She provided purchasers with a few helpful tips to promote healthy supplier compliance, which you can find here on supplymanagement.com.  What caught my attention was the second tip listed:  “Target and segment suppliers by importance and compliance risk.  There are a lot of companies out there that have a pretty minor supplier in a high-risk country.  That supplier is not crucial to the company, so it should think hard whether it wants to be associated with that vendor at all.  Is there somewhere else we can get the goods or service that avoids this troublesome relationship?”  This is an important point to consider.  Your first thought in evaluating this minor supplier might be just that – that it’s minor, so why worry?  But no supplier is too small, and no worry is too minor when considering supplier compliance.  Liston’s advice to try and seek these goods or service elsewhere is merited.  Even though the supplier is minor, why not eliminate all identified sources of potential risk, in order to be best prepared for any unknown risks that may sprout up?

Ultimately, whether or not risks like these are worth taking is entirely up to you and your business.  What do you think?  Would a minor vendor in a high-risk country warrant serious consideration of alternate supplier options?  Or would you be content, given its non-crucial status?

Source: http://www.supplymanagement.com/news/2013/five-ways-to-drive-supplier-compliance/?utm_source=Adestra&utm_medium=email&utm_term=

It’s simple, really.  Human beings are capable of some pretty amazing things.  But all of our best work – and I’m not just talking about good work, but the best work; that which achieves the highest potential caliber of greatness – comes from employees having good morale.  Good morale can be defined as having generally good spirits, and it often equated to having a generally optimistic outlook and persona.  Good morale for businesses simply means your employees are happy.  In its most pure form, good morale is inspired from a clear sense of purpose, accompanied by a strong belief in the rectitude or validity of that purpose.  In today’s world, this kind of inspiration is difficult to steadily maintain.  By nature – it’s fleeting; evasive and slippery.  And it is greatly affected by an individual’s immediate current-circumstances.  Certain days, it even has the ability to elude us entirely.

But there is a ray of hope to be found when considering the unpredictable nature of inspiring greatness: morale is highly contagious.  A little bit of celebration and positive reassurance can go a long way in terms of inspiring your employees to achieve their highest potential degree of greatness.

Source: http://www.supplymanagement.com/news/2013/successful-procurement-transformations-need-sense-of-urgency/?utm_source=Adestra&utm_medium=email&utm_term=

During my daily search for informative, original articles relevant to procurement I stumbled upon a hidden gem of a post, entitled Procurement: To Protect and Serve.  After reading the title, for one reason or another, instinct beckoned me to press on with my search.  Thankfully, my mind stumbled onto that somewhat juvenile phrase: never judge a book by its cover.  So I decided to finish the read.  To say that I was pleasantly surprised would be a gross understatement.

Through his unique perspective as a Boston native, writer Pierre Mitchell draws a strange comparison between procurement staff and members of the Boston Police Department, in lieu of the tragic bombing that took place at the Boston Marathon.  He describes that during the manhunt for the alleged suspects of this heinous crime, that “The police were no longer overweight beat cops with dour attitudes and bureaucratic power.  They were now one of us, and looking out for us.”  Skipping ahead to avoid any potential disservice that paraphrasing this man’s brilliantly written article could lend to, he writes:   ”I can’t help thinking of the analogy with procurement.  Procurement staff don’t want to push POs.  But yet, the analogies are everywhere:  Procurement is the “bad cop” in negotiations.  Procurement is an enforcer of various types of compliance.  Procurement tells us what we can’t do.  Procurement is bureaucratic.  And on and on.  Certainly, catastrophic events will bring stakeholders together and demonstrate their interdependence and common goals.  But when the emergencies subside, how can we stay connected and focused on the real priorities?”  Mitchell then provides three possible answers to his proposed question, whose meaning I will not attempt to dilute by paraphrasing.  You can find them here.

I am not ashamed to admit that the spot-on comparison between police and procurement staff was mind-blowing.  The eloquence, professionalism, and empathy inherent in this article’s respectful tone, along with the valuable insight it provides, constitutes this heartfelt piece as nothing less than a masterstroke; a must-read for readers everywhere.  Bravo.                                                                                                                                              

Source: http://spendmatters.com/2013/04/26/procurement-to-protect-and-serve/

Spendmatters.com began a new blog series that might quenching your thirst for this kind of blunt, practical advice, defining exactly how technology can optimize procurement.  In the first installment from the series, after acknowledging the tremendous strides made in way of the visual capabilities of data presentation, author Jason Busch poses a simple question, through the brief analysis of plot points from the famous, futuristic movie Minority Report.  He writes: “After watching this many times, we finally decided to ask: in an all-powerful world of predictive analytics, why didn’t he (Tom Cruise) just ask the system what would happen next? … Our takeaway question for procurement is the same: why don’t we spend more time asking for tools to tell us the answer rather than logging into the systems, drilling through dashboards, running reports, and exporting charts?”

The obvious answer to his question is this: most people do not possess the complex knowledge-set required to understand the specific fundamentals of how our technology operates.  Despite the general reluctance to blindly trust a computer’s functionality, this is a definitive example of what the future may have in store for those of you in procurement.  Just think of all the hours spent combing through data; hours that could soon potentially be saved and spent elsewhere!  What do you think?  Would you be skeptical to wholeheartedly place your trust in the capabilities of a machine?  For Busch’s full article, including his list of ideal questions to ask our futuristic “procurement analytical tools” click here.

Source: http://spendmatters.com/2013/04/22/navigating-procurement-data-simplify-to-think-outside-the-cube/    

While digital disruption is not undeserved of its recent hype within all areas of business, Liz Herbert, another of Forrester’s principal analysts shines some light on its direct connection to those of us involved in purchasing.  In a post last week, she quoted a past survey done by Forrester in which “85% of executives polled opined that ‘the need to drive innovation and growth’ would have a moderate or high impact on IT services’ spending.  However, the ominous, potentially threatening force that is digital disruption, along with the “fragmented, fast-moving landscape of niche technology and service providers” within emerging fields (i.e.: social media, mobile devices, and cloud based software, etc.), is keeping sourcing professionals on their toes.  In order to help keep you from getting caught in the wake of digital disruption, Herbert reiterates five of its most telling traits, as originally defined by James McQuivey.  But she doesn’t simply restate them, in hopes of reminding us; instead – she identifies how they might directly impact the field of sourcing.

One of the points she sought to drive home was that sourcing professionals need to work hand in hand with their own IT-experts, in order to evaluate, and hopefully mitigate, new kinds of value or enterprise risks, that are not necessarily linked to “dollars and budgets.”  The full article can be found here.     

I found her fourth “trait” to be the most interesting.  She writes “Sourcing strategists must take a more ‘guardrails’ approach of setting criteria but not stifling leading businesses’ fast-paced innovation.  If they cannot adapt to this new pace, they will not survive.”  The necessary balance between regulation and innovation is difficult to master, as often one will demand or inspire the others absence.  But – what do you think?  Does your company have the ability to navigate this balance?  Does any company?

Source #1: http://www.forbes.com/sites/forrester/2013/01/09/what-really-counts-as-digital-disruption/

Source #2: http://spendmatters.com/2013/04/19/digital-disruption-and-what-it-means-for-sourcing/

Briefly summarized, he first claimed that global supply markets are actually few and far between in the world of indirect procurement; next – that “most sourcing” is not exactly strategic, and is more akin to simple purchasing; and then finished by describing the infinite complexities involved in this type of innovative, field-changing transformation, and how it cannot and will not merely occur within individual procurement divisions.  Paul Snell summarizes in full the foundation of Alexander’s three supporting points here, in his article.

The section of the post that caught my eye began where Snell quotes Alexander, as saying, “Let’s stop talking about strategic sourcing, and let’s talk about better buying.  I think the essence of transformation is to give the business what it really needs – to listen very, very hard.  It might be better deals, it might be good data, other things, but the important thing is to listen hard and not assume you know what the business wants.”  Of course, just what your particular business wants can be both ambiguous and subjective, but Alexander brings to light a valuable lesson about the importance of clearly identifying the specific needs of your business, and serving those needs to the utmost regard.

But how then do we inspire the transformation of an entire field of discipline, when the exact needs, aims, and goals of people within that field are often so completely distinct from one another?  I would argue by doing so creatively, and very carefully.

Alexander finishes with a few pieces of general advice – three stepping stones, forged from weathered bits of procurement insight – to help get you started thinking about how you can effectively incubate an efficient, meaningful transformation of the field.

First: Do not mistake the role of procurement professionals to be that of preventing spending.  Instead, make it easier to buy.  Second: Invest heavily in the right people for the job – those who are trustworthy, intelligent, and creative.  And finally, focus on having adept negotiation and sourcing skills.  What do you think of these pearls of wisdom?

Source: http://www.supplymanagement.com/news/2013/strategic-sourcing-not-the-answer-to-procurement-transformation/

An article we found on crowdsourcing.org identifies one of these crowd-sourcing agencies as Enterprise Crowdsourcing, or ECS.  “The ways in which ECS is leveraged will evolve over the coming months and years.  Right now, organizations are comparing this model to outsourcing and quickly realizing and reaping the benefits.  Access to an elastic workforce, that has the ability to ramp up and down based on work fluctuation or seasonality, is critical for any business, regardless of industry.  Tapping into a locally relevant, globally based workforce that can execute smarter, faster, and cheaper will open up new doors for businesses trying to compete at a global scale.  Finally, organizations are weighing the cost-savings and the ability to pay-per-task with less ramp-up time and finding it is critical to driving the bottom line.” 

Although this could generally lead to a decrease of more permanent, salary based positions being offered to professionals, it may be the antidote to what I refer to as the ‘grass is always greener’ mentality of typical working class Americans, by adding a degree of variance as to who you actually work for.  To me, this crowd-sourcing style of recruitment and sourcing seems to have a lot in common with being considered a ‘freelance’ worker – a term most commonly applied to journalists and technical writers.  These methods of practice, along with improving costs, may also contribute to upping the standards of what is considered to be ‘quality work,’ as the best individual for whatever needed task will be most sought for, and less skilled, lazy individuals will quickly be weeded out from the pool of talent that is the ‘crowd.’  On the other hand, without a good editor, filtering out the ‘quality work’ from the overwhelmingly large ‘crowd’ may end up causing more trouble than it’s worth.  What do you think?

Source: http://www.crowdsourcing.org/editorial/enterprise-crowdsourcing-the-next-generation-of-outsourcing/25310

First, I wanted to clear up any discrepancies that may have arisen in regards to the terminology used here.  Out-sourcing is process of contracting out internal business related tasks to a third party company.  Out-sourcing technically has absolutely nothing to do with the physical location of the business.  In the above quotation, the process that Tice is describing is called offshoring, which means the relocation of a company’s business practices to a different country.  Although the price of offshoring currently remains more appealing (in the general sense, due to lax foreign labor laws) than that of in-shoring (or on-shoring), whether or not this will continue to be the case in the immediate future remains to be seen.

In certain areas, a switch to purchasing locally may even immediately beat the costs of offshoring, and Tice’s article poses a quick batch of procurement evaluation criteria, comprised of five different points – originally recommended by David Pyke (dean of the School of Business Administration at the University of San Diego) – that are worth taking a look at. 

So, hold on a minute – what exactly does near-sourcing mean?  Well, for starters, given its lack of even a Wikipedia page, it’s a relatively new term.  In the her article, Tice basically writes that near-sourcing is simply the business process attaining goods and services from vendors located closer to where that business’s end-products are sold.  By this definition, not only does near-sourcing provide for faster delivery times, but it also can potentially support local economic stability, as it would keep local job opportunities plentiful.  But without a more profitable bottom line, it is doubtful that these incentives alone will be enough to sway the minds of CPOs and other procurement decision makers.   

Source: http://www.entrepreneur.com/article/226357#ixzz2QkgQr7vU

Amongst some of the more self-explanatory tips (like #1: Begin with the end in mind, and #6: Stick with it), the second and forth tips peeked my attention.  #2 read: “Don’t be afraid of a little discomfort.”  This is an important tip, as a functional procurement system may initially seem like it’s drawing attention to all the ugly parts of a company’s spending habits; singling out all the mistakes or shortcomings of coworkers.  But that just mean that the system is doing its job correctly.  It is supposed to point out all the flaws and misgivings of your company’s current purchasing processes, and in order to clean out the cobwebs, it must first bring them to light.

This works in accordance with the next one I found most interesting.  #4 stated: “Use the system as a way to strengthen purchasing relationships.”  Further in the explanation, the post read: “Standardizing purchasing via automation is not about good guys vs. bad guys.  It’s about gaining visibility into the company’s buying activities to produce a more intelligent and profitable supply chain for everyone.”  I think this is an important concept to keep in mind while considering the content of #2 – that at the end of the day you are all on the same side.  Procurement isn’t just about cutting cost, ie – getting the cheapest items when sacrificing quality.  It’s about optimizing purchasing, so both the purchasing department and those utilizing what was purchased are satisfied.  For the rest of the list, click here.

Source: http://spendmatters.com/2013/04/18/6-insider-tips-for-getting-a-purchasing-system-off-the-ground/             

One of the most interesting aspects of Gartner’s findings spoke of a reversal of the “not invented here” syndrome – that is, that the majority of Generation Y first seeks an already existing IT solution for any given task, as opposed to the current/dated option of businesses creating their own IT services.  “Generation Y looks first into what is available on the market before deciding to build anything, especially with highly commoditised services,” Gartner claims.  Being a member of Generation Y, my own personal preferences further support this claim, as I would definitely prefer to utilize an already existing IT product from the market, rather than create one entirely from scratch. 

I believe this logic derives directly from Generation Y’s elaborate connection to (and dependence on) technology.  The vast majority of us are at least basically familiar with the ins-and-outs of computer use, due to the constant, early exposure to computing technology in our every-day lives.  Given the fluctuating nature of this type technology – the recurrent need for upgrades, the consistent changes in basic functionality of programs – Generation Y is frequently forced to adjust and to adapt to new user-interfaces, and generally more acceptant of change.  Therefore, learning how to use already-existing software comes as second-nature to us, as it was an integral part of our computing experience since the beginning. 

Another one of the more interesting findings from Gartner’s research is that ”the demand for speed is much higher with today’s impatient Generation Y workers.”  I won’t deny that the timely completion of any work related task is important, but I was under the impression that this concept spans all generations, and would be interested in learning the specific data collection methods utilized in drawing this conclusion.  What do you think?

Source: 1) http://www.computerweekly.com/news/2240181294/Sourcing-strategies-must-change-to-reflect-Generation-Y

Source 2) http://www.gartner.com/DisplayDocument?id=2413415