Someone asked me this week: "Why should I go to Commodity Edge when I'm already committed to a bunch of events this Spring?" I responded that the event, taking place March 19th and 20th at the Intercontinental at Chicago, O'Hare, is probably not for everyone in procurement (especially those entirely focused on areas like P2P systems). But I also noted the content and takeaways would be absolutely invaluable for those in a category/commodity management or sourcing role, not to mention those that they report to.

The discussion sparked my interest in creating a list of reasons why people should attend the event or, at the very least, stay current with the topics we plan to address. These topics include an up-to-date view on the directions of commodities (e.g., metals, energy, indirect, packaging, and many more), forecasting strategies and approaches for procurement, technologies to support negotiation, contracting and hedging and the overall direction of the domestic and global economies and their impact on procurement and supply chain strategies. Incidentally, the complete program will count for 9.75 continuing education credits/hours with ISM.

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Our sister site MetalMiner recently did a bit of research on Twinkies -- but not the type that require a workout to burn off. Specifically, MetalMiner took a look the questions to ask in evaluating how commodity prices and related costs may have played a role in the ultimate demise of Hostess. It does not take a rocket scientist to consider the volatility we've seen with ingredient prices in the past twenty-four months. Sugar, wheat, corn -- you name it. Just as the costs of Midwestern farmland have gone through the roof, so have the commodities that you can plant in the fertile soil of the nation's bread belt. At Hostess, challenges extended far beyond just labor, and we strongly suspect that commodity management and procurement were not helping the cause, at least not at the level they needed to.

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Please click here for the first post in this series.

Continuing on in sharing insights from a MetalMiner series on sourcing commodities in the context of a falling (and/or highly volatile) euro, Lisa suggests that US buying organizations may wish to consider a range of sourcing strategies. These may include offsetting a falling euro "against the dollar with the contract in dollars." Under this approach, "the buyer should negotiate hard at the outset for a 'lower price,' as a declining euro will result in increased supplier profits over the course of the contract. In other words, the buyer should negotiate some sort of discount at the outset." An alternative approach might a contracting model factoring in a falling euro against the dollar with the contract in euros.

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Here at Spend Matters, we've spent quite a bit of time lately giving consideration to twenty sourcing, supplier management and related strategies companies are likely to take in the context of the falling euro (see our initial two posts in the series here and here). Yet much of the credit for these strategies, to be fair, should go to the sourcing experts at our sister site MetalMiner, including Lisa Reisman (my better half) and Stuart Burns (our UK-based metals sourcing expert and the often behind-the-scenes but ever present third owner/partner in our parent company). Not to be outdone by Spend Matters, MetalMiner is taking some of the ideas we've introduced around sourcing raw materials in an environment where the Euro is falling and fleshed them out further in the post Sourcing Metal Categories in a Volatile or Collapsing Euro Environment.

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I'd wager that among Spend Matters readers, I've probably attended more procurement and supply chain conferences than most. Yet virtually no events I've been to have had a consistent focus on economic and commodity outlooks specifically tied to the daily sourcing and supplier management decisions that procurement and supply chain professionals need to make. Every year there are good general session keynotes covering general economic trends at certain events, but almost always, the economist or management consultant presenting fails to make the leap to what such trends mean for strategic and tactical procurement decisions. The only event I've been to that did an excellent job of bridging the procurement, commodity and economic divide was the Purchasing Smart Sourcing Summit, although it was cancelled after its inaugural excellent showing when the overall publication folded.

So we at Spend Matters and MetalMiner put our heads together to develop an idealized conference agenda that took elements of what Purchasing introduced at their event, but further refined the content to provide additional depth on commodity analysis, forecasting and strategy development specifically aimed at the procurement and supply chain community. The result of this planning effort is our first US Spend Matters and MetalMiner event for 2012 -- Commodity Edge: Sourcing Intelligence for the New Normal. The conference is taking place March 19th and 20th at the Intercontinental Hotel, Chicago (O'Hare).

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In the first post in this series, which we featured yesterday on MetalMiner, we covered the basics and key themes surrounding AngloAmerican's recent procurement transformation. We learned quite a bit from the keynote presentation that Susan Lasecki-Coiro, AngloAmerican's Head of Global Supply Chain Strategy and Performance, presented at the event. Susan's experience leading AngloAmerican's "supply chain transformation" is really just another story of a large multinational realizing it could potentially save billions of dollars through better procurement. But a few themes beyond the basics that we shared in our initial take on AngloAmerican's story do stand out.

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Spend Matters and MetalMiner have published extensive research in the area of supplier management. But nearly all of our analysis and primary research to date has focused on vendor level information, aside from coverage of conflict minerals (Dodd-Frank) and related registration. Now, we're hoping to dig deeper into the area of supplier management, vendor/material risk and supply chain traceability by conducting a survey and additional primary research that takes an even deeper view of the extended products and vendor supply chain.

This survey aims to examine the potential demand for supplier information and enrichment content primarily on the item/material level, including products/components/chemicals that may be subject to regulation or restriction based on their base components, inherent hazards or intended usage. It will be used to judge the broader marketplace interest in these new solutions and the findings may be shared, in the aggregate, with a range of organizations as well as Spend Matters and MetalMiner readers.

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Following declining PMI data (both manufacturing and non-manufacturing) of late, you'd be hard pressed not to spot a picture that looks significantly less rosy than it did this time last year. But there's a fundamental question at the moment about how much the economy really ever recovered, aside from part of the stimulus, from the recession. In fact, much of the growth of PMI and GDP from non-deficit spending no doubt came from two areas: restocking and rising exports. Indeed, companies within the S&P and other organizations with strong balance sheets have continued to reinforce their cash fortress because of concerns over core economic fundamentals beyond GDP, including consumer spending. And this is of course one of the reasons so many of us in procurement and operations roles have had more free reign to enter different areas of the business and identify and implement cost reduction opportunities with little push-back from those whose axe wielding efforts on cost have been most affected in recent years.

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Here at Spend Matters, we believe the skill sets required of sourcing professionals and commodities traders are beginning to blur -- at least as it relates to the knowledge and technology that procurement organizations must adapt to survive in today's volatile age. In a post from earlier this week on Spend Matters' sister site, MetalMiner, Lisa Reisman shared a number of strategies that commodity managers might deploy in a situation where commodity markets are in moderate to deep contango, citing steel as an example. But perhaps we should first start by explaining contango, which Wikipedia defines as "the market condition wherein the price of a forward or futures contract is trading above the present spot price."

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