In part 3 of this 4-part series, I am covering some of the insights from a powerhouse panel of CPOs and other procurement leaders we had at the last Summit. Our own Dawn Evans facilitated a fireside chat with a group of sourcing leaders, including Linda Behan, Senior Vice President, Iron Mountain; Clyde Dornier, Head of Global Sourcing and Procurement, Visa; Cory Locke, Vice President, Global Categories, Hewlett-Packard; and Todd Podell, CPO, Alcon, who shared some pearls of wisdom on what keeps them up at night and how they have achieved success in their careers. With all due respect, I can't even begin to capture all the fantastic feedback, insights and advice our panel provided, but in my opinion, these are some of the highlights:
Being uncomfortable teaches you to succeed. This nugget came after a question regarding how the panel overcame challenges at the beginning of their careers. If you think about this one, it makes a lot of sense. Innovation doesn't come from the status quo. It comes when people are shaking things up. If you are comfortable in your job and going with the flow, you may not be looking for ways to make things better. But if you are uncomfortable for any reason — worried that something isn't "quite right," you are probably seeking ways to make things better. Makes sense, doesn't it?
You must have tenacity in procurement. It's safe to say that tenacity is a virtue in just about any career, but in procurement, it may be even more critical. Said one of the panelists, "You need to have the doors slammed in your face to become good (at what you do)." Hopefully there aren't too many slamming doors, but the reality is that talking business units into collaborating with procurement isn't always an easy sell. Tenacity is a must.
The phrase "Spend Management" is heard often today in the world of Sourcing and Procurement. It even has its own Wikipedia entry. It is often used in place of, or in the same context as "Spend Analysis." Some might think that the two are interchangeable. They are not. Each has a distinct and separate meaning. Spend Analysis is a more structured and well-defined phrase. Loosely, Spend Analysis should answer three basic and broad questions:
Patrick Reymann, Director, Strategic Sourcing Operations, Corbus
In my last post, I provided some tips for networking. I actually enjoy networking, but I know many who think of it in the same way that others think of public speaking...they are scared to death to do it. They'd rather find the one person in the crowd that they know than to seek out new connections. At SIG Summits, which attract 350-450 people, we try to make it easy to network by putting a special sticker on the nametags of first-time attendees. At the first General Session we explain the sticker and encourage everyone to "introduce themselves to the cowboy boots" (for example, since a cowboy boot sticker was the chosen icon for the last Summit in Fort Worth, Texas). It takes a lot of the pain out of the process for those who don't enjoy seeking people out and is an instant conversation starter. But if you are in a situation without your "cowboy boots," (and/or if you are a network-a-phobe like so many), perhaps some of these questions can be helpful to you. I use them when first meeting a fellow Sourcing professional.
Mary Zampino, Senior Director of Global Sourcing Intelligence, SIG
Several months ago a valued SIG member suggested we consider asking Dr. Tim Elmore to keynote at our Summit. A leading authority on generational diversity in the workforce, Tim has authored more than 25 books and appeared on CNN's Headline News and had media coverage in The Wall Street Journal, Forbes.com, and The Washington Post among others. It was immediately clear that what Tim had to say was something our delegates needed to hear. As entertaining as he was instructional, I once again found myself taking notes as quickly as my fingers could type. Discussing what he calls "Generation iY" — the second half of the Millenial Generation, so called because they've grown up under the influence of iPods, iPads, iPhones, iTunes, etc. — Elmore's keynote was on how to understand this generation to enable them to be successful in the workforce. My key takeaways from this fabulous speaker and my interpretation of how to apply them: 26 is the new 18. In generations past, many 18-year-olds left home to enter the workforce. Not only is this not as common today, but many young adults are living with parents after college, where they still have their cell phones paid for, laundry washed and meals fed. Not a bad gig if you can get it...but isn't this in fact enabling this generation to be narcissistic? Having low empathy, being ambiguous about the future, "slack-tivists," technology-savvy, self-absorbed, and postponed maturation are all characteristics/adjectives that have been used by Elmore to describe the Gen iY group.
There's nothing more I love to do than get to know someone new. I'm curious about where and how they live, if they prefer a good book or movie over a roller coaster ride (or both), if they like Beethoven or the Beatles (or both), if they went to school abroad or in the South, or wherever. I like stories. I like people. That makes it easy for me to network. However, not everyone finds networking easy. One of the top two reasons people attend SIG events is to network with other like-minded folks who are in the same roles, have similar responsibilities and face the same type of challenges. Every SIG event offers ample opportunity to network, whether at a reception or a meal or our specific speed networking program at the Summits. So whether you're at a SIG event or (gasp) another industry event, I thought I'd take a few minutes and just offer some ideas for making networking a little easier for the "non-networking-inclined."
Create your own elevator pitch - Be prepared to explain yourself in just a few minutes. It's easy to put together your story if you come up with answers to these questions:
What is your role at your organization? How long have you been in that role?
What are your immediate goals within your current role?
What are your future goals? For your current role? For your future role?
What is your boss asking you to accomplish?
What keeps you up at night?
Review the attendee list beforehand - If available, review the list of expected, registered attendees. Look for folks in your industry and make a list so you can be sure to find them when you're onsite. Ask your team members or direct reports if there are certain organizations or people you should target. Don't hesitate to ask one of the conference organizers for help making these connections, either beforehand or onsite. We at SIG are always happy to facilitate introductions!
Mary Zampino, Senior Director of Global Sourcing Intelligence, SIG
At the last Global Summit, we hit the jackpot in our keynote speakers. We had fighter pilots, CPOs, Ph.D.s and MBAs...we had practitioners, motivational speakers and authors...and we had people who have viewed things from the trenches and seen them from the sky. In each, we received pearls of wisdom...anecdotes to apply in our daily lives and corporate positions. In this series, I'll try to capture some of the key messages our general sessions provided. We kicked off the event with Carey Lohrenz, a former U.S. Navy Tomcat Fighter Pilot. Her session was inspiring and had the audience scribbling furiously, trying to capture her lessons from the flight deck that we could carry into the business world. As the first female fighter pilot, Carey learned to thrive in adversity. Some of the more poignant things I took away from her presentation...and my interpretation of how they apply to those of us in civilian clothing:
If I had asked people what they wanted, they would have said 'faster horses.' - Henry Ford It seems counterproductive to put Creatives in a box. They are meant to be thinking outside the box. Yet finding a way to work outside the box when it comes to sourcing the marketing function can be a challenge. At the SIG Global Summit in Fort Worth, I was lucky to be able to sit in on a session given by the Ultimate Fighting Championship (UFC) and LogicSource. UFC's marketing production team was in a grudge match with managing terabytes of digital assets while attempting to responsively support a rapidly growing global brand. With over 31 major events in 2012 alone, the vast accumulation of assets and dramatic increase in workload put the creative and procurement teams in a stranglehold. The UFC's internal marketing department took off their gloves and took up the fight partnering with LogicSource's OneMarket solution to create a system that automated the end-to-end process from creative requests complete to sourced services. Contracts and pricing on the backend for services were negotiated and monitored within the cloud-based system, greatly decreasing time and money spent on the bid process out of the marketing department. The deals were in place, the pricing locked in, and at the click of a button, video production or print work could be bought and executed seamlessly. By taking a year to fine-tune, document process and implement the system, the UFC put chaos into submission through the integration of digital asset management and eProcurement, cutting significant time out of the creative approval and procure-to-pay processes while enabling a lean buying team to more effectively manage its complex marketing production spend categories. This was a marketing driven project, however, and its success was driven by the fact that they had buy-in from the marketing side to begin with.
Although the US economy is improving, businesses remain focused on both increasing sales and minimizing or reducing SG&A costs. The "Order to Cash" (O2C) functions of a business continue to represent a significant part of a company's SG&A expenses and are under pressure to achieve long sought goals: to reduce costs and improve productivity, while maintaining or increasing customer service levels. Corbus regards O2C as including the functions of credit management, order processing, logistics/carrier management, returns processing, billing and collections, and reporting and analytics. Prior to the recent recession, these functions could be found sharing or spread across multiple functional areas and budgets. However, as the recession progressed, much of this changed. Businesses often adopted a strategy of separation and identification - that is, segregating these functions organizationally and financially as a way to apply management focus, create accountability and achieve goals for cost reduction/productivity improvement. In many cases these steps led businesses to greater clarity for measuring costs and productivity as well as to establish shared services centers and preposition for outsourcing. While cost savings can result from separation and shared services, cost optimization is best achieved by engaging with a compatible outsourcing partner. Under the right terms of engagement, an outsourcing partner is more easily held accountable for delivering results and attaining challenging goals to adopt efficiencies and improvements, and much more quickly. The partner needs to share mutually beneficial goals, provide intellectual property to add value, and have demonstrated experience in successfully performing the functions to be outsourced under similar conditions. The results can be staggering, with cost per savings on the order of 30% or more while achieving 2:1 productivity improvement and customer service gains.
Not long ago, rising labor costs sparked a trend among U.S manufacturers to seeking alternative sources in the Far East. But as many who moved production overseas have found, transportation costs abroad can quickly add up and be three to four times the amount of sourcing from domestic suppliers. Couple this with the time-to-market challenges related to suppliers being so far away, and unless there is a huge labor arbitrage, outsourcing does not make a lot of economic sense. Despite huge cost savings, companies have to worry about other problems like worker safety, child labor, and pollution, which can very quickly create significant risk and ultimately affect brand image. And that can have a potentially catastrophic impact on performance and profits. So a lot of companies are starting to bring production back and focusing where they should have in the first place, which is on managing risk. Whether companies are using domestic suppliers or overseas suppliers as part of their supply chain, a robust and programmatic approach to managing them is needed to reduce both supply and overall business risk. In today's global economy where time-to-market requirements are faster than ever, you need total visibility into supplier information alongside sophisticated analysis and data sharing that goes beyond traditional sourcing and supplier management. Having 360-degree visibility into supplier information and performance, for instance you can anticipate disruptions to supply and prevent them before they occur. Many companies are using innovative technologies to gain this view, tapping into business networks to syndicate supplier information and using predictive intelligence to uncover supply chain risks. When combined with the insights and intelligence that live in these networks and tools such as community ratings, and risk scores from firms such as Dun & Bradstreet and third-party sources, these technologies simplify the arduous task of managing suppliers.
Sundar Kamakshisundaram, Senior Director, Global Solutions Marketing, Ariba, an SAP company
The weeks following a Summit are always kind of sad. The euphoria of the event is over...the anticipation of seeing colleagues and friends behind us. But the things we take away from the event--the new peer relationships, the insightful things we learn--carry on for years to come. I attended some incredible sessions on topics I knew little about previously. One such session was with Ernst & Young (EY) and Caterpillar on Conflict Minerals. In the sourcing world, the term has become fairly well known, but for those unfamiliar, conflict minerals are minerals--namely tantalum, tin, tungsten and gold (aka columbite-tantalite, cassiterite, wolframite and gold)--that, much like "blood diamonds," are mined in conditions of armed conflict and human rights abuses, most namely in the Congo and adjoining countries. To me this was still a little ethereal until I dug a little deeper and learned that the "miners" are often hired by gunpoint or physically forced to do this work to protect themselves or their families. The work conditions are horrific and in themselves may result in death to the miners. In fact, more people have died in Congo Civil Conflict than in the U.S. Revolution, Vietnam War and Korean War COMBINED. Without more transparency in the supply chain, consumers don't have any way of knowing if their purchases, primarily in industries like electronics, aerospace, industrial products, automotive and jewelry, are funding armed groups that are widely known to commit human violations and mass atrocities unfathomable to most people. To address this, Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act was written that requires companies to identify where the minerals used in their products originated from. The Dodd-Frank Act has successfully reduced the amount of revenue militias are receiving by around 65% by dissuading companies from engaging in trade that supports regional conflicts.