I recently interviewed Magnus Carlsson, the author of Strategic Sourcing and Category Management: Lessons Learned at IKEA. You can listen to our conversation on demand on BMP Radio.
Although the book centers around the how and why of IKEA’s approach to procurement and supply chain, its content is not limited to large multi-national corporations or companies in the furniture and home goods industries. IKEA is a company that competes on brand and low costs, which makes its approaches to spend and supplier management absolutely critical to its ability to operate.
IKEA has been able to accomplish many things that other companies have not because it is necessary for them to remain competitive. As a result, their team members – and former team members, for the sake of including Carlsson – approach complex and strategic procurement with a striking clarity of purpose. There is no other way for IKEA to work, and therefore there is no reason to resist or bemoan the uphill strategic path.
Jonathan O’Brien, CEO at Positive Purchasing, has written a number of weighty books for procurement and supply chain professionals: Category Management in Purchasing, Negotiating for Purchasing Professionals, and Supplier Relationship Management make up the ‘big three.’ Not only has he written these books, he regularly revises them – I know because I’ve reviewed all of the originals and many of the revisions.
I write all the time (including two books of my own), and yet the sheer volume of content O’Brien has pulled together in these books makes my head spin. In fact, I once asked someone at his publisher Kogan Page if they had him locked in a room somewhere hunched over a laptop.
What that suggests to me, is that there is something about the process of writing, and his relationship to the content, that is important for him as a practitioner and thought leader. Somehow, O’Brien inexplicably maintains a successful consulting practice in addition to his writing habit.
The supply chain may be the best organized in the world, but if trust and transparency are not there the commercial results will not materialize.
- The Lean Supply Chain, p. xxiv
The Lean Supply Chain: Managing the Challenge at Tesco (September 3, 2015, Kogan Page) by Robert Mason and Barry Evans is fascinating – for its timing as much as the overview it provides into one of the world’s most prominent retailers. The book’s timing is impressive (and critical) given the turbulent few years Tesco has had: including the horsemeat scandal in 2013, and an accounting scandal in 2014.
While this book is not solely about the scandals and their exact aftermath, it acknowledges them right up front and includes as many details as the publication timeline would allow – and probably a few more than that. The Preface is an absolute must-read and would stand as a B-school case study in its own right.
Just over 18 months ago I reviewed the second edition of Category Management in Purchasing by Jonathan O’Brien. (You can read my original review here). When I recently learned there was to be a third edition, I was unsure what I would be able to say in a new review that would add to my earlier observations.
I found it interesting to read O’Brien’s commentary, not only on the progression of this title, but on how he sees it fitting in with his other work. I don’t personally know of anyone who has written more substantial procurement books than O’Brien, and knowing that he sees a subset of them as being connected is an interesting idea. Category Management in Purchasing, along with SRM and Negotiation for Purchasing are seen by the author as his ‘trilogy’. Knowing that changes how I would approach any of the books in the group.
Strategic Sourcing and Category Management: Lessons Learned at IKEA by Magnus Carlsson (KoganPage, August 2015) is not a case study, although I didn’t need the note from the author in the introduction to know that. The author may have spent 25 years at IKEA, working in strategic sourcing, but this is less a story of one company and more the learnings gained by one professional over 2.5 decades in a competitive environment.
Like any other book I review or event I attend, my focus in reading this book was to cull out the important ideas: what are the few take aways that really stand out as unique? There are quite a few in this book, any of which will improve the maturity and results of your procurement organization. I think this book is fantastic – full of great new ideas and ways to implement them.
On June 5th, I covered a webinar on Robotic Process Automation (see my notes here). At the time, they announced the planned release of an eBook on the topic. It is now available for free as a download after joining the Institute for Robotic Process Automation (IRPA) - which is also free - or on Amazon for $9.99.
Unless you are a hard-core Kindle user, I’d recommend the free download, but that’s just me. The eBook is 35 very readable PDF pages that make the case for RPA equally to audiences in IT, procurement, and service providers. The best thing about the eBook is the prevalence of discipline agnostic case studies. Although the basic RPA concept is not too complex, its application may seem a little abstract. The frequent examples in the eBook make the idea easy to embrace.
It is very important for businesses to be able to react to changes in the marketplace within their supply chains. This is possible where: there is a desire to make changes; there are clear market signals; there is good information available within the supply chain; and when optimum amounts of inventory are held. (p. 22)
Inventory Management: Advanced Methods for Managing Inventory within Business Systems by Dr. Geoff Relph and Catherine Milner (Kogan Page, July 2015) is accurately described by the authors in their introduction as achieving a balance between the philosophical and the practical. In fact, despite the complexity or maturity of their approach (appropriate given the ‘Advanced Methods’ designation in the title) all of the Excel-based tools for modeling inventory requirements based on the book are available for download. It doesn’t get more practical than that.
One of the most powerful things you can do with broken windows management is to empower your employees to fix their own issues whenever possible.” (p. 35)
In his fifth business book (seventh overall) Dr. Tom DePaoli takes broken windows theory and combines it with liberal doses of lean methodology and his own no-nonsense approach to process improvement. While this is not a long book, just 70 pages long, it is a working book. This is emphasized by the pages at the back that are specifically designated for “Doodles, Notes, and Ideas.”
Done well, the use of supply chain companies brings technical superiority and innovation to the project, and their specialist knowledge and experience brings enhanced efficiency, quality and consistency of delivery. However, there can also be increased risk if the strengths and weaknesses of the third party companies are not fully understood and managed.” (p. 78)
Supply Chain Management & Logistics in Construction: Delivering Tomorrow’s Built Environment (Kogan Page 2015) contains the collective knowledge of seventeen highly qualified contributors representing a number of roles within the industry – including its suppliers. Greger Lungesjö, listed as the book’s author, serves a double role as contributor and editor.
It is important to clarify that logistics has a different meaning in the construction industry than it does in others. Logistics is the term used to describe the movement of materials, people, and supporting services around a project site – not getting the materials, equipment, and people to the building site. You might even think of logistics as the ‘indirect spend’ of a construction site/project. It is absolutely critical, but it does not become part of the final structure. Fear not however, supply chain is still supply chain – an area of investment from which the industry is just starting to realize the potential for benefit.
…today’s supply chains encompass complex webs of interdependencies, frequently spanning the globe, designed and deployed to optimize critical attributes – such as speed, agility, and resilience – that drive competitive advantage. (p. 11)
Global Supply Chain Ecosystems: Strategies for Competitive Advantage in a Complex World by Mark Millar provides a multi-dimensional look at supply chains. The ecosystem concept was originally used by the Financial Times to describe the increasingly complex nature of business in general. When it is applied to supply chain operations, it provides us with the idea that chains are more spherical than linear and non-consecutive.
One of the things I realized early in my reading of the book is that Millar is writing from a much different perspective than the authors we am used to hearing from. His biography lists him as a speaker, presenter, and board member. His view of supply chains in general, and their potential value contribution to the modern competitive enterprise, is more elevated.
Supply chains that are governed well will also protect the environment and create ethical behaviour not only between the transacting partners but hopefully across the network. However, developing the supply chain and the relationships requires effort and commitment from partners and help and support from governments. (p. 93)
Food Supply Chain Management and Logistics: From Farm to Fork by Professor Samir Dani is an eye-opening look at the complexity and criticality associated with feeding people the world over. Right from the outset, the book considers each topic in the context of a balance between advancements and opportunities and the consequences of failure, corruption, and manipulation.
“The big idea behind this book is that the way a company configures its operations to deliver this brand experience to customers – while delivering viable financial performance – is an opportunity for significant competitive advantage and marketplace disruption.” (p. 2)
Business Operations Models: Becoming a Disruptive Competitor by Alan Braithwaite and Martin Christopher (Leading Procurement Strategy, Humanitarian Logistics) is a book that sort of sums it all up on its own with the ‘big idea’ quote above. Changing the configuration of an operation to get a different result is a straightforward enough idea. Why, then, do you need to read beyond page 2? The answer to that question lies in the many case studies and visuals in the book. Needing to reconfigure your operating model for competitive advantage might be an easy concept to accept, but the execution is likely to be difficult.
“The best operating strategies and metrics portfolios are built when companies translate business strategy into tactical plans.” (p. 47)
Supply Chain Metrics That Matter (Wiley, 2015) was written by Lora Cecere, founder of Supply Chain Insights and author of the Supply Chain Shaman blog. I am familiar with her work from the many webinars she has spoken on, as well as through the Supply Chain Index developed by her research firm.
Logistics and Supply Chain in Emerging Markets (Kogan Page, 2014) by John Manners-Bell, Thomas Cullen, and Cathy Roberson adeptly captures the interconnectedness of global economies and commercial activity while also studying a number of countries and industries independently.
Humanitarian Logistics: Meeting the Challenges of Preparing for and Responding to Disasters (Kogan Page, 2014), by Peter Tatham and Martin Christopher, provides a look inside the challenges faced by the people and organizations providing relief after disaster strikes.
When we were preparing for last week’s annual Thanksgiving post (which you can read here), we pulled all of the titles and authors that included me in their launches this year. I actually managed to review 18 books this year (although I still have two to go before the clock runs down).
As always, there are a few that really stand out as being worthy of a professional’s extremely scarce reading time. I’m going to make a wild assumption that most of you don’t have time to read 20 books on top of your other responsibilities just to get your creative juices flowing.
If you, like me, have been ‘awful good’ this year, here are a few titles that you might want Santa to slip into your stocking.
“As supply chain complexity increases, so do the services which logistics providers are asked to perform. No longer is logistics seen as a tactical activity, where the gains made are purely measured in terms of transport or warehousing cost savings. Instead, customers become more engaged in the transformational impact on supply chain competitiveness which a logistics provider can achieve.” –Manners-Bell, p. 23
Global Logistics Strategies provides the characteristically thorough and thought-provoking coverage we have become accustomed to from author John Manners-Bell. In his acknowledgements, he mentions that his father set up a transport company in the 1970s. Logistics is clearly in his blood.
“To succeed in business is more complex than it used to be - it is no longer economically desirable to control all the components of your customer value proposition.” (p. 6)
Strategic Procurement by Caroline Booth (Kogan Page, November 2014) is a second edition, updated from its original release in 2010. Before I even get into the book’s content, I think it is worth reflecting upon the pace at which the procurement profession is changing. In the four years since Booth first released this book, there have indeed been significant changes in economies and business dynamics, requiring equally significant adjustments in procurement. In the preface, Booth calls out her increased focus on risk and the improved position of procurement, as well as enough changes in M&A involvement to add a whole chapter on it.
“Although procurement has certainly evolved from its early roots, it still faces challenges in terms of executive recognition, talent management and organizational challenges. Modern enterprises are faced with a massive set of new challenges, including the forces of globalization, increased risk, complex supply chains, and the spread of government regulation on decision making, not to mention the tremendous strain of man’s presence on the earth’s natural resources.” (p. 1)
The Procurement Value Proposition (Kogan Page, December 2014) takes on some of the most pressing challenges facing procurement today and makes them seem both more comprehensible and realistically addressable. As acknowledged in the quote above, taken from the book’s introduction, procurement has evolved significantly since the early days when we got our start in the railroad industry. The problem we must own today is that the organizations we support have evolved faster and more dramatically than we have. What procurement needs is a better understanding of how to fuel our development.