Agile Procurement

Bernardo Nicoletti

Agile Procurement

Bernardo Nicoletti

2018, Springer eBooks

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The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Agile Procurement Bernardo Nicoletti Agile Procurement Volume I: Adding Value with Lean Processes Bernardo Nicoletti University of Tor Vergata Rome, Italy ISBN 978-3-319-61081-8 ISBN 978-3-319-61082-5 DOI 10.1007/978-3-319-61082-5 (eBook) Library of Congress Control Number: 2017953569 © The Editor(s) (if applicable) and The Author(s) 2018 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Printed on acid-free paper This Palgrave Macmillan imprint is published by Springer Nature The registered company is Springer International Publishing AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland Contents 1 Introduction to Agile Procurement Processes 1 2 Procurement Processes 7 3 Agile Procurement 15 4 Agile Procurement Support of the Value for the Customer 43 5 Customer Relationships and Agile Procurement 73 6 Processes in Agile Procurement 113 7 Resources and Agile Procurement 149 8 Costs and Agile Procurement 171 v vi 9 Contents Conclusions for the Agile Procurement Processes 225 Glossary 227 Bibliography 249 Index 269 Abbreviations AI AILOG API AR ASC B2B BC BI BMC BPO Capex CFFR CFM CIM CM CNC COPIS CPFR CPG CPM Artificial Intelligence Associazione Italiana di Logistica Application Programming Interface(s) Acquisition Request Agile Supply Chain Business to Business Business Continuity Business Intelligence Business Model Canvas Business Process Outsourcing or Business Process Optimization Capital Expenditure Collaborative Planning, Forecasting and Replenishment Cash Flow Management Computer-Integrated Manufacturing Configuration Management Computer Numerical Control Customer, Output, Process, Input, Supplier Collaborative Planning, Forecasting, and Replenishment Consumer Packaged Goods Corporate Performance Management or Critical Path Method vii viii Abbreviations CPO CRM CRS CTC CTQ DDLC DMADV DMAIC DRP DSO ECM EDI EMEA EMS EOBR EOQ EPC EPE ERP ETL ETS EU EVI FMCG FTE GDP GPO GPP GPS HR IaaS ICC ICT or IT IoT IP ISO JIC Chief Procurement Officer Customer Relationship Management Computer Reservation System Critical to Customer Critical to Quality Document Development Life Cycle Define, Measure, Analyze, Design, Verify Define, Measure, Analyze, Improve, Control Distribution Requirements Planning Days Sales Outstanding Enterprise Content Management Electronic Data Interchange Europe, Middle East, and Africa Small and Medium Enterprises Electronic on-board Recorder Economic Order Quantity Engineering, Procurement, and Construction Every Part Every Enterprise Resource Planning Extraction, Transformation, and Loading European Treaty Series European Union Early Vendor Involvement Fast Moving Consumer Goods Full-Time Equivalent Gross Domestic Product Group Purchasing Organization Green Public Procurement Global Positioning System Human Resources Infrastructure as a Service International Chamber of Commerce Information and Communication Technology Internet of Things Internet Protocol International Standard Organization Joint Integrating Concept Abbreviations JIT KPI KRI LAN MMR MRP MSA MTO MTS NIST O&M OEM Opex OPG P2P PA PaaS PC PERT PIN PLM PO POS QFD R2P RACI RE RFB RFI RFID RFP RFQ RFX ROA ROI S2P SaaS Just in Time Key Performance (or Process) Indicators Key Risk Indicator Local Area Network Mass Market Retailers Manufacturing and Material Requirement Planning Master Service Agreement Make to Order Make to Stock National Institute of Standards and Technology Operations and Maintenance Original Equipment Manufacturer Operating Expenditures Order Processing Guideline Procure to Pay Public Administration Platform as a Service Personal Computer Program Evaluation and Review Technique Personal Identification Number Product Lifecycle Management Purchase Order Point of Sale Quality Function Deployment Requisition to Pay Responsibility-Accounting-Control-Information Real Estate Request for Bid Request for Information Radio-Frequency Identification Request for Proposal Request for Quotation Any type of Request for Procurement Return on Assets Return on Investment Source to Pay Software as a Service ix x Abbreviations SCF SCM SG&A S&O S&OP SIPOC SLA SMED SMEs SRM STP SWOT TCM TCO TP TPM TPS TQM UCC UK US or USA VA/NVA VMI VoC VSM WIP WMS XML Supply Chain Finance Supply Chain Management Sales, General, and Administration Strategy and Operations Sales and Operations Planning Vendor, Input, Process, Output, Customer Service Level Agreement Single Minute Exchange of Die Small and Medium Enterprises Supplier Relationships Management Straight-Through Processing Strengths-Weaknesses-Opportunities-Threats Total Cost Management Total Cost of Ownership Transaction Processing Total Productive Maintenance Toyota Production System Total Quality Management Unified Collaboration and Communication United Kingdom United States of America Value Added/Non Value Added Vendor-Managed Inventory Voice of the Customer Value Stream Mapping Work in Process Warehouse Management System Extended Messaging Language List of Figures Fig. 1.1 Fig. 2.1 Fig. 3.1 Fig. 3.2 Fig. 4.1 Fig. 5.1 Fig. 5.2 Fig. 5.3 Fig. 6.1 Fig. 6.2 Fig. 6.3 Fig. 6.4 Fig. 6.5 Fig. 7.1 Fig. 7.2 Fig. 7.3 From the supply chain to the value network Value network, logistics and sourcing The agents of change in procurement Business model canvas The approach to agile procurement The big data analytics cycle The sourcing process and the use of open data E-collaboration (elaboration of the author on Bertele’, U. and Rangone, A. (2004). The B2B in Italy: finalmente parlano di Dati, Associazione Impresa Politecnico, Milano, Italy) The basic processes of sourcing The supply matrix (Kraljic) Functionality of a process of transportation. (Musumeci A. (2012), Un caso reale di realizzazione di un Big Data nel Gruppo Ferrovie dello Stato, Big Data Forum, Nov. 21) Capabilities and decision-making level Capabilities of a logistics system in relationships with vendors From a product perspective to a customer perspective Porter’s value chain A model for the classification of services 3 8 19 37 51 75 86 97 114 118 132 133 133 154 154 160 xi xii Fig. 7.4 Fig. 8.1 Fig. 8.2 Fig. 8.3 Fig. 8.4 Fig. 8.5 Fig. 8.6 Fig. 8.7 List of Figures Examples of services in the case of a transportation organization The structure of lean thinking The SIPOC Typical kanban A leagile approach based on decoupling (elaboration of the author from Christopher and Towill) The method of leagile and digitize The three flows in procurement Procurement finance model 161 174 194 196 202 204 211 214 List of Tables Table 4.1 Table 4.2 Table 4.3 Table 5.1 Table 6.1 Table 6.2 Table 8.1 Table 8.2 The characteristics of agile procurement Effect on the organization and procurement department Eco goals and levers to achieve them Some tools used to support organizations with big data analytics Procurement processes Capabilities and decision-making level The 5S tools Lean and Six Sigma characteristics 50 53 65 79 116 134 184 199 xiii

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