Friday, 31 May 2013

Spend Analysis - It's Important to your Bottom Line

Authored by Shayda Sharfaei
Spend Analysis is a topic that is almost on every procurement professional's mind these days and this is why organizations are dedicating more time and effort to spend management, in which the spending patterns are identified and the organizations can point out the bottlenecks and increase opportunities for long-term savings.

However, organizations are often intimidated as they all know it's not an easy task. It involves a lot of data that may come from multiple sources, determining a classification system and classifying each piece of data which is usually linked to a financial transaction. But before even beginning to decide where to extract the data from, you need to consider a few factors such as what you are spending and where you're spending on and this will actually be your starting point!

Wednesday, 29 May 2013

What are you buying? Software, Valueware or Vaporware…

Authored by Sara Omer 

Working with all those clients that I collaborate with, I noticed their increasing demand for acquisition of ICT solutions, hardware, upgrades, and so on. In some instances it can reach up to 35% to 45% of the total value / transaction number of requests that are managed by the procurement function. In my last two blog posts on the implementation of an IT system, I tried to share an in-depth assessment of the difficulties that arise and of how best to overcome them, now I ask the question what added value do the acquisition of new ICT solutions bring to the table?

Sunday, 26 May 2013

How Samsung Spends its Profits

Authored by Mickey North Rizza

Samsung has an interesting approach to when, where and what the company spends its money on. Below is an excerpt from the Wall Street Journal that explains it better than I can:

Samsung routinely outspends rivals on capital expenditures to build newer and bigger factories. During market downturns, when competitors would scale back on investment, the world's top producer of memory chips would continue to spend billions of dollars—allowing it to extend its market-share lead and give it scale to gain more bargaining power in price negotiations.

Wednesday, 22 May 2013

Implementing a New Major IT System – The Likely Difficulties and How Best to Overcome Them

Authored by Sara Omer

In the last post we discussed how difficulties may arise when implementing a new major IT system and in this post we identify what those likely difficulties are and how best to overcome them.

A major concern identified in process technology implementation in a study undertaken by Wen-Hsien, was the consistency between business processes and the selected Enterprise Resource Planning (ERP) system. Their survey findings - with the aid of ANOVA analysis - pinpointed the direct impact of the degree of correlation between the ERP systems and the business processes on organizational performance and user’s satisfaction. Moreover, considering the generic nature of most pre-packaged ERP systems, customization is critical in any implementation in order to suite the running business process, the writers further highlighted the need for a degree of business process re-engineering as a pre-requisite with any new ERP system implementation to bridge any possible gap between the information systems parameters and business process information flow. The second major concern is resource related. 

Monday, 20 May 2013

Implementing a New Major IT System – How do Difficulties Arise?

Authored by Sara Omer

Last week we looked at Category Management, what is actually is, its benefits and how to ensure a successful program, this week we will be looking at the difficulties involved in implementing a major new software system and how those difficulties can best be cover come. In this first post we’ll start with an introduction on how these difficulties may arise.

Attempting to resolve the paradox of escalating the complexity of high technology demands of modern business environments and addressing the ever-lasting quest for responsiveness and efficiency can only be attempted through technology, namely information technology (IT). Enterprise Resource Planning (ERP)’s are IT solutions that brought the concept of integrated supply network to life, linking customer’s focus drivers, supplier demand tuning and internal business processes into a unified platform enables flawless information cross-exchange across the entire value chain.

Friday, 17 May 2013

Category Management - Ensuring a Successful Program

Authored by Fayaz Haq

Now for the final part in our series of posts on Category Management, yesterday we looked at the benefits of Category Management and the effects it has on your organization, and finally we center on how to ensure a successful program when implementing a Category Management approach.

Over the last decade and a half or so, there has been a natural evolution from purchasing to procurement to sourcing and now on to strategic category management. Hence, organizations cannot view Category Management as simply a procurement led initiative and just one of the many initiatives within the business as then, the resources required will likely be unavailable. However, if the organization views Category Management as a primary company-wide and collaborative initiative making it ‘the way we work/buy,’ and thereby adding dramatic value across the business coordinated by the Procurement function, it will lend to its success.

Wednesday, 15 May 2013

What are the benefits of Category Management?

Authored by Fayaz Haq

In the last post we discussed what Category Management actually is and how adopting a strategic approach can maximize business profitability and result in competitive advantages for an organization. In this post we look more at the effects on the organization and focus on the benefits associated with Category Management. 

When well executed, the development of category strategies and resulting sourcing plans will result in dramatic value and benefits. “Value” might take the form of leveraging dramatic reductions in purchase price but it could equally be about reducing the whole-life cost or total cost of ownership, mitigating price increases in a rising market, reducing supply-chain risk or securing increased innovation from the supply chain. In addition to increased value, a formalized approach to managing strategic categories will also provide organizations with a view into spend data resulting in opportunities to manage demand, extend cash-flow and promote greater compliance to contracts.

Monday, 13 May 2013

Category Management- What is it?

Authored by Fayaz Haq

This is the first in a three part series of posts on Category Management where we will look at the benefits of Category Management and identify the factors that ensure a successful programme, but to start with, we will answer the question; What is Category Management? Category Management is a strategic procurement approach that focuses on optimizing an organization’s spend on goods and services. It is process based and incorporates business improvement in hand with change management. This is largely due to the fact that a successful Category Management program requires the active participation of and engagement with stakeholders, functions and individuals across the business.

Wednesday, 8 May 2013

Technology Cube: Technology Supply Chain Security Standard

Authored by Mickey North Rizza

Risk management is a standard practice in most companies, and definitely those with IT products. Counterfeit and intentional malfunctioning or sabotage to technology products is widely known. To combat the counterfeiting and tampering, The Open Group published a technical security standard for a technology acquirer “to protect a company from acquiring maliciously tainted or counterfeit products.”

The standard is a 32-page document available on The Open Group website  It is aimed at supply chain safety by laying out best practices in design, sourcing, building, fulfillment, integrators and distribution of technology products: the technology supply chain. The Open Group is addressing concerns that imposters or altered electronics, hardware and software are being sold.

The Open Group is working towards an official process for accrediting technology suppliers. With their motto, “build with integrity, buy with confidence,” it appears to be making headway.

Wednesday, 1 May 2013

Tragedy in Bangladesh: A Case for Better Supplier Visibility

Authored by Fayaz Haq
An eight-story building which was home to several garment factories collapsed in Bangladesh last week, killing at least 87 people, and bringing back memories of the devastating factory fire from last November. Within the building were garment factories that supplied clothing to well-known brands including, Benetton, Primark and Matalan. 

Bangladesh has about 4,500 garment factories, but recent events have raised questions regarding how much control brands actually have over their supply chains for products manufactured in Bangladesh.