Spring will soon be here, that means it’s spring cleaning time and, chances are, somewhere in your Procurement organization is a mess … maybe a whole whack of messes. And there’s no better time than the present to clean those messes up … as much as you might want to leave them buried.
The first step is to identify the messes you have. Chances are they fall into one of the following buckets.
We’re not saying that your people are a mess, and should be let go (although that is sometimes the case), just that, probably due to lack of experience or lack of training, they are contributing to the mess. For example, they might be regularly ordering off contract or from non-preferred suppliers (because they don’t know how to look up contracts cut by the centralized CoE), screwing up the master data (because they don’t know the proper procedures for requesting data updates that can be properly verified and approved), or even signing contracts with denied parties (because they don’t know how to check the lists).
Maybe you are getting a third of your invoices on (e-)paper when only 3% should be coming in on (e-)paper, maybe you are only sourcing 30% of your buys when you should be sourcing 80%, and maybe your return rate is 10%, when it should be 2%, as a result of poor quality control processes.
Maybe you are lucky (given that only 6/10 Procurement organizations have any Procurement Technology at all) and have a first generation e-Sourcing or e-Procurement platform and have primitive RFX, e-Auction, or Supplier Information Management technology, and maybe you are not so lucky. Anyway, without the right platform, you’ll be impaired day in and day out.
Maybe you have some sort of process / technology review, and / or some sort of change management capability, but chances are you don’t. In most organizations, any evolution of the function is literally seat-of-the-pants, and that’s a recipe for chaos and even disruption. Change management is critical for procurement success as modern supply chains are the most dynamic entities on the planet, with disturbances and disruptions occurring on almost a daily basis, and the severity never known until it hits.
In other words, you need to take stock of where you are and what you need. Then you need to do something. What? Come back tomorrow for part II.