Tagged Content: Procurement Research

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

- 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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FMC Technologies: Closing the SPM and Spend Analysis Books Fast!

- June 12, 2013 8:04 AM | Categories: Commentary

FMC Technologies’ spend analysis and SPM process is mature and fast enough that procurement leadership has promised business users that they will have access to updated reports within five days of their monthly closes (the frequency of refreshes is monthly). Yet FMC Technologies is exceeding its internal service level agreements in this area. At the moment, the process has become so streamlined that users get their data three days ahead of schedule – on “Day 2” after close!

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Exploring A/P and Procurement Best Practices at P&G: Lesson 5

- June 11, 2013 10:10 AM | Categories: Procurement Research

By the “hand of God,” I don’t mean soccer player Diego Maradona’s famous soccer goal but rather the ability to take invoices that might have otherwise been DOA (dead on arrival) in terms of capturing an early payment discount— and bringing them to life via a dynamic discount offer (i.e., “pay me now” – even past the early pay discount date) to the supplier. I saw P&G do a presentation a few years ago. This was something they wanted to implement more thoroughly, and I suspect that they might use one of their banking partners to help offer this (e.g., JP Morgan Chase is a good example of this with their Order-to-Pay service, acquired from Xign), but of course there are many other options from a landscape of providers.

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Exploring A/P and Procurement Best Practices at P&G: Lesson 4

- June 10, 2013 10:08 AM | Categories: Procurement Research

Lesson Four here is that project participants must understand improvement objectives and how to handle trade-offs. So let’s assume you’ve seized a nice prize, and per the WSJ article, let’s say the prize for P&G is $2B in cash. The prize could be taken as freed cash (or to a supplier, an increase in cash held captive!) But it could also be taken as a cost reduction in the form of an early discount. So, we have the classic cash vs. cost trade-off (we’ll ignore the service aspect of on-time payments that AP is measured on). So, which is more important? In this case, it’s cash.

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Alternative Spend Analysis Approaches: Performance Management at FMC Technologies

- June 6, 2013 8:07 AM | Categories: Commentary

Unlike many organizations that use spend analysis as a tool to drive supplier rationalization, FMC Technologies is not looking to reduce its supply base. Rather, their focus on building visibility into spending and supplier performance centers on standardizing and deepening relationships with their strategic suppliers worldwide. Some of the data points they leverage in this hybrid spend and performance analysis include quality, on-time delivery, open purchase orders (POs), forecasts and supplier risk information.

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Tax Optimization Meets Supply Chain and Procurement

- June 3, 2013 8:07 AM | Categories: Commentary

KPMG frames the topic in their analysis by noting that “most multinational manufacturers are currently struggling to ‘triangulate’ their supply chain to achieve end-to-end visibility among customers, suppliers, partners and intragroup entities. This is not just about improving ERP systems or other ICT elements; it also requires organizations to carefully plan and monitor the division of roles, risks and tangible and intangible assets amongst the group.”

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Getting More from P2P with Better Analytics and KPIs (Part 2)

- May 2, 2013 6:02 AM | Categories: Procurement Research

In the first installment of this series, based on the Spend Matters research paper Avoiding “Dumb Ways to Die”: eProcurement and P2P Style Adoption Scenarios to Breathe Life into Implementations, we began to explore the limitations of analytics and insight often found in today’s P2P implementations. When thinking about the type of insight that’s essential for building through better dashboards, reporting and analytics, we must consider a number of areas. This visibility could include the ability to drill down on vendor information, such as spend with specific suppliers on a PO, non-PO and invoice basis linked back to historic baselines […]

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Compliance Elements and Supplier Management

- May 1, 2013 10:05 AM | Categories: Procurement Research

When Spend Matters surveyed 36 companies during Q4 2011 on their interest in substance and materials centric compliance as part of supplier management and supply chain risk programs, a number of compliance elements emerged that were of keen interest to corporate procurement and supply chain leaders. Materials conformance was noted by nearly 70% of survey respondents as being a compliance element “when selecting and managing vendors and materials.” Somewhat similarly, the importance of adherence to a proprietary set of internal or adherence to a set of industry criteria was noted by 62% and 56%, respectively. Interest in environmental health and […]

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Enabling Suppliers Without Massive Cost or Effort

- April 24, 2013 10:02 AM | Categories: Procurement Research

What organization does not have thousands of suppliers that ideally they would onboard into a closed-loop, visible procurement environment? Just about every middle market and larger entity wants this level of supplier enablement. Yet one size never fits all when it comes to onboarding and enablement for a given supply base, which is why the great majority of vendors are not linked into a closed-loop system. For supplier enablement, companies must make trade-offs when it comes to how quick and cheap they want a process to be. Furthermore, they must consider what level of automation touch points they require: self-service […]

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An Open Letter to the WSJ: Do Big Companies Really “Pinch Suppliers on Payments”?

- April 23, 2013 6:53 AM | Categories: Commentary

When we see business and news media coverage of the somewhat esoteric procurement, finance and supply chain topics that form the core of our focus on Spend Matters, we usually celebrate. The classic logic is that the more attention the popular press can bring to supply management, the better for everyone on the supply side. Yet sadly, this is not always the case anymore. Shades of grey are to blame. Procurement and finance topics are more complicated than ever, especially where new processes and supplier engagement approaches can lessen the often zero-sum buyer/vendor relationship game. To this end, we believe […]

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2013 CPOs Agenda – First Quarter Update

- April 2, 2013 9:33 AM | Categories: Commentary

I caught up with some old colleagues of mine at The Hackett Group, who offered to let me share some of the insights from their 2013 procurement key issues study.  I am familiar with the study (because I actually developed it!), but here are some of the highlights and my reflections upon them one quarter into 2013: The overall focus for the enterprise was not just cost discipline, but agility to respond to changing global business conditions.  Just sitting in on annual stakeholder planning and budgeting sessions is not enough to stay aligned.  Proactive engagement of stakeholders to develop scenarios […]

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Conflict Minerals Compliance: Bill of Material (BOM) Approaches

- March 19, 2013 10:29 AM | Categories: Procurement Research

This post is based on excerpts from the MetalMiner (part of the Spend Matters Network) paper: The Definitive Guide to Conflict Minerals Compliance for Manufacturers: An A–Z Guide to Conflict Minerals and Semi-Finished Metals. Spend Matters PRO Subscribers can also click to read two more detailed technology analyses on conflict minerals compliance strategy here and here. If one could leverage opportunities to use the International Material Data System database for 3T’s/G purposes in an industry like automotive, or if a company builds their own approach tied to a BOM, PLM or similar resource-- at some point it makes sense to […]

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