Enerkem boosts their procurement process with Lean Agile Procurement for the EcoPlanta project
Learn how Enerkem, an innovative leader of the clean tech, sourced a strategic engineering partner in less than 3 months for deploying their technology at the heart of EcoPlanta, which will produce biomethanol and circular methanol from non-recyclable waste.
Enerkem, a clean technology company headquartered in Montreal, is the global pioneer in the production of renewable methanol and ethanol from solid waste.
Their agile and innovative approach reflects also in their ways of working.
Faced with a critical three-month deadline to select a strategic partner for the design of their new European plant, EcoPlanta, Enerkem adopted an innovative approach with Lean Agile Procurement (LAP) to ensure efficient and rapid collaboration.
In the petrochemical industry, selecting a partner of this magnitude generally takes a minimum of six months.
How did Enerkem manage to select a supplier while accurately assessing the cultural and business alignment between its team and the partner's, thus ensuring a smooth and effective collaboration, all within a timeframe half as long as the standard ?
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This case study was also published in the Swiss Magazine Professional association for Purchasing and Supply Management in German & French
Author
AirFrance KLM - How to Outsource a Critical Project with Lean-Agile Procurement
With a challenging six-month time frame, Air France looked to a new innovative approach to procuring the right team for the job.
Air France KLM Cargo Operations needed to improve the efficiency and productivity of its door-to-door cargo. Time is essential in freight and any delay or break in the chain would lead to product waste and unhappy customers. It was critical that a new system was created to improve the efficiency.
A new booking system was required within six months, how were Air France going to assemble a team that worked cohesively and remotely, thought innovatively, understood the cargo industry, and produce the product within the challenging time frame.
With a challenging six-month time frame, Air France looked to a new innovative approach to procuring the right team for the job.
Air France KLM Cargo Operations needed to improve the efficiency and productivity of its door-to-door cargo. Time is essential in freight and any delay or break in the chain would lead to product waste and unhappy customers. It was critical that a new system was created to improve the efficiency.
A new booking system was required within six months, how were Air France going to assemble a team that worked cohesively and remotely, thought innovatively, understood the cargo industry, and produce the product within the challenging time frame.
Key Points
Challenges:
Critical project with potentially high business outcomes
Short time frame
Keeping a high level of cooperation with an outsourced team in a remote location
Remodel the vendor sourcing policy
Results:
Six weeks to select a vendor and actually start the project
Accelerated project start: team building already done and new team already well aware of the business context and challenges
Challenging milestones easily reached
A key player in the air cargo industry, AIR FRANCE KLM MARTINAIR Cargo is the specialised air cargo business of the Air France KLM Group, offering a worldwide network of 457 destinations from two hubs, Paris Charles de Gaulle and Amsterdam Airport Schiphol.
The recording
To hear Frédérique’s talk jump right to 31:17 in the video.
The slide deck
End of 2018, Frédéric was facing two major problems:
Deliver a new critical IT application for Cargo Truck management within a tight schedule. High importance – vital the Cargo Truck management system was efficient to reduce waste and increase output.
Recruit a new team to develop the new system. The existing team consists of many contractors from different vendors. It is not big enough to handle the project and there is a need for new skills.
The Team - Air France KLM Cargo Operations Department
Frédéric Jacques, Head of Cargo Operations IT
Simon Spoor, Frédéric’s Business counterpart (acting as Product Owner)
Eric Chaumette, Head of Managed Delivery Centers initiative
Sophie Durand and Lionel Massiera, Agile Coaches and LAP specialists
According to the new Air France procurement policy on hiring contractors, Frédéric would have to source a whole team, remotely located on the vendor’s premises.
Air France Cargo department has been working in an agile way for years (SAFe): how would a brand new remotely located team fit in? How would they quickly reach the necessary level of cooperation?
Time was of the essence and following the current procurement policy would have taken several months. Frédéric’s business counterpart, Simon was really concerned with this issue and couldn’t believe that sourcing a new team would fit in the challenging project schedule, given that traditional RFP (request for proposal) processes usually lasted several months a new way of thinking was needed.
Congratulations & Thank you!
Congratulations to the whole AirFrance KLM Team and our LAP Trainer Sophie Durand & Lionel Massiera. Furthermore we also wanna give a big thank you to Emily Ruffle from the Agile Business Consortium how made the interviews, crafted this success story and co-published it to spread the word.
Rolling out Lean Agile Procurement at BNP Paribas: A retrospective.
GUEST Blog Post: We’re proud to co-publish and share with you a very honest retrospective by Reeve Randriamananjara rolling out Lean-Agile Procurement at BNP Paribas. He described his journey from being infected by the LAP virus in one of our public workshop, over convincing his stakeholders at BNP Paribas to actually executing a first pilot. Thanks so much for sharing your story and we’re keen on your further developments with LAP@BNP Paribas :-)
GUEST Blog Post: We’re proud to co-publish and share with you a very honest retrospective by Reeve Randriamananjara rolling out Lean-Agile Procurement at BNP Paribas. He described his journey from being infected by the LAP virus in one of our public workshop, over convincing his stakeholders at BNP Paribas to actually executing a first pilot. Thanks so much for sharing your story and we’re keen on your further developments with LAP@BNP Paribas :-)
The training
1 March 2018: Snowstorm in Switzerland. All planes going to Geneva had been grounded. Luckily my plane was heading to Zurich. However I only had confirmation that I was going to fly a couple of hours before the check-in at Brussels airport. From Basel, I had to take the train to Rotkreuz, home to the pharma giant, Roche. Rotkreuz was also where my one-day Lean Agile Procurement training was going to take place on the following day. But what was I exactly looking for?
Well, I was on a mission to challenge myself and take my 15-year IT procurement experience to another level. For over a decade, I had always been facing the same challenge: lengthy sourcing processes (request for proposals or RFP's, that is), poor alignment with project teams and, occasionally, conflicts with the vendors around the signed contracts.
There was a permanent debate between us, buyers, who demand that our IT colleagues wrote down 100% of their requirements as a condition to send out an RFP. My colleagues, on the other hand, needed a fast sourcing or procurement process, seeing it as necessary pain. Something was structurally wrong and it was high time we changed our ways. This is where I had decided to embrace Lean Agile Procurement.
What is Lean Agile Procurement?
"I took a speed-reading course and read War and Peace in twenty minutes. It involves Russia.” - Woody Allen.
As Woody says it, Lean Agile Procurement is difficult to put in a nutshell.
It is an Agile procurement or sourcing framework that allows businesses to find solutions for complex and/or strategic IT projects; complex as in "we don't know what our customers want exactly and there isn't an off-the-shelf piece of software for that".
What it takes is a clear vision and part of the required features. More importantly, Lean Agile Procurement vows to reduce the time it takes to search, find and select the most appropriate vendor for a project. It claims to do so in days or weeks instead of months. And that's bold!
Lean Agile Procurement basically merges the RFI (request for information), RFP and contracting processes in a couple of daily workshops with the vendors. It invites people on either side of the negotiation table to fully cooperate by being transparent, focused and bringing the right people around. Last, the canvas is Lean Agile Procurement's keystone.
The framework is heralded by the folks at Flowdays. Mirko Kleiner tirelessly preaches all over the world. Interestingly Mirko doesn't have a buyer profile at all.
Complex projects have the following features: Those who sponsor them take strong commitments vis-a-vis the top management who, in turn, take commitments with the market and customers. Additionally innovation is the bottom line. So there is a huge constraint and expectation in marketing the right output the sooner the better. If either the deadline is missed or the deliverable is of poor quality, your competitor will move ahead and the organization will be left behind dealing with project cost overrunning, litigation with vendors and more stress on extended project team members to fix things.
Lean Agile Procurement promises to satisfactorily address the issue. Yet, to paraphrase the definition of Scrum: Lean Agile Procurement is simple to understand and difficult to master.
What Lean Agile Procurement is not or can't do
Lean Agile Procurement is not a miraculous therapy for dandruff, stinky armpits and smelly feet.
It isn't advisable if the product or service you are looking for is neither complex nor strategic. On the contrary, using it for everything will be counter-productive for your organization.
It can't be the last resort to hastily shortcut procurement processes for ill-thought projects.
It takes a huge toll on your workload; meaning that all other topics will have to be postponed until the process is done. Believe me when it is, all other topics will pop up again and hit you hard.
If Agile values and principles are neither fully understood nor shared nor trusted, don't go for it. You will end up perverting the system and cutting corners.
So now, how did we do for our first project?
Finding candidate projects
Once I have received my Lean Agile Procurement certificate, I was full of hope and eager to implement the method as soon as possible. I quickly identified a first project in the same month. Of course, the project team was in a hurry and they asked me to advise on the best sourcing approach. I gave them the choice between the classical RFP and the experimental Lean Agile Procurement. They shrugged off the latter and eventually opted to stick to the standard process. Eventually, 8 months later, the RFP was dropped. What a disappointment.
Later in October 2018, a colleague asked to brief him about the standard procurement process and lead times for a strategic project. I told him to start filling the Request for Information (RFI) template documents with his requirements. I also warned him that it may take up to 6 months to have a contract ready for signature. He shared my warnings to the project team members. One of them called me back asking me if there was a way to make it in 2 months because they had to select a vendor by end of December.
So I took a poker face and told her quietly that I had a solution. The only trade-off I requested was everybody's full availability and dedication during those 2 months. And it worked.
From my initial procurement plan…
Initially my plan was:
Send out a concise RFI with our vision, a description of our project, what we are looking for with a handful of requirements and leave the vendors 2 weeks to reply.
Analyze the answers and shortlist vendors for the workshops.
Invite the shortlisted vendors to come and attend a 1st workshop and share their questions with us and their competitors.
Prepare the Lean Agile Procurement canvas in order to share it with the vendors during the 2nd and 3rd workshops.
Invite all shortlisted vendors to come and attend a 2nd workshop and start collaborating using the canvas as the guidelines for the negotiations. The draft of contract would also be filled in. At the end of the day, we would share our feedbacks with the vendors and shortlist a few (i.e. 1 or 2) for the 3rd workshop.
Invite the shortlisted vendors to come and attend a 3rd and last iteration of the workshops. Again feedbacks to the vendors right at the end of the sessions.
Submit our vendor recommendation to the steering committee and confirm the award to the selected vendor.
Sign the contract and kick the project off.
… to our final procurement plan.
This is what we eventually did:
We wrote a 6-page RFI. The project team felt more comfortable with annexing a spreadsheets that contains requirements such as a fair list of features, a high level project, technical, operations, legal, commercial, ethics and vendor due diligence (i.e. financial risk assessment).
We elaborated an RFI balanced score card for the requirements we have listed. The format I have suggested has been discarded in favour of an old one everyone else was comfortable with.
We invited all vendors to attend the 1st workshop. However we didn't anticipate that vendors wouldn't speak their minds as they were surprised to find each other in the same meeting room!
Broadcasting the Lean Agile Procurement canvas received a lukewarm welcome among the team. In other words, nobody wanted to leave it in the clear. So we used the RFI score card structure as the guideline for our negotiations.
We held one workshop per vendor. The project team thought it was disrespectful to vendors to have them all in the same session and do a beauty contest. This was obviously more exhausting: Instead of one day with all vendors, it was a full week of 4-hour workshop with each. Also our legal team didn't wish to participate leaving the contracting as the last step of the process. As I expected it, this added another two intense weeks after the December deadline.
The last workshop worked well but was equally demanding.
There were a few requests from the steering committee that led to an extra-negotiation over the phone and via e-mails with the selected vendor. I expected this so no specific issue there.
The contract negotiations added some delay but it was great to see that those who participated to the workshops earlier on either side were perfectly aligned. So two weeks to close a contract in a fair constructive way wasn't bad at all.
The check list for success
Here are my recommendations for a successful Lean Agile Procurement:
Ensure people are available and focused during the workshops. This is a strong prerequisite. This entails everybody to be in the same place and participate (no multitasking).
Prepare sufficient training and communication for the people who will be involved.
An reciprocal non-disclosure agreement (NDA) is compulsory as usual. Your organization must have a template available. Note that a vendor that is too picky at NDA stage must be discarded. It is usually a bad sign.
Keep your RFI content concise. 5 pages are recommended. Sentences must be clear and short. Avoid unnecessary (procurement and legal) jargon.
The canvas is a must. It is difficult to draft if your mind is unclear. If you can't fill then you are neither ready to share your vision and objective nor ready to engage in a transparent and constructive conversation with the vendors. All your organization project documents must serve as annexes to the canvas.
People (including all vendors) must be in the same room. Forget concerns about a vendor stealing new features from their competitors and releasing it fully-tested by the time the RFP is awarded. It is very unlikely to happen.
The sponsors must participate to the workshops. They can't just be the "second negotiation table behind the scene" acting like the hidden puppet masters of the negotiations.
Brief your project team members that they have to be very demanding with the vendors. Similarly, prepare them to be equally put on the grill by the vendors. Gone are the days where the mighty client knows it all and the vendor just executes.
Still, it is acceptable not to have all vendors attending the same workshops. Keep in mind that this is more exhausting and vendors will attempt to regain control over the process by playing the game they know (i.e. the sales rep running the show and the other guys remaining silent for 4 hours).
A 4-hour long demo is the best basis for the workshop interactions. So request your vendor to come ready. The canvas will be filled in by the buyer and the sales person.
The inputs of the workshops must immediately fill the annexes of the future contract. So again, have the contractual structure ready and shared. Leave the main body of the contract to the lawyers though.
Lessons learnt and achievements
Lesson #1: Don't assume that those who blame lengthy procurement processes are ready to change them and adhere to Lean Agile Procurement.
Lesson #2: Use the project's time constraint as an advantage to market the Lean Agile Procurement method internally.
Lesson #3: Keep in mind that anything in Agile can adapt and improve. So procurement dogma don't always apply here.
Lesson #4: Vendors are wary of their competitors. You have to factor that in when explaining the process and the project. Keep reminding them what the process is good for.
In just one attempt, we managed to reduce to procurement lead time from 6+ months to 4 months. 1 cumulated month was sufficient for all workshops and contract negotiations. Also, Lean Agile Procurement has demonstrated that the Procurement department is a trusted partner for ambitious projects. To my surprise, we received very positive feedbacks from both sponsors and… vendors. And the word is spreading around faster than expected.
Conclusion
I reckon I did find what I was looking for when I attended the Lean Agile Procurement training on a snowy day in Switzerland. So I will keep pushing. You might try it too.
For more information about Lean Agile Procurement, get in touch with Flowdays (https://flowdays.net/en/home) (https://www.lean-agile-procurement.com/#home/comparison).
From more information about Scrum (an Agile framework), read the Scrum guide (https://www.scrumguides.org/docs/scrumguide/v2017/2017-Scrum-Guide-US.pdf)
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Original source of the blog post:
https://www.linkedin.com/pulse/rolling-out-lean-agile-procurement-retrospective-randriamananjara/
Author
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.
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