Viewpoint December 2012

11/01/2013

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SANTA’S SOURCING: A Plan for Radical Transformation

Father Christmas was not at all happy. For some time there’d been much grumbling from the team and stakeholders. Lots of presents late; lousy quality; kids not getting what they wanted; dismal morale in the elfin workshops; even his trusty friend Rudolph was threatening to go on strike. The economic crisis brought it all to a head.

Santa had always believed that “If it ain’t broke, don’t fix it”. He knew he was a fabulous brand with instant recognition worldwide, ever-increasing global demand and a distribution system Amazon could only dream of. What was going wrong though was everything upstream. He’d always got by with a few quotes, sucking of his wizened old teeth and demanding his suppliers’ best prices. That’s all he thought there was to procurement.

Well, it just wasn’t working any more. He was flummoxed by insourcing, outsourcing, offshoring, ethical sourcing, balanced risk sourcing, volatile commodity sourcing, etc., etc., etc. No-one was happy.

So Santa made the key decision for 2013: let’s sort out sourcing. He felt better already. The only problem was that he didn’t know how to do it. But then he heard about the highly practical hands-on consultancy support from Future Purchasing, and there was an audible sigh of relief. He despatched an email immediately from santa@hohoho.com  to another well-nourished, white-bearded individual – Jon Hughes, Chairman of Future Purchasing, ejhughes@futurepurchasing.com

“Please ensure that I am the first to receive a copy of your new Category Management Report, 2012. I’m determined to make catman the bedrock of my new approach to sourcing and supplier management. Happy Christmas to all! P.S. Am sending you a signed copy of the present you asked for – The CPO’s Handbook – Everything You Wanted to Know About Modern Procurement But Were Afraid to Ask. Enjoy – it’s a long read!”.

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“Next Level”
Procurement

Santa was overjoyed when he found in the Knowledge Hub six articles on the subject of Next Level Procurement, all developed by leading experts worldwide. Strategies, tools and techniques in abundance. Happy Christmas!

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Set New Benchmarks for 2013 and Achieve New Goals through Category Management

We know that many CPOs are framing new or updated strategies for 2013 and beyond as we enter the New Year, so we’re delighted to announce the release of two high-quality guides to best procurement practice.

The first is the summary of 15 key differentiators of “next level” procurement performance, grouped around three fundamental enablers of leadership, processes and people. These were detailed at the recent Scandinavian conference, “Next Level Procurement”, which Jon Hughes chaired. Detailed benchmarks are provided in the summary article drawing on the research work of a global team and also keynote CPO speakers such as Jean-Philippe Collin. He detailed the 60% performance improvement and 21.5% efficiency gain in procurement operating costs already secured at Sanofi within the last three years, and flagged up his ongoing strategic priorities as “improving procurement operating efficiency; ensuring full, broad, deep procurement integration into the business; fully deploying world-class category management and amplifying procurement leadership”.

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The second is the imminent release of our report into the current state of category management. It is being issued initially to all who participated in the survey. We will then publish the detailed conclusions from the report within Viewpoint throughout the first half of 2013. The report has already confirmed three key factors: (1) category management remains a top three priority for most organisations; (2) the majority of them do not believe that they have successfully adopted it yet into their ways of working; and (3) most have less than 50% of their total external spend driven through properly structured and resourced category management activities.

The report explores in detail the major reasons why category management has proved difficult to adopt and then, very importantly, offers practical insights into the best practices being used by leading organisations worldwide to secure the full range of benefits.

So, lots of food for thought as well as highly practical guidance on how best to pursue the various routes to procurement improvement and business transformation, whether in the private or the public sector. This remains the absolute focus of Future Purchasing’s consultancy and performance learning work, and we look forward to supporting you in various ways in 2013 and beyond. Until then, with best wishes for Christmas and the New Year.

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