Tag Archives: procurement capabilities

Order Up! 5 Supply Management Capabilities You Can’t Leave Off The Menu

When it comes to supply management, are you managing your customer orders effectively? Dave Food discusses Order Management and five more capabilities you just can’t go without.

Last week, Dave Food talked us through five of the key supply chain capabilities that everyone needs. This week, he’s come up with five more!

From order management to shop floor execution and supply chain visibility, these are the things procurement and supply chain professionals should be on top of.

1. Order Management (OM)

Knowledge and skill necessary to manage the receipt and scheduling of customer orders. An integrated OM system may encompass these modules:

1) Product information (descriptions, attributes, locations, quantities)

2) Inventory available to promise (ATP) and sourcing

3) Vendors, purchasing, and receiving

4) Marketing (catalogues, promotions, pricing)

5) Customers and prospects

6) Order entry and customer service (including returns and refunds)

7) Financial processing (credit cards, billing, payment on account)

8) Order processing (selection, printing, picking, packing, shipping)

2. Shop Floor Execution

This is the area in a manufacturing facility where assembly or production is carried out, either by an automated system or by workers or a combination of both. The shop floor capability may include equipment, inventory and storage areas. You can create customer orders and shop orders for each product manually or import shop orders from an ERP system. When this shop order authorisation is created or received, it contains a specified quantity of the product to be built on the Shop Floor.

Once you define your production work floor processes and rules, the platform to optimise operations can be implemented. Real-time status updates can be provided to your organisation and your customers as they need them. A SF provides an on-demand view of bill of materials, routing details, work instructions, material availability, part and product images and programs, to develop optimal SF processes. These should match your business needs, increase view production work orders at any stage of manufacturing, and rework instructions are sent directly to the factory floor to coordinate processes efficiently and improve customer service.

3. Supply Chain Continuity Planning

This is the process that seeks to optimise Supply Chain strategy, processes, human resources, technology and knowledge. Supply Chain Continuity Planning controls, monitors and evaluates Supply Chain risk, which serves to safeguard against new uncertainties that may emerge affecting profitability. The continuity of the company is vital for the long-term success of the business, in today’s world; all aspects of the functioning of an organisation are vulnerable to disruptions and risks. Supply Chain Continuity Planning controls, monitors and evaluates Supply Chain risk.

4. Supply Chain Visibility

Supply chain visibility (SCV) is defined as the ability of parts, components, or products in transit to be tracked from the manufacturer to their final destination. SCV enables you to perform “what-if” scenarios. Visualising these different scenarios can help you predict issues and problems that may arise, and then plan for them and their solutions.

Visibility allows people in the supply chain to see problems before they occur and take necessary steps to avoid the expense in real time. Visibility also provides insight to make more intelligent decisions early in the order cycle (just in time inventory) and perform more intelligent audits in the distribution centres on inbound shipments. Finally, visibility can also be a major driver increasing throughput in the existing distribution network and thus delaying the need for costly new DCs

5. Supply Chain Network

The collection of physical locations, transportation vehicles and supporting systems through which the products and services firm markets are managed and ultimately delivered; it can be manufacturing plants, storage warehouses, carrier, docks, major distribution centres, ports, intermodal terminals whether owned by a company, suppliers, a transport carrier, a third-party logistics provider, a retail store or an end customer.

Emerging technologies and standards such as the RFID and the GS1 are now making it possible to automate these SCNw in a real time manner making them more efficient. A SCN can be strategically designed in such a way as to reduce the cost of the supply chain. Designing a SCN involves creating a network that incorporates all the facilities, means of production, products, and transportation assets owned by the organisation or those not owned by the organisation but which immediately support the supply chain operations and product flow.

There is no definitive way to design a SCN as the network footprint, the capability and capacity, and product flow—all intertwine and are interdependent. Following on from this, there is also no single optimal SCNw design, in designing the network there is an apparent trade-off between responsiveness, risk tolerance and efficiency.

Dave Food is a supply chain innovator, a passionate educator, a futurist, a trend-watcher, an insightful consultant and a marketing strategist. This article was originally published on LinkedIn.

5 Core Supply Chain Capabilities Everyone Needs

What are the supply chain capabilities that everyone needs? Dave Food gets to the core of the issue…

What are some of the key capabilities for supply chain professionals?  When it comes to acing decision-making, cost effectiveness, forecasting, and productivity you can’t go wrong if you’ve nailed these five things.

1. Capacity Planning

CP is essential to determine the optimum utilisation of resources, and plays an important role in the decision-making process. It is a technique used to identify and measure the overall capacity of production. CP is utilised for capital intensive resource like plant, machinery and labour. Capacity planning also helps meet the future requirements of the organisation; it ensures that operating costs are maintained at the minimum-possible level without affecting the quality, and ensures the organisation remains competitive and can achieve its long-term growth plan.

2. Inventory Management & Optimisation

IMO is a top investment priority for manufacturers. It is driven by a set of values which are typically service level and inventory investment. IO is widely known as a way to free-up working capital or cost-effectively increase service levels. IO can:

  • identify all the stages of inventory
  • point out exactly which stock is excess inventory and where it is stored in the supply chain
  • understand which warehouse space can be freed up (and which shouldn’t be)
  • create a series of “what-if” scenarios based on the organisation’s improvement ideas and alternative configurations.

An IO solution should offer opportunities for supply chain professionals to understand the causes of inventory, accept or reject recommendations, and build trust in fact-based decision-making.

3. Demand Management

Demand Management is a planning methodology used to forecast, plan for and manage the demand for products and services. DM has a defined set of processes, capabilities and recommended behaviours for companies that produce all manner of goods and services. DM outcomes are a reflection of policies and programs to influence demand as well as competition and options available to users and consumers.

4. Master Production Scheduling

Scheduling is the process of arranging, controlling and optimising work and workloads in a production process or manufacturing process. Scheduling is used to allocate plant and machinery resources, plan human resources, plan production processes and purchase materials. It is an important tool for manufacturing and engineering, where it can have a major impact on the productivity of a process. In manufacturing, the purpose of scheduling is to minimise the production time and costs by telling a production facility when to make, with which staff, and on which equipment. Production scheduling aims to maximise the efficiency of the operation and reduce costs.

5. Materials Replenishment Planning

Most MRP systems are software-based, but it is possible to conduct MRP by hand as well. In almost all supply chains, materials need to be stored or buffered. This competency involves different steps, considering aspects of the planning environment/conditions about the product and the supplier. The importance of the companies’ goals/motives for materials supply must also be assessed.

MRP uses global demand plans to create a pull-driven replenishment process; this prevents ordering from the supplier when there is excess stock elsewhere in the supply chain.

Dave Food is a supply chain innovator, a passionate educator, a futurist, a trend-watcher, an insightful consultant and a marketing strategist. This article was originally published on LinkedIn.

Learning the Fine Art of Creativity

We live in an ideas economy where creativity is the new currency. So is it possible for those with less artistic flair to learn how to get their creative juices flowing? 

Register as an online delegate for the London Big Ideas Summit 2017 here.

Everyone’s A Little Bit Creative 

Many of us enjoyed a childhood spent imagining, innovating and creating whether we were painting pictures, constructing dens from cardboard boxes or inventing fantastical make-believe games.

Indeed, the vast majority of research into child psychology suggests that we are all born naturally creative but we subsequently endure an education system or working environment in which our imaginations are more or less stamped out of us.

James Bannerman, a creative change agent and author of Non-Fiction best-seller Genius: Deceptively Simple Ways to Become Instantly Smarter, firmly believes that everyone has the capacity to be creative and innovative. Of course, some adults demonstrate greater potential than others but by employing certain techniques and embracing our inner creativity, we can all achieve additional moments of pure genius.

In a world where innovation is the new currency, procurement teams that fail to execute their ideas with originality will fall behind and die. James will be on hand at the Big Ideas Summit 2017 in London to give our CPOs and online delegates tips to release the creative genius in their teams.

Innovate Or Die

The maxim that organisations must innovate or die has never been more true thanks to rapid technology developments and fierce competition. In procurement, CPOs need to foster their intrapreneurs and work to achieve what Bannerman calls a ‘return on inspiration’:

“ It is easy to become fixated by Return On Investment in business, and often with good reason. The problem with traditional ROI, however, is that it is built upon ‘known returns’.

Creative Thinking, however, is more closely connected with ‘surprise returns’. You don’t always know what you’re going to get at the end of it – because creativity involves ‘the defeat of habit by originality’ (as Arthur Koestler once said in his 1964 classic The Art of Creation.

Yet, to those with an open mind, it can still be worth exploring the world of “return on inspiration”, as the ad agency Golley Slater referred  to it,  to see what comes out the other side”

At the Big Ideas Summit 2017, Bannerman will be putting 50 CPOs through their paces as he introduces them to lateral thinking exercises.

“ During our interactive session we will look at the C.A.N.D.O. model – which I write about in Genius!  This pinpoints the 5 main ways to come up with new ideas, whatever the challenge and whatever the problem: New Connections, New Alterations, New Navigations, New Directions and New Oppositions.

Before we explain what they are, and how they can be used in the real world of work, however, we’ll start off with a few Lateral Thinking exercises.

Take the question ‘What do you lose everytime you stand up ?’ for example. Many people struggle with this question, because they approach it far too rigidly and logically.”Maybe you lose your balance?” or “Maybe you lose the comfort of your chair” etc… If you apply a little Lateral Thinking and spin the question around, however, it can start to become much easier. ‘What do you gain everytime you sit down’ ? You gain a lap!

Join the conversation and register as a digital delegate for Big Ideas 2017 now!

5 Skills To Drive Supply Chain Success This Year

The skills required to drive supply chain success are forever changing. However, there are some skills that will serve you well over time.

Far from abating, the pace of change in the supply management procession continues to accelerate. It’s critical for supply managers and for the survival of the profession itself that practitioners continually update their skill-sets to avoid being left behind.

It doesn’t matter how experienced you are. If you let your capabilities fall behind while the profession continually reinvents itself, you might as well hand in your resignation today.

A common discussion we see on Procurious revolves around the new skills required for today’s procurement and supply managers. The catch is that even the latest skills are likely to become outdated with a matter of months as new technology and unexpected shifts in the global economy change the game again and again.

That’s why the list below is comprised of five skills that will see you through the next year and beyond, despite the galloping rate of change.

1. Becoming a lifelong learner

The most important skill for 2017 is more of a habit. Starting a new, lifelong routine of daily learning will open your career horizons, keep you informed of disruptive technology, and will rapidly transform you into the best-informed member of your team.

Your daily routine may involve reading industry news and blog articles, or targeting your capability gaps with online microlearning. Investing only a few minutes of professional development every day will make an enormous difference.

2. Improving your cultural intelligence

Although globalisation suffered at least two body-blows in 2016 (UK’s Brexit and Trump’s protectionism), it’s safe to assume that supply managers will increasingly work across borders and, subsequently, across cultures. The best global procurement and supply professionals have high cultural intelligence. This means they:

  • have the drive and curiosity required to understand the norms and behaviours found in different cultures
  • actively seek to understand cultural similarities and differences to avoid cultural missteps
  • plan ahead for cross-cultural interactions – making the time to learn common phrases such as greetings and farewells
  • are flexible enough to adapt their tone and manner during cross-cultural interactions according to their observations.

3. Mastering your elevator pitch

Every procurement and supply professional needs an elevator pitch. This is important not just for the benefit of your own career, but for the profession as a whole.

Even in 2017 we’re still in a situation where there’s a vast ignorance out there about what procurement is, and what we do. Being able to confidently spread the word with a short, engaging summary of procurement’s value will help your own prospects, improve stakeholder understanding of procurement, and (most importantly) help attract top talent to the profession.

4. Building your brand online

Are there still some stalwarts out there who are holding out on embracing social media as a career-building tool? Again, this skill-set is not only good for your own networking and career development, but very important for the wider profession.

We need as many people as possible being positive about procurement and supply management online.

Why? Because the alternative is a mire of online negativity from disgruntled stakeholders or suppliers with a grudge. Join two or three social networks, talk up the profession, and reap the professional benefits of a strong online network.

5. Embracing social procurement

Social procurement has gone from a nice-to-have, good-for-the-brand exercise to an integral part of business strategy. Before launching your first social procurement project in 2017, ensure you’re able to articulate how it benefits the business by aligning your efforts to enterprise-level targets and organisational values.

Setting KPIs for Beginners: Measuring Success

Now we have our KPIs agreed, how do we measure our data in order to ensure success in supplier relationships?

measure success

Catch up with part one and part two of this three-part introductory overview of the role and relevance of KPIs to support Supplier Relationship Management (SRM).

So, we’ve established the why, the what, and the how for setting KPIs. Now we need to understand how we are going to measure the KPIs in order to provide meaningful reports, and set a recipe for success!

Systems for Capturing KPI Data

In a perfect world, KPI data should come from automated systems. However, when you receive the data from the supplier, you may want to corroborate some of it with your own.

Commercial software vendors like SAP-Ariba, Coupa, Oracle, Emptoris and others have features that monitor and track some KPIs. The base functionality comes through the core purchasing systems. Some organisations, however, choose to develop their own reporting systems to ensure they have the features and flexibility they need.

Another option is to use manual systems and processes. This could include disseminating data through spreadsheets, email or any other format that users have access to.

These methods are simple and can be very effective if applied consistently, but obviously take a lot more time than automated reporting. One concern with manual systems is the higher potential for human error.

Typical Data Points for Measuring KPIs

The types of data points you can collect depend on the system you’re using. Below is a sample list – keep in mind that your list will depend on your organisation’s tools, systems and reporting requirements.

  • At the point of ordering: you can check the order against the contract to track compliance.
  • At the point of receipt: you can verify whether goods are delivered in full or delivered on time.
  • At the point of invoicing: you can check invoice accuracy and blocked invoices.
  • At the point of inspection or usage: you can collect quality metrics, including defects and out of specifications.
  • At the completion of the order: you can poll end-users to gather feedback on the ordering process and the goods or services delivered.

Multi-Supplier Performance Dashboards

These dashboards can be used to compare several suppliers across the same or multiple categories, depending on your objectives.

Comparing the suppliers in this way can be powerful motivator. For example, you could use the comparison data to push your suppliers towards best practice.

Alternatively, you could identify the least competitive suppliers for elimination, or identify other improvement opportunities. If your objective is to reduce your number of suppliers, KPI data could help you make a decision based on the suppliers’ ranking.

Recipe for Success

Keep the following five tips in your procurement toolkit for the next time you’re drafting KPIs and thinking about how to get the most out of your supplier relationships:

  1. Avoid an adversarial approach. Remember, this is all about relationships – and about people. People are more relaxed and inclined to come to an agreement when they aren’t in an adversarial environment. As a procurement professional, you’re going to lead your supplier to success through innovative and progressive means. Essentially, you are the champion of their cause to your senior management.
  1. Work collaboratively with your supplier to develop each KPI and agree on how it will be used. Let the supplier know which KPIs are critical to your organisation – the ones you’ll be listing on the dashboard and sharing with senior management. This enables the supplier to work with you to develop the best approach for success.
  1. Have regular reviews with the supplier – both formal and informal. Always keep the lines of communication open.
  1. When issues do arise, address them as soon as possible. Workshop with the supplier on how to best solve the issue. Remember, don’t focus on the symptom, but try to identify the root cause of any problem and find a solution that will work for everyone.
  1. Let your supplier know how they’re performing compared to others suppliers, while keeping their identities anonymous. This is a form of benchmarking and can help motivate suppliers to improve.

That wraps up our three-part series on setting Key Performance Indicators! Hopefully this will set you on the path to KPI success, but if you have any comments or questions, you can ask them in our new Procurement Tools and Templates Group.

Setting KPIs for Beginners: Types of KPI

We know the why in the role of KPIs in Supplier Relationship Management. But we also need to be able to identify which type of KPI will bring the best results.

KPI for beginners

Catch up with the first part of this introductory overview of the role and relevance of KPIs to support Supplier Relationship Management (SRM).

So now we have established the role of the KPI in the SRM process, we need to think about the type of KPI we’ll use. Much of the decision making around this will be based on what procurement is measuring with the KPIs.

Remember – procurement should discuss KPIs with other stakeholders and, where possible, involve suppliers too. This engagement could make the difference between success and failure.

Types of KPI

Here’s an overview of the three different types of KPIs:

  1. Quantitative – these are measurable, numeric and objective, like rating on a scale of 1 to 10. An example of a quantitative KPI would be the number of late deliveries per quarter.
  1. Qualitative – these KPIs are more subjective. An example could be how responsive the supplier is to a request – let’s say you have a special order that needs to be delivered to an unusual location. It’s a one-off request, but if the supplier makes the delivery it would save you significant costs in transport and you know they make deliveries to that location for other customers. Is the supplier reluctant to change the delivery location, and is there a fee involved? Is the fee reasonable?
  1. Cultural – are the KPIs aligned with your organisational values? Let’s say your organisation has a drive to always buy locally-made products. You want KPIs to capture whether your suppliers are buying locally as well.

Remember, there’s no one-size-fits-all set of KPIs. Whether you are working on direct or indirect categories, manufacturing or distribution, you need to match the KPIs to the supplier.

For your Toolkit: KPI Checklist

This checklist is a quick summary to confirm if your KPI will stand up to scrutiny.

  • Is it measurable? If it’s not measurable, than what good is it? How will you know if your supplier is meeting the required standards?
  • Is it meaningful? Do you or anyone else in the organisation care about it – if not, why collect it?
  • Is it actionable by the supplier? There’s no use measuring a data point and feeding that information back to the supplier if the supplier is unable to act on or improve the situation. If it’s not within their sphere of influence, they probably won’t accept the KPI to begin with.

Keep the KPIs simple, easy to understand and easy to measure. Ensure they support your overall business strategy and objectives by aligning them to your customer requirements.

Experience shows it’s better to capture a few vital measures that can be tracked consistently and repeatedly. This is much more effective than measuring randomly and or inconsistently.

Institutionalising the measurement process and regularly reinforcing it with suppliers and stakeholders will provide a common ground and common language, support a collaborative environment and make it easier for everyone to understand, participate and achieve.

Finally, you want to reinforce the value of the data collection to support improved business performance – that is, now that you’ve collected the information, make sure you tell the right story.

Contract Level KPI Reports

The dashboard (or scorecard) summarises your KPIs and measures them against a particular supplier.  This tool can be used internally to review a supplier’s past or current performance. It’s also important to share this information with the supplier so they are aware of the data and can act upon it.

KPI status reports should be delivered in a timely manner to enable you to address stakeholder concerns quickly and responsively. The reports need to include all the relevant information your stakeholders require – this includes the good and the bad.

You don’t want the senior management finding out bad news from the inter-office grapevine or worse, the media. This is your chance to deliver important details relevant to the success of the business. It’s your news and you want the kudos that go along with identifying and sharing it first.

You also want to define a clear escalation process to address issues and problems as they arise. For example, in a supplier review meeting you may realise the supplier’s data doesn’t match yours.

The supplier is reluctant to change their process based on your data, when their own data says everything is okay. You need an agreed escalation point to review and resolve this disagreement.

Finally, you want KPIs that will deliver predictive measures, not just historical. This allows you to stay one step ahead by being in a position to identify and act upon issues before they become serious.  Predictive measures will also help you to identify targets for the supplier to meet and beat over the course of the contract.

All of this information fits into the reporting documentation to demonstrate how and why you’re spending your organisation’s money. The highlights of this report can be summarised in the dashboard and presented to senior management.

Stay tuned for the third and final article in this series, which explores systems used to capture KPI data, typical data points for measuring KPIs, and multi-supplier performance dashboards.

Setting KPIs for Beginners: Why Bother?

An introductory overview of the role and relevance of KPIs to support Supplier Relationship Management (SRM).

KPIs article 1

In this three-part article, we discuss some of the different KPIs that are used specifically for SRM. This list is by no means exhaustive; it can’t be, as performance indicators must be relevant to your own organisation, customers, and requirements.  However, this list can be used as a guide and can become an essential part of your toolkit.

We’ll also review some of the popular ways people measure and monitor KPIs through systems and reports. Again, this won’t be an exhaustive list because of cultural and technical requirements unique to every organisation.

You’ll also find some key tips for implementing KPIs successfully, including a checklist (more tools for your toolkit!).

We will explore how dashboards can be a fantastic tool for procurement professionals to use when communicating to stakeholders and promote hard-won benefits to the business. An effective dashboard will include KPIs that demonstrate how suppliers or categories are being managed and their impact on the business. Remember, the KPIs you set may influence senior management decisions. Therefore, you need to get it right.

Why bother with KPIs?  

To get started, let’s talk about why we use KPIs.

As procurement professionals, we’re responsible for making smart purchasing decisions that support the values and principles of procurement, such as probity and value for money. These decisions must also support the philosophy and strategy of individual organisations. Importantly, we need to be able to justify and document how (and why) we’re spending money.

KPIs can help us justify spend. In fact, KPIs can be used to identify risk, cost savings, innovation opportunities and successes, value-for-money initiatives, customer satisfaction and any number of other factors that we or our customers feel is important.

The role of a supplier KPI is vast. They set the performance standard and have measurable features used to identify areas of improvement, such as establishing a baseline, identifying where you want to be and developing a path to get there. But it doesn’t stop there – KPIs can also be connected to payment milestones, credit payment and liquidated damages.

The important point to remember is that supplier KPIs must be agreed upon by all parties involved. If your supplier doesn’t know what is expected of them, they won’t be able to comply, let alone excel. That’s just one side of the relationship.

The other side of the relationship involves the professionals within the buying organisation. How do you, the procurement professional, know which KPIs to use? Are cost savings important? Delivery times?  ISO standing? Inventory reduction? You won’t know unless you ask your customers about their requirements.

So, why are KPIs important?

What gets measured gets done. KPIs are a way of ensuring your supplier focuses on your fundamental business needs. We can do this through:

  • Incorporating our customers’ requirements into the KPIs to align supplier performance with organisational goals.
  • Providing constructive feedback (rather than punitive criticism). Why? Because the end goal is a win-win situation where you get what you and your customers need, while the supplier gets to improve its reputation and build its business.
  • Promoting a continuous feedback loop using KPIs to drive supplier performance, initiative and improvement. KPIs should be linked to the terms of the contract but remember, the focus is on the relationship. Indicators should therefore reflect the “spirit” of the contract as much as the “letter”.
  • Bringing clarity to overly generic contract requirements to drive meaningful performance.

Challenges in KPI management

Here are some common challenges that we’ve seen through our own experience:

  • Capturing the data – identifying the relevant data and accurately acquiring the data points.
  • SRM fatigue – motivating yourself, your team and your suppliers to continue SRM activities over the life of the contract, which can be months or even years. Activities can easily become stale and sometimes you’ll need to push them along.
  • Comparing and contrasting suppliers – supplier performance will be very different depending on their size, sector and region. Ensure you’re comparing apples with apples.

Engaging end-users is important

When driving supplier performance over long-term contracts, we want to keep things moving so end-users don’t feel that nothing is happening. Keep end-users in the loop, ensure their voices are heard and let them know how things are progressing.

We often focus on senior management as our primary “customer”, but the end-user is arguably more important – especially when it comes to compliance. After all, they’re the ones who will use the product, system or tool that is being purchased.

Stay tuned for Part 2 of this series, which will explore the different types of KPIs, complete with a KPI checklist and contract-level KPI reports.

Are You One of Procurement’s Game Changers?

As disruption is increasingly recognised as a strategic business skill, being one of the game changers is a highly coveted role.

Game Changers

In a world increasingly recognising ‘disruption’ as a strategic business skill, where an army of highly talented and ambitious professionals are fighting their way to the front line in the war for talent, the idea of being identified as a ‘game changer’ is quite coveted.

After all, we all want to get named on the high potential talent list, don’t we?

Game Changers – A Bad Thing?

That was the premise that started the procurement talent discussion at the Productivity in Pharma Think Tank in London. But then there was a revelation.

Despite media hype and discussions at high brow HR think tanks about these ‘unicorns’ – game changing individuals – it turns out that being a game changer isn’t necessarily a good thing.

You see, what most large organisations actually want are executives who can execute the strategy and implement. In other words – get stuff done. What has been discovered is that game changers can sometimes lack EQ, and have the potential to bulldozer their way through an organisation, eventually proving themselves to actually be too disruptive.

Those organisations who actually do need a disruptive or transformative force are now separating out these individuals from the rest of the pack, and placing them in “garages”, “incubators” and “shark tanks”, to use their unique skill sets for good, not evil.

Increasing Collaboration

In fact, well known procurement search and interim consultants, Langley, put forward a case that procurement should actually be the “great integrators”.

“Today’s procurement professionals need to integrate the link between company, suppliers and the environment. They need to be able to bring the outside, in,” said the Managing Director of Langley, Cristina Langley.

In talking about the talent he is trying to attract to his organisation, Tyson Popp, CPO at Mallinckrodt Pharmaceuticals, further reinforced this need for an increasingly collaborative style. Popp mentions that he is looking for talent with “an intellectual curiosity and a need to connect across the organisation”.

The Science Bit

The good news is there is some science behind this debate. The Game Changer Index (GC Index®) has been created by eg.1’s CEO Nathan Ott, and Chief Psychologist Dr John Mervyn-Smith, in collaboration with Professor Adrian Furnham at UCL.

The Index was developed in response to client demand for a more useful way of identifying people who could implement transformation. It was born from a frustration with the way that traditional tools, such as Belbin and Myers-Briggs, neglected this special group of talent.

The team believed that Game Changers were fundamentally different from ‘High Potentials’ and ‘Traditional Leaders’, and would not be identified by existing, antiquated assessment tools. This was an issue for businesses searching for individuals who could drive transformational change.

This was the foundation for the development of The GC Index. The tool, through several phases of research, highlighted the ways in which individuals differed in terms of Imagination and Obsession. Those high on both emerged as the Game Changers.

Applications in Procurement

Despite me having given game changers a bad rap earlier in this story, and given that my personal mission is to change the face of procurement globally, I really do hope we have a lot of CPOs out there who are game changers. That is, transformational leaders who can deliver paradigm-shifting change. The real issue is how best to enable them to succeed in a structured environment.

The GC Index® identifies these dynamic individuals, but has evolved to also assess four other profiles, which are equally valuable and are necessary to ensure genuine, long term, game-changing transformation.

These profiles could apply to anyone within your procurement team. However, I thought for demonstration purposes I would share my thoughts on what the generic procurement roles for these profiles could be:

  • The Strategist – This could be Category Leaders. They have an ability to analyse patterns and trends. They will be most comfortable leading by giving a focus to action, through direction and purpose.
  • The Implementer – This profile could best be characterised as sourcing professionals and transactional (P2P, etc.) executives.  They are essentially task-focused individuals, driven by a need for tangible achievements. These are the leaders who will be in the ‘thick of the action’, and get on with things.
  • The Polisher These people lead through setting standards, and could therefore be best characterised by our Compliance and Procurement Process Excellence leaders. They are demanding of themselves and others. Their mantra will be, “If a job’s worth doing, it’s worth doing well”. They instil belief in people in action, and in the possibility of a better world. This definitely sounds like our best practice procurement leaders!
  • The Play Maker – This probably epitomises the poster-child version of the modern-day procurement professional. Perfectly placed right in the intersection of all four profiles, this individual is interested in people and relationships. They are, therefore, best equipped to take on the all-important task of stakeholder engagement, but also managing upwards (C-level) and outwards (supply markets). Play Makers at their best will lead through building productive relationships and helping others to do the same.

Apparently Richard Branson is a playmaker – not only driving outcomes, but making sure the whole experience is enjoyable, even potentially playful! (Heaven forbid in procurement!)

Making a Contribution

So the real question is, how do you develop your skills to maximise your success in this new corporate reality?

The good news from eg.1 is that you don’t necessarily fit into one box. Their data shows that while some individuals have a dominant profile, they also have an ability to ‘flex’, moving, for example, from being a Strategist, when the situation demands it, to being an Implementer.

The other good news is that just about all leadership styles can work. You just need to understand what your style is and play to your strengths. And as Nathan Ott commented at this year’s Big Ideas Summit:

“Not everyone can be a Game Changer, but everyone can make a Game Changing contribution.”

The Productivity in Pharma Think Tank brings together a conclave of senior procurement leaders from the Pharmaceutical industry, creating a unique, mini-MBA style environment, where the most pressing issues facing the function are explored in detail and, from which, key insights and applicable takeaways are derived.

You can find out more about this event at The Beyond Group website, and connect with the event hosts and facilitators Giles Breault (@GilesBreault) and Sammy Rashed (@RashedSammy) on social media.

Businesses Alarmed by Digital Skills Shortage

A major training effort is needed to improve digital skills, and make sure people are not left behind in the digital age, say the Institute of Directors.

Digital Skills

The Institute of Directors (IoD) have stated that a major effort is required in the UK in order to ensure that workers have the digital skills required to keep up with technological advances.

The IoD was responding to a report from the House of Commons Science and Technology Committee, which suggested that, while 90 per cent of current UK jobs required digital skills, over 12.6 million UK adults did not have the skills to allow them to perform these roles.

The report also stated that two-thirds of digital-based organisations have struggled to fill a vacancy in the past 12 months, and that 93 per cent of technology companies have seen a direct impact on commercial operations from a digital skills gap.

This is despite over 12 per cent of Computer Science graduates still being unemployed six months following graduation.

Digital Exclusion

The House of Commons report also highlighted a worrying trend in digital exclusion, with 23 per cent of the UK population lacking even basic digital skills. These include a high percentage of disabled and elderly people, as well as those without a formal education.

However, the good news on this front, is that around 4.5 million of the 12.6 million are currently in full time employment, with employers being asked to assess how to aid with digital skills education and training.

While the impact on the economy of these statistics is estimated to be in the region of £63 billion per year, in lost potential GDP, individuals also miss out on savings of £560 per year on average by not being online.

The report concludes that there is more to be done by the UK Government, both in terms of facilitating the training of digital skills, but also putting the infrastructure in place to enable the entire population to have access to the Internet.

Digital Skills Education

In April, the IoD released a major report arguing significant changes to education and life-long learning were needed to enable the UK to adapt to rapid advances in technology and automation.

The IoD’s Chairman, Lady Barbara Judge, in a piece for the Sunday Telegraph yesterday said that society needs to make “a concerted effort to upskill and reskill its population, and not leave a whole generation ill-equipped to meet the new reality”.

Seamus Nevin, Head of Employment and Skills Policy at the Institute of Directors, said of the House of Commons report: “This report shows the need for businesses to invest more in training British workers. We also must make sure tomorrow’s workforce is leaving school or university with the digital skills that employers require. Just as importantly, we must enable people already in employment to retrain or up-skill in order to meet the demands of the changing workplace.

“The IoD has called for the government to increase the use of technology in education — such as use of MOOCs (Massive Open Online Courses) — to provide training at much lower costs and improve access to learning for all. We have also suggested the creation of tax incentives to encourage and enable people at all stages of their career to return to education and learn new skills”.

“The Committee says the UK needs another three quarters of a million workers with digital skills by next year. In order to meet the immediate shortfall, businesses must be able to access workers with the right skills from abroad.”

ISM’s Jim Barnes: three major L&D challenges for procurement

Are you clear about the capabilities your role requires? Do you regard yourself as financially acute? Does your organisation have processes in place to capture vital knowledge from departing professionals as they retire?

Jim Barnes

Jim Barnes is a busy man. He’s the managing director for ISM Services, the Institute for Supply Management’s team learning and development arm, and the nature of his role means he’s on the road, or in the air, for much of his working week. His team and its affiliates are truly global, working around the clock with top corporations across the US, Latin America, Europe and Asia – in Barnes’ words, “the sun never sets on ISM Services”.

Procurious was lucky enough to get some time with Barnes at ISM2016 in Indianapolis. We asked him for his top three concerns for the future of learning and development in procurement. From his unique viewpoint near the pinnacle of one of the biggest supply management associations in the world, Barnes sees the following three shared challenges:

1. Lack of clarity around procurement roles and competencies

With procurement role definitions and responsibilities becoming increasingly fluid in modern businesses, Barnes has become aware of confusion around what many roles actually entail. “We’re seeing a lack of alignment between job roles and organisational needs. There’s also a lack of clarity in what it takes to get to the next level in your procurement career”.

ISM’s solution was to launch the Mastery Model, which CEO Tom Derry has referred to in the past as “the world’s greatest collection of job descriptions”. All of ISM Services’ content and training now maps to this model, and it’s part of Barnes’ role to ensure the model itself stays relevant in a fast-changing profession. “We’re constantly updating the Mastery Model”, he says. “That’s the whole point – procurement has moved so fast that we’ve almost outstripped the ability to have formalised career structures, but the model is designed to stay ahead of the latest trends.”

ISM Services surveys individuals to determine their competency levels across no fewer than 73 sub-competencies in the Mastery Model, identifying individual or group-wide gaps and devising a targeted investment plan for training and career feedback.

“There are so many ways people can be up-skilled”, says Barnes. “It could be formal training towards ISM’s CPSM or CPSD, or eLearning, or on-the-job mentoring and coaching. It’s all about targeted investment to address identified gaps. Most importantly, the Mastery Model helps procurement professionals understand what competencies they need to excel in their current roles, and what skills they’ll have to master to move to the next step in their careers.”

2. Procurement professionals need greater financial acumen

“If you’re in procurement, you need to ensure you have a basic understanding of business finance and accounting. For example, when selecting suppliers, you should be able to look at the financial data around their business to understand their dynamics”, Barnes says.

Being able to speak intelligently about finance will greatly benefit your ability to engage internal stakeholders and talk their language. “This is especially important when engaging with Finance, of course, and the C-level will expect you to have a good grip on business finance.”

Barnes says that more and more universities are offering quality courses in procurement and supply chain that address the gap in financial knowledge. “We’re seeing some terrific graduates coming out of these courses, including this year’s impressive group of Richter Scholarship recipients”.

Barnes’ advice to newly-minted graduates looking for a great role in procurement? “You’ve got to be willing to travel’, he says. “Lots of manufactures have plants in regional areas, often in the middle of nowhere – we can’t all land jobs in San Francisco”.

3. An ageing workforce

US electricity and gas company Duke Energy, says Barnes, is a prime example of the ageing demographic in procurement. “Over the next five years they’ll lose two-thirds of their supply chain staff. They’re replacing 200 people a year”. Barnes’ main concern with the demographic shift is capturing lost knowledge. “Of course there’s going to be a ‘brain drain’ – companies need to be very proactive about capturing as much knowledge from outgoing professionals as possible. But it’s also an opportunity to shift the skill set in procurement from old-school tactical to cutting-edge strategic.”

Barnes notes that ISM is on the front foot when it comes to developing millennial talent, most noticeably in its 30 Under 30 Supply Chain Stars program (in partnership with THOMASNET.com) and through its innovative eLearning initiative.

“The eISM online learning options make skills acquisition so much more accessible. We’ve now got people in remote places accessing our guided learning by webcam – they may not have been able to attend a workshop in person due to time constraints and travel expense. Trainers have to be able to accommodate people’s needs – and some procurement and supply chain professionals simply can’t find the time to leave their jobs”.

Virtual learning benefits trainers, too

On a personal level, Barnes is very pleased about the increasing popularity of virtual learning. “There’ll always be a need for face-to-face learning, networking and workshops, but one of the great benefits for me is that hopefully I won’t need to be on the road quite so much in the future!”