ORGANISATIONAL ASSESSMENT AND TRAINING COURSE
CASE: HMF Group A/S
Assessment and training courses raise competences and provide procurement savings At HMF Group A/S, the purchasing department received the necessary help to strengthen the department’s competences, and at the same time develop a procurement strategy that supports the company’s overall business strategy. GROWTH AND AMBITIONS With an ever-increasing request for cranes to be exported to more than 50 countries across the globe, even greater demands are made of the purchasing department. After the financial crisis, orders once more started to flow in to HMF Group. In the period after the financial crisis, the purchasing department consisted of a group of experienced purchasers who had implemented budget cuts, increased delivery performance and built a network of sub-suppliers. However, it remained increasingly difficult to make further improvements, as the purchasers lacked a clear strategy for procurement and were not systematic in their problem-solving. In cooperation with 4IMPROVE, the purchasing department embarked on a project where the primary focus was to develop a procurement plan that supported HMF Group’s overall strategy.
THE SOLUTION: THE RESULT:
ASSESSMENT OF DEVELOPMENT NEEDS It was essential that the project provided the purchasing department with the necessary tools to support HMF Group’s need for a stable, flexible and scalable supply chain. The first step was to establish a shared understanding of actual needs, and then develop the most appropriate plan for improvement. The next step was a training course, tailor-made for the department, with the focus on strategy, structures, processes, tools and competences. The training course involved five steps, and concluded with an exam in strategic procurement. BACK TO SCHOOL How do experienced purchasers react when they have to learn new things and then be tested afterwards? Mogens Kjærgaard, Head of Procurement, explains: “In the beginning there was scepticism, but that quickly disappeared. The teaching level was matched to the department, and people have really learned something. The exam was good because we went into depth about the basics, theories and tools. We have achieved a shared reference framework and a toolbox we can all use, which means more thoroughness and less firefighting”.
The purchasing department was lacking both a clear procurement plan, and a systematic approach to dealing with tasks. New approaches to saving money had to be found, as the old methods would no longer be effective. The department needed to strengthen its competences and acquire a shared reference framework and toolbox. Organisational assessment and a tailor-made training course focusing on strategy, structures, processes, tools and competences. A clear and well-defined procurement plan that efficiently supports HMF Group’s overall strategy. Both the toolbox and shared reference framework were updated. Structures and processes were harmonised. An annual wheel for suppliers, purchasing tasks and processes was established. Clear, uniform lines from strategy to action and results were laid out.
AN UPDATED TOOLBOX Categorisation: Categorising spend data, together with the creation of a Business Intelligence set-up with analytical tools, has made it easy and manageable to analyse spend data, to identify new potentials and explicate deviations. Idea bank: an idea bank for improvements has been created, and has proved to be an excellent tool, both for prioritising the department’s resources, and for providing an overview of potentials. Strategic procurement: the new process for strategic purchasing has ensured that the work is undertaken thoroughly and analytically without any overkill. The tendering process has been improved, and has already delivered savings. Project management: a strong concept for effective project management and control provides a guarantee for optimal resource allocation and efficient project progress, which previously tended to take too much time. Annual wheel: Annual wheel: the department’s annual wheel for suppliers, purchasing tasks and processes ensures structure, and the certainty that purchasing categories are updated. Development plan: at last a procurement strategy has been designed to support HMF Group’s development. Amongst other things, the new strategy identifies suppliers of the latest technology, and therefore ensures that all cranes are up to speed for the future. The strategy has resulted in the creation of a plan that takes HMF Group’s procurement all the way to 2020.
IMPLEMENTATION SUPPORT To ensure ownership and a thorough implementation, the purchasers themselves are responsible for converting the new tools into fully functioning internal processes. 4IMPROVE remains a close associate on the journey, making sure the department adheres to the plan. Indeed, an auditing tool has also been developed, and periodical process reviews have been planned, all of which ensure successful and workable implementation. Additionally, 4IMPROVE’s GREEN card will identify and plan areas of improvement, thus converting the plan into reality. Mogens Kjærgaard says: “The focus needs to be kept on the goal, and we need to work with new structures and tools constantly. If not, it is so easy to fall back into the old habits when we become too busy.” HMF Group and 4IMPROVE have planned follow-up meetings where the themes will include a thorough assessment of the process, further development of the annual wheel and procurement strategy, GREEN card, Supplier Selection Process, savings projects, supplier audit, and a development plan that illustrates where the department should be in 1, 2 and 3 years’ time.
The foundation we have built with 4IMPROVE means that we have a shared frame of references and a shared toolbox, and we have also progressed well with our strategy. We have found a platform for the process, and the right push to continue our development”, Mogens Kjærgaard adds.
THE FUNDAMENTAL IDEA: ORGANISATIONAL ASSESSMENT AND ENHANCED COMPETENCES Director of 4IMPROVE Consulting Group, Martin Dyg Jensen, explains: “It is essential to define a targeted plan for the procurement department, so it continues to support HMF Group’s overall strategy. An improved tendering process, enhanced competences and unique structures, processes and goals that ensure delivery.”