If you are wondering what kind of gift you can give to your staff this holiday season, here is a suggestion: Give them the gift of freedom. Not political freedom, but freedom to try new strategies for bringing in value from procurement efforts. Encourage them to think big, and let them know that if they occasionally fail their world will not end.
Anyone familiar with American-style football probably knows who Bill Belichick is. For those who don’t, he is the head coach of The New England Patriots, and has taken his team to the American Superbowl five times, winning three of those contests. Probably the most-often quoted utterance of this famously laconic manager is that “it’s all about the team.” Despite the talents and individual celebrity of some of his players, in his mind there are no stars. The team itself is the star, and that’s the culture he has cultivated. While the analogy might be a slight stretch, there may be lessons here for procurement, particularly in the realm of category management.
Lost in all the hubbub last week about Apple’s decision to bring some manufacturing jobs back to the US, was a much smaller and more local supply chain story, one involving the local restaurant industry in Boston. The stories are vastly different in content, scope, impact, and importance. But taken together, they illustrate an important lesson: regardless of company size, the way procurement manages total-cost-of ownership (TCO) evaluation and buyer-supplier communication can determine whether supply chains are a competitive advantage or disadvantage.
A recent report from Procurement Leaders’ Procurement Intelligence Unit (PIU) says that CPOs are not so concerned about risk as they were a year ago. In fact, in its comprehensive CPO Planning Guide for 2013, based on extensive surveys with a range of CPOs, the PIU actually noted a considerable drop in concern for risk. That drop in concern is unfortunate. It seems we need a reality check here.
All CPOs rightly seek partner status in their companies. They want to be seen as equals who work with other corporate executives and business-unit leaders to accomplish the company’s strategic and product objectives, and so they will often go out of their way to help. But sometimes, the best thing a CPO can do is say "no."
Finally, the US presidential election is over, and already one of the issues debated seems to be resolving itself. Both candidates talked of outsourcing, and President Obama made the topic a primary part of his standard stump speech, saying he would work to bring outsourced jobs back home. And now, it seems, some of those jobs are coming back to the US. Are his plans working so soon, just a week after the election?
In theory, risk management seems such a simple concept. When discussed in the abstract, it lends itself to all sorts of platitudinal phrases, like “pre-planning,” whatever that means. But when a risk turns into an actual event, the platitudes become imperatives, and how well you and your suppliers planned beforehand and respond can determine the survival of your business. American Airlines’ actions before and during the recent Hurricane Sandy provide a great role model for how exceptional supplier relationship management can turn risk-management theory into practice.
Who defines procurement’s role? That was the intriguing question Ivan Gutierrez, CPO of SunGard, asked attendees at a special breakout session at the Procurement Leaders Forum in Boston Monday. His answer: the CPO does. "How you see your role determines how the rest of the organization sees procurement," Gutierrez told the attendees. CPOs have to define their role and then sell that role to the rest of the company, he added.
One of the most important things procurement has to do in the quest to gain recognition, says Sena Kwawu, CPO of State Street Bank, is to let business stakeholders know what procurement can do, will do, will not do, and what procurement is required to do.
Perhaps the least appreciated, but among the most important tools procurement executives can have are their ears. That’s because listening to others in the organization - particularly the individual business stakeholders - is the first and most critical step in understanding corporate culture and aligning procurement’s culture with it.
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