BuyTrain News

May 2010

Happy Spring!

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Education

I O U

Angel Mendez presented the opening remarks at the ISM Internationals Conference in San Diego. It was one of the best presentations I've heard in a long time. Mendez spoke about Supply Chain networks and their value to global businesses. The example he used was the impact to the supply chain at Cisco because of the Iceland volcano. It clearly demonstrated that we no longer can assume our Supply Chain is only one truck backhaul away.

 It was also one of the most well done Power Point shows I've seen. I have a page of notes that I want to share with you. But in case I don't get to it soon enough I wanted to let you know that Angel Mendez is speaking at again at an online conference on June 15. Registration is free. http://cscosummit.raptureworld.co.uk/ Angel Mendez is Senior Vice President of Customer Value Chain Management at Cisco.

Educational Events

  • NAPM Columbia Basin dinner program May 26.  "Improve Your Contract Negotiation Techniques "Gary L. Hopper, MBA, C.P.M. , OPBC   Owner: Total Cost Solutions  http://www.totalcostsol.com/.  Read more here....   May 26 th  6:30 p.m.  Cousin’s restaurant, Road 68, Pasco. No-host dinner starting at 5:30p.m.;  order from the menu and pay individually. No program cost to NAPM –CB members and guests. Space is  limited – RSVP to Michael_L_Taylor@rl.gov

  • NAPM Western Washington located in Seattle, will be hosting a one-day seminar on negotiation in June. Read here
     

  • NAPM Spokane will be hosting the Pacific Northwest Purchasing Conference in October. Keep your eyes on this web site for conference information. http://www.napmspokane.org/seminars.htm

TeamBuilding

Building an effective team is an important part of managing an affiliate or working on a task. One person can start a team just by recruiting another person to help. To help the newly formed team grow, and keep them on track takes some thought and effort. At the ISM Leadership program in San Diego, I had the opportunity to share a few of my thoughts on teambuilding. Link here to download a copy of my Team Building presentation. This presentation was a logical follow-up to my remarks last year on Leadership. In case you missed it, here is a link to the Leadership presentation. On this web page, you'll find other workshop Programs, Seminars and Handouts.

Advertise Your Next Program on YouTube

Send out program notices including a 30 second video trailer of the speakers. Add the YouTube video to your affiliate program web page. Just about any new cell phone or iPhone can do it. A real-time video trailer was one of the great ideas discussed at the leadership program this year. To prove how quickly and easily it could be done, one of our participants, captured a short video trailer of me and posted it on YouTube before the program was over. View the example on this page.

Lack of Planning?

“ The best professional procurement manager and the best low-cost suppliers can’t overcome the excess costs, lost profits, production delays and missed business opportunities caused by poor planning and lack of communication.”

"Grasshopper thoughts: Understand the value of good vendor relationships vs. the excess cost of freight and other logistical costs to ship last minute items or urgent supplies that were not ordered in a timely manner. It actually helped me to think about why I react to some requests the way I do. I have had items become urgent way too many times and have had to shipped up parts way too many times at an inflated cost of both parts and freight when poorly planning was the problem."

So…….. any of us could write the article; but how are we going to get management to read it?  Try using a chart like the one below to show the net impact of poor planning.

Item

$ Estimate

What Happened

Why?

 

50 gpm pump

 

 

What we should have paid  $ 

$500

Our best supplier with lead time = 2 weeks

If we had lead time to go to our preferred supplier and negotiate our best price and normal lead time

What we had to pay <$ >

<$650>

Only supplier who had it in stock when we needed it immediately (because someone forgot to plan ahead?)

Price paid to the only source we could find at the last minute who had the item in stock

Excess Freight Costs <$ >

<$100>

Airfreight from California

Expediting costs & freight charges to get it delivered overnight

Excess Internal Costs <$>

<$100>

Courier to airport (2 hr); procurement  (3 hr); engineer to evaluate alternative (1 hr); management (1 hr)

Repackaging, air freight to plant, courier service, administrative time

Direct Cost Loss

<$350>

 we spent more than we should have

   = Should pay – actual costs

Work Around Costs  <$>

<$1000>

Last minute modification to design, temporary repair of old equipment to hold until replacement could be obtained

Lost Productivity <$>

<$2000>

Revised schedule, impact to other plans, design changes, safety risks, additional regulation liability, impact to other purchase schedules, impact to customers, missed business opportunity, loss of “most favored” customer status with suppliers, cost of money, lost profit, worker stress

Net Impact to Business

 <$3350>

 The net impact to business finances because we had to obtain the pump without adequate planning.

 Accountants and business owners speak this language  < $ >. They understand losses - now it's up to us to explain why.

Accounting Changes Ahead

International Financial Reporting Standards (IFRS) is the new global accounting system being implemented worldwide Read the full article by Todd Neely in Inside Supply Management http://www.ism.ws/pubs/ismmag/ismarticle.cfm?itemnumber=20069  Here are a couple of excerpts I found interesting:

Last in, first out (LIFO). The change to LIFO is easy to understand. IFRS does not permit inventory to be valued using the LIFO method. If you are valuing inventory using LIFO, implementing IFRS will require switching from LIFO to another method. The switch can have large tax consequences and should be thoroughly investigated to minimize taxes

Inventory valuation. Under GAAP, inventory is valued once. As long as the inventory sits on the shelf, it reflects the historical prices paid. Under IFRS, inventory is valued at current market price. For many inventory items, the number of turns is high, resulting in current market price being equal to historical price paid. But for other items, significant changes between the price paid and current market price will require repeated revaluation to report the inventory's true value.

Long-term contracts. Under GAAP, possession and ownership are not the same. Under lease or consignment agreements, you can have possession but do not own the inventory. The inventory would not have to be included in the reporting of your financial statements. Under IFRS, when you take possession, you take responsibility. When you are responsible for an item, it is to be reported on the financial statements

Personal Development

Professionals develop their own professional development programs! No one would want to use a doctor or a tax attorney who hasn't kept up with the latest advancements. Are we any different than them? Only if we hope that someone else will take responsibility for our professional development. Read more.... Here is a different look at a strategy

The Christian Doctrine

In discussion with a government contracting officer (CO) about prime contract flowdown provisions someone might mention the Christian Doctrine. Basically it's a legal decision which could affect all of us who have prime contracts with the Fed.. Ernest Gabbard, JD, CPSM, C.P.M., CPCM, mentioned it in his web seminar for the ISM Federal Acquisition and Subcontract Management Group. The Christian Doctrine is a reference to a legal case, wherein the courts held that a contract clause required by Statute or Regulation can be read into a government contract (even if it wasn’t included in the prime contract directly) . Example: the Buy American Act (it’s the law) would be part of our contract even if our CO forgot to put the clause in our prime contract.

It’s a subtle point – but it makes arguing with the Fed about applicable clauses in the prime contract just a little bit harder.  Because I knew you’d want to know…. and be prepared for the next time someone refers to the Christian Doctrine as it pertains to government contracts:

https://akss.dau.mil/askaprof-akss/qdetail2.aspx?cgiQuestionID=13106&cgiSubjectAreaID=5

and for you  over-achievers and raise-the-grading-curve people: http://cases.justia.com/us-court-of-appeals/F2/312/418/53812/

My Resume... Note to Self

  • Don’t use – or repeat words that imply minimal responsibility.
    - e.g.     “assistant” or “support” .  Instead; use better sounding words like “managed administrative details for high energy 5-person team”

  • Don’t use phrases that sound like you were the last resort for the job.
    - e.g. “ brought in” or  “phased in”  . Instead use; “recruited”,  “promoted” or volunteered

  • Don’t list extraneous information unless you relate it to the performance expectations of the hiring manager.
    - e.g.  “ swim coach, summer of ‘42” . Instead; “Coach, responsible for scheduling 43 member swim-team workouts, and motivating teenagers to achieve superior performance”

Growing Where?

Are you seeking advancement or a new job with more responsibility and a bigger paycheck? ISM has published the latest salary survey. Great information if you are considering asking for a raise or trying to determine what industry to move into if you want to increase your earning potential. http://www.ism.ws/pubs/ISMMag/ismarticle.cfm?ItemNumber=20335

Reality Check:

I talk to a lot of Supply Chain Professionals from all over the world. I've interviewed many candidates and conducted numerous professional development workshops. One thing is very obvious when you get them all in the same room. Employment standards and expectations are very different in various locations and different companies. Unfortunately, many of the experienced people I talk to aren't qualified for the jobs they want - and even worse, they don't realize why.  So,...........If you expect to crawl out of your shell and qualify for a better paying job elsewhere, then you need to see what will be expected. The least painful way to checkout the competition is to mingle with other professionals  at an ISM workshop or conference. You don't want to find out the hard way that the grass is a different shade of green on the other side of the fence.

ISM News

Leadership Programs

If you missed the ISM leadership training programs, you missed a great chance to network with other affiliate leaders. Programs on membership and affiliate management were mixed with discussion forums on a variety of timely affiliate management issues including. We wrapped up the program with an open discussion about connecting with younger affiliate members. The leadership training programs are held just prior to the ISM International Conference. Registration is free to affiliate members who want to participate. Our next leadership training program will be held  in conjunction with the ISM conference in Orlando on May 13, 14, 2011. You can find copies of previous program materials in the members-only area of the ISM web site at http://www.ism.ws/MembersOnly/content.cfm?ItemNumber=18768

The leadership Program Planning Committee will be considering program ideas for the 2011 affiliate Leadership workshop. Please send me your Leadership Workshop program suggestions and I’ll pass them along to the committee.

Leadership program are a great place to train, encourage and energize key members of your affiliate. Officers, Committee Chairs, Board members, and other active volunteers all benefit seller the information about ISM and networking with other affiliate members. Encourage affiliate members to plan on participating.

Newsletters from ISM

Subscribe to one or more free email ISM newsletters and stay in touch with current professional news. http://www.ism.ws/account/EmailPreferences.cfm?navItemNumber=3D4912

Knowledge Transfer

Interesting article in the May edition of Inside Supply Management by Jay Pendergrass. Pendergrass is talking about the organization imperative to transfer knowledge from senior people (who might soon retire) to the younger workforce.  With changes in communication styles and data information availability on the internet, I think the task of transferring knowledge to new workforce is more complicated than ever. The global data network is so easily accessible that traditional training plans focusing on "what you need to know" are boring and superfluous. I don't blame the younger workers for not seeing the relevance.

To make the transfer of information more attractive to younger workers, review training plans to see if they focus on "how" and "why" rather than "what". It will take some work to help senior members of the company to get in the habit of explaining "why" or discussing options.  Given that our workforce could see some dramatic changes over the next few years – It's important that we do our best to encourage effective communication between the various age groups in the office.  Read the article in the members only area of the ISM web site

Report on Business

Did you notice that the latest PMI index is 60.4. The rate of growth as indicated by the PMI is the fastest since June 2004 when the index hit 60.5 percent. As a leading economic indicator, the PMI index has a pretty good track record. It might be had to imagine now, but if the economy has truly turned around, it would probably be a good time to start discussing long-term contracts.

Software Tips

Want to set up a temporary discussion forum for your organization or company. It could be a place to talk about program ideas, training needs, collaborate on process improvements or share best practices. Setting up an online discussion forum is easy and there are several free web sites that make it a simple task.  An Administrator will set it up and then controls passwords or access codes for the rest of the group. Users can be restricted to only people with the access code and updates can be hidden from public view if so desired. Take a quick look at one of these sites to see how easy it is to get started. www.FreeForums.org  

Dirty Computer?

Is your computer full of cat hair and dust bunnies? If you haven't opened the case and cleaned you PC in the last year, chances are that a software infection may not be your biggest worry. Computers full of dust can eventually shut down when air circulation is obstructed. Read more about cleaning your PC here.

Hotlinks 

Business FUNdamentals

Some fun ideas to turn your next teambuilding experience into a fun experience.
http://www.businessfundamentals.com/tips_and_ideas/tips_and_ideas.htm

A Different Way of Looking At It

Interesting type of clock  http://home.tiscali..nl/annejan/swf/timeline.swf

Government Contractor Web Site Help

There is a web site set up to help people use some of the government web sites. It provides answers to questions about CCR , EPLS and several more. https://www.fsd.gov/app/about 

Could be a useful reference for contractors (or us) who are trying to use those systems Check out the FAQ list to get an idea of the types of information they can provide. Forward the web site to contractors who have questions. https://www.fsd.gov/app/answers/list 

A few quotes from George Carlin

  • Keep learning.  Learn more about the computer, crafts, gardening, whatever, even ham radio. Never let the brain idle. 'An idle mind is the devil's workshop..' And the devil's family name is Alzheimer's.
  • Enjoy the ride. There is no return ticket.
  •       Life's journey is not to
    arrive at the grave safely
    in a well preserved body,
     but rather to skid in sideways,
    totally used up and worn out, shouting
     '...man,what a ride!'

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

I really do appreciate those of you who take the time to write and comment on this newsletter! As always, you are welcome to use my articles or presentations for educational purposes. Just as long as you are not charging for the materials and credit the source.  

TTFN, 

Mt

 


Read more articles in the Purchasing Toolbox at http://www.mltweb.com/prof/tools.htm and in the BuyTrain news article archive at http://www.mltweb.com/tools/buytrain/index.htm Return to MLTweb

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