Category Archives: Miscellaneous

Could Word Smarts Get You That New Supply Management System Sooner?

You’re an ambitious Supply Management Professional who wants to do the best job you can. (That’s why you read SI everyday.) However, it’s tough to be the best when you don’t have the best tools at your disposal, as it limits your productivity and savings potential. You know you need that new system (be it spend analysis, decision optimization, or next generation supplier information management) and the sooner you get it, the better you’ll do.

However, you know that the company still has tighter reins on spending that are tighter than a prairie dog’s butt in a dust bowl. You need to get around them. Your boss has to want to buy that new system if you have any hope of getting it. How are you going to make that happen?

Ask smart. As per this recent post in the Harvard Business Review on “why it’s better to be smart and wrong than just silent”, if you ask smart, even if you’re wrong, you impress your boss and make it easier for her to help you. Similarly, if you ask for a new supply management system smartly, it will be easier for the boss to agree with you and fight your case.

Which is more likely to get the boss’ support?

I’ve been doing my homework and I think our best chance of hitting that 15% savings target is to identify the categories with the biggest savings potential, not the categories we spend the most on. We’ve been hitting those hard for the past two years and I don’t think there are much savings to be had in them at this point. If we procured a modern spend analysis system, we could quickly rank our categories by total spend and then compare the prices to index prices for the categories using these indexes I’ve identified. A single report would identify our most likely opportunities. Furthermore, we could use the tool to compare our purchase order totals to invoice totals at the end of every quarter and make sure the supplier isn’t overcharging us. And that’s just the beginning of what we’ll be able to do.

or

I don’t know how we’re going to save 15%. Maybe we should buy some consulting services from Supply Management Vendor XYZ and then buy whatever new-fangled tool they recommend.

I don’t know about you, but I think one way is superior.

And if you can spin it in a way that will let your boss take all the credit, then you’ll probably double your chances of success.

What do you think? Can you apply psychology to this situation or not?

What’s the Secret Sauce to Good SPM?

SupplyChainBrain recently published a piece by APQC that outlined 10 Steps to designing an effective supplier relationship management program. It had some good tips, and was dead-on when it said that successful programs have four major components — methodology, collaboration and supply chain synchronization, technology processes, and measurement and rewards — but it overlooked the fact that not all components are created equal.

Methodology, Technology, and Measurement are all necessary conditions, but without collaboration, none will be sufficient. But collaboration is not an instant cure. As the article states, strategic relationships require time, trust, mutual understanding, regular and consistent communications, and mutual commitment to establish a long-term relationship. Collaboration will make the difference between good results and great results, but the great results won’t happen over night. They will only happen after the relationship has had time to simmer. Collaboration is the secret sauce, but it’s not a sauce that can be brought to a rapid boil and served.

Are You Keeping Up with Your Customers?

As per this recent post over on TechCrunch, Global E-Commerce Revenue To Grow By 19 Percent In 2011 To $680B. That’s right, your customers are embracing e-Commerce in droves. How about you?

How many events are conducted on-line? How many payments are made by ACH, p-Card, or wire? Be honest. While you might still need the physical meetings, you don’t need the paper — and that includes the cheque. So if you are still doing things the old-fashioned way, maybe its time to finally break down and buy an eSourcing and eProcurement suite? Your suppliers, and the trees, will thank you.

It’s Darwin Day!

Darwin Day is a global celebration of science and reason held on or around Feb. 12, the birthday anniversary of evolutionary biologist Charles Darwin, who is best known for the classic work On the Origin of Species in which he proposed natural selection, the basis of the modern evolutionary synthesis.

Darwin Day should not be confused with the Darwin Awards which salute the improvement of the human genome by honoring those who
accidentally remove themselves from it that are currently open for voting. (And while they do little to advance the state of science education, they are, in their own way, so sad that you have to laugh so you don’t cry.)

Deferred Spending Isn’t A Recovery

A recent article over on CNNMoney.com on “Made in America. Staying in America”. (CNN Money, Jan 28, 2011) reported that a turnaround in the U.S. economy is contributing to the solid fourth quarter profits reported by manufacturers that have been staying afloat by making a killing by selling industrial goods to customers in emerging markets.

As the CEO of Eaton said, people that deferred maintenance eventually have to buy new products. And people who prolonged a product’s life with maintenance eventually have to buy new products. And after two or three years of deferred spending, no matter what efforts are made to keep old machinery working, it’s going to start to break and the organizations are going to have to replace it. This doesn’t mean that there’s a recovery in the works or that demand is going to skyrocket, and acting like this is the case will only lead to the appearance of the bullwhip effect in your forecasting. And that’s not good for anyone.

The economy will recover, but it’s going to be a slow-and-steady recovery this time. Not only is the North America is tired of the boom-and-bust cycle of the past decade, but the jobless recovery and continuing mortgage crisis is going to ensure that it will be a while before exuberance returns to the market. So take it slow. Your supply chain will thank you.