I hope that you have enjoyed the article "The 25 New Rights of Purchasing, Part III."
To those of us who have been in the profession a while, this edition really cements the fact that many more aspects of purchasing have come to the forefront in recent years compared to the mid-90's (when I began my purchasing career). For example, while Rights #12 (ethics) and 13 (supplier support) were certainly near top-of-mind for any strategic purchasing department back then, very few of us were spending much time thinking about the other three Rights from this edition: environmental responsibility, risk management, and (supplier) financial stability.
Back then, "go green" was not the mantra it is today. Sure, risk management was a concern, but it was addressed mostly by dual sourcing and not the thoroughly-developed risk mitigation plans that are common today. And, with the economic growth during that period, we didn't see supplier insolvencies the way we have for the past decade.
Stay tuned as we hit the last of the "25 New Rights of Purchasing" in the next two months.
To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com
Tuesday, May 07, 2013
Tuesday, April 30, 2013
The Purchasing Certification Blog Welcomes Sourcing Innovation as a Sponsor
I am delighted to announce that Sourcing Innovation has joined the family of sponsors of the Purchasing Certification Blog.
Sourcing Innovation is a leading resource for sourcing, procurement, and supply management professionals who are interested in improving themselves and the performance of their supply management organizations. Sourcing Innovation provides in-depth analysis of technologies and processes that can have a profound impact on the way an organization conducts business.
I've personally followed Sourcing Innovation's blog since its inception and have admired its tireless insights into all things supply management. Just a few procurement blogs remain from the days when starting a procurement blog was all the rage and Sourcing Innovation has stayed relevant by staying true to its original voice, focusing on quality of posts rather quantity, and being consistent and consistently good!
All of us here at the NLPA are looking forward to establishing this new stage of our long-term relationship with Sourcing Innovation and hope that you check them out at http://blog.sourcinginnovation.com for daily coverage of current events in the procurement space.
To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com
Sourcing Innovation is a leading resource for sourcing, procurement, and supply management professionals who are interested in improving themselves and the performance of their supply management organizations. Sourcing Innovation provides in-depth analysis of technologies and processes that can have a profound impact on the way an organization conducts business.
I've personally followed Sourcing Innovation's blog since its inception and have admired its tireless insights into all things supply management. Just a few procurement blogs remain from the days when starting a procurement blog was all the rage and Sourcing Innovation has stayed relevant by staying true to its original voice, focusing on quality of posts rather quantity, and being consistent and consistently good!
All of us here at the NLPA are looking forward to establishing this new stage of our long-term relationship with Sourcing Innovation and hope that you check them out at http://blog.sourcinginnovation.com for daily coverage of current events in the procurement space.
To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com
Friday, April 26, 2013
Has Your Company Ever Been Raided by a SWAT Team Because of a Sourcing Decision?
About a year-and-a-half ago, it was big news when the Gibson guitar factory was raided by gun-carrying agents of the US Government. The raid was deemed necessary because of an alleged violation of the Lacey Act.
The Lacey Act, as amended in 2008, now makes it illegal for a US business to purchase any plant that is sold in violation of a foreign law. A United States Department of Agriculture document says that "It is the responsibility of the importer to be aware of any foreign laws that may pertain to their merchandise prior to its importation into the United States. Currently, the U.S. Government has no plans to create...a database [of applicable foreign laws]."
Apparently, some wood purchased by Gibson from India and Madagascar was originally considered to be illegal for export from those countries and, per the amended Lacey Act, by default, illegal for purchase by a US company. Despite the massive news coverage at the time of the raid, there was very little coverage of the resolution this past August. So little, in fact, that I did not see any coverage at all until now, when I got curious and googled the topic.
I guess sourcing news isn't sexy to the general public unless guns are involved. So, despite the fact that it is somewhat "old news," I think the resolution is still relevant and I will cover it here.
It ends up that the US government decided not to bring criminal charges against Gibson, opting for a settlement that had Gibson paying a "$300,000 penalty to the U.S. government, and it also has agreed to make a 'community service payment' of $50,000 to the National Fish and Wildlife Foundation -- to be used on research projects or tree conservation activities," according to an article on cnsnews.com. Interestingly, the same article reports that the US government and Gibson "acknowledge and agree that certain questions and inconsistencies now exist" relative to the imported Indian wood products and, therefore, Gibson may continue to purchase such products from India "unless and until the Government of India provides specific clarification" that the wood products are, in fact, in violation of Indian law.
As far as the Madagascar wood...it appears that wood was and is definitely illegal for exportation according to Madagascar's laws. However, even that situation is not so cut and dried and should be of keen interest to all sourcing professionals. Here's why...
In a US Department of Justice memo summarizing the investigation, there is buried this interesting paragraph:
"Gibson ordered ebony fingerboard blanks to use in the manufacture of guitars from T.N. GMBH, a company based in Hamburg, Germany. Based upon documentation now in Gibson's possession, T.N. purchased some of its ebony fingerboard blanks from R.T., a forestry operator in Madagascar. Gibson maintains that specific information concerning that sourcing was not provided to Gibson by T.N. when Gibson placed its orders. Gibson assumed, without asking, that T.N. had undertaken to provide it with lawfully harvested and exported materials and, after the execution of the search warrant in this case, T.N. represented to Gibson that it had supplied legally obtained and exported materials."
So, Gibson bought the "illegal" wood from a supplier in Germany, who bought that wood from a supplier in Madagascar. But, in the end, Gibson is held responsible for illegal sourcing. This case has several sourcing lessons:
My hope for you is that you never make a sourcing decision that invites a SWAT team.
To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com
The Lacey Act, as amended in 2008, now makes it illegal for a US business to purchase any plant that is sold in violation of a foreign law. A United States Department of Agriculture document says that "It is the responsibility of the importer to be aware of any foreign laws that may pertain to their merchandise prior to its importation into the United States. Currently, the U.S. Government has no plans to create...a database [of applicable foreign laws]."
Apparently, some wood purchased by Gibson from India and Madagascar was originally considered to be illegal for export from those countries and, per the amended Lacey Act, by default, illegal for purchase by a US company. Despite the massive news coverage at the time of the raid, there was very little coverage of the resolution this past August. So little, in fact, that I did not see any coverage at all until now, when I got curious and googled the topic.
I guess sourcing news isn't sexy to the general public unless guns are involved. So, despite the fact that it is somewhat "old news," I think the resolution is still relevant and I will cover it here.
It ends up that the US government decided not to bring criminal charges against Gibson, opting for a settlement that had Gibson paying a "$300,000 penalty to the U.S. government, and it also has agreed to make a 'community service payment' of $50,000 to the National Fish and Wildlife Foundation -- to be used on research projects or tree conservation activities," according to an article on cnsnews.com. Interestingly, the same article reports that the US government and Gibson "acknowledge and agree that certain questions and inconsistencies now exist" relative to the imported Indian wood products and, therefore, Gibson may continue to purchase such products from India "unless and until the Government of India provides specific clarification" that the wood products are, in fact, in violation of Indian law.
As far as the Madagascar wood...it appears that wood was and is definitely illegal for exportation according to Madagascar's laws. However, even that situation is not so cut and dried and should be of keen interest to all sourcing professionals. Here's why...
In a US Department of Justice memo summarizing the investigation, there is buried this interesting paragraph:
"Gibson ordered ebony fingerboard blanks to use in the manufacture of guitars from T.N. GMBH, a company based in Hamburg, Germany. Based upon documentation now in Gibson's possession, T.N. purchased some of its ebony fingerboard blanks from R.T., a forestry operator in Madagascar. Gibson maintains that specific information concerning that sourcing was not provided to Gibson by T.N. when Gibson placed its orders. Gibson assumed, without asking, that T.N. had undertaken to provide it with lawfully harvested and exported materials and, after the execution of the search warrant in this case, T.N. represented to Gibson that it had supplied legally obtained and exported materials."
So, Gibson bought the "illegal" wood from a supplier in Germany, who bought that wood from a supplier in Madagascar. But, in the end, Gibson is held responsible for illegal sourcing. This case has several sourcing lessons:
- It's nice to talk about trusting suppliers. But when it comes to legal compliance, sometimes trusting a supplier isn't enough. You need to verify. Trust may please the textbook writers, but when your company is getting raided by officials with guns, who gives a crap about pleasing textbook writers? Oh, a supplier may not like feeling untrusted but, I would wager that Gibson's sourcing team would tell you, that would pale in comparison to the pain that Gibson felt as a result of the raid. If a supplier or buyer is uncomfortable with a discussion that may feel like trust isn't at its maximum, one or both needs to grow the proverbial pair.
- When it comes to legal compliance, just having visibility in the first tier of the supply chain isn't enough. You need to be able to trace your supply chain back as far as it goes. You can be held responsible for violations at your suppliers' suppliers or even further back in the supply chain.
- You need to take responsibility for all materials that eventually make their way into your factory as if the very first stages of manufacture were conducted in your factory and not at a supplier's.
My hope for you is that you never make a sourcing decision that invites a SWAT team.
To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com
Thursday, April 25, 2013
Purchasing & Supply Management Salaries in 2013 - Free Webinar!
“How well am I paid?” That’s the question on the mind of nearly every purchasing and supply management professional. And you now have the opportunity to find out!
By attending the Next Level Purchasing Association (NLPA) webinar, "Purchasing & Supply Management Salaries in 2013," you will be the first to learn of some very revealing statistics about purchasing and supply management salaries. Are they going up? In what industry do procurement and supply management professionals make the most? What difference does certification make? And how do salaries of women purchasing and supply management professionals compare to those of their male counterparts?
All of these questions - and more - will be answered and backed by data from a survey of over 1,800 purchasing and supply management professionals from throughout the world. And for the first time this year, we’ll be sharing how much bonuses factor into the compensation of purchasing and supply management professionals!
This is a webinar you do not want to miss!
This webinar will be held on Tuesday April 30 at 11:30AM Eastern US time. This webinar is open to all members of the NLPA and a Basic Membership in the NLPA costs nothing and is instant.
Here's how to secure your attendance for the webinar:
If you're already an NLPA member: Head over to http://www.NextLevelPurchasing.com/login.html, log into the members' area, and navigate to the "Webinars" tab. There you'll find a registration link, be sure to enter a valid email address as attendance details will be sent to you by email.
If you're not yet an NLPA member: Register for your complimentary Basic Membership in the Next Level Purchasing Association at http://www.nextlevelpurchasing.com/procurement-association.php?pcb . After doing so, you'll receive an email with information about how to log in. After logging in, navigate to the "Webinars" tab. There you'll find a registration link, be sure to enter a valid email address as attendance details will be sent to you by email.
Registration is free but may be limited, so sign up soon to ensure access to this event. I hope that you will join me for this exciting webinar!
To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com
Monday, April 22, 2013
More About Procurement Negotiation Offers
I hope that you have enjoyed the article "The Art of the Procurement Negotiation Offer."
I wanted to expand a bit on Tip #3 - "Predict the Likelihood of Scaring the Supplier Away." For some of you, you may think that it is unrealistic for a supplier to be scared away. They are in the business to sell, right?
Well, yes, but there is a line that can be crossed that can send the supplier running for the door. That "line" can vary from situation to situation, but here are some variables that can make a supplier less willing to put up with hardball negotiation:
By the way, I do not regret either of the times suppliers have walked away. In both cases, I found excellent (perhaps even better) suppliers. Plus, I learned from the experience. Finally, I validated my personal belief that I do push things to, but not over, the line when I negotiate, which is a better alternative than being too soft and depriving your organization of profits that it deserves.
To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com
I wanted to expand a bit on Tip #3 - "Predict the Likelihood of Scaring the Supplier Away." For some of you, you may think that it is unrealistic for a supplier to be scared away. They are in the business to sell, right?
Well, yes, but there is a line that can be crossed that can send the supplier running for the door. That "line" can vary from situation to situation, but here are some variables that can make a supplier less willing to put up with hardball negotiation:
- If the supplier is already performing well, financially, and has plenty of other prospective clients competing for its capacity
- If the supplier is a service-provider and your contact is the person providing the service. These people may take personal offense to a "low-ball" offer and feel that you are devaluing their personal work.
- If the supplier has many clients, making your organization more of a "number" and less essential
- If your organization has no marketing value to them other than the payments that you will make (i.e., giving them a testimonial would not be of value because other prospective clients would not recognize, or be impressed by, your organization's name on the supplier's customer list)
- If your choice of words takes on characteristics of a personal attack
By the way, I do not regret either of the times suppliers have walked away. In both cases, I found excellent (perhaps even better) suppliers. Plus, I learned from the experience. Finally, I validated my personal belief that I do push things to, but not over, the line when I negotiate, which is a better alternative than being too soft and depriving your organization of profits that it deserves.
To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com
Friday, April 12, 2013
On Average, How Many Times His/Her Salary Does A Procurement Professional Save?
"On average, how many times his/her salary does a procurement professional save?"
That's just one of the questions that is answered in the just-released 2013 Purchasing & Supply Management Career & Skills Report - a publication annually issued by the Next Level Purchasing Association (NLPA). The report is free to all NLPA members and an NLPA basic membership itself is free and instant.
In addition to learning the answer to the above question by reading the report, you'll learn:
If you're already an NLPA member: Log in to the members' area at
http://www.NextLevelPurchasing.com/login.html and navigate to the "What's New" tab. There, you'll find a link to the report dated April 9, 2013.
If you're not yet an NLPA member: Sign up for your free membership in the Next Level Purchasing Association at http://www.nextlevelpurchasing.com/procurement-association.php?pcb. After doing so, you'll receive an email with information about how to log in. After logging in, navigate to the "What's New" tab. There, you'll find a link to the report dated April 9, 2013.
I hope that you enjoy this free resource from the NLPA!
To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com
That's just one of the questions that is answered in the just-released 2013 Purchasing & Supply Management Career & Skills Report - a publication annually issued by the Next Level Purchasing Association (NLPA). The report is free to all NLPA members and an NLPA basic membership itself is free and instant.
In addition to learning the answer to the above question by reading the report, you'll learn:
- What skill procurement professionals think is most important to their jobs (HINT: Once again this year, it is NOT negotiation)
- What the average per-person annual cost savings for procurement professionals is overall as well as in over 50 different industries
- What effect certification has on cost savings performance
- And more!
If you're already an NLPA member: Log in to the members' area at
http://www.NextLevelPurchasing.com/login.html and navigate to the "What's New" tab. There, you'll find a link to the report dated April 9, 2013.
If you're not yet an NLPA member: Sign up for your free membership in the Next Level Purchasing Association at http://www.nextlevelpurchasing.com/procurement-association.php?pcb. After doing so, you'll receive an email with information about how to log in. After logging in, navigate to the "What's New" tab. There, you'll find a link to the report dated April 9, 2013.
I hope that you enjoy this free resource from the NLPA!
To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com
Thursday, April 11, 2013
How to "Make Procurement Rock"
We all want to find that "one thing" that will help us quickly and substantially improve our procurement departments' results, right?
The Next Level Purchasing Association (NLPA) aims to give you what you've been looking for with our first annual NLPA Conference!
With the theme "Make Procurement Rock," we've put together not only an impressive array of thought leaders ready to teach you and your procurement team some insanely effective best practices, but we've also prepared an event designed to be the most fun procurement conference you've ever been to! The NLPA Conference will be held on September 12-13, 2013 in Pittsburgh, Pennsylvania (USA).
You can download the brochure at
http://www.NextLevelPurchasing.com/resources/nlpaconferencebrochure2013.pdf
or visit our conference page at
http://www.NextLevelPurchasing.com/procurement-conference-agenda.php
I hope to see you in Pittsburgh in September!
To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com
The Next Level Purchasing Association (NLPA) aims to give you what you've been looking for with our first annual NLPA Conference!
With the theme "Make Procurement Rock," we've put together not only an impressive array of thought leaders ready to teach you and your procurement team some insanely effective best practices, but we've also prepared an event designed to be the most fun procurement conference you've ever been to! The NLPA Conference will be held on September 12-13, 2013 in Pittsburgh, Pennsylvania (USA).
You can download the brochure at
http://www.NextLevelPurchasing.com/resources/nlpaconferencebrochure2013.pdf
or visit our conference page at
http://www.NextLevelPurchasing.com/procurement-conference-agenda.php
I hope to see you in Pittsburgh in September!
To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com
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