Much debate has raged over the impact President Obama’s new universal health care law will have on business. To date, most of the analysis has focused on the impact the rule will have on businesses’ insurance and benefits costs. But a little-known tax-reporting provision in the law could be far more costly and burdensome procurement [...]
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Robert Van Brederode of Ryan (a tax strategy firm that is an Ariba partner) shared his insights into the opportunity and risk posed by VAT at Ariba LIVE in Amsterdam. Robert recommends that companies look beyond income tax since there is “too much money involved” in VAT and customs duties to ignore them.
Justin Fogarty is [...]
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C-SPAN has never been known for their riveting programming line-up. Even die hard political junkies like myself shun the channel these days in favor of alternative sources of news and analysis. But C-SPAN’s value changes dramatically if you can cut out the bloviating and get to the meat of what you would like to see. [...]
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While making fun of the way governments purchase has long been a good source of humor in spend management circles, the deficit news coming out now leads one to believe that it is now time to really make something happen.
What do you think? How would you make this happen? Is it a lost [...]
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Although there are many moving parts in the equation (especially around the health care reform package making its way through the US Congress currently), health insurance premiums, which doubled in the last decade, are on track to repeat that feat over the next ten years. From 1999 to 2008, premiums increased by a reported 119%. The average employer-sponsored insurance premium in 2008 was approximately $12,300, however based on current growth rates this figure is expected to be almost $24,000 by 2020. Some experts are forecasting even steeper growth, predicting an increase in excess of 150% over the next decade. If this growth continues at its current and/or projected pace, it will place an increasingly large burden on both families and employers. Employers have traditionally paid the majority of the premiums and will face tough decisions as to whether they are willing to primarily carry the load.
With the projection of increased insurance premiums, companies will have to make tough decisions in terms of the portion of the premiums they are paying, and how much of the increases they will pass on to their employees. Based on current growth rates, it is expected that most companies will switch a larger portion of cost to employees. As these costs continue to rise, large companies will focus more closely on their benefits administration and management services.
Prudent buyers should work with their current providers to develop creative solutions and work to reduce costs, while maintaining employee satisfaction with the overall benefit program. This can either be done through sourcing efforts or direct collaboration initiatives with incumbents.
Endre Støgård is a Category Manager for Services in Ariba’s Global Services Organization (GSO). In this role he provides commodity knowledge and strategic sourcing direction for a wide range of categories within the corporate services area, including Finance, Human Resources and Travel.
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I thought we might try something different this Friday and if it works perhaps turn it into a regular feature here. The news often tells the story of spend management efforts gone awry … or worse yet … a total lack of spend management! Thus is the case with the Air Force’s attempt to award a bid for new aerial refueling tankers.
The facts:
I have little doubt that all of you reading this would go about this process differently. And although Capital Hill politics play heavily into the debate, let’s pretend for a minute that we don’t have to worry about key players bringing home the bacon.
So, you have a complex project with two main competitors trying to earn the business. What do you think the Air Force did wrong? And what would you do differently?
Justin Fogarty is Managing Editor of Supply Excellence. For any questions or feedback on the blog or its contributors, Justin can be reached at jfogarty[at]ariba.com.
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The long-awaited report from the Department of Transportation on the safety of Mexican trucks crossing the US-Mexico border stated that the Mexican trucks’ out-of-service rates were similar to those of the United States’ trucks. The report found that in 2008, 21.2% of inspections of Mexican trucks resulted in taking trucks out of service, while 21.8% of inspections of US trucks resulted in trucks being taken out of service. During those inspections, 1.2% of Mexican drivers were taken out of service, while 6.9% of US drivers were taken out of service.
One item that was highlighted in the report was the lack of consistency in reporting of traffic convictions incurred by Mexican truck drivers. Although the inspections were done in the same manner in which Canadian drivers are compared to US drivers, some groups have questioned the validity of the inspection process, since the inspections mainly took place in US-Mexico commercial zones instead of randomly throughout the US.
Earlier this year, Congress chose to end a Bush Administration sponsored test of long haul trucking between Mexico and the US. Many argued that the program needed to be ended due to safety concerns, yet this recent report would indicate that Mexican truckers are at least as safe as domestic truck drivers. This report does make one ponder the true reason for the cessation of the program…
Was it because of job protectionism? Was it due to the recession? Were there safety issues that this report doesn’t reflect?
No matter what the true reason was, it’s hard to deny the results of the DOT’s report, and the industry should be eager to see what type of program the Obama Administration intends to promote.
Rachel Rutkoski is a Senior Indirect Services Category Manager for North America in Ariba’s Global Services Organization. Rachel is recognized by the Institute for Supply Management as a Certified Professional in Supply Management (C.P.S.M.) and has several years experience as a supply chain and transportation analyst in Fortune 500 companies.
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UPS is currently in labor discussions over a new contract with its 1,200 mechanics who work on UPS’s fleet of aircrafts. Although the workers represented by the Teamsters have overwhelmingly voted to approve a strike, UPS has stated that their vote is a typical negotiation strategy and that the company is not alarmed. The two sides have been in talks for almost three years and several rounds of negotiations have taken place between the two sides and even more negotiations are scheduled to settle outstanding issues. While a strike would be difficult to actually start due to the legal classification of the negotiations covered by the Railway Labor Act (RLA) and the National Mediation Board (NMB), if a strike would take place it would affect approximately 16% of UPS’s 15.5 million daily deliveries that are made by air.
It is surprising that UPS has allowed these negotiations to continue into the peak 4th quarter shipping season. While a strike would be difficult to start it is not impossible. When the freight industry is clearly a shipper’s market, some shippers are alarmed at any risk that may cause a disruption to service and are quick to put a contingency plan in place that moves freight to the competition. In an industry that tends to say that FedEx’s core competency is their airfreight movements, it is even more surprising that UPS has let this situation linger.
This labor negotiation brings back up the labor battle between UPS and FedEx. In last quarter’s Supply Watch the battle between FedEx and UPS were detailed out and many were anxious to see if the Senate would back the House of Representatives and pass FAA Reauthorization Act permanently affecting the labor landscape of the industry. The Senate announced mid September it would not pass the bill by the time the current bill expired at the end of September but intends to vote on the bill by the end of this calendar year.
Rachel Rutkoski is a Senior Indirect Services Category Manager for North America in Ariba’s Global Services Organization. Rachel is recognized by the Institute for Supply Management as a Certified Professional in Supply Management (C.P.S.M.) and has several years experience as a supply chain and transportation analyst in Fortune 500 companies.
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As Tim Minahan pointed out last week, the history of US government procurement is riddled with biting rhetoric about cutting “fraud and waste” from government purchasing. But as we’ve seen time and again, one politician’s glaring example of “pork” is another elected official bringing home the bacon (and helping their chances at re-election). So valiant [...]
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Yesterday, GM and Chrysler reported that they’ll begin administering the $3.5 billion in TARP funds to their Tier 1 suppliers ($2b from GM and $1.5b from Chrysler, while Ford took a pass on the Fed’s $1.5b offer that would have reached the planned $5b). The money will be used to guarantee the suppliers’ receivables and, [...]
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