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Papers and Briefs

Procurement Analytics: How to Plan (and Optimize) Your Process

Pierre Mitchell, Chief Research Officer, Spend Matters
Since procurement, the department, is responsible for supply management (or spend management, if you like), the process, the proper scope for “analytics” is to help answer the right set of questions surrounding the optimal management of supply. Therefore, the scope of this business process is massive, and so is the breadth of technology used for supply analytics. But the key thing to remember is the analytics is a business capability - not just about technology. This paper, excerpted from our Spend Matters PRO Procurement Information Architecture series, is here to help guide you through the analytics process.

Customizing Your Supply Chain: Why, How, and "The Culture of Me"

Pierre Mitchell, Chief Research Officer, Spend Matters
Pierre has previously mentioned the notion of mass customization in the supply chain, discussing the impact on the supply base and procurement itself. This includes a redesign of the needed resources (i.e. services and IT systems underneath). This paper, originally published on Spend Matters Plus, dives a little deeper into the various mechanics of this, giving some real-life examples around how and why customization is becoming necessary.

How to Justify Spend Analysis to Finance/IT When There’s No Clear ROI

Pierre Mitchell, Chief Research Officer, Spend Matters
Analytics are all the rage. And spend analysis is Procurement 101. So, getting some reasonable investment shouldn't be a problem, right? Wrong. The problem with analytics is that the identified value is all “option value.” You don't know how much value opportunity you will uncover with the analytics until you actually perform them (and implement the identified opportunities)! This article, which previously appeared on Spend Matters PRO, gives you ten ways to overcome this Catch-22 problem.

Why Procurement Should Control Payments

Jason Busch and Pierre Mitchell, Spend Matters
Learn ten reasons procurement shouldn't forget the second "P" in "P2P" (if you did forget, it stands for "pay"). Payment matters much more than most folks in procurement think. By taking control of the area, we can do an end-run around the administration hassles and supplier headaches that poorly-run A/P functions create.

A Seat at the Top Table

Peter Smith, Editor, Spend Matters UK/Europe and Ed Cross, Executive Director, Xchanging Procurement Services
We discuss how procurement professionals can position themselves best to work at the highest levels of organisations, and how they can show they’re ready for the top jobs!

Everything You Wanted to Know About MRO Sourcing But Were Afraid to Ask

Jason Busch, Executive Editor, Spend Matters
If your procurement organization is applying old techniques to a category where new approaches, options, and technologies can dramatically impact the cost and quality of the MRO experience, then you’re losing out on potentially tens of millions of dollars of savings.

The effective sourcing of the most strategic and largest MRO areas requires that procurement organizations invest the time to segment their spend effectively by fully exploring different supplier options and understanding internal preference. This paper offers the strategies and tools to do just that!

Re-inventing Direct Procurement

Pierre Mitchell, Managing Director, Research, Spend Matters
In this report based on a recent recent study conducted with ISM, we highlight how and where direct procurement organizations are exerting their influence and leadership (or not) on the broader extended supply chain. We also examine the impact on performance, and specifically how more advanced organizations are implementing 11 key supply management activities that transcend traditional direct procurement.

Conflict Minerals Compliance: Integrating Spend Analysis and Supplier Management Technology

Spend Matters and MetalMiner held an event earlier this year: Conflict Minerals EDGE. It drew over 50 senior practitioners from all areas of the Conflict Minerals supply chain – large OEMs, tier one suppliers, distributors, attorneys, and consultants. The various sessions brought much debate on the topic, but a number of topics stood out. This paper covers what larger organizations are already doing to tackle Conflict Minerals compliance and our own technology recommendations.

Can Supplier Management Be Saved? Analysis and Technology Overview

Jason Busch, Executive Editor and Thomas Kase, Principal Analyst, Spend Matters, and Lisa Reisman, Executive Editor, MetalMiner
This analysis examines some of the key advantages and recent developments in the field of supplier relationship management. MetalMiner's Lisa Reisman looks at two specific examples from the automotive industry, and Spend Matters' Jason Busch and Thomas Kase take an in-depth look from at some of the problems companies face when it comes to supplier management - and what they can do to address them.

P&G: A Case Study of Supply Management's "Non-Invisible Hand" in 10 Easy Lessons

Pierre Mitchell, Managing Director, Research, Spend Matters
Sometimes the best intentions get in the way of constructive outcomes. Such is the case with the coverage behind a Wall Street Journal article on P&G’s recent initiative to extend supplier payment days, as announced by P&G’s Chief Procurement Officer Rick Hughes on their supplier portal.

But the real story is often more nuanced than what shows up in the general business press or trade publications. And in this case, there are several reasons to dig below the surface.

Indirect Category Sourcing Savings: Fact or Fiction?

Peter Smith, Spend Matters UK/Europe and Ed Cross, Xchanging
In this paper we look at what category management and sourcing programmes need to succeed, the paradox of procurement savings and how to deliver credible benefits from such programmes.

The Four Faces of Procurement

Peter Smith, Spend Matters UK/Europe
We look into the future shape of procurement - find out why you will need to be a Diplomat, an Analyst, an Investigator and a Leader if you want to really succeed as a top procurement professional in 2020!.

Is your Supplier Selection Process a Source of Competitive Disadvantage?

Peter Smith, Spend Matters UK/Europe
Pre-qualification. Not the most exciting topic in the world is it? And yet we regularly choose suppliers who bring unacceptable risk or fail to deliver to our organisations. Then there are the great suppliers who never make it through to winning our business. Not to mention the cost and time needed for the pre-qualification process.

In this Spend Matters research paper we describe how pre-qualification can help – or hinder – your efforts to improve procurement performance, and why it is an important part of the overall sourcing process. We explain the different purposes of the pre-qualification process, why it is important and how it can add value. We look at how to construct and manage an effective pre‑qualification programme, and the different stages involved in the process. We will also comment on the cost of the process, and the options, benefits and issues around using third parties to assist in the process, which can save significant time and money.

Balancing internal and external service provision - key decisions for procurement professionals

Peter Smith, Spend Matters UK/Europe
In this new Spend Matters research paper, we look at two separate but related topics.

The first looks at what we believe is a key role for procurement leaders today. That is to optimize the use of resources from both inside and outside the organization, blending them successfully to achieve their goals. We consider the decision process CPOs can use to decide what is best delivered from external sources, and why getting these decisions right can bring big benefits.

Supplier Lifecycle Management: Reduce risk, Improve Performance and drive Supplier Value

Peter Smith, Spend Matters UK/Europe
In this research paper, Peter Smith looks at the concept of Supplier Lifecycle Management, which works from the premise that the supplier should be considered as central to procurement activities and processes.

Managing Indirect Services – Procurement’s Greatest Opportunity?

Peter Smith, Spend Matters UK/Europe
This Spend Matters research paper considers complex services and how procurement executives and functions can gain more influence in these spend categories by moving up the "maturity ladder" in terms of procurement input and performance. In many organisations, procurement continue to struggle to get involved and lack credibility, so we highlight challenges and success factors.

Market-Informed Sourcing: A game-changer for Procurement

Peter Smith, Spend Matters UK/Europe
In this paper, sponsored by BravoSolution, we suggest that the latest advanced sourcing technology brings opportunity for organisations – but only if procurement changes the current approach to Category Management, one of our most fundamental processes and methodologies.

Driving Real Value from Multiple Supplier Framework Contracts

Peter Smith, Spend Matters UK/Europe
How technology can simplify contracting and help buyers maintain competitive pressure when using frameworks, in the public sector and beyond.

Frameworks, and their close cousins preferred supplier lists, have become a central tool used throughout the public and private sectors used with the aim of driving effective and good value procurement. But there has been criticism that, too often, they don't deliver that value; they may be convenient for users, but the lack of volume commitment up-front means that the terms offered by suppliers are often a long way short of their best.

Sourcing Optimisation – Extracting Value from Complexity

by Peter Smith, Spend Matters UK/Europe
This paper looks at how optimisation tools are changing the way in which organisations can achieve increased value and performance from large-scale and complicated sourcing challenges.

School Catering: Value for schools; nutrition and enjoyment for children

Peter Smith, Spend Matters UK/Europe
This Spend Matters case study focuses on a group of schools who have used a framework contract and an innovative software platform to let new catering contracts that will provide flexibility and value.

If it ain't broke, fix it!

Peter Smith, Spend Matters UK/Europe
In this opinion paper, we look at why organisations and individuals often leave it too late before looking to innovate and change. Quoting Charles Handy and his work, we explain why you should be radical, even when things are going well!

Misc. Briefs

Ariba Network Price Hike: Plan for Increased Supplier Fees in September 2010

Jason Busch
Ariba is increasing supplier network fees in September 2010 by a significant amount. Certain supplier groups (higher spend/dollar volume, lower transaction volume) will be most impacted, with the cost to process invoices for this group to potentially exceed $100 per invoice in certain cases. Specifically, Ariba is raising network fees to 15.5 basis points (.155%) for suppliers meeting new, lower transacting volume thresholds, meaning more suppliers will be impacted. This represents a 55% price increase from the previous 10 basis point cost (e.g., a $100 invoice would incur a 15.5 cent versus 10 cent fee).

Managing Supplier Risk in a Post-Recession Recession: Webinar Slides

Jason Busch
With most indicators suggesting that the economy is no longer declining, but growth and rebound will be slow, there's more pressure than ever to manage suppliers effectively. One way you can meet this challenge is to take a collaborative approach in managing your supplier relationships.

Exploring the Dirty Secrets of Dirty Supplier Data - Adding up the Costs for Finance and Procurement: Webinar Slides

Jason Busch
Slides from this recent webinar that may provide insight into the correct antidote to a malady that's currently metastasizing within a number of corporate patients. Moreover, if you fix the dirty data problem, you can potentially identify and book savings much faster than through sourcing and spend analysis projects. Sherry DePaw of Lavante and Jason Busch of Spend Matters put on their lab coats and do their best to provide your organization with the information necessary to win the fight against contaminated and outdated data.

Quantifying Supplier Management Returns-Hard Dollar Working Capital Improvement and Beyond: Webinar Slides

Jason Busch
A look at working capital as one of the benefits of supplier management and provides a general overview of today's current landscape in the sector.

Richard Stack, director of sourcing and procurement at Boston University, provides a case study example of how BU deployed a dynamic supplier information management system that pushed the responsibility for data quality back to the source-the suppliers. It also enabled working capital operational process savings of $16 million.