The Procurement Function has traditionally been perceived as cumbersome, slow, and a necessary evil for doing business. The demands of the modern customer for products delivered cheaper, better, and faster puts unprecedented stress on procurement functions to ensure consistent supply of mission critical inputs to be converted into useful products and services.to be consumed by customers.
The Procurement Function can be Transformed in the following ways:
- Vision: Procurement Transformation begins with a shared and carefully articulated vision and sense of purpose. This is domain of effective leadership, leaders who lead and manage by a sense of purpose and direction.
- Assessment of the Ability to Change: This is done by measuring the resistance to change. It must be understood that resistance to change is natural and that effective strategies must be put in place to gain buy in for the transformation. Understanding the 20-60-20 rule is key. 20% of people will support transformation, 60% must be persuaded, and 20% are hard core resistors. The key is to focus on the 60% (Critical Mass) but listen to and respect the resistors.
- Talent Enhancement: Procurement leaders must ensure that their employees have the skills to effectively execute their job functions. This highly skilled talent pool must be matched to the right jobs. Robust mechanisms must be in place to assess current staff skills sets and determine and close gaps.
- Technology and Process Capability Improvement: All processes must be mapped, defined, and measured for current capabilities and gaps. Root Causes of performance gaps must be determined, prior to the selection of solutions. At this point technology solutions can be designed to solve problems at the root cause level.
- Response and Control Planning: Once the required improvements are realized, controls plans must be put in place. A control plan assures that the transformation is sustained. A clear definition of out of control processes is made, and instructions of how and who to respond is made as well.
- Accountability: Once the preceding systems are in place, a clear vision shared with excellent talent who use excellent processes and technology, accountability is the final step in Procurement and Supply Chain Transformation.
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