Tag Archives: L2

FedEx Quietly Unveils New Surcharge

Guest Post - June 19, 2013 1:20 PM | Categories: Commentary

If you’re a FedEx customer who utilizes SmartPost services, now’s the time to push back on new surcharges. There is little reason to believe that FedEx’s cost justification for this most recent example adds up, even though the carrier has yet to offer an official explanation. What does add up, however, is FedEx’s mile-long list of surcharges (370 to date) that continue to negatively impact shippers’ budgets. Not a FedEx customer? Don’t let your guard down. If past behavior is any indication, UPS will soon follow suit with a similar surcharge.

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Uganda’s Coffee Entrepreneur, Men’s Wearhouse Ousts Founder, Natura Pet Food Recall

Sydney Lazarus - June 19, 2013 11:49 AM | Categories: Industry News

Afternoon Coffee brings you some news close to its heart. The coffee business is nothing new in Uganda, a country producing 3.4 million bags of coffee beans each year. However, the beans are usually exported raw to the West, where they are roasted and packed and processed. Ugandan businessman Andrew Rugasira seeks to bring the refining process back to Uganda, with the corresponding profits split 50-50 with his network of thousands of local farmers.

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

Pierre Mitchell - June 19, 2013 10:13 AM | Categories: Procurement Research

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.

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

Jason Busch - June 19, 2013 8:39 AM | Categories: Commentary, Commodities

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.

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Capital Equipment Sourcing: Pitfalls to Avoid

Guest Post - June 18, 2013 1:51 PM | Categories: Commentary

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

Sheena Moore - June 18, 2013 11:36 AM | Categories: Commentary

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

Jason Busch - June 18, 2013 10:07 AM | Categories: Commentary

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

Pierre Mitchell - June 18, 2013 8:01 AM | Categories: Procurement Research

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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Processing Tomato Production Down in the US and Abroad

Guest Post - June 17, 2013 1:41 PM | Categories: Industry News

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

Sydney Lazarus - June 17, 2013 11:33 AM | Categories: Industry News

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

Pierre Mitchell - June 17, 2013 10:01 AM | Categories: Procurement Research

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

Pierre Mitchell - June 17, 2013 8:09 AM | Categories: Procurement Research

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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Charlie Trotter Sued Over Counterfeit Wine, Billboards and the Moon, Beechcraft Loses to Embraer

Sheena Moore - June 14, 2013 11:45 AM | Categories: Commentary

Two collectors have alleged that Charlie Trotter sold them a counterfeit bottle of wine for $46K, Corona is doing some pretty fun advertising stuff right now, Beechcraft lost a $431 million contract with the USAF to Brazil-based Embraer, US industrial output stayed slow in May, and we end with some Father's Day fun.

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Canadian Purchasing and Supply Chain Organizations to Combine

Sydney Lazarus - June 14, 2013 10:28 AM | Categories: Commentary

This week, members of the Purchasing Management Association of Canada (PMAC) and Supply Chain and Logistics Association Canada (SCL) voted in favor of merging operations. The new organization will be called the Supply Chain Management Association (SCMA), effective September 3.

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

Pierre Mitchell - June 14, 2013 9:14 AM | Categories: Commentary

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.

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How Might We Drive Innovation from Others’ Assets?

Guest Post - June 13, 2013 1:44 PM | Categories: Commentary

Last month, Shweta Shanker of GEP wrote a dead-on post on Procurement and Marketing Collaboration. One of the many important points she made is the need for procurement to provide visibility into any individual supplier’s spend relationship, which then ensures that all possible leverage is maintained. Conversely, one might argue that marketing needs to provide upstream visibility into their activities so that procurement has adequate time to source and procure. All too frequently, marketing’s creative process eats the time theoretically allotted to sourcing and procurement. As a result, procurement is forced to provide expedient support (using the same suppliers every time) as opposed to optimal support, delivering the best possible pricing and quality for the marketing piece or program.

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