NPLA’s Strategic Procurement Operations Transformational Model (SPOT)

Strategic Procurement Operations Transformation Model (SPOT)

PurchTips Edition #448

Strategic Procurement Operations Transformation Model

The ability of procurement leaders to transform their procurement functions is critical in order to meet the demands of today’s business landscape. Next Level Purchasing Association has formulated it’s Strategic Procurement Operations Transformation Model (SPOT) to address today’s challenges.

The following are the 3 Phases for Effective Transformation:

Phase 1, Prepare for Change

Phase 2, Manage Change

Phase 3, Reinforce Change, make it stick

The following is the process for the deployment of the SPOT Model:

Step 1, Asses your organization’s Ability to Change and create a purpose, vision, and Sense of Urgency around business and organizational process improvement (Phase 1)

Step 2, Improve and manage processes, machines, materials, and technology (Phase 2)

Step 3, Ensure you have the Right People or Team and that they contribute to the initiative (Phase 2)

Step 4, Guarantee the realization of robust skills (NLPA PASS) and cross-training (Phase 2)

(PASS = Procurement Assessment of Skills for Success)

https://www.nextlevelpurchasing.com/procurement-training/purchasing-skills-assessment

Step 5, Guarantee sincere respect, appreciation & effective compensation of employees (Phase 2)

Step 6, Guarantee Ergonomic, Efficient Workspaces (Phase 2)

Step 7, Leverage the Right, Balanced Metrics. Manage Resistance to Change (Phase 2)

Step 8, Ensure accountability for making transformation stick (Phase 3)

Step 9, Manage risks & unintended consequences (Phase 3)

The benefits of robust Change and Transformation Processes are:

  1. They create platforms for critical thinking, innovation, synergy, and effective problem solving
  2. They provide inputs and data points for supplier selection criteria
  3. They provide information for cost reduction opportunities
  4. They create buy-in, big-picture perspective, and systems thinking
  5. Enhanced Customer Satisfaction
  6. They are diagnostic tools that examine cause and effect relationships of systems variables Xs and Desired Outcomes Ys.
  7. They guard against systemic sub-optimization and unintended consequences

Figure 1, Framework for Strategic Procurement Operational Transformation Model (SPOT)

Strategic Systems

Source: Next Level Purchasing, Supply Executive Leadership Course. Level 4 Certification

The SPOT Model is driven by 9 Critical Dimensions of Change and Transformation Management based on the latest research in the field. The key underpinnings of this innovative model are customer, market, and business requirements. Procurement Leaders create a culture of innovation and Collaboration to realize these core needs and requirements.

Section A. Figure 2, Strategic Procurement Operational Transformation Model (SPOT), Example

Strategic Systems

Section B.

Business Problem

Risk Management

Source: USA LEAN Engineering Training, based on the real-world situation at a US-based Manufacturing and Retailer of Soups

Section B, Directions:

  1. Draft the Problem Statement for the issues you are attempting to solve in the (Y) Business Problem section
  2. Determine the magnitude of the gap between current performance and customer requirements
  3. Determine the root causes of the gaps in each of the 9 Business System Leverage Dimensions
  4. Develop, list, and deploy solutions to issues in the 9 Dimensions
  5. List solution references in the Reference Section
  6. List the target and actual implementation dates

Notes:

Dimensions 1, 2, and 3 are underpinned by Purpose, Process, and People. The elements are fundamental in the development of a Lean Culture.

In the book, Lean Thinking, Womack and Jones strongly recommended that executives and managers focus and reflect on 3 critical dimensions:

  • Purpose: What value do the organizations create for their customers?
  • Process: How will organizations configure their supply chains and procurement processes to deliver this value with the required speed, quality, and cost?
  • People: How can organizations inspire and engage their staffs to continuously improve their supply chain processes?

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Learn More About Procurement Talent Management

Want to know all the details behind world-class procurement talent management? Simply download the NLPA’s new whitepaper, “Procurement Talent Management: How To Recruit, Train & Retain a Modern & Awesome Buying Team.”

You’ll learn the two current approaches to procurement recruiting, how to use the SPSM-BOK® Mastery Model to plan procurement training and five powerful retention techniques. If you’re a leader attempting a procurement transformation, you must read this whitepaper!

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Copyright 2019. 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 David Millington, SPSM, SPSM2, SPSM3 - Director of Education (Next Level Purchasing Association)

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