Governance

Successful Governance in Procurement

Image of Governance

SIG University Certified Supplier Management Professional (CSMP) program graduate Cathy Rutherford describes how curcial Governance is in a procurement organization and how it can transform your team for the better. 

Cathy Rutherford, Director of Procurement, CoStar Group Inc.

Why Does Each Step of Buyer-Vendor Relation Require Governance

Image of Vendor Relations

SIG University Certified Supplier Management Professional (CSMP) program graduate Grzegorz A. Pioruński shares a different perspective on how to implement modern governance into a supplier-vendor relationship.


Some years ago, I heard someone who had not been exposed to significant processes and had no chance to consider all industry connections of a business event say: “Why must present-day everything be a project? This is just a task to do.” These words are the opposite of how I see modern governance in business and risk management.

If you take a closer look, anything we do is a kind of project, smaller or larger, but on nearly every occasion, we plan action, steps, workflow, risk, and expected outcome. Whether or not we are aware of this, this is a fact. Even such a simple task as going to a store to purchase a loaf of bread can be described as a project.

We do plan when to go (the store must be open), what to wear outdoors (depending on weather conditions), we do plan to have some money in our pocket (enough to pay, and not too much “just in case”), we do try crossing roads safely, we do expect to return home with the said bread. The deeper you consider it, the more details and sub-tasks you can recognize. Sometimes you do this on your own; on other occasions, you may like involving other stakeholders, whomever it may mean.

The same strategy we shall apply in business. The more critical the process or, the more significant business it is, the more risky your operation may be, and the more carefully you should prepare, perform and govern the project.

Grzegorz A. Pioruński, Vice President Financial Services, BNY Mellon

The Importance of Selecting the Right Sourcing Business Model

Selecting the Right Sourcing Business Model

SIG University Certified Supplier Management Professional (CSMP) program graduate Gicela Isla-Richter breaks down the importance of the selecting the correct sourcing business model and the levels of supplier management.


The CSMP course has provided me with the tools and methodologies to help my company ensure that the supplier provides value and complies with applicable internal and external business rules. Equally important, we can better mitigate risks and work more effectively by providing the right amount of effort to manage and build a collaborative relationship with its key suppliers.

Not all suppliers should be managed the same way: each supplier requires a “right-sized” level of governance!

What is Supplier governance?

It is a framework mutually agreed upon by the buyer and supplier. It establishes and enforces rules, distributes authority, defines working environments and identifies risks.

Depending on the importance of the service or product, supplier governance can span through multiple levels of company governance: i.e., corporate, business unit, and contract governance.

Gicela Isla-Richter, Enterprise Risk Manager, Investment Industry Regulatory Organization of Canada

The Importance of Supplier Governance Programs

governance programs for procurement

SIG University Certified Supplier Management Professional (CSMP) program graduate Adrienne Westerfield outlines how supplier governance programs and relationships are extremely beneficial to all stakeholders involved and can help drive business success.


What is a governance program? During the SIG University Certified Supplier Management Professional (CSMP) program, while learning unfamiliar governance terminology, I realized I had been involved with creating and establishing various types of governance throughout my career. Supplier governance is a relationship or framework that is mutually agreed upon. Both the company and the supplier benefit from this relationship. The framework can be at a corporate, business unit or contract level depending on the needs and value sought by both parties.

If it is an established relationship that has never been formalized, adding governance will ensure contract compliance. It will mitigate risks for both parties while making sure the objectives of the relationship are met. Over time, the goals for each company may change so that the structure can be re-evaluated accordingly and adjustments made to align with a new direction or specific initiatives. A more structured governance framework will also define the roles and responsibilities for teams, departments and individuals at each company, which will mitigate the risk of any tasks remaining incomplete or done incorrectly.

Adrienne Westerfield, Contract Administrator, Louisville Gas & Electric Company (LG&E)

Making Supplier Relationship Management Work

supplier management

SIG University Certified Supplier Management Professional (CSMP) program graduate Indre Ciuberke breaks down the importance of the Supplier Relationship Management (SRM) Framework and the four quadrants of SRM communication that adjust the ways of working with suppliers. 


When you think about the Supplier Relationship Management (SRM) Framework, it’s not just walking and talking with your Organization partners and having a relationship with them. From my perspective, SRM is based on relationships, however, stressing the communication and information sharing process in the particular relationship. Usually, SRM has corporate attributes such as ensuring the governance, agenda tracking and managing risks associated with the services or products that the supplier provides to the organization.

Every team is focused on bringing value to the organization. SRM can contribute to this is to push the streamlined service delivery by becoming a core internal team in the organization's structure for outsourced service management.

Supplier Relationship Management Team Framework

Supplier Relationship Management Team Framework

I have tried to describe the basic SRM as an internal core team framework in the picture above. The idea is based on communication and information flows:  

Indre Ciuberke, Procurement Manager, Moody’s

Sustainable Sourcing 101

An image of a sustainable forest with the sun coming through the trees.

The concept of sustainable sourcing, also known as green purchasing or social sourcing, is nothing new. Sustainable sourcing is impacting nearly every area of corporate business and the consumer’s mindset. Everything from sourcing materials, talent attraction and consumer purchasing habits is changing because of sustainable sourcing growth. However, the term gets thrown around in the procurement industry quite often and is often misunderstood or misused. So, here’s a guide with all the basics you need to know about sustainable sourcing.  

WHAT IS SUSTAINABLE SOURCING

First and foremost, we have to define the term. Sustainable sourcing is the integration of social, ethical and environmental performance factors into the process of selecting suppliers. It includes purchasing sustainably preferable products and services (products made from recycled or remanufactured materials), as well as green purchasing guidelines that might pertain to certain products or commodities.  

Heather Schleicher, Chief Marketing Officer

The Role of Governance in Supplier Diversity Initiatives

The supplier community plays an integral role in improving enterprise diversity standing.

The supplier community plays an integral role in improving enterprise diversity standing. I’d like to share some observations from my career, along with tips for the supplier community and enterprise procurement teams to improve diverse supplier access, expand opportunities and provide support.

A Risky Approach to Client Management

Historically, client management and sales practices have been disjointed and focused on winning by dividing and conquering. A generation of sales teams has been trained to get as much information as possible out of the client organization to sell them what they have, instead of what the client needs, and have been somewhat siloed in the process.

In large supplier organizations, clients doing business with them on the applications side would struggle to engage from the marketing or infrastructure side. This short-sided view usually led to the client chasing the supplier organization to find the right resources.

The "whole client" management approach is necessary to transform the sales process to fit the more modern and sophisticated enterprise customers. Not having a modern sales approach is one area where clients, both Procurement and business stakeholders, get incredibly frustrated when dealing with a supplier organization. Many of the practices considered “old-school sales tactics” have become relatively visible to the enterprise client. For example, taking enterprise employees (particularly business stakeholders) to lunches or dinners at fancy restaurants, sporting events in private boxes and conferences in an attempt to build relationships, with a focus on gaining commitment to sales, early visibility and access to opportunities.

Purvee Kondal, Senior Director of Technology & Engineering Sourcing

The Impact of the Pandemic on Strategic Relationship Management & Governance

Beyond the terrible human tragedy that COVID-19 represents, the pandemic has staggered economies, forcing businesses to re-examine every aspect of their operations.

Strategic relationship management and governance (SRMG) in the absence of a strong operational framework can be challenging in the best of times. As we are all too aware, these are not the best of times. Over the past six months, we have faced enormous challenges; the speed of change and the need for quick decision-making is unprecedented. 

As the world struggles to recover and our workplaces, global supply chains, manufacturing and logistics cautiously rebound from the first wave of the COVID-19 pandemic, we are grappling with what the future holds.  Our strategic relationships will require flexibility and scenario planning that incorporates significant uncertainty as we face challenging times ahead.

Partnerships between clients and service providers are being tested like never before. These partnerships require an SRMG framework that adapts quickly to change. You should identify pain points as well as processes or services that must be added or changed to accommodate shifting priorities and workplace requirements.

The pandemic raises many critical questions that must be addressed as we consider what the workplace of the future will look like, and strong SRMG will be essential.

Here are a few critical questions to consider:

Does your contract with your strategic partner have the flexibility you need in the current environment?

Every business has had to adjust during the pandemic. Is your contract holding you to an agreement that doesn’t make sense in the current environment, or requiring your partner to perform in a way that doesn’t suit your current needs? It may be time to renegotiate a new contract that has the flexibility that you and your strategic partner require.

Ingrid Finn, President and CEO, Sireas, LLC

How a Tainted Supply Chain Spelled Disaster for the e-Cig Industry

e-cigarette supply chain

America’s love affair with e-cigarettes evaporated quickly as millions of users were recently confronted with unnerving news—their vapes could actually contain toxic chemicals powerful enough to be deadly.

With 12 confirmed deaths and more than 800 people sick with a mysterious lung illness, tainted THC-infused vape products appear to be the culprit. Unchecked systemic risk combined with a complex supply chain has jolted the e-cig business.

The CDC issued words of caution on September 27, “Anyone who uses an e-cigarette or vaping product should not buy these products off the street.” The sentiment is clear—consumers need to avoid e-cigs from potentially shadowy manufacturers and distributors fed by an unregulated supply chain.

Duty to the Consumer

E-cig manufacturers have a responsibility to pinpoint precisely what in their products is harmful, just as distributers must be confident they are only carrying reputable items that are sourced through a responsible supply chain. Many vaping products have been found to contain illegal synthetic marijuana, even when consumers believed they were buying THC-free products such as CBD pods.

In an industry as young and unregulated as e-cigs, it’s not surprising an unknown health consequence was lurking on the horizon. Consumers had no idea what ingredients or manufacturers to be wary of because no one yet knew there was a concrete hazard.

Liz Mantovani, CSP, CSMP, C3PRMP, Director of Operations, SIG

Governance and Implementing Transformation – The Importance of Executive Sponsorship

SIG University Certified Supply Management Professional (CSMP) student, Justin Kline, works at Canon. In this blog, he shares his learnings about the pivotal role of executive sponsorship in governance transformation and how his team plans to implement some of the best practices within his job function and organization.

In this program, SIG University students will comprehend the significance of governance, risk and compliance. They’ll understand the various levels of supplier management governance, including corporate, business unit and contract level activities. They are also able to select the appropriate governance program, and key components, for each relationship model. They gain an effective understanding of how to capture and activate innovative ideas through the governance structure, in addition to describing the critical tools to use in implementing a governance program.


 

At Canon, I am responsible for scoping and delivering outsourced services to our customers. Today, our customers are looking to Canon not only to take over a business process but also to assist or lead the transformation of the process simultaneously. These types of projects require more time, resources and investment by both sides to achieve targeted results. This level of investment and risk makes these projects higher profile.

Justin Kline

Pages