Vork’s Tips for Surviving a Recession
Use according to your own judgment. For even more tips, WatchTheGuild.com. …
Read the rest » Sourcing Innovation
Archive for the 'Finance' Category
A Simplified Explanation of the Global Economic Meltdown
Like these liquid mountaineers, too many fat cat bankers thought they could walk on water. However, as these overly adventurous individuals demonstrate, while you may be able to take a few steps with a running start, you always sink in the end. …
Read the rest » Sourcing Innovation
The IFRS is Coming – Is Your Supply Chain Ready?
That’s right, the International Financial Reporting Standards (IFRS) could be replacing the Generally Accepted Accounting Principles (GAAP) at your US headquarters in as little as four years with the current proposals on the table. And since you have to maintain double books for a year (in GAAP and IFRS) before you switch over, to make sure you have a good handle on the new rules, that means your new IFRS-friendly systems have to be in place in less than three years. Which means your people have to be trained in less than two years … especially since …
Read the rest » Sourcing Innovation
A Quick Introduction to Finance, Part III
A recent article over on CPO Agenda on Skills for the Future that summarized the findings from a recent workshop that debated the skills the future would require identified better finance skills as keys to future purchasing success. Since the article simply rambled off a list of terms with no definition, I decided I’d define the basics for you.Asset Turnover: is the amount of sales generated for every dollar worth of assets. Simply put, it is revenue divided by assets. It measures an organizations efficiency at using assets to generate revenue. The higher, the better. …
Read the rest » Sourcing Innovation
A Quick Introduction to Finance, Part II
A recent article over on CPO Agenda on Skills for the Future that summarized the findings from a recent workshop that debated the skills the future would require identified better finance skills as keys to future purchasing success. Since the article simply rambled off a list of terms with no definition, I decided I’d define the basics for you.Cost Breakdown: is the process of breaking a cost down into its components.Cost breakdowns are the basis of Total Landed Cost and Total Cost of Ownership calculations. For example, the cost breakdown of a transformer would be steel, labor & …
Read the rest » Sourcing Innovation
A Quick Introduction to Finance, Part I
A recent article over on CPO Agenda on Skills for the Future that summarized the findings from a recent workshop that debated the skills the future would require identified better finance skills as keys to future purchasing success. Since the article simply rambled off a list of terms with no definition, I decided I’d define the basics for you.Working Capital: is a financial metric which represents the operating liquidity available to a business. It’s calculated as current assets minus current liabilities. Positive working capital is required to ensure that a firm is able to continue its operations. …
Read the rest » Sourcing Innovation
The Tiger is Only Beginning to Roar
Earlier this year I told that that this is the year of the tiger … and China is going to roar as it is on track to overtake Japan as the 2nd largest global producer of GDP. But this is just the beginning. China is expected to become the global leader in scientific research in a mere 10 years (Financial Times [FT]) and the global leader in GDP within 25 years (The Economics Journal). According to the FT article, Thomson Reuters, which indexes scientific papers from over 10.5K journals, analyzed the performance of the BRIC over the …
Read the rest » Sourcing Innovation
Does a Quick Start Imply a Quick Finish?
It seems that the fashionable thing to do these days if you’re a Supply Management technology provider is to build a “Quick Start” platform and promote a rapid initial implementation, and the “obvious” rapid ROI that will result. Coupa, Rosslyn Analytics, and Aravo, among others, have all been making noise about their new SaaS platforms that allow for rapid results. And while each platform will give you rapid results if you listen to their advice and apply it properly, I’m starting to worry if this is the right thing to do. Just like a narrow focus on “cost …
Read the rest » Sourcing Innovation
Is Basel II Crippling Trade Finance?
The purpose of Basel II, the second of the Basel Accords (which are recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision), was to create an international standard that banking regulators can use when creating regulations about how much capital needs to be reserved to guard against financial and operational risks. In essence, the goal was to reduce risk and insure trade even in the event that a series of major banks collapsed.But did it, in fact, accomplish the exact opposite? In two recent articles in the financial times which addressed the …
Read the rest » Sourcing Innovation
Could Escrow Accounts Return Us To Long Term Thinking?
Besides the fact that you’re probably as fed up as I am at the ridiculous compensation packages that many Executives are getting these days despite the fact that they are on their way out the door having just tanked the company, there’s also the fact that their focus on short term gain is hurting the company and your ability to do your job. You want to switch to sustainable sources of supply, because you know that the long term savings (as energy, water, and carbon costs are all poised to go through the roof) will dwarf any short term …
Read the rest » Sourcing Innovation