I remember as a kid wanting a shiny new bicycle. My dad looked at my then current bike, dirty and uncared for, and said “Why get you a new bike when you don’t take care of the one that you have”. How does this apply to buyers? Many purchasing managers, directors and vice presidents come to us looking for that shiny new buyer who is going to help relieve an overburdened staff or improve their organization’s results when what they should be doing is taking care of the buyers that they … [Read more...]
Sorry to interrupt your Summer…
I find it almost cruel to do this but I am going to interrupt your summer with the following work-related thought. Most companies operate on a fiscal year that corresponds to the calendar year. Some of those companies have already started developing their business plans for 2017 and almost all, even those who have not started yet, will be knee-deep in plan development in August and September. Over the course of the past 12 years in consulting I have noticed that purchasing leaders address … [Read more...]
Purchasing Can Have it All: How Collaborative Cost Processes Deliver Results and Build Alignment
Our experience is that far too often purchasing leaders see collaboration with the supply base and savings achievement as mutually exclusive goals; you can achieve one or the other, but not both. Perhaps that is why 58% of the CEO’s we surveyed questioned the value their purchasing organizations drop to the bottom line and 52% believe there are significant savings yet to be realized. When we interviewed CEO’s, they often talked about the lack of strategy and alignment/collaboration within their … [Read more...]
Does Purchasing Have a Seat at the Big Table?
Approximately 70% of a manufacturing companies’ revenue is spent with third party suppliers. The importance of the strategic management of that spend, across the entire purchasing lifecycle, cannot be overstated in terms of its impact on an organizations financial success. But despite that imperative, do we, as purchasing leaders and professionals, have a seat at the big table? The CPO answer is often a resounding “yes”. In fact, Deloitte’s 2016 CPO Survey, published just a couple of … [Read more...]
Antitrust Violations: “Inside the Shark’s Mouth”
This week I had the privilege of participating on a panel sponsored by Finance Executives International on the topic of the antitrust violations that have occurred in the automotive supply chain. For those of you who are not familiar with the issue let me bring you up to date. In February 2010, the FBI raided the offices of three wiring harness manufacturers in the Detroit area carting away papers and computers. Soon, it became known that they were investigating price fixing and other … [Read more...]
How to Deploy Resources? Strategically or Tactically
As we close in on the end of January, most resolutions have already fallen by the wayside – freeing us up with more time. Now is the accepted time to make your regular annual good resolutions. Next week you can begin paving hell with them as usual. – Mark Twain The beginning of the year is a good opportunity to examine the alignment of your purchasing organization and objectives. High performing purchasing organizations combine breakthrough strategies with a clearly defined, aligned … [Read more...]
Five Things to do in the New Job
Congratulations you have worked hard and gotten that new purchasing position that you were chasing. Whether the position is a lateral move, a promotion or a move to a new company here are some tips to help you start getting results: Build understanding the internal landscape Identify the key people in the company who you will be interfacing with on an ongoing basis. Go meet with them to understand how their roles interface with yours, their priorities, their plans for achieving and … [Read more...]
The Power of Small Steps
In a training class I was delivering last week one of the buyers expressed frustration about the time and effort that was going to be required to implement a change across her supply base. She understood the current state, knew where she wanted to go and had a realistic view of the time and effort that the change would require. I think that many of us share her frustration when implementing change. Sometimes when we think about the current state and think about the future state, frustration … [Read more...]
Finding Untapped Savings Opportunities
Now that we are at the end of the year, most companies have their 2016 business plans completed. In many business plans, purchasing will have savings task(s) to achieve throughout the year; purchasing teams are continuously trying to find ways to accomplish these task(s). A commodity-by-commodity review of company spend can often times turn up untapped, easily implementable savings. To start, take the time to write down the questions you should be asking about each commodity in your spend … [Read more...]
Why Good Buyers Make Good Leaders
I have always thought that good buyers transition into good managers and finally good leaders. What characteristics do good buyers have that make them good leaders? Here are a few: They ask good questions. “Judge a man by his questions rather than is answers” is a quote attributed to Voltaire. A good buyer is always seeking to increase their knowledge and understanding of what they buy, why they buy it, who they buy it from and other parties’ interests by asking good questions. As a … [Read more...]