Top Nine Posts of 2018 … From Years Gone By

As per yesterday’s post where we highlighted the top 10 posts from 2018, of which five were on GDPR, the top 9 visited posts of the year were actually from year’s gone by. Today we are going to look at those, and even speculate as to why.

  • 9. The Purpose of a Contract is Easy to Define Is it because people, for reasons that perplex the doctor , struggle with contracts? Is it because Lawyers have done a great job pulling a fast one over the majority of the population and convinced them contracts are difficult and must be worded in complex Legalese? Is it because no one believes that contracts are relatively easy to create and can be written in plain English. It’s all about defining what both sides want, what happens when things go wrong, who’s responsible, and how you get out. It’s predicting all the scenarios and accounting for them up front. In plain English.
  • 8. Common Challenges of Indirect Procurement Most people in indirect Procurement know these, but it’s always nice to be sure, right? Direct wants to know that the other side of the wall has similar problems? The reason for this post’s popularity is a conundrum.
  • 7. A Strategic Sourcing Plan Outline This is probably the most direct, to the point, article out there on what should be in a basic strategic sourcing plan, with a hat-tip to Robi Bendorf of Bendorf & Associates .
  • 6. The Evolution of Purchasing
    Who doesn’t like a good history lesson? Especially when it’s one of the few guest posts in SI’s history on the subject (from Lisa Nyce).
  • 5. Is There a Difference Between Strategic Category Sourcing and Strategic Category Management
    This is a confusing question, to this day. Both terms are interchanged, used, and misused on a regular basis. No surprises a lot of readers would be looking for some clarification.
  • 4. I Will Survive
    Wow! the doctor knows you like his lyrical humour — he often gets more “fan mail” on these pieces then deep expositions (which he knows you read to cure your insomnia), but how did an ode to vendors who need to be forgotten become the fourth most visited post of the year? At least one inquiring (but not Enquiring, Americans will get this) mind wants to know!
  • 3. RFX Defined This is obviously the de-facto definition of RFX on the entire World Wide Web.
    This is a top post year after year after year. Webster’s should just point to SI. Seriously. the doctor would be a top ten NYT best-selling author if everyone who read this post bought a book!
  • 2. Five Types of Supply Risk and How To Mitigate Them This is probably SI’s top-visited post of all times. Normally 10X the traction of a top 10 post after the top 3 posts of the year are discounted. Can no other source define supply risks so succinctly? the doctor wants to know! The secret sauce in this post is worth a fortune!
  • 1. Its My Blog This post is obviously mistaken for the about post. SI’s rant anthem is pretty damn good, but #1 good?

Top Posts of 2018 To Date … A Breakdown

Stats are not something the doctor obsesses about. This is the second oldest continuously running niche blog in the space, and if you broke Spend Matters into its constituent blogs and measured them individual, there are many weeks this blog would get more hits.

And while the statistics have not been interesting to the doctor since SI reached #1 on all the ranking engines many years ago (when Spend Matters was just one blog and not a family) and stayed neck and neck for a while, it is interesting to the doctor to see what people are reading (and figure out why).

It’s also interesting to see if any posts of they year make the top 10 visited posts of the year. One thing about taking an educational and informative focus is that posts on this blog stand the test of time. The most visited educational post of the year is actually from 2007! In fact, only one of the top ten visited posts this year is from this year. (But that’s a subject for our next post.)

The most visited post of 2018 was a GDPR post and, in fact, five of the ten most visited posts of 2018 were on GDPR back when it was coming into focus. It seems no one was really ready for the new EU data tax and were scrambling to figure out how to comply. (And it is a data tax. If you don’t keep someone’s private data private or can’t expunge it to the extent legally required when asked, you get a big fine. But if the government exposes millions of records in a data breach, nothing happens. Companies, and even individuals, can get penalized while governments can continue to keep poor privacy standards to no ill effect. Sounds like a tax to me!)

The other five posts were:

  1. Maybe You Can Be a Procurement Hero
    Let’s face it, it sucks being stuck in the dungeon of the The Tower of Spend day in and day out. It sucks that sales and marketing get all the glory when every dollar you save is ten times as impactful as every dollar they bring in. It sucks that the C-Suite is telling you to cut 10% across the board on already lean categories while they still fly business class, have no restrictions on meal spend, and upgrade their perfectly functioning laptop and phone every year while you have to wait three. Of course you want to be a Procurement hero!
  2. One Hundred and Fourteen Years Ago
    This was a surprise! A short post on the construction of the Panama Canal, an important development in the history of Ocean freight (as it cut two to three weeks and 7,872 miles off of Atlantic-to-Pacific (and vice versa) voyages.
  3. Ariba Live Europe Needs a Mascot
    This was also a surprise! Of course Ariba is still a significant player and of course news from Live is always sought after. But a mascot recommendation? Maybe the doctor is right and smart, talented, sexy Procurement people do prefer cats to dogs!
  4. Is TCO a No Go Without Optimization
    This is a bit of an odd-ball for a top 10 post. The holy grail for most Procurement professionals is TCO — Total Cost of Ownership — minimization (so of course the topic is popular), but many Procurement professionals still feel they do not need, and sometimes even fear, strategic sourcing decision optimization, because it is heavy math and early solutions were extremely difficult to use (and, despite the doctor‘s insistence since the beginning of this blog that you need it, it is often avoided. But new solutions hide the math, walk the user through scenario (and constraint) construction, and are often easier to use than first (and even second) generation e-RFX solutions which, as pointed out last week, are often (still) kicking you when you are down (Part I and Part II).
  5. Of Course Catalogs Cant Be Trusted to This was about the only no surprise. Catalogs are a staple. Low value spend is a pervasive problem. And the doctor‘s rants are his most popular posts.

Come back tomorrow to find out the nine most visited posts of the year which, as per above, were not actually published this year! Proving that, unlike blogs that focus on news (or, in some cases, speculation and rumours) of the day, blogs that focus on education and explanation really do stand the test of internet time. Even if they maintain an old-school look! (Because, sometimes in unglamorous Procurement, we’re lucky to have old school tech. Unlike modern tech, it always works! And being the world’s second oldest profession, we know how to make old-school work!)

RFX Creation – Kicking You When You Are Down (Part III)

In our last two posts we’ve been arguing that the RFX process, at least traditionally, has been unnecessarily manually intensive and painful, almost taking the “strategic” out of “strategic sourcing” as so much manual time and effort is required to get it done that you can lose sight of the cost savings forest as you try to cut your way though the individual trees that continually block your way.

We indicated that much of the manual work that is typically required in RFI and RFP creation is relatively easily automated in an appropriate, modern, system — in addition to being much easier to accomplish in modern interfaces designed for efficiency and productivity — and that is why newcomers continue to rise, and profit, in an enterprise software space that should be mature and crowded enough to prevent this from happening.

We also indicated that a lot of time was required to vet potential suppliers for an RFP (even after an initial RFI round), that an organization might not be able to cull the list even if it wanted to, and that neither of these situations should be the case. Why?

First of all, it should be possible to not only auto-score the models against appropriate thresholds of suitability, defined by industry best practices and fine-tuned over time using machine learning techniques that learn the appropriate characteristics and scoring along multiple axes based upon suppliers you select and suppliers you don’t, but rank the suppliers in suitability based on the RFI alone.

Secondly, a modern platform should be able to absorb industry intelligence to predict quality, cost, and delivery and determine how likely a new supplier will fare against incumbents and market average. And then refine the rankings based on this data.

With this data, you could then predict if it’s (very) likely or (very) unlikely that a supplier would receive an award (now or in the future) and allow you to determine if you want to invite the supplier now or not.

How? RPA, ML, AR, and “AI” integration of these technologies.

How specifically? That’s a discussion for a later article, but hopefully, by now you get our point — most RFX technology is kicking you when you’re already down.

Twenty Years Ago Today

Exxon and Mobil sign a $73.7 B USD agreement to merge and become the world’s largest company at the time, now surpassed only by Walmart, the staple of the US retail economy.

As the world’s largest oil company, it produces almost 4 Million BOE a day, is the largest refiner in the world, and despite the rise of tech, is still one of the most profitable companies in the world.

And with the continued reliance on petroleum based fuels in ocean and air shipping, most of the world’s supply chain indirectly rely on its products.

We may claim it’s the information age, but the products we use and consume still rely on the holdovers from the industrial age to get us through.

RFX Creation – Kicking You When You Are Down (Part II)

Yesterday we explained how, just from an RFI perspective, many S2P “e-Negotiation” or “e-Sourcing” platforms kicked you when you were down and reeling from an unnecessarily intensive, and painful, supplier discovery process — a process that should be mostly automated (as per our lead up articles). But, as we all know, the RFI is just the first stage of the process.

Once a supplier passes the RFI, you need to

  1. actually create the RFP
  2. determine if you are going to invite a supplier to the RFP (and monitor the process once you do)

Generally speaking, creating an RFP is no walk in the park either as the platform is even less likely to contain a relevant RFP template, especially if you are sourcing direct materials or custom manufactured products and need details on processes, raw materials, warranty, maintenance, and delivery methods as well as detailed cost breakdown models. If the RFI process was manual and painful, the RFP will be ten times as manual and painful.

You will have to:

  • identify the relevant bill of materials for each product (and possibly build them from scratch)
  • identify the non-cost information required at each level (raw material, source, quality specs, etc.)
  • identify the cost models required at each level (and possibly build them from scratch)
  • identify the roll-up models for costs and quality scores
  • identify the evaluation models that you will use
  • put all this together into a cohesive and comprehensive RFI

When all you should have to do is:

  • identify the products you are sourcing

Since a modern system, especially one built for easy direct material sourcing, should automatically, for each product:

  • pull in the relevant bill of materials
  • identify the relevant non-cost information based on the compliance requirements noted in the RFI and organizational policy
  • identify the relevant cost models based on the bill of materials (and preferred production processes)
  • build the roll-up models based on embedded intelligence in the platform and defined relationships between the different levels of the BoM
  • apply a standard evaluation model for the category to the RFI
  • … and integrate all of this into a comprehensive RFP for your manual review

Once you have this RFP, you need to determine if you still want to invite the supplier, especially if you have more potential suppliers than you really need.

And, right now, platforms don’t help you here at all.

You see, you only want to invite the supplier if there is a chance you will actually make an award to the supplier in this, or a future, event. If the quality is too low, the prices are too high, the necessary services do not exist, or the necessary culture is not present, the RFP process will be a waste of time on both sides.

Now, you might say that there’s no way to know this before going through the RFP, but is that really the case?

No.

But we’ll take this up in the next part of this series.