A recent article over on Industry Week on “What [You Need] To Know About Product Safety Challenges in European Business” pointed out something very important that U.S. business that want to expand into Europe need to know — U.S. product safety regulations are not enough if you want to sell your wares over in Europe. As per the article, if you want to sell in the 27 member states of the EU, you need to meet the “made in Brussels” European legal regulations (that set an identical standard throughout the entire EU). Before a product can be sold in the EU, it must have a CE mark that verifies that the manufacturer has ensured that the product conforms with the essential requirements of the EC directives. It must also have a declaration of conformity that includes the manufacturer details (name, address, etc.), requisite EC standards and performance data, relevant id number of any notified body, characteristics of compliance, and a legally binding signature. And if the more stringent requirements are not met, your product cannot be sold.
Author Archives: thedoctor
High Definition Adoption Measurement Part VI
Today’s guest post is from John Shaw (Senior Director, Adoption Services) of BravoSolution, a leading provider of spend analysis, (e-)sourcing, supplier performance management (SPM) and healthcare sourcing solutions and a sponsor of Sourcing Innovation (SI). It is the sixth of an eight (8) part series, which, when complete, will form a white-paper that BravoSolution will be releasing to the general populace this Wednesday.
Last Friday’s post (Part V) discussed the importance of the category to High Definition Adoption Measurement (HDAM) and the process required to transition to HDAM given that understanding. HDAM is achieved when adoption measurement and adoption opportunity assessment have been aligned with organizational objectives and category-specific strategies.
Today’s post provides an example of HDAM for an energy company operating in a regulatory environment.
Company B: Measuring Transparency
Our second company is an energy company operating in a European regulatory environment. The organization receives funding from the government and has a legal obligation to follow public sector procurement regulations. These regulations focus heavily on creating a sourcing process that provides equal opportunity to all suppliers.
Whereas the previous private sector manufacturer (Company A) focused their e-sourcing tool on generating supplier value, this organization’s primary focus is:
- Process Compliance:
Specific timeline requirements for public notices and publications must be met. - Equal Treatment of Suppliers:
Communications and Evaluations must be timely and fair. - Auditability:
All supplier interactions must occur in the system.
As in our previous example, we can monitor system activities to understand how user behaviours roll up to this overall business objective.
As we change the focus of the analysis to transparency, the metrics we measure in the system also change.
Now we are looking to understand where system functions tie directly to regulatory compliance. Beyond looking for violations, this data also has the potential to serve a quantitate evidence of fair dealings with suppliers in the event of a supplier challenging an award decision in court.
Here are some examples of the types of data we might monitor and react to:
You Can Search, Search, Search … or Just Read SI!
In 2008, Google had indexed One Trillion Web Pages. And many, many more have been added since then. According to Rick Skrenta, co-founder of blekko, there are now more web pages than there are things in the world. And while it’s likely not the case yet, as there are probably 10.5 Sextillion bugs in the world (as it is estimated that there are 1.5 Billion Bugs per person, and there are close to 7 Billion people), and we could count each individual bug as a thing, at the rate the web is growing –especially when each post, each comment, and each tweet can be its own web page — it might not be long before this is true, especially since predictions put the size of the web at 600 quintillion web pages, or one for every 17.5 bugs, by 2020 (which puts us at one page per bug by about 2021).
With content proliferating faster than even the fastest computer virus, it’s getting almost impossible to find what you’re looking for through a web search. Good luck coming up with an initial query that returns less than 100,000 pages. I tried three random combinations of unlikely words in Google, and the best I got was 190,000 pages. (Dodo, apollo, elvis – 961K; Risk, canary, electricity – 1.43M; Poppins, Hamlet, vikings – 190K.) There’s a reason that Googlewhacking died a long, long time ago. There is no one result anymore.
And that’s why blogs, which have been proclaimed dead by the twits who think tweets are the future, are going to return to the glory days. You need someone to sift through the noise and find the useful content to get you through your day, because it’s now beyond the power of even the most powerful search engines to do most of the time. So keep reading SI, and you’ll have one fewer (time-consuming) search to do each day.
Want to Beat Commoditization? Follow Dow Corning’s Example and Embrace It!
A recent article over on Chief Executive on “how Dow Corning beat commoditization by embracing it” tells a great story about how the onset of commoditization might actually provide an advantage to your company and your supply chain and how a careful study and segmentation of the market can be productive and profitable.
About ten years ago, when Dow Corning realized that silicone was about to become a commodity as the markets matured, it did a strategic customer segmentation exercise that revealed that not only did its customers exist within four segments, but that there were still opportunities for success in each segment through better service and appropriate strategies. In particular, Dow Corning realized that it could be much more profitable if it could find a better way to serve the “price seeker” segment which knew what products it needed, and how to use them, but also knew that it didn’t need high value services bundled into the price of the product. This segment simply wanted standard silicones at the lowest possible price point.
However, as CFO Don Sheets realized, you can’t win the price seeker segment merely by cutting prices, as that inevitably results in unacceptably, and sometimes dangerously, low margins. The only way to win is to define and implement an appropriate business model specialized to that customer segment that provides value to the customer (low cost) and the business (reasonable margins).
Sometimes merely cutting value added services (that the price seekers don’t want) is enough, but sometimes it isn’t. If the organization was focussed on high-value, chances are the processes don’t support the price points necessary to win the “price seeker” segment as low-cost was never the primary goal, as in Dow Corning’s case. In order to support the target price points that were identified as necessary to win in the space, production and distribution had to be optimized and, in Dow Corning’s case, minimum order quantities and order lead times were required to create the necessary efficiencies in the supply chain to lower production, logistic, and storage costs sufficiently to support a lower price point. This ensured that all prices could be minimized with proper planning. In addition, Dow Corning created the new product line as a web-enabled business to allow the customer to place orders with no human interaction to minimize resource overheads. This allowed for the creation of a low-cost brand that allowed Dow Corning to tackle the price-seeker market, earn back their investment in three (3) months, and drive a majority of business from new customers.
Patent Pirates Are Still Plundering
According to this recent article over on CNN Money, “patent trolls” (Sep 21, 2011) have cost investors Half A Trillion Dollars over the last 20 years. Half A Trillion Dollars! That’s an awful lot of innovation down the drain!
At this point, I’m wondering which pirates are worse? The pirates off the coast of Somalia, who have escalated their attacks and brought ocean piracy to an all time high this year, with 142 attacks in the first quarter alone (and 346 attacks as of September 27). Now, it’s true that the attacks are sometimes violent and that 15 people have been killed this year, but for the most part, the Somali pirates are more focussed on taking hostages in return for ransoms, and release the hostages when they get the ransom. And while the ransoms are getting higher, with the average ransom reaching 5.4 Million in 2010, total payments in 2010 were only 238 Million. Yes, this is a big number, and 20 times 238 Million is a bigger number at 4.76 Billion, but that’s only 1% of losses that can be attributed to patent pirates. One percent!
And the “contributions” that the patent trolls supposedly make to innovation are essentially nonexistent. They’ve funnelled less than 10 Billion to R&D, or less than 1/50th of what they’ve cost investors and innovators. All they do is create a disincentive to innovate. And in SI’s view, they should be made to walk the plank.