lessons learned and change management
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LESSONS LEARNEDDriving Change at Essroc
July 2007
http://www.essroc.com/default.aspx?pageid=36http://www.essroc.com/default.aspx?pageid=36 -
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Internal Intervies
Essroc
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Internal Intervies
! "rocess variation #eteen locations$
! "rocess % #uying channels not o&ti'i(e)$
! Dissatis*action ith SA" a&&rovals$
! Lo +R" usage an) user satis*action$! Lo level o* cor&$ contracts
! "ro,Car) syste' - li'ite) .an) varie)/ use an) tracing
! oo 'any ven)ors ith lo "O count .noise/$
! oo 'uch ti'e &ushing3 things through the syste'.or aroun)s4 searching4 *i5ing/
! argete) training % ti&s an) trics3 sharing nee)e)
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"rocure'ent Car)s
! 6se) on a li'ite) #asis - only *or 'inor e5&enses$
! ave a li'it o* 810004 #ut &oor un)erstan)ing ingeneral o* ho an) hen to use the' ithin the
&lants$
! In Southern In)iana e ha) 9 )i**erent &,car)s4 an) Iha) to &rovi)e reconciliation on a s&rea)sheet an))e*ine hat :L account it ha) to go to; Each ha) a810< li'it &er 'onth - an) e 'a5e) out every oneevery 'onth;3
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Re=uisition Strategy
! "oorly )e*ine) channels4 an) no or*loesta#lishe) *or re=uisition a&&roval$
! A&&rover level is unclear - an) long lea)ti'es are
*rustrating to &lant #uyers an) 'aintenanceengineers$
! Cor&orate is sitting on the re= an) )oesn>t a&&rove it
- hat is taing so long?3
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One Suggestion
! 6tili(e a to,ste& a&&roach - a re=uisitioner an) ana&&rover$
! Designate) re=uisitioner *or @o#s$
! A&&rover oul) #e a cost center 'aners .e$g$ =uarry'anager or &lant 'anager/ ho is in charge o* the#u)get$- as authority u& to 8290< *or 'aintenance @o#s$
! or 'ore closely ith &lant co'&trollers to givethe' 'ore authority$
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Li'ite) 6se o* Blanet Or)ers
! Blanet or)ers are largely use) only through or)o* 'outh3 -
! :eneral set o* rules that i* you re=uisition this'aterial #ase) on this assign'ent - you can #y,&ass a&&rovals;
! No stan)ar) ays o* #uying - an) &oorun)erstan)ing o* a&&roval &rocesses *or large #uyso* 8100< or 'ore$
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"ro@ect Engineering rustrate)
! "ro#le's are un)erstan)ing the real nee) o* the &ro@ect - hich'ight start as a ish that the &lant has$ hey have an i)ea o* hatthey ant - #ut the reasons hy is #ecause I say so; I* you ant'e to &ro)uce4 I nee) this;
! or the &eo&le 'aing the )ecisions - it is )i**icult *or the' to
sallo that$ hey nee) #acu& - hy )oes the &lant nee) tore&lace ES">s ith #aghouses? e *ail at trying to get that throughan) get the &eo&le ho ill a&&rove it or re=uest it$
! "rocure'ent )oesn>t ant to #e involve) in *easi#ility an)i)enti*ication o* hether you nee) it$ Once it #eco'es a &ro@ect -then the role o* &rocure'ent is to #uy$ But so'eti'es e havealrea)y gone through the technology )ecisions - et &rocess4 )ry&rocess4 #ag &rocess4 ES"4 etc$ e go through the technology iththe su&&ort o* our technical grou&>s gui)elines in Italy$ Once e )othat - e are 'arrie) to a technology an) a ven)or - at ti'es that ishat ha&&ens$ An) then e have to start all over again to @usti*y itto &rocure'ent$ An) they are u&set #ecause they eren>t involve)in )evelo&ing the s&eci*ications;
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"lant Buyers See the "ro#le's
! Everyone in our &lant has NO converte) to usingthe syste'$ hey )on>t no ho to use it4 an) taethe shortcut$ hey ill go outsi)e the syste' an)rite a re=uisition4 #ecause that is easy *or the'$
An) I can>t #la'e the' - I have e5&eri'ente) iththe re= syste' *or 'aintenance4 an) a' not thrille)ith it$
! :etting *ee)#ac *ro' the &lants is the *irst thing thatcor&orate has )one rightG$they are alays 'aing
changes IO6 going to the &lantsG
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Lots o* ransactional or at "lant Level
!I generally )on>t have ti'e to go to ven)or catalogs or s&en) anyti'e learning the syste' - i* I can>t )o so'ething in 9,10 secon)s4I 'ove on to so'ething else$ I a' oring 11,12 hours in a )ay -'y &urchasing activities inclu)e closing "O>s4 looing at it to see i*it is correct4 *olloing u& ith orers to un)erstan) i* they have)one the or4 etc$
!
! I have &ut in hours to)ay4 an) a' only 1%F o* the ay throughthe or$ +ost o* the &ro#le's are services - nee) to ensure it isco'&lete4 an) i* or &ost&one)4 etc$
! Biggest areas *or i'&rove'ent are to hel& clari*y the roles an)res&onsi#ilities o* &urchasing an) &ro)uction &eo&le$ "ro)uction
is creating re=s *or &ro)uction,relate) ite's - as it shoul) #e -a#ut are not )oing it alays as a rule$
! I)eally4 &eo&le using the ite's shoul) #e creating there=uire'ents4 #ut not the "O - this shoul) #e escalate) over ti'e
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oraroun)s
! Because o* sloness o* release &rocess4 our 2007 &ro@ects are going south$It use) to #e one or to ees at 'ost *or the ven)or to &ut it on the invoice$
! So hat e have )one - is i* it is a 829< @o# hich taes 2,F ees4 e illre= it out on a eely #asis instea) - so it stays there$
! he &ro#le' see's to #e so'eone on the release strategy line ho isoutsi)e o* the &lant4 on vacation4 out o* the &lant4 #ut on vacation4 an) it is
not #eing a))resse)$ he re=uisition ill sit *or ees;! As a result4 one thing e try to )o4 hich e shoul)n>t4 is to convert that
8294000 @o# into *our 8HF77 line ite's - so e can get it )one$ e shoul)n>thave to )o *our line ite's *or one - #ut they no e nee) to *i5 it =uic 4 an)it has got to get *i5e) to get it running again$ It is tough to ait *or 2,F ees*or the "O$
! he BI::ES issue is getting re=uisitions release); hat is the #iggest thingthat I have any &ro#le's ith$ It is not #eing local - #ut I have to get on the&hone to release it$ hat is ha&&ening at cor&orate level - an) I thin itoul) hel& i* they ha) our &lant 'anagers 'ore leeay to release so'e o*the re=s$ "urchasing at cor&orate is aiting *or &eo&le to a&&rove it;
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Su&&lier Intervies
Essroc
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Bravo is NO 6ser,rien)ly
! he 'a@ority o* the ti'e .70/ there is not enough 'oney on the"O$ So'eone ants the or )one an) &uts in a guessti'ate -an) it is a #ig &ain to go in an) change the or)er4 or so I>' tol)$
! A lot o* ti'es to get the in*or'ation you nee) on sco&e4oring through the syste' - a &ain$ I* you hit therong #utton ith the 'ouse4 you are #ac at s=uareone$ I a' a han)s on guy - #ut the *act is it is not easyto use an) is in *act a real night'are4 an) co'&licateseverything$ I un)erstan) that a #ig co'&any has to
centrali(e &urchasing - #ut the syste' inter*ace is a&ro#le' an) is ay too co'&licate)$ E are not a #igco'&any4 an) )on>t have great co'&uter sills4 so es&en) a lot o* ti'e trying to *igure it out$
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Not Enough 8 on "O>s
! :etting the "O into the syste' is a real&ain$ I no it ill get #loce) i* it is over4so I on>t invoice over the "O a'ount4 an)
have to as the' *or another "O *or there'ain)er - hich can tae a long ti'e$hat is hat they as 'e to )o4 an) tell 'eI ill get &ai) =uicer that ay$ It alaystaes longer *or the secon) one to get &ai)- no one is in a hurry to get it &rocesse)once the or is )one$
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Lac o* Res&onse *ro' Essroc
! It 'ight tae to to *our ees to get a "O a&&rove)4 an) it)e&en)s on the a'ount an) everyone>s vacation sche)ules4 hois out o* ton$ All 'y accounts &aya#le go to Na(areth$ I get 'y"O>s *ro' the &lants #ut invoices sent to "A - an) have little orno contact ith those &eo&le$ ou can call an) leave a 'essagean) they ill get #ac at so'e &oint4 an) it 'ight tae several)ays$
! I ill call the' - I calle) the'4 rote to the'4 'aile) to the' *orF 'onths *or "O nu'#ers an) never got the' - so 'y invoicesoul) not get &ai)$ I trie) )ealing ith the &lants4 I trie) ithcor&orate4 I trie) &lant 'anagers - an) no one ante) to ste& u&an) get it )one$ hat as last su''er$ No e are getting "O>s
- an) sen) in an invoice - an) in H0 )ays e still )on>t get &ai)$So they 'ae you e'ail .e aren>t alloe) to tal to anyone/an) they co'e #ac an) say they )on>t have the invoice$ Inanother F0 )ays e rite again an) the sa'e &erson says they)on>t have it - even though e have )ocu'ente) &roo*$ heyare @ust a*ul to )eal ith$
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E'ergency Or)ers are the orst
! he "O a'ount ill alays change #ecause they ant it )one noan) they )on>t no ho long it ill tae$ hen they usually 'ae usait until the invoice is )one to create a "O to 'atch$ I* they give 'ea "O *or 890< #ut there is 8100< to get it )one - they )on>t a)) it tothe "O$ I rarely see a "O$
! On e'ergencies there is no ti'e *or a "O - an) they coul) )o a #etter@o# on turning those aroun)$ hen ti'e an) 'aterials runs over theirguessti'ates - they )o a &oor @o# on the esti'ates$ No clear ay to)e*ine ho to )o it until you get insi)e$ hey )on>t no ho #a) it isuntil they shut it )on - an) can>t say 8100< every ti'e - or theyon>t get a&&roval *ro' cor&orate to )eal ith the e'ergency;
! Essroc>s ty&ical &ay'ent is 0 )ays - only a*ter e go a*ter the'several ti'es$ hey are a #ig custo'er - e )i) 8900< ith the' lastyear$ I no so'eone in their cor&orate grou& *or 20 years - an) thatis ho I got &ai) - I calle) hi' u& an) he calle) u& the &lant 'anager;
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Co'&arison to other Custo'ers
! hey are not our *avorite &lant to or *or$ I* to &eo&le call 'e onthe sa'e )ay an) one is Essroc I ill tae the guy ho ill &ay 'ein F0 )ays an) not give 'e a har) ti'e a#out "urchase Or)ers$
! ! Essroc is the orst o* the #unch$ Every#o)y reali(es e are a
critical su&&lier - #ut they still @er us aroun)$ Others 'ae sure our&ro#le's are solve) - an) they are 'ore *le5i#le u&*ront reali(ingthat the or can>t #e esti'ate) u&*ront$
! ! +ost co'&anies e or ith have e'aile) invoices an) &ay us
electronically$ I )on>t have any trou#le$ I a' &retty sure e @ust get
a chec *ro' Essroc - never seen an electronic &ay'ent$ I get ane'ail an) voice'ail hen I call the'4 an) no one ever calls #ac$hey are the orst custo'er I have$
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Reco''en)ation 1K Co'&lete "O a*ter'aintenance or co'&lete
! I )on>t no i* they can *ill the "O in a*terar)s .e$g$ give hi' anu'#er they can invoice on4 total u& the #ill4 *ill in the #lan4/ #ut*or so'e reason they can>t )o that$ Or so they tell 'e$ Jo#sthat e )o a *ir' lu'& su' - e get a "O *or those$ here isNO &ro#le' getting &ai) on those$ I* they coul) )o so'ethingto i'&rove ti'e an) 'aterials an) the unnon costs4 that
oul) hel& us out =uite a #it$
! hey shoul) internally #e 'ore *le5i#le to a)@ust "O>s$ I* theygive 'e a "O an) they change it later - that shoul) #e their&ro#le'4 not 'ine$ ave to give 'e "O>s *aster - e )o 8100s$ eare in the &lants every )ay4 so they coul) issue #lanet or)ers tocover 'iscellaneous or)ers - an) clean the' out every 'onth$
All o* 'y #illing is acco'&anie) #y a signe) ti'esheet4 ith thee5act hours an) hat e )i) - an) is signe) #y the en) o* theshi*t$ here is never a =uestion a#out the hours - that alaysgoes ith the invoice$ I* they ha) 'anagers that oul)n>t orrya#out 82000 or)ers every )ay - it oul) save a #unch o* ti'eon their en) an) 'ine$
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22
Buying Channels
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E5ternal Best "ractices
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Bench'are) Co'&anies
! Suncor Energy .Doug
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Co''on he'es
! Every organi(ation I s&oe ith is struggling to use SA" inservices
! None o* the' ha) i'&le'ente) +ySA"4 though 'any ereusing Enter&rise Buyer .SR+/
! arying levels o* "car) i'&le'entation! Integration ith 'aintenance organi(ation i)enti*ie) as a
co''on critical success *actor
! Nee) *or goo) 'aster )ata integrity is also a *un)a'ental
#uil)ing #loc *or success! Each co'&any ha) )evelo&e) their on uni=ue a&&roach to
oring ith the co'&le5ities o* SA" in a services&rocure'ent environ'ent
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he SA" StoryK Sel*,Service "rocure'ent - Search Catalog
! To retrieve a desired object, users can search catalogs across
company boundaries optionally from- Internally hosted catalogs, where purchasing controls the
content, but the suppliers deliver the content.
- Internal catalogs, where purchases are booked against yourown stock.
- External supplier catalogs, accessed over the Internet
- Catalogs hosted by marketplaces or other external brokers,maintained and hosted by external broker.
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Dave Rice , BAS - 6se &car) on"unchout,Roun)tri&
! 6se 12,1 catalogs in a roun)tri& 'etho) *or o**ice su&&lies4in)ustrial su&&lies4 sa*ety4 la#4 *loers4 &acaging4 so*tare4s&ecialty eche'icals4 electrical su&&lies4 'aga(ines4 #usinesscar)s4 stationary4 electronics4 recognition gi*ts
! Start #ehin) the *ireall in SA" SR+4 i)enti*y the co''o)ity4 clicon lin4 &unch out to su&&lier site4 *ill u& sho&&ing cart4 a)) cre)itcar) an) shi&&ing locations4 an) hit or)er$
! Su&&lier is sen) SCDL &urchase trans'ission - an) @ust &ay the #ill
*ro' A'e5
! 890+ % year on &car)4 an) 810+ on &unchout roun)tri& ith &car)
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Dave Rice , BAS - Au)iting users o*&car)s on roun)tri&s
! Re&ort each 'onth to site coor)inator o* users ho are NO usinga&&rove) su&&liers
! Au)it 10 o* car)hol)ers annually to ensure they are *olloing #est&ractices
! Su&&ly 'anager veri*ies &rices #y ran)o'ly selecting ite's on su&&liercatalog
! F0 o* transactions on EDI .9 o* su&&liers/ *ocusing on high volu'e .ra'aterials4 che'ical 'aret&laces/
! "lan on utili(ing 'ore su&&liers on e,catalogs .currently at a#out 100/
! SA" is co'&le5 - an) you have to #e a *re=uent user to #e goo) at it3
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Doug
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Doug
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Doug
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Doug t have agrou& that 'anaging it ell4 it is a &ro#le'$
! +anaging it ell3 'eans ro#ust 'aster )ata4 an) a ay o* lining that it lins toyour SA" nu'#ers$ I* you &unch out your 'aster )ata an) it &oints to this &art -an) i* they 'ae it o#solete an) stic it into a grou&ing or asse'#ly - hat
ha&&ens is that your 'aster )ata &oints to it4 their syste's tells it that it iso#solete4 an) your syste' ics itout to a &rocure'ent &erson$! No your error han)ling syste' on han)shaing is ritten #y I &eo&le ho
can>t s&ea nor'al English - an) the &rocure'ent ill NEER *igure out hate5actly ha&&ene)$
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BSC ,
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s &rice list$ +ost co'&anies illsen) you an E5cel *ile ith the &art nu'#er an) the &rice &ai)$
!
! he other ay to )o it - is to negotiate a )iscount o** &rice list - soevery transaction involves a 29 )iscount - an) your en) &rice is P$An) then you have to au)it the list &rices an) negotiate &riceincreases as a&&ro&riate$
! E,invoicing ors ell in SA"4 #ut a lot o* care an) *ee)ing isre=uire) *or SR+4 using stan)ar)s *or invoice )ocu'ents
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"aul hi''ons - +aster Data
! So e sent &eo&le out to the *iel) *or EER SIN:LE'aterial4 an) cleane) u& all the )ata$ his as anintensive e**ort$
! e no have 004000 ite's in the catalog$
! he "IR contains &ricing an) s&ecial in*or'ation such as&rocess sa*ety )ata4 an) instructions to the su&&lier thatthey cannot su#stitute other 'aterials *or this 'aterial4 etc$his is in a))ition to the 0 character te5t li'it$
! he "IR is line) to a 'aterial nu'#er in SA" use) to
'aintain inventory$ 100 o* our )irect 'aterials have'aterial nu'#ers4 ith )etaile) #ills o* 'aterial associate)ith these #uilt out in the *iel) through intervies ith our*iel) &eo&le$
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Rocell Collins - "hil t ha) any 'a@or &ro#le's$
! o* s&en) is in SA" - have release) so'e a#ility aroun) our in)irect an)su#contract s&en) - 'ost o* the e**ort has #een on )irect - an) getting visi#ility tothe invoice an) &aya#les level *or in)irect$
! e have i'&le'ente) various auto'ation strategies an) tools ithin SA" - an)utili(e the sourcing agree'ents$
! 0 o* our s&en) is on sourcing agree'ent - an) o* that 79 is going throughauto'ate) ele'ents - eRQ4 e"urchase or)er$
! Sourcing grou&s get as 'uch as they can on L agree'ents - hich *acilitatesSA"$
! e loo out si5 ees *or re=uire'ents - loo *or source lists4 &ull )raings out4attach to =uote4 sen) out to su&&liers on source list #ase) on critieria - an) havea 2 ee L to res&on)$
! :ets =uotes #ac #ase) on cost a)@ust'ent an) aar)s to su&&lier auto'atically$:et a#out 1004000 &er year$
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"hil Crot( - Su&&lier "ortal
! Su&&ly Collins e#site has a su&&lier &ortal$ his the *ront en))ash#oar) *or SA"$
! All transactional in*or'ation goes on SA"$ :et *orecasts *or Lagree'ent &arts4 or the source *or the &art$ 6&)ate) "O>s - i* they
&ull it in4 they can s&lit the or)ers4 &ush it out - #ase) on theirca&a#ility$ Su&&ly Collins A"O also through - can &ull )raings4&ush )raings to the' - an) get CAD *iles to the'$ "+ &ushes a&)* *ile to the' - get "O>s4 &rint #arco)es4 an) 'anage A">s on the&ortal$ "lu'tree as the original &ro)uct$
! ave custo'i(e) it to or on to& o* SA" an) looing at ho to'igrate to enter&rise &ortal on SA"$ A lot o* )ata in *ro' su&&liers
*ro' the &ortal4 lots o* in*o churne) *ro' SA"4 lots o* DMB )ata&ulling in4 s'all #usiness in)icators .govern'ent contractor/ - Dennisis turning that into in*or'ation$ e are sen)ing that )ata out - an)nee) to set it u& ith 000 su&&liers ho sen) #ac in*or'ation on a=uarterly #asis$ As e go *orar) - ho to #eco'e 'ore &re)ictive
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F
Core "rocess4 Ena#lers an) echnologyG
uying
Channel
!election
"e#uisition
Information
$%Card
&se
$' auto
(ax
)one !tore
"e#uestContracting
T*CCore "2"Business"rocesses
Ena#ling"rocesses
+aintain
'+s +aintain
+aster
"ecords
$olicy
eployment
!upplier
!election
!upplier
evelopment
Invoice
$ayment
$erformance
+easurement
echnology%Syste'eatures
$%Card
Contract
+gmt
!"+
$lant
+aintenance
(orecasting
-$lanning
'utline
greements
+"$EI- /+0 1orkflow
+aterial
2umbers
!$ "esponse
Time1eb enabled
procurement
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Co&yright 2009 Baios4Inc$
Outco'es o* InteractionsCommitmentCommitment
Co'&lianceCo'&liance
ResistanceResistance
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Co&yright 2009 Baios4Inc$
9
"roactive +anage'ent an) the E5ercise o* "oer
Relationshi& Ca&ital
Knowledge
Power
Role
Power
Insight
"roce)ure
Controlling Ena#ling
Lea)ershi&
En*orce'ent
+anage'ent
Resistance
Co'&liance
Co''it'ent
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Co&yright 2009 Baios4Inc$
H
+easuresC'"E I2(0&E2CE !3I00!K "roactive in*luence sills 'ost liely to gain co''it'ent$! ConsultingK Dee&ening your un)erstan)ing o* others vies #y asing engaging =uestions
an) res&on)ing in ays that encourage )ialogue$
! AligningK Aligning *eatures o* your i)ea or a&&roach to in)ivi)ual an) institutional values or
i)eals$
! ReasoningK O**ering evi)ence o* ho your i)ea or a&&roach ill &rovi)e institutional an)&ersonal #ene*its$
0!T "E!'"T I2(0&E2CE !3I00!K In*luence sills that 'ay result in co'&liance ithoutco''it'ent$
! "ressuringK 6sing )e'an)s or &ersistent re'in)ers to convince others to )o hat you antthe' to )o$
! Legiti'atingK Esta#lishing that you have the authority or right to 'ae a re=uest4 orveri*ying that the re=uest is consistent ith organi(ational &olicies4 &ractices4 or tra)itions$
-
8/9/2019 Lessons Learned and Change Management
47/50
Co&yright 2009 Baios4Inc$
7
Colla#orative Engage'ent
+o)el
Outcomes
Relationshi& Ca&ital Role "oer
-
8/9/2019 Lessons Learned and Change Management
48/50
Co&yright 2009 Baios4Inc$
Colla#orative Engage'ent
+o)el
ConsultConsult ReasonReason
Inputs Outcomes
Actions
AlignAlign
-
8/9/2019 Lessons Learned and Change Management
49/50
Co&yright 2009 Baios4Inc$
Colla#orative Engage'ent
+o)el
Consult Reason
Inputs Outcomes
Actions
Align
Co''it'entCo'&liance
Resistance
"oer an)Relationshi&Ca&italIncreaseDecreaseLevel
-
8/9/2019 Lessons Learned and Change Management
50/50
Co&yright 2009 Baios 90
inal houghtIf you insist on beginning only with
certainties
you shall end in doubts4
but if you will be content to begin with
doubts
you shall end in certainties.
(Francis Bacon)