Message from the President…Jan’09

The news media continues its projections for a gloomy 2009 for employment and for business profits. According to most projections profits in most segments will be lower than 2008. In many cases profit margins will be negative. Unemployment rates continue to raise with most projections the unemployment rate inCalifornia will exceed 10 percent in 2009. I believe the unemployment rate for Supply Chain, Contracts and Procurement professionals is not as severe.

I continue to see trends that government entities and private industry companies are expanding Supply Chain’s role in the business. Cost reduction and cost saving ventures are the key areas for most businesses and government agencies. Companies are seeking ways to reduce direct and indirect spend categories. Most government agencies are looking for cost saving opportunities. Tax revenue streams and state government grants/allocations are cut. Reducing the spend rate through labor reduction is not a viable option for them.

Companies are evaluating spend categories seeking new or improved methods to reduce costs. The process includes evaluating labor costs, process methods and agreements to purchase the materials and services. Outsourcing continues to be a viable option for some companies. However, outsourcing has many issues and in some cases many problems. The outsourcing path has many directions, many leading to a dead end. Know the outsourcing game, prepare a plan, schedule and budget for the project. Develop metrics so you can determine if the product or services is delivered according to your specifications. Look at the total cost of the service or product. Will foreign currency fluctuations impact your cost? If the currency fluctuates will your costs increase or decrease?

Cost reduction programs require expertise in change management. How to successfully implement the new process can be a challenge. Many employees resist change – why change something that works is a common comment.

Many companies and government entities will look for “project support” professionals. Rather than increase FTE’s, they will look for temporary or project support professionals. Consider this option if you are unemployed.

Procurement Services Associates/Material and Contract Services can provide project support professionals for short term and for partial work week requirements. Contact us for a list of Supply Chain, Procurement and Contract Administrators.

Look for cost saving opportunities, but can not find the talent to conduct a Spend Analysis. We have the experts that can perform the work and prepare a spend reduction plan.

Looking for E-Procurement Programs to simplify the procurement process, improve controls and provide catalogues for the bulk of your direct and indirect spend items? Check EZBuys web site for information on E-Procurement programs.

Need help locating the next career opportunity. Contact us for career suggestions.

Dan P. Plute
President