Embedding_the_Category_Management_Mindset_-_Denali_Group
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
Shelley Millis-Wight, Senior Manager<br />
Presented by:<br />
Conrad Snover, Partner
© 2014 Copyright <strong>Denali</strong> Sourcing Services Inc.. All Rights Reserved.<br />
2
§ The Era of <strong>Category</strong> <strong>Management</strong> is NOW<br />
§ <strong>Mindset</strong>: The 3 <strong>Category</strong> Manager Imperatives<br />
§ Operationalizing <strong>Category</strong> <strong>Management</strong><br />
© 2014 Copyright <strong>Denali</strong> Sourcing Services Inc.. All Rights Reserved.<br />
3
Expanding Procurement’s Value<br />
for The Global 2000 since 1996<br />
Procurement Transformation, Strategic<br />
Sourcing, and <strong>Category</strong> <strong>Management</strong><br />
Sourcing, Contracting, Supplier <strong>Management</strong>,<br />
Analytics, Managed Source to Pay Programs<br />
Subscription and Custom Supply<br />
Market Intelligence<br />
Learn, Play and Reinforce: <strong>Category</strong> <strong>Management</strong><br />
and Strategic Sourcing Training<br />
Staffing and Recruiting of Procurement Professionals<br />
3 year growth rate: 194% <br />
© 2014 Copyright <strong>Denali</strong> Sourcing Services Inc.. All Rights Reserved.<br />
4
<strong>Category</strong> <strong>Management</strong> Era<br />
Strategic Sourcing Era<br />
Traditional<br />
Buying Era<br />
© 2014 Copyright <strong>Denali</strong> Sourcing Services Inc.. All Rights Reserved.<br />
5
ü Needs assessed at <strong>the</strong> CATEGORY level across entire enterprise -<br />
not just by Region, BU, Plant, Supplier, or Project level<br />
ü Specialization – CMs are <strong>the</strong> Subject Matter Experts (SMEs)<br />
ü Challenges current state thinking – and develops a portfolio of<br />
potential solutions<br />
ü Adopts best-in-class category approaches<br />
ü Becomes a category thought leader as <strong>the</strong>ir time with category<br />
grows<br />
ü Strong relationship skills – “Salespeople of Procurement”<br />
ü Proactive versus Reactive<br />
ü Delivers or exceeds expected annual goals – stakeholder<br />
satisfaction, value/savings delivered, spend under management<br />
© 2014 Copyright <strong>Denali</strong> Sourcing Services Inc.. All Rights Reserved.<br />
6
In conclusion: our major contract expires<br />
tomorrow, we have no idea what we want and<br />
no knowledge of <strong>the</strong> market. It is time to pass<br />
this across to <strong>the</strong> Procurement team…<br />
© 2014 Copyright <strong>Denali</strong> Sourcing Services Inc.. All Rights Reserved.<br />
7
CM S C SM<br />
KNOW YOUR STAKEHOLDERS<br />
q Be with stakeholders - spend time (real/mental) with <strong>the</strong>m every day<br />
q Intimately know <strong>the</strong>ir business objectives (AQSCI), <strong>the</strong> key<br />
enablers and barriers to those objectives; where value is created<br />
q Establish true alignment with stakeholders – establish shared<br />
goals, earn trusted advisor relationship<br />
q Sell your vision - fully aligned and integrated with stakeholders<br />
q Bring new opportunities to <strong>the</strong> table vs. react to requests or issues<br />
q Plant seeds with Stakeholders – this is an evolution; start one<br />
project at a time; build reputation, trust<br />
q Your category knowledge will grow with time, and your<br />
credibility with stakeholders…<br />
© 2014 Copyright <strong>Denali</strong> Sourcing Services Inc.. All Rights Reserved.<br />
8
CM S C SM<br />
UNDERSTAND YOUR CATEGORIES<br />
q Get dirty with <strong>the</strong> data - become intimate with your category<br />
q Get to true insights - go beyond data – <strong>the</strong> “so what’s”<br />
q Drive and curiosity to seek insights and develop strategies<br />
q Be intentional regardless of <strong>the</strong> depth and category maturity<br />
q Be “in <strong>the</strong> market” – study market drivers/trends, talk to suppliers,<br />
participate in market events, read<br />
q Network with category peers in o<strong>the</strong>r organizations<br />
q Understand your suppliers – capabilities, performance, why you use<br />
<strong>the</strong>m, leverage <strong>the</strong>m<br />
q Knowledge grows with time – but should not delay execution…<br />
© 2014 Copyright <strong>Denali</strong> Sourcing Services Inc.. All Rights Reserved.<br />
9
CM S C SM<br />
DELIVER RESULTS<br />
q Sense of urgency to deliver on goals (savings, stakeholder needs)<br />
q Know your targets by month/quarter, and have a plan to get <strong>the</strong>re<br />
q Eliminate extraneous work - Make sure that all activities link<br />
directly to executing against intentional strategies<br />
q Don’t get hung up on templates, data analysis or status quo<br />
q Challenge business as usual … If not now, <strong>the</strong>n when?<br />
q Leverage all available resources to reach your objectives<br />
q Press sourcing strategies for greater value (go to auction?)<br />
q Sustain <strong>the</strong> value by managing supplier relationships and<br />
performance<br />
© 2014 Copyright <strong>Denali</strong> Sourcing Services Inc.. All Rights Reserved.<br />
10
1. Drives <strong>the</strong> overall vision and strategy of <strong>the</strong> Global <strong>Category</strong><br />
and communicates it to all stakeholders.<br />
2. Hires, develops and enables <strong>the</strong> execution team for effective<br />
and efficient execution of category projects<br />
3. Removes all barriers for execution team to achieve objectives.<br />
CM Lead should delegate all o<strong>the</strong>r tasks to his or her team.<br />
© 2014 Copyright <strong>Denali</strong> Sourcing Services Inc.. All Rights Reserved.<br />
11
" Securing a global supply base that meets company cost targets to<br />
manufacture a highly efficient vehicle to be <strong>the</strong> low cost leader in<br />
its market<br />
" Developing a new call center capability in a low cost South<br />
American country to meet <strong>the</strong> localization and customer service<br />
needs of your organizations growing South America presence<br />
" Meeting with your top IT service suppliers to brainstorm on how<br />
<strong>the</strong>y can support a variable fee structure to support you<br />
organizations unpredictable demand patterns<br />
" When renewing your next outsourcing contract, embedding risk /<br />
reward incentives to ensure suppliers are vested in <strong>the</strong> success<br />
and outcome of <strong>the</strong> initiative that is a top 3 priority for your<br />
company<br />
© 2014 Copyright <strong>Denali</strong> Sourcing Services Inc.. All Rights Reserved.<br />
12
" Finding new suppliers that can participate in your RFP.<br />
" Conducting spend analysis to understand your purchase<br />
price variance in IT services you have been purchasing over<br />
<strong>the</strong> last 5 years.<br />
" Running a competitive bidding process to create a preferred<br />
supply base for your sheet metal purchases.<br />
" Holding an impromptu supplier meeting to address ongoing<br />
performance issues<br />
Out-task this tactical work to a centralized team<br />
© 2014 Copyright <strong>Denali</strong> Sourcing Services Inc.. All Rights Reserved.<br />
13
Nicole wants to hire a supplier to provide<br />
Negotiations Training for her team<br />
Option 1 – Do it herself<br />
• Nicole finds supplier on her own<br />
• Negotiates deal<br />
• Submits PO<br />
Option 2 – Engage <strong>Category</strong> <strong>Management</strong><br />
• If Nicole is aware, she can reach out to <strong>Category</strong> <strong>Management</strong><br />
team for support with her request.<br />
• Training <strong>Category</strong> is currently unmanaged, <strong>the</strong>refore it is not<br />
clear whe<strong>the</strong>r <strong>the</strong> team can support her request or recommend<br />
preferred suppliers<br />
Option 3 – Reach out to Buyer Team<br />
• If Nicole is aware, she can reach out to <strong>the</strong> US Buyer<br />
Team for support with her request.<br />
• Functional SPOC or Sourcing Lead will support Nicole<br />
as much as <strong>the</strong>y can, but since <strong>the</strong> <strong>Category</strong> is<br />
unmanaged, it is unclear what support will be.<br />
Nicole has 3 primary options:<br />
1) Do it herself<br />
2) Engage <strong>Category</strong> <strong>Management</strong><br />
3) Reach out to Buyer Team<br />
She may not know about option 2 or 3<br />
© 2014 Copyright <strong>Denali</strong> Sourcing Services Inc.. All Rights Reserved.<br />
Key Takeaway – Engagement model with<br />
Procurement is unclear and without prior<br />
awareness, it is unlikely that stakeholders like<br />
Nicole know how to get support<br />
14
Nicole wants to buy something<br />
Nicole reaches out to a<br />
Centralized Sourcing Team (CST)<br />
CST works with Nicole to understand what she wants<br />
to buy<br />
• Requirements<br />
• Timelines<br />
• Budget<br />
• Preferences<br />
CPT decides on <strong>the</strong> best solution<br />
• Catalog Buy<br />
• Card Buy<br />
• Quick Buy from preferred suppliers<br />
• Quick Bid/SOW<br />
• Competitive Bid, Sourcing Event<br />
• Contract Negotiation<br />
• Strategic Sourcing Event<br />
CPT assesses <strong>the</strong> request<br />
• Nicole’s requirements<br />
• Complexity<br />
• Procurement Strategies & Guidelines<br />
• Policy & Best Practices<br />
© 2014 Copyright <strong>Denali</strong> Sourcing Services Inc.. All Rights Reserved.<br />
15
Nicole’s Request gets assigned to <strong>the</strong> right operations team<br />
- Tactical<br />
- Strategic<br />
- Help Desk<br />
The assigned team engages<br />
Nicole for next steps and to<br />
• Explain Process<br />
• Agree on timeliness<br />
• Level set expectations<br />
• Explain engagement model<br />
• Agree on outcomes & results<br />
CST executes <strong>the</strong> request<br />
• Identify suppliers<br />
• Negotiate<br />
• Analyse and find <strong>the</strong> best value<br />
• Consult & agrees with Nicole<br />
• Consult & engage with GPP<br />
• Draft <strong>the</strong> contract<br />
• Execute <strong>the</strong> contract<br />
• Advise Nicole on next steps<br />
<strong>Category</strong> Manager is Happy<br />
• His category is executed based on his strategy<br />
• His stakeholders are happy<br />
• He got engaged at <strong>the</strong> right time at <strong>the</strong> right level<br />
• He can concentrate his energy to <strong>the</strong> right strategic events or<br />
strategy development<br />
• He receives feedback on what’s working, what’s not working,<br />
so he can include into his strategy<br />
He scaled himself to do more and watch his<br />
strategies make stakeholders happy and bring<br />
value to <strong>the</strong> organization<br />
Nicole is Happy<br />
• She received what she wanted and fast<br />
• She didn’t need to worry<br />
• Who <strong>the</strong> suppliers are<br />
• How to negotiate<br />
• If she’s getting <strong>the</strong> best TCO quality/<br />
service/price<br />
• How to draft a contract<br />
• Follow all <strong>the</strong> policies<br />
• She even saved money on her budget<br />
All of <strong>the</strong>se Services provided to her by <strong>the</strong> CST and<br />
she was involved at <strong>the</strong> right times and decision<br />
points and watched all happen very quickly on her<br />
behalf<br />
© 2014 Copyright <strong>Denali</strong> Sourcing Services Inc.. All Rights Reserved.<br />
16
Business<br />
Stakeholders<br />
<strong>Category</strong><br />
Manager<br />
Toolbox<br />
Centralized Intake<br />
<strong>Category</strong><br />
Playbooks<br />
Processes / Systems<br />
Project<br />
Triage<br />
Sourcing<br />
Contract<br />
Supplier<br />
Mgmt<br />
Request Intake &<br />
Project Tracking Portal<br />
Centralized<br />
Sourcing<br />
Execution Team<br />
Operate within Client<br />
Procurement Ecosystem<br />
COE & Knowledge <strong>Management</strong><br />
© 2014 Copyright <strong>Denali</strong> Sourcing Services Inc.. All Rights Reserved.<br />
17
Conrad Snover<br />
Partner<br />
415.806.6726<br />
csnover@denaliusa.com<br />
Shelly Millis-Wight<br />
Senior Manager<br />
602.692.4074<br />
smillis-wight@denaliusa.com<br />
© 2014 Copyright <strong>Denali</strong> Sourcing Services Inc.. All Rights Reserved.<br />
18