The Center Led Procurement Model in Action – The Hub of the Organizational Wheel
It’s a key challenge for organizations around the world.
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 it’s an often overlooked but key focus area. There exists significant operational savings AND revenue potential that requires a deep dive into your procurement and 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 preferred procurement organization design and operating model. 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 why, what and how the organization spends its money.
As we like to say, a center led procurement model can provide procurement and supply chain teams operational freedom within a framework. As always, we encourage some organizational prototypes to try the model and test drive it, to see if there is a strong fit for your organization.
The Three (3) Key Learnings of the Center Led Procurement Model
We share below three (3) key learnings of the application of center led procurement in the organizations we support.
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 waiting until the Global ERP promised land 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 ERPs in a single spreadsheet, we suggest using spreadsheets for early process prototypes. After that, 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 center led procurement model, we encourage building your internal capability by rapidly developing business processes, and testing them within your EXISTING supply chain system.
If you have some broken internal processes, accept that and course with rapid kaizen events. Identify the biggest pain points and most impactful improvements that can be made quickly. Then “pressure test” those process improvements and data against the systems you have in existence today.
Ready to Learn More and Explore Next Steps?
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.
Take that first step by reaching out to us here or drop an email to [email protected] or check out our events pages to learn more or schedule a private session with us.
At The Innovation Garage®, we help organizations grow. Providing education, tools, technology, and expert consulting in change management for strategy, innovation, and supply chain. Guiding leaders from organizations across the world to intentionally self-disrupt their offerings and organizations. We deliver world-class education, tools, and technology on how to craft business operating systems focused on long-term profitable growth.
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