-75%
Solution
Executive Summary
In this assessment, it focuses on evaluating the process of leading a project team for implementing a new category management. For achieving this, British American Tobacco (BAT) in Malaysia has been used as an organisation of interest. The selected category of spend is technology and particularly the procurement of high speed machines for meeting the market demand. The rationale of this is that as an international organisation, BAT organisation engages both local and international suppliers in sourcing of technology. Considering this high demand, there has been challenges which sustainability of their sourcing approach. Therefore, BAT has been prompted to invest in a system which is modernised for ensuring modernisation of the procurement and supply process in BAT. For the Procurement and Supply Management (PS&M) tasked with the responsibility of procuring the technology system tend to take part in learning and development strategies, improving the suppliers relations, increasing improvement of the suppliers relations, high-level inclusion of stakeholders and to transform technology. In this report, internal and external data with different change management models have been used with stakeholders analysis adopted for noting the level of change in category management of the technology system in BAT.
Considering the findings in this assessment, it is evident that BAT modernisation of the procurement of the technology imply efficiency and effectiveness in their operations. Further, by embracing diversity and inclusion of the suppliers internationally, the best practice would be achieved. Further, by guaranteeing an increased innovativeness in active operations. BAT PS&M team of the technology systems could come up with appropriate digital transformation of their procurement process. Through collaboration of the leadership teams, this would lead to successful category management. As a team leader, it would the author role to identify the expected change level, implement a holistic process implementation and establish most relevant decision.
Finally, considering this assessment findings and evaluation, various recommendations could be suggested. They include;
- Guarantee a holistic inclusion of entire procurement and supply teams in the BAT category management plan
- BAT need to adopt the Maslow Hierarchy of Needs and Herzberg 2 factor theory in ensuring an increase motivation of all leaders and stakeholders satisfaction
- Guarantee a holistic modernisation of the BAT technology system sourcing and come up with an appropriate iSourcing strategy which is already in use in the organisation sourcing strategies
Table of Contents
1.3 Category Management of the Spend Category. 5
2.0 Category Management in BAT Malaysia Current Situation. 6
3.0 Category Management Analysis. 8
3.1.1 Stakeholders Management Analysis. 8
3.1.2 Team Dynamics (Multi-Skilled and Cross-Functional) 9
4.0 Category Management Implementation. 11
4.1 Kraljic Matrix Analysis 11
4.2 Category Management Strategy Implementation. 13
5.0 Category Management Change Team Leadership. 18
5.1 Tannebaum & Shmidt Model 18
6.0 Conclusion and Recommendation. 19
Appendix 1: Future Purchasing 5 Stage Model 23
Appendix 2: CIPS Purchasing Model 23
Appendix 3: Category Management Process. 24
Appendix 4: Kotter’s 8 Phases Change Model 24
Figure 1:Personality Types Key in Teams 7
Figure 2:5 Rights Procurement Model 8
Figure 3:Mendelow Stakeholders analysis. 10
Figure 4:Tuckman’s Team Development Process. 11
Figure 5:Lewin 5 Force Field Model 13
Figure 6:Kraljic Matrix Analysis. 14
Figure 7:Blake and Mouton’s Leadership Grid. 20
Table 1:Steps of Gantt Chart 18
1.0 Introduction
1.1 Company Background
British American Tobacco (BAT) in Malaysia has actively been operating in the country for more than 100 years hence a cumulative history of above 100 years. Currently, as evidenced in BAT Malaysia (2022) the organisation is currently ranked as the largest and leader in the tobacco industry in Malaysia. The success of the organisation has been appreciated by working as a corporate citizen characterised by excellence in their track record in corporate governance. This is while working as a leader in employment where multiple awards have been offered and a recognition for best-in-class talent development. As evidenced in Edge Markets (2022), as a result of the organisation increased performance in Malaysian industry, their profitability has increased from 25.1% to 25.7% owing to the costs of sales optimisation albeit global inflationary pressures. Further, the profit incurred from their operations in 2022 has increased from RM191 million to RM193 million in the second quarter this year. The organisation has been successful in operating as a subsidiary of the organisation which is headquartered in London England.
In order to attain the different vision and mission of the organisation, they have a sustainable procurement and supply management (PS&M) sector which operate an iSourcing program which is a modernised sourcing approach. By use of this modern platform the organisation involve various suppliers who record their existence in this platform. All transactions and orders are made through the system. Through this, they attract all suppliers hence leveraging on competitive advantage and sourcing high-level quality supplies.
1.2 Category of Spend
For BAT Malaysia, they are engaged in sourcing technology system as part of obtaining speedy machines for meeting their market demands. In the last quarter of 2022, BAT Malaysia spent approximately RM12 Million to source new technologies in this organisation. However, this approach is still adopting conventional sourcing approaches albeit the other spend category significantly adopting the use of technologies. Since COVID-19 pandemic, BAT Malaysia has transitioned from majorly relying on human capital to use of machines and technologies in their active operations. Today, working in BAT Malaysia PS&M department, the author ensure that they offer an appropriate guidance for locally sourcing required IT systems sourced locally in Malaysia.
There is a necessity to modernise the process followed in sourcing the Technology systems in BAT. This would be pursued by a team mandated for overseeing the process implementation. The conventional sourcing approach adopted by BAT is ineffective and not competitive comparing how the other competing organisations have been putting efforts in adopting modern procurement systems.
1.3 Category Management of the Spend Category
Adopting the definition of CIPS (2022), a category management is a strategy which is followed to organise different procurement resources to prioritise on particular spend categories. In order to implement a successful category management, this method is significantly effective contrary to traditional purchasing strategy which is currently in use in BAT Malaysia technology system sourcing. The importance of this is noted in Viale and Zouari (2020) as leading to development of procurement teams who prioritise on particular supply market. This is different from internal clients or departmental roles for in-depth leverage on overall procurement decisions.
For success of the organisation category management, there is a need of coming up with a team-based decision process for their technology systems sourcing. The rationale of contract management is ensuring that all suppliers are holistically engaged with quality and cost savings being prioritised for BAT Malaysia. For success in the team development, it is essential to note on the team skills and personalities. According to Sulaeman et al. (2019) the different skills which could be essential entail;
- To understand technology market and appreciate consumer insights and existing trends
- Attain a high-level people management and persuasion skills to manage and influence stakeholders in entire organisation level
- Analytical approach with strategic capacity
- Effective communication and interpersonalised skills to engage suppliers
- Appropriate appreciation of numerals of technology integration
Additionally, considering personalities of team members engaged in change, Belbin’s Team Roles and Myers Briggs Personality Test (Muhammad et al., 2020) is applicable. The rationale of this is to evaluate the personality traits forms of the team members. Considering technology spend area, there is a possibility of matching previously noted traits and interest to acquire maximum outcomes as illustrated in figure 1;
Figure 1:Personality Types Key in Teams
Hence, considering figure 1 summary, it is worth arguing that there is no best personality traits. Nevertheless, by having al the traits, a team member would be successful in category management of the IT products. Further, for success of the category management, it would be essential for the BAT Malaysia technology sourcing to transition from traditional/conventional to a modern practice targeting many suppliers. The team areas of interest would entail talent management, supplier relations, stakeholders engagement level and transformation.
2.0 Category Management in BAT Malaysia Current Situation
For BAT Malaysia organisation, prior COVID-19 pandemic, an upward of $15 million was being used by the PS&M with more than 4,000 supply base. Hence, BAT Malaysia PS&M has a significant impact on success of their practices as it represent an enormous budget for the organisation department. For their spend categories grouped into Technologies, vehicles, health and safety and office materials are all sourced in an independent manner by the organisation. For Technology system sourcing, there has been an immense inconsistence practice.
Further, BAT Malaysia as a subsidiary of the larger BAT organisation has been growing exponentially. This is supported by BAT Malaysia (2022a) report which highlight that post-pandemic, there has been 60% increased growth by the organisation in terms of their share value. As a result, there has been a mismatch of the supply and demand in their various suppliers market. Specifically, for the technology sourcing, to retail prospective supplier has been a challenge which is partly an attribute of technologies becoming obsolete within a short timeframe. Nevertheless, this challenge is majorly due to the trend of BAT Malaysia adopting conventional sourcing approaches of the technology system. Hence, to ensure they are engaging a broad scope of suppliers, efficient and effective in operations, strategic sourcing need to be put in place. To achieve this, capacity development, suppliers relationships, engagement of all stakeholders and digitally transformed procurement system would need to be implemented. By modernising their PS&M strategy would imply being in a position to prioritise on the factors identified in the 5 Rights of Procurement Model as illustrated in figure 2;
Figure 2:5 Rights Procurement Model
As illustrated in figure 2, BAT Malaysia ought to involve the right supplier by modernising their procurement and sourcing approach. The outcome of this would be the supplier being appropriately positioned to deliver good quantity and quality on right time and price. This is while adhering to the set policies of procurement, credibility level, reliability and potential innovation and development.
3.0 Category Management Analysis
3.1 Project Team
In the category management highlighted, it ought to be part of Technology systems sourcing in BAT Malaysia. This is as opposed to piloting of the approach in several areas. This inform the need for establishing a team to execute the project as stakeholders representatives. The relevance of engaging a team is what Zahur et al. (2022) identify as increasing engagement and customising the project to meet needs. A significant responsibility of such teams is managing change implementation, on-time provision of project requirements, category management, on-time project goals delivery and implementation. As evidenced in CIPS (2022a), by use of Mendelow Stakeholder Matrix, it is possible to note the different roles assigned to stakeholders.
3.1.1 Stakeholders Management Analysis
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