Category Management: AGILE Procurement or Back to the Future?

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We were recently approached by the CPO of a very large global organization who has been a client in multiple different companies, and he was all excited about this new concept called AGILE procurement and wanted it introduced to his organization immediately. First, let me acknowledge that it is very gratifying to our ego to see so many of our alumnus succeed so spectacularly in their careers (not that we are claiming any credit for it 😊). So, we got on the phone and asked him to explain further what he thought he heard about this brand new concept and it did not take long for him to realize that this was the same old wine – just in a different bottle. Having used AGILE over the years in the IT world and having adopted its core principles in our various practices (both internally within the firm and with clients), we knew we were in very familiar waters.

Here were the four basic themes or tenets of AGILE Procurement that she was most intrigued by:

TMG clients and alumnus will be grinning and looking smug when they see this because these are messages that they’ve been hearing from us ad nauseum.

Change Management has been the major cornerstone of our philosophy for many years and the good news is that we don’t have to convince many clients or prospects about its importance too much anymore. And as all of you know, increasing emphasis on Change Management is what differentiates the ordinary organizations from the outstanding.

Moving from adversarial to collaborative relationships it the fundamental difference between Category Management and Strategic Sourcing – and this is true of both internal and external relationships. If there is one thing that COVID has taught us, it’s the absolute value of collaborative relationships with all members of the supply chain. We can share countless stories of such relationships determining whether you get the next load of critical supplies or your competitor.

Yup – there is the focus on value and not just cost again. We think that his change in focus will quickly become the norm and not the exception, we’re almost there. The last missing piece seems to be a misguided insistence on quantifying and measuring value the same way we have been measuring and presenting cost. However, the pandemic has changed a fair amount of thinking on this too as Stakeholders quickly realized that exclusively focusing on cost may actually mean an existential impact on many other critical Value Drivers. We finally feel hopeful about this challenge.

And of course, empowering teams and then getting out of their way has long been something we’ve been passionate about with ALL our clients. High Performance Work Teams are now becoming a necessity in this world of virtual work. Not being able to depend on the more traditional ways of getting work done, more and more organizations are quickly learning to adapt to the world of self-directed work teams – mostly because they don’t have any choice.

What that also necessitates is that our community embrace the following roles that we must be able to play concurrently. There is no way to achieve the goals of AGILE Procurement without this:

And of course, the ability to play these roles is deeply entrenched in the kind of competencies that your people have and what you have planned for them to achieve. Without a fundament shift in your thinking and strategy around Competency Development, AGILE Procurement will remain totally unachievable.

We ended up having a great conversation with this CPO and gave her lots to think about as she is in the middle of setting strategic direction for her group of over 500 professionals across the globe. So where are you with your planning for this year? Give us a call if you would like us to challenge your thinking and re-energize your brain cells 😊.

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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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