Currently in the Procurement and Supply Chain world, there is a wide disconnect between the “available” and “ideal” workforce.
Kevin O’Marah, Chief Content Officer at SCM World, summed it up best when he said, “There are plenty of people who have worked in a function—logistics, sourcing and production. But only a few have program management expertise across those functions. That is the gap.”
How grave is the situation?
Numerous studies and surveys have highlighted that attracting new talent, and training and retaining existing ones are among the biggest challenges faced by procurement executives today.
A few notes reflecting these concerns:
- KPMG’s 2015 Procurement Advisory Pulse survey spotlights the rising shortage of talented procurement professionals globally—and the situation is expected to worsen
- The CIPS/Hays Salary Guide and Procurement Insights Report 2015 revealed that 73% respondents experienced challenges in finding relevant talent
- The Deloitte Global CPO Survey 2014 highlighted that 57% CPOs felt their team did not possess the relevant skills to formulate and execute their firms’ procurement strategies.
- According to the 19th Annual Third-party Logistics Study, nearly half of the respondents faced trouble finding and retaining qualified employees.
How can you deal with this?
While there is a substantial challenge, the situation also nudges organizations to take a fresh mix of measures.
- Hit the campuses…again and the right ones
Rather than looking at trained resources, it may be time to bring in some fresh blood into the system. For instance, US-based multinational toymaker Mattel has started hiring graduates directly from supply chain courses.
It is more difficult to hire someone specialized in supply chain or procurement than a general management graduate. While researching Ivy League schools, we found that fewer than 40% offered dedicated supply chain degrees; the ones offered were master’s degrees. Very few colleges globally offer a bachelor’s degree in either supply chain or procurement. Having said that, this is an option that cannot be ignored.
- Revisit goals, guidelines, and policies
Sometimes it is not about getting great talent from outside, but reviewing internal policies and procedures, to beef up the team capabilities. Job rotation is one such method.
Mattel, for example, has altered the metrics used to evaluate its procurement and supply chain managers—they are now evaluated on overall supply chain costs across units, as opposed to measuring the costs by unit. The firm is also attempting to diversify employee experience, by moving them across job functions and geographies, early on in their careers. For instance, while a manager was transferred from Mexico to Asia, two strategists from California headquarters were relocated to plants in Mexico and Malaysia.
“You need people who have moved between different parts of the supply chain… Both (strategists that have been moved) studied supply chain, but if they really want to come up to a senior level, they would have to have had real life experience out in the field.” – Peter Gibbons, Chief Supply Chain Officer, Mattel (June 2016)
- Get some girl power
There is clear lack of women supply chain and procurement jobs, globally. Further, in January 2015, a Procurement Leaders survey showed that women in procurement are underpaid compared with their male counterparts. This clearly indicates the need not just for more women in the procurement function, but also balanced compensation, regardless of gender.
- Create, don’t just buy – talent
If you don’t have enough avenues from which to hire, consider investing in your own training, or schools. PepsiCo launched the Global Procurement University, offering tailored curriculum for its personnel to help develop functional expertise and leadership.
Pfizer collaborated with the training academy of a consulting firm, to train employees on various aspects of procurement and supply chain. It also helped Pfizer establish the right metrics to ascertain the impact of the training sessions on the latter’s goals.
Governments are also taking measures to curb the burgeoning procurement skill gap. In March 2015, the UK government launched a public sector procurement apprenticeship program. The two-year apprenticeship covers all aspects of commercial life cycle—pre-procurement, sourcing and contract management. After the program’s completion, each apprentice will be required to obtain the Chartered Institute of Procurement and Supply (CIPS) level 4 diploma in procurement and supply chain.
The role of a CPO is becoming increasingly strategic; so much so that CPOs are being promoted to CEO—the best example being Tim Cook. He revolutionized Apple’s procurement and supply chain function, and is now the CEO. Another notable example is Willie Desee, President of Manufacturing at Merck.