by Jennifer L. Ulrich, Project Analyst
In this continuing series, Jennifer Ulrich shares her experiences in the trenches of executing strategic sourcing projects, to give you practical insights into best practices.
When performing any type of sourcing activity, one of the underlying and continuous concerns is the inevitable roadblock. Roadblocks can emerge in many forms, such as the possibility, indicated in last month’s newsletter, of the lack of adequate sponsorship. Some roadblocks to a successful sourcing initiative cannot be helped, such as a significant drop in purchase volume or simply a lack of resource availability. Other issues such as slow decision making, low priority projects, or an unresponsive supply base are some of the most common roadblocks over which you actually have some control. Dealing with these issues proactively, before they become roadblocks, is the best approach, but some unforeseen problems have to be dealt with reactively. Proactive behavior is not something that always comes instinctively. You need to train yourself to
approach situations in a way that will allow you to see the whole picture and forecast for unexpected stalls in the process.
First and most important, you want to consider what roadblocks can be prevented before they ever become a problem. During the initial data collection process of a strategic sourcing project, you should try to anticipate what issues might occur based on what you find in this discovery phase. Are the suppliers initially difficult to work with? Are they unresponsive or generally opposed to providing data? Are your sponsors supportive of your actions and responsive to your requests? When developing the project plan, have you considered all of the necessary steps involved, including the timelines associated with those steps? All of these questions should be running in the back of your mind while etermining
strategies and overall timelines.
Unfortunately, not all problems can be foreshadowed; in some instances reactivity is the only option, so try to make sure that you react appropriately in a way that will not prolong the issue further.
Below are a couple of common issues we have encountered, roots that might be causing the issue, and potential solutions.
Stakeholder continuously delays the decision making process.
Possible Root #1: Stakeholder was not provided with enough information to adequately make the decision.
Potential Solution #1: This is definitely an issue that can be addressed proactively. Make sure that when you initially interview the stakeholder or decision maker that you address all of their concerns with the current process or supplier as well as what their expectations are for the results of the sourcing initiative. Effectively executing the discovery phase will set the tone for the entire endeavor.
Possible Root #2: Stakeholder is managing a similar initiative simultaneously.
Potential Solution #2: This root cause can be addressed both with proactive or reactive approaches. Ideally the stakeholder will be upfront and honest about any other activities being run to avoid any duplication of efforts. In this case you can either find a way to assist them in the process or evacuate your resources and drop the project to avoid wasting time. In this situation you can approach the stakeholder with the work that you have completed and try to combine your efforts in some way.
Possible Root #3: The project is not a priority for the stakeholder.
Potential Solution #3: A reactive approach might include finding ways to ensure that they only need to be involved for the critical points in the process. On the other hand, you may want to find a way to work around this particular roadblock instead of trying to break through it. This may include finding a different stakeholder or perhaps simply finding something that piques their interest such as a short implementation timeline with immediate savings opportunities, if possible.
Problem: Unresponsive supply base.
Possible Root #1: Supplier does not interpret the initiative in an opportunistic way.
Potential Solution #1: This issue is generally avoidable through proactivity. When initially communicating with the incumbent or alternate suppliers you should clearly state the goals of the project as to avoid any confusion. Second ensure that you establish a solid foundation for the relationship, assure the supplier that, while your intention is to generate cost savings in some manner, you can offer additional value-adds such as streamlining the payables process. Look for ways to improve upon the supplier-client relationship that will be mutually beneficial.
Possible Root #2: Insufficient sponsorship on the supply side.
Potential Solution #2: Ideally you want to determine right away who the right people are to coordinate your efforts with on the supply side in order to be as effective and efficient as possible; that would be proactive. However, in some instances further along in the process, you might find that your initial sponsor is not the most effective person. Your reactive behavior is pivotal in avoiding overstepping the primary account manager’s authority and potentially damaging the relationship. Ask the individual if there is someone else that you can work with to accomplish your project objectives, or proactively involve their management team in a collaborative manner to foster a positive reaction rather than an offended one.
While proactively anticipating problems is the best way to manage potential roadblocks, you may find that reacting to unpredictable events is your only alternative. You will find that refining these proactive and reactive behaviors and using each of them where they make the most sense will aid you in the sourcing process with stakeholders and suppliers alike.