It's my pleasure to present the 1st survey "State of Agile Procurement" summarized and translated from the German, Source: Komus : Kurzstudie Agiler Einkauf (2017). My key learning of the survey is that lean-agile procurement is leading edge and might become the option to disrupt the procurement industry. Nevertheless the transformation is still at the very beginning.
Prof. Dr. Ayelt Komus published a representing survey about the state of procurement and it's application to agile in Germany. In this blog post I've summarized and translated the survey and the conclusions from the German. Find below the visualized summary. Feel free to share it!
Reading the results of the survey might create more uncertainty for classic procurement managers, as every change does. In his blog post Prof. Dr. Ayelt Komus concluded with the following 9 recommendations. Please find below the answers that lean-agile procurement offers you. Btw. I personally agree to all of his recommendations!
Answers by LAP
1. Provide basics
Every employee in the team should understand how fundamental the change is, that the business will profit from that and that the implications of these developments imply both opportunities and risks.
LAP is easy to understand, learn and to implement. It's promising improvements reduce through-put time, costs, increase transparence, cooperation with all stakeholders and so LAP meets the current market demands of agility.
→ Provide basic information on agile methods, digital transformation and, if necessary, industry 4.0!
2. Understand the specific situation
Determine with the various stakeholders how and where the agile / digital transformation makes sense and the purchasing has to be adopted.
LAP is a flexible approach, based on agile and lean principles. It could be adapted to specific situations, negotiations and even per procurement case.
→ Be clear about the specific situation in your company!
3. Appropriate differentiation
Basic variants of the purchasing process and procurement strategies should, among other things, take into account, in addition to the goods / services to be procured, your actual purchasing power, interdependent dependencies with the supplier, as well as the complexity and suitability of the trade union / service for the description.
LAP doesn't claim to be the one solution for everything. It's perfect for complex sourcing cases e.g. if the solution is not yet that clear and will be developed agile. On the other hand it could make totally sense to stick on classic procurement approaches for sourcing e.g. simple goods.
→ Ensure that the differentiation in purchasing processes and strategies is practiced appropriately!
4. Working closely together
Agile methods live from small steps, critical testing and learning curves. This applies to all areas: products, methods, techniques and technologies. All this is based on a tight and short-clocked interaction. You should also take this into account when focusing on this new topic. Look for a suitable path for your organization / projects.
One of the key aspects of LAP is improving the social integration and collaboration of all stakeholders during the whole procurement process. So that everybody needed, e.g. legal, business stakeholders, etc are involved from the beginning till the decision.
→ Work closely together - especially with the department and the legal department!
5. Develop skills and contract framework
With agile methods, the meaning of certain skills changes in negotiation, contract conclusion and accompaniment. New contract framework and procedures have to be developed. Even if any agile activity is unique. Develop solutions. You practice. Watch. Learn.
LAP is based on the same agile leadership principles, so that implementing LAP will support you in learning those and the change in paradigm. Furthermore the lean procurement canvas is an agile contract, so that you already have an important component of your new contract framework. Furthermore LAP transforms the role of the purchasing manager into an enabler, coach, moderator that facilitates all stakeholders during procurement in a much more efficient way. As a servant leader you'll become the main contact if it comes to procurement.
→ Develop appropriate skills and contract framework!
6. Make processes fit for agile shopping
Agile methods and industry 4.0 are faster and more value-oriented than traditional methods. Agile processes change the role and the typical focus of purchasing from a one-time purchasing activity before the service delivery to a sustainable accompaniment also during the service provision. Ensure that your processes can keep pace with procurement. Provide the basis for the implementation of the advantages of agile methods in the process of purchasing the implementation, control security and transparency.
LAP is fokusing to the users and customer needs instead of their wants. On the same time LAP is looking for building an oekosystem of sustainable partners instead of just finding the one-time, most cheap vendor. This ensures the maximum business value and the needed flexibility for innovation. Note: The lean procurement canvas is also a tool for partner management.
→ Make your processes fit for agile purchasing!
7. Reflect the profiles of the employees
Consider what new requirements mean the new agile processes and success factors of purchasing. In many places, changed skills and tendencies will gain in importance. Against this background, you should reflect the current profiles of your employees and colleagues. Check the personnel development options and selection / promotion criteria.
LAP requires a deep understanding in agile principles, better an agile mindset. The employees in procurement will find out hands-on in the CLAP workshop if there fitting the new requirements.
→ Reflect the personality traits, abilities and tendencies of your employees!
8. Use Agile methods
Agile methods have been so widely used already. Even innovative legal and purchasing departments already use the opportunities of agile methods and principles. In the best possible way, you can only support procurement in an agile context if you also take advantage of agile methods.
LAP is the first pure agile approach for procurement. All it's elements are agile, so that the implementation of LAP will be agile too.
→ Use agile methods also in your processes!
9. Start today!
Agile methods mean continuous development, continuous improvement. So there is no reason not to start today and start the learning process. Avoid paralysis through analysis - especially in an agile context.
LAP and the lean procurement canvas are ease to understand on the first view. However, the lean procurement canvas and the moderation of a big room planning session with 20 and more people is never easy. Hands-on exercises, real cases and our agile coaches will help you to understand LAP more deeply.
Register for the next certified lean-agile procurement workshop today and become a wanted expert, that has a promising option to transform the world of procurement into agile!
→ Start today!
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A big thank you to Prof. Dr. Ayelt Komus and the University of Applied Science Koblenz, Germany for sharing the results of their survey.