Ariba and the price of the Snickers Bar wrapper (part 1)

I was reading Jason's post - excellent and insightful as usual - on Ariba and their "cloud based category management solutions", which appear to be taking them more and more into the consulting / procurement outsourcing space.  I won't repeat things here; take a look if you're interested.

But that got me thinking about a concept that we don't often discuss in procurement; competitive advantage.

I started my career in Mars (that's in Mars, not on Mars.  Mars Confectionery in Slough).  And as a terrified young Buyer, meeting the Mars brothers was a real experience.  "If they fall asleep during your presentation, just keep talking" I was instructed by my Director.

But what 'the Family' wanted to know was not whether we had saved money against last year's costs, or even the budgeted 'standrad price',  for butter, cocoa or packaging, but this.   "What have you done to make sure you're buying packaging better than Cadbury / Nestle / Hershey?"  In other words, how are you providing the company with competitive advantage?

Of course there was some benefit if, say, prices were coming down in the packaging market; all chocolate bars would become a little cheaper and consumers would eat more.  But in the long term, we couldn't do anything about market movements.  What we could do was make sure we bought better than the competition, so Mars could offer better value and take market share from the competition.  If my Orange Juice costs had gone up 20% but Cadbury were paying 30% more, that was fine with Forrest and John.

I've never worked anywhere since that had quite such a strong focus on this concept, rightly or wrongly.  It certainly served Mars well as one of the greatest business success stories of the last century.

So tomorrow I'll explain why I think it is relevant to procurement and Ariba.

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Voices (4)

  1. Drew1166:

    I may have to act on the nostalgia you have awakened! 😉

  2. Peter:

    Absolutely – best firm I ever worked for by some distance.

  3. Drew1166:

    A lesson I draw from this is that family owned businesses of a certain size are the ones to work for – they have vision, patience and they nurture.

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