Archive for November, 2009

Expoliting the current purchasing talent pool surplus

November 24, 2009

Over at Procurement Leaders, the staff reports that in the UK the “flood of jobless procurement pros creates ‘challenging’ environment” for those looking to staff up their procurement functions. Not only is there a bigger talent pool that needs to be navigated, but in many cases there are great retention risks involved as many companies hire over-qualified staff to fill the vacancies.

Last year I edited a book called “Purchasing Tranformation” and in it Björn Stenecker provided a solid skill mapping model which he had used to great effect when dealing with hiring, rentention, development and coaching issues of purchasing functions.

Simply put the model spreads 20 or so criteria across four dimensions which are graded on a scale of 1-5 for both the individual hire/employee and the role.

Education

  • Level of education

General competence

  • IS/IT
  • IS/IT – ERP knowledge
  • Project management
  • Budget
  • Business development
  • Strategy development

Specific competence

  • Purchasing skills
  • Negotiations
  • Contracting
  • Supplier development
  • Category expertise
  • Logistics

Personal skills

  • Leadership
  • Analysis
  • Communication
  • Cooperation
  • Stress handling
  • Initiative
  • Accuracy
  • Flexibility

This model can be used as self assessment in the recruiting process for new hires to quickly see which candidates fit the proposed role. It is also a brilliant tool for seeing in which direction one could develop over-qualified staff in order to retain the competence in the company.

Posted in Uncategorized | 1 Comment »

When collaboration becomes essential for success

November 6, 2009

Jason Busch recently posted a note worthy piece on collaboration (Supplier Collaboration – How Sweet It Is) where he recounted how Hershey Foods and Kmart had developed and executed very successful programs for the Kmart chain.

I was further reminded on how these types of relationships work at lunch yesterday when I ran into an old friend and he mentioned that he was waiting for the response from one of his customers to whom he had delivered material earlier that week. My friend is a songwriter and he’s is contracted as a supplier to one of the major record labels. It’s a buyer/supplier relationship built purely on trust (and past performance).

Now I understand that this might seem a bit farfetched for some, but remember that the recording industry is an 18 billion dollar industry that has experienced a nearly 15% drop in sales annually over the past few years. It’s a business that more and more has become dependent on external suppliers to deliver songs, the changes to the industry that were caused by The Beatles in the sixties have become obsolete and they are more and more resembling the industry demography of the fifties with freelancing songwriters providing songs to labels. But in order for this to work:

  • The buyer needs to trust the songwriter to be able to deliver what they (and their artists) need in order to become more successful.
  • The suppliers need to build a relationship that enabled them to deeply understand what both the record label and the artist was looking for. And unless this is delivered, there is no money coming in. So the depth of the relationship and common understanding is essential.

Now this type of supplier relationship might only be fruitful for a few select categories, but I believe that if we are to be able to exploit the potential for innovation in the supply chain – relationships like this will surely be integral in attaining that goal.

As for my friend in the example mentioned above, I don’t know the outcome yet, but if my friend has understood exactly what the stakeholders were looking for his material will end up on the next Kylie Minogue album.

Posted in Business, Supplier Management, Supplier Performance | Leave a Comment »

Asking the right questions – how to find weaknesses in your supply chain operations

November 3, 2009

Despite some of the headlines (true or not) regarding the practices of IBM’s executive management, there are still some interestion material emerging from the big blue.

In IBM Global Business Service’s recent ”Sourcing in a demanding economic environment” white paper the men in blue offer up a wide range of tactics and ideas for how purchasing departments can excel in even a harsh business climate. Though not much is new, and I personally would have emphasized exactly which skills are core when interacting with other parts of the business and taking on a leadership role in the value creation process, the authors have managed to collect a very comprehensive set of questions that purchasing managers should ask themselves when considering how to go forward with key purchasing challenges.

  • Supply base: Who are the right suppliers?
  • Commodities: What are the strengths and weaknesses in commodity coverage across growth countries?
  • TCO: How can I help ensure sustainable TCO savings? How do I build a reliable business case and estimate risks?
  • Quality and skills: How can I maintain quality levels? How do I attract and retain top-quality staff?
  • Supply chain integration: How can I most effectively manage an extended supply chain? How can I help ensure competitive lead times and flexibility?
  • Contracts and legal: What contractual and licensing issues should I be aware of? What are the import and export regulation requirements?
  • Taxation: What are the benefits or pitfalls regarding local taxation? Should I buy in local or foreign currency?
  • Language and local culture: How can I manage the local language and cultural challenges? How can I protect mu intellectual property and prevent fraud?

Though most of these questions may seem basic to more advanced purchasing professionals, I’d suggest you go through them in your next purchasing council (or board). Chance are that you will unveil unknown weaknesses in your supply chain that can be bettered.

Posted in Change Management, Governance, Organization, Procurement, Sourcing, Supplier Management, Supply Chain Management | 1 Comment »

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