Procurement's Coming Paradigm Shift
Procurement is about to undergo another paradigm shift. Thirty-four years ago, McKinsey & Company Director Peter Kraljic published the ground-breaking article “Procurement Must Become Supply Management” in the Harvard Business Review. Kraljic articulated the idea that procurement staff must apply specific strategies to categories of suppliers in sync with the financial impact on the business and the supply chain risk associated with those suppliers. This insight led supply managers to evolve their role, think more strategically, and consequently increase their impact on their organizations’ budgets and bottom-lines. This was a timely paradigm shift that helped supply managers navigate the challenges and opportunities of rapid globalization and technological change of the last two decades.
The next procurement paradigm shift will be fueled by the adoption of Supplier Collaboration, Social Communication, and Mobile Apps.
Supplier Collaboration - Collaboration technology links procurement, internal stakeholders and suppliers in unprecedented ways. The collaboration platform will double as a corporate memory of what has transpired in the complex web of relationships that exist between companies and their suppliers. Today, these relationships leak knowledge as category managers, stakeholders, or supplier personnel move to new roles. Collaboration platforms will enable a continuity of effort between supply chain participants and ultimately a faster upward trajectory of improved performance.
Social Communication - Many of us use Facebook and LinkedIn without thinking about the fundamental advantage they have over the last paradigm shifting communication app called email. We would all likely quit Facebook tomorrow if it filled your email inbox daily with hundreds of updates related to friends’ kids, cool travel destinations, and questionable political views. But that’s pretty much what our email inbox does at work. A complex culture has grown up that governs who to appropriately copy and what to share with bosses, colleagues and subordinates that limits the dissemination of information. Email will be augmented by the simpler social model. Co-workers who follow the issue you are working on or supplier you are interacting with will get relevant updates in their daily feed. Say good-bye and good riddance to 150 email per day inboxes! Social Communication will help us be better informed supply managers with less time and effort.
Mobile Apps - Procurement solutions are slowly beginning to offer access to our data on mobile, but almost none are taking advantage of the unique opportunity that mobile presents to acquire information away from our desktops. Supply management communication will be enhanced by recording pictures and videos during a supplier site visit or documenting a non-conformance directly from a loading dock via a mobile device.
Supplier managers will be more productive and effective in the near future as we embrace the emerging technologies of collaboration, social communication and mobile apps in our day to day work lives.
