Agile purchasing: all nonsense or important success factor?
People all over the world are talking about agility. We have to become more agile, agility means the future, nothing works without agility. Everywhere there is a lot of talk about how important it is. But when it comes to defining concrete measures and practical approaches, there is often helplessness. The fact is that digitalisation, ever faster changing framework conditions, such as last year's Corona, and a more complex and confusing world situation are presenting companies with the challenge of having to act faster and more flexibly. Of course, this also applies to purchasing.
Shutterstock.com | Olivier Le Moal
I see the modern buyer running from one meeting to the next with his laptop under his arm. This is important for the exchange of information and the gathering of know-how. However, in my practice as a purchasing manager, I have experienced many of these meetings as stressful, time-consuming and sometimes superfluous. It was not uncommon for me to arrive at the office in the evening with a large mountain of new tasks. Decisions were postponed until the next meeting and the overview was lacking. The team had also not been informed in a timely manner. Rigid structures and rules were the order of the day and I wondered if things could be done differently.
During a walk through the production, I noticed a Kanban board. All employees stood around the board and after a few minutes everyone knew what to do. I wanted a tool like that for my team in purchasing. In the weeks that followed, I read up on the subject and have since completed further training: EXIN Agile Scrum and Product Owner. I have become a fan of this way of working and say: "Agile purchasing - that's the future."
Agile as an all-purpose weapon?
It is undisputed that agility brings many benefits. Nevertheless, it does not make all structures and processes obsolete. Companies must learn to decide where and how much agility makes sense. Purchasing must therefore be able to support both the innovation and the project management process. If, for example, the requirements and implementation of a new product development are still unclear or specifications are not available, purchasing can contribute its know-how by means of various innovation methods. After the first ideas have been developed, specifications can then be created in an agile project. Here, Purchasing can act in the role of Scrum Master, for example. But let's take another step back and ask ourselves...
What is agile working?
Agile by definition means "of great agility" and that is what we need in procurement, we need to be able to react to changes quickly and efficiently.
In 2001, the "Agile Manifesto" was signed by software developers, including Ken Schwaber - here software developers were looking for new approaches to be able to react quickly to necessary changes in large projects.
The 4 values of the Agile Manifesto:
1. individuals and interactions are more important than processes and tools
2. functioning software is more important than comprehensive documentation
3. cooperation with the customer is more important than contract negotiations
4. reacting to change is more important than following a plan
The Agile Manifesto has a history in software development, but the core values from it can be applied to all agile teams - including procurement.
Waterfall method or Scrum?
From classic project work, we know the "waterfall method", i.e. like a waterfall, we go process step by process step from top to bottom. Errors may only be noticed at the end of a long process and then we go back to the beginning of the "waterfall" step by step. This is time-consuming and not efficient. Does agile working now mean that we no longer have to adhere to process steps and rules in the future? No - of course not. Despite the flexibilisation in the working world of procurement and the desire to push agile working, a set of rules is needed - an example of an agile management framework is Scrum. The word "Scrum" originally comes from the sport of rugby and means something like "arranged scrum".
Scrum has been used as a process framework in the development of complex products since the early 1990s. A framework within which people can tackle complex tasks.
In summary, Scrum is:
- Easy to understand
- Difficult to master
The Scrum framework is a guideline and contains the definition of Scrum roles, events, artefacts as well as rules. Each component of the framework serves a specific purpose that ensures the success of Scrum.
The Scrum Team
Process control in Scrum theory is based on empiricism, i.e. knowledge gained from experience. Scrum uses an iterative (repetitive) and incremental (building up) approach. Incremental means that after each "sprint" there is a saleable product.
Process control in Scrum is based on three pillars:
1. transparency > common process language and the definition of "Done".
2. review > Scrum artefacts
3. adaptation > do it as soon as possible
Scrum prescribes four events for review and alignment. These are:
1. sprint planning
2. daily Scrum
3. Sprint Review
4. sprint retrospective.
These events are controlled by the Scrum Team. A Scrum team consists of the product owner, the development team and the Scrum master. Scrum teams are self-organising and interdisciplinary. The core of an agile department is formed by teams working independently in self-management. These teams decide for themselves how best to carry out their work, instead of being dictated to do so by other people outside the team.
Agile purchasing - the future
What does agility mean for the future of purchasing? It poses challenges to buyers that they have never faced before. In order to change the system, buyers need time and the willingness to change traditional ways of thinking and structures. However, it is certain that companies cannot survive in the long run without agile methods, because product life cycles are becoming shorter and shorter, customers want to be served more individually and producers have to react faster and more flexibly. I am firmly convinced that agility in purchasing is an important success factor for the future.
Do you also want to make your purchasing more agile and lead it successfully into the future? Then let's tackle your challenges together on the way there.