With more than 20,000 procurement and supply chain jobs available, do you have the necessary skills to land a coveted position? This was the topic of discussion among four CPOs. Moderated by Lara Nichols, associate vice president, externalization and Center of Excellence for Merck & Co., the panel explored a variety of issues around critical skills CPOs look for in their hires.
The following includes insights from each of the CPOs present on the panel.
Deborah K. Beavin, C.P.M., MBA, Six Sigma Master Black Belt, CPO for Humana Inc.:
For Beavin, core analytical skills and the ability to manage change and thrive in an environment of ambiguity are critical in succeeding at Humana. And when faced with resistance, how do you work through that? Are you resilient? This is where cultural fit becomes important. Beavin looks for individuals who are able to drive change. It’s important for candidates to discuss their expectations to ensure alignment between those expectations and company culture.
Eric Germa, senior vice president and CPO for ANN, Inc.:
Germa views the supply management organization as an internal consultancy that is constantly adding value to the enterprise. Thus, having team members with an entrepreneurial spirit and problem-solving abilities is paramount — as is having a passion for discovering new business opportunities and involving others to help find solutions. When interviewing candidates for a supply management position, Germa asks, if you were in charge of a procurement organization, what would you change? The answer to the question often reveals where that person’s passion lies.
Tim Fiore, CPSM, C.P.M., MCIPS, senior vice president, supply management, and CPO for ThyssenKrupp NA:
Regardless of your level in the organization, you must bring change and make people feel comfortable with change. And what about advice to those entering the profession or looking to advance to the next level? Fiore wants to know that they’re committed to the profession. He looks for people who want to be in supply management. From a skills perspective, critical thinking, interpersonal and leadership skills are vital. And like Beavin, Fiore says people must be responsible for their own careers. A major part of that is understanding your strengths and your ideal working environment. For example, after researching a company, is it too fast-paced or slow-paced for your style of work? Recognizing this before making an employment decision is important.
Quentin Roach, CPO and senior vice president for Merck & Co.:
In the pharmaceutical industry, data analytics and using the information to drive decision-making are key for that sector. And having core skills such as negotiating is not enough unless they’re elevated to a strategic level. For example, pharmaceutical companies must deliver on products and solutions three to five years out. Thus, contracts must be negotiated appropriately in order to execute on those time horizons. Like his colleagues on the panel, Roach emphasized the importance of self-awareness and alignment with company culture. Is there an understanding of the full scope of the business and industry? Roach also said people must have “confident humility” — recognizing that you can’t be successful without other people.
Google’s procurement has sure changed a lot from the early days of the company. According to David Natoff, head of procure-to-pay at Google, the company has experienced “hockey-stick growth” that looks like the shape of a hockey stick on a graph. Total spend has shot upward since 2009 when the economy tanked. The only problem was the purchasing team was operating on a transactional basis. Payments were slow to reach suppliers, and it was far from strategic sourcing. To keep up with fast-growing levels of spend, procurement had to seek efficiencies and streamline processes. Outsourcing to third-party providers and automation of processes worked wonders, but e-sourcing was clearly going to be the key to world-class supply management for this global Internet giant.
Suppliers compete in real time in e-auctions, and the process is quick, transparent and results in fair market prices from suppliers. As long as the sourced item has clear specifications and there are a minimum of two competitive suppliers, an e-auction can be a great solution for sourcing everything from professional services to temporary labor and construction/maintenance services.
“We created an eSourcing Center of Excellence because our stakeholders want answers quickly and we want standard processes,” said Bernd Huber, Ph.D., head of Google’s Global Sourcing Center of Excellence. “It also enables our training for suppliers in e-sourcing, and provides project management and documentation throughout the process. Data is king.”
Today, e-auction penetration of total supplier spend is at 21 percent.
If you would like to increase e-auction spend in your organization, here are some tips from Google’s experience:
- Gain senior-leader sponsorship.
- Hire collaborative-minded sourcing professionals who are open to the e-auction concept. There’s likely to be some resistance within the procurement function, as well as with some of the stakeholders; try to counter it with proponents of e-sourcing.
- Spend time with stakeholders and other business units that have used e-auctions, and find out the best ways to build your e-sourcing strategy from those who have gone before. No need to reinvent the wheel!
- Start small, with low-spend items, and focus on getting that first “win” in one category. Once you have that one win, you can market the concept much easier to move on to other categories with higher spend.
- Keep strong documentation and make sure all activities measure up to the highest ethical standards. No phantom bidding or other dishonest practices allowed.
- Invite senior leaders to come in and witness an e-auction in real time.
- Reward key individuals/teams for success, or if they are early adopters of e-auctions.
- Create a competitive spirit and celebrate e-auction culture.
In time, you can be successful with e-auctions and will find they can be a tool to gain value (reduction in costs, etc.).
“In Google’s case, other business units now support the e-sourcing of certain items that wouldn’t be sourced in this way before,” said Natoff. “There’s ongoing potential for more value the more you run e-auctions.”
Global supply chains must be fast and agile, much like the global teams of supply management practitioners who manage them. But as many procurement professionals know, working collaboratively across different countries, time zones, cultures and languages is not an easy task.
With teams dispersed throughout the world, it is easy for things to go off course, says Cate Lawrence, CPIM, C.P.M., Lawrence Research Associates. That’s why when companies engage their global teams, it is important to make sure all employees understand the organizational structure and its focus.
Lawrence pointed to statistics that show collaboration is 52 percent less effective when done via phone and teamwork is 34 percent less effective when done via videoconference. Too often, she added, companies focus on tools and processes in global collaboration when they should also focus on building trust and engagement in their worldwide teams.
“You need soft skills for hard targets,” she said. “Soft skills” are words that often are overused and sometimes misunderstood, but they are necessary, she added. “Often, the main problem in team dynamics is silence. It kills collaboration ad trust.”
Lawrence suggested companies working globally on team projects should leverage “global team power.” That can be done by:
- Increasing positive personal relationships
- Configuring teams strategically
- Being aware of conflicting interests
- Keeping workloads manageable
- Providing teams with as much autonomy as possible
- Establishing deliberate and proactive strategies to create engagement
“Leadership is the most important process in all of business.” — Dr. Robert Kemp, president of Kemp Enterprises
Throughout the session “How We Did It: Gaining Professionalism, Developing Leadership Skills, Building Teams and Leading Business Success,” there were numerous inspirational messages on leadership from some of the most successful leaders in the supply management field. The following is just a sampling of what the esteemed panel had to share on the topic of leadership and professionalism.
Lisa Martin, C.P.M., senior vice president and chief procurement officer at Teva Pharmaceuticals, and ISM’s 2013 recipient of the J. Shipman Gold Medal Award, discussed women in leadership.
Martin sees a resurgence in discussions about gender in the workplace and the rising awareness of unconscious bias in companies. She emphasized the importance of having a thick skin, and the ability to have offensive and defensive leadership tactics without burning bridges. And don’t forget, always have patience. Look at where you’re starting from and celebrate your singles — which are just as important as home runs.
Shelley Stewart, Jr., CPSM, vice president, sourcing and logistics/chief purchasing officer at DuPont, made an excellent statement about the purpose of networking — it’s not about just having someone to help you find the next job, but having someone to talk to for support and feedback. And today’s supply chain management practitioners must have passion for the job. Stewart advises practitioners to run toward risk-taking, not away from it.
Brad Holcomb, CPSM, CPSD, chair of the ISM Manufacturing Business Survey Committee, focused on the importance of mentoring, both as a mentee and mentor. “Try to mentor five to 10 people. And if that’s cascaded, we can change the profession. Be a mentor, find a mentor, or both and help change the world,” he said.
Angel Mendez, senior vice president of Cisco transformation at Cisco, advises practitioners to always be learning. Have a global curiosity. And most important, consider your style — the package that skills come in.
R. David Nelson, C.P.M., A.P.P., CEO and senior adviser for Dave Nelson Group Inc., encourages people to make a real contribution wherever you’re at and at whatever level.
Finally, Dr. Kemp, who opened the panel discussion, closed the session with some inspiring words: “Never miss an opportunity to achieve success. Get yourself good mentors, listen to them and learn. And build and reward your team.”
Lisa Martin, C.P.M., was named the 82nd recipient of the J. Shipman Gold Medal Award at today’s Conference luncheon. The Shipman award is the highest honor a supply management professional can achieve, and Martin was chosen as the 2013 medalist for her many contributions to the profession over her career. [Click here to view the official ISM press release announcement.]
Norbert J. Ore opened the presentation with high compliments about Martin’s passion for excellence. Not only has Martin’s career been packed with professional achievements with companies like NBC, Sony and Pfizer, her impact on people has always been a shining strength.
“Our 2013 winner is well-known in the field of supply chain management. She’s a mentor to many, and a friend to many more,” said Ore.
Martin’s career began in the 1980s, when she was tasked with creating a procurement function at a Los Angeles-based production company. She was brand-new to procurement, so she took courses at California State University, Northridge, to learn the basics. One of her professors introduced her to NAPM—Los Angeles, Inc. (now ISM—Los Angeles, Inc.) and she quickly fell in love with the art of supply management and procurement.
Today, Martin reflected on her experience and how far the profession has come over the past three decades.
“It has been so gratifying to see those changes take place and to be a part of it,” said Martin in her acceptance speech.
Martin serves on the ISM Board of Directors, and served as the Board Chair from 2007 to 2009.
One of Martin’s mentors is Elaine N. Whittington, C.P.M., A.P.P., who was the 2000 J. Shipman Gold Medal Award winner and the first woman to receive the honor. Martin is only the second woman to be awarded with the prestigious gold medal … so far. The up-and-coming supply management professionals hold much promise, and Martin is far from the last woman to win this award. Martin loves the opportunity to mentor others, and looks forward to doing more of it in the years to come.
After all, one of the things she’s most proud of in her career has been her relationships with colleagues. “I am so proud of all the people who’ve worked for me and have now gone on to become successful in their own right,” she said.
Martin’s latest position is with Teva Pharmaceuticals Industries as the senior vice president and chief procurement officer.
She lives in New Jersey with her husband of 30 years, Rick, and has two adult children who are following in her footsteps: Both have just begun their own careers in procurement. The legacy continues …
Despite some weak economic numbers in the first quarter and the continuing chaos in Washington, 2013 is shaping up to be a year of solid economic growth.
That’s because the economy is being fueled by the oil and gas industry, a rebound in housing and pent up consumer spending, according to Bernard Baumohl, chief global economist at the Economic Outlook Group.
During ISM’s Economic Outlook Presentation, Baumohl told Conference attendees he is confident in the economy because its “fundamentals” are strong. The fundamentals he points to include:
- Americans who are eager to spend
- A housing and real estate market that is rebounding
- CEOs who are optimistic
- Banks that have strong balance sheets
Employment is increasing — although unevenly — he says, and the real question is why is that happening four years after the end of the Great Recession. He listed reasons why companies are still skittish about hiring, including anticipated increases in healthcare expenses, reduced demand for labor because of technology changes, and competition from a global environment.
What can be done to make a dent in unemployment?
“I believe the government has to get more involved in education,” he explained. “Many argue that we can’t do that because the government can’t afford it. Well, if you think education is expensive, just try ignorance.”
During the interactive session, Baumohl asked the crowd how the budget battle in Washington, D.C., was affecting their business. Using the Conference’s new ThumbTalk Interactive, 53 percent of participants replied that it was hurting their business. The rest were just about evenly split between expecting it to hurt later and saying it was not making a difference.
Attendees also logged in on their perception of some of the global risks facing businesses today.
Higher corporate taxes topped the interactive poll, followed by the European economic crisis.
After talking about global risk, Baumohl asked attendees how many have performed a stress test to protect against supply disruptions. The results — 49 percent, no; 39 percent, some but not rigorous; 12 percent, yes.
Baumohl said despite risks that persist in the global economy and a slow start to the new year, he predicts U.S. economic growth of 3.1 percent in 2013 and 3.4 percent in 2014.
What is your economic outlook for the rest of the year?
In a special session, “Nurturing Supply Chain Talent,” Stanford Professor Dr. Hau Lee discussed the talent challenges facing supply management organizations. During the presentation, Lee offered several findings from a SCM World survey of nearly 800 respondents.
1) Is talent a problem for your organization?
56.5% view talent as an important challenge in their company.
34.9% indicate it’s one of the top challenges they’re facing.
8.6% do not believe talent is an issue affecting their organization.
2) Is the acquisition and development of talent getting worse?
63.1% say the issue has always been a problem.
22.1% believe talent acquisition and development has become more difficult over the past three years.
14.8% think the issue has become easier to address in the past three years.
Lee and the attendees agreed that incoming college students need to be introduced to the concept of supply chain management earlier in their education.
What are the opportunities? What skills are critical to being successful in the field once you graduate? How do you play both offense and defense in the complex supply management game? It’s about generating excitement about the field — presenting the offensive side of the profession (adding value in the organization through leveraged supplier partnerships and supplier knowledge) as well as defensive responsibilities (reducing costs, inventory management, etc.).
Companies also have an obligation to offer compelling career progression. How can they challenge employees? Where are skills development opportunities? This is not only an investment in the future of the company, but the profession as a whole.
If you haven’t heard Dr. Hau Lee speak, you’ve missed out on an engaging and passionate speaker. The attendees of the Keynote Address/Luncheon today were treated to a delicious lunch and an entertaining presentation by Lee.
As a professor at Stanford University, Lee is a proponent of “sense and respond” as a critical strategy to keep a supply chain agile. It’s not forecasting, per se — rather, it’s knowing how to feel out subtle indicators that will affect the supply chain, like changing customer tastes or an economic reality that affects demand, and then knowing what do to with what knowledge you find out.
“Sense is not just about sense,” Dr. Lee emphasized. “You have to put common sense into your sense.”
In other words? Know how to analyze data and understand the factors that may be driving that data.
For example, when the Magic Theatres chain opened, one location had a stock-out on hot dogs. No one was prepared for the demand in this location. The demand driver turned out to be the socioeconomic state of the neighborhood. This theater was in a low-income, inner-city area, and dinner and a movie meant, for its residents, having a cheap dinner at the movies, not a separate dinner at a restaurant. Enter the lowly hot dog — the perfect solution for money-conscious patrons. What the theater owners expected was not what happened, but they responded accordingly.
How can you get a good sense of what will give you a competitive advantage in this ever-changing and risk-filled global market?
Reach out to suppliers and customers. Find out whatever you can, and then make smart decisions about what you’ll actively do to respond. It could mean updating the life-cycle planning for short-term products based on early demand signals.
Think of how video-game manufacturers depend heavily on Internet and social media buzz to gauge the customers’ mind-sets, and alter their plans or release dates in response. Another example is Threadless, which produces T-shirt designs based on ratings from customers on its site.
And don’t waste time responding, advised Lee. A fast response is the key to being responsive.
It might sound obvious, but think about how easily changes can get held up in red-tape or communication gaps. Leverage the information technology we now have at our fingertips to get things moving as fast as possible. The fact is the market is morphing and adapting to new situations all the time, and not all of it can be predicted. But honing your sensing skills to perfect your responsive response is what will keep companies in business going forward.
“Deep intelligence and efficient execution” are the keys to becoming “hyper-agile,” said Lee.
“Agility is not enough anymore. We need hyper-agility!”
In the comments below, we’d love to hear about your own techniques to sense and respond. Have you had an unusual experience or some tips you’d like to share with ISM and its members? Let us know! We want to get a sense of what you’re doing, and we, as an association can respond —
Oh, you know the rest!
To reshore, or not to reshore? That’s the question examined during two workshops and lively discussions today. Harry C. Moser, founder and president of the Reshoring Initiative, explains that reshoring is bringing manufacturing back to the United States. But, he emphasizes that this is not solely for the benefit of the U.S., because at its core is the concept of bringing manufacturing to the market where products will be consumed.
Moser’s reshoring workshop was followed by a look at the “Changing Landscape of Manufacturing in the U.S.,” by Daniel Feiman, managing director of Build it Backwards.
Both manufacturing experts agreed the landscaping is slowly changing and will continue to change in the future.
Manufacturing left the U.S., Moser contends, because companies did not do their math properly. He said they “applied rudimentary total-cost models and ignored 20 percent or more of the total cost of offshored production when they shipped manufacturing overseas.” With rising labor costs in China, he expects labor costs in China and the U.S. to converge around 2015.
Feiman says manufacturing has been moving back to U.S. shores for numerous reasons, including quality control, reduced shipping costs and consumers desire to see a “Made in America” label.
Moser and Feiman highlighted companies that have reshored recently, from Airbus to GE, as well as several middle-market companies. Moser said he is passionate about bringing manufacturing back to the U.S. He told the crowded workshop that the Reshoring Initiative offers many free online tools to help companies calculate if reshoring is the best move for their companies.
Feiman noted that reshoring has been going on since 2008, and he projects it will continue in earnest for the next several years.
“The question is, do you want to participate, or sit around and watch as your competitors participate?” he said.
How can you find a mentor to help you advance your career? And if you’re on the other side of the spectrum, how can you identify the individuals you’ll develop a meaningful relationship with as mentees? These and other issues were on the minds of attendees of Monday morning’s “A Few Good Mentors” panel.
Two sets of mentors/mentees were on hand: The first was mentor Ron Schnur, CPSM, vice president of dairy supply and operations at WhiteWave Foods, and the colleague he has mentored, Bill Dempsey, currently the vice president of global procurement at Shire Pharmaceuticals. Schnur and Dempsey met when Dempsey worked on a contract basis for Miller-Coors Brewery, where Schnur was a senior procurement executive. Schnur immediately recognized a motivated and career-minded professional, and so began a mentoring relationship that’s lasted several years as both Schnur and Dempsey have moved on to other companies. It’s a classic example of what could be considered an “informal” mentoring relationship. They didn’t follow guidelines, or a corporate program.
The other mentor/mentee pair was Derek Everitt, CSPM, global sourcing director for Terex Corporation, who mentored Nicole Zhang, now regional sourcing manager at Terex. In their case, they came together through a structured Terex initiative to link graduate students with senior executives.
“The mentor is someone you can be a point of continuity for as the mentee moves along in their career,” said Everitt. Zhang meets with Everitt on a scheduled basis and discusses both a set of pre-planned questions as well as any other issues that have arisen since they last met.
If you’re looking for a mentor, Dempsey recommended approaching the people in your organization who are known as “influencers.” It doesn’t need to be someone at the VP level — directors and managers can make wonderful mentors, as well. “Invite them to coffee and just have an informal chat, find out where your common interests are and then, you can broach the subject of mentoring if it feels like a good match,” said Dempsey.
As for the mentor, what’s in it for you? “I’ve had a successful 25-year career, and now it’s my turn to give back to the profession,” said Schnur. He makes himself available to “anyone who wants to talk seriously about their career in this profession.”
Everitt added that it’s about retention of good talent. “The younger generations don’t always make it known why they are moving from company to company, but through mentoring, you can find out that there are often simple things that can be done to improve their work experience. It’s about giving them a safe channel to discuss these things and help give them direction early in their careers.”
There will always be challenges to mentoring, like making the time to meet/check-in, or learning how to read the other person and say “the right things” for each individual’s situation, but the panelists agreed it’s a rewarding and enriching experience if both mentor and mentee are on the same page.