In our last post, we discussed the conclusions drawn by AMR in their survey of 198 organizations to assess the state of the supply chain management discipline, identify key requirements to support a demand-driven curriculum, and construct the first functional talent attribute model (which can be downloaded from the Supply Chain Council). Today we’re going to discuss their new talent “model”.

“Model” is in quotes because I don’t know if “model” is the name for an intersection of seven (7) “functional” talent stations across four (4) “enabler” talent stations supported by three intersecting “networks”. Myself, I’d be tempted to go with “mess”. Take a look for yourself (and select the thumbnail to enlarge).

Now, I’m sure you’re saying “this doesn’t look too bad”, and it doesn’t, until you dive into the sub-attributes, as compiled from respondents. Then you get:

Function	Sub-Attributes
NPDL	NPD Planning & Logistics Execution Cross-Functional Collaboration w/ Ongoing Sales & Operations Demand & Capacity Planning Network Design Make-vs-Buy Sourcing Decisions
Plan	Demand Management Inventory Planning & Optimization Sales & Operations Planning Capacity Management Modeling / What-If Scenarios
Source	Sourcing Strategies & Plans Total Cost Analysis Supplier Selection & Development Supplier Collaboration Relationship Management Negotiating & Contracting Risk Management
Make	Materials Management Production & Inventory Control Master Production Scheduling Process Control Product Conversion Quality Management
Deliver	Transportation – Strategic & Operational Logistics Planning & Control Warehousing – Strategic & Operational Third Party or Outsource Management Delivery Management Inventory Management & Control
Customer Management	Relationship Management Order Management Customer Service

… and you wonder what happened to Post Sales Support, but you also get:

Enabler	Sub-Attributes
Governance	Organizational Planning Business Controls Risk Management Training Fundamental Governmental Controls
Strategy & Change Management	Best Practice Analysis & Benchmarking Change Management Techniques Global Manufacturing & Distribution Management Dashboards & Metrics Life-cycle Management Strategy Process Integration Globalization
Performance Measurement & Analytics	Development of Dashboards Hierarchy of Performance Measures Presentation & Reporting Ad-Hoc Analysis
Technology Enablement	Planning & Execution System Management, Selection & Implementation New Technology Adoption Enterprise Resource Planning System Management IT Communications with Suppliers & Customers Statistical Analysis Tools EDI

And although all of this (and much more) is necessary, I think a layered model, that separates supply chain functions from supply chain technology, and that allows users to dive in on different areas of expertise, is needed – because not everyone needs to acquire such a broad understanding (and this is important because not everyone will be able to). Maybe something similar to what The Logistics Institute, which breaks the state of affairs down into a strategic view and process flow, is proposing.

Although it’s arguable as to which model is more complete, the model from The Logistics Institute is easier to understand, and right now, I think that’s key.

AMR recently released its “Supply Chain Talent: State of the Discipline” report, sponsored by the Supply Chain Council where they surveyed 198 organizations to assess the state of the supply chain management discipline, identify key requirements to support a demand-driven curriculum, and construct the first functional talent attribute model. From their research they drew some interesting conclusions:

• No two supply chains are alike
  AMR found that very few companies defined their supply chain in the same way and that almost every leader had different plans of control.
• Leaders view supply chain management as a business discipline
  AMR found that supply chain management is still very engineering centric and that few companies include manufacturing and NPD (new product development) within the supply chain function (and that this is a differentiator among leading companies).
• Globalization has created urgency
  AMR states that a general flattening and global broadening of supply chain organizations has boosted the need for a more extensive set of skills and competencies.
• A common supply chain talent model is the foundation for improvement
  AMR states that for supply chain management professional development to evolve into a more universal body of capabilities, industries and academia need to adopt a shared, modern, comprehensive model that incorporates the growing depth and scope of the discipline.
• Universities have an opportunity to take a leadership role
  AMR states that schools can lead the way in providing more universal supply chain management skill sets and that truly comprehensive programs would gain strong support from the industry.

These conclusions are interesting for three reasons. First of all, they sound very plausible, and the report does a very good job at convincing you they are right. Second, there is fair amount of truth and insight in these conclusions and in the report. But they aren’t quite right. Here’s why.

• No two supply chains are alike – but definition is not the problem
  The fact of the matter is that every business needs to differentiate itself, which means that every business has slightly different needs, and this means that every supply chain will be slightly different. This makes the problem harder than just a definitional problem.
• Leaders should view supply chain management as the business – not just a business discipline
  Many business leaders still think their business is what is within the four walls of their company. That’s just not the case anymore for the vast majority of industrial companies. These days, your business is the supply chain you create, and everything should revolve around the supply chain. Accounting tracks the money that flows through the part of the supply chain directly under your control. Marketing markets the differentiating factors you bring compared to competitors with similar chains. Engineering takes the inputs and designs outputs. HR manages the people that make it all happen. And so on.
• Globalization is the result of urgency – created by market-driven capitalistic need to beat the other guy in any way possible
  We might sell the strength of our business on “better, faster, cheaper”, but at the end of the day, all that Wall Street (and its hoards of brainless automatons) cares about is profit – which is revenue minus expenses, and once your business can’t get any better / faster locally, globalization is the next logical step. However, AMR is right when they note that this has boosted the need for a more extensive set of skills and competencies, and without these competencies, global supply chains could start to crumble.
• Talent is the foundation for improvement
  You can have the best damn model in the world, but if no one uses it, it’s useless. A shared, modern, comprehensive model that incorporates the growing depth and scope of the discipline is a great guide, but what we need is people who understand the depth and scope of the discipline and who can not only manage today’s supply chains, but evolve them into tomorrow’s supply chains. Good programs and teachers will be more important than good models, especially in the short term where expertise is about to be in critically short supply.
• Universities always have the opportunity – but private programs will lead the way
  I had the (dis?)pleasure of teaching in a number of public Universities and of trying to move curriculums forward. To be blunt, a dentist has an easier time pulling teeth than a progressive individual has of moving a program forward where, typically, a third (or more) of the department is nearing (early) retirement and see no reason why they can’t teach the same course they taught last year (and the year before and the year before), and where they believe that, even in areas such as technology, a course should be good relatively unchanged for at least five years. And even if you’re lucky enough to be part of a progressive department who sees the need for regular program enhancement and redesign, the bloated process, the need for approval by committee upon committee, and the internal politics at most publicly funded institutions limit you to progress at a snail’s pace. Considering that very little, if anything, moves faster than supply chain these days, by the time you get a program approved, it’s ancient history. That’s why, in the short term, for-profit private institutions will lead the way.

One of the presenters at this year’s reSource 2008, Iasta’s (acquired by Selectica, merged with b-Pack, rebranded Determine, acquired by Corcentric) user conference, was Charles Dominick of Next Level Purchasing (now the Certitrek NLPA). 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:

Expert Purchasing Management, A Review, Part I
Expert Purchasing Management, A Review, Part II