Yearly Archives: 2008

• Resampling Stats

  Posted on December 28, 2008 by hudgeon in VendorManagement

  Good online resource on Monte Carlo simulations and resampling techniques useful in estimating the probability of outcomes with small samples or a number of variables with a broad range of potential values. “Resampling: The New Statistics” by Julian L. Simon Second Edition published October 1997 This text grew out of chapters in the 1969 edition [...]

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• Unintended consequences of measurement: Boomerang Measurements

  Posted on December 20, 2008 by hudgeon in VendorManagement

  Donald Gray posts a good example of measurement gone wrong. A software development team manager implemented a measurement system that penalised the team if they had unfinished work at the end of a work cycle, even if the reason they had unfinished work was that they finished their existing work early and started the next [...]

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• Agile in Practice – Procurement in practice

  Posted on December 15, 2008 by hudgeon in VendorManagement

  I believe there’s a lot purchasing professionals can learn from agile software development; which values iterative development and process adaptability over large-scale, long-term locking down of requirements – imagine a vendor relationship that is actively managed and can be easily dismantled vs a 15 year outsourcing agreement. The theory is that the additional effort that [...]

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• Unit testing procurement performance measurement

  Posted on November 19, 2008 by hudgeon in VendorManagement

  I’d like to see an study showing the percentage of performance measurement initiatives that last longer than a year. I bet it’s not high. My working theory is that the designers of performance measurement initiatives are too ambitious at the outset and set up measurements that never get used and therefore eventually stop getting collected [...]

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• Measuring procurement performance: Does it need to be complex?

  Posted on November 16, 2008 by hudgeon in VendorManagement

  Spend Matters recently linked to an article published by the W.P. Carey School of Business. The article, in the section “Handling challenges”, made the following observation: Handling challenges But while companies can achieve great success with their metrics programs, measuring purchasing performance effectively is not without challenges. Particularly for large, global companies, measurement programs need [...]

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• Not your grandmother’s spend analytics

  Posted on November 13, 2008 by hudgeon in VendorManagement

  I’d always been taught to do spend analytics the same way. Start with a data dump from your AP system. For illustration purposes, imagine we have a million rows of data. First, categorise every row as “Other”. (This allows you to claim that you have categorised 100% of your data and you’re only on step [...]

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• Want innovative supplier relationships? Set the right environment

  Posted on November 12, 2008 by hudgeon in VendorManagement

  A Dutch community has recorded a 44% rise in birth rates 9 months after a helicopter accidentally cut power transmission lines into town. “It was cold in the houses. They [the townspeople] went to bed early to keep warm.” Inadvertently, Maasdriel created an environment conducive to producing babies. If you want your suppliers to produce [...]

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• Performance measurement tips from search marketers

  Posted on November 11, 2008 by hudgeon in VendorManagement

  Measuring performance is hard work. It’s not just hard work in sourcing / vendor management; it’s hard work in every industry. The key is measuring outputs rather than inputs and the challenge lies in the diverse nature of the outputs. Here’s the search marketing perspective on the nature of the outputs: To effectively measure real [...]

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• The first casualty of recession is long term planning

  Posted on November 11, 2008 by hudgeon in VendorManagement

  With everyone talking recession, I’ve been asking colleagues over the past couple of weeks whether they’d rather be Coupa or Ariba in this economic climate. Almost unanimously, my colleagues have said Ariba because it’s better to be a more well-known brand in a down-turned economy, but I’m not so sure. Like a body, when an [...]

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• John Stuart Mill on the moral benefit of global trade (1848)

  Posted on November 8, 2008 by hudgeon in VendorManagement

  The economical advantages of commerce are surpassed in importance by those effects which are intellectual and moral. It is hardly possible to overrate the value, in the present low state of human improvement, of placing human beings in contact with persons dissimilar to themselves, and with modes of thought and action unlike those with which [...]

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