Author Archives: Peter Smith

When Should You Fire a Non-Performing Supplier?

When is the best time to fire a non-performing service provider? Should we take action as soon as serious problems become evident? Once they've had a chance or two to sort out the issues (but have failed in those initial attempts)? Or only as a very last resort, after a lengthy period during which they can try to rectify errors? There are a number of key issues to be considered here. Read on for what these are, as well as for supplier management lessons that can be extracted from soccer clubs and their hiring and firing of managers.

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The Spend Matters Stock Portfolio – April Update

- April 3, 2014 11:17 AM | Categories: Industry News, Procurement Commentary, Spend Humor

We're three months into our stock portfolio exercise and for the first time Jason and Peter's joint portfolio has lost a little ground. Despite still being up 6 percent on the year, they're down 3 percent from March. In the individual portfolio race, Peter is now showing a 13.4 percent gain whereas Jason is at 9.6 percent. For now it appears as though Peter's decision to spread his portfolio out among almost double as many firms as Jason was a good move. Who knows what these April showers will bring, though.

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A Note of Caution about Ethics in the Supply Chain (Part 2)

- March 25, 2014 2:29 AM | Categories: Supply Chain Management, Supply Risk Management

Procurement must not get too far out of step with our organisations. Of course we always have the option of saying no, as I would to a tobacco firm. But the profession generally needs to make sure that we support our organisations as well as these wider ethical goals. Therefore, institutes like CIPS need to tread carefully. It is right that they seek to educate the profession, but they face a tricky balancing act. Take too much of a “holier than thou” stance, and they may be seen as anti-business and misaligned. But go easy on ethical issues, and they may be accused of pandering to corporate clients.

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A Note of Caution About Ethics in the Supply Chain (Part 1)

- March 17, 2014 3:15 PM | Categories: Commentary, Public Sector, Supply Risk Management

Corporate social responsibility has of course been a huge area of growing interest for businesses over the last 20 years or so, and many organisations have quite rightly put significant time and effort into it. This is all very admirable and we are not suggesting for one moment that procurement – and indeed businesses – should ignore or de-prioritise these areas. However, in the usual Spend Matters style (challenging, counterintuitive, and contrarian), I want to sound two notes of warning, identifying where procurement executives need to exercise some caution as they address these issues. First off, many of these issues are more complex than they may first appear.

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The Spend Matters Stock Portfolio – March Update

- March 7, 2014 2:14 AM | Categories: Industry News, Procurement Commentary, Spend Humor

We are now two months into our stock portfolio exercise. If you remember, we have created an imaginary portfolio of 21 procurement-related stocks that we're tracking, to see how they perform individually and as a portfolio against the market. And as a personal challenge, Jason Busch and I have decided on our own portfolios in which we have invested a virtual million pounds. Jason chose just eight of these 21 firms; I spread my risk more broadly and put “money” into 14 firms. So how are we doing so far? And who's winning? Hint: the procurement-focused portfolios have been comfortably beating the market.

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Manipulation of Specifications: A Clever Way to Enable Procurement Corruption

Don't interpret this the wrong way, but corruption and fraud in the procurement and supply chain context has long been an interest of mine. It might go back to something very interesting I saw in my first year in the procurement profession, where a supplier and some internal colleagues combined in what would have been a highly original deception, had it worked. More recently speaking, a few years ago I did some work with an excellent organisation called Transparency International (TI). It is a non-governmental global organisation that campaigns against corruption and for openness and good government. It is probably best known for its corruption index, where every country in the world is rated on that particular subject.

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Please Consider Appropriateness When Writing for the Procurement Audience!

Procurement must become more centralised. No, procurement must be more in decentralised with power passed to budget holders. Procurement people should be specialist negotiators and commercial strategists. No, procurement people must become deep experts in contract law and displace the lawyers. Clearly, these ideas can't all be right all the time in all organisations.

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One Month Into Our Spend Matters Stock Shares Portfolio– How Does It Look?

- February 7, 2014 2:28 AM | Categories: Commentary

Well, our balanced portfolio of 21 procurement-related stocks from businesses that are significant in our market showed an overall gain of 2.5% from the beginning of January to the beginning of February. That’s not at all bad, given that markets generally have moved down in the month, with major indices like the FTSE and Dow Jones off 3 to 5% over the last 30 days. So in relative terms, that is outperformance by the portfolio of at least 5%, we would reckon. But that, as you would expect, conceals some major variations.

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Optimum, Wax Digital Partnership: The Procurement BPO Land Grab Continues (But With a Twist)

During Jason's recent visit, we met with directors of two UK-based firms, whose reach is currently largely in the UK, but both are interesting enough to make waves on a wider basis in the not too distant future. And, as we’ll see, there is a link between the two. The first meeting was with Peter Rushton of Optimum Procurement. Rushton is one of the founders and directors of Optimum, having learnt his outsourcing trade as part of the team that successfully created Xchanging’s procurement division.

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Proactis to Buy EGS: Initial Thoughts

- January 23, 2014 2:26 AM | Categories: Industry News, M&A

We only launched our Spend Matters Solution Provider Stock Portfolio a couple of weeks ago, but it has already had a galvanising effect on the market, with the first acquisition involving one of the firms in the Portfolio announced last week. Of course, I’m only joking about the cause and effect, but the acquirer is Proactis, the UK-based software firm that’s had past issues with their major investor, largely because of a lack of corporate activity. Since then, Proactis announced a couple of what could be very interesting and worthwhile ventures in India, and produced steady but largely unexciting annual results.

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The Spend Matters Procurement Solution Providers Stock Portfolio is Launched

As we enter 2014, we’ve got a new regular feature for our Spend Matters Plus readers. We’ve looked at all the solution providers in the procurement industry, or as many as we can think of, who provide software, outsourcing, and other services. We’ve tried to identify the main firms that are publicly quoted on various stock exchanges, as opposed to those that are owned by their directors, private equity, venture capital, or other private entities and structures. We intend to use this portfolio for three purposes. Firstly, we will track each firm individually over time and we will feature their financial results and other significant reported events regularly...

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Lockheed Martin Acquires Amor Group, Gets a Foothold in eProcurement Services

- December 9, 2013 7:26 AM | Categories: Industry News, Public Sector, UK/Europe

Is it pointless for government – or indeed private sector businesses - to try and support smaller suppliers (SMEs)? We’ve been writing on Spend Matters UK/Europe about supplier diversity recently, and in a generally positive manner, so it may seem a counter-intuitive question to ask. But one major issue with offering that support was highlighted at the UK government’s Public Accounts Committee the other week. The PAC, as it is known, works to a format whereby the committee of politicians takes a report written by the National Audit Office and quizzes officials, suppliers, or others about the report’s content and related matters. This session was looking at the top outsourced service providers to government – firms such as Atos, Serco, and Capita.

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