Supply Chain Transformation...a Change Process

Transcription

1 Supply Chain Transformation......a Change Process Gerry Tominey CPO ABF CIPS Southern Africa Pan African Conference

2 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

3 The case for change The traditional and constant case Cost down, profit up Supply Chain Agility The developing case Environmental Ethical Risk

4 Who are the agents of change? We all play a role in delivering the hierarchy of needs Business requirements Innovation Cost Service Quality/Regulatory Assurance of Supply

5 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?

6 Step 1. Acting with Urgency Examine market and competitive realities Identify and discuss crises, potential crises or major opportunities 2010 Kotter International

7 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

8 3. Developing a Change Vision Create a vision to help direct the change effort Develop strategies for achieving that vision 2010 Kotter International

9 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

10 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

11 6. Generating Short Term Wins Plan for visible performance improvements Create those improvements Recognise and reward employees involved in the improvements 2010 Kotter International

12 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

13 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

14 Associated British Foods plc

15 Global presence Associated British Foods is a diversified international food, ingredients and retail group with sales of 10.2 billion and 97,000 employees in 44 countries

16 Group at a glance: 9 Divisions, 50 Business Units Sugar Sugar, Europe Sugar, China Sugar, southern Africa Co-products Agriculture Animal feed UK Acquisition of raw materials China Retail Primark and Penneys Grocery Herbs and spices World foods Hot beverages, sugar and sweeteners Meat and dairy Vegetable oils Bread, baked goods and cereals Ingredients Yeast and bakery ingredients Speciality ingredients

17 Corporate objectives 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

18 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

19 Getting it right for ABF Businesses How 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 Balanced Scorecards 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? Commercial Synergies Process Synergies Secondary focus is on the overlaps between 2 Divisions Can we identify People the opportunity Synergies 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?

20 Procurement Framework Business Needs Our Response Our Objectives Sourcing Methodology Excellence in the development and implementation of sourcing Procurements activities and priorities must be aligned strategies to business Cost requirements and expectations, which differ between divisions Supplier Development and sometimes within divisions. Risk Quality Technology Knowledge Management Achieve maximum benefits form Critical supplier relationships Our Appropriate objectives deployment in each of esourcing of these solutions areas to optimise should be efficiency and business benefits aspirational yet be appropriate to the individual requirements of each division. Provide access to internal & external data and analysis to support decision making Service Risk Management Sourcing Collaboration Minimise risks exposed through contracting with third parties Maximise the benefits of cross divisional sourcing collaboration Innovation Talent Corporate Responsibility Low Cost Country Sourcing Corporate Responsibility People Communication Sourcing from appropriate locations (suppliers) to ensure lowest total cost of ownership Sourcing ethically and in support of ABF / business sustainability objectives Develop the talent pool through functional training & development and succession management Procurement staff across ABF are well networked and informed on functional activity

21 Procurement Methodologies change based