How do you keep your procurement process compliant but agile? The function I inherited seems to lean on the bureaucratic side but I don't want to overcorrect.
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VP of Supply Chain in Transportation15 days ago
I advise taking an unbiased and agnostic view of the existing end-to-end procurement process. Identify the significant gaps, pain points, and redundancies, to formulate an alternative functional framework that maximizes the contributions of people, processes, and systems. Without knowing the details of what you mean by being "lean on the bureaucratic side," at the least, you need to create an environment that enables individuals to make informed strategic decisions without being burdened with top-heavy approval processes or delays.I would also look into technology-enabling tools that can digitize many procurement processes.
Before "overcorrecting" based on the analysis, develop a business case and roadmap to articulate the advantages of critical changes with a calculated ROI.
The two go hand-in-hand when addressing compliance v. agility; efficient processes blended with automation to reduce human error can create an environment ripe for agility without sacrificing compliance. There should also be an internal audit process to monitor progress and identify areas of potential risk and exposure.
I sincerely hope this helps in answering your question.
Streamline Approvals: Simplify thresholds and empower teams to make decisions within set limits, reducing bottlenecks for routine purchases. Use a specific dollar or Euro amount for each level and more significant values for seniors.
Having clear, flexible policies is essential in procurement. These policies should allow for exceptions in urgent situations while maintaining compliance. This adaptability is key to agility in procurement. For instance, there may be times when you need to get a PO out as soon as possible to secure stock available on the open market. In such cases, your policies should facilitate this without compromising compliance.
Leverage Technology: Use procurement software to automate compliance checks and workflows and employ data analytics for real-time monitoring. SAP, Oracle, and many other companies have solutions that you can use.
Agile Techniques: Break down large contracts into smaller modules and maintain a pre-qualified vendor list for quicker procurement. Use contracting software. DocuSign is an excellent tool for driving this.
Cross-Functional Collaboration: Engage stakeholders early and use collaborative platforms to keep everyone aligned and informed. Early engagement is critical to success. Document the process and who should be on that list of NPIs or key contracts. It should not be everyone.
Risk-Based Approach: Focus compliance efforts on higher-risk areas, allowing lower-risk transactions to proceed with less scrutiny. You could make a simple chart map of your supply risks and target them.