There are those who practice what they preach. At Spend Matters, I try to avoid this entirely by shunning the soapbox and bully pulpit. Instead, in the spirit of W's dad, Spend Matters aims to be a kindler, gentler blog. Call us the UN of Spend Management if you will.
But I do believe in eating my own dog food. As such, one of my resolutions for 2005 was to incorporate the Spend Management philosophy that I preach at Spend Matters into my wine collecting habits. As some of you know, I'm married to someone who knows a few things about Spend Management. But as I tell her, it's important not to get involved in commodities which you know little about. You might lose your shirt. Best to leave it to the experts ...
But I digress. What are some of my Spend Management lessons for wine collecting? Well, to begin with, wine collecting is not just about stockpiling and consumption. It's also possible to make a few bucks by buying low and selling how. How do you do this? Investing in wine futures (typically first growth Bordeaux and Burgundy will do the trick) is one possibility. I also tell my wife that this is a good way of hedging and diversifying our currency position. But as important, calculating inventory turns and material holding costs (not to mention shrinkage, which is particularly high in our case for some reason) is also necessary.
Another possibility is getting on the mailing lists of cult California wines and selling your allocation at a profit (not that I have ever done this, but I know of scores of people in the 60614 zip code who do, and personally, I believe that it would behoove those wineries who sell to those bozos with no appreciation for the grape to up my allocations accordingly).
Purchasing to sell at a profit -- or stockpiling wine for future consumption -- without additional inputs is not always the best idea. Having learned from Ford's little Palladium debacle, I've decided that it is important to incorporate cross functional interests into some of my Spend Management-driven wine collecting decisions.
What’s my top learning? Collaboration is key. On the other hand, some people go to great lengths to hide their wine buying habits from functional groups (and spouses). Now, I would never do this. The fact that I store my wine offsite is because of the stable, temperature controlled environment of the storage facility that I use. Much like companies which do make versus buy decisions, I did the same on my wine storage. Why else did I arrive at this total cost decision? Convenience. For example, my liquid 3PL (as I describe them) will arrange for and take shipments directly from my tier one suppliers. Now the fact that the CFO does not have a key to the facility might violate some aspect of Sarbox , but it's no worse than Tom DeLay or Jesse Jackson going on a junket funded by a special interest group.
Speaking of compliance, it's important to invest in the right procedures and technology. Clearly, if you’ve been reading this blog on a regular basis, you know that you need to invest in processes, information, and tools if you’re going to reap the true benefits that are possible from Spend Management.
On a personal note, while I use Excel today, I've considered upgrading to several tools designed to manage my wine spend (and inventory). But because our CIO disdains the latest tools, we'll need to wait for another few years until others adopt them first and we can justify the investment based on competitive benchmarks (maybe Hackett or Aberdeen could help us). And who knows, maybe our ERP provider will even come along in the next century with the right solution (because of the longevity red wine drinkers enjoy, statistically I should be here). But perhaps in the meantime, an on-demand or shared service offering would be a good first step.