Best Of: Bad Procurement Lessons


Here on Spend Matters, we share our insights on how procurement can improve, expand, innovate, be efficient, etc. To do so, sometimes we talk about bad examples of procurement to show CPOs and other supply chain professionals what not to do in their organization to be successful. Here we provide a roundup of such articles from the last year. Enjoy!

FREE Research: The 4 Faces of Procurement

First, Understanding the Bad Behavior

Influencing Change: Addressing Bad Procurement Behavior
Back in October, Thomas Kase wrote how bad procurement behavior can impact an organization. Kase writes, “...many worthwhile initiatives fail for the lack of adoption sword – the unimplemented savings – as the industry euphemism goes for the negotiated savings that the sourcing team created, but the business users passive-aggressively ignored. Even worse, relationships, both internal and external, take a turn for the worse as toes are crushed under a well intended, but perhaps awkwardly placed, sourcing boot.” He also talks about his interview with Barbara Ardell of Paladin Associates and her plans to fix these procurement challenges.

It’s Time to Pull Procurement Research Out of the Gutter
While the quantity of procurement research reports has increased, the quality of that research has declined, according to Spend Matters Chief Research Officer Pierre Mitchell. What’s the problem? Why is this happening? Pierre writes, “I often say that the biggest cost in procurement is the opportunity cost of wasting your time on something relative to what you could be spending your time on. There’s only one truly precious commodity: time. And life is too short for crappy procurement research.” Check out the article to read Pierre’s suggestions to improve procurement research.

Procurement Needs to Stop Benchmarking Itself Against Procurement
Here is another article from Pierre Mitchell - more of a “what not to do,” or a “what can go wrong,” post. Pierre offers valuable insights on where procurement organizations can look to add value to their company and improve the business and its processes. “Most procurement organizations know to benchmark themselves against others outside of their own industry, but they often don’t look to completely different functions, processes, technologies, techniques and even cultures to help them find and deliver new sources of value,” Pierre writes.

The Apple Supply Debacle

Could Proper Procurement Have Saved Apple and GT Advanced?
Spend Matters has been covering the Apple/GT Advanced Technology case for the last month. GT filed for bankruptcy recently, within a year of announcing it struck a major deal with Apple to supply synthetic sapphire materials for Apple’s smartphones. That deal never went through. Pierre tells us what went wrong, and how, perhaps, things could have ended differently.

Will There Be Consequences for Apple Once GT Court Docs are Unsealed?
Before the court ordered documents in the GT bankruptcy case to be disclosed (they were previously kept under seal) we wrote about the latest in this new story and what might be the consequences of the information leaking. Would the release affect Apple’s relationships with other suppliers?

The “Bait and Switch” That Ended the Relationship Between Apple and GT
Our coverage of the Apple/GT case after GT bankruptcy files were disclosed. In these documents, was GT saying Apple pulled a “bait and switch” on it. The documents portrayed a nasty situation between Apple and its supplier.

Supply Chain Top Tip: Engage With Your Suppliers – Don’t Beat Them Up!
In our latest coverage, Thomas Kase offers this advice and other takeaways from the situation between Apple, GT and other suppliers. He also writes, “Apple uses a grossly neglectful, even abusive, sourcing, contracting and performance management process.”

First Voice

  1. Omar Khan:

    Perhaps we will never know the facts and real reasons behind the collapse of relationships between Apple and GD Technologies but nevertheless it is a sad situation. It seems like one side has lost a good supplier and the other, a great customer. This is certainly a lose – lose situation by any standard. I still remember an advice concerning supplier management by my manager & mentor from more than 30 years ago, a time when supplier relationship management (SRM) wasn’t cool. He advised me to; “Be tough on your suppliers to bring them to their senses but never beat them up to bring them to their knees”.

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