Most companies have subscribed to one ERP or MM management system or another and did so years ago.
What started with simple materials management software has grown exponentially into full-blown enterprise-wide resource programs. ERPs were a boon to the energy industry especially in the downturns because they did a lot of the heavy lifting. There was, however, underlying issues that seemed to get lost in the process and as these systems continue to evolve the problem could get worse.
The issues are two-fold.
The first has to do with configuring the systems. Just getting these complex systems to operate within the corporate model was a harrowing task. One of the standard documents housed in the system was the company terms and conditions. Terms and conditions that Supply Managment would use when ordering goods and services. As I have said so often, one size does not fit all, but SCMs’ personnel were trained or told to trust and use what was provided in the system. And they did. But more often than not new vendors would challenge them and when an agreement on the changed wording was made it was done outside of the system. Therefore issues around a particular article that happened repeatedly and might have made the case for updating the T&C’s in the system where never captured. Needless to say, when RFPs were issued with these standard t&C’s a lot of time was wasted in negotiations that almost always resulting in acceptance of the vendor’s demand for changes in wording.
The second came from blind acceptance and reliance on the system. This second issue led to complacency and lack of competency. As these programs became the normal operating procedures buyers just accepted everything the system provided in the way paperwork. And because everything from the description to the terms of payment had been input the system when it was configured, they were not challenged. SCM personnel became so dependent on using what the system produced they lost their ability to craft some of the documents on their own. They also no longer even read, let alone challenged what the system provided.
These issues have now been compounded as the workforce becomes more mobile and frequently change companies. The truth of the matter is that many new to supply management even with a degree in it can not independently issue a Request for Proposal RFP. A document that needs much more attention given the benefits it brings. ERP system or not I strongly believe that every SCM practitioner should have this basic skill. If you or your team doesn’t then they can learn about it HERE. A well crafted RFP can help demonstrate to the supply community the maturity and proficiency of the organization as a whole.
Request for Proposal will become more important as the Energy Industry recovers. That recovery will have companies more cautious in their contract which will put more pressure on Supply Management to ensure they are getting the best value for their contacts. This course can help to make sure all bases are covered. Click Here to take the course – HOW TO ISSUE AN EFFECTIVE REQUEST FOR PROPOSAL.