Daily Archives: July 21, 2006

Si, Se Puede! (Yes, Procurement is Able!)

While browsing through the European Leaders Network portal earlier this month, I came across the article Firms yet to realise procurement potential and then the article Increased competition for procurement professionals in rapid succession. To me, the connection is obvious. As Tim Minahan points out in Supply Excellence, great supply management organizations use a simple strategy to stay on top: buy the best talent available.

The first article notes that a recent study by PA Consulting Group found that only a quarter of leading organisations have realized the full potential of best procurement practice and that current firms are focusing too much effort on reducing procurement overheads, which does not deliver significant benefits. After all, as the study explains, “The disproportionate focus on reducing procurement overheads risks undermining the ability of many organisations’ procurement functions to deliver significant sustainable benefit.”

The quoted study concludes that CEOs and CFOs must invest in procurement capability through restructuring the procurement function in order to achieve a genuine transformation. This transformation can be achieved by extending the capabilities of their staff, rotating them to increase awareness, and recruiting to fill identified skills gaps.

However, what it overlooks is the importance of having top performers on your team to lead the way and mentor your junior staff. The reality is that top results often come from efforts led by top performers who have the best ideas and the most relevant experience and expertise in the job they do. I believe that is the main reason competition for professionals is heating up, as pointed out by the second article, which notes that competition for procurement professionals has hit an all time high.

The second article references the 2006 Salary Survey by recruitment company PSD and supply chain consultancy State of Flux that found competition for high-calibre procurement professionals has risen as more companies demand candidates who have well rounded commercial skills in addition to their purchasing backgrounds. The survey found that salaries in the technology and banking sectors are up ten percent while regional senior salaries have risen five percent.

Given the constantly increasing demand for experienced procurement professionals and the limited talent pool, what can you do? Focus on retaining the top performers that you already have and on moving them up into senior roles where they can help you groom your future all-stars into top performers down the road. After all, as Dr. Joseph Robert Carter, the Avnet Professor of Supply Chain Management and Department Chair at the W.P. Carey School of Business at Arizona State University, says, the key to great supply chain performance is to 1. Train your existing team. 2. Repeat step #1.

*Si, Se Puede!, a famous quote attributed to, Cesar Chavez translates as “Yes, we are able!”