Negotiating one of the key skills for procurement professionals
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The Infosys global supply chain management blog enables leaner supply chains through process and IT related interventions. Discuss the latest trends and solutions across the supply chain management landscape.
March 09, 2010
March 03, 2010
Work Bench for improving Supply Chain Effectiveness
Work process effectiveness has direct impact on the profitability of the overall business it supports. As the saying goes, a good process is required to develop a great product; it is essential for businesses to review their current processes for improvements in areas like work style and collaboration, cycle times, accuracy, emotions and essentially TCO- Total Cost of Ownership.
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February 24, 2010
Supply Chain Predictions for 2010 - how far are we from our end-state vision?
Last month, Infosys got a call from Supply Chain Digest magazine, courtesy the editor-in-chief Dan Gilmore to air our views on the key trends for Supply Chain Management in 2010. Supply Chain Guru Predictions for 2010 published earlier this month covered a set of 5 other eminent folks from MIT, Gartner, Descartes and so on, so I was happy for the opportunity to be featured amongst these industry thought leaders.
As primarily a package supply chain enabler, I stuck to my knitting and covered my theme along two lines (a) Improving efficiencies in the back-end supply chain to reduce costs and (b) Enhancing end-customer experience by augmenting the front-end supply chain. People ask me where the relentless pressure to slay every efficiency killer would end up. What next after Multi-channel commerce, end2end procurement, green asset management... whither goes SCM end-state?
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February 07, 2010
Et Tu Toyota …
Reading about the Toyota Accelerator Pedal recall (around 2.3 million vehicles to quote a figure), one can’t help but wonder how a company with its squeaky clean quality and safety reputation, a temple of learning for supplier collaboration processes, could falter on such a grand scale.
January 28, 2010
...SAP SRM 7.0 is here to stay, available to Leverage your SRM footprint: “The Implementation: What's the sandwich filling? ” – Part 4
December 22, 2009
Part one – Strategic Cost Reduction: What is strategic about cost reduction?
Last year brought in difficult times for everyone. From individuals to small, mid size and large global companies’ echoed one sentiment – reduce costs to survive. We saw large scale layoff’s as knee jerk reactions. Not sure why companies saw their people costs as the first level opportunity to tackle and their only scope for survival. Buyers were beating down their suppliers to get the best price against target goals, 10% per annum over their scope of supply or haggling over the increasing the payment terms, not realizing that the suppliers were also going through the same issues on liquidity crunch. Net result, suppliers went bankrupt and along with them the entire industry started collapsing, e.g. automotive industry.
Things have started turning around now and we felt it was time to take the learning’s from these experiences and reactions to prepare a strategic response approach to the situation. Surely we need not wait for the next recession but get started on a systematic process of quick wins, tactical and strategic initiatives that can keep the organizations going strong at all times.
Continue reading "Part one – Strategic Cost Reduction: What is strategic about cost reduction?" »
December 14, 2009
Part 3 -Is Supplier Relationship management a “technology need” or a “strategic business capability” for your organization?
I thought we would be nearer to the end my blog series on SRM with this one hoping to get onto the solutions, but it was not to be. I was in a couple of solution discussions in SRM implementation situations over last week and realized we were far away from getting to the solution discussions if we do not do more to confirm our understanding on this topic.
What is Supplier Relationship Management for you?
November 23, 2009
Part Two: SRM is Real
In my last blog “ Do we really understand SRM ( Supplier Relationship Mgmt)?” we defined Supplier Relationship Management" as a collaborative win-win business discipline of strategically managing the supplier engagement process to maximize the potential value of those relationships by providing seamless integration capabilities for smooth harmonized operations and aligned business goals with the partner supplier community”.
We had some valid questions coming up from the readers of how to address SRM in a bilateral relationship where the supplier is also a customer , how do we define a metrics model to track we are realizing what we planned etc but there were some very fundamental questions that needed answers to ensure the rubber meets the road. I have put my thoughts here to a couple of them for I believe this is essential to get to a solution which addresses this vision
November 20, 2009
Customer benefits in Centralized Purchasing: A Case Study
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November 13, 2009
Sarbanes Oxley (SOX) and the Procurement Function: Let Us View Compliance as an Opportunity
SOX, better known as Sarbanes Oxley is as dry as “the desert”, nevertheless I’ve seen people resulting in tears trying to hide a yawn whilst attending a SOX seminar. ….Don‘t laugh at me, that’s what you’d feel to sit through seminars or sessions related to it, that’s what public opinion is. I remember such a session where, I was the host …lets not get to the crux of “that initiative”, We’ll for me it was positive, Ram Bhaskara had me initiate working on the topic & as a follow-on Gopi GR pumped my enthusiasm to begin research on the SEC’s (Securities Exchange Commission) strategy and requirements for Sarbanes Oxley and the procurement function.
I don’t want to repeat the shady state of affairs that affected Enron and others, that’s a stale tale.
November 02, 2009
Part One: Do we really understand SRM ( Supplier Relationship Mgmt) ?
1) 62% of Supply Chain operations did not have an accepted definition of Supplier Relationship Management in their organization
2) 50% of the companies having implemented SRM applications do not know how to measure the benefits of these initiatives.
I was equally confused as many others in the supply management function, of the various terminologies that are used interchangeably for the same sourcing and procurement processes e.g. supply management , supplier relationship management , strategic sourcing , spend management , supplier performance management .
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October 28, 2009
So is SCM Transformation an Oxymoron or a Holy Grail to aspire to?
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October 27, 2009
Why do sourcing professionals overlook factors other than cost despite enormous consequences of potential failures in supply chain?
The current economic environment with looming bankruptcies in the automotive supply chain requires buyers to consider all elements of supplier performance in their sourcing decisions more than they ever did. The recent shutdown of Chrysler’s Jeep Wrangler plant due to parts shortage is an example of how supply chain failure can cause disastrous consequences. The evaluation parameters must include traditional factors like cost; often overlooked quality and delivery; and now the critical parameter of financial risk.
October 23, 2009
Leveraging Centralized Purchasing for Customer Benefits
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October 14, 2009
...SAP SRM 7.0 is here to stay, available to Leverage your SRM footprint: “Roadmap -> SRM Journey Kick-off” – Part 3
What it meant to the team and the gigantic tasks that lie ahead of their face for the days to come. It’s not necessary that every kick-off meeting calls for a champagne burst or a Donut offering or even a free lunch”, for most it starts with a Heavy meeting instead of a heavy meal. There is so much already on the platter to digest, that we have barely the time to breathe in these agile project situations.
October 13, 2009
Perfect Order Execution
September 29, 2009
Travel and Expense Spend and Recessionary times…
Travel and Expense (T&E) spend is usually the first casualty in the battle to control spend in recessionary times. And the reason is not difficult to understand either. T&E is perceived to be relatively easy to control, and a lack of focus on this segment of spend during high growth periods, make it plum pickings for a recession-triggered spend management program. But while it is true that T&E spend is a low hanging fruit, it is also important for companies to understand that T&E spend cannot be brought under control overnight.
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September 18, 2009
...SAP SRM 7.0 is here to stay, available to Leverage your SRM footprint: “Sign-off the SAP SRM 7.0 Road mapping exercise for an Enterprise” – Part 2
In this blog we will focus on what exactly goes in during the “Road Map exercise”, the length and the breadth of the exercise.
i. Roadmap Scope Definition
ii. Questioning the holy cows
iii. Intent for a BPR (Business Process Re-engineering) initiative, YES / NO
iv. Identification of an SRM council
v. Pre-Blue Printing (powered by Workshops)
vi. Revisiting the Roadmap Scope definition
vii. Roadmap review and Sign-off
Most of these look repetitive, but believe me, these in itself are a masquerade if not dealt with properly.Lets try and understand what we do in each of these phases and the Exit Criteria for the exercise.
August 27, 2009
...SAP SRM 7.0 is here to stay, available to Leverage your SRM footprint: Is your On-boarding business case ready for the Roadmap exercise? – Part 1
In the blog sequel 4 and above we will get into the Nerve of the Solution and evaluate the business benefit of every functionality, Scenario that’s delivered. Again re-instating, “Every Dollar Saved in Procurement -> Contributes to every dollar earned in Revenue”
August 26, 2009
SRM Implementations: Designing business solution for “predictable target performance”
Best in class implementations have benchmarked up to 98% enablement of procurement processes on SRM platforms.
August 10, 2009
Let's Negotiate...
For me, the negotiations part of an RFx process has always been the most interesting and critical aspect of the Sourcing process. A well-orchestrated negotiation approach can bring about great value to an organization, while a confused and haphazard approach can bring pain for both, the buyer, as well as the supplier. In this blog, I have tried to capture some key points to be kept in mind for a fruitful negotiation, based on my experiences with a few sourcing organizations
July 16, 2009
Handling Business Process Transformational Change during the lifecycle of an SRM upgrade – Part 2 (“Early stakeholder involvement and Supplier On-boarding” )
July 01, 2009
Beware! Do not mix Procurement and Marketing
Much has been said, written and debated about Procure-o-marketing. My friends in the procurement community have advocated the advantages of introducing procurement concepts in marketing. This group in procurement community has seen marketing spend with skepticism and disdain, as an overhead which needs curtailment. So, all these talks of Procure-o-marketing have come as a “novel concept”. The million dollar question, (and this is not figurative alone…) Is a natural “marriage’ of the two enterprise entities possible? I strongly advocate NO.
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June 25, 2009
Part I: Winning over this "Tsunami" called Global Recession
Apply the balm where it hurts the most ...In the first of part of the blog series here, we are trying to understand the global economic problem through the the view that matters most for organizations , the lens of "Free Cash Flow", a measure of liquidty and business performance that most organizations operate on. In the interest of keeping this discussion focused, we have limited the point of view around the "procurement and supply management" processes and response strategies , but is well applicable across all operations . As we may still be getting over the worst of this " Tsunami " , wish if all of us could share the experiences and the survival stories for the benefit of the larger supply management community .
We keep getting lashed by these heavy waves of destabilization at frequent randomness, from Katrina, to Avian flu, to global recession and while we were still struggling on these, as if not enough, now the Swine flu. The USP of all these are that we don’t know what, when and how this hit us, when we were least expecting. It takes a good toll of all of us. The good thing about this is that it wakes us all from the slumber and complacency to make us take note and innovate.
The current economic crunch is one such great "Tsunami "which has jolted all the greats and spared none.
Continue reading "Part I: Winning over this "Tsunami" called Global Recession" »
June 24, 2009
Video: Common Challenges and best practices in Contract Life cycle Management
June 17, 2009
Video: Common Challenges faced by most enterprises in the area of Strategic Sourcing
June 08, 2009
Congratulations, Procurement professionals…
Procurement salaries on the rise - 7% increase in 2008 vs. 2007. I very much expected this and I am sure the percentage will go up in 2009 as well. Reason, I attribute to, is the “R” factor - Recession. Cutting cost and improving on savings target are on the high focus and is uniform across industries, enterprise size and global regions. Though procurement department is not solely responsible to achieve these targets in the rough time (all the departments in the organization are involved), but these professionals drive this cause across the organization.
Continue reading "Congratulations, Procurement professionals…" »
June 05, 2009
Buyers & Suppliers - Time for redefined win:win practices
I just read Justin’s blog on “hammering suppliers on price”; Prof. Rob has a very valid advice for companies on early warning signs of danger from suppliers.
Hammering suppliers on price and payment terms “now” vs. “long” term relationship, is a very important aspect in risk management. When there is a financial crunch in the buying organization, their sales are hit and their bottom-line is impacted.... suppliers, as partners or extended community to their organization, are expected and should also be a part of this tough journey. (Hopefully, this is only for few more months) So "renegotiating price" and change in the DPO with the business partners are inevitable. But to what extend?
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May 28, 2009
Handling Business Process Transformational Change during the lifecycle of an SRM upgrade – Part 1
Buy side user community : How are we going to take this daunting task of managing change with the new system coming in, more templates new training modules, supplier readiness, end-user perception and acceptance of the new solution etc. ?
Sell-side / vendor community: In addition to the challenges that I’m given to face w.r.t delivery schedules, quality and being pushed to the limits to reduce costs, what’s this new concept of supplier enablement that am expected to onboard, is this another muscle power showcase?
May 04, 2009
Notes from Ariba Live - 2
This is in continuation to my earlier blog which covered Day 1 of Ariba Live: http://www.infosysblogs.com/supply-chain/2009/04/notes_from_ariba_live_1.html#more
On the second day of “Ariba Live Virtual 2009”, presenters continued to build upon the “Spend Management: Time to be Hero” theme from Bob Calderoni’s Day 1 keynote. It was the turn of Kevin Costello, President Ariba, to solicit belief in the theme, by assigning numbers to the savings opportunity available. Some numbers that Kevin put forth are really interesting. As per Ariba research, Fortune 500 companies alone could save close to $300 billion through improved Spend management initiatives. Include the other companies as well, and that figure should go up to $500 billion in North America alone. As Kevin put it, this is a stimulus package organizations cannot afford to ignore.
April 30, 2009
Notes from Ariba Live - Part 1
April 22, 2009
DNA Therapy for Strategic Cost Reduction in Supply Chains
My recent hunt for stem cell banking information in South India got me excited on a subject of high interest in the biomedical world. Stem cell therapy is the latest medical wonder discovery and supposed to be a cure for 70 odd complex maladies of humans, especially interesting because till late these ill’s were supposed be hard to win over with the conventional medical treatment methods - treatments which were more focused on treatment of the symptom or providing a patch solution for the life threatening diseases, not usually a permanent cure.
DNA is the building block of all life and living on this planet. They are the smallest finite elements which determine the characteristic and personality of any individual. DNA or gene therapy gets to the root cause of the problem. They provided the paradigm shift in medical treatment from the symptomatic treatment of the yesteryears to treating or correcting the diseases cells at source.
What has DNA therapy got to do with Supply Chain Management?
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April 17, 2009
Reduce your TCO with migration to SRM MDM Catalog
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April 06, 2009
Does the Procurement Boardroom wilt under supplier pressure in a downturn economy?
March 31, 2009
Supplier Consolidation Vs Sourcing
March 17, 2009
This Pharma major is doing the right thing by “talking” to its suppliers
Pharmaceutical industry - defensive and an inelastic sector as far as demand is concerned - is known to be relatively less impacted by this recession. But then, it is far from remaining immune and certainly cannot escape unscathed. The lay-off announced by the leading pharma players (Sanofi 650 US sales reps, Novartis 550 US sales reps, Merck ~8000 jobs, AstraZeneca 1400, Wyeth ~5000 and GSK 1000) is proof enough of the problems present in this industry. Though the problems stem from poor drug discovery and expiration of patents, the recession is certainly compounding the situation. Naturally, belt-tightening is high on the corporate agenda with inefficient supply chains ranking at the very top among all the belt-tightening opportunities available.
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March 09, 2009
Is there confusion with SAP SRM suite positioning after acquisition of Frictionless commerce (now rebranded SAP E-Sourcing)? – Part 2
Why is it difficult to convince customers to have both these applications operational in the same landscape?
- Frictionless commerce (now SAP E-Sourcing) has overlapping functionalities with SAP SRM which happens to be its core SRM solution
- Customers already using SAP SRM, would need a strong business case to convince CPO desk for SAP E-Sourcing licenses
- Integrate the applications, as they don’t talk to each other still.
- What is the ROI for such an integration
- Is there a customer base that will really look forward to integrate these 2 applications
Is there confusion with SAP SRM suite positioning after acquisition of Frictionless commerce (now rebranded SAP E-Sourcing)? – Part 1
As a consultant, I am still trying to understand why this acquisition? Am trying to logically place these questions to arrive at an answer
Whats the confusion?
SAP SRM (version 5.0 and lower) was always ranked low in comparison to what “best of breed” offers for Sourcing and Contract management functionalities.
However, to overcome this, they acquired Frictionless commerce (now rebranded SAP E-Sourcing) to bridge this gap. They had a strategy to sell it as an On-demand solution only they have been successful in selling the on-demand solution. But they realized the need to make the on-premise solution available for customers who where skeptical in parting with data, but however the On-premise solution brought with it major confusion, leaving the suite offering with heavy questions, reasons stated below.
February 17, 2009
Get the Sourcing process in order first …
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February 12, 2009
Supplier Enablement continues to be one of the top priorities as well as challenges
Supplier Enablement (SE) continues to be one of the top priorities as well as a challenge for organization looking at transforming their procurement office and gain better visibility into their supplier relationship by increasing their spend under management. With the meltdown in Global economy, challenges are doubled but still the priorities overweigh these challenges.
December 03, 2008
....Customer demands "Where is the tangible translation of my Compliance to revenue you promised from my SRM solution, show me? "
Are you ready with the metrics, have you even thought about how to have these metrics strategized and signed off even before you could possibly track them.
How can you measure it, how will you show that realization from day 30 post go-live, 1month would be a very tight time frame to really show benefits on the P&L, but today’s customers, for sure are going to.
November 19, 2008
Automate, Integrate, Extend….err Exploit
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November 04, 2008
Aligning to the best practices for combating challenges faced in contract management
One of the major challenges is that Organization’s contracting principles are sketched around the package they use and not with respect to the way they would like to do their business. Late 90s and early 2000 is when organization started to invest on Contract Life cycle management packages / tools. This definitely provided a host of tangible business benefits to the end users and also to the buying organization. But, very soon, companies (esp. in Retail and Manufacturing) realized that the package is not flexible enough to manage the growing business needs such as Globalization, changes in business processes like invoicing against contracts etc.
Leveraging contract management in the “R” period
In this dynamic and challenging global environment termed also as “Recession”, I read a series of blogs
- on ways to manage recession,
- worst innovations mistakes in recession,
- Is re-negotiating during these tough times ethical?
- “R” word can be a boom to sourcing and procurement world etc (http://www.supplyexcellence.com/blog/2008/10/30/renegotiate-contracts-recession/, http://blog.sourcinginnovation.com/2008/02/25/the-10-worst-innovation-mistakes-in-a-recession.aspx)
The “R” word is probably not a welcome term for sourcing and procurement world – buyer as well as supplier, but it will definitely help in restructuring most of the processes. Contracts Management (with sourcing on the left side) plays a vital role in achieving this – Compliance, Collaboration, Commitment etc
Continue reading "Leveraging contract management in the “R” period" »
Have we funneled out everything in the SRM space, or is there any more oil left in the lamp
……..Looks like we are reaching the saturation level in designing a Supplier relationship management system that can milk the supplier to the extent possible, thats what the enterprise expects the buy side to have on the top of their mind rather than looking at the bigger picture.
It’s a realm for the buy side to have it their way. Let’s listen to a small story.
October 06, 2008
Black and White of Green Procurement – role of procurement professionals
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October 03, 2008
Procure - O - Marketing
September 01, 2008
The oft repeated problem: spend visibility
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Overcome procurement challenges resulting through business expansion (M&A) - Part 1
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- Supply Chain Predictions for 2010 - how far are we from our end-state vision?
- Et Tu Toyota …
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