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Articles in category: Sourcing
Procurement has a role in delivering value and smart cost reduction is about buying the products and services you need at a competitive price without exposing your business to risk or failure. If you are value driven, it goes beyond getting what is just cheaper, because cheaper in some industries could mean disaster. There’s a lot more to being a category manager than being a buyer – they need to take account of the consequences of their actions and recommendations.(Read Full Article)
I find it ironic that many organizations today look at supply chain risk from a unilateral perspective. The impact of natural disasters have repeatedly raised questions on organizations’ preparedness to tackle supply chain disruptions. Companies today look for geographical presence and spread of their key suppliers to ensure business continuity. But is that all a company should do to mitigate risk?(Read Full Article)
As companies pursue growth in an environment where operations risk is pervasive, and where supply chain risk has become a top priority, a robust risk management capability is key to designing and operating supply chains. A recent Accenture study of senior executives found that the majority believe supply chain risk management is important or very important.(Read Full Article)
Without contract lifecycle management (CLM) in the modern business world, numerous things can go wrong, including missed savings opportunities, heavy fines, costly litigation and broken relationships. Generally, CLM is the ability to ensure contractual obligations are met.(Read Full Article)
Total cost of ownership (TCO) analysis was popularised by the Gartner Group in the late 1980s to assist clients in quantifying the financial impact of deploying IT products. A decade later, McKinsey applied the TCO approach to asset intensive industries in South Africa(Read Full Article)
The cost of running a fleet of company vehicles continues to rise each month. These increases are driven by factors such as the deteriorating rand-dollar exchange rate and the ever-increasing fuel price. So procurement managers need to be aware of the ways in which their fleet costs can be better managed.(Read Full Article)
The financial impact of ineffective procurement in Africa, calculated as value leakage, is estimated at a “staggering” $31.5-billion for the continent and $24.9-billion for sub-Saharan Africa, a recent report by professional services firm KPMG has revealed.
Although the firm believed that the role of procurement in an organisation was becoming increasingly strategic, 73% of C-level executives polled during KPMG’s ‘Power of Procurement 2.0 Survey’ did not believe that procurement added real value.(Read Full Article)
E-procurement is constantly evolving – but its foundation of improving customer/supplier relationships and internal business processes remains intact.
According to CIPS, e-procurement is:
“The combined use of electronic information and communications technology (ICT) in order to enhance the links between customer and supplier, and with other value chain partners, and thereby to improve external and internal processes. E-Procurement is a key component of e-business and e-commerce.”(Read Full Article)
Every business faces risks - the probability of events occurring - that can or will present challenges to their operations. Risk management is the practice of using processes, methods and tools to identify the level of probability, and then manage the ensuing risks.
In practice, this means identifying in advance what can go wrong in relationships between buyer and supplier. Failing to do this means you will be under-prepared and get some unwelcome surprises.(Read Full Article)
The CSIR’s 10th Annual State of Logistics Survey for South Africa¹, released in May 2014, highlights progress made and areas for improvement in South African logistics. The survey’s results mirror Tech-Pro’s experiences in this increasingly specialised area of supply chain management, Tech-Pro tells SmartProcurement .
Subtitled ‘Bold Steps Forward’, the survey emphasises the growing importance of the South African logistics industry, particularly as modest economic growth continues.(Read Full Article)
Better supplier relationship management could significantly improve company profits, with "soft" benefits offered by suppliers worth more than the value achieved from price concessions.
OEM Profitability and Supplier Relations - which is based in part on data gathered over the past 13 years from the annual Working Relations Index Study published by consultancy Planning Perspectives - found the better the relationship an automotive manufacturer has with its suppliers, the greater its profits are.
It explained the relationship “quantifies the economic value of suppliers’ non-price benefits to the OEM”.(Read Full Article)
In support of Gauteng Premier David Makhura’s vision of a “radical transformation” of the provincial public sector, Gauteng MEC for Finance Barbara Creecy announced on Thursday that Provincial Treasury and the provincial Department of Transport (DoT) have agreed to pilot an open, transparent tender application process in the current financial year.(Read Full Article)
This is the perfect time of year to review sourcing strategies and remember what an important role they play when procuring hotel accommodation. The hotel market is fragmented and highly complex which means that many companies often lack the necessary analysis tools and benchmark information needed to obtain and negotiate an efficient hotel programme.(Read Full Article)
The market for supply chain management (SCM) software, maintenance and services posted another year of solid growth, generating $8.944 billion in 2013, including applications for procurement software. That represented a nearly 7.4% increase over 2012 revenues, according to Chad Eschinger, vice president of supply chain with research firm Gartner (gartner.com).(Read Full Article)
We all may be sick of hearing the phrases “the war on talent” or “the talent wars,” however, the very truth of contemporary contingent workforce management (CWM) dictates that talent is a primary focus for achieving core business objectives through temporary labor.
It’s no great secret that the CWM industry has been evolving for quite some time; a space that was once an afterthought before the economic downturn of last decade has now become a vital component of the average enterprise. In fact, Ardent’s latest research has discovered that this industry will grow by nearly 30% over the ...(Read Full Article)
Comprehensive Category Management
Spot buying individual categories at market lows or evening running reverse auctions at opportune times is not category management. And for that matter, neither is an event that covers the entire category. At this point you probably think that the doctor is losing it a little, because how could it not be category management if you are addressing the whole category?(Read Full Article)
Supply Managers are only heroes in those leading organizations that were forwarding looking enough to let Purchasers gain influence in both the inbound and outbound supply chain and raise the profile of the organization in the eyes of both customers and suppliers. Their new practices, global view, and risk mitigation not only raised their profile, but also the profile of the organization as a whole. They were given more respect and authority, and soon after were the heroes of their organization.
But not every organization had the foresight of these leading organizations and, as a result, it is still only ...(Read Full Article)
For the Dodd-Frank reporting year 2013 98% of suppliers filed with no sourcing determination. Didn't know or not telling? While we can't be certain why virtually all filers did not have meaningful sourcing declarations, we do know that supplier education & training can improve suppliers' response time and completion rates for conflict minerals due diligence.
Seven of the world's largest industry associations collaborated with Source Intelligence and Schulte Roth & Zabel LLP to launch a web-based training module within the Conflict Minerals Resource Center (CMRC). The training module is based on the best practices developed by leaders in these ...(Read Full Article)
When it comes to purchasing new software, many organizations do so to increase efficiency, save time, and reduce costs. This is particularly true of nonprofits, which often have limited staff and busy schedules.
Enter "free" software: on its surface, a simple, cost-effective solution. However, free software isn’t always free, and nonprofit executives often learn this the hard way: after incurring costs from implementation, consultants, ancillary features, support, and ongoing maintenance.(Read Full Article)
We're all familiar with software licenses. It's the bit you ignore when installing a new program, right? But what's less understood is the difficulty they cause for businesses. New research by IDC sponsored by Flexera looks at the latest trends in software licensing, virtualization and the compliance issues involved.
The report points out that the software license supply chain is one of the most opaque, difficult to understand and complex to manage. As a result, the relationship between application producer and customer has often suffered in the past.
IASTA, a leading global provider of strategic sourcing and spend-management solutions, has entered into a partnership with Bespoke Sourcing Solutions, a South African-based procurement and supply chain management advisory and knowledge development provider.(Read Full Article)
It makes no sense to waste your time and valuable resources on unprofitable and unreasonable customers.
My students were desperate for strategies and tactics to help them out of these “price reduction only” discussions with their customers and broaden the conversations. We worked hard to develop some effective strategies for negotiating with buyers and bullies who focus on price only. These include:
1. Every time a customer asks for another price reduction, suggest trading for something in return. Ask for something of value back such as move volume, another division, another project. Never concede, always trade.(Read Full Article)
2. Keep opening the ...
The days when procurement was merely another support function are long gone. Organisations are becoming more aware that procurement is vital to adding value for the company and its customers, and should, therefore, be part of the overall corporate strategy, explains Anita Carolus-Opperman , Nedbank Corporate Card National Sales Manager, in this month’s SmartProcurement .(Read Full Article)
South African corporations' ability to collaborate with their SME business partners on supply chain innovation was in the spotlight recently at the Procurement Leaders Awards of the Second World Procurement Congress.
Anglo American and Johannesburg-based Aurik Business Incubator were the only SA organisations named as finalists in the categories ‘External Collaboration Award’, ‘CSR Award’ and ‘Innovation Award’.(Read Full Article)