By William Gindlesperger, email@example.com
Innovation is required if the United States is to regain the level of productivity that it enjoyed toward the end of the 19th Century through the mid-20th Century. However, innovation by itself is not enough. Just as our parents and grandparents adopted electricity, the automobile, credit cards and airplanes in the period from 1870-1950, businesses and organizations of the 21st Century must embrace change.
This is one of the conclusions of the McKinsey Global Institute Report on Productivity, prepared by McKinsey & Co. in February 2011. “U. S. infrastructure is not only inadequate to meet the needs of a dynamic, growing, and productive economy, but its quality has been in relative decline. The United States today ranks 23rd (among worldwide economies) in the quality of its infrastructure. There is major scope for the United States to identify and implement leading-edge practices from project selection to financing and delivery, sometimes through public-private partnerships,” the report stated.
An area that is singled out by McKinsey as a potential significant contributor to greater productivity is the implementation of business and technology innovations that will improve supply chain integration and how goods and services are provided to customers. Integral to this are best procurement practices.
These practices must facilitate communications and collaboration, in a transparent way, between the buyer and vendors. They also must automate workflow and establish accountability among all participants, and they must be adaptable to a customer’s changing needs.
To be more specific, timely processing and production must be ensured from the moment an idea is conceived to when the finished product is packaged, delivered and invoiced. Delays must be avoided. Duplication of orders and tasks also must be avoided by using one communications and workflow system. The same system, with related processes and procedures, must make it possible to maximize efficiencies so work can be done by the vendor during peak and off-peak periods. Throughout, communications must be clear to avoid wasting time and inventory and service errors.