Successful procurement transformations need sense of urgency

Paul Snell is managing editor at Supply Management
posted by Paul Snell
1 May 2013

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1 May 2013 | Paul Snell in Grapevine, Texas

It is important to create a sense of urgency during a procurement transformation to reap the benefits, according to the head of indirect procurement at Coca-Cola.

Speaking at the Institute for Supply Management annual conference in Texas, Gregg Waterman, vice president, procurement, indirect goods and services, explained how the supply chain function had changed, following the business' acquisition of the North American operations of Coca-Cola Enterprises – the company's largest bottler – in October 2010.

“It's very easy for people to sit and listen to a senior leader speak, come out of that meeting all fired up, go back to the desk and a few hours, days or week later fall back into the regular routine – it's human nature,” he said. One of the tactics he used to stop people falling back into a comfort zone was to take the overarching goal – saving $100 million (£65 million) – and to try to make it relevant to people working on the project.

“That's a big number and it can be hard for individuals to understand their role in it. We tried to bring it to something that’s relevant and part of everyday life: That's $10 million a month, $13,000 an hour. And if you put those into day-to-day actions you realise if ‘I delay that meeting for three hours that's $1,300’ or, ‘if I wait a week to get back to you with that information – or delay a meeting – that's potentially a $70,000 impact’. We tried to make it very real and keep that sense of urgency front and centre to connect with every individual involved. And that's not just for procurement folks, that's for everyone on the cross-functional teams.”

He also raised the importance of celebrating success and making sure it is done publicly – especially when you have cross-functional teams working on a project that might not be part of their day job. And to ensure it is not just the CPO saying it, but people throughout the organisation and senior leaders acknowledging what has been done for the business.

Equally critical was taking advantage of the huge opportunity on offer because for many companies they do not come along very often. “This was a unique opportunity, we had to take full advantage. We are a 127-year old company, mergers and opportunities like this don't come along every day – we needed to seize the moment and take full advantage of it,” Waterman said.

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