How Procurement Can Win Over Manufacturing Managers
For any procurement initiative to win hearts and minds on the manufacturing floor, you have to have a deep understanding of the two most important priorities in a plant. The first is safety. The second is keeping the line running. You have to respect that, and approach your initiative accordingly, as I learned in my first job out of college, which was rolling out Coupa at a global manufacturer.
How important is safety in manufacturing? At the company where I worked, even in corporate settings the COO would start every meeting by pointing out the fire exits and potential hazards in the room, such as laptop cords running across the floor. Safety is that big a part of the culture, because if you don’t honor it at the highest levels of the company, you can’t expect people to honor it on the factory floor. And in manufacturing, that can translate to real-life injuries.
If someone doesn't have the safety equipment to do their job then, they're not supposed to do it. But because the second rule, “Keep the line running” is so ingrained it can be hard to strike the right balance. It might be tempting to, say, work the line without the right gloves. Procurement’s main job is to make sure factory workers always have what they need, so they never have to make choice like that.
Similarly, when undertaking a new procurement initiative, you want to make sure they never have to choose between their twin priorities and supporting your initiative or you will not be successful. It’s not as though people will go out of their way to avoid corporate policy, but they also won’t go out of their way to adopt a new tool they didn’t ask for and that gets in the way of speed or efficiency.
Boots on the ground
To really win hearts and minds, you have to understand the culture, and then you have to get out and talk to people. Change is not something you can just peanut butter-spread out over your organization from your corporate office. It’s the hardest thing in the world to get someone to change something they’ve been doing for years, and there may be really good reasons why it’s done a certain way.
You have to hit the road and walk as many factory floors as you possibly can. Every individual plant is a different entity and the more you can learn about each one, the greater your chances of success. And you can’t just walk in from corporate and start telling people what to do. Come in with an open mind. Explain why you think your project is valuable. Ask people to work with you and give you their feedback. Be prepared to really listen.
What you learn will improve the project. For example, at one plant I worked with, the main buyer that does all of the purchasing is also the direct transportation manager for all of the trucks coming in. He has no time to support any extra processes so the only thing you can give him is something that makes his job easier and takes next to no effort to come up to speed on. If I stayed up in corporate, I might not have known he did that extra job. I’d just be looking at my data wondering why he wasn’t following the program.
Balance corporate and plant priorities
Look to balance the needs of the company with plant priorities. For example, we had preferred suppliers for maintenance, repair and operations (MRO). There are a lot of competitors in MRO, and every plant had their favorite so we were doing business with a couple dozen vendors. To get preferred pricing on a national agreement, we had to pick just a few, and of course, some plants weren’t happy with that.
We needed a way to promote buying on contract while still giving buyers the ability to purchase from other suppliers if they needed to for safety or to keep the line running. So, we did punchouts with our preferred suppliers and gave users access to buy from non-preferreds through a free form.
The free forms needed to go through a slightly longer approval process and as a result a lot of people stopped buying from non-preferreds. When you're at a point where everybody is doing two or three jobs, it really is faster and easier to buy in one place if you can, but they still had access if there was something they had to have that they just couldn’t get from a preferred supplier.
You also have to be flexible. For the project I worked on, there were a lot of locations that did 100% spot buys, with no automatic generation of purchase orders, and no automatic reordering.
We needed to approach those plants differently. For those that were doing a lot of spot buying, we moved them onto the new system to make buying easier. For ERP users, we took the purchase order that's already automatically flipped and pushed it into the new system so that we could do invoicing all in the same place. Both types of orders end up in the same place, without forcing everybody to use the same system.
You have to have a great tool that supports all of this, of course. But even with the best tool, if I had just walked in and said, “Use this tool,” it would have been much more difficult. I had an agenda and mandates from my leadership, but a pull approach rather than a push approach was a better way to get there.
It’s critical to visit the plants and get to know the local people and understand their challenges. Keep asking for their perspective until they figure out you’re not just a suit; you really do want to know what they think and you really are going to take their feedback into account as much as possible. Connect and win hearts and minds and first and everyone will win in the end.