(Solution) CIPS Module 6 – Project, Programme and Change Management in Procurement & Supply

Question

Task

You have been asked by your organisation to propose and develop a procurement and supply related business project to deliver clear benefits and sustainable improvements. Your report should be in the style of a business case and must demonstrate your understanding of:

  • THE CONCEPT OF CHANGE MANAGEMENT AND HOW IT CAN BE ACHIEVED.
  • ASPECTS OF PROJECTS AND PROGRAMMES IN ORGANISATIONS.
  • APPROACHES TO THE PLANNING AND MANAGEMENT OF PROJECTS, PROGRAMMES AND CHANGE INITIATIVES.
  • CONTRACTING AND FINANCIAL OPTIONS IN PROJECTS AND PROGRAMMES.

Your report must include recommendations for improvement or change and should consider how your recommendations might be implemented. In order to develop your business report, you will need to draw on and integrate the content from the other five CAAP modules.

Your report should consist of 10,000 words.

Prepare a business report Whilst the task asks you to prepare a business report, it is important to bear in mind that this is an academic assignment and not a business report. As such, make sure that you write your assignment in the 3rd Person. Also, if your organisation does have a standard report template, do not use it as it is not appropriate for this academic assignment.   Refer to the Candidate Assignment Guidance document for details on how you should structure your assignment.   Also, remember that you are being asked to develop a business project in YOUR organisation, so it is really important that you always relate the content back to your organisation.  

Solution

Executive Summary

The aim of this project is to improve the goods not for resale (GNFR) supply chain in Eco2Solar organisation. This is for logistics support focusing on Non-Traded goods. The rationale of this is informed by the fact that Post COVID-19 pandemic, Eco2Solar organisation has been investing in GNFR products currently in their supply chain and procured by their PS&M. Considering the output of this project, Eco2Solar would gain from an implementation of an appropriate supply chain ecosystem which is inclusive of cross functional teams with all contributing and all benefiting. The findings in this report also evidence that the improved GNFR sourcing would be in a position of improving Eco2Solar cost savings with all existing stakeholders being involved appropriately. Also, the outcome of this would entail, driving a cross-functional collaboration in broader groups and leveraging on internal systems and knowledge of existing mature GNFR supply chain matrix.

For the purpose of achieving the intended report aims, quantitative and qualitative data has been used in obtaining the essential findings. Also, appropriate benchmark of different organisations practices has also been evaluated which represent the most appropriate strategy identified. Different tools have been adopted including ADKAR Model, stakeholders analysis tools, suppliers preferencing matrix, SWOT and PESTLE analysis and many more. The findings in this report evidence that through ADKAR model of change, all barriers are identified and overcome in a collaborative manner. The flow charts used have evidenced and defined distinct roles and responsibilities in all their operations. The identified leadership styles are critical and essential for being supportive, collaborative and transparency. At the end, various recommendations have been provided which would improve the team effectiveness, leadership management and change implementation. These opportunities are important for further people development and embracing new innovativeness for an improved supply chain. This is noted by necessity for exploring and evolution of their supply chain in full potential.

Table of Contents

1.0 Introduction. 3

1.1 Organisation Background. 3

1.2 Scope of this Project. 5

1.3 Background. 5

1.4 Problem Statement 7

2.0 The Current Situation. 7

2.1 Good Not for Resale (GNFR) Program Initiative. 8

2.2 The Existing GNFR Model 9

2.3 Proposal of the GNFR Model/ Change Improvement 10

2.3.1 Process Mapping. 10

2.4 Goods for Resale (GFR) compared to Goods Not For Resale (GNFR) before COVID-19/Economic Stability to Post-COVID/Economic Slowdown   11

2.5 Christopher Martin’s 4R’s Model 12

2.6 The Bullwhip Effect. 14

3.0 Scope. 16

4.0 Category Profile and Strategy. 17

4.1 Current Suppliers 19

4.2 Current Amount of Spend and Volume. 20

4.3 Kraljic Matrix Analysis 21

4.4 SWOT Analysis. 23

4.5 Porter’s 5 Forces Analysis 25

4.6 Risk Analysis. 26

4.7 Contracts and Development. 31

5.0 Team Development/Building. 32

5.1 Tuckman Team Development Model 33

5.1.1 Forming. 33

5.1.2 Storming. 34

5.1.3 Norming. 34

5.1.4 Performing. 34

5.2 ADKAR Model 35

5.3 Current Structure. 36

5.3.1 Proposed Structure. 37

5.4 Squads, Tribes and Chapters. 38

5.5 Leadership Styles. 39

5.6 Leaders Versus Managers. 40

6.0 Change Management. 42

6.1 Need for Change. 43

6.1.1 The Implementation Plan. 44

7.0 Conclusion. 45

8.0 Recommendations. 45

References. 47

Figure 1:Eco2Solar Organisation Structure of PS&M.. 6

Figure 2:Eco2Solar Organisation PS&M.. 7

Figure 3:Suez Crisis in UK. 8

Figure 4:Traditional and modernised ecosystem.. 10

Figure 5:Current GNFL Sourcing and Procurement in Eco2Solar 11

Figure 6:Proposed Improvement of the GNFR Model 12

Figure 7:ProMapp System for current system.. 13

Figure 8:Challenges of the Supply Chain Network. 14

Figure 9:Christopher Martin’s 4R’s Model 14

Figure 10:Bullwhip Effect 17

Figure 11:Description of the Scope of the Change. 19

Figure 12:Scope implementation and Challenges management 20

Figure 13:Gantt Chart of Process implementation. 21

Figure 14:3PL and 4PL explanation. 22

Figure 15:Annual Spend for the identified GNFR Categories. 23

Figure 16:Volumes of the entire Categories. 23

Figure 17:Kraljic Matrix Analysis. 25

Figure 18:SWOT Analysis Summary. 26

Figure 19:Porter’s 5 Forces Analysis 27

Figure 20:Risk Analysis Tool 28

Figure 21:Tuckman Model of Group Development 35

Figure 22:ADKAR Change Model 37

Figure 23:Current Eco2Solar Group Organisation Structure. 38

Figure 24:Proposed Structure. 39

Figure 25:Summary of Squads, Tribes and Chapters. 41

Figure 26:Tannenbaum & Schmidt Model 42

Figure 27:Approach of Win-Win. 43

Figure 28:Thomas Kilmann Conflict Management 44

Figure 29:Barriers of Change Management 45

Figure 30:Implementation Plan. 46

Table 1:Financial risk analysis 29

Table 2:Supply risk analysis. 29

Table 3:Commercial Risk. 30

Table 4:Summary of Product/Service Quality Risk. 31

Table 5:Operational Complexity by employees 32

Table 6:Corporate Social Responsibility. 32

Table 7:Summary of the Strategic Importance/Relevance Risk. 33


1.0 Introduction

1.1 Organisation Background

Eco2Solar is a United Kingdom (UK) energy sector based organisation which has been in active operations since 2007 with their focus being addressing a wide array of climatic change issues (Eco2Solar, 2022). Through their partnership with different stakeholders, Eco2Solar ensure that they offer solar energy solutions to newly constructed residential homes and commercial installations. Majority of their customers are multinationals which include Barratts, Taylor Wimpy, Linden Homes, David Wilson ad Lovells. In order to achieve successful operations in their business sector, being the best practice, their projects include areas of healthcare centers (50%), institutions (60%), care homes (40%) and large apartments installations (30%). Today, the organisation overall profit average at approximately £15 million and primarily informed by their recent partnership with Worcestershire County Council and Sanctuary Housing which occupy upto 60% of the entire spend of the organisation as illustrated in Eco2Solar organisation internal classified documentation. This breakdown is essential for attainment of their goals and objectives. Apart from this, they are in a position of initiating different domestic construction sites in Midlands and in different cities in UK, Scotland and other neighbouring nations.

Eco2Solar engages different corporates, developers and individual homes in provision of the alternative or solar energy from their 5 different stores, 20 licensed venues and 4 offices in UK supporting their operations. To continuously run their operations, they engage 6 distribution centers (DC’s),  3 Third Party Logistics (3PL), and Direct to store (operating in different UK cities). In all their operations, Eco2Solar engages more than 4,000 employees in their different offices, sites where they operate and solar power distribution centers.  The organisation Procurement and Supply Management (PS&M) organisation structure is as illustrated in figure 1;

Figure 1:Eco2Solar Organisation Structure of PS&M

Further, the Eco2Solar organisation operations are anchored on their core values which are clearly stipulated transparently with their clients being aware of them. The priority is ensuring they abide to appropriate health and safety and the best practice of their employees operating in different sites and areas of operation. Their different principles which are prioritised include;

  • Excellence which include always giving their best
  • Fairness- always treating others fairly
  • Innovation-always working to be better
  • Trust- being trustworthy partner

The Eco2Solar organisation PS&M is mandated to offer all the products and services which the organisation prefer for their operations as illustrated in figure 2. This is in the areas of construction, solar panels, properties, all corporate services including people practice professionals/HR, marketing strategies, information technology (IT) and equipment. Also, they are tasked with a role of pursuing packaging roles, any consumable and supply chain.

Figure 2:Eco2Solar Organisation PS&M

1.2 Scope of this Project

In this project, considering the current UK economic crisis CNBC (2022) where Post COVID-19 pandemic the UK GDP has contracted with 1.2% with their performance below the major global economies, the need for an improved Supply Chain particularly for managing the demand of the Eco2Solar organisation essential services. Also, part of this project will be to evaluate the management of the Supply Chain of Goods Not for Retail (GNFR). A success in optimising their supply chain in their existing status for lowering inventory holdings in a short-term basis, exploring best practice process reducing touchpoints. Also, part of this would include creating a simple transition from the ordering to their warehouses and initiating sustainable relations and partnership with all their stakeholders. In this entire project, the categories of spend would include the consumables, Personal Protective Equipment (PPE) and their supply chain categories.

1.3 Background

In Flynn et al. (2020) report, since January 2020, COVID-19 pandemic prevalence was evidenced in UK. Since then, ONS (2022) note that the UK economy has never recovered from the different economic shock. The current shock is worse than the 1955 Suez crisis (see figure 3);

Figure 3:Suez Crisis in UK

Within this period, the demand for essential products and services in UK has similarly surged in unprecedented scope. According to Mbah and Wasum (2022), this has contributed to necessity for sourcing alternative supply channels which are inefficient and ineffective compared with the past strategy with normalcy. This has elicited an increase in risks of the supply process of essential items demanded by Eco2Solar and other companies. Owing to these uncertainties, it is apparent that change in Eco2Solar was essential for the purpose of coping up with prevalent demand and supply uncertainties.

In UK and globally, Inoue and Todo (2020) report highlight that as a result of COVID-19 and the subsequent economic crisis, sourcing and supply chain of the Goods Not For Resale (GNFR) has significantly been disrupted. In UK particularly, existence of immature supply chain as a result of these disruptions has had a significant implications. For instance, in CIPS (2022) report which focused on evaluating the supply chain crisis, it had argued that “you sort of have a dual pressure there on availability, where specific supply chains using newly-manufactured pallets”. Similarly, in the energy sector where Eco2Solar operates, there had been challenges with supply chains having a weak link. This has been complexed by the recent re-shuffling of their workforce facilitating products unpacking and repacking to traceable amounts to facilitate visibility to subsequent phases of their supply chain network.

Considering the solar panels and systems installed to different installations, these are classified as Goods for Resale (GFR) with a distinct supply chain from the Goods Not For Resale (GNFR) teams all relying significantly on management of demands. This is to plan, forecast, replenished and transition their products to various stores strained n the increased pressures of volumes unprecedented.

Considering this background information, it is important to pursue this evaluation to evaluate overhauling of GNFR Supply Chain, areas of failure, improvements. A question can be asked which is;

  • How could Eco2Solar as a critical provider of energy sector can ensure their supply chain network is withstanding future disruptions and economic challenges leading to disruption in their supply chain networks?

1.4 Problem Statement

After the emergence of COVID-19 pandemic and eventual UK Economic crisis, the current Supply Chain network applied for the Eco2Solar Goods Not for Resale (GNFR) was noted as inefficient and ineffective. This has been occasioned by what Brandtner et al. (2021) report has identified as pressure for manufacturing products with significant lowered lead times and demand for products earlier not required being unprecedented. Further, Bloomberg (2022) report had identified that the shipping of goods from China had slumped down in their lowest level owing to stumbling economy which have dimmed prospects for container carriers turning in record profits in the pandemic. Hence, for Eco2Solar, their supply chain network was inefficient and ineffective for management of future potential issues which would occur.

In this project, the focus is on evaluating Eco2Solar organisation supply chain network for their Goods Not for Resale (GNFR) and initiate an approach to optimise planning for consolidating and creating a sustainable supply chain eco-system of mutual benefit to all stakeholders.

2.0 The Current Situation

Considering the available research works, a transition from linear supply chain to a fluid ecosystem (Brandtner et al., 2021; Sharma et al., 2020; Chen et al., 2021). The success and effectiveness of a supply chain is as strong as its weakest link which contribute to an immense instability. According to CIPS (2022a) having a fluid ecosystem of supply chain is relevant for harnessing different stakeholders collaboration, innovation embrace and accrued value for all stakeholders and engaged suppliers. Adopting the definition of Sjödin ET AL. (2021) an ecosystem “represent various actors with different degree of multilateral, non-generic complementary which are not found controlled holistically in a hierarchical basis. Basically, this is an arrangement of all contributing and all benefiting (see figure 4).

supply-chain-ecosystem - SlideModel

Figure 4:Traditional and modernised ecosystem

Hence, for Eco2Solar, an adoption of a more transformed hierarchical supply chain network would make sure the organisation GNFR supply chain is appropriate and facilitated for facing current and future uncertainties. The outcome of this is integration of an ecosystem which is futuristic and integrate all the facets of Eco2Solar organisation.

2.1 Good Not for Resale (GNFR) Program Initiative

Adopting the definition of Novitasari and Agustia (2021) Goods not for Resale (GNFR) are identified as a major cost item for most organisations. In average, it entail approximately 6.5-8.5% of the entire retail total revenues. In Eco2Solar organisation, this spend include an approximately £5.8 billion every year where the organisation commercial teams supplement their gross profits in their bottom-line. In late 2019, Eco2Solar had sourced the services of Boston Consulting Group (BCG) with an intention of recommending on the best transformation change which would harness ability to lower costs in their supply chain management (Lang et al., 2019). The organisation had been mandated in pursuing diagnostic evaluation for appreciating costs management in their GNFR products and services.

The different set initiatives outcome was team-based transformation where Eco2Solar organisation introduced the GNFR as part of their operations. The organisation initiated the program management team who were to work in collaboration for lowering costs and broadening transformation of all projects which are sourced from consulting entities. The outcome of this was Eco2Solar organisation PS&M retaining best talents and offering substantial exposure to broad organisation. For Eco2Solar, the organisation team is mandated with a role of harnessing projects success and implementing them, procedures set for successful programs streams. Hence, for implementation of this program, it will be under their stewardship with success in its adoption mandated for their implementation. This is for successful daily practices and pursuing a continuous improvement for projects implementation.

2.2 The Existing GNFR Model

In Eco2Solar operations, their GNFR operates through fragmentation and demand immense focus areas. There lacks a direct relationship of the multiple models in use. Their products and services are procured in a direct arrangement by PS&M in UK and New Zealand offices. The immense touch points in their existing design is found being ineffective to manage the overall GNFR supply chain as shown in figure 5. The supply chain evidence a prompt inefficiency including “dead transportation lines” to de-stuff and palletise their containers to one of the 3PL and another 3PL and later resent to the third 3PL to be distributed in different warehouses. Similar to Loiseau et al. (2020) findings, their systems are in a fragmentation state with dead transport lanes in place with Chinese providers into a 3PL and to different 3PL and later re-picked and xdocked to supply chain and some of the 6 distribution centers.

The Eco2Solar organisation PS&M is mandated with the current role of sourcing products, contract management of different suppliers in their 3PLs. This is with the management by Eco2Solar ensuring that they are managing daily practices of their different suppliers (see figure 5);

Figure 5:Current GNFL Sourcing and Procurement in Eco2Solar

2.3 Proposal of the GNFR Model/ Change Improvement

The suggested GNFR supply chain as illustrated in figure 6 could focus on eliminating the suppliers to store which include the BUZL being the third 3PL and engage Pegasus to market their products representing core business . The current products which are being obtained and under management of Bunzl ought to be prioritised for direct procurement and sourcing. This is by engaging their category teams and transitioning to the Eco2Solar network since the GNFR Supply Chain Operations Team would be engaged. For the summary of the model, it would be used in ensuring simplification of the entire strategy by application of the model and eliminating issues with transportation lanes and using different storage warehouses. This is for increasing overall value and eliminating further storage in warehouses, handle and costs to distribute. There similarly prevail chances for leveraging on opportunities for internal distribution networks and coming up with strategic partnerships engaging suppliers.

Figure 6:Proposed Improvement of the GNFR Model

2.3.1 Process Mapping

For success in process mapping, Staaden (2021) has recommended on the need to create a process map. As illustrated in figure 7, this is to detail transition to the Eco2Solar National Distribution Center Network for guaranteeing shelf existence for different members of the team. This is a form of a digital process mapping for incorporation of job roles and information ensuring strict following of the process. Further, similar to Jahani et al. (2021) findings, the relevance of the system is linking systems and artifacts essential for a seamless following of the entire practice. By use of ProMapp system, this is in a position of sharing their practice in the entire organisation for accessing by stakeholders in the process for accessing them at will. Considering their digital characteristic, the best version is at all times used to ensure all individuals have updated practices. A central management of this system would be facilitated with a version controlled automatically harnessed in their updates. All stakeholders roles would be stipulated in their operation and being in a position of linking entire practices in the organisation offering a holistic completion in their end-view.

Figure 7:ProMapp System for current system

2.4 Goods for Resale (GFR) compared to Goods Not For Resale (GNFR) before COVID-19/Economic Stability to Post-COVID/Economic Slowdown

For Eco2Solar, prior COVID-19 pandemic and economic downturn, the demand for solar panels were in high demand. This is with an increase in volumes which flow in their different networks and being in a position of responding to a leverage on past crisis management plans. According to Hallikas et al. (2021) this is while ensuring that suppliers are engaged for ensuring clients are limitedly impacted by the strain to their supply chain network.

Conversely, for GNFR Eco2Solar teams, they were under mercy of suppliers where costs increase and ineffective crisis management owing to the demand for products which were essential. Similar to Shivajee et al. (2022) findings, this evidence today product range is essential for expansion and modernised supply avenues being explored in uncertainty. Eco2Solar has been impacted significantly by COVID-19 and economic downturn where there is a need for improving their operations in PS&M for harnessing improvement of non-trade supply chain in long run.

Further, in a report by CIPS (2022b), it was hypothesised that changes in the organisations as a response strategy to the crisis identified contributed to 50% of maintaining collaborative practice. This is in buying and logistics, alternatives and collaborative practice. In this regard, GNFR collaboration and new suppliers networks would be initiated in the time of economic downturn and hence improving stakeholders relations and effectiveness of supply chain. Future emergencies impacting Eco2Solar organisation would be controlled by such an undertaking (see figure 8);

Figure 8:Challenges of the Supply Chain Network

2.5 Christopher Martin’s 4R’s Model

A major noted issue in the arrangement was the silo operations of GFR and GNFR teams. For GFR teams, they offer relevant insights on best practice for GNFR management of crisis (global economic crisis) and COVID-19. Through a reference of Christopher Martin’s 4R’s Model (see figure 9), it is possible to clearly ascertaining if the GNFR teams are in a position of gaining relevant insights from the GFR Teams (Madhani, 2018).

Figure 9:Christopher Martin’s 4R’s Model

Responsiveness

As evidenced in Al-Nimer (2019) the agile supply chain ought to leverage on the capability of a rapid alignment with all operations and practices to respond to change. This is informed by their clients, markets changes in regard to volume and varieties. For GFR teams, this was more prompt as opposed to GNFR teams. The sourcing of GNFR items took a longer timeline recovering post COVID-19 pandemic. For the Solar panels classified as GFR, they were in a position of recovering from the challenges occasioned by disruption from COVID-19. For allowing an appropriate inventory control, they were in a position of recognising the best practice in using historical data and setting limits of purchase of items such as inverters for the solar panels and switches.

For GNFR in Eco2Solar, they lacked historical data for their entire products and services sourced and required clear assumptions pursued in uncertain situations rather than planning for demand spikes beyond the evident peak timelines. This was worsened by GNFR lacking control of inventory and scrambling for sourcing data from different sources primarily external.

Reliability

For GFR products and services sourced by Eco2Solar organisation, they were reliable albeit slight supply chain disruption. The solar panels, support structures, wires and switches were delivered to their warehouses and stores with those which could not be accessed communicated to their clients. This was different in GNFR products and services which were not reliable considering the unprecedented demand for new products with multiple managers being pressured in sourcing alternative suppliers. Similar to Al-Nimer (2019) findings, there were issues with engaging alternate suppliers and developing fresh relations with products. The outcome of this was more instability since economic downturn indicated low link to international markets and delaying the entire bottleneck of goods and services flow.  To improve reliability, part of recommendation to Eco2Solar is to improve monitoring services and review them for managing significant message sharing in the entire business.

Resilience

Considering the current uncertainties and volatility elicited by COVID-19 pandemic and UK economic crisis, achieving resilience is core for the supply chains sustainability (Shukor et al., 2021). Comparing GNFR and GFR teams, the former supply chain is more mature than the later and this is core for guiding them for rapid responses to challenging phenomenon. To respond on the identified knowledge areas by assuming an Intelligent Enterprise (Quan & Zhang, 2022) would evidence success in a transition from top-down making of decisions, teams empowerment informed by purpose, data and information available, embrace of modern technologies and facilitated by cloud for a prompt market relations.

Relationships

The prevalent relations of different segments of Eco2Solar supply chain was under fragmentation and this likely limited success of market response in economic uncertainties and during COVID-19 pandemic. As aforementioned, the operations in a Silo approach meant limited sharing of ideas and teams limited interaction. The supply chain management relations were core for maintaining their supply chain ecosystem holistically. For instance, in a research by Sutduean et al. (2021) which focused one valuating the correlation of organisation performance and supply chain efficiency, relevant findings were obtained. It was evident that 80% of entities with efficient and siloed supply chain gain more than 60% increased revenues and leveraging on competitive advantage. This is while mitigating entire risks, building a trust-based relations, initiating collaborative environments and innovativeness embraced. Hence, in this report, it would be recommended on the need for GNFR teams and all the Eco2Solar management to ensure that they leverage on the opportunity of improving their suppliers relations and integrating technology and innovation.

2.6 The Bullwhip Effect

This also identified as Forrester Effect is identified in Dolgui et al. (2020) as distortion of demand travelling upstream in supply chain owing to variance of orders primarily larger than those of sales (See figure 10).

Bullwhip Effect PowerPoint Template - PPT Slides | SketchBubble

Figure 10:Bullwhip Effect

Hence, as evidenced in figure 10, CIPS (2022c) identify the issues of consideration in Bullwhip effect as inclusive of demand forecast update, order batching, price fluctuation and rationing and gaming. For instance, in regard to forecasting updating, in current economic slowdown in UK and COVID-19 pandemic times, there lacked sufficient data to guide the process of inventory management. For Eco2Solar, their relationship with different stakeholders were hindered by issues of inventory reporting affecting forecast and supply.

Further, according to Mondol (2021), inventory reporting for the different products transitioned in the internal supply chain leading to issues of insufficient knowledge by GNGR teams on interpretation of reports. The outcome of this was slowing the approach and this lead to immense errors hence forecast of demanded products. Also, the orders shared with suppliers were evidently inflated owing to lack of sufficient historical data hence suppliers failing in meeting the requirements. This contribute to knock-on effect to suppliers McCann and Myers (2020) by lacking the ability of meeting the order demands essential for the GNFR teams placing more orders of securing raw materials and productivity.

As part of recommendation, there would be a need for improving interaction and flow of information, forecast of data and limited incremental ordering, horizontal and vertical supply chain limiting the period of ordering and allowances of information (CIPS, 2022d). The outcome of this is to ensure the outcome of supply chain ecosystem operate successfully and initiate innovativeness and progressive improvement opportunity.

3.0 Scope

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