Elevating Strategic Sourcing Capabilities:

Transcription

1 Elevating Strategic Sourcing Capabilities: Implementing an Outsourcing Talent Management Program at Boeing Boeing Lawrence Kane Sr. Leader, ITI Strategy & Sourcing

2 Elevating Strategic Sourcing Capabilities Implementing an outsourcing talent management program at Boeing Lawrence Kane, COP-GOV SIG Global Executive Summit Amelia Island, FL March 10 12, 2015

3 About Boeing The world s leading aerospace company Provides products and support services to customers in 150 countries Designs and manufactures commercial and military aircraft, rotorcraft, electronic and defense systems, missiles, satellites, launch vehicles, and advanced information and communication systems Headquartered in Chicago, Boeing employs more than 170,000 people across the United States and in 70 countries More than 140,000 of our people hold college degrees, including nearly 35,000 advanced degrees, in virtually every business and technical field 3

4 Our job, regardless of organization, is to make sure we re spending our money where it moves the needle because we only have so much. Kevin Schemm, vice president of Finance & Strategy and chief financial officer, Commercial Airplanes 4

5 Background Boeing/McDonnell Douglas merger, 1997 Heritage Boeing insourced all IT Heritage McDonnell Douglas outsourced all IT We needed a sourcing strategy Worked with Gartner to develop and implement industry leading strategic sourcing practices and methods Multisourcing one of the first to implement Benchmarking actionable clause; retroactive adjustments Gated evaluation process acquire the right supplier Red team reviews assure first time quality 5

6 Current Environment IT infrastructure is ~ 75% outsourced IT applications are ~ 50% outsourced Needed products and services cannot be delivered without partnering with suppliers Strategic sourcing and vendor management disciplines are critical to overseeing the process Outsource/retain strategy RFx development Bidder evaluation and supplier selection Governance Etc 6

7 The Challenge We Discovered Robust tools and processes are not enough it takes an experienced workforce Personnel changes, attrition, and reorganizations have led to knowledge/skill loss Escapes have caused value leakage Customer impacting transitions Unanticipated costs Excessive contract changes Need to engage consultants to shore up internal capabilities Etc 7

8 Discuss People Process Technology how mature is your sourcing organization? common process or compartmentalized? centralized vs. decentralized decision-making? 8

9 Target Environment Help new sourcing and supplier management employees become productive as expeditiously as possible Define a common language, principles, and leading processes Assure consistent implementation across all organizations Continuously adopt industry leading practices (that are applicable to Boeing) Leverage industry proven practices Lay the foundation to strengthen outsourcing processes Make the implementation of the sourcing process better, faster, and cheaper with assurance (achieving expected outcomes/results) 9

10 Implemented Solution Licensed rights to use an industry standard training program Trained and certified 8 Boeing SMEs to teach the materials internally Candidates needed sufficient experience to earn industry accreditation Highly effective communication and instruction skills Commitment to teach at least two classes per year Implemented a three-year cascade training program to educate stakeholders Hold ~ 8 classes per year across three geographies Optimal class size is ~ 20 attendees Mix n match organizations to facilitate crossfunctional networking 10

11 Class Curriculum Standardized materials that cover every aspect of the sourcing lifecycle In-depth training Industry leading practices Recognized worldwide by suppliers, consultants, and buyers alike Precursor for accreditation Boeing customization: Boeing executive expectations 4 days, including additional governance focus Links to policies and procedures Tailored case study that assures relevancy to Boeing 11

12 Discuss Training plans Sources of knowledge have you licensed a formal training program? other sources of knowledge? what changes have you institutionalized? what benefits have you achieved? 12

13 Value Proposition Example: 90 trainees Cost Value It means that you are someone who will be continuously in touch with emerging industry best practices and can successfully apply them to your organization. Wayne Heiler, Pfizer It is as much based on real lessons learned from the application of the standards as it is on best in class or proven approaches to the work. Catherine Giles, Liberty Mutual Year 0 Year 1 Year 2 Year 3 Internal Training Public Training For a large rollout, internal training costs significantly less than sending employees to public classes It means that I can speak a common outsourcing language, and drive successful outsourcing solutions in my workplace. Teresa Harris, GE The curriculum provides for a common lexicon for our industry and enables more effective execution across the outsourcing value chain. Eugene Kublanov, KPMG 13

14 Likelihood Risk Management Risks ) Value leakage in existing and new supplier relationships 2) Training investment outweighs value loss 3) Making investment doesn t guarantee results and treated as a passing fad 4) Viewed as invented by a small group Mitigations Consequence 1 1) License industry standard program and train affected personnel 2) Communicate success stories cost of quality = cost of non-conformance + cost of conformance 3) Management commitment and relentless discipline 4) Following industry proven methods; trainers industry certified 14

15 Assuring Momentum Active executive sponsorship Continuous commitment Accountability for results 15

16 Rollout Plan Class schedules in 2014 Puget Sound Nov ( beta test class) Plan of class schedules by site for 2015, Q 2Q 3Q 4Q Charleston Feb Oct Puget Sound Mar Jun Aug St. Louis Apr Sep Nov Class Agenda ½ day Monday Full day Tuesday Thursday ½ day Friday Class size ~ 20 students Assure diversity of background of attendees for optimal experience 16

17 Discuss Lessons learned how do you assure continuous improvement? how do you energize employees to seek out and adopt new knowledge? how do you gain support for needed change? 17

18 Lessons Learned Think big Stakeholder analysis Executive sponsorship Employee engagement Implement the easy ah-ha s and institutionalize Don t try to boil the ocean continuous improvement not revolutionary change Exercise change management discipline Help stakeholders overcome fear of change WIFM career growth and certification opportunities 18

19 About the Presenter Lawrence Kane is a Certified Outsourcing Professional in Governance (COP-GOV) and a Boeing Designated Expert (BDE) in IT Sourcing. A senior leader at Boeing, he established the sourcing office, hired and developed a high-performance team, and saved more than $2.1B by architecting the IT infrastructure sourcing strategy, designing the proposal evaluation process, executing RFPs, negotiating with providers and benchmarking the effectiveness of resultant deals. He is also the best-selling author of eleven books, including three USA Book News Best Books Award finalists, an elit Book Awards Bronze prize, a Next Generation Indie Book Awards finalist, and two ForeWord Magazine Book of the Year Award finalists. 19

20 Thank you! Lawrence Kane Senior Leader ITI Strategy & Sourcing The Boeing Company Phone: (425)

21 Evaluation How-to: Why? Your feedback drives SIG Event content By signing and submitting your evaluation, you are automatically entered into a prize drawing How? Option 1: App 1. Select Schedule 2. Select Schedule by Day 3. Select Day 4. Select Session 5. Scroll to Description 6. Click on the Evaluation link Option 2: Browser 1. Go to 2. Select Session (#26) Complete and submit!

22 Session #26 Elevating Strategic Sourcing Capabilities: Implementing an Outsourcing Talent Management Program at Boeing Speaker: Lawrence Kane Boeing (425) bit.ly/downloadameliaapp Tweet using: #SIGspring15

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