People, process and tools is a methodology of starting to put together a strategic framework within the team. I am saying the team only because I am looking at the team and put together the means to meet the business’s needs;
#1 The right human resources and their fit within the team. Are the right people in the current positions of purchasing officer, inventory controller et al.
#2 Training (and here I am talking way past just being sent on a course) and mentoring schemes, taking advantage of team dynamics and hidden strengths in individuals.
#3 Motivation, commitment and attitude – a biggy. It was put to me recently that the right attitude of your team can make up for shortfalls in other areas such as education.
#4 Business processes – another biggy and one that can save a whole lot of heartache. Bearing in mind, I am referring to the team here; so how is work managed coming into the team, cycle and turnaround times for purchase requisitions to purchase orders, goods receipts and issues, business reporting. One that must deserve the earliest attention is pain points and removing them so that the team functions optimally and by extension the business.
#5 Tools – and this goes past laptops and cell phones. For example is the inventory controller using optimisation software to deliver the best inventory models? Are there paper processes that could be addressed by an e form workflow solution?
#6 What does the team need to take their performance to the next level? What else within the team is needed in order to focus on improvements and efficiencies?
A strategic framework built around these above gets a team off the starting blocks and delivering value immediately. So what about the business and the needs of its stakeholders?
* A stakeholder engagement plan – much more than just meet and greet. What are their expectations of Procurement, what are their pain points, explore and drive the merits of demand management and assisting them in this process of delivering products and services on time in full and to specification.
* Category planning – this can be done for many reason’s but what comes to mind is identifying the total spend of each category, spend patterns in terms of peaks and troughs in usage, identifying low hanging fruit in terms of gaining best results and outcomes when prices may be seasonally affected and much more.
* Sourcing and market engagement strategies for each category – obviously not all sourcing projects will be managed the same; coupled with this is a market analysis and assessing the relative strengths of main suppliers in the market; where does the real strength lie and is this a potential risk to your business.
* A dashboard – OK I am saying this with some caution. Procurement is all about engaging with their suppliers and business stakeholders alike – the latter needs to know what you are doing to make their business tick so he needs informative reports. Yes many horror stories on what bad non meaningful reports mean and its value. So what is the rule of thumb and strategy? Provide the information, date and feedback that is needed and nothing more – back to your stakeholder engagement plan….
* Risk analysis – primarily looking at the market for procured goods and services and even finished products I suggest. Are there any potentially weaknesses from your supplier’s, labour unrest that can affect your business’s performance? A SWOT analysis can prove very helpful.
* A RASCI – a real biggy in a business that has recently take on Procurement and there now being some changes for roles, responsibilities and accountabilities.
This does do not do a strategic framework justice. It does cover your internal stakeholders in the business as well as suppliers. It also covers your team and business expectations on benefits realisation. Let’s not ignore strategy and working to the right mix in a framework.