PASCION Future CPO-event June

Transcription

1 PASCION

2 PASCION Future CPO-event June

3 Event Agenda welcome intro P Masschelein, president PASCION G Rietveld: the purchase paradigm splitup in workgroups break debrief per groep (+- 5 min approx) debrief Gerco roundup JP Hollevoet & K Smet start buffet Page 3

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5 Paradigm A set of assumptions, concepts, values, and practices that constitutes a way of viewing reality for the community that shares them, especially in an intellectual discipline Paradigm shift A change from one way of thinking to another. It's a revolution, a transformation, a sort of metamorphosis. It just does not happen, but rather is driven by agents of change Paradigm paralysis The inability or refusal to see beyond the current models of thinking Page 5

6 Classical procurement Business-driven procurement Break out session Feedback Debriefing Page 6

7 If you want to change purchasing, you have to change the purchasers Buyers want lower prices, at all cost Buyers are loaded with testosterone Procurement has surpassed its use-by date Page 7

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9 Mental connection with the board: procurement = cost savings Economic crises are procurement s perfect storms Procurement gets promoted from backroom to near-boardroom, headed by a new star: the chief procurement officer Mainly by tendering procurement achieved that (supply) markets became much more efficient and competitive In the shortest of times procurement grew into the second most important business function (McKinsey, 2000) Page 9

10 Buyers belief: I save, hence I exist There s an end to what procurement can achieve through volume aggregation and tendering Suppliers cannot become more efficient than efficient The recent crisis surfaced extreme procurement behaviour (pay later, pay less) By continuing these price pressing practices procurement starts to demolish supplier relationships, supply chains, and thus the economy Fierce buying helps procurement to provide his organization systematically with weak suppliers, quality-poor products, and minimal services Page 10

11 Genuine breakthroughs in procurement fail to appear Increasing executive attention for procurement doesn t generate results. In many organisations procurement didn t evolve beyond a narrow, traditional practice (McKinsey, 2007) Procurement, albeit unintentionally and unaware, is the architect of its own island The procurement agenda is most often self-invented, fully isolated from business objectives After completion of the sourcing cabin we re starting to build a second (and third) cabin: one for SRM, or one for e-auctions, or one for category management. We re just creating our fantasy island Not aware of the fact that from a business perspective everything we can, know and do is fully irrelevant Page 11

12 Procurement Island is our comfort zone Our role is to build a bridge connecting our organization with the supplier land However, we only have an eye for the construction of the bridge, not for its function That is, we do not spend our energy in tempting our business colleagues and suppliers to cross the bridge From a procurement perspective we re doing great. However, that perspective is wrong Procurement delivers the wrong things to the wrong people Page 12

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14 Top management Common focus of procurement Financial impact Financial impact Business management Business impact Procurement Recommended focus for procurement Page 14

15 Focus on cost drives out quality Focus on quality drives out cost Page 15

16 Operational excellence Corporate values Businessgedreven LESS inkoop MORE Ethics/integrity Transparency Lawfulness Sustainability Brand value Employership Safety Cost Effort Time Waste Complexity Risk Capital employed LESS Revenue Margin Quality Service Innovation Flexibility Cash MORE Page 16

17 threats Business model Vision Mission PMCs Business strategy weaknesses Capital model Earnings model strengths opportunities End-to-end value chain perspective Partners Key suppliers Common interests Missing capabilities Procureme nt strategy Outsourcing Capabilities Production strategy Operational excellence Value propositions Marketing/Sal es strategy Distribution model Customer needs & benefits Customers Segmentation Customer relation Staff Style/values Enabling strategies Operating model Structure Systems Page 17

18 Suppliers who properly understand the business your organization is in and are capable of adding value to it Suppliers who have complementary capabilities and the will to match them to your organisation s ambitions Suppliers selling solutions (in stead of products) New suppliers It is a golden rule in Sales that it is far more effective to foster the current clients than to hunt for new ones Wouldn t the same rule apply to suppliers? Suppliers who have been scraped to the bone by Procurement And lost their motivation to go for the extra mile Page 18

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20 We do want to move beyond cost savings. However, the board just wants savings from procurement. There s nothing we can do about it... Or is there? If so, which (broad) strategy would bring us a break through? Page 20

21 Interesting story so far. Yet, it does not apply to us. We re already business driven Because? Please share with us your best practices, demonstrating a businessdriven approach Page 21

22 Fierce buying helps procurement to provide his organization systematically with weak suppliers, quality-poor products, and minimal services. True or false? If true, what should we change? If false, why? Would your business colleagues agree? Would your suppliers agree? Page 22

23 Having influence on business management is the key to businessdriven procurement Do you agree? Why / why not? On a scale from 1-10, how much influence would you have on business management? Since there s no such thing as having too much influence: what could we do to intensify our influence? Page 23

24 Discussion groups Group A - case 1 - Zaal 1: Katrien Van Broeck (Atlas Copco) Bart Smedts (ASCO) Joris Meerschaert (Unilin) Joke De Knock (Cegelec) Sabine Bouckaert (Barco) Isabelle Martens (NMBS) Group B - case 2 Zaal 2: Karolien De Maen (ASCO) Tom Smet (Cegelec) Wendy Fleurackers (Telenet) Marc Hermans (Barco) Hans Schurmans (Belgacom) Page 24

25 Discussion groups Group C case 1 Zaal 3: Birgit Naeyaert (Atlas Copco) Sara Van Reeth (ASCO) Elise Delbeke (Unilin) Wim Bosmans (Cegelec) Marc Slegers (Telenet) Sophie Bauden (Barco) Group D case 2 Zaal 4: Hans De Ruysscher (Unilin) Guido Engelen (Cegelec) Filip Schwartz (Telenet) Johan Kesteloot (Barco) Gunther Gutermann (Eandis) Patrick Florus (Mazda) Page 25

26 Discussion groups Group E case 1 Zaal 5: Matthieu Nyst (Cegelec) Liselot Declercq (Barco) Johan Maes (Eandis) Jan De Veirman (Belgacom) Mark Neefs (Fabricom) Herman Merckx (Mazda) Group F case 2 Zaal 6: Roger De Vos (Atlas Copco) Mieke Tollet (NMBS) Steven Cloostermans (Eandis) Hederik Tijs (BASF) Paul Mariën (Belgacom) Sandra De Clercq (Mazda) Page 26

27 Discussion groups Group G case 1 Zaal 7: Dimitri Deneve (ASCO) Ann Demaegdt (Unilin) Chris Croonenborghs (NMBS) Kurt Ceulemans (Eandis) Gert Van Nuffelen (Belgacom) Mark Neefs (Fabricom) Group H case 2 Zaal 8: Jan De Leersnyder (Unilin) Lenart Lenaers (NMBS) Jean-Pierre Hollevoet (Eandis) Guy De Poortere (Belgacom) Marc Vanelverdinghe (Fabricom) Page 27

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30 Top executive Paul Polman announces that over the past two years Unilever saved almost three billion euro in its supply chain. This enabled Unilever to effectively intercept the ongoing price pressure in its sales markets. As a result revenues grew by 9.2 %, and ample savings remained to improve the gross margin by 0.9 %. Hence, Unilever has successfully fortified its market position and raised its gross profits by 2.6 billion euro. Page 30

31 Abandon your isolated island! Don t keep fishing in the bloody red ocean, find a blue one (The Blue Ocean, Chan Kim & Mauborgne, 2010) Procurement has to understand the business and its challenges. Only then procurement will have the capacity to mobilizing business benefits from the supplier markets Stop producing savings and procurement concepts (e.g. category management, supplier relationship management). Tender for quality Stop selecting suppliers for their anorexia. Find suppliers with (complementary) capabilities Page 31

32 STOP talking about procurement Talk about suppliers and business issues STOP producing savings and procurement concepts (e.g. category management, supplier relationship management) Tender for quality STOP selecting suppliers for their anorexia Find suppliers with (complementary) capabilities Page 32

33 Brauweringen KK Baars the Netherlands Management Book of the Year 2010 Phone +31 (0) gerco@gercorietveld.nl Website Page 33