Category Archives: Talent

The Supply Chain of Supply Chain Talent is Not Only Broken … It’s Running On Empty!

A recent article in Forbes noted that The Supply Chain of Supply Chain Talent Is Broken, which it is, and has been for well over a decade. The problems started back with the global first world truck driver shortages back in the early 2000s, but the real problems were much deeper and hidden from view due to the fact supply chains were otherwise running smoothly and no one was looking behind the curtain or shining a light into the dark recesses of the supply chain.

Why? Because of the rampant digitization of procurement, logistics, and supply chain over the past twenty years, a time when globalization reached its peak, conflict was at a minimum, inflation was in the rear-view mirror, and natural disasters were still manageable, supply chains just worked. Predictable processes, routes, costs, and flows allowed simple systems to manage the supply chains almost automatically. Supply Chains didn’t need traditional supply chain talent to run; they needed buyers, logistics managers, inventory operations, and compliance personnel who could use systems — IT geeks ruled the day!

At the same time, seasoned supply chain professionals — negotiators, logistics professionals, and inventory/warehouse managers — were retiring in droves, and no one was replacing them. More importantly, no one was replacing them because there was no perceived need. These were the individuals who where doing supply chains in the 80s and 90s, before modern systems managed everything, when there were still lots of regulations to deal with (as the EU was still forming), when you didn’t always have container ships available (or easy container transportation to all locales), and when you would have to know, by rote, who to call when a truck wasn’t at the factory or the dock for a pick-up. When you had to do everything by phone and fax, because email was a luxury; when you had to deal with dozens of import/export regulations (and know how to create the reports by hand), and how to manage logistics scheduling on paper, especially when availability of certain carriers or personnel would change by the day. When you had to truly know how supply chain operations worked end to end, and not just push buttons on a virtual screen.

But then they retired, and no one replaced them. Even worse, no one was recruited to replace them. The organizations saw no need, since the systems did everything, the EU and harmonized regulations across regions made trade easy, and the big global carriers managed logistics for them. As long as they had negotiators, system operators, outsourced carriers, and outsourced consultants to do the rest, who cared? They certainly didn’t.

Furthermore, because there was no need in the organizations, people who studied Operations Research and might have went into Supply Chain went elsewhere, and as demand shallowed, so did students, but more importantly, so did apprenticeships. Now, with disruptions on the rise, globalization retreating, inflation resurging, supply chains breaking due to slowdowns, (port) shutdowns, and double canal slowdowns/closures (Panama and Suez), and current systems not designed for the world today, there’s no one who can handle the current situation. And that’s why supply chains are broken, talent chains are broken, and most importantly, why they are empty.

All of this happened behind the scenes because no one was watching, no one was thinking about the future, and no one was doing a risk assessment or managing the risks that were destined to come. All despite the fact that natural disasters were on the rise, political tension was on the rise, and we were being warned that a pandemic was the top global risk for over a decade.

Now we are at a point where software alone won’t fix this, consultancies who don’t have talent either (despite telling you to go to China for two decades) won’t fix this, and hope won’t fix this. The only thing that will fix this is the re-introduction of supply chain apprenticeship programs, as noted by the Forbes article, along with the return of retirees with actual knowledge to mentor the new recruits, which is missed by the article. Most organizations, or consultancies, these days barely have enough talent to manage their own operations yet alone train a batch of new recruits on the side, especially if they didn’t live through the rise in global trade in the 80s and 90s. The retirees did, and they have the knowledge the consultancies, and modern systems, don’t. Along with new recruits, it is their (temporary) return that is needed to fix the supply chains.

The Prophet‘s 2024 Procurement Prediction Number 10

A “CFA-like” Credential Emerges in Procurement and Supply Chain B+.

The Prophet says that the procurement and supply chain industries, similar to most others, excluding finance, are lacking any certifications/credentials, by those “in the know,” as a superior qualification for a job than even a top degree from a world-class or specialized university which is totally true.

The Prophet also says that organizations such as CIPS, ISM, SIG, etc., might disagree with this viewpoint which is also totally true. The Prophet does note that he supports all of these organizations, which the doctor does as well, and that he believes their training materials are highly valuable, which the doctor doesn’t across the board. (the doctor has seen some of their training materials. While some of their training materials provide a very good foundation, some of their training materials are not so good. Most of these organizations are very weak when it comes to analysis, tech-backed processes and practices, government/industry specific compliance requirements, risk management in today’s increasingly fragile global supply chains. etc. But when so many Procurement departments are struggling with the basics, understanding what their role is, and how ethics should enter the equation, we do need these organizations and that is why the doctor supports them while reminding you to do your homework when it comes to training. Use them for their strengths, not their weaknesses.)

The Prophet then suggests that in 2024, credentials will take on new meaning, and the best ones, particularly those challenging to obtain and requiring rigorous exams (which many fail), similar to the CFA in finance, will begin to take on a new significance in Procurement.

the doctor agrees with the principle, but does not agree it will happen this year, or even next year. Why? This will only happen with industry regulation, and that only happens in two situations.

  1. when an industry-led body gains enough support from the majority of professionals in an industry to make it a de-facto requirement in any employer of any size to get a high-level procurement job; no organization yet has that weight, and we’re not going to see the NLPA, SIG, APS, etc. all fold into the ISM, and definitely not into CIPS, which is pseudo-global (as it has made progress in some of the Commonwealth); this means that we’d need to see a new industry initiative that gave all parties representation and allowed them all to contribute to the standard and exam — for this to form, a certification to be adopted, and a test accepted will take years
  2. when a government forces a requirement that can only be met by a certification (and either creates their own or adopts one); governments move slow, and when we have the situation in the US where
    1. the republican focus is on ripping democrats apart for what they didn’t do, rolling back human rights to the fifties, and installing a wannabe dictator as President-for-Life
    2. the democrat focus is on shaming the republicans, selectively protecting the human rights they want, and taking up the former republican war mantle (since Trump just wants to be a dictator, which doesn’t profit the military complex) and doing everything they can to back Ukraine and Israel (including risking World War III with their Middle East bombing of Yemen vs. just destroying every Houthi vessel launched into the water)

    and the situation in the UK where

    1. the conservatives are too busy trying to keep Dishy Rishy from making them the laughing stock of the political world (as he’s so far disconnected from the common person he has no clue)
    2. the liberal (democrats) are too busy trying to counter the conservative support for the global wars and lack of focus on the situation at home by being extra woke (and we know how that fared in America) …
    3. when we look at the NHS mess and postal service mess and their apparent unwillingness to do anything meaningful about it (for longer than should be humanly possible to ignore a crisis), it seems that good procurement is the last thing on their mind

which are the two countries that would need to lead such an effort (as the EU is very focussed on climate change and AI and struggling to hold itself together now with active protests in about a third of its member states on any given day; heck it’s too focussed on attacking the farmers, already forgetting what happened when Stalin called the Farmers the enemy of the state. (See this article, for example).

Thus, while such regulation is sorely needed, it’s not likely to happen, if it happens at all, until the later part of the decade (unless, of course, The Prophet and the The Public Defender want to once again band together and take up the charge and lead the effort to bring all the necessary parties together).

The Prophet was dead on with three of the primary reasons we need it.

  • GPAs are no longer a measure of academic performance in many universities.
    The Prophet notes that, according to the Yale Daily News, “Yale College’s mean GPA was 3.70 for the 2022-23 academic year, and 78.97 percent of grades given to students were A’s or A-’s,” including the hard sciences and engineering! He also notes that the Michigan State Broad Business School (which includes the Supply Chain and Procurement degree programs) also experiences significant grade inflation, with 80% of students in 3 out of 5 undergraduate classes earning a 4.0. (Source)
    The situation is even worse in China where you don’t even get accepted to some Universities unless you are an A- or better student, and where you are under intense pressure to maintain that A, to the point where a student will drop out (or commit suicide) rather than risk being thrown out for not maintaining it. Now, this would be great except for the fact that As are often contingent on rote memorization and learning to do the work the “state way”, not always with any free thinking whatsoever. (And then graduating ONLY if they think you’ll agree to share what you learn when they allow you to go outside China for that Post-Doc/Professor position).
    The situation is better in Canada [except Quebec], but there are some Universities / Departments that are under great pressure to remain competitive to maintain grant and industry funding, and others where the professors are so overworked that they don’t even bother to confirm that a Master’s student in Engineering can manually calibrate an oscilloscope or a Master’s student in Computer Science can appropriately identify and test for all boundary cases in a simple procedure. (Remember, the doctor has been a Professor, and maintains regular contact with Professors and knows this to be truth.) How could you trust either to validate your equipment or your code? (He couldn’t!) (Regarding Quebec, the current premiere is taking Quebec’s status as a nation within a nation and essentially discriminating against anyone who is not French and willing to speak French as a first, and only, language. [See this article, for example.])
  • DEI/affirmative action preferences, which still exist (despite the supreme court ruling and their illegality if they enforce admitting or hiring a less qualified candidate), have removed objective academic criteria in both degree-based programs and industrial training programs. This has resulted in candidates who might only be a D being admitted to programs because of their minority status while non-minority candidates with Bs were excluded.
  • The best talent may no longer be pursuing traditional college or graduate programs. There needs to be an objective means of evaluating hard and learned skills for those who cannot afford or do not wish to invest time in university studies, especially those who have taken industry training programs or annex courses specific to what they need as well as obtained relevant real world experience under a mentor. (There’s a reason there used to be apprenticeships; some learning onlly happened under the guidance of a mentor.)

The only other reason that needs to be mentioned in the doctor‘s view is

  • without a certification, how can you know that any candidate, no matter how experienced and skilled they appear, knows all of the foundations you need them to know? With so many different definitions of sourcing, procurement, and purchasing; so many different thoughts on what an individual should know about analytics, supplier identification, supplier vetting/onboarding/management/development, negotiation, contracting, global trade, logistics, risk identification and management, compliance, finance / finance support, etc., how can we have a solid baseline with a (multi-level) certification program?

It would be great if 2024 is the year that we saw this certification, but while we desperately need it, the doctor believes that, unfortunately, it’s still years away. (But he will challenge The Prophet to step up and make it happen!)

14% of Procurement Leaders Have Adequate Talent to Meet Future Needs? Bull Crap!

the doctor has to stop looking at headlines, especially those on surveys of Procurement Leaders. Because there is no way that 14% of companies have adequate talent to meet future Procurement Needs. Why? Because there’s no way that 14% of companies have adequate talent to meet current Procurement Needs. Adding this survey result from Gartner with the recent survey result from Forbes who said that 9% of companies claim to be ready to manage risks posed by AI, and the doctor is starting to wonder who they h3ll they are asking to fill out these surveys … because it’s clear that these people either have no connection to reality, are drowning so deep in despair in their job that the only way they can keep their sanity is to pretend that the future is going to be way better than it is today (even though there’s no way that can be true if the company doesn’t fix the problems it has now because problems in companies multiply faster than European Rabbits in Australia), or are higher than a kite on drugs (as that’s how they deal).

The reality is that just about every company has problems in Procurement around:

  • Tech: they don’t have enough modern Sourcing and Procurement systems, sometimes it’s because they are cheap are not-forward thinking (another problem), other times it’s because they aren’t technologically proficient enough (to even know what they need)
  • Risk: otherwise, there’d be a lot less disruptions (even when pandemics hit as they would be doing more near-sourcing, have backup plans ready to go, etc.)
  • Contracts: ask them where there contracts are, and what they are usually protected from and what they are usually not
  • Logistics: beyond risk, chances are they don’t have the right network for the logistics they need or the right carriers for the network they are forced into
  • Spend Under Management: they aren’t able to do nearly enough projects in a year to address enough significant/strategic/critical spend (either due to lack of talent, tech, turbidness [of spend], etc.)
  • Negotiation: some companies are paying more on contract than the spot market, sometimes this is bad negotiation, sometimes this is lack of insight, but regardless, it’s problematic
  • Forecasting: both actual demand (because you can’t trust Sales & Marketing) and future supply/demand imbalances and prices
  • inventory management: (because JIT sometimes stands for just-in-trouble)
  • Spend Visibility: for every dollar: who, what, when, where, why, and how … they just don’t know
  • etc. etc. etc.

If companies had enough talent today, they wouldn’t have the majority of these problems.

But here’s the thing, even if the mythical company existed that had none of these problems, Procurement is still constantly evolving. The suppliers they need to buy from are constantly evolving. The supply networks from the supplier to the company to their consumers are constantly evolving. Technology is constantly evolving. You don’t even know what’s coming, so you can’t know what skills you need, or if your talent will be ready. (Hint: They won’t. Because, even though we keep telling you, you won’t Train Them! [Even though educated, efficient talent are way more productive, you still cut the training budget first for reasons the doctor can’t fathom!])

In other words, it’s ludicrous for any company in the real world that buys and sells products and services in the real world who is, more than likely, barely treading water today to think they are prepared for tomorrow! (Now, they might be in good shape if they have top talent today, but they still need to keep that talent trained and at the top of their game to have any chance of being ready for tomorrow.)

Recruiting Top Procurement Talent is More than Just Standard Best Practice Recruiting …

A recent article over on the Supply Chain Management Review proclaimed to offer 9 Ways to Recruit Top Procurement Talent in Today’s Competitive Market. So of course it caught our attention. However, the tips it offered were just standard Best Practice Executive Recruitment, and it was quite disappointing. According to the article, the best way to recruit top procurement talent, which is the rarest talent out there right now, is to:

  • Personalize the Recruitment Process
  • Optimize the Candidate Experience
  • Clarity and Transparency on the Role
  • Tangible Opportunities for Growth
  • Flexible Work Arrangements
  • Holistic Compensation Packages
  • Consistent Employer Branding
  • Empowered and Inclusive Workplace
  • Understand and Act on (Current) Employee Priorities

… and absolutely, positively NOTHING here is specific to Procurement talent. It’s the basics you should be employing when recruiting for ANY role as you are seeking out the talent (which is NOT coming to you). If you want Procurement talent, you have to do more than this. For starters, we recommend

  • Parity Compensation with Sales … in an average company, if that company is lucky, 10 cents of every sales dollar goes to the bottom line but the sales person, on top of a nice baseline salary, will get a 10%, 20%, and even 30% of the sale; in comparison, every dollar of spend reduction achieved by a Procurement professional goes straight to the bottom line (i.e. 10X the ROI, or more) and their commission is a pat on the back and maybe a trip to ISM … they should be incentivized to go above and beyond baseline expectations if you truly want the best (of the best)
  • Adequate Technology Budget … as almost half of organizations don’t have any modern sourcing and/or procurement technology solutions/platforms and the majority that do have not yet digitized the full Source-to-Pay+ process to maximize Procurement productivity and profits
  • Adequately Sized Procurement Department … while technology will allow the team to do more with less, as per the Hackett Book of Numbers, there’s still a minimum number of personnel you are going to need to sufficiently analyze and monitor the spend, strategically analyze and source all the necessary categories, keep the tail spend under control, improve sustainability, support the brand, etc. etc. etc.

… but what we really recommend is not trying to lure away more than one high talented Procurement individual (to be your Director / CPO if you don’t have one) but instead lure away top talent with the potential to become Procurement Rock Stars because they have deep category expertise in multiple categories the organization needs to source; outstanding project management, technology/math, and management skills; and the right EQ to be both a team player, team leader, and supplier development professional.

In particular, you should consider looking for:

  • new age logistics leaders (who can model supply chains, complex landed / ownership costs, and understand lead times and extended supply chain risks);
  • astute supply chain modellers and designers from consultancies who have particular expertise in your domain
  • engineering leaders (who know their categories inside and out, do complex modelling on a daily basis, have been trained in project management and managed projects, and have leadership and people skills
  • corporate / supply chain insurance actuaries and professional economists who have the expertise to appropriately predict, cost, and manage risk and create proper risk-aware sourcing events and risk mitigation plans

… and then training them on your Procurement processes, which will be easy-peasy for them to learn compared to the complex logistics, supply chain modelling, science/technology/engineering/math knowledge, and actuarial science and econometrics they had to learn to do the job they’re doing now.

Moreover, depending on your domain, you may also be looking for chemists (chemical manufacturing), biologists (pharmaceuticals), lawyers (if you do a lot of contracting / contingent labour / outsourcing), etc. The reality is that the best of the best for your organization likely aren’t in Procurement yet (because, as we pointed out in our recent article on how If You Want Good Procurement People YOU NEED TO TRAIN THEM).

Need Some Procurement Principles? Balfour Beatty Published a Great Starting Point.

Google sometimes digs up the strangest things when you ask for Procurement News. One thing it recently dug up was the Balfour Beatty “Procurement Strategy” page, which wasn’t so much a strategy, but a set of principles that every organization should subscribe to. (Regardless of what industry they are in.)

So, if you’re wondering what principles you should adopt before you set your Procurement organization strategy, you can start with these seven principles:

  1. Become the customer of choice
  2. Ensure that we have the right, skilled people for the job, a strong talent pipeline and that we provide an environment where they excel
  3. Put in place processes that work, are compliant and transparent, making the best use of technology to deliver for our business and for our supply chain partners
  4. Mitigate and manage risk through early and closer integration with our supply chain partners
  5. Work together to identify market risks and forecasts
  6. Keep safety and wellbeing at the forefront of all that we do
  7. Prompt Payment for Suppliers

The great thing is they will lead to a great strategy as:

  • it covers talent, technology, and process transformation
  • it places importance on the supplier, the relationship, and the supplier sustainability
  • it covers CSR (corporate social responsibility)
  • it covers risk

In fact, the only principle that is missing is Sustainability, so if you add this eight principle

  1. Embrace sustainability in all that we do

We’re pretty sure that if you were to start here, you won’t go too far astray in the creation of your Procurement Strategy.