Monthly Archives: December 2015

Sydney the Monster Stops Bullies

 

“The story’s bottom line is a powerful moral of friendship, love and support; forces that can transcend bullying and bring any child’s life back on track,” explains the author. “It is vital that children learn to recognize the social, physical and psychological effect that are part and parcel of bullying. Preaching directly to children doesn’t work, so I opted for an enchanting story with a happy ending! All kids love monsters, hence why I created such an unusual main character. Sydney is able to influence children in a way no human can, and the fact that he is one step removed from real life allows children to confide in his message in a way they simply couldn’t with any friend or relative. It’s powerful stuff.” The author sees wide appeal for his work. “There’s no denying that bullying is an epidemic that knows no geographical or cultural boundaries. Therefore, this book has truly global potential. There should be a copy in in every home, school, church or any place where young people congregate. It contains a message they desperately need to hear.” ‘Sydney the Monster Stops Bullies’ is available now!

Sydney cover 2 copy

Information-Based negotiation

An information-based negotiation is a radically different approach to negotiations. It emphasizes deep knowledge of the supplier and their industry. It transgresses from some traditional approaches to negotiations. It is not the adversarial win-lose negotiation style with the emphasis on game playing, theatrics and taking full advantage of a supplier’s weaknesses. An information-based negotiation is not the win-win model either. Information or knowledge is power, but in information-based negotiations the purchasing professional gains a deep understanding of the supplier’s industry, their margins and their culture. In essence this is an immersion or empathy with the supplier and their competitive landscape. The best way to describe it is that the purchasing professional knows as much or more about the supplier and their industry as they do!
In my recent book Common Sense Supply Management I state, “The very best piece of negotiations advice I ever received was to know the capabilities of your supplier, their industry, their competitors, their cost drivers, their margins and their capabilities better than they do. It requires a lot of homework, digging and flat out work. You obviously cannot do this with every supplier only the most important and most strategic ones. It is a powerful negotiation tactic based on knowledge not histrionics. There is no glamour in the information-based approach it requires immense research about the industry, the suppliers financial condition and competitive forces. Understanding their culture and their organization is critical. You are in essence trying your best to put yourself in their shoes, and mimic as best as possible their anxieties and fears about the whole process. The information-based approach is not for the faint hearted or those who do not want to persevere. It should only be exercised for critical materials or services. It requires ongoing market research and it will work better when executives are actually exchanged with the supplier on their site. The resources and commitment to pull off such an information based approach are significant.”
With the Internet the gathering of information for the information based negotiations approach has been greatly facilitated. There are numerous industry reports, websites and search engines that can help the purchasing professional. Nothing beats personal face-to-face contact and dialogue with numerous suppliers in a particular industry. They all have a fairly keen knowledge of their competitors which can rapidly improve your overall knowledge. Since many industries are oligarchic in nature, once you understand the top three or four players in the industry you have a real good foundation from which to start partnerships with your chosen supplier.
I suggest the purchasing professional consider using the Porter Five Forces analysis. Although this used extensively in marketing and marketing analysis, it can be invaluable to the purchasing professional. This will provide a good start for industry understanding. Another good source for information about suppliers and particular industries are distributors. Often they are glad to provide information about suppliers and especially their customer service. Here is a general diagram of the approach to information based negotiations that I have used:

IBN

De-mystifying Lean Six Sigma (LSS) for Supply Chain and Purchasing Professionals

LSS
Many supply chain and purchasing professionals are intimidated by Lean Six Sigma (LSS) and its proponents. Relax; it is just a disciplined approach to problem solving. It uses many tools that have been around for years and the tools have just been cleverly repackaged by consultants. Decisions are data based, disciplined and plodding. Without top-down commitment, it is doomed to fail. Make sure you secure this executive commitment, and better yet make participation a strong criterion for individual performance reviews (raises). Projects should be selected by ROI and since much time and teams are required for a project, they must return or save at least $300,000 to qualify as a full blown LSS project.
Supply Chain and purchasing professionals must be involved in sourcing the LSS consultant. Experience is critical and a proven track record of project success essential. Get references and insist on examples of work. Use a fixed hourly rate and make sure all developed training and projects remain your property. You can try to make the contract performance based but many LSS firms will not agree to this. Make the goal to be self-sufficient internally within two years with all LSS training and projects.
Some projects that have been done in purchasing and the supply chain are: inventory cost, part obsolescence prevention, lead-time reduction, backlogs, unexpected orders, customer service internal and external, cost of schedule changes, transaction flows, cost of return product, and supply chain optimization. Many of these involve process mapping which is a type of flow chart that illustrates how things are done and identifies areas of strength or weakness. LSS is not the only tool that can be used by supply management professionals for improvement. In my experience LSS should be used when the potential savings is great and you have some good data to analyze. If you do not have good data the LSS project will take even longer. If data is sparse, the Lean approach is much preferred which is highly visual, intuitive and does not require as much data.
Always Lean a process before your use LSS. By this I mean eliminate any redundant steps in the process that can be easily eliminated first. Reduce the number of variables in the process. Try to understand the voice of the customer (VOC) clearly before your start process improvement. Remember if the customer does not really care or value a process step; ask yourself, “Why are we doing it?”
Finally use kaizens for straight forward less complicated projects. The kaizen approach is usually done by the work team using the process and strives to eliminate waste in the process. The new kaizen improved process should then be quickly implemented. Supply chain and purchasing professionals must take the leadership role in LSS, Lean and kaizens. In my professional experience, the rewards of these approaches can be astounding. They do however require a measured and disciplined approach, and a commitment to not giving up!

A New Way to Look at Paying Procurement

A New Way to Look at Paying Procurement

supply_chain
Most supply chain professionals are familiar with the best practices of a supply chain organization and how to transform purchasing into a lead strategic partner in a company. These usually include a thorough spend analysis to focus on the major areas of materials and services. Another aspect includes the rationalization of suppliers and the formation of a few key partnerships with important suppliers. The institutionalization of a comprehensive sourcing methodology is also crucial. The area that is often overlooked or neglected is the investment in people!
Many purchasing professionals have been rewarded for bureaucratic and tactical behaviors for many years. The culture of risk aversion is prevalent and roles are particularly well-defined and limited. They focus on a particular material or service and become “experts” on these items. Often they work in silos and have no real connection with operations. It is usually not their choice but the expectations of the culture or of their organization.
The retraining of supply chain professionals begins with developing the capability to lead cross-functional teams not only in sourcing, but in process improvement activities such as Lean and Lean Six Sigma. Most need to reach the level of at least a green belt in a process improvement approach, and to reinvent themselves to be total product experts not just a particular material expert. You have to be a product expert to understand the Voice of the Customer (VOC) or what is really important to them. This requires striving to become an expert in an entire industry not just a narrow material. It also requires a dedication to understanding and working with operations. Performance reviews need to be tied into how well they do in predicting the market trends of their particular industry and meeting or exceeding the VOC.
All too often this training is piecemeal, unorganized and uncoordinated. Fortunately there is a comprehensive approach that has been around for 40 years that works in many industries particularly ones where employee knowledge is highly valued like the chemical, oil and process industries. The approach has been called pay-for-skill or pay-for-knowledge. Employees are paid more for each skill or knowledge area that they develop, and demonstrate their proficiency in by job performance. It does require a significant monetary investment by the organization in training employees and the organization evolves to a continuous learning campus. The word campus is critical because many organizations partner with local technical schools or universities to jointly provide the comprehensive training and courses.
Unfortunately many organizations have disinvested in training employees and would rather outsource for many skills or functions. This is deadly to the supply chain concept and process improvement, which must strive to constantly improve the entire supply chain from start to finish without breaks which may or may not be performed better by an outsourced entity.
The major objection to the pay-for-skill approach is the cost and the length of time for payback from the employees’ improved knowledge. Once in place, however; the power of this employee intellectual capital, and the momentum of continuous improvement, establishes a supply chain centric organization that is nearly impossible to beat competitively.
People transform supply chains and organizations not technology or best practices.

Tom DePaoli