Category Archives: Miscellaneous

Five Secrets of Team Building

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In “Why Teams Don’t Work”, J. Richard Hackman of Harvard laid bare the five critical conditions that mark the difference between success and failure. Given that these trying times are requiring your team to do more with less and that the ultimate secret of supply chain success often boils down to cross-functional teams managing needs from product inception to final product disposal, successful teams are more important than ever. Here are Hackman’s five basic conditions of effective teams and ultimate success:

  1. Teams Must Be Real
    People need to know who’s on the team, who’s not, and who has what responsibilities. A virtual team or vague team concept won’t get the job done.
  2. Teams Need a Compelling Direction
    Members need to know what they’re supposed to be doing together. Without a clear direction, there is a real risk that different members will pursue different agendas.
  3. Teams Need Enabling Structures
    Teams with poorly designed tasks, the wrong mix of members, and un-enforced norms gravitate towards trouble.
  4. Teams Need a Supportive Organization
    The organizational context must facilitate teamwork in a manner that is conducive to the team and its members.
  5. Teams Need Expert Coaching
    A focus on individual performance does not necessarily improve the team. Teams need to be coached as a group in team processes.

Today’s Spend Management Priorities ARE Today’s Spend Management Priorities

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This spring, Ariba conducted a survey across 225 Procurement and Finacne executives across a variety of regions, industries, and company sizes to determine the spend management strategies and approaches that companies are adopting to cope with the global economic recession. What they found, as chronicled in their white-paper on “The Return to Profitability”, shouldn’t be surprising:

  • Identifying savings opportunities faster is the #1 focus for most companies
    Companies are looking for a quick ROI and immediate savings to demonstrate the value of spend management before seeking executive support and funding for a wider roll-out.
  • Increasing spend under management is a key initiative for most companies
    Companies are recognizing the advantages of more spend under management.
  • Automating procurement processes is becoming a top priority for many companies
    Almost two thirds of respondents listed the need for automation across the entire source-to-settle process in their top five priorities as they are feeling the pain of depending on paper and people-intensive processes.
  • Mitigating risk and managing supplier performance is critical
    Concerns range from meeting customer demand if critical suppliers are interrupted to reduced supplier innovation to deteriorating quality and service.

Ariba, which has adopted their own variation of the best-in-class, leaders, and laggards classification of Aberdeen with their pioneers, survivors, and stragglers classification, found that pioneers had over 75% of spend under management, made moderate to extensive use of technology, and had over 50% of suppliers under a formal management program while stragglers had less than 25% of spend under management, made low to no use of technology, and had less than 10% of suppliers under a formal management program.

As a result they made the usual recommendations that organizations should:

  • improve spend visibility NOW to help identify savings opportunities faster
  • make procurement automation a top priority to maximize savings and compliance
  • not be afraid to get outside help to capitalize on current market conditions

So what does this mean?

It means that you need to take action now to avoid falling further from the path of profitability and recovery. Because when software companies are spending tens of thousands of their own money to verify analyst results, which have been cross-verified by multiple analyst firms, it means the results are right and that you have to take action now.

Recession? What Recession? Here’s 91M for Inventory Software

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I couldn’t help but notice this recent article in Intelligent Enterprise that noted that “SAP offered 91M for SAF”. Now, good inventory management software is extremely valuable because it can significantly reduce the 30%+ overhead (on product cost) that many organizations lose in inventory each year, but SAF is a little company of about 100 employees that only had 19M in revenue last year. That’s a 4.8 multiplier … in a down economy!

Forget the current share price, which likely skyrocketed on the rumor alone. You invest based on the likelihood of getting your money back in a reasonable time-frame. Considering that most small company sales drop considerably when they’re swallowed by an 800 lb gorilla, SAP will be lucky to get their money back in five years.

But more importantly, if that 91M had been funneled into an R&D group with some freedom, imagine what that could have built! Maybe they could even realize their Vision of the Future. Instead, as far as I can tell, they’re just spending more of their customer’s money on empty calories by paying too much of a premium. Well, at least they ain’t spending 5 Billion for Business Intelligence.

Ensuring Responsible & Ethical Production: Can You Answer Walmart’s Five Questions?

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Walmart has made it’s 15 Question Sustainability Product Index public. Can you answer it’s five questions on people and community?

  • Do you know the location of 100% of the facilities that produce your product(s)?
    You should. You really, really should. Not just for ethical reasons, but for compliance and regulatory reasons.
  • Before beginning a business relationship with a manufacturing facility, do you evaluate the quality of, and capacity for, production?
    If you sell the product, and it’s defective, you’re on the hook.
  • Do you have a process for managing social compliance at the manufacturing level?
    If you don’t, how do you insure your social policies are being followed?
  • Do you work with your supply base to resolve issues found during social compliance evaluations and also document specific corrections and improvements?
    You need to lead the way.
  • Do you invest in community development activities in the markets you source from and/or operate within?
    While not critical from a compliance or regulatory viewpoint, it’s the right thing to do.