If the fox is watching the henhouse

…then who is watching the fox?

“The Equal Employment Opportunity Commission, responsible for ensuring that the nation’s workers are treated fairly, has itself willfully violated the Fair Labor Standards Act on a nationwide basis with its own employees, an arbitrator has ruled.”

When is a materials shortage is a good thing?

Well, any responsible and diligent Procurement Hero would look at the title of this post and scoff. “A trick question!” they would say or “It is NEVER a good thing!!”

Well. Mostly.

Today I was checking on Google news under the search term “procurement” and an interesting article popped up.

Seems that the number of roadside bombings in Iraq has noticeably decreased. You know, those fun, destructive munitions where the Sunnis bomb the Shia and the Shib bomb the Sunnis?

Yup, have declined dramatically. Why?

Cuz they can’t get the materials.

No blast caps, no primer cord, no explosives, shells and grenades.

It’s shut down a very industrious production line!

Well ok!

The reasons are due to increased police tip offs and Iraqi army actions. But hey, this material shortage is a good thing!

Ok, ok, granted, this isn’t a traditional procurement scenario, but it shows how clipping a supply chain can be detrimental across the board!

Makes me think that much more about the issues of supplier solvency that are on the lips of CPOs around the globe.

How would YOU continue your company’s most valiant competitive fight if the key ingredients to your product were suddenly unavailable?

Deep thoughts for a Friday.

What takes priority?

These are strange days, indeed for Procurement Heroes around the globe.

Doing what we do has never been more valuable. And never been more under the microscope.

I’ve been reading (and in many cases, posting here) all the evidence that backs up my claim that Procurement needs to take the main stage to lead business and government out of this crisis.

So ok, here we are. The spotlight is on. We have their attention.

Now what?

What do we work on first?

My gut would tell me “cost savings”. The economic times are tough. My first priority is to the solvency of my newly acquired employer. Right?

Well, if you listen to Supply Chain Digest, they say otherwise.

Supplier solvency, they say, should be our number one priority.

And I can’t say I disagree. If you don’t have the critical parts to go into your product, you don’t ship product, you don’t sell product, and you don’t make money.

But then again, if you are shipping and selling product at a price that doesn’t cover costs, you are doomed anyway.

So which is right?

I would actually say, both opinions are equally true. Since we Procurement Heroes work on both sides of the equation, direct side, meaning what you buy goes into products, and indirect side, meaning what you buy goes to supporting the operations of the company, these days the Procurement organization will have differing priorities.

How about you tell you direct side folks not to take their eye off the ball when it comes to suppliers. Then you challenge your indirect folks to also not take their eye off the critical suppliers, but also look for efficiencies that can save money.

I say as a CPO you can’t pick and choose cost savings over supplier solvency. You’d better keep up with both or things will slide and slide fast.

Image lifted from Supply Chain News who lifted it from elsewhere on the web…

Termites come out of the woodwork

Money is an odd thing. When times are weird, like they are now, the termites come out of the woodwork looking for any angle.

The best device is one that makes you a bit scared, quick to take action before thinking.

So when I read this article in The Leaf Chronicle I had to sigh and shake my head because the swindle, a phony letter sent out to people who may want to business with the US Department of Transportation, is something that probably could have taken me in.

Here’s a copy of the actual letter [click here]

It says if you want to be included in DoT business, you’d better hand over your financial information. Eager suppliers in a down economy don’t want to exclude themselves from a share of DoT contracts, so boom, they send it all out, including bank account number, no question.

Ugh.

Anyhow, note to all of us, keep your radar up, eyes open, and question everything!

Practicing what I preach

I had a chance to sit next to my very busy manager (a Director) today in a staff meeting. We both arrived early and had some time to chat, along with a coworker.

She told us that a pretty well known company’s CPO will be in next week, and we’re to meet with his team and do benchmarking on procurement processes.

At which my coworker snorted and said, “Why would they benchmark us? Our processes show we aren’t really a procurement organization.”

And we laughed. Because it’s true.

My coworker then pressed on and said, “So why is that? You’d think our CPO would push to make this a more robust procurement organization since we are growing so fast.”

My director replied, “Because the CPO doesn’t think our end users are ready for it.”

To which I pulled out all of the good knowledge I’ve been sharing with my readers here. I told her of the variety of articles about both government and private sector and how they are starting to recognize the value of procurement. That these lean economic times call for a reassessment of how the procurement organization shows up in our company. I said that maybe now is the best time ever to impress upon people that we’re not here to be a foot in the aisle or a project killer. That we do add value.

My Director listened to me thoughtfully, nodded, and said, “You know, I have noticed that our end users are more conscious about their budgets than ever before….”

So, ok, I didn’t change the world today or even my little corner of it. But I got my boss to think. And if she thinks on it enough, she’ll take it to her boss (the CPO) and get them to think on it.

Change like this doesn’t happen overnight, but it takes a single spark like that to begin to get the tide to turn.

Not bad for a day’s work!

More data…

…now backed up by a big 8 accounting firm (are there still 8? I can never keep track)

The procurement function within many large corporates is under-leveraged and unappreciated, yet a crucial role beckons during the current downturn…

This, the findings of KPMG.

I’m actually really happy to see a lot of these articles on this same theme hitting the press and the web. I’ve been saying this for, oh, several months now and am starting to feel a smirky self-satisfied “I told you so” feeling.

But when I get past my personal moments of “oh I am *so* good,” I step back and am grateful that for the first time in my fifteen year career, executive management in private companies, and heck, executive management of the freaking country is finally having a breakdown and realizing that procurement adds tremendous value, when done right, and can no longer be ignored.

But don’t think for a minute we can just step up to the plate and say “neener neener, I told you so!”….we still have a lot of trust to earn.

Procurement needs to be agile. Honestly…we’re not always agile.

Procurement needs to understand what the client needs and the differences between cost and value. We’re not always great at this. Then again, our clients aren’t always great and knowing what they need.

We need to make the process efficient and streamlined. Don’t even get me started on this…

If this economic crisis breaks down some walls and helps us work better together, supplier, end user and procurement professional, then we’re doing the right thing for all of our businesses. Maybe we can weather this storm.

Meanwhile, I’ve got to follow up my incredible bout of soothsaying with a new prediction…..I’ll get working on that now.

Someone gets it!

Whoo hoo!

Article today from Federal Computer Week

“A panel of defense experts today told a Senate committee the acquisition workforce must be an important and high priority if the Defense Department wants to improve its purchases.”

and “‘Even if we pass all the laws in the world, we need the people who are going to be driving this process,’ said Gansler, who leads the Defense Science Board Task Force on Industrial Structure for Transformation.”

and “Without experienced people, the government is left vulnerable because the acquisition decision-makers won’t know what questions to ask as they develop the major weapons systems”

Yes. A bit of recognition that good, experienced procurement people who find meaning in their work and not roadblocks leads to better procurements and better efficiencies.

Heck yes!

I’d say I can finally lay down my rallying cry, but I’m afraid this is just the beginning. But it’s a damn fine start.

Experiencing something of a renaissance in the Procurement profession, yes we are.