Wie fit ist Ihr Einkauf?

In a series of ten regular posts published by the Procurement Leaders Global Intelligence Network I looked at the different facets to transform procurement to a partner of choice

Part 1 - balance between global and local

2011-09-16 00:00

Posted on Friday, September 16 by Registered CommenterSteve Hall in Leadership, Strategic Sourcing, Talent Management

Thought Leaders is a series of regular posts from experts from across industries and regions, looking at the issues procurement faces today. In this post, procurement and supply chain consultant and former CPO of Deutsche Post DHL Hugo Eckseler warns of the dangers of 'hollow facades' that can derail transformation programmes and highlights the lessons learned from his time as head of a function.

One of the first activities of new CPOs taking office typically is to conceive a corporate procurement vision and communicate it to the entire organisation.

Their management teams and central procurement experts create a roadmap how to achieve the visionary goal within the next 3, 4, 5 years and start to release a full suite of state-of-the-art procurement programmes and tools: from global categorisation and analysis of spend data, detailed savings calculation and tracking handbooks, comprehensive supplier evaluation and risk management procedures, standardised e-sourcing and e-purchasing tools all the way down to “Green Sourcing” and annual employee opinion surveys - accompanied by well-prepared change management and incentive programmes.  Monitoring of progress is done via sophisticated and standardised measurement systems around the globe.

So, where is the problem?

Well, if you have a closer look at multi-national companies you rarely find homogeneous procurement organisations: there are top countries with highly qualified and mature units as well as small countries with just a few procurement people on the ground. The latter often fully occupied by day-to-day operations and with limited time to read, understand and implement corporate initiatives. However, the headquarters expect a “mission accomplished” statement at the end of the day and so it’s no surprise that some of the locals may be inclined to report “hollow facades” in order to meet corporate expectations and protect their personal target related variable salary.

Is there a way out of the dilemma?

I think so. One of the learnings from my time as CPO and Supply Chain Manager in multi-national companies:  corporate programmes must take into account size, resources and needs of large and small countries and must allow for alternative solutions. Sophisticated programmes requiring special expertise may be introduced in top countries only following an 80:20 approach. Simple templates and tools may suit the needs of small countries more than fully automated systems, reporting may be simplified or even skipped for some operating units, etc.

It sounds easy, but needs strong leadership by the CPO.  Global programmes driven by young and motivated professionals develop their own dynamics. It’s up to senior management to identify the capacity limits of their organisation, to set the right priorities and to define what is “out-of-scope” - based on an organised and open communication between the center and the local teams. As said before: it sounds easy, but needs a lot of experience and seniority.

I’m curious about any comments.

Hugo Eckseler works today as senior consultant for procurement and supply chain management - after more than twenty years as CPO and manager in manufacturing, logistics and quality at Deutsche Post DHL, 3M, WELLA and other multi-national companies.

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