Top 5 Things to Keep In Mind As Your Sourcing Program Changes

The best annual plan ever will change. Don’t let it change you.

Tuesday, June 7, 2016
BY: Ole Nielsen, Chairman & Founder

“Plus ça change, plus c’est la même chose”

You invested significant time building your annual sourcing plan. Hours and hours of projections, spreadsheets, commodity plans and stakeholder interviews. Then, as soon as you got into the new year, things changed and you had to adjust. One thing that probably didn’t change with it were your targets. It happens every year. What’s a smart sourcing professional to do?

As we approach the middle of the calendar year, we’ve had customers asking us for advice on how their peers deal with change. Here are the Top 5 considerations we’ve seen that might help you navigate your way through turbulent waters.

  1. Change is coming, no matter what
  2. Understand where changes are most likely to come from
  3. Managing change and change management are not the same thing
  4. There are many resources available to help you
  5. Change, but don’t lose sight of what’s worked for you so far


1. Change is coming, no matter what

The very best and most intricate plans will change. Just ask Germany’s Alfred von Schlieffen how his plan for World War I worked out (The Schlieffen-Plan). There’s been a lot of talk lately about “agility” as a core competency for procurement (CPO Rising 2016 Summit: Agility and Innovation Will Keep Procurement Valuable). It’s often referred to as something new due to today’s increased needs for collaboration with stakeholders and changing market dynamics. However, if agility is defined as “the ability to think and draw conclusions quickly, intellectual acuity”, then you already do that every day. While you might not know exactly where it’s going to happen, you know it will.


2. Understand where the changes are most likely to come from


Just as you can count on change, you can place a pretty good bet on the source. Two primary areas are most frequently mentioned by our customers:

  • Supply markets: The most predictable change will come from one of your spend categories whether it be a supply disruption, market dynamic, supplier bankruptcy or other. While you most likely have risk management plans for your strategic categories, even the non-strategic have the potential to throw you off your schedule and force you to address spend areas that were scheduled for another time. This often calls for quick action and even quicker thinking
  • Stakeholders: As the need for procurement and strategic sourcing to collaborate with business stakeholders increases, so does the importance of the individual stakeholders involved. We all have friends and champions “out in the business” that we use to try new things and boost volume. Make sure you have multiple champions out there so that you’re not left “high and dry” when one of them unexpectedly leaves
  • Team members: Another frequent topic of discussion in procurement circles is the talent drain (News focus: Pay rises for procurement, but talent shortage continues). You may not know which team member is going to leave, but count on some attrition and spend time on your development and succession plans so that you can find, on-board and train new team members in the most efficient manner possible


3. Managing change and change management are not the same thing


You need to manage change and you’ll likely have to do it without the resources of a full change management program. Change Management is a formal discipline and not the subject of this article. However, there are lots of experts out there who build and execute more formal change management programs. They generally accompany major business events such as a takeover, re-branding or major systems implementations. One little-known fact about formal change management programs is that they have been shown to fail more than 2/3 of the time so be careful what you wish for (The Hard Side of Change Management).


4. There are many resources available to help you

There are significant resources that can help with the changing events and situations that you will encounter. For supply market changes, many of our customers go first to one of the procurement specialist blogs such as CPO Rising or SpendMatters (How to Counter the “Unknown Unknowns” in Supply Risk Management). For change management, both management journals such as Harvard Business Review and procurement specialists such as Barbara Ardell of Paladin Associates (Change Management and Procurement: Sitting Down with Paladin’s Barb Ardell) provide significant information.


5. Change, but don’t change HOW you do things

When dealing with the inevitable changes, make sure you use the tools and processes that work best for you. For example, if you have a supply disruption and need to find a new source for a key commodity, don’t revert to only phone calls and known contacts. Instead, use an accelerated sourcing approach that will allow you to still employ what has made you successful so far. This includes making sure that all events go through your sourcing platform, that all projects follow at least an abbreviated version of your process, and that you’re looking for new sources of supply in every case.

By using these approaches, you’ll be better equipped to better handle the change that inevitably comes your way.

For more information on these approaches or to learn more about how Scanmarket can help you achieve your business objectives, please visit us at www.scanmarket.com.


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