Images

Collaboration, KPI, Strategy, Talent

10x Impact

Image 2 Comments

I was asked the other day to articulate the secret recipe to become a successful procurement individual. A great question!

My on-the-spot response was that procurement offered a service and by placing the customer (our stakeholders) at the center, engaging to understand needs, and collaborating with the customer to develop solutions, procurement would deliver value add that the customer actually values.

Together with this positional change, and to ensure procurement understands the business, procurement needs to act as a ‘business manager’ to appreciate the cost, quality and time factor interlock. Too often functions operate in silos and lack appreciation of what happens upstream and downstream.

A win in one function which leads to a failure in another part of the organization is not a success for the business. The challenge is finding a way forward that respects each contribution and gives individuals the opportunity to play their part within the time constraints. Moving from a reactive to proactive way of working pulls effort forward and essentially delivers more time for collaboration, but needs a level of business maturity.

Unfortunately many organizational success measures are not consistent; they can conflict and sometimes force a short sighted and short term approach within the respective function. Establishing common goals will enable individuals to work together as a team, and focus on a shared objective. The sum of the whole is greater than the parts!

My favored recipe:

  • Customer centric mindset
  • Business acumen and value creation skills
  • Team work
  • Focus

Successful procurement individuals that enact and advocate these attributes will deliver 10x impact compared to their counter parts.

Have a better and or improved recipe ? Alternatives welcome. Please share and comment.

Category Management, Sourcing, Strategy

Is Category Management really dead?

Image Leave a comment

Fashions come and go, and then re-branding invents a return. There have been past pronouncements claiming the death of category management, but it is a little like saying that the Newton laws of motion are outdated. So what? Application and practices evolve as we subject them to new tests, but basic theory remains sound.

For those not familiar with the Category Management term, my favored definition is:

” Category Management is the strategic end-to-end process for buying goods and services that aligns business goals and requirements with supply market capabilities.

It transforms the long term value achieved from an organizations spend and drives reduced cost, reduced risk, improved revenue , improved service and ultimately better business performance.

Effective internal and external collaboration is the bedrock of successful Category Management ” – Future Purchasing

How does this differ from strategic sourcing ? In short, category management underpins procurement’s strategic understanding of goods and services that it acquires from the relevant market and allows the organization to create subject matter expertise to help structure supply side focus. Category Management is as much as an organizational construct as well as a vehicle for those sourcing strategies to be determined.

Unfortunately not all organizations have been able to successfully implement Category Management. A typical failing is that procurement talent lacks the dual ability to perform the analytics, develop the insights and most importantly, engage in a collaborative relationship with stakeholders to challenge the status quo and agree an appropriate action plan.

The inability to embed Category Management is a result of missing ‘soft’ skills, and a lack alignment with the business. Alignment extends beyond understanding the business goals, it is becoming that trusted member of the team; a valued contributor. This trust needs to be earned.

Value success measures these days are much broader and arguably makes the challenge more complex. Strategic sourcing is a bigger play. This does not mean that the category management approach is dead; it is in my opinion more valuable then ever given the current supply chain disruptions. There is no substitute for good product and market knowledge, however the procurement terminology and language used outside the function needs to be more explicate and inclusive. Long live Category Management!

Success feeds success. Start small and grow big. Contact Us.