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 →
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 →
- Guest post by Kyle Meissner, Sachs Marketing Group -
Payment processing has come a long way in the past few years. Customers have more options than ever before to house their money. Businesses have to make sure that their system reaches out to all its customers to successfully complete transactions. As new technologies emerge, businesses need to stay on top of the experience. Continue reading →
This blog entry is inspired by Leo King, independent journalist, who recently asked three questions and interviewed me for an article in The Times, 21 January, “Building a First-Class Procurement Function.” These are my notes in preparation for the interview, with a few additions and corrected grammar for this publication.
Q1: What are the key factors required for a strong procurement function? Why are these so important?
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 →
Recently I commented on a LinkedIn discussion, “Presently I am looking to devise a simple classification structure for my supply base – something that will allow my suppliers/providers to know where they presently stand from an engagement/expectation perspective and that shows them what they can work towards…. Does anyone have examples of such structures that they can share?”
Today, on seeing @HarvardBiz’s tweet, “We respect leaders more when they don’t need co-pilots,” I was compelled to read the corresponding article in Harvard Business Review, “Why Command-and-Control Leadership Is Here to Stay.” The article comments on the Vroom-Yetton model of leadership, which identifies five different decision-making styles, ranging from autocratic to consultative to group-based decisions. I found the tweet and headline provocative (although the article rather less so). Continue reading →
The concept of Cost to Serve has been around for many years (to my knowledge at least 20) and is an important tool in consumer packaged goods industries. Cost to Serve is a method of identifying profitability of individual products and customers. It is also used to unravel the complexity of multiple supply chains and channels to market. The analysis of the cost of each activity across the supply chain also provides data and insights to enable supply chain optimisation.
The focus of Cost to Serve is usually the in-market or post-launch costs of serving a product to a customer. Cost to Serve rarely looks at the development and launch costs of new products, which is the focus of this article. Yet product development teams can gain benefit from Cost to Serve methodology. Continue reading →
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 →