Daily Archives: November 2, 2012

Friday Rant: Where's The Gasoline Post Sandy?

Answers to this critical supply chain debacle question are all over the map in today's press from claims that refineries pre-emptively shut down as Sandy advanced, to mention of damage at refineries preventing them from coming back on line. But the real answer appears to be lack of electricity to pump refined fuel from stocked storage tanks and POS retail service stations. CNBC reports "The problem is not gasoline supplies, but the ability to distribute it, especially from the critical terminal area around Linden, N.J., which lost power and was hit by storm surge. An estimated 75 percent or more […]

Friday Latte: Helping After Sandy, CV Success, Payphone’s Heyday, US Adds 171,000 New Jobs

How you can help! Hurricane Sandy: How you can help -- Lots of ways to give, volunteer, and show that you care about those who were affected by Hurricane Sandy earlier this week. Picture or no picture?? Tips for CV success.... and more procurement jobs -- If you haven't done so already, and you're interested at all in recruitment or being recruited, read our new article on Spend Matters search4 procurement – all about the psychological research that suggest whether or not we should attach a picture to our CVs. That's our own picture, not one of Brad Pitt or […]

Prediction: SAP and Ariba Will Terminate the Current Network Fee Structure By 2015

Closing out Spend Matters PRO week, we feature a prediction from a three-part series covering the future of the Ariba supplier network under SAP's ownership and guidance (Spend Matters PRO subscribers can access the series here: Part 1, Part 2, and Part 3). Here's the PRO call: SAP and Ariba will terminate the current network fee structure that charges a percentage of transactional value to suppliers by 2015 and replace it with flat connectivity charges (either annual subscriptions for basic connectivity or per-document pricing). Curious to learn more about the thought process behind this prediction? We hope you find the […]

The Genesis of a Firestorm – Managing Risk and Value in the Supply Base (Part 2)

To manage the complexities of the brave new supply chain, few things are more important than more and better data, as well as improved tools to analyze and manage the data points. Much is happening on both fronts – recent developments around unique exposure to commodity shortages (helium, earth metals) and regulations (Dodd-Frank; tin and other metals) in multi-tier supply chains coupled with the qualitative risks (social media, sustainability) and all the traditional risks have come together around driving new solutions and processes.

JDA and RedPrairie Merge: Financial-Driven Supply Chain Rollup or Something More?

We'll caveat this Friday rant on JDA and RedPrairie joining forces in a billion dollar merger with the footnote that our primary coverage area is procurement. We touch on supply chain topics and cover direct materials procurement extensively on our premium research site Spend Matters PRO -- but there are better supply chain analysts who we turn to outside our own Six Sigma walls (even though we have one black belt on payroll) for advice on demand planning, forecasting, S&OP, etc. We know enough to be dangerous and have been involved in implementing and buying these systems in the past, […]

Optimizing Marketing Spend in a Digital World (Part 2)

In the last post in this series, Amy O'Brien-Bird and Bill Stotzer of Alvarez & Marsal discussed how companies can optimize their marketing spend through market segmentation and data management/measurement. This week, they continue. Diversify Buys: Digital technology has also spawned many alternatives by which to purchase media, including real-time media exchanges and other vertical markets allowing for media buys on the "spot" market. Even though the process for placing an ad through an agency has not changed dramatically from past practices, alternatives eliminate the need to involve an agency. For example, online services like Google's Adwords and Craigslist can […]

Afternoon Coffee: $6bn for Boeing, American Airlines Loose Seats, Apple Tracks Laborers

Big deal for Boeing. Boeing secures $6bn order from Brazil's Gol -- Boeing has secured its largest order from a South American airline, in a deal worth up to $6bn (£3.7bn). Brazilian low-cost carrier Gol is to buy 60 of Boeing's forthcoming narrow body 737 Max aircraft, with the first due to be delivered to it in 2018. Gol said the new planes were 13% more fuel-efficient than its current fleet and would help to cut its costs. The airline is currently reducing its workforce by 2,500 jobs, or 12%, as it seeks to return to profitability. "An initial review […]

CPO Corner: You Can’t Have Your Suppliers’ Cake and Eat It…

The new Chief Procurement Officer for the UK government, Bill Crothers, gave a number of surprisingly open and interesting interviews in his first weeks in the job. He made some quite aggressive comments in terms of how large government suppliers had been exploiting their position – charging different prices to different parts of government, for instance. There was a clear message from him that government procurement was going to expect better deals and would use its leverage more aggressively to drive them.

Getting Creative With Suppliers: Extracting More By Engagement, Not Extortion (Part 1)

Over on Supply Chain Management Review, there's a useful blog by Rob Swanson that asks the question: What Else Can My Suppliers Do? In it, Swanson does a quick and acceptable job of dispensing with the logic and common procurement argument of simply asking suppliers to do more for us (e.g., price concessions) versus actual engagement and collaboration. I've probably seen this argument made a hundred different ways. Swanson does it succinctly and eloquently. For example, "From the supplier's perspective, reactionary requests, such as across the board price reductions are punitive. This approach puts the supplier on the defensive and […]

Procurement ROI: The Right Metric? (Part 1)

Proxima's Guy Strafford recently got me thinking (in a way he probably didn't see coming) about the right ways to measure procurement effectiveness. In a post over on Proxima's blog, Guy makes the observation that executives should be wary of high procurement return on investment (ROI) claims. He frames the argument by noting that he's had conversations with many a procurement executive product of his "10x, 20x or even 30x ROI based on team cost" but that this measure "is far too simplistic ... [and] misleading and are forcing the wrong behavior in our business leaders." Guy then makes a […]

Managing Scope and Cultural Differences: Making Commitments

Spend Matters would like to welcome a guest post from Vantage Partners. This is the first part of a five-part series focused on managing scope in offshoring relationships. Today's post focuses on how cultural differences, in making commitments in offshoring relationships, make managing scope harder. Scope is challenging to manage in most professional service arrangement, and a challenging economic environment only increases the pressure on both sides to win that battle. In offshore deals, customers and providers must grapple not only with these familiar challenges, but also with the obstacle that hundreds of study participants, both customers and providers, identified […]

Private Equity and Procurement: Building a Lasting Savings Foundation Requires Getting Operational (Part 2)

The use of P2P systems also ties into another area we’re beginning to see early interest and curiosity about within forward thinking firms: creative uses of working capital strategies. For example, an approach here might entail using a fund’s capital that would otherwise be in cash, short-term high rated debt or commercial paper to fund early payment discounts to suppliers within the portfolio itself. In fact, some hedge funds are already using their own free cash to invest in short-term maturity instruments tied to receivables (with APRs based off of the credit rating of the buying organization). We believe PE firms will investigate similar options.