Monday, October 31, 2011

Sourcing Tools

I hope that you have enjoyed the article "Are Advanced Sourcing Tools For You?"

This article came out of another great podcast with guest expert Jason Busch of spendmatters.com. Beyond just what's in the article, the 30 minute podcast also covers topics like developing financial justification for investing in advanced sourcing tools, how advanced sourcing tools can help procurement and its stakeholders get "on the same page," and how to properly evaluate some sourcing tools that your ERP system provider may have available.

All in all, if you're researching eSourcing beyond the reverse auction and basic RFx functionality, the podcast is a must-listen resource for you. You can download it for free from http://www.NextLevelPurchasing.com/supply-management-podcast.php.

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
www.NextLevelPurchasing.com

Thursday, October 27, 2011

The NLPA Dedicated Member of the Month for October 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 October 2011 is...

Henry Oraih, a Group Materials Auditor for ALLTERRAIN SERVICES GROUP (ATS) in Accra, Ghana completed all six Senior Professional in Supply Management® Program classes and passed the SPSM® Certification Exam during the month of September!

"After almost 15 years career in logistics & supply chain management and obtaining several qualifications, I realized that I need to expand my purchasing knowledge to adapt successfully to the rapidly changing business environment. I decided to enroll for SPSM® Certification and having completed the courses, I would say that it is one of the best decisions I have made in my entire career. All the course materials were exceptionally detailed that I just could not stop reading. The program is great and well worth the time and money!

I am privileged and proud to be a member of Next Level Purchasing Association and SPSM2® Certification is next on my agenda."
Next Level Purchasing and the procurement community around the world congratulate Henry 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
www.NextLevelPurchasing.com

Wednesday, October 26, 2011

APICS vs. ISM: A 10-Point Conference Comparison

I spent the past three days at the annual conference of the American Production and Inventory Control Society (APICS). Earlier this year, I had attended the annual conference of the Institute for Supply Management (ISM). This was the first time that I attended both conferences in the same year.

At lunch yesterday, I was asked by a fellow attendee how the two conferences compared. I rattled off several points of comparison and thought that you may be interested as well. So, here it is: a 10-point comparison of APICS' and ISM's conferences!

Disclaimer: Some people consider Next Level Purchasing to be a competitor of ISM and, to a lesser extent, APICS. I have made the effort to make this a balanced review, giving credit where credit is due to both organizations. Keep in mind that some elements of this review are inherently subjective, just like anyone else's review would be. For example, what is a "good" workshop to one person may be a "poor" workshop to another. Who is right? Neither - it is an expression of two opinions, not facts. Me writing that a workshop is "poor" is me expressing my opinion, not an unfounded attempt to discredit a competitor. Like I said, credit is given when due so any constructive criticism is necessary for a truly balanced review.

Size of crowd: Based on the hosts' claims and my own personal observations, I'd estimate the ISM crowd at around 2,000 attendees and APICS a little less with around 1,500.

Composition of crowd: Despite the fact that APICS and ISM get compared a lot, I found that the crowds were drastically different when it came to the positions held by the attendees. APICS seemed to be mostly planners, inventory managers, operations managers and directors, logistics coordinators, and others on the more blue collar end of the supply chain. ISM attracted mostly buyers, purchasing managers, and purchasing directors. While ISM seemed to be equally male and female, APICS was decidely more male - 70 - 80% by my estimation!

Topics of workshops: The topics matched the attendees' roles at both conferences. APICS' workshops were very deep in operations management and blue collar supply chain with very little attention given to purchasing, sourcing and supplier management. Conversely, ISM's workshops mostly centered around purchasing, sourcing and supplier management with little to no attention given to operations management or the areas of supply chain beyond the receiving dock.

Organization: Time for a little "constructive criticism" for APICS. APICS' audience lacked some serious etiquette and APICS did nothing to help. In many of the sessions I attended, there were dozens of people standing in the back. Yet, there were a good number of empty seats in the middle of rows. Instead of encouraging attendees to move to the middle and give some of the standees the opportunity to snag an end seat, APICS did nothing and let their attendees - who paid handsomely to be there - stand for 75 minutes! Shortly after one session started, I mentioned to the APICS coordinator that he should encourage people to fill the empty seats so almost everyone can sit. He replied that it's too late because the presentation started. Pssssshhht, I say! A classic non-profit move - no care for the customer. Then, in every session I attended, as soon as the speaker got to the Q&A slide half the audience rudely bolted for the doors! Not only was that unprofessional, but these people missed what are sometimes the best parts of presentations! APICS, help your people out and teach them two aspects of seminar etiquette: (1) fill in the seats in the center when you have a packed room and (2) don't leave until the speaker says "thank you" and everyone claps.

Professionalism of visual atmosphere: Despite the lack of etiquette among attendees and APICS' abject lack of help for them, the professionalism of visual atmosphere is where APICS put ISM to shame. From the signage to the consistent look of each presentation, APICS projected a professional brand. ISM gave the impression that it picked its "i-dotters" and "t-crossers" and marketing people right off the street. As an example, here's a photo that I snapped at the ISM conference. Notice anything wrong with the spelling of "excellence?" Kind of an ironic word to misspell, don't ya think?


Size and selection of workshops: APICS had fewer sessions with bigger audiences (200-300 people) whereas ISM had more sessions with smaller crowds (50-75).

Exhibitor-friendliness: Next Level Purchasing did not exhibit at ISM but did exhibit at APICS, so perhaps it is unfair for me to compare the two here. But I will share our experience as a vendor. And that experience at APICS? Ugh, horrible! First of all, they really had no dedicated time or special "draw" for people to be among the exhibitors in the exhibit hall. The exhibit hall was on a separate floor from all of the workshops and the only excuse to be in there was because you had to walk through the exhibit hall on the way to lunch. Not only that, but the path through the exhibit hall to the lunch area was not through the middle of the exhibitors! It was down the far end of the booth area, where APICS had its books. So that aisle got a lot of traffic but the remaining aisles got comparatively little traffic. Actually, those remaining aisles not only got little traffic, they got little light - the convention center being a "green" building uses a lot of natural light instead of artificial light. Well, in cloudy October, there's not a whole lot of natural light in Pittsburgh! Many booths were in the virtual darkness. In comparison, ISM had many scheduled events (e.g., continental breakfast, dessert, networking receptions, etc.) right in the exhibit hall during times when there was nothing else going on. The exhibitors' fees cover much of the cost of a conference. It was a shame they got shafted at APICS.

Diversity of speakers: I have to give APICS some props here. APICS had a great variety of speakers including practitioners, consultants, and professors. ISM was mostly practitioners except for a few consultants who are part of the "old boys network." APICS was definitely more consultant friendly, which I like. While a practitioner can tell you what worked well in one situation - and that's valuable - s/he usually doesn't put much thought into what can make their success transferable to other organizations. On the other hand, consultants can experience success in multiple organizations and, therefore, understand what the true common threads of success are and what things need tweaked to fit other organizations' cultures. For example, one speaker consulted on something like 41 ERP implementations. I find that more helpful than a practitioner who may have succeeded at one and thinks that his/her methods will work everywhere without an explanation of what needs to be adapted for slightly different situations.

And now the aspect you've all been waiting for...

Quality of workshops: Frankly, both APICS and ISM were hit and miss - some bad sessions, some OK sessions, and just a couple of nuggets. I've already written about the highlight of ISM's conference, so I won't regurgitate that here. There were two presentations that absolutely rocked at APICS. First, Gary Smith, Supply Chain Operations Director for New York City Housing Authority, gave an excellent presentation of cost savings through sustainable initiatives using a total cost modeling approach. And, second, there was Michael Martin, Global Supply Chain Planning Strategy Manager for Stanley Black & Decker, who gave an absolutely incredible presentation on multi-echelon inventory optimization principles. He was such a rockstar of a speaker that he had a large crowd around him waiting to chat with him after the presentation. I waited 20 minutes and gave up on meeting him because I had another session to attend. He was that good.

Overall: Given the price of these conferences - which is more than the cost of earning the SPSM® Certification which will serve your career for years, not days - you'd expect that they would be great. Unfortunately, you only get one or two truly good workshops at these conferences and have to sit through average or worse sessions the rest of the time. That being said, hey, it's like a company-funded vacation for just about all attendees, so you won't hear them complain. But that's not cool - the companies funding these conference passes deserve better. I'm thinking that it's time to bring consistently high quality education to supply chain conferences. With over 220,000 members, the Next Level Purchasing Association is the largest purchasing association in the world. Even though we have focused on being modern and all online, perhaps it's time to show these old fart associations how it should be done. I'm thinking that you should keep your eyes and ears peeled for an NLPA conference announcement in 2012 or 2013...

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
www.NextLevelPurchasing.com

Friday, October 21, 2011

Prospective Suppliers: Why Do You Think What You Think About Them?


When considering doing business with a prospective supplier, many times those of us with procurement decision-making authority have certain impressions of that supplier.

Maybe we think they're big. Maybe we think they're good. Maybe we think they're expensive. There are almost an infinite number of adjectives to describe how we may perceive a supplier.

But have you ever stopped to think why you think what you think?

Collectively, suppliers spend a gargantuan amount of time and money to influence their prospective customers' perception of them. Many of them work with ad agencies who know all of the psychological triggers associated with creating the desired perception. That's called branding.

So, does it work?

Do you think in a way that the supplier has tried to make you think?

How much of your perception is based on what the supplier communicates vs. what you find independently?

Is your perception accurate?

What makes you think that a supplier is big?

What makes you think that one supplier is more trustworthy than another?

Think about some well-known suppliers that you are not currently doing business with. I'll list a few to get your brain started, although you may be doing business with some of them:
  • Ariba
  • Grainger
  • Dell
  • IBM
  • AT Kearney
  • Staples
  • Apple
  • Waste Management
  • Xerox
What's your impression of each company you're NOT doing business with? That's a rhetorical question, you don't have to post an answer (although you're welcome to if you want).

Isn't it interesting that you have certain perceptions of these companies. Now, where does that perception come from? Does it come from:
  • Advertising?
  • Word of mouth?
  • The press?
  • Past experience?
  • Your research?
  • Something else?
  • A combination of things?
Or do you really not know why you have the perception that you have?

It's interesting to ponder, isn't 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
www.NextLevelPurchasing.com

Wednesday, October 19, 2011

Whitepaper Wednesday - Procurement Team Certification

Welcome to another installment of Whitepaper Wednesday here on the Purchasing Certification Blog. Today, I'll be reviewing a whitepaper entitled "Procurement Team Certification: 5 Benefits That Procurement Leaders Can't Afford To Ignore" from Next Level Purchasing.

Procurement transformations are being done everywhere. New leaders are coming in, deciding that things need to change, and setting the wheels of procurement transformation in motion.

These procurement transformations are anything but simple. They often involve implementing new technologies, hiring people from the outside, and virtually starting from scratch in terms of setting goals and establishing KPI's. In short, it takes many things to make a procurement transformation successful.

One of the components of procurement transformation with arguably the most potential for improving business results is procurement team certification - getting every member of the procurement team certified. However, with the veritable tornado of activity surrounding new technologies to be implemented, new processes to introduce, new people to hire, and new goals to set, not every procurement leader has enough time to explore the benefits of procurement team certification and, as a result, fail to ask themselves questions like:
  • How will procurement team certification improve relationships with management and stakeholders?
  • What is the financial payoff of procurement team certification?
  • What changes in employee performance can result from procurement team certification?
  • How will procurement team certification affect relationships with the supply base?
  • What effect on the procurement leader's brand will procurement team certification have?
This whitepaper goes into detail in answering all of these questions and more. It's a straight-to-the-point guide for any procurement leader who needs to quickly understand what procurement team certification can bring to the table for a procurement transformation.

You can download your own copy of the whitepaper from the Next Level Purchasing website (registration required).

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
www.NextLevelPurchasing.com

Monday, October 17, 2011

Performance-Focused Negotiation

I hope that you have enjoyed the article, "How To Negotiate When 'Time Is Money'."

The article gave an example of how you can negotiate in order to give your supplier the incentive to deliver on time. Of course, on-time delivery is not the only aspect of good supplier performance, so I'll use this post to provide a couple more examples...

"What you've proposed is what we consider a premium price. We usually push for rock bottom prices. However, we'd be willing to pay a premium price for premium performance. Here's what we propose: you reduce your price by 10%; however, if your deliveries conform to the 4 parts-per-million defect rate that you promised, we'll pay the price in your proposal."

"What you've proposed is what we consider a premium price. We usually push for rock bottom prices. However, we'd be willing to pay a premium price for premium performance. Here's what we propose: you reduce your price by 10%; however, if you respond to all service calls within 10 minutes as you promised, we'll pay the price in your proposal."

The point I'm trying to make with the above-linked article and this post is that you should never approach a negotiation without considering the criticality of supplier performance and how you might be able to negotiate creatively to assure - and not decrease the percentage chance of - satisfactory performance.

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
www.NextLevelPurchasing.com

Friday, October 14, 2011

Free Webinar on 10/20 Will Help You Increase Your Productivity

* Do you formulate goals only to get sidetracked by a busy life?

* Are you living life unfocused and overwhelmed?

* Do you, often times, wish you had more time to complete tasks?

* Would you like to identify steps to minimize and ultimately eliminate procrastination?

If you answered "yes" to any of these questions, sign up for this month's Next Level Purchasing Association webinar. In this webinar, you will join Dr.Renee Galloway to identify time tested tools and strategies that can help you achieve the satisfaction of personal accomplishment by increasing personal productivity. Dr.Galloway is the author of Done! Prioritize, Plan and Perform to Accomplish Your Goals and has 15+ years as a Supply Chain Management/Supplier Diversity Professional.

This webinar is free to all members of the Next Level Purchasing Association (NLPA) and membership in the NLPA itself is free and instant.

Here's how to register for the webinar:

If you're already an NLPA 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 an NLPA 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 us for this exciting 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
www.NextLevelPurchasing.com

Wednesday, October 12, 2011

What Type of Personality Does A Procurement Leader Need?


Who do you think of when you think of business leaders? Do you think of loud, charismatic people like Donald Trump? Or do you think of more reserved, almost nerdy people like Bill Gates? Or do you think of both types?

Is there one right personality for good business leadership? Or, to be specific to our profession, is there one right personality for good procurement leadership?

Personally, I've seen both types succeed. And I've seen both types fail. But I read an interesting article in Kelly Services' SmartManager newsletter today that gives some insight into what conditions are necessary for both types to succeed.

According to the article, a study of a chain of stores revealed that stores with the "combination of extroverted managers and relatively passive employee groups achieved high profits. However, those stores with proactive employees, when managed by introverted people, earned equally impressive bottom lines." The study also discovered that stores earned "lower profits when extroverted managers were supervising proactive employee groups."

Essentially, the point of the article was that either type of leader can succeed if their underlings collectively have the type of personality most conducive to the leadership style. Certainly good news, especially if you ever worried that your lack of Trump-ish charisma may limit your success.

A clear implication, however, is that, regardless of your leadership style, you have to be good at hiring the right people. While I personally may not be as strong as I'd like to be in every skill area, one thing that I consider a core competency of mine is my ability to hire great people.

When you're good at choosing a team, so much takes care of itself. Regardless of whether you're more like Trump or more like Gates.

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
www.NextLevelPurchasing.com

Friday, October 07, 2011

Is Procurement's Hypocrisy Why Internal Customers Refuse To Cooperate?

Strategic goals of a typical procurement department include things like reigning in more spend categories, reducing maverick buying, and getting involved earlier in the product development and procurement process. These are among the more challenging procurement goals because internal customers are often resistant to earlier, more, or even any procurement involvement in the responsibilities that they have historically handled.

Procurement departments typically try to overcome such obstacles by explaining what their strengths are: procurement can identify all the alternatives and then lead a well-defined process to select the best option. And, at the end of the day, the company will end up with better quality, lower cost, and minimized risk.

Instead of doing things the way they've always been done, procurement departments encourage internal customers to really think through things with an open mind and do everything the best way using the best available information at the current point in time. Sounds good.

But does the procurement department eat its own cooking?

Think about the things your procurement department spends its discretionary budget on. Does your procurement department apply the same strict process to those purchases?

Maybe it does. But I see plenty of procurement departments make at least two decisions where they do things because "that's how we've always done it."

What are those two decisions?

1. Which procurement association they join; and

2. Which procurement certification they get.

Can you honestly say that your procurement department has investigated all alternatives for these two procurement decisions every time it's ready to spend company money on them?

Is there a less expensive association out there? Is there a higher quality certification out there?

Your internal customers are watching. Is your procurement department guilty of hypocrisy?

If so, how will you ever convince internal customers to follow directions that you don't follow yourself?

To quote Mahatma Ghandi, "Be the change you want to see in the world."

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
www.NextLevelPurchasing.com

Wednesday, October 05, 2011

The New iPhone 4S: Make Or Buy Wasn't Strategic Enough For Apple

Yesterday, Apple unveiled its new iPhone: the iPhone 4S. While it had a few upgrades from the previous version that seemed to disappoint analysts and investors, the hot new feature of this iPhone is the voice command technology, called Siri.

Siri is the name of the voice command software firm that Apple bought last year, precisely for the purpose of adding innovative capabilities to the iPhone. Having watched the video about Siri, I was impressed that it can be used to send texts and emails, put appointments on your calendar, help you find destinations, and more.

What intrigues me in particular is using voice and audio to "read" and send texts. Texting has undeniably been the most rapidly-growing communication method in the past six years. Today's teenagers and twenty-somethings use texting as their primary form of communication. It's interesting to see that email is almost irrelevant to them (and it's kind of annoying when they almost walk into you at the mall or park because they have their eyes fixed on their phones!).

The big question on my mind is: will Siri - and copycat technologies - fundamentally change the way that people communicate the way that texting did?

It's pretty crazy to ponder that. And it's fascinating to think that an acquisition is what enabled Apple to take such a potentially game-changing leap forward.

Why it's fascinating is that Apple, desiring voice command technology, could have just rested on the good ol' make or buy decision: do we develop the capabilities ourselves or do we procure the capabilities from a supplier?

Developing the capabilities themselves would have taken a relatively long time when there was already another company out there with those capabilities. But rather than just opt for the "buy" decision, Apple got strategic and acquired the would-be supplier.

Essentially, that was a step to prevent competitors from using the same technology. That gives Apple the proverbial competitive advantage.

Think about your own supply base. Is there a supplier that is so good and so innovative that your company would benefit if no other company in the world was able to do business with that supplier?

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
www.NextLevelPurchasing.com

Tuesday, October 04, 2011

Your Procurement Resume Needs To Have More of These Four Words

I hope that you have enjoyed the latest Next Level Purchasing Association article "Is Your Procurement Resume All Wrong?" (If you missed it, you can find it at http://goo.gl/caynv)

In the article, I gave some examples of traditional procurement resume excerpts that listed responsibilities. Then, I gave examples of something that is more effective than mere responsibilities: results. In this post, I will continue to illustrate the differences between responsibilities and results.

For example, "Managed a 12-employee procurement team" is a responsibility. "Increased the procurement team's productivity by 15%" is a result.

"Was responsible for customer satisfaction levels" is a responsibility. "Improved customer satisfaction from a 3.1/5 average to a 4.3/5 average" is a result.

"Transformed purchase-to-pay process" is a responsibility. "Reduced average invoice backlog from 32 days to 3 days through transforming the purchase-to-pay process" is a result.

"Negotiated contracts for information technology purchases" is a responsibility. "Saved the company $13 million through negotiation of information technology purchase contracts."

There are four key words I've used in these examples: saved, increased, reduced, and improved. These are results-oriented words that should be the focus of your procurement resume. You should use these words as often as possible because they indicate what you achieved, not merely what you did.

I'll close this post with some more examples of "what I did" words. Scour your procurement resume and see if you can replace sentences using these words with sentences that leverage the power of "saved," "increased," "reduced," or "improved."
  • Administered
  • Assigned
  • Assisted
  • Awarded
  • Bought
  • Completed
  • Consulted
  • Coordinated
  • Developed
  • Implemented
  • Led
  • Managed
  • Negotiated
  • Procured
  • Purchased
  • Served
  • Sourced
  • Supervised
  • Supported
  • Transformed
  • Traveled
  • Worked
This list is not exhaustive, but I hope you get the point. And I hope that you can use these tips to measurably "improve" your procurement resume!

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
www.NextLevelPurchasing.com

Monday, October 03, 2011

Services Contracting: How To Avoid The Many Pitfalls

It happens all too often. A buyer who has done reasonably well in procuring goods gets assigned to a services contracting/procurement role.

And then the trouble starts with that buyer's first services contracting project.

The supplier doesn't complete its work on time. The deliverables don't match what the internal customer was expecting. There is a dispute over the contract language.

If only there was a quick, easy, and inexpensive way to avoid learning the pitfalls of services contracting the hard way.

Well, there finally is!

Next Level Purchasing just released our new online Express Course series, "Secrets of Painless Services Contracting." These two courses - called "Secrets of Painless Services Contracting, Part I" and "Secrets of Painless Services Contracting, Part II" - cover pretty much everything a procurement professional needs to know to successfully procure services: scope of work writing/review, demystifying supplier performance time tricks, managing liability and legal issues, and much more.

Learn more about "Secrets of Painless Services Contracting" at http://www.NextLevelPurchasing.com/services-contracting.php

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
www.NextLevelPurchasing.com

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