Tuesday, 11 November 2014

Lean is supposed to about getting rid of waste

I could barely believe my eyes when I read today that public sector managers are now going back to school, gaining an FICiPS en route, to learn about 'lean'. It's not that I don't agree with the need to implement 'lean' thinking in the public sector, indeed back in the 90s I was writing about the application of lean supply in the public sector. No, my concern is that the UK government have been preaching the 'lean' message for years too - indeed we have the 'Lean sourcing: The standard solution'.

What has gone wrong with their recruitment that they now need to invest in training for these managers - did the recruitment process actually let staff through the system without checking their understanding? Are we to view this as an admission that central government is 30 years behind the curve in management thinking?

My suggestion is quite simple: give each of the managers who require training a copy of either The Machine that Changed the World, Lean Thinking, or Systems Thinking in the Public Sector get them to research why the Japanese local government has struggled to implement 'lean', and then set within their personal objectives an appropriate objective to pilot a 'lean' initiative, reporting on the difficulties, how they overcome the difficulties, and the lessons learnt. No £17,000 training course, no mercy, if they can't deliver chase them - I can't see that after so long any other approach will work.

Thursday, 6 November 2014

"Purchasing: Can we bridge the gap between strategy and daily reality?"

A new academic paper is in press at the moment for publication in Business Horizons: 'Purchasing: Can we bridge the gap between strategy and daily reality' by Knoppen and Saenz which I think is worth a read. The paper is based on the survey findings of the International Purchasing Survey - over 600 usable responses from North American and European purchasing professionals - and a few anonymised case studies.

At first I wondered why the paper wasn't published in one of the mainstream procurement journals, then I decided it may be the reported findings quite possibly jar against the message their editors generally want to accept.

Nevertheless the findings are important and certainly merit further debate and validation.

I am not going to steal the paper's thunder, but the key messages include that 47% of the respondents believe Purchasing (I take that also to cover the Procurement function) is not included in the strategic planning process, and 56% the purchasing are not focussed on long-term issues that involve risk and uncertainty. Furthermore that organisational structure tends to be either centralised or decentralised with little development of hybrid models.

Those findings certainly act as a reality check on the rhetoric but, I have to say find some resonance with what I have all too often seen in big household name companies. If the findings are reliable we need to stop the bluff and really get down to asking the serious question of why is Procurement still suffering from an identity crisis, despite almost 30 years of procurement's potential contribution having been identified, the financial crisis, and even the recent spate of procurement related supply chain risks manifesting themselves? Why are simplistic structural models still prevalent despite the benefits of hybrids? Is the problem that with the profession of those who look at the profession?

However, leaving solving the world's problems for another day, and getting back to the paper. In answering the core question the authors pose: Can we bridge the gap between strategy and daily reality? The authors use the case studies to demonstrate the answer is 'yes',  and identify key pitfalls in bridging the gap, namely:

  1. No time for reflection;
  2. Lack of scale;
  3. Lack of scope;
  4. Unaligned incentives. 
While I may question some of the content and approach, and feel there may be an over-simplification of the discussion and recommendations,  I encourage you to give some thought to the findings.