Getting your extended enterprise working as one. Harmonising your suppliers and your business objectives
Dec 3, 2013 9:11:00 AM
The modern business now consists of a small central core conducting a large virtual orchestra of suppliers.
The maestro leading this symphony is procurement.
Unfortunately for our maestro, the audience (who are the various functional managers in a company) are allowed to participate in this particular symphony, demanding how they want various instrumentalists to play. And they all want to hear something slightly different, to meet their individual needs.
The maestro does his best to manage the first chair violinist who is playing a very detailed, rapid fire medley of complex patterns and articulations. At the same time he is having the percussionists smashing wind chimes and banging cowbells mindlessly, while the brass section is busying themselves playing ‘When the saints go marching in’. At one point, he picks up the flute and plays it himself…
All of the different elements playing their own tune creates a mess of noise and distortion, and definitely does not sound like the beautiful symphonic masterpiece the audience is here to listen to.
The maestro begins to put the pressure on the different instrumentalists to better meet the demands he is making (from the audience) – but all that is happening is that the playing gets worse and the group becomes more disconnected, missing notes and losing morale.
So the maestro stops the orchestra. He turns to the audience, and explains that the instrumentalists cannot meet their demands, and as such he (the maestro) needs to look for a new orchestra, which will take a few months, to meet their demands.
The audience is left unhappy – after all, their needs have not been met. They will not come back to the next ‘symphony’.
This is an exaggerated example of a very real issue facing procurement functions; hindering their credibility, limiting their reach across businesses, and generally keeping them arm’s length with stakeholders who have been ‘burnt’ before.
Effective business and supplier harmonisation requires a deep understanding of stakeholders’ needs, drivers and their perceptions of value. How can you expect your suppliers to ‘add value’ (above a cost reduction), if you cannot articulate how value is measured?
Harmonisation requires knowledge, insight, experience and expertise to challenge legacy and long-held beliefs – a different mind-set that asks ‘why?’ first, then ‘how much?’
Harmonisation requires a long term vision, one that is agile and flexible about change, one that encourages the curious mind to dig deeper, one that truly understands business demands, one that aims to exceed expectations and deliver a positive experience back to the business – regardless at what level.
Suppliers now play an integral role in your business, effective harmonisation between your functional objectives and your supply base can be the difference between hitting and missing your goals.
We have thought hard about how to achieve business and supplier harmonisation – we call it, CatalyticsTM. Take a look at this short animation to find out more about CatalyticsTM.