Information Management and Data Management

The most essential aspect about purchasing is having all the data and information about the product. Many companies have gone ahead with extensive data mining activities and had some amazing results. There is lots of examples with organizations adopting spend analysis projects at regional as well as global level to reduce spend and enhance savings.

However most of the spend analysis project simply put the readily available data like spend involving a particular category of product through a period of time and then analyze it to create value in terms of consolidation and savings. This method is very effectively used till now but organizations have to move ahead from here to tap in large about of information that is available in the system apart from simple numbers and data sheets.

To understand this concept it is very important to understand the difference between data and information. Data is essentially any kind of number i.e. part price, part number, supplier name, share of business, yearly spend, raw material / foreign exchange prices and trends etc. Information is knowledge about supplier base and part. Generally there are key suppliers in every organization and there is a continuous negotiation and interactions which takes place with them. These negotiations don’t happen only with one dep’t or person but with different persons and departments.

The reason why I defined data and information is that data analysis is becoming increasingly common but at information level even the first step of compilation has not begun yet in most organizations. Data analysis was the first step of Consolidation which has been on since a decade now. Now organizations should move ahead with information management and analysis.

The essential aspect of data and information management is that buyer should have each and every bit of information with him during its sourcing process. This will take science of purchasing to next level. I would talk about details about this thought in my next blogs and will try to explore the topic in full detail. Also I would like to involve my reader’s participation to refine my thoughts on this topic.

Buyer Role in Managing Strikes

There have been lots of new aspects about purchasing that I am learning lately. The latest is understanding of handling of strike at supplier end. This is a nightmare situation for a buyer when his supplier, who is single source for many critical components, is hit by strike. To start with once the strike has started the buyer has very little time to react but there are lots of steps which can prevent the strike or give advance warning signals of the same and also prevent the line stoppage at his end.

Buyers are the eyes and ears of an organizations supply chain. They are the one who are at constant touch with the outer world and they have to keep looking for clues of any impending catastrophe. Understanding the enivornment at supplier end is possible on frequent supplier visits. There is a popular saying that “Prevention is better then cure”. Not only looking minutely at the process and raw material of the supplier it is important to keep on communicating with workers at supplier end. Machine operators, dispatch workers and other shop floor workers provide many clues of distress related to salary or working culture. Immediately this should be discussed with the supplier management at the highest order and necessary corrective actions should be placed.

Although despite of best efforts strikes do happen like the current strike in labor sensitive North Indian Auto Hub around Delhi / NCR. It is also important to deal with the crisis by moving to alternate source and planning your inventory accordingly. However it is very difficult to completely negate the effects of these strikes and almost impossible to prevent such occurrences but detail and thorough planning can reduce the downtime at the manufacturing organization to certain degrees.