Art of Procurement

In last week's podcast, Host Philip Ideson described the concept of the flywheel, a consistent pattern of small but deliberate actions designed to build momentum and deliver business results described in the book Good to Great by author Jim Collins. This week, we apply that idea to procurement directly to ensure our strategies and tactics become (and remain) aligned with the goals and objectives of the enterprise as a whole. This focus has to permeate every effort we are involved in and the benefit can drive competitive advantage through cost optimization, risk mitigation, revenue growth, regulatory compliance, or operational agility. Listen to Part 2 of this series on the flywheel to learn: How procurement can apply the flywheel to reposition procurement at the organizational level How we can harness the flywheel principles to help build more adaptable project management processes for efforts such as category management and strategic sourcing How it is possible to turn seemingly tactical efforts into full strategic alignment with high-level business decision makers

At Art of Procurement, we believe that helping procurement teams effectively align their capabilities and outcomes with the goals of the businesses underpins the transformation of a team from transactional to strategic. In this podcast, we discuss a concept that is a big part of our Procurement, Inc approach and a core part of how we manage the Art of Procurement business itself: the flywheel. Because this concept may be new to many of our listeners (it was new to us when we discovered it), we're going to cover the idea in two episodes. This week we provide the broader business context of the flywheel concept, and in part two (next week) we will contextualize the flywheel for procurement teams and discuss ways to put it into practice. In this podcast, you will learn about the following from Art of Procurement Founder and Host Philip Ideson: What is a flywheel and what value does it generate for a business? The sub-elements of the flywheel concept and where you have likely seen one in action as an individual consumer (whether you received it or not) Why it is the accumulation of smaller efforts, executed consistently, that is more important to success than one 'big bang' moment

Due to the risks posed by the coronavirus, procurement teams responsible for managing facilities services are currently experiencing quite a change. Services such as janitorial have quickly gone from transactional contracts established based upon cost to highly strategic relationships that must be in place and meet a new high standard for a facility to operate or even open. Arthur Piszczor is a Consultant at Corcentric, where he has been helping organizations manage their facilities services spend since long before our current elevated requirements went into effect, and he has helped a number of clients manage not only the transition, but the process of planning for the future. In this interview, Arthur shares his point of view with Philip Ideson and Kelly Barner on: Whether smaller localized or large national players are more commonly used, and how a company's existing supplier base and contracts affected their ability to respond to the COVID-19 shutdowns The combined involvement of HR and procurement in cases where employees not only need to be kept safe by third party janitorial and sanitation providers, but need to feel safe as well. How the elevated standards that we expect to be in place going forward may be restructuring not only facilities services markets, but also the relative leverage of the buyers and suppliers in those relationships.

It is never easy to request additional headcount, so making sure the timing is right and having a solid business case are critical to protecting your internal reputation and hopefully getting an affirmative response. There are plenty of ways procurement can stack the deck in their favor, and most of them have to do with demonstrating alignment with enterprise objectives and a vision that explains the value associated with that position in the longer term. Alexis Ryan has been in procurement for 2 decades, the last 5 years of which have been spent in leadership positions. After starting her career in Legal, she ended up in procurement with no preconceived notions about the function's value proposition or focus. In this interview, Alexis provides her advice about how and when to request additional procurement headcount and how to increase the chances of the request being approved: Which procurement metrics can be most effective at supporting requests for additional headcount The objections to growing procurement's headcount that leaders should expect to face in the enterprise-wide competition for resources What a documented headcount business case should look like, and the type of information it should include

When it comes to governance during the sourcing process, your experience probably matches one of the following two scenarios: You have a strict 7 or 8 step process, and at the end of each step you have to get an approval of some sort to move to the next. You have an approval council that wants to see proof that you checked every single box during the sourcing process. What do these scenarios have in common? They are burdensome, create mountains of paperwork, and really slow down the process. No wonder stakeholders want to bypass procurement altogether. In this podcast, AOP Founder and Host Philip Ideson shares his easy 2-step governance process, one that he created when he was an Indirect Sourcing Manager earlier in his career. This process - and the templates required to carry it out - are part of one of the AOP Mastermind mini-courses that you member companies will be able to access on July 1st,.

For many procurement teams, risk management is now priority #1. If that sounds like your situation, how can you make sense of all the unknowns and ensure that each one of your category strategies is prepared to adapt to whatever may come your way? In today's solo show, AOP Founder and Host Philip Ideson shares one way you can balance risk and agility: by taking the business continuity and disaster recovery plans we often ask our suppliers to provide and applying the concept to your category strategy. This approach can be used whether the category, product or service in question has a physical supply chain (products) or a virtual supply chain (services). Either way, a category continuity plan will help you proactively identify the risks associated with a category, product, or service and identify potential mitigation steps to take should a particular scenario occur. Listen to this podcast to learn more about the following ways to apply business continuity planning to risk management: The six key steps you will need to follow to create your business continuity plan, and why the focus is about ensuring you are well-informed Why supply chain mapping and scenario planning are a powerful (and actionable) combination Which proven frameworks and tools can be helpful when identifying specific points of failure

A lot of things have changed as a result of the coronavirus pandemic, not the least of which has been procurement and supply chain teams being thrust into the spotlight in very challenging conditions. As an Executive Search Consultant, Tom Graham has naturally been focused on how this increased exposure has impacted leaders, individual contributors, and entire teams. Since the lockdowns began, Tom has been holding regular, virtual roundtables with Chief Procurement Officers and Chief Supply Chain Officers to discuss everything from crisis management to planning for the new normal. Their observations and perspectives on next steps have evolved with the status of the crisis, and as businesses begin to open back up, the time is drawing near to start acting on those ideas. In this interview, Tom shares what he has seen and heard and what he expects to see next as the world continues to adapt to the new normal: Why he expects the initial transition period to be so difficult for companies that are in the process of bringing their operations back online Why natural leaders have been less impacted by our current virtual 'working from home' situation than people might have expected One of the best techniques he has seen in practice for finding a solution to a highly complex problem and making it very easy and straightforward for others in the enterprise to support

Logistics has never been an easy category of spend to manage. Whether your company is multimodal, focused on less-than truckload (LTL), or depends upon small parcel, carriers and third-party logistics providers form a critical link between you and your customers. Superimpose the disruptions of the COVID-19 pandemic on top of that complexity, and you have one of the most fluid and challenging situations procurement will get involved in. Joe Lazzerini is a Consultant at Corcentric, where he helps organizations manage their logistics category spend. In fact, he was consulting in logistics long before he found his way to the world of procurement. In this interview, Joe Lazzerini shares his point of view with Philip Ideson and Kelly Barner on: What the state of the global logistics market looked like before the onset of the COVID-19 pandemic When companies should look to their carriers for input on costs, contracts, and shipping capacity Why paying the right price is more important than paying the lowest price, and the importance of becoming a 'shipper of choice'

According to Harvard Business Review, under Zero-based budgeting (ZBB), "Expenses must be justified for each new budget period based on demonstrable needs and costs, as opposed to the more common method of using last year's budget as your starting point, then adjusting up or down. ZBB is a straightforward, intuitively simple way to aggressively strip out costs that cannot be rationally justified." Sounds wonderful, right? Well, as this week's guest (and the HBR article referenced above) point out, there is no such thing as a 'one-size fits-all' silver bullet, even when it comes to aggressively cutting costs. David Ward is the Director of Global Sourcing & Procurement at a global pharmaceutical company, and has held procurement positions at Ford, Rolls Royce, AstraZeneca, and Unilever. During his time at Unilever, he became the ZBB Programme Leader for Marketing and Business Services, and so he has seen the advantages and disadvantages of this budgeting and management method first hand. In this interview, David explains how ZBB works and whether it is a strategy that procurement should actively consider in the current economic conditions:

The scope of responsibilities associated with enterprise procurement has grown significantly over the last decade, and yet we keep coming back to the 'good old' RFP. This one enabling tool often defines our reputation as a function, and not always in a good way. At the same time, no other approach has been able to unseat the RFP, and it remains the best way to evaluate supplier costs and capabilities in a standardized and structured way. Dave Hulsen, Co-Founder and Chief Operating Officer of RFP360, joined us for an AOP Live session on March 31st. His topic - reclaiming the power of the RFP - clearly struck a chord with the procurement community, because we've never had so many excellent questions submitted by audience members before.