Category Archives: Sourcing Innovation

Ensuring Executive Support in Your Quest for Purchasing Fire

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Last year, over on the e-Sourcing Wiki, I brought you The Quest for Purchasing Fire, a twelve step guide to selling sourcing and procurement initiatives internally in your organization. Last month, the SSON published the “top ten tips for ensuring buy-in from the top”, which complements the wiki-paper nicely. Because you have to:

  • Have a Compelling Business Case
    Anything less than a complete, finely detailed, business case with backed-up ROI calculations and you’re just asking for rejection from an executive with too many time requests and a need to kill some as quickly as possible.
  • Create a Sense of Urgency
    If you can’t demonstrate why the organization can’t wait to take advantage of your cost saving initiative, it will likely get put on the back burner
  • Understand Your Organization’s Internal Processes
    Go through the channels and make sure not to offend anyone who could cause trouble if not included.
  • Be Open and Honest About Endeavors
    Be honest about past mistakes and any shortcomings you may have and how you plan to correct them with this initiative.
  • Keep Company Staff in the Project
    Not only do many organizations still distrust consultants, but getting company staff involved early is key to obtaining buy in.
  • Maintain a Tight Focus
    You’re not trying to save the world … so don’t tackle everything at once.
  • Be Bold Where it Counts
    Even though you’re not trying to save the world, be sure to have a plan that aims high with respect to the problems you are tackling.
  • Give Examples from Beyond the Organization
    Demonstrating how similar projects have helped your competitors will go a long way towards alleviating fears of the unknown.
  • Demonstrate Your Risk Awareness
    Every project involves risk … be sure to address all of the likely, and unlikely risks to let management know that you’re aware of the risks and actively taking steps to mitigate them.
  • Highlight the Compliance Benefits
    As the article says, pull up your SOX.

The New Global Sourcing Professional

A recent article in Global Services had an interesting take on “The Rise of the Global Sourcing Professional”. According to the article, experienced IT professionals have a unique opportunity to transition into global sourcing professionals due to their role in the evolution of outsourcing in its infancy to a mature industry.

The article, which starts by noting that companies need to move beyond the traditional outsourcing model if they want to continue to reduce costs, indicates that the next round of cost savings will only be realized if a high level of productivity between vendors and employees is reached. Furthermore, this will only happen if global sourcing professionals are able to help management understand their unique issues around outsourcing and build a new organization that focuses on communication and collaboration.

In this brave new world, experienced IT professionals have a unique opportunity to transition into the role of Global Sourcing Professional as they have the technical knowledge, a keen awareness of business processes, and an understanding of system and automation infrastructures. A GSP needs to have a full understanding of the company’s culture, how they align with the vendor of choice, and recognize opportunities … and IT professionals face these issues every day. Furthermore, the best GSPs seek out new ideas and processes, and this is what drives IT professionals. It’s something to think about.

Don’t Pontificate, Innovate! … After All, Lean Was Forged in Tough Economic Times

Supply Chain Digest recently ran a great piece by Jim Womack, the founder of the Lean Enterprise Institute who points out that while this may be the worst recession some of us can remember, recessions are part of the natural cycle (and severe recessions do happen every two to three decades and they are, in fact, an incredible opportunity for success). Those who rise to the challenge and get lean and innovative will emerge from the recession victorious, while those who don’t … well, we won’t have to worry about them much longer, will we?

In his article on how lean thinking was forged in similar economic times, Jim notes that as the Japanese economy entered a steep recession back in 1950, the Toyota Motor Company ran out of cash, which was tied up in inventory for products that customers no longer wanted. Under the control of bankers, the company was split into separate firms, dividing the sales and marketing functions from the product development and production functions. This created a crisis which could have put the company out of business. Instead, the leaders of the production function developed what was to become the Toyota Production System.

Starting with a few simple ideas — minimize lead time (to free up cash), remove waste (to reduce costs and enhance quality), and take action now — the founders of Lean (Taiichi Ohno, Kikuo Suzumura, and Eiji Toyoda) used their scientific discipline to understand the current state, document improvements they believed would improve matters, implement those improvements, measure the results, and use these findings to continually refine the process. Over time, these improvements were refined and assembled into the Toyota Production System, mainly to explain it to suppliers. But these improvements, which led to the great company Toyota is today, were made when the company was struggling for its very survival … proving that true winners — who won’t be too busy coming up with excuses as to why they can’t develop, deliver, and market — are born during periods of chaotic markets and falling demand.

Identifying Individual Learning Patterns is Key to Effective E-Sourcing Training

A recent article on Supply Management . com by Aneela Nasim on “effective e-Sourcing” notes that you will only maximize your benefit if your staff are effectively trained on the system and know how to use it. In order to help you devise an appropriate training program, the author notes that the best way to devise training programs is to tailor it to user roles and individual learning methodologies.

The author suggests you start by outlining the key roles, such as “regular buyer”, “super user”, and “cross-functional team member”, defining the activities required, and then outlining the key methodological and technological aspects of the process and system that need to be addressed.

Then, within each group, determine the learning styles will be displayed by your users — such as the activist, reflector, theorist, and pragmatist learning styles defined by Honey & Mumford — and tailor your training materials and presentations appropriately.

Finally, encourage and enable your team members to share what they learned with each other. Users who teach each other and support each other are more likely to buy into the system and champion its use.

Cross Blog Challenge: (Supply Chain) Anti-Trends for 2009

A week and a half ago I alerted you to Vince Kellen’s Technology Duds for 2009 which highlighted five “anti-trends” for 2009 that stand out as a brilliant counterpoint to the rose-colored predictions of the laissez-fair wannabe analysts that tend to dominate the technology landscape.

After writing the post I started thinking about how great it would be if there were more voices like Vince’s that spoke the truth and opened our eyes to reality and not marketing fantasy. Thus, I have decided to make anti-trends the focus of the next Sourcing Innovation Cross-Blog series, which I will kick-off with this post.

My first two and a half trends echo Vince Kellen’s. My last two and a half diverge into the space.

1. Social Networking Will Unravel
As Kellen says, “at the risk of offending Web 2.0 enthusiasts, most firms, especially those hardest hit in this recession, consider social networking speculative and in some cases frivolous. And as I said in my last post, there’s a reason why “facebooked” has become an urban slang slam, “myspaced” has become a synonym for a late-night booty call, and why the blogger elite (including the doctor and Loren Feldman of 1938 Media) slam Twitter on a regular basis (as the only thing you can do with it is say nothing in only 140 characters). There’s no real value in these technologies, and no commercial value to a productive business. Businesses will drop these efforts to focus on projects with value.

2. Web 2.0 will soon be Web 2.Done
Similarly, mash-ups, fancy portals, and other web 2.0 projects are going to be axed because speculative ROIs or projects not directly assisting with significant savings are going to be difficult for IT leaders to advance. While mashups can be a useful component of B2B 3.0 platforms if they focus on enhancing content, community, and connectivity, on their own they are just useless eye-candy.

3. Traditional “Spend Analysis” will Lose Luster
Although a sound spend analytics package (you know the one) in the hands of a true expert (you know who they are) will find you limitless savings opportunities, the reality is that most of the offerings on the market are just static data warehouses with static reports in the hands of recent grads with little real-world experience and almost no training. As a result, as early adopters come to the end of their maintenance agreements, which came with six figure (plus) maintenance fees, you’ll see a lot of movement towards modern low-cost B2B 3.0 data analysis packages or spend analysis as-a service offerings.

4. Home Country Sourcing finally comes back in vogue
Regular readers will know that I’ve been pushing not just for best-cost, but home-cost country sourcing for a while now. Giving the skyrocketing transportation costs from mid 2007 to mid 2008, the repeated product safety scandals with imported products, the current recessionary environment, the low dollar, and fears of protectionism with the new US administration, more companies will finally start looking for strategic sourcing opportunities close to home — which will also come with more predictable costs, and savings, over the long term.

5. Sustainable green catches on, despite the recessionary environment
Although green initiatives that cost more than they return will be scrapped faster than unburied copper cable, as my fellow bloggers on Supply Excellence and 2 Sustain are pointing out, more and more companies will be looking at sustainable initiatives to save them money, and those green initiatives that save money as well as improve the corporate social responsibility image will catch on.

Now it’s time for my fellow bloggers to join in with their anti-trends in and help you understand where supply and spend management is headed.