Procurement doesn't need to be slow - agile can help
Lean Agile Procurement (LAP) is a new way of thinking about how companies buy goods and services.
It can transform your procurement process from a hindrance to a competitive advantage with an agile, collaborative, and continuously improving approach to buying goods and services.
We all know procurement can be slow, bureaucratic, and inflexible. This can hinder companies looking to move quickly and innovate – especially in today’s fast-paced business environment.
In the modern procurement landscape, organisations are prioritising digital transformation efforts and implementing modern technology with new capabilities, and operating models.
The Hacket Group’s leading research, CPO Agenda: 2023 Key Issues Study, highlights agile procurement as a top 10 priority for procurement leaders. Hackett says leaders must improve the agility of the procurement process through simplification, empowering decision-making and calculated risk-taking, digital processes, and streamlined governance. This surely spells excitement for procurement in the future?
LAP is a powerful approach that can help companies transform their procurement process from a hindrance into a competitive advantage. It’s all about being agile, collaborative, and constantly looking for ways to improve. Success stories in commercial functions have demonstrated the potential for huge business impacts, improving lead times between 200 and 800%.
Learn how to apply agile to procurement on our online course.
Procurement made more manageable
With LAP, companies are streamlining their procurement process by breaking it down into smaller, more manageable steps.
This approach emphasizes collaboration, flexibility, and continuous improvement, which can help companies get the products and services they need more quickly and efficiently.
One of the key tools of Lean Agile Procurement is the Lean Procurement Canvas, which is a visual framework that helps companies map out their procurement process and identify areas where they can improve.
Get a free agile procurement coaching call APA Group, Air France KLM, Gazprom, BNP Parisbas, Auckland Council are some of the organisations to have effectively adopted the canvas in procurement.
The awarded success story of the CKW Group (7), an energy company in Switzerland with 1,700 employees and a turnover of ~850 million, showed that with Lean-Agile Procurement complex sourcing cases can be successfully processed in four to five weeks. The company successfully sourced a group intranet solution and time to market was achieved in just six weeks instead of six months.
By using the Lean Procurement Canvas, companies can identify waste, streamline their processes, and reduce lead times, which can help them stay competitive in today’s marketplace.
Benefits of the lean-agile procurement canvas
Purpose: This element defines the overall goal of the procurement process.
Scope: This element defines the scope of the procurement process, including the products or services that will be procured.
Suppliers: This element identifies potential suppliers for the products or services.
Needs: This element identifies the needs of the business and the customer.
Criteria: This element defines the criteria that will be used to evaluate potential suppliers.
Process: This element defines the procurement process, including timelines and milestones.
Relationships: This element defines the relationships between the business and the suppliers.
Risks: This element identifies the risks associated with the procurement process.
Metrics: This element defines the metrics that will be used to measure the success of the procurement process.
Start your lean agile procurement journey
To get started with Lean agile Procurement, companies can follow these steps:
Develop a clear understanding of the Lean Agile Procurement principles and methodologies. This can be done by attending training sessions, reading agile books and articles, and seeking guidance from experienced professionals in the field. Download a free agile procurement canvas.
Identify the areas in the procurement process that need improvement. This can be done by conducting an assessment of the current procurement process and identifying areas of waste, inefficiencies, and bottlenecks.
Implement small-scale Lean Agile Procurement pilots in selected areas of the procurement process. This will help companies to test the methodology and assess its effectiveness.
Measure the results of the pilot projects and use the data to adjust the procurement process accordingly. This can help companies to identify areas for improvement and make adjustments to optimize the process.
Build a culture of continuous improvement by promoting a mindset of experimentation, learning, and adaptation. This can be done by encouraging open communication, embracing failure as a learning opportunity, and fostering a culture of collaboration and teamwork.