What is Lean Agile Procurement?
Lean Agile Procurement is one of the last bastions of Agile.
For an organization to become truly agile, everybody in that organization needs to think in an empirical manner.
- Short feedback loops.
- Time to market for products, features, and services.
- Validating feedback.
- Moving forward based on data and evidence.
And so forth.
If your supplier contracts are not set-up to support Agility, it creates a real tension between what the organization are attempting to achieve and what they can achieve because you are locked into a project management style of working through the partner and supplier contracts you have signed.
You often find that you need to alter how you work, and the sequences of that work, because your commercial contracts prevent you from being agile. They force you to follow the waterfall style of project management because your partners and suppliers aren’t agile, nor do they think in terms of empiricism or empirical process control.
In large organizations, we are talking about millions of pounds at stake.
The supplier or partner will not get paid until X has been delivered, and they want to dot all the I’s and cross all the t’s to ensure that they get paid on a schedule.
Mirko Kleiner is the person who came up with the concept of Lean Agile Procurement and I was drawn to his expertise and thought leadership in this space because I recognized that organizations were being hamstrung through traditional contracts and supplier agreements despite their commitment to agile.
I wanted to understand how that challenge – the commercial relationship and contracts between suppliers, partners and organizations – could evolve into an agile partnership between organizations.
Unpacking Lean Agile Procurement.
Lean is the principles of minimizing waste and maximizing flow.
Agile is the collection of practices and philosophy that looks to optimize the value being created and delivered for customers, in the shortest time frame possible, whilst managing risk effectively. It is also the capability to adapt and evolve based on the data and evidence we gather whilst learning and doing.
Both concepts have been designed to help organizations navigate and innovate despite high uncertainty and complexity.
Procurement is what it says on the tin. The procurement of goods and services from suppliers around the world which are necessary to capture and create value for both customers and the organization we serve.
The pivot that Lean Agile Procurement brings into the equation is the ability to move away from the confrontational – us versus them – style of working and into a far more collaborative relationship with our partners and suppliers.
So, by working collaboratively with prospective partners and suppliers, we can validate the relationship. It’s like dating before getting married so that you have an opportunity to test your compatibility with that supplier or partner.
You get to see how adaptive and responsive they are to your business, in the same way that your organization is adaptive and responsive to your clients.
Ultimately, it’s a conversation that seeks to identify win-win scenarios that empower both organizations to be agile, adaptive, and responsive. Where both organizations capture and create value for one another through the process of procurement and supply.