CASE STUDY
STATE OF FLUX
2014 GLOBAL SRM RESEARCH REPORT
38
Q: FIRSTLY, WHEN DID AZ FIRST ADOPT SRM? OR WHAT THEY CONSIDERED TO BE SRM? John Hudson: The gradual evolution and improvement of AZ’s procurement and supplier management capability had been happening for many years. In 2008, Global Procurement launched a new Supplier Sourcing and Management Framework (SSMF). This framework was the first attempt to put in place a global standard for procurement and supplier management activity. While we succeeded in deploying SSMF globally, it became clear there were issues with local commitment, interpretation and capability that meant it was not consistently adopted. In 2012, a decision was taken to re-evaluate our approach in order to drive greater adoption and consistency in its application. Q: WHAT WAS THE CATALYST FOR INITIATING THE REVIEW AND CHANGE OF APPROACH? JH: This is where our Group Internal Audit function played an important role. As part of a review of AZ’s approach to procurement and supplier management activity, they reinforced the fact that SSMF was not being consistently applied. In parallel, there was an increasing need within the business to drive greater value from the management of key suppliers through the lifecycle, as opportunities to realise savings from sourcing activities became more challenging. It was clear our strategy would need to evolve if we were to realise more value post contract award.
There was an increasing requirement to release greater value from the lifecycle management of key suppliers
Q: WHAT WERE THE MOST SIGNIFICANT CHANGES?
JH: We took the time to understand and learn from other companies’ experiences; through networking and making use of research tools we had access to. However, one of the most important things we did was to talk to and listen to our own people. We met with key stakeholders and procurement practitioners to understand the reasons why the SSMF methodology had not gained wider acceptance by the business and become embedded. This vital feedback enabled us to pinpoint three key attributes the new approach required: ö ö Simplification, while maintaining process integrity ö ö Flexibility, to enable users to be agile and responsive to business needs ö ö Focus, to allow our limited resources to align to the activities that added the most value
Q: WHEN DID THE REVIEW START? AND HOW LONG DID IT TAKE?
JH: We started the review in the second half of 2012. We were conscious that many companies had been starting or restarting their SRM initiatives, which we felt had led to a level of fatigue amongst suppliers. To overcome this fatigue, we took time to research best practice and ensure we took a measured approach to changing our framework. Equally, it was important to recognise where changes were not required. The SSMF methodology had many components that were working well and we did not want to lose them. Consequently, the review and refresh of our approach took around six months, with the launch of the new iProcure methodology taking place in early 2013.
Powered by FlippingBook