Articles by "Best Practices"
Showing posts with label Best Practices. Show all posts

on Monday, July 11, 2022 0
Organizations that have utilized traditional procure-to-pay (P2P) solutions are experiencing the need to monitor spend efficiency more closely. The same holds true for businesses that have deployed a combination of disparate systems, alongside enterprise resource planning (ERP) software. Leaders are prompted to seek more robust solutions—while lowering costs—and find that a comprehensive source-to-pay (S2P) platform is the answer. 

sourcing cycle with multiple considerations
Automate Source-to-Pay Workflow

Increase Workflow Automation
When S2P solutions are implemented, organizations can increase the automation of their workflow and reduce critical cycle times. The ease of use, simple implementation, and visibility across robust procurement workflows are unmatched with end-to-end platforms. Meanwhile, organizations that rely on general ERP applications, may require supplemental tools to manage their complete sourcing to payables process.

Seamless Integration
The best fit S2P will offer a plug and play install and seamlessly integrate with all ERPs. This eliminates the need to migrate data from existing tools or worry about costly downtime. When multiple solutions or “extra” modules must be deployed to extend to end-to-end coverage, customers encounter added cost. This is more painful when teams refuse to adopt the individual ERP or niche solution because it does not meet their needs or otherwise lacks flexibility. 

Tech-Enabled Solutions
When S2P solutions are enabled with the latest technology, features like artificial intelligence support advanced capabilities through process automation and document processing. This is demonstrated in Intelligent AP Automation by eliminating inefficiencies associated with manual processing and boosting compliance. The capabilities of complex document recognition, sorting and classification accessible through a simple, customizable user interface are transformative to the way purchasing is managed. 

Image displays bar chart to demonstrate growth
Monitor spending while reducing costs with your S2P

Intelligent Assistants and other proactive technology are further differentiators seen in S2P platforms. These features add an expanded element of convenience by enabling users to access documents and workflow details, through conversational or text prompts while on the go and outside of the platform interface, using recognized communication tools. 

End-to-End Processing
S2P solutions are designed with the full sourcing process in mind, extending capabilities and workflow visibility.  




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on Monday, December 13, 2021 0



Many categories, especially those related to construction and transportation have recently been subject to volatile price fluctuations due to a wide array of unique market conditions.  As a result of this volatility many organizations have seen their cost of goods experience an unexpected and rather drastic rise in price.  While predicting these market fluctuations can be difficult, many strategies do exist to help protect your organization against this unpredictability.  The following section below will help identify a few tactics to help protect your organization against market volatility:


Market Index Protection via Contracting

When entering into an agreement with any supplier, from a best practice perspective a “core list” of commonly used items should be populated in the exhibits portion of the contract with a negotiated price list.  This core price list should have competitive unit costs locked in for the entirety of the agreement.  Historically, when pricing is locked in language is populated in the agreement to protect the supplier from unexpected market disruptions and material shortages.  

For example, if a product you are buying is made from stainless steel, and the market price of steel increases at such a drastic rate that it results in a cost increase outside of your current negotiated rate, the goal in this scenario is to protect yourself from additional increases outside of the market index percentage increase.  To achieve this, your supplier must be contractually responsible to provide documentation in writing direct from the manufacturer and/or source that illustrates this price increase as a passthrough to you the buyer, with specific information tied back to steel’s price index supporting the reason for this increase.  This will help protect you from any potential increases outside of market conditions established within each commodity’s pricing index.   


Negotiate Pricing Rebates

Another way to protect your organization against market unpredictability is by engaging in end of year rebate programs associated with spend volumes.  For instance, you can structure your agreement with your supplier in a way to capture a year end rebate based off total annual spend.  Creating a sliding scale of larger rebates associated with higher spend volumes will help protect your bottom line against some of these unexpected increases, while also establishing organizational rewards for program purchasing compliance.  For example, structuring a contract with a 1.5% rebate for $1 million in spend, a 2% rebate for $1.5 million spend, and so on will create protections for your organization in unpredictable market conditions.  


Forecasting & Planning

It’s also important to analyze historical spend data to help identify trends to help get ahead of potential future-state needs.  For instance, if you properly analyze supplier usage reports while also holding discussions with stakeholders regarding organizational goals and objectives, this will help establish a strong understanding of future needs.  It’s also important connect directly with your key suppliers to understand what their market expectations are.  For instance, are they anticipating an unexpected increase in any cost of materials, or perhaps they have potential cost saving opportunities through bulk purchases that could benefit your organization from an economies of scale perspective?


In short, it’s impossible to forecast market unpredictability, but you can implement protections from a contractual and forecasting perspective to help mitigate risk for your organization.  

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on Friday, December 03, 2021 0

 What is Supplier Relationship Management (SRM)?

Supplier relationship management is the discipline of strategically planning for, and managing, all interactions with third party organizations that supply goods and/or services to an organization in order to maximize the value of those interactions. In practice, SRM entails creating closer, more collaborative relationships with key suppliers to uncover and realize new value and reduce risk of failure.

Getting back to the initial goal of cost savings, the question becomes ‘when cost savings is a critical driver in supplier selection, how do you balance the collaborative relationship with low cost?


The major key is internal alignment between procurement and other business units. Supply Chain leaders must be able to explain why certain vendors are selected who may not be the low-cost option for reasons like customer service, on-time deliveries, payment terms, reporting, etc. while also stating how they are managing those vendors to get the best price possible. 

Category leaders must be able to explain how new suppliers versus incumbent suppliers will impact the company. There are too many cases where the grass appears to be greener on the other side and by selecting a low cost, new supplier, operational differences get lost in the shuffle and the transition becomes a disaster.

Why is Supplier Management Important?

In plain and simple terms, it creates a competitive advantage. Whether you are the procurement or the supply chain leader for your organization, having a strong supplier management system in place allows for maximin opportunities in cost reduction, value driven services, and over all systematic efficiencies which otherwise would be achieved.  

Supplier Relationships

A critical component to any company’s success is their ability to maintain strong working relationships with their suppliers and vendors. SRMs should always look to avoid complacency. You should never be satisfied with the idea of ‘if it’s not broke, don’t fix it’. SRMs should always be looking for opportunities to improve the relationship, streamline processes or procedures, or change costing models. Relationship Managers should always be looking to challenge the status quo.

Another key to a strong supplier relationship is to open that line of communication and don’t be afraid to ask the question, ‘what we can be doing better?’ Here are some quick ideas as to how you, as a customer to your key suppliers, can help enhance your relationship and make those suppliers want to compete for your business. 

• Trust and Loyalty (treat them as more than just vendors)

• Improve technology and automation

• Adhere to payment terms

• Develop communication plans

• Differentiate between price versus value

• Have a dedicated Supplier Relationship Manager (SRM)

• Internal alignment between Procurement and Supply Chain Category leaders


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on Sunday, September 26, 2021 0



Finding the perfect supplier and solution to fulfill any business requirement can be cumbersome and stressful. However, leveraging a sourcing initiative such as a Request for Proposal or Request for Information (RFP,RFI) can help you effectively evaluate the market and its supply base and find the right fit partner(s) and program(s) to satisfy your business objectives. 

Depending on the commodity, service, and depth of the requirement one or multiple strategies can be used. As an RFP encompasses many elements to address and inquire about qualitative and quantitative aspects of supplier capabilities, I want to offer some insight into best practices for writing an effective RFP. 

The RFP should allow you to clearly communicate your specifications, goals and objectives, wants vs. needs, and what is and is not acceptable. Below are some of the critical areas of inclusion recommended that will result in obtaining the right information and therefore allowing you to make an informed decision.

  • Define your project: Explain your business and the reason for the release of the RFP. Brief suppliers on the current state and overall project requirement.
  • An introduction, business overview: What is your business (services or products provided) and what are your values? Is there something unique that should be part of the consideration and selection? You want to ensure bidders align with your vision and company values.
  • Outline the expectations: What are your business goals and objectives? What do you foresee the end state looking like? Make suppliers aware of any paint points you are looking to address or incumbent problems under consideration. This might be something straight forward like replacing old equipment with modern services or it can be more complex and strategic such as replacing workforce resources and services with an outsourced solution that requires various teams to be involved and requires a heavier investment from all parties involved. 
  • The format/style the suppliers should respond with: What are the expectations for the responses? Are there attachments to be populated or specific documents to be submitted? Will demos or POCs be expected?
  • What are the criteria suppliers will be evaluated on? You should look to be extremely specific and categorize each section elaborating on goals and metrics being used. This can help to guide the suppliers to be more explicit with responses and mitigate the sales fluff. 
    • If there are rules around using or not using 3rd party supplier assistance in the RFP make that a separate clear section.
    • If there is special consideration for women owned, veteran owned etc. suppliers, this should be outlined as well. 
  • Outline any potential roadblocks that might delay a decision or allowances for scope change during the RFP and selection process. 
  • State your budget: Although this might be a very conservative number, you should try to set some expectation to what value you have assigned to this project. There are going to be some suppliers who will talk around budget and total cost until they move into next stages, but those who really want and deserve the business will try to work within your confines or be honest early on if they cannot. 
  • Define all timelines and response processes: What are the timelines for each stage of the RFP? Do your best to set expectations for next steps including additional timing for demos and conversations, down-selection, and award. Make sure you provide clear instructions on where responses should be submitted and how all communications should be handled. Providing detailed information in this section can eliminate unnecessary and numerous follow ups from the bidders.
The above sections are just the tipping point to set the stage of your deeper dive inquiry. More to come in my next Blog in looking at the Questionnaire itself and how to ask the right questions and get the right answer in support of your overall decision making.

If you can include the above and be transparent to bidders, you are more likely to mitigate responses from those suppliers who cannot fulfill the request, minimize some of the sales jargon, and ensure responses are on time, within budget, and offer winning solutions. 

Your efforts will help to reflect your expectations for an effective response.

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on Friday, September 17, 2021 0



As offices across the country begin reopening, many organizations have begun the process of reengaging former facility service providers to reactivate programs that were disrupted as a result of temporary facility shutdowns.  Some examples of categories impacted by facility closures includes services such as water & coffee, food & beverage, security, and janitorial services.  While there is a lot to gain by establishing a go-to-market sourcing strategy for each of these categories, this blog will specifically focus on how to successfully source best-in-class janitorial and cleaning services. 


Identify current state vs desired future state

Before going to market it’s important to understand what’s working and not working with your current janitorial services provider.  Take the time to run an internal review and score the supplier based on factors that are important to your company, some examples may include: Is facility cleanliness acceptable, are staffing levels adequate, are response times for emergencies acceptable?  Understanding the pain-points with your current supplier will help naturally pivot the next crucial step which is updating and/or creating a Scope of Work to align with your desired future state.  The Scope of Work (SOW) should be created and included in your janitorial services contract to ensure supplier expectations are clearly established.  Any concerns regarding the requirements established in the SOW should be aligned on between both parties prior to contract execution to ensure your desired future state is fully understood.   


Request for Proposal (RFP) development

Prior to building your RFP to receive supplier pricing, it’s important to ensure you have the correct janitorial service providers invited to this sourcing event.  I highly suggest starting this process off with a Request for Information (RFI) with detailed questions submitted to a wide range of potential suitors to help identify suppliers that fit the needs and requirements within your newly updated SOW.  Once this list of potential janitorial services providers has been properly vetted, the RFP construction process can begin

When building your RFP, it’s important to arm bidders with the proper metrics to ensure an accurate bid can be delivered to help meet the requirements established within your SOW.  Some examples of metrics that will lead to a successful RFP may include: total locations in scope, cleanable sq/ft per location, supplier’s forecasted full-time employee (FTE) bid count per location, and FTE hourly rate per location.  While there are many other metrics that could also be included, these selected inputs shared by bidders will enable you to accurately understand costs by location as well as the total cost to service your janitorial services portfolio.


Holding awarded supplier accountable

Congratulations, you’ve successfully gone to market and identified your suitable janitorial services provider through a successful sourcing initiative.  While you’ve confirmed that the supplier’s price is acceptable, now is not the time to let up!  It’s important to establish processes during the contracting phase to help manage expectations of the supplier, and to ensure they are held accountable.  For instance, if you wish to establish a required cleanliness score minimum across your entire portfolio, apply language within the agreement that applies penalties associated with facility scores below a certain threshold.  Quarterly check-ins should also be a goal to ensure continuity is in place, this can be achieved by including language in the contract requiring Quarterly Business Reviews (QBRs) to be conducted.  While these suggestions may not seem like much, they can often mean the difference between a good program and a great program.  


Going out to market can be a daunting task at times, I hope this blog helps guide you and your organization along the way to successfully source best-in class janitorial and cleaning services.  


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on Friday, September 03, 2021 0

For those who have not heard the term “Elevator Pitch” (for the under 40 business population this may be “new jargon”) … it meant if you get into an elevator with someone you wanted to obtain a business relationship with you had the time of traveling up (or down) to make an impression.  Sales folks/Co-workers would time their elevator trips to join the people they needed to connect with for the ride… first ride up in the morning, when they went out to lunch, or when they left for the day.

A good elevator pitch should last no longer than that elevator ride of 30-60 seconds or 75 words. It must be interesting, memorable, and succinct. It must contain or explain what makes you or your organization, product, or idea – unique.  The truth is during that elevator ride the true connection created is of personalities, a foundation during that shared ride and your future timed rides with that individual.

One origin of how the “Elevator Pitch” began is that of Ilene Rosenzweig and Michael Caruso, two former journalists active in the 1990s. According to Rosenzweig, Caruso was a senior editor at Vanity Fair and was continuously attempting to pitch story ideas to the Editor-In-Chief at the time, but could never pin her down long enough to do so simply because she was always on the move. So, to pitch her ideas, Caruso would join her during short free periods of time she had, on the elevator ride. Thus, the concept of an “elevator pitch” was created.

Advantages to conducting an elevator pitch include convenience and simplicity. For instance, elevator pitches can be given on short notice and without much preparation due to the pre-planning of the content being delivered within said pitch, making the listener more comfortable. Furthermore, elevator pitches allow the individual who is giving the pitch the ability to simplify the content and deliver it in a less complicated manner by providing the information in a cut-down fashion that gets right to the point.

In this 2021 business world the “Elevator Pitch” as morphed into what has been coined the “Meet and Greet”.   I have even heard it referred to as “Business Speed Dating” no matter how the interaction is referenced, it often is accompanied with a business card being offered or exchanged between the two parties.

Let’s take the convention center “Meet and Greet” scenario – This type of Elevator Pitch/Meet and Greet/Business Speed Dating has been around for decades – you are invited to a booth or get a punch card to visit many booths and then your full punch card is entered into a raffle for a wonderful prize.  At the booth, for as long as you will stand there a representative from that company will determine if your company is a fit to start building a foundation with.  You may be asked for your business card or on your own drop your card in their bucket or have your badge QR code scanned.  If asked for your business card by an individual or QR code scanned, be rest assured, notes about your discussion can immediately be documented for future reference.

True Business card story: I use to work for a company by the name of Medical Logistics 20+ years ago.  It was a startup, and the business cards were dark royal blue with white lettering.  The printer made an error and did the dark royal blue on both sides of the card, there was nowhere to jot down a note on the card! The male Client Acquisition Team members kept their business cards in a right top shirt pocket to easily hand them out at tradeshows – one morning it rained buckets, we all got drenched going into the convention center… the blue leaked onto their shirts! (mine were safely stored in a business card holder in my pocketbook!)

The goal of the business card or QR scan with notes is be able to continue the conversation where it was left off, “dog is Shih Tzu, kids are___” or “company has problems with name a vendor that supplies them X” the next time there is a conversation?

No matter the jargon – The Elevator Pitch/Meet and Greet/Business Speed Dating… the first step is making a connection with an individual in less than a minute… that is a skill very few people have naturally.

 Today an Elevator Pitch is to “hook” a person into truly listening… with our high population of the business world working via Zoom/Teams/Skype for Business etc. combined with being able to hide your face makes many wonders, who is listening? 

The University of Louisiana Monroe morphed to the times and held a Virtual Elevator Pitch competition in 2021 with a 1st place prize of $150?!  Stephen King has been quoted to say, “Sooner or later, everything old is new again.”   

Ilene Rosenzweig and Michael Caruso would be proud to know what they did and documented still has relevance in our long distance, virtual business world.

The bottom line, “The Elevator Pitch/Meet and Greet/Business Speed Dating” – the technique builds a comfort level.  Once the comfort level has been created then an introduction to “talk business” can truly begin.  

At Corcentric, we are often introduced to provide both Procurement support and IT related subject matter expertise. In working with IT stakeholders, we strive to develop and maintain the comfort level, listen to pain points, providing resources to improve the client-supplier situation that is creating angst; This enables the building of trustworthy partnerships with our clients.  









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on Tuesday, August 31, 2021 0

 

Credit: Spirit Airlines
Spirit Airlines recently made public that they were conned out of almost $1 million. A material operations manager and a senior buyer conspired to send through overpriced items from a specific vendor and received kickbacks from the vendor for doing so.

While not an everyday occurrence for companies, it is common enough that if a company hasn't seen it happen, they either will in the future or lack the processes to know that it could be happening. 

I've seen this quite a few times using different methods and doesn't have to require employees to participate for the con to be effective. Usually, the reason it occurs and isn't immediately caught comes down to 2 root causes:

  1. Poor separation of duties. One of the most common issues is when the person who is requesting new supplier creation is the same as the person who approves those suppliers' invoices/POs. Not having a different staff member verify the supplier is legitimate as well as other people verifying dollar amounts are in the expected range (such as a Cost Center Manager looking at a report of all line items) are common holes that can be attacked.
  2. Insufficient processes for validating invoices and payment instructions. There should only be specific people who can update a company's Remit To address or payment instructions, and those people must have defined verification processes for each.
We've seen this happen not just when companies come to us asking to improve their processes, but it can even become apparent during an otherwise normal Corcentric technology implementation. Unlike many other companies, we review relevant processes during the implementation and provide recommendations on where to make improvements to achieve their Target Business Outcomes. Even in just the past 12 months, I've worked with clients during these implementations who do not vet new suppliers, do not have defined processes for updating bank account information, and do not have strong reporting for managers to review purchases.

These holes may not be obvious unless you are looking for them, but once found can be plugged. In the examples above, we come in with recommendations on how to fix it and then can work with the client to ensure they are properly deployed in order to maximize the reduction in fraud potential.

While companies like to think of staff as family, all it takes is one person acting maliciously for millions of dollars to be removed, and without the proper controls, the company may not realize it for years, and could never discover the truth.


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on Thursday, August 26, 2021 0

 The movement of goods from one point to another is complex - the transportation industry is a blend of the networks, infrastructure, equipment, information technology, and employee’s necessary to transport a large variety of products safely and efficiently throughout the nation and around the world. Although generally considered separate transportation entities, trains, planes, ships and trucks are actually part of an integrated network.

With such varieties in how company’s ship their goods, its impossible for two organizations to have the exact same supply chain profile. For this reason, to compare data from one shipper to the next, it can cause misguided recommendations and expectations. Benchmarking data versus industry wide historical rates or against other shippers does not account for future trends and predictive modeling.

In the Big Data Era, companies in a variety of industries, including transportation, more acutely feel the need to collect information most relevant to their businesses. They want to find a way to make decisions based on accurate information at the right time. To achieve this, the development of systems that can transform the data collected information from which to generate actions that benefit the business directly.

Some of these benefits may be:

  • Identifying growth opportunities – internal and external data analysis can help to shape and forecasting business results, allowing identification of the most profitable growth opportunities, as well as some differentiators for business
  • Improving business performance – data analysis facilitates agile planning, forecasting more accurate budgeting and improved planning is an important tool for decision making
  • Better management of risk and regulatory requirements – data analysis allows improved reporting procedures, identification of risk areas such as compliance violation, fraud or reputation damage
  • Using emerging technologies – can identify new opportunities for obtaining information relevant to business management, based on new technologies

Very few companies use the full potential of predictive analysis. On the other hand, this approach often comes into conflict with trying to keep under control and lowering IT costs. Therefore, identifying and capitalizing on available information and identifying information sources that can support the generation of new opportunities have become the main challenge.

Effective integration of predictive analysis in business management has a measurable impact on performance because it allows better planning, weather clearer and more informed decisions, resulting in increased profits, reduce risk and increase business agility.

Using predictive analytics is useful transport companies to ensure that all relevant functions involved in the process so as to obtain an overview and to minimize information leakage. Information about consumers are a typical example in this respect: sales have billing addresses data and record transactions, marketing has information obtained from the analysis of feedback coming from consumers and the logistics department has details on concrete deliveries. All this information can sometimes double or vary from one department to another.

A coherent analysis of all these data can be a challenge, but an accurate analysis and enhanced business can generate added value. 

Stop living in the past and jump on the predictive analysis train…or truck…or ship.

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on Friday, August 13, 2021 0

 



I recently needed to obtain a client relationship representative at five companies
for an RFP sourcing initiative I was executing.
I had no contacts in my on-line rolodex or direct connection through LinkedIn.
What a nightmare this simple task became.

My process:

Step 1 Reach out to people within the company I work for and inquire if anyone had contacts with the potential Suppliers. – No luck

Step 2, Look up each company website for a phone number to call –  the only option was  fill out a form and someone would get back to me – maybe… each website was seeking all kinds of information and there was no way to bypass this process and just state my request and press send…

I was not going to spend 10 minutes filling out fields for the supplier to decide if they wanted to engage in a conversation – how many employees, location, budget for the service etc.…

My frustration was building, Dang it – 
            All I wanted was a human voice to chat with and I would explain the purpose of my call.

Step 3, Go back to my email rolodex and reach out to former colleges that might have connections to any of these companies – No luck

Step 4, Go to LinkedIn and look up the individual companies to see if I could connect with a Client Relationship Manager or Customer Service Representative by sending a LinkedIn message – No luck. 

I was blocked!  I do not have a paid Premium Membership with LinkedIn which was required to contact members at 3 of the Suppliers the client wanted vetted.

             Of the two Suppliers where I could send a message to an employee… 
            one never responded (even though she did have over 300 connections).    

             The second person who received my message did respond 
            - with a link to fill out a form to see a demo – NOT WHAT I WANTED!

Do companies not want business??? My frustration was at a peak, plus I was baffled.

Have we become so automated that human interaction for business transactions has evaporated?

Every company website home page should have a phone number or contact us with direct contacts, 

this is my strong opinion… 

The result:

Two of the Suppliers that our client was interested in vetting for the RFP lost their chance to participate because I gave up…

Eventually through colleges inquiring to colleges they know in the telecommunications arena; I was eventually introduced to each supplier representative.  To obtain the correct contact person for the remaining three companies took over 8 hours of time during a week.  This is not a good business practice/face to present – it shouldn’t matter if you sell a hammer or managed security services or network hardware gear – a Supplier is a Supplier and all businesses need clients to survive…The doors must be open for a potential client to walk in and in my case the walk in required a telephone conversation.

The postscript: After my initial conversation with each supplier I asked for the CEO’s email address and sent a message.  Since receipt of my emails all three Suppliers have either added a phone number or way to write an inquiry through their website that does not ask vetting questions…

About Corcentric: Procurement Services are EASY to engage!  888-909-3894 or email me twankoff@corcentric.com and I will personally introduce you to the correct person in the appropriate department to answer your questions. www.Corcentric.com

Corcentric’s Sourcing team is made up of subject matter experts; covering areas from Telecommunications hardware/software/voice and data services, to Managed Security Services and IPaaS solutions.  Our strengths include providing real-time insights to the requirement building, carrier identification phase including but not limited to just the sourcing and negotiation phases.  We take a strategic approach in facilitating and managing a RFP process where we identify opportunities that align with both the short-term vision and long-term objectives of our clients.  

Corcentric leverages our proven process and best practices, keeping carriers engaged and motivated about the opportunity.  By managing the carriers throughout the process, we ensure our clients have visibility into all viable options for its requirements in terms of carriers, technologies, contract, and pricing approaches.   As an outcome of the sourcing process, we provide our insights so that our clients make informed decisions regarding which carriers are best matched to their specific requirements and future state growth.






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on Friday, July 30, 2021 0

 


I believe that the health of a department depends on the strength of their systems – especially in the realms of procurement and strategic sourcing. As a consultant with over 10 years of experience, I’ve worked within the procurement departments of numerous, global organizations. These days, I can quickly assess whether a team will meet its goals simply by understanding which systems (if any) they have in place.

The truth is: when the proper systems are put to work, everyone’s work life is better. When they aren’t, everyone’s work life is hell.

In a previous role, I experienced first-hand what it was like to work on a procurement team with little to no systems. Instead of complaining at the virtual watercooler with my colleagues about how messed up things were, I chose to do something. I decided to advocate for the implementation of more solid systems. And since this article is designed to help you understand the reasons why things like this are critical to the success of your teams, let’s just jump right in:


1. Strong systems dramatically reduce email inbox clutter and instant message pings

Being a successful strategic sourcing professional requires focus. One must properly prioritize their ever-growing to-do list and expertly manage their time.

In my 10+ year career, I’ve found email and instant messaging to be one of the biggest time drainers. Still, as a team it’s important to have multiple channels of communication because things can and often do change in an instant. Essentially, striking balance in how much time you spend communicating with your team is critical to the success of any strategic sourcing team. After all, no one can get work done if they’re constantly wading through email or if they often have to divert their attention to answer a “quick question” via instant message.

At my former organization, I quickly realized the procurement team was very unorganized. Some members of the team saved contracts and other important documents to their desktop or personal One Drive. Other members of the team saved files in shared folders like BOX, or on the Teams site. However, everyone on the team didn’t have full access to all items in the BOX drive, which hampered productivity severely. For instance, if I needed to see current contracts to understand the history of a vendor relationship, I would have to reach out directly to a member of the team. However, oftentimes, that team member would inform me that they didn’t have access to said contract. This would result in hours of wasted time attempting to track down where the contract was saved. This became very frustrating, because internal stakeholders who inquired about specific information within a contract would have to wait an unreasonable amount of time to get an answer to a basic question, which didn’t reflect well on the Procurement team.    

That’s why strong systems are important and need to come into play. When everyone is on the same page, knows where all the files are, knows who is working on what, teams are more productive. There’s less time and energy spent on reaching out to ask and answer the same repetitive questions and more time spent getting things done.



2. Strong systems make collaboration a breeze

Prior to me joining the team, my former company had recently divested from its parent company. Subsequently, the company acquired another. All this change took place within the span of six months. With this massive change, teams were left to their own devices to get things done, which meant there was no centralized information hub or efficient processes. Trying to collaborate on anything always felt like an uphill battle – mostly because everything was always so all over the place.

I implemented a centralized hub: a Procurement Tracker and Contract Repository that innovated the way the procurement team communicated, managed vendor and stakeholder relationships, shared information, and stored contracts.

The new system I created tracked the Supplier Name, Vendor Contact Name and Email, Title/Purpose of Project, the Internal company the Supplier’s Location, Country in which the work is being performed, the Region in the country, the Level of Urgency, the Current Steps Taken in the project, the Next Steps to be completed, the Date the project was assigned to me, the Date the contract was Executed, the Expiration of the contract, the Dollar Value of the contract, Budget Approval status, Funding Approval status, Savings (if any) of the project, the Type of Document being executed (i.e. MSA, SOW, Order Form, etc.), who the Internal Stakeholder is, and their Contact Information, Vendor Onboarded status, and where the signed contract would be stored (i.e. Teams, Box).

I did this because I knew everyone on the team needed to know where to locate important documents like contracts and invoices at a moment’s notice. There’s nothing more frustrating than not being able to find a file to reference while on a call with a stakeholder or vendor.


3. Strong systems create solid teams who communicate well

I know no one particularly leaps for joy at the thought of attending meetings but having strong systems in place makes them more effective (and shorter!).

Before implementing new systems at my previous organization, I noticed many team members worked in silos and rarely met as a collective to debrief and request help. When we would meet, there were multiple instances where we discovered redundancies because there were team members often working on the same tasks or projects unknowingly. This was another red flag that I brought to leadership’s attention.

So, I introduced the idea of consistent weekly meetings, which became extremely important because the time together allowed us to calibrate, and back someone up if they were out of the office. Nothing is fun about trying to cover a colleague out of the office if you don’t know what they’re working on! It’s almost like drinking out of a fire hose.

Communication is a core reason why many teams fail and succeed. The best systems make it so that communication between team members isn’t overwhelming or even frivolous, but instead intentional and impactful.

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on Friday, July 23, 2021 0

 For those of us in the Procurement field, negotiating can be the most uncomfortable skill that we must master. Many factors play into a negotiation, and the considerations can easily become overwhelming. There is often so much on the line. The supplier relationship, the client relationship, and the sourcing initiative’s success can all ride on this one simple step.

I believe the skill of negotiating also has the most misconceptions attached to its name. Many think the best of the best dig a hard line in the sand and stick to it. The most successful negotiators are the sternest. But, when you are searching for a win-win, is this the most logical strategy? I do not believe so. Being aggressive towards your counterpart does not lead to successful partnerships. To give an inch and take a mile will not build a long-term relationship that promotes positive growth for your organization.

So, how do you deploy a negotiation that is successful, builds partnerships, and does not make you want to rip your hair out? Read on to see my favorite tips that I employ with my friends, family, clients, suppliers, and in long conversations with my dogs when they are being bad that they absolutely do not understand.

Do NOT Draw A Line in the Sand

As I stated before, the misconception of drawing an arbitrary line and sticking to it no matter what is not negotiating. Negotiating requires some form of compromise from all the parties included. Even with all the power, do you really want to crush a smaller sized supplier? Will the supplier want to help you when times get tough, like in the supply chain disruptions of 2020 due to COVID, if you just gauged them for a single sided contract? Instead, hear each party’s wants and needs and craft a deal that is mutually beneficial. It almost always creates a better agreement in the long term.

Business is Business, Kind Of…

In a negotiation, even when attempting to create a mutually beneficial deal, things can get heated. Remember that your negotiation counterpart is a representative of a larger organization. They have higher ups, in most cases, that are really making the decisions. So, what should you do? Separate the negotiation from the person. Just because they are not compromising on a specific piece of the sought-after agreement does not mean they are attacking you. The issue is YOU. You are too closely tied to your points and are projecting the same attachment on your counterpart. Talk it through and find out why they are not budging. Attempt to craft a solution that provides enough promises to get them to budge or ask for something in return elsewhere to even the playing field.

Kindness is Not Necessarily Good

If you are not a confrontational person that is often a positive. However, sometimes that can cripple you. Just because the goal is a mutually beneficial deal in your mind does not mean that it is in your counterpart’s mind. If you are too kind to objectively quantify your position and stick up for your reasoning, you can open yourself up to getting steamrolled. The lack of tact can lead to bad terms for you and portray that you can be taken advantage of. This will harm your future negotiations, as well. If you have sound reasoning, explain it until the supplier wholly understands. If you do not feel you can push back, get someone who will. Using your coworker’s skills is a benefit to the organization and there is nothing shameful about requiring help.

Require Objectivity and Objectivity Only

Finally, perhaps the most important tip I can offer is to keep negotiations objective. Subjectivity leads to the “drawing a line in the sand” type of negotiations in my first tip. It can also lead to a personal attachment to the items you are negotiating. If you do not think of objective reasons as to WHY compromise should take place, you are not crafting solutions. You are creating whimsical ideas and acting as if they are objective. There is no room for impulsive decision making in negotiating. Use logic, math, statistics, and hard data to provide actual reasoning as to why you want what you want. Use the same objective standard to provide solutions that simultaneously show how your offering gives the supplier what they want, as well. That is creating a true win-win situation.

Hopefully, employing these tips can aid you in more successful and less stressful negotiations. This step in the Procurement process does not have to be the worse. If done right, it can be an enjoyable way to build your rolodex of supplier contacts for future projects. Long lasting, very beneficial relationships can be built that put you and the supplier in an advantageous position within your market.

For more on this topic click here!

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on Wednesday, June 09, 2021 0

How a digital supply chain can help transform the future of logistics

The world is moving from physical to digital, from wasteful to sustainable, from delayed to instantaneous, and from manual to automated. This faster pace of commerce and the disruptions force us to re-think how we do business. As a result, this
innovation provides an opportunity in disruption. It creates fertile ground for innovation and partnerships that deliver new products, services, and business models to an industry that is in dire need of re-inventing itself to keep pace.

The future of logistics benefits from the data provided by multiple systems, advanced analytics, and the automation of intelligence. As information is provided through the many different sources, the digital supply chain connects technologies, assets, systems, and locations to enable real-time analysis, smarter decision making, and informed actions inside the supply chain.

The data provides predictive analytics that helps shape new strategies for transportation and logistics. It takes into account all variables inside the supply chain, as well as traffic, weather, and social trends, to create an accurate plan. It also allows for flexibility. For example, instead of creating monthly plans, strategies are set weekly or daily to meet inventory volatility and customer demand.

While this breaks the traditional steps between fixed processes, it opens the door for continuous improvement. It allows for better placement of inventory in warehouses that drives quicker order fulfillment. The data, connectivity, and analytics provides the foundation for automation and smart warehouses.

Robotics such as autonomous forklifts, transporters, and assembly line vehicles provide a safe, efficient, and reliable solution for the movement of goods in a warehouse, while improving productivity, visibility, and customer service levels.

Wearable technology gives managers and employees the capability to exchange data between devices and the network. Wearables support core processes such as shipping, receiving, routing, inventory management, picking, and replenishment.

Outside of the walls of warehouses and distribution centers, advanced vehicle technology that includes everything from in-cab systems to engine and trailer diagnostics, and from electric and hydrogen fuel systems to autonomy is transforming the supply chain. Connected trucks have the ability to provide a plethora of data that translates into business intelligence and key predictive analytics with the right people utilizing it.

Having all these pieces in place – technology, data, analytics, warehouse automation, advanced vehicles, and infrastructure – a connected digital supply chain can be adaptive and responsive to the demands of consumers. It gets products to assembly lines quicker and when needed. It strategically maps warehouses and distribution centers for inventory placement, and eliminates waste inside the supply chain. It drives accurate, efficient, and accelerated e-commerce fulfillment and last mile delivery.

The digital supply chain connects everyone involved from suppliers to the consumer. Products can be seen moving through the supply chain, fleets can maximize uptime, and consumers can better predict the delivery of their products they purchased. Companies can meet sustainability regulations, digitize records, and forecast better.

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on Tuesday, June 01, 2021 0

Many companies in today’s world are driving organizational growth via the acquisition of businesses and competitors that operate within the same marketplace.  This concept allows for rapid growth and an immediate uptick in current market share of the industry being serviced, as opposed to an often slower organically executed strategy.  While many positives come as a result of the immediate growth realized from acquisitions, many hurdles also exist.  One of those hurdles this blog will address is the process of successfully implementing acquired companies into your organization’s sourcing and contracted supplier programs.   


Identifying Acquired Company’s Supplier Spend & Trends

As soon as the acquisition is closed, it is important to gain an immediate understanding of how spend has been flowing, and to what suppliers within the newly acquired group.  Running an internal report showing high-level General Ledger spend broken down by categories should help easily identify the key suppliers being utilized.  Once this spend is categorized and filtered by highest annual supplier, begin identifying any contracts tied back to these high spend suppliers.  If you are unable to identify the most up-to-date contract internally, reach out to the supplier directly for this information.    

Once the contracts are on hand, review them in-depth to identify any penalties or clauses related to early termination.  Often times contracts have buy-out clauses within them related to early termination, which depending on the total spend identified may be in your best interest once the total cost of ownership is fully realized.   

Also, if this acquired organization happens to use one of your contracted national providers, a simple amendment to your national agreement can be executed in a matter of days to immediately roll the acquired group’s locations into your program with minimal downtime and oversight required.  Always be on the look-out for these quick wins when running through the supplier identification phase of an acquisition.


Implementation 

Once legacy contractual obligations have been sorted through, the next step is to ensure the newly acquired organization understands the proper purchasing programs that should be utilized.  Depending on the size and complexity of your purchasing programs, the roadmap that often leads to success is through hosting program introductions and training sessions.  These trainings often include the distribution of buying guides, a demonstration of online purchasing portals, and Q&A portions at the conclusion with each supplier’s national account manager to talk through any specific questions.


Monitoring Progress & Compliance

The compliance tracking portion of major implementations is a critical piece of the process that is often times understated by many organizations.  Establishing effective processes to help monitor implementation and buy-in at the local level will enable your organization to easily pivot towards corrective action to ensure long-term success and buy-in.  This crucial step will immediately help identify and eliminate bad habits at the local level as soon as possible.

This part of the process is where you can begin to lean on the effort and accountability of your contracted supplier’s national account manager.  The account manager may even have personal incentives tied back to sales performance volumes with your organization, use this to your advantage and begin establishing a weekly or bi-weekly cadence early on to track the program’s progress and purchasing levels.  Creating a document such as a “compliance tracker” that the account manager oversees will help monitor each location’s actual vs forecasted spend.  During these meetings if any locations are trending in the wrong direction, a combined communication effort from your organization as well as the national account manager should help establish strong messaging to the local level regarding the importance of this program.  

If these steps shared above are executed in a consistent manner throughout the acquisition process, the groundwork for a long-term successful purchasing program will be established.

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on Thursday, May 20, 2021 0




We are in the world of “Specialized” ,“We are the best...” type Suppliers – We have all encountered companies of this type.  A company that makes it clear: Take our contract terms as written we do not make contract changes.

 I recently negotiated a contract for a client where the Supplier "Specialized" in a software management product. The Supplier provided a quote in the body of an email, the SLA’s and and contract terms are publicly displayed on their website and the actual “contract” is just an order form – how many licenses do you need at what level? – The price is X.

• The Supplier didn’t care that the company I was representing is a Fortune 1000 in revenue in the United States.
• The Supplier didn’t care that the client wanted to start with 25 to see how it goes and then increase the order
• The Suppler didn’t care that my client wanted a 3-year term agreement – the supplier only issues a 1-year term agreement and renewals after that.

How can anyone negotiate under these circumstances????

• Research the Actual Costs – it is truly rare to only have one supplier selling a specific type of widget.

• Know the Lingo – when speaking with the Supplier representatives during the decision of purchase - learn and speak the lingo.

• Discover/Discuss the mutual gains – Our logo represents X amount of potential future clients

• Quote Alternative Suppliers – politely discuss that you could purchase the widget from X for % less….

• Identify Supplier Freebees - Look for items that cost the vendor nothing to provide but are a value add to your company.

What I was able to negotiate:

• Additional training hours beyond the 10 for administrators within the first 30 days became 20 hours over 3 months.

• Two extra licenses for the same cost as the 25 we began with

• Reduce the written notice to not renew from 60 days down to 30 days.

• Test drive a different product they are selling for two users for 6 months. 

We will always be in a business world with "Take it or leave it" type companies...and in most cases we take it because time and effort had already been extended to make the decision of who to engage with; starting over or requesting a contract from the second choice on the list will not truly fill the need.

What have you been able to negotiate in a take it or leave it situation? 
I'd like to hear/read your thoughts... twankoff@corcentric.com

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on Thursday, April 29, 2021 0








Did you know under a microscope a single grain of salt appears in a cubed non-pattern?
Each grain of salt is approximately 0.03mm and visually is the color of brown sand. 

A connectivity network viewed from a high level appears very different than looking at it from a granular point of view; when trying to obtain what the value of each connection is and the type and amount of traffic it can support.  There is money to be saved, time elimination to be obtained, and technology options for service and speed to be explored through a microscopic approach = Rationalization and Optimization.

What is Rationalization?
Rationalization is to reduce the total number of suppliers which will reduce costs and presumably introduce efficiency.

What is Optimization?
Optimization is to focus and refine the supplier base which includes:
Streamline Services - To analyze the services and suppliers your company uses to determine the merits of adding, retaining, or deleting services each telecom vendor provides.

What can be documented or created? 
(and these are just a few grains that can be shook from the shaker)
  • Contract term status report – expired and/or due to expire.
  • Vendor Services not under a current contract· Services not in sync with current contract terms
  • Contractual Rate Errors
What are the focus areas?
That depends, is there is currently a service provider is not meeting contracted obligations or providing sub-par service responses? If the current situation is good, these are some of subject areas to focus on:
  • Audio/Video Conferencing Services
  • Broadband Services
  • Cable/Internet Services
  • Data Network Services (LAN/WAN)
  • Fiber Services
  • Landline Services
  • Leased Telecom Equipment
  • Legacy Voice Services
  • Maintenance Services
  • Managed Services
  • Music on hold services
  • Security and Alarm ring down lines
  • SIP Trunks
  • Toll Free Services
  • TV services
  • Voice Traffic
  • VOIP Services
  • Wireless Services
What are the benefits to engaging a company that specializes in Rationalization & Optimization?
Telecom vendors have a myriad of jargon for the same services and pricing can be all over the map when comparing and vendor to vendor services and costs. In addition, contractual language, SLA’s (Service Level Agreements) and real-time responses to your concerns will be vastly different from supplier to supplier for the exact same connectivity.

This type of audit; down to the granular level produces cost saving – consolidation, elimination of no longer used/needed services, and creates a way for a clean dialog to begin which can be the pathway for technology service advancements and better yet - COST SAVINGS!

If you have questions on this topic please email twankoff@corcentric.com.
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on Thursday, April 29, 2021 0


Previous articles in this series define three important elements of an effective Procurement team: Vision, Interaction, and Perception. But a developing team can’t impact these things without having a clear understanding of Procurement’s function within their organization.

  • We can’t define our vision if we don’t ultimately know the role Procurement is to play in our organization.
  • Likewise, our interactions can only reinforce positive relationships when stakeholders understand how we functionally fit into their world.
  • The perceptions other teams have of Procurement tie directly to the amount of value our function provides.

Function drives the roles we hire, the metrics we track, and the processes we develop and memorialize. Failing to define our function could mean focusing on the wrong roles, metrics, and processes – moreover, Procurement cannot present a cohesive message of our value without a clearly defined function. This can lead to turmoil inside the team as roles are likely not clearly defined at that point.

Defining Functional Types

Function will always be organization-specific. Some Procurement teams handle strategic sourcing and collaborate with business units on new initiatives. Others simply process the requisitions needed to purchase items other teams want. There are three main types of functions a procurement department will fall into:

  • Clerical: Review requisitions and ensure people follow proper policies and processes. The only value-add is confirming that other teams are doing things correctly.
  • Tactical/Analytical: Run sourcing events and may keep tabs on subscriptions and other recurring expenses to ensure proper renewals. Value is added in a reactive way.
  • Strategic: Procurement adds value in a proactive way, identifying cross-departmental initiatives that could combine to save money or providing additional benefits to the organization. This may include consolidating suppliers, negotiating for purchases on behalf of the entire company, or collaborating on new initiatives. Procurement ensures other organizations get more value than simple tactical support, and view the function as a boon rather than an impediment.

Defining Your Organization’s Function

Defining function is more complex than these buckets might suggest, but they are a good starting point. As part of your vision, you may want to perform a broader procurement transformation in order to position your Procurement organization as strategic leaders in your company.

Corcentric’s Jennifer Ulrich will be speaking at the ISM World Annual Conference in May on how to do just this. Her session covers how Procurement can build lasting relationships with key partners to success. She will present three case studies demonstrating challenges we’ve seen among our clients and the solutions we employed to solve these challenges.

Need help defining your Procurement organization's function? Register today to attend.  


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on Tuesday, April 27, 2021 0

 














Procurement can often be an undervalued or unrecognized component of a business, especially when there is limited visibility into how their activities impact the bottom line. With more focus being directed towards procurement within the recent years, both internal and external stakeholders are beginning to see the benefit these teams bring beyond cost savings  Last week John Sepcie explored how improving how procurement interacts with other areas of the organization can be critical to the success of the business. Examining the nuances of how procurement interacts with stakeholders can also heavily impact how this group is perceived by all other parties.

When we think about perception of procurement, there are several things to consider:

  • Does procurement have a seat at the table?  Does procurement have any strategic pull in executive decisions made for the business or are they simply seen only as a tactical group?
  • Are job responsibilities proactive or reactive? Does procurement help build strategic purchasing plans, assess supplier performance, formulate market assessments, or simply function as short-term buyers when someone else identifies a need
  • Does procurement have cross-functional engagement?  Where does procurement stand in the company hierarchy and how do they engage with other areas of the business? How often do they work with other areas of the organization to help make their value known to stakeholders outside of the procurement team? 

Communication, Support, and Understanding 

Its important to start asking yourself the questions above to truly understand the image procurement portrays to the entire organization. If that image is murky, other stakeholders may not even know when to collaborate with procurement The good news is that there are always ways to improve upon that perception. Most of the work will be around improving the relationships procurement has with stakeholders, employees, and suppliers, and making the value they bring to these respective groups more transparent.


  • Build cross-departmental relationships – Building relationships with other departments within the organization is critical for procurement to be seen a strategic asset to the company.
  • Understand stakeholder goals – Does procurement understand the goals of organization and are they able to respond appropriately to have those needs met? A big part about showing procurement’s value is displaying that procurement understands the goals of the different departments and how the goals of different departments may intersect.
  • Know what your organization is buying – When procurement understands not only what departments are buying, but how these goods and services tie back to overarching company objectives, it opens the opportunity for procurement to become an advisor on more strategic organizational initiatives.
  • Improve Self Perceptions- With so much emphasis on how procurement is viewed externally, it’s also important to consider how they perceive themselves within the organization. If procurement feels as if they are contributing nothing other than being a tactical purchasing group, that can strain relationships they may be trying to build.

 

Altering the Image of Procurement

If you would like to learn more, Corcentric’s Jennifer Ulrich will be speaking at the ISM World Annual Conference about the ways businesses can maximize the value of procurement departments. Her talk will include ways in which you can alter the perception of the procurement team through specific case studies and personal challenges and successes she has experienced while working with clients in the industry.

Need help improving how your procurement team is perceived in your organization? Register today to attend.

 


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