Spend Matters

Analytics at the Core of P2P and E-Invoicing: Bridging the A/P, Finance and Procurement Gap

Jason Busch — Tue, 18 Jun 2013 21:05:05 +0000

One of the key elements of advanced analytics is not just increasing dataset complexity (e.g., adding more and more source data, like back-end financial systems and card-payment data) but rather exploring the key intersections and trending of the combinations of assets. “Big data” is almost a misnomer in this context. The queries and visualizations that sit on top of slices of the underlying dataset combinations are even more valuable.

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posted in Commentary by Jason Busch

Capital Equipment Sourcing: Pitfalls to Avoid

Guest Post — Tue, 18 Jun 2013 19:51:20 +0000

Procurement professionals who participate in the sourcing decisions for capital equipment often face several challenges: how to measure and derive value (especially when historical precedent is not available), how to gain the trust of the business stakeholders (especially the plant production and engineering ones), how to gain an “even place” at the negotiation table with the suppliers, etc. In attempting to address several or all of these challenges simultaneously, procurement professionals lose on more than one count. There are a few important pitfalls that need to be avoided to ensure success in the sourcing efforts of capital equipment.

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posted in Commentary by Guest Post

Produce Without Bees, Grass-fed Beef, Automotive Supply Chains Face Pressure

Sheena Moore — Tue, 18 Jun 2013 17:36:18 +0000

What would your grocery store produce section look like if bees going extinct? (It’s pretty scary). Also, is there really a massive difference between buying, procuring, purchasing, and sourcing? What’s going on with the automotive supply chain? And finally, what’s it like to raise grass-fed versus corn-fed beef? Find out in today’s edition of Afternoon Coffee.

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posted in Commentary by Sheena Moore

The Hidden Supply Chain Benefits of Chinese/US Cross-Border Swine Deals (Part 1)

Jason Busch — Tue, 18 Jun 2013 16:07:28 +0000

Excuse our slightly biased headline, but we find it more than a little amusing that China would find a way to import porcine food safety through a recently announced acquisition (pending regulatory approval) of Smithfield Foods by Shuanghui International. Now if you look at Shuanghui’s list of shareholders, this might seem like a typical cross-border PE-led takeover. After all, private sector firms are listed among the major Shuanghui shareholders. However, there are potential reasons for welcoming this transaction.

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posted in Commentary by Jason Busch

Exploring A/P and Procurement Best Practices at P&G: Lesson 7

Pierre Mitchell — Tue, 18 Jun 2013 14:01:05 +0000

Lesson #7 here is that the hand must be a helping hand, i.e., not brass knuckles. In any procurement project, taking all relevant stakeholder perspectives into account is key – especially supplier perspectives. A project that merely stretches payment terms is obviously not a recipe for success. As P&G’s Rick notes, “Rather than a simple ‘mandate’ which we believe could be punishing for our small/midsize partners, we have developed a solution with pre-selected partner-banks that will enable us to offer a financial product called ‘Supply Chain Financing’ (SCF) that can create a win-win-win for our external partners, P&G, and the banks.”

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posted in Procurement Research by Pierre Mitchell

Basware: The P2P Conundrum Keeps Chugging (Part 1)

Jason Busch — Tue, 18 Jun 2013 12:37:42 +0000

We’ve always liked dealing with the folks at Basware. Unlike many other tech firms in the P2P sector, at Basware there’s a general awareness that deep technology and product knowledge is essential. This holds true on the marketing and sales front, but it also cascades up and down product management and even into the corporate development side of the business. Those who know Basware well for its software-based e-invoicing capabilities are well aware of the peel-the-onion depth that has gone into the product over the years. Basware is not only impressive as a tool for A/P efficiency, however. It’s a toolbox that in the right hands and with the right support behind it can make A/P strategic to the business versus just being a cost and risk center.

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posted in Commentary by Jason Busch

Processing Tomato Production Down in the US and Abroad

Guest Post — Mon, 17 Jun 2013 19:41:21 +0000

Tomatoes produced for processing are very different from those intended for the fresh market. Typically, processing tomatoes are of the plum variety, always picked ripe, and packaged aseptically, i.e. drummed, canned, or bagged in a sterile environment to increase shelf life. In August 2012, we wrote about how the US processing tomato crop was “coming to the rescue” as production in 2012 fell in the global market. Ten months on and in the new 2013 season, it seems that production in the US is set to fall this year while global supplies are expected to become increasingly restricted due to another poor global crop and low carryover stocks.

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posted in Industry News by Guest Post

Car Industry Faces Parts Shortage, Investor Urges Smithfield Breakup, DreamWorks Signs Deal with Netflix

Sydney Lazarus — Mon, 17 Jun 2013 17:33:14 +0000

More new car models and more consumers wanting to buy new cars is causing a parts shortage across the automobile industry. Could Smithfield Foods be worth more broken up and sold separately? And how would you answer this question, if you were a Miss USA contestant: “A recent report shows that in 40 percent of American families with children, women are the primary earners, yet they continue to earn less than men. What does this say about society?” Afternoon Coffee brings you the latest in supply chain, business and pageant news.

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posted in Industry News by Sydney Lazarus

Exploring A/P and Procurement Best Practices at P&G: Lesson 6 (Part 2)

Pierre Mitchell — Mon, 17 Jun 2013 16:01:48 +0000

For companies like P&G, GE, J&J, etc., there will always be a tension and trade-off between opportunities at the business unit level versus the corporate level. Functions like procurement will need to walk the fine line between both rather than swinging wildly from one to the other. Procurement must help the business units and functional partners get more value from their supplier spending individually, and also look for cross-BU opportunities not just by spend category, but also by risk type, opportunity type (e.g., supply chain financing), region, corporate-wide program, etc.

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posted in Procurement Research by Pierre Mitchell

Exploring A/P and Procurement Best Practices at P&G: Lesson 6 (Part 1)

Pierre Mitchell — Mon, 17 Jun 2013 14:09:48 +0000

Trade-offs exist everywhere, especially in regards to the trade-off of cash, cost, service and risk. “Service” is broadly defined, starting with the end customer and aligning back through internal stakeholders and back to suppliers. We discussed the cash versus cost trade-off above. But it could just as well be trading off raw material inventory levels (cash) vs. inventory (service) level performance vs. the cost of replenishment. Similarly, the trade-off could be between the relentless search for innovation and revenue traded off against the costs of creating that growth.

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posted in Procurement Research by Pierre Mitchell