As we talk to businesses across many industries, more and more we see a desire to speed up the time to market. Be that a new product introduction, or an expansion of existing product into new markets, time is of the essence.
This example of disruptive procurement in action is a business that was competing with others to be first to market for existing products in new countries. All competitors knew that being first in a new market gave a distinct advantage in terms of overall market share that lasted long after the initial launch.
Being first to market wasn't just vanity. They could put real, big numbers against the advantages.
The issue was that their supply chain just wasn't working in these new emerging markets and needed a redesign.
However, in the interests of speed, all agreed that the supply chain had to be "good enough" not perfect, but good enough to get them to be first to market.
In the past, procurement concerned themselves with making sure that the supply chain was as close to perfection as could be. Through a series of workshops, we transformed the thinking into a more iterative process of setting up the supply chain to get us to be first to market THEN resolving any supply chain issues.
It was a tough call.
We didn't want to compromise on quality or customer satisfaction but could we sacrifice some cost in order to make it happen?
The answer was a clear yes - because of the huge value involved in getting to market first, some initial increase in cost was going to be acceptable.
However, in the longer term the costs had to come down to - so we needed a strategy to work on that as soon as a new market was established. We simplified the supply chain and put review processes and targets in place. We improved the time to market by several weeks and achieved a cost reduction too!
The business transformation was incredible:
- time to launch was reduced by several weeks
- new markets captured
- supply chain complexity reduced
- 20% reduction in total costs
This example of disruptive procurement in action shows that sometimes "good enough" is better than being perfect from the start. It's a different way of thinking that prioritises value creating activity over short term cost reduction.
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