Critical Purchasing Officer

In a recent CAPS Research publication Supply Leadership Changes they point out that few decisions that affect the success of supply in an organization will have more impact than the decisions regarding who will be the CPO and to whom he or she will report.

The report had some interesting findings:

  • There were a total of 73 CPO changes and 75 reporting line changes in the 30 companies studied over a 10 year period.
  • There was a total of 29-first CPO appointments in the 30 companies studied over the 10 year period.
  • The centralization of supply at a firm was typically triggered by a simultaneous corporate strategic change and move towards centralization of many functions, and trigged the establishment of the fist CPO in 22 of 29 instances.
  • In 5 of 29 cases, the first CPO was established when the executive team recognized that centralization of supply would gain the corporation a variety of benefits.
  • Initial CPOs and replacement CPOS are typically found within the company more than they are not (62% and 73% of the time).
  • When a CPO was recruited outside the company, the CPO came from a supply position.
  • An internally recruited CPO with a supply background had an average tenure of 4.3 years while an internally recruited CPO without a supply background had an average tenure of 3.5 years, but first-time CPOs with a combination of supply and non-supply experience had an average tenure of 5.5 years.
  • CPOs leave their position for a variety of reasons, the most common being promotion to another position. Other common reason are major corporate strategic and structural change and a major corporate strategy strange.

These findings, and other, have some interesting implications:

  • Leadership in the top supply function is in a state of constant flux and getting a running start at the position is important.
  • The trend toward the appointment of non-supply managers to the CPO position is continuing and a significant burden of education and support falls upon the shoulders of the senior supply managers with supply experience.
  • Individuals aspiring for the CPO position need to move to a corporate supply position.
  • The CPO and the person to whom he or she reports forms a powerful team within the organization.
  • A new CPO must create a plan of action.

This might imply that:

  • A supply manager should constantly be improving herself. Continuing education and awareness is critical. ( Blogs contribute to awareness. )
  • A supply manager should be ready for increasing responsibility.
  • Corporate supply is where it’s at.
  • If you want to be a powerful CEO, get a great CPO.
  • A good plan is important.