IW Manufacturing Business Challenge: Discussion

[Rog]

Now I can't claim to be an expert but I would like to make some observations.

Trying to control something that is large and rapidly changing will be as successful as trying to control the content of the internet (which is large and rapidly changing). Even trying to co-ordinate it will more than likely cost you more than you will ever see in return (of course ERP solution providers will beg to differ).

Perhaps it's time to completely break the mold and look from another perspective. If all of your employees globally understand what your business does and how you expect them to behave in doing it, let them go out and do business on your behalf. You employed them after all. Let them organize themselves into effective groups. Give them minimal targets and objectives.

As an executive or manager your job is to manage the gaps. Help people communicate, listen to their concerns and act upon them. Executives and managers facilitate their employees to do business. Your employees already possess all the power and talent that you need. They do not need your leadership or your stategy, they just need your support and understanding and a clear statement about the reason your company exists. Think of yourself as a million small, independent operators joined together for a common good rather than one big organization.

Would your brain work if you structured your neurons to operate like most companies are structured?

Rog

[Sporter@IW]

This is an excerpt from the IW Manufacturing Business Challenge, a monthly custom e-newsletter sponsored by Kinaxis. Click here to learn more about this free newsletter or to subscribe.*

NOVEMBER 2009 CHALLENGE

NEED STRATEGIC PROCUREMENT
Existing purchase efforts leave money on the table.



* The Challenge incorporates hypothetical persons, companies, and products and does not portray the actions of any actual persons, companies, or products.

CREATE COMPETITIVE ADVANTAGE
New procurement KPIs can lead to improved purchasing.

By Corey Billington

To begin creating an outstanding procurement organization, consider your business model and resulting supply chain strategies, and then develop processes and supporting purchasing structures that allow everyone to understand and align with the business model. A supply chain strategy can be defined by how choices and investments are made in the management of three primary flows (materials, information, and money) and three secondary flows (risk, relationships, and ideas). The procurement organization affects all of these flows….

Click Here to read the rest of this Expert’s Solution.


BALANCING ACT
Weigh product lifecycle and department concerns when evaluating procurement.

By Trevor Miles

Segmentation is key when deciding how best to reorganize procurement. And politics will always be an issue when trying to balance flexibility at the factory vs. control from headquarters, perceived or otherwise. Even within a factory there will always be the conflict between the expediency of satisfying a particular order and the need to follow established purchasing contracts and delivery schedules.….

Click Here to read the rest of this Expert’s Solution.

[oddnystrom]

The Power of Competence Building
Without doubt, establishing relevant KPI's and procurement processes are essential in this context. I therefore support the general contents of Mr. Billington's article.
However, having worked with highly autonomous entities within a corporation (airline industry), I would suggest one more step - or rather a basis for the subsequent work. This platform is the Competence Building, not within the procurement organization per se, but in the line organization, both in management and for members of your local procurement teams.
The object of the competence building program will be to enable the participants to understand and contribute to the processes and mechanism of procurement. How often have you lost competitive advantage because of poor "procurement behavior"? This may be reflected in how the procurement needs og requirement specifications are defined, or how local management disregards the rules of your defined purchasing processes.
In our case, we defined a 6 months program for selected personnel throughout the organization. The main themes were:
- Professional Purchasing Processes,
- Specifications as a Competitive Edge,
- Market and Supplier Analysis,
- Negotiations,
- Contract and Supplier Management.
The final contents of such a programme must still be adapted to your own organization, and discussion cases should be familiar to the participants of such a programme.
The result in our case, however, was a closer adherence to the established procurement process.

Odd Nystrom