Procurement needs to maximise its productivity if its going to meet business needs. Having access to real-time supplier information is a step in the right direction.
When I started my career in procurement over 40 years ago, we used notebooks to store all of our supplier information.
Go ahead – be shocked or have a little chuckle about how ‘primitive’ we were! But guess what? Things haven’t changed nearly as much as people like to think.
Today, most procurement teams have modernised their supplier information management by using some type of a shared database. These solutions, while centralised and searchable, still rely on internal team members manually entering and then searching for supplier knowledge.
And while most companies are doing the best they can with scarce resources, it is important to remember that it is possible to make progress without actually resolving any key business issues, or becoming the slightest bit more strategic.
Value in Scalability
We had notebooks and you have a database. But if the information isn’t (a) current and (b) fully leveraged, it doesn’t really matter where it sits.
The true transformative value of any technology is its scalability. How much of an effect does it have on the amount of work each person can accomplish?
tealbook, a platform that centralises supplier provided information, internal supplier knowledge, data from Dun & Bradstreet, and aggregate intelligence from industry peers, has set this challenge of scalability as their target.
Making it possible for procurement to accelerate the discovery process through instant supplier recommendations, and improving the match between business needs and prospective suppliers, gets at that need for scale.
With better suppliers available sooner, procurement can achieve a step change in their productivity. This also helps to move the needle on the all-important metric of spend under management.
Productivity – Focusing Your Efforts
Let’s say you’ve got 20 people working 40 hours a week, 50 weeks a year. That gives you a maximum of 40,000 procurement hours per year. You’ve got to ask yourself how many of those hours the team spends looking or searching for something to satisfy an information need. Every hour not spent on value-added activities is an opportunity to improve productivity.
When we look at procurement’s productivity in the context of supplier discovery, we have to focus our attention on how much time procurement spends searching for the right suppliers before a sourcing project can get off the ground.
In order to decrease the time required for discovery – and increase the quality of the suppliers invited to participate – we need to make sure we’re searching a resource dense with suppliers and supplier information, preferably using a common language search rather than archaic codes.
Whether you’re looking at a supplier discovery platform or a more traditional supplier marketplace, the point is to focus your efforts where they are most likely to generate positive results.
There’s a huge advantage in somebody being willing to take the time to centralise the right information and maintain it. The resulting resource will make a dramatic improvement to what procurement is able to deliver, how often we can deliver those results, and just how BIG those results are.
There aren’t many companies adding employees, so if you can find a solution that dramatically changes the amount of work each employee can do, you’ve really got something strategic.
Meeting Real-Time Supplier Information Needs
Today, an increasing number of corporations want to believe that their procurement teams operate strategically. As that reputation spreads, more and more projects will come from the business.
In order to handle the increased demand for our time and skills, procurement has to be really good at making decisions about how to spend time and allocate scarce resources.
If we are going to facilitate purchases, strategically source every category, AND meet the real-time needs of the business, technology has to be capable of actual heavy lifting, not just function as an electronic supplier notebook.
In my next post, we’ll go beyond the supplier information modernisation process to look at the strategic value of a marketplace approach.
Gregg Brandyberry is a recognised pioneer in procurement and sourcing technology. He has over 40 years experience in industries such as automotive, textile, manufactured goods, electronics and healthcare.
He is the former Vice President of Procurement – Global Systems and Operations for GlaxoSmithKline, and a Senior Advisor for A.T. Kearney’s Procurement and Analytic Solutions organisation.