Friday, September 28, 2007

2 Purchasing Breakthroughs Next Week!

There will be two groundbreaking events happening next week.

First, on Monday, we'll be announcing the most exciting development ever for a purchasing certification. We're introducing a game-changing innovation.

Attention members of the media and bloggers: if you haven't been contacted by our PR firm about what we're launching, please contact me directly at cdominick [at] nextlevelpurchasing [dot] com ASAP.

Second, on Tuesday, we'll be releasing an edition of PurchTips that discusses an aspect of socially responsible purchasing that is ignored today, but will be a big part of purchasing in the future.

You can watch this space for announcements of both breakthroughs. Have a good weekend.

To Your Career,
Charles Dominick, SPSM
President
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM Certification Online At
http://www.NextLevelPurchasing.com

Wednesday, September 26, 2007

Visiting A Supplier In Chicago?

I ventured to Chicago yesterday. It was only my second time in the windy city.

It was a good trip with the exception of a rental car nightmare. Knowing that there are some good suppliers in Chicago that you may need to visit, I thought that I'd share my bad experience so perhaps I could prevent one for you.

I flew into O'Hare, which had no shortage of rental car companies nearby. I've had some pain-free experiences with Thrifty in the past, so they were my choice yesterday. Bad move!

I arrived in the late morning, ahead of a 1PM meeting. Well, to get a rental car at O'Hare, you need to get a shuttle to the rental car facility.

So much time - and countless Hertz, Dollar, Alamo, and Avis buses - went by before the Thrifty shuttle arrived. Then, it was an unbelieveably long drive to the facility.

But that wasn't the worst of it.

After another long wait in line, I was told to wait outside for a Dodge Avenger. After about 5 minutes, one of the car jockeys asks me what car I'm waiting for and tells me that my car will be next.

After at least 10 more minutes, another car jockey in an Avenger drives up and...drives past. I approach that car and the jockey tells me it's not my car.

Soon after, the jockeys begin arguing over whether or not it is my car. The first jockey tells me that it is and I can get in. I do.

But when I try to exit the lot, the guard at the booth tells me it is NOT my car, that there is nothing he can do, and that I need to go back inside. I do.

There, the counter rep changed some stuff in his system, had me sign the new contract (with a $15 discount for my inconvenience, big whoop), and tells me to get back in the Avenger. I do.

Then I drive back to the gate but...the guard isn't there! I beeped and the guard walked in virtual slow motion and sent me on my way.

Total elapsed time between baggage claim and leaving Thrifty's parking lot: 90 minutes!

So I was late for my meeting. Fortunately, my clients were very forgiving.

Getting back to Thrifty was not much better. They are more off the beaten path than the others - the Rental Car Return signs at O'Hare don't even have their name on them.

Overall, it definitely seemed that Thrifty didn't understand the business traveler. Shouldn't their associates be trained on how people need to be places?

Perhaps I should have known by their name that they aren't geared for us road warriors.

I also have a reservation with Thrifty when I go to the "ProcuRiba" Empower conference next month. My first inclination was to cancel it, but I think I'll keep it to see if it is just their Chicago location that is so pathetic. A quick googling didn't turn up any ATL-specific Thrifty complaints.

But if you're visiting a supplier in Chicago, don't use Thrifty! I know I won't when I go back!

To Your Career,
Charles Dominick, SPSM
President
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM Certification Online At
http://www.NextLevelPurchasing.com

Monday, September 24, 2007

Who The H*ck Is Tony Poshek?

If you read Spend Matters and The Sourcing Innovation Blog every day like me, you see a lot of "hat tips to Tony Poshek." And, if you're like me, you're wondering:

  • Who the h*ck is Tony Poshek?
  • And what else does he do other than find quirky sourcing-related stories and feed them to bloggers?
  • How much does he charge for these tip-offs which, admittedly, are usually quite interesting?

Maybe some day we'll all find out. Til then, keep looking for those "hat tips to Tony Poshek." It's like the purchasing blogosphere's equivalent to the Good Housekeeping Seal of Approval.

To Your Career,
Charles Dominick, SPSM
President
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM Certification Online At
http://www.NextLevelPurchasing.com

Friday, September 21, 2007

Certification In Canada Gets Less Expensive

One of the headlines that caught my eye today when I picked up my Pittsburgh Post-Gazette today was "Look out below: A dollar's a dollar in Canada." This article highlighted how the US dollar has weakened vis-a-vis the Canadian dollar over the past few months and, now, the exchange rate is 1 US dollar = 1 Canadian dollar.

This got me interested. Our friends north of the border may be able to earn their SPSM Certifications cheaper than ever!

You see, if a Canadian enrolled in the SPSM Certification Program on February 9, they would have had to pay 1355.82 Canadian dollars to fund the equivalent of the SPSM Certification Program's $1149 (US) price tag. Today, the cost to enroll is just 1149 Canadian dollars - a difference of over 200 Canadian dollars!

One of my team members just checked the futures prices for the US-Canadian dollar and it seems like this may be "rock bottom" so now just might be the best time for Canadian purchasing professionals to get the career-building benefits of the SPSM Certification at a more affordable price than ever!

To Your Career,
Charles Dominick, SPSM
President
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM Certification Online At
http://www.NextLevelPurchasing.com

Friday, September 14, 2007

Supplier Relationship Management

I hope that you have enjoyed the article, "4 Supplier Relationship Management Tactics."

One tactic that I wanted to expand upon here is Idea Sourcing & Value Creation. Though it sounds modern, I have to confess that I am far from the leading edge on this.

My first exposure to this was when I went to see a presentation by a PPG purchasing executive in the mid-1990's. He introduced PPG's "Supplier Added Value Effort" or $AVE process.

I was totally blown away by what they were doing. Not only were they collaborating with suppliers moreso than anyone else at the time, but they were also using the Internet to collect, route, approve, and track ideas - IN THE MID-1990'S!

You can check out a description of the $AVE process here, but the description alone doesn't do justice to the fantastic stuff PPG demonstrated that night some 10 or so years ago.

To Your Career,
Charles Dominick, SPSM
President
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM Certification Online At
http://www.NextLevelPurchasing.com

Thursday, September 13, 2007

Bullying Suppliers Goes To A Whole New Level

Bullying suppliers - while generally regarded as old-school and having little place in today's business world - still is a common practice, particularly among the largest buyers in certain markets. But recent articles in the Pittsburgh Post-Gazette have shed some light on a story where bullying suppliers has gone to a whole new level.

If you want full coverage, you can check out the PG articles from today and August 31. But here are the key points:

  • LeNature's - a bankrupt beverage bottling company - was up for auction
  • Giant Eagle, a large regional grocery store chain, and Cadbury were two of the bidders
  • Cadbury is a supplier to Giant Eagle
  • Just prior to the auction, Giant Eagle sent a letter to Cadbury apparently stating that "it was terminating the purchase of about $7 million in goods annually" in an alleged attempt to "intimidate" Cadbury into dropping out of the bidding
  • Giant Eagle was the high bidder in the auction
  • U.S. Bankruptcy Court Chief Judge M. Bruce McCullough vetoed the sale of Le-Nature's Latrobe plant to Giant Eagle, on account of the alleged intimidation
  • Lawyers previously have said Giant Eagle's actions also could become the subject of a federal investigation.
  • There's all kind of legal action circulating that is almost too confusing to follow, but a settlement is being considered

The bottom line is this: being firm with suppliers is totally acceptable and, at times, expected of you. But there is a line. Think carefully about where that line is and don't cross it. You may never be involved in competing with a supplier to purchase a bankrupt company, but in every day procurement negotiations, it's smart to know when firmness is actually bullying.

To Your Career,
Charles Dominick, SPSM
President
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM Certification Online At
http://www.NextLevelPurchasing.com

Wednesday, September 12, 2007

Ammunition For Expanding Services Purchasing

With Purchasing being viewed as more and more valuable, we are seeing Purchasing taking responsibility for more and more categories of goods and services that have not historically been part of Purchasing's portfolio: travel, fleet management, HR benefits, advertising, etc.

But, in many companies, getting the opportunity to be responsible for every dollar spent on goods and services is still challenging. Especially when there are internal politics involved.

Sometimes, senior management needs that little extra push to feel comfortable in reigning in spend. I found an interesting push.

I was listening to a recent Business Week podcast called "Selling To Giants," which discusses how small companies can sell to big companies and the advantages of doing so. There were a couple of quotes from host Michelle Nichols and guest Jill Konrath that I think could help convince senior management to ensure Purchasing's involvement in more services purchases. Check these out:

Konrath says: "Bigger companies pay better than smaller companies and they're willing to pay higher prices for products and services," but then sheepishly adds "Maybe not always - if they're in supply chain."

Nichols asks: "So you mean we can actually sell that same hour of that same service for more per hour to a big company than a small company?" Konrath replies affirmatively and explains how small companies' purchasing decisions have the built-in control of the fact that purchases take money away from the owners for the owners' personal financial needs such as funding their children's college education or even their kids' school shoes. No such control exists in large corporations where budget holders have total responsibility for their purchasing decisions.

Nichols then replies: "So what you're saying is (that) small businesses - their purchasing is personal because they had to decide between (doing business with) Jill or (buying) shoes for the baby. But (for) big companies it's impersonal - it's just a bucket of money called 'my budget.'"

To me, these quotes reinforce the truism that budget holders are not all that fiscally responsible when Purchasing is not involved. Obviously, I've seen this behavior first-hand in companies and, as a purchasing guy, was able to introduce more fiscal responsibility into those areas.

Does your senior management need that extra piece of ammunition to understand how the company's money is being spent?

To Your Career,
Charles Dominick, SPSM
President
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM Certification Online At
http://www.NextLevelPurchasing.com

Friday, September 07, 2007

Questions Buyers Should Ask Themselves

One of my guilty pleasures as a purchasing professional has always been reading sales educational material. I have always had a passion for knowing how the "other side" is trained and what they are thinking when they meet with us.

Currently, I subscribe to several sales ezines and occasionally find nuggets that can be applied to purchasing. Such was the case when I received this week's edition of Art Sobczak's ezine.

In that ezine, Art gives salespeople tips on how to respond to buyers who say "I already have a regular supplier for that." He teaches salespeople to ask questions such as:

  • "What do you do to ensure you're getting the best prices?"
  • "What type of evaluation process do you go through to be sure you're getting the best service available?"
  • "What do you do to keep up with the other latest innovations in that area?"
Is that sneaky salesmanship?

No - it's brilliant!

In fact, we, as buyers, should be asking ourselves those very same questions regularly. We shouldn't have to rely on a salesperson to bring them up for us to be thinking those thoughts.

And just think about this...the VP of Purchasing is likely to ask you those same questions. Do you want to be unprepared when s/he does?

To Your Career,
Charles Dominick, SPSM
President
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM Certification Online At
http://www.NextLevelPurchasing.com

Thursday, September 06, 2007

The Future of Sourcing: Results-Based Process Specialization

Well, The Doctor is at it again. Michael Lamoureux from the Sourcing Innovation Blog is coordinating another cross-blog series on "The Future of Sourcing."



I am going to base my contribution to the series on a conversation that I just had yesterday with a veteran purchaser who expressed concern about some developments over the last few years in supply chain management which I, too, have watched with great interest.



With the recent mass adoption of the not-so-recent approach of supply chain management, we are seeing many historically separate functions grouped under the single supply chain management "umbrella": purchasing, logistics, warehousing, inventory management, production scheduling, etc. This concept is definitely beneficial because it does increase coordination between related functions.



But as with virtually any trend, some people adopt it without understanding it fully. So what we are seeing now - and likely will see for a couple of years - are individuals who are not properly cross-trained taking responsibility for functions in which they have little expertise.



Production managers have become responsible for purchasing. Purchasing managers have become responsible for the warehouse. Logistics managers find themselves negotiating contracts. And, despite the coordination between functions, the results are not always stellar.



The principle of supply chain management is to have an operation running like a well-oiled machine - NOT to have workers be jacks-of-all-trades.



You know the old adage: jack-of-all-trades, master of none?



How would you like a "master of none" negotiating a multi-million dollar deal with your supplier?



That's a rhetorical question, obviously.



So for the future of sourcing, I see a continued adoption of the supply chain management concept, just a smarter adoption of it. Supply chain management teams will have specialists for those areas requiring specialist-level expertise: strategic sourcing, negotiation, supplier management, etc.



With the various aspects of purchasing and supply management developing so rapidly and gaining new best practices and technologies, you really have to dedicate yourself to keeping up with them and achieving world-class status. Very few people will be able to spread themselves across the entire spectrum of supply chain management and expect to be at the top of their game on every component of supply chain management in this ever-changing world.



Sure, an understanding of how the other functions within the supply chain interrelate will become more important. But some of the somewhat ignored purchasing skills will resurface as people remember why strategic purchasing has become an elevated profession and how well-done purchasing really does contribute to organizational effectiveness and profitability.

The role of the purchasing manager or team leader will become more important as well, as it will be necessary to facilitate knowledge-sharing among the specialists. The purchasing manager of the future will be neither a jack-of-all-trades nor a master of none, but someone who may be a master of a few and definitely a master of facilitating a team of specialists.

But won't this approach only apply to large companies with large purchasing staffs?

Yes.

But I also feel that there will be a shift in the types of companies that are out there. Historically, the economy has been characterized by a pyramid structure: lots of small companies, a smaller number of mid-sized companies, and few large companies. In the future, I see more of an hourglass shape.

With investors seeking immediate gratification and mergers and acquisitions being one way to provide such immediate gratification, I think that larger companies will become increasingly aggressive at acquiring mid-sized companies. The $1 billion annual revenue mark will make mid-sized companies acquisition targets and the big companies will gobble them up as fast as they can.

The specialist concept will fit well with the larger number of large companies that will remain as this gobbling occurs.

So what area of supply chain management will you specialize in?




It's not to early to think about it.



To Your Career,

Charles Dominick, SPSM

President

Next Level Purchasing, Inc.

Struggling To Have A Rewarding Purchasing Career?

Earn Your SPSM Certification Online At

http://www.NextLevelPurchasing.com

Wednesday, September 05, 2007

How Buyers Buy Time

One of our students asked me how their purchasing team can get their internal customers to give them enough time to do their work on purchasing-related requests. I thought that you could benefit as well, so I'll share my response with you.

To ensure that internal customers give you enough time to do your job well, you must communicate four things:

1. What you actually do after getting a request for your action

2. Why your work is valuable and has measurable benefit to the organization

3. How you do care about productivity and how you've improved your productivity/cycle time over the past few months/years

4. What the consequences are if you are not given enough time

I hope that this helps you, too!

To Your Career,
Charles Dominick, SPSM
President
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM Certification Online At
http://www.NextLevelPurchasing.com

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