Procurement Organization Redesign – Form Follows Function

A major industrial gases company’s North American Procurement Organization transformation journey A major industrial gases company’s North American business aimed to significantly increase savings from their strategic procurement activities.  The company understood that in order to achieve their goals, they needed to re-align and optimize the Procurement Organization to fully harness its capabilities.  They hired a small team of consultants led by OnDemand Professional Network member Steve Strickman to significantly upgrade the function. Situation Overview: The company had a centralized transactional procurement team but lacked spend transparency and was hindered by the dearth of sourcing skills.   Procurement was not seen as a value-added leader that could bring critical Sourcing and Cost Management expertise, which caused a fragmentation and localized execution of procurement activities across the company.  Senior Management’s goal was to upgrade the Procurement capability across-the-board by building out a new organizational structure and its capabilities.  Approach: The Consulting Team first performed an assessment of the Procurement function, and the company graded poorly along seven high-level Procurement “success dimensions”:  Change readiness/willingnessStaff motivation and empowermentStructural alignmentSpend transparencyMeasurement and reportingBusiness process managementProcurement data capture and tools Understanding the current state was important in the successful re-design of the organization.  Among other things, the Team uncovered significant “Shadow Procurement” activity – procurement being executed by non-Procurement staff – that caused significant downgrade in opportunity to save money and excessive use of personnel resources (to the degree of several dozen FTEs). The approach followed a proven concept – Current State Analysis/Gap Analysis/Future State Design across People, Process and Technology in Procurement.  The Steering Committee and the Team agreed that they should jointly work...

Drive Explosive Growth With Comprehensive Business Assessment

An Independent Business Assessment presents an often overlooked opportunity to drive dramatic value creation and profitable growth.  Given the ever-increasing pace of change driven by enabling technologies and emerging risks such as pandemics, it is more essential than ever for businesses to drive their offerings and performance to the highest possible levels.  The Assessment can be done quickly (typically 4 to 5 weeks for small to medium sized businesses), does not require a significant resource commitment and delivers prioritized opportunities to improve business performance and mitigate risk.  This comprehensive Assessment covers Business Strategy, Deployment, Value Stream Core and Support Processes, Organization Design, Competencies and Performance, and Hard Assets (Footprint, Systems, Facilities, Equipment). Below are several areas where opportunities are often found: Business Strategy, Plan and Deployment – maintains a realistic, actionable Strategy Deployment with demonstrates progress on plan.Management Operating System – has effective PDCA (Plan-Do-Check-Act) based Business Management System with effective design of KPIs, reports, meetings to plan and achieve the business annual and strategic goals.Value Stream Best Practice Processes – standard work is documented, deployed and managed for compliance, effectiveness and continual improvementHigh Performing Team Culture – maintains and demonstrates progress to plan on an Organization Development Plan driven by Business Strategy Jim Schoen, a member of our OnDemand Professional Network has has completed many assessments during his Executive and Consulting career and has a structured approach for delivering the best value creation opportunities.  His recent work is highlighted in the Case Study below. CASE STUDY – $25M Consumer Packaged Goods (Cannabis) Supplier The Venture Capital Board of a $5M Cannabis start-up asked for a comprehensive business assessment...