Knowledge Paper - Co-published with CIPS.org
We’re very proud to announce, that we recently co-published a knowledge paper about Lean-Agile Procurement together with cips.org - The largest global association for supply management- and procurement professionals.
We’re very proud to announce, that we recently co-published a knowledge paper about Lean-Agile Procurement together with cips.org - The largest global association for supply management- and procurement professionals.
CIPS-Members
CIPS Members could download the knowledge paper directly on the cips.org knowledge section lean & agile.
Free Download (Registration needed)
Anybody else could also download it for free joining the LAP Community (all free).
UPCOMING - Stay tuned!
Case Study with Amnesty International France - Talk-show Video
Talk-show style interview of the very first LAP initiative in France involving Amnesty International France (the client), Troopers Web Republic (the winning Partner) and Goood (the LAP trainer and coach)The interview focuses on how all 3 parties (Amnesty, Troopers and Goood) lived the experience.
Talk-show style interview of the very first LAP initiative in France involving Amnesty International France (the client), Troopers Web Republic (the winning Partner) and Goood (the LAP trainer and coach)The interview focuses on how all 3 parties (Amnesty, Troopers and Goood) lived the experience.
This is a video capture of a conference held for Web2Day 2019 in Nantes, June 2019 in French.
Authors & Lead Coaches
Keynote Article in THE PROCUREMENT MAGAZINE - This is the dawning of the age of agility
This Article has got published in THE PROCUREMENT MAGAZINE 2019-05 as lead article. It was also hand-out at their procurement awards. A big thanks goes to Micol Barba, Editorial Manager - Editor in chief at THE PROCUREMENT ITALIA, who is a strong supporter of our movement Lean-Agile Procurement!
Lets change the game
with Lean-Agile Procurement
by Mirko Kleiner & Philipp Engstler
This Article has got published in THE PROCUREMENT MAGAZINE 2019-05 as lead article. It was also hand-out at their procurement awards. A big thanks goes to Micol Barba, Editorial Manager - Editor in chief at THE PROCUREMENT ITALIA, who is a strong supporter of our movement Lean-Agile Procurement!
Not just a new approach, but a new mindset, even a new age is needed to cope with the upcoming market demands. Cases using this new mindset have been proofed to source complex cases in as little as one day! No wonder do companies such as Barclays, Gazprom, Air France, etc. radically tran- sform their organisation and so their strategic procurement.
We live in an exciting, rapidly developing world where it’s possible, for example, to print an aircraft engine within 72 hours (1). Commodity sourcing cases are increasin- gly digitized or taken over by machines. That leaves the complex, mostly strategic sourcing cases for which our existing tools such as Rfi, Rfp, Reverse Auction, etc. are inadequate (2).
In other words, we need new approaches to deliver added value to the business fa- ster and so to stay relevant as procurement
“It’s a matter of delivering fast added value as procurement”
How do we meet the challenges of in- creasing complexity and the demand for rapid time-to-market? The startup scene has already shown how it can be done. They use approaches such as Lean Startup (3), Scrum/Agile (4), or the Bu- siness Model Canvas (5), and they have absorbed uncertainty into their DNA. Benefiting from their experience, lean-agi- le procurement (6) opens up completely new possibilities for procurement, sales and partner management.
DESIGNED FOR ADAPTIVE, STRATEGIC SOURCING
Lean-Agile Procurement is an approach that can be used in both direct and indirect sourcing (6). Originally developed for the sourcing of agile development teams in di- gitalization, it is now used in all categories and industries (2).
The prerequisite is a high level of com- plexity in terms of sourcing content or organization, which is usually the case in strategic sourcing. It is unsuitable for com- modity sourcing, where it may even gene- rate unnecessary overhead.
Barclays for example has started begin of 2018 to organize more than 100 people in pods (stable, cross-functional) teams. Idea is that these pods could handle complex, strategic cases as team much faster, than handing them over and over again. Their numbers showed, that they were able to increase lead time radically.
FOUR TIMES FASTER FROM IDEA TO FIRST VALUE DELIVERED
The awarded success story of the CKW Group (7), an energy company in Switzer- land with 1,700 employees and a turnover of ~850 million, showed that with Lean-Agile Procurement complex sourcing cases can be successfully processed in 4-5 weeks.
While this could be done twice as fast without a problem as this included team setup, learning on the job, etc. Even though this represents four times faster time-to-market compared to classic ap- proaches (4). New ideas can be introduced and tested in the market much faster, and the generated return occurs much earlier. Companies applying Lean-Agile Procure- ment have a competitive advantage with direct impact on the company’s success. From a customer perspective this means a much faster availability of new services and/or products and high reduction of cost-of-delay. Focusing on time-to-market changes everything for procurement!
“This is a game changer”
~80% SAVINGS THROUGH ALIGNMENT AND FOCUS
In complex sourcing cases, especially strategic sourcing, there is a very high de- gree of uncertainty as to what the custo- mer or market needs (8). This makes it all the more important to focus first on the most important business goals (why) and customer needs (what), and only after that on solutions or products (how).
During the development of a new busi- ness case we should already be entering into an intensive interaction with our custo- mers and continuously collecting feedback (3). Instead of creating huge specification documents it’s recommanded to have e.g. representatives of all customer segments in one room and directly ask them for their needs, priority, etc., we are using the Lean Procurement Canvas(6) to capture this. By consistently focusing on the most impor- tant customer needs we simultaneously increase our alignment, push nice-to-ha- ve’s to the back of the queue, and minimize unnecessary effort (4).
RADICAL RISK REDUCTION THROUGH ADAPTABILITY
Tighter focus leads to smaller batches, which allow for increasingly faster sour- cing, which in turn makes it possible to prolong or even change a partner/product/ etc. more easily (6). The overheads incur- red by suppliers, legal, etc. are reduced and incremental deliveries ensure a fun- ctional solution at all times. The fact that customer feedback is collected after each iteration ensures that the solution meets the initial expectations. This requires new, more agile contracts (9) with which a part- nership can be adapted, or even stopped, at any time. This radically reduces risk.
Current cases that applied this principle e.g. co-created the contract with their po- tential partners in one room simultanuo- usly. Doing so open questions, concerns could have been resolved immediately. Even more than that cost drivers could have been identified much earlier and adapted jointly even before starting the cooperation.
~50% MORE EFFICIENT ECONOMICALLY
Complex sourcing cases are corre- spondingly complex to implement. With Lean-Agile Procurement we reduce the overheads on the buyer side by an average of 50% (2). This is mainly achieved by set- ting up a cross-functional team of experts, that can do the job. Having an empowered team together reduces decision-latency to the minimum, so that things develop much faster.
The reduction of effort on the suppliers’ side should also not be underestimated. From an economic point of view, what we are achieving is an optimization of non-va- lue-adding work (10), which ultimately has a direct effect on market performance and the associated success of the company.
COLLABORATION INCREASES INNOVATION
Uncertainty about customer needs can only be minimized through direct inte- raction with customers and users. Consul- tation occurs not just once, but continues throughout the entire procurement process and beyond. Not just the customers but the providers too are included and bring their ideas into the discussion.
A common understanding of customer needs leads to simpler solutions, better collaboration, and new ideas (2). That’s why it’s recommended to ask for a joint wor- kshop with the potential partner/s, where both parties bring in the people that might cooperate and do the job.
Being agile is a mindset and we need to ensure even before we go into a partner- ship, that we have a social fit too. Often we run a proof-of-concept in parallel to the co-creation of an agile contract. This way the delivery capabilities and the behaviors of the people in the room could be obser- ved while actually working. If we invite e.g. at the end of each day the real users we even get direct feedback for new innovative ideas implemented.
TRUE PARTNERSHIP — BOTH SIDES WIN
Strategic sourcing is a two-way street. It requires an attitude of trust cooperation based on partnership and shared values (6). Binding contracts and cost focus are usually to the disadvantage of one party and do not lead to a genuine partnership.
While in Lean-Agile Procurement the hard facts of quality, costs, etc. remain important, social facts, such as the beha- viour of potential suppliers in concrete si- tuations, become just as important, if not more so, as issues are worked out during contract fullfillment.
This leads to fundamental changes in behaviour not only towards partners but also within the company itself (10). This has consequences for the reputation, loyalty, and indirectly also for the motivation and work performance of each individual em- ployee (2).
In one case a new ERP has got sourced in just two days (!) with three potential part- ners in one room simulaneously. The buyer side decided as a team for one partner, but asked for another person from another competitor to join their team. This wouldn’t be possible sending papers back-n-forth.
HIGHER PRODUCTIVITY
Lean-Agile Procurement makes the exi- sting sourcing process more efficient, whi- le focusing on being more effective – doing the right things. In an uncertain environ- ment (8) this also means saying goodbye to detailed specifications, and accepting that anything can change at any time. In today’s smart business development scene the Business Model Canvas (5) is a living document and 100-page business cases are a thing of the past. With Lean-Agile Procurement we demand the same, and the Lean Procurement Canvas provides it.
“Speed is the new currencyof business”
EARLIER RETURN AND FAST FEEDBACK CYCLES IS MORE IMPORTANT THAN COSTS
With innovative ideas, it is more important to learn from customer feedback and to be ahead of the competition than to optimize the last few percent of costs. Because we are only sourcing in small batches, the risk of a bad investment remains small (3).
It’s not any more a question if agile will become a topic for procurement, then in most companies agile transformation pro- grams are already in progress. Full stack business agility require an agile acting procurement departmenet, start experi- ments with agile practices, approaches such as Lap and see what of it makes sen- se in your context.
Lean-Agile Procurement is a proven ap- proach for indirect and direct sourcing in all categories where the sourcing case has a certain complexity. Applied in commodity sourcing cases it creates unnecessary overhead.
It is a practical approach that improves time-to-market significantly and radically decreases risk through incremental and value-added funding for improved busi- ness outcomes.
Lean-Agile Procurement has a sustainable impact on the way we work together, both internally and with our partners – because the soft facts are evaluated by the very people who are going to be working together.
With Lean-Agile Procurement it is once again possible to deliver added value to the business faster and thus remain relevant as procurement.
For more information go to: https://www. lean-agile-procurement.com
Magazine
To order the magazine goto:
The original article could be download here:
https://drive.google.com/open?id=1EyJC-MLPJqsfTM99dbZYI2A7fo5RUY1f
Autors
(1) Additive Manufacturing, GE 2016
(2) Survey/research about agile@procure-ment & sales, flowdays, Switzerland, 2018(3) The lean startup by Eric Ries
(4) For example: “Twice the work in half of thetime” by Dr. Jeff Sutherland, co-creator of SCRUM, author and founder of Scrum Inc.(5) Business Model Canvas, Alex Osterwalder(6) lean-procurement.com & Lean Procure-ment Canvas by Mirko Kleiner, flowdays
(7) “CKW case study”, CKW & flowdays, 2018 (8) Complexity theory by R. Stacey, 2019
(9) See agile contracts at e.g. http://www. flexiblecontracts.com
or http://www.vestedway.com, 2019
(10) Decision latency, www.scrumatscale. com 2019 (11) Pull system by Lean Manu-facturing 2019”
In a fast changing world is the team the main asset!
Côte d’Azure in France, April 25+26 2019 - Together with guests from Air France KLM and David Kershaw from the UK Cabinet office we spent 2 days on our first LAP Retreat 2019, exchanging, challenging, developing Lean-Agile Procurement (short LAP) and most important had some fun & beers!-This blog post is a short summary about and why our concussing was valid for us as well: „In a fast changing world the team is the main asset!“
Côte d’Azure in France, April 25+26 2019 - Together with guests from Air France KLM and David Kershaw from the UK Cabinet office we spent 2 days on our first LAP Retreat 2019, exchanging, challenging, developing Lean-Agile Procurement (short LAP) and most important had some fun & beers!-This blog post is a short summary about and why our concussing was valid for us as well: „In a fast changing world the team is the main asset!“
Who were „we“?-The main attendees were the members of the LAP Alliance, the Certified LAP Trainers. To get an outside view we invited members of the recent success story with LAP at Air France KLM as well with David a representative from the public procurement/GOV. We’ve got hosted by 2 of our members Sophie and Lionel from Good!. A big thank you again for that!
We had great exchanges, we’re able to align towards a joint strategy and even developed new things, just awesome!-I for my side enjoyed it a lot.
A brief summary of our achievements:
Great exchanges with our guests from Air France KLM and with David Kershawfrom the UK Cabinet Office (involved in the Brexit)
Intensive exchanges, challenging our approaches, even the strategy of LAP, so that we became all better as a team
Gathering quotes and exchanging about further success stories
Understanding public procurement, it’s challenges and drafting how LAP could be applied
Develop new things like e.g. 1st drafts of visualizations about LAP in general and the Big Room Evaluation Day (so called POCATHON)
Sharing LAP to a bigger audience in France via the first LAP Conference together with Air France KLM
We’d like to share with you the following out of this exciting 2 days.
1st LAP Conference
In the evening of the 1st day Sophie and Lionel organized our very first LAP Conference for and with their customers/community. It was setup as private event and almost 40 people showed up, mostly with a procurement background. The event was kicked of by Damien, also Certified LAP Trainer and the found of goood!.
His talk about „Building a Sustainable Business“ showed very good, why we should include our partners and need to start treating them as such. Furthermore it’s no more a choice of being „just“ profitable but also responsible. And that in a fast changing world the team becomes an intangible asset!-We couldn’t agree more on that!
To achieve that he closed with the statement „We need to BREAK with all the RULES, but not the LAW“. In other words if we find and enable the mavericks in our businesses only we will overcome the current traps.
Air France KLM Success Story
After Damiens talk Frederic and Eric representing their Air France KLM team shared their success story with LAP in an interview style. AF KLM is already operating mostly agile, but the sourcing was done in a classic approach still and they saw very fast the benefits of LAP and were confident to rock it with the help of Sophie and Lionel.
Frederic started the interview, that it was quit a difficult project for him. He was new to AF KLM Cargo and they didn’t knew the partners either. The organization at AF KLM is furthermore highly distributed (Nizza, Amsterdam, Paris, …). At this moment they had less trust, that the vendors will provide the right people and a new approach to source a partner for their new Tracking Solution was very welcome.
It’s important to mention, that LAP wasn’t applied full stack. The pre-selection of the shortlisted vendors and the final contract negotiations have been done in a classic approach. However, to choose the right partner they all met in Amsterdam for 2 days in the center of AF KLM Cargo. The potential parters should show up with the people that will do the job and the ones with the commercial background too.
“Instead of eliminating the less promising offers, we ended up improving each proposal and choosing the best one!”
They have recognized from first hands how the vendor is organized, how they run the proof-of-concept (POC) and how decisions have been taken. E.g. one vendor showed up with 7 commercial people and decision taking was very painful with them. As on the other hand another vendor could take decisions right away. During the POC they run 1/2 day iterations and demoed at the end of each iterations their results to the real users at CARGO. At the end of the 2 days they decided and continued working with the partner the week after!-Ericmentioned something very interesting: Instead of eliminating the less promising offers, we ended up improving each proposal together with the potential partner and then we've chosen the best of it!
“The team building with the partner has been done mostly within the 2 days!”
„It seemed that the team building has been done within the 2 days right away!“, they said.-Interesting to hear was, that the initial ranking from the RfP had changed seeing the partners and their people in action.
Frederic and his team are very satisfied with the results of LAP and will apply it to future complex sourcing cases with AF KLM. One more time we’d like to thank Frederic and his team for sharing their case with us and the LAP community.
SwissCasinos Success Story - How we sourced an ERP in just 2 days!
Before the QnA session I had the pleasure to introduce LAP based on our latest full stack success story with SwissCasinos Group, that has sourced an ERP in just 2 days!-Full stack in a sense of setting up an agile, cross-functional product team with people that will do the job from the start. So became e.g. Daniel Pellegrini, Head of Finance & Board Member at SC Group, the Product Owner of this initiative. He and his team will be in charge not just for the sourcing, but the whole product life cycle. This is in his interest, as he knows exactly where he wants to develop that topic at SC Group.
In other words we started as early as possible with the right people. In addition to the AF KLM case we also co-created and signed the agile contract by the end of the 2nd day of the partner workshop. Therefor we needed beside procurement, decision takers, legal, etc. just everybody needed from both parties at the table.
Did you recognize how many we’ve mentioned „the right people“ and „team“?-Yes a lot!-Coming back to our initial hypothesis „In a fast changing world is the team the main asset!“ I personally can confirm, this!-I’ve felt it during the LAP Retreat, while hearing the story of AF KLM and I've got remembered by every success story we’ve done so far!
I can just recommend everybody out there: „give it more of a weight, the social facts are as important as the hard facts! “
We had a lot of fun too and this comes with true social fit for free :-)
Cheers
Mirko
Co-founder of flowdays, Creator Lean-Agile Procurement
Media Release: CKW & FLOWDAYS WIN SUPPLY MANAGEMENT AWARD 2018 EUROPE
CKW and flowdays won the most important European award in the procurement industry with the Supply Management Award. The award honors the innovative and agile procurement process for a new intranet from CKW in weeks instead of months.
CKW and flowdays won the most important European award in the procurement industry with the Supply Management Award. The award honors the innovative and agile procurement process for a new intranet from CKW.
In a so-called Pocathon (Proof of Concept and "Thon" by Marathon), the teams and products of three intranet providers were put through their paces for two days. The goal was to implement real CKW application needs.
"On the one hand, we wanted to test whether the products actually meet our expectations, whether the intranet fits in with CKW's IT landscape and whether a legal, commercial partnership agreement could be found," says Andreas Schneider, Head of Supply Chain Management at CKW. "With the approach 'Lean-agile-Procurement', we were able to significantly shorten the time from the idea to the productive start of the new intranet compared to traditional approaches». Specifically, CKW signed a letter of intent with the winner after exactly two days, 1st Quad. Usually, such a procurement process takes weeks. Just six months after the Pocathon, CKW's new intranet was put into operation in mid-October 2018. A further advantage for the project managers of CKW was that they did not get to know the salespeople of the three suppliers, but specifically the implementation team.
Recently, Andreas Schneider, Head of Supply Chain Management of CKW, Yvonne Ruckli, Project Manager of CKW and Mirko Kleiner, Agile Coach of flowdays in Prague, accepted the award.
Caption: Recently, Andreas Schneider, Head of Supply Chain Management of CKW (2nd from left), Yvonne Ruckli, Project Manager of CKW (3rd from left) and Mirko Kleiner, Agile Coach of flowdays (4th from left) in Prague were honored answer.
DOWNLOADS
Downloads via CKW Website
CONTACT
Case Study - CKW Group: Sourcing of a group Intranet Solution in 2 days via Lean-Agile Procurement
Procurement so far has shown that CKW must move faster and closer to customers in order to better meet their needs. So they decided to try Lean Agile Procurement (LAP) for the first time in order to procure a group intranet solution. With fantastic results, e.g. 400% increased time-to-market!
Thought leaders like Dr. Jeff Sutherland promotes Agile in his book “Doing twice the work in half of the time“ (1). Wouldn’t it be cool to increase time-to-market in procurement as well?-Free Download of our Article in “THE PROCUREMENT MAGAZINE”
Thought leaders like Dr. Jeff Sutherland promotes Agile in his book “Doing twice the work in half of the time“ (1). Wouldn’t it be cool to increase time-to-market in procurement as well?
No wonder agile is currently one of the top three strategic topics in corporate boardrooms. Case studies from all sectors and industries have proven that following agile principles and practices dramatically increases the timeliness and quality of business outcomes...
Find the whole article in "The procurement Magazine" 2018 / 05 (FREE Download)
Author
1st purchaser of the book: lean-agile procurement
It feels awesome, the book is in a very early state and the first purchaser decided to buy the book. Thanks a lot!-This motivates us to continue our journey
It feels awesome, the book is in a very early state and the first purchaser decided to buy the book. Thanks a lot!-This motivates us to continue our journey
Interview (German): «Agile as Enabler for effective IT-Procurement»
Mirko shows with Lean-Agile Procurement a more agile Alternative to the current procurement Approach. In the Interview with Netzwoche he explains, why a more agile procurement is a win-win for the customer and the vendor.
The Interview was published in German in the print magazine and online.
Mirko shows with Lean-Agile Procurement a more agile Alternative to the current procurement Approach. In the Interview with Netzwoche he explains, why a more agile procurement is a win-win for the customer and the vendor.
The Interview was published in German in the print magazine and online.