Unlocking The Value Code…###solutions;
Albert Einstein once said, “We
cannot solve our problems with the same thinking we used when we created them.”
As globalization was heralded as the great path forward, we are left with
the past as our sole learning experience for a future that is far from certain.
This is especially true if we don’t unlock the code for sustainable success in
a world that has become hyper-connected globally in a way that Milton Keynes
could not have suspected in the days of colonial globalization of the 19th
and early 20th century.
A business that has global scale is at
risk of becoming a victim of its own success with downside risk presenting many
scenarios, where inflexibility and unresponsiveness will be punished in a
dynamic and every demanding marketplace. Sourcing and the Procure 2 Pay chain are
at the center of this challenge given its value proposition and how it affects
everything from customer satisfaction to inventory supply to cashflow.
Every business will have process
variants on procurement that suits their business model, but to be flexible
enough in a global environment, the following should be considered as key
points for evaluation in any review of same:
Organisational Positioning. Do senior management and the company culture understand the ‘source 2
pay chain’ and its importance in delighting customers from Bombay to Boston?
Procurement. Is procurement considered an
active business partner by business units globally and do they input meaningfully
into purchasing decisions where economies of scale can bring cost savings?
Sourcing. Can value be unlocked in
decentralized sourcing of everything from office stationary to raw materials
and services? Google unlocked amazing value gaining market share in India
through local sourcing for its ‘Android One’ smartphone which is a big hit in a
populous country thanks to sourcing and procurement enabling a low cost
qualitative assembly of the product.
Process Management. Are the processes within the
‘procure 2 pay’ chain centrally visible increasing senior level awareness of
the chain’s operational state but not at a cost of local management
responsibilities or authorities? Is the process structure lean and inset into
the larger process infrastructure of the organisation? Can it cope with a
dynamic marketplace and facilitate change rather then obstruct it?
In terms of global solutions in
organisational design, here are some thoughts and insights that can be applied
to any business when formulating an upgrade or development of their source 2
pay process chains.
1. Sourcing and Procurement can be split
especially if specialist scientific knowledge is required for vendor product
evaluation and selection. A global framework needs to account for this in its
design.
2. Sourcing & Procurement can be
decentralised unlocking value in supply chain. Decentralised sourcing and
procurement in a hyper connected world is becoming a competitive advantage in
many industries.
3. Following point 2, are controls and transparency
of the process infrastructure considered carefully through techno-centric eyes?
The need to balance local freedom with centralised over-watch is tricky, but necessary
to get right if a global process model is to work.
3. Process localisations should follow a
prescribed control process where process changes are evaluated, processed and
approved in a standard format. This is very important when it comes to
compliance and management inspection. Integrated process structures are not
truly integrated unless it is present.
4. It is recommended that an expressed
authority exist for the global process owner to have an audit
capability/authority to instruct audits of process as part of the internal
audit process.
5. Payables automation and centralisation
in a global process model is recommended on the basis of process quality,
consistency and cost effectiveness.
There is no doubt that unlocking the
value code is complicated for the source 2 pay chain on a global level.
However, with the right information, business model and people at the table in
a stakeholder led review, the sky is truly the limit!
Source/Credits:
Pics
Credits:
No comments:
Post a Comment