Search Results for: sourcing

New Downloadable Paper Delves Into Sourcing, Supply Chain

Kyle Fitzsimmons - July 22, 2014 2:22 AM

Get the Spend Matters viewpoint on sourcing and its transformation into supply chain with a new, downloadable paper from Jason Busch (managing director). "When Sourcing Becomes Supply Chain" enforces the notion that data-driven analysis in procurement is essential and already underway. This movement can benefit organizations and businesses from various industries, and the paper digs deeper into the continuing outcomes that can be expected when sourcing and supply chain become one and the same.

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Managing Complexity – A Reevaluation of Energy Procurement Strategy

Guest Contributor - July 22, 2014 2:24 PM

There are few areas of corporate spend that invites as much fierce debate in strategy as the area of energy. The sheer number of purchasing mechanisms and strategies available can be overwhelming, and the advice of consultancies and subject matter experts is often contradictory. The combination of electricity, natural gas, and fuel oil is frequently one of the top five areas of indirect spend, and some organizations with energy-intensive manufacturing processes build energy expenditures into standard costs. Such a critical and complex category requires a clearly defined management strategy that is flexible enough to evolve with changing internal and external conditions.

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Looking at Supply Chain Risk Like an Insurance Provider: Do Business Here, Not There

Jason Busch - July 21, 2014 2:24 AM

It would be great to have a supply chain risk silver bullet that highlighted specific suppliers that present riskier prospects. That would be financial risk variables, broader supply chain exposure, political risk (of site/factory/host countries), and more. Short of this risk management panacea or expensive one-off analysis, the 2014 FM Global Resilience Index is a fascinating starting point, at least as it pertains to both country specific risk and the overall factors that contribute to supply chain risk.

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The Great Telecom Shakeup – How Will Enterprises Benefit?

Guest Contributor - July 9, 2014 2:42 PM

Unless you’re in the telecom industry, you probably haven’t noticed that it is in the throes of an historic shakeup – one that will have a lasting impact on enterprise buyers. Think of all the M&A deals, plans, and rumors in the market. How does this affect enterprise customers? Will the outcome be in their favor? NPI's Matt West argues yes.

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Cocoa Prices Jump 30 Percent in 18 Months

Guest Contributor - July 7, 2014 2:29 PM

The demand for chocolate remains on the increase despite the soaring cost of the key ingredient, the cocoa bean. The price of cocoa beans has been climbing since early 2013 and reached over $3,100 per metric ton at the end of June - a 37-percent increase since January 2013, and a three-year high. This price increase doesn’t seem to have curbed our desire for chocolate though!

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Rising Crude Oil Prices May Cause Economic Concerns

Guest Contributor - June 30, 2014 2:23 PM

As we get further into the summer months and the weather starts to heat up, so does the price of crude oil. The summer is the driving season and the increase in gasoline consumption means higher demand for crude oil. However, this year there are more than just driving habits causing prices to rise. Crude oil prices in the US have increased by nearly 10 percent since the start of the year, and the international benchmark rose over 5 percent in just the last month. So what’s to blame for the rise in prices?

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FedEx, UPS, and Volumetric Pricing: A Tale of Three Boxes

Guest Contributor - June 19, 2014 1:35 PM

By now, just about every shipper has heard the news: effective January 1, 2015, all FedEx Ground shipments, regardless of size, will be subject to DIM (short fordimensional) charges. For many shippers, this will represent a very hefty increase. Are there any silver linings to these new DIM charges? Probably not much, but If you have high density shipments – over 10.4 lbs per cubic foot – there could be minor benefit to you. First, you were not subject to the DIM before, and will not be under the new rules. Secondly, the carriers will argue that since the shippers with “bad” cube will now be paying their fair share, it might translate into slightly lower annual rate increases in 2015 and beyond.

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Shippers, Get Ready – UPS Moves to Dimensional Weight Pricing for Ground Delivery

Guest Contributor - June 25, 2014 2:30 PM

Last week, UPS announced that it will move to dimensional weight pricing for all ground shipments in 2015. For certain packages, the impact of UPS’s changes is huge. For lightweight shipments in packages less than three cubic feet, the price increase could be 30 percent or more. Many shippers won’t be able to handle these cost increases without passing it on to their customers – especially those in industries like retail, where margin is razor thin and consumers are accustomed to low-cost or free shipping options. Here are some things you need to do as soon as possible if you are using FedEx or UPS ground services to ship in 2015.

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Spend Matters 50/50: Insight Sourcing Group – A Provider to Know

Thomas Kase - July 4, 2014 6:48 AM

“When you can’t be bothered to source it on your own” – would be a rather simplistic quip to explain what Insight Sourcing Group does for their customers. The Atlanta-based firm takes a full service and hands-on approach in all sourcing areas. They get their hands dirty analyzing all your spend data and develop a list of sourcing projects that will deliver the best bottom line bang. Over the years they even developed their own spend analytics solution for this purpose – and spun it out into a separate business entity, SpendHQ.

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Lessons from A&D: When Suppliers Take on an Outsourced Supply Chain Management Role

Jason Busch - June 16, 2014 6:26 AM

It is very easy today to “outsource” indirect procurement (though it’s not something that is necessarily by itself the right decision for companies – we’ll leave that topic for another day). But it’s a more difficult decision, no doubt, to indirectly or directly outsource parts of supply chain management to suppliers. Yet when companies turn to suppliers to provide finished parts and components, they’re doing precisely this, although they might not be hiring a partner such as a BPO to do it on their behalf. The same is also true, mind you, of the “outsourcing” that occurs when working with intermediaries and distributors in other spend areas, including logistics and MRO.

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Methanol, the Cheaper Gasoline Substitute

Guest Contributor - June 23, 2014 2:37 PM

As a fuel substitute, methanol has many advantages. It is greener, cheaper, easily blended with gasoline, and unlike ethanol, its feedstock doesn’t have to compete for food consumption. However, it is not currently part of the US fuel market. In the 80s and early 90s, methanol was used as an alternative fuel in the US, but since then its blending into gasoline has been abandoned, possibly due to limited availability and the high price. Recently though, the methanol industry has been thriving due to the shale gas revolution and the abundance of its cheap feedstock, natural gas. Natural gas prices have fallen 30 percent over the decade while crude oil prices have more than doubled. The price disparity of natural gas over crude oil has invited vast amounts of capital investment into the methanol sector.

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Beware Ariba’s Patent Treasure Chest: Sourcing and eProcurement (Part 2) [Plus+]

Thomas Kase - July 17, 2014 4:09 PM

This is the second in a multi-part series on Spend Matters Plus. Read Part 1 here.

As our exploration of Ariba’s extensive and deep patents continues, we turn our attention to three specific patents tied to sourcing and eProcurement. Ariba’s stash covers a broad range – and a good deal of provider companies in the market can't avoid being in violation. That said, to us, many patents appear to cover either features used prior to the filing date – prior art, as the legal term goes – or be overly broad or otherwise fairly trivial. However, if and when Ariba decides to release their legal hounds, a good number of companies will likely be dragged in. Some providers might have struck licensing deals, and for those with IP portfolios of their own there is always a mutual cross-licensing arrangement to be made. In this Spend Matters Plus research brief, Thomas Kase, VP of research, discusses the following Ariba patents: auction bid and visibility restrictions; eProcurement (“figuring out if your supplier is on the Internet”); and supplier connectivity.

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Lessons from A&D in Local Sourcing with Industry Certifications, Regulation, and Offsets

Jason Busch - June 11, 2014 10:16 AM

For those with total cost on their minds, re-shoring remains a hot topic – especially from the standpoint of factoring both price and risk into the supply chain equation. But in certain industries and categories, in-country or local sourcing is in fact the right strategy from the start. I came across an article in AMD that points out just how critically industry certifications and regulation can factor into the sourcing equation for markets such as A&D with specific requirements.

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Billentis Releases 2014 E-Invoicing Report – China and More

Jason Busch - June 19, 2014 10:28 AM

For a while I've been hoping to meet in person with Bruno Koch, the brain behind Billentis (known most for its annual e-invoicing report). My plans to attend and speak at his event last year in Europe did not work out, but I hope to do so at some point in the future. Bruno’s annual compendium is an encyclopedia of e-invoicing activity that explores trends and growth on a global basis. One area that caught my attention in this year’s edition was the evolution of country-specific activity. Bruno had some interesting things to say about China .

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Strong Housing Starts Lead to Rising Cement Prices

Guest Contributor - June 18, 2014 2:53 PM

The market for most building materials has shifted in favor of sellers as annual price increases take effect and construction activity resumes after a challenging winter. Wallboard and cement prices both posted significant gains in the first half of 2014, when previously announced price increases took effect. In contrast, lumber prices have softened modestly to date. In our view, 2014 will in fact be a very good year for housing, and therefore we are expecting lumber prices to snap back over the summer.

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MarketMaker4: Xchanging’s eSourcing success – and the key to future direction?

Peter Smith - July 15, 2014 12:01 AM - Available @ Spend Matters UK/Europe

We featured the change of strategy at Xchanging here, and coincidentally I recently spend a couple of hours with the firm, taking a look at the MarketMaker4 product. MarketMaker4 (MM4), the eSourcing software and service provider, was acquired by Xchanging last September and has by all accounts performed very strongly since. That success appears to be one reason behind the greater focus on software they announced last week, with the firm moving away from being a pure-play outsourcing provider. So I met with some of the MM4 team for my first real look at the product. Two were ex Trading […]

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IT Pricing Update – What’s a Fair Price for Storage?

Guest Contributor - June 4, 2014 2:20 PM

Commoditization is common in IT, and the price of storage proves this point. Over the past 30 years, the cost per gigabyte has gone down by half every 14 months. In 1985, the average cost per gigabyte was $105,000. Today, that cost is a mere $0.05. Most IT buyers know the drop in price has been precipitous, but they are surprised to see exactly how much or how steep the decline has been in recent years. So if you’re not sure whether you’re paying too much for storage – you probably are.

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Hey Brother, Can You Spare a Couple Hundred Thousand Tons of Local Cobalt and Graphite?

Jason Busch - June 2, 2014 6:35 AM

The benefits of local raw material supply are no doubt significant. But Tesla may directly face a “not in my backyard” challenge from environmental opponents as well as an indirect economic hurdle in identifying new local sources of supply given the business considerations involved. As SCD writes, “the US hasn't had an active cobalt mine since 1971. But a company called Formation Metals is developing a new one currently in Idaho. However, the Vancouver-based company needs to raise $120 million to complete the project, and new mine start-ups are historically risky endeavors.”

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How and Why Negotiations Are Being Replaced by Expressive Auctions in Sourcing

Nancy Clinton - July 14, 2014 4:30 AM - Available @ Spend Matters UK/Europe

The art of negotiation has existed for millennia. In more recent years it has evolved into a number of techniques used by the respective contracting parties, as they endeavour to have full clarity of the range of possible outcomes and their walk-away positions/ best alternative to a negotiated agreement. As with poker, negotiating strategies can sometimes involve feigning a position of strength to achieve a preferred outcome, while on other occasions the only option is to accede to your opponent’s demands. Experience and skill play an increasingly important part in any negotiation. Any strong negotiator will benefit from having a good grasp of game theory in order to understand an opponent’s likely response to moves and intuitively this forms part of the initial strategic reasoning. Read more on the replacement of negotiations in sourcing by expressive auctions by Alan Holland, CEO and Founder Keelvar.

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Healthcare Providers, Are Your Software Vendors ICD-10 Ready?

Guest Contributor - June 11, 2014 2:24 PM

With the deadline for the implementation of the new ICD-10 coding system extended to October 1, 2015, some IT sourcing professionals in the healthcare industry may be breathing a sigh of relief. From the beginning, ICD-10 has represented a mammoth undertaking. Compared to ICD-9, the new code set exhibits much greater specificity (there are five times the number of codes) that will affect everything from documentation and patient reporting to staff and physician training, as well as changes in reimbursement patterns. The cost impact of these changes are estimated to be in the $50,000 to $250,000 range for small healthcare practices, with medium and large practices expected to pay anywhere between $200,000 to $8 million.

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