Category Archives: Miscellaneous

Next Level Supply Management Excellence: Your Straight to the Bottom Line Roadmap

Leading analysts and practitioners have recognized for a while now that supply management practices and methodologies must be taken to the “next level” if supply management is going to continue to deliver the returns the organization expects.

But most professionals have had no idea how to accomplish this as there have been no manuals or guidebooks … until now.

Next Level Supply Management Excellence (by Robert Rudzki and Robert Trent) is the first book to not only define the foundations of a “next level” supply management organization, but to also provide a transformation roadmap that an organization can use to make the transition.

From advanced collaboration and negotiations management through idealized design and energy management to a detailed discussion of risk management and complexity, this is the first book that will help you understand where the untapped opportunities are, how to tackle them, and how to realize sustainable savings while identifying and managing risk from a bottom-line perspective.

The discussions of idealized design and complexity alone will have you looking at your supply chain in a whole new light.

So, don’t just read Next Level Supply Management Excellence, devour it! (And follow the link to order it today.)

Vision 20/30 — The Future Of Procurement Needs a Course Correction

The last six posts in the series have explored in detail Ariba’s recently released “Vision 2020 – The Future of Procurement” report, which was intended to define what the Procurement function is going to look like in 2020. While a valiant effort, the report doesn’t live up to SI’s expectations, which only gives it a B-*. Next Generation Supply Management is going to be a lot more intensive than most Supply Management professionals are predicting and many of the realities are going to be substantially different than they are today in but a few short years.

As SI will make clear in the months ahead, both on this blog and in an upcoming white-paper, a leading Supply Management organization will have to make significant improvements in sourcing process, organization, finance, IT, product management, risk management, asset management, relationships, and metrics, in addition to adopting a value focus, in order to reach the next level of Supply Management. It will have to go well beyond a realization that more automation, financial sophistication, strategy, supplier integration, and risk management is needed. Even the leaders will have to revolutionize their approach to Supply Management and take their talent to the next level. It’s fortunate that 2020 is still 9 years away as an average Supply Management organization still has a long way to go.

*
SI calculated the final grade of B- as follows. It assigned each entry a score from 1 (for effort) to 5 (for being on the mark) depending upon where it ranked on the scale of I Hope It’s Just a Ruse to Tomorrow’s Shoes. The precise calculation is as follows:

Category Entries Entry Value Score
Tomorrow’s Shoes 14 5 70
Close, But No Cigar 4 4 16
Today’s Blues 6 3 18
Yesterday’s News 3 2 6
I Hope It’s Just a Ruse 4 1 4
Score 114
Maximum 155
Percentage 73.5%
Final Grade B-

Is Piracy About to Become Standard Operating Practice in Somali Government?

As per this article over on MSNBC which headlined that a “US pilot [was] jailed for 15 years over pirate ransoms”, six foreigners have been jailed on charges of illegally bringing money into the country (to pay ransoms for the release of vessels held by pirates), carrying cash intended to pay ransoms, and landing in Mogadishu without the correct papers. Their sentence is a 15 year imprisonment and a $15,000 fine each, as reported by the Mogadishu’s court judge Hashi Elmi.

However, according to the article, Elmi said the six might be able to buy their freedom. “The men can appeal and if they ask to pay more instead of (remaining in) prison then we shall see and take our decision”, Elmi said.

Hmmm. Allow pirates to flourish in the north, knowing that they are demanding multi-million dollar ransoms. Wait for foreigners to send in millions of dollars of cash in an effort to free their ships and their people without the right papers. When they do, seize the plane, the cash inside, and the pilots and then charge them for not having the right papers, for illegally bringing money into the country, and for attempting to pay bribes. Then convict the pilots to ridiculous sentences and give them petty fines in comparison. Then say they might be able to reduce their sentence or even buy their freedom in exchange for a bigger fine. Almost sounds to me like the government has figured out they can cash in on the rampant piracy in their country too by passing laws to make bribes illegal, insuring planes suspected of carrying cash never have the right papers, ordering customs officials to deem large cash imports illegal, and ordering the courts to hand down ridiculously harsh sentences in hopes that the foreigners will buy their freedom. Then, they not only get millions of dollars in seized ransom money, but hundreds of thousands, or millions more, in fines.

So what does this mean for your supply chain? Even if it costs more logistics wise, avoid the Somali coast at all costs. Take a longer route. It’ll be cheaper than air dropping a ransom when your vessel gets commandeered, and much cheaper than buying the freedom of your people if they get caught trying to deliver the ransom. Given that piracy attacks are on track to more than double this year, it won’t be long before your ship is next. Unless you’re prepared to hire your own private militia to defend the ship in international waters, don’t take the risk.