Wednesday, June 30, 2010

How Big Of A Supply Chain Threat Is Internet Over-Reliance?

I hope that you have enjoyed the article "Today's Biggest Supply Chain Threat?"

Over the past two weeks, I've learned more than I've ever wanted to know about Internet security issues ranging from website downtime to cyber terrorism. Ignorance was indeed bliss. Now, being exposed to the threats that all businesses and even countries face is certainly not very comforting.

In the article, I reference the Protecting Cyberspace as a National Asset Act of 2010. There are some interesting - and scary - excerpts from a US Senate press release about this bill that are noteworthy for supply chain professionals and the general public alike. Here are a few of those excerpts:
  • "The Internet...is now a necessity of modern life, and sadly one that is under constant attack."
  • "For all of its ‘user-friendly’ allure, the Internet can also be a dangerous place with electronic pipelines that run directly into everything from our personal bank accounts to key infrastructure to government and industrial secrets. Our economic security, national security and public safety are now all at risk from new kinds of enemies -- cyber-warriors, cyber-spies, cyber-terrorists and cyber-criminals."
  • "We cannot afford to wait for a 'cyber 9/11' before our government finally realizes the importance of protecting our digital resources, limiting our vulnerabilities, and mitigating the consequences of penetrations of our networks."
  • "Key elements of the legislation include...[d]evelopment of a comprehensive supply chain risk management strategy to address risks and threats to the information technology products and services the federal government relies upon. This strategy will allow agencies to make informed decisions when purchasing IT products and services."

A lot of people are taking the cyber security threat seriously.

Are you?

To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
Next Level Purchasing . com

Monday, June 28, 2010

NextLevelPurchasing.com Is Back Online

I am relieved to report to you that NextLevelPurchasing.com is back online after suffering a massive DDoS attack, similar to the kind that you read about hitting Twitter, CNN, and other high-profile websites. While we are working to bring the site's speed and functionality back to its former levels, NextLevelPurchasing.com is available to you while being protected by some of the most advanced security available.

As the saying goes, "that which doesn't kill you makes you stronger." That is certainly true in our case. Warding off this attack wasn't easy. It wasn't cheap. And it wasn't done as quickly as we'd have liked it. But I am cautiously optimistic that the worst is behind us.

Fortunately, we were able to implement our contingency plan and have our students take their classes, exams, and assessments on our backup site while our main site was under attack, giving them a virtually uninterrupted experience. However, I do want to express my appreciation for the patience and understanding of our students who were inconvenienced by the outage of our main site.

We have a lot of catching up to do here. So blog posts this week may not be as frequent as you may be accustomed to. But, bear with us. We are going to leverage this month's catastrophe for
its lessons learned which will be adapted to procurement situations and shared with you.

Thank you for supporting Next Level Purchasing during this outage!

To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
Next Level Purchasing . com

Friday, June 25, 2010

NextLevelPurchasing.com Website Status

We continue to fight off the DDoS attack on NextLevelPurchasing.com that I reported on Wednesday. Our technology partners have reported that our website is being hit 300 - 1,000 times per second with malicious traffic, crashing the server and rendering the website inaccessible.

We continue to work on implementing solutions in the hope that access to our site can be measured in hours, not days. The FBI (US Federal Bureau of Investigations) is involved in determining the source of the attack.

Please remember that our students have uninterrupted access to their classes via our backup site at http://www.purchasingcourses.com/login.html.

We are striving to get NextLevelPurchasing.com back online ASAP.

Thank you for all of your patience and understanding during this very, very challenging time.

Best Regards,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.

Wednesday, June 23, 2010

NextLevelPurchasing.com Update

Since the last update, we have gathered a great deal of information on why NextLevelPurchasing.com has been down this week.

Our site has endured a DDoS attack. This is where a virus causes hundreds or thousands of computers to repeatedly “hit” a website so fast and frequently that it causes the website to be unresponsive to normal traffic. Fortunately, no student information was compromised.

As of Monday, we have implemented a contingency plan where our students are able to participate in their classes on our other domain. Students can log into their classes at http://www.purchasingcourses.com/login.html.

We are in the process of moving our website to an entirely new dedicated server with even better protection from these types of malicious incidents. We are working hard on this move and configuring our site in the hope that we will restore normal access through NextLevelPurchasing.com very, very soon. We are optimistic that NextLevelPurchasing.com will be accessible in the USA as early as today and to the rest of the world next week.

Please contact us with any questions you may have at 1-412-294-1990 or help@nextlevelpurchasing.com.

I sincerely apologize for the inconvenience of our main site being down. We appreciate your patience and understanding as we deal with this very, very challenging situation.

To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.

Monday, June 21, 2010

The Next Level Purchasing Website Will Be Back Up Shortly

NextLevelPurchasing.com has been down for a little while due to some unplanned events as we implement our new innovations. We expect it to be up in the next hour or two.

I'm personally hoping that the site is back up by the time you are reading this. But I wanted to get the message out there in case we run into any last minute problems in returning it to service.
If we can be of any assistance while the site is down, please email us at help@nextlevelpurchasing.com or call us at 412-294-1990.

All of us here at Next Level Purchasing apologize for the inconvenience and appreciate your patience.

To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
Next Level Purchasing . com

Friday, June 18, 2010

Three Big Announcements Coming From Next Level Purchasing Starting Tuesday!

Innovation in purchasing and supply management training and certification is a constant focus of what we do here at Next Level Purchasing. We've been hard at work over the last several months working on three major launches that will, once again, alter the landscape in the purchasing and supply management training and certification market.

On this upcoming Tuesday - June 22, 2010 - we will be announcing a launch that will help purchasing and supply management professionals prosper in the context of one of the most significant and strengthening trends of the past several years.

On July 1, 2010 - the sixth anniversary of the SPSM® Certification - we will be announcing a launch that I can't share many details about right now. Let's just say that it is very, very cool.

And in August, we will be announcing an entirely new and exciting approach to doing what purchasing and supply management professionals have done the same way for nearly 100 years. And it will be FREE. Big companies will be able to stop spending tens of thousands of dollars by having their purchasing and supply management employees take this alternative approach all while getting significantly more value.

Keep an eye on this blog over the next two months to be the first to know!

To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
Next Level Purchasing . com

Thursday, June 17, 2010

June 2010's Dedicated Purchasing Student of the Month Is...

Every month, Next Level Purchasing recognizes a student who has made impressive progress in learning more about the field of purchasing and supply management. We are proud to announce that the Dedicated Purchasing Student of the Month for June 2010 is...



Wayne Owens, a Purchasing Manager for Goodwill Industries from Greenville, South Carolina, USA. Wayne completed all six Senior Professional in Supply Management® Program classes during the month of May! Wayne also passed the SPSM® Certification exam!

Wayne says: "You must read and understand the concepts of each course. Take plenty of notes! The presentation of the courses is easy to follow so if you are willing to invest the time into the courses you will be finished before you know it. I'll be back for SPSM2!"

Next Level Purchasing and the procurement community around the world congratulate Wayne and his dedication to improving his purchasing career!

To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
Next Level Purchasing . com

Wednesday, June 16, 2010

Whitepaper Wednesday - Cloud Computing Technology in Procurement

Welcome back to another installment of Whitepaper Wednesday here on the Purchasing Certification Blog. Today, I’ll be reviewing a whitepaper from Supply & Demand Chain Executive and Ariba.

Speaking of Ariba and whitepapers, they recently updated their site and, on my first visit, I couldn’t find their whitepapers on the new site! I was pretty disappointed as they built up a really good library over time.

Fortunately, I was a little smarter or more patient (or both) this week and I was able to find the link to their whitepapers and other resources. It doesn’t appear that they date the whitepaper links, but hopefully that will be a feature that they’ll add (or re-add) in the near future.

This whitepaper, though listed as a whitepaper on Ariba’s site, isn’t so much a whitepaper as it is a digital edition of Supply & Demand Chain Executive Magazine. But I’m going to review it because it sort of answers a common question: “What the hell is the cloud?”

And, actually, it takes some reading deep into the whitepaper to get a usable answer to that question. Part of the reason that this cloud is so murky is that Ariba is using it as somewhat of a trademark or label for its latest offerings (i.e., Ariba Commerce Cloud) in addition to using it in a descriptive manner to describe cloud computing. After reading how these terms are used in such an intertwined manner, I can understand how someone asked if she could “buy the cloud” at Ariba’s conference as reported by Spend Matters. Though Spend Matters poked fun at this individual, the way the label is used doesn’t exactly lend superior clarity to the term or the service.

For example, in describing Ariba’s offering, the whitepaper said “Commodity managers manage their global categories and suppliers in the Ariba Commerce Cloud. Supplier report cards are tracked and commodity teams survey key stakeholders around the globe to determine how suppliers are performing with both objective and subjective data in the Cloud. Negotiation plans are approved and all projects are tracked with complete transparency to ensure sourcing decisions are made based on auditable lowest total cost data in the Cloud. Global spend data are scrubbed from SAP and encoded into a UNSPC-structured (sic) format that allows for spend visibility, reporting and analysis in the Cloud.”

I don’t know about you, but this description certainly makes “the Cloud” sound like something that can be purchased.

So, allow me to dredge up what the whitepaper considers definitive characteristics of cloud-based commerce, the practice (not necessarily Ariba Commerce Cloud, the service or platform). All the way on page 17, the whitepaper shares its first definition of cloud computing from Maureen Fleming, program director for business process automation and deployment at analyst firm IDC: “It’s consumer and business services delivered and consumed in real time over the Internet.”

With that definition not being very specific – because it could apply to millions of websites that have been active for many, many years - the whitepaper goes a little deeper by saying that “typically Cloud-based applications are distinguished by their strong use of standards and strong self-service capabilities. In addition, Cloud-based offerings typically provide for a pay-as-you-go model.”

OK, so how is that any different from the software-as-a-service models that have been hyped up since the mid-2000’s?

After all, even one of the CPO’s interviewed for one of the articles in this whitepaper said that “Cloud computing to me seems to be a new buzzword for something that has been around for quite some time, at least in concept…Cloud computing basically allows IT infrastructure, software, best practices and standards to be shared across an entire community in a way that allows individuals to only pay for what they use, while leveraging an infrastructure that is far greater than one could cost-effectively build on their own.”

If you’re confused, that’s understandable. Fortunately, some additional excerpts shed some light on the distinction between SaaS and cloud computing.

Much of the distinction comes from the fact that different companies will be interacting via the same technology instance. The whitepaper says “The next wave of productivity is all about collaboration and aims to attack the inefficiencies that remain between companies to enable more effective collaboration among trading partners. Industry watchers say ‘Productivity 3.0’ will be fueled by Cloud-based platforms that allow businesses to share common business processes in areas like product development and commerce.”

This distinction is solidified further with a quote from Ariba’s CEO, Kevin Costello. After he said “The key to extending and improving collaborative trading relationships lies in open systems that can be easily accessed regardless of their architecture or delivery model decisions,” Supply & Demand Chain Executive simply wrote “Translation: Cloud-based solutions.”

The last page of content in the whitepaper goes clears up the skies a bit for understanding why the cloud model is different than what we’ve seen in the past. Article author W. Lamar Chesney, executive vice president and chief procurement officer at SunTrust Banks, Inc., writes “the Cloud comprises both the on-demand solutions that power one company’s internal processes as well as the electronic networks connecting companies and their ecosystems of suppliers, partners and customers. Cloud computing, in a sense, is the ‘utility’ that provides a channel for the data and information exchange, process integration and transparency between buyer and supplier interactions through a low-cost means of integration.”

So, that’s a little more clear for me. If you’re still asking “what the hell is the cloud?” after reading this review, I can understand. But, perhaps you can get an even better understanding by reading the full whitepaper yourself. You can download your own copy from Ariba’s website (registration required).

To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
Struggling To Find More Good Resources For Procurement Leaders?
Check Out Our Web Site's New Whitepaper Section At
http://www.NextLevelPurchasing.com/WPcharles

Monday, June 14, 2010

Dating Suppliers Before Marrying Them

I hope that you have enjoyed the article, "Do You Make These Purchasing Mistakes?"

In the description of the fifth mistake, "Failing to qualify a new supplier," I wrote that you should always "qualify new suppliers in a way that is appropriate for the value and criticality of the purchase. This may even mean 'dating the supplier before marrying the supplier.'" Writing this made me realize how cultural customs affect both choosing your life partner and choosing your suppliers.

Although prearranged marriages are "still practiced in South Asia, and the Middle East and East Asia" according to an entry on Wikipedia, they are virtually unheard of in Western culture. To us in the USA, it would be unthinkable to promise the rest of your life to someone you don't really know (unless you are seeking fame via a reality television program). Though, as a culture, we view critical, long-term commitments without "trial periods" as crazy, somehow that aversion didn't make it into our procurement practices.

Much to the contrary, procurement departments often make critical supplier selections on the basis of strong proposals alone. There is no dating - it is straight to the altar - with incompatibility issues left to be discovered later.



While this custom forces procurement departments to write probing RFP's and to be very diligent in their proposal evaluations, I personally think that there is room for us to date our suppliers a little more. First, it reduces the risk of being stuck with a mistake, the mere fear of which makes the "devil-I-know" tendencies stand in the way of continuous improvement. Second, it will make the successful bidder put as much effort into making those critical first few weeks of performance competitive as it put into making the proposal competitive.

New supplier integration is often a big challenge. Forcing the supplier to earn the business with its performance as well as its proposal will help suppliers develop their project kickoff skills the same way that procurement professionals have developed their proposal evaluation skills.

Is dating your suppliers before marrying them appropriate in every situation? No.

But where circumstances permit, it may be the most risk mitigating thing you can do as a procurement professional.

To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
Next Level Purchasing . com

Friday, June 11, 2010

Dick's Sporting Goods CEO On Marketing Spend

Yesterday, I attended the 12th Annual Entrepreneur's Growth Conference, a high-quality event that really provides business owners at all levels with good new ideas and strategies. This most recent conference was no exception.

One of the more interesting parts of the day for me was the afternoon keynote, delivered by the CEO of Dick's Sporting Goods, Ed Stack. I had the opportunity to ask Mr. Stack a question at the end of his keynote. I'll provide a paraphrased recollection of it here for your reading pleasure.

Me: "For small businesses, it is relatively easy to measure the effectiveness of marketing activities because they reach out to very few people with very targeted methods and often have direct contact with the people that they marketed to. With larger companies, it seems more difficult to know what works and what doesn't. For example, you guys have television commercials and you did a product-placement spot on the Celebrity Apprentice. How does a big company measure its marketing performance and understand what works and what doesn't?"

Stack: "You can't always measure marketing performance. For things like sale ads, you can determine how much more a product sold if it was featured in the weekly ad. But it is tougher with things like commercials. You don't know if they worked. And the Celebrity Apprentice - we'd probably like to take a mulligan on that. If we had the chance to do that over, I'm not sure we'd do that. But it is part art and part science. J.C. Penney once said 'I know that half of my advertising budget is wasted - I just don't know what half.' So, for big companies you don't always know what worked and what didn't."

Part of the value that a well-trained procurement department brings to the spend it touches is a reduction or elimation of wasted spend. And marketing services are beginning to become a more and more common category sourced by advanced procurement departments.

The one caution that I would offer to those procurement departments is to not get too scientific with managing marketing spend as they try to reduce wasted money. As Stack noted, "It is part art and part science." Marketing professionals sometimes should take risks. Part of marketing is differentiating the company from its competitors. And that means not doing what everyone else is doing, even if it means going down an unproven path. Sometimes it will work, other times it will not.

CEO's understand that there is a risk of waste. And they are willing to accept that waste, if not expect it. Don't get so overzealous trying to restrain waste that you restrain an opportunity to hit the proverbial "marketing home run."

To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
Next Level Purchasing . com

Wednesday, June 09, 2010

Whitepaper Wednesday - Inventory Reduction

Welcome back to another installment of Whitepaper Wednesday here on the Purchasing Certification Blog. Today, I'll be reviewing a whitepaper entitled "Inventory Reduction: Getting Traction for Fast Track Results" from R. Michael Donovan & Co.

The whitepaper begins by stressing today's executives' interest in reducing inventory levels, saying that "the old ways [of keeping large inventories] caused erratic and long lead times, high costs and unnecessary cash consumption." Though the whitepaper uses the term "the old ways," many organizations are still plagued with too much inventory as the whitepaper attests that many organization's past efforts to reduce inventory were "ill-fated" and ended up bringing about unintended consequences such as "decreased customer service; lower productivity; lost sales; lower profits; and, ironically, more cash unnecessarily consumed."

So, how does one go about decreasing inventory?

According to the whitepaper, not by using traditional inventory metrics such as inventory turnover or days of inventory. Instead, the whitepaper recommends a methodology called IQR. Maybe I read through the whitepaper too quickly, but it wasn't clear to me what IQR stood for.

The IQR process involves identifying, for each part number, an optimum inventory value. Then, it requires you to classify inventory into four categories: Active (where the optimum inventory value matches the amount of inventory you actually have for that part number), Excess, Slow Moving, and No Moving.

Here is where my problem with the whitepaper's methodology starts. Does "Active" mean exactly the right value? Is there an acceptable range? Is +/- 10% sufficient?

Moreover, the whitepaper offers no criteria for what consistutes the difference between Excess, Slow Moving, and No Moving. While this doesn't appear to matter at first due to the whitepaper's calculation of IQR (sum of Active values divided by total inventory value), it does later.

You see, a case study near the end of this whitepaper attempts to demonstrate how IQR is used to prioritize inventory reduction opportunities. But, more confusion ensues when the case study ends up listing seven categories - Active 1, Active 2, Excess 1, Excess 2, Excess 3, Slow Moving, and No Moving - then said that "the biggest inventory reduction opportunity is clearly in the Excess 2 category with $26,879,000. or 49% of the $54,965,000. total inventory."

It would have been helpful to know the criteria used to determine the common characteristics among all of the items included in "Excess 2," but there were none to be found. Instead, the reader is left to guess. The case study closes with quantified inventory reductions, but doesn't mention any specific techniques that were used to achieve the results.

Then, a second case study is presented with no mention of the use of IQR but a mention of an inventory reduction technique: "a pull system for inventory replenishment was designed to replace MRP push methods." With a 65% reduction in inventory, it leads you to believe that this company didn't bother with prioritizing certain items, they just tried to reduce inventory across the board, which would be in conflict with a tenet from the whitepaper which states "Separate the vital few from the trivial many. Do not attempt to tackle every suggested 'defer' action."

So, as you might imagine, I was a little disappointed with this whitepaper. Maybe if you're smarter than I am, you can draw helpful conclusions for yourself by reading it firsthand. If you have that type of appetite, then go ahead and get your own copy at R. Michael Donovan & Co.'s website (registration required).

To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
Struggling To Find More Good Resources For Procurement Leaders?
Check Out Our Web Site's New Whitepaper Section At
http://www.NextLevelPurchasing.com/WPcharles

Tuesday, June 08, 2010

Is This The Reason The Economy Continues To Plod Along?

Despite all of the economic news that says the worst is behind us, let's face it: the economy isn't exactly back to full health. Unemployment remains near 10%. The stock market stumbles once it seems it has legs again. No one feels recklessly confident.

Why isn't the economy taking off? Wasn't there supposed to be "pent-up demand" that would put people back to work?

Well, I have observed things in multiple aspects of life that are showing a disturbing correlation.

First, at home...In February, we had a blizzard here in Pittsburgh. Record snowfall that month. Unfortunately, the insane weather took its toll on a number of homes, including mine and several of my neighbors'. Insurance companies declared it a catastrophe, so we were written out checks for repairs and our rates didn't go up.

Sounds like it would be easy to recover, right?

Wrong!

Neither I or my neighbors can get a contractor to complete the work! And it is four months later!

We have had people make appointments to give us estimates. Many times, the contractors don't show up. Those that do show up won't get back to us with estimates or to schedule the work.

There is a ton of business there for a contractor. But they are all too busy with their status-quo labor force to accept new business.

With nearly 10% unemployment, it would seem like a ripe time for these contractors to recruit good quality workers who will work cheap, but these companies seem to have no ambition to grow. They would rather turn work down than grow their business.

And this is not just in construction. My second example comes from Next Level Purchasing Headquarters. Our business is growing and we are ordering more from our suppliers. However, one of our suppliers who stands to gain from our growth told us that they "don't have the manpower" to handle our increased requirements.

Well, that's simple, right? Acquire more manpower! Our volume of business would justify it.

But, just like the construction contractors, this supplier has no interest in growing her business.

I know that I'm not the only one seeing this trend. Where is the entrepreneurialism? Where is the hunger? Isn't anyone motivated by the opportunities that are out there for the taking?

Unless we, as a business community, get more ambitious, I can foresee the return to 4 - 5% unemployment being a very, very slow journey.

To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
Next Level Purchasing . com

Monday, June 07, 2010

When To Request Supplier Setup Forms

Today's post continues a series of posts that go into more detail in the thinking behind some of the major points found in the 20-Point Proposal Evaluation Checklist. You can find the previous posts in this series here and here. Today's checklist item is...

Did the supplier provide the information necessary to be set up in the purchasing system?

Here's why this information is important to obtain in th RFP, not later.

I often see lower-level buyers request supplier setup forms to be completed by a prospective supplier while their managers are still trying to negotiate the last few pennies out of that supplier's price. Nothing says "you already have the deal" like being asked to submit a W9. Sure, you want to expedite the implementation process, but you want to do so without deleveraging your negotiation abilities.

Require all suppliers to submit their information with their RFP responses. Sure, you won't use all that you get, but it's better than tipping your hand during a procurement negotiation.

To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
Next Level Purchasing . com

Friday, June 04, 2010

The Worst Oil Spill In History: Are Suppliers & Supplier Management Practices To Blame?

Unless you've been living under a rock - and I mean no disrespect to anyone out there who may actually be living under a rock - you know about the continuing crisis with the BP oil spill in the Gulf of Mexico. Eight hundred thousand gallons of oil have been spewed into the water each day since an April 20 explosion on an oil drilling platform.

With the catastrophe continuiung and garnering significant attention from everyone from the international news media to the President of the United States, people are looking for someone to blame. And most are pointing their fingers right to the top executive of BP for overseeing a process that has led to such a massive disaster.

But who is the top executive of BP blaming?

It sounds like suppliers and the BP team responsible for working with those suppliers.

In today's Wall Stret Journal, BP Chief Executive Officer Tony Hayward published a letter explaining how BP is trying to curb the crisis in the Gulf. In this letter, he cites three "lessons" learned from the crisis. The third lesson is the one that will get procurement professionals' attention.

He writes that "the industry should carefully evaluate its business model. For decades, exploration and production companies have relied on outsourcing work to specialized contractors...But the question after the Deepwater Horizon accident is how all involved parties—including exploration and production companies and drilling contractors—can work even more closely together to better understand and significantly reduce the various risks associated with drilling operations."

According to an article on comcast.net, "the doomed Deepwater Horizon exploration rig...was owned by Transocean Ltd, while Halliburton Co was working to seal the well when the blowout occurred."

Hayward appears to be playing the "when you look bad, blame the vendor" game that I've written about so many times here on this blog. The upside that I see from a procurement standpoint is that Hayward's statement indicates that depending on suppliers will continue, but that a more collaborative approach can be taken.

That is a small silver lining in a very dark cloud (or body of water, in this case), but it is better to have procurement practices improve as a result of a catastrophe than to have a catastrophe followed by no changes made in the way things are done.

To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
Next Level Purchasing . com

Thursday, June 03, 2010

Have Your Suppliers Offered Value-Creating Or Cost-Saving Ideas?

Today, I am going to continue on a series of posts I started last week in which I began providing a deeper explanation of some of the bullet points from Next Level Purchasing's 20-Point Proposal Evaluation Checklist. In this post, I'll be digging into the line item labeled "Did the supplier offer value creating or cost saving ideas?"

Procurement professionals have been accused of focusing on price and not recognizing differences in supplier offerings. Sometimes, this is a supplier's shallow, last-ditch attempt to win the business. Other times, it is absolutely spot-on. To make sure that you understand the value (i.e., opportunity for higher profits) that your supply base can deliver, always ask for value creating or cost savings ideas.

And that is just a first step. It disappoints me that procurement professionals go as far as asking for such ideas, but then do nothing when they receive them. In many instances, there are profit-improving opportunities placed literally right under their noses that they ignore. Sure, some of these supplier ideas would be time consuming and costly to implement and may be a distraction from more mission-critical projects, but some can be implemented relatively easily and the financial benefits would be measurable.

Are you requesting - and using - ideas from your suppliers?

I sure hope so.

To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
Next Level Purchasing . com

Wednesday, June 02, 2010

Whitepaper Wednesday - How To Have A Successful Business Career

Welcome back to another installment of Whitepaper Wednesday here on the Purchasing Certification Blog. This week, I am going to keep things general (rather than procurement-specific) by reviewing a whitepaper entitled "The Universal Principles of Business Achievement" from IdeaBridge.

This short whitepaper essentially is just a compilation of two lists: "The Four Key Determinants of Success in Business" and "The Universal Qualities of Successful Business People." Though each of the four key determinants has several bullets of advice, here are a few of my favorite...
  • Under Determinant #1 - Have A Great Attitude, the whitepaper says "Don’t say, 'It’s not my job!' Just jump right in to help. Be the one to get it done!" While I don't advocate doing everyone's job for them, I've always found it funny is that when you hear someone say "It's not my job," the task at hand almost always is part of that person's job description.
  • Under Determinant #2 - Have A Strong Work Ethic, the whitepaper says "Have a laser-like focus on the critical objectives, the ‘Vital Few’." I very much agree with this. If you get 75% of all of your tasks done, you have left the most important things incomplete. If you have a dozen things to do, it is usually best if you complete your top priority in its entirety even if that means that your bottom priority didn't get started.
  • Under Determinant #4 - Stay Out of Trouble, the whitepaper says "Maintain absolute integrity in all that you do. Period."

In the second list, one bullet point did stick in my craw: "8 hrs/day=paycheck. 10 hrs/day=career. 12-15 hrs/day=Independence!" Yes, if your management sees you come in exactly on time (or a little late) every day and leave exactly on time (or a little early) every day, you are seen as being there just for earning a paycheck and not to make a difference and advance your career and the company. Yes, if you work 10 hours a day, you demonstrate that you are committed to your career and your employer. But 12-15 hours a day is far from independence if you are not the owner of the company unless you consider independence to mean that you are independent from a family, social life, or hobbies. Even if you have a passion for your work or even own the company, I think that everyone needs a balanced life with at least one interest outside of work.

That was my biggest complaint from the second list. I generally agree with the rest and feel particularly passionately about the bullets under "11. Be Teachable and Admit When You Don’t Know" because it lists values that I teach to my kids.

So, if you feel like your career needs some quick inspiration, you may find this whitepaper thought provoking. You can download your own copy from IdeaBridge's website.

To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
Struggling To Find More Good Resources For Procurement Leaders?
Check Out Our Web Site's New Whitepaper Section At
http://www.NextLevelPurchasing.com/WPcharles

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