Collaboration Is King
Jennifer Botterill knows how to bring her best. As a 15-year-old, her dream was to play for Team Canada at the Olympics —a dream she shared with father over lunch. The three-time Olympic gold medalist and Olympic silver medalist with the Canadian Women’s hockey team recalled the conversation during her keynote speech at the 17th-annual Supply Chain Management Association Ontario (SCMAO), held in Mississauga, October 24-25.
“Why not you?” came her father’s response. Later, as a Team Canada member, she and her teammates brought their best to their routine at training camps and on the ice. She encouraged delegates to do the same, recalling advice from her head coach while she attended Harvard University, who encouraged the team to focus on the role each member had. You can’t always choose that role, she said, but you can choose how you play.
The value of change
Following Botterill’s keynote, delegates chose from several education sessions, with procurement transformation the focus of one such session, hosted by Roger Ladoucur and Bill Michalopulos. They described where the corporation stands with its procurement-to-pay function. A total of $4.2 billion goes through the procure-to-pay process, Michalopolus noted, and the system is highly automated. As well, 99 percent of spend is paid through controlled, standardized methods. “All companies depend on third parties to be successful,” he said. “We’re the link—we’re the people who make that happen.”
Before the transformation, there was low visibility into decision making and significant maverick buying, said Ladoucur. No link existed between sourcing and accounts payable and the process was manual, with office furniture and complex IT purchases costing the same. Supplier relations were fragmented.
The corporation worked to reduce costs and procurement cycle time, Ladoucur said, as well as to consolidate the vendor base, increase client satisfaction, integrate accounts payable and procurement, foster ongoing cost reductions and to outsource some procurement like fleet and other non-core items. “At the end of the day, all that was to demonstrate procurement-to-pay value,” he said.
Canada Post did a skills gap analysis, said Ladoucur, and the organization outsourced niche procurement projects. Rules around non-compliant purchasing were introduced to deal with maverick buying. As a result, Canada Post saw a “significant reduction” in maverick buying, noted Michalopulos. Accounts payable now reports to procurement. Processes can always be improved, he said, highlighting the need for training and investment in people. And while technology is important, it’s just one device in the overall transformation. “It’s there, use it, but it doesn’t provide the change—it just gives you the tools,” he said.
Legal and business requirements for contracting took centre stage during a session run by Richard Venerus, principal at RV & Associates, who addressed contracting’s legal and business requirements. A balancing act exists between doing contracts well and adhering to a business deal that keeps risk at bay while getting the job done fast. Organizations should therefore tap their people as a resource, he noted.
But those organizations can end up with groups of people performing tasks independently, Venerus said. That can lead to contracts done in an unplanned, tactical fashion. An organization may lack the skills to maintain contract quality, Venerus said, while mistakes can appear even in a good contract when employees are in a rush to put it together.
Venerus drew a distinction between contracting and contract management, noting contracting refers to preparing the contract and contract management focuses on supplier performance while using the contract as a tool to get the best performance possible. In contract management, it may be necessary to deal with dispute resolution or a claim, compliance and other issues. Meanwhile, contract administration, a third term, means measuring the performance of the contract management function itself.
Many organizations don’t assess contracts, Venerus said, opting instead to start working on it immediately. While many people do a risk assessment, it’s important to look also at how long the process will take—a factor few consider. The benefits of an assessment include better ID priority items on a risk adjusted basis, ability to allocate the right combination of skills and experience, as well as the right time and effort spent on each contract, Venerus noted.
The theme of collaboration, both within and outside of supply chain organizations, remained throughout the two-day conference. The event lived up to its slogan of Partner for Performance. B2B