‘Best of the Best’ 10 Years On: APICS CEO Abe Eshkenazi on the Past, Present and Future of the Procurement Profession

Sales and operations planning hardly seems sexy on paper. Yet as more than 200 cross-functional professionals poured into the grand ballroom of the Chicago Marriott O’Hare for the 10th annual Best of the Best S&OP Conference Thursday, the participants seemed excited to tackle this essential business process, as well as learn from an impressive lineup of senior supply chain leaders.

Presented by APICS and the Institute of Business Forecasting & Planning (IBF), Best of the Best this year examined numerous topics of interest to the forward-thinking procurement professional, such as enhancing collaboration across business functions, managing and mitigating risk, and better exploiting analytics to support broader operational planning.

To learn more about why the presenters chose to focus on these topics this year, I sat down with APICS CEO Abe Eshkenazi, who provided a fascinating perspective on how the conference has developed over the last decade. What began as an educational summit centered on S&OP has now become an event that supports two of APICS’ key initiatives: fostering procurement and supply chain professionals who can become critical business leaders and elevating the profession to a strategic enabler for the enterprise.

“We’ve seen a dramatic shift from the linear, process-driven supply chain into a much more strategic, integrated supply chain,” Eshkenazi said of the 10 years since the first conference. “And that requires a very different type of talent — not only for the individual but for the organization.”

A Tumultuous Decade

When Best of the Best first started in 2007, procurement professionals were operating in an entirely different world, one where the cloud was far from ubiquitous and the iPhone had been only recently announced.

Despite this relative lack of technological maturity, Eshkenazi said he still saw the beginnings of several trends that have come full force today. Perhaps most of all, there was a trend among procurement leaders to emphasize cross-functional collaboration, pushing the supply chain to the forefront of S&OP discussions rather letting it remain an afterthought.

Alongside that campaign, the rapid pace of technological development over the past 10 years has proven the most influential for how the conference has changed. This is due to improved technology, as well as the fact that the amount of data procurement is expected to handle has grown far beyond the ability of anyone in the supply chain to manage it.

Two specific technologies are responsible for this. The primary one, in Eshkenazi’s view, is the internet of things. With the vast array of sensors being incorporated into industrial machinery and consumer products, the sheer volume of information creation and consumption within the supply chain has exploded.

As procurement and supply chain groups take a more active role in leading S&OP processes, all of that data needs to be integrated in demand planning, risk models and the like. For most supply functions, this is a complete flip from how management expected them to operate.

“Previously, information was relegated or owned by specific segments with the supply chain — finance guys kept the finance information, procurement guys kept the vendor list, production guys kept the inventory list,” Eshkenazi said. “Now, it’s multidimensional. Everybody has access to all of the information.”

The key to enabling this is the second technology: artificial intelligence (AI). Here, Eshkenazi is wary of overselling something that has gotten a lot of press over the last year. Processing power has increased, sure, but no offering available today represents true intelligence, certainly nothing that can replace the creative intellect of a human.

Caveats aside, the hot air swirling around AI still has a solid core practitioners can’t afford to ignore. That processing power will be used to sift through and analyze the enormous amount of data coming into and being produced by the enterprise. That’s a huge opportunity for procurement. It allows organizations to automate manual, data-heavy work and spend more of their time on the activities that AI haven’t matched yet — most important the ability to produce analytical insights about that data, to answer “why” and “how” in addition to “what.”

That last point leads to a critical insight for practitioners regarding technology: No technology can solve all of your problems. Even advanced systems offering prescriptive analytics cannot sign off on the final course of action. People need to solve the final problems themselves.

One person who echoed that sentiment was Pete Alle, vice president of supply chain at Oberweis Dairy. In his presentation on implementing S&OP and managing the process, he said that technology is last on his list of considerations.

“Tools enable, they do not fix!” he said. “The questions and planning are far more important than how you’re doing it.”

The Rise of Risk and Sustainability

Beyond technology, Eshkenazi said the most striking development he has seen over the last 10 years is the way businesses have changed their attitudes toward risk.

“Back in 2007, risk as a capability was a ‘nice to have,’” he said. Now, the aftermath of the Great Recession and various environmental catastrophes have changed the way businesses look at the world. “Competency in risk is now a “’must have.’”

Complementary to this has been an increased focus on sustainability. While this includes environmental concerns, the term encompasses far more than just building a “green supply chain,” Eshkenazi said. Rather, it’s about choosing practices that allow you to stay in business over the long term.

Many of those practices are starting to be dictated by consumers, who are having a marked effect on how supply chains are changing. Ethical concerns from slave labor to conflict minerals are becoming essential criteria in the product selection journey, and as transparency data on the composition and sourcing of products become more widely available to consumers, supply chain professionals will be key to ensuring their organizations will be capable of meeting these exacting standards.

Satisfying those consumers leads to another form of sustainability: financial. Much of the post-recession environment has been “about driving costs out of systems,” Eshkenazi said, “making them more lean and efficient.” But this has also left supply chains highly exposed in the case of a disruption or broader economic downturn.

Leadership from procurement, then, will become dependent on illustrating to management what could happen to prevent disruption or unexpected costs down the line. Nowhere was this clearer at Best of the Best than during Thursday’s keynote presentation by Laurence Wolfe, senior vice president of operations at Heineken USA.

“Risk is the biggest thing we should all be thinking about in our supply chains,” Wolfe said. “You can’t legislate for your supply chain, but you can plan for it” when new laws are being discussed.

Top of mind for Wolfe and his team during S&OP has been gaming out different scenarios for the proposed border tax, whether that means brewing in different areas or moving inventory to entirely new locations.

“It’s a seismic shift,” Wolfe said of the proposed legislation.

The Way Forward

So technology is disrupting businesses regardless of industry, consumers are demanding clean supply chains and the global economy is fraught with political and environmental risk. How can procurement lead the enterprise through these tumultuous times?

In Eshkenazi’s view, developing several advanced management skills will be essential. Prime among these is a deep, cross-functional understanding of how the business operates, a poignant message for professionals attending an S&OP conference to understand.

“Procurement used to be about just managing vendors and keeping down costs,” he said. “Now it’s becoming about managing risk, ensuring sustainability and creating a new competitive competency for your business.”

Much of that competency depends on procurement learning to speak the language of other functions. That means not only sharing common terms and processes across the enterprise but also speaking a common language in terms of goals each function aims to achieve.

In many cases, the demands of the customer can be a uniting focus. Several companies in attendance at Best of the Best spoke about bringing together sales, marketing and supply chain leaders to determine what products consumers were looking for and how operational data could inform their ability to deliver those products, in some cases even influencing what the company decided to make.

Demonstrated critical thinking skills have also become vital, Eshkenazi said. While specific procurement and supply chain knowledge is still important, employers today are noticing a gap between what their new hires learn in school and what skills they need to complete their work. Analytical reasoning skills are one of the most notable gaps.

Eshkenazi used analytics to explain. The technology can identify new issues as or before they arise, and prescriptive systems can even recommend corrective actions. But the human ability to analyze and understand the problem, so it can be prevented and the solution appropriately communicated to other stakeholders, is the capability that will distinguish someone as a candidate to lead supply chains in the future.

Finally, those leaders will need to learn to advocate for both themselves and the profession when working with senior leaders, as well as cultivate the ability to mentor younger professionals to think the same way. Eshkenazi spoke passionately about getting people interested and excited about the supply chain — let alone S&OP — which is why APICS is focusing on fostering a diverse group of young professionals to become cross-functional business leaders.

“If you want to make a difference across the globe, if you want to have exposure to the entirety of the organization, if you want to have multiple job opportunities, if you want to be a leader — come to supply chain,” he said. “ I can’t think of greater opportunity for individuals that want to make a difference not only in their careers but in the world.”

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