Monthly Top 5 - June 2024

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Hi Readers,

Tonight is an experiment and I need your help.

I usually send out the Monthly Top 5 editions of this newsletter on the first Wednesday of every month and then an additional article on the Sunday night of the same week (when you are getting this email).

That means you get 2 emails from me in “Monthly Top 5 weeks”.

I’m thinking about integrating the Monthly Top 5 into the Sunday schedule so you only ever get 1 email from me weekly, further decluttering your inbox.

You decide!

Thanks for letting me know. Now onto the content!

📰 In this month’s edition of the Top 5:

• No. 1 - Diving into the 7-Step Strategic Sourcing Process

• No. 2 - Simple Changes Can Have Massive Effects

• No. 3 - Ideas to Fix Public Procurement

• No. 4 - Should AI Influence Your Operating Model?

• No. 5 - IT Sourcing Is On an Exponential Complexity Curve

What was your favorite story this month?

Rate this edition at the bottom of the email and tell me in the comments.

No. 1 🥇

Diving into the 7-Step Strategic Sourcing Process

This month’s best article is a detailed overview of “step 2” in the classic 7-step Strategic Sourcing process: Creating a category profile.

So often, the 7-step strategic sourcing process is held up as the gold standard yet I don’t often see content going into detail for individual steps.

This is a great read that reminds us how to ensure a category strategy is based on solid foundations and assumptions.

How to Create a Category Profile for Strategic Sourcing
by Art of Procurement

No. 2 🥈

Simple Changes Can Have Massive Effects

This is not an article but rather an old video I just came across.

It shows the efficiency gains that come when you change/challenge the standard “grid layouts” used in most warehouses.

On top of giving you a great topic to discuss the next time you meet your warehousing stakeholders, the video also illustrates a powerful lesson that is applicable in all areas of Procurement:

Being thoughtful about how work is executed can generate massive benefits without much investment or effort.

Always leave room to question the status quo.

The Fishbone and Flying-V Warehouse Layouts
by Corporox

No. 3 🥉

Ideas to Fix Public Procurement

Generic procurement content is rampant these days (e.g. “You need to use AI or be left behind!”)… If you can’t give me concrete use case, business rule, policy or process examples I can reuse in my own work, I’m left feeling hungry for more…

That’s why Peter’s June article proposing policies to help straighten out the UK government procurement processes was very interesting indeed. I don’t agree with all proposals but at least they open up concrete debate!

Here’s one to get the discussion going:

“Introduce a sceptical “National Audit Office type review” process BEFORE major programmes are started.” (to prevent issues before they happen instead of simply reporting on them after-the-fact)

Warranted or too heavy? Tell me in the comments.

My Manifesto for Public Procurement
by Peter Smith at Bad Buying

No. 4 🏅

Should AI Influence Your Operating Model?

Artificial Intelligence, Intake Management and Process Orchestration technologies are making the market rethink how Procurement functions should operate (read: What is Process Orchestration?). I touched on this topic myself in last week’s Sunday Night Note.

In Hackett’s recent report, they essentially recommend the same thing: “Enterprise capability centers (ECCs) [should] evolve from today’s Centers of Excellence (CoEs), elevating their capabilities and expanding their scope beyond the function to drive greater impact for the enterprise.”

What does this mean? For me: You need folks with change, risk, process, system, HR, etc. skills directly in your Procurement function report-to structure.

Another way to think about it?

Procurement needs to become a business within a business…

Define Your Next-Generation Operating Model - Enabled by Gen AI
by Amy Hillcox, Jeff Gilkerson and Kurt Albertson at Hackett

No. 5 🎖

IT Sourcing Is On an Exponential Complexity Curve

As I’ve often stated before, with the demographic challenges ahead, “Technology is our savior.” (deep dive article coming soon).

However… As Thomas puts it in his great recent article: “the increased complexity of environments, and multiplicity of technology service platforms and providers, creates ever more opportunities for things to go wrong.”

Lots of technology introduces lots of risk… A Swiss Army Knife is great if you know how to use it correctly without cutting yourself. In this article, Thomas lays out a useful framework for approaching IT Sourcing.

Choosing the Right IT Service Provider for Your Needs
by Thomas Naylor at Techerati