Category Archives: CPO

The CPO’s Agenda: A Breadth and Depth to Rival the Pacific!

CPOs are inundated with requests and requirements from all directions on a daily basis. Not only do they have to cut costs to please the C-Suite to keep their jobs, but they have to do so while dealing with constant distress (when shipments are late), disruption (when plants go down or suppliers go bankrupt and the materials or products aren’t coming at all), and dispute (when the supplier wants to be paid for goods that weren’t up to quality standards or arrived damaged).

Plus, they are plagued with requirements from engineering to improve quality and use better raw materials, from marketing to use suppliers that will provide them with brand leverage (either due to the supplier’s brand recognition, such as “Intel Inside”, environmental responsibility, via waste reduction and/or utilization of recycled material, or corporate social responsibility, where the supplier follows fair labour practices and provides compensation and care to its employees above and beyond government mandated minimums in developing countries), and from finance to find suppliers that will either extend DPO or offer early payment discounts just for paying on time. All of this adds cost, and complexity, to the supply chain when Procurement’s prime directive from the C-Suite, which often defines the only metric they are measured on, is cost reduction.

As a result, in addition to having to constantly brush up on their skills, CPOs have a lot to worry about from day to day. That’s why a recent post over on the new Spend Matters Chief Procurement Officer site that askedWhat is Top of Mind for CPOs delved into the subject and identified what should be the top 20 areas of concern for every CPO (or every head of Procurement doing the job of the CPO without the recognition).

In this post, which is a collaboration between the doctor and Pierre the maverick Mitchell
(who soars through the buzz and the noise until he gets to the truth), we pointed out that, in addition to cost cutting, good CPOs are also highly focussed on:

  • availability and on-time delivery
  • contract management and spend creep
  • environmental stewardship and sustainability
  • quality, reliability, and safety
  • reputation management
  • risk management
  • supplier relationship management
  • working capital optimization

and a dozen other topics of significant concern because if any of these twenty topics are ignored or mismanaged, any identified and negotiated cost savings will disappear in the blink of an eye (and the CPO will be looking for a new job in the blink of the other eye given how unforgiving the shareholders and Board of Directors can be in tight economic times).

The first of these topics, availability and delivery, is addressed in detail in our post on The CPO’s Agenda Part I: Availability and Delivery in a “Hierarchy of Supply” which discusses Supply Assurance and its foundational role in Procurement. Go check it out.

The remaining 19 topics will be addressed over the next couple of months in this ground-breaking new series which will lay each and every topic bare so that you, as an up-and-coming CPO, can understand not only what the topic is and why it is important, but what you have to do to tackle it head-on and make progress while your peers get buried in the avalanche of distresses, disruptions, and disputes that will continue to increase in quantity and complexity until many of these issues are addressed and adequately solved.

Keep a close eye on Chief Procurement Officer in the months to come. This is the first of a number of series that the doctor will be collaborating on in order to help bring you desperately needed education that you won’t get otherwise!

The CPO’s Agenda

A CPO has a lot on her mind these days. As per SI’s recent “Future Trends” expose series, the reason that so many ancient trends are being recycled as future trends is because so many issues are still current for Procurement organizations struggling to catch up to the times and become best in class. That’s why we have to continually deal with:

  • Governmental Regulations
  • Globalization
  • Increased Competition
  • Margin Pressure
  • Outsourcing
  • Risk
  • Collaboration
  • Demand Planning
  • Governance
  • Systems
  • System Integration
  • Process Convergence
  • Raw Material Scarcity
  • Strategic Focus
  • Talent
  • Supplier Relationships
  • Product Life Cycles
  • The Cloud
  • Sustainability
  • KPIs

and a dozen more issues that should have been put to rest a decade ago. But which of these issues are the most important issues and which issues are being overlooked by a CPO who is being blindsided by false issues? And which issues are top on the list?

Fortunately for you, this is a question you don’t need to ask anymore. On the new Chief Procurement Officer site, the doctor of Sourcing Innovation and Pierre Mitchell, of Hackett Group and AMR fame, have collaborated on a 20-part series on the The CPO’s Agenda, which is overviewed in the preamble post on What is Top of Mind for CPOs, that will tell you, as a new or aspiring CPO, what you need to focus on.

And stay tuned to this new, first of its kind site which, for at least the next six months, will be bringing you a cross-blog collaboration between the doctor of Sourcing Innovation and Pierre Mitchell of the Spend Matters Group (with occasional contributions from Thomas Kase and Jason Busch). The new Chief Procurement Officer is the first of its kind and the education that is coming your way will be unequalled! This is only the first of three in-depth series between the doctor and Pierre Mitchell that are almost ready to roll, with more in the works. Stay tuned!

The CPO Defined

What is a CPO? We all know that CPO stands for Chief Procurement Officer, but what is a Chief Procurement Officer? Considering that the only about half of organizations have a VP or CPO heading up Procurement and that only one in five of these allow the CPO to sit at the C-Suite table, it should be obvious that this position is still not that well defined.

Even less defined is who this individual is. Is the CPO an executive, leader, strategist, tactician, buyer extraordinaire, supply chain guru, visionary, or rouge? What skills should the CPO possess? What should the CPO be measured on, and, more importantly, how does this relate to what the CPO is actually measured on?

However, these problems are trivial when compared to the problems possessed by a new CPO (or VP) or a senior buyer or director aspiring to the CPO position. These individuals, desperately in training and guidance, have no where to turn. There is no one location where they can go to

  • find out what a CPO is
  • find out what the CPO job description means
  • find out what an organization that needs a CPO is really looking for
  • find out what qualities and skills a CPO needs
  • find out what issues the CPO should be concerned about
  • find out what strategies and tactics the CPO needs
  • find out what best practices need to be put in place
  • find out what technologies will be needed to support them
  • find out what transition management skills will be needed to effect the changes
  • … and so on …

This is because no one person, and to be honest, no one site has all of the necessary expertise in:

  • Sourcing & Procurement
  • Operations Management
  • Strategy & Tactics
  • Best Practices & Technology
  • Internal Sales & Fire Lighting
  • Education & Training
  • … and so on …

You see, it takes a lot of knowledge and ability to be a great CPO, and a lot of this knowledge can only be parted by true experts. Given the fact that it typically takes an average person ten years to become an expert in just one skill, it’s not surprising that there is no one person with all of this knowledge and capability. Moreover, given the fact that most small expert consultancies are formed by people with like interests and skills, it’s also not surprising that you are only going to get expertise in a few of these categories.

However, when the right people with the altruistic goal of fulfilling a need come together, to fill a need that would otherwise not be fulfilled, they can combine their expertise to create a curriculum and a resource that fully defines what a CPO is, the skills and knowledge the CPO needs, the strategies and tactics to get the CPO through the day, the best practices and technologies to put in place, and the transition management skills that will be needed.

And that’s what has happened. Today, the Spend Matters network launches Chief Procurement Officer. This new initiative, overseen by the legendary Pierre Mitchell, is starting off as the first collaboration between Spend Matters and Sourcing Innovation designed to fully define what a CPO is, what a CPO needs, and what a CPO should expect upon starting a new job. Over the next few months you will see a number of multi-part series on:

  • What is a CPO?
  • Tearing Apart the CPO Job Description
  • The CPO’s Agenda
  • The CPO’s Journey
  • … etc. …

the doctor has already co-authored over thirty posts with Pierre on these topics, with dozens more in the works. When you combine Pierre’s expertise on Supply Management, Operations, and Organizational Planning with the doctor‘s expertise on Supply Management, Technology, and Education with Thomas Kase‘s expertise on Strategy, Tactics, Best Practices and Field Operations with Jason “The Prophet” Busch’s ability to show you how to internally sell and light the fire — the whole gambit of what you need is covered!

So I recommend you head on over and check it out, starting with: