Don’t Abuse Lean and Mean — The Four Horsemen of the Shipocalypse Don’t Need Any Help!

If you are in Procurement or Logistics, you know that the time of cheap, fast, and reliable — which we had for almost two decades, is now long gone and likely to never return. That is because the four horsemen have turned their attention to global trade … specifically, global logistics … and have brought:

  • war: the conflict in the Red Sea, one of the two most important waterways in the world, has made most transport almost impossible
  • famine: the droughts in Panama, the other of the two most important waterways in the world, have reduced its capacity by at least 1/3 for at least 1/3 of the year
  • pestilence: plague has returned, taking down the necessary workers (and closing the necessary ports) with it
  • death: corporate greed and union response have stepped in here to bring certain death to global supply chains if things don’t change:
    • oil prices: the more they go up, the more unaffordable our dirty ocean freight becomes
    • limited capacity: greedy corporations scrapped ships during the pandemic for insurance claims, sometime ships that hadn’t even made a single voyage … and now that they’ve learned they can raise prices up to 10X pre-pandemic prices for a single container during peak season, and the richer (luxury good) companies will still pay the rates, they have no incentive to bring capacity back
    • union demands: inflation has been rampant, workers have been impacted, and they want their pre-pandemic buying power … and, as I’ve noted before, labour unrest and strikes is now one of the biggest risks in your global supply chain

As a result, the last thing you want to do is help the horsemen bring your supply chain to a a halt, but that’s exactly what you keep doing day in and day out as you keep pursuing, and applying, lean, mean, and JIT (just-in-time) where it doesn’t belong.

As noted by the author of this recent LinkedIn article on how you have (less than) two weeks to stave off supply chain chaos, we’re at the point where a one day stop in any part of the supply chain turns into one week to recover from, a one week stop in any part of the supply chain turns into one month to recover from, and a one month stop in any part of the supply chain totally f*cks us for a year! (Since the effects are not linear but exponential!) And it’s all your fault.

Lean and mean was supposed to be about efficiency in manufacturing and lack of waste, not slashing inventory to dangerous levels, not slashing capacity to dangerous levels, and was certainly NOT meant to be used by idiot MBAs (which stands for Master of Business Annihilation) with no concept of what the corporation does running global corporations off of spreadsheets alone!

So stop applying it to inventory and capacity! Thank you.

666+ S2P+ Solutions … But Key Problems Are Still Not Addressed! Part 2

In Part 1 we noted that, by now, you should have seen the Mega-Map and the 666 solution logos on it.

We also noted that you will have repeatedly heard the doctor and THE REVELATOR say repeatedly that another massive purge is coming to our space over the next 18 to 24 months (which will be the greatest since 2009-2011 where hundreds of companies were acquired, merged, or went insolvent), and that it’s already starting (with a few notable insolvencies, at least as far as the doctor is concerned, already occurring).

And you’ve heard us say multiple times that there isn’t room for this many companies because even if you account for market size and vertical, we still only need so many solutions that more-or-less do the same thing.

That being said, there are still core needs not being met in the modern enterprise, especially given that we are seeing a return to protectionism, sanctions, and border closings; a continual rise in natural disasters; and a continual disruption in logistics. Solutions are needed that go beyond siloed Procurement. And any company that steps back, analyzes the problem and the needs, and takes the time to define, and build, something truly new still has a chance to breakout and succeed in today’s overcrowded SaaS market.

the doctor is not alone in this understanding. Back in 2022, THE PROPHET saw this need to rethink Procurement Technology and that’s why he proposed his alt-suites. And while we believe he didn’t get them all right, some of the fundamental issues he saw and reasoning he gave, when expanded upon and thought through, will lead you in the right direction. Just like two of our last three suggestions were built on the core ideas behind his DFS [Design for Sourcing] (which was almost perfect) and A2M [Assess to Monitor] suites, two of today’s take some ideas from two of his suggestions as well.

4. Third Party Management (TPM)

Now, you’re probably saying “wait up, we already have that” since we have third party risk management and third party compliance management solutions starting to pop up, but those just represent a slice of Third Party Management requirements. Now you’re probably saying “but we have some very extensive supplier management solutions that do development and performance and they can be used” but the answer here again is that they represent another slice as they are not only supplier centric, but typically found in organizations that need to manage direct suppliers for quality and cost control — and typically not used to manage partners for consulting or implementation (which those systems have no capability to support).

Just like an organization needs a Risk 360 for it’s Risk Management function, it needs a TPM system to fully monitor and manage the third parties it works with, regardless of what it uses them for. Having separate systems for product suppliers (SXM), contractors (CWM), services providers [for implementation, integration, and support) (TPRM), etc. not only gives a fragmented view of the organizational partner ecosystem, but doesn’t even give a complete view for any single partner. A services partner may provide you with internal headcount (CWM) and third party service outsourcing (TPRM). A product partner may provide you with goods (SDM) and select services (TPRM). And so on. Plus, there’s also quality control systems and customer support systems that will have relevant data on the partner performance.

In other words, you can’t just Assess-to-Monitor from a Risk perspective, but you also need to manage and develop as well. And while you might think that Risk360 could be a sub-offering, risks go beyond the entities you are dealing with to include risks that are independent of partner and sometimes specific locations.

5. Vertical Enterprise Project Management

Now, before you say the doctor has lost it, because we have more project management systems than we can shake a stick out, the reality is that most of these “project management” systems don’t really manage projects across the enterprise, and most don’t support anything beyond timelines, milestones, and resources — not nearly enough to handle the intricacies of complex projects that involve the entire enterprise like NPD/NPI, building/facility construction, partner-aware supply chain (re-)design, and so on.

When THE PROPHET said we needed Commercial Value Management (which was defined as the next generation of Contract Lifecycle Management), he was onto something … because no one really “manages” contracts; no one really takes full advantage of what modern, advanced, contract modelling/creation/analysis systems can do; and no on ever pulls the contract out of the electronic filing cabinet unless there is a dispute … even though it is the foundation of the relationship and should be used as the baseline for relationship management. Commercial Value Management was defined to fix all that, putting the contract at the center of organizational “value”, but “value” is nebulous, and organizations have already proven time and again that they only thing they want to do with a contract is redline it, sign it, and resign it to the e-filing cabinet.

However, at the core of the CVM concept is an ability to manage projects off of the contract, projects that would span multiple departments throughout the enterprise. That is useful. If we focus in on that and then realize the problem with most “generic” project management solutions is that they don’t meet specific organizational needs because every vertical has its own unique project needs, we can see that what enterprises need is true enterprise-wide project management support tailored to its vertical. Software that understands the intricacies of construction/facility construction and how it requires the coordination of sub-projects with many contracts and subcontractors, as well as temporary assignment, use, and return of equipment. Software that understands NPD in electronics and how the quest to even determine if you are going to design a new mobile personal computing device will require input from the entire company tailored to electronics project design, component and supplier identification, supply chain design, customer support, etc. Software that understands the unique aspects of identifying an organization’s needs before, during, and after the rip-and-replace of an ERP system and all of the project aspects that will be required (process analysis, data analysis, gap analysis, integration requirements, change management, training, etc.). And while there are tools to support the core activities in the core departments, none take an enterprise view and, further more, can link into the TPM system, ERP/Inventory/HR system, CLM system, etc. and take a truly enterprise view of project management customized to a vertical.

And while it’s possible that someone could build a baseline solution that can support multiple verticals, the front end and customizations required will require separate offerings for each vertical that company goes after. Efficiency, which should be the goal of technology acquisition, cones from supporting integrated processes, not piecemeal tasks.

6. Real-Time True Enterprise Analytics

This is a bit of a cheat in that the doctor knows of one system that can do it (Spendata), but the reality is that the vast majority of enterprise analytics systems claiming to be “best in class” cannot. Even the majority of “best in class” spend analytics solutions don’t even permit true, real-time, do-it-yourself spend analytics.

At a minimum, a modern analytics system must be capable of:

  • pulling in any type of data from any source in real time (and mapping it to a structure that supports analysis)
  • allowing the user to define whatever rules are necessary for cleansing, enrichment, validation, and mapping to not only the internal structure but multiple, simultaneously supported, taxonomies for analysis
  • defining as many derived dimensions as necessary, on whatever calculations and metrics are required
  • supporting as many cubes as are required to accommodate the different data sources being pulled in
  • enabling federation across as many cubes as are required for the analysis
  • managing not only supporting multiple views across the federation, but linked views that support simultaneous drill down
  • creating arbitrary, reusable, filters that can filter on an dimension using any value, or calculation, as is required
  • enabling derived cubes, federations, and views as needed to support dependent, what-if, and problem specific analysis
  • performing data updates in real time, and then propagating those updates through all affected cubes, federations, and views as well as all derived cubes, federations, and views in real-time
  • permitting a user to do all this, on demand, in real time

Most current Business Intelligence (BI) solutions are still based on ROLAP, at best, and all analysis is done against fixed cubes that are updated on a schedule (or on demand, but the entire cube needs to be recalculated before any analysis can be done). They also generally support fixed view types on the provided ROLAP cubes, and an analyst is very limited in terms of what they can do.

The same goes for most Spend Analysis systems. The providers support a fixed number of cube types, give you a default set of reports and dashboards, and you are limited to customizing views on those cubes and dashboards. Building whatever you want, whenever you want, from scratch is out of the question, as is real-time data updates. The best solutions will allow you to bring in additional data to augment your analysis, but unless it’s in the main database, it will be lost when the analysis expires, which is whenever the core cube is updated as only one of these solutions currently supports true inheritance.

In other words, a Strategic Spend Terminal is not enough. Not even close. In fact, it’s just one view, tailored to Sourcing, on the federated data sets that such a next generation analytics solution will support. In fact, there should be multiple strategic spend terminals, one per business unit that shows them the data they need the way they need to see it to allocate their time and effort accordingly.

Until analytics is rethought at the core, users will never be able to do the what-if analysis they need on different data types to get the insights they need when they need it, and AI won’t solve the problem. AI allows for better predictive analytics IF you have the right, verified, structured, data and IF you know the right AI algorithm to apply to the question at hand with the data you have. If you don’t have the right platform, AI is ultimately useless.

Dear Vendor: Your Top 10 ProcureTech resolutions for 2025: Part 2

Last Friday we noted that even though we were done with our dumb, dead company walking, and smart company series, that did not mean that we weren’t going to give you good suggestions for 2025 ProcureTech resolutions. The simple fact of the matter is that if you are going to make resolutions, you should at least make good ones. So today we are going to give you five more great ones.

#5 No More Buzzwords (There’s Enough Hogwash Already!)

As per another of our posts from July, the Procurement Space is Filled with Hogwash! Too many marketing soundbites, buzzwords, and overall misdirection. the doctor can’t remember the last time he saw real content from a solution provider on precisely what the solution does (without at least a good dose of exaggeration), how it will help the customer now and over time, and what results the customer can realistically expect in the first year.

And definitely, and we mean most definitely, don’t use any buzzwords. As per our post on Demystifying the Marketing Madness, the following buzzwords, among many others, should be instantly dropped from your vocabulary (if they haven’t been dropped already):

  • AI-backed/driven/enabled/enhanced/powered etc.: no one cares; they just want solutions that give results … and a bit of honesty
  • Autonomous Sourcing: the entire point of any back-office technology is to automate tactical data processing and workflows that don’t need human intervention; all platforms should have some autonomy, and, moreover, only a small set of categories should be sourced fully autonomously (as per our recent post, the real answer is Augmented Intelligence)
  • Delightful Procurement: you’re offering enterprise tech, not a culinary experience
  • Intake-to-Procure: it’s not about taking requests in, it’s about executing sourcing, procurement, supply (& supplier) management, and similar events — so who cares if you can take requests you can’t process (no one, and, in fact, this might even upset your customers!)
  • Margin Multiplier: what the heck does this mean? anyone?
  • Orchestration: this is just a fancy term for easy API-based integration; middleware is not new, and the fact that it’s now SaaSy doesn’t make it special
  • Smart Procurement: technology is not smart; it’s dumb; just because computers calculate a billion times faster than we do doesn’t mean they think
  • Spend Orchestration: this is just a fancy word for orchestration of Procurement systems
  • Sustainable Procurement: all procurement should be sustainable, plus, sustainable means something different to everyone
  • Supplier Insights: so generic that every SXM platform can qualify; be specific!

Get the picture? Drop the buzzwords and go back to basics.

#4 No Pay-to-Play, Only Pay-for-Payback

Major analyst firms have recently hiked their fees again. As per our post on does it matter if analyst firms aren’t entirely pay-to-play if the Procurement space thinks they are, analyst firms are now seen as very expensive pay-to-play offerings.

Some vendors are paying the “minimum fees”, even though they are receiving nothing in return. Even worse, as noted in a recent article, some vendors are paying multiple times that, and getting almost nothing in return. A writeup or too. Access to research. A few “leads” that downloaded a select “report”, which aren’t leads at all and rarely result in even prospects, let alone sales.

Real analyst firms don’t charge for discussions, demos, or even basic write-ups. They charge for advice and work product (that you have an unlimited right to if you paid for it) and introduce you to customers who are actually looking for the type of solution that you offer.

Don’t pay for generic research. Don’t pay for papers you don’t get unlimited (non-exclusive) commercial rights to. Don’t pay for shared access to download lists. Pay for research you need. Pay for papers you own. Support partners who can help you identify potential clients who need you.

#3 Get Expert Help

SI has been telling you this for years. You don’t know everything. You’re definitely not experts in everything. So identify your weaknesses, admit them, and get help. Customers don’t care if your team are employees, contractors, or partners. Right now, they want results … and, given that their costs and risks are skyrocketing, they want results fast.

So whether you need help with product, marketing, sales, implementation, integration, or education, get the help, get it now, and succeed. You need to succeed as much as your customers do.

Please remember that, relative to the value they deliver, expert consultants are cheap.

#2 Customer-Centric Focus

By now you should see that the common thread is customer focus. And we don’t mean whatever you can to sell to them — we mean whatever you can do to serve your current customers and make them as successful as you possibly can. The goal should be more than whatever you promise them in sales. Happy customers renew without question. Happy customers trust you and are willing to buy more from you over time. Happy customers are willing to tell their peers about you. Happy customers will speak on your behalf at important events.

Successful companies focus on their customers, who in turn make them successful. After all, implementation success goes well beyond the basics!

#1 F*ck Gen-AI!

If you’ve read our post on valid uses for Gen-AI, you know our disdain for Gen-AI, and that it’s well earned because Gen-AI, overhyped to the max, is hallucinatory, biased (and often hateful), inciteful, scamming, destructive, brain-washing, sleeper, and probably full of dangers we’ve not yet discovered.

Gen-AI, like all technologies, has uses, but very limited ones. It was designed to process massive amounts of data, and, unlike traditional Deep Neural Nets that retrieve a canned response, instead assemble a response as a collection of sub-responses that are, statistically, most appropriate for the request at hand. As a result, it’s best suited for the summarization of large documents and response generation in natural language. No more, no less.

Plus, the recent 85% Gen-AI failure rate reported by Gartner should be more than enough to make you think twice. Customers are tired of the Gen-AI hype. It hasn’t delivered, and for most situations, it never will. Most Procurement processes require detailed mathematical calculations, analytics, and reasoning, which is something Gen-AI doesn’t do and never will (despite what some of the zealots may continue to believe). Plus, as we’ve already said, it’s not autonomous systems or BS AI, it’s Augmented Intelligence which uses the right solution for the problem at hand, which is sometimes traditional ML and sometimes just workflows that encode expert knowledge.

So unless your uses cases are restricted to massive document processing, creating a more natural language chatbot (which can take and forward requests to real solutions), or creating more natural language summaries of massive data sets, there’s no place for Gen-AI. So just F*ck it!

And use real-AI instead. After all, there is so much you can do with AI in Procurement, Sourcing, Supplier Discovery and Supplier Management with the AI we had before Gen-AI! And if you have advanced (predictive) analytics and optimization, the options are endless.

Are 45% of Enterprise Leaders Asleep at the Wheel?

According to a short recent article over on Supply Chain Brain on Next-Gen Supply Chains: The Transformative Role of Supply Chain Leaders in Today’s Business which quoted a GEP and Economist Study on “Next-Gen Supply Chains: The Transformative Role of Supply-Chain Leaders in Today’s Business”, 55% of enterprises anticipate a major supply chain disruption to strike at any time.

Are 45% of enterprise leaders asleep at the wheel? The chance of a disruption has been getting worse by the day for at least the last decade (if not the last two)! In 2014, Reslinc tracked almost 300 major global supply chain disruptions across natural disasters, factory explosions, labor disputes, power outages, chemical spills and geopolitical upheavals that impacted the supply chains of multiple global companies. That’s almost one major disruption a day, every day!

In 2013, at least 8 out of 10 companies had experienced a major supply chain disruption in the last two years (Supply Chain XChange). By 2014, one year later, 3 in 4 supply chain professionals admitted they experienced a chronic supply chain disruption. (APICS) Since then, natural disasters (fires, hurricanes, tsunamis, etc.) have increased year over year. Geopolitical conflicts, including wars, are on the rise. So are droughts, and now we have the double shipping whammy of the reduced capacity of the Panama canal part of the year and the ongoing Red Sea Crisis. We also have sanctions with unintended consequences, power shifting to the BRICs, world class pandemics, and a country Big X Consultancies made us 100% dependent on willing to shut down entire cities at a moment notice on an impossible zero-tolerance policy. We’re literally at the point where every company has an almost 100% chance of experiencing a considerable disruption in the next 12 months.

So I ask again, are 45% of enterprise executives asleep at the wheel?

Forget Cost Reduction. It Ain’t Happenin’. Best you can hope for is Cost Avoidance!

Costs are going up. And since you spent decades, including a decade and a half where those of us who could carry the thought experiment to its logical conclusion told you not to, outsourcing everything you can to China and low-cost locales in Asia and Eastern Europe, there’s nothing you can do.

The sanctions on Russia, which are skyrocketing energy costs in parts of Europe, are raising prices.

The logistics challenges, as a result of lost capacity from perfectly good ships being scrapped during the Pandemic and a new requirement to sail around the capes again (Houthis in the Red Sea, droughts in Panama reducing canal capacity), is raising prices.

Just the threat of thumping tariffs from the incoming President in the US is already starting reciprocal threats and trade wars (because the billionaire the US elected doesn’t seem to understand it’s the working class people who pay the tariffs, not the countries being sourced from, and that tariffs are to prevent markets from being flooded with goods that citizens can buy at home … and shouldn’t be used to prevent citizens from getting goods they can’t get otherwise).

China is cutting off access to critical raw materials and rare earths, when it represents the majority of the global supply (and where Russia was second or third).

Year-over-year increases in natural disasters (which are only going to increase in frequency as the US abandons any efforts whatsoever to curb carbon and GHG emission and slow global warming) is destroying larger and larger portions of global crops annually while global population is still increasing.

We could go on, but you get the point. You’re not reducing cost anymore. The best you can do is control it, and that’s going to take all of the strategic sourcing strategies available to you, as well as the best sourcing platforms to make it happen.

Which means you need to focus on cost avoidance. More specifically, we mean reducing the amount you have to buy, not just mitigating expected cost increases through better buying practices. More specifically, we mean minimizing waste and eliminating the needs for a purchase in the first place. This means, among other things:

  • eliminating disposed/fire-sale inventory at end of life (and up-front buys)
    optimizing the production relative to the demand (and eliminating the bullwhip effect)
  • reducing defects AND returns
    defects cost money to process, even if the buyer gets credit; and returns cost a company many times what the product costs — the product needs to not only be defect free, but right for the customer
  • reducing MRO
    this involves not only buying only what you use, but only using what you really need;
    i.e. does the executive need to print out all the reports? probably not, and maybe it could be prevented with a one time buy of a second monitor or an iPad Pro
  • reducing services
    do you need your office cleaned every night? probably not! (and if your employees are that messy, tell them to grow up or get out); do you need PR services if you’re in enterprise to enterprise sales? most likely not! do you need an annual Big X operations review just because the former CEO always did it? definitely not! (you just need to identify your inefficiencies and get point-based help to remove them)
  • reducing long-term inventory
    long-term, not mid-term, and definitely not short term; we’re well aware that the move to JIT ultimately crippled manufacturers during the pandemic, and it was something we foresaw when we first advised you to stop offshoring everything, but that being said, if it typically takes 30 days to restock, given that there is often the option of airfreight in a worst case situation, more than 90 days inventory is likely excessive and costly; and if you’re holding inventory for 180 or 360 days, that’s too long, and too costly; optimizing inventory to sensible sizes reduces inventory cost as well as minimizing the chance of end-of-life/expired inventory that has to be trashed

In other words, you have to go beyond the buy to analyze if the buy is even needed in the first place, if the demand can be reduced (optimizing production to realistic projections, reducing demand for paper with tablets), if the quality/targeting can be improved to reduce returns, and so on. The only way you are going to save with certainty in the economy that is coming is to NOT SPEND IN THE FIRST PLACE!