Wednesday, October 31, 2012

Buyers Meeting Point's Coverage of "The Procurement Game Plan"

Buyers Meeting Point has built up quite an arsenal of procurement-related content over on their growing site.  While quite a bit of the content consists of summaries of reviews of third-party events, webinars, and the like - sharing "the best of the best," if you will - they also have some great original content as well.

That original content includes a review of "The Procurement Game Plan:  Winning Strategies and Techniques For Supply Management Professionals" - the book I co-authored with procurement thought leader, Dr. Soheila Lunney - as well as several exclusive interviews with myself and Dr. Lunney.  In case you missed these entries on the site, I will link to each and provide some nuggets from each here...

Book Review:  The Procurement Game Plan - In this article, Buyers Meeting Point co-owner, Kelly Barner, gives an overwhelmingly positive review of the book, saying that she highly recommends the book as an addition to your professional library and that "The Procurement Game Plan does not disappoint."  She shares her three favorite sections of the book and provides some excellent commentary.

Interview With Soheila Lunney, Part I - In this segment of the interview, Barner and Dr. Lunney discuss Dr. Lunney's background and how it has helped her develop into the thought leader she is today.  They also cover that oh-so-important topic of how procurement professionals really need to get up to speed with financial principles in order to maximize their positive impact on their organizations.

Interview With Soheila Lunney, Part II - In this segment of the interview, Barner and Dr. Lunney hit on an amazing amount of value in a very small amount of space.  In an article that takes mere minutes to read, you will learn about supply risk management, managing backdoor selling, and improving internal relationships.  Good stuff!

Interview With Charles Dominick - This interview is more about the Next Level Purchasing Association and how we work to help procurement professionals learn best practices and keep up with the rapid changes in the profession.

I hope that you get a chance to check out these links as well as the other stuff that's on Buyers Meeting Point.  It's all about keeping up with - or, preferably, keeping ahead of - the changes in the profession and they, like the Next Level Purchasing Association, help you do just that in different, yet complimentary ways.

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com

Tuesday, October 30, 2012

Today's NLPA Webinar Will Go On As Planned!

Thank you to everyone who contacted us to see if we were OK after Hurricane Sandy hit Pennsylvania.  Fortunately, our area in Pittsburgh experience only moderate rainfall, so we are safe.  Our thoughts go out to everyone further east who are felt Sandy's effects more catastrophically.

Today's NLPA webinar, "Risk Management in Purchasing," will go on as scheduled at 11:30AM Eastern US time.

If you haven't already registered for the webinar, here's how to do so...

If you're already an NLPA member: Go to
http://www.NextLevelPurchasing.com/login.html, log into the members' area, 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/procurement-association.php?pcb. 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 for this exciting webinar!

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com


Monday, October 29, 2012

Surprise Supplier Audits: Good or Bad?

One of the students of a Next Level Purchasing online course asked me, as the instructor, whether I thought that "surprise" supplier audits were a good idea.  The goal of such surprise audits would be to confirm that the supplier is truly meeting its obligations, whether those obligations are things like maintaining the agreed-upon stock levels, keeping up with production schedules, complying with child labor laws, or the like.

So, how did I answer?


I said that conducting surprise supplier audits are definitely a worthy idea.  Too many times, we hear about manufacturers getting bad publicity because of problems in their overseas suppliers' factories and those problems would have been avoided if only there was a little physical oversight by the manufacturers' supply chain teams.

That being said, I consider it best when you specify in the contract that you have the right to conduct surprise supplier audits without notice. You actually want the supplier to expect to be surprised.

Why? 

Because the ultimate goal is not to catch your supplier doing something wrong, but to persuade your supplier to do the right things...even when you're not watching!


To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com

Wednesday, October 24, 2012

Free Purchasing Risk Management Webinar on Tuesday!


As part of Enterprise Risk Management, purchasing departments, should define their framework in terms of types of risk they face, risk appetite (risk level), and tools to measure the risk.   

They need to calculate the impact of risks in the company.  They need to provide governance to make sure processes are followed, the risks are tracked and mitigation plans are in place and implemented.  


To assist you in implementing these types of processes in your organization, the Next Level Purchasing Association (NLPA) is hosting a webinar entitled "Risk Management in Purchasing." This webinar will introduce you to methods of being successful at these activities and will address at least four risk types: Supplier Risk, Product/Service Risk, Business Risk and Commodity Risk.  You will also learn the different risk drivers for each risk type.

The presenter for this webinar will be Paulo Moretti, Principal of PM2 Consult - a consulting firm that helps companies develop work processes and tools to move purchasing organizations forward to Best-in-Class.

The webinar will be held on Tuesday October 30, 2012 at 11:30AM Eastern US time.  This webinar is free to all members of the 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: Go to
http://www.NextLevelPurchasing.com/login.html, log into the members' area, 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/procurement-association.php?pcb. 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 for this exciting webinar!

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com
 

Tuesday, October 23, 2012

The Similarities Between Sourcing Negotiation & The US Presidential Debates

I hope that you enjoyed the article "Sourcing Negotiations & Political Debates."

I know, by the few instances of negative feedback we received, that not everyone enjoyed or comprehended this creative marriage of sourcing concepts with examples from the Obama/Biden vs. Romney/Ryan debates.  I was careful not to take sides in the article, giving equal examples of good and bad moves by both parties.  Alas, sometimes just one "developmental idea" mentioned about a political party can send the over-sensitive into a tizzy.

Oh, well.

Anyway, the article was written before last night's debate.  After last night's debate, I was inspired to use this blog to add one more point to the four lessons learned from the preceding debate.  So, here is that final point...

Do your homework!  I thought that both President Obama and Governor Romney performed well in last night's debate.  One common thread between them is that they were both extremely prepared.  Despite the frequently changing subjects - it was supposed to be focused on foreign policy, but drifted into the domestic economy, education, and more - both candidates never had to say "I don't know much about that issue, let me get back to you."  I don't know about you, but sometimes in my procurement negotiations early in my career, I had to say such things when I wasn't as prepared as I should have been.

It is always best to know your issues inside and out.  Like both presidential candidates could lean on their specialist policy advisors, you need help, too.  Strong relationships with internal customers and technical specialists can help a lot in this regard.  You never want your supplier to know more about your requirements than you do!  You need to be as adept at addressing multiple, subtle, and complex issues as Romney and Obama were last night.

That was the last debate of this election cycle.  Certainly, there was a lot to be learned from a political perspective, from a debating perspective, and, interestingly enough, a negotiating perspective.

I hope that you were able to look past politics and see the value of analyzing the communication styles and approaches of these two smart men.

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com

Friday, October 19, 2012

Supplier Error Reduces CEO's Net Worth By Over $5 Million in 16 Minutes

Wow.  I have to say that this headline refers to one of the most dramatic procurement-related screwups ever.

Yesterday, Google's stock plummeted from $754.64 per share at 12:34PM to $687.30 per share at 12:50PM (source:  Yahoo! Finance) before trading of the stock was halted.

What was the reason for such a sudden and substantial drop?

According to a statement issued by Google and reported by ABC News, the company's printing supplier, RR Donnelley, mistakenly filed Google's quarterly financial report with the Securities & Exchange Commission early and without final authorization from Google.

Sounds like an innocent mistake right?  We've all had suppliers deliver a little early, deliver a little late, complete something before told to, etc., right?

Sure, but let's look at the effect of this.

CEO's are often compensated with stock.  When the company does well, its stock price goes up, and the CEO's net worth increases.  This practice is designed to keep compensation aligned with organizational goals.

Like most CEO's of publicly-held companies, Google's CEO, Larry Page, owns a crap-ton of company stock.  According to Forbes, he owns 80,000 shares.

So, let's do a little math on how this "little" supplier mistake affected the personal assets of Mr. Page.

The stock declined $67.34 per share in 16 minutes.

Larry Page owns 80,000 shares.

80,000 x $67.34 = $5,387,200

That's how much net worth Larry Page lost.

In 16 minutes.

Due to a supplier error.

How would you like to be the Google procurement specialist responsible for managing the relationship with RR Donnelley?

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com


Tuesday, October 09, 2012

The "Outbuying" Procurement Concept

I hope that you have enjoyed the article "'Outbuying' Your Internal Customers, Part II."

As you may have guessed, this article was preceded by "'Outbuying' Your Internal Customers, Part I."  You're kinda smart like that ;-)

Anyway, this whole "outbuying" concept is rooted in the notion that a procurement department should be better at procurement than their internal customers.  Sounds almost irritatingly logical, but one of the main reasons that procurement policies fail to get solid compliance is that many internal customers think that the procurement department doesn't buy as well as they can.  Sadly, some of them are right but that's beside the point.

Now, a well-trained procurement department should be able to do the seven things described in these two articles much better than any non-procurement professional can.  But, that's not the end of it.

These seven things are pretty foundational and don't even address the more strategic ways that procurement can contribute to organizational success.  Try this...

Imagine yourself on a game show.  Your job is to answer questions better than your opponent does.  In this case, your opponent is an internal customer of yours...and let's say that this internal customer is your procurement department's most vocal critic.  You know, the one who always buys from his own suppliers.  A maverick.  A rogue.  And he not only wants to win this game show, he wants to annihilate and embarrass you!

Ready for the questions?  Here we go!

  • How do your procurement activities activities contribute to an improvement in the quality of goods and services throughout the organization's supply chain?
  • How do your procurement activities help the organization produce goods or perform services faster?
  • How do your procurement activities increase the service ratings given to the organization by its customers?
  • How do your procurement activities improve the job satisfaction of the organization's employees?
  • By how much do your procurement activities reduce (or adversely affect) the organization's carbon footprint?
Hopefully, you've imagined yourself outshining your internal customer/opponent.  If these questions have made you a little uncomfortable because your procurement department doesn't exactly have its act together in these areas, it may be time for a little (or a big) improvement.

Never let your internal customers outbuy you!

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com


Friday, October 05, 2012

The Nuts & Bolts of Implementing a Spend Visibility Solution

Our friends over at Sourcing Innovation, in conjunction with one of their sponsors, have released arguably the most detailed eBook on implementing a spend visibility solution ever.  It is entitled "Spend Visibility:  An Implementation Guide" and I'm going to review some of the more interesting aspects of the eBook here and then tell you how you can get your free copy.

First, I have to advise you that this eBook is highly scientific.  It really gets into a lot of granular details and, occasionally, some tech-speak that may scare off the merely curious.  However, if you're looking to implement a spend visibility solution, you will appreciate this level of detail as the eBook covers a lot of the many, many landmines that one can encounter when taking on that task.  Obviously, it's better to identify the mistakes that are common before a project rather than learning them through making them on your own!

The majority of the paper revolves around a 10-step spend visibility implementation plan designed to "ensure that savings opportunities will be maximized year after year."  The paper takes a deep dive into each of those 10 steps.

Now, because this is a detailed eBook, even summarizing each section would be quite a lot for you to read.  Therefore, let me quickly share some thoughts on my favorite parts.

Data Aggregation:  Right from the beginning, the eBook stresses the importance of identifying where all of your spend data resides.  Even in smaller mid-size companies, spend data is captured in various places and, as a result, isn't easy to aggregate.  Got a p-card program?  Guess what...you already have a separate bank of data that you'll need to aggregate with your ERP data.  The eBook gives plenty of examples of other places spend data resides and, more importantly, some best practices on how to aggregate it for across-the-enterprise spend visibility.

Change Management:  Despite the fact that this eBook is highly scientific, it does not ignore some of the human elements and challenges associated with spend visibility implementation.  For example, it advises that "putting in a spend analysis system that 'makes analysis easy' may feel threatening to [a current analyst] if their job is to be 'the data person'...Change can be frightening, so you need to work to prevent pushback from these people."

Merging Data:  About 1/3 of the way through the eBook, the authors shine some serious light on how data should be merged properly to avoid common problems that certainly plague the unsuspecting.  From currency challenges to timing issues to more, the eBook alerts implementers to simple things that might get ignored, but can have an impact later.  This is best illustrated via an excerpt:  "Data draws from different systems may have different timing.  You will need to confirm that transactions for the month of February represent the same range of dates.  For example, one system might use the accounting date for transactions.  Another system may use the check date.  These will be close, but you will need to determine if adjustments need to be made."

Commodity Classification:  This is certainly my favorite part of the eBook because it is very consistent with what Next Level Purchasing teaches in our online course "Savings Strategy Development."  I will be the first to agree that getting your commodity classification scheme down is one of the most important things to do to maximize the success of a sourcing initiative.  There are plenty of great pieces of advice for doing just that in the eBook, including how large a single commodity/category should be and how to determine where one commodity/category ends and another begins.  Truly great stuff!

Commodity Mapping:  Once you decide on your commodity classification scheme, it's time to take all of that data you've collected, bring it into one central place, and have commodity codes assigned.  Sounds much easier than it is.  In my experience, I've built some pretty solid mapping schemes.  But the mapping approach in this eBook is much more sophisticated than anything I've done in this area.  It uses a "swiss cheese" analogy and sends the data through multiple layers to ensure that an extremely high level of commodity mapping accuracy is achieved.  It's easy to see how this approach can help get commodity mapping done right much earlier than a "try to do a decent job and tweak it later" approach that many organizations follow. 

Again, I know that this summary is already long.  But, if you're still reading, you're clearly interested in spend visibility best practices and I won't take any more of your time.  Instead, I suggest you go over to Sourcing Innovation and click on the Lexington Analytics logo under "Sponsors" on the right-hand side.  You'll get immediate (and free) access to the eBook.  If you're looking to implement a spend visibility solution, I don't know of a more thorough resource out there on the topic!

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com


Tuesday, October 02, 2012

Increasing Your Personal Productivity, Part II Is Now Available!

Last month, the Next Level Purchasing Association (NLPA) launched a popular new online Express Course entitled "Increasing Your Personal Productivity, Part I."  Yesterday, we completed your roadmap to better, faster results by launching "Increasing Your Personal Productivity, Part II."


In "Increasing Your Personal Productivity, Part II," you will learn how to overcome common obstacles that keep people from reaching their goals, plus:

*  How to prioritize your work to get the most important results out of your effort

*  How to manage time like those that have attended the best time management training on the planet

*  How to avoid the "archenemy of personal productivity" that most people battle and many succumb to

*  And much more!

Sign up for "Increasing Your Personal Productivity, Part II" today for immediate access to the most valuable tips for becoming the achiever you know you can be. You can take this single-lesson Express Course in about 30 to 60 minutes, whenever you want and as many times as you want to over a 60-day period.

There are two different ways that you can gain access to "Increasing Your Personal Productivity, Part II":

  • The first way is by having a Premium Membership to the NLPA.  Currently active Premium Members automatically have access to every Express Course available as part of their premium benefits.  For as little as $15.99 (US) per month, you can access all of the available Express Courses as well as the NLPA Library which includes templates, checklists, presentation slide decks and on-demand replays of the NLPA members-only webinars, and more. Visit: http://www.nextlevelpurchasing.com/procurement-membership.php to learn more about Premium Membership and to get started.
  • The second way is by enrolling in the Express Course directly. If you enroll by Friday, October 5, 2012, you can have access to this Express Course for the discounted price of $9.99 (normally $14.99).  Simply add the Express Course to your cart and use the coupon code: 2012OCT when you enroll online to take advantage of this time-limited discount.  (Please note that we do recommend beginning with "Increasing your Personal Productivity, Part I." If you have not already enrolled in Part I, you can enroll in this Express Course at the same time as "Increasing your Personal Productivity, Part II.") To enroll, visit: http://www.nextlevelpurchasing.com/registration.php or login to your account and click on the "Enroll Now" button next to "Increasing Your Personal Productivity, Part II." You can also print a registration form from:  http://www.nextlevelpurchasing.com/registration.pdf. This is a limited time offer - use the coupon code provided above to enroll in "Increasing Your Personal Productivity, Part II" for $9.99 by October 5, 2012.

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com

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