The Point

As I look at my weekend ahead, and the one behind, my family has 3 significant wedding anniversaries being celebrated. Brace yourself - 29 years, 50 years and wait for it.... 68 years. Incredible!! Those couples entered into a contract all those years ago and clearly had an evergreen clause to keep renewing year after year. I know it was not without work and making adjustments as needed. Quite similar to what is required with suppliers that you would work with as a procurement professional.

The eSourcing wiki series this week is about the Benefits of Contract management. There is a very positive story with statistics to back it up on why organizations should choose and implement a process for managing contracts. 

Many organizations have difficulty with contracts in two ways. First is getting it through the contract cycle in the first place to finish the sourcing initiative. The longer that takes, the longer it is until the new pricing, service or program is in place. In Jason Busch's 10 Ways to Drive Procurement Influence, Number 2 is moving sourcing into contracts.

Everyone has a story of a partnership or business relationship that changed over time and eventually dissolved. That is the nature of things. What is difficult is when that was not solidified from the beginning with a contract of some kind to protect both parties and the continuity of the business and the clients. No one likes that type of drama or thrill added to their workday! 

Earlier this week, we discussed the Many Hats a procurement professional wears. With that comes the many skills that are needed. I know the breadth of it can seem daunting. You need to be a good analyst, negotiator, influencer, presenter, and communicator. How does anyone fit all those talents into the same resource? And how do you begin to try to train existing staff as they want to develop in their career?

When I read this blog, I found a lot of correlation to raising children. Don't promise if you can't deliver and don't threaten if you won't carry through. I know my son was a fussy eater. One day he was given a choice to either eat the supper or go to bed. It was only 5PM and he choose to go to bed. Needless to say, we would have been the losers in that battle so out came the peanut butter.

As procurement professionals, we are in constant negotiation. These tactics from sales associates often include various types of strong arming.

Basic Advice for staying healthy - KEEP ON MOVING! Walk, swim, play tennis, golf - whatever! Just keep moving! Certainly nothing fancy about that but not always easy to execute on. There is always something more important or pressing in the schedule.

The same is true for our professional health. KEEP ON MOVING - attending webinars, reading and learning new tools and strategies. 

When I was growing up, we had shortcuts to our friends houses in the neighborhood. There was a well worn path through the backyards. Grass did not have a chance of ever growing!!

Everyone loves the benefits of shortcuts. Easier and faster! This week's esourcing Wiki is about the benefits of utilizing optimization. A fancy word for shortcut!

We spoke a few days ago about What is today in 100 years? The theme was about sustainability and adopting that strategy and practices into your procurement organization. Buyers Meeting Point has a motto of Learn, Share, Grow. Certainly as we do that with sustainability practices, we move as a whole faster to a better environment.

There is a lot of news lately about the Titanic and the voyage of 100 years ago. With that in mind, I looked at today in history and saw many interesting facts from hundreds of years ago to just a few years ago. It always strikes me that something I think just happened was actually in 1980 or 1990 something.

 So how does all this tie into procurement. What are you doing today that someone will look at 100 years from now?

Whenever you do business in a culture different from your own, there is so much to learn. There are many nuances that can make or break the deal. This blog from Smart China Sourcing outlines some of the common mistakes.

Most organizations do not have the time or resources to work directly with the manufacturers in China so they must rely on a third party to be their 'eyes and ears on the street'. Because of that, the process of selecting that agent becomes a serious selection process that requires serious attention.

Most of us ask the 'what if' question to ourselves about many of our personal decisions. "What if I eat another piece of cake?" "What if I take this job?" "What if I say yes to.....". For such a small word, "if" carries a lot of weight.

In the use of optimization for your analysis of a procurement bid, using "what if" scenarios also carries a lot of weight. In this week's featured eSourcing Wiki article, we introduced the idea of Optimization. 

I always think "indirect spend" is an interesting term. One company's indirect is another's direct. Similar to one person's trash is another's treasure? For example, most companies buy laptops and IT equipment as tools to run their business. Yet IBM and Dell think of it as their "direct" spend to their customers.

Managing the indirect spend and controlling costs make such a huge impact to the bottom line. Technology is changing so quickly, it is getting more and more difficult to manage this area of procurement. By the time a rollout is underway, there is another version or an upgrade available. 

When a sourcing professional is being reviewed or considered for a new position, we often look at their negotiation skills, analytical abilities and sometimes their communication style. However, it is rare when we review their project management expertise. This is critical and often overlooked and underrated. Without it, timelines get stretched and deadlines missed if projects are not managed properly. I myself have been frustrated by others when it becomes apparent they are not capable of developing a plan and following the process to completion. I would imagine you have been too. 

Last night I was on the phone with my favorite daughter (only one as well!) and she was talking about Pinterest which I had never heard of. Then Voila – it seems to be everywhere I look. My first reaction was oh no, not another social media website. I am on overload as it is and can't keep up with Twitter, Facebook, blogs, email, websites. I am sure many people feel the same way. Information overload - how do you know which way to turn? 

People do business with people they like. We have all heard that phrase before and know it holds a great deal of weight. In this economic climate, the financials have to be the key driver in decision making. However, with that being comparable, the strength of the relationship will seal the deal.

The process is basic and simple but since not everyone does this, it can be quite a differentiator. This has a lot to do with procurement since you have internal customers and also constantly working with suppliers and salesmen.  

Sears, as one of the largest retailers, has a slogan "The softer side of Sears".  This week's eSourcing Wiki article is about eAuctions in Sourcing. It too describes a softer side of auctions which offers a great deal of value.

Most of the time when a company is running an auction, they are focused on savings and getting the lowest price. While the award may not go to the supplier with the lowest price, it sets the stage overall. 

Those who are optimists see the glass half full and those who aren't see it as half empty. There is also a saying : Plan for the worst and hope for the best.

A few years ago I had the opportunity to participate in development of a business continuity plan. My first instinct was that this was going to be a waste of time. Nothing is ever going to happen so why talk about it. As we went through it, there were so many considerations. The first of which was to know the locations of all the associates and did we have emergency contact information easily accessible for their families. We failed miserably on that simple one never mind any of the more complicated ones.

Much of the news this week has been reviewing the events of a year ago when a tsunami hit Japan. Like most things of this nature, it seems impossible that a year has passed.  The rebuilding is a massive undertaking and will be years and decades in the making.

This event displayed the risk and exposure that so many companies have within their supply chain. With the globalization of businesses, events around the world can significantly impact operations and profits.

I found this article in Industry Week very appropriate as it discussed the risk and lessons learned over the past year. So many organizations have survived but not many really changed much in the interim. Those that are building a strategy have followed some of what is discussed in this article.

We have all had the persistent sales account manager who is contacting us multiple times weekly or even daily. That can be incredibly annoying. There is also the time that you answer the phone late in the day and wish you hadn't as someone goes into their sales pitch. Been there, done that!!

So what is it that opens the door for the sales person and the procurement professional is welcoming and thankful they did? How do they get that first appointment?