Douglas Macbeth
Lead Educator
Professor of Purchasing and Supply Management. Using theory and practice to make business better is what excites me.
Location University of Southampton Business School
Activity
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How will they demonstrate their value?
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Douglas Macbeth replied to Clive Brown
If you cannot offer them volume can you offer something else they might value? Ease of doing business, guarantees of future business, share in new business opportunities in other words look for other ways to compete.
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The type of behaviour you describe is possible only when there are a lot of suppliers and can actually lead to having too few suppliers left that the power shifts to them and then see what memories they have about how they have been treated!
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Douglas Macbeth made a comment
Interesting point. The personality and style aspects cannot easily be captured in an IP statement but will often be the reason for more business following on. It. Is often said that in stance for example buyers do not buy firms, they buy the people who will deliver. If this is true the details of the IP are a little less important.
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Douglas Macbeth replied to Danielle Zawalich
Good examples of why more specialisms need to be part of a team approach to contracting.
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Douglas Macbeth replied to Jacek Balewski
There is good work with some of the WCC associates to simplify and make contracts more understandable through use of graphics.
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Douglas Macbeth made a comment
Welcome everyone. I look forward to reading and sometimes commenting on your comments as the course gets underway.
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Douglas Macbeth replied to Natasha Bertenshaw
It might just be the form of the words but 'kept in the loop' suggests communication of what others are deciding rather than inclusion and empowerment of those affected by the change. Sometimes decisions have to be made by external parties but change is easy to implement if all involved have participated and agreed the future direction.
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As a teacher I often thought I was talking to the wrong people and would have more impact if their bosses were in the room as well.
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It would be good if you would explain why the issues you mention work against the leasing option.
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As a general point it is worth explaining and expanding acronyms the first time they are used. Remember that this group of participants is from all over the world and terms that are common in some places will not be in others. The point is important however. @MiriamDouglas
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It will be free to our participants.
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This is a superb presentation. Good examples and challenges.
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Douglas Macbeth replied to Luca Beltrame
You make good points ut would add it is not just about risk sharing but about mitigation and recovery when the risk happens.
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The need for self protection only diminishes with good experiences over time it never disappears.
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You highlight an important point that if power is used against you that over time you will find a way to walk away from the abuser or alternatively find a way to fight back.
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However we need to recognise that all parties need to want to work collaboratively or it cannot happen.
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Douglas Macbeth replied to Khalid Mahmood
Or maybe how to not use their power?
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Douglas Macbeth replied to Luca Beltrame
Part of the problem is that what is crucial can change quite quickly. For example it is clear that health systems around the world did not consider personal protective equipment (PPE) to be strategically important until COVID struck and the the procurement and supply chain systems could not cope.
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You make a very important point. Well done.
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Douglas Macbeth replied to Samantha Winter
Chartered Institute of Purchasing and Supply. World Commerce and Contracting (co academic leaders of this MOOC). Kraljic first proposed the 2x2 matrix of relationships.
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Douglas Macbeth replied to Samantha Winter
Have a look at the WCC website. They have done a lot of work on visual contracting where diagrams etc avoid worries about language difficulties.
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Douglas Macbeth replied to Eric Neisse
@EricNeisse also remember that innovators also often recognise a need that is not being satisfied currently and then design a solution to satisfy the need.
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Douglas Macbeth replied to ASHA BOEING
The problem with the 'aint broke thinking is that if your competitors are continuously improving they will be so far ahead of you you will never catch up.
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Douglas Macbeth replied to michelle T
Assumptions are all the things we think are correct without even thinking about them. These are often culturally influenced but because we have always done something a certain way does not mean that there might not be a better way.
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Douglas Macbeth replied to ASHA BOEING
I believe that you should not outsource your complete capability in anything since the world can change and if you need to bring it back you need capability to do that and keep operating until more capacity is created. For that reason retaining a core team monitoring developments in the outsourced capability provides risk mitigation.
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Douglas Macbeth replied to Vijayakumar Thelaprolu
Thanks for the explanation
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Thanks for this. Good to know that profitability and social care can work.
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I suppose part of the problem is how we believe that profits will be achieved. Pursuit of profit above all else benefits some but might damage others in society and it is consideration of these others that is driving discussions about how best to manage capitalism amid concerns about climate and fairness of treatment and opportunity. Even some of the most...
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Douglas Macbeth replied to Vijayakumar Thelaprolu
Can you explain VUCA please?
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There a few comments about lack of clarity in objectives.
My best example of an organisation which has this well executed is the Royal National Lifeboat Institution (rnli.org) which operates as a charity to save people in trouble in seas and inland waters across the UK and Ireland ( and increasingly as disaster responders overseas. They operate with 95%...
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What powerful companies need to remember is that sometimes market conditions change and the power can switch. In addition if the supplier thinks that their legitimate concerns are not being properly considered do you think they give their best efforts for that customer? Customers need to recognise that there are risks at some stage in using their market power.
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Thank you very much. My email is dkm@soton.ac.uk.
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As a general point it is better to spell out all all acronyms for those newer to the subject matter.
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Daryl
This sounds really interesting and a valued link for the participants. Unfortunately I am struggling to get to it. I have registered for the site but cannot yet get to your highlighted feature. I shall persevere a little more but if you have a more direct link it would be great. -
Important that you mention both sides. A good contract management process is when both sides are empowered to check and challenge each other to do better in performing against the agreed deliverables and in some cases improving on them
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Douglas Macbeth replied to Ronald Nair
The key is who makes the law - the lawyers applying precedents and expertise following directions and wishes from legislatures or legislatures setting standards that are not easy to modify and can only be applied. Kind of depends what kind of society you live in and of course this can also change as leaderships change.
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Thanks for this reminder to us all Nikolay.
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Douglas Macbeth replied to Heike Tölg
This is a good suggestion and also emphasises the need to discuss and agree these aspects at the beginning of the overall process.
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I would argue that many of the principles of relationships apply even more so in not for profit organisations but it is sometime more difficult to find the best measures of actions and successes.
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Douglas Macbeth replied to Carlos Morais
Teams are always important but essential in multi-faceted decisions like the ones we are discussing.
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Douglas Macbeth replied to Samantha Winter
I also have a background in CIPS so maybe no surprise here but lately I see CIPS as being too focused on the buying processes and not enough on the contract aspects that WCC is strong on. The Kraljic matrix (adapted) will be covered later in our relationship discussions.
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I worry about the phrase 'dictate terms'! This course has emphasised understanding, communication and agreement rather than dictation. There is of course a role for all of the varieties depending on circumstances.
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Douglas Macbeth replied to [Learner left FutureLearn]
Perhaps this example is a good one for the 'create a common purpose' argument plus it is also about support for family and community by individual actions being considerate. All relevant to our discussions about contract and change?
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Douglas Macbeth replied to Paul Hughes
Conversely a potential crisis can focus minds on the need for change but often too late to make the change effectively.
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Douglas Macbeth replied to [Learner left FutureLearn]
I guess a lot of us have been in your situation. Maybe we can adapt the advice to sales people (since you are trying to sell yourself) and that is to research how the (buyer/employer) business works, how they define success and how we as sellers can contribute through all of our capabilities and experience (across all of our life experience) to helping...
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Douglas Macbeth replied to Ajith Watukara
There remains a huge risk around getting a usable evaluation of possible future changes and how they impact the cost benefit calculation.
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Henry The business case is the justification for suggesting a particular decision. A business model is 'the way we do things', how the big systems work and who it interacts with.
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Douglas Macbeth replied to victor z
Please remember that both sides should do the measuring of each other for fairness.
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Good point about the margin as the focus instead of joint benefits. The quality people argue that good quality reduces costs of getting things wrong so should not cost more Please see Bookboon publisher, Quality by Design by D K Macbeth.
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See an earlier post about the difference between equal and equitable.
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Just a general point for everyone, can you explain what acronyms mean the first time you uses them. Often the non expert can guess but it aids understanding to make that initial effort.
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Douglas Macbeth replied to Irina Z
Two interesting examples. Thank you. Irina's in particular I will communicate with my son who lives in Abu Dhabi.
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I argue that equality is not always justified or sensible but equity between the parties is actually more important.
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This is very significant and is to be welcomed. Maybe more o f the project managers should be interacting with the contract ones?
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Douglas Macbeth replied to Ko Ko Soe
WC&C have done a lot of work on making contracts easier to understand and less dependent on the language used, by making them more visually based including diagrams to replace complicated word descriptions.
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We will argue later that not every relationship needs high levels of collaboration but all need good communication.
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Douglas Macbeth replied to [Learner left FutureLearn]
Maybe it is key to all good interactions in business and life?
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Douglas Macbeth replied to Paul Hughes
Let us hope it is because some of them have been previous participants on this MOOC.
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I would argue that the most important suppliers and customers are the one with whom you are most involved and communicative. These are the ones on whom your future depends so take care of them and allow them to prosper with mutual support. This i the essence of the relationship portfolio discussion.
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Not just the language but the graphics. IACCM have done a lot of work on contracts that are understandable by diagrams and pictures and are not language dependent.
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As long as you think about them and manage your external communications carefully I am happy.
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You make valid points. For me the most important aspect is what is actually done. A partner will agree with your win-win words but will not commit until they see your considerate and collaborative behaviour.
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Douglas Macbeth replied to David Ward
I agree about governments not being willing to invest in low likelihood events even when the impacts are high but companies do the same too often.
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Clearly competitors are not the same as someone who is directly involved but the reason to include them is that while they are not interested in our success they still have a stake in our processes to learn what they can so as to compete more effectively. If we do not have them in our consideration set we might allow communications to other stakeholders to...
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Douglas Macbeth replied to Linda D
In the UK it will be interesting to see what changes in public procurement happen without EU Procurement Guidelines to follow.
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Douglas Macbeth replied to Mark Evans
Most management decisions and strategies need to be reviewed on appropriate frequencies and as external circumstances change.
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Douglas Macbeth replied to sandra Henderson
With a monopoly supplier all you can do is try to influence them to treat you well and maybe look to develop an alternative supplier if possible and legal.
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Douglas Macbeth replied to Barry Matthews
One problem is what is likely to become core in the future. Remember that IBM thought they made machines and outsourced the operating system design and control for the PC to Microsoft and then see what happened.
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Vertical integration is where an organisation owns all of the stages of production rather than buying them from the supplier market. It is the Make rather than the Buy option.
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Fundamentally all operational systems can be considered to be somewhat similar. OK the driving forces are social service driven rather than for profit but many of the managerial processes will be somewhat similar.
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A joint venture is a new legal entity and is not what we are focused on in this course. However the best inter-company relationships behave as if they were in a joint venture with co-destiny and consideration across the boundaries.
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For more information about these issues in general my latest book might help, although it would be better to get it from a library than buy it as you will see from the pricing!
Supply Ecosystems
Interconnected, Interdependent and Cooperative Operations, Supply and Contract Management.
It is published by World Scientific. ISBN: 978-981-3223-08-0
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Starting off a new line of thought and research is a great result for us as educators. Thanks for sharing.
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There are some similar provisions under the EU Procurement Regulations but who knows what will happen in the UK after Brexit.
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You need to explain this more.
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Douglas Macbeth replied to Toni Lovett
Contracts will still be bound by whose jurisdiction is agreed by the parties.
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Some of the IACCM work is addressing these issues of standardisation and even using graphics to explain what is meant.
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Douglas Macbeth replied to Tony Glover
Foreground IP is all new but informed by the background IP of the partners.
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Douglas Macbeth replied to Mark Evans
In most cases the customer claims the IP anyway.
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This is very valid. We tend in the West to evaluate developing nations from a 'modern' standpoint forgetting that for example we in the UK used to send small boys up chimneys to sweep them and domestic servants were close to being slaves, while much of our historical wealth was built on actual slave trading. This also makes the climate argument more difficult...
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Douglas Macbeth replied to Joe Hayward
Lots of good words can be spoken but the other party will watch for behaviours and decisions before they will trust the words.
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Douglas Macbeth replied to Tony Glover
I am not sure that the believers in unfettered capitalism would be interested in understanding this course which is why implementing its lessons in large organisations often means there is an internal selling job to be done. When this is the reality a small pilot project with careful monitoring of costs and benefits can help make the argument more robust.
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This is true if both sides are important to each other but this is not always the case. This is why we talk about portfolios of relationships later on in the course.
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Douglas Macbeth replied to Ben Tourny
We look at aspects of the different types of law systems later on.
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Douglas Macbeth replied to Alberto Perez Navarro
Thank you very much on behalf of the whole team.
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Douglas Macbeth replied to Michele POLAME
I would echo that and you raise an interesting point that these courses can be taken more than once so it maybe that some of the points we discussed will make more sense when participants gain new experiences in their future careers. I would also encourage everyone to keep the materials for reference purposes later.
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Overall the poll points to many organisations apparently applying what we regard as good practice so maybe the messages are being heard and implemented. I certainly hope so.
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I would argue that not all customers or suppliers are equally important so that do not deserve the same level of invested resource to manage them. That is the whole point of having a relationships portfolio to direct effort where it has most impact.
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Douglas Macbeth replied to Youssef Mouzahem
It would be easy to google this and follow the discussion in the literature.
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Douglas Macbeth replied to Kevin Tomlinson
There is evidence of growing pressure that businesses more generally need to include more social objectives and not just profit maximisation.
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This is a valid point but of course would need a re-design of the course and might be too advanced for some in our group.
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An agreement can be created that makes it impossible to radically change something without a process to discuss the implications on the other party. This avoids some new manager trying to score quick points by changing a high service supplier for a cheaper one without the same commitment.
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You need to think about their role. Are they customers, suppliers, competitors, regulators, finders, employees and so on. Then consider what their agendas are. Do they present a threat or opportunity or maybe a constraint. And do not worry about numbers in the chain from two to many it is still possible to identify stakeholders ie those who have an interest in...
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I believe we need to also have systems which are not reliant on people liking each other if we are serious about building long term business relationships.
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Can you ask some specific questions about how we can help?
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Douglas Macbeth replied to Eze Ihedioha
Money is clearly not the the only factor. Attractiveness allows for more criteria to be added into the mix.
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Douglas Macbeth replied to Alison Wright
Some people are using the word portfolio instead of multiple suppliers. The relationship portfolio argument is that some customers and suppliers are so important they need more resource devoted to them (high relationship importance) while others can be managed simply through market transactions.
