CASE STUDY
STATE OF FLUX
2014 GLOBAL SRM RESEARCH REPORT
40
Q: WHAT HAVE YOU WORKED ON APART FROM THE GOVERNANCE MODEL? JH: We did a lot of work on creating new guidance materials that would help users determine the right approach to take. This was coupled with the development of new tools and templates to aid information capture. We then needed to inform users of the changes, which required a global training programme. All of the new guidance materials are available through our portal. We have also commissioned some changes to our Ariba technology platform to support the new process. HOW DID YOU APPROACH THE RE-LAUNCH AND WHAT WERE YOUR MAJOR CHALLENGES? JH: We started the re-launch in early 2013 and there were numerous challenges, not least of which was scale. We were ambitious in looking to achieve global coverage across the AZ procurement network. To date we have trained over 450 procurement staff in the new ways of working. We have also invested heavily in stakeholder management across all of the associated business areas. The approach we adopted required a lot of work to coordinate the launch across multiple business areas and geographies in parallel. Centrally we provided the process materials, communications and coaching. This was supplemented by creating a network of local champions who played an important role as ‘process ambassadors’ in each of their local groups. There’s no disguising the fact it was, and continues to be, a lot of hard work due to demand for ongoing user coaching or new hire training. However, the resulting governance baseline means supplier management is now prioritised and levels of adoption continue to improve in each of the business units.
Q: HOW DOES THAT PRIORITISATION MANIFEST ITSELF? IS IT MEASURED? WHAT HAVE BEEN THE BENEFITS? JH: The adoption of this simplified approach is consistent with our measured approach to establishing and building from a strong foundation. We have a very clear view of external spend that is within the scope of our supplier management programme. Associated value delivery is tracked on a global basis; this continues to highlight the fact that we have more to do in this area to deliver what is required. These elements are measured on the global procurement scorecard and this has been an important step in ensuring user engagement. Having key governance metrics tracked at the highest level, sets the right tone from the top and helps users to engage with the importance of the activity. I believe AZ now has a solid supplier management foundation in place and a roadmap to ensure we achieve the delivery of increased value going forward. Q: WHAT DOES AZ CONSIDER THE MOST EXCITING VALUE OPPORTUNITIES GOING FORWARD? JH: We are now well positioned and very keen to explore the broader value proposition of supplier management. We recognise that an effective supplier management programme opens up other key value streams which we need to capitalise on; notably innovation, increased pace of delivery and speed to market, improved quality, and better supply performance. Q: WHAT ARE YOUR GOALS FOR 2014/15? JH: The importance of broader value delivery through supplier management combined with increased functional efficiency is a primary goal for 2015 and beyond, as we continue to evolve and improve our methodology, tools and capability. Ultimately, this will come from the continued adoption and embedding of good practice supplier management. Q: HOW WOULD YOU SUMMARISE THE LAST TWO YEARS? JH: In summary, I would say the critical question we asked ourselves is ‘what are we trying to achieve and how do we do this consistently given that we have limited time and resources?’ As a result, we’ve embraced the need to take a more pragmatic approach; one that the business buys into and one that can support the obvious resource constraints we face. We now have a robust and effective global governance model, which helps us achieve our aim of good practice supplier management in the future.
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