Procurement Trend #18. Improved Supply Management Skill Set

Fifteen anti-trends still remain but today we can take solace in the fact that we have finally finished with the “old news” anti-trends and have reached the “ongoing” blues anti-trends. While these anti-trends are still “old news”, most are only a few decades old, as opposed to some of the earlier trends we debunked which described situations encountered by many business centuries ago (which is when globalization really began).

So why do the modern historians continue to peg an improved supply management skill set as a future trend? Maybe it’s because they’ve only recently been expelled from an old-school Procurement organization into this brave new world, and this is as far as they’ve made it in their readings, but three likely reasons are:

  • technology is progressing rapidly

    and much faster than the average person can be reasonably expected to keep up with

  • the breadth of supply management continues to expand

    and new categories and responsibilities are often added to Supply Management’s (shared) purview on a regular basis

  • processes aren’t keeping up

    and Supply Managers are getting buried under an avalanche of tactical demands

So what does this mean?

Rapid Technology Progression

Your organization, and in particular, your talent, needs to keep up. Regular training is going to be required for your talent, and thus your organization to keep up. You will have to fight for this though, because despite the fact that it has been among the top three or top five concerns of most CPOs and CXOs for the past five years, the training budget is always the first budget to get cut.

Expanding Supply Management Breadth

This is a good thing, but you your Supply Management organization needs to keep up, not fall behind. The tech progression is a good starting point, the training is a good continuation, but you need to also learn other areas of the business – their language, processes, and goals so that you can collaborate with them, learn their wisdom, and, if possible, share the workload.

Processes Need to Move Out of the Past

Processes need to continually progress forward — that’s why SI is all about Transition management and not just focussed on the classic people-product-technology triangle (as it’s actually talent-technology-transition management). You will have to conduct process reviews not only on all Procurement processes, but on all related operational processes to determine if they can be made more efficient, reliable, or better, identify what new processes would look like, determine if the current technology platforms can support these new processes or if new platforms are needed, and create, and then execute on, appropriate transition plans.

Procurement Trend #19. Service Providers Excel

Sixteen anti-trends still remain but we again assure you that we are getting to the end of the series and all is ok as LOLCat is still dreaming of his grandfather’s adventures as an archaeologist cat uncovering lost tombs, and waiting for this series that is regurgitating topics of his past lives to fade into history. We will continue to lay bare each and every one of the futurists’ lies, and when we’re done, you’ll be in a better position to learn the truth and seize upon the real trends that lie ahead and the opportunities they contain.

So why do the historians keep pegging service providers excelling as a future trend? Have they spent too much time in the janitors’ closets breathing paint fumes from improperly sealed paint cans while practicing their speeches that no one really wants to hear? Hard to say, but some of the reasons probably include:

  • Outsourced Services are still improving

    in both traditional Business Processing Outsourcing (BPO) and non-traditional service sectors.

  • Service Providers are mastering tech faster than their clients

    and often get a lot more experience with a platform in a shorter time frame as they are running projects for multiple clients on that platform.

  • Everything is going out

    because overpriced overly-optimistic consultants have strapped themselves to the outsourcing bandwagon in an effort to make sure that they never fall off.

So what does this mean?

Outsourced Services

Service Providers can often do things better than you, but if they do, you need to adapt or lose control. You don’t want to lose control, because one of your jobs is Supplier Relationship Management. However, at some point during the adaptation, you will, if you are doing it right, become better at managing the process than the outsourced provider, but you will still be locked into a multi-year service agreement. So you will have to transition from learning through managing through teaching. And once the service providers masters your teachings, as they will have more opportunity to practice and perfect, they will again get better than you and the cycle of the student becoming the master and the master becoming the student will continue.

Technology Progression in the Outside World

While this is one of the reasons that service providers outpace you, this is a great learning opportunity for you. Most companies don’t pick the right technology the first time around — and instead implement expensive systems in even more expensive projects that turn out to be massive failures. Then they learn from their mistakes, implement the right technology, and provide you a free lesson on what works if your processes match theirs if you choose to seek it out and learn from it.

Out, Out, and Away

Because your managers are still living two decades in the past where cost reduction was defined as outsourcing, you can, unfortunately, expect more pressure in the organization to not only outsource your tactical work, but to outsource as much tactical work for other departments in the organization as can possibly be outsourced. So you need to either prepare for this, or build the business case as to why the work should stay in and how keeping it in house will either deliver savings or add value.

Procurement Trend #20. Increased Strategic Focus

Seventeen anti-trends still remain. And while somedays it might seem like this series will never end, we assure you it will and now that LOLCat has figured out that the best thing to do is just take a nap, dream of his grandfather’s adventures as an archaeologist cat uncovering lost tombs, and wait for the series that is regurgitating topics of his past lives, we can march on knowing that as long as other LOLCats do the same, the series will do no our poor LOLCats more harm. And in fact, when we lay bare each and every one of the futurists’ lies, you’ll be in a better position to learn the truth and seize upon the real trends that lie ahead and the opportunities they contain.

So why do the historians keep pegging increased strategic focus as a future trend? Besides asphyxiation as a result from breathing in too much of their own hot air, probably because:

  • Supply Management is still tactically focussed in many companies

    on purchase order creation, invoice processing, and other forms of paper document and contract management.

  • Supply Managers are too focussed on survival, not control

    Procurement in many companies is comparable to the Island of Misfit Toys where the toys are all wandering around aimlessly trying to figure out how to find what they need to get through another day, instead of taking control of the situation.

  • Reaction is the name of the game, but Planning is the key to winning

    but most Procurement departments spend their days reacting to requisitions, supplier mishaps, late deliveries, stock-outs, and other unplanned events.

So what does this mean?

Strategic Focus

Procurement has to acquire and implement automation management to reduce tactical focus from mundane processing to exception management to give it time to focus on more strategic sourcing tasks, category planning, process review and improvement, and other tasks that will allow it to not only find any savings it has not yet tapped but identify new sources of value to the organization.

Transition to Farming and Harvesting

When you’re just trying to survive, all of your efforts generally go into hunting and gathering to meet the day’s needs. But in order to get ahead, you have to start farming and harvesting. You have to work together and divide up the work in such a way that someone has time to focus on more long term tasks while others handle the emergency situations of the day. While Procurement cannot avoid doing what it takes to put out the fires to avoid burning to the ground, it has to regularly step back, step up, take a wider view, and come up with ways to advance its methodology and operations and implement those so it can progress towards a path of proactive strategy and not reactive data processing.

Forward Planning

Procurement has to not only look for ways to get better today, but for ways that will allow it to continue progressing in efficiency and capability and potential beyond next quarter and next year. True forward planning looks five years into the future, not five months. While it won’t be able to see that far right away, when it has truly matured as a strategic organization, it will be working on projects for the current the year, next year, and on preparing for projects that will happen three to five years in the future that take a lot of planing and preparation to get right, such as factory and warehouse relocation as a result of a supply chain redesign project.

It’s Faster PussyCat; not Faster Idiot!

Fashion. Mobile Devices. Software. Everything is moving faster and faster. Maybe LOLCats need to move faster because their expected lifespan is one sixth of ours. But we don’t. We’re moving so fast that we’re bringing back infinite scroll and software mystery meat. We’re building mobile devices so thin that they bend, sewing new clothes after they are already out of fashion, and re-launching movies from the 80s because no one has time to even think of an original idea (so forget about taking one to completion).

There’s a place for speed — and it’s on the racetrack. And while first to market is nice, in the long run, it’s usually best to market that wins. The same goes for organizational technology. It’s not about being the first to have the shiny new toy, it’s about identifying and implementing the right technology the first time. A shiny new toy always looks good, but what good is a toy that sits on the shelf? And that’s exactly what happens when you buy a piece of software that looks good but doesn’t support organizational processes and do what needs to be done.

Slowing down isn’t just for buddhists and chess masters, it’s for anyone who wants to get ahead in business and Supply Management. While it’s important to be efficient and effective when doing non-value added tactical tasks, when it comes to important, strategic, activities that, if done right, can generate an ROI that is effectively multiples of the resources invested in the activity (but, if done wrong, can cost the company millions), speed is not of the essence. Getting it right is. If it takes an extra hour, an extra day, an extra week, or even an extra month to get it right, sometimes that’s the right thing to do.

And in each of the examples given above, the extra time would make a big difference. With enough time, developers would be able to research, understand, and build software that did what people want the way they wanted the software to do it — there’d be no mystery meat. And while the mobile iPhone version of your site might need to be infinite scroll because, let’s face it, you can’t click a button the size of a flea on a 4″ screen, no one wants that garbage on a regular 13″ laptop screen and they definitely don’t want it on a 27″ desktop monitor! You could take the time to research exactly how thin and light you could make a phone that was still resilient enough for everyday use and you could design practical, fashionable clothes that people actually wanted to wear, and not just wear the day a model walks them down the runway.

There’s nothing wrong with wanting to go as fast as you can, but going fast just for the sake of going fast doesn’t help anyone. It just makes your organization look stupid. So slow down once in a while, figure out where you are, figure out where you want to be, and work out a detailed plan to get there. The results might surprise you.

And now, to (software) developers everywhere who bring us infinite scroll and mystery meat on a regular basis, LOLCat has a special message just for you!


LOLCat says you're stupid!

Twenty Five Years Ago Today

Due to a miscommunication, the Berlin Wall Fell (a day before it was supposed to) and Germany was united. (See the Wikipedia History.)

It’s both a reminder of how a situation can literally change over night and of how fast the world moves on. For example, a report over on euractive.com notes that while most of Germany wants to look ahead rather than reflect on their recent history that consisted of a divided Germany, 58% of the 14-29 demographic would like to find out more about the history of the communist East German state and the German division because they feel they don’t know enough about their own history.

Today’s fast paced world is moving so fast and focused so much on the future that recent history is being overlooked because the older generation, who still remembers it, feels that it’s recent enough that it does not need to be discussed. However, it is not yet making the school curriculum and being taught in enough detail to the younger generation in a manner that will allow them to understand why the older generation just wants to focus on the future and what the lessons to be learned from the past are.

But we have to remember, because if we don’t, we’ll make the same mistakes, and more importantly, we’ll forget how to deal with the situation when it rises again. For example, the Ukraine is in the process of splitting just like Germany was split after World War II, and may, or may not, reunite someday. As long as there is conflict, borders are destined to change, border crossing rules are destined to be revised, and new trade restrictions will be created while old ones removed. So we have to remember, learn, and prepare.