It goes without saying that technical procurement skills and business acumen (listen to Jim Barnes on the Art of Procurement podcast) are the prerequisites to be successful in procurement. While these skills will take you far, they may not be enough. From studying procurement and supply chain professionals across the globe, I have noticed five personality traits that separate mediocre from highly successful leaders. I love it when data backs up observation, especially since these observations aligned with a SpendMatters and ISM procurement personality survey in 2015, which found that Myers-Briggs personality types ENTJ and ESTP were the top personality types for CPOs.
- Flexibility and Agility – procurement leaders operate in a highly dynamic environment where acquisitions, mergers, bankruptcies, economic changes, risk and regulation can change both the daily routine and strategy for procurement. The ability to move with the dynamic world is one of the differentiators between successful and run-of-the-mill procurement practitioners.
- Communication and Relationship – building stakeholder and supplier relationships based on trust, mutual benefits, innovation and that delivers value is a core requirement for procurement leaders today. To develop these skills, a leader must be an expert listener and an even better communicator. The ability to communicate, listen and build strong relationships can make a difference in a corporation’s success or failure in the marketplace.
- Objectivity – many procurement professionals are solely focused on cost. Their relentless drive for cost without understanding the suppliers’ financial makeup can be a disaster. All suppliers have to make a sufficient margin to reinvest, satisfy shareholders, and innovate. Successful leaders maintain objectivity and understand the drivers behind the suppliers cost and typically receive more value than their competition. Maintaining this objectivity enables them to keep things in perspective, balancing cost and value opportunities.
- Learning by Experience – in organizations where procurement professionals have developed and changed strategies frequently not allowing the strategy time to embed always fail. Consequently, it is not uncommon for these organizations to make mistakes and continue to make mistakes without learning from the previous strategy. The most successful procurement leaders learn from experience and drive continuous improvement.
- Confidence to Acquire Top Talent – professionals who are reluctant to bring in high-level talent for fear that they will be overshadowed and potentially displaced achieve suboptimal results. The best leaders bring in the best talent and lead that talent to deliver high levels of performance. The confidence to on-board, coach, mentor and execute strategies is a valuable asset to any organization.
Perhaps the most important skill of a leader is giving back to the profession and having time for everyone.
How does your personality match up?
5 tips to be a better mentor
Many people have asked me what one thing has made a difference in my career and what can they do to help their careers. The answer is always the same; I was fortunate to have a couple of great mentors to lead me through political landmines, point me in the right direction and provide helpful hints to keep me on track. I was reminded of this last week at the ISM Conference when I met the 2016 R. Gene Richter Scholarship Program recipients. I’ve been fortunate to meet every Scholar since 2004 and see the Scholars and their mentors grow from their mentor/mentee relationships.
Like many who are fortunate to have great mentors, I have also developed mentoring skills over the years. Through paying it forward by mentoring, plus building and delivering training for over 10,000 students, I’m very proud to have played a part for those who have gone on to fill executive procurement and supply chain positions in some very large organizations.
To be a good mentor, it is really important that you feel a need to give back and that you are willing to make yourself available to the mentee. It goes without saying that the mentee must be someone worthy of the guidance and direction and someone who will carefully consider the message and value that you bring to the table. It’s important that mentees realize that they must make their own way in the world with the advantage of having a sounding board and someone to help them understand the political and market dynamics.
Mentoring is not for everyone, but, if you want to give back, here are some tips:
- Be positive in attitude and keep things in perspective. It’s important that the mentor keep the big picture in mind for the mentee. Sometimes the complexities of business keep our orientation tactical, so remember to step back for the broader view.
- Pick a few mentees. It’s easy to get caught up in the process, but it takes time, energy and planning. Be sure your mentee will respect your time and is worthy of it.
- Set out some rules and expectations at the onset of the relationship.
- If you make a commitment, stick to it.
- Be open, listen and don’t over commit.
Mentoring has been a rewarding and meaningful experience and I would encourage everyone to try it. These 5 tips will help you keep the process going and assure success.
Who mentored you?
This month is National Slavery and Human Trafficking Prevention Month. The President’s Interagency Task Force to Monitor and Combat Trafficking (PITF) is a cabinet-level entity created by the Trafficking Victims Protection Act of 2000, its mission is to coordinate the the efforts to combat human trafficking. In the PITF Fact Sheet released earlier this month, Procurement and Supply Chain is named as one of the 4 priorities. The PITF meets annually and is proposing some new measures sure to put pressure on organizations like the fishing industry and retailers who unknowingly purchased product where trafficking was involved.
I mention this in my blog because I have long held the belief that it is impossible to responsibly source internationally from one’s desk in the US. Unfortunately, that’s the practice that a large number of companies engage in. They locate sources of supplies through trading companies, brokers or stumble across them on the internet. In many cases employers enjoy the cost benefits from global sourcing, but fail to see the value in the required due diligence of investigating the entire supply chain and creating relationships with suppliers. They are concerned about the budget and expense of travel and fail to see the damage that the company can be exposed to if the product has a reputation risk or bribery issue.
It may seem like a prudent move, but it can land a company in a PR, regulatory and customer nightmare. My experiences with international sourcing are that I have found that the trading companies and brokers are often not concerned with product consistency, CSR, dedicated manufacturing sites and sanitation. The customer orders are coming in and the customer is content to stay in the US and fork out money, so, why worry about anything but price and delivery.
Some things I’ve seen are food companies processing materials in rusty metal cans, unsanitary plants, machinery incapable of holding tolerances, safety violations capable of great harm, death and life-long disabilities and the list goes on. I have also seen the most modern robotics and invested capital to assure consistent, safe and least-cost manufacturing in many foreign companies. The trick is to survey and understand the supply chain, visit the supplier and make sure your company is not exposed to reputation damage from the global supply chain. Understanding the culture and building strong relationships with foreign entities is even more important when sourcing globally.
Here are 5 key tips that I recommend:
- Never source from your desk; visit the supplier
- Include the cost of visiting suppliers in your cost reduction analysis
- Always visit the suppliers and consider contracting resources in the region to be your eyes and ears
- Look for all health and safety issues, create extensive interviews with principals
- Develop strong CSR and Sustainability policies that the suppliers must sign and agree to
The PITF is creating resources to help, including the release of the online Responsible Sourcing Tool this month. Use these resources and read up on USAID’s new Supply Unchained initiative. Look into the tools offered by ISM like the Supplier Risk Tool and CIPS’ Sustainability Index. And most importantly,
Get up from your desk and visit suppliers.
Milestone for Supply Management
Today I’m dedicating my blog to the Institute for Supply Management, a group that I have been a member of for over 40 years. Next week at the ISM2015 Conference, the organization will celebrate its 100 year anniversary of serving purchasing and supply management practitioners and their organizations.
The backbone of the organization is the large volunteer group that supports the organization. These volunteers have recruited, educated, and supported the organization with countless hours throughout their careers with many continuing into their retirement. These active volunteers come from all career levels from student through CPO. When I first joined as an entry-level buyer, it was the volunteers of the Central NY PMA who helped me find the right educational events and are the reason I continued my membership as my career took me from central NY to Watertown NY, then to Cleveland and to Detroit and to the opportunity to be an ISM employee for 3 years. The networking and volunteer experience helped me develop leadership and presentation skills that enhance the skills learned through my work experience. I am extremely grateful and owe these volunteers a lot.
As an organization, ISM has provided educational programs, certification programs, conferences, seminars, research and practices that drive the organization and the profession forward. In the last 10 years especially, the profession has experienced rapid growth, technology change, process change and integration into larger supply chains. The Institute for Supply Management has always been at the forefront of these changes, providing global reach with local touch through the volunteers and affiliates to the profession moving forward.
As I look to future, the role of the ISM will no doubt change with technology, business practice and talent changes in a rapidly changing environment. The organization faces stiffer competition than ever with many new entrants into the education and certification association space and the membership growing globally as supply chains become more integrated.
I’m looking forward to seeing ISM strategically move to serve the future needs of its members and their companies. Congratulations, ISM on 100 years and
I’ll see you at ISM2015 in Phoenix next week!
I apologize all my followers for not writing a blog for a while. As many of you know, I have been transitioning from the position of President of ISM Services to a new role. Consequently, I am the founder of a new firm, Aripart Consulting. This firm represents collaboration with media, clients, consultants and firms looking for innovation and improvement through procurement and supply chain.
Through the move from retiring from ISM to starting the new company, my wife Linda (@SourcingChick) and I have taken a lot of time to reflect on the experiences, opportunities and rewards from the procurement and supply chain profession that have so greatly enhanced our lives. Linda was part of the ISM-ThomasNet team that designed the 30 under 30 Supply Chain Stars program (whose amazing winners were just announced). This program was created to honor and reward Millennials who have chosen our profession. I have spoken to many manufacturing company owners and senior management who have said one of their biggest risks is that the younger generation is not attracted to manufacturing. I wish I had the chance to speak to every young person to describe the feeling of knowing how dirt in the ground becomes the can from which you’re drinking. Or of travelling on 6 continents and seeing the sights and being a better citizen because of exposure to many cultures. Or of understanding the good and bad aspects of regulation. And of the ability to give back to causes dear to my heart because the salaries in the profession are very good. Yes, Linda and I owe this profession a lot.
In all, it has been a great transformation. I would like to thank Tom Derry and the Institute for Supply Management for releasing the rights of Sourcing Guy back to me. I will start regular blogs this week.
Thank you all for your patience. I look forward to challenging and calling us all to action.
Bill Michels (Sourcing Guy)
I’m catching up on the ISM Manufacturing Report on Business for November and looking at inventory levels, which are on a 43-month trend downward. The index is 41.3, a 5-point drop from October and in the range that often aligns with a stagnant economy. Since other indicators suggest a slowly recovering manufacturing sector, the inventory numbers are more evidence that companies are creating “planned scarcity.” The cost of credit to carry inventory outweighs the risk of lost sales opportunities because of shortages, and there could be a hope that shortages will support higher prices.
From a buyer’s perspective — that analysis keeps us watchful for inflationary pressure. It’s been a buyers’ market generally for more than a year. It’s time to lock in prices for key categories if you can. Low inventories also increase risk — especially if parts are coming long distance. The winter winds are whipping around our office in Ann Arbor, Michigan today — a reminder that weather is not an insignificant risk factor in the supply chain.
Here’s the link to the ISM news release about the November Report on Business.
Posted in Logistics, News Analysis, Risk Mitigation, Uncategorized
Tagged cost containment, economic recovery, Institute for Supply Management, inventory, ISM, Logistics, manufacturing, procurement, purchasing, Report on Business, risk management, sourcing, supply management, truckers