Amid the coronavirus lockdown, many of us are having to grapple with the current realities we face, at a personal and a professional level. The individual challenges will be as varied as our circumstances are, and there is a whole range of commentaries on how best to approach them and to progress.
In the world of procurement, there exists a similar set of challenges that we have to face. Demand management, supplier stability, forward forecasts, contract renegotiations are all-enveloping our working hours.
As we start to see a slight lifting of the gloom in some countries, as Spain reduces some work restrictions, there is a thought process initiating which we will need to explore. What will the future look like, and how will we get there?
Exploring potential scenarios
Without a functioning crystal ball, it is hard to make an absolute determination. However, it is possible to develop a range of potential scenarios and to explore what sort of response might be necessary for those scenarios. At one extreme, we might have a return to like it was, and indeed many commentaries have that as a starting point. At the other extreme, some are hoping for a profound change from the alterations in behaviour we are experiencing.
The reality is likely to be somewhere between those two extremes. We might be able to estimate a number of possible changes in international trade, cost of transport, frequency of flying, supplier survival and more. Many of us are likely speculating about where that future might land.
The category playbook
The opportunity here is to manage that process of speculation in a structured way and to explore the outcomes and actions likely across a range of those outcomes. The critical bit is to capture the speculation in a way that is useful and to convert it into a category ‘Playbook’.
The concept of the playbook arose from American Football, in which a particular play is described at a level of detail, including coaching options, detailed responsibilities and some diagrams showing setup and movement. In the world of procurement, we can describe a series of conditions in which we expect to be operating, and the sort of category responses we will need to enact to meet the demands of that play.
Within it, we might cover a general description of the volumes we’re expecting, the suppliers we expect to use, the supply chain design, stock levels and the sorts of specific activities that we would need to undertake to make it happen. It’s not meant as an absolute; there are bound to changes that happen underway, but if we’re setting off with a generally agreed direction, then we have more chance of getting there. This could sit as an addendum to any existing category or supplier strategies created pre-coronavirus.
The business playbook
This will need to tie into the overall business playbook – how the organisation as a whole sees the forward picture. To get at this means that we’re going to need to spend time understanding who our overall business strategists are, and how they see the future. This is often the hardest part of the process; getting to understand the range of planning options that are being considered is usually deeply protected as the commercial sensitiveness it implies is significant. However, ensuring that procurement is looking at these options, and, ideally, contributing to them from our understanding of the marketplace and the supply chains we operate within, is a critical part of optimising our responses and planning.
By building a series of category playbooks for a range of different starting scenarios allows us to capture possible ways forward and deliver a better outcome for our organisations.
Blog post: Category Management – What next?
About Mark Hubbard
30+ years experience in procurement and supplier management, in line and consulting roles
Previous employment: Positive Purchasing Ltd, SITA,
QP Group, BMW, SWWS, Rover
Education: BSc in Engineering Metallurgy, MBA University of Plymouth
CIPS: Current Member