supply chain transformation a change process plenary gerry tominey... · 2011-05-30 · supply...
TRANSCRIPT
Supply Chain
Transformation...
...a Change Process
Gerry Tominey
CPO ABF
CIPS Southern Africa Pan African Conference
• What is case for change?
• Who are the agents of change?
• Is Procurement any different to the rest of the business?
• My own recent experience of managing change
• What I think we should take away
The case for change
• The traditional and constant case
– “Cost down, profit up”
– Supply Chain Agility
• The developing case
– Environmental
– Ethical
– Risk
Who are the agents of change?
• We all play a role in delivering the hierarchy of needs
Service
Cost
Innovation
Quality/Regulatory
Assurance of Supply
Business
requirements
Is Procurement any different?
• Dr John Kotter established, over 30 years of research, that
70% of all major change efforts in organisations fail!
• What is our collective experience?
Step 1. Acting with Urgency
• Examine market and competitive realities
• Identify and discuss crises, potential crises or major
opportunities
© 2010 Kotter International
2. Developing the Guiding Coalition
• Assemble a group with enough power to lead the change
effort
• Encourage the group to work as a team
© 2010 Kotter International
3. Developing a Change Vision
• Create a vision to help direct the change effort
• Develop strategies for achieving that vision
© 2010 Kotter International
4. Communicating the Vision Buy-in
• Use every vehicle possible to communicate the new vision
and strategies
• Teach new behaviours by the example of the Guiding
Coalition
© 2010 Kotter International
5. Empowering Broad-based Action
• Remove obstacles to change
• Change systems or structures that seriously undermine the
vision
• Encourage the risk-taking and non traditional ideas,
activities, and actions
© 2010 Kotter International
6. Generating Short Term Wins
• Plan for visible performance improvements
• Create those improvements
• Recognise and reward employees involved in the
improvements
© 2010 Kotter International
7. Don’t Let Up
• Use increased credibility to change systems, structures
and policies that don't fit the vision
• Hire, promote, and develop employees who can implement
the vision
• Reinvigorate the process with new projects, themes, and
change agents
© 2010 Kotter International
8. Make Change Stick
• Articulate the connections between the new behaviours
and organizational success
• Develop the means to ensure leadership development and
succession
© 2010 Kotter International
Associated British Foods is a diversified international food, ingredients andretail group with sales of £10.2 billion and 97,000 employees in 44 countries
Global presence
Sugar
Co-productsSugar, China
Sugar, southern AfricaSugar, Europe
Ingredients
Meat and dairy
Herbs and spices
Bread, baked goods and cereals
Vegetable oils
Hot beverages, sugar and
sweetenersWorld foods
Group at a glance:
9 Divisions, 50 Business Units
Grocery
Speciality ingredientsYeast and bakery ingredients
RetailPrimark and Penneys
Agriculture Acquisition of raw materialsAnimal feed
UK China
• Twin financial goals:
- Sustainable real profits growth
- Long-term cash generation
• Focus energies on market segments where we can establish strong, sustainable
leadership positions
• Grow organically and by acquisition in complementary activities
• Achieve high levels of operating efficiency
• Operate through a focused divisional structure in which each business:
- has an influential market position
- has sufficient scale to attract highest quality management
- has differentiated features for leveraging added value
- has potential for sustained revenue and profit growth or cash flow
Corporate objectives
Operating model & expectations
• Business model remains unchanged:
– individual businesses responsible for their own performance &
profitability
• Individual companies should gain an unfair advantage from being a
part of ABF
– Eg lowest input costs compared to competitors
• Primary focus should be to deliver for one’s own business but we
should also look across the ABF divisions to identify where we can
collaborate and deliver more
– To the benefit of your own business
– To the benefit of other businesses
• The benefits of centralised procurement, without centralised
procurement
Getting it right for ABF BusinessesHow ABF central team and divisional teams work together
• Identifying the appropriate value levers to the ABF operating model:
– Developing best in class procurement processes in businesses
– Providing access to better deals, resources, tools and information
– Coordinating the network on prioritised opportunities
• ABF cross-divisional procurement model:
Prime Focus is on activity within Divisions
•Are their ambitions sufficiently stretching
•Are they linked in to the big strategic supply issues
•How’s their capability – what resource do they need
from outside their division?
•How are they tracking
Secondary focus is on the overlaps between 2
Divisions
•Can we identify the opportunity or threat?
•Are the Divisions aligned – resource, priority etc
•Is there an effective way of working?
•Can we track progress?
•What additional resource do they need?
Secondary focus is on the overlaps between 3+
Divisions
•Can we identify the opportunity or threat?
•Are the Divisions aligned – resource, priority etc
•Is there an effective way of working?
•Can we track progress?
•What additional resource do they need?
People Synergies
Commercial Synergies
Process Synergies
Balanced Scorecards
Cost
Risk
Quality
Service
Innovation
Talent
CorporateResponsibility
Business NeedsExcellence in the development and implementation of sourcing
strategiesSourcing Methodology
Achieve maximum benefits form Critical supplier relationshipsSupplier Development
Appropriate deployment of eSourcing solutions to optimise efficiency and business benefits
Technology
Maximise the benefits of cross divisional sourcing collaborationSourcing Collaboration
Sourcing ethically and in support of ABF / business sustainability objectives
Corporate Responsibility
Sourcing from appropriate locations (suppliers) to ensure lowest total cost of ownership
Low Cost CountrySourcing
Provide access to internal & external data and analysis to support decision making
Knowledge Management
Procurement staff across ABF are well networked and informed on functional activity
Communication
Develop the talent pool through functional training & development and succession management
People
Minimise risks exposed through contracting with third partiesRisk Management
Our Response Our Objectives
Procurement Framework
Procurements activities and priorities must be aligned to business requirements and expectations, which differ between divisions –and sometimes within divisions.
Our objectives in each of these areas should be aspirational yet be appropriate to the individual requirements of each division.