Category Archives: Knowledge Management

All Hail the CPO. Wait, what?

You want to be a CPO. But do you know what are the requirements for the job? Especially when the number of companies with CPO positions is still few and far between? (Recent stats from a CapGemini study found that only 9% of Procurement organizations have a CPO that sits at the C-Suite table. In SI’s view, unless the head of Procurement sits at the C-Suite table, it’s not a real CPO position.)

Chances are you don’t, especially since a search for CPO job descriptions yields few and not all are consistent (since each organization has their own view on what a CPO is and what the CPO needs to do during the first year or so). But more importantly, chances are you don’t know what is required to fulfill both the written, and more importantly, the unwritten requirements of the job.

But you don’t need to be in the dark. the doctor and the maverick, in their latest collaboration, have assembled a typical CPO job description and a multi-part series explaining the written and unwritten requirements, in detail, so that you, an aspiring Procurement professional, know exactly what is required to be a CPO. The first four parts of this series are now online on the new CPO site (in addition to the first parts of the Agenda series and the Lean / Six Sigma series). Check them out! They will be worth your time. (Part I: The Job Description and Part II: Examining the Job Description, Part I, Examining the Job Description, Part II, and Examining the Job Description, Part III.)

Societal Damnation #44: Education Quality

Supply Management is hard. Real hard. And it’s only getting harder. SI has said it before, and it will say it again — in order to excel at Supply Management a Sourcing or Procurement professional has to be a jack-of-all-trades and master-of-one.

But this is not an easy thing to do. The skill set required by today’s Procurement professional is longer than Santa’s naughty and nice lists put together and is growing by the day. And that’s just the basics. The EQ, IQ, and TQ required for an average Procurement professional to get through the day is enormous. It’s to the point where a person of average intelligence can’t cut it. It used to be that only the best and brightest could do law and medicine and engineering but now only the best can do supply management. And, to make matters worse, just EQ, IQ, and TQ is not enough.

A modern Supply Management Professional needs knowledge — and lots of it. With constantly changing market conditions, new inventions, and new modes of operation, whatever a supply manager knows today is unknown tomorrow. As new methods of production come online, old methods become cost prohibitive. As new products are invented, old products become obsolete. As market conditions change, old plans become irrelevant.

Supply Managers need to keep tabs on the market. They need to identify new modes of production that will become more cost effective before they are under-cut by the competition; they need to identify new inventions that will threaten the organization’s market as soon as they are announced; and they need to detect market changes as they happen. They not only need oodles of market intelligence but the knowledge on how to interpret it. Not every new production technique is a threat, not every invention breaks existing or creates new markets, and not every market change has lasting effects — some are corrected in days. But others are atom bombs, iPhones, and extreme supply and demand imbalances caused by a major production plant being destroyed by an earthquake or tsunami.

But where is a Supply Management professional to get that knowledge? Most universities have a curriculum that is still mired in old-school logistics and operations research. Most professional associations are still teaching you old-school negotiating tactics. Most blogs are mired in the noughts and still preaching the gospel according to Ariba and Emptoris (which no longer exist). And the analysts … well, we’re not too sure just what they are inhaling before they do their preaching, tragic quadrants, and dangerous graves.

In other words, not only is education quality in general (especially in North America) bad, with the US ranked 14th (as per the global heat map), but education in Supply Management in particular is particularly bad. We’re desperate for education, but almost no one is giving it to us. We truly are the damned. Let’s hope we can learn on our feet as we are dancing amid the flames. (As we no longer have the frying pan to shield us.)

After Two Series on the Future of Procurement – What Have We Learned III

In our first post we noted that, after two series, fifty (50) posts, and almost seventy five (75) pages on the “future” of Procurement, we learned that while the majority of trends being positioned as “future” trends weren’t future trends at all, they were trends that your organization will encounter as it matures and grows and the sooner your organization ploughs through them, the sooner it can get to the real future trends.

We then reviewed our series and noted that most of the requirements for dealing with these trends fall into a baker’s dozen plus one of high-level categories. Today we will break the last seven categories down into the most important sub-categories:

Regulations

  • get up to date on &
  • get systems in place &
  • get BOM visibility for
    • Environmental Regulations
    • Financial Legislation
    • (Free) Trade Agreements / Zones
    • Trade Security
  • to make sure, among other things, that you don’t
    • get activists on your case
    • join Fox in the box
    • get burned on duty rates
    • lose your cargo

Risk Management

  • supply chain visibility to detect issues and disasters as they happen, not three months later when the delivery doesn’t show up
  • mitigation planning for when disruptions occur
  • (natural) disaster response for when disaster strikes
  • rare earth minerals plans for when costs skyrocket
  • food reserves plans to reduce waste and deal with rising costs as reserves shrink
  • supplier failure responses ready

Supplier Development

  • co-design of product and services
  • cost avoidance when market costs (for labour, energy, raw materials, etc.) rise
  • new supplier identification if current suppliers aren’t improving
  • performance tracking to make sure suppliers are performing as expected and to identify areas where continued improvement is needed
  • value generation from supplier relationships

Supply Chain / Inventory Flexibility

  • Faster production cycles to keep up with faster product life cycles
  • Flexibility to ramp production up or down with demand
  • (Better) Forecasting for better volume determinations pre-contract negotiation
  • Innovation from suppliers and partners and customers for market advantage
  • Just-In-Time (JIT) production / distribution when needed

Talent

  • Development – EQ / IQ / TQ is analytical, technical, and emotional skills all need continued advancement
  • Collaboration between team members, departments, suppliers, partners, and customers
  • Fiefdoms must be disbanded and the heads cut off
  • Management to insure regular collaboration, development, and team-building

Technology

  • applicability / usage management to make sure the right technology is used for the right task
  • support the right processes subject to the 80 / 20 rule as core systems must support the common (mass) requirements (and niche solutions can be brought in for the rest only once the base-line is covered)
  • design & implementation management as many of the greatest supply chain and corporate failures have been due to failed technology implementations
  • S2C & P2P -> S2P -> S2D (Delivery) as the entire product lifecycle needs to be managed, not just identification
  • complete roll-out of the right platforms to all users who need access
  • mobile management as mobile devices proliferate like Fibonacci’s rabbits

Transportation

  • Mode Planning taking new options into account
    • Panamax vs Post Panamax
    • 787s
  • FTL & Inventory Management vs LTL & JIT to minimize cost and maximize flexibility as needed
  • Supplier vs. 3PL vs. In-House depending on efficiency and cost effectiveness

Overwhelmed? We hope not! While getting these categories and sub-categories under control is a good start for any organization wanting to progress in maturity and capability and get yesterday’s trends under control, in terms of what an organization has to know and deal with, it is just the tip of the iceberg. There’s even more a Supply Management organization has to know, and master, to be best-in-class and take the enterprise to the next level of performance. And, like you would expect, SI will address these requirements in one or more future blog series. Stay tuned!

After Two Series on the Future of Procurement – What Have We Learned II

In our first post we noted that, after two series, fifty (50) posts, and almost seventy five (75) pages on the “future” of Procurement, we learned that while the majority of trends being positioned as “future” trends weren’t future trends at all, they were trends that your organization will encounter as it matures and grows and the sooner your organization ploughs through them, the sooner it can get to the real future trends.

We then reviewed our series and noted that most of the requirements for dealing with these trends fall into a baker’s dozen plus one of high-level categories. Today we will break the first seven categories down into the most important sub-categories:

Cost Control

  • Life-cycle Costs need to be modelled and true TCO understood because all that is accomplished with T-CAP modelling is opportunity capping
  • Should Cost Models need to be developed for all custom manufactured products so that an organization can do a proper bid evaluation
  • Optimization needs to be done for any buy of any complexity as costs and opportunities often mix in unexpected ways
  • Supply Chain Finance with respect to DPO vs Discounts vs. Alternate Value for Money needs to be understood

CSR

  • recycling, design for since rare earth minerals are becoming expensive and hard to acquire and dangerous materials in some countries have to be safely recovered by your organization by law
  • renewable energy as energy costs are going through the roof and coal and oil generates too much pollution
  • renewable materials whenever possible to keep long-term costs down
  • responsible supply chain from a people and environmental perspective
  • waste reduction where natural resources and food are concerned (especially given recent all-time lows in global food reserves)
  • workers’ rights as no supply chain should contain slave-labour conditions

Home vs Near vs Out Sourcing

  • product development / production which has to consider the best decision given transportation and time-to-market options as well
  • procurement, back-office, and front-office functions which has to be balanced against cost-savings, expertise, knowledge, and reaction-time

Knowledge Management

  • Capture because knowledge can’t retire with your employees
  • Distribution because everyone needs to be able to tap into organizational knowledge
  • In/Near/Out Sourcing Management needs to be knowledge based
  • Master Data Maintenance as good decisions require good knowledge and good data
  • Value Generation as the IP is an asset that should be tapped into

Market Knowledge

  • New Emerging Markets because it’s not the BRIC anymore, it’s the MIKTS
  • Emerging -> Emerged Markets as every BRIC country is now a top 10 country with respect to total GDP
  • Hyper Competition in Developed Markets due to high jobless rates, slow GDP growth, and other factors that are making for intense competition in traditional / home markets
  • Opportunity Identification in different markets from a source/sell perspective as the markets arrive
  • The New Silk Road because the new China – Germany – Russian trade partnership is a game-changer and if the EU goes all-in, that’s over 40% of Global GDP participating in a new, non-North American trade partnership

Market Intelligence

  • commodity market data as this greatly influences should-cost models
  • consumer & public markets as this provides the baseline for off-the-shelf CPG and services spend
  • labour rates as this greatly influences should-cost models
  • energy rates as this greatly influences should-cost models
  • supply vs demand as this influences sourcing decisions
  • should cost models to understand what the organization should be paying
  • trends to understand if prices have been rising or falling
  • predictive analytics to take different factors into account and predict future prices and availability of labour, materials, and energy

Organizational

  • Center Led / Control Tower / COE to make sure the organization is on the path to being Best-in-Class
  • Stakeholder/Shareholder Management to keep stakeholders happy and the shareholder monkeys off your back
  • Strategic Focus to make sure the organization is aligned on the right way of doing things
  • Transition Management to take last year’s processes and technology to next year’s processes and technology

Tomorrow we will break down the remaining seven.

After Two Series on the Future of Procurement – What Have We Learned I

After two series, fifty (50) posts, AND almost seventy-five (75) pages on the “future” of Procurement, what have we learned? Besides the fact that most futurists are backwards-looking attention-seeking historians who will happily sell you snake oil past its expiration date, we’ve learned that they are able to sell this snake oil because they are addressing issues that not all organizations have encountered yet.

Recognizing that certain issues and trends are only encountered when an organization reaches a certain level of maturity and/or size, these futurists have figured out that when they target those organizations that are below a given level of maturity and/or smaller than a certain size, they look like they are visionary when, in fact, they are just selling knowledge they acquired by keeping a close eye on the leaders.

In the end, what we learned is that the trends they are telling us about are the trends that, if they haven’t hit you yet because your organization hasn’t matured or grown enough, you have to plough though in order to get to the true future trends.

We’ve mentioned three. We’ve discussed the Top Ten Trends for 2015. And maybe, if the LOLCats let us, well discuss a few more future trends. But for now, we need to focus on the trends that won’t end and what your organization needs to do to get these trends under control and out of the way. If we review all of the trends, we find there are a (core) set of (common) categories of common and related issues that must be addressed to deal with the trends. The fourteen categories that are the most important with respect to the futurist anti-trends that we examined are:

  • Cost Control
  • Corporate Social Responsibility
  • Home / Near / Far Sourcing
  • Knowledge Management
  • Market Assessment
  • Market Intelligence
  • Organizational Insight
  • Regulations
  • Risk Management
  • Supplier Development
  • Supply Chain / Inventory Flexibility
  • Talent
  • Technology
  • Transportation

In our next post we’ll break out the sub-requirements in each category as they provide a guide that helps you target your learning and organizational advancement.