From the Fail Blog:
Monthly Archives: August 2010
Are You Ready for the Workplace of the Future?
No Wonder Procurement Has No Credibility at Some Companies: Squillion is Not a Number
I was astounded to find that a Chief Procurement Officer of a major electrical retailer used the word “squillion” in the CPO Agenda Executive Roundtable this past May in London on “budgeting for a wider influence”. In order for Procurement to get a seat at the table, it has to first impress the CFO. To do that, it not only has to speak the language of finance, but use real numbers!
In North America, and in the general scientific community, these are the units of the Base 10 number system. Note that squillion is NOT on the list!
| Unit | Term |
| 1 | One |
| 10 | Ten |
| 100 | Hundred |
| 1,000 | Thousand |
| 1,000,000 | Million |
| 1,000,000,000 | Billion |
| 1,000,000,000,000 | Trillion |
| 1,000,000,000,000,000 | Quadrillion |
| 1,000,000,000,000,000,000 | Quintillion |
| 1,000,000,000,000,000,000,000 | Sextillion |
| 1,000,000,000,000,000,000,000,000 | Septillion |
| 1,000,000,000,000,000,000,000,000,000 | Octillion |
| 1,000,000,000,000,000,000,000,000,000,000 | Nonillion |
| 1,000,000,000,000,000,000,000,000,000,000,000 | Decillion |
| 1,000,000,000,000,000,000,000,000,000,000,000,000 | Undecillion |
| 1,000,000,000,000,000,000,000,000,000,000,000,000,000 | Duodecillion |
| 1,000,000,000,000,000,000,000,000,000,000,000,000,000,000 | Tredecillion |
| etc. | etc. |
Now you know. (And don’t make me tell you again! Or I might give Wacko back his industrial strength mallet.)
A Hitchhiker’s Guide to e-Procurement: Catalogs & Contracts, Part I
Mostly Harmless, Part XIX
A(n e-)catalog is an online catalog that lists products and services that a supplier is offering for sale. It can take many forms. It can be a simple flat file listing all products and services that the supplier sends to the buyer (who can then maintain it in their catalog system). It can be a database that can be queried. It can be the supplier’s website. It can be a punch-out marketplace. It can be an e-marketplace. It can be a virtual supplier network. As long as it lists item for sale and prices, it can be considered a catalog for the purposes of e-Procurement.
A contract is an agreement between two parties which, if it contains the elements of a valid legal agreement, is enforceable by law. In the procurement realm, a contract is usually between a buyer and a supplier for one or more services, under one or more conditions, at contracted rates. Contracts are generally managed by a contract management system, which may or may not be part of the e-Procurement system as contract management is a key part of the (e-)Sourcing cycle.
At the end of a procurement cycle, and before the next cycle begins, the catalogs and contracts need to be revisited to make sure they are still relevant and up to date. This is because, over the course of time, the following will happen:
- the number of products purchased not in the catalog will increase
over time, new needs will arise and replacements will have to be found for items no longer being manufactured
- the number of items in the catalog no longer purchased will increase
over time, needs will change and certain items will no longer be required
- the number of items purchased against a contract will decrease
as needs change and old items are no longer needed and new items not contracted for are required, the usefulness of contracts will decrease
- contracts will expire
and the pricing they contain will have to be renewed, revised, or removed from the system
The next post will outline some of the challenges associated with catalog and content management, some best practices, and some of the benefits that can be expected.
Next Post: Catalogs & Contracts, Part I
Unscrupulous Supplier Reverse Auction Tactics
Are you prepared for them?
The best part of a recent ChainLink Research piece on “Contract Management: Negotiating, Creating, and Monitoring Compliance” was actually the sidebar on supplier reverse auction tactics that presented some of the less-than-scrupulous strategies sophisticated suppliers will employ in an attempt to win, or deflect, your business. If you are not prepared for them, they could derail your event. They include:
- bidding to purposely come in second with less aggressive price, counting on advantages in non-price areas
- bidding low on the auction in an attempt to capitalize on lock-in to sell un-auctioned related services and materials at high margins
- “Sniping” in “hard-ending” auctions
- Deliberately no-bidding auctions when they calculate it is not in their interest to participate
So what can you do?
- if you are using a total weighting, be very careful in your weighting of non-price factors and indicate, up-front, that there will be significant (and serious) financial penalties (which must be enforced) for not adhering to any promises on lead-time/delivery time, defect rate, or quality (or other relevant factors)
- make sure you also bid out all related and associated services
- don’t do hard-ends — always do short extensions
- create a policy that suppliers who do not bid do not get business, period
While some suppliers might still attempt to ply their dirty tricks even if you take these steps, once they see what it costs them, they’ll stop. Or you’ll get better suppliers. Either way, you win.