The Trade Extensions Event Was Different. It Needed to Be. Do You Know Why?

Those of you following Spend Matters and Spend Matters EU will have noticed Nancy’s and Jason’s posts on the recent Trade Extensions events in London and Chicago on Managing Complexity. In these posts they made a number of interesting observations (which the doctor can verify as he was at the UK EVENT) about the event and how it was different from many other customer-focussed vendor events.

Major differences included:

  • Focus of the talksSpeeches focused on real, live issues and scenarios that listeners could learn from and apply to their procurement functions and their companies’ wider strategic visions. (Optimising Your Game in “at the trade extensions user event an overview of the day” on Spend Matters UK) There wasn’t a single demo or even a detailed description of the next major release (which will be their biggest release since 2009), coming next year.
  • Make up of the crowdUsers tend to be forward-thinking and technology-savvy people, given this is leading-edge software, and there were more people in their 20s (“bright young things”) than is usual at events of this nature. It was the leaders of today and tomorrow, not the leaders of yesteryear counting the days to their retirement. (A Rewarding Day, Spend Matters UK)
  • Value to the crowd. Nancy noted that one person said that coming to the event had taught him more in one day than he could have learned from going on a £30K procurement course.(A Rewarding Day) The focus was on real-world value, not vendor messaging.
  • Key takeaways.There’s more to an optimization-based sourcing system than just product sourcing. One company noted that having changed from their existing sourcing system to something more advanced 12 months ago, has proved invaluable in two key areas: logistics activities (not surprisingly) and supplier data capture. Optimization is about total costs, goods and transportation, and in order to analyze and select the best total cost scenario, a lot of data needs to be captured. As a result, such a tool must be great at data capture. And, as a result, the tool can be used in more diverse ways and in more applications than you would expect. (A Rewarding Day)
  • Individual ThoughtJason noted how many thoughts of the attendees center on areas around the technology rather than the core solution itself. Taken together, I believe the thoughts below point to the future of where sourcing technology is headed, which centers as much on people as systems. (Brainstorming: Spend Matters) Trade Extensions is encouraging ideas and feedback, hoping to harvest the best for future development.

These were all major differences, but the biggest difference is the one that is going unsaid by Nancy, Peter, and Jason and Trade extensions. What is the biggest difference? What is left unsaid. What was left unsaid? We’ll tackle that in our next post …
after we give you a day to think on it.

LOLCat Says “Canada, Vote that [Person] Out”!

Last week, Canadian LOLCat said Canada, do NOT vote Conservative because, in LOLCat’s view, it was long past time for Harper to go.

However, since the election is tomorrow, SI wanted to be sure LOLCat hadn’t changed its mind. So we asked:

LOLCat, have you changed your mind about your opinion that Canadians should NOT vote conservative tomorrow?

LOLCat replied …


No way! It’s time to Vote that [Person] Out!

Why so hard on Harper, LOLCat. Not that we don’t agree that he deserves it, but I’m curious. Is it his invasion of our privacy? Is it his withdrawal from environmental protection? Is it his adoption of war-like ways and his love for Uncle Sam? Is it his treatment of sick moms on disability? Can you even settle on a #1 reason why Harperman, it’s time for you to go?

It’s his refusal to end the seal hunt!

Really? I know it’s cruel, but why does that particular injustice bother you more than his many efforts to enact legislation that violates our very basic rights and freedom?

If he allows those poor, defenceless, furry seal cubs to be bludgeoned to death, how do we know we’re not next? Our fur is just as soft …

Good point, LOLCat. Good point. You must be terrified. (FYI, if you, like LOLCat, love the seals too, you should sign the Humane Society International petition to end the seal hunt.)

So, in the words of our new Veterans Group slogan, tomorrow, remember its Vote Anyone But Conservative! And maybe Canada will have a future that doesn’t involve it becoming the 51st state …


Canadian LOLCats Do NOT Vote Conservative

Fifty Years Ago Today …

The 1964 New York World’s Fair comes to a close after a two-year run. More than 51 Million people attended the exposition designed to showcase mid-20th-century American culture and technology that is still inspiring some people today, as evidenced by its inclusion in Walt Disney Pictures recent epic film, Tomorrowland. While it was not sanctioned by the Bureau International des Expositions, it was the first time many of the attendees saw, and interacted with, mainframe computers, computer terminals with keyboards and CRT displays, and telephone modems when the few corporations that had computer equipment kept it in back offices.

Major exhibitors included General Motors, IBM, Bell Systems, Sinclair Oil, and Ford Motor Company — still big names in American Industry 50 years later. While it may have been a financial disaster, it’s legacy and remnants still live on today, with a handful of the pavilions being relocated to new homes around the country, including a ski lodge in western New York, a radio station in Wisconsin, a Hilton Hotel in Missouri, a Four Seasons Lodge in Missouri, a church in California, a science center in Seattle, and attractions at Disneyland.

These days there are conventions galore, but when was the last time there was a true international exposition that really tried to look ahead to what we could achieve with peace and prosperity instead of war mongering (and that people remember) ?

Societal Damnation 39: Brand

Joan Jett may not give a damn ’bout her bad reputation, because when you’re a rock star (or a bad girl movie star), that’s actually a good thing, but when you are a consumer-driven corporation, these days, that’s about the worst damnation that can be thrust upon you. Brand disasters can far outweigh the average 10%+ decrease in shareholder value found by Hendricks & Singhal back in 2003. As per a recent study by CIRANO on Corporate Reputation, not only is there an 80% chance of a company losing at least 20% of its value at least once during a five year period, a major incident that significantly impacts the brand can wipe out over half of a company’s value overnight! Just look at what happened to BP after the Deepwater Horizon disaster. BP’s share price experienced a 52% drop in 50 days. Brand has went from that crazy ethereal concept unnecessarily promulgated by marketing mad men to that very real, critical, corporate requirement that must be maintained at all costs. Why?

Bad press results in backlash and consumer boycotts.

Any indication that your corporation is not the most sustainable, ethical, and corporately responsible organization on the planet can land your organization in the news. A minor supply chain infraction will result in a back page story that will be picked up and circulated by bloggers and activists until every concerned customer notices it and decides to write you angry letters and stop buying your products, resulting in that 10% decrease in sales and value found by Hendricks & Singhal while major supply chain oversights such as using suppliers who experienced preventable (man-made) disasters such as the factory collapse in Bangladesh (which should have not only been condemned but demolished) or the Philippines factory fire (in an overcrowded factory with no fire exit) that resulted in large death tolls will get your organization in front page headlines. This will result in significant backlash and widespread consumer boycott. If consumers will boycott a franchise for its beliefs (such as the boycott of Chick-fil-A for its beliefs on same sex marriage, as opposed to an actual refusal to serve the LGBT community), imagine the backlash and widespread boycotts your organization is going to get if child labour, slave labour, or human trafficking is found in your supply chain as a result of lack of oversight.

Bad decisions result in NGO and governmental investigations, fines, and seizures.

If your company gets caught holding the bag when someone finds melamine in the milk, diethylene glycol in the toothpaste, or BPA in the baby bottle plastic, it’s going to have every governmental agency with authority investigating, watching, and looking for ways to fine it even if it was a supplier two tiers down in the supply chain that did the dirty deed. And every NGO in the sustainability and Corporate Social Responsibility space doing a 360-degree supply chain review to find out what other skeletons are hiding in your closet and what snakes are lurking in your supply chain. So, not only will the government seize any products it finds that violate any environmental laws and fine you as much as it can under environmental, supply chain, and human rights / trafficking legislation, but the NGOs will be feeding the media that will in turn be feeding the consumer backlash and consumer boycotts. Losses will multiply quickly.

And both result in lost investor confidence and severe value drops!

As soon as something goes wrong, even if Procurement had absolutely nothing to do with it because a decision was made, or forced on it, by another department and/or it followed organizational protocol in supplier evaluation and selection, it is going to be blamed by the Investors and the Board who are going to be quite perturbed at the egg on the company’s, and their, face, and want someone else to point the blame at. Procurement’s going to be hung out to dry and if the situation is perceived to be bad enough, someone is going to be made a scapegoat that will be sacrificed in efforts to appease the masses.

It’s extreme damnation, and any Procurement department that wants even the slightest hope of being able to deflect the blame is going to have to go well above and beyond the call of duty in supplier evaluation, selection, monitoring, development, and, if all else fails, dismissal if it wants to survive any attack on the corporate brand intact.

Economic Damnation 01: Fiscal Crisis

Bank Failure, which can be a result of fiscal crisis, is pretty bad, but the fiscal crisis that precedes it is often much worse. This is due to the fact that while a bank failure only affects the handful of companies that are using, and relying, on the bank, the fiscal crisis affects every company equally. No company is safe from a fiscal crisis — every company that does business in a country affected by the crisis is a company that is going to experience considerable supply chain impacts. Why?

Letters of credit become worthless

A letter of credit, which is a document from a bank guaranteeing that a seller will receive payment in full as long as certain delivery conditions have been met, is worthless in a fiscal crisis as sellers understand that the guarantee is only good as long as the bank is stable. But in a fiscal crisis, even apparently stable banks can become unstable so quick that a guarantee today might be worthless in a week when the bank, that over-insured buyers who are in danger of bankruptcy and in financial default, becomes unable to honour the letters of credit. As a result, no seller will be willing to take on additional letters.

Lending halts

As more and more companies begin to experience financial duress and become late, or default, on payments, banks will become very reluctant to lend additional funds as they will be short on cash and fearful of additional loss. As a result, companies that depend on that cash for payroll and day to day operations as they wait for customer payments will enter severe financial hardship, and their situation will worsen. These companies will then be unable to support their suppliers who will then be unable to deliver the products on time that the customers require before payment can be made, creating financial turmoil up and down the supply chain.

Corporations go into cash hoarding mode

As a result of the financial crisis that will result from the lending halts and the bank’s unwillingness to issue letters of credit, those corporations with cash will go into hoarding mode. Supplier payment cycles will be extended to 90, 120, and even 180 days and those companies that rely on the cash to survive, especially with few options, will be under even more undue hardship. So even if your company is okay, and doesn’t hoard cash and pays its suppliers on time, your suppliers could still be suffering as a result of most of their payments being delayed, and the actions of others puts your supply chain in jeopardy.

Consumers panic and stop spending

Eventually, when the fiscal crisis starts to enter panic mode, a large number of consumers, fearful for their jobs (as fiscal crisis almost always result in layoffs from cash-strapped or cash-hoarding corporations, take your pick), stop all unnecessary spending. As a result, any product line that your corporation makes that is considered unnecessary by a segment of consumers sees a drop in sales and all those nice rebates and discounts you negotiated based upon an expected volume commitment go out the window.

And since fiscal crises cannot be predicted, it’s another damnation that will drive you mad.