Author Archives: Oscar Pacheco - Iasta
In a past position I held, I remember our CEO hiring a consultant that specialized in Knowledge Management to help our company become much better at retaining and sharing the collective knowledge of our global organization. Just like most business / process improvement concepts the idea behind this was very solid and worthwhile, but the implementation was going to be costly and time consuming. The implementation consisted of software / hardware costs for a system to store and provide access … More
Where do I start? I have been hearing less and less of this phrase when it comes to the eSourcing / eProcurement space, but it is still out there. All too recently most procurement leads (Directors, VP, Managers, etc) were very reluctant to start an initiative because of fear of making the wrong choice in software, hardware, scope, etc. I guess just like anything that was once new, people get a better understanding of the concepts and learn more about … More
I live in Dallas which is a large warehousing and distribution center due to its central location in the US. This area of the country is only a two day drive (or by rail) to anywhere in the US therefore many companies choose it to locate their distribution centers. A recent article in the local paper wrote that Dallas may not be the best place anymore, because of the increased fuel cost a central location may not be the most … More
Whenever I run sourcing projects, or advise others, I recommend that, as much as possible, it is a good strategy to try and compare suppliers in the same format. In other words, don’t allow suppliers to differentiate themselves from one another because it makes the evaluation and selection process much more difficult. Auctions were a great way to accomplish this, but would often lead to disgruntled suppliers if not conducted in a fair manner. I think this is in general … More
I remember being at a conference a couple of years ago and a Purchasing VP from a global company was talking about his vision of a fully integrated procurement system. The system would be totally paperless and allow the buyers to conduct virtually all their work using the system. At the time I was critical of this vision (and I still am somewhat) in that it was impossible at the time and much too costly and time consuming to implement. … More
I read that Caterpillar and Navistar will begin joint purchasing of some raw material and commodities. Of course this makes total sense especially in the increasing a cost market we currently have going. This is not a novel idea although it is good one and often times a difficult one with two different companies. I know about the difficulties in combining a purchase from two different companies having done this a few times. Usually, the 2 different companies end up … More
I read a good article (by David Hannon — Purchasing, 6/12/2008) that showcased several procurement professional that made it to the C-Suite and were reporting directly to the executive team within their companies. Procurement has come a long way in the past 10 – 15 years and has been elevated greatly. I remember in my early engineering days referring to purchasing as cost adders, but now see that a good purchasing team can be value adders especially in today’s market. … More
The eSourcing field always seems to have a new hot topic or buzz word going around. It all started (at least for me) with auctions, then asset management, then supply chain management, then spend analysis, then eCatalogs, etc (I think I could go on forever). I heard the next one being talked about more recently, BI or Business Intelligence. This has been around for a while, but has been a need being met by other methods such as analysts crunching … More
I used to work as a design engineer in my early work career and often ran into issues with Procurement and Quality Assurance when it came to production problems with suppliers. Parts would come in slightly out of specification which would raise quality issues, the procurement group was usually on the side of the supplier trying to justify the errors, and then I as the engineer would have to get in between the two departments. As an engineer my main … More
I have noticed that most companies tend to start cost savings and efficiency efforts when things are not going well in their market sector or in the economy overall and they usually start by trying to save money on supply cost. This means reducing supply or reducing the cost of supply, which can be very difficult in a tough market. Suppliers are impacted by this in the same manner as a buyer and they in turn try and reduce their … More
The recent article on improving SAP suite of product was a very interesting read, not because of what was written, but because of what was omitted. A group of CPOs whose companies used SAP were having difficulty extracting consolidated spend information from their SAP system in different business units and lobbied SAP to improve the product to more easily obtain this information. Certainly a valid request that will prove useful to SAP users, but there is a large assumption that … More
Companies spend an enormous amount of money on buying services, including temporary labor, consulting, cleaning, relocation, accounting, security, legal, financial, and on and on. Usually these services are not “direct” cost items and have not traditionally been managed by the purchasing organization. That has been changing, according to a purchasing.com article, How+Why you should be buying Services. There are many valid reasons to include services as part of the spend that is managed by purchasing, including of course saving, but … More
Global Sourcing has certainly been a trend in recent years and its benefits are clear…..increased cost savings being the primary. As with most initiatives the key is in implementation and a strong recommendation has been to include a Local Procurement Office (LPO) as part of a Global Sourcing program. The LPO is a procurement group placed in country and performs a variety of activities to ensure the supply chain is functioning within the local country. A recent Accenture study, Global … More
