Purchasing transformation for industrial components manufacturer
Transforming purchasing at an industrial components manufacturer to a much more strategic role, in both synergy capture and innovation.
Top management initiated and sponsored a transformation program headed by a strong program management office (PMO), with active involvement of central and local purchasing, business stakeholders and HR.
Understanding the Starting Point
As a part of the change management ambition, significant emphasis was placed on thoroughly understanding the starting point in detail, including current activities, individual and collective capabilities, as well as spend analytics and comparisons to internal and external best practices.
A new overall strategy and role for purchasing was defined, fully in line with overall strategy and thoroughly anchored with purchasing and business stakeholders. This created a clear view of what value and impact purchasing was expected to deliver to the organisation.
A new operating model and (more centralised) organisational structure provided clarity as to how purchasing was to collaborate with stakeholders, as well as a clear separation between strategic vs. operational activities. Dedicated centers of excellence capabilities in strategic locations.
To enable the transition to the new structure, a new approach to professional development was defined, including revised job descriptions, career paths and competence frameworks. A concept of individual competency assessments and development/training plans was rolled out globally to support the transition into new roles and jobs.
A much stronger strategic sourcing approach delivering significant savings.