Category Archives: Miscellaneous

And the Ratings Roller Coaster Ride Continues

Because I will not publish comparative rankings that cannot be substantiated by one or more external sources, and because I claimed that SI was ranked #1 among the supply management blogs the first time this blog took #1 in the Alexa rankings (primarily because it was the ranking site most favored by the blog that was ranked #1 on Alexa for quite some time), I have no problems pointing out that, as of Saturday (August 15), Sourcing Innovation slid back to the #2 spot on Alexa (with an Alexa rank of 324,279) while Spend Matters climbed back on top (with an Alexa rank of 317,868). [Get the Updated Facts]

But that’s fine by me. Why?

  1. Sourcing Innovation Always Bounces Back
    Every second time the ranking engines “renormalize” their ranking algorithms, my ratings drop. But they always bounce back. And even if SI doesn’t ever make #1 again (on Alexa), that would be okay because I’m confident SI will continue to do what it has done since day one … and that’s grow in visitors, visits, and hits and continue to grow in breadth and reach — and that’s all that really matters.
  2. Spend Matters Brought Back the “A” Game
    The last few months have seen not only an increase in the quantity of posts, but in the quality … harkening back to the early days when Spend Matters was breaking new ground. The in-depth coverage of the Staffing Services Providers in particular (in the late Spring) was great and brought you useful information that you can use to help you identify the providers that might be right for you. And as long as Spend Matters posts information that helps you, dear reader, I have no problem nipping at its heels.
  3. SI’s goal was to be the #1 niche blog dedicated to Innovation
    SI is about “best practices, education and innovation in sourcing, procurement, and supply management” and bringing you useful information day-in and day-out that can help you become a better sourcing and procurement professional. It was never the intent to make SI a news site, forum, commentary on current events, talk radio, print publication replacement, or analyst alternative. SI, which grew 30% in unique visitors in a single month last quarter, is doing phenomenal against its goal. What more could I want?
  4. SI Still Outranks A (Large) Number of (Big) Print Publications in (Daily) Web Traffic
    Sure the print publications have more recipients on the paper-copy and e-mail lists, but when it comes to daily web-traffic day-in and day-out, SI does very well because, unlike these publications which offer very little new content on their web site in any given week, SI brings you new content every single day.
  5. SI is Still the #2 Blog in Supply Management
    SI reaches (well) over 10,000 unique visitors every month. This traffic, combined with its steady growth, is why SI has ranked #1, at least temporarily, on each of the five major traffic ranking sites over the past six months.
  6. SI is very close to another big milestone.
    One where it will be only the second blog in the Supply Management space to achieve that milestone. SI is only three years old. The best is yet to come.

And SI’s traffic, which is still increasing month-over-month, is extremely impressive for a niche blog in Supply Management, so I’m quite happy with its progress … and the next post will be back to regular programming.

Four Tasks of the CPO

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In a recent edition of the Harvard Business Review, an article on “What Only the CEO Can Do” outlined the four tasks of the CEO who has to link the outside to the inside. They were:

  1. Defining the Meaningful Outside
    Which stakeholders matter most? What results are meaningful?
  2. Deciding What Business You Are In
    Where do you play to win? Only the CEO has the enterprise-wide perspective to make the tough choices involved.
  3. Balancing Present and Future
    The CEO needs to strike the right balance between the short and long term.
  4. Shaping Values and Standards
    Values establish a company’s identity and behaviors. If the company is out to win, the values must be connected to the meaningful outside and be relevant for the present and future.

This prompts the question, what are the four primary tasks of the CPO? Especially given the dozens, and dozens, of issues that the CPO has to manage on a daily basis? Well, they are very similar:

  1. Define the Meaningful Inside
    Most of the supply chain is outside … it’s the CPOs job to figure out what needs to be inside and how it’s going to be managed.
  2. Decide what Business You Are NOT In
    What products are not cost effective for you to make? What processes are you not first class in? What processes are not good candidates for outsourcing?
  3. Balance Present and Future
    It’s not about the lowest cost today, it’s about balancing value today versus value tomorrow.
  4. Focus on Sustainability
    It’s values, standards, ethics, compliance, social responsibility, and long term sustainability.

If you think about all of the things a CPO has to do, you see they fall under the above umbrella:

  • analysis : Business You Are NOT In
  • strategy : the Meaningful Inside
  • team recognition : the Meaningful Inside
  • innovation : Balance Present and Future
  • compliance : Focus on Sustainability
  • risk : Focus on Sustainability
  • technology : Balance Present and Future
  • sustainability : Focus on Sustainability
  • etc.

Supply Management is NOT a Joke

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Over the past couple of weeks, two attempts at humor have emerged in this space that, quite frankly, scare me. One is Ariba’s Spendman, covered recently on Spend Matters (It’s a Bird, It’s a Plane, It’s Spendman), and the other is Kinaxis’ Entertainment Center with Married to the Job, Sensei Bob, and the Late Late Supply Chain Show.

Whether you call it Purchasing, Procurement, Spend Management, or Supply Chain Management; Supply Management, the one area that is guaranteed to help any business in these troubled times, has been struggling to be taken seriously for over a decade. And, by and large, it’s still not at the table in most companies. And, as far as I am concerned, this is not a laughing matter … but yet we have a late late show I couldn’t watch more than 59 seconds of, a set of Second City skits that left me scratching my head wondering just what I was watching, and a comic book character?

You know what this says to me? And more importantly, what I think it’s going to say to the executives that still don’t get supply management? It says supply management is nothing but entertainment for low-level tactical purchasers (the late late supply chain show), that we’re nothing but back tactical office desk jockeys (married to the job), and that we’re not grounded in the real world (Spendman). After all, talk shows talk about irrelevant fodder, comedy skits make fun of that which is silly to begin with, and comics are fiction read only by losers who live in their parents’ basements while dressing up in costumes and speaking made-up languages. And while these generalized statements may not be entirely true, you have to admit they are the stereotypes … and I can’t see how supply management can benefit in any way from these stereotypes, with nothing but negative connotations, that will be applied by anyone who doesn’t get Supply Management and stumbles on the Kinaxis entertainment center or Spendman.

Maybe I’m overreacting, but what if I’m not the only one?

Five Risks for @Risk

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Yet another vendor, namely Aravo, launched another blog recently, namely @Risk, and, just like the many vendors before who launched blogs, they got some press out of it. But are you going to get anything out of it?

I think it’s a fair question. Over the past three years, dozens and dozens of blogs have come and gone in this space, or lingered on in such a tragic state of decay that you have to wonder why they weren’t put out of their misery months and, in some cases, years ago. Just check the blog directory on the Sourcing Innovation Resource Site. There are 92 blogs listed in the Sourcing category as I write this post … and 30 of them are dead (with no posts in the last 3 months), 17 are taking their last breaths (less than 1 post a month), 26 are fading away (with less than 1 post a week), leaving a mere 19 in stable condition, with 9 of these only managing an average of a post or two a week. That leaves a mere 10 blogs posting regularly, with 5 posting less than 5 posts a week, and only 5 posting more than 5 posts a week.

Needless to say, unlike some of my colleagues, I don’t get very excited when I see yet another vendor launching yet another blog, because there’s well over an 80% chance it won’t be around long, especially if it hasn’t been alive for three months. (When it comes to blogs, the 3/3/3 rule, as comically depicted in the third pane of this xkcd strip, applies.)  Many blogs don’t survive beyond 3 days / 3 posts, many more don’t survive beyond 3 weeks / 3^2 posts, and many more still don’t survive beyond 3 months / 3^3 posts. And in this space, looking at the stats I laid out above, even if it is still pumping out content beyond 3 months, there’s almost a 75% chance it won’t be here in 3 years. Why not?

Well, that’s where the Five Risks, which apply to any vendor blog, come in.

  1. Lack of Time / Resources
    Maintaining a blog that posts regularly enough to attract, and maintain, readership takes a lot of time and effort. Many companies don’t understand this and pile the responsibility on a communications or marketing person who already has a full time job without lightening his or her load. Eventually, especially in recessions where everyone collects more work as time goes on, the person just doesn’t have time to do everything and the “least critical” activity w.r.t. revenue, i.e. the blog, gets dropped.
  2. Lack of Internal Support
    Sometimes the communication, marketing, or services/support person starts it on his or her own as part of a new initiative to build better relationships with the company’s potential customers through regular communication, agreeing to take on the extra workload and overtime until it proves out. But since blogs aren’t overnight successes, and generally take years to get to the level of following and support that is required for the company to label it as a success, the support doesn’t come before the blogger gets disillusioned and either abandons it or …
  3. Burnout
    Sometimes the blogger continues on despite lack of support, working overtime until he or she just burns out. At this point, he or she totally turns against blogging and the blog stops cold.
  4. Repetition
    This is a big risk for blogs narrowly focussed on one topic. After a while the blogger finds that he or she has nothing new to say and starts recycling content. At this point, the readers go away and the blogger, now disillusioned with the power of the blog as he or she watched his or her stats plummet into the toilet, just gives up.
  5. Writer’s Block
    Sometimes, when the blogger has reached a point where he or she realizes she said everything he or she has to say for now, writer’s block kicks in. So the blog gets abandoned for a few days while he or she takes a “vacation”. But that vacation turns into weeks … then months … and then, well, the blog is history.

I’m not saying that @Risk isn’t going to make it. After all, 2Sustain, written by Aravo’s CEO, has survived for almost two years, but that there is a big risk that it won’t, and since it is focussed on Risk Management, I’m going to pick on it … especially since risk #1 is a big risk for @Risk. Aravo isn’t a big company … can they support two blogs when most vendors can’t manage one?

Strategy in a Structural Break

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Last December, the McKinsey Quarterly published an article on “Strategy in a ‘structural break'” that is even more appropriate now than it was then as the structural break, at least according to some, shows no sign of ending this year. The article, which started off noting that a structural break in the economy is an opportunity in disguise, made a good point … you need a strategy … a real strategy … a cohesive response to the challenge … to survive. This is especially true when the old ways no longer work and you have to change … and chances are, for the majority of companies out there, this is the case.

So what can you do? You definitely have to avoid the phenomenon by which process engenders further process, eventually becoming a self-sustaining buzz and reduce the complexity of corporate structures and transform your business models. You have to simplify and simplify again. Then provide lean central and support services that don’t require business units to spend time and energy coordinating their activities.

So what does this mean for your supply chain? What is your strategy for the structural break?

While it’s hard to say, as each company will need it’s own, unique, targeted strategy to survive, I can tell you this. You need to:

  • adopt a center-led strategy
    that allows you to use the best of center-led and distributed models and uses collaboration software to share best practices and knowledge throughout the organization in an easily searchable and retrievable anywhere, anytime model
  • adopt a dynamic real-time push-pull demand chain model
    it’s a volatile market, and old methods of forecasting, pull-only, and push-only don’t cut it anymore … you have to adapt in real time, pull when you sense a sharp uptake, and have your manufacturer push when they can predict uptakes ahead of you and create optimal production runs
  • organize around the “networked person”, not the organization man
    if you’re not on the move, you’re standing still and … in this economy … if you’re standing still, you’re being pushed off the cliff with the rest of the lemmings
  • implement SaaS or cloud e-sourcing and e-procurement technology
    make sure your entire team can use the applications anytime, anywhere to do their jobs and get what they need, when they need it, at the best value point
  • if you don’t have it, get optimization software …
    and if you have it, use it
    figure out where you’re spending the bulk of your money (by way of a good spend analysis if need be), and get the right optimization software for your needs: if it’s goods or services, get strategic sourcing decision optimization software; if it’s transportation get transportation and network optimization software; if it’s manufacturing and production, get production optimization software … applied against the right problem, you can expect a 10X return … or more … for your investment … if not more!
  • use more consultants
    but target them on near-term and mid-term ROI initiatives until you get your cash flow optimized, then go back to the long term planning