Interest is growing rapidly in what Lean-Agile Procurement can do for procurement teams around the world. The new methodology is being heralded as a “game-changer” for the discipline, with benefits including 400% faster time-to-market, radical risk reduction and 50% more efficiency.
But like any new methodology, it’s important to back up these figures with a real-life example of the process in action. This article will examine how Mirko Kleiner’s Lean-Agile Procurement methodology helped a Swiss company slash its time-to-market to 6 weeks, down from 6-12 months.
CKW Group is a Swiss company with over 1700 employees that has supplied central Switzerland with electricity for over 120 years. The company realised that its procurement processes must move faster and be closer to customers, but standard purchasing processes (RFI/RFP) did not lead to this desired outcome. The procurement team decided to use Lean-Agile procurement to source a new group intranet for CKW Group, with the aim to:
- increase go-to-market to 1-2 months instead of 6-12 months
- involve internal customers (stakeholders) to introduce the solution in an interactive and incremental way
- test not only the product/service, but also the potential partners’ ability to collaborate before signing the contract
- ensure employees are more self-organised and empowered to make decisions.
CKW Group agreed to follow the four-step approach of lean-agile procurement:
1 – Initialisation:
- Review of vision and strategic goals with management/sponsor.
- Identification of key staff for the cross-functional team.
- Establishment and empowerment of the cross-functional team, together with the sponsor.
2 – Preparation:
- Preparation and support of the first agile, cross-functional procurement implementation team, which participatively developed the customer needs within the set frame conditions around the strategic goals and prepares the large group event with the customers and potential partners.
3 – Execution:
- Execution of a large group event with all customer (stakeholder) representatives to get their needs first-hand.
- Execution of a 2-day large group event to jointly create an offer and select the new partner/product.
4 – Peer Review:
- Team decision and contract sign off with selected partner.
- Retrospective of approach with the team including definition of further steps based on the experience gained by using an empirical approach during the pilot.
- Idea to contract: the time from business case to signed contract was improved by 400%.
- Alignment: the time taken to align with end-users and customers (all gathered together in one room) improved by 2800%.
- Effort: The sourcing project required 2.1 FTE, down from an average 4.5 FTE.
- 1st Info to Decision: The time between the vendor receiving the first information to the decision to award was improved by 400%.
- Decision to contract: The time between the decision to award and the signed contract (and informing all vendors of the result) was cut from 1-2 months to the same day (1000% faster).
Read more about Mirko Kleiner’s Lean-Agile Procurement approach.
Join PASA’s Competitive Advantage Via Lean-Agile Procurement workshop, a two-day certification workshop (LAP1) taking place from 18-19 September 2019 in the Sydney CBD.
The workshop will be facilitated by Lean-Agile Procurement’s Mirko Kleiner, Thought Leader in Lean-Agile Procurement, CIPS Award Winner 2018, international Speaker, Author, President of LAP Alliance, co-founder Flowdays, Agile Enterprise Coach, Certified Scrum@Scale Trainer. Register here.