In survival/containment mode, you are just getting started in your turnaround. The situation is such that every cell phone call is a crisis and the team’s priorities are set by whoever yelled at them last or the latest email demand. There doesn’t appear to be a direction of the team and the situation reminds you of a scene in a war movie where bombs are dropping into a camp and the citizens are running around yelling “incoming!”

Your first focus has to be on those things that prevent stability. These symptoms include, but are not limited to anything that:

1. causes production interruptions
2. requires expensive containment
3. causes your team to incur expensive premium freight charges, or
4. forces people to work unplanned overtime for which you are unable to seek recovery because it is due to your lack of efficiency or readiness.

In short, if it will affect stakeholders in the form of cost, timing or quality, it has to be eliminated before you can ever achieve stability.

Survival/containment inherently includes a phase of discovery. The objective is to “overturn all of the stones” to confront the reality of what’s hiding under them. In the simplest terms, the objective is to observe and classify as either “important” or “urgent”. Urgent items will be addressed in the survival/containment phase of the turnaround and have some of the characteristics listed, above. Important items will be captured on issues lists after being considered for scale (measured) and categorized to determine who, or which department, should be working on them in the “get organized” phase.

By separating important from urgent, the team will not only identify the items that will be resolved during the survival/containment phase, but they set up the finite list of assignments and issues to be addressed in the future. Also, when there is down-time during survival/containment, team members can reach ahead into the future state of the business by using the available bandwidth to begin the organized attack on the finite, categorized issues lists and start getting organized.

A parallel activity, that will be discussed at length in later in this publication, to the direct phases of a turnaround is to define the inputs, outputs and “business of my business” (BOMB) for each function in the organization. The confluence of the input/output analysis and the getting organized phase will introduce a sense of predictability and calm to each person, function and department in the company.

Once the urgent items have been identified, they have to be worked on with extreme focus with a sense of urgency on arriving at a solution. These are not the types of items where the immediate appropriate action is to form a committee, review our processes or call a meeting next week. These require immediate intervention. Anything less is just kicking the can down the road and is, likely, the behavior that allowed them to go from important to urgent in the first place.

An effective means of applying appropriate attention is for Vice Presidents to divide the urgent items evenly between their directors (or directors to divide them evenly between their managers). These assignments must be made whether the directors have specific responsibility for the particular issue or not. Each person assigned an issue to resolve has to immerse themselves in the topic and have a clear sense of ownership to provide a solution. They must know, or have the assistance of somebody that knows, a credible problem solving means (i.e. Shanin Red X, Kepner-Tregoe, etc.) to ensure a direct approach to a solution. This will prevent the expenses and time required for a trial-and-error approach.

The cadence of follow up for survival/containment items has to be indicative of the implied urgency of the issues. It is not unreasonable for a Monday-Wednesday-Friday, or even daily, 30 minute review where each champion reports out for a couple of minutes. Urgent issues call for sudden action. The daily follow up should include reports about walking over and seeing someone, flying to the source of the issue (going to gemba) or at least calling people on their phones to get the logical progress that is required to secure the solution. Sending emails and setting up meetings next week are only acceptable as means to follow up. If they are the primary tools of engagement, then the person assigned to that issue does not understand the urgency with which the topic should be approached.

So, survival/containment is about identifying those items that will have a substantive affect on the enterprise if not resolved. Appropriate urgency should be engaged in resolving these critical items and frequent follow up is required to assess progress toward a solution. “Getting organized”, the step that follows survival/containment, is addressed in the next section.

Before you can get a turnaround started, you have to realize you need one.  You have to realize that you need an immediate change in your output or direction.  When you realize your approach isn’t working, you need to be committed to the thought that you need solutions and not more systems and processes.  In fact, the tools in your team’s toolbox are not only not addressing the problem but they are, likely, making it worse.  Further degradation can come in the form of additional movement in the wrong direction or it can be related to allowing more valuable time to pass without making course correction.

If your people are “pulling together all the key people”, scrutinizing KPI’s to determine how they failed to predict the tailspin or setting up a meeting next week to evaluate putting processes and systems in place, they are not focused on the direct path to a solution.  You need a solution, not a system audit.  These are all signs that your team cannot sense danger and is not applying the appropriate sense of urgency to change the direction of your out of control situation.  What are they going to do until the meeting next week?  More of the same?  Business as usual?  Isn’t that what got them into that situation in the first place?

Business-as-usual and working within your processes and systems is a state of activity that is reserved for when you are getting results that meet expectations and satisfy stakeholders.  Of course, some would argue that you should always be striving toward “best practices”.  The argument for “best practices” or “next practices” is a continuous improvement refinement to avoid stagnation or being left behind.  It is not a stop-the-bleeding, turnaround.

Assessing your processes for the necessity to modify them to meet performance expectations might be acceptable if the project, department or company has the time to recover to meet stakeholder expectations.  However, taking immediate containment action to ensure survival is usually called for by the time you realize you need help.  Forming a committee, tweaking systems or scheduling a meeting are clear signs in the corporate world that the people working on the problem are going to be able to tell you all of the activity that they engaged in rather than demonstrate progress toward a solution.

Before you can be “world class” you have to get organized.  To buy the space to get organized, you have to install appropriate containments to ensure survival.

Of course, acting like neither of them could require that you end up having to hire one to fix your enterprise.  Acting like a consultant might mean that you subordinate the metrics of your department to those of the organization.  Acting like a turnaround specialist could lead to continuous improvement instead of embracing the status quo.

Corporate America often creates it’s own problems.  If you see something that could be improved, but it’s beyond the scope of your department, you’re often considered meddlesome.  If you’re motives are pure, you have a leadership position and you’re told to mind your own business, that’s a clear sign that you work for someone that doesn’t “get it”.  I’m not sure it was ever satisfactory to operate in silo’s but, if it was, those days are certainly over.

Of course, impure motives of those that have led before us have made everybody suspicious any time you reach beyond your area of responsibility.  However, interaction is required between departments.  Someone’s output is someone else’s input.  Why shouldn’t that interaction be discussed and optimized such that the overall performance of the organization is made more efficient?  You’ll have to earn the trust of your peers because you’ll only be able to make lean progress if everybody has the guard down and they are sold on the idea of maximizing the performance of the enterprise, even if it means their metrics suffer. 

An example of not subordinating a functional group’s metrics to those of the greater organization is a Purchasing department that is rated on piece price savings instead of total cost of ownership or, at least, best landed cost.  They could select a supplier in China that would save them $0.05 but pay an inbound freight price of $0.27 instead of awarding it to a local supplier without the nickel savings but with an inbound freight cost of $0.07.  So, the Purchasing metrics might look good, but the enterprise is paying $0.15 more than they should.

Not all top-level leaders can sense danger.  They also aren’t often in the minutiae of each transaction in the organization that produces the output.  Some are just not cut out to run a company.  As leaders of a functional team in a cross functional organization, it is your responsibility to constantly strive to improve efficiency and eliminate waste.  Is your team doing what they do because it’s what they’ve always done or because you have an acute understanding of the inputs and outputs of your department and you have prescribed the most effective process for executing the duties of your team?  If you’re working with stale practices, look for best practices.  If you’ve given best practices a try, you should be considering “next practices”.

Of course, such behavior could maximize the output of the enterprise and eliminate waste and what fun would that be?  I would apologize to consultants and turnaround specialists for letting the cat out of the bag if I didn’t firmly believe that they have nothing to worry about.  Corporate myopia over the next financial period will always guide the majority of leaders instead of the passion to actually fix their enterprise for the long term.  As long as the C-level continues to be rewarded for short-term blood from a rock as their primary priority, consultants and turnaround specialists have nothing to worry about.

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Purchasing is a function that each company defines differently.  First, the company has to decide whether the department is expected to be clerical or strategic.  Then they have to define where in the range from the culture of short-term ruthless cost cutting to that of building a network of strategic alliances that target savings through stability.  Once those are defined, there are certain characteristics that determine the extent to which an individual will excel in Purchasing. 

Most of the writings I’ve seen on procurement deal with the nuts and bolts of the tools of the business, contract law, negotiation training or incoterms knowledge.  However, the business of Purchasing relies heavily on people skills and mastery of behavior.  You have to know what type of image you want to have and what conduct will allow you to sleep at night.  So, you’ll see that the list, below, contains many of what might be considered soft skills.

I contend that there is no single most important attribute that makes a Purchasing professional perform at a benchmark level.  It is a combination of many traits, skills and behaviors.  However, there are likely many different combinations of those listed below that will achieve optimal results on a more regular basis.  The list of characteristics, in no particular order, includes:

Integrity:  Integrity is made up of character and morality.  It defines whether you are solid, trustworthy and reliable.  Say what you mean and mean what you say.  Do what you commit to do.  Keep your word.  Do not over-commit, because you will, likely, under-deliver.  Be honest.  Every transaction requires certain flexibility but never compromise your integrity for the sake of a transaction.  It could be your last.

Morality:  Not doing what is wrong.

Character:  This means you do what is right.  It’s one thing to have the morality to not do what is wrong, but it often, takes great courage to do what is right.  What you do speaks so loudly that what you say I cannot hear.  Character is following through on a commitment long after the mood in which the commitment was made is gone.  This is non-negotiable.

Knowledge and organization:  Mastery of data is a key ingredient in the secret sauce of Purchasing.  You have to know more about what you are buying than the person selling it.  You have to know how supplier’s prices compare to the lowest possible cost to manufacture it and what other suppliers are willing to sell it for.  Finally, you need to be able to recall all of this immediately to assist in negotiations and planning.  Note: you don’t have to be an expert.  That’s what experts are for.  Seek their counsel, if required.  It’s not a sign of weakness, but a sign of intelligence.

Forecasting:  How many of what will you need?  Where?  What are the market trends?  What are your customer’s consumption habits telling you?  Your ability to buy at an optimal level depends heavily on this knowledge.

Entrepreneurial:  Are you working like its your own company?  Don’t sit and wait, like a clerk, for “the business people” to think of the smart questions for you.  What is needed?  Why?  How many?  How often?  Is there a better mousetrap?  Are the business people asking the wrong questions? This is “You Incorporated”.  Get to work.

Anticipation:  What can go wrong?  What opportunities exist?  Is your commodity high risk?  Is this a new product?  Is this a new supplier?  Does your program team not have a clue?  This is, likely, the single most important skill to have engaged at all times.  This skill is essential to get out of the reactive way of doing business and behaving proactively.  How many times do we encounter people, departments or companies that spend all of their time whining about all the firefighting they have to do?  An ounce of anticipation can go a long way to prevent this way of doing business.  You need to kick off a supplier by January 7 to meet program timing.  Engineering has committed to get you drawings by December 7.  However, if you wait until December 7 to check on them, you will almost certainly be disappointed.  You can dwell on how it’s not your fault, but you still end up fighting a fire.  On November 7 you should be asking for partial information and validating that drawing creation is on schedule.

Behavior:  Conduct.  Anybody can do the task, but not everybody makes everybody else miserable when they do it.  Conduct becoming an officer.  Are you hiding in your silo or are you a part of the team?  This is the key differentiator between a procurement team that needs help and one that is looked at as a positive influence on the organization. 

Intimacy:  Companies don’t buy from companies.  People buy from people.  Build relationships with suppliers and with the members of your organization for whom you are doing the buying.   Visit your suppliers.

Negotiation:  What can you not live without?  What can your supplier not live without?  What would you like to have?  What would your supplier like to have?  Look for the common ground and adjust.  This is a complete oversimplification, but “negotiation” had to make the list.  Too often individuals go into a negotiating situation ill prepared and think they can talk their way into an agreement with no preparation.  My advice is to learn as much as possible about your commodity or service before going to the table.  Tools like Porter's Five Forces Model can help you understand where your range for negotiating. 

Communication:  Inside the company and out.  Clear communication with all functional groups is essential.  You aren’t running a hot dog stand waiting for customers.  To be truly successful, you need to have traits of a general manager or a program manager and jump into the fray.  Look for the big picture and then fill in the gaps between company silos with transparent communication.  Having a line of communication with suppliers is obvious, but, creating strong lines of communication with your internal customers and stakeholders can bring significant results. If your team sees, and believes that you are working for them, they are happy to work toward your objectives.

Resilience and agility:  

Not everything is going to go well all the time.  How we, as procurement professionals, react and adapt to situations will maximize our value and contribution to our company.

Concern for Quality:  Yes, knowledge of the product is important.  Of course, the price has to be a bargain (you’re in Purchasing, afterall).  However, you need to work very closely with the Supplier Quality organization to ensure suppliers are doing what they said they would do.  You owe Operations good parts.

Understand scale:  Too few suppliers, and your Operations can be held hostage or suspended because of a supplier’s failure to perform.  Too many suppliers, and you aren’t important enough to any of them for them to care about you or your emergencies.  Also, there isn’t enough of you to go around to manage an unnecessarily large supply base.

Thick skin:  If it goes wrong at a supplier, it will: A) be an emergency for you, or B) be your fault, in the eyes of poor leadership.  Either way, the way you recover is to recover.  If B), however, start looking for a new job.  You don’t have a boss worth working for.



Sense of urgency:  Don’t panic, but don’t dawdle.  Be logical.  Use solid problem solving and decision making skills, like those taught by Kepner-Tregoe.  Just get the job done on time.

Interpersonal skills:  You are not in the job suited for an introvert.  You have to be able to speak to people in a way that makes them pleased that you are engaged if you are in Purchasing.

Peacekeeper:  Supply chain professionals work with, or directly affect, every department within a company.  There are also the main contact for most entities outside of the company.  There will be disagreements and misunderstandings.  Do not be the source of them.  Be the solution.

A balance of quantitative and qualitative analytical skills:  This is a must.  You think your job is to buy stuff.  However, you will have to make decisions with partial data and have to solve problems that seem unsolvable.  Shainin Red X or Kepner-Tregoe are examples of formal training.



Sense of humor

:  You are dealing with people.  Everybody makes mistakes.  You are dealing with products.  If you’ve ever witnessed a birth or a funeral, you know what’s really important.  So, don’t overreact and focus on solutions and results.  There’s no need to be nasty.  Tough situations do not need to be miserable.  Also, the day-to-day doesn’t have to be so boring.  A little levity can make mundane tasks more palatable.

Avoid conflict of interest:  You are making 3rd party purchases.  That is, you are buying product that you will not, personally, consume with money that is not yours.  Be careful not to base decisions, on behalf of the company, on factors that result in your personal gain.  Your objective has to be the best interest of the company.  In these hyper political times, even the appearance of impropriety can be damaging to a career or reputation.

Reciprocity:  There is give-and-take in any healthy relationship.  It is crucial to have the win-win big picture in mind for all transactions.  Any imbalance in benefit will surface, at some point, as a commercial issue.  There will be times when suppliers will need a favor from the customer and vice versa.  Favors are more difficult to achieve in a one-sided relationship.

Strategic:  You have to have a long-term plan for success.  Executing a plan of action enables you to assess progress toward a particular goal.  It’s about shaping the future instead of just letting commerce happen to you.  You have to secure the desired ends with the available means.

Supply chain thinker:  You have to think about every aspect of the creation of the product that you seek to buy as well as its delivery to your door step.  It’s more than the lowest piece price quote.  Your company doesn’t need to pay you good Buyer wages when any clerk can pick the lowest quote.  You need to be thinking about things like vertical integration, manufacturing footprint and supplier proximity to it, freight and packaging.  If a supplier stamps a part for you and another supplier paints it, wouldn’t it be better to find a supplier that stamps and paints?  It would save the second supplier’s markup for SG&A and profit on the SG&A and profit of the first supplier, at a minimum.

Patience:  Your internal processes will take too long.  Your supplier will quote too high of a price or too long of a lead-time.  The program team will give you unreasonable cost and timing expectations.  You will wonder where your management team has been when you realize how little they know about the circumstances of your job.  There.  Now that you expect it, just focus on creating and executing a credible plan to achieve your objectives.  If the objectives are impossible, speak with data instead of emotion and calmly lower the stakeholder’s expectations so you can exceed them.

Attention to detail:  The devil is in the details.  When you ask for a presentation and the file is emailed to you, do not just forward it.  The person that sent it either didn’t get the assignment right or attached the wrong file.  When you’re handed a form to get your bosses signature on, be sure to proofread it.  Because, when he asks questions, you need to know the answers.  By paying attention to detail, you establish credibility because the accuracy of your output is reliably high.

Go to Genba:  Have you visited your suppliers?  When is the last time?  Get up from behind your desk and get to the business end of the business.  When there was an issue, did you call and ask for an 8D or did you go to the source of the problem to see it for yourself?  Of course, you’ll have to prioritize.  You can’t be everywhere at once.  However, you need to develop the habit of going to where the action is when prudence suggests it based on risk scale or probability.

Creative solutions:  “Outside the box thinking”.  The more you know about the details of a situation, the more creative you can be.  The most direct approach might not be something you can sell, but stringing together a series of one-thing-leads-to-the-other actions can have a domino effect that gets you the result you need.

Risk management:  You will have at least 3 different categories of risk: operational, commercial and legal.  The more you document agreements on mutually beneficial contracts, the less likely you will be of encountering risk.  However, if it sounds too good to be true, then it probably is and you are introducing risk.  For example, if a supplier offers to sell you a widget for $1 when the lowest price you’ve ever paid is $1.30, a red flag should go up.  Did the supplier have a new innovation that lowered the cost and, subsequently, the price or are they buying the business?  What if it costs $1.05 to make the widget?  Awarding the business to them introduces risk because they can’t lose money forever.

Time Management:  The Purchasing professional is always working against the clock.  You have annual budgetary expectations.  You have new projects launching that will require suppliers and parts.  This is similar to “sense of urgency” but it’s more about how you structure your day.  Are you constantly distracted by your email and smart phone and so you get less done than you wanted to in a day?  You will have countless people coming to your cubicle asking about things and you have to manage your priorities.  What needs to be done right now?  What needs to be done tomorrow?  What are B or C priority items that can probably wait forever? 



Willing to learn new things:  

Supply Chain work takes you into new areas all the time. You have to be able to adapt, quantify and have the desire to get to work.  The entrepreneurial Purchasing professional doesn’t let “it’s not my job” prevent him or her from getting results.

Influencing skills:  The ability to sell.  The first time you introduce an idea, it will be received poorly.  The second time it will sound familiar, but not desirable, to the person you are trying to sell.  By the third time they will have internalized it and might even thing they came up with it.  Understand their needs and try to create a win-win.  Know the politics of the organization, without contributing to them, to understand how to influence your peers to meet your objectives.

Collaboration:  You have a big job to do.  Work with the people that are involved in the project to divide and conquer.

The ability to decide:  The inability to decide is frustrating to all who are counting on you to get your job done so they can do theirs.  You will always only have partial information.  Study Kepner-Tregoe decision-making training.  Analysis paralysis only causes delays.

Technological advancements:  A better mousetrap.  Be looking for improvements at one supplier that are not present at other suppliers.  Read trade publications and attend industry conferences.  You are not a clerk.  You are an entrepreneur that your company is counting on to make a difference.  You need to be cognizant of 3 different categories of the way to get things done:  1) current practices, 2) best practices and 3) next practices.  The first one to answer the question “what’s next?” wins.

Motivation:  The business world is tired of purchasers as clerks.  A strong initiative to continually seek out new opportunities in both savings potential and supply chain options is essential in your role.  Act like a clerk and you will be treated like a clerk.  Make a strategic contribution and you will be looked at as a provider of solutions.

Learn from mistakes:  You’re going to make them.  A good management team will not punish someone that makes mistakes, but you have to learn from them.  If your recent mistake helped you learn another facet to the concept of anticipation for the future, you have just become more valuable to your organization.

Business acumen:  Ask yourself “why would they do that?” when a supplier agrees to something.  What’s in it for them?  “Business” is an understanding of finance, accounting and operations of your company.  “Acumen” is the ability to make good judgments and quick decisions.  Put the two together and start learning.

Continuous learning:  You need to learn how your company does things.  Then you need to learn the essence of the role of the function that you were hired to perform.  They are rarely the same.  Lean thinking is the optimization of the combination of the two.  You need to know how to use the tools of your trade while constantly striving to eliminate waste.  Too many people think this means they should create more processes and policies to add to their systems until the system is as complex as the IRS tax code.  On the contrary, strive to stop doing wasteful things and only take the shortest distance between your current status and the objective.  Just never stop learning.

Critical thinking:  Look at, and consider, the data.  Observe, classify, measure, sequence, infer, predict and communicate.  You are a highly skilled professional.  Don’t just accept what is presented.  Look for logical relationships between propositions.  Put generalizations, conclusions, hypotheses and assertions to the test.

Contract management:  Read the contract.  It’s yours.  Read the terms and conditions.  Look for pitfalls.  Look at the big picture.  There are a lot of moving parts.  You have to understand the cause and effect of all of them.  You have to be firm, but fair.  How many professionals, when asked about some contractual agreement, start search through their emails for the answers?  Scope and commitments belong in unambiguous contracts.  You will write many versions before the final product is complete.  Know that before you get started and you won’t wait for perfection before you begin.

Attitude:  You are in a “people” role.  You deal with people.  Would you want to work with you?  Get a relentless commitment to the objective and drive your tasks, with a positive attitude, to the conclusion.  Your way of saying and doing things will directly affect people’s desire to work with you toward the objective.

Tenacity:  Know your deliverables.  Circumstances, and less focused people, will constantly be attempting to throw you off the scent of the critical path.  You have the subordinate the functional metrics for those of the overall program or organization, but you do not have to waste time activity that will not result in accomplishment.  The wisdom to separate important from urgent and the tenacity to get the important stuff done before it becomes urgent is a key skill in the professional world.

Cross training:  Knowledge of what it takes to perform the other functions in your organization will help you see how you fit and how others rely on your contribution.  Getting cross-functional training helps with perspective.

Total cost of ownership:  Is best-landed cost a meaningful metric for a Purchasing organization?  The answer is a resounding: maybe.  After all, you could get lucky.  What about total cost of ownership?  What about value?  What about warranty costs?  What about the cost of production interruptions while you have manufacturing operators standing around waiting for parts?  By focusing only on best-landed cost, your organization can achieve a very short-term benefit of buying something as inexpensive as possible.  However, this myopic Purchasing practice can be very expensive in the long term.  There is a difference between value and pricing.

Awareness about ourselves, and the roles we are attempting to fill, improves the odds of success.  I have tried to dissect the essence of a good Purchasing professional and break it down into components with the least common denominator.  By being aware of these characteristics, and mastering the combination with which you are most comfortable, you can raise your raise your game past benchmark performance and start targeting an entrepreneurial world class Purchasing organization.

Purchasing departments can, and should, contribute so much more than just buying to their organizations. However, so many of them don't earn the respect of their organizations because they are waiting for assignments instead of contributing to the tactical and strategic level of company business.  It often seems like a goal to just survive on an administrative level.  Instead of driving solutions, the administrative Purchasing department “let’s business happen to them”.

Developing a Supply Chain Rather than “Buying”

To be strategic, Purchasing needs to set challenging objectives and demonstrate results.  They need to be developing supply chains and not merely buying products.  They need to know the products they are buying as well, or better, than the companies supplying them. They need to be looking at total cost of ownership instead of being forced to the myopic view of lowest piece price. 

Don’t Wait to be Asked to Contribute

As important is it is for Purchasing to be strategic, an organizational structure is not going to change to create a void for Purchasing to backfill.  Instead, the Purchasing team will have to get strategic and demonstrate their value to create their own space in the leadership of the organization.  I once heard, "what you do speaks so loudly that what you say I cannot hear". 

It takes things like: get an organization that is convinced that lowest landed cost is the best metric to assess a buy to consider total cost of ownership by factoring in elevated warranty, containment and premium freight expenses with the "lowest cost" bidder.  It can be an uphill battle, but with budget and forecasting upside, Purchasing can demonstrate strategic value if the company focuses on the long-term big picture.  Of course, leadership that only focuses on the current quarter results are not likely to appreciate Purchasing's potential strategic contribution.

Department Metrics or Organization Optimization?

The optimal Purchasing department needs to think beyond procurement.  They’ll need to know how the business operates, the business needs and goals.  In an organization that rewards and punishes based on departmental metrics, it takes courage to optimize the organizational metrics instead of sub-optimizing the Purchasing performance indicators.  However, to have strategic impact, Purchasing must learn to provide solutions to the organization while providing purchased goods to run the operations. 

The department that only focuses on Purchasing metrics will only be brought in at the last minute for “the buy” and the function will be administrative.  Purchasing has to work with the cross functional organization and bring solutions to make them successful.  Purchasing has to insert itself in the process early so they can strategically influence the direction.

Hire and Train for Strategy

For a manager that wants their procurement group to be strategic, you need to hire the best people you can find, train them, and require that they continue to invest their time in building their knowledge and skills so they can think and operate strategically when they have the chance.  The objective is to build a group where the internal cross-functional team members want to come to it for help and expertise rather than just issue a purchase order.  To maximize value for the organization, the hiring and job descriptions must match the ambition.  Traditional Purchasing clerical skills must be preceded by working knowledge of Program Management, Sales, Quality and Operations.

Wrap-up

1)    A Purchasing department that would be strategic will have to focus on developing a supply chain rather than “buying”. 

2)    They’ll have to take the lead and start contributing strategically where they can before the rest of the organization asks them.  The skill has to be evident to create the need for it. 

3)    The strategic Purchasing department will need the courage and self-confidence to prioritize Company performance over departmental metrics. 

4)    Finally, the people on the team will have to have the skill and experience to contribute strategically.  So, the hiring and training will have to be focused on the objective.

Your Processes

Why is your enterprise doing things the way they do them?  As the leader of the organization, are you asking your team to push the envelope or are you satisfied with the status quo, as long as things seem to be moving along reasonably well?  I mean to apply the question in every aspect of your business; from accounting methodologies to engineering systems to manufacturing processes to hiring policies.

So, you have a particular process that’s doing just fine.  It’s been in place for months or years.  Nobody is complaining, there are no known errors and the job seems to be getting done.  If you haven’t asked your senior management to process map their workflow then you are likely paying for wasteful activity that doesn’t directly contribute to the value that your customer is willing to pay for, in the context of Lean or Kaizen.  Without intentionally searching for, and removing waste, company processes tend to grow like the IRS tax code or become obsolete in our competitive, hyper-improvement business environment. 

Often, “workarounds” are put in place as Band Aids to achieve the output that were intended of the process.  However, the “output” might be different than the “results”, which go beyond the actual product of the process and include cost, timing and quality parameters.  By adding a workaround, the process might yield the same product, but at a cost that erodes margin.  With changes in business and advancements in technology, it is likely that entire processes can be eliminated but they remain because of the “we’ve always done it that way” or “if it isn’t broke, don’t fix it” approach to business.  Routine can be the silent enemy of an enterprise.  If you’re in a rut, it might be time to go break something.

Best Practices (Benchmark) or “Next Practices”

“Best practices” forces you to ask if you are doing things at least as efficiently as your competitors or as is available on the market.  If you’re only comparing today’s performance with yesterday’s performance, you can get a false sense of confidence or pride.  It might be that your best is still twice as slow, expensive or of a poor quality as your competitor but your internal-only data has prescribed rose-colored glasses to mask the disadvantage.

Potential sources for process improvements include benchmarking your competitor’s products, listening to suggestions from your direct labor, consultants, your new hire that came from a competitor, suppliers, customers, challenging your team to propose alternate process flow and trade shows.

Best practices, however, can be a slippery slope.  As Mike Myatt suggests in his article, “Best Practices – Aren’t” (11/18/11, Forbes online), you have to be careful about selecting a process just because your competitors use it.  What worked for them might not work for you and, instead of a “best practice” your team should be seeking the “next practice”.  Given the complexities of running an enterprise, it is unlikely that there is a one-size-fits-all solution for every process at every company.  Also, if you succeed in copying your competitor you have missed the opportunity to take a strategic leap past them.  So, “best practices” should be sufficient to demonstrate that there might be something better/faster/cheaper available.  However, an enterprise should rely on the resourcefulness of their team to develop the ultimate, competitive “next practice” rather than resorting to an also-ran, me-too, cookie-cutter solution as a reflex. 

Whichever path to continuous improvement you choose to take, the message to challenge the status quo is of vital importance for any hope of sustained competitive advantage.  Use best practices, and thoughts of next practices, to look for the next strategic leap beyond your practices.