CIPS’ Bill Michels shares the latest on growing in the Americas

Bill Michels

The Chartered Institute for Procurement and Supply (CIPS) is a well-known group for professional development and certifications. Its roots lie in Europe and Australia, but it has recently been expanding to the Americas.

For the past year or so, procurement veteran Bill Michels has been CIPS’ vice president of operations for the Americas, leading the group’s efforts to grow beyond its traditional areas.

To find out how that’s going, we caught up with Michels for a two-part Q&A series, where he discusses new CIPS’ initiatives, the lifecycle of a CPO, what it means to be strategic in the digital age, and the role of soft skills.

Q&A

Spend Matters: How has your first year and a half in that role gone?

Bill Michels: It’s been an outstanding year overall. A lot of U.S. firms recognize how important it is to keep their procurement team highly skilled and completely aligned across the organization, and often around the world. CIPS has excellent professional development materials, lots of choices for delivering instruction and a unique global presence that means a lot to U.S. companies that have operations in foreign countries.

Dana Incorporated is a good example of a company that is pushing to maintain technological leadership in the automotive space as it moves to more electric vehicles. It knows it will have to purchase a huge amount of new technology as it moves forward, so it has set up a procurement academy to deliver CIPS-quality training with customized Dana content. That’s a model we are replicating in other large U.S. companies.

So, needless to say, we are expanding rapidly. Our new office in Chicago has three new people to manage our growth and partnerships with educational institutions, which are very important for us to maintain CIPS’ high standards. Currently, we have new training and development initiatives with industry leaders in utilities, construction, integrated circuit manufacturers and public procurement. The most exciting opportunity is in a Silicon Valley tech company where we created a digital learning program that delivers on-demand training whenever, wherever learners want to learn. Learning is delivered in e-learning, podcasts, webinars and on-demand knowledge. The program has attracted high interest in our other corporate clients.

As CIPS looks to grow, does it focus on the Americas — North, Central, South America — as separate markets?

At this point we are treating all the Americas as a single market, largely because CIPS is pretty new to the hemisphere, and the U.S. part of the market has been growing rapidly. But CIPS is very well-equipped to operate in Central and South America as the need arises, so that’s something that could grow and spin off in the future. We have recruited and developed a strong network of instructors and associates to help us in the regions. Currently we are attracting a lot of interest in Mexico and Brazil.

How is CIPS doing so far in these newer markets?

We are mostly focused on serving U.S. and Canadian organizations right now, only because the demand is there, and we are keeping up with it. We are setting up a robust presence now, which will, in time, be well-equipped for more expansion into the other Americas. In addition to the strong demand from the corporate executives seeking development and training for their teams, there is a high demand from individuals and other organizations who desire to join up with CIPS and share our commitment to the profession.

You worked for ISM, and CIPS has a partnership with APICS/ASCM. What does that partnership entail?

We both serve the overall supply management profession, but with core expertise in different areas. CIPS has long experience in procurement while ASCM has been a leader in logistics. As these two functional areas become more deeply intertwined, it made sense to have a partnership that covers best practices in supply management in the broadest sense of the term.

In this early stage of our partnership, we are co-located in the same office space in Chicago. We are participating in their annual professional conference, and we are developing some training and certification programs that bridge our areas of expertise. We are working closely with our clients who are looking to enhance the entire supply chain.

How successful are the groups at connecting procurement and supply chain functions — and where do the groups have common ground?

There was a time when a buyer could negotiate a price and freight charges were almost an afterthought, usually baked into the price delivered to a factory. “Just-in-time” everything has changed all that — as have long supply lines from low-cost-country sourcing. Logistics for in- and out-bound items has become an important component in calculating the overall value of a sourcing decision. There you will find the common ground. Longer term, we will see continuous supplier rationalization and integrated supply chains.

Many companies have formed and developed a strong supply chain organization, and they are looking for one source that can educate, evaluate and provide value in a one-stop solution.

Does CIPS have any new initiatives?

We have just completed and are about to announce a bridge exam for supply professionals who have another certification and want to upgrade to an MCIPS certification, which is recognized all over the planet. We should have details on that in the next 30 days.

Technically it may not be an initiative, but we are finding that more large organizations want us to deliver certified, customized training across the enterprise. We call it the academy approach, and Dana Incorporated is a good example of a company that is using it. There is little value in generic, online teaching modules that use widgets as the example — unless they are only a prerequisite to a more comprehensive professional development program. The academy approach provides individually tailored, company-specific training and often includes projects that have a direct ROI.

On the subject of technology, the digital transformation promises to reduce manual tasks, thereby cutting costs and saving time. It’s also supposed to add insight that lets procurement be a more strategic partner to the business as a whole. What should procurement professionals be doing with their saved time now?

Well, it isn’t brushing up on “procurish” — the jargon of procurement. Read my article “What Your CEO Wants to Hear” on the CIPS-USA website for details, but the takeaway is that supply managers ought to be spending their time learning their overall business and considering how they can bring innovation or new revenue into it.

I like to say the lifecycle of a new CPO is three years. In year one, they focus on cutting costs. In year two, they push suppliers to their limits. By year three, they had better find sources of innovation or new business to keep their jobs because that’s what drives success in an organization.

What does it mean for procurement to be more strategic?

In its simplest terms, strategic means considering questions beyond the basic terms of each transaction or contract. For instance, you might ask if you are putting too much or too little time into the relationship you have with a supplier. Are you treating a commodity as a critical component, or vice versa?

In the larger view, thinking strategically means considering how every facet of your supply chain brings value to the overall organization. Is it moving the company forward? Is it exposing it to unreasonable risk?

We are constantly changing strategies as the pace of business changes. Shorter product lifecycles, speed to market and risks associated with regulation, trade, climate events and corporate social responsibility force category managers and CPOs to be flexible and agile with the responsibility of influencing dynamic change on the business.

Does CIPS have any instruction for people on how to deal with all the changes in technology and use or expand the soft skills needed for procurement?

One of the critical skills needed for procurement is influencing business skills. Many of the procurement people today are highly trained in the technical aspects of procurement. They can produce cost analysis supplier maps or a Krajlic matrix, but fall short on the business skills.

It is interesting to see a step change in people when they are taught to prioritize the message to focus on the four key business interests: revenue, growth, risk and cash. That appeals to senior management.

Our content contains megatrends in procurement, technology and practice in soft skills.

In Part 2 of this Q&A, Bill Michels takes a more global view of procurement, discussing the U.S.-China trade war, protecting intellectual property overseas, Brexit and the U.S.-Europe tariff disputes.

Look for the article tomorrow.

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