Author Archives: Guest Contributor

What Procurement Professionals Can Learn From That Internet Obsession, Candy Crush

- July 29, 2014 2:38 PM | Categories: Guest Post, Procurement Commentary

The latest rage in Internet gaming is Candy Crush. I hardly know anyone who, having started playing, has abandoned it in the middle of a game. Yes, the addiction is widespread across all age groups and the firm now is hoping to come up with a strong IPO in the market as well. While I have been playing the game for over 150 levels now, I introspected on some important lessons that game leaves on my mind from the perspective of my work, particularly as a procurement consultant.

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Price of Charcoal (Just Another Part of the BBQ Supply Chain)

- July 28, 2014 2:44 PM | Categories: Commodities, Guest Post, Price Forecast, Spend Humor

I hosted a quick poll within the office recently, posing the question: “What do you associate with summer?” The responses were varied, ranging from Wimbledon to extended daylight hours to grass stains (cricket). However, one thing that was pretty universal across the team was that summer means barbeques and sunshine. If you were to ask most people what makes a good barbeque, they will probably say good food (when it’s black it’s done!), great company, plenty of drinks, and a spell of excellent weather. If you were to ask me, I would in all probability answer: charcoal burning; functional design; solid construction; and stylish looks. Let's look at that first element.

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Six Sigma Sourcing (and Procurement) – A Bridge Too Far?

- July 27, 2014 11:40 AM | Categories: Guest Post, Procurement Strategy & Planning, Sourcing

Six Sigma, the process measurement methodology originally developed by Motorola and popularized by GE, has far-reaching applications beyond its manufacturing roots. Applying the discipline of Six Sigma to improving sourcing and procurement processes will undoubtedly produce systemic and sustainable business process improvement. But the bigger questions for procurement leaders to address in considering Six Sigma are these: What level of performance is realistic, which projects would produce the most benefit, and what enabling technologies will be required to apply the DMAIC principles (Define, Measure, Analyze, Improve, Control) of Six Sigma effectively?

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Mobile Procurement and the Line Manager

- July 25, 2014 5:58 AM | Categories: Guest Post

Outside of being a full-time Red Sox fan, Bob also works at a manufacturing plant. As the line manager, Bob works long hours and often finds himself having to pop in to oversee operations in the evening or during an overnight shift. It may seem like the baseball world never comes to a halt, but Bob must guarantee that his company’s operations never do. Between both of Bob’s full-time endeavors, he’s a pretty busy man. He can’t recall how many times someone at the plant alerted him to supplies running low while he was occupied with reading sports news on his smartphone. However, he can definitely remember the moment he realized that he could conduct his supply chain needs on that same device.

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Shipping Rates in the Near Term: Weak Demand, Oversupply, and Post-Panamax Ships

The shipping markets have been depressed over the past few years, reflecting a combination of persistent weak demand and over capacity. In order to succeed or even survive against this backdrop, carriers have repeatedly tries to implement general rate increases (GRIs). However, most of these have failed to hold, due to the intensive competition in the market and weak price discipline among carriers. Consequently, carriers have shifted their focus to the challenge of how to cut costs. One approach has been to build bigger ships to achieve cost competitiveness. In particular, the growth of large, so-called Post-Panamax ships has been accelerated by the expansion of the Panama Canal project

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What Do You Mean, a Coed Sauna? On Sourcing Activity Synchronization and Customers

Screen Shot 2014-07-23 at 5.03.41 PM Art van Bodegraven, managing principal of Van Bodegraven Associates and founding principal of Discovery Executive Services, is back with another essay for Spend Matters. As we look for better ways to integrate and synchronize sourcing and procurement activities intelligently within the greater supply chain, it is easy to become confused about who and where the customers are. You know, the ones we are supposed to be delighting? This is a burning question in both the B2B and the B2C worlds. And the obvious answer is not always the complete answer. For example, when a company's customers are the ones actually paying the bills, and the sales and marketing mission is to get them to buy as much as can be rationalized, plus some extra “just in case,” we cannot afford to overlook sales and marketing as an internal customer, whose needs and demands we must at least recognize.

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How to Cut Software Maintenance and Support Costs (and Fund IT Innovation)

- July 23, 2014 2:39 PM | Categories: Guest Post, Spend Management, Technology

The cost just to “keep the lights on” in IT has grown exponentially over the years. Recent studies show that an average of 72 percent of the enterprise IT budget goes to this area, leaving only 28 percent to fund new projects. A big chunk of the 72 percent goes to maintenance and support – and that reality isn’t expected to change anytime soon. Here are four of the best ways to cut maintenance and support costs.

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Managing Complexity – A Reevaluation of Energy Procurement Strategy

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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European Olive Oil Prices Rise Over 30% Since Start of the Year

- July 21, 2014 2:43 PM | Categories: Commodities, Guest Post

Prices for olive oil have risen sharply in Italy, up 32 percent since the start of the year and 15% year-over-year. Spanish prices had been falling since September 2013 due to a record production year; however at the start of June prices started rising and are currently over 10 percent higher than a month ago. This rapid price acceleration has been driven by the weather. There was above average dry and warm weather throughout the Mediterranean olive-growing belt in May and June. This dry heat hit the olive trees during the blooming period when moisture is vital to ensure maximum olive growth and the eventual oil yield.

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Tips for Making Your Financial Close Count

- July 17, 2014 2:46 PM | Categories: Finance, Guest Post

At many companies, most of the time effort and scrutiny of the close process is sharply focused only on its final stages—"last mile of finance"—and then only on specific steps within it. Organizations use multiple ERP features that assist with consolidation, software packages that perform some reconciliations, and workflow monitors that provide checklists. However, spot automation like this at the very end of a profoundly corporate-wide activity—such as the financial close—can only offer so much.

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Buying VMware? Demand Transparency in Contract Terms

Transparency has always been an issue in IT sourcing. Not only is there no “Kelley Blue Book” for pricing, the degree of detail provided in one customer’s agreement terms compared to the next (even with the same vendor) is often inconsistent. Let’s take VMware for example. Many IT buyers don’t take into account the extent of detail that VMware or its resellers can or will furnish in quotes and contracts. Some wonder if they’re getting enough detail but have little understanding of what a healthy amount of detail looks like. Lately, we’ve seen several common “transparency pitfalls” in enterprise VMware purchases. Here are a few ideas to guide you through your next VMware transaction.

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Procuring the Brazuca: The Complexity of Sourcing a World Cup Football

The Adidas “Brazuca” was the official ball of the 2014 FIFA World Cup. Over the last month, more than a billion people watched this ball from more than 200 countries (talk about sensitive procurement categories). To add to that, the last World Cup’s “Jabulani” was mired in an “aerodynamics controversy,” resulting in even more pressure to get this one right. Read on to see how procuring a Brazuca is a good case study in managing suppliers down your supply chain.

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