Author Archives: Kelly Barner- Buyers Meeting Point

P is for Procurement… except when it isn’t.

The Finance team manages the finances of the enterprise. Marketing people market services and solutions to the purchaser (or customer). Human resources manages… well humans. Given those examples, you would think that Procurement handled procurement. In an ironic twist, this is becoming less and less true—especially as technology evolves and blurs the line between Procurement as an entity and procurement as a process. It used to be that every company had buyers; they were the people managing contracts and placing … More

Contract Management: Yours, Mine, and Ours

In his recent book Global Supply Chain Ecosystems, Mark Millar wrote, “…today’s supply chains encompass complex webs of interdependencies, frequently spanning the globe, designed and deployed to optimize critical attributes – such as speed, agility, and resilience – that drive competitive advantage.” His point plays out on a daily basis through the contract management strategies and practices in many organizations. Because our supply chains are no longer linear or consecutive, we may be buying from and selling to the same … More

Is there “Tough Love” Embedded in Your Budget Process?

It is the worst question Procurement ever faces. C’mon – you know what question I’m talking about. That horrible, terrible question from Finance for which there is no good answer… If Procurement worked so hard and saved all of this money, WHERE IS IT? Ugh. The problem is that the space between negotiated and realized savings is full of pitfalls: unexpected requirements, inaccurate demand, and budget holders who see an opportunity to unofficially reallocate savings elsewhere. Even when additional value … More

Whole Foods Markets Shift Their Cost Model as They Target Millennial Shoppers

In March, I wrote a post for this blog about the Whole Foods grocery chain in which I asked the question: “How Much Can Procurement Change on Their Own?” I looked at how Whole Foods has defied the low margins commonly seen in grocery retail by employing an operational strategy that merges brand reputation, consumer identity, and high-quality products in justification of higher prices. Their procurement team is part of a top to bottom approach to creating the right value … More

Where to find contract management discussions at ISM 2015

ISM’s annual supply management conference is just around the corner, May 3 – 6 in Phoenix. If you haven’t yet made plans to attend, there’s still time to look into it. If your travel plans are all in place, then you have to make some tough decisions about which breakout sessions to attend. This year, the tracks at ISM 2015 are decidedly strategic and value oriented, making it harder to determine which sessions offer the processes that can best benefit … More

How much can procurement change on their own?

As procurement professionals, we have come to take certain ideas for granted. Savings is still our primary performance metric given the ever-increasing challenges of today’s market environment. However, savings can no longer be the exclusive North Star to our voyage. We need to become more strategic by increasing our ability to create shareholder value and contribute to corporate competitive advantage. Collaboration with suppliers, at least in certain categories, requires that we take a multi-dimensional look at each commercial opportunity and … More

A New Metric for a New Perspective on Procurement

In March of 2014, Matthew Eatough, CEO of Proxima Group, wrote an article for Harvard Business Review discussing what he called ‘corporate virtualization‘. The concept is based on research that found that, on average, “69.9% of corporate revenue is directed toward externalized, supplier-driven costs.” The fact that such a large percentage of corporate revenue is spent with external business partners is surprising enough, but the study also uncovered that the percentage increased by 4% from 2011 to 2014, marking a … More

Procurement Gone Wild

On February 19, 2015, Paul Shin Devine must surrender himself to the U.S. Marshall Service and begin serving a one-year sentence on corruption charges. He has already repaied $4.5M in restitution and will be on supervised release for three years starting in February 2016. Is Devine a crooked politician? No. A member of the mob? Not even close. Devine is a former Global Supply Manager for Apple. A procurement professional just like the readers of this blog. The difference is … More

How Much Are Your Contracts Worth?

How much value is your business gaining from your contracts? If a procurement executive asked you what a given contract was worth, you would likely give an answer based on estimated spend value as a result of projected volume, negotiated costs, and term. While this is accurate, it is also a limiting perspective that places more emphasis on the transactional footprint of the contract than what it means to the company’s operations. Patrick Stakenas, Chief Strategy Officer of Selectica, recently … More

Supply Chain Finance Collaboration

I recently wrote an article for eSourcing Forum about the role procurement can play in carrying out a company’s working capital strategy. Since more procurement pros are reporting to Finance, I shared three ways procurement can support the CFO: Establish Payment Terms Implement Technology to Manage Initiatives Manage Interface With Suppliers The third way, which leverages procurement’s existing relationships with suppliers, allows procurement to contribute to working capital by managing the importance of expense-based supply relationships to an operation. As … More

3 Ways Procurement Can Support the CFO’s Working Capital Strategy

Working capital is defined as the amount of cash an organization has on hand at any given time. Some people also refer to working capital as net liquid assets or current assets minus current liabilities (where ‘current’ means due within a year). The amount of working capital held by a company is a primary measure of operational health because it communicates a steady top line and the ability to manage costs. The management of costs is a clear reason procurement … More

Collaborative Supply Thinking Outside of the ‘Giga’ Box

Has your organization considered entering into a highly collaborative supply relationship? Some organizations are moving in this direction. Let’s take Tesla Motors and Panasonic for an example. On July 31st, Tesla Motors announced details about their plan to build a lithium-ion battery factory (Tesla Gigafactory) with their primary battery supplier, Panasonic. The factory will most likely be located in the Reno, Nevada area and is being hailed as the solution to Tesla’s lithium-ion battery supply constraints. According to current plans, … More

“The Power of Positive Thinking” for Procurement – Part 3 of 3

If you are just joining this series of posts on “The Power of Positive Thinking” for Procurement, you can read Parts 1 and 2 here and here. We have looked at the need to make meaningful change from within procurement professionals, and the importance of mindset discipline in the face of demanding stakeholders. In this post, we will conclude our series regarding Norman Vincent Peale’s inspirational bestseller The Power of Positive Thinking with rule number six from his “ten rules … More

“The Power of Positive Thinking” for Procurement – Part 2 of 3

If you are just joining this series of posts on “The Power of Positive Thinking” for Procurement, you can read Part 1 here. We started with a look at the need for procurement professionals to make a change from within in order to get a different external result. In this post, we will focus on rule five in Norman Vincent Peale’s “ten rules for taking the hard way out of your job” from the international bestseller The Power of Positive … More

“The Power of Positive Thinking” for Procurement – Part 1 of 3

Since it was first published in 1952, The Power of Positive Thinking by Norman Vincent Peale has become an international bestseller, selling over 7 million copies in 15 different languages. Inspirational quotes from Peale are often found on calendars, greeting cards, and bookmarks, but it would be a mistake to dismiss them as platitudes. His philosophy applies to our professional as well as our personal lives. Peale emphasizes the need to find a balance between enjoying our work and having … More