Best Practices Content

Exploring A/P and Procurement Best Practices at P&G: Lesson 10 and Conclusion

Lesson #10: Make Your Invisible Hand Visible Key to any procurement journey is the demonstrated ability not only to implement successfully, but also to storyboard […]

Exploring A/P and Procurement Best Practices at P&G: Lesson 8

Lesson 8 is "Whoever has the best hand wins." While this adage pertains most literally to poker, the procurement lesson is really about finding the best resources (e.g., internal vs. external) to execute procurement processes, whether they are "steady-state" or transformational. Processes might be executed by salaried staff, contingent labor, BPO firms and/or suppliers themselves. There is even a rise of a category we have begun to cover on Spend Matters called “procurement managed services,” which falls somewhere in between consultancy, skilled contingency and BPO work.

The Hidden Procurement & Supply Chain Benefits of Chinese/US Cross-Border Swine Deals (Part 2)

As the NYT pointed out in a column highlighting some of the details (and regulatory scrutiny) surrounding the recently announced acquisition of Smithfield Foods by Shuanghui International, a partially state owned/influenced Chinese firm, closure of this deal in particular is not a given. But something we can take away from the proposed transaction regardless is not just Western capacity in the agricultural and food supply chain, but also the value of enhanced supply chain visibility and risk standards in driving deals and valuations in these areas.

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

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.

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

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.

PMOs Have Failed in IT: Should We Really Use Them in Procurement?

My colleague Jason Busch just penned a fine piece on PMOs in procurement, and since I have some experience in this area, I thought I would weigh in. Project Management Offices (PMOs) sound great theoretically: better project visibility, coordination, standardization, resource utilization, etc. to optimize all the project activity going on. Great, so, let’s learn about PMOs where they’re most implemented and then adopt those best practices: IT. One would think that in areas such as IT where PMO's have been implemented more than anywhere else, we could look there to understand the benefits.

Dark Clouds on the Horizon? Your Data is Everywhere, Whether You Like It Or Not

Think about it. You create a document on your laptop – it’s got performance results, strategic positioning statements and an analysis of the biggest risks to your operation and you email it to the senior management. Now there are a dozen copies of that document on as many laptops. Your colleagues have their company email synced to smartphones and tablets and within moments those sensitive documents are replicated dozens of times on as many devices. Those individuals concerned with losing data will back it up to memory sticks. Before you know it, the data you spent millions on protecting has spread like a virus across half the devices in your company in a highly concentrated, easy-to-understand form. Any one of those devices could be lost, mislaid, stolen or otherwise compromised, and it is an awful lot easier to crack email on a smartphone than a corporate firewall.

Exploring A/P and Procurement Best Practices at P&G: Lesson 3

The third lesson to remember is that the invisible hand needs to make invisible opportunity visible. Even when companies strive to simplify the value chain, there are still opportunities, albeit they tend to be hidden and difficult to find. P&G has employed many typical strategies for creating value in the P2P process, including an ERP backbone "wrapped" with appropriate best of breed solutions, a supplier portal strategy and others.

Exploring A/P and Procurement Best Practices at P&G: Lesson 1

In this ten-part series of procurement lessons from P&G, the first thing to keep in mind is that there is "no rest for the best." I have yet to meet a single “award winning” procurement organization that does everything well and has run out of opportunities to pursue. I always roll my eyes when companies want to find the ultimate world-class procurement organization to learn from. That’s impossible – it’s a search for a purple squirrel.