Is there actually a "Top 10" that can be defined for the purchasing and supply management professional? Or, in reality, is there a more precise science to finding out what will make your supply management team the most competitive in the industry?
Sometimes a particular industry will demand certain skill sets that may not even be noticed or required by different industries. Or the hot-button skills that are so popular today may be replaced by newer, sexier terms. Strategic sourcing, spend analysis and supplier development processes — terms that didn't exist 15 years ago — are some prime examples.
And look at the logistics professional: Today he or she commonly uses computerized network modeling to design optimal warehousing and transportation networks, and applies bar coding and radio frequency identification (RFID) technology that only 10 years ago would have seemed like science fiction.
The ever-changing business environment of progressive supply management departments demands continuous evaluation and updating of specific skill sets. Assessing exactly the right mix for your group requires attention to three critical areas:
- Track business changes that cause a realignment of skills sets
- Maintain the skill sets that withstand the test of time
- Build and know your company's "Top 10"
Track Business Changes that Cause a Realignment of Skill Sets
"Several factors can cause leadership to realign the required skill sets in a supply management group," says John Evans and Don Dougherty, co-founders of SupplyStaff, a recruiting firm specializing in purchasing and supply management professionals. "Of most recent significance are the more progressive processes being used by today's supply chain organizations, including strategic sourcing and total cost modeling. Additionally, more complex global markets and greater expectations from C-level executives and customers force shifts. Progressive organizations with clear profitability targets now demand greater involvement in strategic initiatives by the supply management department."
Supply management executives interviewed by SupplyStaff sum it up this way: Significant improvements in strategic supply management processes, globalization, procurement automation, outsourcing, regulatory pressures, competitiveness and market instability have elevated the discipline and increased the challenges. This is especially evident in industries where the overall spend of an organization is tremendous and profit margins are tight.
But even in industries with robust profits, corporate executives' new awareness of the power of supply management raises the bar. C-level executives ask for and expect strategic cost reduction, regular supply availability despite volatile markets, aggressive market expansion and successful product innovation to be supported by — if not come out of — their supply management departments.
In one corporate example, the integrated supply chain became core to transforming the mix of skills. "Skills for supply chain professionals have been changing and elevated as a discipline to the boardroom level here at IBM," says Linda Cantwell, vice president, business growth initiatives, IBM Integrated Supply Chain. "In the last few years we've integrated the functional supply chain components into one end-to-end supply chain at IBM. As a result, we no longer only look for functional talent, but skills that complement our integrated, end-to- end supply chain strategy."
As a result of the increased expectations by C-level leaders, supply management executives are keen to keep their team's skill sets totally aligned with the strategic approach of their organizations. Supply management executives relayed to SupplyStaff the following four steps for skill set realignment:
- Continually assess the skill requirements of the team
- Provide continuing education where gaps exist
- Hire new talent in areas where skill gaps of current staff cannot be fixed
- Regularly review requirements based on new and ever-changing expectations of the supply management group
Additionally, procurement automation has freed up supply management groups to concentrate on more strategic requirements of the business. However, many enterprises have discovered that buyers often lack the domain expertise or skills to drive strategic activities. As a result, supply management executives are recruiting new talent to drive the mix of strategic activities. They are looking for those with graduate degrees in supply chain, logistics, procurement and finance. It's also quite common today to hear about manufacturing firms recruiting buyers with engineering degrees.
To accommodate the realignment of skills set requirements, corporations today partner with graduate programs to provide continuing education for current staff. Arizona State University's W.P. Carey School of Business in the Department of Supply Chain Management annually hosts 20 to 25 managers from South Korea's LG Electronics for a month of advanced training in supply chain management. In fact, it's not difficult to find major corporations partnering with universities for specialized continuing education programs on behalf of their workforce to constantly close skills set gaps discovered by their training assessments.
Pharmaceutical firm Bristol-Myers Squibb's Global Sourcing and Supplier Management team uses several strategies, including partnering with universities for continuing education and special internship programs. Additionally, the team uses special assessment tests before hiring people, rotates current team members into the various areas within the department, conducts on-the-job training in addition to hosting a mentoring program, and has designed its performance review process to hunt for skill gaps that can then be fixed with continuing education options.
Maintain Those Skills That Withstand the Test of Time
While an ongoing assessment of skill sets influences and drives realignment, certain skill set requirements of the team will always be maintained. Some skills may simply increase in emphasis.
The Center for Strategic Supply Research (CAPS) in 2004 released its follow-up study on "Purchasing Education and Training II," authored by Larry Giunipero, Ph.D.; professor at Florida State University and Robert B. Handfield, Ph.D.; professor at North Carolina State University. The original 1993 study explored education and training requirements for supply management professionals. This follow- on study explored what has changed in the past 12 years.
In the area of skills sets, one of the study's key findings states "There are key skills needed for success in purchasing and supply management." The study then goes on to report what skills sets have stood the test of time and what skill sets have made the largest gains (See Table 1).
Most supply management executives SupplyStaff spoke with have some variation on the list of skills sets listed in Table 1. They all express the notion that while a shift in emphasis occurs as strategies are realigned, like ethics, they consider the cited list above as core to what they expect from their top supply management team members.
Identifying with interpersonal communication and influencing and persuasion, IBM's Cantwell explains that relationship management has been a long-standing skill set requirement for IBMers. "In a company that's 320,000 strong this is a very important skill set that can be used both internally with colleagues and externally with suppliers and clients."
A broader perspective of IBM's skill sets focus involves its Workforce Management Initiative (WMI), which is an effort to map IBM's hardware supply chain principles to the organization's growing service business. Thus, the supply chain team and IBM human resources have developed a new labor resource management system that enables IBM to efficiently match its labor resources to client needs and quickly deploy the exact expertise. The data can now be accessed by business units seeking a specific expertise for a particular assignment.
Build and Know Your Company's "Top 10"
That brings us to building and knowing your company's "Top 10." The executives SupplyStaff interviewed pointed out that the skill set mix required from a supply management team must be designed around the organization's short- and long-term strategic goals, and then drilled down to the specifics of the supply management department. In fact, for organization and ease of focus, some supply management groups will break out skills into three categories:
- Technical & Process Skills (TP)
- Creative & Strategic Skills (CS)
- Interpersonal & People Skills (IP)
"Broadly, supply management executives seek professionals with a diverse skill set," points out SupplyStaff's Evans. "They're looking for individuals with an ability to lead and those who are team players." The strategic positions offered today also expect individuals to be stellar communicators as well as possess a degree of sales and marketing skills. Many cite project management skills as a plus.
Once supply management leaders have assessed and identified the appropriate skills required for their team to operate at a strategic level, education and training can be instituted to fill any gaps.
Table 2 is designed to help organize your company's slate of required skill sets based on the overall strategic goals of your organization. (Those listed in Table 2 are simply examples and do not constitute absolute skill set listings.)
The reality of the "Top 10" is that every supply management group will have a variation of its own while understanding that categories such as Technical & Process, Creative & Strategic, and Interpersonal & People can help organize the required skill sets holistically and inclusively.
"Our set of skills is different than just a few years ago, and they'll probably change again," says IBM's Cantwell. "We will continuously look at the mix of skills, knowledge and competency needed to maintain a high level of innovation within our organization and an integrated supply chain that serves an on-demand client."
All executives interviewed indicate that certain skills will survive the test of time. What's important to executives, however, is continually assessing their top skill requirements based on their organizations' business strategies, and then formally testing for shortcomings and using education or hiring strategies to fill the gaps.
About the Author: Julie Murphree is the founding editor of Supply & Demand Chain Executive. She has written countless articles and spoken on such subjects as negotiations, business management issues, and supply and demand chain management. www.JulieMurphree.com.