Category Archives: Training

Talented Professional, Train Thyself!

Earlier this month, in our Procurement Key Issue 2013 post, we noted that CXO’s still don’t get the disconnect and that the average CFO, COO, and CEO still does not understand the value of the Procurement Organization. Furthermore, despite the ever increasing need for Procurement Training, from what we’re seeing, for the fifth year in a row, as part of the continued drop in operating budgets for the Procurement function, Procurement training budgets are (again) being slashed, if they exist at all!

In order to achieve the objectives being put before you, which include:

  • the acquisition of game-changing innovation and technology,
  • the increase in purchasing’s scope and influence,
  • the increase in value of the organization’s product and service offerings

and, SI’s favourite,

  • a further decrease in organizational spending

(even though inflationary times are back with a vengeance and the pursuit of cost reductions is a lost cause in this market where food reserves are at an all time low, China has a monopoly on rare earths, oil (and energy) demands are skyrocketing around the world, and metal prices are shooting off of the charts), you need training. The skill sets and knowledge you need to keep up with today’s supply markets is almost overwhelming!

Right now, you’re probably asking why you should front the time and money to train yourself. Especially when it looks like the organization will get all of the benefit. Well, the organization will get a lot of benefit, but so will you. At the end of the day, the fact of the matter is that you will be more skilled and you will be worth more. If you are unable to negotiate a pay raise with your current employer that at least reimburses you for the effort and money that you spent getting yourself trained within three months, then another Procurement organization will be happy to give you a significant raise. The reality is that many companies would rather pay more for already trained talent than pay to train the talent themselves. While the exact amount that training will boost your salary is hard to quantify, some institutes claim that the acquisition of a purchasing management certification can boost your salary by 30% to 40% and Next Level Purchasing knows of at least one case where an individual obtained a 67% salary increase! While increases of this magnitude are atypical, salary increases in the 10% to 20% range are not!

So train thyself. It will be worth it!

Have We Reached the Supply Chain Plateau? Part II

Yesterday, we noted that Lora Cecere discovered, after reviewing balance sheets of process companies over the last decade, that the average process manufacturing company has reached a plateau in supply chain performance. And, moreover, that the majority of progress improvements over the last decade came from lengthening days of payables and squeezing suppliers. That’s Not Progress!

So have we reached the supply chain plateau? SI doesn’t think we have, but agrees that growth has stalled. But why has it stalled?

Lora conjectures that while complexity has increased, many well-intentioned executives lack the understanding of the supply chain’s potential or how to manage the supply chain as a system. So, while individual projects are getting great results, departments as a whole are not performing as well, and being managed even worse. SI has to agree.

Why? One hypothesis, as implied in Lora’s pot, is supply chain technology, and ERP (and forecasting) systems in particular. As Lora notes, the current state of supply chain technologies is such that, in an average company, the greatest gaps are in the areas of the greatest importance. Gaps in supply chain planning are high, and the ability to use the data from ERP and order management remains a gap.

This is true. And SI has to agree with Lora when she says that there is a discontinuity and we need to declare the APS and ERP systems of the 1990s obsolete and start again. But SI doesn’t think this is the core problem. The core problem is manpower capability. Not only do most executives not understand the supply chain from a holistic perspective, treating each step as its own function (and disassociating NPD/Design from Sourcing (a manufactured product) from Logistics and Distribution, when they all have to be examine and managed as part of an integrated supply chain, but neither do the function managers. Moreover, these function managers often do not even understand the best practices associated with their job.

Why is there a manpower capability issue? A lack of education. These people generally don’t leave college or university with a solid supply chain background, as few institutions offer such programs, and they haven’t been properly trained. Year after year training budgets are slashed and leaders are run ragged fighting fires and dealing with tactical issues instead of being given time to focus on long-term strategy, how the supply chain works, and how it should work for optimal performance and optimal corporate gain. Where supply chain is concerned, not only do we have the reality that you can’t manage what you don’t understand, but you can’t even manipulate what you don’t understand with any level of success. People have to be educated and trained at all levels of the function, and until that happens, up-to-date technology or not, there is not going to be any progress.

Iasta: Smart Source-Style! Part II.

To the tune of Gangnam Style.

Sourcing Smart-Source Style.
Smart-Source Style.

Sourcing platform for users and bosses too. Sweet.
SaaS on the cloud, always on, real-time reporting complete. L33t.
Analyze this. Auctions, Performance. Real time data.
Optimize It. Contracts, and vendor schema.
  One. Two. Smart-Source Success!

In Part I, we covered the first three significant changes to the Iasta platform since we last covered Iasta in depth on SI three years ago. Today, we cover the remaining significant changes.

Extensive Support for Third Party Data Feeds
Realizing that no analytics platform is complete without the ability to enhance the data with supplementary data that makes it meaningful (like index data for raw materials / components, inventory cost data from an ERP, services spend from a third party management [3PM] system, etc.), Iasta has developed native in-house capabilities to pull in data from a plethora of ERP/MRPs, e-Procurement/P2P systems, and third-party data feeds (like D&B, etc.) as well as custom feeds from sources you already use.

P2P Integration Capabilities
Iasta knows that the best sourcing event is all for naught if the sourcing plan, ultimately embedded in a contract, is not properly implemented and followed through and 40% of the negotiated savings leaks and goes down the drain. Thus, they have developed powerful P2P integration capabilities in-house and can suck in all of the transactional data from your e-Procurement and/or P2P systems, map it against your contracts, and let you monitor spend in near-real time as the contract progresses. This way, if the contract is being neglected, the buyer can detect that after the first or second purchase, and not three years down the road during the re-sourcing event when all of the negotiated savings have been lost due to maverick spending or dishonoured discounts and/or rebates on the part of the supplier.

Customizable Reporting and Dashboards for Users and Executives
While Iasta, like other (e-)Sourcing and (e-)Procurement providers has always had sourcing dashboards, by module and by suite, it has developed the ability for users to create their own dashboards using pre-configured reports and widgets, custom reports (which can be created by its custom reporting engine), or existing dashboard templates. Most clients don’t, choosing to have Iasta do it for them, but the extensive reporting and dashboard configuration capabilities allow Iasta to create extensive summary dashboards to meet any need or desire in a matter of hours. Buyers can see what they need to see to be most effective on a daily basis, supervisors can see what they need to see to make sure all of their buyers’ programs are progressing appropriately, and high-level executives can get their traditional 6-gage 30,000 foot view dashboard and see that everything is, or is not, under control.

A Broader Services Offering
Iasta is finding what many other software and services providers are finding, that most organizations that (still) don’t have a (modern) (e-)Sourcing platform don’t have the resources to manage one, the skills to fully apply one, or the support to acquire either. The fact that an average organization still is not hiring or putting money back in the training budget means that a new supply management software acquisition is not beneficial to an organization without vendor or third party support. Due to the lack of talent, and training, most of the advanced functionality ends up being shelf-ware unless it’s used by an appropriately knowledgeable third party. So, like BravoSolution, Iasta has extended their suite of services and are now doing as much, or more, services work than software support. In addition to being able to fully manage events, they can fully manage sourcing programs, spend analysis efforts, integrations with P2P or ERP systems, and training efforts.

Other changes include enhanced category management and sourcing pipeline management capabilities, built-in trend reporting and variance analysis, geographic reporting, enhanced project management with milestone-level tracking, and built-in supplier scorecards.

It’s an extensive suite, and exemplative of why Iasta is now a clear-leader in the e-Sourcing mid-market.


We are the Priests of the Temples of Syrinx
Our great computers fill the hallowed halls!

Are You Ready for the 4th Quarter Crunch?

Even though businesses can choose their own fiscal years, many choose to coordinate with the calendar year. As a result, the 4th quarter is now upon them, and, in any company that is not best in class, a lot of people are getting anxious about meeting their numbers. It happens every year, and even if I’m not oot and aboot (NSFW*), I see it indirectly every year in the 4th quarter slump (when blog stats take a temporary dive).

And this year, many supply management professionals have good reason to be worried. While the economy has started on the road to recovery, the road is full of potholes and, with the impending U.S. election, we don’t know what’s going to happen and whether or not the U.S. Congress that is elected on November 6 is going to vote to raise the debt ceiling or take the U.S. over the fiscal cliff. Given the lack of sound economic and global trade policy since Clinton left office, it’s hard to say what’s going to happen.

The issues is that many of these professionals did’t plan for the rapid increase in some commodity cost categories, talked about risk but never took mitigating actions, and didn’t take the time to upgrade their skills so that they could continue to do more with less (as we all know that even though many companies are spewing the talent talk, they aren’t engaging in the talent walk [and will be surprised when the market eventually rebounds and their top talent walks out the door, but that will be another post]).

But the year’s not over yet, and there’s still things they can do to not only mitigate the “damage” that is expected as year-over-year spend increases, but contain costs and demonstrate their ability to add more value to the organization before the year is up.

Three things in particular that they can do right away are:

  • Have Finance Agree to Better Cost Savings and Avoidance Metrics
    As discussed in yesterday’s post, savings on categories negotiated this year should factor in (index & formula based) commodity rate increases and exchange rate fluctuations and cost increases on spot-buys should be calculated using similar year-over-year comparisons. This way, even if the Sourcing team couldn’t get to as many categories as they’d like, and savings were less than anticipated, a better, more realistic, picture is painted.
  • Start Monitoring Contracts and Supplier Performance more Actively
    Has the supplier been billing at contract rates, honouring discount levels, and shipping on time with an acceptable defect rate? If the supplier is over-billing, if discounts are missed, and if shipments have to be constantly expedited at higher costs, the savings that were negotiated evaporate rapidly. Increasing the rate of savings capture across all high-spend categories will go a long way to meeting targets.
  • Take some online / distance training that can be done after hours
    Increase your skills, increase your efficiency, increase your supply management opportunity astuteness, and do better at every task you do. There are a number of options, and some, like Next Level Purchasing, offer certifications recognized to various degrees around the globe.

And then they can start planning for next year by pushing for the acquisition and implementation of better technology and the transition to new and better processes.


* But hilarious!

Is it Time to Certify?

Let’s be honest. Many certifications in many professions are nothing but bunk and not worth the paper they’re printed on. They exist for the sole purpose of helping the organization or private enterprise that offers them a quick buck for little or no effort. (This is especially true in the technology profession where many of the technologies you can get certified in are bunk to begin with.)

But some of the certifications, especially those offered by reputable organizations or enterprises, are not that bad … and some of them can considerably fatten your pay check. Consider recent findings from both Next Level Purchasing (NLP) and Purchasing Magazine that found that those who possess the SPSM (from NLP) or the CPSM (from the ISM) can earn up to 14% more annually than their peers. In addition, if you’re out of work, it might even considerably shorten your job search. As noted in this recent Certification Update article on Supply & Demand Chain Executive, a recent random sampling of over 100 purchasing manager jobs posted on Monster.com revealed that 20% of those jobs listed certification as a mandatory or desirable qualification. When you consider that only about 10% of professionals in the workforce possess a certification, which also includes the expired APP, CPP, and CPM in addition to the CSCP, SCMP, PPP, SPC, and a few others, a certification does help you stand out from the crowd.

And when you consider that some certifications, like the SPSM can be obtained for as little as $1149, and, if you’re out of work, completed in a few weeks, maybe it’s time to bite the bullet. After all, if it gets you a job faster, and helps you earn as much as 12K more than you might have otherwise, you might as well bite the bullet and get it.

(To be brutally honest, if you aren’t able to earn the basic SPSM, you probably shouldn’t be in Supply Management anyway. It’s not that hard. And if you really want to excel at your job, even the SPSM2 isn’t enough. You’ll need custom courses from industry leaders like Greybeard Advisors or the MPower Group.)

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