Quality Channel

There are some wonderful acronyms applied to goal setting. Here is one. It's the BHAG - the Big Hairy Audacious Goal! A BHAG is one that really stretches you to think differently about your value chains. It's the goal that's going to help you transform the way you work with suppliers, rather than being satisfied with incremental change.

So, the question is how to set SRM goals that fit into the BHAG category? This article shows you how.

The first step is to shake off any beliefs about what is possible in your value chains. If you already have a mindset that limits your achievements you'll never get serious about a BHAG.

Next, pose some Very Hairy Challenges - like these:-

•I want to halve my costs in the next 12 months
•I want my supply chain to deliver the highest quality product or service in the UK
•I want to reduce the delivery time for my purchased products from 2 weeks to one day.

Now you have to work backwards from this end point in 3 steps. Let's take the "halve your costs" example.

Step 1: Brainstorm ideas (or use the techniques explained in the next module) for reducing costs. No limits remember - everything is possible.

For example -
•Reduce the purchase price
•Eliminate all sources of waste in the supply chain
•Re-design the product or service
•Innovate a new way to deliver the service and sell this to other organisations (in other words, change a cost into a revenue generator)
•Find a way of leasing the product or service rather than buy it.

Step 2: Make a list of obstacles and ways of getting around them.

•Don't have any ideas for re-designing the service? Get some users together and have a brainstorming session.
•Don't know how to innovate? Identify people who have this reputation and hire them in as a freelance.
•Suppliers won't lease the product? Take the idea to a leasing company and see if they will do a deal.
• There's nothing that can't be overcome if you are really committed.

Step 3: Identify what needs to happen for you to be successful.

For example:-
•Surround yourself with creative people
•Build your knowledge in certain areas
•Set monthly Little Hairy Audacious Goals that progress you towards your milestones
•Get the support you need.

Imagine how your CEO would react if you get so much as half way to your BHAG!

Want to know more? A copy of "The 5 Keys to Breakthrough Sourcing Strategies" can be downloaded free from http://www.SourcingStrategyWizard.com. Steve Carter is a procurement professional and published author specialising in category management, strategic sourcing and supplier relationship management.