Category Archives: Talent

The Procument Game Plan – The Missing Chapter

Back in March / April, SI did a detailed review of Charles Dominick and Soheila Lunney‘s recent book, The Procurement Game Plan. This review was in-depth and spanned eight posts, which are indexed at the end of this post.

Astute readers will note that the doctor never finished the review. There were a couple of reasons for this, but one of the reasons was that he felt that something was missing from the final chapter of the book, on how to become a perennial Procurement all-star. It was good, but becoming an all-star is harder than you think, and if you’re only going to write a chaper on the subject, you better hit the nail on the head – fast. The chapter didn’t entirely do it for me.

Turns out, they were saving some of their best material on that point for the interviews. A few weeks (or so) ago they did a Q&A with Buyers Meeting Point that I bookmarked but didn’t bother to read closely until today. Answering a seemingly unrelated question on what place that traditional associations have in today’s social media environment, Soheila gave the best piece of advice a seasoned veteran can give a new entrant to the Procurement Game, especially if such entrant wants to be a Procurement All-Star. Soheila said you tend to get as much out of these opportunities as you put in – either a little or a lot. If you want to be a Procurement All-Star, you have to give it your all. Just memorizing the tips and techniques isn’t enough, you have to put your heart and soul into them. You can’t just go through the motions, you have to make them part of you. They have to be natural and instinctual because the Procurement Game is, in reality, as unpredictable as you can get. You could have an IT problem. You could have a market fluctuation that totally changes the supply-demand balance or projected exchange rates halfway through a negotiation. Your shipment of fig paste could be mistaken for hash by an untrained, inept cargo inspector and destroyed. (It has happened.) Every day presents a multitude of opportunities for your game plan to be turned inside out, upside down, and outside in (simultaneously) and you have to be able to react and take a reasonable course of action in real time. You might not even have time to wait for your boss to return from lunch. But if you’ve put all you got into it, you’ll have all you need to get it all back, and then some.

Anyway, check out the Q&A with Buyers Meeting Point. It offers some great insights into the book. (And Charles’ recommendation for Managing Indirect Spend by Joe Payne and William Dorn of Source One, also reviewed in depth on SI earlier this year, is dead on.) (Soheila’s recommendation for Charles Poirier‘s The Supply Chain Manager’s Problem Solver is a good one too. Although the nature of technology and the internet have changed in the last decade, most organizations are still making many of the 12 mistakes covered in the book.)

To be concluded???

Procurement Game Plan: A Review Part 1.1
Procurement Game Plan: A Review Part 1.2
Procurement Game Plan: A Review Part 2.1
Procurement Game Plan: A Review Part 2.2
Procurement Game Plan: A Review Part 2.3
Procurement Game Plan: A Review Part 3.1
Procurement Game Plan: A Review Part 3.2
Procurement Game Plan: A Review Part 3.3

Successful Supply Management Organizations are Empowered

“What Works for Nations Works for Business”, and what works for business works for organizations within the business — Supply Management included. This recent article, over on Chief Executive, that reviews the new book, Why Nations Fail, noted that just as nations flourish when they foster political and economic institutions, and they fail when power and opportunity are concentrated in the hands of the few, companies are setting themselves up for trouble when decision making is almost entirely restricted to top executives. Similarly, your Supply Management organization is setting itself up for trouble if all (major) decisions have to pass through the Director or, even worse, CPO.

In order for your supply management organization to be successful, your people have to not only be in a position to make the decisions that need to be made when they need to be made, but feel empowered to make such decisions. They need to know what authority they have, when they have it, and feel trusted to use that authority. They should only be going to their manager, director, or CPO when a new issue arises that is beyond their experience where they should have some guidance to solve it. And if your supply chain organization is filled with talented, empowered people, this is not an event that should be happening every day.

I’m keeping this post short because I want you to read the article on “What Works for Nations Works for Business” and dig further into this issue, both in the SI archives and the CE publication. It’s one issue that should not be overlooked.

Great Advice on Career ROI Can Be Found on the E-Side

Yes, on the E-Side. ISM’s eSide Supply Management to be precise. Earlier this year, it published “Career ROI: Advice From the C-Suite” which offered 10 great suggestions to get, and keep, your career on a successful career path. These were offered by a career procurement professional with over two decades of experience and were right on the money. These five in particular were on the money.

  • Own Your Career Plan
    Actively take charge of your career growth and the opportunities that come your way. This includes educational opportunities, professional opportunities, and networking opportunities — whatever and wherever they may be. And be sure to check out the talent management resources popping up from the leading consultancies (Greybeard Advisors, The MPower Group, etc.) and professional organizations (ISM, Next Level Purchasing, etc.). Start with the presentations from the recent ISM conference which had a track on talent management.
  • Develop a Personal Brand
    Figure out who you are, how you are different from everyone else, and what it is that you bring to the table. Then work the brand online and offline. Start by establishing a great electronic image, that has clout (with or without Klout), and advertises who you are, and then live it when you network and interact with people. And be sure to constantly maintain and build your networks as this will help demonstrate the success of your personal brand.
  • Work Hard on Your Soft Skills
    If you look at a top 10 skills list for Supply Management today, you are just as likely to find team management, change management, negotiation management, supplier (relationship) management, CSR (Corporate Social Responsibility) management, leadership, communication, cultural sensitivity, and professional development as key requirements as you are e-Sourcing/e-Procurement technology experience, data analysis, risk management, financial management, innovation management, or working capital management.
  • Be a Strategic Thinker
    Supply Management is about the long term. It’s not about reducing costs today just to inflate them tomorrow (by cutting too deep into a supplier’s cost margins, selecting components of inferior quality, or hanging on to last generation technology too long and avoiding investment in next generation technology that can greatly reduce costs and increase sustainability in the long term). It’s about finding ways to increase the pace of innovation, assist the organization in NPD (new product development), and assist the organization in new market entry. It’s about finding new opportunities for value generation, and not chasing the same cost reductions year over year. At some point, 2% just doesn’t make a difference.
  • Don’t Be Afraid to Take Risks, or Fail
    If you aren’t willing to take risks, you’ll never push the envelope and see what you are, and are not, capable of. If you don’t figure this out, you won’t make much progress in developing your personal brand, and won’t really stand out form the crowd. So take a few risks, fail once or twice, learn from your mistakes, and exceed expectations the next go around.

For five more great tips, see the original article on Career ROI: Advice From the C-Suite.

For Lasting Results, Follow the Procurement Leaders …

… but be sure to focus on the right characteristics first. Reviewing a recent summary of A.T. Kearney’s 2011 “Assessment of Excellence in Procurement Study” over on the A.T. Kearney site on why you should “Follow the Procurement Leaders” that described seven ways to lasting results, I couldn’t help but notice that they had all the right suggestions, but in reverse order. Starting from the bottom of the list, and working our way up, we see that the suggestions will transform your organization from an average performer to best in class.

  1. Win the “War for Talent”.
    This is the first T necessary for supply chain success and the most critical one. No supply chain function can be happen without someone in place to plan, manage, and execute it — and for any function to be planned, managed, and executed in an optimal manner, you need world-class talent.
  2. Adopt Technology.
    This is the second T necessary for supply chain success and the next most critical one. Once you have found the right talent to take your supply chain to the next level, you need to enable your talent with the right technology to make them as efficient and effective as possible.
  3. Transition to Category Strategies.
    As the article notes leading procurement organizations use more advanced toolkits — systematically employing more than twice as many methods as the followers — to tailor their approaches to each situation. That’s why leading e-Sourcing / e-Procurement providers are now offering platforms with category templates / workflow management capabilities to allow platform customization to each organizational category and support the third T of supply chain success.
  4. Use Supplier Relationship Management.
    Suppliers are key to supply chain success, and leaders manage the relationship to get the most out of it. They use suppliers to improve innovation and growth, monitor compliance and risk management, and improve capabilities across the supply chain.
  5. Manage Risk Systematically.
    Leaders use risk-impact analysis, financial risk management, and disaster planning as ways to protect against, and mitigate the effects, of disruptions — unlike the risk management “followers” that constitute 80% of companies that are a single natural disaster away from a major supply disruption.
  6. Contribute to Top and Bottom Lines.
    It’s not just about cost reduction, but about value generation. Good Supply Management doesn’t just stop at cost reduction, but goes onto demand reduction, component innovation, product innovation, and even market innovation. This is done by managing risks, managing supplier relations, applying category strategies, using technology, and using all of the skills your talent possesses.
  7. Align with the Business.
    Leading supply management organizations support the business strategy. And while this is the most important goal from the viewpoint of Supply Management, as the goal is to increase the image of Supply Management in the organization, this can not be accomplished until all of the pieces of the puzzle, described in the first six steps, are in place.

Where Should Your Supply Management Organization Be Located? Part I: Factors

Chances are, if your organization is a better-than-average Supply Management organization on the path to becoming a world-class Supply Management organization, then it is in the process of moving from a centralized to centre-led organization — and in the process of trying to figure out where to locate the centre of excellence (CEO). It’s a tough decision. Chances are the organization has identified the following factors as important in location selection:

  • customer location
    the organization should be close to its customers
  • supplier location
    the organization should be close to its suppliers
  • business incentives
    the location should provide some business advantages over other locations
  • infrastructure
    there should be a good infrastructure (in terms of utilities, business support, and personal services for the employees) to support the organization
  • the local talent pool
    there should be a good mix of talent to draw from

And on the surface, these sound like good selection criteria. However, for an organization on the path to world class centre-led Supply Management excellence, only one of these factors really matters. Can you guess which one?

Let’s take them one by one, starting with customer location. The organization should be close to its customers, but this doesn’t mean Supply Management has to be. Sales and support should be close, because they interact with the customer on a daily basis, but Supply Management can be half a world away as long as they take the time to consult with a customer focus group periodically to find out what needs are emerging and with sales and support regularly to find out if the current customer needs are being met with the current products and services being sourced.

Similarly, while the organization should desire to be close to its suppliers, generally speaking, it’s more important for the manufacturing organizations to be close to the raw material and component suppliers, as this minimizes shipment time and lead-time requirements when a spike in sales requires a corresponding spike in production or a quality issue or supply interruption requires a quick shipment replacement (from a different supplier). Plus, your suppliers today may not be your suppliers tomorrow and some are unlikely to be your suppliers in three to five years with constantly shifting market conditions and organizational needs. Thus, any attempt to locate near suppliers (unless, of course, your organization is a significant shareholder of a supplier and it’s part of the organizational strategic plan to take a strategic interest in the supplier for the long term) is likely futile.

Business incentives sound like a great idea, until you realize that any incentive on tax reduction is probably not going to result in any savings as most taxes are based on the (country) headquarters location. Similarly, any reduction on payroll taxes is going to be minimal as Supply Management tends not to the anywhere close to the largest division in the organization. And any one-time start-up grants that may be offered are going to pale in comparison to the savings a good Supply Management organization is going to deliver. So, from a Supply Management perspective, business incentives are rather irrelevant.

This takes us to infrastructure. This is somewhat important, but nowhere near as important as it is for the placement of a manufacturing facility. It’s not like a Supply Management organization requires 3-phase 480-Volt power, hundreds of thousands of gallons of water each day, or a thousand telephone lines coming in. The only thing it requires is decent phone service and good bandwidth so its people can collaborate in real time with their colleagues around the world. And these days, you can get decent bandwidth in just about any city, so infrastructure is only a minor concern.

This leaves us with talent, and this is the one factor that really matters. You can take the doctor‘s advice and get the best technology available, and manage the implementation using the best transition process that change management gurus can provide, but without talent to properly use the technology or implement the transition, it will all be for nought. Processes and systems don’t find savings, people find savings, implement the changes to capture those savings, track those savings, and ensure that those savings are delivered. This says that you need a good talent pool available to you. While a few top-notch people may be willing to relocate to your chosen centre for the experience, and a few more new hires might be willing to move for a chance to rise rapidly through the ranks, most people won’t move just anywhere for a job — no matter how good that job is. Consider the findings of Professor Richard Florida, as chronicled in Who’s Your City, when he asked his students if they would move anywhere for a great job. While most initially said yes, diving deeper into the answer (by asking if they would move to a place like Des Moines, Iowa), we find that most people would not be willing to move just anywhere. Most people who say they will consider moving anywhere in fact mean they will consider moving to any big city with lots of opportunity or a growing city where they have lots of connections. This means if you don’t already have a talent pool locally, you’re not likely to attract one.

So where should you locate your new centre-led Supply Management organization? Using talent as our indicator, we’ll discuss that in detail in Part II.