Category Archives: Event

Spot the doctor!

Like Waldo, the doctor can often be hard to spot in the wild. Since he’s a blogger, and not an analyst, he isn’t plageed by the media whore persona and can blend in, observe, and see what is actually happening out there. That’s why, occasionally, he gives you some hints as to his whereabouts.

Two weeks from today, if you look really hard, you might just see through his urban camouflage and spot him at the Coupa OneVision Roadshow in downtown Toronto.

If you care to try and find him, after being fed, you will get to hear John Mavriyannakis, a Director at Deloitte, talk about Empowering Modern Procurement and Ian Murray of TD Bank talk about their Coupa e-Procurement Success Story. Deloitte always has quite a few insightful success stories to share and given that TD Bank is a Fortune 500 company and a bank, this makes their success story all the more impactful.

the doctor will see you there. (But will you see him?)

Is Your Financial Performance Lagging?

Even if it is not, you might want to consider BravoSolution’s and Basware‘s upcoming webinar on Five Untapped Methods to Improve Financial Performance. Hosted by Mickey North Rizza, former Gartner and AMR Research Analyst with over two decades of supply chain experience, you know that this webinar taking place next Wednesday, August 21 @ 11:00 am PDT / 2:00 pm EDT is going to be filled with useful information.

All you have to do is look at the statistics. Research has demonstrated that leading companies that improve their Purchase to Pay processes find operational savings that can exceed 40% and that those who also implement end-to-end Source-to-Settle processes (with smartly linked Sourcing and Procurement) see an average 14.6% increase in operating margin and a 12.8% ROIC (Return on Capital Invested). Given the increasingly low returns in cash-based investments, pursuing this opportunity should be a top priority.

Is Your Supply Management Ethical?

Corporate Social Responsibility (CSR) and Corporate Ethics are becoming more important by the day. Just ask BP, the Gap, Chick Fillet, and Monsanto, who have all had to deal with Boycotts in recent years (for oil spills, supply chain factory fires resulting in worker death, stance on gay rights, and genetically modified food). You don’t want to get caught in the cross hairs of an organized activist group like PETA, GreenPeace, or Anonymous.

It only takes one slip up somewhere in your supply chain to become the target of globally organized boycott. Thus, you need to take a step back and ask if your supply management is ethical.

A code of Supply Management conduct, as described in The Procurement Game Plan, is a good start, but it’s not enough. You also need a supplier code of conduct, and you need to insure that not only do your suppliers honour the code of conduct they agree to, but themselves have a code of conduct for their suppliers. The buck stops with you, so you are responsible for making sure the buck is spent ethically. Turning down free World Cup tickets from a potential supplier is a good start, but making sure the supplier adopts a code of conduct that prohibits them from even offering such a wasteful, lavish gift in the first place is better — especially if that money is redirected to safety improvements and community programs for its workers.

Supply Management Ethics provide the foundation for CSR, so it’s important that your organization get them right. One of the experts on this topic is Stephen Guth, Chief Corporate Counsel and VP Vendor Operations for the National Rural Electric Cooperative Association and author of “The Contract Negotiation Handbook”, “The Vendor Management Office”, “Hotel Contract Negotiation Tips, Tricks, and Traps”, “Project Procurement Management”, and a set of free “Procurement Contract Templates”. This fall, Stephen is going to be giving a session on Building a Strong Foundation with Supply Management Ethics at the NLPA Conference where he will go beyond the usual horror stories of supply management professionals in jail jumpsuits and look at supply management ethics through the eyes of a forensic auditor. In this session, you will go beyond the process of learning how to put a code of conduct together and learn what investigators look for, who is most likely to violate supply management ethics, and why. You’ll learn how to identify potential problems and violators before they occur.

If you haven’t already, consider registering for the NLPA Conference today.

Supply Chain Resiliency: More than Supplier Management!

We have a thorough supplier (performance) management program in place — all of our strategic suppliers are appropriately managed and monitored. We don’t have to worry about unexpected bankruptcies, lapses in quality, or shipment delays.

Falser words could not be spoken!

Just because your suppliers are well managed and not likely to be a source of risk unless an external event causes one or more of those suppliers to shutdown or become inaccessible, that doesn’t mean your supplier’s supplier is managed! According to the BCI 2012 “Supply Chain Resilience Survey”, 39% of analyzed disruptions originated below the immediate tier-one supplier! In other words, the best (tier one) supplier management program in the world is only going to mitigate 60% of supplier-based risks that can be mitigated! Given that, depending on the study, somewhere between 73% and 85% of companies experienced at least one disruption last year (with the average survey respondent experiencing an average of 5), and that 21% of companies suffered disruptions that cost more than 1 Million Euros, can you really rely on your world-class supplier (performance) management program?

So how do you identify and assess sub-tier risks? We’ll get to that in a series of posts on supply chain visibility that will begin this summer, but if you want a leg up on your competition, I would suggest that you strongly consider the forthcoming webinar on “Assessing Sub-tier Risks” by Resilinc, who will be doing a deep dive into a proper process, the benefits it will produce for your organization, and the high cost of doing nothing in today’s global economy.

You can Register for the webinar, which will take place on June 19, 2013 @ 11am PDT / @ 3 pm EDT, at your earliest opportunity.

Buying and Negotiating on TCO – A Must Know for Any Supply Management Organization!

At this point in time, very few people are still in the stone ages of Supply Management and buy on price per unit (PPU) alone, the first level of sourcing value. However, there are still a number of buyers in a number of organizations that still buy on landed cost or total cost of acquisition (TCA) and buy solely on the sum of price per unit, transportation, duty, tariff, temporary storage, and other costs that are incurred from the time an order is placed until the time the product is received. These organizations are still in the dark ages of Supply Management and need to find the light very, very quickly. Most modern Supply Management organizations attempt to buy on total cost of ownership (TCO), the third level of sourcing value.

The most commonly used metric today by analysts, consultants, vendors, and (I’m sorry to say) bloggers, it is a comparative cost metric that quantifies the overall cost of each acquired unit from a direct, indirect, and quantifiable market perspective that takes a broader look at the cost of a product from an acquisition, utilization, and delivery perspective. In addition to the landed costs, it also considers indirect utilization, supplier switching, and transaction costs as well as cost adjustments for quality, waste, and brand power (if your supplier has a brand that increases the selling price of the product you create with the component). TCO captures the ‘true cost’ of a product (or service) from a supplier and does a much better job of helping you to compare apples-to-apples when determining the best buy for your organization. It’s not the ultimate metric, as that’s total value management (TVM), the next level (and pinnacle) of sourcing value measurement, but you cannot apply TVM until you have mastered TCO (which is a big component of TVM just like total cost of acquisition is a big component of TCO). Plus, the effort required to apply TVM isn’t worth it in all categories. If the category is low-spend, non-strategic, or best handled in a leveraged purchasing agreement, you don’t bother with TVM. (Just like you don’t bother spending hours looking for the absolute cheapest supplier when buying a box of printer paper for your home office as saving $2 isn’t worth hours of your time, you don’t bother with an advanced analysis on the office supplies category.)

An in-depth understanding of TCO, and how to negotiate on TCO, is vital to the success of your Supply Management department as your organization’s success ultimately depends on the proper application to every category you source now that we are returning to (rampant) inflationary times. To assist you in the acquisition of this knowledge, Next Level Purchasing is hosting a webinar on How to Negotiate and Buy on Total Cost of Ownership this Thursday, May 30, 2013 @ 8:30 am PDT / 11:30 am EDT. It’s free to all NLPA (Next Level Purchasing Association) members, and basic membership in the NLPA is free! (Join Here!)

The webinar, which will be presented by Todd Snelgrove, Global Manager for SKF Group, will teach you how to reduce organizational costs by managing TCO. You’ll learn about updated strategies, techniques, and TCO-reducing methodologies. The webinar will delve into real world case studies and share the experiences and pitfalls to watch out for. You’ll leave this webinar with a firm understanding of the do’s and don’ts of buying on TCO.

To register for this free, live, event, Login to the NLPA, navigate to the “Webinars” tab, and click on the webinar to get to the registration screen.