Procurement news from the US — Weekly Round-Up

Hey, guess what? Peter will be HERE at the Spend Matters US headquarters next week, and I can’t wait to have him relive his university days by taking an evening to cox my rowing team and then filling him with the greasiest Chicago-style pizza and Bud Light (The horror! The horror!). Kidding, kidding. In all seriousness, we’re greatly looking forward to his visit and have some great activities planned -- especially around procurement. More on that next week.

Also, thanks for checking out Healthcare Matters! We saw a steady stream of UK readers yesterday and today, and today we officially hit our highest traffic numbers yet.

Here’s what’s up:

I have to include a Friday rant, because it was a tad incendiary: Friday Rant: An Enemy of Treasury, Procurement: Time to Blow Up A/P (Diagnostic Included!!) “Accounts payable is a wretched function. It's mere existence, to pay vendors, strikes of something begging to be automated or absorbed into another function. And that would be if it did it right. All too often, AP organizations do a horrible job at forecasting liabilities -- they simply don't have access to the information necessary to forecast specific payment dates, let alone to enable suppliers to take advantage of early payment programs that could, theoretically, turn the function into an asset. Secretly, it's not only treasury that dislikes AP or must deal with its ineptness. It's also procurement, who must face the aloof AP wrath of not having any visibility into the black hole of when their strategic suppliers will actually be paid, agreed upon terms or not.”

Cost reduction? Zzzzzzzzz. Beyond the Cost Reduction Pill: What Corporate Malady can Procurement Executives Address Next? “I enjoyed the first installment of a guest blog over on Procurement Leaders authored by Sammy Rashed, who I had the opportunity to catch up with at Procurement Leaders' last US event in Chicago. Sammy, who serves as Novartis' global head of productivity strategy and PMO, is no stranger to the tactical elements of sourcing and procurement automation cost reduction. But, as he suggests, he's taking things in new directions at Novartis beyond typical Spend Management practices. No doubt, as Sammy observes, "procurement has increasingly become recognised as a strategic partner to the business...However while enjoying its time in the sun, the function has somewhat become a victim of its own success: driving savings through cost management and compliance has brought impressive results but at the same time kept procurement professionals focused on their knitting."

All you ever wanted to know about cloves, phosphates, and Thai chicken. Breaking the law, the commodity way! “The choice this week is a mixed bag, ranging from cloves, to phosphate rocks, to tartrazine and finally chicken. They all have a theme which is quite difficult to spot apart from the recent price movements. The theme is legality, starting with the base commodity, followed by some interesting trivia.”

Looking back. Success Cues May Be in the Rearview Mirror for Procurement “We've tried it already and it failed." It's regrettably a line too many procurement leaders hear as they strategize new cost efficiency initiatives. Implementing a new spend management program or procurement technology integration is challenging enough, but an unfortunately large number of new initiatives face scars left by previously failed attempts at similar programs. (One company we advised on change management and communications had eight different fruitless attempts on record!). Our assessment has shown that in most cases these previous failures were the result of people related issues -- lack of leadership support, ineffective governance, little stakeholder involvement, poor adoption, etc. One client said it simply: "Changing technology is easy, the hard part is changing people.”

And finally, here’s some fun. Best of Spend Matters: Spend Humor

- Sheena Moore

First Voice

  1. Paul H:

    I have fond memories of my one visit to Chicago in 2006, staying in a hotel next to the Merchandise Mart, I wandered out one evening for a pizza pie and a Bud. When I made my order, the waitress first asked me if I was eating alone or whether a friend would be joining me and when I said I was eating alone, she asked me if I was sure I wanted what I ordered. Of course, I said. Needless to say I could only eat two and half slices of the medium pie I had ordered before I was completely full. The waitress just gave me that knowing look!

    What a fantastic city though, I’m sure Peter will enjoy his first visit immensely.

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