Tag Archives: procurement skills

Making a Difference through Mentoring

mentor

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:

  1. 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.
  2. 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.
  3. Set out some rules and expectations at the onset of the relationship.
  4. If you make a commitment, stick to it.
  5. 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?

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The Economics of Cheese

cheese

What every sourcing professional should know

When you read this week’s Wall Street Journal story A Cheese Glut is Overtaking America, after thinking about doing your part to assist with the report that every American would have to eat three extra pounds of cheese this year to work it off, did you think about the economic impact and why this story matters to sourcing, procurement and supply chain? There are many lessons that can be learned from agricultural commodities and understanding the economics, especially in strategy development and managing volatility and risk.

During my career I have managed agricultural commodities and I understand the value and role that economics plays in sourcing. Let’s look at a commodity cycle we’ve experienced in recent years. It’s not difficult understand that after a period of drought, many crops fail and grain prices increase significantly. Farmers then look ahead to a tough winter of feeding cattle with the high cost grain, which will have a negative impact on profitability. As a result, farmers send their cattle to the slaughterhouses and cut their losses. As consumer demand remains steady and exports continue to rise, there is little doubt that the limited supply will force prices to rise. As the weather becomes more stable and grain prices fall, it’s natural for farmers to increase their herds of cattle, production of milk (and cheese!), flocks of poultry and grains. This is the easy to understand supply and demand economic cycle.

In this recent cycle, the opportunity to capitalize on the high prices became apparent to many farmers, however, the failure to understand the impact of the high US dollar on exports and the collapse of the export market, has caused increasing inventory levels, plus the time requirements to flex the size of herds and flocks has built up to the glut of some commodities. Gluts, shortages, currencies, pandemics, weather, labor, regulation and government stability all contribute to agricultural commodity economics and add financial and capacity complexity across supply chains, requiring an increased understanding of the economics to gain control. Today, I’m wondering how many Midwest farmers will switch from planting corn to soybeans, since the USDA projects that soybean production in the US and South America will be tight over the next two years while global demand continues to rise. How much corn is planted, of course, will impact the economics of food supply chains, but it also will impact ethanol, alcohols, building products, plastics and even tires.

Sourcing professionals involved in commodities of any kind can make or break their company’s profitability. The skills required to manage the complexities of commodity sourcing are understanding economics, extensive research of the market, having the right tolerance for risk and volatility, maintaining a calm demeanor and building extremely strong supplier relationships at both the farm (producer) and broker levels. They also need an analytical approach combined with communication and quick decision-making skills to be effective in commodities. We can all learn much from understanding the economics of commodities.

Have you thought about the economics of low-priced Cheddar?

Donald Trump or Hillary Clinton: How much personal risk are you willing to take?

Ten tips for managing risk in uncertain times

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This is personal; especially in procurement and supply chain, our career and our lifestyle depend on how we manage risk. Procurement and supply chain executives are seeing volatility in 2016 with unstable markets, mergers and acquisitions, increased regulations and slow growth in the global economy. All bets are off for 2017, when a new administration will be in place whose policies are unclear at this time. There is little doubt that procurement and supply chain leaders will be forced to build strategies, plans and processes in uncertain times. To survive, we must welcome and embrace uncertainty.

No one can predict what the level of uncertainty will be, but with digital disruption, artificial intelligence, unstable markets and supply-chain integration, it is only natural that procurement and supply chain leaders build flexible strategies, be prepared to take risks and calculate the impact of risk-based decisions. Politicians are proposing many activities that could have a drastic effect on sourcing and supply chain operations. The thought of UK pulling out of the EU, the US pulling out of its trade deals, pressure on offshore headquarters, increasing wages and support for reshoring will all impact procurement and supply chain operations.

Taking the right risks and making early decisions will make or break a career. Here are 10 tips for managing personal risk:

  1. Continuous review of the strategy and the horizon will keep you and your team aligned to necessary changes
  2. When change is evident, build a clear business case and act decisively
  3. Be proactive and engage management early
  4. Quickly build a fact-based analysis and use influence to align top management to the strategy
  5. Assure that you have an effective change process
  6. Put your top people on executing the necessary changes
  7. Prepare for cynics and challenges to the plan
  8. Build communication and preparation for a crisis mode
  9. Lead with confidence and bring your team along
  10. Keep on top of the business news and use the analysts on your team to brief you daily of changes that are occurring

No one can predict the future, but the signs of significant change are in the wind. In preparing for battle General Dwight Eisenhower said “In preparing for the battle, I’ve always found that plans are useless, but planning is indispensable.”

What is your proactive strategy? How much risk will you accept?

The CPO’s biggest vulnerability – Building and refreshing the team

team

On this day after “Super Tuesday” for the US political race, it’s easy to see that the voting population today is not the same as 4 years ago. Campaigns are scrambling to reach both the younger voter and the older voter (Millennials and Baby Boomers) and the establishment isn’t working. The same is true for businesses: org structures that worked 4 years ago are not working now. In the Deloitte Global Human Capital Trends 2016 new study, 92% of the top executives surveyed cited organizational design as a top priority and the report highlights the rise of a new “network of teams” org model. I see this in my own practice, especially in procurement and supply chain. For CPOs, leading teams is a real challenge.

To add even more complexity to the team building and refreshing process, ManpowerGroup’s 2015 Talent Shortage Survey found 38% of companies are have difficulty filling jobs due to lack of available talent. No longer can the chief purchasing officer rely on finding individuals who have demonstrated technical and strategic procurement skills. Today, the job requires individuals who are well-rounded and have financial, relationship, influencing, financial, political and collaboration skills. The job no longer requires just the ability to negotiate, communicate and transact. The job now requires architecting the supply chain, integrating suppliers along the chain, quantifying the added value, driving increased levels of performance and building relationships that make their company shine brighter than the competition. Plus, they need to do this as a team. And, Millennials do not expect to work for the same company for decades, so the team must continue to advance as the individual members change.

I worked with a company recently that had 18 people in the procurement department. Of the existing team, 11 people had well over 30 years’ experience in the company and in purchasing. There was no succession plan and new approaches and ideas were limited. For this CPO, bringing in fresh faces was both a do-or-die and a no-win with the existing org structure and culture. It became essential to understand the talent required for generating the kinds of value extraction that will be required from the supply chains in the future and, most importantly, to find ways to foster a collaborative team process.

What’s a CPO to do? Here are five ideas for building and refreshing the procurement team:

  1. Build strong rotational programs so that new hires will rotate through several departments in the organization enhancing their business knowledge, commercial skills and relationships throughout the organization.
  2. Understand the current culture and the desired culture, what works in the current culture, who has the strongest skillsets and who has the weakest (for now and the desired state) and develop a strategy to strengthen the weak links.
  3. Build a strong succession plan for the entire team.
  4. Move more senior team members to different roles to let the newer members develop leadership and other skills.
  5. If you find the right talent, hire that person whether you have the position now or not.

By building and continually refreshing your team, you will assure your longevity as a leader. If you fail to build and refresh your team, you will become victim of the CEO’s plans to build and refresh the team.

Are you ready for the “network of teams” org structure?

How to Achieve Disruptive Training and Development

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How effective is your training and development initiative? I have led and participated in training and development initiatives where the results in the classroom are great. The class is motivated, excited about the new tools and concepts, course ratings are high and everyone feels really good. When the class participants return to their work, they may try a few of the new techniques, but soon it’s business as usual. Has this ever happened to you?

Think online learning is the better approach? Businesses can agonize over finding the right online program, roll it out and require that each team member complete the course. The online course system will report on course completion compliance. Unfortunately, most people have busy schedules and cram multiple modules into a short timeframe near the deadline for completion. Some extend the course over a longer time, failing to absorb the concepts because too much time has passed between sessions. The result is the same for both types of course-takers, the learning is not embedded and the new skills are not utilized.

Face it, it’s easy to spend training budget on courses, check the box for the task “deliver training”, then deliver poor to mediocre performance appraisals to employees because there’s little application of new skills in their job. The employee must be the problem, right? Wrong!

What’s the solution? Training supported by active project-based coaching. Here are two examples of disruptive T&D that continues to deliver high performance and results.

Case 1: A global conglomerate needed cost and value improvement by enhancing tactical and strategic procurement skills. While the initial overall program components are not unusual—HR, procurement team and internal corporate university works with outside firm to roll-out competency assessment, online learning and instructor-led classroom training—it’s the implementation of a requirement to complete an action plan for an expenditure category in their portfolio over the 6 months following the classroom with coaching/mentoring available by the course instructors and the individual’s supervisor during this time. Actions plans had to be approved by the instructor and the supervisor.

The results were astounding! The documented return on investment from the training delivered $40 for every $1 invested in the program. Besides the $millions in savings and the value from innovation and other improvement, the learning was embedded and skillsets enhanced.

Case 2: A medium-sized company with 4 divisions was unable to get collaboration, leverage and synergy. The project focused on small category teams comprised of members from each business unit. A four-day workshop was delivered, during which tools and concepts were introduced, the teams selected projects, identified opportunities, built initial strategies and presented them to senior management. After the workshop, the teams launched with weekly conference calls with mentoring and coaching. The teams presented monthly updates to senior management. At the end of the 6 months, the supply base was optimized and $64 million in cost and value improvements were achieved.

Most companies are reluctant to engage in programs like these because of complexity and the additional cost of engaging an instructor or coach for longer than a 2-day course delivery. The right training provider can manage the complexity and offer a coaching program on a per person or monthly fee option that works for your budget and delivers the breakthrough you need.

5 Ways to Embed Learning

  1. Establish course completion timelines for online courses: use an outsourced provider to work with individuals, chart progress and report status
  2. Require a pre-requisite online course before delivery of a classroom course or workshop to orient participants so class time learning is optimized
  3. Include a work project in the training
    1. Alert the participants ahead of the training
    2. Allow class time to get the project started
  4. Provide coaching and mentoring post training by the training provider, internal resource or both.
  5. Launch category management teams with
    1. Kick-off workshop
    2. Weekly coaching
    3. Project management

Ready to disrupt your training initiatives?

Are you sabotaging your procurement or supply chain career?

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As a consultant, I get to observe procurement and supply chain professionals in almost every situation. It is always rewarding to see bright stars move through their organizations to the C-Suite. On the other hand, it is tragic to see bright stars burn out and get stuck on their career path. You may wonder, what’s the difference between success and failure in people with similar ambitions and skill sets?

In my career, I had several strong, ethical mentors who disciplined me in critical soft skills that make the difference between success and failure. Technology changes, digital disruption, social media and email are all changing the way we do business, but successful businesses have the best people who communicate and collaborate effectively.

Here are a few soft skills that can take you far:

  1. Business etiquette is one of the essential skills that shows that you are thoughtful, polite, professional, engaged and and respectful person. How you treat people says a lot about you. Do you take the time to send a thank you note? If you’re visiting suppliers or meeting new business partners take the time to write a note. You will create a great impression of you and your company.
  2. Always learn names and learn them quickly. This immediately shows interest and respect in the new people you meet. There are a lot of techniques for learning names and they will help you gain this skill
  3. Don’t make value judgments on people’s importance in the workplace. People deserve respect and others in your firm will be observing your behavior and will ultimately judge you. It is critical that you build strong relationships and self assess how you might be viewed.
  4. Be careful about your personal life. What you put on social media and what you share can come back to reflect on you in the future when being considered for promotion or elimination.
  5. Communication is a core skill. It’s sometimes not what you say, but how you say it that counts! Always return phone calls and emails promptly. You should make it a practice to promptly return all calls within 24 hours. Personalize your voicemail greeting so the caller doesn’t just get a cold system generic voice with a number.
  6. When writing emails, be sure they are professional and courteous with a bit of humanity so they are not seen as cold and manipulative. Make sure that the communication you send is grammatically correct with no spelling errors. Judith Kallos has an excellent resource on her business communication website.
  7. Just because you have a mobile phone number doesn’t mean you should text without asking permission. Even with permission, be respectful of the time of day you’re texting.
  8. There are few things that irk me more than someone arriving late to meetings or scheduling a meeting with no agenda, resulting in unprepared attendees and wasting time. Always be prepared, have an agenda and have a professional presence.
  9. Create the right image with your work space. Keep the space professional and neat with appropriate personal touches. Those who see the space consider it a reflection of you. Always respect the space of others. Even in casual business cultures, it is very important to dress for success. You may stand out, but in an impressive way.

Every procurement and supply chain professional with a desire to advance and make a great impression should take inventory of these skills. These skills are common sense, but at times we all need to review the skills, make adjustments and control the way we are perceived.

The things your mother taught you can serve you well.

 

photo: Olu Eletu

 

Leading Procurement and Supply Chain Transformational Change – Do you have the right stuff?

astronaut photo: NASA

Never content with status quo, companies that excel want to be the very best. They constantly drive continuous improvement, yet many procurement and supply chain professionals lack the confidence and capability to assess, build a business case for change and manage change across the business. How can companies and individuals get “the right stuff” to get to best in class?

The process starts at the assessment of the current state of the organization. Typically, it reveals an inefficient organizational alignment, gaps in the processes, competency issues in the team and systems which may or may not support the procurement and supply chain mission. I have seen leaders shy away from and resist change, while defending the current ways of doing business. Over time, the resistors of change are displaced by more progressive individuals. Those who stand before the management highlighting the issues and delivering a plan for change always accelerate their careers in the business.

Early in my career I worked with a purchasing leader that attended a seminar at Penn State. He approached the CEO and Chairman of the company, detailed that his team was tactical and influenced the senior management team to let him to build a change program. The change was painful and difficult, but resulted in over 40 million dollars in savings, streamlined the organization structure and the company achieved a leadership position in their sector. He moved on to different positions in the company, eventually ending up as CEO of one of the major divisions.

What made this individual a success? He created the assessment of the current state of the business by looking at the core competencies required to be successful in the food business and measuring the gap to achieve the best organization, processes and people to reach world class in his industry. He looked at benchmarks with the understanding that they are merely data points. To make benchmarking successful, one must understand both the process implemented to achieve them and the business cultural adjustments required to make them work. Too many times, the focus is on the size of the gap, which can cause some to think “we can never get there.” The focus should be on taking the first step, then the momentum to keep the team moving. Whether it’s a meter or a marathon, some will run, some will walk and some will do both to reach the finish line, so a plan should be developed that considers the company culture and the speed that the team can practically achieve.

Once the change model is identified and a plan developed, it is only the beginning and once started, it is ever evolving. There are lots of drivers of change, like:

  • Technology
  • Economy
  • Competition
  • Innovation
  • Profitability
  • Industry consolidation

It’s important that procurement and supply chain team members understand that each of them has an important role in how these drivers impact the business and in making the changes needed for the business to succeed. For example, similar to, but broader than technology, product and service innovation occurs faster and faster, often making the ‘shelf life’ of current products shorter and shorter. Innovation in new product ideas, product packaging, integrated supply chain operations and distribution channels, customer service, and marketing are all examples of areas that can be market-changing for a business. Clearly suppliers can provide many of these innovations, if managed properly. The procurement and supply chain team is in the middle of the action.

What skills are needed for transformational change? One of the core skills of a leader is the ability to influence. The ability to evaluate your organization, develop a solution and build a business case to get the business to invest are critical skills of leadership.

Since change impacts every aspect of the organization, the change process really needs a good business case including all cost, risks and the measurable return that the company will see at the end of the process. The implications should be clear that the organization will be changed (reflecting the global, regional and local requirements of the business) to simplify the supply chain and increase velocity, flexibility, value and customer needs. As a result of the change, people will need development (some may no longer fit in the business) and processes will surely change.

Its always best to establish a management steering committee to remove roadblocks and select a project leader and a cross business/cross functional team to build stakeholder awareness and engage them. Build Change Champions and willing helpers to support the transformation and have a plan for the opponent and cynic who may work to disrupt the change.

There are many reasons change initiatives fail. Usually, failure is the result of:

  • Lack of management buy-in and commitment
  • Lack of leadership
  • Lack of focus and commitment
  • Resistant too hard to over come
  • Lack of knowledge
  • No process
  • No strategy

Procurement and supply chain transformation is exciting and can create competitive advantage for your company. It takes leadership, focus, influence, management commitment. It is a big task, but those with the confidence and capability will accelerate their careers.

Do you have the right stuff?