One of the presenters at this year’s reSource 2008, Iasta‘s user conference, was Charles Dominick of Next Level Purchasing. In his presentation on Purchasing Team Skill Building and Certification, Charles suggest that one of the best strategies available to a CPO (Chief Purchasing Officer) or CSCO (Chief Supply Chain Officer) trying to deal with today’s challenges of increased competition, price pressure, supplier savvy, new technology, and expectations from the CEO might be to get their entire department certified – and initial results appear to be proving him right.
Last year, Next Level Purchasing started stepping up their efforts to sell training and certification programs on a department level, and the first few departments to obtain the SPSM certification on a department level quickly recouped their investment, and one of the first companies to complete certification on a department level – a 1 Billion plus furniture manufacturer – doubled their annual savings one year after completing the certification! That’s an astronomical ROI! An average 1 Billion company these days is probably spending 600M to 800M and capable of sourcing at least half that – 300M to 400M. If it was saving 10% on average using basic e-Sourcing technologies and techniques, it would be saving 30M or 40M. If it doubled that, through better processes and use of technology, that would be an additional 30M to 40M. For a certification program that would cost less than 100K to 200K for a department of 20 to 40 people, that would be an ROI of over 20 to 30! (Certification is less than 1500 per person, plus the cost of department-wide training courses to accelerate the process and learnings.)
So how can certification alone achieve such impressive results? It has to do with the fact that the average purchasing team today is a mish-mash of employees that range from Generation Y’ers to imminent retirees, high school graduates (and, in some cases, that’s if you’re lucky) to recently minted MBAs, career purchasers to other departments’ cast-offs, and tactical grunts to strategic thinkers. As a result, you have a team that generates inconsistent results across unevenly distributed workloads, a lack of independence, a lack of unity, and a consistent communication breakdown, often due to a lack of understanding of current tools, processes, and terminology.
However, with a department wide certification, where everyone has the same understanding of modern processes, tools, techniques, and, most importantly, terminology, you begin to see more consistent results across the board as all of your buyers, who are now on the “same page”, are not only appropriately trained for their jobs, but are able to build a “true team” where they are able to learn from and leverage each other’s successes. And when you consider the potential that exists in a well-trained team, it’s definitely worth some serious consideration.
For more information on NLP’s certification offering, you can check out my reviews of some of their standard courses:
Mastering Purchasing Fundamentals, A Review Part I
Mastering Purchasing Fundamentals, A Review Part II
Savings Strategy Development, A Review Part I
Savings Strategy Development, A Review Part II
14 Purchasing Best Practices, A Review Part I
14 Purchasing Best Practices, A Review Part II
Supply Management Contract Writing, A Review Part I
Supply Management Contract Writing, A Review Part II
As well as my review of their advanced course: