In search of the Category Management Holy Grail - CIPS Speaker... · In search of the Category...

Copyright © SpringTide 2016 www.SpringTideProcurement.com Copyright © SpringTide 2016

In search of the Category Management Holy Grail

Copyright © SpringTide 2016 2 www.SpringTideProcurement.com

Category Management

Launch Process Current Position Strategy

Development Strategy Selection

Strategy Implementation

• Category Profiling

• Business Needs

• Sourcing History

• Stakeholder Mapping

• RACI Matrix

• Communications Charter

• Change Management

• Portfolio Analysis

• Supplier Perception Matrix

• Relationship Positioning

• Risk Analysis

• Specification Challenge

• Supply Market Analysis

• Opportunity Analysis

• Request for Information

• Conditioning

• Price & Cost Analysis

• Supply Chain Analysis

• Quick Wins

• Options Analysis

• Request for Proposal

• Supplier Selection

• Capability Assessment

• Negotiation

• Contract Award

• Debriefing

• Implementation Plan

• Savings

• Category Profiling

• Business Needs

• Sourcing History

• Stakeholder Mapping

• RACI Matrix

• Communications Charter

• Change Management

• Portfolio Analysis

• Supplier Perception Matrix

• Relationship Positioning

• Risk Analysis

• Specification Challenge

• Supply Market Analysis

• Opportunity Analysis

• Request for Information

• Conditioning

• Price & Cost Analysis

• Supply Chain Analysis

• Quick Wins

• Options Analysis

• Request for Proposal

• Supplier Selection

• Capability Assessment

5, 7 or 8 steps… matters not: each company and each consultancy has their

own methodology


OK, so I’ve got a Mandate

• Corporate Governance

• Business Process

• Top-level support

• Understood by all

• RRAA must be clear

• Condition the market

1


I’m working on the chain gang… 2 Not always a sequential process

Avoid the ‘tunnel’

Think of ‘clusters’

Requires expertise

Depth is driven by category complexity

Creative not predictive

Not a form-filling exercise


Break the category down… 3

What are the sub-categories for? Stationery

BSS FM

RS Components

Why do you think this is important?


Know what has gone before…

“Study the past if you would define the future” – Confucius

Sourcing History

What worked?

What changed?

Why did it change?

Performance?

Innovation?

Bare minimum?

Contract parameters?

4


“As we know, there are known knowns. There are things we know we know. We also know There are known unknowns. That is to say We know there are some things We do not know. But there are also unknown unknowns, The ones we don't know We don't know.” – Donald Rumsfeld

Data is king 4 Use it powerfully

Who made the decisions?

How have you been influenced?

What is missing?

Is the past the same as the future?

Don’t observe it


Learning and changing

Stage 1: Unconscious incompetence (Don’t know that we don’t know)

Stage 4: Unconscious competence (Don’t know that we do know)

Stage 3: Conscious competence (Know that we know)

Stage 2: Conscious incompetence (Know that we don’t know)

Lost unaware

Searching aware

Learning aware

4


If you keep doing the same thing… 5

Be creative!

How could you approach these categories differently?

Stationery

Office space

Mobile phones

• Contract terms

• Duration

• Performance regime

• Relationship


6 Know your marketplace

OMG global economic crisis

Agency Workers Regulations

Currency fluctuations

Energy prices

Raw material movements

BRICS

Bankruptcies

M&A activity

NAFTA/EU

Spending cuts

Porter’s

PESTLE


Delay

Haphazard

Contrived

Interference

Know your supply chain

Who owns whom

Weak points

Conversion process

Profit points

7


“In the long history of humankind, those who learned to collaborate and improvise

most effectively, have prevailed.” – Charles Darwin

Know your stakeholders 8 They are not the same

Beware of Social Proof

Bad press can be good press

Humans are influenced

Some play games

…some enjoy it

…others can’t be bothered


Champion: takes personal responsibility for ensuring the project’s success

Helper: willing to assist

Fence-sitter: not engaged but waiting to see how the project unfolds

Cynic: tests the team’s resolve by challenging at each step

Blocker: undermines at every opportunity

Champion

Helper

Fence-

sitter

Cynic

Blocker

Disposition Negative Positive

Involvement

Classical Stakeholder Mapping 8


I want it all… but do I need it? 9

Wants

Aspirational

Feature driven

Supplier’s USPs

Even ego driven

Needs

Business driven

Logical

Non-negotiable

Precise

“On the road from the City of Scepticism, I had to pass through

the Valley of Ambiguity.” – Adam Smith


Know your Category

• If you go blindly, accept the consequences

• Stakeholders may know more than you

• Acting dumb is not a strategy

• Logic is hard to challenge: Category Management is logical

10


Obedience to authority: examples

Doctors are considered respected authorities

Nurses trust doctors so much that they appear to turn off their own intelligence when receiving

instructions from them

10


Don’t be afraid to be the spy 11 You must make Functions trust you

Speak their language

Be able to extol the virtues of Category Management

Represent their views

Some may be paying for you

Get them to speak yours • thinking • practices • behaviours


Visualise the relationship

Roadmap

Know exit strategy

Time

Effort

Resource

Never equal

Consensus

Realistic

Trust

Transparency

12


Targets and measurement 13

Use correct baseline

Get sign-off from CFO

Make sure that savings are real not imaginary

Prioritise approach • resource • benefit • time/payback • complexity • PA and preferencing

Do not pluck out of thin air


Price and Cost

Why is competition not always the best solution?

14

Why do suppliers price in a particular way?

What can you tell me about

– price?

– cost?

– value?

– quality?


Develop a range of options

Done well, Category Management is highly innovative

• New technologies

• New processes

• New contracting philosophies

• New solutions

• New entrants

• New supply chains

• New markets

"Everybody has accepted by now that change is unavoidable. But that still implies that change is like death and taxes – it should be postponed as long as possible and no change would be vastly preferable. But in a period of upheaval, such as the one we are living in, change is the norm." – Peter Drucker Management Challenges for the 21st Century (1999)

15

"Only the wisest and stupidest of men never change." – Confucius


Get out of the office 16 Testimonials mask reality

Time for shift changes

Access all areas

Unannounced

Paper v reality

Not a desk job

Question sparingly

Use your eyes

Take colleagues

Key function first

Speak to people


Look for visual clues 16

Lots of new cars – perhaps indicates higher-than-average salaries/packages/fleet programmes

Inability to hide surplus stock; condition may indicate that it has been there a while!

Disposal policy; pride or lack of it amongst employees; volume of waste

Location; rents and rates; distribution network; labour market pool and average wages

Care and maintenance of building fabric; building itself; owned or leased

Containers may suggest that stock has been rejected, hiding excess products, tooling


Observe key parts of the operation 16 Employee attitudes company certificates; employee awards; is there a harmonious atmosphere? what is the attitude to customer service? are staff busy getting things done? is there an excessive overhead burden?

Staff knowledge is there intellectual capacity to improve present operations; enhance product designs; refine service levels; recognise need to refresh?

Quality control degree of inspection and validation; frequency of checks; customer care; statistical quality control

Care and maintenance dirty or clean; old or new; proper size for operation; safe; worn


Plan your implementation

• Debrief fully

• Be realistic

• Recognise constraints

• Cover the patch

• Assume nothing

• Inform the business

• Involve stakeholders

17


Communicate your success 18

Buyers are not sellers, useless at self-promotion!

Business needs to know

Congratulate entire team

Communicate all benefits

Create Case Studies

Learn from mistakes

Let the supply market know

Let management know


Any questions now?… or get in touch later

SpringTide Procurement SpringTide Procurement

SpringTide Procurement @SpringTide_News

Mike Utting Mobile: +44 (0) 7973 445297 [email protected]

[email protected] www.SpringTideProcurement.com

David Wightman Mobile: +44 (0) 7495 468 488 [email protected]

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In search of the Category Management Holy Grail - CIPS Speaker... · In search of the Category...

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