Kaizen – A Purchasing Mantra for 2014 (Part 2)

Authored by Marwa Aburahma

In my last post i introduced you to the Japanese term 'Kaizen' meaning “change for the better” and as promised, I'm sharing with you a story of mine from 2013 that stood out for me as a great example of Kaizen in the workplace

The Challenge

· This organization was young technology company with an agile and dynamic approach to business also with diverse direct and indirect purchasing needs.

· They had an empowered stakeholder community (budget owners) who would shortcut the procurement process and thrived on maverick spending.

· On the other hand, financial controls had to be in place to ensure due diligence for company venture capital opportunities planned for long term.

The Solution

As we all know, value is always driven by the customer – In this case, there were two voices, the voice of the end customer and the voice of internal customer (budget owners and end users). In this instance it was imperative that a balance between the voice of the organization and the voice of the end customer had to be attained. Primarily, several tools were used to identify waste from the internal customers’ perspective based on the company’s balanced score card objectives. This is where Kaizen came into the picture. 

Kaizen tools were implemented to identify the different types of waste in the current process. Surprisingly, Waiting time was identified as the number one waste area; “waiting - time” in attaining approvals that were not based on a defined internal authority matrix, “waiting time” to dig out supplier performance records that turned to be outdated and “waiting-time” in reinventing the wheel in developing specifications not building on historical procurement records. Eventually, the company’s’ time to market was shaken due to lack of visibility and real time access of fresh data, an integral part of decision-making.

Short Term: The key roadblock “waiting time” , was addressed through an enhanced delegation of authority structure – whereby cross-functional teams were empowered with multiple layers of delegated approvals to reach fast and  collaborative decisions. Immediate surges of improvement was achieved.

Mid Term:  An electronic supplier management tool was implemented, with the capability of online supplier self-registration, prequalification, involving cross functional assessment groups and supplier ranking with online scorecard capability. The Kaizen provided risk mitigation towards supplier management.

Long term: Internal stakeholder satisfaction surveys and gathering structured feedback from the stakeholder community to address those areas through immediate and radical change were employed.

So the above kaizens focusing on process improvement and involving employees across the organization, paved the way for a culture of radical, continuous and sustainable enhancement.

Did you experience any kaizens in your supply chain management over 2013? We’d love to hear them.

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