Category Archives: Talent

Why Are There No World Class Procurement Organizations in Asia Pacific?

A recent brief by Bain on Winning With Procurement in Asia, released last December, in which they summarize the results of interviews conducted with 60 business heads and CPOs throughout Asia-Pacific, stated that while many of these business heads and CPOs report their Procurement capabilities as fair, or even good, none report their Procurement capabilities as great. Why?

According to the article, procurement teams in Asia-Pacific often
(1) lack organizational support and prominence,

(2) tend to focus on short-term activities,

(3) rely on inadequate demand management processes, and

(4) struggle with underdeveloped supply bases and insufficient core procurement processes such as category management.

In addition, they lack

(5) systematic supplier management processes,

(6) reliable data systems and

(7) strong procurement talent. Moreover, even though some companies make a point of investing in procurement talent, they fail to take the critical move of defining a clear career path for procurement professionals.

In other words, it’s the classic Triple-T Problem — a lack of talent, technology, and transition management. If we go through the list, we see that (7) is the talent problem, (6) is the technology problem, and (1) though (5) are an example of a lack of transition management.

The lack of systematic supplier management processes in (5) is a result of not transitioning to modern supplier management processes driven off of modern supplier management systems.

As a result of the lack of systematic supplier management processes, which is a direct result of poor, or nonexistent, transition management, these organizations are (4) struggling with underdeveloped supply bases and insufficient core procurement processes.

As they haven’t transitioned to newer Supply Management processes, these organizations are still suffering from (3) inadequate demand management processes.

Furthermore, as a result of not transitioning to newer Supply Management processes, with a longer term outlook, they (2) tend to focus on short term activities.

And, finally, as they have not helped the organization as a whole transition to better supply-management inspired business processes, they still have to deal with (1) a lack organizational support and prominence.

At home or abroad, good Procurement and Supply Management starts with the 3 T’s — talent, technology and transition (management). Without meeting this necessary condition, an organization will never be great.

The Intersection of Talent, Technology, and Transition – How Do You Balance It?

Supply Chains run on talent, technology, and good transition management — but it’s a difficult recipe to get right because it not only requires the right mix, but the right execution because, just like a soufflé, the perfect mix can still fall flat. So how do you get the right mix? And how do you execute it properly?

Let’s step back a bit. For years, consulting companies and project managers said it is all about people, who do the work; process, that people follow; and technology, that people use to execute the process. And they were right. That’s a basic requirement for success in any company. But it’s not enough in today’s supply chains. And there’s two big reasons for that.

First, we’re not in the industrial revolution where economic growth depends on manufacturing which runs on a production line where you need a lot of workers who do well defined, easy to teach tasks. We’re in the knowledge economy where you need educated, innovative, self-reliant growth leaders who can do a wide variety of tasks, dependent on the situation at hand. Warm bodies in seats are not enough anymore — you need talent.

Second, with supply chains global and the participants many and dynamic, processes are no longer static as they were in the late stages of the industrial revolution where one company controlled the goods supply chain end-to-end and processes were well defined and relatively static. Now they are dynamic and have to constantly adapt as parties change, trade routes become temporarily inaccessible, raw materials and components become (temporarily) unavailable, and consumer demands and market availability changes. Static processes are not enough anymore, you need dynamic processes and transition management to manage them.

The only component that hasn’t changed is the technology component, because technology is constantly changing and you still need the most advanced technology, just like you needed during the industrial revolution to keep up with your competition. However, the technology is always in transition and if your technology is too far behind, you may not be able to compete even with the best talent and transition management to throw into the mix.

So we definitely need the right mix of talent, technology, and transition management to succeed — but how do we balance it in our supply chain to make sure the supply chain rocks (because we are the rock stars of the resource revolution)?

The answer is simultaneously ridiculously easy and insanely complex.

Alignment.

Your talent, technology, and transition management game plan must all be aligned.
What does that mean? We’ll tackle that in an upcoming series of Sourcing Innovation white-papers this fall, and offer a few hints over the summer. So, keep your eyes here!

The (Board) Gamer’s Guide to Supply Management Part XXI: Dark Minions

In Part V and Part IX, we introduced you to Small World, a delightful game from Days of Wonder (also on iOS) that, in the words of Wil Wheaton, combines the military strategy of Risk with the delightful art and fantasy races of Cosmic Encounters. Except it’s more dynamic than Risk, more variable than Cosmic Encounters, and a good introduction to how your suppliers’ sales and marketing forces are going to try and counter, and undermine, your every effort to procure and manage supply at a fair and sustainable price (as profit is the name of their game, not cost control).

Small World, with its 14 races and 20 powers, leading to 280 different possible pairings of race and special ability, did a great job of capturing the many different types of sales professionals that will ascend upon you in the course of your day job, but it lacks a mechanism that accurately captures the hoard mentality of larger vendors with seemingly endless and disposable sales forces. Larger vendors, when they lack the ability to win on saleability alone, resort to trying to overwhelm a potential customer with a large sales team that will descend upon the potential customer on every front in an effort to overwhelm the potential customer and wear them down until they just give in and sign on the dotted line.

On the other hand, Dark Minions not only captures that hoard mentality to a tee, but effectively lets you take on the role of a Sales Director of a large vendor with undifferentiated commodity products who’s only sure method of success is to strategically send his hoard of disposable snake-oil salesmen against the most susceptible targets. In the mindset of Dark Minions, differentiated capability doesn’t matter, as the organization doesn’t have anything unique to sell, only strength in numbers. More on this later. For now, let’s introduce the game.

In Dark Minions, hordes of dark minions have descended upon the countryside, eager to secure their reputation as a scourge on mankind. The despicable evil marauders attack everywhere in search of conquest. The citizens are helpless and will soon be overwhelmed. Death and destruction awaits all those in the path of the evil ones …”

In Dark Minions, you are a great evil one and your goal is to vanquish the medieval towns in your domain. Every time you vanquish a town you gain vanquish points, and the first great evil one to a fixed number of vanquish points (which varies according to the number of great evil ones playing) wins the game.

In Dark Minions, you control an evil hoard, equal to 50 minions to start, and on each turn you can either use part of that hoard to attack a town or capture a defense tower, or you can choose to re-spawn some of your evil minions from the graveyard. When you send part of your hoard against a town or a tower, you knowingly send them to their doom. (But you are a great evil one, and minions exist to be sacrificed! Plus, since you have the power to re-animate them at a later time, their deaths have no impact on your overall power.)

Unlike most of the games we have covered in our series, Dark Minions is a dice-based game, which adds a considerable element of randomness to your strategy (which mimics nicely the apparent strategy of some sales forces), as each roll dictates what you can, and cannot, do on your turn. (This is a good analogy to the real-world where a sales organization is often limited by the number of sales resources currently available for deployment, the financial resources free to deploy them, and the organizational resources to acquire more sales resources.) At the start of the game, each player rolls three six-sided black dice (as you are evil, remember) on their turn, numbered +1, 2, … 6. If a 4, 5, or 6 (or higher) is rolled on a die, and one is available, the player may choose to commit that many minions to attack, and capture, a white, grey, or black tower (on a 4+, 5+, or 6+ respectively). When you have captured one of each tower, you can trade them in to gain a level. If a 2 or higher is rolled on a die, the player may choose to attack a town with the number of minions allowed by the die (and if the total number of minions attacking the town exceeds the strength of the town, the town falls), and if a 1+ is rolled, that is added to another die. Alternatively, you can choose on a roll of 2 to 6 to re-spawn that many minions from the graveyard. (Minions go to the graveyard when a tower or town falls.) [Each die in the 2 … 6 range is a separate hoard and cannot be combined in the conquest of an individual town or tower. Only +1, or +2 rolls can be added to another die to increase the size of a hoard.]

Gaining levels is important because, at each successive level, you get to replace 1 black dice with 1 (blood) red dice, which allows you to roll 2 to 7 instead of +1, 2 … 6. Then, once all of your black dice have been replaced with (blood) red dice, at the fifth and final level, you get to roll a bonus white die (which has +1, +2, and re-spawn 10 minion squares) every roll. So if you were to roll a 4, 5, and 6 on your first turn, and if they were available, you would likely want to attack and capture a set of (white, grey, and black) towers, and turn them in for a level. But if you rolled a 3, 5, and +1, you would likely add the +1 to the 5 to attack and capture a black tower (which is the hardest to capture) and attack a town with 3 minions. Towns will take, on average, between 15 and 25 minions to vanquish (as the game progresses), and will typically take multiple turns to collectively vanquish.

The strategy is figuring out when to attack towns versus towers and which town to attack when. The evil one who sent the most minions against the town gets the vanquish points associated with the town (which will generally be between 3 and 9 points, as the game progresses) when the town is finally overrun, the evil one with the second most minions gets 2 Vanquish Points, and the evil one who triggered the vanquish of the town (by committing the minions necessary to bring it to its tipping point) gets 1 Vanquish Point.

Additional variability is added by the fact that on any turn, you can choose to roll the white die in place of any other die. Generally speaking, you will take this gamble when you need to re-spawn minions since using this die (at levels 1 through 4) means that you will only be able to attack 2 towns and/or towers. The advantage is that a successful roll allows you to respawn 10 minions (instead of 2-7) but the disadvantage is that an unsuccessful roll simply gives you a +1 or +2 on another die (which will increase your chance of capturing a tower, assuming you have enough minions left to commit to the tower). A good roll will allow for a more effective re-spawn, a bad roll (which is twice as likely as a good roll) will dictate a weaker round. But, if you still have your two starting tokens (worth 1 and 2 VP, respectively), you can use these as re-spawn tokens (which are equivalent to a white die re-spawn roll) and if you use both of these in conjunction with a successful white die re-spawn roll, you can re-spawn all of your minions. Properly timed, you can get all 50 minions back in one turn, which can be a great boon early game (especially if you just went up a couple of levels, getting a red die edge on your competition). (The sales analogy is that instead of sending a hoard of average, run of the mill, salesman, you can send specialists, represented by the +1 and +2, who often have the ability to tip a worn down customer into a sale a little bit faster, or, in the case of the re-spawn roll, better apply your financial resources to hire even more salesmen to send towards the next unsuspecting target.)

While it won’t teach you the strategic planning skills you need to design supply strategies that will deliver value in the long term as well as the short term, as Rosenberg’s games tend to do (and, so far, we’ve covered Agricola [Parts I, II-A, and II-B], All Creatures Big and Small [I], Le Havre [Parts I and II], and The Inland Port [I]), it’s a fun distraction that will help you relax at the end of a tough day because, just once, you get to play the evil black knight salesmen instead of the white knight of procurement — and possibly learn to identify hoard mentality sales organizations fast enough to put defenses in place before your organization gets overrun.

The New Supply Chain Manager – Global and Local

Supply Chain Digital recently published an interesting piece on three core trends impacting UK supply chain skills in 2014 where they noted that, even across the Atlantic, globalization is taking a new spin.

According to the article, complex supply networks are now deployed to offset inventory risk, balancing low production costs of far away places with short-lead time replenishment from factories closer to market. This allows for an initial order to be made in the Far East and then supplemented by more local sources if sales demand. This allows the buyer to balance cost vs. lead time / stock out / quality risk and indicates that, like the US, the UK is now focussing more on total cost of ownership and optimizing the total supply chain cost and not just the landed cost (even though the transportation costs from Eastern Europe and parts of Asia are much less for them then the transportation costs their North American counterparts need to bear). It’s a good sign, and SI has always maintained that the right sourcing methodology is best-cost country sourcing, and that often means, when the full life-cycle cost (and risk) is analyzed, home-country sourcing is the way to go.

The need to be local is further emphasized by the evolving purchase patterns of the local consumer. E-commerce is being widely adopted and the Amazon effect is taking hold. Consumers want to shop at home, get the goods delivered to their homes, and if something is broken, return the goods from their homes. This is forcing retailers and distributors to adapt to complex and challenging operating models as they need to not only manage the home-delivery process but the home-return process, often getting products back to the factory from which they came for repair, refurbishment, or recycling (as strict laws in the EU, such as RoHS and WEEE, often prevent outright disposal of anything with electronic components).

Finally, it all comes together in the last trend which revolves around the need for a broader skill-set to manage the broad nature of today’s Supply Management initiatives — initiates that are hugely complex in nature and require Supply Management professionals to know how to manage suppliers, production facilities and freight movements across a multitude of countries and time-zones. It’s not easy, but it can be fun!