manufacturers using to offset these costs?
  • Are manufacturers bringing production closer to customer markets?
  • What are the critical success factors for optimizing the supply chain footprint?

The study is open until September 16 (2011) and all participants will receive a free copy of the research report and an invitation to the presentation of key research findings. As always, responses from individual participants will remain completely confidential and will be used only in combination with those of other study respondents to develop a composite picture.

The study on “Optimizing the Supply Chain” can be found on the Hackett site.

Food Costs are Still Spiking – Are You Ready for the Risks?

As per this recent FAO Food Price Index, food prices have surpassed the 2008 highs, and there is no end in sight.

Right now, the world is on the verge of riots around the globe, and this includes developed countries like Japan (where food riot fears [are] on the rise [wealthwire.com]). The riots in Tunisia and Algeria in January and Mogadishu from earlier this month are just a start. Over half of the world lives on US $2.50 a day or less. The lucky ones can barely afford to eat as it is. If food prices keep rising, they won’t be able to. Talk about political risk. We’ve even seen riots in England and Canada this year … imagine what will happen if a significant number of poor people in the developed world can no longer afford to keep a roof over their head and eat.