Procurement News from the US: Riots at Foxconn, The Elusive “Group Buy,” Optimizing Marketing Spend

Get a grip on contract management!

We’ve gotten some amazing feedback around the webinar Peter and Jason presented on earlier this week. If you attended, thanks very much. If you didn’t and are tearing out your hair because you missed it, the recorded version is available here: Getting to Grips with Contract Management - Managing Contract Visibility, Risk and Opportunity as a CPO

Apple and their ongoing vendor management approaches...

Memo to Foxconn (and Apple): Don't Discipline Your Workers with Nightsticks -- As Chris Rock said about Rodney King and LAPD in one of his skits on The Chris Rock Show: "if the police have to come and get you, they're bringing an ass kickin' with them." Unfortunately, this particular labor/supplier management philosophical embrace courtesy of the LAPD seems to run rampant among Foxconn's security staff in China at the moment. The topic to which I refer specifically is Foxconn's latest labor challenges (and Apple's supplier management challenge) outlined in the following Reuter's article.

Mo’ Money Mo’ Problems.

Samsung and Beyond: Can Suppliers Meet Apple’s Supply Chain Thirst? (Part 1) -- In this commentary, Bob strikes at a broader chord: Apple is massive. It's truly massive on a scale that is hard to fathom, in fact. Let's put the numbers in perspective. As we observe in a recent research brief on Spend Matters PRO titled Apple, the Global Market Monster: Supply Chain Voodoo, "with Apple's market cap now reaching $656 billion ... [the company] makes up at least ¼% of the world's total financial markets (well, technically Apple's shareholders own ¼% of all the financial assets in the world)." (Part 2 here)

SIM is carving itself quite the niche these days.

Constantine Limberakis -- Former Industry Analyst Now 100% Focused on Supplier Management (Part 1) -- Late this summer, Aberdeen's lead analyst in the procurement area, Constantine Limberakis, left the research world to get his hands dirty in the supplier management sandbox, joining HICX Solutions Ltd. as the head of marketing. I've known Constantine for years and used to consider him one of my go-to colleagues and experts in the P2P solutions area (Ariba specifically) before he left the consulting world for the industry analyst halls. Now, he's made the transition full-time over to the vendor side of the house.

Thoughts on group buying?

The Elusive Group Buy: GPOs, Healthcare and Beyond (Part 1) -- The concept of group buying is one that many seasoned procurement buyers and managers often get excited about, given the leverage such an initiative might bring in getting suppliers to sharpen their pencils (and ideally improve service levels). Yet the number of effective group buys (different from leveraged contracts!) are tiny in the scheme of overall corporate spending. Might this be changing? Over on HealthCare Matters, my colleague Tom Finn recently covered Healthcare GPO Premier's Success with Group Buying Initiatives.

The last part in our series on procurement hazing.

The Case for Procurement Hazing (Part 3) -- I previously tossed out the first of three suggestions exploring why the procurement universe needs a type of hazing to elevate its capability and status. Outside of top performing organizations, a newfound level of visibility and respect for the profession is desperately needed (despite what some may think, we have a very long way to go). Consider how the UK government is attempting to more narrowly redefine procurement by creating a whole new class of public servant outside the function (who in fact is still "procuring").

A useful guest contribution from Alavarez & Marsal.

Optimizing Marketing Spend in a Digital World (Part 1) -- Marketing has not historically been an easily measured function. While component goods or even other services were easy targets for the procurement function's cost reduction efforts, marketers have always held that measuring the impact of their spend was "part art, part science." Marketing is still "part art," but thanks to changes in media, consumer targeting, and availability of data, the ability to measure--and impact--your company's marketing spend is taking a big step in the direction of science.

Have a wonderful weekend, all!

- Sheena Moore

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