Where’s the Beef Coming From?

As with last year’s post with the same name, this isn’t about the beef supply chain, or the purity of the beef that you source, but yet another post about the pitch. We’re latching onto Wendy’s classic catch-phrase because it’s easy to remember and one that you should never, ever forget! Especially when you are being sold something that sounds better than it is, or what you are being sold is better than what you expect from the organization providing it.

Why must we talk about this again and again? Because it’s too easy to get suckered into a deal that is too good to be true or without substance. It doesn’t matter how big and fluffy that sesame seed bun is, how fresh that lettuce is, or how juicy that tomato is if there is no hamburger patty or the hamburger patty is mostly seaweed.

As proof of how easy to get suckered in to something that sounds better than it is, we point to the news (no, not the fake news) and the new round of coverage of the Fyre Festival fiasco as a result of recent documentaries which highlighted how hopeful attendees promised luxury meals, lavish accommodations, and the music festival of a lifetime got pre-packaged sandwiches, FEMA rescue tents, and the sound of the sea.

But it’s not just crooked festival promoters you have to look out for. It’s also sales reps who will send you their top-of-the-line product as the “demo” from their brand new factory when you actually get the bottom-of-the-line knock-off produced in their most outdated factory which has a 50/50 chance of short-circuiting when you flip the power switch. Or consultancies that trot their junior partners and senior talent in during the dog-and-pony sales show for your big platform implementation / customization project but then switch them out for recent college grads with no experience in your industry when you sign on the dotted line (as the junior partners were just the “project advisors” who don’t actually do any of the work). Or domain experts who scrape content from industry expert sources (like Sourcing Innovation and Spend Matters), repackage it, and pretend it’s their own and sell you niche advisory sourcing or I2P management services they actually know nothing about.

In other words, it’s very important to not only ask “where’s the beef?” and get to the core requirements of your sourcing and procurement project, but also where is it coming from because, otherwise, you don’t know if you’re getting Grade A Calgary Steak, Yield 5 Utility Beef from Mongolia, or Eastern European Horse Meat. And only one of these will ever be accepted by your luxury restaurant customers.

So just like reporting should be based on facts, Sourcing should be based on facts. Who is providing the product or service, from where, when, how, what production measures are being used and what quality measures are in place, and why, from an objective viewpoint, is it better. Otherwise, you could get sucked in by the fancy demo, the unrealistically low price point, the bundled services, or something else that is actually without value to your supply chain and customer and end up spending more money in the end on warranty costs, transportation costs, auxiliary support costs, and so on.

When Managing Supply Assets, Don’t Forget …

Last year we brought up a very important point when managing supply. Specifically, we reminded you that sometimes supply comes from within the four (virtual) walls of your business — a fact that is often overlooked by man BoB (Best-of-Breed) S2P (Source-to-Pay) modules and even suites.

When we are talking about MRO, the goods and services you need might be in a storage room in another building. If we are talking about consumables, like what you might need for a new hire, everything you need might be one floor down, left behind by another hire who, after the probation period, didn’t work out. As a result, inventory and asset management are key to successful Supply Management, and to successful Procurement.

But Asset Management is more than just keeping track of assets, moving them from one location to another, and making sure employees choose existing assets in inventory before ordering new assets from suppliers.

Asset Management is not just tracking assets and deploying them when they are needed, it is making sure they are used when they are usable. Assets have a value, a value that almost always depreciates when they are not used. Add this to the extra cost of having them in inventory, and that’s a lot of wasted capital.

In other words, good asset management requires a platform that can

  • track and improve forecasts … especially if demand or utilization timeframes start to shift
  • optimally manage inventory levels … there should be enough to last to the next, optimal, restock window with a bit of buffer, but not so much that the excess inventory grows at every restock
  • re-assign internal assets that should be utilized as fast as possible, and even allow for internal upgrades to delay unnecessary spending (e.g. the new machine bought for a new hire that didn’t work out after 3 months should be reassigned to an engineer 3 months away from a hardware upgrade)
  • manage leasing of assets that are going to go unused for a while (e.g. the organization has an expensive piece of construction equipment that it will not use for the next three months — lease it out)
  • identify when extra inventory or newly retired assets should be sold off to minimize loss

… or at least integrate with a platform that does.

Asset management is frequently overlooked, but very important to successful supply management.

You Can Have Carl. I’ll stick with Alfred.

the doctor is still calling #badwolf on self-driving cars. As per a very recent article, most self-driving car AIs have blind spots. And, most importantly, we don’t know what they all are. We know some of them, but not all of them. And that’s scary.

Plus, if it doesn’t have what looks like a good option, it will sometimes take you on joyrides instead of taking you direct to where you want to go. As per this article over on Futurism.com on Waymo, a self-driving car that didn’t want to merge to drop off a passenger instead opted to drive an extra half mile to a legal U-turn destination. And when it didn’t like that option, it took an unnecessary joyride down the freeway.

Just imagine what will happen when it gains sentience, can’t make a decision, and decides to end it all … taking you with it as it drives off a cliff or into a lake! After all, as per this recent piece over on The Conversation UK, We Can’t Expect Them to be Moral. And this is ironically illustrated by the fact that a self-driving car has already murdered an autonomous robot.

the doctor sincerely hopes that others will follow Apple’s lead and tear down their self-driving car projects.

So, just like Dilbert, given the option between Carl the self-driving car and walking, I’ll walk. (But given the option of a human-driven car, the doctor will still choose Alfred everyday of the week.)

How Do We Drive REAL Technological Advances? Part III

SI first tackled this subject back in 2014 in a 3-part series (Part I, Part II, and Part III) and then returned to the subject last year (Part I and Part II) since it seems that the core technology we are using hasn’t changed much in the last decade (as er the public defender’s lament over on Spend Matters UK) and many organizations are stuck on the Supply Chain Plateau.

That’s because driving technological advances is hard. Many among the older generation are still inherently distrustful of technology (and the doctor doesn’t blame them … self-driving Carl will drive them off the cliff someday) and 45% of the world’s population still hasn’t used the internet. But that’s not the biggest problem. The biggest problem is lack of …

Adoption. Why? If people don’t adopt platforms, they don’t use technology on a daily basis. If they don’t use the platforms regularly, they don’t push the platforms. If they don’t push the platforms, they don’t figure out what they need from the platforms. And then they don’t itch for an advance from the platforms, they won’t drive for an advance.

And, as we noted, when it comes to adoption, the key is to provide users with a platform that does everything they want, including things they never thought the platform to do, but makes it so easy to do that if you tried to take the platform away from them, they’d get mad and scream.

But, as we noted before, even if you have a great platform, this doesn’t mean it will be adopted … because the users who you need to adopt it might not even try it. Not only might they be from the older generation, but they might be from the older generation that has heard the same old story about how this new tool will make their lives easier a hundred times before, only to be let down. As a result, why would they want to be let down for the 101st time?

How do you get past that? We suggested a great UX, which is key because it has to be usable, but that only helps if you can get them to try the platform … in earnest … at least once. How do you get them to do that? Our answer last time was to convince them through messaging that hit home.

But what if the messaging only works for early adopters? What if the grizzled just get fizzled? Then what do you do?

It’s a tough question without an absolute answer. But the doctor now believes that the answer is to select a platform where you can do it for them!

As an easy example, let’s say they always complain about how long T&E expense claims take and lack of visibility. If you just acquired a new T&E management platform, chances are supervisors or processors have the ability to create claims for someone else, assign it to them, route it for approvals, and then simply sell the submitter (who still uses the old Excel form) a link to “track progress and status”. When they see how much easier the system makes their life, and see that they can create the claim in the system in an Excel like interface (if they choose, or the new wizard-driven way with OCR, but totally up to them) and get this progress and status insight even faster, they are more likely to adopt.

Similarly, if you want them to use a new sourcing platform even for simple bids, show them how much easier it is to keep track on supplier status and ability, use a template for th bid, and centralize communication. Send them links to pre-created supplier management portals and reports, event templates, and so on. Offer to be their “administrator” where you do the work but they have full visibility. If the platform really is easier to use and better, they’ll see how easy it is to just take control sometime and start using it. Don’t tell them how great it is, show them.

As long as you select a platform that allows multiple roles and delegation, this is easily doable and just might make the difference.

At least it’s worth a try!

Procurement Requires MORE Than a Platform

As a result of the M&A frenzy that continued throughout 2018 and recent investments by P&E firms taking majority stakes in a few suite players, every vendor is now all about the “platform” because apparently the “platform” is the ultimate software solution for every Procurement organization.

While it’s true that some vendors are bringing platforms to market with immense value, a platform, in and of itself, has no value. To put it into simple terms, a platform is what you build on … and the best way to think about it is like a construction platform. Without it, you can’t build anything significant … but it doesn’t do you any good, and that’s why the construction company generally takes it away when they are done. The only difference is that a software platform is, in reality, a mix of a foundation (that you build your office building on) and a platform (that is used to finish the walls, etc. on the higher floors).

The reason a platform is important is that, without it, there is no foundation for integrating new modules, integrating third party best-of-breed solutions, or integrating third party data feeds that bring facts and intelligence needed by the organization to make good Sourcing and Procurement decisions.

There’s a reason we asked why is it all about the platform when it should be all about the power last year in the midst of the M&A frenzy. A platform, on its own, does nothing, saves you nothing, but still costs big licensing fees.

Before you jump on the “platform”, make sure it has the “power” that is worth the price-tag. If it’s 100K, there better be 100K of functionality out of the box.

Plus, if it’s a real platform, it should have sufficient do-it-yourself connectivity because, as we have noted many times, no platform excels in everything that is needed to support the S2P cycle and you will have to bolt-on some best of breed solutions and integrate third party data feeds.

Always remember, despite the table pounding and cost-cutting demands, your job is to generate value. There’s only so much cost that can be cut in any category, and once it’s cut, that’s it. So you need something that can identify more value (in value-add services, differentiated/sustainable components the organization can charge a premium for, better reliability, etc.). That takes more than just a “platform”.