Economists like to point to the German Mittelstand as an example of how manufacturing and export economies can thrive without necessarily depending on the direct support of larger companies and conglomerates around them. But what fascinates me about the Mittelstand is not looking at this group of middle market firms as an archetype overall for manufacturing renewal in the West generally but rather specific procurement lessons we can learn from it. What I found when investigating this wide range of organizations during a recent trip to Germany took me off guard. In short, the Mittelstand in Germany is generally more advanced and standardized within procurement. There are both general procurement lessons to be learned from this group as well as technology-specific lessons, the latter of which we’ll focus on today.
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I recently spent three days on a scouting and fact-finding mission in Munich and Frankfurt. During the trip, I had the chance to talk to a broad range of organizations — technology vendors, consultants, practitioners, financial services firms — about the current state of procurement and supply chain in Germany. In particular, the lessons I learned about the state of the Mittelstand, or what we would term “middle market” procurement organizations in the U.S., really took me aback in a positive way. For the sake of argument here, let’s define middle market as ranging from $250 million to $2.5 billion in annual revenue. On the flight back, I jotted down 10 lessons from the Mittelstand I thought would be applicable to procurement practitioners everywhere. Today we start with 5 general procurement lessons. In the second installment of this PRO series, we’ll cover technology lessons.
It’s not news to any buyer of software development labor services that businesses are encountering shortages. Demand is exceeding supply and costs are rising. This presents a wicked problem for buyers. But sourcing and buying through online channels and platforms may present new solutions. In this Plus brief, we will provide insight into the different kinds of online platforms for software developers and software development services that are now operational, in order to give buyers a taste of this new supply source landscape. In the second brief of this two-part series, we will discuss the challenges buyers face in tapping into this digitally intermediated pool of talent and service providers as well as suggest some ideas for taking steps forward.
Back at the beginning of 2014, Peter Smith, chief research officer and managing director of Spend Matters UK/Europe and Public Spend Matters Europe, identified the top five things procurement professionals should focus on for the coming year. He reflected on these priorities in another one of our popular Ask the Expert webinars: Ask the Expert: 5 Priorities for Procurement Leaders in 2014. This top five list may have been based on trends at the time, but it remains relevant today for a procurement organization to continue creating value for its company, to innovate and improve.
Human resources has a place in procurement, Gert van der Heijden, executive editor of Spend Matters Netherlands, proves in another one of our most popular Ask the Expert webinars. In this webinar, Ask the Expert: The HR Side of Sourcing and Procurement, Gert explains how a procurement organization effectively hires and manages its team members. He takes listeners through how to pick the best candidates for the job, what competencies these candidates must have to be successful in the procurement role and how to keep them onboard and continue to elevate the organization’s sourcing process. Check out the full webinar in this post...
This is your last chance to register for this afternoon's webinar and learn The 7 Deadly Barriers to a Successful Procurement Business Case. Pierre Mitchell, chief research officer at Spend Matters, and Dipan Karumsi, managing director, operations advisory services at KPMG, will give you the confidence you need to makes the case to your CFO, who is increasingly upping his or her standard of what constitutes successful ROI. Register here and join us at 12 p.m. CDT. (Can't make it live? Register anyway and we'll send you a copy of the slides and recording of the webinar for you to review at your convenience.)
At the very beginning of 2015, the Spend Matters Analyst Team made more than 20 procurement predictions for the year ahead. Now that we are well into the second half of 2015, did any of these predictions come to light in the procurement and supply chain industry? To find out, check out one of our most popular Ask the Expert webinars of all time: Ask the Expert: 2015 Procurement Predictions – Part 1. This webinar launched a series of webinars in which Spend Matters analysts discussed the changes they expected to take shape over the next 12 months. In this first prediction webinar, Jason Bush, founder and managing director, and Pierre Mitchell, chief research officer, joined forces to tackle the first 5 predictions on the long list.
We kicked off this series on global process ownership (GPO) last month over on our Chief Procurement Officer website. The first parts of this series discussed the concept of global process ownership and its relevance to procurement and then dove down into 2 of the 3 key aspects of GPO: process scope/breadth and organizational scope/breadth (or “reach”). So, you may define a process such as category management to be very broad, and you may adopt it globally across all your business units (and across multiple spend categories), but you may not manage that end-to-end process very well in terms of the “quality” of the process ownership. I'm not talking about process quality in terms of defect rates and such, but more broadly. Let me explain...
Is consensus decision making the right approach for CPOs and other executives in leadership positions? Maybe not, according to some recent academic research. The headline finding from the study published in Proceedings of the National Academy of Sciences, is that people tend to regard the views of other members in a group equally, regardless of competence. This "equality bias" then prevents them from making optimum decisions as a group. And, while consensus decision making is seen as a positive approach that motivates staff and helps to get buy-in from our teams and stakeholders in a business context, it may not make the best sense for procurement organizations.
This is Part 2 of our PRO series that began earlier this week. What should procurement do regarding supplier diversity? There is a clear shared-value benefit for the buy-side to actively finding and engaging with SMWBE firms. We don't need to create artificial reasons to satisfy photo ops and artificial statistical goals. Today's SMWBE is tomorrow's innovative growth success and its acquisition target! For future success, the inherent shared value derived from engaging with SMWBE firms is critical to both companies and country.
In the first part of this multi-part series, we will begin to methodically dismantle the myths and lore that have been tribally developed over the years within procurement that have now become “common wisdom.” No, this will not include something as obvious as dispelling the myth of “procurement is all about reducing vendor prices.” There are many more than that – at least 25 of them, actually. Some you may know. Some you may not. And some you may not agree with it. But, it is important to have the discussion because complacency and the lack of awareness is the real risk.
Asset-intensive industries such as mining, energy (including oil & gas), utilities, chemicals, heavy equipment, construction and related sectors can meet, exceed or miss earnings expectations based on the availability of key assets and facilities in their portfolio, from plants to rigs. To maximize up-time and availability and to minimize the time to overhaul specific assets, many have invested in specialized solutions to manage plants and other facilities. Yet in the vast majority of cases, organizations have not prioritized specialized procurement solutions that could drive substantial savings, risk reduction and other benefits, sitting alongside asset and facility solutions including Maximo/IBM, SAP PM/MM, IFS, Ventyx, ABB, Oracle Asset Management, Intentia, Infor EAM and others. This Spend Matters PRO brief, the second in a series, explores MRO-specific e-procurement use cases for specialized investment in this area. Today’s analysis centers on building the business case for specialized investment in this area and provides recommendations to organizations on how to get started.