How do procurement and supply chain teams move beyond savings to drive value and revenue growth for the organization?
In the quest to maximize total value for your organization, an often overlooked but key focus area with significant savings AND revenue potential should be a deep dive into your procurement teams and your global supply chain operations.
There are many models and organization designs out there to evaluate and deploy within your organization. The Center Led Procurement (CLP) model is our of our preferred models.
The CLP model is built on cross-functional teams led by the sourcing and procurement organization. These teams represent the different areas of your organization, aligned by the what, why and how you spend your money.
As we like to say, CLP can provide procurement and supply chain teams freedom within a framework. As always, we encourage some organizational prototypes to try the model and test drive it, to see if is for you.
We share below 3 key learnings of the approach:
Key Learning 1: Don’t wait for perfect data.
You’ll never have “perfect” data. Work with the data that you have that is accessible to you. Understand what and where you are spending, as best you can. If you wait for “perfect” data, you will never get started. Get started now.
Key Learning 2: Build your systems with what you have.
In general, we see two camps from a data management perspective. If you have a single data source global Enterprise Resource Planning (ERP) system that can provide you spend visibility, that’s great, as you are in the minority. Take advantage of that.
Even with organizations that have this benefit, collecting and sifting the data streams can still be quite a challenge. If your organization is in the middle of a Global ERP deployment, we encourage starting in parallel with that roll out, and not wating until the Global ERP is “fully functional” before starting.
If you are like most organization’s we work with. You have multiple disparate, and disconnected systems. If all that is available is extracts from various global ERP’s, we suggest using spreadsheets for early process prototypes. After that, then pick a region to pilot and test your spend analysis methods and category design for your organization.
Key Learning 3: Ship Against your already existing but Imperfect System.
Many systems in your organization are broken. We understand.
As you develop your CLP model, we encourage building your internal CLP capability by rapidly developing business processes, and testing them within your EXISTING supply chain system.
If you have some broken internal processes, do some rapid kaizen events, identify the most impactful improvements that can be made quickly, then pressure test those processes and data against the systems you have in existence today.
To learn more about how The Innovation Garage® can help support your plans for Center Led Procurement and Supply Chain with our 3 phase approach, blended education delivery, and the supporting tools and technology to help. Please reach out to us below.
At The Innovation Garage®…
We help organizations become more profitable. We build strategy. We build ideas and the capability of teams. We design products, services and supply chains. We guide leaders from startup to the Global Fortune 50 to intentionally self-disrupt their offerings and organizations.
We provide world-class education, tools and technology on how to craft business operating systems focused on long-term profitable growth.