MGMT 565 Guest Lecture Summary
On the 29th of September, 2015, we had Marc Hochman, the VP of the Procurement team from A.T. Kearney present a guest lecture on Building the Brand for Procurement. He gave us a brief talk about the future of Supply Chain Management by 2020. The topic that interested me the most from his talk was about ROSMA - Return of Supply Management Assets.
Marc mentioned that A.T. Kearney has come us with this ROSMA framework which is going to be a revolutionary performance measurement standard enabling procurement by quantifying its financial contributions. He narrated how they came up with the framework. He said,” Working with the CPOs and CFOs from leading multinational companies, A.T. Kearney identified 7 drivers required for procurement leaders to measure procurement performance continuously and, using accepted financial frameworks, created the ROSMA framework.”
When you look at how procurement functions in the business world, it is easy to see why so many companies take advantage of it. I believe that a sound procurement operation can help merely any business improve its product, save money and be more competitive. Basically when it is done right, procurement can be really really good. But in the business world, the word - GOOD is pretty ambiguous. I mean, how does a company know how good its procurement operations actually is? Or how much of value it is adding to its business? They say GOOD isn’t a kind of language that executives especially CFOs typically speak.
When CFOs communicate with each other they speak in measurements. Think about it… during all those quarterly analyst calls you hear all kinds of stuff about cash flow estimates, earnings per share, return on ...
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...ur performance in a quantifiable term. I believe that with this specific concrete measurement for procurement, companies can streamline ROI, benchmark their performance and communicate in a language that C level peers can understand. And when you look deeper into their overarching solution you really get more than just a simple calculation. They say by organizing the important elements of an operation you’ll be able to set and track annual goals, giving your executives a better visibility of what needs to be accomplished and what their level of engagement should be and how they can add value. It also gives the ability to compare performance with other companies and industries. I feel, ultimately with A.T. Kearney’s PPM solution and ROSMA it is never been easier to manage, track and most importantly measure procurement operation ever before. Hats off to their efforts!