Looking through the soft commodity futures, and particularly the changes over the last month, three figures caught my eye. Cocoa futures have risen 6.46%, Sugar (no.11) has risen 14.68% and coffee has rocketed 22.3% in the last month.

Understandably, it wasn’t that long ago we were talking about soft commodities hitting the heights – but there is an interesting sideline to this, as I was reading in the FT recently.

The ballooning price would seem to have no small matter to do with the influence of certain traders, particularly in the London market, amassing strong positions through buying up large chunks of the market, then manipulating the futures prices.

Although there is, as far as I have understood from various sources, nothing illegal in this – yet the London International Financial Futures Exchange received complaints from 16 trading organisations a couple of weeks ago saying they were “shocked with what is happening on the London cocoa market”.

The implication, whether founded or not, is that the kind of speculation these plaintiffs are unhappy with destabilises markets for consumers and suppliers. Many take the view that it is a lack of transparency and unreliable data that is making this market less predictable. Either way the effect is the same and it will make various commodity buyers nervous.

The reality is that tight supplies are pushing these prices up at an alarming rate and managing that will be a big test for procurement as recovery continues to be dogged with uncertainty. Whether or not its the action of traders, farmers or the exchange, the main thing that matters is having the intelligence to anticipate it, and the foresight to build in measures to adapt.

If there’s one thing that the service providers I’ve spoken to recently would be likely to agree on, it’s that 2010 has not been easy – not by a stretch. Uncertainty continues to hold back the wild growth that many predicted. But the possibility that customers are beginning to grow restless with traditional outsourcing models is even more intriguing.

“While there is significant interest in conventional outsourcing, a growing number of buyers are also exploring options like virtual IT infrastructure and software as a service”, noted managing director of Equaterra’s global research, Stan Lepeak. Equaterra’s Q2 research showed quite convincingly that the economy is gradually becoming less of a driver for traditional outsourcing deals and customers are investigating the alternatives.

Meanwhile, TPI’s quarterly index painted a similar picture of a slow and uneven recovery for outsourcing. However, buried within that is the figure that suggests that 78% of the company’s clients have had internal discussions about cloud computing. Equaterra, meanwhile, found that 53% of service providers reported software as a service deals already under way.

For some this will insinuate the much-heralded rise of cloud computing. But, while this may well be the case, not all companies are keen to adopt potentially risky technology simply because they’re there. The abundance of these conversations could also be interpreted as a sign that the current fading interest outsourcing deals is giving way to enthusiasm to ask what else providers can offer. This could set the scene for a jolt in the adoption curve on some of the fresher models.

And not just the adoption of cloud services, but in areas like BPO, where outsourcing relationships are much criticised by various commentators who feel that they are not innovative enough, or are simply outdated models. There’s clearly scope for development.

A few weeks ago, I blogged about outsourcing not meeting expectations for growth. I’d argue that there’s a lot of data in these reports released this week that suggest that change may be around the corner.

Steve Hall is senior staff writer of Procurement Leaders. To find out more about the magazine, click here.

Vance will be announced shortly as Aberdeen’s new leader for its Procurement and Supply Management. He strengthens an already strong team there. Spendmatters broke the news here.

Vance and I worked together for years at Oracle. During the .com boom days Vance was ‘CEO’ of Oracle’s Exchange.Oracle.Com business. He spent many years as leader of Oracle’s Procurement product management organization. More recently, Vance was top gun in a global overlay sales group – a key expert who not only interacted directly with prospects but also advised regional sales forces on trends in the Procurement market.

To date, one of the most impressive things I can say about Vance is that everyone we both know likes, admires, and respects him.

It will be great to see how the new and very much energized team at Aberdeen can do in the Procurement analyst market. Given the inexplicable lack of investment from other research firms, perhaps Aberdeen will take a chokehold on research and become the clear #1.

Furthermore, in a press release noting the appointment, Walmart President and CEO Mike Duke suggest that, “As we continue to become a truly global company and address the business challenges of a rapidly changing world, it is clear that Global.com and Global Sourcing are critical to our future growth and success … Appointing him to this role demonstrates our commitment and the importance we assign to these areas and to building the next generation Walmart.” In addition, the move will “also allow Eduardo to relocate to California to be with his family during his wife’s illness.”

In other words, there are a couple ways to read into this internal move from a sourcing and supply chain perspective (and a familial one). On the one hand, Eduardo is a strong global operator. He has extensive experience running operations in both Latin America and Asia (he ran all of Honeywell’s Asia-Pacific operations in the late 1990s, Wikipedia notes). Clearly, Wal-Mart is facing the greatest challenge it’s ever had from a cost management standpoint, with goods coming from China in the coming years given the rising China price. It would seem Eduardo has the right qualifications and on-the-ground experience in the region to navigate all the options Wal-Mart has available (and the general management skills to oversee what is already one of the best global sourcing teams in the market). On the other hand, the personal aspect of Eduardo’s situation with his wife suggests that the location and possibly the demands of his old position — in-country managers in the retail business often have very heavy travel schedules to visit regions and stores — also points to the need for a change of pace.

In short, from a global procurement and supply chain perspective, it’s not worth reading into this announcement as a shake-up inside Wal-Mart or necessarily a shift in strategy. Rather, it appears that Wal-Mart is actually taking care of one of their own during a challenging family time as well as putting a seasoned GM in charge of a global sourcing operation that will clearly require some serious strategic decision making on an operational and cost level, given factors outside of its control in China.

- Jason Busch

 

In previous posts, I brought up the fact that if analysts are running analytics without using optimization, their results may come up with AN answer that satisfies all of their business criteria, but not necessarily the BEST answer. Depending on the category of the criterion, this could impact anywhere from 1-20% of the total spend.

Additionally, if using pre-bundles, there is a tremendous amount of hedging of the supplier’s upward bids in case they are awarded a bundle in which they have no direct supply — meaning they would need to purchase some of the items at a higher price and then re-sell them. This pre-bundling also does not allow the suppliers to package items together in a way that enables efficiency within their operations. If the suppliers are able bundle the items a way that makes the most operational sense for them, then they can produce them at a lower cost, and thus pass those savings on to the buyers. In effect, the suppliers make more money and the buyers save more money.

Unfortunately, unbundling and bidding on the individual items makes for many, many more individual items that are out to bid. The optimization engines need to be scalable in order to handle tens of thousands of items instead of just a few.

– Dr. Jason Brown

Transformation is a universal constant that affects our lives from the moment we are born until we leave earthly existence behind. At the root of all growth, we find change. Occasionally, change and the circumstances leading up to it are a source of extraordinary joy, but more often than not they provoke feelings of discomfort, fear, or pain. Though many changes are unavoidable, we should not believe that we are subject to the whims of an unpredictable universe. It is our response to those circumstances that will dictate the nature of our experiences. At the heart of every transformation, no matter how chaotic, there is substance. When we no longer resist change and instead regard it as an opportunity to grow, we find that we are far from helpless in the face of it.

Our role as masters of our own destinies is cemented when we choose to make change work in our favor. Yet before we can truly internalize this power, we must accept that we cannot hide from the changes taking place all around us. Existence as we know it will come to an end at one or more points in our lives, making way for some new and perhaps unexpected mode of being. This transformation will take place whether or not we want it to, and so it is up to us to decide whether we will open our eyes to the blessings hidden amidst disorder or close ourselves off from opportunities hiding behind obstacles.

To make change work for you, look constructively at your situation and ask yourself how you can benefit from the transformation that has taken place. As threatening as change can seem, it is often a sign that a new era of your life has begun. If you reevaluate your plans and goals in the days or weeks following a major change, you will discover that you can adapt your ambition to the circumstances before you and even capitalize on these changes. Optimism, enthusiasm, and flexibility will aid you greatly here, as there is nothing to be gained by dwelling on what might have been. Change can hurt in the short term but, if you are willing to embrace it proactively, its lasting impact will nearly always be physically, spiritually, and intellectually transformative.

Prepare purchase orders and send copies to suppliers and to departments originating requests.

Determine if inventory quantities are sufficient for needs, ordering more materials when necessary.

Respond to customer and supplier inquiries about order status, changes, or cancellations.

Perform buying duties when necessary.

Contact suppliers in order to schedule or expedite deliveries and to resolve shortages, missed or late deliveries, and other problems.

Review requisition orders in order to verify accuracy, terminology, and specifications.

Prepare, maintain, and review purchasing files, reports and price lists.

Compare prices, specifications, and delivery dates in order to determine the best bid among potential suppliers.

Track the status of requisitions, contracts, and orders.

Calculate costs of orders, and charge or forward invoices to appropriate accounts.

Check shipments when they arrive to ensure that orders have been filled correctly and that goods meet specifications.

Compare suppliers’ bills with bids and purchase orders in order to verify accuracy.

Approve bills for payment.

Locate suppliers, using sources such as catalogs and the internet, and interview them to gather information about products to be ordered.

Maintain knowledge of all organizational and governmental rules affecting purchases, and provide information about these rules to organization staff members and to vendors.

Monitor in-house inventory movement and complete inventory transfer forms for bookkeeping purposes.

Monitor contractor performance, recommending contract modifications when necessary.

Prepare invitation-of-bid forms, and mail forms to supplier firms or distribute forms for public posting.

1.  Understand how big it is. Before you bid something out, do your homework and understand what level of effort is required to do the work you are bidding out. If you were to do the project, how many people and what skill would be required, and how long would it take? Is it a simple project with few interfaces, or does the project have tentacles throughout the organization? Is the knowledge required to complete the project localized, size, leadership and technical expertise components of the project before you award the or is it spread throughout the globe?

2.  Verify the service provider’s ability to do the work. Verify the ability
of the service provider and particularly its team as proposed to you to do
the work. Once you know the size of the project, you must make sure that the
service provider’s team has the same order of magnitude size perspective
that you do. The service provider needs to commit to the team business.

3.  If it seems too good to be true, it probably is. If the service provider
underestimates the magnitude of the project, the duration, the complexity or
the risk, it may offer a very attractive price. If the price doesn’t look
right (too low or too high) given your understanding of the size of the
project, verify scope and expectations with the service provider before
proceeding. Remember, the service provider would not have gotten this far in
the process if you didn’t think they could do the work, so now make sure
they understand what that means.

4.  Contract for risk and incentives. Some risk is inherent in any contract
arrangement, but minimize risk by being clear on your responsibilities, the
service provider’s responsibilities and the required deliverables. Be clear
on acceptance criteria. Make sure the service provider has incentive to
deliver a successful outcome by your measure, even under the worst-case
conditions. If nonperformance or delay by the service provider will cost you
money, the penalties for these conditions should be structured to be in line
with your risk exposure.

5.  Manage the results of the contract. Don’t “fire and forget.” Designate
someone responsible to you as the client project manager, even for small
projects. Depending on the size, your project manager may need assistance
from other technical resources or coordination assistance from other parts
of your enterprise. Make sure all of these resources are lined up before the
service provider is contracted. Have periodic meetings. Project-level
meetings handle the daily workings of the project, and the executive-level
contacts keep lines of communication open in case they are needed.

Are you looking for comprehensive staffing services where impetus is always on careful screening of the appropriately qualified candidates? If yes, then you are at the right place. PSA has been matching the right industrial workers to the right clients.

Procurement Service Associates specializes in harmonizing top talented professional candidates with companies for temporary staffing services in India, temp to Hire, temp contract, contract staffing projects and direct hire placement positions.

We are the leading IT Non-IT staffing service company in United States that service short term, long term or project based manpower staffing requirements.

Our hands-on experience in the various fields and an exclusive partnership with the companies, provide us with the access to the best and brightest talent in the marketplace, and staffing services unique in the industry

Staffing services for clients seeking employees

We use our wide industry expertise to match great employees with great companies. For employers, this means accurate placements leading to a more productive working team and less time and money spent on the hiring process

We also provide clients with our temp to hire option; we keep the new employee on Maven’s payroll for a specified amount of working hours so you can see this person in action before transferring onto your payroll.

Our direct hire service allows clients to put the employee of their choice directly on their payroll. Thus pay rolling allows companies to find the person and we handle all payroll administration, payroll taxes and quarterly reporting, benefits administration, workers’ compensation coverage and claims management, and any other employer mandated payroll costs.

Our contract Staffing Services India provides continual availability of qualified and efficient resources to the clients required to fill short-term contractual needs.
Staffing services for candidates seeking employment

Let us get you connected! This is what Procurement Service Associates offers to the job hunting people. For people seeking employment, we offer our inside connections to our area’s top employers. We are the known recruiters in the market thus having partnerships with the companies and people who hire candidates for great companies.

Human beings, by their very nature, love to gather. Yet as much as we crave community, the rigors of real life frequently interfere with our efforts to come together with likeminded individuals. For this reason, fellowship is crucial to humanity’s wellbeing now more than ever. Most towns and cities play host to a variety of small groups that allow people to congregate purposefully, but that does not mean we should not consider founding our own. When people with similar interests, ideals, or aspirations come together as a group, a community is built that provides a new dimensionality to our earthly experiences.

The formation of a group is like an invitation welcoming all those desiring companionship and camaraderie into a circle of support. You may feel driven to found a group for women, healers, knitters, readers, writers, or political activists. Rules need only be a part of your communal experience if you find that level of organization appealing, and it matters little whether your group is large, goal-oriented, or structured. When you have a firm vision of the group you wish to bring into being, hang posters, reach out to acquaintances, and get in touch with similar groups to attract
participants. Groups of likeminded individuals are to some extent inherently exclusionary, being that they serve as a supportive environment in which people who have something in common can gather. Yet such groups can also transcend the boundaries that might otherwise keep people apart, The group you create will likely attract people from many different ethnic, cultural,and spiritual backgrounds, and if you make these individuals feel equally welcome, your group will grow and thrive as a result.

Try to ward off any discouragement you feel when those intrigued by your group’s purpose are not ready to contribute actively. They are likely waiting to see how it evolves and whether you are truly committed to servingas its heart and soul. If the group you have founded is a positive influence in the life of even a single individual, it is well worth it. Your intention to bring people together will be the seed that develops into a source of nurturance and community that stays true to its purpose long after its initial incception

Ramesh C. Manghirmalani
L’Entrepreneur En Residence at The Global Foundation
Telephone: 1-408-621-3314