Corporate education and training continues to evolve with the availability of multiple training modes including e-Learning, instructor-led webinars, instructor-led classroom workshops, instructor-led simulation events and m-Learning.

This range of training mode options has created uncertainty for our clients about the training mode or blended program to prioritize. This is especially true when taking into account budget considerations.

It is clear that the landscape for executive education and training is rapidly evolving, influenced by budget constraints, pandemic-related changes, and technological advancements. In response to client uncertainty the analysis below outlines the pros and cons of the different training modes to help clients prioritize and optimize their training solution, especially for large organizations.

INSTRUCTOR-LED WEBINARS

PROS

• Scalable for large audiences
• Minimal logistical planning
• Easily recorded for future reference

CONS

• Reduced engagement with trainees
• Lack of hands-on activities
• Limited networking opportunities

INSTRUCTOR-LED WORKSHOPS

PROS

• High engagement
• Immediate feedback
• Networking and team-building

CONS

• Costly (venue, travel)
• Budget constraints
• Less scalable for large groups

E-LEARNING

PROS

• Interactive & engaging
• Flexible timing
• Moderate scalability

CONS

• Requires reliable internet & hardware
• Less effective for complex topics
• Requires strong self-discipline

MICRO-LEARNING MODULES

PROS

• Easily digestible content
• Highly flexible
• Good as refresher or cross-skilling

CONS

• Often lacks depth
• Less suitable for complex subjects
• Fast in, fast out

INSTRUCTOR-LED SIMULATION EVENTS (Learning-by-doing)

PROS

• Helps retain previous learning
• High interaction with peers
• Competitive environment

CONS

• High cost (venue, travel)
• Pre-learning essential
• Only for high achievers

Recommendations for large organizations:

1. Absolutely prioritize:

Given scalability and minimal logistical requirements, instructor-led webinars and e-Learning should be the go-to options.

2. Mix-and-match optimization:

• Use instructor–led classroom workshops for specialized skills and team-building activities.
• Integrate e-Learning to provide standard reskilling and upskilling activities and to build a common way of working and vocabulary across the organization.
• Integrate m-Learning modules as ongoing skill refreshers or cross-skilling.

In conclusion, a blended approach that capitalizes on the strengths of each format will likely offer the most robust and flexible training solution for large organizations.

Current inflation means that supplier price increase requests are coming in thick and fast.  Once conceded price increases can be difficult to recover so it’s vital that the buyer takes cost avoidance action to eliminate, or at worst minimize, their financial impact as early as possible.

Calculation of a price increase and cost avoidance:

Although cost avoidance savings are often referred to as “soft savings”, as the money has never actually been spent, it is still a vitally important task of purchasing – and should be recognised as such – especially in high inflationary times.

There are two fundamental and mutually exclusive strategies that the buyer can adopt for cost avoidance:  Reactive & Predictive.

The REACTIVE cost avoidance strategy is when the buyer waits until the supplier asks for a price increase and then reacts to minimize or eliminate the increase after it is requested.

The 10 most effective reactive cost avoidance actions that a buyer may use in a sequenced step-by-step approach to eliminate / reduce supplier price increase requests are shown in the “Reactive Funnel” illustration.

The PREDICTIVE cost avoidance strategy is when the buyer predicts when the supplier will ask for a price increase and forecasts its value and then tries to eliminate or minimize it before it is requested.

There are 5 predictive cost avoidance actions that a buyer may use step-by-step to eliminate / reduce supplier price increase requests, shown in the “Predictive Funnel” illustration.

The 7-step PREDICTIVE cost avoidance process provides a rigorous and structured approach used to:

1. Identify those suppliers who are most likely to increase prices
2. Identify the potential size of future price increases (in percentages)
3. Identify the potential value of future price increases
4. Identify the likely month of future price increases
5. Evaluate the overall financial impact by month
6. Prioritize cost avoidance actions in descending order of value
7. Determine the cost avoidance actions to be taken
8. Measure and report the results back to management

Tip: Never invite the supplier to justify their price increase request; If you do ask for justification then in principle you’ve accepted that there is going to be a price increase with the only question remaining being “how much?”

An effective supplier performance measurement process can create a virtuous customer cycle.  Without it numerous unacceptable outcomes can result for the buying organization and its customers, including: increased prices, disrupted supply, higher risk, poorer quality, etc.

The most rigorous, widely recognized and simply the best supplier performance measurement process is DMAIC (an acronym for Define, Measure, Analyze, Improve and Control). Pronounced deh-MAY-ick, DMAIC is a methodical, closed-loop, fact-based process that is used to define performance targets, measure, analyze, improve and enhance supplier performance.

The DMAIC Process

Step 1 – Define

This step details the prioritized business needs identified, evaluated, sourced and contracted for in the strategic sourcing process. 

Step 2 – Measure

This step compares actual supplier performance (the As Is state) with what is required and contracted for (the To Be state) so that the “performance gap” can be identified.   

This gap analysis gives the suppliers a clear understanding of what they need to do to improve or enhance their performance. 

Step 3 – Analyze

In this step, DMAIC focuses on determining the root cause of poor supplier performance in order to identify appropriate solutions.  Root Cause Analysis (RCA) identifies the primary cause of poor supplier performance and answers the questions: What happened? Why did it happen? What can we do to minimize the likelihood that it will happen again?

Step 4 – Improve

In this step, DMAIC focuses on implementing the changes that eliminate the root cause. These changes can range from specification changes, process changes, technology changes and capital investment through to people changes, retraining and behavioral changes.  Each of these changes can be introduced in isolation or in combination with others.

Step 5 – Control

In the final step, DMAIC focuses on ensuring that any actions identified in the Improve phase are implemented and sustained. It answers the question “Supplier performance has been improved, but how do we sustain it?  Using Key Performance Indicators is the most common way used to keep an eye on supplier performance in this phase of DMAIC.

In summary, using the DMAIC supplier performance measurement process will improve, sustain and enhance supplier performance and not only result in hard dollar savings, it will also ensure the delivery of your sourcing strategy.

Covid, the global trend of digitization and new communication tools, such as Teams and Zoom, are transforming the way in which corporate training is designed & delivered.  Procurement training is no exception and over the past 18 months, with travel restricted, for synchronous learning, webinars have become the common solution.

So, what happens next?  In the post-covid world a key question for procurement professionals is “Are instructor-led webinars effective or should I return to classroom workshops?”

The answer looks pretty straightforward.  With a webinar, you can learn without taking a plane or staying overnight in an hotel and so learn without spending a great deal of time & money.  Given this scenario, offline learning looks the least attractive option.

However, offline classroom-based learning, with fewer distractions meaning learners are more focussed and attentive, have more time to learn and practice than in a webinar.  The key word is “practice”.  The offline classroom environment is ideal for learning–by-doing; something that is much more difficult to replicate online.

So, the answer to the previous question is to develop a blended learning solution that treats online & offline as a complimentary mix.  As webinars and classroom-based learning serve completely different purposes you don’t want to get rid of either.

When developing a blended learning solution it’s important to understand the objectives of each training mode and to adopt a number of best practice principles for developing and delivering each training mode.

Webinars aim to provide a good introduction and grounding in a topic.  The design and delivery of webinars should be based on the following Goldilocks principles:

• The webinar length should be not too short and not too long but just right
• The number of webinar attendees should be not too few and not too many but just right, and importantly,
• The material content should be not too heavy and not too light but just right

In contrast, classroom-based learning aims to provide an environment so participants can practice using a topic through learning-by-doing (experiential learning).   The design and delivery of classroom-based training should be based on the following:

• Little, if any, show and tell – that’s where webinars fit in
• Working in competitive teams leading to significant improvement in procurement competency
• Use of case studies that accurately reflect real-world scenarios
• High level of challenge from a highly experienced tutor
• Time given for reflective observation & thinking about ways to improve

Following these key principles will enable you to design and deliver a blended synchronous training programme for your team.

In the next ADR insight, we will discuss how asynchronous learning can be part of your blended learning solution.

Robin Jackson – ADR International CEO

Supply chain issues have again hit the headlines recently with Nando’s temporarily closing restaurants and MacDonald’s even running out of milkshake!  On a more serious note, it is believed that ninety-four percent of Fortune 1000 companies experienced supply chain disruptions due to COVID-19.   A huge proportion of global economic production is organized around a complex system of interdependent supply chains. Supply chains facilitate the production of everything from computers and cars to lifesaving medicines and food and support world trade in goods worth almost $20 trillion annually.  The pandemic, Brexit, Suez Canal trade recently halted, are all cited as current events impacting the supply chain but what about global warming and the subsequent unpredictable weather events and how this will potentially impact your supply chain?

In a recent report McKinsey explained that predicted increase in rainfall, hurricanes, flooding and reduction in rare earth supplies should all be considered within the context of supply chain risk.  Dramatic changes in approach to production and stock control may be required, depending on the demands for your business.

All personnel involved in the supply chain process will need to be comfortable with deep involved risk analysis starting with the thorough understanding, and potentially challenge of, the business needs.

When we talk to senior executives within supply chain and sourcing, they tell us that one of the demands they face with a diverse global team, is to ensure everyone has a standard level of training.  The same approach, methodology and business language used across a team can achieve dramatic results.

Modelling for the “what if” demands of potential climate change will need an innovative approach when dealing with stakeholders and presenting potential sourcing strategies to senior executives.  The faster team members can be developed will only assist this process.

Training has been one of the many aspects of business life to have been impacted over the last year, perhaps delayed or cancelled altogether.  While companies continue to develop strong internal learning management systems, often with personal learning journeys for employees’ development, these risk falling short with providing quality, relevant, procurement content.

As the world of sourcing and supply chain becomes even more challenging, team members knowledge, expertise and development must take centre stage.

Read the full McKinsey Report on the potential impact of global warming on the supply chain here

Learn more about quality Procurement eLearning here

Around a fifth (17%) of 199 CEOs recently surveyed by Gartner said they want their CSCO (Chief Supply Chain Officers) to gain greater control over spend and cost saving, while 16% believe they should dedicate their efforts towards supply chain resiliency – both in response to the impact of the pandemic.

The supply chain intensive industries were surveyed between July and December 2020 and found that the pandemic has shifted the focus away from undefined innovation projects towards concrete goals to bring resilience and control to their value chain.

Global Procurement and Supply Chain teams are diverse, with varied experience and knowledge.  This represents a challenge in building consistency not only ensuring the basics are in place but the approach is consistent to optimise cost reduction and drive value from ongoing supplier relationships.

There can sometimes be a disconnect between training material provided from Learning and Development across the organisation, and the specific demands of the sourcing, supply chain role.  A starting point is a competency framework – to define the skills and competencies required for each role within procurement or supply chain management across the organisation.  It is far more consistent for individuals to then be assessed in line with the skills and competencies required.  These results should provide a clear indication of where any gaps exist across the team and provide  clear individual learning journey’s required.

eLearning is a swift option to then fill the skills gaps providing a consistent approach, language and methodology across the team.  With a more tailored procurement training approach, rather than “one size fits all”, the requirements of the CSCO, individual’s development needs and the CEO’s business drivers are easier to meet, manage and maintain.

Gartner clients can read the full report here

Externally supplied products and services from third-party suppliers will always carry risks.  An effective Risk Management Strategy is therefore essential.  But what questions should Purchasing, Category Managers or your team be asking?

Recent events regarding Covid have affected the supply of items such as PPE and vaccines.  Halts in essential transport routes have also catapulted supply chain risk into public awareness.  Recent events have shown that ALL potential risks should be considered, discussed and managed throughout the procurement process from business need analyses, sourcing, negotiation, contracting and ongoing management.  Even the the most unlikely of events should have a considered response if it will have a significant impact to the business.

In today’s world, more than ever, risks evolve, grow, diminish and rapidly change, with the increase in cyber-attacks, many are “invisible”.  An effective Risk Management strategy will ensure these risks are all considered throughout the sourcing process

As a starting point, Procurement should be asking questions such as:

• What are the major risks?
• What are the causes of risk?
• What are the sources of risk?

 Perhaps the first and most important consideration driving the resulting actions is:

 What is the risk impact on the organization?

 Risk can be analyzed by assessing where the impact of failures will be experienced.  Will the impact effect the customer, employees be operational, or tarnish the brand or reputation?  Will the impact effect sustainability programs?  Would it be time-related, and what would be the financial impact?  What is the risk probability?  Can the risk be mitigated?

These questions should form part of your Risk Management Process, enabling Risk Prioritization to be calculated (Severity x Occurrence x Detection), and should be a standard approach and methodology used across the organization, raising awareness of Risk Management, generating discussion, prevention and capitalizing on competitive advantage.

Risk Management is just one of the topics covered in our eLearning for Procurement.  If you would like to discuss this in relation to your organization’s requirements or that of your team’s, please contact us.

ADR International have joined forces in a partnership with United World Schools (UWS) to support the employment and continual training of community teachers.  Every purchase your organisation makes for OPRA eLearning now contributes towards UWS’s valuable work.

Student learning outcomes are heavily reliant on effective and relevant teaching. To achieve this, UWS recruit, train and develop teachers from within local communities to work alongside government teachers. This provides new job opportunities and ensures that the education they provide is relevant to local contexts. Training local community members to teach at the school helps to ensure that education is locally contextualized and anchored, offering an inclusive education to all children.

Robin Jackson, ADR CEO “Education is one of the most powerful and proven methods for breaking the poverty cycle and empowering communities for generations. Yet one in six children globally are not in education.  ADR are very pleased to be actively involved as a corporate partner of UWS in support of their valuable work.  With every sale of OPRA we will make a further donation to UWS; thereby our clients too are supporting the education of children all over the world and helping to shape their futures.”

More about ADR

As well as OPRA, our e-learning platform, ADR deliver procurement training through a number of alternative modes including instructor-led classroom workshops, instructor-led simulation events, instructor-led online webinars, e-tutorials and online coaching.  Whether you wish to adopt a more strategic procurement approach, strengthen value from supplier relationships or improve negotiation outcomes, each learning programme is blended and tailored to meet the needs of your team.

To learn more

Contact [email protected]

More about United World Schools

United World Schools is an international education charity transforming lives in the world’s poorest communities by providing access to education for the first time.  Over the last 12 years, UWS has built 250 schools, trained 1,200 teachers and reached over 43,000 children in Cambodia, Nepal and Myanmar with a life-changing education. They are empowering children to reach their full potential and build a better life for their families.

To learn more

It is widely recognized that sustainability in procurement requires a high degree of collaboration between all parties in the supply chain.  This has to be built on a strong commitment from the organization of sustainability across, not only the procurement function, but all business requirements.  Successful sustainability therefore starts with Business Needs Analysis and, as so often is the case, effective communication with stakeholders is vital to maintaining sustainability.

We are all more than aware that the last year has given business unique and unplanned-for challenges.  For some it has meant swift adaption to the market place they operate in, with the opportunity for new products and services and the challenges these bring to sourcing and procurement.  Unless sustainability is baked-in to the sourcing process, when responding to market demand, there is the risk it will be compromised, or at worst overlooked.  Unpredicted challenges have also impacted supply chains, driving the need for inventive swift action.  Sustainability must always remain on the agenda.

We are all aware that the impact of poor or negative sustainability on a brand can be devastating.  With sustainability demanding its own section within Annual Reports, and senior executives heading up responsibility in this area, organizations are turning to the education of not only procurement, but also stakeholders on this topic.  Sustainability has to be embedded in all Business Needs Analysis to inform RFI, RFP, ITT and the entire supplier selection process, all contract content and ongoing Supplier Management.

The first step in a sourcing process is to analyze business needs and identify all impacted stakeholders.  If individuals in the organization are specifically responsible for sustainability, their involvement should be secured from this step forward.  To ensure clear communication to the business, stakeholder and supplier business needs should be categorized into a standard approach, covering Assurance, Quality, Service, Cost, Innovation, Regulatory and Sustainability (AQSCIRS).  The three pillars for consideration for sustainability are social, environmental and economic.

If you feel your procurement team would benefit from some specific focus on Business Needs Analysis, including sustainability considerations, please contact us to discuss your requirements and learn more about what other organizations are achieving.

It is often assumed that negotiation training is only relevant to the skills required in the final stage of procurement – the close!  Negotiation tactics should be a top priority for effective Category Management, from the launch of a sourcing project to every interaction with potential suppliers and internal stakeholders.  It goes without saying that business needs are always clearly defined and in line with the organisation’s overall strategy, but all messaging and actions with suppliers need to remain consistent to those end goals.

When people hear ‘negotiation’, they tend to interpret that as meaning ‘leveraging suppliers to reduce price’ but effective negotiation is a skill required throughout the sourcing process to make achieving the “most desirable outcome” MDO possible.   A procurement professionals negotiation skill is required within their own organisation, without a Supplier in sight!

Internally focused negotiation includes promoting ideas and influencing internal stakeholders to achieve the best outcome for not only their business needs, but that of the organisation.  Both supporting and being supported by colleagues to benefit everyone’s skills, wellbeing and input requires skilled negotiation with the different internal stakeholders involved.  Communication is vital across the organisation to ensure everyone is onboard with a specific approach to a supplier.

A procurement executive recently shared how a key Business Executive on bumping into a new potential supplier for a major project enthusiastically told that supplier how great their product was and how “we cannot wait to sign up and get on with the project” not so easy to achieve those cost reductions expected in negotiation after that!   ALL key stakeholders need to understand how they deal with a Supplier is part of the negotiation; effective conditioning produces results.

Whatever your negotiating style, externally focused negotiation should include understanding and mitigating risk within contracts; championing sustainability issues through category choices; exploring new contract relationship and payment models as well as tenaciously driving continuous improvement initiatives in supplier cost and performance.

Negotiation skills are not only about application but also coaching.  We need to enable our internal colleagues, who maybe the daily post-contract supplier managers, to be just as effective as commercial negotiators as our Procurement colleagues.

The value of targeted learning on negotiation across the organisation, not just for Procurement, will be realised with increased value from contracts, improved mitigation of risk and lower costs.  E-Learning is a cost-effective way of delivering relevant, practical training ensuring all team members including new hires and strategic stakeholders are on the same page for driving for those cost reductions at the close.