It’s a key challenge for organizations around the world.
How do procurement and supply chain teams move beyond savings to drive value and revenue growth for the organization?
In the quest to maximize total value for your organization, an often overlooked but key focus area with significant savings AND revenue potential should be a deep dive into your procurement teams and your global supply chain operations.
There are many models and organization designs out there to evaluate and deploy within your organization. The Center Led Procurement (CLP) model is our of our preferred models.
The CLP model is built on cross-functional teams led by the sourcing and procurement organization. These teams represent the different areas of your organization, aligned by the what, why and how you spend your money.
As we like to say, CLP can provide procurement and supply chain teams freedom within a framework. As always, we encourage some organizational prototypes to try the model and test drive it, to see if is for you.
The three key steps in evaluating and prototyping the CLP model are to:
First, identify and have visibility to your direct and indirect spend.
Second, categorize your spend into meaningful categories that matter for your operation.
Third, create very flexible category/commodity strategies that can be implemented at the local/regional level.
These initial steps can help you optimize and take advantage of local markets and increase your speed to solution for your customers. You are able to increase your operations efficiencies, and can react quickly to local supply chain challenges or disruptions.
There is also a deeper reality in that a strategically aligned and highly trained procurement organization, with proper foundational education, business systems, tools and technology can be the functional group to harmonize, scale, solve long-term challenges and maximize total value for the organization.
We call this CLP evolution, that occurs over time, a solution-sourcing approach.
The objective and mission over time is to develop your procurement and supply chain teams, and shift away from a tactical focus of getting things to the right place at the right time towards a strategic business focus.
Today, the procurement and supply chain team can become the hub of the wheel for the organization. A Hub that drives long term growth focused on generation of revenue beyond savings.
To Read the Other Posts in This Series, Please see the links below:
To learn more about how The Innovation Garage® can help support your plans for Center Led Procurement and Supply Chain with our 3 phase approach, blended education delivery, and the supporting tools and technology to help. Please reach out to us below.
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We help organizations become more profitable. We build strategy. We build ideas and the capability of teams. We design products, services and supply chains. We guide leaders from startup to the Global Fortune 50 to intentionally self-disrupt their offerings and organizations. We provide world-class education, tools and technology on how to craft business operating systems focused on long-term profitable growth.