Cathy Johnson - CPG Event - 10th November 2010 - The Knowledgeable Buyer
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Transcript of Cathy Johnson - CPG Event - 10th November 2010 - The Knowledgeable Buyer
© Celerant Consulting
Page 1
© Celerant ConsultingThe content of this presentation and/or documentation contains the proprietary and confidential information of Celerant Consulting Holdings Limited and/or of its relevant parent(s), subsidiary
and/or subsidiaries (as applicable 'Celerant') and, as applicable, the proprietary and confidential information of third parties used by Celerant under an appropriate license therefrom. In consideration of Celerant making this information available to you, you agree to protect the confidentiality of the same as might reasonably be expected by Celerant. Without limitation, the
information contained herein is the copyright of Celerant and may not be re-produced in whole or in part without the express prior permission of Celerant.
The knowledgeable buyer and the impact on
quality of Business Improvement Programmes
Cathy Johnson, Celerant Consulting
© Celerant Consulting
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Business improvement purchasing – changing the way services are purchased and performed
Consulting Advice
“Defining what and how”
Business Improvement
“Making the change happen”
© Celerant Consulting
Page 3
Challenges of pitching Business Improvement into Procurement
Risk/Reward, commitment to results, return on investment
Daily rates/rate cardsSpend criteria
Sustainable Behavioural changeResults need measurement & monitoring to ensure they hit the bottom line
Advice, expertiseResults are the advice and conclusions
Benefits/ outcomes
Evaluation of consultancies
Needs identification/definition
Demand management
Criteria
Selection of the right partner to co-create the solution – confidence in the partner to deliver the required outcomes (more flexibility on the activities)
Confidence in the quality of the presentation at the pitch and the individuals present
References (evidence of how)Credentials (evidence of what)
Dynamic phased process to increase certainty of results
Often consultant led, discreet process at single point in time
Ongoing contract management, collaboration with Operation
Separate roles for operations and procurement
Purchasing Business Improvement“Traditional” Purchasing
© Celerant Consulting
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The emotional journey of change
Where adviceactivity stops
Where Business Improvement activity starts
Results
Results
© Celerant Consulting
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Business Improvement projects are not always well defined at the outset
1. Optimism - the start of the journey
3.The defined results
2. The journey of business improvement
Simple to define
Reasonably simple to define
Difficult to define & measure but critical to success
© Celerant Consulting
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Where Business Improvement purchasing often focuses
MANAGEMENT SYSTEMS
PROCESSES
PEOPLE & ORGANISATIONS
Get Get Get Get BuyBuyBuyBuy----in in in in
BEHAVIOURAL CHANGE
SUSTAINABLE
RESULTS
Mapping key processes and applying appropriate “lean” and 6 Sigma type tools to generate improvement
# people trained in tools and techniques to which level The Celerant 5 Box Model®
Get Get Get Get CommitmentCommitmentCommitmentCommitment
Make itMake itMake itMake itHappenHappenHappenHappen
Make it Make it Make it Make it StickStickStickStick
� Financial� Operational� Cultural
© Celerant Consulting
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The critical success criteria for successful Business improvement engagements lie in...
MANAGEMENT SYSTEMS
PROCESSES
PEOPLE & ORGANISATIONS
Get Get Get Get BuyBuyBuyBuy----in in in in
BEHAVIOURAL CHANGE
SUSTAINABLE
RESULTS
The Celerant 5 Box Model®
Get Get Get Get CommitmentCommitmentCommitmentCommitment
Make itMake itMake itMake itHappenHappenHappenHappen
Make it Make it Make it Make it StickStickStickStick
� Financial� Operational� Cultural
Installing an effective MCRS®; KPI’s and meeting structures, escalation process and performance related behaviours
© Celerant Consulting
Page 8
Discovery Baseline Analysis Design & Deploy Implement
To 1 week 4-6 weeks 8-16 weeks 20-30+ weeks
High level opportunity assessment, prioritisation and approach
Validate business case, primary drivers and implementation plan
Implementation Solution Design and Mobilisation
Install new ways of working and ensure sustainability
Divide the decision process into more manageable chunks An example phased approach to defining BI outcomes
© Celerant Consulting
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Sustainability – leaving behind an organisation capable of continuous performance improvement
Engage TrainingGuidance coaching
Coaching coaches
Coaching sustainability
CONSULTANT TEAM:PROJECT FOCUS
CONTINUOUS IMPROVEMENT:EMBEDDED IN ORGANISATION
DESIGN IMPLEMENTANALYSIS SUSTAIN
Competence Development in Client organisation
© Celerant Consulting
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Defining and tracking the results to ensure the return on investment
Area / Process Issue / Problem StatementBaseline (Financial
workwith)
Machine Availability: Excess time beyond
required is required to complete
mandatory washing / cleaning of
machines
£131,363 4% 5% £4,926 £6,897
Management skills:
Lack of tools on how to solve and find
root cause on daily/weekly issues. £131,363 4% 5% £4,926 £6,897
Machine Availability: Excess time beyond
required is required to complete routine
changeovers£131,363 5% 7% £6,568 £9,195
Machine Availability: Excess time beyond
required is required for machine
shiftchanges
£131,363 3% 4% £3,284 £4,598
Machine Availability: Excess time beyond
what is required to do first line
maintenance
£131,363 3% 4% £3,284 £4,598
Machine Availability: High volume of
unplanned machine downtime due to
lack of input material and machine
breakdown
£131,363 3% 4% £3,284 £4,598
Machine Rate :Losses due to inadequate
standards on how to utilize machine
capacity £131,363 5% 7% £6,568 £9,195
Area % Impactability
Min / Max
Identified Financial Benefits
Min / Max
Production
Effectiveness
Sum 32,841 45,977
Evaluation Financial Benefits are tracked weekly in an evaluation tool
agreed with the business case
The Overtime budget was recently approved and can begin measuring Overtime against target.
Results Planning: Where will the financial and operational improvement come from
Evaluation Methodology:How we know the financial and operational improvements are actually hitting the bottom line
Area / Process Issue / Problem StatementBaseline (Financial
workwith)
Machine Availability: Excess time beyond
required is required to complete
mandatory washing / cleaning of
machines
£131,363 4% 5% £4,926 £6,897
Management skills:
Lack of tools on how to solve and find
root cause on daily/weekly issues. £131,363 4% 5% £4,926 £6,897
Machine Availability: Excess time beyond
required is required to complete routine
changeovers£131,363 5% 7% £6,568 £9,195
Machine Availability: Excess time beyond
required is required for machine
shiftchanges
£131,363 3% 4% £3,284 £4,598
Machine Availability: Excess time beyond
what is required to do first line
maintenance
£131,363 3% 4% £3,284 £4,598
Machine Availability: High volume of
unplanned machine downtime due to
lack of input material and machine
breakdown
£131,363 3% 4% £3,284 £4,598
Machine Rate :Losses due to inadequate
standards on how to utilize machine
capacity £131,363 5% 7% £6,568 £9,195
Area % Impactability
Min / Max
Identified Financial Benefits
Min / Max
Production
Effectiveness
Sum 32,841 45,977
© Celerant Consulting
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The underlying journey means measuring progress along the way is critical to ensuring the results are delivered
LEARNING/
EXPERIENCE
DEVELOPING PRACTICE AND LEARNING PERFORMING
MISTRUSTWatching
DISBELIEFProtecting
HOPEFULContributing
ANGRYWithdrawing
UNCERTAINTYCo-operating
CAUTIOUSLYPOSITIVE
Engaging
SELF-CONFIDENTGiving
PRIDETake-over
ACCEPTANCE
20%
COMPLIANCE
60%
OWNERSHIP
100%
USE
40%
UNDERSTANDING
80%
© Celerant Consulting
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So a knowledgeable buyer will need to shift the criteria and goal posts for comparison and selection
Risk/Reward, commitment to results, return on investment
Daily rates/rate cardsSpend criteria
Sustainable Behavioural changeResults need measurement & monitoring to ensure they hit the bottom line
Advice, expertiseResults are the advice and conclusions
Benefits/ outcomes
Evaluation of consultancies
Needs identification/definition
Demand management
Criteria
Selection of the right partner to co-create the solution – confidence in the partner to deliver the required outcomes (more flexibility on the activities)
Confidence in the quality of the presentation at the pitch and the individuals present
References (evidence of how)Credentials (evidence of what)
Dynamic phased process to increase certainty of results
Often consultant led, discreet process at single point in time
Ongoing contract management, collaboration with Operation
Separate roles in the operation and procurement
Purchasing Business Improvement
Purchasing Advice
© Celerant Consulting
Page 13
Contact
Cathy Johnson
Vice President
+44 783 627 3799