BuyTrain News

May, 2004

Professional Development
  ISM News
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North to Alaska!

Make plans to attend the 61st Pacific Northwest Purchasing Conference October 7-9, 2004 at the Anchorage Marriott Downtown. The NAPM Alaska conference is committee is hard at work on the programs. We'll get details to you as soon as we can. 


Are your subcontractors subcontracting?

All Purchasing and Contracting professionals need to read this article from the Chonicle! 

This is an extreme example of work being subcontracted by contractors and the Buyer eventually loosing control of private information. Loosing the information is bad enough, but the buyer has probably also lost legal privity and jurisdiction.

Before dismissing it as irrelevant, consider the kinds of information and data your company provides to contractors and vendors. What are the possible ramifications if someone gets that information and uses it maliciously.

Competitive designs, proprietary tooling and unique specifications are only just a few obvious items to consider. Also consider:
- business plans (we're going to build 400 over the next year),
- new markets (this next order will ship to our new warehouse location)
- classified or national security information (these parts are for the new security system at...)

At the least you should reconsider any personal, private or financial data processing that your company out sources. Where is the information really going? Who has control of the data? Is it being stored by one or more subcontractors? Not to mention just plain old security concerns wherein you grant access to your plant and discover that your carefully selected contractor is subcontracting labor to a fly-by-night labor source in an obscure 3rd-world country.

So - what are we to do about it? Here are some ideas:

  1. Ensure that contracts, purchase orders, etc. include language which prevents contractors from subcontracting without specific consent of the Buyer.
  2. Include a privacy clause that specifies all information, data, analysis, extrapolations etc. may be only used for the performance of the contract and nothing else.
  3. Retain ownership of data, designs, analysis and ensure all sensitive information is returned and not recorded or retained by the contractor.
  4. Sensitize your payables department to look for invoices that show different company names or remit to addresses.
  5. ASK the subcontractor before award and on a regular basis during performance. "Are you subcontracting any of this work or allowing any of this information to be processed outside of your organization?"
  6. Be sure that anything sensitive or important is clearly identified as such. Maybe even include a penalty. Example: "This tooling is considered proprietary and is not to be disclosed, duplicated or copied in any way. Loss, damage or disclosure may be considered a violation of contract terms by contractor. In addition to such other penalties that may be imposed by the court, Contractor agrees to reimburse Buyer $ xxx "

Still not convinced it's a concern? Try this exercise.

At your next staff meeting, group function or round table discussion at an
affiliate program; brainstorm and answer these three questions.

  1. What kinds and types of information/materials/access does you company put into the control of contractors which could be detrimental if lost, stolen or misused? Example: proprietary tooling or access to private information stored on a computer laptop.
  2. What controls does the company have or can put into place to ensure that
    contractors can't subcontract or loose control of that data or materials?
  3. What indicators can buyers looks for to reveal potential problems?

Professional Development

Sharpen Your SoftwareTools

Are your software skills helping you or frustrating you? 

Surely by now you've heard the parable about the two lumberjacks in a wood-chopping contest. One Lumberjack worked furiously over the long day, never stopped to rest, but still lost. The second lumberjack also worked hard, but he took a number of breaks and yet he won. When asked how he could have done it even though he took several breaks, the winner replied, " I wasn't taking breaks to rest, I was taking time to sharpen my axe."

The moral of the story is clear. A sharper axe cuts faster. In the long run, talking the time to sharpen your axe is much more efficient that just working harder and faster.

Now how can that story apply to us? I'm glad you asked.

For most of us our 'axe', has become the PC. We work furiously to process large amounts of data, analyze spreadsheets, compose correspondence, store and retrieve documents and locate information buried in the vast expanse of the World Wide Web. Software has become the working tool used by professionals to cut through the information tasks at hand. 

Read the full article: Sharpen Your Software Tools


ISM News

Just in ETime

Results Of The 2003 ISM Member Needs Survey
Periodically, ISM conducts a survey to determine member opinions and perceptions about existing ISM programs, products and services. This survey also gathers information about the program topics, methods of delivery and other program particulars that members are most interested in. Members are also asked for feedback on their interaction with ISM headquarters staff, and general demographics information is collected. The last time the Member Needs Survey was conducted was back in 2000. To
read the new 2003 Survey results see: 

2003 ISM Membership Demographics Report
The Demographics Report is a concise, stand alone document that reports key demographic information from the 2003 Member Needs Survey. To review the Demographics Report go to: 

Principles of Social Responsibility
As part of its commitment to lead the profession, the Institute for Supply Management(tm) (ISM) has created Principles of Social Responsibility, a document designed to provide a framework for supply professionals to be leaders in the area of social responsibility. ISM's Principles of Social Responsibility can be viewed on the ISM Web siteat


White collar Crime in the field of purchasing has always been a major concern. Now with increased attention resulting from the Sarbanes Oxley Act  procurement controls are finally getting some direct attention from senior management. The hot question of the day is "What kinds of process controls do we need?"  You can help answer the question and become a more valuable resource to your company. Start by checking out this web site. Use the menu to drilldown on ways to Identify and Detect Fraud. Spend a few minutes reading some of the case studies. 

Here is one case study that should raise the hair on the back of your neck:

Find more news and articles in the BuyTrain Archive 

Visit the Purchasing Toolbox for more articles on negotiation, E-Commerce and Professional Development

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That's about all for now. Hope you find something useful!

Provide Feedback and suggestions for future newsletters at any time. I'll try and use what I can.



MLTWEB is assembled and maintained by Michael L. Taylor, C.P.M. 
Materials and articles prepared by Mike may be shared for purchasing education provided that this source is cited and no fee is charged. The rights for any other use are withheld.
Copyright;  Michael L. Taylor, C.P.M.
Last Updated: 11/26/2016