Supply Excellence — …And What I Learned From Top Performing Supply Organizations

…And What I Learned From Top Performing Supply Organizations

June 6th, 2006 · by Tim Minahan · No Comments · best practices, supply management

My recounts of the Supply Management Forums highlighted best practices and advanced strategies of some of the world’s best-in-class supply management organizations. But more intriguing to me (and helpful to you) is not what these top performers are doing today, but how they began supply management transformation at their companies. Here’s a run down of some of the approaches these companies used to launch their success:

Start with high impact, low friction areas, such as strategic sourcing, which doesn’t incorporate multiple functions and can drive some significant measurable savings that you can use to demonstrate the value of your program and even fund improvement initiatives. Disagree? Consider this story. A friend of mine who recently took the procurement reins at a Boston-based university began by running four e-sourcing pilots, negotiating double-digit savings for each event. Next, he went to the administration and said (and I paraphrase), “Here are the savings. I can either give these back or you can fund investment in the e-sourcing tool to continue such savings.” Such a bold strategy is not for everyone. That meeting could have gone either way. Luckily for my friend, the quantifiable e-sourcing savings was impressive enough to secure funding for the project — and to keep his job.

Use On Demand solutions to speed results and reduce risks. Many Forum attendees touted the benefits of On Demand solutions, indicating that the low-risk, low-IT-impact, and subscription-pricing model helped them avoid the challenges and delays of securing IT budget and resources. The use On Demand solutions also enabled them to drive quick and measurable supply management value required to gain early executive and stakeholder support. Attendees also said converting to On Demand improved system support and provided access to frequent functional improvements.

Don’t recreate the wheel – leverage know-how of your solution provider to speed to yourself to self-sufficiency. Other Forum participants, such as Sun Microsystems, recommend using the expertise of your provider to learn the methods for effective sourcing and tools usage. This helps you avoid the mistakes made by early adopters and helps drive tool adoption and program alignment.

Align program goals with corporate objectives (piggyback on a crisis, whenever possible). Ensure sourcing and supply management goals map directly into those of the company. If possible, align your goals with those of the organization. Example: Qualcomm used corporate requirements for Sarbanes-Oxley compliance and IP litigation to secure budget and support for a company-wide contract lifecycle management initiative and solution deployment.

Enlist your best and brightest as program directors. Too often supply management and technology initiatives fail because companies tap freshly hired MBAs or IT managers to lead the transformation. While well trained and skilled in doing their current jobs, these profiles often lack the experience and political clout to manage complex projects and secure alignment among internal executives and stakeholders. Supply management leaders like Cadbury Schweppes have succeeded in large part by putting their best talent in charge of process improvement or solution initiatives. Others, such as Qualcomm, backed up project leads with support from senior executives with strong influence and big sticks.

Train early and often. Initial training should be a two-way street, educating stakeholders on program goals, protocols, and system usage and soliciting stakeholder feedback on process improvements or functionality changes. This feedback loop secures stakeholder alignment and improves program adoption and compliance. Companies like Mead Westvacao view training as a continuous process that reinforces standards and introduces advanced techniques that drive continuous improvements in performance and costs.

Establish clearly defined metrics and incentives – and shamelessly market your results. It may seem obvious, but the best way to ensure program success (and secure budget and resources) is to clearly map out your goals and broadcast these to executives and stakeholders. Reinforce these goals often. (If it’s “three times for the average mind,” you’ll need to repeat program goals even more to get through to busy executives.) And don’t forget to market your results. Forum attendees such as Compass use multiple marketing channels to communicate program results, including company newsletters, presentations at company meetings, and distributing “deal sheets” on every sourcing event to business and functional leads. Whether you’re just starting out or looking to jump start a stalled supply management or contract management initiative, these tactics can help accelerate success.

Email Forward & Bookmarks