Category Archives: Supplier Performance
I’m about to throw you a curveball… How does Procurement Analytics relate to the baseball-themed movie, Moneyball? Well, if you haven’t seen the movie before, let’s recap the story. Brad Pitt stars as Billy Beane, General Manager for Oakland Athletics (A’s). Beane is faced with the challenge of assembling a winning team, but he is handicapped with the lowest salary constraint in baseball. If the Oakland A’s ever wanted to win the World Series, Beane knew he needed to find … More
With the end of the year quickly approaching, many procurement groups are looking at their performance metrics for the year. For procurement groups that haven’t quite hit their savings targets, December 31st is an unwelcome but inevitable date looming on the horizon. Before you resign yourself to your current savings numbers, there might be some things you can do in the last weeks of the year to improve your position. Although there is not enough time left to run additional … More
In Part One, I introduced a discussion of some surprising trends I found when looking at supplier registration forms from a wide variety of companies across many industries. The first surprise for me was that so many of these companies are asking the same questions from supplier companies. In this post I’ll discuss the other unusual thing I discovered: some organizations ask potential suppliers essay questions. It’s not quite as open as the classic American “How I Spent My Summer … More
When organizations adopt formal supplier management programs, one of the first steps they take is to focus on a more disciplined approach to collecting and managing basic information about current and potential suppliers. I am interested in the kind of data they collect and how they use it to manage suppliers so I took a look at supplier registration forms for a wide variety of companies and I was surprised by a couple of things: First, the data requested from … More
This is the fourth post in our 10 part series. Click here to read Part 1, Part 2 and Part 3. Investing in capabilities to support basic supplier management activities is Spend Matter’s fourth idea to enhance procurement’s value across the organization. During the Webcast, Jason Busch presented a few key supplier management activities including: Supplier on-boarding (i.e., the need to efficiently electronically enable suppliers for eProcurement and invoicing) Supplier portals (i.e., basic portal capability designed to capture supplier information … More
Sustainable sourcing — considering environmental and social impacts in selecting and managing suppliers — can enhance your company’s brand, improve operations and drive efficiency while promoting a healthier environment and stronger community. Regulators, consumer groups and customer demands drive sustainability requirements. Trillions of dollars are being invested in green funds, and companies tout their sustainability initiatives through ad campaigns. Risk management experts know that a company’s reputation can be tarnished by the careless environmental actions of its suppliers. Procurement organizations … More
In the past few years, the procurement world has developed better ways to level the playing field between new suppliers and incumbent suppliers. Buyers have successfully driven costs down by embracing processes and technologies that increase competition between suppliers. Generally this trend has made it easier for suppliers to get “introduced” to buyers. Supply relationship management technology has also increased the pressure for incumbent suppliers to maintain competitive pricing. Clearly the risks associated with switching suppliers are commodity dependent. It’s … More
In the past decade, manufacturing and service firms, to name two examples, have become increasingly aware of the importance of supplier performance and its impact on their own performance and market competitiveness. A number of factors have converged to create the perfect storm in these sectors: • Increased outsourcing and reliance on suppliers for both goods and services • Globalization of business and supply chains • Increasing complexity in managing suppliers • Increasing supply risks • The view of suppliers not just as a cost, … More
Have you ever considered that Thanksgiving might be the perfect time of the year to think about how to get valued suppliers more involved in helping your business succeed? Setting up an awards program that recognizes your supplier’s accomplishments, business improvements and future initiatives is an excellent way to show your gratitude. Supplier award programs help solidify your relationship, drive motivation and make the supplier feel like they are a critical contributor to your team. One of our clients, a … More
On Friday, McDonalds announced the company dropped its egg supplier after learning about reports of animal cruelty. From a recent article, “A three-month investigation conducted by ABC News and Mercy for Animals, a non-profit organization devoted to animal welfare, produced a video alleging abuses at farms run by McDonald’s egg supplier Sparboe in Iowa, Minnesota and Colorado. The video, first shown on “Good Morning America,” shows hens packed into industrial cages too small for them to spread their wings. It … More
While reading through the Procurement Professionals group posts in LinkedIn, I came across this discussion post: “hi guys, explain why companies are turning toward having a few preferred suppliers rather than selecting on price alone (the traditional method of supplier selection).” Immediately, this question entered my mind: Is price alone truly the traditional method of supplier selection? By selecting a supplier based solely on price, buyers may be failing to gather critical supplier information such as quality, service, dependability, and … More
Today, many children will roam the streets trick-or-treating, and people of all ages will attend costume parties and decorate their homes with all things “scary.” This spooky holiday got us thinking about what fears keep procurement professionals restless and awake all night. Below are three of the scary situations we came up with for procurement: 1. Supplier risk – Risk should always be taken into account as part of good supply chain governance. Without having a process in place to track and … More
A recent post on SupplyChainDigest featured new findings from CAPS Research, which affiliated with the Institute of Supply Management. The article included 12 key factors for successful Supplier Relationship Management (SRM). The 12 Keys to SRM Success from CAPS Research 1. A consistent approach that encompasses all of the work streams identified above in an integrated way. There is no silver bullet. 2. While SRM can be approached as an initiative with a beginning and an end, the greatest success … More
