ProcureCon Change Management

Change Management: Leading Inside and Outside the Supply Chain

By: Ian O’Brien & Mike Inman

•  The 3 things your boss wants you to demonstrate as an acBve leader •  Leading in-‐ and outside the supply chain; taking the right approach to each •  Developing stories about wins and losses •  Sales-‐person-‐ship in procurement •  The power of “I’m sorry”

Together with our millions of supporters, the American Cancer Society saves lives and creates more birthdays by helping you stay well, helping you get well, by finding cures, and by figh=ng back. •  We help you take steps to prevent cancer or detect it. •  We guide you through every step of your cancer experience.

–  Phone lines (1MM/year); Cancer.org (25MM/year); Moral support (groups and 1-‐on-‐1)

•  Offer prac=cal solu=ons to daily challenges: transporta=on; a free place to stay when care is far away from home, and pa=ent naviga=on services.

•  We fund groundbreaking research that helps us understand cancer’s causes and cures. –  Largest private funder of cancer research -‐ ~ $130 million per year ($3.5 billion + since 1946) –  Played a role in nearly every major cancer breakthrough last century:

•  CigareIe smoking , obesity, drugs for treatment •  We help pass laws to defeat cancer and rally communi=es worldwide to join the fight.

–  79% of the US populaBon is now covered by smoke-‐free laws –  State laws ensuring that people have access to and coverage for treatment –  Rallying communi=es through community events like the American Cancer Society Relay For Life® and

Making Strides Against Breast Cancer ®

•  Results —  15% decrease in the overall cancer death rate between the early 1990s and 2006. —  350 more people each day who are celebraBng birthdays.

•  Our vision is 1,000 people a day in the US and 10,000 worldwide celebraBng birthdays who would have otherwise been lost to cancer

Addi=onal ACS Facts •  99 years old •  50 states, 900+ locaBons •  Decentralized •  Indirect spend: $500MM •  Sourcing organizaBon is ~ 2 years old •  All spend is in Sourcing’s scope

•  Small porBon fully sourced and managed so far •  % hands-‐free transacBons

•  ImplemenBng Source to Pay soluBon •  OrganizaBonal Design: Center led (previously extremely decentralized)

•  Direct reports: sourcing, supplier management, inventory management, supply chain analysts

•  Indirect reports: divisional procurement leads •  Annual savings: 23% contracted savings on sourced categories •  Procurement environment: Non-‐Mandated

Mike Inman

ü  15 years in supply chain •  Gaming/hospitality, publishing, internet, airlines, defense, manufacturing •  Global & domesBc, direct & indirect •  Buyer to head of organizaBons •  $1+B in spend responsibility

ü  Now teaching b2b global negoBaBons with TableForce and advising on supply chain iniBaBves through C3

3 Things Your Boss Wants

1.  The job gets done! OperaBonal and financial improvements delivered

2.  Healthy supply chain pracBces a.  Right supplier mix to balance management effort, new ideas, and compeBBon b.  Improved quality / lead Bme c.  Reduced total cost of ownership d.  Risk reducBon e.  Revenue enhancement f.  Efficiency gains

3.  Internal Clients, peers, sr. execs think and say good things and ask for more!

John Koqer – HBS 1.  Increase urgency 2.  Build the guiding team 3.  Get the vision right 4.  Communicate for buy-‐in 5.  Empower acBon 6.  Create short-‐term wins 7.  Don't let up 8.  Make change sBck

Tradi=onal Change Management The “what”

Cliffs Notes…

The Right Approach The “how”

Driver

Backseat driver…

All “passengers” – Who’s driving!

Consigliere – trusted advisor

“War stories”

Stories: Wins & Losses

Excerpt from my job interview…

Me: What category is going to be surprisingly difficult at ACS?

Boss: T-‐shirts

Me: (??????)

Me: (Aver 2 years) I get it.

Relay For Life Global phenomenon that raise much-‐needed funds and awareness to save lives from cancer:

•  Annually: 3.5 million people in 5,000 communiBes in the United States •  20 countries

Survivors celebraBng life

Collegiate Shirts Par=cipant Shirts

White, Custom Back White, No Back

CommiIee Shirt Sky Blue Stock

Survivor Shirt Purple stock back

Though front is consistent (primary brand), many divisions have developed their own supply base and varia=ons on t-‐shirts colors, styles, etc.

Division 1 (Illustra)ve)

Community Shirts Par=cipant Shirts

White, Custom Back White, No Back

CommiIee Shirts Blue Sky, Stock Back

Survivor Shirts Purple Stock Back


Collegiate Shirts Par=cipant Shirts

White Custom CommiIee Shirts

Frost Blue Custom Frost Blue Stock Grass Green Custom Grass Green

Stock Caregiver Shirts

Lavender Custom Lavender Stock Purple Custom Purple Stock

Grand Club Shirts Scarlet-‐ Customer Scarlet Stock

Caregiver Shirts Lavender Custom Lavender Stock Purple Custom Purple Stock

CommiIee Shirts Frost Blue Custom Frost Blue Stock Grass Green Custom Grass Green

Stock White Custom Back

White Custom Grand Club Shirts

Red-‐ Custom Red Stock

Team Captain Shirts Frost Blue Custom Frost Blue Stock Grass Green Custom Grass Green Stock

Survivor Shirts Lavender Custom Lavender Stock Purple Custom Purple Stock

Survivor Shirts Lavender Custom Lavender Stock Purple Custom Purple

Stock Team Captain Shirts

Frost Blue Custom Frost Blue Stock Grass Green Custom Grass Green Stock

No back Shirts Frost Blue Scarlet Grass Green Lavender Purple White

PURPLE SURVIVOR (10 sizes) Purple w/ back

ORANGE COMMITTEE (8 sizes)

Orange w/ back

LIME TEAM CAPTAIN (8 sizes)

Lime w/ back


Star Supporter Shirt (6 sizes) Maroon with back

White Par=cipant Tee (10 sizes) White White Custom Back

College Par=cipant Tee (8 sizes) White White Custom Back

PURPLE College SURVIVOR (8 sizes)

Purple w/ back

Orange College Team Captain (6 sizes)

Orange w/ back

LIME College Committee (6 sizes)

Lime w/ back

Royal College Security (4 sizes)

Royal w/ back

Color (17 variaBons)

2011 RFL T-‐Shirt Na)onwide Inventory Mix (Illustra)ve)

Weights (3)

Brand (3)

Sizes (12)

6.1 Heavier Wgt

Brand1

Brand2

Brand3

5.X Mul=ple Lighter

Front Design (2)

Shirt Type (15)

5.X Mul=ple Lighter

Variability has massive effect on SKU combinations

Color (x variaBons)


Weights (1)

Brand (1)

Sizes (12)

Brand1

Front Design (2)

Shirt Type (x variaBons)

1 weight

Effect of reduced variability and other process changes: •  90%+ reducBon in combinaBons available •  More consistent brand •  Redeploy staff to more mission related acBviBes •  More consistent quality •  Simplified processes (internal and external) •  Increased flexibility •  Reduced supplier inventory obsolescence and stockouts •  Reduced pricing •  PotenBal posiBve impact on revenue

Color (x variaBons)


Weights (1)

Brand (1)

Sizes (12)

Brand1

Front Design (2)

Shirt Type (x variaBons)

1 weight

Relevant example for en=re organiza=on •  Visible category •  Easy to understand •  High benefits •  Concepts apply across many categories – good teaching opportunity

U=lize trusted advisors

Challenge: Sourcing was new in our organizaBon. Our reputaBon had not yet been established. Ques=ons:

Who can support our concepts? Whose opinions does the business trust?

Results

•  Support from trusted parBes can drive change (Suppliers? Finance? Another business unit?)

•  These real world stories helped drive real supply chain change:

Impact •  Reduced cost •  Increased quality •  Reduced risk •  Increased revenue •  Increased efficiencies •  Increased innovaBon •  Increased flexibiliBes •  Increased revenue •  More producBve suppliers

Change • SKU reducBon • Expanded Bme lines •  Improved forecasBng • Simplified and standardized processes

• Listen to supply base

CommunicaBon plan –  INTERNALLY -‐ StarBng statements to open the door

•  “Help me to understand what you’re trying to accomplish?” •  “What’s your biggest problem?” •  “In a perfect world, what would you like?” •  THEN TAKE TIME TO REFLECT – SILENCE IS GOLDEN

–  What are they saying is but HOW they are saying it is key too •  Are they “entrepreneurial”…. or lean six-‐sigma operators??? •  Are the finance people or funcBonal???

–  Mid-‐project •  With suppliers – “This is what the team is looking for”

–  You: “bad cop” if/when necessary –  Internal clients: must develop a good relaBonship for the long term

•  Internally – publish the agenda and updates

Sales-‐person-‐ship

•  Credit – be a giver!

•  Emphasize benefits beyond cost – proudly and early

•  Ask for feedback – let them feel like they’re a part of YOUR change management

process too!

Sales-‐person-‐ship The project close-‐out

From: Inman, Mike To: Exec Team Subject: Re: Agency of Record results To respond to your initial request, before looking at the fees (and I assume you’re also looking for the associated reduction) I think we were able to: 1) get a fantastic agency (supported by more objective criteria than just “they’re very creative” – attached is the final evaluation) 2) improve the service offering (adding strategic planning and web) 3) increase the amount of work we expect the agency to perform (both strategic and tactical) 4) reduce the risk contractually (as they are new and hungry, we were able to get very favorable terms to reduce our risk of going with them, something that would have been more difficulty with the incumbent agencies) and lastly, reduce costs...

•  NOT the same as taking responsibility for others issue…

•  Builds bridges and deepens relaBonships

•  Displays true confidence

•  Solidifies respect and leadership

The power of “I’m sorry”

Finishing up!

•  Have a plan –  What does your boss want + ???

•  Research the what? –  Tools in your tool belt

•  Consider the “how” –  EffecBve role –  Sales-‐person-‐ship

•  Follow up breakfast! 8:00 – 9:00

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ProcureCon Change Management

Education

Transcript of ProcureCon Change Management