Needs and demands
Writing for Spend Matters, Adobe's senior director of global procurement, Conrad Smith, recently wrote about structuring procurement based on the the classic hierarchy of needs. The best way to do this could include seeing the early stages of development as necessary for the later ones.
In the "pyramid model" Smith uses, the top is dedicated to "design & strategy" while the lower layers concern themselves with aspects like transaction management. His conclusion states that attacking the basics this way sets a standard for reaching future goals. However, one thing Smith doesn't go into as much is the "need" to meet goals even after an organization has moved on to a "higher" level.
Factoring the need to save into the equation can complicate things. The elements of a good supply or procurement setup can help support the company's evolution by effectively adding recovered funds to the overall budget.
"Look for areas where you can save money through situation-related solutions."
A procurement plan can make this efficiency the target while even cutting certain aspects of the existing chain that are no longer valuable or can somehow be made more cost-effectively. Assessing supply decisions strategically could mean reduced spend in different categories.
Reaching this kind of specificity can take procurement management improvements that integrate into the existing model easily, with no disruption. The transformation plan can incorporate this from the beginning, with an intent to slowly build into full integration for whatever the new procurement solution is. In a way, this can parallel the gradual development Smith mentioned.
That's what a Strategy& piece for Forbes said, outlining the goals of strategy based on a well-structured approach that starts with an honest assessment of the starting position. It's interesting to note that the final product of the piece's five-step plan actually involved a segmented rollout to move through the most important supply chains based on company priorities.
This is all in keeping with the author's commitment to a new view of business modernization called Industry 4.0. This is the vision of the fully-digitized business world, where the different sectors of the supply chain can all connect. The source also noted that simply embracing digital solutions could be transformative, so it recommended a small-scale pilot program first to develop the plan.
Taking a comprehensive approach
The most effective procurement management implementation plan will include new staff as well software, so the company uses the latest technology effectively.