Next Level Purchasing

Purchasing & Supply Management Salary Trends Revealed on April 30!

Charles Dominick 4/23/2014 5:33:00 PM



One of the most popular pieces of annual procurement research is back for its fourth year:  The Next Level Purchasing Association’s “Purchasing & Supply Management Salaries in 2014” report and webinar!

By attending this webinar, you will be the first to learn of some very revealing statistics about purchasing and supply management salaries.  Are they going up?  In what industry do procurement and supply management professionals make the most?  What difference does certification make?  And how do salaries of women purchasing and supply management professionals compare to those of their male counterparts?

All of these questions and more will be answered and backed by data from a survey of over 1,100 purchasing and supply management professionals from throughout the world.  And like we do every year at the Next Level Purchasing Association (NLPA), we’ll be slicing and dicing salary data in new and informative ways to help you better pinpoint what you could and should be earning!

This is a webinar you do not want to miss!


This webinar will be held on Wednesday April 30, 2014 at 11:30AM Eastern US time. This webinar is open to all members of the NLPA and a Basic Membership in the NLPA is instant and doesn't cost a cent! Here's how to secure your attendance for the webinar:

If you're already an NLPA member: Head over to http://www.NextLevelPurchasing.com/login.html, log into the members' area, and navigate to the "Webinars" tab. There you'll find a registration link, be sure to enter a valid email address as attendance details will be sent to you by email.

If you're not yet an NLPA member: Register for your complimentary Basic Membership in the Next Level Purchasing Association at http://www.NextLevelPurchasing.com/procurement-association.php?pcb. After doing so, you'll receive an email with information about how to log in. After logging in, navigate to the "Webinars" tab. There you'll find a registration link, be sure to enter a valid email address as attendance details will be sent to you by email.

Registration may be limited, so sign up soon to ensure access to this event. I hope that you will join me for this exciting webinar!

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com

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Tricky Cost Savings Calculation Example

Charles Dominick 4/22/2014 6:47:00 PM

I hope that you have enjoyed the article, "Tricky Cost Savings Calculations."

In the article, I walked you through four calculations that you may use in situations where calculating cost savings is not cut-and-dried.  I'd like to take this opportunity to walk you through an example.

Let's say that your price for an item was $100 on January 1 of last year.  You bought 300 units at that price until the price changed to $90 on October 1 of last year.  You bought 100 more units at that price last year and 100 more units in the first quarter of this year.  Then, for the rest of this year, you bought 300 units at $85.

What is your cost savings for this year?

Some procurement professionals, in an effort to boost their cost savings numbers, would say that each unit they bought for $90 would produce a savings of $10 and each unit they bought for $85 would produce a savings of $15.  That would result in a cost savings of $5,500.

That's not correct!

The correct cost savings is $3,600.

"Whaaaat?," you ask.  Let me explain...

The issue with the calculation of $5,500 in cost savings is that the highest price from last year should not be your baseline.

So, what should be the baseline?  $90?

Nope, not that either.

Walking through the calculations from the article...

Calculation A: Last Year's Average Price = Total Spent Last Year / Number of Units Purchased Last Year

Last Year's Average Price = ((300 x $100) + (100 x $90)) / (300 + 100)
Last Year's Average Price = ($30,000 + $9,000) / 400
Last Year's Average Price = $39,000 / 400
Last Year's Average Price = $97.50


Calculation B: This Year's Average Price = Total Spent This Year / Number of Units Purchased This Year

This Year's Average Price = ((100 x $90) + (300 x $85)) / (100 + 300)
This Year's Average Price = ($9,000 + $25,500) / 400
This Year's Average Price = $34,500 / 400
This Year's Average Price = $88.50


Calculation C: This Year's Cost Savings = (Last Year's Average Price – This Year's Average Price) x Number of Units Purchased This Year

This Year's Cost Savings = ($97.50 - $88.50) x 400
This Year's Cost Savings = $9.00 x 400
This Year's Cost Savings = $3,600

So, each unit purchased will contribute to cost savings by the difference between the price paid and a baseline price of $97.50.

Got it?

Good!

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com


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3 Confessions of a Buying Maverick

Greg Uhrlen 4/18/2014 6:06:00 PM

Maverick Buyer

(The name has been changed to protect the innocent)

I have a confession to make: my name is Josh and I am a buying maverick.  However, I am in recovery now that I work for the Next Level Purchasing Association.

So how did I come to acknowledge my problem?  In two words, “procurement education”.

Working in an environment where I am surrounded by great material like SPSM Certification courses, “PurchTips” and our express courses, has made it much clearer to me that I had erred in my ways.

I assumed I was saving my previous employers time and money, in the long run, I was causing greater problems for the organizations as a whole.

Under the Radar:
I worked for a gentleman for many years whose goal was for our department to do things “under the radar”.  He himself was somewhat of a maverick and instilled such qualities into our team.  Admittedly, it made us a stronger group utilizing the “us against the world” mentality which is so often seen in professional sports.  Purchasing wise, it wasn’t beneficial for our company.  We had no accountability and were able to purchase items that on occasion became huge assets to the business, but more often than not became paper weights in our offices.  Purchase Order reviews were done by the Human Resources department who “rubber stamped” just about everything because they didn’t know our business function and didn’t want to be bothered.  Talk about a lost opportunity for measuring ROI, cost savings and containment!

Enablers Along the Way:
In one of my previous positions, I was told by one of the owners of the company to, “skip the procurement manager on hardware purchases”. Since I reported directly to him, I took it as a great opportunity to make my life easier.  However, there was a caveat to this directive.  I had to use a particular “buyers group” for all hardware purchases.  As I quickly learned, this “buyers group” was no bargain, purchases of desktop PC’s alone were 25% higher than buying online straight from the manufacturer!  Even though I reported my findings back to my boss, I was told to keep purchasing hardware in this way.  You can draw your own conclusions from this story, however it did keep me away from the purchasing manager’s office.

There’s No Such Thing as a Free Lunch:
In my first senior level position, I was suddenly overwhelmed with all the attention I received from vendors, consulting organizations, etc.  Somebody always wanted to take me out to lunch to discuss their latest and greatest offering.  In the past, I’d never had a problem saying no to people. But let’s face it, regardless of how ethical one tries to be, such perks eventually wear you down and your judgment becomes a bit clouded.  Purchasing SaaS or technical support services is easier to do when someone is schmoozing you and talking up their product line constantly than when you have to dig really deep into the nuances of a product or service you truly know little about.  Hence, you make buying decisions based on the words of convenient acquaintances rather than sound judgment. 

4  Realizations of a Buying Maverick:
  •        Maverick buying is harmful to all levels of your organization.  Just say no.
  •             Maintaining a standard of ethics at all times in crucial to your employer.
  •              While your input is important, leave purchasing decisions to the purchasing department – that’s  their specialty!
  •            Businesses need to have an educated purchasing professional; no longer should purchasing be cast upon someone with no procurement experience.
H      Here are 6 critical tips to stop maverick buying within your organization.

Share with us your stories of maverick buying and how you have dealt which such detrimental situations.


To your career success,


Greg Uhrlen
Next Level Purchasing Association

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50 Procurement Tips for the 100th Day of 2014

Greg Uhrlen 4/10/2014 9:42:00 PM

This week, we here at Next Level Purchasing Association (quietly) celebrated Charles' 300th PurchTips newsletter.  Over the years, PurchTips has become a "must-read" for over 260,000 purchasing professional across the world.

Since I am in the mood to celebrate, (hey it is the 100th day of the year, it's almost Friday and the sunshine has finally reappeared in this part of the USA!) I have taken 50 quick procurement tips Charles has authored over the past 300 issues of PurchTips and condensed them into one article.  Enjoy and here's to the next 300!

1.  Your supplier's first impression of you impacts how much you will be able to persuade that supplier in a negotiation.
2.  Require suppliers to complete and return a Notice of Intent to Participate provided in your RFP so you can predict participation.
3.  Identify the risks to achieving your terms, timeline, and other goals and plan to mitigate those risks.
4.  Anticipate your supplier's reaction to each tactic.
5.  Create tiered risk/rewards scenarios for Service Level Agreements.
6.  See if the supplier has implemented a leading quality improvement program like Lean, Six Sigma, or Lean Six Sigma.
7.  Determine the format (i.e., face-to-face, phone, etc.) and location of your negotiation sessions.
8.  Regular oversight can ensure that your global suppliers are behaving properly and reduce risk for your organization.
9.  Don't make your offer seem like a predictable negotiation tactic.
10.  Factor internal customers' interests into supplier selection criteria.
11.  Find out what motivates the vendor and make it win-win. 
12.  Create an agenda for the negotiation and practice.
13.  Develop a timeline for the negotiation process.
14.  Identify your second-best option in case you cannot reach agreement with your primary supplier.
15.  For each metric, determine the value that would separate "good" performance from "average" or "mediocre" performance in your particular situation.  
16.  Analyzing suppliers' "financials" is a critical activity in supplier qualification.
17.  Look for small "value adds" to enhance the deal.  
18.  Self-assess after each negotiation session and adjust strategy and tactics if necessary.
19.  Identify the risks to achieving your terms, timeline, and other goals and plan to mitigate those risks.
20.  Check if the supplier has a quality-related certification like ISO9001.
21.  Develop and share internally a communications plan stating who must be updated on negotiation progress and what information they must keep confidential.
22.  Comply with your employer's policy on accepting gifts, meals, and entertainment from suppliers.
23.  Ensure/insist that the supplier assigns a negotiator with decision-making authority.
24.  Review notes from previous negotiations, courses, etc. for tips for success.
25.  Start the negotiation confidently.
26.  Evaluate the probability of political unrest in the supplier's country including uprisings, war, or sanctions by your country.
27.  Knowing how direct costs, overhead, and profits comprise suppliers' prices gives you a negotiating advantage.
28.  Decide what to concede if necessary to reach agreement.
29.  Evaluate the probability that the supplier will covertly use prohibited materials (e.g., lead paint).
30.  Agree on an objective price adjustment method for the future.
31.  Evaluate the likelihood that the supplier's quality performance will not be within acceptable limits.
32.  Identify changes that you can make that will help you improve your numbers. If you already exceed the standard, aim even higher!
33.  Evaluate the probability of new legislation that would require a design or materials change.
34.  Invite the primary supplier to negotiate and learn who the supplier's principal negotiator is.
35.  Evaluate the probability of work stoppages (i.e., strikes) for multiple tiers of suppliers.
36.  Identify all the terms that you will negotiate.
37.  See if the supplier uses parts-per-million (ppm) as its quality unit of measure, not percent defective.
38.  Define the criteria for being a good purchasing professional.
39.  Set targets and least acceptable alternatives for each term.
40.  Never buy or hold the stock of your employer's suppliers.
41.  Research the probability of a natural disaster (e.g., proximity to fault lines, hurricane belt, flood plains, etc.) in the supplier's region.
42.  Determine your overall negotiation strategy (e.g., hardball, collaborative, etc.
43.  See if the supplier's quality efforts are focused on preventing defective items from being produced.
44.  Never share a supplier's proposal details with another supplier unless required by law.
45.  Investigate how a safety issue (e.g., fire, explosion, accident, etc.) might disrupt supplier production.
46.  Prohibit maverick buying as a company policy.
47.  Investigate if the supplier has a documented record of continuous quality improvement over several years 
48.  Identify at least one secondary source in the event of a failure of the primary supplier.
49.  Evaluate the probability of the supplier going bankrupt or experiencing financial challenges.
50.  At the end of the negotiation, help the supplier feel positive about the new relationship rather than feeling like it lost the negotiation.

To your success,

Greg Uhrlen
Next Level Purchasing Association

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Your Supplier Needs To Get His/Her Boss Involved In Your Negotiation...Now What?

Charles Dominick 4/8/2014 2:00:00 PM

I hope that you have enjoyed the article, "In Negotiations, Small Talk Can Be Huge."

In the article, I mentioned that buyers can push for more concessions than a supplier's salesperson is authorized to give.  At that point, the salesperson will say “I’ll have to ask my boss if we can do that.”

I've seen buyers react to this in various ways - some great, some atrocious - throughout the years.  Here are three reactions I've observed and my commentary on each.

"Oh, that's alright."  This is the worst possible response.  It means that you have gotten all of the concessions you're going to get.  You've given up.  Called it a day.  Thrown in the towel.  It probably comes from a polite person's innate desire not to inconvenience others.  But, let's face it, it is not in any buyer's job description to make suppliers' salespeople's lives as convenient as possible.

"OK."  Unlike the previous response, the negotiation is staying alive and that's good.  And, as described in the article, the salesperson may in fact be an advocate that will go to bat for you and get a good deal.  But the opposite can be true, too.  So, even though the negotiation is still alive, you have conceded control.  And conceded control to someone who may have goals that are quite different than yours.

"Thank you for that idea, but it may be a great time for me to meet your boss.  Why don't she and I have that conversation directly."  A core principle of powerful negotiation is to negotiate directly with the people who have the authority to give you what you are asking for.  This is your opportunity to do just that and ask for much more than your front-line sales counterpart would ever be authorized to give.  Go for it!

To Your Career,
Charles Dominick, SPSMSPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com

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The Most Common, Stupid, and AVOIDABLE Excuse For Procurement Ethics Violations

Charles Dominick 3/27/2014 6:18:00 PM

Cheswick, Pennsylvania is a small town.  For most purposes, it's pretty much irrelevant. But, for this story, it is very relevant.

Why?

Because there are probably just over a bajillion small towns just like Cheswick in the USA.  And, right now, procurement ethics violations could be happening in each and every one of them right at this very nanosecond just like they were happening in Cheswick from about 2010 to 2013.

What was going on in Cheswick?

Well, apparently, a Cheswick councilman during that period owned a company that was a vendor of the town.  Now, that itself isn't necessarily an ethical violation.  But, according to an article in the Pittsburgh Post-Gazette, the former councilman, Brian Harvanek,  failed to file documents or abide by contract value limits that would have made his being a vendor permissible.

That, my friends, is what you call a classic conflict of interest.

And, unfortunately, Harvanek's "excuse" for this conflict of interest was equally as classic.

The article states that Harvanek said that all of this stuff went down because of him being "ignorant of the ethics laws when he took office."


Almost every time that someone is investigated for a procurement ethics violation - either in the public sector or in the business world - they always say "but I didn't know that was an ethical violation."  While we would all like to think that procurement ethics are common sense, they clearly are not.

And that's sad.

It's sad because organizations have done implemented so much new employee training on other "grey areas."  Sexual harassment is a good example.  From what I understand, back in the day, male employees would often say things to female employees in the workplace that are simply unthinkable today.  Organizations have done a good job at clarifying the definition of sexual harrassment, codifying it, and training and communicating to their employees in a manner that certain behaviors don't happen nearly as often as they once did.


Why organizations don't do the same with procurement ethics is beyond me.  It's not like there aren't resources, expertise and procurement ethics training out there.

How many more of these Cheswick situations are going to happen in the USA before something changes?

Organizations could stop most of these Cheswicks from happening if they simply took away that most common, stupid, and avoidable excuse used by Harvanek and the countless others that made the same bad decisions.

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com


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Negotiating The Non-Disclosure Agreement (NDA)

Charles Dominick 3/25/2014 5:30:00 AM

I hope that you have enjoyed the article, "When A Supplier Should Sign Your NDA."

The NDA, short for non-disclosure agreement and also called a confidentiality agreement, is usually one of the easiest contracts for a procurement professional to negotiate.  The problem with NDA's is not usually in the negotiation of them, but knowing when you should be using one.

Unfortunately, there are many sensitive situations where they should be used and they're not due to the buying organization's ignorance.  Hopefully, the above-linked article will serve to eradicate some of that ignorance from the world.

There is one negotiation thing to look out for when negotiating an NDA.  If your organization's standard template is one-sided - in other words, protects your confidential information but not the suppliers - suppliers will often ask for it to be made mutual.  Ideally, your legal department should have a mutual NDA template at the ready.  If not, then ask about using the one that they draft as a template in the event that you find yourself in a similar situation in the future.

Other than that, NDA negotiation is pretty straightforward.  Now, if only other types of procurement negotiation would be so easy...

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com


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What Do The Missing Malaysian Airplane & Procurement Certifications Have In Common?

Charles Dominick 3/21/2014 9:17:00 PM

As of this writing, it has been two weeks since Malaysian Airlines Flight 370 went missing.  In each day since then, there have been many "experts" emerging on the news with different theories about what happened.  Pilot suicide, terrorism, a rapidly spreading fire that knocked the pilots out before they could call for help, and an explosion of batteries are just a few of the myriad explanations for what might have happened.

And despite the fact that each "expert" so adamantly justifies his or her theory and makes it sound so logical, the aircraft has not been found.  In fact, the search area has shifted a whopping 4,000 miles from where it started!

No matter how this tragedy turns out, this means that a lot of these "experts" will end up being wrong.

Oddly enough, I see a parallel between the "expertise" sought when a procurement professional seeks advice on what certification to obtain.

So, what's the parallel between the missing Malaysian airplane and procurement certifications?

Well, it's pretty common to see procurement professionals post online a request for advice about which certification to obtain.  And the responses vary so wildly!

One person may say that APICS' is the only "procurement certification" recognized by the employers that he or she is familiar with.  The next person may adamantly argue that point and say that APICS is not a procurement institution but more of a supply chain/production institution and that ISM is more aligned to the procurement side of the supply chain.  Still another person may say that the NLPA's certification (the SPSM) is much more results-oriented than ISM's and, therefore, the best choice.  Someone else may cite ISM being in business the longest as an advantage while others may retort that quality matters more than time-in-business.

I've seen all of these arguments and more.

The person that asked the question becomes easily confused.  So confused that they may never decide on a certification to pursue.

In other words, they hear so much "expertise" that they may give up on "finding the plane."

What's my advice?

Well, as the founder of the NLPA, I don't really need to state my recommendation for a specific certification, do I?  What I will say is that, if you are considering more than one certification, take a little time to research each.  Compare some of the materials that each offer.  Whose material appeals more to your style of learning?  Who seems to have the type of service that meets your expectations?   Whose material is updated frequently enough for your satisfaction?  Whose is not?

In other words, what are your own, personal observations?

Relying on others for advice on the topic of procurement certifications can open up a can of worms for you.  You're an adult.  Come to your own conclusions.  Make your own decisions.

You wouldn't ask a stranger to select your organization's most important supplier for you, would you?  So, don't delegate your certification choice to others.

On one final note, I will also say that procurement certifications are not mutually exclusive.  There's no reason why you can't have certifications from the NLPA, APICS, and ISM.  From the strong and diverse opinions on "which one is best," it's easy to see how you might go to a job interview bragging about your certification from ISM only to find out that the hiring manager prefers the SPSM Certification.

If you cover all your bases, you won't have that problem.  That's why dozens of countries are not just searching one part of the world for that Malaysian plane.  They are spreading themselves out,  refusing to listen to one single expert, in order to maximize their chances of success.

Not a bad strategy for your procurement certification ambitions.


Post-Script:  While many are captivated by the disappearance of Flight 370, it is important to not forget the potential tragedy of this occurrence.  Families are wondering whether their loved ones are alive.  All of us at the NLPA are hoping that the plane is located and that all on-board are found safe.  Our heart goes out to their families. As an educator, I always try to help my students see parallels between "hot topics" and what is going on in their own world.  By noticing similarities between seemingly dissimilar situations, one can often achieve a higher level of learning that would be otherwise difficult or impossible.  That is what I tried to do with this post.  I realize the risk of citing a potentially tragic situation and I sincerely hope that no one interprets this post to be playing down the seriousness of the worst case scenario.  That is not my intention at all.  Those that know me personally know my respect and love for my fellow human beings.  My heart does ache for the families of those on board and I hope that this story has a happy ending.

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com


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How To Present A Procurement Business Case - Free Webinar on Wednesday!

Charles Dominick 3/20/2014 2:18:00 PM



Delivering a truly persuasive presentation then implementing, measuring, and sharing the results with management can lead to being rewarded with higher pay or a promotion and living happily ever after. However, successfully presenting a case for smarter procurement involves more work in building the case than actually presenting that case.   

The webinar "How To Present A Case For Smarter Procurement: 7 Steps For Getting Management To Approve Your Procurement Ideas" will give you a step-by-step approach to enable you to put together a high-quality business case in less time than you would by "winging it," thus moving you one step closer to greater career success.


This webinar will be held on Wednesday March 26, 2014 at 11:30AM Eastern US time. This webinar is open to all members of the NLPA and a Basic Membership in the NLPA is instant and doesn't cost a cent! Here's how to secure your attendance for the webinar:

If you're already an NLPA member: Head over to http://www.NextLevelPurchasing.com/login.html, log into the members' area, and navigate to the "Webinars" tab. There you'll find a registration link, be sure to enter a valid email address as attendance details will be sent to you by email.

If you're not yet an NLPA member: Register for your complimentary Basic Membership in the Next Level Purchasing Association at http://www.NextLevelPurchasing.com/procurement-association.php?pcb. After doing so, you'll receive an email with information about how to log in. After logging in, navigate to the "Webinars" tab. There you'll find a registration link, be sure to enter a valid email address as attendance details will be sent to you by email.

Registration may be limited, so sign up soon to ensure access to this event. I hope that you will join me for this exciting webinar!

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com

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Philippine Government Procurement Violation Reveals Something Shocking

Charles Dominick 3/17/2014 8:06:00 PM

According to an article in the Philippine Star, auditors have found that the Philippine government's Office of the Omsbudsman has violated procurement law.  Apparently the office purchased some IT equipment without conducting competitive bidding.

The article notes that purchases can be made without competitive bidding, but only when the Bids and Awards Committee writes a resolution justifying and recommending an "alternate mode of procurement" to the government's top procurement executive.  That didn't happen.

So what's so shocking about this story?

That a government department failed to comply with competitive bidding requirements?

No, not shocking.  Unfortunately, that happens all the time.

That the offending entity was the Office of the Ombudsman?

After all, an ombudsman is supposed to be a trusted person who helps people with complaints - often related to ethical violations - about the ombudsman's organization.  Well, yeah, that is kind of shocking although sometimes people in positions of trust are those that behave in the least trustworthy ways.  But that wasn't exactly it either.

Actually, the most shocking thing about the story is that the top procurement executive for the Philippine government has the title of HOPE - Head of Procuring Entity!

Maybe I'm just a procurement nerd, but I find that funny!  I hope that all of you HOPEs out there did, too.

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com


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Utilizing Fear When Negotiating With Suppliers

Charles Dominick 3/10/2014 7:52:00 PM

I hope that you have enjoyed the article, "What Suppliers Fear When Negotiating."

I only had room to begin touching on Fear #4:  "Losing Face."  You are only one constituency to whom a supplier's sales rep could lose face.  Another is his or her management.  If that sales rep returns to headquarters after a negotiation session with you and reports that they agreed to the least profitable deal in the history of the company, that sales rep may not exactly be seen as a hero.

Thus, the tug-of-war between pleasing you and getting the deal and pleasing management.

In his book, Getting Past No:  Negotiating Your Way From Confrontation to Cooperation, William Ury advises that you, as a negotiator, have to build for your counterpart a "golden bridge."  In part, this means that you have to help them save face with their constituents.

Ury offers a few strategies for this, such as showing them how circumstances have changed between the time of refusing to budge and the time of agreement, getting a third party recommendation, and pointing to a standard of fairness.

The book offers some additional strategies.  Most of them are not directly applicable to modern procurement as written, but hopefully they give you enough ideas that you can adapt to your situation.

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com


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How To Get A Supplier Development Program Going

Charles Dominick 3/5/2014 8:01:00 PM



Wouldn't it be nice if you could pick any supplier and that supplier would perform perfectly with as little work on your part as possible? While that would sound like a procurement professional's dream come true, that scenario is far from reality. And the more suppliers that you are responsible for, the more likely you'll find yourself dealing with suppliers that fail to perform to their potential.

Well, the truth is, outstanding supplier performance doesn't have to be an unrealistic goal! You can master methods of working with your suppliers to get closer and closer to that goal. How? By taking the two-part online Express Course series the NLPA just released today, "Supplier Development Program Basics."

You will learn:

  • The characteristics of good and bad suppliers
  • 4 options available when a supplier fails and doesn't know how to fix its problems
  • 4 supplier relationship management approaches and when to use them
  • 6 steps of the supplier development process
  • How to identify categories for supplier development
  • What the Kraljik Matrix is and how to use it in your supplier development program
  • Some project management techniques that you should apply in your supplier development program
  • 9 supplier development techniques that work
  • And more!
To learn how you and your organization can start reaping the benefits of a well-structured supplier development program, please visit 
http://www.NextLevelPurchasing.com/supplier-development-program.php


To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com

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Are There Shortcuts To Procurement Technology Vendor Selections?

Charles Dominick 2/28/2014 9:49:00 PM

On a recent Next Level Purchasing Association webinar, an attendee asked an interesting question.

That question went something like this:  "Identifying and evaluating procurement technology vendors is very time consuming. Are there any resources available to try to shortcut the initial investigation process?"

My short answer was "yes and no."

And I had a long answer, too.

Let me explain...

There are indeed a large number of procurement technology vendors.  To thoroughly investigate them all would be a process that would take an impractical amount of time.

But there are really two parts to this attendee's question.  One is are there any shortcuts to identifying procurement technology vendors.  And another is are there any shortcuts to evaluating procurement technology vendors.

With regard to identifying procurement technology vendors, there are plenty of resources.  Blogs such as Sourcing Innovation and Spend Matters cover the procurement technology space fairly thoroughly.  And analyst firms like Aberdeen and Gartner publish research that describes, and sometimes compares, procurement technology.

Additionally, peers can be a great source for identifying procurement technology vendors.  A few simple emails and/or phone calls to fellow procurement professionals you may have formerly worked with or met at networking events like procurement conferences can yield some valuable recommendations.  And a post on a procurement-related LinkedIn Group can often yield dozens of responses from people in positions similar to yours.

So, are there shortcuts to identifying the procurement technology vendors that are the best potential fit for you?  Absolutely!

Now, for the second part, I feel that there are absolutely no shortcuts to evaluating procurement technology vendors once you have identified a healthy subset of competitors.  If there was one procurement technology vendor that was the best fit for every organization, regardless of size, industry, culture, or unique business requirements, none of the other vendors would be in business.

But there are a multitude of procurement technology vendors out there - and doing well - because each has value that they bring to the table.  So, no shortcuts to evaluating them!  Complete your typical supplier qualification:  review financial statements, do site visits, see demos, do pilot projects, talk to customers, etc.

A procurement technology purchase is a decision you'll have to live with for a long time.  In some cases, the success and perception of the procurement department are dependent upon a successful vendor selection.  Don't shortchange your organizations by taking shortcuts.  You'll regret it.

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com


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The Quality Rarely Found on Procurement Job Descriptions (That's Required For Every Modern Procurement Job)

Charles Dominick 2/24/2014 8:08:00 PM

I hope that you have enjoyed the article "Is Your Procurement Job At Risk?"

In the article, I introduced you to three things you should do to ensure that a new procurement leader doesn't kick you to the curb in favor of a more energetic, younger - though less experienced - replacement.  In this post, I'd like to elaborate more on the third tip:  Show that you are likeable.

Now, we ALL think that we are likeable.  Most of us have someone in our lives that likes us.

But that doesn't make us likeable in the broad business sense.

Ask yourself these questions:

  • Do I greet everyone with (a) a warm smile, or (b) a not-so-enthusiastic facial expression?
  • Do I present myself (a) professionally in appropriate dress and grooming, or (b) find myself looking less professional than others I work with?
  • Do I (a) walk, talk, and carry myself with energy that others can notice, or (b) appear tired and slow to others?
  • Do I often (a) offer to figure out a way to make things work, or (b) find myself telling people why things won't work?
  • Do I (a) ask internal customers about what they want to accomplish, or (b) only talk about what I can or can't do for them?
  • Do I (a) know when "if you don't have anything nice to say, don't say anything" is appropriate advice, or (b) find myself being critical of others, either to them or behind their backs?
  • Do I (a) demonstrate calmness in the face of adversity, or (b) lose my temper in front of others and appear as a "loose cannon?"
  • Do I (a) show that I care by talking about "the big picture" of my employer's success, or (b) only talk about my job and appear to care only for myself?
If you've answered (b) more than (a), I hate to say this, but...you're probably a little unlikeable to some people!

And that could spell procurement career trouble for you.

"Must be likeable" is rarely found on a procurement job description.  But it is required for every modern procurement job.

Though the leaders I discussed in the article cited behaviors, attitudes, historical performance, and the like as the reason why some of their former subordinates became dispensable, really what they were saying was "I just didn't like the person."

Being a procurement professional is a job.  When you have a job, that means you may not have the freedom to totally be yourself.

So, you may have to act a little.  You may have to study the foregoing bullet points and adopt some of the (a) behaviors.

But you have to be likeable as much as you have to be competent in today's business environment.

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com

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e-Sourcing/e-Procurement Webinar on February 26

Charles Dominick 2/14/2014 3:46:00 PM

Just knowing that your organization needs an e-Procurement and/or e-Sourcing solution is not enough to begin evaluating vendors in the space.  This is especially true if your biggest need is a basic e-Negotiation suite that is theoretically available from over two dozen vendors.

Which solution, or solutions, are right for your organization?  Depending on the needs of the organization, it might be the case that only two out of twenty solutions will appropriately address the organizational needs, but unless the right questions are asked, it might look like six meet the needs and the organization will have a 66% chance of selecting the wrong solution.

In the upcoming webinar, "Acquiring e-Sourcing and e-Procurement Technology: What Questions Should You Really Be Asking?," we will outline the critical questions that must be asked when searching for an e-Sourcing or an e-Procurement solution, as well as important questions that should also be considered for each major module.  An explanation of the importance, and ordering, of the questions (in a multi-round RFX process) will also be provided.


The guest presenter for this webinar is Dr. Michael Lamoureux, Editor-in-Chief of Sourcing Innovation.

This webinar will be held on Wednesday February 26, 2014 at 11:30AM Eastern US time. This webinar is open to all members of the NLPA and a Basic Membership in the NLPA is instant and doesn't cost a cent! Here's how to secure your attendance for the webinar:

If you're already an NLPA member: Head over to http://www.NextLevelPurchasing.com/login.html, log into the members' area, and navigate to the "Webinars" tab. There you'll find a registration link, be sure to enter a valid email address as attendance details will be sent to you by email.

If you're not yet an NLPA member: Register for your complimentary Basic Membership in the Next Level Purchasing Association at http://www.NextLevelPurchasing.com/procurement-association.php?pcb. After doing so, you'll receive an email with information about how to log in. After logging in, navigate to the "Webinars" tab. There you'll find a registration link, be sure to enter a valid email address as attendance details will be sent to you by email.

Registration may be limited, so sign up soon to ensure access to this event. I hope that you will join me for this exciting webinar!

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com

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A Buyer's Introduction To Performance Bonds

Charles Dominick 2/12/2014 3:39:00 PM

Procurement professionals often begin their careers as buyers of goods.  Later, they often find themselves buying more and more services.  Sometime during that transition, they will come across the issue of requiring suppliers to obtain performance bonds as part of contractual relationships.

At this point, the buyers will ask:  "What is a performance bond?  When do I know when to require one?"

Allow me to take this opportunity to answer those questions.

A performance bond is a type of financially-backed guarantee that is purchased from and underwritten by a third party, such as a bank or insurance company.  According to Investopedia, a performance bond is "issued to one party of a contract as a guarantee against the failure of the other party to meet obligations specified in the contract.  For example, a contractor may issue a bond to a client for whom a building is being constructed. If the contractor fails to construct the building according to the specifications laid out by the contract, the client is guaranteed compensation for any monetary loss."

So, when should a procurement professional require a performance bond of a supplier?

The first thing you have to do is be familiar with the industry and understand routine practices in that industry.  For example, performance bonds in the construction industry are extremely common.  But if you asked an office supplies vendor to get a performance bond as part of their contract, they would probably look at you with confusion!

For those industries where performance bonds are used but perhaps not used in every situation, deciding on the performance bond issues requires you to understand your risk:  the likelihood of a supplier failure and the financial impact of a failure on your organization.  If the likelihood of a supplier failure is high and the financial impact of a failure would be devastating to your organization, then a performance bond is an essential risk management tool.  If the likelihood of a supplier failure is low and the financial impact on your organization is negligible, then requiring a performance bond is probably overkill.

It is surprising that it is common that, in many organizations, the procurement department is the last to be involved in providing guidance on performance bonds.  Often, that responsibility is handled by an internal customer department (e.g., the facilities management department) or even the finance department.  While it can be helpful to have a team involved in making determinations about performance bonds, that doesn't absolve the procurement department from having the necessary expertise in the subject matter.

I encourage you to use this article as a starting point in learning about performance bonds and to communicate with others in your organization about how you have used performance bonds in supplier relationships to this point.  From there, you can work towards having a better process for identifying when to use them and when not to use them.

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com

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One Key to Better Procurement Compliance

Charles Dominick 2/10/2014 7:09:00 PM

I hope that you enjoyed the article "How To Improve Procurement Compliance."

In the article, I provided three tips and alluded to a fourth.  That fourth tip is "where appropriate, give internal customers a choice of a few approved suppliers rather than one mandated supplier."

Sure, certain categories must be single sourced.  But for some less critical categories, particularly in the MRO realm, use of dual sourcing - or even using up to four suppliers for huge categories in huge companies - is a decent strategy.

Too often, when single sourcing, procurement professionals assume that there will be 100% compliance.  That's a valiant, if perhaps unrealistic, aspiration.  But they often rarely approach that compliance level as disgruntled internal customers engage in maverick buying.  So, if your primary supplier is only going to get 75% of the business anyway, wouldn't you want that other 25% to go to a supplier that has been properly qualified, has agreed to your organization's standard terms and conditions, and has offered a low, negotiated price?

Internal customers love to feel like they have control over their destiny.  When they have to use a single, mandated supplier, they feel like their control has been stolen from them.  Giving them limited choice helps them feel they have the control that they seek (and will often break company policy to have).  In the end, this limited choice is a key to better procurement compliance in many situations.

Some procurement purists will insist that this approach unnecessarily costs the organization money.  But unless you've sought bids for varying percentages of your business, this theory cannot be proven for your situation.  For tips on how to know the incremental costs of using multiple suppliers instead of one, check out the RFP tips at http://nextlevelpurchasing.com/articles/dual-source.html.

If you've linked to this blog post from the "How To Improve Procurement Compliance" article and wish to return to it to check out the Spotlight on Professional Development Opportunities, Latest Purchasing News, and FREE Offer, click here.

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com


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The Philosophy Behind The NLPA's Procurement Course Quizzes

Charles Dominick 1/29/2014 3:57:00 PM

As the instructor for many of the online procurement courses offered by the Next Level Purchasing Association (NLPA), I will occasionally get an email from a student (a procurement professional) saying something like, "I got question #3 on the quiz wrong.  The way that it was written was confusing."

I will admit...Some of our quiz questions DO require the student to read very carefully.

Why?  Do we want you to get questions wrong?

Absolutely not!

What we do want to do is build your analytical skills.  When you pass one of our courses or go on to become certified as an SPSM, SPSM2, SPSM3, etc., we want you to have the skills necessary to work in today's challenging procurement environment.

Procurement professionals work with terms and conditions, contracts, and other legally binding documents.  Believe me, those documents aren't easy to thoroughly understand by skimming them.  You have to carefully read each and every word, otherwise you may be agreeing to spend money that you didn't intend to spend or accept risk that you didn't want to accept.

In the real world of procurement, no one is going to spoon-feed you information and coddle you until you understand it.  No one will feel sorry for you if you failed to properly understand something you were given adequate time to review.  If you want to be successful, you need to develop the skills to read things carefully and interpret them properly.  This is the philosophy behind the NLPA's quizzes.

Here's an example of one of those "confusing" questions...

Which of the following is a false statement?
a.) the UCC governs transactions of goods in the United States
b.) common law governs transactions of services in the United States
c.) the UCC governs transactions of services in the United States
d.) CISG governs some, but not all, transactions of goods between different countries

The correct answer is (c), "the UCC governs transactions of services in the United States."

Now, a student may come back and say something like, "I think your system is grading the quiz wrong.  It is listing the correct answer to question 1 as 'the UCC governs transactions of services in the United States.'  I don't think that's the correct answer."

Well, it IS the correct answer because the question asked the student to identify the FALSE statement.  The UCC does not govern transactions of services in the United States.  Therefore, that is a FALSE statement.  Because the question asked for the FALSE statement, then (c) is the CORRECT answer.

Tricky?  Perhaps.  But not nearly as tricky as some of the supplier terms and conditions a procurement professional is likely to encounter throughout his or her career.

My job is to prepare you for the real world in an environment where the only consequence is getting a point deducted from your course score.  Read carefully, my friends.  You'll thank me for it when you catch the stuff that your suppliers try to squeeze past you.

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com

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Trouble Getting A Sole Source Vendor To Play Ball? Negotiate Creatively!

Charles Dominick 1/28/2014 2:00:00 PM

I hope that you have enjoyed the article, "Creative Negotiation With Sole Source Vendors."

In the article, I described how you can offer terms of value to the sole source vendor in exchange for that oh-so-elusive price reduction.  This approach works quite well.  But it doesn't work 100% of the time - no single negotiation technique does.

If the sole source vendor does not respond at all to this technique then, if you're feeling dangerous, you may want to consider making the incentive appear more valuable by temporarily not being as good a customer.  For instance, if you and the vendor have agreed on 30-day payment terms and your organization routinely pays in 25-30 days, then moving to 15 day terms may not seem attractive enough to offer you any type of discount.

However, if your organization's payments begin to get a little erratic - say, paying in 31 days, 45 days, 37 days, etc. - then the vendor may see more value in getting payment in a guaranteed 15 days.  As with almost any procurement negotiation situation, you should calculate your risk.  If "playing" with payment terms is going to compel the vendor to refuse to deliver a critical shipment, then this approach isn't worth the risk.  However, if the vendor's performance won't be affected in the short term by uncharacteristically extended payments, then it's worth considering the pros and cons and deciding accordingly.

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com


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Bridging The Gap Between IT and Procurement: Free Webinar on January 29!

Charles Dominick 1/22/2014 7:56:00 PM

In many organizations, there is a gap between IT and procurement despite both departments being similarly burdened and given similar roles within the organization.If this gap exists in your organization, or are worried that you may face that challenge in the future, you can’t miss the webinar, “Bridging The Gap Between IT and Procurement!”

In this webinar, guest experts from Source One Management Services, LLC will offer insight as to how these gaps emerge and common causes for disharmony between the two departments, then offer sample strategies designed to bridge these gaps and remedy their future occurrences, all culled from its more than 20 years sourcing the category.

This webinar will be held on Wednesday January 29, 2014 at 11:30AM Eastern US time. This webinar is open to all members of the NLPA and a Basic Membership in the NLPA is instant and doesn't cost a cent! Here's how to secure your attendance for the webinar:

If you're already an NLPA member: Head over to http://www.NextLevelPurchasing.com/login.html, log into the members' area, and navigate to the "Webinars" tab. There you'll find a registration link, be sure to enter a valid email address as attendance details will be sent to you by email.

If you're not yet an NLPA member: Register for your complimentary Basic Membership in the Next Level Purchasing Association at http://www.NextLevelPurchasing.com/procurement-association.php?pcb. After doing so, you'll receive an email with information about how to log in. After logging in, navigate to the "Webinars" tab. There you'll find a registration link, be sure to enter a valid email address as attendance details will be sent to you by email.

Registration may be limited, so sign up soon to ensure access to this event. I hope that you will join me for this exciting webinar!

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com

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Compromising in Negotiations: What It Is, What It Isn't

Charles Dominick 1/14/2014 4:10:00 PM

I hope that you enjoyed the article, "How To Use The '4C' Negotiation Strategies."

I wanted to use this post to elaborate a little more about the third "C": Compromising.

At a previous employer, I had the opportunity to sit in on an interview with a candidate for a Senior Buyer position. In this particular instance, I didn't have any decision-making authority but could certainly influence the decision, which was being made by two higher-ranking procurement executives.

The gentleman being interviewed was a very sharp individual and seemed to be perfectly qualified for the position. I kind of liked him.

However, he was asked a question and, with his answer, he just blew his opportunity to get the job.

Actually, the "question" wasn't a question, per se. It was one of those classic behavioral interviewing conversation starters.

One of the interviewers said, "Tell me about a time when you had to compromise in a procurement negotiation." The interviewee looked nervous, taking a minute to dig through his memory banks for an example.

He then proceeded to tell a story about a time when he asked for a concession from a supplier, the supplier refused and, after much back-and-forth, he ended up accepting the supplier's terms. The interviewees asked a couple of follow up questions to confirm that this gentleman didn't get any more value from the supplier through that conversation.

The interviewee sensed that he messed up. He asked, "Was that a bad example?" and the interviewers admitted that they were looking for a story that demonstrated more of a split-the-difference type of scenario and they quickly moved on to additional questions.

The interviewee performed well for the rest of the interview. But he wasn't offered the job.

He basically lost the job on the compromise question. He gave an example of "Caving In" when he was asked for an example of "Compromising."

Now, when most of us prepare for purchasing job interviews, we tend to prepare our stories of successes. Compromising can feel more like a negotiation failure. So, many of us may be like the interviewee in this example - without a story prepared about our failures.

To me, this story demonstrates a couple of valuable lessons. First, always make sure that you use the "4C" negotiation strategies in order and don't skip any steps. In other words, don't cave in if you didn't try to compromise first. Second, while continuing to make sure to prepare your success stories for job interviews, also prepare some stories about your not-so-successful efforts. Of course, end those stories with a positive - what you learned, what you accomplished in spite of the failure, how everything turned out good in the end, or a similar "silver lining."

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com
- See more at: http://www.purchasing-certification.com/#sthash.4erGd0nO.dpuf
To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
http://www.NextLevelPurchasing.com

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NLPA's 2013 Procurement Year In Review

Charles Dominick 12/31/2013 7:21:00 PM

In 2013, the Next Level Purchasing Association (NLPA) had yet another breakthrough year for serving procurement professionals, leaders and departments.  This post recaps some of the highlights of a great year in procurement!  It won't focus so much on the "everyday stuff" we do, like the 10 free webinars, 12 new editions of Leading-Edge Supply Management (our online magazine), or our 24 new editions of our PurchTips newsletter - only the bigger stuff!

One of the things that the NLPA has always done well is replacing outdated procurement models with new models more in touch with how procurement is done today and will be done in the future.  In March, we did just that by replacing the haggard "5 rights of purchasing" with the "25 New Rights of Purchasing" via a five-part series of articles.

Also in March, we expanded our series of case studies by releasing one that documented the success of Island Hotel Company (formerly Kerzner International) after they brought the skill levels of their staff up via training from the NLPA.

That same month, the NLPA launched the first of several online Express Courses introduced this year with the release of "How To Plan For Outsourcing Success."

Still in March, the NLPA was featured in an article  in Supply & Demand Chain Executive entitled "The Value Proposition of Associations." 

And finally in March (wow - what a busy month!), we launched the Express Course "7 Critical Steps for Effective Supplier Selection."

In April, we launched the annual edition of a resource we've been publishing since 2002 - the 2013 Purchasing & Supply Management Career & Skills Report.  Among the many findings in this report was that purchasing and supply management professionals had received the most training ever on record - 23.4 hours per person in the preceding year. 

Also in April, we launched updates to our two international procurement-oriented online courses, "Basics of Smart International Procurement" and "Executing A Global Sourcing Strategy."  The updates included adding 30% more audio to the courses, which has proven to be very popular to the students of the NLPA.

Our last launch of April was that of the report, "Purchasing & Supply Management Salaries in 2013."  For the first time, this report tracked the changes in bonuses as a component of compensation over time, revealing that 68% of purchasing and supply management professionals received a bonus in the survey year (up from 47% in the preceding year).

In June, we launched a four-part series of Express Courses entitled "Procurement KPI's & Business Acumen."  This series delved further into the use of The Procurement Funnel - a model that we introduced in 2012 for measuring and improving procurement performance.

Our BIG accomplishment for the year was hosting our first ever NLPA Conference, held in September.  The theme was "Make Procurement Rock!"  It was such a fun, different and educational event that brought together procurement professionals from six different countries.  Because of its success, we will be hosting the second annual NLPA Conference on September 15-17, 2014 in Pittsburgh, Pennsylvania, USA.  More details are coming soon, but save the date!

At the 2013 NLPA Conference, we awarded the first SPSM3TM Certification!  Jamie Ray from Porter, Texas, USA had the distinct honor of being the first procurement professional to have the ambition, dedication and intellectual horsepower to pass the SPSM3 Certification Program's rigorous requirements.  Congratulations, Jamie!

In October, we launched yet another Express Course, "Tips For Regret-Free Supplier Communication."

Then, in November, we launched our last Express Course of the year, "How To Take Charge of Your Procurement Career."

We began the year by introducing a new model and we ended the year the same way, by introducing "The Dominick Matrix."  This matrix helps guide procurement professionals to understand what type of supplier relationship strategy they should employ with different types of suppliers.

We have a lot in store for 2014.  Stay tuned - the NLPA always aims to have its best and biggest year ever.  And we measure "best and biggest" by the volume of resources that we provide to help procurement professionals succeed in an ever-challenging business environment.

Happy New Year!

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com

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Check Out The Best of PurchTips 2013!

Charles Dominick 12/30/2013 5:22:00 PM

If you have a membership in the NLPA - either the free Basic Membership or a Premium Membership - you should have received an email with  the Best of PurchTips 2013 today.  If you're not an NLPA member, PurchTips is our members' bi-weekly newsletter that features easy-to-implement purchasing tips that can really make a difference to your organization.

Some of the articles featured in today's "Best Of" include:

So, if you haven't found the Best of PurchTips 2013 in your email, you can access it online at  http://nextlevelpurchasing.com/articles/negotiation-and-sourcing.html.

And more information about becoming an NLPA member can be found at http://nextlevelpurchasing.com/procurement-association.php.

Happy New Year from all of us at the NLPA!

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com


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How To Present a Case for Smarter Procurement

Charles Dominick 12/19/2013 6:52:00 PM



Here's an opportunity for you to get a copy of an extremely informative, 10-page whitepaper entitled "How To Present A Case For Smarter Procurement: 7 Steps For Getting Management To Approve Your Procurement Ideas."

Delivering a truly persuasive presentation then implementing, measuring, and sharing the results with management can lead to being rewarded with higher pay or a promotion and living happily ever after. However, successfully presenting a case for smarter procurement involves more work in building the case than actually presenting that case.  This whitepaper will give you the step-by-step guide to enable you to put together a high-quality business case in less time than you would by "winging it," moving you one step closer to greater career success.

To get your free copy of "How To Present A Case For Smarter Procurement," simply complete our survey at:


When you complete this survey, you will also get:

*  A $6 discount voucher for one month of Premium Membership in the Next Level Purchasing Association.  That's right, you can have one month of Premium Membership benefits for only $9.99 US.

PLUS

*  If you complete the survey by this Friday, December 20, 2013, you will be entered for a chance to
   be the one randomly selected winner of a $30 gift certificate to Amazon.com!

The absolute last date to participate in the survey is December 31, 2013, so visit this website today!

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Use The Dominick Matrix For Supplier Stratification

Charles Dominick 11/29/2013 3:27:00 PM

I hope that you have enjoyed the article "Supplier Stratification & The Dominick Matrix."

Like many things in our profession of procurement/purchasing/supply management/sourcing/acquisition, there is no standard for supplier stratification.  However, there are some approaches that make more sense than others.

I believe that the approach that I've outlined in the aforementioned article is one of those that make the most sense.  Because the concept of supplier stratification encompasses concepts both from that article and the preceding PurchTips article, "Supplier Collaboration, Development, More," allow me to summarize a few of the salient points here and then I will introduce the Next Level Purchasing Association's latest model, the Dominick Matrix.

First, let's restate the definitions of four approaches you can take to work with a supplier:

Supplier collaboration means working with decision-makers at a supplier to determine improvements that can be made that will have a measurable, positive financial impact for both organizations.

Supplier development means devoting some of your organization's resources to a project that develops a supplier's capabilities or expertise beyond current levels.

Supplier management means collecting metrics about a supplier's performance for your organization, sharing those metrics with the supplier, and discussing and implementing ways that the supplier can improve its performance as measured by those metrics.

Supplier rationalization means reducing the number of suppliers by consolidating purchases with fewer suppliers.

Second, let's review when to use each one of these approaches:

  • For sophisticated strategic suppliers, use supplier collaboration
  • For unsophisticated strategic suppliers, use supplier development
  • For sophisticated tactical suppliers, use supplier management
  • For unsophisticated tactical suppliers, use supplier rationalization

Finally, let me introduce you to the Dominick Matrix, which gives a quick, at-a-glance visual representation of which approach to use when:



Sometimes, the most successful way of getting started - and eventually succeeding - with something complex, is by simplifying things.  I think that the Dominick Matrix, just like the Procurement Funnel, helps you in exactly this manner.  Good luck using it!

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com

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