Th The Procurement t Valu lue Propositio ion: : Th The Ri Rise of f Su Supply Management Gerard Chick FCIPS chief knowledge officer Sponsored by 25 th September 2015
Today’s Presenter Gerard Chick, Chief Knowledge Officer, Optimum Procurement Group (UK) Gerard Chick is Chief Knowledge Officer at Optimum Procurement Group. He has considerable experience working with some of the keenest minds at the most senior level in supply management today. He is regularly invited to make keynote presentations and deliver workshops on strategic procurement issues to senior executive teams across the world. A visiting Senior Research Fellow at Curtin University in Australia, a visiting Fellow at Cranfield School of Management, and a member of the Logistics and Operations Management Board of Cardiff Business School.
About Zycus Zycus is a leading global provider of complete Source-to-Pay suite of procurement performance solutions. Comprehensive product portfolio includes applications for both the strategic and the operational aspects of procurement - eProcurement, eInvoicing, Spend Analysis, eSourcing, Contract Management, Supplier Management and Financial Savings Management. Proud to have as clients, some of the best-of-breed companies across verticals like Manufacturing, Automotives, Banking and Finance, Oil and Gas, Food Processing, Electronics, Telecommunications, Chemicals, Health and Pharma, Education and more.
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Zycus presence in in ANZ Zycus ANZ office with Customer Success Manager BRISBANE AUCKLAND ADELAIDE SYDNEY MELBOURNE Federal organization in the utilities domain using our P2P module
What is this all about? The birth of professional procurement began around 1980 via business and academia 80’s - Edwards Deming , Lean, and JIT Managing 90’s - Offshoring and Outsourcing ‘cost’ out but drove 00’s - Everything starts with an ‘e’ ‘risk’ in 10’s - Risk and Complexity All business is predicated on three core activities: Inputs Supply Conversion Conversion (Operations and Manufacturing) or Outputs Sales
Who says procurement isn’t strategic ? This equation reflects: Profit (P) equals Revenue (R) minus Costs (C) divided by Asset Usage (A u). Which in turn reflects: If procurement effects the P&L and cost of goods (COG) then it is strategic! Peter Kraljic’s publication in the Harvard Business Review in 1983 ‘ Purchasing must become Supply Management’ was pivotal in the rise of procurement from a tactical service to a strategic business function.
Procurement’s Value Proposition Procurement’s value proposition, to the business is inextricably linked to performance, and capability. Capability enables better performance, as well as adding value
ACE THE TRINITY OF ASPIRATION, CAPABILITY AND EXECUTION Need for Leadership Change External/internal & Direction Aspiration : What do you drivers of change want Supply Side Leadership Willingness & Direction Management to be? Need for Planning to Change Change Planning Capability : How good are the people and processes you Know-how Know-how have today what do you need to bring about change? Organisation & Resources Organisation Effecting Behaviours & Resources Execution : What the Systems performance level is Change & Controls required for efficiency and effectiveness? Systems & Controls Behaviours
The 5 Game Changers DEVELOPING ECONOMIES 18% 24% 18% 15% CHANGING 25% DEMOGRAPHIC
Modern Procurement’s ‘operating space’ Lifecycle Performance Managing Complexity Management Measurement Markets Supply Through Life Management Capability Governance Complex (public-private) Products Risk & Services Temporal Dynamics 4 domains Sustainability Relationships Knowledge Contracts & Learning Product-service Outsourcing Innovation Innovation Procurement Discontinuity Alliances Management
The evolution of procurement’s value proposition
Procurement Skill Sets for the 21 st Century Contemporary Professional Procurement Skill Sets Core Life Soft Fundamentals Competencies Personality How you approach change How you apply your skills How you solve problems Knowledge Nature Intellect Literacy Curiosity Creativity Numeracy Initiative Communication Scientific knowledge Resilience Collaboration Technological proficiency Adaptability Empathy Commercial awareness Leadership Structured Critical Cultural and civic Social and cultural Thinking understanding awareness Problem solving Life long learning
Procurement Professionals in the 21 st Century? Tech Savvy Business Savvy Part Part Technology - smart phones, They will be Analyst Commercial tablets, embedded chips, professional; polished; have created a mobile work intelligent; respected; environment for influential; persuasive; procurement professionals visionary; strategic; sharp; global; and collaborative. Students of Industry Enablers Procurement Procurement professionals professionals will know will deliver strategic impact, everything, from the in organisations they just science, economics, law won’t be part of a large, and politics of their discrete, enterprise-level supply markets on a function any more. global scale. Executive Risk Aware Procurement Procurement professionals professionals will focus will generate consensus on profitability, but will around how to measure they concentrate on cost risk, and access savings or revenue growth standardised, readily to get there. These people available information for will make and take that operational risk assessment. decision Analytics Commercially Prudent Procurement professionals need Procurement to be data experts, professionals will share able to see major risks and rewards in trends and contracts, and will important accept greater risk in takeaways in a mass relationships so as not of data at a glance. to de-motivate suppliers.
Questions? 'The Procurement Value Proposition: The Rise Of Supply Management’ Is available from Kogan Page receive your special 20% discount . Visitwww.koganpage.com/PVP and enter discount code PVPLI415 when prompted at the checkout .
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