A recent discussion with procurement consultant, Bill Young, caused us to reflect on the use of ‘supply positioning’ as a model for developing strategies to add value through procurement. We considered the possibility of positioning procurement projects rather than purchase items or supply categories. I concluded that this application had potential but also had practical difficulties. The use of supply positioning by Procurement, without the engagement of other stakeholders, is dangerous. As supply positioning is often misapplied, I thought I might share my thoughts here. Continue reading
Recently I commented on a LinkedIn discussion, “Presently I am looking to devise a simple classification structure for my supply base – something that will allow my suppliers/providers to know where they presently stand from an engagement/expectation perspective and that shows them what they can work towards…. Does anyone have examples of such structures that they can share?”
My reply (edited): Continue reading
Today, on seeing @HarvardBiz’s tweet, “We respect leaders more when they don’t need co-pilots,” I was compelled to read the corresponding article in Harvard Business Review, “Why Command-and-Control Leadership Is Here to Stay.” The article comments on the Vroom-Yetton model of leadership, which identifies five different decision-making styles, ranging from autocratic to consultative to group-based decisions. I found the tweet and headline provocative (although the article rather less so). Continue reading
Infographic illustrating degrees of stakeholder engagement and the significance of leadership style, type of change, and required co-operation or collaboration.
The concept of Cost to Serve has been around for many years (to my knowledge at least 20) and is an important tool in consumer packaged goods industries. Cost to Serve is a method of identifying profitability of individual products and customers. It is also used to unravel the complexity of multiple supply chains and channels to market. The analysis of the cost of each activity across the supply chain also provides data and insights to enable supply chain optimisation.
The focus of Cost to Serve is usually the in-market or post-launch costs of serving a product to a customer. Cost to Serve rarely looks at the development and launch costs of new products, which is the focus of this article. Yet product development teams can gain benefit from Cost to Serve methodology. Continue reading
A recent post in Purchasing Insight, “What can game theory teach us about Financial Supply Chain Management?” highlights the overall financial impact of paying suppliers as late as possible. The key point is that the working capital cost to supplier usually far outweighs the savings to the customer, thereby increasing the overall cost to the supply chain. The post got me thinking about a much bigger issue: how businesses manage their supply chains – a cross-functional collaboration or a collection of functional silos? Continue reading
Following up on some recent tweets on employee motivation and engagement, I was reacquainted with Gleicher’s Formula for Change, published by Beckhard and Harris (also known as Beckhard and Harris’s Change Equation). Although I agreed with the formula when I first saw it several years ago, I rather dismissed it as a statement of the obvious. On reflection, it is a more powerful tool in change management than I first gave it credit. Continue reading
PAC report has relevance to public and private sector procurement.
The Public Accounts Committee (“PAC”) published its report last week, ” Cost reduction in central government: summary of progress“. The report may be of interest to procurement stakeholders in both public and private sectors :
- Procurement is critical to achievement of deficit reduction and provision of (maintained) frontline services.
- The report contains messages that apply to any organisation seeking to make savings through procurement initiatives.
- The PAC makes observations and recommendations regarding the approach to achievement and measurement of savings. Continue reading