Category Management: AGILE Sourcing

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Many of our stakeholders would argue that AGILE Sourcing belongs on the same list as Military Intelligence, act naturally and deafening silence – oxymorons all.  They are of course not willing to recognize that most of the delays are actually caused by them but that’s a losing debate.  Borrowing from the IT world, the principles of AGILE have become increasingly relevant in our profession to help add speed and velocity while never sacrificing a focus on value (which includes lower cost).  And thus, came AGILE Sourcing.

Some would argue that this is nothing but old wine in a new bottle and they may have a point.  Most of the fundamental principles seem awfully familiar and things that we have been seeing for a while.  Cynics would even say that this is nothing but the latest gizmo from the consulting profession to create some sizzle and buzz and sell more hours.  And they may have a point.  I prefer to take a slightly different approach.  There is always value in rebranding ourselves.  Refreshing our message is refreshing – both for us in the profession and our stakeholders.  It allows us to convince people within the profession that we must focus on agility and it conveys to our stakeholders that we are focused on it.  Sand in the gears is what Procurement/Sourcing has become infamous for.  While we can argue whether that is justified or not, and it’s mostly not, our Stakeholders continue to believe it and therefore it’s a reality that we must deal with.   

For those of you not familiar with AGILE, it is an IT systems development methodology that fundamentally changed the way IT worked with their stakeholders.  Here is the quickest definition I could grab: discovering requirements and developing solutions through the collaborative effort of self-organizing and cross-functional teams and their customer/end user.  While there are more, here are some basic constructs of AGILE Procurement/Sourcing that most people focus on:

  1. Embracing Change and managing it for maximizing leverage
  2. Changing the nature of ALL relationships (External AND Internal) towards Collaboration
  3. Relentless focus on Value as defined by the Stakeholders
  4. Self-Directed Teams empowered to run

In an attempt to de-mystify this new thing, you may remember this model of Category Management from us from a few years ago.  You will notice Change Management, Collaboration with internal AND external stakeholders, changing Supplier Relationships from managing to enriching or optimizing and of course, alumni from Sourcing/Supply Chain “U” know our relentless focus on creating High Powered Teams and the insistence on Strategic Competencies.

I make the connection not to belittle this new thing but to make sure that we refocus our energies on the fundamental messages from AGILE knowing that we have the tools we need.  Embracing AGILE will do nothing but add credibility to our function and communicate our intent and desire to improve and change our selves.  And in the case of a very significant and usually recalcitrant stakeholder – IT- it may actually help establish a much stronger relationship.

By the way, knowing what has to be done and actually doing it are two totally different things (e.g. the difference between training and building competency).  To accomplish the above, we will need to fundamentally change (amongst other things):

  1. Metrics
  2. Processes
  3. Competencies
  4. Decision Making

And these must  change in collaboration with our stakeholders since their role in this also fundamentally changes.  For example, if they don’t collaborate in significantly re-engineering their decision process, there is no way to make AGILE Procurement/Sourcing effective and deliver speed and velocity.  Intrigued?  We can arrange a briefing or a customized workshop for you and your organization.

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Dalip Raheja is President and CEO of The Mpower Group (TMG). Dalip has over 30 years of experience managing large organizations and change initiatives. He has worked across the spectrums of supply chain management, strategic sourcing, and management consulting.
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