Posted On 31 Dicembre 2018 By In Supply Chain With 306 Views

Procurement, a way of being…

Riportiamo l’articolo di Philip Ideson, co-founder e Managing director di Palambridge e fondatore del metodo Art of Procurement, pubblicato sul magazine “The Procurement – Qualifica Fornitori” (Anno 4 Numero 2) nella sezione International.

Like red blood cells carry oxygen to all the other cells in the body, procurement is primed and perfectly placed to aid in the sharing and transfer of knowledge across the entire organization. No other group of professionals can so robustly impact an organization’s ability to function effectively and sustainably.

I believe procurement is not so much a function, as it is a way of being…

Procurement is the actualization of value: the value of strategy and vision, the value of relationships, the value of coherence and execution.

Procurement is process, consistency, and scalability.

Procurement is responsibility and competence.

Procurement is integrity and creative expression.

Procurement is boldness, contribution, and professionalism.

Procurement is the power of the individual to transform a challenge into an asset and give expression to a company’s mission across all points of contact, both internal and external.

Procurement is never-ending development and innovation.

Procurement is being an agent that provokes or speeds significant change or action.

Procurement is being a catalyst.

Given all of the above, what is procurement’s most important asset?People. All great companies work to generate value in ever more particular, scalable, and sustainable ways. This can only be accomplished through the efforts of individuals and teams.

As a professional community, we are massively creative, wonderfully diverse, and highly intelligent. We are also – at times – overwhelmed to the point of effective inaction by all the conflicting and confusing perspectives on our profession, personal development, and career paths.

When we say we want to “elevate the role of procurement” what we mean is we want to clarify, curate, and coalesce the wisdom of our leaders and acknowledged catalysts. We do this to build and maintain momentum, generating fulfillment and seizing the opportunity to make a difference.

The challenge of forming an effective coalition of stakeholders – internal and external – confronts our most cherished and closely held beliefs about risk, our responsibilities as procurement professionals, and our established workflows. That is exactly what makes it such a worthwhile effort: the more difficult the objective, the greater the reward.

All professionals are procurement players

Research suggests that in an evolving and competitive marketplace, procurement fails to take on being catalysts at our collective peril: “We found a significant correlation between the ideation rate at these companies and growth in profit or net income: The more ideation, the faster they grew.” — Dylan Minor, Paul Brook and Josh Bernoff, Are Innovative Companies More Profitable? MIT Sloan Management Review, 28 December 2017.

The authors of the above quoted study speak about the “ideation rate”, or the management of employee-generated ideas that pass muster with senior management and are developed and implemented. Priorities must be established and choices made about which ideas to invest in. More fundamentally, companies must develop a creative culture that rewards catalysts.

Should companies implement a formal innovation program? Is this the province of procurement?

It is a common practice to group professionals based on their subject matter expertise or skill set verticals (e.g., creatives, finance, procurement, innovators, business development, marketing). Established companies are organized around this idea, and as startups grow they tend to trade their amorphous structure for one that supports these distinctions.

When dealing with innovation and creativity, some firms take functional distinctions one step further by creating a separate team for creatives and innovators: i.e., a ‘skunkworks’. If such a division is created, the leadership team is essentially saying, “these people are creative and innovative and the rest of you are not.” It sends a bad message, one that has a tendency to become true over time.

Removing the idea that innovation is the responsibility of a single group harnesses the power of the entire organization and sets the expectation that all contributors should think of themselves as creatives.

In a similar fashion, I believe procurement is about responsibly caring for the long term health and success of the enterprise; something in which all professionals have a vested interest. In practice, all professionals are procurement players and, therefore, have an active role to play in leveraging the full capabilities of the supply chain.

 

Experimenting with an innovation mindset

One company that stands out in its investment in procurement-led innovation is the telecommunications giant Vodafone. Last year I had the opportunity to interview Ninian Wilson, the CEO of Vodafone’s procurement group. We talked about innovation, and he shared how Vodafone encourages collaboration with startups through single-page contracts and immediate payment terms. This transformation of standard operating processes helps the young, innovative companies Vodafone works with reduce their costs, improve their cash flow, and increase their impact both with Vodafone and the other clients they serve.

Vodafone recently took this effort one step further through the launch of Tomorrow Street Global Innovation Center. Tomorrow Street partners with emerging companies to help them grow internationally, connecting them with Vodafone’s global ecosystem of operating companies, partners, and infrastructure.

While not every company wants to formalize, or has the funds to invest in, a Tomorrow Street-type innovation center, all can embrace an innovation mindset. Procurement can lead the way by instilling a catalyst culture and experimenting with initiatives such as contract simplification, payment term flexibility, and supplier/client engagement focused on generating transformative ideas.

A business will only sustainably succeed with effective (and efficient) procurement. This includes carrying knowledge, experience, and wisdom across all points of contact: internal and external.

As a functional group, procurement is perfectly placed to lead the charge and help the company evolve. Our ability to catalyze innovation is an important measure of  our impact.

Not only is it key to the long term success of our enterprises, it also presents an important opportunity for each of us individually.

 

 

 

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