How many !!!’s make a PR hot?

Like any company, sometimes The Company has procurements that need to happen RIGHT NOW.

We also have our fair share of Chicken Little’s who make things critical when they don’t really need to be.

According to our Buyer Manger, it only take the word “hot” in the header of the PR to make them prioritize the purchase.

But there is any array of things that clients do to make sure we know it’s really, really, super duper, *totally* hot.

Exclamation points are often used: hot!!!!!

And asterisks: **hot**!!!!

And capitalization: ***HOT***!!!!!!!

So really, a the end of the day, this is what makes the PR prioritized as urgent: hot.

What we get is:

!!!!!!***********HOT HOT HOT***********!!!!!!!

And a variety of other urgent looking symbols.

Funny thing is…I find that the more pixels the request takes, the like likely it is that it’s actually flaming hot.

The truly critical orders just usually say so and they get taken care of.

Ah the games clients play.

When the lines blur

I’m one of those folks who, usually, can leave work behind at 5:00 p.m.(or whenever). When my hand hits the door on the way out, I’m done. I can go a whole weekend, usually, without thinking about work (until the Sunday night blues kick in).

For me, I think this is a nice way to keep sane. Home life. Work life. And as little as possible shall the twain meet.

But every once in a while, my two worlds collide.

I am currently hiring a creative person to perform a valuable service for me. I’m paying a not-insubstantial amount of money out of my little pockets for this work.

And, as to be expected when that much money is on the line, in meeting with this, we’ll call, Supplier, a one page contract was slid across the table, and I was asked to sign.

Now, see, I have a mental block about “just signing” ANY set of T’s&C’s. Call it a hazard of my profession.

So what do I do…even on my day off? I read. Every word.

When I arrived at the bottom of the page, my first thought was, “Whoa…if I was this person’s advisor, there is a LOT more I’d put into this contract”.

Next thought was, “Well, it’s actually not that bad, all in.”

I then read it again. Taking note of what was in the contract. And more importantly what wasn’t in the words.

In the end, I realized it was a fairly equitable contract. If push came to shove and I had to “get Legal” on this Supplier, it might be a tough haul. Lots of he said/she said. Then again, do I personally really have the money for a court battle? Not really.

And it did mention arbitration. So okay.

With trepidation, I signed.

Credit card numbers were provided.

And soon enough, we’ll see performan.

Oh, and I do get a bit of “acceptance” in the deal. So okay.

Once again the power of reading the fine print.

Oddities R Us

Being a part of the gray cubicle walled office environment for some fifteen years now, it’s often given me pause to ponder.

One of the most perplexing phenomenon is now greatly affecting my own organization.

The effect is this: the reward for being a top-notch performer is, often, that you get more work. You don’t often get any more raises or bonuses than the rest, just more responsibility.

That’s happening to my team of high performers.

The Company’s procurement team is roughly broken down based on commodities we buy.

But life being what it is, not every procurement fits neatly into this structure. There is a lot of “gray area”. Projects that aren’t easily categorized.

They gotta land somewhere. Some procurement professional has to step up to the task.

I’m noticing, recently, that all these oddballs keep dropping like rain on my team.

Part of this is that my folks have worked so hard for their clients, those folks will come to us for EVERYTHING, knowing how hard they work. We often have to deftly hand them off to other teams (with the ensuing wailing and gnashing of teeth).

Part of it is from our Chief Procurement Officer who sees the stats on our performance and figures we can handle the weird ones.

To be fair, the team *can* handle the unique stuff. But it takes longer, is a learning curve, and we get no relief on the regular old stuff either.

We’re seeing stuff on our desks that NO ONE has ever seen before. There’s no turning to a FAR or DFAR to figure out how to buy these things.

Time to make it up as we go.

What do they always say?

Read the fine print.

One of my folks had what we’ll call a “learning experience” this week. It’s one of those smack-to-the-head type of lessons.

She knows better, she really does, but got snagged in one of the oldest supplier tricks in the business.

She’s been negotiating for weeks with this slimy but anxious vendor.

They’d run through pricing time and time again, she ground ‘em down, negotiated deftly and at times got tacky with the Sales Weasel’s arrogance.

Finally, the vendor sent in a quote with some good looking numbers. The quote was the exact same format as the previous eight or ten she’s seen, so she didn’t look too close.

With new quote in hand, copies were printed and a meeting was scheduled with The Client. Actually, a new client group for us so even moreso are we trying to make a good impression. Anyone we can bring “into the fold” is a good thing.

So while my Contracting Rep was presenting the kick butt deal she had negotiated, a Client executive said, “uh…did you see footnote number six?”

Contracting Rep’s eyes scanned down to bullet six…and her eyes widened appreciably.

Footnote number six said the supplier had the right to do a press release about the deal, that The Company would participate in publishing press and that The Company would provide glowing reference calls. Oh and that Sneaky Vendor could use our name, logo and CEO’s social security number on their website…or something like that.

No wonder we got such a great deal, eh?

With red face, the hardworking contract’s professional apologized for her mistake.

The Client was very understanding. In fact they were interested in this bit of obfuscation on the part of the vendor.

See, The Client already had concerns about the supplier.

So they told their procurement rep to “put the deal on hold.”

My Very Angry Employee at least got the pleasure of telling the Sales Weasel that he’d made a mistake. That’s all she told him. Then she cut off all further contact, letting anxious boy swing in the wind.

Sometimes, karma really does work out.

This was a hard lesson on her. She’s beating herself up about it, but shouldn’t.

Because you know what else “they” say?

All’s well that ends well.

My Procurement Rep will go on to do great things. Of that I’m confident.

And I know I’ll personally be remembering to look at the “small print” a little closer from here on out.

in memoriam

I’m sad to report that today, a deal died.

It was a good little contract. Tenacious. Strong. Fought valiantly in its brief life.

I pushed this seemingly healthy contract through Legal, Risk and the clients.

It survived at least four rounds of negotiations. Exhaustion. And the supplier threatening to walk away.

The pricing isn’t great, but it was workable.

The SLA’s are moderate, but usable.

The terms and conditions are not bad, considering how badly they were bloodied in the legal tug-of-war.

While holding a tube of oxygen up to the nose of this little contract, I presented it to the executives of The Client.

They discussed the conduct of the supplier.

And the marginal pricing.

And “do we *really* need to be spending this money when we have a solution that works?”

Legal was summoned to try to resuscitate the deal, but was unable.

Finally, those responsible decided to let the deal go quietly. The plug was pulled.

It breathed its last sigh quietly today.

Now to break the news to the Sales Weasel.

He won’t take it well.

The gas problem is everyone’s problem.

You know, it’s easy for me to complain about the pinch my wallet feels with the ever rising gas prices. I pay over $4 at the pump. Ouch. Those alternative commuting methods are starting to look pretty good.

But what I didn’t realize, and shame on me, really, is how much the petroleum industry of the world impacts our lives. An especially bad showing as I am a procurement person and as such, paid to think about such things.

But the impact is there.

Easy one: Shipping. My suppliers are squawking about how their shipping costs have gone up. They can’t get the product here for what we negotiated in the deal. They need relief. I’m prone to say no, then again, they can’t control fuel pricing.

Either way, someone has to pay the gas for trucks and planes that move the world’s products.

Less easily spotted: Plastic takes petroleum. So as oil goes up so does the price of plastic components. I can use fabric grocery bags in my “real life” but at work, we have lots of plastic in what we make and buy and no ready alternative. Suddenly we’re getting the screws put to us on some of these items. Whooda thought that a plastic staple puller would be more expensive because of petroleum pricing? But it is.

Yeah, I didn’t even fathom this problem ahead of time. But here it is staring me in the face.

The suspicious part of me asks, “Is it *really* a fuel problem or are eager suppliers taking advantage of the media saturated situation?”

Probably a little bit of reality, a little bit of opportunism.

Either way, I’m starting to feel the pinch of this oddball recession. What’s next! A tax on my coffee? Oh, wait…

Smooooth sailing

Sometimes, things just work. And when they do, when you are “in the groove,” it’s a happy thing.

Two days ago, The Client reminded me that a contract was due to expire in the next couple weeks.

We’ve been real happy with this supplier and want to keep doing what we’re doing.

But as the Procurement person, I know that most vendors see a renewal as the prime time to “stick it to you” on pricing. “Oh, but it’s been a whole YEAR since we last talked about pricing!”

So although I like this supplier, it was with dread that I sent out a quick amendment addressing only the date, standard verbiage at the end “all other terms and conditions remain the same.”

To my pleasant surprise, the supplier returned a scan of the signed copy within about three hours. No complaints. No ’stick it to you’. No hassle.

No wonder I like them so much.

Smooth sailing from here until next year.

Now on to the next problem……

Hurdles.

What’s the biggest challenge a Procurement Professional faces?

Making sure you get the best price.

What’s the best way to achieve that?

RFx.

What’s the most painful, time consuming thing a Procurement Professional has to do?

RFx.

Yup.

An RFx is the heart of what Procurement does. Competition is good. Leverage is good.

But managing any RFx can be a painful process.

One of the rock stars on my team is facing a challenge. We’ve got a *huge* RFP coming. It is a hotly contested, much desired bit of business.

My employee wants to limit the bid list to only three or four. She knows she can manage that size.

There are well and truly at least ten suppliers in this space who should be given an opportunity to bid. Probably more like twelve. When she looks at a list that size, the blood drains from her face.

What’s a Procurement officer to do?

Well. Those hurdles have to be scaled. They *must* or you’ll never know if you left a lot of money on the table.

Choices?

1. If your company has budget, by all means, hire an outside consulting company with expertise in the commodity, and make them suffer the long evaluation process. Hell, they won’t suffer, they are getting paid!

There are many fine companies out there who will do this for you. However, you have to negotiate with negotiators on the pricing for this service, and that can be tricky.

2. Use your tools. Does your company have a reverse auction, dynamic bidding, e-Procurement tool? It’s called all three and more. Any online tool that manages the process for you. Be advised, using dynamic biddings means you move the majority of the work to the FRONT of the RFx process. It’s not easy getting an e-Procurement event set up. LOTS of input time. But once it’s set up, running the event and the evaluation is a snap.

3. Gut it out. Have a plan ahead of time. Make up a score sheet. Brief your team on just what the objectives are and how we’re going to score it. Utilize your project manager skills and if you don’t have any, consult with a project manager at your company. I bet they have a project template they are willing to let you have. A plan ahead of time makes all the difference in the world.

But whatever you do, don’t wimp out. Your job, and you chose to accept it, is to get the best price for your company. Less dollars out the door is music to the ears of your Chief Procurement Officer. Use every bit of leverage you have, and competition is the best way to go. Even if it means a LOT of work in evaluation phase.

Plus, running a bidder’s conference in a hotly pursued race can be a lot of fun. It’s the last time you’ll see your supplier being SO nice. And that is a good thing.

Now get out there and jump those hurdles!

Most Favored Torment

There is a bit of a kerfuffle going on where I work. The Company is one that makes stuff so there is Procurement on the “direct” side of the house. Meaning that which goes into product we sell. Then there’s MRO Procurement. Everything that’s not manufacturing and keeps the company running.

Over on the manufacturing side of the house, the fine, hardworking procurement folks put a “Most Favored Nation” or “Most Favored Customer” clause into all of their contracts.

What this clause says, essentially, is that the supplier promises to always give you, the customer, the best pricing. The pricing they would give their best customer. Always.

Needless to say, the suppliers have a lot of reasons not to agree to this clause. That said, the manufacturing guys have had a lot of luck getting chip, resistor and pcb manufacturers to agree to this clause. And good on them, I think it makes a lot of sense in commoditized items like that.

Our Chief Procurement Officer spends about 97% of his time on the manufacturing side of things. That’s what brings revenue into the company. Recently, though, the CPO has been looking into some of the bigger deals on the MRO side. And he’s noticed the distinct lack of MFC clauses in our deals.

Then he went ballistic.

When he returned to earth, he made it clear, from here forward, it goes into every deal we do.

Well. That’s not necessarily an easy order for us little soldiers to carry out.

I can manage the average supplier protestations, “It’s too hard to manage”, “I do deals for the government and can’t possibly give everyone that pricing,” and “It’s unenforceable”.

But how do you actually make this work with something like a professional services company that does fixed price SOW based projects based on our guidance. Is there comparable pricing? Maybe. Maybe not.

MFC clauses are not a one size fits all bit of language. However, to my CPO, they are.

So we now labor to get this into every deal we do, whether it makes sense or not.

Today in staff, this topic was discussed again, of course. My buddy who heads up the Facilities team told us the latest salvo launched by a supplier in their team.

In the redlines, they not only crossed out the MFC language we put in, they then added in exclusivity language (language that says we’ll only buy the specified products from them).

THAT is chutzpah.

The uphill battle continues.

It’s a proud day.

One of the great joys of where I’m at in my career is the time I spend mentoring up and coming procurement professionals. As I’ve mentioned before, I have a team of rock stars, and they are really the future of this organization.

I learn as much from them as they do from me. Perhaps more, but don’t tell them that, ok? I need to keep them humble.

I have a fairly new person on my team. She’s been here since December and in a short time has impressed the hell out of The Client, her coworkers and me.

She can be a little demure sometimes, owing a bit to her personality, a dash of it owing to her career prior to here with a bank, and finish off with adding in a bit of her culture. You get the picture.

But I always say you have work with what you got when it comes to negotiating. I don’t expect her to change who she is. She has to use her quiet demeanor as a source of strength, not weakness.

So yesterday, she very politely told a supplier, “I feel like I’m buying a hotdog from a vendor, not a high technology item,” which shut the guy right up.

That made me smile, but that’s not what puffed out my chest.

You see, we have an over anxious and quite shady supplier (read down a few entries, you’ll see what I’ve been on about). The Sales Weasel has been making everyone crazy.

Enthusiasm = good

Buzzing Gnat in my Ear = Bad

The Client is feeling cornered. Procurement is getting worn out.

So this oh so polite woman had finally had enough. She picked up the phone, and told Sales Weasel in no uncertain terms, that we need “breathing room” and that if he doesn’t back off, he’ll lose the deal.

She said it in a calm, quiet, steely voice.

Have you ever noticed that sometimes, a quiet steely voice speaks volumes louder than shouting?

Yeah.

The future of this organization is in good hands.