Cathy Johnson - CPG Event - 10th November 2010 - The Knowledgeable Buyer

© Celerant Consulting

© Celerant ConsultingThe content of this presentation and/or documentation contains the proprietary and confidential information of Celerant Consulting Holdings Limited and/or of its relevant parent(s), subsidiary

and/or subsidiaries (as applicable 'Celerant') and, as applicable, the proprietary and confidential information of third parties used by Celerant under an appropriate license therefrom. In consideration of Celerant making this information available to you, you agree to protect the confidentiality of the same as might reasonably be expected by Celerant. Without limitation, the

information contained herein is the copyright of Celerant and may not be re-produced in whole or in part without the express prior permission of Celerant.

The knowledgeable buyer and the impact on

quality of Business Improvement Programmes

Cathy Johnson, Celerant Consulting


Business improvement purchasing – changing the way services are purchased and performed

Consulting Advice

“Defining what and how”

Business Improvement

“Making the change happen”


Challenges of pitching Business Improvement into Procurement

Risk/Reward, commitment to results, return on investment

Daily rates/rate cardsSpend criteria

Sustainable Behavioural changeResults need measurement & monitoring to ensure they hit the bottom line

Advice, expertiseResults are the advice and conclusions

Benefits/ outcomes

Evaluation of consultancies

Needs identification/definition

Demand management

Criteria

Selection of the right partner to co-create the solution – confidence in the partner to deliver the required outcomes (more flexibility on the activities)

Confidence in the quality of the presentation at the pitch and the individuals present

References (evidence of how)Credentials (evidence of what)

Dynamic phased process to increase certainty of results

Often consultant led, discreet process at single point in time

Ongoing contract management, collaboration with Operation

Separate roles for operations and procurement

Purchasing Business Improvement“Traditional” Purchasing


The emotional journey of change

Where adviceactivity stops

Where Business Improvement activity starts

Results

Results


Business Improvement projects are not always well defined at the outset

1. Optimism - the start of the journey

3.The defined results

2. The journey of business improvement

Simple to define

Reasonably simple to define

Difficult to define & measure but critical to success


Where Business Improvement purchasing often focuses

MANAGEMENT SYSTEMS

PROCESSES

PEOPLE & ORGANISATIONS

Get Get Get Get BuyBuyBuyBuy----in in in in

BEHAVIOURAL CHANGE

SUSTAINABLE

RESULTS

Mapping key processes and applying appropriate “lean” and 6 Sigma type tools to generate improvement

# people trained in tools and techniques to which level The Celerant 5 Box Model®

Get Get Get Get CommitmentCommitmentCommitmentCommitment

Make itMake itMake itMake itHappenHappenHappenHappen

Make it Make it Make it Make it StickStickStickStick

� Financial� Operational� Cultural


The critical success criteria for successful Business improvement engagements lie in...

MANAGEMENT SYSTEMS

PROCESSES

PEOPLE & ORGANISATIONS

Get Get Get Get BuyBuyBuyBuy----in in in in

BEHAVIOURAL CHANGE

SUSTAINABLE

RESULTS

The Celerant 5 Box Model®

Get Get Get Get CommitmentCommitmentCommitmentCommitment

Make itMake itMake itMake itHappenHappenHappenHappen

Make it Make it Make it Make it StickStickStickStick

� Financial� Operational� Cultural

Installing an effective MCRS®; KPI’s and meeting structures, escalation process and performance related behaviours


Discovery Baseline Analysis Design & Deploy Implement

To 1 week 4-6 weeks 8-16 weeks 20-30+ weeks

High level opportunity assessment, prioritisation and approach

Validate business case, primary drivers and implementation plan

Implementation Solution Design and Mobilisation

Install new ways of working and ensure sustainability

Divide the decision process into more manageable chunks An example phased approach to defining BI outcomes


Sustainability – leaving behind an organisation capable of continuous performance improvement

Engage TrainingGuidance coaching

Coaching coaches

Coaching sustainability

CONSULTANT TEAM:PROJECT FOCUS

CONTINUOUS IMPROVEMENT:EMBEDDED IN ORGANISATION

DESIGN IMPLEMENTANALYSIS SUSTAIN

Competence Development in Client organisation


Defining and tracking the results to ensure the return on investment

Area / Process Issue / Problem StatementBaseline (Financial

workwith)

Machine Availability: Excess time beyond

required is required to complete

mandatory washing / cleaning of

machines

£131,363 4% 5% £4,926 £6,897

Management skills:

Lack of tools on how to solve and find

root cause on daily/weekly issues. £131,363 4% 5% £4,926 £6,897


required is required to complete routine

changeovers£131,363 5% 7% £6,568 £9,195


required is required for machine

shiftchanges

£131,363 3% 4% £3,284 £4,598


what is required to do first line

maintenance

£131,363 3% 4% £3,284 £4,598

Machine Availability: High volume of

unplanned machine downtime due to

lack of input material and machine

breakdown

£131,363 3% 4% £3,284 £4,598

Machine Rate :Losses due to inadequate

standards on how to utilize machine

capacity £131,363 5% 7% £6,568 £9,195

Area % Impactability

Min / Max

Identified Financial Benefits

Min / Max

Production

Effectiveness

Sum 32,841 45,977

Evaluation Financial Benefits are tracked weekly in an evaluation tool

agreed with the business case

The Overtime budget was recently approved and can begin measuring Overtime against target.

Results Planning: Where will the financial and operational improvement come from

Evaluation Methodology:How we know the financial and operational improvements are actually hitting the bottom line

Area / Process Issue / Problem StatementBaseline (Financial

workwith)


required is required to complete

mandatory washing / cleaning of

machines

£131,363 4% 5% £4,926 £6,897

Management skills:

Lack of tools on how to solve and find

root cause on daily/weekly issues. £131,363 4% 5% £4,926 £6,897


required is required to complete routine

changeovers£131,363 5% 7% £6,568 £9,195


required is required for machine

shiftchanges

£131,363 3% 4% £3,284 £4,598


what is required to do first line

maintenance

£131,363 3% 4% £3,284 £4,598

Machine Availability: High volume of

unplanned machine downtime due to

lack of input material and machine

breakdown

£131,363 3% 4% £3,284 £4,598

Machine Rate :Losses due to inadequate

standards on how to utilize machine

capacity £131,363 5% 7% £6,568 £9,195

Area % Impactability

Min / Max

Identified Financial Benefits

Min / Max

Production

Effectiveness

Sum 32,841 45,977


The underlying journey means measuring progress along the way is critical to ensuring the results are delivered

LEARNING/

EXPERIENCE

DEVELOPING PRACTICE AND LEARNING PERFORMING

MISTRUSTWatching

DISBELIEFProtecting

HOPEFULContributing

ANGRYWithdrawing

UNCERTAINTYCo-operating

CAUTIOUSLYPOSITIVE

Engaging

SELF-CONFIDENTGiving

PRIDETake-over

ACCEPTANCE

20%

COMPLIANCE

60%

OWNERSHIP

100%

USE

40%

UNDERSTANDING

80%


So a knowledgeable buyer will need to shift the criteria and goal posts for comparison and selection

Risk/Reward, commitment to results, return on investment

Daily rates/rate cardsSpend criteria

Sustainable Behavioural changeResults need measurement & monitoring to ensure they hit the bottom line

Advice, expertiseResults are the advice and conclusions

Benefits/ outcomes

Evaluation of consultancies

Needs identification/definition

Demand management

Criteria

Selection of the right partner to co-create the solution – confidence in the partner to deliver the required outcomes (more flexibility on the activities)

Confidence in the quality of the presentation at the pitch and the individuals present

References (evidence of how)Credentials (evidence of what)

Dynamic phased process to increase certainty of results

Often consultant led, discreet process at single point in time

Ongoing contract management, collaboration with Operation

Separate roles in the operation and procurement

Purchasing Business Improvement

Purchasing Advice


Contact

Cathy Johnson

Vice President

+44 783 627 3799

[email protected]

Cathy Johnson - CPG Event - 10th November 2010 - The Knowledgeable Buyer

Business

Transcript of Cathy Johnson - CPG Event - 10th November 2010 - The Knowledgeable Buyer