Next Level Purchasing

How Apple Balances Procurement & Marketing For Financial Success

Charles Dominick 11/11/2014 4:00:00 AM

I hope that you have enjoyed the article, "Why iPhone Cost Savings Matter Less."

In the article, I referred to my method of calculating additional profit from increased sales.  I'll cover that here.

Let me begin by talking about volume.  In press releases from September 2013 and September 2014, Apple reported that it sold nine million iPhone 5S's in the first three days of sales in 2013 and 10 million iPhone 6 and 6 Plus' in the first three days of sales in 2014.

So, that's 1,000,000 more phones sold in the first three days this year thanks, presumably, to the new characteristics of the phone, most notably the larger size.

According to Apple's latest annual report, it sold 169,219,000 iPhones in the last fiscal year for a total of $101,991,000,000.  Dividing the sales by the number of units, the revenue per phone sold is $603.

Multiplying 1,000,000 more units by the revenue per unit of $603 gives a value of increased revenue of $603,000,000.

In the last fiscal year, Apple posted $53,483,000,000 "income before provision for income taxes" (otherwise known as Earnings Before Taxes or EBT) against revenue of $182,795,000,000.  Dividing EBT by revenue gives you a pre-tax profit margin of 29%.

Multiplying the pre-tax profit margin of 29% by the increased revenue of $603,000,000 gives you an additional $175 million in pre-tax profit.

To return to the article, click here.

If number crunching and financial statement analysis like this baffles you, consider enrolling in the online courses "Finance For Strategic Procurement, Part I" and "Finance For Strategic Procurement, Part II."

To Your Career Success,
Charles Dominick, SPSM, SPSM2, SPSM3
President & Chief Procurement Officer - Next Level Purchasing Association
Co-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 Makes One Procurement Certification A Better Choice Than Another? Hint: It's Not Just One Thing!

Charles Dominick 11/4/2014 4:30:00 PM

Imagine this conversation...

Sarah Carbuyer:  "What is the best vehicle available?"

Johnny Expert:  "A Ford F-150."

Sarah Carbuyer:  "Why?"

Johnny Expert:  "Most people I know are familiar with the Ford F-150."

Sarah Carbuyer:  "OK, I'll go buy a Ford F-150."


How does this make you feel about these two people?

Is Johnny's recommendation a little short-sighted?

Is Sarah a little too easily influenced?

How about yes and yes!

So, what would be the correct answer to Sarah's question?

Is there one?

Yes.  The correct answer is:  "It depends."

The best vehicle for Sarah depends on her circumstances.

Does she need to park in tight spaces?

Does she need to drive around five kids?

How much of a priority is fuel efficiency?

And what if the number of people who are familiar with a vehicle model does matter to Sarah but she lives in Japan where Toyota is a more "recognized" name than Ford?

How helpful is Johnny's advice now?

See, there are a lot of things that Sarah needs to consider to find the best fit for her.  But people like Johnny dole out advice based on one factor and one factor alone.  And that's not always helpful.

There are a lot of factors to consider.  And there are a lot of great options available.

Unfortunately, the same thing happens on social media with procurement certifications.  Someone will ask for a recommendation and someone else will chime in with one and only one recommendation based on his/her situation, not the situation of the person asking.  And while intentions are good, it's not necessarily as helpful as it could be for the person seeking advice.

In the procurement profession, we are fortunate to have a choice of certifications.  If one certification was right for everyone, there would be no need for any others.  But different certifications have different advantages.  And that's why just like multiple vehicle models exist, multiple procurement certifications exist.  Heck, there are plenty of ambitious procurement professionals out there who have certifications from multiple providers.  Procurement certifications are not mutually exclusive and it only helps a procurement professional to be more competitive in the job market if they achieve as many credentials as practical for him/her.

It is important for someone seeking a procurement certification to consider more than one factor when choosing a certification.  If someone selects a certification just because it is one that they are familiar with before doing any research, what does that say about their procurement skills?  After all, isn't it a core competency of procurement to thoroughly research a market and identify the option that is the best fit for the organization?  Why should anyone apply a lesser standard to the selection of their own certification?  After all, earning and maintaining a procurement certification requires a multi-year commitment and an investment of money.

So, my advice for anyone asking a question like "What is the best procurement certification available?" is to look at multiple options to determine which is the best fit for your personal circumstances. 

Even though I am the founder of a procurement certification provider, I wanted to keep this post provider-agnostic so that the thought process could be applied to any certification.  You can stop reading now and walk away with some good, objective insights if you have an allergy to the slightest bit of bias.

However, if you do want to better understand 14 factors to consider when comparing procurement certification options, here is a link to a whitepaper that the NLPA published - http://goo.gl/M9lQKo.

To Your Career Success,
Charles Dominick, SPSM, SPSM2, SPSM3
President & Chief Procurement Officer - Next Level Purchasing Association
Co-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 You Making This Expensive Procurement Mistake?

Greg Uhrlen 11/3/2014 9:09:00 PM

Several years ago, I actually looked at one of our homeowner’s insurance bills and found our provider increased our rates significantly beyond our initial rate.  So, I went out and found better coverage and a much better rate with an alternate provider.

Then, the other day, my new homeowner’s insurance bill arrived in the mail.  “Ugh”, I thought, another envelope I’ll let my wife take care of.  Then, I heard her ask me if I was interested in taking a look at it.

With a lack of enthusiasm and sincerity, I said, “sure, why not”.  To my shock and horror, the bottom line struck me like a kick to the gut…a whopping 40% increase!  For once, I was actually glad to get a paper cut! 

In less than an hour, I had a new homeowner’s policy through another provider that was 20% less than my previous year’s rate. Celebrating my victory I added the savings to our vacation money jar!

So the question I have for you is simply, “when is the last time you looked at what your suppliers are charging you for goods and services that are typically overlooked”?

Think about it, even if you are utilizing many of the procurement best practices and are taking the time strategically negotiating large deals, there are goods and services purchased that are potentially falling under the radar.
 
Andrew, your long-forgotten supplier, certainly isn't going to call and say, “Jacob, you are spending 15% more for paper supplies than you have to, let me offer you better pricing”!  Andrew is glad to never hear from you and may even try to slip in additional price increases without your knowledge.  Jacob, it is time to go to battle with Andrew!

Now, it doesn't have to be a battle of cinematic proportions, rather, it can be a “win-win” for both organizations!

Remember, the last number a supplier wants to see showing up on his or her phone is from a buyer who buys in large quantities, pays their bills on time and never asks any questions. 

Before contacting your supplier, make sure you are well-prepared with a list of open-ended questions to ask your supplier regarding terms, pricing and possible solutions that are satisfactory to both parties. 

For example, asking a question like, “can you do better on the price of paper supplies?”, can easily be dismissed with a simple “no”.
 
Whereas, saying, “Andrew, we have had a great relationship with FineView Industries for years, but I recently noticed that the price of paper products is much, much higher than your competitors, what can you do to help us both out?” 

In this scenario, you are asking an open-ended question that requires a thoughtful answer.  You are subtly implying that even though you like FineView Industries, you are very much aware of their competitors without making a direct threat to take your business elsewhere.  Also, by positioning the question with the wording “help us both out”, you are letting the supplier know you are willing to achieve a “win-win” result. 

Of course, you will want to utilize your contract-writing skills as well, making sure you have the newly agreed upon terms in writing.  Just make sure your supplier isn't hiding any pricing or terms behind fancy jargon.


Once you have hashed out the details and negotiated agreeable terms, make sure to let your supplier know you will keep in touch.  This is a good way to keep your supplier relationship strong and helps to keep you as a top of mind buyer for your supplier.  


Greg Uhrlen
Marketing Manager
Next Level Purchasing Association
1315 Coraopolis Heights Rd, Suite 1001
Moon Township, PA 15108
Phone: 1-412-262-1334

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SourceDogg Takes a Bite Out of eProcurement Marketplace

Greg Uhrlen 10/31/2014 5:36:00 PM

Ambitious and aggressive are certainly words that can be used to a new player in the eProcurement market in the United States.  Founded in 2009 and based out of Galway, Ireland, SourceDogg is an ISO9001 certified provider of eProcurement software solutions aimed typically at small to mid-sized businesses.  Thanks to strong sales and funding from Nucleus VP Group, SourceDogg has been able to increase the size of their team from 20 to 90 in the past two years. 

According to Alan Phelan, CEO of SourceDogg, in an interview with the Irish Examiner, “Our solution is a cloud-based eSourcing platform which is hosted on Microsoft’s Windows Azure cloud computing platform, which provides us access to data centers in multiple countries and unlimited processing power for our customer.” 

Since SourceDogg is cloud-based and doesn’t require additional hardware, it could be an appealing solution for those organizations who do not want to incur additional IT maintenance and management expenses.  On average, it takes 3 to 4 weeks for implementation of the SourceDogg eProcurement system.

SourceDogg has a live chat feature available at all times which works as an online help function for users having difficulty within the system.  This functionality is available to both buyers and vendors and stands out as a rather useful feature for those with minimal experience within the system.

In addition to possessing a Windows 8 look and feel, SourceDogg has a very clean, easy to follow user interface (UI).  In addition, like other user-conscious eProcurement systems, it has a right sidebar to keep track of where you are at all times while in the e-Request creation process.

Creating an e-Request is very intuitive.  When creating an e-Request you can easily attach files, which is a relatively new feature to the system.  SourceDogg also contains a failsafe approval system which ensures that only e-Requests with a set, indicated level of approval can be published to thus avoid maverick spending.

With SourceDogg it is possible for users to clone any e-Request that has been created, except for one that has been deleted.  A cloned e-Request is then created and set into a draft state.  All data relevant to the prior e-Request is cloned and it is available in just a couple of clicks which makes it extremely handy for e-Requests that need to be created frequently. 

SourceDogg offers a supplier settings profile that integrates with LinkedIn, allowing for particular contacts at supplier to show up in the profile area making it much easier to be aware of your particular supplier’s personnel who work with your account.
When looking to choose a supplier, you can add weighted fields to further evaluate and compare suppliers against your specific criteria and each other. You can then save these weighted questions to a library where you can recall specific questions for other suppliers going forward without having to repopulate the fields manually.

Any supplier can come on board free of charge with SourceDogg, thus reducing the time needed to submit a quote or proposal.  As a buyer, you have the choice to choose from you own approved suppliers or invite a list of registered SourceDogg approved suppliers to participate in your sourcing events within their own private email system.  All global currencies are available based on the location of the particular supplier. 

There is also a supplier tagging feature available where you can add your own tags to suppliers (to narrow searches) or use SourceDogg generated tags as well to specify particular features a supplier offers. Punchout catalogs will be introduced in the next updated release of SourceDogg in November 2014.

There is a Q&A message board available in real-time between buyers and suppliers. The message board shows all suppliers, but not by their actual name that other suppliers can see.  Here, you can also easily monitor a supplier submission status. Due to strong demand from their clients, a recently added feature here is the ability to attach a file in the message board area.

Within SourceDogg you can award supplier contracts as well as decline supplier offers with the ability to indicate why the supplier has not been chosen at the present time.   In this area, there is also the ability to store and manage contracts in an online filing cabinet for future referrals.

Reports available within SourceDogg regarding vendors offer such features as the percentages and numbers of successes and failures indicated by each individual supplier.  Reports are available for export in Excel and PDF formats.

As of this time, there are no mobile apps available for SourceDogg, but the system works with all desktop, mobile and tablet versions of the available major browsers.  Going forward, SourceDogg will be offering reverse auction capabilities within the system starting in Q1 of 2015.

SourceDogg’s largest volumes of customers are presently in the areas of manufacturing, construction hotels and hospitals.  They have recently expanded their business reach into India and are currently looking to expand their reach further into the United States.

Greg Uhrlen
Marketing Manager
Next Level Purchasing Association
1315 Coraopolis Heights Rd, Suite 1001
Moon Township, PA 15108
Phone: 1-412-262-1334

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Risk Mitigation In Any Industry

Charles Dominick 10/31/2014 4:44:00 PM

The Next Level Purchasing Association welcomes this guest post from Heather Grossmuller from Source One Management Services.



When it comes to third-party vendors, there is no one-stop solution to mitigating risks. However, there are some key elements that could play a vital role in managing risks more effectively. Take for example Target and Lowes. Both are reeling from data breaches due to a lack of third party security protocols. These breaches did immeasurable damage, yet could have avoided by integrating two very import risk mitigating tactics -- a comprehensive Service-Level Agreement (SLA) and SRM (supplier relationship management) Program. 

According to TechTarget.com, SLAs are negotiable instruments that reflect the company’s appetite or tolerance for risk; its size and complexity, geographic distribution, type of information managed, as well as the ability to effectively monitor the third-party management program. In the case of Sony’s PlayStation Network producing one of the worst data breaches of the 21st century in April 2011, a thorough SLA could have included a third-party data breach violation penalty which could have offset the millions lost while the site was down for a month. In order to most completely address risk in an SLA, the following should be considered: security and privacy of information, safety and risk analysis, compliance obligation scope, enforcement structure, internal audit accessibility and disclosure requirements, and corrupt practices management.

Since trust in suppliers alone cannot prevent scandal or potential risk, an in-depth SLA is a critical component to risk mitigation along with an all-encompassing supplier relationship management program. Through monitoring a supplier’s operations, a company has the potential to be confronted of compliance issues early on, before a widespread scandal can occur. In this sort of relationship, although a supplier may not be a direct component of a company, an organization would be held accountable as though a third-party association was a direct employee in certain industries. To prevent an outside party from causing widespread scandal and damaging brand reputation, it is crucial to have control mechanisms in place. 

Through establishing a common set of procedures for interacting with suppliers, an SRM program opens communications and enhances the way companies work together. With this enhanced visibility into supplier operations, there is less threat of an incident causing lost sales or hardship because the company would institute structure to their roles that would be continually monitored and assumingly accident-proof. 

Whichever the method of risk mitigation, it is essential to prepare for any disturbance to business whether through proper SLA preparation or an in-depth SRM program. The consequences of negligence can be ground-breaking and are—in many industry leaders’ opinions—worth the investment. 


Heather Grossmuller is a Marketing Manager at Source One Management Services, LLC, a Philadelphia Business Journal “People on the Move” Recognition Recipient, an advisory board representative of La Salle University’s Association of Women MBAs, and all-around marketing enthusiast. As Marketing Manager, she oversees Source One’s efforts in internal/external communications ranging from social media management to recruitment.



Sources Referenced:
http://searchsecurity.techtarget.com/feature/Third-party-risk-management-Horror-stories-You-are-not-alone

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Supply Chain Social Responsibility Webinar This Wednesday!

Charles Dominick 10/27/2014 2:50:00 PM

Supply chain social responsibility is an area that is evolving and expanding quickly. It is placing new and complex demands on today's procurement professionals who are struggling to keep their supply chain social responsibility programs up-to-speed with the business world.

Unfortunately, some procurement professionals haven't even gotten started with implementing a supply chain social responsibility program. They have little understanding of concepts like conflict minerals, supply chain transparency legislation, and carbon footprint reduction.

The good news is that the NLPA will be presenting a webinar entitled "Introduction to Supply Chain Social Responsibility" to help procurement professionals catch up on several of today's top supply chain social responsibility issues. This webinar will be led by Mr. Dick Locke, former HP procurement executive and author of "Global Supply Management: A Guide to International Purchasing."

This webinar will be held on Wednesday October 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 Success,
Charles Dominick, SPSM, SPSM2, SPSM3
President & Chief Procurement Officer - Next Level Purchasing Association
Co-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 is the Best Procurement Software System?

Greg Uhrlen 10/17/2014 7:58:00 PM

Recently, the Next Level Purchasing Association has been reviewing some of the available procurement software systems in the market.  This has really been due to the fact that we have read and heard (loudly, I might add!) numerous questions from our students and their executive leaders concerning, “what is the best procurement software system you have ever seen?” 

Face it, in my position that is a rather loaded question!  The beauty of a particular procurement software system is in the eyes of the beholder so to speak.  But much further beyond that clichéd statement lays a more important answer, which I will give towards the end of this post.

At the recent 2014 NLPA Conference, one of our speakers, Ron Nawojczyk from Oracle, brought up some interesting statistics about failed software ERP implementations during his presentation “Coaching to Win: How to Get Your Users to Drive Your Procurement System to Victory”. In his presentation, according to Panorama Consulting, 66% of ERP project implementations fail and, according to AMR Research, end-user adoption is the #1 reason for failed implementations.

Now while I was listening to Mr.Nawojczyk presentation, I started thinking about how many failed ERP project implementations I had witnessed in my previous career in IT.  The number caught me quite by surprise; 5 in the past 15 years, which includes 2 failed ERP initiatives at one company!

In the 5 cases I witnessed firsthand, there were other significant issues that contributed to the failures besides end-user adoption, but these other issues eventually circled right back to end-user adoption. 

So what allowed these failures to occur?  From my perspective there were two main issues.

The first issue that stood out was that organizations were ill-prepared to purchase the right system.  In defense of the vendors, they highlighted the features of their systems and those who were involved in the discovery process did not always communicate their specific needs (or were unaware of their specific needs).  In 2 cases, I saw modules purchased and installed that were never going to be used anyway.  So to this statement you ask, “where was procurement”?  My reply is simply, “good question”.  For some reason, in these 2 cases, procurement wasn't invited to the table for discussions and negotiations with these vendors!

When you fail to appropriately address the needs of the front-line user, it is exceptionally hard to get buy-in on an ERP system, procurement system or any other system for that matter.  Change within an organization is difficult enough to implement without apathy immediately creeping in because you are making the users' lives harder, at least through their eyes.

The second issue was an apparent lack of leadership championing the systems.  Whether you call it “sticking your neck out”, “putting your reputation on line”, etc., nobody was willing be a true leader and take responsibility for implementing the system.

Alright, so you've read this far because I promised you at the beginning that I would tell you the best procurement software I have ever seen, right?  So here it goes, it is hands down by far the following:  It is the one that has 100% buy-in and commitment from C-level executive management as well as end-users.

While 100% buy-in may be an unrealistic expectation, executives need to market and sell the procurement system to their team.  They absolutely must share their vision with their organization as to why the system has been selected and as to when they will be expected to start using it with no exceptions. 

Now, while this may sound like a harsh, “our way or the highway” type of attitude, it really isn’t if sold properly. The end-users need to have their say at the table as well, so why not task your front-line users to participate on discovery teams alongside more senior members of the organization?

In the vendor selection process, a cross-functional team can review vendors and weed out systems by vendors that potentially over-promise and under-deliver.  IT can offer their knowledge as to the ability to integrate the new procurement system with current ERP, AP and other legacy computer systems.  The procurement department can perform a total cost of ownership (TCO) analysis and negotiate appropriate Service Level Agreement’s (SLA’s) to mitigate risk.  Dedicated super users can receive extensive training and become the subject matter experts of the procurement system and go-to person(s) for others within the organization who do not use the system on a more frequent basis.


When senior leadership takes the ball and champions the cause, there is far greater likelihood the procurement software implementation project will be a success.  While you may lose some non-adopters along the way, your business will be far better off when a successful plan is drafted, reviewed and implemented with a leadership champion at the helm.

So, in your opinion, what is the best procurement software system you have encountered?



Greg Uhrlen
Marketing Manager
1315 Coraopolis Heights Rd, Suite 1001
Moon Township, PA 15108
Phone: 1-412-262-1334



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The NLPA Partners With SourceOne To Launch Groundbreaking Marketing Procurement Course

Charles Dominick 10/16/2014 4:00:00 PM

In organizations, there are some departments that just refuse to cooperate with Procurement.  Some departments are harder to crack than others.  And Marketing is perhaps the hardest.

Marketing departments are driven by creative thinkers.  People who aren't concerned with cost savings as much as they are concerned about ROI or, even moreso, enhancing the brand of the company.  If you think that winning support from Marketing can be done the same way that you win support from Legal or Finance, you are going to have a hard time ever getting the opportunity to manage Marketing spend.

It takes a creative approach.  So, the Next Level Purchasing Association (NLPA) has taken a creative approach to teaching you how to work with Marketing.

Today, we have launched a new online course that we've developed in partnership with SourceOne Management Services.  SourceOne is a sourcing consultancy with deep expertise in many categories, including Marketing.

What we've put together for you is an online Express Course entitled "Adding Procurement Value To Marketing Spend," available exclusively through the NLPA's website.  Through this course, you and/or your procurement team will learn:

  • Why the Marketing environment is ripe for Strategic Sourcing
  • 3 valuable processes that Strategic Sourcing can bring to Marketing
  • Initial Marketing categories for Strategic Sourcing to consider addressing
  • How Strategic Sourcing should establish a relationship with Marketing
  • 5 phases of Strategic Sourcing for Marketing
  • 5 best practices of Sourcing Marketing
  • When it makes sense to collaborate with consultants when sourcing Marketing
To learn more about this online Express Course or to sign up, please visit http://nextlevelpurchasing.com/marketing-procurement.php.

To Your Career Success,
Charles Dominick, SPSM, SPSM2, SPSM3
President & Chief Procurement Officer - Next Level Purchasing Association
Co-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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Minor Changes to What's Included in the NLPA's Course & Certification Offerings Are Coming

Charles Dominick 10/15/2014 2:51:00 PM

Here at the NLPA, we are always trying to tweak things to give our students, members and clients the most positive purchasing education and certification experience possible.

For example, this year, we've supplemented our physical mailing of beautiful parchment certificates with an immediate, print-your-own-certificate option for individuals who complete our online procurement courses.  And we've decided that, next year, we will NOT increase our prices!

We do have a couple of changes that some people may love and others won't.  You can read more about them at the link at the end of this post.  But the good news is that, if you don't like the changes, there is a way to avoid them.

For example, one of those changes is that the duration of access to the Senior Professional in Supply Management® Program (which is what candidates complete to earn their SPSM® Certifications) is being shortened to one year.  After more than a decade of offering this certification, we've found that a shorter time frame is more effective at motivating individuals to "get 'er done."  The average SPSM completes the program in seven months, so two years is too much.

However, if you feel you need two years instead of one, you can secure that benefit for yourself simply by signing up for the program on or before December 31, 2014 and you'll have two years!

To learn more about both changes and how you can avoid them if you'd like, please visit http://nextlevelpurchasing.com/changes2014.

To Your Career Success,
Charles Dominick, SPSM, SPSM2, SPSM3
President & Chief Procurement Officer - Next Level Purchasing Association
Co-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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Supply Chain Social Responsibility Laws: Which Apply To You?

Charles Dominick 10/14/2014 1:30:00 PM

I hope that you have enjoyed the article, "A 12-Point Supplier Responsibility Checklist."
In the article, I referenced two supply chain social responsibility-related laws:  the California Transparency in Supply Chains Act and the Dodd-Frank Act.  If you are just starting a supply chain social responsibility program, one of the first things you need to do is to figure which of these Acts applies to your organization.  It could be that neither, only one, or both apply.  So, let me give you a quick reference to applicability in this post.
  • The California Transparency in Supply Chains Act applies to your organization if it "does business" in California and has annual sales of $100 million or more
  • The Dodd-Frank Act applies to your organization if it is a publicly-held US company
As you saw in the checklist, there are many areas of social responsibility for a supply chain professional like yourself to focus on.  However, complying with the law should probably take priority over some of the voluntary issues if you don't have the resources to work on everything at once.

To Your Career Success,
Charles Dominick, SPSM, SPSM2, SPSM3
President & Chief Procurement Officer - Next Level Purchasing Association
Co-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 Speaker's Recap: Feeling like a Winner at the 2014 NLPA Conference

Charles Dominick 10/10/2014 9:17:00 PM


The following is an unsolicited guest post from Brad Carlson, Director of Supplier Relationship Management at Source One Management Services.  Mr. Carlson was a panelist at last month's NLPA Conference.




At the end of September, I was lucky enough to attend the Next Level Purchasing Association (NLPA) Conference in Pittsburgh, PA. This year’s theme was sports related, “Where Procurement MVPs Are Made.” This made perfect sense, given our location in ‘Dahntawn’ Pittsburgh in full view of PNC Park and Heinz Field.


I’ve been to many procurement conferences over the years, and this one was unique. Rather than just a trade show where you are herded through a maze of vendor booths, NLPA creates an environment that made it easy to establish real personal connections with others. It was also more educational than any other conference I’ve been to. The speakers were fantastic, engaging, and very approachable. 


NLPA President, Charles Dominick, kicked off the conference with a keynote speech entitled, “Every Team Needs X’s and O’s: The Magic of Using Models in Procurement.”  He reviewed how some jargon can be confusing for internal stakeholders as well as within the procurement profession itself. Charles stressed that you need a playbook and common verbiage to keep everyone aligned when transforming your procurement department and dealing with varying stakeholders and suppliers.


As the Director of Supplier Relationship Management (SRM) at Source One, this hit a chord with me. One of the most efficient instruments for an SRM program is a toolkit. A toolkit outlines the standard methodologies and activities used throughout an organization to monitor program performance, support program objectives, drive executive involvement and ensure ongoing collaboration. One element of a toolkit can be a glossary so that suppliers understand the terminology and can communicate more effectively.


Additionally, there was a session from David Hargraves, Vice President of Clinical Sourcing at the University of Pittsburgh Medical Center. His session was entitled, “Playing To Win vs. Playing Not to Lose: Take the Offensive with Strategic Supplier Relationships.” I learned a lot from David’s session, but most importantly, I was intrigued with his points about flipping the script as a strategic sourcing professional. Many of us may naturally take a reserved approach on projects – not wanting to ‘upset the apple cart’ too much in dealing with suppliers.  Through that approach, we are all selling ourselves short.  So much can be gained by developing a systematic approach to identifying potential suppliers.



I always preach that proactive supplier engagement is a fundamental element of SRM. David Hargraves was able to drive this point home. By challenging and engaging suppliers to think outside of the box, your company can reap greater value from their contracts. In fact, those who do not have an SRM program in place often see one of two scenarios:


1)    Suppliers can be essentially ignored, even after long and timely negotiations


2)    Suppliers are somewhat managed, but not enough to sustain any long-term value


Ultimately, by ‘flipping the script,' your strategic sourcing team is supporting collaboration efforts and processes so that suppliers are engaged and aligned with your business objectives at all times.

Day 2 featured more great workshops including, “Suppliers as Partners:  Why and How Supplier Relationship Management Can Be a Competitive Advantage for Your Company” and “Your Team Needs Fans: How Procurement Can Win Over Hard to Please Stakeholder” by Ron Larimer. Ron took a unique approach – no power point slides. It was purely an interactive working session.

Day 2 sessions wrapped with “Be Prepared for the Game Ahead: A US Economic Outlook,” by Kurt Rankin, AVP Economist from PNC Bank, and “Getting the Lead Right Out of the Gate: The Decisions to Make and Pitfalls to Avoid in the first Six Months of a Procurement Transformation,” by Michael Dewitt from Highmark. Kurt gave great insight into the reasons behind the jobless recovery, while Michael spelled out a premier game plan anyone can use in preparing a procurement transformation.  Day 2 was capped with a perfect evening to take in a ball game at PNC Park.  Pittsburgh defeated Boston 4-0.  LET’S GO BUCS!

We started Day 3 early – on the bus for breakfast at Heinz Field.  Not only did we get a great insider’s tour of Heinz field, but we had two sessions.  First was “From Contender to Champion: Transforming Procurement from Good to Great,” by Dr. Soheila Lunney president of Lunney Advisory Group and co-author of The Procurement Game Plan.  The second was a panel discussion after lunch moderated by Dick Locke, featuring yours truly and Stephen Yuter Deputy Director of Acquisition and Acting Head of the Contracting Activity, US Department of Health and Human Services. 
 

The main points of my presentation surrounded the value achieved through SRM and how its successful practice can lead to increased efficiency, cost savings, revenue growth, risk management, preferred buyer status, and innovation. During my time speaking at the event, I aimed to offer an explanation of how I’ve seen effective supplier management serve as an attribute in any business model.



Hands down this conference was a WINNER!   I can’t wait to see what NLPA has in store for next year...

The NLPA sincerely thanks Mr. Carlson and Source One for such a wonderful recap of an amazing event.

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Directworks - Manufacturing a Powerful Sourcing Tool

Greg Uhrlen 10/9/2014 8:19:00 PM

More often than not, one-size-fits-all business-type solutions are often a poor fit in one area or another for many businesses.  Specific nuances of their industry are often overlooked leading users  to becoming “creative” in ways they shouldn’t be in order to make these solutions work for their specific needs.  However, in the manufacturing sourcing arena, one solutions provider is doing things differently.


Based out of Wexford, PA, Directworks is very upfront in stating that their sourcing tool is specifically designed for direct materials spend within the manufacturing industry.

According to Michael Cross, Director of Marketing for Directworks, "manufacturers need sourcing and supplier management solutions that have been built around their specific needs. It is at this stage of the product design process where profits are truly established."

One of the main points behind Directworks is the problem people in procurement constantly face; chasing after spreadsheets saved who knows where and trying to bring them together into one concise document to share with co-workers and suppliers all the while trying to keep track of updates throughout a project.  A monumental (and somewhat impossible) task to say the least!

Another pain point Directworks alleviates is the problem with suppliers who tend to fail at filling out mandatory fields on spreadsheets leading to hours and days of wasted time and effort chasing down information.  Within Directworks, quotes are not permitted to be incomplete as the fields are immediately flagged.

Directworks is a SaaS/Cloud-based application / database system.  A big advantage to Directworks is that there is no need for additional hardware for your IT organization to maintain.  It also has private “email” capabilities within its system.  If specifications change, everyone involved has the opportunity to see the changes at the same time.

RFQ’s are configurable by you and you are then able to line up supplier quotes all in one area, on one screen which proves to be a huge timesaver.

Directworks contains many standard and highly configurable reports to capture the particular information needed for your organization to make decisions based on a wide variety of specific details.  The most popular of these is the total cost analysis report.  This report shows you who the best supplier to choose is based on cost savings and other weighted overall fields.

Directworks is also a secure workspace in sourcing solution.  It allows for pure sharing and collaboration between employees and vendors / solution providers that login in through an encrypted Internet portal.

A most important feature we found with Directworks is the viewing tool which allows you to look at engineering drawings created in any software format.  Thus, those collaborating do not need the same software to exchange ideas and create enhancements.  The viewing tool also has a security feature that allows you to share images at any level.  So if you only want a collaborator to see particular spec levels of a drawing, you can share just that particular to allow editing, suggestions, etc.  Another great feature you can use in the tool is the ability to zoom in extremely tight on specific areas of the image and insert questions pointing to the exact point in question. 

The reporting features of Directworks are very strong and if there are reports missing to your particular specifications, their technical support staff will help you create the reports you need for your organization.  For example, you are able to run cost savings reports to find outliers based on a percentage difference (too high or too low) of price per part.  You can then export this data to Excel (or other spreadsheet applications) and show your suppliers where they are out of line in comparison with other suppliers.  Our point of concern here would be potentially sharing supplier information amongst competing suppliers so one needs to tread carefully here in an ethical manner.


The quote scenario report in Directworks allows you to show the best way to produce a product and allows you to target numbers for even greater savings.  For example, if one of your suppliers is a little bit higher on a particular part than on others, you can create this report and indicate within the tool to your supplier(s) where they could possibly do a little better.  Overall the quote scenario report saves users a considerable amount of time allowing the user to focus on more quotes and negotiate greater cost savings.  The quote scenario template also handles such details as a VAT (value-added tax) and currency conversion capabilities for overseas suppliers.

In the RFP area, you are able to run extremely detailed reports showing cost savings, manufacturing time, net-terms, delivery terms, lead times, and many other options.  Within this area you can add user (and supplier) comments easily as well.  Thus, if a particular proposal looks, by “running the numbers” better than other proposals, the comments area allows you to red flag potential concerns (for example lead times).  This area allows for data-driven decisions for sourcing projects.

Directworks has a wide variety of reports that track cost savings at various levels such as project level, supplier level, etc.  Within these reports you can measure and graph actual cost savings against estimated cost savings. 

Among this plethora of reports within Directworks is a supply chain social responsibility report based on watching for suppliers who use conflict minerals (tantalum, tin, tungsten, and gold, or 3TG).

Directworks offers enterprise licensing based on annual revenue and is always free to use for suppliers.  Included in the enterprise license fee is 24/7/365 technical support (for users and suppliers) which is based in Pittsburgh, PA and Shanghai, China (with English speaking and Mandarin Chinese speaking support specialists).

Mr. Cross suggests that you have at least one Directworks power user who knows the platform inside and out and can help other users who don’t need to have that level of expertise to use it effectively.

Mr. Cross also mentioned Directworks realizes the importance of having a simple, easily adaptable UI (User Interface) and from the in-office demo we attended, we believe they have succeeded in this area.  If you and your team are comfortable using Microsoft Outlook, it is most comparable in terms of look and feel.

A powerful feature Directworks offers (and strongly encourages customers to try) is their Proof of Value (PoV) pilot program which gives users 2 to 3 months to learn and use the capabilities of Directworks within their own business to get used to doing real work with the system and seeing the potential cost savings and benefits of the system. 

Directworks target market is for manufacturing organizations averaging $400 million dollars (US Currency) and above in revenue.  Their largest customer is in the $100 billion dollar revenue area and runs thousands of reverse auctions per month within the tool.  To further quote Mr. Cross, “Whirlpool knows how to do sourcing, but we can show them how to do it faster and more efficiently”.

Overall, Directworks is worth serious consideration for any large-scale manufacturing organization that is looking to improve cost savings, time savings, project management, innovation of products and secure exchange / viewing of documents.  Visit Directworks at www.directworks.com .

Greg Uhrlen
Marketing Manager
Next Level Purchasing Association
1315 Coraopolis Heights Rd, Suite 1001
Moon Township, PA 15108

Phone: 1-412-262-1334

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The 2014 NLPA Conference Hit A Home Run With Procurement Professionals!

Charles Dominick 10/7/2014 5:19:00 PM

It's taken me a while to catch up afterwards, but I am now ready to declare the 2014 NLPA Conference an overwhelming victory!  Procurement professionals from throughout the US and the world gathered in Pittsburgh, Pennsylvania from September 15th to 17th, 2014 and I'm pretty sure that I saw each one leave with a smile on their faces!

We had such a special inaugural conference in 2013 that exceeded expectations, those of both attendees and NLPA staff alike.  Could we top that amazing event in 2014?  Let's review some highlights!

The first two days of the event were held at the beautiful and super-classy Renaissance Hotel along the shore of the Allegheny River.  I knew when I arrived the night before the event and looked out my hotel window to see PNC Park, Heinz Field, and the beautiful bridges of Pittsburgh that attendees' first impression of the event would be awe inspiring.



I kicked off the event with an always-provocative keynote speech in which I encouraged today's procurement professionals to completely rethink the way they interact with CEO's in order to advance the procurement professionals to heights never before reached.  I closed the speech by challenging the attendees to use the week to get into a creative mindset to create new models for procurement where they are lacking today.



One of the things I always preach about our conference is the diversity of perspectives that attendees will get exposed to (unlike our competition - who I call "the Dinosaur" - whose old-boy-network gives the same presentations every year and who never invites "outsiders" with certifications other than their own).  After my speech, I dispatched the audience to break out sessions, the first group of which were conducted by top supply chain executives.

That first morning was heavy with real-world education.  So, for our lunch keynote speech, we invited former Pittsburgh Steeler football great, Craig Wolfley, to lighten things up a bit with his belly-laugh-inspiring, but still motivational, speech:  "Teambuilding Through Storytelling."  His stories of how the late four-time Superbowl-winning coach, Chuck Noll, led his teams to success had as many business takeaways as they had chuckles.  And the crowd appreciated the opportunity to shake hands with a true celebrity.






I invited our top two speakers from last year to return again this year.  And Day 1 closed with a general session conducted by one of them, David Hargraves.  Did he deliver the goods again this year?  I'll get back to that in a bit...

The education portion of Day 2 got started with another constituency of speakers that we like to have represented:  consultants!  The thing I love about having consultants speak is that they get to see, first-hand, how things work in multiple procurement departments, not just one.  So, they get to share practices that are truly transferable.  Ron Larimer from Procurement Done Right and Julie Brignac and Ashley Hatcher from Vantage Partners delighted the audience with practices that they've seen work consistently for their clients.






If you've followed this blog for a while, you know that I love to keep abreast of what's going on in the sales profession and encourage all procurement professionals to do the same.  So, as part of my commitment to provide a diverse array of speakers, I asked master sales trainer Scot Teachout, from Peak Performance Management, to share some seller's secrets with attendees.  Attendees were pleasantly surprised at how much they could learn from a sales specialist!

Throughout the first day and the first half of the second, attendees made good use of their opportunity to meet in the exhibit hall with our friendly sponsors, ThomasNet and Puridiom, who had the chance to demonstrate why they are among the leading providers of procurement technology tools.


PNC Financial Services Group Vice President and Economist, Kurt Rankin, gave a compelling and extremely up-to-the-minute lunchtime keynote speech on the state of the economy.  He declared that the economy has fully recovered from the "Great Recession."  He also expertly fielded some questions about what current economic indicators mean for the pricing and supply concerns of procurement professionals.  A very authoritative and relevant speech!

The education portion of Day 2 closed with perhaps the most provocative speech of the event.  Highmark's Vice President of Procurement, Michael DeWitt, gave a brutally honest view of what the first six months of a procurement transformation are like.  While some in attendance were a little overwhelmed by a discussion of some of the negative aspects of a procurement transformation, most attendees appreciated that Mr. DeWitt refused to sugarcoat the unavoidable conflict that a procurement leader will face when trying to drive a successful plan from vision to execution.  This was a real-world discussion at its most raw.

If there's anything that people who've attended either of our conferences know about the Next Level Purchasing Association, it's that we believe in having fun - like loads and loads of fun!  So, after we challenged our brains during the day, we walked across the Roberto Clemente Bridge to PNC Park to watch the Pittsburgh Pirates demolish the reigning World Series champion Boston Red Sox, 4-0.  (Yes, the fun is included at no additional charge!)



For the third and final day of the conference, we moved to Heinz Field for a boatload of additional education and, yes, a little fun, too.  Attendees were split up into two groups:  one would go on a supply chain-themed tour of Heinz Field while the others got to learn from the other of the top two speakers from last year, Dr. Soheila Lunney.  Then, the groups switched and each got to do what the other did.



When I asked the Heinz Field team to include supply chain elements to the tour, they said "Huh?  No one's ever asked us to do that before."  But with a little coaching, they prepared something that only a procurement crowd would love like they did.  We got to peek into their warehouse and hear from a member of their supply chain team who discussed issues like how they approach supplier quality.  Here's a pic from that segment of the tour...can you guess what the supplier error being discussed here is?






And more visuals from the tour...





I mentioned that David Hargraves and Dr. Soheila Lunney were the top two rated speakers from last year.  And they were again, despite the fact that we worked hard to top last year's amazing speaker quality and got some crazy-good speakers on board.  In fact, our average speaker rating (on a scale of 1 to 4) increased to 3.53 in 2014 from 3.42 in 2013.  Speaker quality is such a high priority for us, so it is rewarding to know that our attendees acknowledge that quality!

The event ended with a scintillating and interactive panel discussion featuring panelists from vastly different backgrounds:  Dick Locke, SPSM, SPSM2, author of Global Supply Management and former procurement executive for HP; Stephen Yuter, SPSM, Deputy Director of Acquisition and Acting Head of Contracting Activity for US Department of Health & Human Services/Indian Health Services; and Brad Carlson, Director of Supplier Relationship Management for SourceOne Management Services.



It was a triumphant feeling to conclude the conference.  Attendees told us that it was the best procurement conference ever.  At the NLPA, we certainly strive to put on a great event that blows away the competition and it was awesome to know that we succeeded.

If it sounds like a great event, it was.  And you've only read some of the highlights!  There were plenty more speakers and activities that made these three days special!

As they were filing out, attendees asked "Where is the next one gonna be?" and "When is the next one gonna be?" and "How in the world will you ever top yourselves after this?"

Well, we have our thinking caps on.  We definitely set the bar very high and it will indeed be very difficult to top the 2014 NLPA Conference.  But our goal is to do just that!

No decisions have been made yet.  But we have some ideas that we think can make our next conference even better.  And it may take more than a year to be able to accomplish something so groundbreaking.  We are thinking somewhere other than our hometown of Pittsburgh.  And we are thinking May 2016.  And, yes, that is around the same time the Dinosaur will be doing its conference.  But, now that we've proven that we can host an event so far above procurement professionals' other options, we are ready to go head-to-head and show the Dinosaur's crowd (who prefer a Spring event) how much better a procurement conference can be done.

Procurement professionals deserve a breathtaking conference experience.  The NLPA wants to deliver that and more.

Thanks to everyone who came and helped to make the 2014 NLPA Conference an event that will have a lasting impact on careers and memories!

(see our Facebook page for more photos!)

To Your Career Success,
Charles Dominick, SPSM, SPSM2, SPSM3
President & Chief Procurement Officer - Next Level Purchasing Association
Co-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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Procurement Trends That Become Procurement Goals

Charles Dominick 9/30/2014 3:21:00 AM

I hope that you have enjoyed the article, "Procurement Trends Today, Goals Tomorrow."

Last week, I delivered a presentation at a conference where I went into depth on the very topics covered in the article - the current trends that will be future goals.  I had an interesting question from an attendee at the very end of my presentation.

She asked:  "Because you've been in procurement a while, what previous trends have you seen turn into goals?"

I've obviously seen more than I had time to mention but, reflecting on what procurement looked like in the mid-90's, here are a few that I squeezed in...
  • Reverse auctions as a percentage of sourcing events (this has since gotten less frequently used as people have realized that reverse auctions are only appropriate for a subset of all sourcing opportunities)
  • Outsourced/offshored/global spend as a percentage of total spend
  • Percentage of compliance with eProcurement system usage
  • Procurement transactions completed by offshore contractors
  • GPO use that replaces unmanaged spend
  • Pcards (which, last year, I predicted would start to see a shift from plastic to digital)
While looking at these trends that became "the standards" since the mid-1990's, I think that the trends brewing today stand to more significantly alter the future of procurement.  It will be exciting to see what the procurement goals of tomorrow are!


To Your Career Success,
Charles Dominick, SPSM, SPSM2, SPSM3
President & Chief Procurement Officer - Next Level Purchasing Association
Co-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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Mine Untapped Opportunities To Realize P2P ROI

Greg Uhrlen 9/12/2014 9:25:00 PM


We would like to welcome back Roshnee Mistry who works with the content leadership team of Zycus. 

One of procurement’s main functions is to help organisations achieve excellent value from supplier relationships. Top performers deploy holistic purchasing and payables technology platforms to deliver breakthrough results from sourcing, purchasing and invoice processing. 

Deriving operating efficiencies and improving performance of working capital to deliver maximum value to internal business customers is only possible when internal processes and external supply relationships are managed collaboratively.

According to a study conducted by The Hackett Group, “Top-performing purchase-to-pay organizations outperform their peers nearly two-to-one when it comes to efficiency, while also delivering on the higher-level effectiveness objectives of the company. Such objectives include payment strategy optimization, compliance to preferred suppliers, spend visibility and internal compliance and control.”

The current business environment allows little margin for error. Business enterprises must constantly re-evaluate processes and cost structures and align CPOs’ agendas to top corporate priorities. Data shared in a recent white paper by Zycus titled ‘The P2P Payoff: Mining the Untapped Return from Procure-to-Pay’ demonstrates simple ways of maximizing savings opportunities by optimizing P2P processes.

Ø  Make your P2P system the only approved way to buy. By guiding users all the way through procurement processes, compliant buying for can be increased for all indirect purchase categories, boosting potential procurement ROI by a factor of three or more and eliminating maverick spending over time as user acceptance and spend visibility increases. In a service-friendly way, turn off all other order and payment vehicles – make it policy.

Ø  Guide requisition approvers by providing visibility into current budget consumption. Effective P2P systems ensure that all purchases are on-contract and enforce budget control at a line-item level, denying or deferring purchases that are not budgeted and providing complete, real-time visibility into spending versus budget. Such visibility creates individual accountability, engenders proactive management of corporate funds and aids in plugging savings leaks.

Ø  Achieve best-in-class P2P performance by accurately coding and classifying purchase transactions without burdening end uers. An Artificial Intelligence–powered platform assists in eliminating user guesswork, classifying transactions accurately and triggering pre-configured approval workflows, which improves overall P2P usability.

Ø  Streamline requisition-to-order cycles to enable reduced inventory and associated carrying costs. Seamless requisition approval and visibility into order status ensures that all indirect goods and materials can be purchased as and when required. Buying teams can provide outstanding customer service to each business unit and realize exceptional transactional efficiency.

Ø  Eliminate manual invoice processing. Best-in-class invoice processing is achieved only through automation. High first-time match rates feed through to other areas, resulting in greater productivity, lower costs per invoice and larger numbers of invoices paid on time.

Ø  Increase discount capture. Both suppliers and buyers benefit when financial supply chains operate efficiently. Discounting is an effective way for buyers to generate returns on surplus cash and for suppliers to boost cash flow. Automated and accelerated invoice approval cycles enable greater capture of prompt-payment discounts while maintaining appropriate controls.

Ø  Improve spend visibility and enable advanced analytics with P2P automation. Provide insights into suppliers, categories, prices, supply lead-times and contract compliance to promote and maintain strong supplier relationships and to proactively manage supplier performance and improve contract utilization.

Seamless integration of a procure-to-pay automation solutions with existing systems is critical to ROI and employee usability. End-to-end process management approaches are required to transform and realize ROI from automating P2P processes. It is imperative to track successes, report and follow up to prevent leakage and to improve controls and compliance. Corporations must understand that usability, customer centricity and vision are key differentiators for maximizing adoption of P2P systems across organizations.

Each new dollar of spend brought under control can yield significant total cost savings for organizations. As the old adage goes: "A penny saved is a penny earned." Read the whitepaper to learn about more ways to save.

Roshnee Mistry from Zycus regularly writes on procurement-trends and best practices, sometimes taking the off beat path to bring in a fresh perspective.  She also drives the branding activities of her company.

In her free time she enjoys hot cuppa coffee with the latest fiction book.

She is an MBA in Marketing and a commerce graduate.


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A Bellwether of Change for Procurement Departments

Greg Uhrlen 9/11/2014 5:10:00 PM


Are you one of those unfortunate procurement professionals who spend the end of every month putting on your detective coat and becoming a sleuth in a never ending quest to find paper spreadsheets and those who created these monstrous disasters?  If you work for a small to mid-sized organization and are tired of chasing after people every month for their purchase orders, Bellwether Software offers a viable alternative for your business, ePurchasing Management Xtra or ePMX for short.

ePMX is a cloud-based, procure-to-pay system that is really geared towards small to mid-size businesses and is local government-friendly as well.  Dan Ross, VP of Sales & Marketing for Bellwether, said that the typical user counts for their customers are less than 50 end users and 10 procurement department users. 

The current version of the ePMX system does not offer any real-time integration with ERP systems, but can export data to them. The next version of ePMX will allow for integration with Open API’s and is scheduled for the first quarter of 2015.  According to Dan Ross of Bellwether, “the next major version release of ePMX will be a significant upgrade to the current version.  It will include a new UI, notification center, WYSIWYG work flow & approval process builder, and report builder”.  However, current ePMX users are able to import/export data to AP or into an existing ERP system.

While the more recognizable names in the procure-to-pay space target huge customers who want better procurement system performance than their ERP systems are able to provide, Bellwether’s solution is more targeted at smaller organizations who are replacing manual processes with a more formal process that gives them the control over procurement that the big companies already have.

One feature of ePMX that we found appealing was the fact that you are able to only license the actual modules that you will be using as opposed to paying for modules that are irrelevant to your organization.  This is a great cost-savings opportunity for organizations just getting their feet wet in the online procurement world without causing an aversion to due to price.


Bellwether is up-to-speed with the trend of “approvals by email” where no logging into the system from a desktop is required for approvals.  As we often mention, this particular capability can cause stress on IT in terms of security concerns.  With respect to security, Mr. Ross states, “those users on mobile devices still need to log in with a user name and password at least once.  After they authenticate them self once, they can do additional approvals until they log out or the system logs them out.  The client chooses the length of time a user is allowed to be logged into ePMX in the configuration settings based on their security requirements”.

The requisitioning module is fairly simplistic, but also very intuitive. Requisitioners have the ability to PunchOut to a vendor website, select their items and ePMX will download all the order information.  Then they follow the ePMX requisition workflow for approvals and continue the process.  In our opinion, it is impressive that a small company can utilize PunchOut capabilities.

The quotations module does a nice job of organizing and automating the creation of the type of basic RFQ’s that smaller companies do and allows procurement departments to compare bids in a unified location.  It accepts quotations in sealed bid format only – no reverse auctions or dynamic bidding events are facilitated by this particular module.

Even though the graphical user interface doesn’t have a particularly cutting edge look, it is actually pretty pleasing to the eye and thoughtfully designed.  We really like how various records (requisitions, purchase orders, RFQ’s, etc.) can be accessed via dropdown box in the various processes where they are needed. 

Though many eProcurement systems shy away from inventory, ePMX has an inventory module which would prove to be valuable for a smaller company that doesn't want to have to deal with a separate inventory system or worse – inventory kept in an Excel spreadsheet! 

ePMX offers  a very user-friendly help functionality.  Say you are in a particularly deep part of the inventory module and you are unsure of how to handle a particular process; all you have to do is click on the help function and a web page pops open that matches the particular area of the module you are in.  In our opinion, Bellwether hits a home run with this feature as it allows the user to quickly find information as opposed to crafting their own search terminology with respect to what they think their problem is at the present time.  This takes considerable stress away from the user and allows them to finish their tasks at hand much quicker and more efficiently.

Deployment of the Bellwether ePMX system only takes a 3-4 week implementation time frame and is for clients that choose the cloud option.  According to Mr. Ross, “currently 90% of Bellwether clients choose the cloud version.  Only organizations that have extreme security requirements choose the on premise version”.  Mr. Ross further states, “for clients that choose the purchase option for on premise installation, they can expect to add an additional 3-10 business days to the set up process”.  

Overall, Bellwether ePMX offers a great opportunity for smaller companies to professionalize their transactional purchasing process.  It is designed to provide a proven structure to most of the purchasing activities in which smaller companies engage.

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Supply Chain Social Responsibility Is Finally Within Reach

Charles Dominick 9/10/2014 4:00:00 PM

Are you aware of the risks of not having a socially responsible supply chain? Unless you are managing your supply chain in the most socially responsible way, you are risking getting your organization into more trouble than ever. Getting bad publicity, losing customers, and being subject to criminal consequences are just a few of the risks that your organization can face when its procurement professionals are unaware of constantly changing social responsibility principles.

Fortunately, the process of implementing supply chain social responsibility no longer has to be a mystery.

Today, the Next Level Purchasing Association has launched an online course entitled "Exemplary Supply Chain Social Responsibility."   This course will teach you the wide variety of details that can take a supply chain organization from clueless to industry-leading. You'll get more than just an introduction to social responsibility - you will become an expert at flawlessly executing and managing a supply chain social responsibility program.


Learn more about "Exemplary Supply Chain Social Responsibility" at http://www.nextlevelpurchasing.com/supply-chain-social-responsibility.php.


To Your Career Success,
Charles Dominick, SPSM, SPSM2, SPSM3
President & Chief Procurement Officer - Next Level Purchasing Association
Co-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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More Negotiation Steps For Optional Procurements

Charles Dominick 9/9/2014 5:30:00 AM

I hope that you have enjoyed the article "7 Steps For Negotiating Optional Procurements."

In that article, I shared the first five of those seven steps.  Here are the remaining two steps...



6.     Offer to settle at an amount up to your organization’s maximum.  If you haven’t reached an agreement with your supplier at this point, it will require some back-and-forth conversation to reach a price that is less than or equal to your organization’s maximum.  At this step, you may need to disclose your organization’s maximum.  If you reach agreement, you don’t need to move on to the final step.

7.     Revisit the maximum your organization is willing to pay.  If you have executed the preceding steps well, you have pretty much determined the neighborhood of the supplier’s lowest price.  If you haven’t settled, you need to confer with your internal customers and/or management to see if there is a willingness to raise its maximum to meet the supplier at or near its most recent offer.  If not, then you’ll simply need to forgo the procurement.  It was optional, remember?

That's about it.  

Please click here to return to the article to read the "Spotlight on Professional Development Opportunities," "Latest Purchasing News" and "Free Offer" sections!
 

To Your Career Success,
Charles Dominick, SPSM, SPSM2, SPSM3
President & Chief Procurement Officer - Next Level Purchasing Association
Co-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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Last Chance To Register For The NLPA Conference This Month!

Charles Dominick 9/3/2014 7:30:00 PM

Time is running out to register for the procurement event of the year!  You only have until Monday, September 8, 2014 (or until the remaining 15 spots sell out) to register or you're going to miss out!

Get off of the bench and into the game by attending the 2014 NLPA Conference - being held September 15-17, 2014 in Pittsburgh, Pennsylvania.  This valuable and exciting procurement conference is designed for what today's procurement professionals like you need:

* Dynamic speakers providing insights into critical issues and challenges

* Workshops on the latest procurement strategies and techniques

* Networking opportunities with influential procurement thought-leaders

At the NLPA Conference, you'll get the procurement insights that you simply can't get anywhere else! You'll hear 3 keynote speeches covering the most cutting-edge business topics. Plus, you'll get to choose from 11 skill-building workshops and attend an interactive panel discussion sharing insights to help you to deliver better procurement results for your organization.
In addition, your attendance can earn you up to 16.5 Continuing Education Hours (CEH's). Not only will you learn, but you'll also have fun and get energized about procurement.

Procurement professionals from around the world have already secured their spot at the 2014 NLPA Conference. Companies sending their procurement team members include:

* Alcoa
* Bayer Healthcare
* Boston Scientific
* CB Richard Ellis
* Fidelity Investments
* GUESS, Inc.
* Honda
* Mitsubishi Nuclear Energy Systems
* Select Medical
* Wood-Mizer
* And more!

Register today for the opportunity to network with these leading procurement professionals and others while learning from them what is and what isn't working in procurement.

Secure your spot at the 2014 NLPA Conference by visiting:
http://www.nextlevelpurchasing.com/nlpa-conference.html?lc
and selecting "Add to Cart" next to your preferred registration option. 

If you prefer to use a method of payment other than a credit card, please download and complete this form:
http://www.nextlevelpurchasing.com/resources/conferenceregistration.pdf

If you have any questions regarding the 2014 NLPA Conference, please respond directly to this email or call 1(412) 294-1990 and a member of the NLPA team will be happy to assist you.

Registration will officially close on September 8, 2014, unless the conference sells out before then. There are only 15 seats remaining, so don't wait until the last minute if you are considering attending.

Again, the link to register is:
http://www.nextlevelpurchasing.com/nlpa-conference.html?lc


I look forward to meeting you in Pittsburgh later this month!

To Your Career Success,
Charles Dominick, SPSM, SPSM2, SPSM3
President & Chief Procurement Officer - Next Level Purchasing Association
Co-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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Why All the Buzz Around Coupa Software?

Greg Uhrlen 9/3/2014 4:48:00 PM

In the 3/20/2014 Wall Street Journal blog, it was reported Coupa Software raised $40 million (US) dollars in venture capital in less than 48 hours according to their CEO Rob Bernshteyn.  Perhaps it is because, according to Mr. Bernshteyn, “Coupa has been beating SAP AG”.  Now that is a pretty big claim to make, so we decided to take a look at Coupa and see what all the buzz is about!

Coupa Software offers a cloud-based procure-to-pay system. Being well-regarded throughout the industry as having a user-friendly eProcurement system, we did not notice any significant surprises in the Coupa software eProcurement portion of the demo, which was more pleasant than earth-shaking in a sector that is rather mature. 

One thing that wasn’t resolved was whether the system had the capability of showing items from hosted catalogs and “PunchOut” catalogs in the same search results.  It didn’t appear that was possible.  We could see that being a problem in cases where their preferred suppliers have the more tech-savvy ability to provide PunchOut, but their products are less easily found than those in hosted catalogs based on what the demo had shown. 

One nice thing in their eProcurement system that we haven’t seen elsewhere was a line-by-line budget thermometer in their cart which allows the buyer to know how much they have left to spend or are permitted to spend.

A big differentiator in our opinion is their Expense Management capabilities.  Expense Management is a module that many other suites do not include as it is often considered in the accounting realm more than the procurement realm.  More so than just including it, we loved how they integrated the expense concept with the procurement concept via reports and other features, with the goal to migrate future out-of-pocket expensed spend onto purchase orders.

Within the Expense Management module itself, we were impressed with the ability to dump corporate card data into the system.   Users can take a picture of a receipt and use the Coupa app to automatically add it as a line item to ease the administrative burden of creating expense reports.

We were impressed with the ability for managers to approve requisitions, orders and expense reports from email and/or the app (available now for both iOS and Android) without the need to log into the system itself.  Once a request is approved by individual(s) at a particular level, the approver ( or approvers, as the case may be) at the next level receives a notification either via email or the mobile app.  While this convenience is greatly appreciated by those at approver levels, it in turn can raise questions for those in IT as to the security of such applications.

The e-Invoicing module was also very impressive.  What stood out most to us specifically were the analytics that showed the discount opportunities, the list of top savings opportunities (for taking discounts for early payment, missed discount, no discount available, no payment terms), and the various ways that invoices are added into the system (electronically via cXML, created via a “flip PO to invoice” feature, and emailed into the system by supplier).  The list of top savings opportunities (listed by invoice #)immediately jumped out at us and this feature should prove invaluable to those who utilize the Coupa Software system.

Coupa also makes it easy for buyers to buy the right products they are allowed to purchase.  If there are particular technical specifications for a certain product, the required specs will show up on the screen when the buyer performs a search for the product.  Also, the software allows for users to read reviews and rate suppliers and products in detail. 

Other features of the Coupa Software system we liked include:

•          Internal forms can also be created for time off, temporary laborers and other situations
•          The ability to handle transactions in multiple currencies and languages simultaneously
•          Suppliers are not charged a fee to be included in the Coupa Software catalog system
•          Coupa's plan to add asset tracking to the system


For those procurement departments whose #1 technology priority is obtaining an eProcurement system, Coupa deserves a very close look.  While Coupa’s sourcing and contract management capabilities aren’t quite strong enough to stand on their own, they would be nice bonus add-ons for procurement departments who want a world-class eProcurement system with a little extra.  

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Read Procurement Advice & Predictions In Spend Matters' Interview With NLPA Founder

Charles Dominick 8/29/2014 4:27:00 PM

This week, Spend Matters UK/Europe published a fun and informative interview with me.

Lots of ground was covered in this short, but info-packed, interview.  I share my thoughts on advice for young procurement professionals, why organizations should even care about procurement, and the one criterion that may become more way important than price in future supplier selections.

You can read the entire interview at http://spendmatters.com/uk/charles-dominick-of-next-level-purchasing-todays-procurement-provocateur/.

To Your Career Success,
Charles Dominick, SPSM, SPSM2, SPSM3
President & Chief Procurement Officer - Next Level Purchasing Association
Co-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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Types of Procurement Expertise

Charles Dominick 8/26/2014 5:16:00 PM

I hope that you have enjoyed the article, "5 Types of Procurement Expertise."

My main goal with the article was to give some perspective about how broad one's capabilities must be to be successful in procurement today.  I think that the article did that.  But...

Are there only five areas of expertise that a procurement professional must have?

Nope!  There are even more.

I can think of at least one more right now:  business acumen.

In our online Express Course series, "Procurement KPI's & Business Acumen," we share a definition of business acumen from the Financial Times.  An excerpt from that definition is "[b]usiness acumen is keenness and speed in understanding and deciding on a business situation."

Some of the smartest people in the world don't have business acumen.  They wouldn't be able to come up with a way to increase an organization's revenue or market share.  They wouldn't be able to grow profits at will.  They wouldn't be able to develop a new strategy that can take a business to heights it never achieved before.  They can't talk to a senior executive on the same level and have an equal, mutual respect for each others' ideas, concerns, and hopes.

Business acumen is a unique type of expertise.  One that is increasingly being required of procurement professionals.

As you can see, being a successful procurement professional isn't being good at one thing, like knowing how to get an invoice approved for payment or even executing a sourcing process on time and without challenges.  It's many things.

How many of these areas of expertise are you working to improve?

Hopefully all of them.

To Your Career Success,
Charles Dominick, SPSM, SPSM2, SPSM3
President & Chief Procurement Officer - Next Level Purchasing Association
Co-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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Procurement Pros: Learn Leadership Techniques in This Webinar on Wednesday!

Charles Dominick 8/22/2014 8:52:00 PM



"Leadership is influence" - John Maxwell.



Once you understand your influence, only then will you be able to become the leader you're meant to be.  Discovering your leadership style advances your influence.  By developing your awareness of the symbiotic relationship with these two skills, you will in turn grow, and grow others.



When you're done with a project, don't you wish to leave a legacy?  Do it by influencing.  In this webinar, entitled "The Leading Influence" and led by Steve Burns of the John Maxwell Team, you'll gain the understanding of how to influence, lead better, and leave a lasting impression on those you associate with.


This webinar will be held on Wednesday August 27, 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 Success,
Charles Dominick, SPSM, SPSM2, SPSM3
President & Chief Procurement Officer - Next Level Purchasing Association
Co-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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Career Advancement in Procurement – Light at the End of the Tunnel

Greg Uhrlen 8/15/2014 6:14:00 PM

Do you sometimes feel like no matter hard you try to negotiate the best terms possible with a supplier you still don’t get the deal you are looking for?  Sure, you may get some sort of “discount” but is it really beneficial to your organization?  Are there terms somewhere else that need to be addressed that would make it a much better deal for your business?

Well, let me tell you, there is hope…a light at the end of the tunnel so to speak to becoming the savvy purchasing professional that earns the respect of suppliers and colleagues.

At the Next Level Purchasing Association, we speak with students and potential students every day regarding the challenges they face as procurement professionals.  While our knowledgeable, experienced team of professionals can answer any questions you may have about purchasing certification, sometimes it is better to hear from someone who, like you, decided they need to improve their procurement skills.

When Catherine Shaw SPSM3 first enrolled in the Next Level Purchasing Association’s SPSM® program, she characterized her skills in regards to procurement as “weak” and that her results from negotiating were typically unpredictable.

As a result of earning her SPSM® Certification, Ms. Shaw has mastered essential procurement skills, global procurement management and enterprise-wide procurement influence.  Today, Ms. Shaw, who resides in Los Angeles, CA, holds the role of purchasing manager.  Ms. Shaw's ability to get the best terms possible for her organization in negotiations has led to greater responsibilities, including negotiating a particular deal that has been extremely beneficial to her co-workers.


Read Ms. Shaw’s in-depth, compelling procurement case study and find out how the SPSM Certification can transform you into a trusted, world-class procurement executive just like Ms. Shaw.

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The Sharks Are Swimming Around Procurify – And That’s a Good Thing!

Greg Uhrlen 8/13/2014 8:48:00 PM

Dallas Mavericks owner and notorious start-up investor Mark Cuban has placed his hands into the “shark tank” so to speak that is the treacherous waters of the procurement solution field.  This high-risk, high-reward field for software and cloud solution developers is right up Mr. Cuban’s alley, especially when it comes to start-up investing. Mr. Cuban’s target in this area is Procurify; a relatively new entry into procurement software industry that offers its customers a cloud-based purchasing management software system.

The sweet spot for Procurify currently is companies with 50 to 1000 employees with 10% to 20% of those employees having user accounts.  However, if you are a smaller shop with a single procurement employee, the system works great for you as well.

Procurify is a role-based procurement system that comes with many pre-configured roles for a wide-variety of users.  Examples of roles that come pre-configured with Procurify include approver and buyer. Thus, specific buyers in your organization can be set up to approve, for instance, up to X amount of dollars.  If the threshold is exceeded, a higher-level of approval is required (approver, manager, director, etc). If you are unable to find the exact role-set you are looking for, the system offers the ability to customize your own roles on-demand.

One of the slicker features Procurify offers is the ability to create bundle orders.  Say, for instance, you purchase the same setup when a new employee is hired.  You can go into the Procurify system, pull up the “new employee” bundle you previously created and instantly you have items you need to order already picked out.  Kurtis Warren, of Procurify’s business development team pointed out this capability, “works great especially for contractors working on new homes”, where the base specifications for particular models are often the same.

Another impressive feature of Procurify is the ease of adding new departments, budgets and approvers.  Within a couple clicks and by adding specific allotments for approvers, it can be completed with ease.

A critical upgrade to the Procurify system going forward is the ability to integrate with other ERP systems.  I think this could be a serious game-changer for the organization.  The ability to utilize a cloud-based and app-controlled system such as Procurify will save considerable money, time and resources for organization’s that are already overburdened with maintaining servers in-house.

In the Procurify business model, suppliers do not have to pay to add their catalog to the Procurify buyer / supplier portal.  Suppliers are able to login into their specific buyer’s portals to upload their catalogs.  Currently, Procurify does not offer Procurement PunchOut capabilities.

According to Warren, one area of Procurify that is currently being revamped for improvements is the reporting system.  At this time, the systems reporting abilities are somewhat basic, but this is an area where the scheduled improvements would make a notable difference.

Procurify is not ready for the Fortune 500 “yet” as a be-all, end-all eProcurement solution (although they do have several Fortune 500 clients utilizing their services), however they are taking small, but aggressive, steps, listening to the needs of their current customers and growing the product.  

Procurify is an attractive solution for small to mid-sized organizations that are behind the curve when it comes to integrating technology into the procurement department or for organizations that don’t need a full-blown eProcurement solution.

From my e-mails and conversations with the sales and marketing team, they are very hungry and are on their way to becoming a disruptive force in the cloud-based procurement services market. 

Besides Mr. Cuban, other investors in Procurify include Nexus Venture Partners and the Business Development Bank of Canada (BDC). Procurify is also approaching their Series A funding (preferred stock) in the 4th quarter of 2014.


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