Taking A Formal Approach to Procurement Staff Development
Spend Matters welcomes another guest post from Becky Partida, a supply chain management research specialist at APQC.
Research has shown that talent management initiatives are a top priority for a majority of organizations. This can be especially important in the supply chain, as organizations struggle to recruit and retain top performers and ensure adequate skills development for staff. Yet many organizations have not established formal talent management programs for their supply chain staff. These programs can provide an integrated approach to work force planning, staffing, training and development, performance management, rewards, and retention of talent.
In the study “Supplier Category Management: Driving Value Through the Procurement Organization,” which looked at how leading organizations manage purchasing through product categories, APQC analyzed how the purchasing functions at leading organizations provide additional value to the enterprise by investing in the development of procurement employees. Two of the organizations featured in the study, FMC Technologies and Merck, provided examples of how the procurement function can invest in training and skills development for its staff. These organizations also use formal training development plans and career development plans to enhance the skills and capabilities of employees.
FMC Technologies is a provider of technology solutions for the energy industry. FMC believes that talent management should be a key area of focus within its sourcing and procurement group. In collaboration with a third party, FMC developed a training program that each professional within this group is required to complete. FMC is creating individual training tracks for managers, leaders, and procurement category managers. A dedicated talent management group in FMC’s sourcing and procurement organization is responsible for developing employees through competency descriptions, competency assessments, job descriptions, training plans, and development and implementation of training programs (e.g., strategic sourcing training).
This talent management group also manages FMC’s links with educational institutions around the globe. In addition to creating career plans for key individuals and high performers, the group is responsible for resource planning. It tracks open and newly created positions, filling them with internal key talent and external hires.
The pharmaceutical company Merck established an expectation of professionalism for all its procurement employees with its recent introduction of a structured five-step sourcing management process. The organization’s sourcing management process has brought additional rigor to this function, which in turn has created a need for a longer-term mindset within procurement.
A dedicated learning and development team, tasked with identifying opportunities for skill enhancement, seeks to develop the talents of the global procurement team at Merck. This development team reviews the technical skill sets of employees, focusing on the sourcing management process, supplier value or relationship management, outsourcing, advanced negotiation, risk management, contracting, project management, supplier financial analysis, and cost modeling. The learning and development team also evaluates procurement employees’ behavioral skills, such as cross-functional team leadership, change management, stakeholder analysis and influencing, strategic thinking and analysis, cross-cultural awareness and effectiveness, and conflict management.
Both FMC Technologies and Merck have established formal programs for assessing and developing procurement talent and have allocated staff to administering focused programs for talent management. By emphasizing professionalism and skill development, these organizations ensure the competency of procurement staff, which leads to better procurement decisions and better value for the enterprise as a whole. These efforts can also help the organizations retain high-performing employees and reduce the potential for skills loss.
Organizations seeking to establish a talent management program within the supply chain can begin by creating a team tasked with developing a talent management strategy that addresses organizational needs. The team can then use the strategy to develop a formal talent management plan that includes a job description and a list of competency requirements for each role. Organizations can then expand on these elements to develop formal processes for assessing individuals’ competencies, creating individual development plans, and creating employee learning plans. These processes will help organizations identify talent gaps and prioritize training for supply chain staff.