Do You Know The Difference Between Strategic Sourcing & Category Management? Can you Build a House without a Blueprint?

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All Procurement /Supply Chain organizations can be positioned on a Maturity Model.  Some of you are still trying to move from tactical Purchasing to Sourcing while others may be trying to make the leap from Strategic Sourcing to Category Management.  Regardless of where you are, the journey to the right of the Maturity curve requires some level of transformation. 

What you may notice about the model above, it is possible to be at a different level of maturity across the various domains.  For example, the illustration above shows an organization at the Intermediate Sourcing level for Risk Management but still at the Basic Sourcing level for Innovation.  If you looking to move your organization to Category Management (the Value Creating level) it is critical that you know where you are TODAY across the various domains and put a plan in place for how you are going to get there.  Would you start building a house or even add on a new room without a blueprint?  Would you go out and buy bricks, lumber, flooring, cabinets and hire workers without knowing exactly what content you need (materials, equipment, skills)?  You might BUT I guarantee you that it will take longer, be more costly, the building process will be chaotic, and you might not get what you want.  Also, you can’t build an entire house in the same time frame as adding on only one room, yet many organizations believe they can move from Traditional Purchasing to Value Creating in months when it will actually take years.  Organizational transformation, like building a house requires a blueprint.  Here is an example of a Transformation Roadmap:

The first part of the Transformation Roadmap is developing that Blueprint – Design / Launch Future State.  You MUST ensure that this is in place and agreed to before you start deciding on the three most obvious content elements – people, process and technology.  We have many, many clients that want to jump right into hiring people, developing processes and implementing new technology without having a clear understanding of where they are going (the blueprint / transformation roadmap). By the way, the skillset required at the Traditional Purchasing level is COMPLETELY different than the skillset required at the Value Creating level as are the required processes and technology. 

What you should also notice about the roadmap are those elements at the bottom (AEIOU/Context) of the model.  Moving an organization from the left of the Maturity model to the right is a MAJOR change for the Purchasing organization as well as for the company.  There will be so many roadblocks and challenges (mostly internal) that having the ability to navigate through those challenges will be THE key to success.  Many people don’t like the phrase “Change Management” because they picture everyone standing in a circle and singing Kumbaya BUT the best Purchasing process in the world (they are all the same by the way) will get you nowhere unless you can break through those internal challenges. Our AEIOU elements (including Change Management) will ensure that you garner the internal cooperation and support that is required to deliver your transformation.

Having a builder that can work collaboratively with his client (the homeowner) and his workers to build the house that matches your future vision (the blueprint), will accelerate the building process and ensure that you get what you want.  If your vision is to move your organization to Category Management, don’t make that journey without a clear roadmap.  Doing anything less will result in a whole lot of chaos and sub-optimal results.      

Let us know what you think and join in the conversation. 

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Anne Kohler
Anne has been leading consulting and financial management organizations for over 25 years. She has extensive expertise in Strategic Sourcing, change management, contracting & contract management (both the buy side and sell side) organizational design and supply chain management. Anne has a passion for collaborating and educating her clients while helping them to uncover hidden value in their organizations. In addition, Anne has been named by Supply & Demand Chain Executive as a “Top 100 Provider Pro to Know” every year since 2007 and a 2013 Top Female Supply Chain executive.
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