CIPS Paper – The Future of Procurement and Supply Management (Part 2)

Today we’re continuing our review of the recent CIPS publication, The Future of Procurement and Supply Management (PSM) (see part 1 yesterday).

The second part of the report builds on the scenarios described in part 1, and we can be more positive than we were in our previous article.  The thinking is thought-provoking and useful from the authors, as they look at the implications for procurement and supply management (P&SM) of those future scenarios. Indeed, perhaps the most important paragraph in the report is this:

In both scenarios, assuming extensive automation, there will be three key PSM roles.

  • The first is strategy facing, and concerns interpreting the needs of the business, identifying how these can be met through suppliers and defining what is required of the supply management function.
  • The second is (IT) systems facing, translating PSM requirements into systems and data requirements.
  • The third is category, relationship and supplier management in the relatively rare cases where these activities cannot be fully automated.

We might express these points somewhat differently, but wouldn’t disagree with the fundamental message. We need to move ahead rapidly with automation, is the message, then prepare ourselves for this new role, based more around managing relationships and setting the environment (as we think of it) for organisational procurement success.

There’s a key theme in that around the need for PSM to be proactive, to see ourselves market-makers and influencers, not just the passive accepters of what goes on in the supply-side world. But do PSM professionals see that as their role?

The authors also highlight the need for the profession to be aware of strategic blind spots – for example, they report that discussion with research participants around data and systems tended to get stuck around doing current work more efficiently, rather than the “potential game-changing exponential gains and risks of transformative data and systems”.

They also provide some useful tips about how to get into that future-focused mind-set. That’s not easy for anyone, but if we don’t do it, you get the sense the authors do have some concerns about the future of procurement (which we would share).

One final moan though – on a chart of four key factors in the report, along with strategic maturity, data revolution and skills and capacity, we have “professional recognition”. We really need to realise that no-one outside procurement, certainly not our Boards, CEOs or CFOs, gives a damn about CIPS and our concerns about “professional recognition”.

If organisations don’t understand how important it is for them to get the most out of suppliers and supply markets, then that is a strategic weakness and issue – but let’s put it like that rather than talking about our “profession”.

Actually, that talk of strategy has just reminded me – there is no mention of competitive advantage in the report either. For example, if everyone is using Amazon for everything, how do organisations gain competitive advantage?  That’s a pretty fundamental point here.

But to finish on a positive, the last page gives us this, which really is a powerful call to arms for professional leaders.

Both scenarios suggest that leaders need to identify, evaluate and challenge the assumptions and norms that frame typical efforts to plan for the strategic development of PSM. Strategic blind spots limit critical reflection. PSM professionals may find their field moving into a future that does not deliver what is needed by their organisations, that they don’t want, and for which they are not prepared.

In conclusion, my suggestion is that you skim through the sections on the two visions, and cut to the chase, the impact on procurement. It doesn’t feel that the report has generated as much debate as it deserves to be honest as yet – perhaps we can start a little more here. So once you’ve read it, let us know what you think.

 

Discuss this:

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.