National Geographic produced a thought provoking article exploring the causes and consequences of the drought affecting the westernmost sections of the USA, with its usual dramatic graphics, illustration and excellent articles.
Within this is an exploration of the effects on farming in the region, as hundreds of thousands of acres become unfarmable using currently favoured crops, and the brave who are trying to adapt are moving into volume cactus farming (which should at least mitigate the Tequila shortage).
This is exactly the sort of scenario that needs ago be considered by procurement folk when considering the mid term impacts on their categories. At a recent event, one attendee was absolutely convinced that looking at the wider macroeconomic issues affecting their category could not possibly be relevant and was a waste of their time – a view which is repeated on a regular basis across many businesses.
The approach to thinking about these areas is the old and familiar PESTLE analysis, which asks people to think about the impact the six areas of Politics, Economics, Social, Technology, Legal and Environment have on their category. It’s simple enough tool, testing knowledge of a category in a broad way and seeking the implications of particular issues against a category. However, it is regularly attacked as being irrelevant; having just been through the largest economic upheaval in the last 100 years, it is not possible to agree with that as a proposition.
Admittedly, the impacts identified are often medium term rather than short term, but having a business strategy which is ahead of the curve, prepared for the changes in supply chain shape which come up, must surely be a good thing.
Equally, when people do choose to use the tool, it often turns into a list of areas of potential concern, and gets left there. Ideally there should be a degree of critical thinking used to identify the major areas which need follow up and the outcomes from that follow up are taken into the development of a strategy; this whole area needs some challenge and review by those looking at the governance of their category teams to make sure there is an adequate challenge and depth put in place in these areas.
Just as illuminating in the National Geographic article is the use of compelling graphics to illustrate the key issues behind the articles, often with a key compelling graphic which neatly encapsulates the issues presented. In this case, the analysis of snow fall, showing the enormous change in snow pack, is nicely judged to be compelling. Again, category leads need to be looking at these types of representation to help develop ideas to sell their own category strategies and actions.
Bty exploring widely and reading around subjects in these areas, we will develop more compelling category strategies and deliver the results expected of us.
Mark Hubbard thinks about Procurement at Smart Brown Dog Ltd.