The 14th annual ProcureCon Indirect East conference in Atlanta wrapped up this week. It was clearly a great success. In fact, the attendees practically had to be kicked out! So many stayed for the entire event that 30 of the attendants -- myself included -- were treated to lunch in the hotel's regular restaurant since all conference seats were taken!
For those unfamiliar with ProcureCon events, they are similar to ISM activities insofar as they invite practitioners to gather for a few days to discuss current topics, best practices and to look at the latest news from participating solution vendors and service providers. But that's where the similarity stops. ProcureCon activities are intimate gatherings (about 200 attendees at this conference) with far more senior attendees -- e.g. CPO, Director of Procurement, Sourcing, Supply Chain. In other words, the opportunities to interact with procurement peers and senior supply chain decision makers are far greater at ProcureCon than at any other conference that I know of. This sentiment was repeated by all that I met, practitioners and solution providers alike were quite pleased with both the format and the participants.
So, what took place this year? Over the past three days, we were treated to a broad range of presentations and table discussions covering issues ranging from procurement team development, organization transformations, supplier relations and performance, category management, contracts, BPO, globalization, KPIs and metrics, change management, the role of IT solutions -- with lots of networking opportunities throughout.
There were several interesting presentations (both on stage and offline that I plan to write about in more detail). As a starter, and I say this from direct experience as a supplier to Fortune 500 firms as well as a sourcing solution consultant working on behalf of such buying organizations, one topic rang especially true: how companies engage with suppliers. Specifically, how procurement functions can put so many processes, layers of separation, and such tightly written contract terms, and otherwise harshly negotiated pricing in place that suppliers have neither the opportunity to be creative, nor the financial headroom to go above and beyond -- with the result that supplier value-add is eliminated by systematic design, and companies lose out on what could have turned into a more fruitful relationship.
One success story in this area came from Eric Beylier, the refreshingly outspoken French-born CPO of the oil and gas firm TETRA Technologies based in Woodlands, Texas. TETRA buys extensive amounts of protective clothing for their employees, much of which is made from cotton fibers. Cotton is a commodity that over the past 20 months has seen extreme price fluctuations (over the prior 30-years the trading band has largely stayed btw $55 and $80/lb but then in July 2010 it started to climb from $84/lb to hit $230/lb in March of 2011, and over the past year has fairly steadily trended back down to the current $100/lb) which have put severe pressure on related contracts -- actually, if existing contracts had been enforced by Eric, suppliers would likely have been forced out of business.
Instead, the level of trust he had built up with the vendors in question permitted him to both accommodate them when prices rose, as well as be able to take concessions back when prices came back down again. This in a category that not normally would be viewed as business critical, but in TETRA's case is necessary to keep business running.
This topic of vendor value-add ran across several presentations and discussions, and I would like to hear from suppliers and buyers alike how they view this, and what can be done to enable more effective (not just efficient) supplier-buyer relations that develop trust and communications along the lines shown by TETRA's example above. On the direct side, relations naturally run deeper so this is not news to such buyers, but the question is how well the indirect side manages relationships?
In closing, congratulations to Carina, LeighAnn and the others at WBR for yet another successful ProcureCon event -- you have done it again!