Daily Archives: October 27, 2011

Did “The Gambler” Teach Us Everything We Need To Know About supply Management Operational Success?

You Got to know when to hold ’em, know when to fold ’em,
Know when to walk away and know when to run.

Thirty three years ago, Kenny Rogers unleashed upon the world this country classic, written by Don Schlitz, which was the inspiration for a movie that came out two years later. And it seems, thirty three years later, that this is the message that SAP is unleashing upon the supply management world as the foundation of their advice for achieving operational excellence in any economic climate.

In the aforementioned article, the author provides four (4) tactics that are employed by best-in-class performers to elevate procurement proficiencies. Simply put, the author is recommending that you hold ’em, fold ’em, walk away, and run.

  • Hold ’em: Hold On To Your Suppliers through a Supplier Connectivity Strategy
    Integrate suppliers into key points in the supply management process. This will reduce mutual overheads and costs through better insights into your process.
  • Fold ’em: Fold Your Employees Into Your Organizational Procurement Process through a Compelling End-User Purchasing Experience
    Utilize the fact that your employees are web-savvy online shoppers with expertise in navigating online purchasing sites in such a way that allows them to slice and dice their options and get the best deal. Provide them with the right enterprise supply management portals and they will get the best value available to them.
  • Walk Away: from Non-Existent Savings and Unprofitable Efforts by Prioritizing Spend Categories with Significant Cost Reduction Opportunities
    Start with categories that will deliver a high return with minimal effort (usually by way of standardization) and then progress to categories that will deliver reasonable savings with reasonable effort, staying far away from those categories that yield only minimum returns for maximum effort. Remember the 80/20 rule – 80% of savings will typically come from 20% of categories. Focus there.
  • Run: Away from Unnecessary Processes by Moving towards a “Zero-Touch” Procurement Process
    Leading organizations use procurement solutions to do the “heavy lifting” on approvals, order delivery, and invoice management that streamline approvals and automate approvals for low-value, low-risk purchases where manual review would often cost more than could be saved through a detailed analysis.

And it’s all great advice. Now if only they had remember that you:

    Never Count Your Money While You’re At The Table: because Failure is Imminent without Constant Innovation
    Simply put, what is leading-edge today, is average tomorrow, and yesterday’s technology the next day. You can never rest on your laurels — you have to keep improving your processes. The minute you stop to count your money, you stop innovating, you stop identifying new cost reduction or value generation opportunities, you stop saving or generating value, and you begin the slow decline from leader to laggard. Today’s corporate world has evolved to a high-stakes winner-take-all poker game and there’s no time to pause and count your savings until the supply management game is won.

It would be a great starting recipe for supply management organizational success.