Author Archives: Pierre Mitchell

About Pierre Mitchell

Pierre leads Spend Matters procurement research activities and has broader solution development responsibilities for intellectual property creation and firm strategy as Managing Director of Azul Partners. This includes spearheading efforts to build new types of interactive and social communities of interest within the procurement profession including overseeing the evolution of spendmattersnet.com, Spend Matters PRO, MetalMiner, and other digital assets within Azul Partner’s umbrella. Pierre has 25 years of procurement and supply chain industry and consulting experience, and is a recognized procurement expert specializing in supply processes, practices, metrics, and enabling tools and services. He is a regular contributor to business publications, a frequent presenter at industry events around the world, and counts himself fortunate to have served and interacted with so many CPOs and future CPOs. Prior to his positions in research and advisory, he led numerous operations and systems transformations at Fortune 500 organizations. Industry positions include manufacturing project manager at The Timberland Company, materials manager at Krupp Companies and engineer at EG&G Torque Systems. He holds an engineering degree from Southern Methodist University and an MBA from the University of Chicago. In the early 2000's, Pierre was the first supply chain practitioner to become a procurement "industry analyst" as the VP of supply management research at AMR Research (now part of the Gartner Group) where he provided trusted counsel to procurement executives, business leadership, IT, and the solution providers who serve them. Most recently, he was the head of procurement research and adjunct business advisor at The Hackett Group, where he helped expand Hackett's procurement benchmarks and research studies while growing the Procurement Executive Advisory Program into a gold standard membership-based procurement advisory service in the market today.

50 Shades of Pay – Shade 11: Strategic Spend Planning

- December 17, 2014 2:38 AM | Categories: Spend Analysis

In the previous 10 installments of this series, we’ve discussed how (and why) to build a foundational capability to analyze spending history and then identify a myriad of opportunities to improve not just sourcing outcomes, but also opportunities to improve processes, master data, policies, etc. These are opportunities for procurement as well as the spend owners themselves. What this transformation means is that we begin to focus on future spending in order to best shape it and gain more value. Rather than just looking in the proverbial rearview mirror to see black smoke, we begin to look forward with our passengers and discuss where we need to go and what type of vehicle and fuel is needed for the journey.

more ▸
 

IBM 2014 CPO Report: Its Biggest Weakness Is Also Its Biggest Strength

- December 15, 2014 6:24 AM | Categories: Analysis, Learning / Research, Procurement Research

file9021244999056 IBM recently released its 2014 Chief Procurement Officer Study, which boasts an impressive sample size of more than 1,000 senior procurement leaders at firms greater than $1 billion in size. Like the 2013 IBM CPO study, it was led by IBM’s internal research group, The Institute for Business Value, and the execution was outsourced to a third party so that respondent details would be confidential and not shared with IBM services groups. The 2013 CPO study was a fairly traditional one - but the 2014 report is different. Find out why.

more ▸
 

It’s Time to Blow Up Spend Category Taxonomies Once and For All

- December 12, 2014 2:45 AM | Categories: Change Management, Friday Rant, Spend Analysis

file281275324836 For many firms, category management is a foundational element of their procurement operating models. I’ve defined category management as the cross-functional (and cross-enterprise) processes for managing the lifecycle of supply for major spend categories – within which strategic sourcing is obviously a core process. Category management typically organizes clusters of supply markets for such management and assigns responsibility of these processes to category managers who will then “plug into” the organizational hierarchy depending on the operating model. The organizational hierarchy itself is driven by geography, product/service line (which is focused on the supplied solutions or the served industries), function, etc. But wait, it gets more complicated.

more ▸
 

Exploring a Supply Network Model … For Services

- December 11, 2014 2:38 AM | Categories: Services Procurement & Contingent Labor

In a world where everything is becoming a service, including manufacturing itself and other core value chain processes, you’d hope that managing those services would be a core competency – even if many or most of those processes are increasingly outsourced. You would also hope that managing a portfolio of critical third-party service relationships with strategic advisory firms, BPO providers, third-party logistics firms, value-added distributors, managed service providers for temporary labor, and so on, would be coordinated just as rigorously as critical direct material suppliers in the supply chain. But, as you may have expected, it’s not. We find that while product supply chains are managed at Six Sigma levels, “services supply chains” for contingent labor (in the broadest sense) managed at about two sigma levels.

more ▸
 

A.T. Kearney Gets it Both Right and Dangerously Wrong in 2014 ROSMA Benchmark Report

- December 5, 2014 2:41 AM | Categories: Analysis, Commentary, Procurement Commentary

We previously discussed A.T. Kearney’s recently released report titled “Building the Brand of Procurement and Supply,” which summarizes and analyzes its 2014 ROSMA (Return on Supply Management Assets) benchmark metric. In Part 1 of our analysis of the report, we described the methodology and approach of the study. Then, in Part 2, we tweaked the model to fix a bad assumption and to drill it down in a spreadsheet format that shows how the model works with example data (and the assumptions regarding each of the steps).

more ▸
 

50 Shades of Pay – Shade 10: Giving the Car Keys to Those Who Own the Cars

- December 4, 2014 2:27 AM | Categories: Spend Analysis, Technology

In this latest edition of our 50-part analytics series, we deal with the topic of letting business users analyze their own spending. This might seem obvious, but too often spend analysis tools are developed or purchased by procurement power users looking to do strategic sourcing rather than a broader set of business users, with many of them being casual users who actually own the spend. Certainly, business user should be brought in early as part of a spend analysis requirements definition and solution evaluation, but we have waited until the tenth part of our series because we do find that many procurement organizations do hold off until they have built out a reasonably solid-to-spend cube at the line-item level (by supplier, category and cost center) before they really start turning over the keys of the spend analysis tool to the end users for their own inquiries.

more ▸
 

Mr. Gustin Goes to Washington and Other Musings on SupplierPay

- November 26, 2014 2:32 AM | Categories: Suppliers, Trade Financing

file2511287608843 Our fearless compatriot David Gustin at TradeFinancing Matters recently attended a White House meeting on the SupplierPay initiative. David is one of the world’s leading experts on trade finance, and The White House was smart to invite him to share his insights. For my part, I’ve had a few discussions with the US Small Business Administration tasked with running SupplierPay. The people at the SBA were very interested in the financial supply chain study that I did with ISM and with my other research analysis findings on how extending payment terms statistically correlates with lower enterprise value. More specifically though, I’ve reviewed the draft set of metrics that SBA is thinking about implementing with the program, and I provided it some detailed feedback.

more ▸
 

Frank Boyer Takes Over as CPO at Sprint

- November 19, 2014 10:15 AM | Categories: Breaking News, Cost Management, Procurement

Sprint has hired a new chief procurement officer (CPO) in an effort to improve the wireless carrier’s standings in the market. Sprint’s CEO Marcelo Claure announced that former AT&T Wireless CPO Frank Boyer (who was also CPO at EDS) will now serve as the company’s CPO. Claure said Boyer will "oversee our efforts to evaluate where we spend every dollar and look for ways to improve our cost structure."

more ▸
 

Focusing on Efficiency with the AT Kearney 2014 ROSMA Benchmark Report

- November 19, 2014 6:29 AM | Categories: Analysis, Learning / Research, Procurement, Spend Management

Earlier this week, we began our series analyzing the new AT Kearney 2014 ROSMA Benchmark Report, “Building the Brand of Procurement and Supply.” I first talked about the context and how the report analyzes ROSMA’s scores. Then, in a Plus post, I dove deeper into our analysis of the report, and I shared some of its highlights. Today, I’ll talk efficiency – what firms are the most efficient and why.

more ▸
 

Lessons From Another Third-Party-Vendor-Based Data Breach

How did hackers gain access to 53 million email addresses and 56 million credit cards belonging Home Depot customers? Through one of the retailer’s third-party vendors. Home Depot recently reported the news, saying he hackers gained entry to the retailer’s system, and deployed malicious software to steal personal information from customers using self-checkout machines and standard registers at the store.

more ▸
 

Results and Additional Analysis of AT Kearney 2014 ROSMA Benchmark Report

- November 18, 2014 6:45 AM | Categories: Analysis, Learning / Research, Procurement, Spend Management

In the previous installment of this series, I outlined the background and approach for the 2014 AT Kearney Return on Supply Management Assets (ROSMA) benchmark report that can be found here. In this installment, I’ll not only highlight some interesting learnings, but also even enhance the analysis a bit based on the data in the report. The report highlights the basics of the ROSMA model, but I wanted to show a complete model that illustrates the mechanics of it a little more deeply.

more ▸
 

AT Kearney Releases its 2014 ROSMA Benchmark Report – Context and Approach

1411825487tprmf AT Kearney recently released a report titled “Building the Brand of Procurement and Supply,” which summarizes and analyzes its 2014 Return on Supply Management Assets (ROSMA) benchmark metric that it collects on its own (e.g., it has been part of Kearney’s AEP study since 2010) and through a partnership with ISM and CIPS. Members of ISM and CIPS (of any size) can participate in the benchmark study (and get a results readout) and we’d highly recommend procurement practitioners to at least read this report and familiarize themselves with the concepts and the structure of the ROSMA metric.

more ▸