Archive | Upgrade to Premium | Sponsor

Hi {{FIRST_NAME|readers}},

Tonight, a story about looking like a fool for the greater good… 😅

Picture this: I'm sitting across from a division head and three other executives. They've hired me as their "procurement technology consultant" to solve some operational headaches.

I've got 34 carefully researched recommendations. Some involve sophisticated software. Others require process redesigns. A few need significant capital investment.

But the one that made me sweat the most?

Recommending something that costs $300... 😬

I could practically see the thought bubbles: "We hired a consultant for THIS?"

BUT the risk of looking like a fool paid off.

And, It completely changed what technology means to me...

I hope it changes your perspective too.

Onwards!

📰 In this week’s edition:

Note: Some of the content listed above is only available in the email version of this newsletter. Don’t miss out! Sign up for free to get the next edition.

👀 In Case You Missed It…
My Best Linkedin post this week:

If your Procurement department runs on Excel, you need to read this...

"Wait… So one of your recommendations is for us to spend money on... a new cart?"

The head of the division stared at me across the conference table, perplexed.

You could have cut through the tension with a knife…

Three other executives shifted in their seats. I could hear them thinking: "We hired a procurement technology consultant for THIS…?"

The project manager was looking at me like I was juggling chainsaws…

"Not just any cart," I said. "One that holds 6 gas cylinders instead of 4." 😅

What happened next changed how I think about technology forever.

Out of the 34 recommendations I made on that consulting mandate, that stupid $300 cart delivered a 18,275% ROI…

Yes, you read that right. A cart. With wheels.

This boring piece of equipment delivered more measurable business value than every enterprise software deployment I've ever been involved with.

And it taught me something profound about what technology actually means.

Let me explain...

We've been conditioned to think "technology" means software, algorithms, or anything with a screen.

But that's not what technology is…

It's much simpler than that:

And advances in technology give you increased productivity (doing more with the same input/effort).

Yes, that can mean implementing sophisticated procurement applications (and I'm definitely a proponent of THAT as you know! 😅)

BUT it can also mean something quite boring...

Preceding that fateful meeting where I exposed my project manager to the circus arts, I had spent weeks analyzing this business's operations.

Amongst other things, one particular storeroom’s situation was a mess.

On the surface, it looked fine enough… Everything was fairly tidy and well labeled.

However, in addition to typical storeroom activities (delivery receipts, restocking shelves, managing good issues, physical inventory, etc.), large gas cylinders also needed to be delivered to other departments daily (while fetching the empties).

On average, they had 5 cylinders to deliver/fetch per day with little variance.

When assessing this particular storeroom, I noticed that it took the store clerk 2 trips and a total of 60 minutes to complete the cylinder delivery run.

He was running around with a cart that could hold, at maximum, 4 gas cylinders…

The storeroom was left unattended during deliveries.

That particular day, I stayed in the storeroom while the store clerk was out doing the deliveries. 2 things happened:

Although the interactions about my dress shirt were lovely, I saw 2 problems immediately:

That second problem is deadly. Items missing from inventory that wasn't updated in the system meant bad inventory numbers, stock outs, bad reordering decisions, and even more frustration.

Getting a bigger cart to fit the 5 cylinders into a single delivery run would cut all of those issues in half!

With a few other “technology changes” we could get rid of 90%+ of the issues in this store:

Simple. Boring. Quick. Win.

Let's break down what this $300 cart actually delivered:

Time savings: 30 minutes per day x 250 working days = 125 hours annually
At $25/hour: $3,125 in direct labor savings to be redirected to other activities
Inventory accuracy: Prevented stock-out cascades worth approximately $4,000/year
User satisfaction: No more trips to empty storerooms
Purchasing efficiency: No more emergency orders from bad inventory data

Total annual value: $7,125
ROI: 2,275%

Wait... that's not 18,275%. Let me recalculate...

Actually, when you factor in the avoided costs of the inventory management system upgrade they were considering to address these issues ($25,000), plus the reduction in safety stock requirements they had padded ($15,000), plus the eliminated expediting fees from the previous year ($8,000)...

Total annual value: $55,125
Immediate ROI: 18,275%

“I've never seen procurement software deliver those kinds of numbers in one day… Have you…?”, I said, after laying out the details behind the “cart recommendation.”

Tension turned to interest.

“You asked for ‘quick wins’ didn’t you?”, I said with a smirk… 😅

Interest turned to action and they got a new cart the next day.

Implementing the new delivery schedule and paper “goods issue process” was the longest part because it involved humans…!

The new gas cylinder cart succeeded because it solved a fundamental productivity problem with the simplest possible intervention.

Here's what made it work:

Now I know what you’re thinking…

You’re not going to get a 18,275% ROI on a larger scale.. And you’re right!

However, the best tool we have to attempt this trick on a larger scale is enterprise software. There are dozens of case studies that demonstrate this is possible.

HOWEVER, it’s much more difficult to do on this larger scale.

Why?

Every piece of enterprise software introduces friction on every single one of the criteria listed above…

I'm not anti-technology. I write about procurement technology every week because I believe the right tools can transform organizations.

But here's what that cart taught me: Technology is fundamentally about reorganizing how you organize and execute work in your organization.

Whether it's a $300 cart or a $300,000 software suite, the goal is the same: doing more with less by changing how work gets done.

The difference?

The cart required me to understand the work VERY intimately first. I had to watch, listen, and critically analyze that delivery process before I could see the solution.

This is where most software implementations get things wrong...

We buy systems to solve problems we haven't fully understood.

And we oversimplify how easy implementing the solution will be…

Next time someone pitches you the latest procurement technology, don't start with the demo.

Start by getting intimate with the work.

I think you'll still find systems are needed to execute on your vision. Enterprise software absolutely has its place when you're ready to scale optimized processes.

But you will absolutely find a few “$300 cart opportunities” along the way.

In fact, if you haven’t found any, you probably aren’t intimate enough with how the work gets done yet… Keep analyzing.

And those cart opportunities? They'll teach you more about your business than any vendor presentation ever will…. They’ll teach you how to be successful when you implement that new system!

Have you ever had something like this happen to you?

Hit reply in the email to tell me your story or comment below.

P.S. If you're wondering whether that cart is still delivering value 5 years later... it absolutely is. No software updates required.