Striking the Perfect Balance between Service Parts Planning and SLA Performance White Paper (A Baxter Knowledge Leadership Library Publication) “The ability to comprehend the complexity of service parts procurement in which a balance between satisfying client service level requirements and bottom line financial considerations extends beyond the mere provision of a traditional warehouse management technology.

While we are grateful to Smarter Solutions for their sponsorship support the provision of this PowerPoint presentation should not be construed as an endorsement by Procurement Insights. As with any product or service, it is up to you the reader to make an informed decision regarding its potential value to you or your organization.

While we are grateful to PrintVision for their sponsorship support the provision of this PowerPoint presentation should not be construed as an endorsement by Procurement Insights. As with any product or service, it is up to you the reader to make an informed decision regarding its potential value to you or your organization.

While we are grateful to QStrat for their sponsorship support the provision of this PowerPoint presentation should not be construed as an endorsement by Procurement Insights. As with any product or service, it is up to you the reader to make an informed decision regarding its potential value to you or your organization. That said it is our firm commitment to ensure that only the most credible organizations are provided with access to this venue. As such you can be certain that a sponsor’s appearance is a reflection of the high standards of ethical conduct under which they operate.

While we are grateful to CW Solutions for their sponsorship support the provision of this PowerPoint presentation should not be construed as an endorsement by Procurement Insights. As with any product or service, it is up to you the reader to make an informed decision regarding its potential value to you or your organization.

The following position has been posted on the Procurement Insights Career Exchange Page (http://www.procureinsights.wordpress.com/procurement-insights-career-exchange/). If you have a position that you would like to list, or would like to indicate your availability to pursue a position with another organization, please send your information in confidence to jwhansen@sympatico.ca. Vice President, Strategic Sourcing Post Date: July 8, 2008 (Reference No. 1-Jul8-2008)

As popularity for the Procurement Insights Blog continues to grow I spent a great deal of time and thought on how to make my expanding library of white papers, reports and studies available to my readership. Specifically, how do I provide you with optimal access to assess the veracity and applicability of my work on a cost basis that makes sense?

Whenever you purchase a Hansen Consulting and Seminars Inc white paper or service, you will receive a $25 HCSI credit certificate towards your next purchase. Accumulating knowledge through sharing knowledge! Whenever someone you have referred purchases a Hansen Consulting and Seminars Inc white paper or service, you will receive an HCSI $25 credit certificate towards your next purchase. As good as money! Papers and services that qualify for redemption under the HCSI credit certificate program: Double Marginalization and the Decentralized Supply Chain (White Paper)

In August of 2007, I was contacted by Ariba’s PR firm indicating that they wanted to schedule an interview between myself and a senior executive from the company. The purpose for the interview was to discuss Ariba’s latest contract win in the Healthcare sector.

Awareness of the continuing high-rate of ERP/IT-based e-procurement initiative failures to deliver expected results is now entering mainstream consciousness. While vendors and those associated with the recommendation and implementation of solutions find themselves in unfamiliar waters, end-users are beginning to ask tough questions.

George Box is considered to be one of the most influential statistician’s of the 20th century. My theory of strand commonality is based on a variation of his time series analysis model which seeks to determine why and how data points come into being. The distinct difference between strand commonality and those developed or studied by Box is that he attempted to forecast versus adapt to future events based on what he referred to as “known past events.”

Recently, I had the opportunity to exchange ideas on the veracity of the various models that organizations rely upon as the framework for building a successful enterprise. What prompted this open and productive exchange of ideas was a question that was recently posed regarding the merits of Forrest Breyfogle’s latest book on Integrated Enterprise Excellence (or for those of you that have a penchant for acronyms, IEE). In the following paragraphs I will share a few of the more meaningful discussion streams starting with the original question. Original Question:

Double marginalization is defined as the “exercise of market power at successive vertical layers in a supply chain.” Dating back to Lerner (1934) the problem that arises as a result of double marginalization is tied to an impetus to mark up the product’s price above marginal cost. According to a 2005 Caltech paper (Vertical Integration of Successive Monopolists: A Classroom Experiment) the sequence of mark-ups “leads to a higher retail price and lower combined profit for the supply chain than would arise if the firms were vertically integrated.”

Over the past few weeks I have received a spate of questions regarding Procurement Insights, and in particular the services offered through Hansen Consulting and Seminars. In short what do I do, and how can I help an organization.

The People Factor “A supply chain is not an abstract network driven by processes and machines, but a real network driven by people. Good supply chains run on good people. Supply Chain Success will be impossible without the right talent, which is becoming rarer every day thanks to the global talent war. Any organization that does not have a good process in place to identify necessary skills, evaluate organizational gaps, and identify, recruit, develop, and maintain talent is doomed to become a second class citizen in the emerging international market.”

Table of Contents WHAT IS THE CORRECT DEFINITION OF STRATEGIC SOURCING? 3 DEVELOPING AN EFFECTIVE FRAMEWORK 4 OBSTACLES TO A SUCCESSFUL INITIATIVE 7 THE IMPACT OF COMMODITY CHARACTERSITICS 9 THE INHERENT DANGERS OF A PULL-THROUGH STRATEGY 11 THE MYTH OF TRANSACTIONAL REDUCTION 14 A STRATEGY OF ORDER 15 A STUDY IN CONTRASTS – SEEING BEYOND THE ORG CHART 16 THE IMPORTANCE OD SUSTAINABLE SAVINGS AND THE EMERGENCE OF SAAS 18 NYCDOE 2004 – A CASE IN POINT 19 NYCDOE 2007 – (UPDATE) 21 MURDOCH 2007 – (UPDATE) 22 ABRIEF NOTE REGARDING THE PROCUREMENT OF SERVICES 25

Table of Contents DO CANNIBALS WITH FORKS CONSTITUTE PROGRESS? 3 A TALE OF MISSED OPPORTUNITY 7 A DIFFERENT TYPE OF CANNIBAL 6 THE ENVIRONMENTAL CONNECTION? 8 A FINAL WORD ABOUT KODAK 10 A THREE PRONGED FORK 10 A PRELIMINARY SCORECARD? 13 THE CUSTOMER IS ALWAYS RIGHT! 14 GOVERNMENT INFLUENCE – THE FUEL FOR CHANGE? 15 THE INNOVATOR’S DILEMMA 17 OTHER INDUSTRIES 19 GREENWASHING! 20 FINANCIAL DISCONNECT 21 CLOSING SUMMARY 22 ABOUT THE AUTHOR 24 Appendices APPENDIX A 26

Table of Contents OLD WINE IN NEW WINESKINS? 3 SAP PPS – TRUE INNOVATION OR AN EXERCISE IN RE-BRANDING? 4 SAP’S PROCUREMENT FOR PUBLIC SECTOR: THE PAST AND PRESENT 5 SAP GLOBAL WEB SITE 6 REPAIRS ON THE FLY – OVERCOMING PAST CHALLENGES 8 A CASE FOR PPS? 9 SEATTLE PUBLIC SCHOOLS, UNITED STATES 11 ERIE COUNTY, NEW YORK (PDF, 613 KB), UNITED STATES 11 SAN LUIS OBISPO COUNTY (PDF, 848 KB), UNITED STATES 11 CITY OF OTTAWA, ONTARIO (334 KB) 11 SAP – THE DARK SIDE OF THE MOON 11 HERSHEY FOOD CORP 13 FOXMEYER DRUG 14

Table of Contents DO CANNIBALS WITH FORKS CONSTITUTE PROGRESS? 3 A TALE OF MISSED OPPORTUNITY 7 A DIFFERENT TYPE OF CANNIBAL 6 THE ENVIRONMENTAL CONNECTION? 8 A FINAL WORD ABOUT KODAK 10 A THREE PRONGED FORK 10 A PRELIMINARY SCORECARD? 13 THE CUSTOMER IS ALWAYS RIGHT! 14 GOVERNMENT INFLUENCE – THE FUEL FOR CHANGE? 15 THE INNOVATOR’S DILEMMA 17 OTHER INDUSTRIES 19 GREENWASHING! 20 FINANCIAL DISCONNECT 21 CLOSING SUMMARY 22 ABOUT THE AUTHOR 24 Appendices APPENDIX A 26

Member Question: Has anyone applied complexity theory to business in a practical way? Asheville, U.S. My Response: The chaos theory and butterfly effect are interesting concepts in terms of the “complexity” of business. Over a number of years and through funding from the Government of Canada’s Scientific Research and Experimental Development (SR&ED) Program I developed a theory called strand commonality.