People: Supply Chain's Secret Weapon

The complete guide to developing sustainable, strategic competencies


By Anne M. Kohler

Gone are the days when it was enough to deliver incremental savings by forcing suppliers to shave a couple of percentage points off their prices. Now CEOs are demanding that their supply chain/strategic sourcing organizations become competitive competencies for their companies. Creating complex global supply chains to take advantage of constantly moving cost arbitrage opportunities and managing the inherent risk involved; constantly increasing the value from supplier relationships by relying on them for things like joint product innovation; and having supply chain strategies drive business strategies — these are examples of the new realities facing our profession. In fact, in certain industries the supply market is so constrained that the sourcing professional's challenge is to create competitive advantage for the company by securing capacity at favorable terms over the competition.

The role that supply chain/strategic sourcing professionals are expected to play in today's environment has shifted dramatically, demanding competencies that reach far beyond traditional process skills. Savvy supply chain/strategic sourcing leaders have recognized that "process" skills are not strategic. Some of the skills and competencies necessary to play a more strategic role are: consulting and facilitation, change management, project management, industry expertise and information technology savvy. In addition, the complex issues that face world-class supply chain/strategic sourcing organizations require a brand new way of thinking about skill and competency development.

This article will focus on the complex issue of talent management within a supply chain/strategic sourcing environment and how effective people development can be your secret weapon.

What is "Strategic"?

The definition of "strategic," according to Webster's Dictionary, is: "Of or relating to strategy. Of great importance within an integrated whole or to a planned effect." The Mpower Group's (TMG) sourcing/supply chain Maturity Model highlights the meaning of "strategic" within sourcing/supply chain and how it has shifted over the last five years. This model allows us to look at the characteristics of a sourcing/supply chain organization at various levels of maturity:

View Maturity Model

The Value Creating maturity level is where truly "strategic" organizations operate. Elements of this maturity level are:

  • Corporate, business unit and sourcing/supply chain goals and objectives are tightly aligned and managed.
  • Sourcing/supply chain leads value engineering efforts to drive out inefficiencies.
  • Technology is appropriately deployed and seamlessly integrated into process.
  • The strategic sourcing process is well-defined, articulated and utilized throughout the organization.
  • A robust infrastructure is in place to support the strategic sourcing process (tools, templates, etc.)
  • Global supply markets are researched for cost arbitrage opportunities.
  • Performance metrics are closely tied to strategic goals and objectives.

People are clearly your strongest asset and your source of competitive advantage. When we look at the role the sourcing/supply chain professional plays, it is very different from the old approach of "three bids and a buy." Today, sourcing/supply chain is strongly supported by senior management and led by a C-level executive. The sourcing/supply chain professional is considered to be among the best and brightest in the company and helps to define enterprise strategies. In addition, sourcing/supply chain is involved in or leading product strategy and development. The role, which is really a combination of several roles, is more than that of an expeditor:

View Sourcing/Supply Chain Professional Role

In order for a strategic sourcing/supply chain professional to be able to play this emerging role, he or she must have a unique set of skills and competencies, which are concentrated in three key areas:

  • Consulting skills
  • Change-management skills
  • Sourcing/supply chain process skills
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