ISM 2017: Talent, Procurement Zen and a CPO’s Warning About Technology

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I attended a Q&A session with a handful of the “30 under 30” winners in supply management at ISM 2017, and all I can say is that these young professionals from firms like GE, Johnson & Johnson and Coach are indeed impressive (see some of our interviews in the links below).

The competition for the designation is increasing, and the winners are increasingly interested in supply management from the get-go. In the first year of the program, only 17% of the winners came into the industry proactively with a supply (chain) management degree, but 40% of winners this year (the third year) were supply management graduates and practitioners.

My biggest question to the panel was a personal one: how to get my 16-year-old high schooler (who is good at math and science) interested in supply chain — especially with starting salaries hovering at around $60,000 for graduates from top schools like the 30-under-30 winners. The best response was a from a Michigan State graduate who saw a flyer that said, “Do you know what supply chain is?” and then followed up with, “Do you like free pizza?”

The single most important word from the group was “exposure” to the area. Maybe during ISM 2018, I can bring my son along! Actually, there was a session in innovation led by a Pfizer manager that had audience participation to attract more millennials to ISM events, and there were some good ideas generated.

Anyway, the next big attraction of supply chain to the 30-under-30 millennial panel was about the promise of job rotation within supply chain. It’s like consulting in terms of being dropped into many projects, but within a single company. This is similar to c-level job rotation programs, and many supply chain organizations are adopting such programs to accommodate such “virtuous churn.” It’s also a great training ground for even moving outside supply chain into other functions or business units, which creates a favorable “alumni effect” of procurement-savvy stakeholders.

What’s interesting is that these young professionals are already living the life of seasoned practitioners, such as learning the art of influence. “I feel like 90% of the time I’m selling even though I’m in procurement,” one said. Another talked about having a “roadshow deck” that talked about the value of supply management not to reduce the stakeholder’s budget but to reduce risk, improve compliance and do internal benchmarking across business units. Well played, young leader!

Another great session was the Q&A with ISM CEO Tom Derry, Hans Melotte (ex-Johnson & Johnson CPO who is now CPO at Starbucks) and Kris Pinnow (CPO at B/E Aerospace). I asked Tom about the ISM economic forecast showing slightly higher U.S. growth rates in manufacturing compared to non-manufacturing, and he said that it’s likely a combination of nearshoring, automation, foreign investment in the U.S. and manufacturing for exports. Here, Tom aptly said that “a company’s supply chain follows demand – and that’s [U.S. government] administration agnostic.”

Regarding automation and technology, it was refreshing to hear Melotte avoid the conventional wisdom of downplaying the impact of technology because of the over-hyping in the market right now (e.g., this polished Deloitte video pretty much hits every buzzword!) of technology in early stages of adoption.

“We’re at risk of underestimating the impact of technology and [its impact on] how we forecast commodities; demand; customer behavior; and how can we be a source of intelligence,” Melotte said. “Technology will make everything real time”. But although, as he said, “we’re digital natives” he also said “absolutely we don’t have the talent [for technology savviness]” and “we need to learn how to ask different questions” and “we need to sharpen our intellectual curiosity.”

Thank you for putting this out there! If I can quickly expound on this:

  • Procurement organizations can easily destroy value when they don’t let supply markets inform a large strategic sourcing project and then do winner-take-all bidding events on genericized average requirements that don’t model constraints (and the cost of those constraints) and consider scenarios (I’ve done research that showed more than 10% savings advantage of such market-informed sourcing approaches versus traditional competitive bidding approaches like reverse auctions). If strategic planning uses scenarios, shouldn’t sourcing strategy? Reach out to me if you want to chat more on this.
  • Two of my older brothers are black belts in Karate, and my oldest brother turned me onto a great book called “Zen in the Martial Arts.” In it was this great story that reminds me unfortunately too often of some “old school” procurement folks that I meet:

Once a Zen master received a university professor who came to inquire about Zen. It was obvious to the master from the start of the conversation that the professor was not so much interested in learning about Zen as he was in impressing the master with his own opinions and knowledge. The master listened patiently and finally suggested they have tea. The master poured his visitor's cup full and then kept on pouring. The professor watched the cup overflowing until he could no longer restrain himself. "The cup is overfull, no more will go in." "Like this cup," the master said, "you are full of your own opinions and speculations. How can I show you Zen unless you first empty your cup?"

  • Some IT industry analysts do the same thing when they plot simple quadrants based on the assumption that all requirements can be averaged to a single synthetic average. We obviously disagree with that (see here, here, here, etc.)

I’ll be wrapping up my coverage of ISM 2017 in my next post, so stay tuned!

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