Friday, April 29, 2011

Improving Your Procurement Team's Skills Requires This Commonly Forgotten Element


Here at Next Level Purchasing, we train the procurement departments of the world's largest companies as well as plenty of mid-sized and small companies, too. Having the large client base that we do - 1,000+ companies as customers - we see a lot of patterns between the companies that maximize their skill development efforts and those that leave room for improvement.

Do you know what one element is a common difference between those two groups?

Leadership.

Are you wondering what leadership has to do with procurement training?

A lot actually.

Let's talk about those companies that leave room for improvement first. Beware - these traits may apply to you and you may have no idea how self-defeating they are!

These companies typically commit to having their team members trained in a given year, just like their more successful counterparts do. That's noble.

But those companies that leave room for improvement neglect their leadership responsibilities. They fight for an annual training budget, sure. But then they send a soft message to their people to "go out and use" that training budget. And how that budget is used is left up to each individual team member.

There are no topics strategically selected by leadership to ensure alignment with corporate objectives.

There is no time line set forth.

There are no efforts to keep progress visible and team members accountable.

And you know what happens?

The training budget doesn't get used. At least not until the last minute when everyone crams procurement training into their busy end-of-year schedule when the environment is far from conducive to learning and implementing new strategies. Procurement team members don't improve their skills. Results never get better.

In these cases, the problem is clear: the leader didn't lead. Despite the best intentions and knowing that better skills equals better results, the leader didn't lead.

A former co-worker of mine used to say "If you're leading and no one is following, you're just taking a walk." So, Mr. or Mrs. Director of Procurement: when it comes to improving the skills of your team, are you leading or are you taking a walk?

Here's what leading looks like...

  • The leader will be involved in deciding what topics each individual needs to be trained on. Whether they are the same topics for every team member or individual topics customized for each team member's needs, the leader is involved. The leader ensures that the procurement training selected pushes the department in the right direction and isn't just training for training's sake.
  • The leader decides the time line. If you leave it up to team members to find a "convenient time" to participate in training, do you think they will find that time? Do you think they commonly come to a part in the day where they say "Wow! I have absolutely nothing to do for the next several hours, days, or weeks. Maybe now would be a good time for procurement training?" Guess what. It doesn't happen.
  • The leader maintains visibility of training initiatives. Whether it is by using a sophisticated online tool like Next Level Purchasing's real-time "Manager Check" tool or simply having an admin maintain a weekly spreadsheet, the leader is always monitoring progress of the procurement training initiative throughout the year.
  • The leader holds the team accountable for training progress. The team knows what they are supposed to be trained on and when. Are they sticking to the plan? In other words, are they following you?
I would love to report that 100% of procurement professionals are self-disciplined enough to select appropriate training, get it, and apply it. Sadly, the percentage is less than 100.

Like any other worthwhile initiative, sometimes a little leadership is required for the initiative to be a success. Follow the steps above and your procurement team will follow you.

Unless, of course, you're comfortable just "taking a walk."

To Your Career,
Charles Dominick, SPSM, SPSM2
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, April 28, 2011

The Procurement World Breathes a Sigh of Relief...


Earlier this year, I posted about pending legislation in the USA that would "require businesses to file a 1099 form for every supplier with whom they spend $600 or more per year," irrespective of whether a supplier was a sole proprietor or a corporation. I had feared that this would compel organizations to push supplier consolidation efforts past practical limits and procurement departments would be pressured to avoid buying from niche suppliers, even when there was an advantage to doing so.

Well, thankfully, intelligence prevailed in the legislative and executive branches of the US Government. Earlier this month, President Obama signed into law the "Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011" which repealed the onerous requirement.

Hopefully, this will take one needless distraction out of the supplier selection process. I know that I'll sleep better at night.

To Your Career,
Charles Dominick, SPSM, SPSM2
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, April 27, 2011

Whitepaper Wednesday - Purchasing Salaries in 2011


Welcome to another edition of Whitepaper Wednesday here on the Purchasing Certification Blog.

How does your salary compare to the average purchasing salary in the profession? In what part of the world are purchasing professionals paid the highest?

How much of an effect does experience, education, and certification make on salaries? Is getting promoted to a supervisory purchasing position worth the additional responsibilities?

What industry has an average purchasing salary over $100,000? What industries pay veritable poverty-level salaries to purchasing professionals?

If you're curious to see the answers - some of which are shocking - to these questions and others, then you need to download a copy of the new Next Level Purchasing Association whitepaper "Purchasing & Supply Management Salaries in 2011." This whitepaper is FREE to members of the Next Level Purchasing Association. And, if you're not a member, you can join the Next Level Purchasing Association instantly for FREE at http://www.NextLevelPurchasing.com/free.html!

Once you're a Next Level Purchasing Association member with a username and password, just log in at http://www.NextLevelPurchasing.com/login.html and go to the "What's New" tab to get your copy and satisfy your curiosity!

To Your Career,
Charles Dominick, SPSM, SPSM2
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

Tuesday, April 26, 2011

Green Business Hypocrisy? (You gotta see this picture)

I might be a little jaded. But every time I see a business claim that it is been "green" (i.e., environmentally responsible out of the goodness of its heart), it just so happens that the business is doing something self-serving and primarily for profit that also happens to use less paper.

For example, statements like "We're going green and will be sending your billing statements by email" irk me. I think a more truthful version of this statement would be "Look. Our CEO needs to boost our stock price so he can increase his net worth. We're cutting costs by emailing, rather than printing and mailing, your billing statement. This also uses less paper which is good for the environment but, we gotta be honest with you, the real reason we're doing it is to boost profits."

There's nothing wrong with boosting profits. It's what you should do in business.

But must we use the green claims in such an almost sacrilegious way? Do marketers think we're stupid and that we'll support anything that mentions a green benefit?

They must. Because how else could you explain a company putting a promotion to "Use less resources, protect more planet" on the back of a EIGHT HUNDRED AND FORTY SIX PAGE CATALOG?!?!?!?!



To Your Career,
Charles Dominick, SPSM, SPSM2
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, April 25, 2011

Why Suppliers Don't Give You The Best Proposals Possible (And What You Can Do About It)


Do you know what suppliers fear the most about writing proposals for you? Do you know what they assume will happen if they give you a proposal that describes how they can help you minimize cost and maximize value?

I believe that I do.

They worry that they will invest time and resources into crafting a perfect proposal and you will take their ideas, hand them off to their competitors, and give the business to the supplier willing to charge the absolute lowest price regardless of whether or not they came up with the cost-saving/value-creating ideas or if they can even execute those ideas. And the supplier that did come up with those ideas will not get the business, thereby wasting their investment in creating a buyer-benefitting proposal and possibly compromising their own competitive advantage and getting absolutely nothing in return.

You may say "I would never give a supplier's ideas to a competitor. That would be unethical!"

But how is the supplier to know that?

Don't expect them to assume that. They won't.

It can be helpful to put a blurb in your RFP saying something like "[Company Name] will make its supplier selection by identifying the proposal with the optimal balance of measurable value creation, cost reduction, and risk minimization. Therefore, [Company Name] encourages you to propose ideas that will contribute to these goals. You can rest assured that [Company Name] will not share your responses with other suppliers."

Just that little bit of reassurance can be the difference between getting proposals that serve as a roadmap for the highest potential positive profit impact and getting proposals that give you the minimum amount of information possible.

To Your Career,
Charles Dominick, SPSM, SPSM2
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, April 22, 2011

Japan Earthquake/Tsunami Supply Chain Effect Begins To Hit Financials

Earlier this week, BBC News reported that Sony Ericsson would be delaying the release of its Xperia smart phone due to supply chain disruptions caused by the devastating earthquake and tsunami in Japan. The above-linked article points out that with "competition from the iPhone and Blackberry, the delay might be costly for the company."

Has the full impact of the Japan supply chain disruption been calculated?

It doesn't appear so, or it is at least being kept a secret by Sony Ericsson. Even though its quarterly earnings release listed "some supply chain disruption due to the Japan earthquake" as one of the top bullet points, Sony Ericsson did not divulge specifics. Their CEO was simply quoted as saying "the Japan earthquake made it a challenging quarter operationally and we are experiencing some disruptions to our supply chain. We will continue to evaluate the situation.”

Both sales and profits were down over the same period last year.

To Your Career,
Charles Dominick, SPSM, SPSM2
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, April 21, 2011

How Does Your Purchasing Salary Compare?

The Next Level Purchasing Association invites you to attend the FREE webinar, "Purchasing & Supply Management Salaries in 2011" on Tuesday, April 26, 2011, at 11:30AM Eastern US Time.

In this free webinar, you will learn how your purchasing salary is impacted by:

* Years of experience

* Education/Certification

* Your organization's size and industry

* Where you live

In this 45-minute webinar, we will cover all this, average purchasing salaries in multiple categories, and more. This is a webinar you certainly won't want to miss!

The webinar is limited to Next Level Purchasing Association members only but it is FREE to become a member! Here's how to register for the webinar:

If you're already a member: Log in to the association at
http://www.NextLevelPurchasing.com/login.html and navigate to the "Webinars" tab. There you'll find a registration link, be sure to enter a valid email address as attendance details will be sent to you by email.

If you're not yet a member: Sign up for your free membership in the Next Level Purchasing Association at http://www.NextLevelPurchasing.com/free.html. After doing so, you'll receive an email with information about how to log in. After logging in, navigate to the "Webinars" tab. There you'll find a registration link, be sure to enter a valid email address as attendance details will be sent to you by email.

Registration is free but may be limited, so sign up soon to ensure access to this event. I hope that you will join me in next week's webinar!

To Your Career,
Charles Dominick, SPSM, SPSM2
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, April 20, 2011

The NLPA Dedicated Member of the Month for April 2011 Is...

Every month, the Next Level Purchasing Association (NLPA) recognizes a purchasing professional who has made impressive progress in learning more about his/her field. We are excited to announce that the NLPA Dedicated Member of the Month for April 2011 is...


Brian Flanagan, SPSM, a Senior Buyer for Topco Associates in Skokie, Illinois, USA. Brian completed all six Senior Professional in Supply Management® Program classes during the month of March! Brian also passed the SPSM® Certification exam!

Next Level Purchasing and the procurement community around the world congratulate Brian and his dedication to having a more successful purchasing career!


To Your Career,
Charles Dominick, SPSM, SPSM2
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, April 18, 2011

Strategic Sourcing Goals (Note The Plural)

I hope that you have enjoyed the article "The 4 Missing Strategic Sourcing Goals."

"The company needs to save money."

"Strategic sourcing saves money."

"Let's do strategic sourcing."

Such is the thought process behind many a strategic sourcing initiative since the phrase was coined. But, all too often, the strategic sourcing label has been applied to sourcing activities that were anything but strategic. If a sourcing process' lone goal is to save money - or, more specifically, to reduce purchase prices - it is not a strategic sourcing process.

Imagine a sourcing process that leads to a 1% price reduction but the new supplier has such poor tech support that it leaves everyone in the buying organization frustrated, distracted from their core work, and suspicious of everything that the procurement department will do for the next three years. Is that strategic sourcing?

Imagine a sourcing process that leads to a 2% price reduction but the new supplier can't deliver on-time, forcing the buying organization to increase its inventory levels by 20% just so it doesn't get caught in a stockout situation. Is that strategic sourcing?

Imagine a sourcing process that leads to a 5% price reduction but the new supplier ships so many defective items that the buying organization's production line shuts down and it has to make emergency purchases from the just-ousted incumbent supplier. Is that strategic sourcing?

None of those examples are strategic sourcing. Sourcing, maybe. Strategic sourcing? No.

Don't let your own activities be the next example. Source strategically and address all of the strategic sourcing goals, not just saving money. Because when employees spend more time than necessary on tech support calls, or inventory has to be increased, or production lines shut down, any savings may be more than offset by additional costs.

That's not strategic. That's not good.

To Your Career,
Charles Dominick, SPSM, SPSM2
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, April 13, 2011

Procurement Debacle Led to Violence in Nigeria

In Nigeria where, according to BBC News, elections have historically been "marred by widespread fraud and intimidation," citizens were looking forward to voting for their future elected leaders on April 2. Those elections were postponed at the last minute and such postponement elicited a very angry response from Nigerian voters.

Why were the elections postponed?

A procurement blunder of biblical proportions - the voting materials didn't arrive from vendors in time for the elections! In announcing the postponement, Independent National Electoral Commission (INEC) chairman Attahiru Jega declared "It is an emergency" according to another BBC article.

This procurement failure has caused many Nigerian citizens to lose faith in their entire democratic system, as they are reportedly finding "it hard to believe any assurances [Independent National Electoral Commission chairman Attahiru Jega] gives, after he expressed confidence last week that all would be well."

Worse yet, this debacle led to violence. According to Indepth Nigeria, the botched elections "claimed three lives and several people were also wounded on Ekeremo Creek in Bayelsa State...The incident occurred when some youths exchanged gun fires with men of the Joint Task Force." Additionally, an official presiding over elections at a polling booth "was nearly lynched by the irate crowd [and] regretted that the police officers posted to the polling unit were not armed," according to New Nigerian Politics. "The security operatives, who tried to rescue him from the angry crowd, were, however, overpowered."

All because of poor procurement performance.

Of course, officials are blaming vendors and seeking revenge. According to New Nigerian Politics, INEC "has commenced moves to penalize some of its vendors whose failure to supply electoral materials resulted in the postponement of elections."

The BBC reports that many Nigerians are "wondering how such a fiasco could have occurred and how the contract for printing the ballot papers and result sheets was awarded, and to whom." However, INEC is being protective of the identity of those vendors. Jega's Chief Press Secretary said that INEC "was adhering to the terms of the contractual agreements between it and the vendors which stipulates that INEC should not engage in a media trial before meting out the appropriate penalty to the vendor involved" and that disclosing the name of the vendors to the public "will not help the process of penalising anyone who has breached the agreement.”

Everyone who works in procurement makes mistakes. I'm just hoping that no mistake you ever make turns into a disaster like the 2011 Nigerian elections!

Hat-tip to Hassan Mohammed for introducing me to these developments.

To Your Career,
Charles Dominick, SPSM, SPSM2
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

Tuesday, April 12, 2011

The Economy: An Accelerating Pattern of Bursting Bubbles?


Will you promise me you won't click on any of the following links until I tell you it's OK? Great. Thanks.

Check out these headlines:

"Gas pushing $4-gallon"

"Rising food prices: Cause for concern"

"High commodity prices are hard to swallow"

These were from articles published this month right?

Wrong.

These were from articles published in 2008. Right before the Great Recession took hold of us.

It doesn't seem that long ago, does it?

And just as the world has started to feel that we've recovered from that recession, could rising prices push us to the brink of another one?

It is kind of scary to think that once money starts flowing again, sources of fluidly-priced commodities raise prices to uncomfortable levels. If you need further proof of rising prices, just check out the price index graphs in the latest edition of Leading-Edge Supply Management Magazine, available after logging into the Next Level Purchasing Association.

It might just be me, but it is starting to feel like we're in yet another one of those economic "bubbles." And it feels like each of these bubbles is followed by a stock market crash and a recession.

Could we be at that point already?

OK. Now it's fine to click on those links. Or just look at your favorite news site's archives for the past month. You're likely to find stories that are nearly identical to those from 2008.

To Your Career,
Charles Dominick, SPSM, SPSM2
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, April 11, 2011

If Procurement Doesn't Teach Ethics To IT People, Who Will?


This post could apply to any department in any organization. I'm going to pick on IT because IT people at all levels have vendor interaction.

Let's say an IT person is offered an item of nominal value from a vendor - a logoed laptop bag, for example. Or is invited to lunch. Or is invited to a cultural event.

I would guess that most would accept the offers.

But should they?

Well, let's explore this for a second...

Sure, most of us in the procurement field feel that accepting a gift of such high value from a vendor is not ethically proper. Maybe we've had procurement training that covered ethical matters. Or there's a policy. Or we've just heard conversations in the procurement department about what's inappropriate and what's not.

But do you think IT professionals hear about ethics as much as procurement professionals do?

Based on my experience interfacing with IT professionals, I would say "no way!" Most have some degree of ethical understanding, but probably don't concern themselves with the finer points of ethics.

Some have the attitude that, as long as accepting a gift from a vendor was not the reason a buying decision was made, everything is fine - no ethical line was crossed. And, in the spirit of things, that argument may sound logical.

But there are some things that this mindset doesn't take into consideration:
  • The fact that we never really can control what influences us subconsciously
  • The fact that accepting gifts may create the perception that someone is being "bought" by a vendor
  • The fact that accepting gifts increases vendors' overhead costs which, in some form, get factored into higher pricing to eventually be paid by the buying organization
  • The fact that accepting gifts contributes to a culture where everyone thinks it's OK to accept gifts and the proliferation of such behavior will likely lead to some decisions being made with total disregard to ethics at some point
But IT professionals don't learn that stuff in college. How, then, will they learn the finer points of ethics. Who is supposed to teach them?

In my opinion, it is the procurement department's job to bring up the importance of ethics training to top management. And top management, in consultation with the procurement department, should take the lead in implementing enterprise-wide ethics policies and training.

That way, it's a company initiative requiring compliance, not a procurement initiative. Ethics is a business matter, not just a procurement matter.

However, if top management doesn't come through, a procurement department shouldn't sit idly. The procurement department should step up and take the lead.

It will be more challenging without top management driving the initiative, but allowing a vendor gift free-for-all should not be considered an option in any environment. Even in IT.

To Your Career,
Charles Dominick, SPSM, SPSM2
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, April 06, 2011

Automotive Resources International Becomes Newest Sponsor of the Purchasing Certification Blog

I am delighted to announce that Automotive Resources International (ARI) has become the newest sponsor of the Purchasing Certification Blog.

If you're unfamiliar with ARI, they are a major player in the fleet management services industry. And, over the past 10 years, fleet management has become an important new addition to many procurement departments' portfolios of purchased goods and services.

According to their website, "ARI delivers high-value solutions that improve the fleet customer’s business and bottom line." The company was founded in 1948 and has grown into "the largest privately-held vehicle fleet management services company in the world."

In terms of what they deliver to customers, ARI "pushes the envelope of innovation to solve complex vehicle fleet problems." They partner with their customers to "combine business insight and optimal lifecycle analysis, best-in-class services and high-powered technology to drive fleet vehicle efficiency up and costs down—unlocking all the performance and value customer vehicles can deliver."

Beyond its corporate image, I can share personal observations about ARI as I have collaborated with them several times over the past several years. They have a corporate culture that has a relentless focus on creating value for their customers. They have had a lot of stability in their management team. And that management team has what I see as an insatiable desire to get better and better and better.

All in all, I view ARI as a very impressive company. All of us at Next Level Purchasing are honored to have ARI among our sponsors.

Please help me welcome ARI as a new sponsor and visit their website at http://www.arifleet.com.

To Your Career,
Charles Dominick, SPSM, SPSM2
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

Tuesday, April 05, 2011

When A Manager Joins A Negotiation...

I hope that you have enjoyed the article "Join A Negotiation With Caution."

In the article, I gave managers three things to think about before joining a negotiation. I wanted to expand a bit on the first one: "Learn the obstacles to agreement from your team first."

It is a common manager mistake to assume that the non-price issues a buyer is haggling over are trivial and can easily be exchanged for a price reduction or just waived in order "to get the deal done." And this mistake can be a big one.

For example, at the instruction of the Legal Department, the buyer may be insisting that no changes be made to a certain contract clause. When the manager joins the negotiation, the supplier knows that the manager is there to get an ego boost for getting concessions and may say something like “I’ve been willing to reduce the price by 5%, but your buyer has been inflexible on this contract clause.” The careless manager will accept the price reduction without considering the ramifications of conceding on the contract issue.


What happens when the protection of that contract clause is needed months or years down the road? While it would seem like common sense for managers to meet with buyers in advance of a negotiation in order to identify what the issues will be and to prepare for the supplier's tactics, it is shocking that these meetings often never happen.

To Your Career,
Charles Dominick, SPSM, SPSM2
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, April 04, 2011

Announcing A Purchasing Association That's New, Exciting, & FREE


With this 1,000th post on the Purchasing Certification Blog, I am delighted to share with you news that will improve the lives of hundreds of thousands of purchasing professionals from throughout the world. Today, Next Level Purchasing has announced the launch of the Next Level Purchasing Association.

Archaic and self-serving traditional professional purchasing associations that provide lessening value at rising membership costs have a new standard to contend with as Next Level Purchasing revolutionizes the professional purchasing association model. The Next Level Purchasing Association (NLPA) aims to break the mold of traditional purchasing associations by offering all of the benefits of these associations through an all-online, more exciting, member-centric, and, most importantly, free format. No longer will companies or individuals have to pay $200 or more per head for the ‘privilege’ of association membership.

The Next Level Purchasing Association builds on the foundation of the Free Purchasing Resources Program, offered by Next Level Purchasing, which has evolved to include several additional components focused on providing more value at no cost. At its launch, the Next Level Purchasing Association had over 192,000 members representing more than 200 countries, instantly making it the largest purchasing association in the world.

With the creation of the Next Level Purchasing Association, purchasing professionals can now interact with hundreds of thousands of their purchasing peers from all over the world through the online networking area, get the latest articles in NLPA’s new online magazine Leading-Edge Supply Management, and manage their purchasing educational and certification pursuits all in one place. In addition, members receive a copy of the latest Purchasing & Supply Management Career & Skills Report, a subscription to the biweekly email newsletter, PurchTips, and access to both free monthly webinars and the Express Course “Managing Supplier Performance.”

"Today’s purchasing professionals understand that there should be appropriate value returned for each dollar they spend but traditional purchasing associations have failed to deliver that value for their members," said Charles Dominick, SPSM, SPSM2, President and Founder of Next Level Purchasing. "Beginning today, purchasing departments and their employees can get more membership value than they ever have and can stop paying the outrageous dues that they have become accustomed to."

Check out this video describing the features and benefits of the Next Level Purchasing Association...




Next Level Purchasing is a leading provider of online training for purchasing professionals. Its training includes the globally-recognized SPSM® and SPSM2® Certifications for world-class supply management success. Its services enable organizations to lower costs, support operations, and reduce risk by improving purchasing processes and expanding the capabilities of supply management organizations. Visit Next Level Purchasing at: www.NextLevelPurchasing.com.

Friday, April 01, 2011

Are Suppliers Undeterred By Ethics Policies?


Earlier this week, a friend of mine who works in a non-procurement department of a mid-sized company shared that he received tickets to a cultural event courtesy of one of his employer's vendors.

I joked that I really needed to speak with his company's head of procurement about implementing an ethics policy. My friend explained how his company supported his attendance - the event was a part of a multi-customer meeting with business value and his company did have an ethics policy and that policy permitted attendance. He also revealed that the invitation to the game included an ethics disclaimer.

An ethics disclaimer?

Yeah, some fine print that said about how no impropriety was meant and that the invitee is welcome to pay the vendor for the ticket if s/he wanted to.

Hmmmm...interesting!

I asked my friend to send the disclaimer to me to share with you. Its text appears below with names removed to protect the...innocent?

Attention: Government, Public Sector, Public Education/Healthcare Attendees

ETHICS DISCLOSURE

[VENDOR NAME] is pleased to provide attendance to the event above at no cost to government employees and officials when appropriate under applicable laws and agency policies. [VENDOR NAME] is committed to the highest standards of ethical conduct and does not intend to offer an inappropriate gift or create even the appearance of impropriety. The cost of the refreshments and/or logo items provided will be available without charge to attendees of this event. If your organization or local laws require waiver of or payment for items of value, [VENDOR NAME] is pleased to accept payment for any costs to facilitate compliance with gift and ethics requirements. Please refer back to the original invitation for the specific cost details for this event for additional information or assistance to comply with applicable laws and agency policies.

Is it just me or is the need to include a disclaimer almost like an admission that the vendor realizes it is pushing the ethical boundaries? What's your take on this?


To Your Career,
Charles Dominick, SPSM, SPSM2
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

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