Some cautionary advice on the use of Supply Positioning

A recent discussion with procurement consultant, Bill Young, caused us to reflect on the use of ‘supply positioning’ as a model for developing strategies to add value through procurement. We considered the possibility of positioning procurement projects rather than purchase items or supply categories. I concluded that this application had potential but also had practical difficulties. The use of supply positioning by Procurement, without the engagement of other stakeholders, is dangerous. As supply positioning is often misapplied, I thought I might share my thoughts here. Continue reading

Supply chain: a cross-functional collaboration… or the blinkered approach of functional silos?

A recent post in Purchasing Insight, “What can game theory teach us about Financial Supply Chain Management?” highlights the overall financial impact of paying suppliers as late as possible. The key point is that the working capital cost to supplier usually far outweighs the savings to the customer, thereby increasing the overall cost to the supply chain. The post got me thinking about a much bigger issue: how businesses manage their supply chains – a cross-functional collaboration or a collection of functional silos? Continue reading

Lean vs Agile Supply Chain… or can we have both?

This blog is inspired by Rudi Verheyden who posted a question “Does Supply Chain LEANness mean that the Supply Chain organisation is also agile, or are these 2 elements rather conflicting or independent from each other ?”  in the Supply Chain Optimization Group on LinkedIn. (The same question is also posted in the Inspired Supply Chain & Logistics Executives Group but at time of writing had no comments.)

This is a very big question, with many facets to be explored. I look forward to following the discussion. My immediate thoughts are that there is some conflict, some consistency and some dependency. Continue reading

How to Determine Purchasing Organisation: Purchasing Activity Analysis

Judging by the limited references in the literature on purchasing practice and purchasing organisation, it would seem that purchasing activity analysis is a much underrated tool.

Why is activity analysis an important tool in determining purchasing organisation and establishing good practice? Continue reading

The Role of Procurement: Cost Saving or Adding Value?

Where does cost saving sit in your Procurement’s scheme of things?

In a recent series of articles I have been examining the reasons why procurement cost-saving initiatives frequently fail to meet expectations, particularly in term of delivering measurable improvements in business profitability. There is undoubtedly a bigger question: where does cost saving sit in Procurement’s scheme of things? Continue reading

Is your Procurement initiative really a cost saver? – The 8 questions to ask.

Today I ask, “How are you to know that your procurement ‘cost saving’ initiative will not deliver to the bottom line?

Regular readers of my blog will know that, recently, I wrote a series of articles on the reasons why, when many large organisations embark on centralised procurement initiatives with the promise of substantial savings, direct increases in profitability fail to materialize within the business units. Continue reading