Professional Documents
Culture Documents
Fleet Basics
9-10
11
13
14
Contact Us:
www.NextLevelPurchasing.com
Email: info@nextlevelpurchasing.com
Phone: 1-412-294-1990
Fax : 1-412-294-1992
Mail your correspondence to Next Level Purchasing, P.O. Box 1360,
Moon Township, PA 15108, USA
Leading-Edge Supply Management is published monthly by Next Level Purchasing Association as a free
benefit to association members. If you've received a copy of this magazine from someone rather than
downloading it directly from the Next Level Purchasing Association, you can sign up for a free association
membership to have access to this and other free benefits.
Just visit http://www.NextLevelPurchasing.com/nlpamag and submit your name and email address to join
the Next Level Purchasing Association. Reproduction of this magazine in whole or in part without written
permission by Next Level Purchasing is strictly prohibited.
Fleet Basics
Special thanks to Source One Management Services for this guest post by Jonathan Groda
With volatile cost components like fuel and regionally variable maintenance labor rates, fleet operations can be an
intimidating area to source and identify savings while maintaining program consistency. Where does one even start? After
conducting multiple fleet sourcing initiatives with clients of varied size and nature, I have learned a few lessons. If one thing is
certain, it is that no two fleet operations are the same. Each requires custom management and unique approaches to cost
savings. Here are a few key considerations for reviewing and assessing cost saving opportunities within your fleet operations.
Original Equipment Manufacturer (OEM)
What types of vehicles makeup your fleet?
Are they fairly similar?
Can you stratify your fleet into distinct categories
based on their daily use?
Leasing
Who is your primary leasing provider?
Are you leasing from multiple companies?
How are your dealer incentives structured?
Fuel
Do you have a fuel card program?
Do your locations have tanks onsite?
Does your fleet utilize wet hosing services?
Some dealers offer a fixed discount on all vehicles leased through their
program. While this will give a consistent dollar value discount, you
could be saving more by negotiating a percent off, rather than a fixed
price. Also take into consideration your leasing habits. Are you entering
into closed or open ended leases? What are you doing with the vehicles
once the lease term is up? Keeping a consistent replacement schedule
will increase vehicle resale profits and incentivize refreshing your fleet
with the newest, most fuel efficient models on the road.
These are three common ways of fueling a fleet. A fuel card allows
drivers the flexibility to fill up when needed and can simplify invoicing.
The downside, it can be difficult to ensure drivers only use the fuel
cards on the company vehicles. Some cards offer protection by tying
the card to the vehicle, rather than the driver. While convenient, fuel
cards also mean youre paying retail fuel rates. For heavy-vehicles
fleets, if your fleet is large enough, you should be able to leverage your
fuel volume and utilize bulk fueling via wet hosing services (direct to
vehicle) or onsite tank (if available). To clarify, wet hosing services are
when a fuel truck comes to your site and fills the vehicles up for you.
Wet hose services come at a premium, compared to tank fueling, but
they have several benefits. Your fleet is fueled and ready to go when
your drivers arrive at work, cutting down the time they would otherwise
use fueling the vehicle. You do not have to worry about the capital
investment to install and maintain an on-site fuel tank, either.
On-site fuel tanks can offer cost savings as you pay less than retail and
less then wet hose rates. However, tanks come with capital investment
and maintenance costs. Depending on your fleet goals, these three
options should be explored.
(Continued on page 12)
Page 2 Volume 6, Issue 6
Certification and
Training Spotlight
May 2016 Recipients of the SPSM Certification
Anoop D., Purchasing Manager, Bel Air Riviere Seche, Mauritus
Kathryn L., Exec Asst to Pres & CEO, New Mexico, United States
Millennials in Procurement
The New NLPA Whitepaper Is Here!
by Charles Dominick, SPSM, SPSM2, SPSM3
If there is something on the mind of every hiring
manager and team leader in procurement today, it
is this: how do we handle all of these millennials
entering the workforce? Specifically, millennials in
procurement?
Actually, the business world is talking about
millennials as if they are some kind of aliens that
just landed on Earth. Are millennials truly that
much of a concern for those that actually have
them on their teams?
Do they pose real
problems?
Well, thats a matter of conjecture. But one thing
is for certain: millennials are different. They have
unique characteristics. And though procurement
leaders like you should gain an intimate knowledge of those characteristics, you dont need to fear them. More importantly,
you need to learn how to harness the incredible strengths of millennials in order to achieve maximum performance.
The Next Level Purchasing Association can help you do just that. Download our newest procurement whitepaper, Millennials
in Procurement: Hiring for Potential, Training for Results to demystify this unique generation of businessmen and women who
may just be the most successful procurement professionals ever!
Download this whitepaper at http://www.nextlevelpurchasing.com/news/procurement-whitepapers/millennials-procurement-whitepaper
June 2016 Page 3
Register Now
To register, login to the association and navigate to the Webinars tab. There youll find a registration
link, be sure to enter a valid email address as attendance details will be sent to you by email.
Registrations may be limited.
Slides of this presentation will be made available to all members who have an All-Access Plan, and those enrolled in an SPSM
Certification Program or currently certified as an SPSM at least 30 minutes prior to the webinar. Basic members can learn more about
our enrollment plans online: http://www.nextlevelpurchasing.com/plans-pricing.
Page 4 Volume 6, Issue 6
Here are a few quick ways you can add aspects of governance into your daily operational state:
The Aerospace Supply Chain Revolution How market trends affect aircraft OEM and Tier suppliers
Editors Note: This article was written by Matt Chabanon with our partners at Source One Management Services on the Strategic Sourceror
Blog. It is being reprinted here with permission.
On top of the pyramid, obviously, is the engine manufacturers (such as Rolls Royce, Snecma, etc.) and aircraft
manufacturers (Boeing, Airbus, Embraer, Bombardier, etc.). These are the one usually showing off their most
recent products capabilities at airshows, for both the interested public and potential buyers.
Tier 1 suppliers are system integrator companies specialized in developing navigation system (such as Thales,
B/E Aerospace, etc.) or manufacturing engine modules and aircraft aerostructure (Kawasaki for the wings,
Latecoere for the passenger doors, etc.)
Tier 2 suppliers are manufacturers providing Tier 1 suppliers with various type of sub-assembly. Tier 2 suppliers
use Tier 3 suppliers to source all necessary sub-components needed for their products.
So, the question here is how each supplier category is impacted by the aircraft and engine manufacturers new
supply chain strategy? Now is time to take a look at some numbers. In 2007, Airbus was using 200 tier 1 suppliers
for the production of its famous double-deck, wide-body A380. In 2012, this number was reduced to 90 Tier one
suppliers for its A350 model, representing less than half of the suppliers used in 2007. This doesnt mean less
systems or parts are needed to build a plane. This means Tier 1 suppliers are being requested to develop more
capabilities to produce more complex and complete modules and systems.
Tier 1 suppliers have no other choice but to expand outside of their current core competencies, and become
quickly recognized as a cost efficient, reliable supplier in multiple domains untouched until now. Tier 2 and Tier 3
suppliers are then impacted from the snow ball effect, as Tier 1 suppliers want to optimize their new supply chain
model as well. As a result, Tier suppliers have to rethink their supply chain strategy in order to survive in this
growing competitive market.
Page 6 Volume 6, Issue 6
A r e Yo u r S u p p ly Ch a i n a nd M ar keti n g D ep a r tm e n t s C o ll a b o r a t i ng ?
When they succeed, marketing departments typically get a lot of respect from senior management. By collaborating and
aligning with Marketing, a supply chain department can raise its own profile in the organization. Here are three ways that
Supply Chain can woo Marketing into a collaborative relationship:
Demonstrate how Supply Chain supports the competitive advantage that Marketing promotes. A good marketing
department will communicate to consumers the organization's competitive advantage - the reason to choose the
organization over its competitors. If the desired competitive advantage is quality, Supply Chain can influence quality by
doing business with the highest quality suppliers. If the competitive advantage is low cost, Supply Chain can use sourcing,
negotiation, value analysis and other cost reduction practices to help reduce what the organization can charge to its
customers.
Show how Supply Chain helps Marketing deliver on its promises. Marketing creates expectations in customers. But, if
there are supply chain problems, the goods won't be delivered or the services won't be performed when customers expect
them to be. Supply Chain contributes to satisfying customer expectations and keeps performance dependable.
Provide Supply Chain fuel for one of the hottest Marketing angles: CSR. From Starbucks putting "ethically sourced" on its
coffee bags to Apple's highly-publicized annual Supplier Responsibility Progress Reports, organizations look to appeal to
consumers and enhance their brands by promoting their corporate social responsibility (CSR). You can't have CSR without
supply chain social responsibility. By ensuring that purchased goods and services are free from slave or child labor,
environmental hazards, conflict minerals, unsafe working conditions, and other law and ethical violations, Supply Chain
assures an organization's customers that they are doing business with a socially responsible partner. That's especially
critical when your customers have CSR obligations to their customers.
How Supply Chain Can Woo Marketing by Charles Dominick, SPSM, SPSM2, SPSM3 was originally published in Edition 351 of PurchTips.
Reason #3: Quantities purchased were less than forecasted. In calculating cost savings, typically you
multiply the savings per unit by the quantity purchased. So, the more you buy, the more you "save." If the
organization buys a lower quantity than forecasted, Realized Savings will be less than Negotiated
Savings. If the overestimated quantities used in calculating Negotiated Savings were not forecast by the
procurement department, then the procurement department shouldn't be blamed for not hitting "Realized
Savings."
Actually, no one should be looking to place blame when quantities purchased were less than forecasted.
The goal for many organizations, as we teach in "Finance For Strategic Procurement, Part I," is to achieve
expense reduction as recorded on the profit and loss statement. Whether an expense reduction is
achieved due to a procurement department-negotiated discount or the decision not to buy something, it
is still a "win" for the organization. To challenge procurement performance when the organization is
"winning" is counterproductive.
Now, here are three things you can do to help "Realized Savings" match "Negotiated Savings":
Acknowledge the potential of supplier billed prices exceeding contract prices, make sure you know
your organization's requirements and the market inside and out, and manage the supplier and the
contract
Involve end users in the sourcing process so that they buy in to the supplier selection, adequately
communicate that there's a new supplier on-board, monitor usage, and squash any rogue buying as
soon as it surfaces
Help end users forecast accurately after all, you work with many people involved in forecasting, they
don't
Reasons Realized Savings Falls Short, Part II by Charles Dominick, SPSM, SPSM2, SPSM3 was originally published in Editions 350 of PurchTips.
Page 8 Volume 6, Issue 6
In addition to reporting on the indices published by the United States Bureau of Labor Statistics, Leading-Edge Supply Management is proud
to report on an independent index - the MMI metals price index. The MMI is a set of 10 indices, created by Metal Miner, that track price
changes in global metal markets. This month, well feature the May 2016 Construction MMI.
What makes the MMI different than other indices that are already out there? A few things. For one, the MMI takes into account global price
fluctuations, not just domestic ones. For another, the MMI has a few industry-specific indices as Metal Miner sees differences in how prices
fluctuation between industries. For a third, the MMI is accompanied by analysis direct from the source Metal Miner.
So, without further ado, here are the results for the May 2016 Construction MMI as well as Metal Miners analysis.
NOTE: Next Level Purchasing is exploring the possibility of making actual metals price points available as an inexpensive service. If you might be interested
in such a service, please contact Kara Uhrlen, Business Development Manager, at kuhrlen@nextlevelpurchasing.com or +1-412-294-1990 to help us
determine the level of interest and how rapidly we should pursue this option.
Welcome to the third and final installment in our series that unapologetically lambastes buyers for making lame excuses for
not having a procurement certification. In Part I, I discussed how claims of not having time dont hold up under scrutiny. In
Part II, I shared how to overcome the I dont have the money excuse. Today, Ill tear a new earhole into the excuse I hate
most: I dont do well on tests.
Some people are legitimately scared of exams. Ive even known a friend who was a PhD who didnt want to become certified
because there was an exam. I advocate for procurement all the time. Ive dedicated my career to raising the stature of
procurement as a profession. To get procurement recognized and respected in the C-suite. So, when I hear procurement
people act reluctantly about becoming certified because of one stinkin exam, I cant help but wish they would get out of
procurement and become baggers at the local grocery store.
We are tested in procurement daily. Tested to get goods and services delivered on time to support our organizations
challenging schedules. Tested to prove to financial executives that weve saved the amount of money weve claimed to save.
Tested to keep demanding internal customers happy. So, anyone who is too scared to sit in front of a computer screen and
answer questions for 90 minutes probably isnt cut out for the challenges of procurement. Procurement is not a place for
sissies.
And, lets think about the worst thing that can happen: if you failed the exam, youd have to pay a mere $75 to retake the
SPSM Exam. You can retake it immediately or take your time to do more studying. Theres no shame if you do fail your first
attempt or attempts. Its not publicized. And people fail all the time and come back and pass. Its OK to take the exam more
than once. It doesnt diminish your stature once you do pass and become certified.
This discussion reminds me of one of my favorite inspirational phrases: The only real failure is the failure to try. Plus, think
about the opposite result. What if you pass on your first attempt? Youre done! Even if you choose to recertify as an SPSM for
your entire career, it will be the only test youll have to take. And you passed it! Isnt that glorious?
But I dont believe that anyone that has made it through this entire series is an excuse maker. Youre still here because you
have ambition. Youre still here because youre investing your time in making a difference: for yourself and for your employer.
Youre still here because you are ready to take your next step. So, let me direct you to your next step signing up for the
SPSM Certification Program. Do that here -> http://www.nextlevelpurchasing.com/registration-certification.php
Maintenance
Does your fleet have full service maintenance
leasing contracts?
Are you utilizing in-house mechanics to maintain
your fleet?
Do you have your vehicles regularly serviced?
Or, do you only have work done on an as-needed
basis?
Some
We recently redesigned our website (we hope you noticed!). And, as part of that redesign, we now have a single page
showcasing all of our procurement models, ready to be adapted by your organization for success.
Our procurement models include:
October 24-25
June 2016 Page 13
SMART by GEP is easy to set up, deploy and use, with no extensive training required. All GEP products are platform-agnostic
(they work with SAP, Oracle or any other major ERP or F&A system). And with superb support and service, GEP is an industry
leader in customer satisfaction.
SMART by GEP provides complete source-to-pay functionality in one user-friendly, cloud-native platform, inclusive of spend
analysis, sourcing, contract management, supplier management, procure-to-pay, savings project management and savings
tracking, invoicing and other related functionalities. The award-winning, SaaS-based S2P platform is native to touch and mobile
technologies, enabling users to work anywhere, any time on any device.
About Mosaic
Mosaic designs dynamic, shareable experiences at the intersection of the physical and digital worlds that are rooted in emotion
and delivered through human interaction, giving our audience a story to tell and a feeling to cherish. Mosaic connect brands
with consumers through People as Media our one-to-one approach to delivering deeper engagement along the path to
advocacy. From events to retail connection to social platforms, we use the power of dialogue to change minds, drive purchase
and create belief, inspiring people to become the authentic voice of the brands they love.
About GEP
GEP is a diverse, creative team of people passionate about procurement. We invest ourselves entirely in our client's success,
creating strong collaborative relationships that deliver extraordinary value year after year. We deliver practical, effective
procurement services and procurement technology that enable procurement leaders to maximize their impact on business
operations, strategy and financial performance.
Honored as Best Supplier at the 2015 EPIC Procurement Excellence Awards, GEP regularly wins accolades as both a provider
of innovative procurement technology and a broad range of procurement services. Among its recent distinctions, GEP has been
named Leader and Star Performer in Everest Group's Peak Matrix of Procurement Services Providers, Leader in NelsonHall's
NEAT Matrix of Global Procurement BPO Service Providers, Winner in the HfS Blueprint Report on Procurement Outsourcing
Providers, as well as one of Spend Matters 50 Companies to Know and to the Supply & Demand Chain Executive 100.
Clark, NJ-based GEP has 12 offices and operations centers in Europe, Asia and the Americas.
For more about SMART by GEP, our cloud-native sourcing and procurement software platform, please visit
www.smartbygep.com.To learn more about our comprehensive range of consulting and outsourcing services, please visit
www.gep.com.