Daily Archives: December 11, 2012

Social Collaboration and Information in Procurement Applications (Part 2)

Continuing on with our analysis of the impact of social collaboration and information tools on procurement applications, we come to the impact of individuals and profiles in the application community itself. The idea of extending the master data we keep within procurement beyond what we’ve historically thought of is probably the most important step toward fully taking advantage of social collaboration.

Why Some Companies Fail to Get Maximum Value from P2P Automation

Spend Matters welcomes a guest post from Mark Schaffner of Verian. I was recently talking to one of our long-term clients about the evolution of his purchasing program. His company started by streamlining one small department, and then brought 300 items under management. Now they control purchases of over 6,000 preferred items and drive savings on indirect spending of close to $1 billion. He says the biggest challenge around getting front line people to accept centralized purchasing is trust. Front line employees don't trust that purchasing will get them what they need, when they need it – so they don't […]

Afternoon Coffee: Contraband Kinder Eggs, Soybeans Down, Wheat Up, Robotic Arms at Foxconn

Wait. What?? Kinder Surprise: $2,500 contraband chocolate egg -- Kinder eggs are back for the holidays in Chicago -- and surprise, they're still illegal this country. U.S. Customs and Border Protection agents warned that each egg carries a $2,500 fine when they seized six of the contraband confections during a two-hour detention of two Seattle men returning from Vancouver in July. "The USDA made no changes to its supply and demand forecasts for corn, but said farm-gate prices would be weaker than expected." USDA Cuts Soybean, Raises Wheat Stockpile Forecasts -- The U.S. Department of Agriculture lowered its forecast for […]

Stripping Supply Management of Supply Risk Responsibilities (Part 1)

In sales, it's often said that you earn the right to do business with a customer. The opposite is all too often the case for procurement – the business and suppliers must deal with you in some capacity whether they want to or not. In recent years, supply risk has risen to the forefront of new procurement responsibilities and concerns. ISM has even created a new risk board (of which I was a part), webinar series and conference focused on supply risk. Yet we wonder if this effort may be futile, as finance organizations slowly strip procurement and supply management […]

Cost Management: Accounts Payable, Discounting and Self-Service Supplier Haircuts

In terms of cost management strategies, we all too often jump to strategic sourcing and negotiation efforts without addressing the compliance side of procurement. It's a misnomer that P2P (eProcurement and e-invoicing) is just about driving buying compliance to preferred suppliers. It's also about managing demand more effectively, reducing unnecessary purchases and finding new ways to take advantage of accounts payable (AP) activities. This last point is all too often lost on supply management teams. But enabling suppliers to take advantage of discounts that can result in significant cost reductions for our buying activities should be front and center in […]

Cost Management Must Extend to Currency and Commodity Volatility

More and more businesses, including many small and middle market organizations, are beginning to think about how they can "smooth" costs associated with volatility, taking supply risk and distraction off the procurement table. Unfortunately, the cost management skill sets required for effective hedging often don't reside (even physically) within the same offices as core procurement teams. As one example, consider how Alcoa's trading operation is housed away from company HQ in Pittsburgh. Of course if you're one of the world's top market makers for Bauxite, among other commodities, you can house your trading operation in the middle of nowhere if […]