When the financial crisis struck, in 2008, Ron Wilson learned fast that his company’s approach to managing risk had become obsolete. As chief procurement officer at Wilbur Curtis, Wilson intimately knew the ups and downs of managing a global supply chain. But when it came to risk, the Montebello, California-based manufacturer saw him as the point man — and that was it. The aftermath of the Great Recession made that impossible.
What happens when a 120-year-old Danish wind energy company entrusts its contracts to a then three-year-old American solution provider? The companies in question are Vestas, which traces its lineage back to 1898, and SirionLabs, a contract management provider that goes all the way back to 2012. Last year, Jason Busch analyzed SirionLabs’ solution for Spend Matters PRO, and he concluded that the vendor would be a good fit for companies with “multi-year strategic supplier relationships encompassing complex services and solutions,” for whom “insufficient supplier governance is leading to lost savings and value creation opportunities.” This certainly sounds like Vestas’ situation before 2015, when the company implemented Sirion.
In 2012, AGCO stood at a crossroad. The agricultural equipment manufacturer faced stiff opposition from competitors, and knew that to extend its global reach, the company would need to transform the way it operated. The key to this transformation was a reimagined supply management function. The former AGCO purchasing organization ran a decentralized, regional and brand-oriented procurement model that had proven sufficient for those needs. But to become the operating company management envisioned, AGCO knew it needed to establish a single, global procurement organization, based on a global commodity management approach and setup, a strategic procurement philosophy and the technology platforms necessary for a streamlined supply chain.
Spend Matters welcomes this guest post from Suvigya Muchhal, of GEP.
For any potential customer, case studies are instrumental in providing an overview of the provider’s capabilities and in helping the client assess previous experience and scalability in a particular domain. These case studies are mostly published by service providers; some are posted on the provider’s website, while others are shared with the clients during a sales pitch. The question is, how can these case studies be validated?
Procurement's role, and a supply chain group's role more broadly, should figure into the strategy as well. Any procurement organization can have a strategy that supports an existing enterprise strategy, but only a truly strategic procurement group can actually help influence the business strategy. So, let’s consider a future case study in the making and consider the situation with office products retailer Staples.
Yesterday, we shared the first 5 of our 10 tips for getting started with a global supply chain risk management (SCRM) program. This post, based on content from a Spend Matters paper by Thomas Kase, vice president of research at Spend Matters, looks at our final recommendations. We invite all of our readers to download this analysis and our PRO subscribers to speak with our team about how to build their business case for SCRM program investment.
Our final tips for getting started with global SCRM programs include considering interoperability and integration, obtaining c-level sponsorship and tying in HR. Organizations that want an inside track on building or accelerating a business case for investment in SCRM are likely to find the Spend Matters paper, A Case Study in Global Supply Chain Risk Management: How AGCO Implemented an SCRM Solution to Save Millions, useful in their efforts.
If your organization is vested in supply chain risk management then we have the perfect example for you to follow. AGCO, a leading agricultural equipment manufacturer, uses riskmethods as a technology solution and the results have not only been successful – they've contributed to the bottom line.
Thomas Kase, VP of research at Spend Matters, has the story with A Case Study in Global Supply Chain Risk Management: How AGCO Implemented an SCRM Solution to Save Millions, now available for FREE download!
Global 2000 firms interested in the latest technology for their supply chain risk initiatives will especially benefit from this research.
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It is important to realize that supplier risk management (SRM) is still in its infancy. The solutions on the marketplace today are only scratching the surface of what is possible. Any company that has grown beyond a trivial size realistically has to be proactive about risk, not fighting fires only after emergencies strike. And it must stay on top of the latest technology and information sources capable of building visibility and awareness into incidents at all tiers in the supply base.
Organizations that want an inside track on building or accelerating a business case for investment in SRM are likely to find the Spend Matters paper, A Case Study in Global Supply Chain Risk Management: How AGCO Implemented an SCRM Solution to Save Millions, useful in their efforts.
Throughout this series exploring a case example of a services procurement transformation program aligned to overall company transformation efforts, we have centered our exploration on the program itself: its past and current state. In this final installment of the series, we explore the actual program office structure and operating model itself that the firm put in place as part of its transformation efforts.
At the IQNavigator IQNsider’s event earlier this month, the contingent workforce program leader from a large financial services institution took the stage to talk about how his firm’s overall transformation efforts included a new focus on services procurement programs as part of the overall change elements for the company. As part of this initiative, the organization focused on creating a hybrid top-down and bottoms-up approach to managing an overall program office to “show value through stakeholder partnerships” and to engage line-level managers.
At IQNavigator’s customer event earlier this month, I had the chance to listen to a case study from the services procurement program leader for a financial services firm, a story that offers lessons for procurement organizations regardless of industry. Most curiously, the company has started to tie elements of its overall organizational transformation efforts – the firm promoted within a chief transformation officer who is on the executive team – to its services procurement efforts.
Even with an initial well-constructed strategy in place with support tactics, it is inevitable in any supplier enablement and e-invoicing deployment that things will not always go as planned, or issues will arise that couldn’t possibly have been pre-determined. One issue for an organization we recently talked to was around communications to suppliers requesting information. It turned out that a surprising number of suppliers going through the onboarding process believed the outbound email and phone-based efforts were “phishing” efforts designed to steal their confidential information (e.g., banking details).