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Did a Natural Disaster Disrupt Your Supply Chain?

Hurricane Sandy struck the east coast of the United Sates last night. Massive flooding, high winds, and more than 7.5 million people and businesses without power and more than 50 million people impacted. Our thoughts and prayers are with those facing these terrible situations. 

It brings to mind things we face in our business, our increasing dependencing on a global supply chain. We’ve looked at this once before in an article called Supply Chain Risk Management

Maybe your business is not disrupted at all by the current hurricane, but a tsunami in Japan or a wildfire out west would devestate you. Now is a good time to take a serious look at the preparations you have made.

Communication: Make sure to have multiple channels of communication. The old fashioned land line may still work in a power outage, but if phone lines are down as well, consider cell phones, email service, etc. Having a plan in place can limit confusion.

Suppliers: Many natural disasters come with some level of warning, but some do not. If you work with a single supplier consider diversifying into different geographic areas. Even if it doesn’t make sense financially to order from more than one on a regular basis, make sure you have relationships in place to pick up the slack should disaster strike one of your suppliers.

Customers: Do you provide supplies and materials essential to other businesses? Are you able to plan ahead to adjust and manage inventory levels in anticipation of a disaster?

Data: IT and other technological infrastructure is of paramount importance to most every business, big or small, today. Some businesses are entirely online and others store massive amounts of data online. Find out from your network administrator what your sever backup process is like. Do they have multiple locations in different areas? How often do they back up your data?

Today, if you are in a part of the country unaffected by Hurricane Sandy, think about what you can do to help. This is part of what makes this country great. When disaster strikes, it doesn’t matter which political party you belong to, if it is your competitor who is struggling, or any of those things on a day to day basis that form our competition. We bind together. I challenge you to find a way to reach out – individually as a person or corporately as a business. 

October 30, 2012
BY Bellwether
The Procurement Manager of Tomorrow

Only the bravest of brave procurement manager would raise their hand to proclaim themselves prepared for the upcoming decade.  To anticipate the challenging skills that lie ahead means they must also challenge themselves as an individual.  With these new skillsets and the continued assistance of purchasing software to meet a multitude of needs, soon they will view themselves as more of a strategic business partner rather than a simple employee. 

The Evolving Procurement Manager

The world is getting smaller, and while not in a literal sense, we advance into the future and progressively become better about traveling to conduct business in various parts of the world.  The procurement manager is in the perfect position with their business to help navigate the global economy. 

Today’s purchasing manager should be preparing for tomorrow as their role changes from the unresponsive doer to the trusted advisor.  The effect of this change enables stakeholders to act more quickly and decisively giving the ability to call on them for support when needed.   With their new role they are now able to support the business leaders to improve procurement performance as well as provide a main source of expertise to their business.

Crucial Capabilities A Procurement Manager Must Have for the Future

As the procurement manager steps into the strategic business partner role the thinking and talking to their customers as if they were buyers comes to a half and instead thinking of their needs.  The ability to understand things like world trade, cultures, and world market have given the procurement manager an much broader perspective of the global business landscape.  Their job is not only to assist their business clients in negotiations through that world, but also to provide insight, expert knowledge, and guidance. 

Another crucial capability is to not be held to a certain definition of procurement.  The ability to understand the actual needs of the business and purposely build capability to fulfill them will certainly be a large determination of how important the procurement manager’s function is for the future.

While a combination of analytical and soft skills that the procurement manager currently possesses, there are certain skillsets within these areas that will play a prime role to future purchasing success: 

  • Analytical Skillsets
    • More strategic thinking
    • TCO (total cost of ownership)
    • Full supply market analysis
  • Soft Skillsets
    • A greater ability to work in a team environment
    • Greater influential and persuasive skills
    • Better change management

Will You Have The Skills To Align With The Future?

As you can see, the procurement manager will need to align their skills with their businesses goals over the next decade; hard to do without looking into a crystal ball.  They have always been able to react when needed, they currently possess the skills to open savings and they have a keen sense knowing when just the right economic circumstance is to put them in position for that savings.

With the help of procurement software the procurement manager takes that skill globally to set their business in an increasingly successful position.  No matter what the role of the procurement manager is within their company or industry, their future is set to be difference makers.  Their role of the future will depend greatly upon being that difference maker in order to gain the competitive advantage.

October 23, 2012
BY Bellwether
Does Social Media have a place in the Procurement Industry?  (Part 2)

Today’s economy is less than robust, to say the least. People and businesses try to get the things done in the most cost effective way as possible. Therefore businesses are tightening the belt and cutting costs and one of the most obvious areas is procurement of goods and supplies. Internet and social media networks have created an ideal platform for both businesses and vendors to engage in their work with less hassle.

In our previous post we looked at the possible use of Facebook within the procurement industry. Despite its popularity in the social media realm there are other avenues available and each offers a wide range of unique services to their users, many of which can be capitalized on for purchasers and vendors. Almost all these social media networks are flexible and they can adopt according to the needs of the industry. In this post, we are going to take a brief look at LinkedIn, Twitter and Pinterest.

LinkedIn is probably one of the best choices for product sourcing and procurement specialists. LinkedIn is a platform specifically made for professionals, experts and industry leaders to connect, share ideas and insights. It is also an excellent place to find your customers, especially if you are in the B2B business. Business owners can join the LinkedIn groups that are directly and indirectly related to their industry. Then the ideal business partner will connect with you through those groups and you will get the opportunity to do some effective deals.  Business owners can actively participate in the discussions and polls. The prevailing industry in the present world is changing on a rapid pace and it is essential for them to know the latest updates. These discussions and newsletters will provide them with the necessary knowledge and updates in a convenient way. Procurement specialists may learn of a better source by networking with others within their industry or they may make a new contact with a vendor that can outbid a current vendor.

Twitter is a popular way for businesses to interact with their customers. The customers could be end-users and individual people or even other businesses in a B2B situation. The great thing about Twitter is that everything is in real time and business owners can receive their daily news from it. The basic search function of Twitter is an extremely useful tool as it lets you save time when searching for any topic or subject. It can either be a brand name or an industry that you work in. Twitter users often search for services or products. Therefore business owners should be more active and responsive in order to grab the opportunities before the competitors.

Pinterest is a relative newcomer to the social media world, but it has rapidly grown in popularity. The business application remains to be seen as far as measuring its effectiveness. For product sourcing and export companies, this is quite an interesting platform to look into, but not without some controversies. This social media allows users to post pictures or ‘pins’ of just about anything within categories called “boards”. It does seem to be geared more toward physical products; it’s a little difficult to pin a photo of services you provide. But if your business targets women, it may be that monitoring Pinterest will help you discover trends and quite possibly a new product that you may consider procuring for either internal use or even as a product to be sold by your business.

All these social media networks can help the companies to engage in their work with less hassle and save more money, but with some caution. None of them are going to be a magic bullet, but their might be just that little nugget of information or an idea that transforms your procurement status within your company or even your industry.

October 18, 2012
BY Bellwether
Does Social Media have a place in the Procurement Industry?  (Part 1)

Procurement industry, which is also known as the acquisition of goods or services, can be recognized as a popular. Almost all the companies which exist try to purchase products or services at the best possible cost through procurement. Therefore there is a big demand for procurement from every corner of the world. The development of technology has taken the procurement industry to another level. It has created an ideal platform for the procurement industry and people prefer to engage in their work with the help of Internet.

The social media networks can be considered as an important aspect in the Industry. A wide range of social media networks can be seen in the present world and Facebook is inarguably one of the most popular social networks around today. Billions of people from all over the world have their own profile on Facebook and more than half of them access their profiles on a regular basis. People engage in various types of activities on Facebook. Business activities on Facebook are not at all uncommon. The procurement industry, like many others, has naturally gravitated toward Facebook because of those reasons.  

Features that are available on Facebook can be considered as the main reason behind the expansion of the procurement industry within the Facebook platform. Facebook is extremely user friendly and people can accomplish their needs with minimal hassle on Facebook. Facebook has made the communication easy and people can maintain regular contacts with others in a convenient way. Communication plays an important role in procurement. The available photo and video sharing facilities of Facebook will assist them to share the audio visual content in an effective way. Facebook can be accessed from any part of the world and people can even use their mobile devices to log on. This flexibility has impressed the business owners and both large scale business owners and small scale business owners tend to seek the assistance of Facebook for their procurement work.

Many product and service suppliers have created their own Facebook profiles because of the demand for procurement industry on Facebook. Business owners can easily search for strategic suppliers and contact them within Facebook itself. It will be convenient for both sides and they will be able to go through the procurement process with less hassle. The problems that arise can be solved within a short period of time and innovation can be shared in a convenient way.

One note of caution: Facebook has a mixed reputation as to the privacy of its users. There have been several publicized privacy breakdowns. Most of these pertain to the amount of personal data recorded by Facebook to analyze and further develop its platform as opposed to outside companies having access, but at the same time, it is a public domain so cautions should be used when conversations turn to items of a confidential nature. If you are talking procurement of office pens the danger of a competitor finding out is very low impact. However, if you are engaged in conversation about different aspects of a new product development or proprietary formula then you may want to consider other forms of communication other than Facebook.

The bottom line as to whether or not your company should use Facebook often involves, well, the bottom line. Facebook offer its services free of charge and you won’t have to pay even a single penny to get their services. Therefore communication, research, and an exchange of ideas that takes place within Facebook is cost effective way of doing things. Facebook has a vital place in the procurement industry that can be seen in the present world when used with intelligence and caution necessary to protect proprietary and confidential information. 

October 16, 2012
BY Bellwether
Is Transparent Procurement for Government a Double-edged Sword?

Transparent procurement for government is the belief that honesty and integrity aid in the delivery of better value for money. Over 200 years ago President Thomas Jefferson remarked, “we might hope to see the finances as clear and intelligible as a merchant’s books, so that every member of Congress, and every mind in the Union should be able to comprehend them, to investigate abuses, and consequently, to control them.”

The need for transparency across procurement operations has since become a hot topic within the social spectrum. Government agencies set transparency so that citizens can see how their taxes are being spent against what is delivered, but is this a fair means of disclosure and does the government always comply with these best interests?

The Life of Transparency in Government

Modern technology transformed the ideals of transparency into a reality that is readily-accessible for anyone with internet access. In 2003, the American government introduced the Public Procurement Act (PPA) as a means to announcing public procurement measures, ensuring money could be saved by cutting out the risk of dubious practice going unnoticed. The primary objective of the PPA was to create cost-effective implementations of public sector activities that are devoid of corruption, allowing the true meaning of transparency to be utilized. 

Better value for money, encouraged investment, positive innovation and reduction of corruption are just some of the benefits transparent procurement offers. Greater transparency creates a wealth of positive opportunities for businesses, particularly small to medium-sized enterprises (SMEs) who rely on consumer branding and trust. Businesses that gain knowledge of public spending also stand to benefit when choosing outside suppliers, or when seeking a collectivized stance when competing for public sector contracts.

Why is Social Media Important During Transparent Procurement?

When stepping into the public arena, transparency may create problems when sourcing individual buyers. The question of suitable or existing buyers may also arise if ethics are exposed within the public arena, or that reflect on the initiating company. Instead of enriching their marketplace or increasing revenue, companies and even the government at large may now see these investment opportunities as a liability. The subsequent withdrawal can affect others on a local to national basis.

Whether or not social media could be used as a way for vendors to influence this selection process has since been overridden by social media participation and users abilities to decide for them. Not even high-brow companies or the government is immune from slanderous attacks or allegations made on social media networks, though many businesses adopt the Cone of Silence to ensure that social and public transparency does not inadvertently create liability. Companies are also encouraged to monitor their personnel when posting comments on social media platforms and the government has a dedicated press team to monitor their reputation in the public arena.

Putting it all Together

Due to the nature of transparent procurement for government, these debates will inevitably continue to present themselves as a hot-topic. The manner in which a government conducts itself will always be of public interest, but transparency can affect businesses and other streams of income in ways that was not previously considered. So long as the transparency is carried out with the vested interests of the public, the opportunities for growth remain strong and can be overcome with common sense and applied responsibilities. 

October 11, 2012
BY Bellwether
Who is Financially Responsible for Advanced Procurement Training?

While many tend to agree that continued education is beneficial, a purchasing manager usually moves to the front of the line in terms of corporate importance. Procurement training is ideal when looking to maximize results when purchasing marketable goods, but who should be financially responsible for tuition fees?

Employers understand the value derived from this form of training, that it not only affects the employee but also the company as a whole, yet many jump ship when it comes to continuing education, out of pocket expenses or simple tuition fees. Employees may not be able to afford, or have the desire, to invest personally in continued education. So what happens next? 

The Importance of Educating Purchasing Managers

Purchasing managers are responsible for development and management when buying marketable goods. Further education is a critical factor when looking to maximize these results as it can also create potential for cutting expenses dramatically over the long-term. Companies looking to hire exceptional employees may benefit from staff training as a cost-effective work-around when hiring on a budget.

Often, employees may not be aware of their company importance. Many may take out an expensive loan or seek other methods of personal funding, when any reputable company should be more than happy to discuss or implement a training development program when asked of their purchasing manager. Many will even offer this as part of the course of employment or during the application phase, knowing it may be critical to success.

Companies should consider taking a vested interest in corporate training when looking to advance the company as a whole. As the purchasing manager is responsible for the majority of major expenses, this makes for a logical place to create improvement. Employees are known to offer a higher success rate when training correctly and can help create long-term savings.

What Are the Benefits of Advanced Procurement Training?

Those who take the time to invest in their staff can expect to see employee loyalty increase, as the duration of employment is usually extended on completing a contracted period of time once qualified as a means to “pay-back” advanced training. This can also help save on costly re-training or new staff induction expenses, along with immediate cost spending savings, improved efficiency and competency in general.

Advanced training depends on several factors such as:

  • The current financial stability of the company 
  • The availability of educational benefits
  • The purchasing manager in question

 Should My Employer Pay For Continuing Education?

Sadly, there is no magical answer, it all depends on your employers training policy, budget and willingness to help you work towards your goal. You may ask your employer to consider you for training, exercising your employee rights to do so, but they are not obligated to provide specialized training. Employers may not turn down procurement training based on age, sex, marital status or other personal factors.

You should anticipate questions and possibly even concerns. Try to address these in a professional manner that demonstrates your worth to the company. For example, if your employer shows concern that training is an added expense, you may politely advise that tuition can often cost less than hiring and training newer employees. Make a case for how your education will generate a higher level of competency and income for the company.

It doesn’t matter if your employer has a tuition program in place or not, you should always attempt to make a compelling case as to why schooling for advanced procurement training is needed if you feel it would be beneficial in carrying out your job. At the end of the day, the importance of educating purchasing managers relies on the communication between employees and employers.

How Will You Approach Advanced Procurement Training?

The financial responsibility of advanced procurement training ultimately falls on the respective employee and employer decision of an agreeable outcome; each should be equipped to address the interests and concerns of advanced training. When continuing training, both careers and companies may grow; take time to consider the benefits of training a purchasing manager before writing it off as another expense. 

October 9, 2012
BY Bellwether
Is Advanced Procurement Training Really Worth The Investment?

Companies hire a purchasing manager for a specific reason; to provide commodities, or marketable items, through the development and implementation of specific strategies and plans. In addition to managing a solid relationship with suppliers, employers may wish to supplement their purchasing manager with procurement training, a form of continued education to better this service.

Recent debate has led employers to question this important expense, calling into question whether training is really worth the time and investment from a fiscal standpoint. We are going to look at each side of the debate and provide you with an honest look at both the benefits and disadvantages, to help you draw your own conclusions. Let’s take a look!

What are the Benefits of Procurement Training?

Procurement training offers specific management skills; melding together recent, industry concepts that provide an advanced level skill set that is applicable of any procurement professional. This is an important consideration for business owners who are looking to maximize their investments, creating a more efficient cash-flow system when purchasing marketable items.

Additional benefits of advanced training include:

  • A higher understanding of how procurement impacts on the finances of an organization
  • A potential reduction in the cost of materials and services from boosted efficiency
  • Confidence from purchasing managers to contribute in strategic objectives
  • Improved interpersonal skills resulting in a solid team work environment
  • The ability to assist other employees with leadership skills
  • Increased relationship between contractor and supplier

What are the Disadvantages of Procurement Training?

While the benefits certainly speak for themselves, training does come at a cost. Sadly this form of education is not free and while it may merit the benefits over the long-term, businesses should look to their financial department to decide if this is worth the immediate and short-term investment. It is also important to look at the candidate in question, to the length of time they are expected to continue their employment and if these factors out-weigh the associated risks.

Factors to consider:

  • The existing skills of the purchasing manager, evaluating if training is necessary
  • Alternative, cost-effective training methods that may help overcome areas of weakness
  • Researching additional funding methods, such as grants that can help alleviate costs
  • The long term results and how training will impact on those plans
  • The employees willingness to be trained as a long term member of staff

Some companies may require proof of training, a measure of results if you will, to guarantee against or back-up the total training investment. This data can be compiled by tracking the existing and new results through a development management campaign as part of training. It is also important to note that there is no significant agenda behind advanced training in terms of the manager, so research the company’s value instead.

Investing in a Bright Financial Future

While training can help a purchasing manager create a more efficient purchasing system, the necessity for continued education falls down to budget and personal preference. The responsibility of financial backing is between the employee and employer; with many large companies setting aside a specific budget. Training may evidence enough that the investment that the company has made are dollars well spent as the immediate benefits make themselves known.

October 4, 2012
BY Bellwether
Tactical Procurement in Your Organization

Whether you work for a smaller sized business where all employees wear the ‘procurement’ hat at one time or another or work for a large company with a dedicated procurement department, you will do better if you learn how to put tactical procurement to work in your organization.  Tactical procurement enables you to ensure that things get done when they should get done and that every order and every designated task is completed accurately, with nothing whatsoever falling through the cracks or getting overlooked.  Before we explore how tactical procurement can be used to benefit your organization, we must first define exactly what tactical procurement is, how it works an why it can be such a great benefit for your business.

What is Tactical Procurement?

Firstly, let us define what a tactical plan is.  It is a plan that is crafted with the aim of achieving goals that are short-term in nature, short-term generally meaning within a year’s time or less than that.  A tactical plan is used to pursue shorter-term goals that can add up to achieving the strategic (and more long-term) goals of the company.  A tactical plan is mainly concerned with delegating responsibility to the workers and explaining what they need to do and how they need to do.  The time frame for a tactical plan is much shorter and the scope is generally much narrower than it would be for a strategic plan.  A tactical procurement plan is usually created by top level management within an organization or without an organization’s procurement department.  Tactical procurement plans are oftentimes necessary in order to achieve the strategic plan of the company.

How Can You Decide If Tactical Procurement Is Right For You?

The first thing you must do is consider the things you need to do in the short-term in order to be successfully working towards your long-term goals.  This is much easier to do if you have a strategic plan in place already.  For example, if you work for a giant corporation with a huge procurement department and your strategic plan is to get your entire team certified and you have a team of over 40 people, the certification process will definitely take some time.  A tactical strategy can break down this enormous task into smaller, more manageable goals.  For instance, in this example you could begin by getting all of the senior members of the procurement department certified, or by signing up groups of ten for four different certification education course, all to be completed within a year’s time.

Tactical procurement strategies have gotten many a procurement department and many a procurement professional out of a tricky situation.  If a tactical procurement emergency should occur, it will be much easier for you to deal with it and overcome it if you are familiar with using tactical procurement strategies.  Just keep in mind that you should continue to work towards your long-term strategic procurement goals while working on your short-term tactical procurement solutions.  Here’s to your success!

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October 2, 2012
BY Bellwether

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