Daily Archives: October 20, 2006

Are you getting what you’re worth?

Tim Minahan of Supply Excellence offered us a great post on How to Assess Your Net Worth back in June IF you were a purchaser in the US, leaving Canadian purchasers out in the cold. Fear not, as reported in this month’s Frasers/PMAC NewsLetter, the 2006 Purchasing b2b/PMAC Salary survey was recently released and here’s what the numbers say.

On average, supply chain practitioners are receiving a salary of $66,357, up 4.2% from last year; male purchasers are still earning 17% more than their female counterparts, $70,089 vs $60,119; and Alberta is the best place to be with an average salary of $75,418. Furthermore, the most lucrative industry is retail and wholesale trade, where purchasers pulled in an average of $81,092, followed closely by natural resources at $80,709.

Here are the average salaries, by job title, for the last three years.

Title 2006 2005 2004
VP Dir Net $90,700 $84,250 $78,158
VP Dir Purch $87,118 $80,068 $75,182
VP Supply Mgmt $104,000 $99,000 $84,000
Chf. Dir Supply Mgmnt $96,750 $91,000 $84,500
Dir Mtrls Mgmnt $85,000 $79,000 $76,000
Mtrls Mgr $88,778 $91,967 $85,328
Purch Mgr $71,465 $66,728 $62,108
Purch Agent $52,218 $48,428 $45,415
Sr Buyer $58,779 $56,583 $54,951
Other Buyer $48,617 $46,800 $44,718
Other $66,162 $66,600 $65,215

The full report is available. How do we stack up to the US, the average buyer makes more $66 vs. $62 (adjusted to Canadian based on the average of the ISM and Purchasing Magazine surveys), the average Director makes less $91 vs. $120, and the average VP makes significantly less $94 vs. $160. This is bad news for Canada, already number two in the world in the talent crunch with 76 million baby boomers in the US eligible for retirement in the next five years, since you know the US compensation for supply chain leaders is only going to increase, making it even more unattractive for those leaders to stay in Canada when south of the border starts paying not 33% to 70% more, but 50% to 100% more.

The only thing on a Canadian company’s side right now is that it’s more profitable for a purchaser to start his or her career and gain valuable experience in Canada. So my message to corporate leaders is this: make an effort to slowly increase your pay scales to match US rates for senior professionals and keep our talent here – and over the next decade we can show the US how efficient operations are done Canadian style.

Sometimes Good Advice for IT is Good Advice for Sourcing

A while ago, ZDNet published a short article that described a 10-Step program to SOA Success. What’s neat about this article is that it could have been titled 10-Step Program to Sourcing Success as it is a great primer if you are just entering the world of eSourcing.

Let’s examine the ten steps carefully.

  • Who’s Your Daddy?
    Without support, any project is doomed to failure. If your organization does not yet have a Chief Procurement Officer on the senior management team, you need to find someone in senior management who is responsible for a top business imperative and convince them the project will save money and let them champion your cause.
  • Have a Vision!
    You need to articulate your vision regularly and consistently to gain support from other teams, departments, and upper management. You’re implementing the foundations for sweeping business change that is going to affect the business for decades to come.
  • Identify Attainable Projects.
    Start with an initial project that has immediate value and that can be finished in a few months since nothing speaks louder than a successful project delivered on time with better-than-planned savings.
  • Support the Business.
    If you choose the projects with the greatest potential impact to the business, you will ensure that your sourcing projects get the attention they deserve.
  • Flexibility Matters.
    Create flexibility through loosely coupled on-demand services that can be formed to create composite applications that automate business functions across the sourcing and procurement cycles. This flexible infrastructure will form the basis of business processes that are capable of adapting quickly as markets change.
  • Networking is Not Just for Salespeople.
    A key to success is the establishment of corporate-wide support at all levels of the organization. Be visible, promote your success, and find a way to make your success their success.
  • Don’t Lose Control.
    Establish strict governance procedures from the outset. With stringent government regulations, organizations need to be acutely aware and be held accountable. In sourcing terms, this means documenting each step of the process and ensuring compliance with negotiated contracts.
  • Don’t Fear Change.
    Organizational changes are imminent and you should be prepared to not only adapt to them, but guide them. After all, procurement is a central business unit in a successful organization.
  • Learn as You Go.
    Even if the first projects go very well, which they can if you use good tools, best practices, and follow the advice of experienced category professionals (that you should consider hiring as consultants if you do not have the expertise internally), there is always room for improvement. The most successful aspects should be recognized, captured, and carried to the next project while the less successful aspects should be identified and improved.
  • The Best and the Brightest.
    Create a center of excellence and staff it with the best and brightest. This team will be responsible for identifying best practices and guiding your procurement teams in their implementation.