Piggybacking off of our recent plastics outlook for Q4 2016, we had the chance to sit in on a presentation given by Paul Blanchard, director of engineering plastics for IHS Chemical, for The Right Place/Supply Chain Management Council's Commodity Trends 2017 Outlook. Whereas Spend Matters contributor John Hall focused more tightly on the drivers of feedstock costs and pricing — ethylene and propylene, for example — Blanchard dove into three distinct markets: ABS, polycarbonate and nylon 6 (and nylon 6,6). (Although, I'd be remiss not to mention that Blanchard fielded a polypropylene question right off the bat – and late last week we ran a propylene outlook on Spend Matters from our friends at contributing firm Mintec.) Here are some details and price outlooks behind the three resin markets, according to Blanchard and IHS Chemical.
The Procurement Strategy & Planning Category
Spend Matters welcomes this guest post from Michael Nelson of Alvarez & Marsal. Ask any executive in a product-based company if they think a formal Sales, Inventory and Operations Planning (SIOP) process is critical to success in their business and they will immediately say “yes, of course.” Ask them if their companies have this process in place, or do it well, and they will just as quickly say “no, not yet.” So, why is this the case in too many companies? It is hard to do, and even harder to do well! There are several factors that contribute to difficulty in SIOP implementation and process stabilization. However, if you understand the failure modes, you have a much better chance of successfully implementing a beneficial Sales, Inventory & Operations Planning process. Here's how.
The latest version of ISO9001 (called ISO9001:2015) is a “quality system” that is really a business management system customers might ask you to get certified in — and that you may in turn ask your suppliers to get certified. The beauty of ISO9001:2015 is that it can actually help you do both of these things simultaneously while also using the power of a customer-required certification as a way to drive internal change management. In the previous two installments that I wrote on ISO9001, I focused on using ISO9001 for such transformation, specifically on how to align risk and compliance, and to build a business case for supply risk management.
In this two-part Spend Matters Plus brief, I highlight how to use ISO9001:2015 to not just run the business but more specifically the business of procurement. This will illustrate how to make a quality management system that is more than just a transformative business management system — a transformational supply management system.
More important, this brief delivers deeper dive into ISO9001:2015 and shows procurement professionals how exactly how to use it to drive 100% spend influence in strategic sourcing and supplier management. People often forget that spend/supply influence also includes supplier management, when, in fact, the leader of ISO9001:2015 described the capabilities from ISO9001 simply as “confidence that customers around the world right through the supply chain — business-to-business and business-to-consumer — right down to us as individuals, can have confidence in the products and services they’re receiving from their certified suppliers”
It makes complete sense, and the certification can help procurement drive a case for change on this simple idea.
Procurement organizations almost always say, “We can’t mandate anything around here.” Well, now you have a mandate. So, use it to your advantage. We’ll show you how.
An n-step chevron process is a siloed procurement-centered sourcing methodology geared towards supplier rationalization. It’s a fine start for procurement hitting cost savings goals, but it’s not a great way to align to the broader organization as procurement evolves. So, we’re proposing DMAIC as an emerging, superior approach, but it’s far beyond the DMAIC that you usually think of. The n-step sourcing process has had a good run, but let’s not try to make it do unholy things. Read on to see how other companies have used DMAIC.
I’m excited to announce a new relationship with Accenture that I know our Spend Matters Plus+ readers will be excited about. Accenture currently publishes a broad set of category intelligence and analysis to its community of procurement clients. These Spend Trends insights offer some of the latest thinking, from strategies for third-party management to optimizing MRO spend and risk management approaches in critical categories like energy.
When it comes to attracting top talent, there’s a lot of conflicting information about what matters most — especially around generations just entering the workforce. Beanbag chairs and corporate swag may seem like easy ways to attract prospects, but at the end of the day, employees are looking for more than just cool stuff when shopping for a job. That was the overwhelming consensus of the recently released 2016 Universum Talent Survey, which polled more than 70,000 undergraduate students on topics such as salary expectations, career trends and what they look for in an ideal organization. As procurement leaders consider implementing targeted hiring strategies in order to develop their talent landscapes, they should consider harnessing and promoting these five organizational attributes that more than scratch the surface.
Prices for most plastics will continue rising during the fourth quarter, thanks to surging raw material costs, capacity issues and a rebound in crude oil. Observers are mixed on the current market state. In late August, Plastic News’ Bill Wood asserted domestic plastic production was actually down most of 2016 and will likely end the year flat.
As an old Zen Buddhist riddle goes, “If you seek it, you can not find it.” To paraphrase, you'll be miserable if you seek happiness only through specific outcomes rather than attaining happiness merely as a byproduct of living life fully. The same concept applies to cost savings. Procurement groups that only focus on finding purchased cost savings as their raison d’être will not be happy, nor will the stakeholders who own the spending where savings are generated.
What technology solutions does your procurement organization use? Procure-to-pay? E-invoicing? Are supply chain practices connected to your company’s accounts payable processes via a cloud-based network solution? Or, is your organization still relying largely manual processes and paper invoices? The answers to these questions can shine a light on the maturity level of your procurement organization.
Spend Matters welcomes this guest post from Maulick Dave, of GEP.
One of the most popular KPIs used to measure the performance of a procurement organization is savings realized. However, the magnitude of the savings projected at the goal setting phase for the year, or at the start of a sourcing project, is often looked upon with skepticism. How can you verify such cases and set a practical savings target that will improve your planning and decision-making abilities?
Rapid Ratings has released a very cool procurement content solution that I had a chance to kick the tires on. It’s called a “Financial Dialogue Report,” and basically it packages up Rapid Rating’s FHR (Financial Health Rating) score, CHS (Core Health Score) and supporting FHR components and data analytics into a scripted conversational guide that buyers can use to support their discussions with suppliers regarding “data of concern.”
Spend Matters welcomes this guest post from Wayne Weil, director, performance improvement at Alvarez & Marsal.
One of the hottest topics in the financial services regulatory world is third-party risk management (3PRM). While regulated firms scramble to meet new guidelines, they may be surprised to find there is a group within their organization that has been working to accomplish many of the same goals for years: the procurement organization. The people, processes and tools found within most procurement organizations can provide a powerful complement to the compliance organization’s third-party risk management aims. As firms grapple with developing compliant 3PRM programs, they would be well served to partner with their procurement teams to jump-start the implementation, as well as to capture the additional hard-dollar benefits that have been the yardstick for success in traditional vendor management.