The Procurement Idea Pipeline, Part II

Do You Have The Infrastructure To Use Supplier Ideas?

PurchTips Edition #416

In the previous edition of this series, I wrote about the value of soliciting profit-boosting ideas from your supply base.  I also cautioned you about some business characteristics and resources that would be necessary. Well, here they are!

Senior management support.  Some good supplier ideas will affect how stakeholder departments operate. Stakeholders are unlikely to want to change how they do their jobs just because the procurement department wants that.  Therefore, changes can’t be viewed as a procurement initiative.  You have to get senior management to drive the changes as a strategic, company initiative.  Senior management can tout the procurement department as a resource to help stakeholders achieve the results that they will be held accountable for Procurement will get much more cooperation this way.

Internal cross-functional resources to evaluate, implement ideas.  If a procurement department lacks the technical expertise to properly evaluate and implement supplier ideas, you must engage a cross-functional team to fulfill this process.

Procurement leadership support.  Adding a supplier idea initiative will greatly increase procurement workload.  Procurement leaders must be prepared to realign to continue the current mission while handling the new work.

Skilled front-line procurement staff.  Strategically collaborating with suppliers requires a higher skill level than placing orders.  Therefore, if a procurement department is serious about soliciting and implementing supplier ideas, it either needs to actively work towards increasing the skill levels of its existing staff or to augment existing staff with new people or both.

A method for soliciting, collecting and distributing ideas.  You should expect to get more ideas than you can ever use.  So, be prepared to organize those ideas, separate the highest priority ones from the lowest priority ones and work them accordingly.  Think through any technology resources you will need to manage the flow and value measurement of ideas.

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Copyright 2018. This article is the property of the Next Level Purchasing Association and may not be copied or republished in any form without the express written consent of the Next Level Purchasing Association. Click here to request republishing permission.

By Charles Dominick, SPSM, SPSM2, SPSM3