Supply Excellence — Aberdeen Reveals CPO’s Secret Fears and Strategies

Aberdeen Reveals CPO’s Secret Fears and Strategies

December 7th, 2006 · by Tim Minahan · No Comments · best practices, skills rectruitment and development, supply risk

What’s the biggest risk facing supply management executives today? It’s not supply constraints, logistics delays, or even unforseen natural or man-made disasters.

Nope. Today’s top supply risk is recruiting and keeping top talent.

That’s the word from Aberdeen Group’s latest study of 200 supply management professionals and executives. According to the report, The CPO’s Strategic Agenda, “top CPO’s rank recruiting, training, retaining, and aligning their organizations as their #1 goals.”

My own experience finds that this risk transcends geography, industry, and company size. Consider the VP of Supply Chain at a multi-billion aerospace and defense company that launched a supply management transformation initiative by poaching sourcing and commodity experts from other companies. Or the CPO of a high-tech manufacturer who complained about losing five of his key sourcing and commodity experts: three to a rival company and two to the sales and marketing organization — of his own company. Or Volkswagen’s CPO who earlier this month said, “The single biggest challenge we face is finding highly qualified purchasing people. It is very difficult to keep them trained and up to speed.”

The point: this is not your father’s supply management function. Pressures from globalization, outsourcing, and technology require new skills that most veteran procurement managers lack.

But don’t expect to go on a hiring spree. On the contrary, Aberdeen finds that most organizations will need to tackle these challenges without adding new headcount. Instead, “the mix and required skills are shifting heavily in favor or sourcing, category, and supplier management functions.” In fact, 69% of study respondents are recruiting in these areas.

Aberdeen reports that employees with skills in deploying and managing supply management technologies are also in high demand. This reaffirms my recommendation for supply managers to volunteer to take a lead role in supply management technology selection, deployment, and training. The move will not only help you develop a valuable skill set, but also provide a high-profile opportunity to interface with other functions (IT, finance, operations) and executives; expanding your career options further.

Aberdeen unveils some unique approaches to recruiting and maintaining top talent. For one: think (way) outside the function. In recent years, supply management organizations have been adding new recruits with financial and engineering skills. But the Aberdeen report cites one CPO saying, “I hired a sales and marketing person to evangelize the benefits of procurement throughout our organization. The results have more than justified the decision.” I have personally noticed that a number of companies — including the aerospace firm noted above — have hired people from their supply management software or consulting service provider to manage technology deployment and adoption.

Aberdeen also recommends retaining top talent by assigning them to special projects, providing non-financial rewards, promoting them, or increasing their compensation. The latter is a point that has been validated by salary studies by Purchasing, ISM, and the Hackett-Group.

The talent crunch is only one of the hot-button issues uncovered in Aberdeen’s The CPO’s Strategic Agenda study. Other top goals of supply management execs include increasing spend under management and compliance; enhancing supplier development and management; and adopting technology to support and accelerate procurement policies and procedures.

We’ll examine Aberdeen’s views on each of these topics in more detail in the coming weeks. If you can’t wait that long, you can get your own free copy here. But hurry, I am told that this free link will only be available for a limited time.

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