Still at risk …

The economy may be topsy-turvy, but issues such as risk management are timeless.

I was reminded of that when Jan Husdal recently reviewed an article our consultants Jim Kiser and George Cantrell wrote in 2006 for Supply Chain Management Review.  It lays out six steps necessary to manage risks in the supply chain. Here’s the link:

http://www.scmr.com/article/CA6329866.html

One of the messages we often forget is to look beyond direct suppliers right through the supply chain. As we were saying on the PI Window on Business Blogradio program recently purchasers are prone to focus on what’s immediately in front of them. I like to use the term “supply management” or “sourcing” rather than “purchasing” because they both imply a deeper approach to the profession.

How “New” is the New GM?

It’s obvious a lot of us are waiting to see how “new” the new GM is going to be in its supplier relations. Jason Busch recently chimed in with this posting. (The link is also in my link list.)

I’ll be talking about GM and supplier relationships in general in a few weeks with Jon Hansen at Procurement Insights’ Internet radio show. More on that as we firm up the details.

Time to Rethink

As light begins to appear at the end of the economic tunnel, there are some key steps businesses should take to streamline their procurement —

Read more of this article published in the ADR International e-Newsletter.
Also in the current e-Newsletter, an article by Rebecca Howard about getting the most out of every training dollar. Professional development for procurement teams is usually a slam dunk return on investment — but training programs are not all equally effective.  Read more here.

ADR has recently launched its own ADR Academy with nine online courses on fundamental topics — from portfolio, cost and market analyses to global sourcing. Here’s a link to an article about it, and another link directly to adracademy.com.

Pro to Know, Five in a Row

Bill Michels, chief executive officer at ADR North America LLC, has been named by Supply & Demand Chain Executive magazine as a “Pro to Know” as a consultant advising companies about purchasing strategies and managing supplier relationships.
Every year the trade magazine for purchasing executives honors industry leaders who have made substantial contributions to the supply chain field. This is Michels’ fifth time earning the “Pro to Know” designation; Michels was recognized for his leading expertise in identifying troubled suppliers and mitigating the risks if they fail.
Michels is a nationally known expert on strategic purchasing, cost and change management.  He has pioneered new methodologies and theories, practices and tools for the transformation of the supply chain, helping businesses increase profitability and value. Michels writes regularly for trade publications and general business periodicals and is called on to present his expertise at seminars and conferences in manufacturing, wholesaling, chemical, pharmaceutical and commodity industries. His blog is www.sourcingguy.com.
“This year’s Provider Pros to Know have shown themselves to be thought-leaders in their respective supply chain segments,” said Andrew K. Reese, editor of Supply & Demand Chain Executive. “Their efforts in developing the tools and processes have enabled companies to weather risky economic conditions and place themselves in a position to surge ahead in better times.”

Cost Containment and the Economy

Congress and the President are getting ready to put a few hundred bucks into the pockets of most American families as a way to keep the economic pump primed. But how much difference will that make if manufacturers try to take advantage by passing along their higher costs across a broad spectrum of commodities?

Record commodity prices, such as $100-a-barrel oil, record wheat and soaring precious metal prices, have penetrated many of our supply chains. However, it’s pretty clear that consumers are not in any mood to simply absorb higher prices. Cost containment strategies by manufacturers are imperative to avoid a sharp reduction in consumer spending.

To avoid a spike in consumer costs, take action now:

Conduct cost analyses. Manufacturers should analyze supplier costs to understand the mix of material, labor, overhead and profit that are driving costs higher. An understanding of costs puts manufacturers in a better position to negotiate with suppliers seeking price increases.

Don’t accept price increases as “business as usual.” Manufacturers should make suppliers work hard for price increases by demanding three months notice, in writing, of all increase requests and insist that they are accompanied by a detailed statement of the actions the supplier has taken to reduce or eliminate the need for an increase.

Know your options. Investigate alternative materials, designs and suppliers now, before you face requests for higher prices. Manufacturers who don’t have options and market intelligence are at a disadvantage when they negotiate with suppliers.