It is when a set of specific efforts (outside of human capital management) comes together alongside fostering a talent-centric culture that true, lasting change and procurement impact become possible. Take the concept of creating a center of excellence of or CoE. Effective CoEs must rely on more than just KPIs/benchmarks. But while we need to make them more powerful to enable teams in new ways (e.g., enabling category managers with better supplier and market information), simply tossing headcount at the problem will not solve the issue.more ▸
Spend Matters welcomes this guest post from David C. Wyld of Southeastern Louisiana University. Whether it is in a corporate conference room on the floor with the nicest furniture, a white board-lined room at a major consulting firm, or the hallway outside an MBA classroom, you won’t go long without hearing the term “value chain” these days. Read on to hear more about how "both the procurement function and the marketing area are crucial in that they occupy strategic placement at opposing ends of that chain".more ▸
I'm writing this from the economy cabin of a very busy London to Dubai flight, on my way to run a couple of workshops in Dubai and Abu Dhabi for the BravoSolution joint venture in the region, Tejari. By the time you read this, the workshop will be completed, and the topic in Dubai is Procurement Transformation - Myth or Reality? One of the reasons we chose this as a topic is that "transformation" has become an over-used expression and procurement has not been immune to its charms. In this Plus article, Pierre Smith talks about what exactly a procurement "transformation" means.more ▸
Spend Matters welcomes this guest post from Vroozi. Holding an interim position isn’t easy. You step into a recently vacated role and are tasked with leading an established group with an established set of practices. Meanwhile, you likely have your own thoughts and ideas and would like to establish yourself as someone who can handle the position going forward—once the interim label is removed. This process is no easier when the interim person in question is the interim chief procurement officer.more ▸
In our previous ‘shades’ (begin with Shade 1 here), we helped describe a foundational capability: to analyze and make visible how much money has been paid to suppliers. We also discussed how to wrangle the supplier master data that feeds the payment data that in turn, feeds the analytics. Now, in this Spend Matters Plus Research brief, Chief Research Officer Pierre Mitchell explores and classifies the types of suppliers with which you've held transactions to analyze your spend – ultimately signaling the shift from spend analysis to supply base analysis.more ▸
Spend Matters welcomes a guest post from Paul Blake, a sales manager at GEP. Earlier this week, I met with a prospective client to talk about spend visibility, big data. and all that good stuff. With the best of intentions of course, and having applied a very great deal of resource and brain power (and inevitably cold hard cash), this client had built a program of data capture, manipulation, and transformation, based on all sorts of rules and manual interventions all designed to make sense of their global spend patterns. I got the impression that they felt that had created a bit of a monster that they'd yet to get anything really, you know, useful out of.more ▸
With each passing year, there are fewer categories in which supply chain transparency (including visibility into total cost at different tiers) is not rising – often considerably. But the lumber industry is one in which total cost transparency is blurred through an intermediary-led brokerage model that has evolved little for over half a century. Woodbrowser is hoping to change this. With the support of one of FreeMarkets co-founders, Sam Kinney - probably one of the most authoritative experts on real-world market mechanisms and market design (and, in full disclosure, a friend and mentor) - Woodbrowser is hoping to shake up the economics of the lumber market.more ▸
The Best-of-Breed vs. ERP Debate is Dead: What Really Matters in Best-in-Class Procurement Suites? will take place this Friday, September 12 at 11 a.m. CDT. Join us for this brief, half-hour event as we attempt to study the nature of procurement suites and identify emerging trends. There will also be a brief demo to demonstrate functionality of the trends we’ve detailed during the webinar. Register here.more ▸
The bigger the organization, the more political the decision-making process is – a maxim all too familiar to most of us. Sourcing, by definition, will step on numerous toes as it navigates the shark infested organizational waters toward better total cost and value outcomes. Internal silos and fiefdoms will have to be cracked open in order to create the best results.
Along the way, as we have all seen, many worthwhile initiatives fail for the lack of adoption sword – the unimplemented savings – as the industry euphemism goes for the negotiated savings that the sourcing team created, but the business users passive-aggressively ignored. Even worse, relationships, both internal and external, take a turn for the worse as toes are crushed under a well intended, but perhaps awkwardly placed, sourcing boot. Some stakeholders run for the mattresses and start sniping you. Others approach the procurement challenge as a no-knock, no-survivors SWAT team effort, doing more harm than good; equally destructive of long-term trust with stakeholders and suppliers.more ▸
Join us this Friday, Sept. 12 at 11 a.m. CDT for The Best-of-Breed vs. ERP Debate is Dead: So What Really Matters in Best-in-Class Procurement Suites? Register heremore ▸
Many organizations recognize that the procurement function can provide the business with much more than simply getting the lowest cost for purchased materials and services. These organizations understand the potential for having procurement align its efforts with the strategies and goals of other business units as well as the enterprise as a whole.
In practice, this can take the form of involving other business groups and even external partners in the selection and appraisal of suppliers. According to APQC’s Open Standards Benchmarking in procurement, organizations involve a variety of groups in this activity, from marketing and sales groups to other suppliers, depending on the needs of the organization. However, the R&D/engineering group and manufacturing group are most often involved in this process. About 60 percent of organizations involve the R&D group in supplier selection and appraisal, and just over 56 percent of organizations involve the manufacturing group.more ▸
Sourcing in Latin America (with Mexico Focus): A Primer for U.S. and Canada Procurement Organizations
Earlier today, Jason Busch, Spend Matters’ founder and managing director, and Xavier Olivera, director of Spend Matters Mexico and Latin America, conducted an “Ask the Expert” webinar titled Spend Matters en Español: The State of Procurement in Mexico and Latin America. Given the interest among both practitioners and providers in the U.S. in understanding priorities and how to do business in Mexico and neighboring countries most effectively, we decided to write a quick primer to showcase those items that companies should be considering as they develop their efforts in the region. For U.S. and Canadian organizations, the total cost equation is increasingly adding up for Mexico sourcing – and the ease of doing business is rising as well (aside from new regulations and compliance requirements for e-invoicing, which we will be exploring in more detail in a separate analysis).
Considering rising U.S. interest in nearshore sourcing, the timing could not be more perfect to launch a new site focusing on Latin America procurement and supply chain (Spend Matters will be launching this site in conjunction with Xavier in Sept/Oct 2014). Awareness and interest is at an all-time high among Latin American companies. Mexican organizations, in particular, are prioritizing efforts to get smart on tech solutions including analytics, P2P, and sourcing. This Spend Matters PRO research brief begins to explore top procurement priorities in the region and the state of solution adoption – as well as how to do business effectively with local suppliers and procurement organizations.more ▸