Purchasing

In one week, I will be on my way to the Institute for Supply Management Conference in St. Louis. They always have some great speakers at their main events and usually I end up buying their books. I guess I have a hang up as I love hardback books that are personally autographed.

 

As a child, I was taught never to turn a page down in a book. Never, never write in a book. It is still hard for me after so many years to highlight in a book, even a textbook you have bought and are using for a class. I refuse to read even a paperback with the pages dog-eared. Did you know “dog-eared” is in the dictionary? It is an adjective and the definition is having worn and well-thumbed pages: having worn and well-thumbed pages that have been cr...Read More

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What is supply risk management? The ISM Glossary defines risk management as directing or conducting the activities necessary to reduce, eliminate the impact of factors that could lead to injury, loss, damage or failure.

Risk management is a program that includes the processes of identifying the risk, quantifying the risk and assigning responsibility for management of the risk and risk mitigation actions.

The risk of disruption to production and distribution processes needs to be examined. In addition, supply risk should be examined on a part or SKU basis or on a specific service provision basis.

Do we as distributors to many manufacturers (our customers) understand the risk factor on the products and services we provide? Do we think about our customer having to shut down a production line because we as a distributor failed to have the produ...Read More

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CFOs don’t see procurement making the grade. Less than 20 percent of chief financial officers consider the work of chief procurement officers and their staff as having a very positive impact on competitiveness, according to a new report by technology consultancy Aberdeen Group.

 

The name of the game for procurement is cost savings, also cost avoidance. The report revealed that of 11.9 percent of average annual identified savings, only 3.2 percent actually gets booked, indicating a fall of 73 percent from identification to realization of potential savings. The question is why?

 

The communication gap between the procurement and finance department has emerged as a significant challenge in pro...Read More

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The American Heritage Dictionary’s definition of “education” (Noun):

 

            1. The act or process of educating or being educated

            2. The knowledge or skill obtained or developed by a learning process

 

Rev. Dr. Martin Luther King, Jr.'s definition is a bit more insightful. He stated “Education must enable a man to become more efficient, to achieve with increasing facility the legitimate goals of his life. Education must also train one for quick, resolute and effective thinking. Education...Read More

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I was reading an article on Continuous Improvement by Ralph Keller, president of the Association for Manufacturing Excellence. His opening statement, “How many companies can you think of who publicly profess that people are there most valuable resource, but then treat them like a consumable commodity?”

 

Years ago, I worked for Kroehler Manufacturing Company. Our slogan was “Kroehler People Care.” This was at one time the world’s largest furniture manufacturer. I still have the years of service pins. Kroehler had a suggestion box and with every entry a tape measure was sent to you with the notation “Kroehler People Care.” I probably have 15 or more. It ...Read More

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Most of us have been down the path of the work/life program, which is “work to live/live to work.” In other words, you try not to let your work dominant your life. But with the communications we have today, you never leave the office, it goes with you. In the era of the Blackberry, businesspeople that travel around the world can answer e-mail in minutes and always remain tethered to the office, bringing up questions of what is work time and what is personal time?

 

Many companies are now debating “Lifestyle Discrimination in the Workplace.” In an effort to control the significant rise in health care costs in recent years, many employers are trying to regulate the off-duty behavior of their employees, when the company believes it creates health risks. It&r...Read More

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I was in a meeting a while back with a bunch of my ISM group and they kept talking about going to sustainability meetings. I guess being in the distribution business, I was clueless as to what they were talking about. (An upcoming ISM satellite seminar on April 17 is on this exact thing, “Supply Management’s Role in Sustainability.”) The topic of “Sustainability” has leapt into corporate boardrooms, raising questions of company’s social responsibility and environmental practice, policies and decision-making.   

 

"Sustainability is the development that meets the needs of the present without compromising the ability of future generations to meet their own needs." This definition was created in 1987 at the Wor...Read More

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I was sitting at a table recently with some of my purchasing associates and the topic of discussion was how many layers of management do you go through to reach the top? Now at this table, we had a Vice President, Director of Purchasing, Purchasing Manager and then the buyers, purchasing agents and whatever they want to call us these days.

 

It seems there is no set rule within companies on how many layers of management a company wants to have. It seems you have the President or Chief Executive Officer which oversees the management. 

 

Level 1 - Top Management – Top Managers are responsible for long-range planning that establishes the overall mission and goals. It is called s...Read More

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Incoterms (International Commercial Terms) developed by the International Chamber of Commerce (ICC), are a uniform set of rules to clarify the costs, risks, and obligation of buyers and sellers in the international commercial transactions. Because they address issues relating to import and export, the Incoterms are most appropriate for use in international shipping.

 

When studying Incoterms in an MBA program a few years ago, it was looked at as the thing for the future. It would spread to use in the United States and we would do away with the old UCC terms. Is this like the same scare they gave all of the manufacturers in the United States a few years ago that all measurements would have to be metric.

 

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A budget is a financial plan that covers a specified period (usually one year). It identifies the financial resources allocated to products, services, departments or divisions of an organization.

 

A budget indicates planned future actions and the funding levels required for their completion. We will be entering the third month of our yearly budget. Every budget should provide for a periodic comparison of actual results and established goals. The budget is used to control expenses. This control activity is called variance analyses. This is the matching of appropriations and expenditures. Variances are analyzed and reasons for deviations are identified. This is where you need to do your homework. The “I think” does not work. You n...Read More

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I am surprised that there are actually bored employees in the business world. When the economy dropped, people were laid off; and if you were one of the fortunate ones to keep a job; you got more work.

 

In reading survey results from Sirota Survey Intelligence, specialists in attitude research, the report claims bored employees have an even greater negative impact on an organization, lowering morale and productivity, and draining resources than an overworked employee.

 

I can really see this happening. These are the employees that have time on their hands. They can sit and think about all of the things they consider bad and unfair. They have time to move from employee to employee to get the latest go...Read More

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I was sitting at my desk the other day when the phone rang. (It was one of those times when everyone looked to see if I am there and going to answer the phone. The open work environment takes away from productivity. Just my opinion.)

 

Anyways, the call was from one of our suppliers, a small business that appreciates doing business with our company. The supplier said, “I usually get an order from you once a month and we did not receive one in January. Is there something we need to do?  Do you have a problem with the product? I just wanted to check to see that everything was alright.” 

 

How many times do you hear that these days? With companies buying companies, corpora...Read More

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