The document discusses how supply management can better inform integrated business planning processes. It argues that supply management needs to have a seat at the table and prepare by assessing risks, building an analytical foundation, and creating opportunities through various scenarios. These scenarios could leverage opportunities through collaboration, contract structuring, and strategic purchasing approaches. Getting supply management involved helps ensure decisions are made using a holistic perspective rather than just individual functional views.
Marel Q1 2024 Investor Presentation from May 8, 2024
NAPM AZ Presentation 25 Aug 2011
1. Supply Management: The Missing
Voice in the Integrated Business Plan
How Cost Management, Negotiation and Contract Management
Inform the Process and are Essential to Its Execution
Arnold Mark Wells, CPIM
25 August 2011
Each function has its own goals and targets to hit. Many times, these are not aligned to deliver an overall greater value to shareholders. This may be a bit more obvious in the direct procurement space, but it is also true in indirect procurement for critical supplies. How can these many interdependent decisions within separate business functions be aligned?
Certainly a risk can present an opportunity and an opportunity implies a risk (at least the risk of an opportunity cost).
Other possible factors:Relative QualitySwitching Cost
This is one visual way to present a potential area of risk for the business plan.Other possible factors:Contribution to innovationRelative QualityCollaboration and Automation
Again, these could be indirect commodities, materials or services as well as direct. This can apply to both manufacturing and to service environments. In the indirect and non-manufacturing spaces, physical space and media space, paper, money (in banking for ATM’s), critical spare parts for manufacturing equipment and other similar purchased goods and services come to mind. Hopefully, you can quickly think of the relevant critical purchased goods or services in your industry and in your company.
In recent months commodity prices have risen and fluctuated. This creates a risk to the costs for both direct and indirect procurement.
Companies like SAP, Oracle and Ariba have created businesses or lines of business that are focused on facilitating transactional collaboration and execution, driving down procurement costs. If this is not in place for your largest and most critical suppliers, is there a good reason? Has the total cost of the opportunity been analyzed and is that part of the integrated decision dialog? Can the collaboration be extended to planning in a way that inventory and lead times can be reduced?