Supply Management: Creating "Gain" Through Process Enhancement
The Supply Management function performs multiple roles - sourcing expert, procurement-related IT services provider, contract manager, consumption analyst, value buying consultants and relationship-builders, among others. In a substantial percentage of sourcing decisions, "purchasing" plays "bad cop" while end user organizations plays "good cop" in pushing for more concessions from suppliers - lower prices, better terms, etc. However, Supply Management's overall opportunity is to empower the Enterprise it serves to tap into the accumulated wisdom, product offerings and infrastructure resources of the economy at large. For specific assistance, see supply management offer.
"Culture" is both an input to Supply Management's role as well as something that Supply Management can influence to its benefit. As the culture of the larger organization changes to be more or less central, more or less autocratic, more or less cost-focused, more or less quality focused, more or less "stovepiped," etc. Supply Management must adapt to those "givens".
Although organizational culture is something of a "given" - being the cumulative result of management direction, managers' personalities and organizational history, culture also can be altered by effective use of technology.
To offer some "blue sky" notions, Supply
Management can champion IT integration
in ways that alters culture and expand the
enterprise's ability to leverage its supplier
base. Moreover, although advocacy has
always been part of a "value buying" and
"value engineering" role, the emphasis on
advocacy needs to be increased.
Supply Management should be the supply
chain best practice "conscience." That is,
Supply Management needs to advocate
adoption of the innovations available from
suppliers - not only their improved products,
but also their value-added service
capabilities. Also in its role as conscience,
Supply Management needs to do its part in keeping all parties playing fairly within applicable policy and regulatory bounds. As it happens, adoption of modern technology facilitates compliance as well.
One of the crucial topics is that of "data" quality - in all three quality dimensions, 1) features,
2) conformance to spec, and 3) fitness for use. As gatekeeper and controller of inter-enterprise exchanges, Supply Management sits at the crossroads of some of the most important data-generating processes that feed the enterprise.
One overall message of this site and its companion - www.XMLoptimization.com - is that today's technology trends are highly favorable to Supply Management organizations and processes.
Indeed, effective adoption potentially can create a "gain," or indeed multiple "gains," and it is important to translate those potential gains into real-world gains. To do so, Supply Management needs to foster a high degree of post-award collaboration effectiveness with suppliers' through the suppliers' sales force and other sales support organizations. Although Supply Management and Sales are necessarily at arms length in certain phases of the relationship, what is critical is that the two work together to bring out the best in each other during the implementation portion of the contract (or other relationship). Given that gains become "real," there eventually will be the need to negotiate "gain-sharing," but what is essential is to create the "gain" in the first place.
The term "partnership" is appropriate in that, if the relationship goes sour, odds are that both the vendor and the supply management participants will suffer retribution at the hands of their respective enterprises.
see sales and marketing