Supplier Relationships – Don’t go over to the Dark Side!

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Early in my career I worked in a department that was responsible for the design,testing, sourcing and procurement of packaging materials.  It was a great experience and introduction to so many aspects of the Supply Chain.

But one day one of my peers was fired.  He was responsible for negotiating with the packaging suppliers.  As it turns out he was taking kickbacks.  When that was discovered and verified he was summarily dismissed.

I never got the precise details but I don’t believe he could have got more than a few thousand dollars for his illicit efforts.  More importantly he got a black mark on his resume, and in his life, that he could never erase.

That was my first lesson on the do’s and don’t of Supplier Relationships.

Continue reading “Supplier Relationships – Don’t go over to the Dark Side!”

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What’s the Difference between Procurement and Purchasing? (Infographic)

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Blog post provided by http://argentus.com.  Argentus is a boutique recruitment firm focused on Supply Chain and Procurement.

 

It’s a good question. We often see these terms used interchangeably, but there are some concrete differences between Procurement and Purchasing such that we think they are two different practices, each with their own set of concerns and skills.

We thought we’d take it upon ourselves to do a summary-style Infographic that highlights some of the core differences between what’s considered “Purchasing” and what’s considered “Procurement.” In short: Purchasing is an activity that’s a subset of the overall Procurement process. But there’s more to it than that.

We should give a caveat: in some professionals’ opinion, arguing about the difference between “Purchasing” and “Procurement” is a matter of semantics. The terms are often interchangeable. But at the very least, the discussion helps give some perspective on two different approaches to how organizations buy the goods and services they need to run. Some organizations are – sadly – still concerned only with “Purchasing” instead of the more nimble and strategic approach of “Procurement.”

Check out the Infographic below!

 

We hope you enjoyed the Infographic.  There are many different opinions about the definitions of Procurement and Purchasing.  There can be differences of opinion between Industries, across Geographies, and from various levels and parts of your organization.  Most importantly individuals may have different views of Procurement and Purchasing even if they work beside each other.

Please share your thoughts on this comparison!

Blog post provided by http://argentus.com.  Argentus is a boutique recruitment firm focused on Supply Chain and Procurement.

 

Check out other Supply Chain Solutions in The Internet of Things (IoT) – Welcome the Digital Supply Chain!

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Procurement Outsourcing – Keep your Integrity!

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Like so many professionals Procurement people are very proud.  They are proud of the job that they do and the contributions that they make.  And they are most always proud of their ability to negotiate and get the best deal!

But at some point in their careers, especially in the age of Outsourcing, they are likely to have to deal with potential suppliers who provide Procurement services.  Procurement typically negotiates deals for other functions like I/T, HR, Manufacturing and every other area in the company.

Now they are faced with dealing with companies who basically state that they can do a better job at negotiating and Procurement than they do.

In the face of such a perceived, direct challenge to your abilities how do you and your Procurement team deal with this professionally and with integrity?

Continue reading “Procurement Outsourcing – Keep your Integrity!”

Tail Spend: The Hidden Procurement That’s Hurting Your Company’s Bottom Line!

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Blog post provided by http://argentus.com.  Argentus is a boutique recruitment firm focused on Supply Chain and Procurement.

 

In the fast-changing world of strategic Procurement, certain categories of spend get all the thunder: IT Procurement gets to help drive a company’s innovation. Business Services Procurement gets to restructure a company’s operations and drive competitiveness. Travel Procurement gets to look at pictures of exotic destinations all day (just kidding).

And most large companies are well aware – by now – of the cost savings and strategic advantages of being more strategic about the way you buy things in an organization. For the most part. For most of the stuff a company buys.

But there’s another sort of spend that never gets any love, a sleeping giant that’s actually costing companies millions of dollars and opening them up to risk: Tail Spend.

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Supplier Collaboration is a Win-Win Strategy!

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Suppliers are an intrinsic part of the Supply Chain.  It does not matter what business you are in, what products you make, distribute and sell, or what part of the world you are in.  And it doesn’t matter where in the Supply Chain you are.  You can not accomplish anything without Suppliers.

Yet I have seen, like many of you, Suppliers treated in many different ways.  No matter what the circumstances are poor treatment of Suppliers is never appropriate.  Given that Customers fundamentally need their Suppliers to be successful why do people treat them badly?  And how do we ensure there is a healthy and productive relationship between Suppliers and Customers?

Working together with your Suppliers is always a formula for success!

Continue reading “Supplier Collaboration is a Win-Win Strategy!”

Procurement (Part 1) – The Spend Aggregation Obstacle Course!

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The theory is simple!  If you can increase spend levels through centralized spend aggregation across entities then you increase your leverage in negotiations.  This leverage should translate to lower costs and better terms and conditions.

These entities may be different departments or facilities within your own company.  They may be different companies under common ownership.  They may be disparate companies within an industry.  Or they may be unrelated companies spanning many industries.

The benefits seem clear.  So why is there so much resistance when it comes to trying to aggregate spend across these entities?

Continue reading “Procurement (Part 1) – The Spend Aggregation Obstacle Course!”