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Procurement

4 Posts authored by: Kris Colby

In the New Normal, it's never been more important to understand where your  organization sits relative to your peers and competitors. This is particularly  true when it comes to commerce management strategies and approaches. A majority  of companies are using some form of advanced commerce management techniques to  help meeting their goals - be it controlling costs, minimizing risk, optimizing  cash flow, increasing sales or improving profits.

 

To help companies understand their opportunities, priorities and challenges,  Ariba is conducting the 2010 Ariba Business Commerce Survey now through April  30. Topics such as Challenges in the New Normal, Supply Risk, Cloud Computing  plans, and Working Capital Management are being covered.

 

Many of you received a survey invitation via email. But if you didn't and  would like to share your perspective in the survey (and receive a customized  report on the results), contact me  directly at kcolby[at]ariba.com - to get an invitation.

While making fun of the way governments purchase has long been a good source of humor in spend management circles, the deficit news coming out now leads one to believe that it is now time to really make something happen. 
What do you think?  How would you make this happen?  Is it a lost cause?
Ariba has jumped into the fray several times and has even set up, with the help of some public sector experts, a toolkit for public sector professionals to get started. 
The value that has been realized by the private sector from the institution of advanced sourcing, contracting, procurement and payment techniques has been staggering. Many in the private sector look at this and think "if only we could do this for the government and, even more, the taxpayer".  Despite the very real challenges, the potential value from broad implementation of Spend Management in the public sector is enormous. Cost savings is just one of the benefits:
  • Improved compliance with existing processes and regulations
  • Reduced cycle times associated with contracting and acquisition
  • Better products and services to agencies and stakeholders
  • Lower Total Cost of Ownership for government purchases, both goods and services
  • More transparency into spend, supplier performance, invoicing and all other parts of the Source-to-Pay cycle
However, the hurdles are very real, from lack of incentives, to special interests, to outdated technology.
At this point (and regardless of your political affiliation), we in US are endangering are grandchildren's futures and need to take action. 

We're hearing increasing talk of procurement professionals (just starting to) turn their attention from sheer survival to some of the other important things on their list.  An article just today in Procurement Leaders is a good example.  http://www.procurementleaders.com/news/latestnews/436-analysis-focus-on-people/

 

Has this occurred for you yet?  Can you start to pay attention to People, Knowledge, Category and Supplier Development yet?  Or are you still in bailing out the water mode?

A reminder that Supply Risk doesn’t go away just because the economy perks up a bit…

Supplies of Eggo waffles were cut off recently due to flooding at a Kellogg factory in the Southeast US. While Kellogg is surely working feverishly to restore supply, the shortages are expected to continue until the middle of next year. Apart from the havoc this is going to wreak on my own household’s morning routine, the key message in this episode of breakfast-interruptus is that the threat to your supply chain from Supply Risk is only partly-related to the supplier bankruptcies that made so many headlines last year.

Instead, organizations need a plan for all three types of risk (Disruption, Brand and Price) across their entire portfolio. Doing so requires:

  • A structured, proactive and (especially) sustained process
  • Technology to support the massive amounts of data involved
  • Content about suppliers, markets, and geographies, and
  • Access to a pre-enabled supply base

Only with all these components can you be sure that you’ve taken all the steps necessary to defend your supply chain from the many threats of the New Normal.

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