The results are in for your RFP (Request for Proposal), now it’s time to pick the supplier(s), sign the contract, and place the orders (Woohoo!). But, have you considered the next critical step in the process: Negotiating the price with market indices as a driving factor?
Most purchasing professionals have never heard of appreciative inquiry. It is a systematic discovery process to search for what is best or positive in an organization or its strengths. These strengths are then improved upon to create an even stronger and more dynamic organization. Implementing change remains positive and thus springs from an organization’s strengths, not its weaknesses, or deficiencies.
Editor’s note: This article is part of the MyPurchasingCenter content archive. It was originally published in 2015 and appears here without revision.
All too often in my purchasing career, I have experienced a new purchasing leader or consultant, who comes from an outside company, then sweeps into a purchasing department and castigates purchasing professionals for, “doing everything wrong, unlike their former company, that did everything right.” This negative reactive approach to change often results in people becoming even more resistant to change. Traditional reactive methods to implementing change emphasize fixing what is broken or weak in an organization. This approach almost never works and causes even more fear.
One of the tools of appreciative inquiry is the sharing of stories about an organization. Employees are asked to describe a time when they were really engaged and excited about their work. Employees are asked to list what was great or memorable about the time. The themes or actions that the organization used are carefully studied and grouped. Common themes of these stories may evolve or confirm a major strength of an organization. These strengths then become skill springboards from which the organization needs to use and embellish.
I previously discussed the storytelling techniques in a Buyers Meeting Point blog.
As a review, here are some of the advantages of storytelling:
- The brain stores information by stories.
- Stories are humanizing and stimulate creativity.
- Storytelling improves listening skills.
- Storytelling builds a team culture.
- It encourages collaboration.
Appreciative inquiry takes storytelling to the next level. The memorable stories and positive results become the dynamic building blocks of an organization’s competitive edge. It makes the vision or mission become actualized or reach their full potential!
Here is an example: One of the strengths of a purchasing organization that I led was sourcing and the use of cross-functional teams. The vast majority of the team members felt good about the sourcing decision and the transition plan to the selected supplier. A systematic methodology was used and modified as needed. Team members were well equipped to defend the selection and present the reasoning to other non-team members. Most members could defend and justify the selection and did it consistently and with enthusiasm. To my surprise the non-purchasing team members were even better at justifying the selection. The metrics almost always supported the supplier selection.
I, like many purchasing professionals, was initially very skeptical of the appreciative inquiry approach. Who has the time for it? Purchasing spends an inordinate amount of time fixing what is broken like expediting orders, handling bad quality parts, fixing bad suppliers, chasing down supply chain interruptions and overall upsets. These are all in the realm of fixing what is broke. The fact is that purchasing spends too much time as a firefighters putting out fires. Living in this type of hectic atmosphere or culture does not encourage a different positive approach to change. In fact, it encourages skepticism and the avoiding of risk.
In conclusion, appreciative inquiry can be a useful approach for positive change in purchasing. The challenge to purchasing is to make the time to discover the strengths of the purchasing organization. It requires patience and the gathering of memorable stories. Purchasing should build on its strengths rather than tear down its image by constantly fixing what is “broke.” In purchasing you are what you are perceived. Too often purchasing is viewed, as the harried firefighter who can never put out all the fires. Appreciative inquiry is a good approach to start to change this negative traditional image.
In 2015, MyPurchasingCenter talked to William Moore, Senior Vice President, Sales and Channel Development at SKF USA. Moore sees value in frank discussions between procurement and suppliers, especially of the practices procurement has in place to implement and measure results of new ideas submitted by suppliers.
Go on. Be honest. You’ve read the slickly worded job description and sat through an interview listening to animated energetic, buzz words and you‘re very interested. But at the same time, haven’t you heard your wise inner voice asking, “Do I really know what this job is going to be like? Have I been given a good picture of what it is going to be like reporting to this executive or working with this team?”
Back in 2012, Chrysler Group allowed a modest-sized company to manage all of the chemicals and related supplies on a trial basis for one of its North American assembly plants. Like any Chrysler supplier, ChemicoMays had to prove itself on cost, quality and its capacity to deliver.
Procurement professionals are instrumental to the success of organizations. They are accountable for innumerable initiatives ranging from solicitation to evaluation of suppliers plus everything that falls in between. Procurement has a significant impact on the organization as a whole – congealing its spot at the management roundtable.
Procurement teams that use the Internet to research highly engineered components and then select a lower-priced alternative product may think they’re doing a good job, especially if they are measured on how well they manage cost. Yet they may unknowingly be putting their companies at risk.
Effective and efficient automation of Supply management and Procurement functions can yield fruitful results. Automation facilitates supply management and procurement professionals to make wise decisions through enhanced tools and visibility. It is definitely a reliable substitute for time consuming and costly manual tasks.
That’s the question Attorney Mark Grieco asked procurement and supply management professionals attending a member meeting of ISM-Greater Rhode Island at Banneker Industries in North Smithfield.
Connectivity is at the core of the modern business. Whether your organization is comprised of one small office with 10 people or a large multinational employing thousands, it is key to find the correct connectivity mix to support your business needs.