Monthly Archives: June 2015

Is Your SRM in a State of Flux? Maybe You Should Find Out!

Earlier this year we introduced you to State of Flux, a provider of Supplier Relationship Management (SRM) software and services, and the initiators of the SRM Research Report which we highlighted in our 3-part series that highlighted why you should focus on essentials, plan against the pillars, and be a customer of choice.

SRM is very important because supply chain success is ultimately dependent on your supply base. Your organization can have the best marketing and packaging in the world, but if the supply base delivers products that are rubbish, your organization’s brand reputation is tainted, and the damage can well exceed even double-digit savings identified during the sourcing phase.

But it’s not easy to effectively manage supplier relationships because SRM is more than just performance monitoring and corrective action management, it’s also nurturing, development, and partnership. Furthermore, effective SRM requires quite a bit of work to get a proper framework in place (as reinforced by Sigi Osagie’s recent Procurement Mojo), which will need to be implemented while keeping the ten essentials in mind that were highlighted in State of Flux’s 2014 SRM Report (and summarized in our post on the essentials).

And it’s even harder to find out how well you are doing until, of course, a major disruption or disaster occurs when a shipment doesn’t arrive or, even worse, arrives with a 10%+ defect rate (because, otherwise, it seems like everything is hunky-dory even when the relationship is spiralling out of control). But there is a way — you can proactively participate in the 2015 State of Flux SRM Research Report and get the full results ahead of the market. You can measure yourself against your peers, find out where the market is, and get the first insights into new best practices.

You have until June 26, 2015 to complete the SRM Survey, which, this year, is focused on helping you get executive sponsorship and support for SRM. Executive sponsorship is critical because SRM needs to be viewed as an organization enabler for the required transition management program to be adopted and enforced.

While this survey will take 45 minutes of your time, the reward is infinitely more valuable than the cost. This year’s publication was one of the most comprehensive compendiums of SRM insight ever produced with 216 pages of data, results, and expert interpretation. Imagine the value that will be yours, for free, as a participant in the seventh annual study.

So, take the 2015 SRM Survey today. Given the depth of the work consistently produced by State of Flux compared to the average analyst report, you won’t regret it!


Gettin’ Sigi With It!

My readers on the other side of the pond are probably well aware that Sigi Osagie’s Procurement Mojo has been available since late last year, but since Amazon UK had it in book form well before COM and CA, my readers on this side of the pond may not have noticed yet.

Procurement Mojo is a bit of an uncharacteristic Procurement book in that it does not attempt to teach you what Procurement is, assuming you already know how to do your job. What it attempts to teach you is explain what Procurement does, which is a critical issue that needs to be addressed since

  1. Procurement is, in many organizations, still the Rodney Dangerfield (and still don’t get no respect)
  2. And most Procurement Pros don’t know how to sell the organization on the unrealized potential that Procurement can bring

Sure this topic has been addressed in such books as Charles Dominick and Soheila Lunney’s Procurement Game Plan, but never has an entire tome been dedicated to this topic and it’s a tome that’s badly needed. (Procurement people really should get sales training because it’s often easier to sell a freezer to an Eskimo than to sell the value of a Procurement Investment to anyone in the organization.)

The reality is that in order to even get noticed, you have to first build a Procurement Brand — and building a brand, especially for something that most people would rather stay invisible, is not easy. You can’t just decide to build a brand and start tomorrow. You need frameworks, process-based enablers, platform support, and good management — and it takes time to get all of this in place. Only then can you build what Sigi calls Procurement Mojo and get your message, and value, taken seriously.

SI will be doing a more detailed review later on, but for now, be it known that if you are looking for a way to build your Procurement brand, start by gettin’ Sigi with it!

Twenty Years Ago Today

The Boeing 777 entered service as the world’s largest twinjet. This particular twinjet had a number of different variants, including the 777 Freighter which was an all-cargo version that had a payload of 103,000 kg (226,000 lbs) and a range of 9,070 km at maximum payload.

While not the capacity of the 747 200F which could handle a MTOW of 378,000 kg, which had a range of about 8,000 kms at full payload, the improved operating economics not only offered new options for long-range, lower-cost air freight.

It was yet another advance in the long line of aircraft advancements leading up to the recent 787 Dreamliner which, despite being a prime example of a supply chain fiasco as chronicled in Supply Chain Digest’s “The Boeing 787 Dreamliner: A tale of TERRIBLE supply chain management”, is still a technological innovation.

Where is Procurement Headed?

Will Procurement ever graduate from the status of misfit toy to that of
one eyed one horned flying purple people eater?

Procurement is still the back room function in many organizations. The early achievers adopted new technology and new processes in the early to mid noughts. The leaders adopted new technology and new processes from the late noughts to the early teens. But the laggards are still on the fence. And not just because they are laggards — but because their organizations are laggards and not giving them the respect and support they deserve.

Let’s face it, with the vast majority of Procurement organizations not having a seat at the table, they are still being treated as a misfit toy. Graduating to the status of one eyed one horned flying purple people eater would be a grand accomplishment — if they could get there.

But first they need to be a rockin’ band. But in order to rock, they need instruments. Technology, which they don’t get budget for, processes, that they haven’t been trained on, and knowledge, that they don’t even know they need. And even if they could get the tools, processes, and knowledge that they needed, they still need to learn how to play in sync.

We’ll start with the second issue first. In order to learn to play in sync, they need training. Training that they never got, even when training was a top procurement survey issue for almost five years in a row. But this is not only hurting Procurement, it’s hurting the organization. Because if Procurement had the training, they would not only know how to play in sync, but they would have the knowledge. In particular, the knowledge they need to not only obtain great savings, and value, for the organization, but the knowledge they need to institute better processes, identify better technology, and convince the organization of the proper steps to achieve savings success.

Good training not only provides knowledge to execute, but knowledge to educate, and knowledge to entice the rest of the organization to follow your lead.

So if your Procurement organization wants to excel, it has to get training. If it can’t get it by hook (by getting it in the budget), then it has to get it by crook (PO now and take the consequences when the invoice come in later), or if there are no other options, with the personal check book (and replace the funds with the bonus you’ll get when the savings materialize). And only then will Procurement be a band of one eyed one horned flying purple people eaters.