The Inovis Blog

Michael G. Lamoureux of Sourcing Innovation and eSourcing forum talks about Talent Retention in Supply Chain.

Given my temperament to tout the talent gap that is now increasing daily, I was happy to see the recent article from the European Leaders Network that stated People Do Matter Most, Really. The article, which referenced a recently completed research study, revealed, again to my content, that the best performing CPOs are concentrating their efforts on their people, capabilities, mindsets, and aspirations.

Every company says “People do matter” but this is one of those times, when McKinsey and Supply Management Institute have quantified it.

The study from McKinsey & Company and the Supply Management Institute found that high performing firms had high performing purchasing departments and that what matters is the people in the purchasing department, how talented they are, how motivated they are, and how they interact with the wider organization. They found that purchasing departments that excel in these aspects of their activities achieve savings two and a half times higher than those that don’t. Furthermore, their positive influence branches out beyond the historical territory of PSM to include areas such as revenue, innovation opportunity generation, and the leadership of commercial change in the company. In more detail, high performing firms demonstrated annual purchasing savings of 3.5%, a 1.4% annual reduction in COGS, and an average EBITDA of 17.7%. Compare this to low performing firms that only achieved a savings of 0.6%, a 0.5% increase in COGS, an an average EBITDA margin of only 12.7%.

Got me thinking about why is it more difficult to hire SCM  talent than any other resource:

1. Balance the delicate line between “vendor” supporting and “company” supporting. Most SC professionals walk that tight rope daily. An immense amount of patience is needed to make sure you have the interests of the partners (suppliers, etc) and those of the company. Getting that rare individual who manages both effectively is extremely difficult.

2. Keen eye for detail with a strong strategic focus. Changing regulations, sourcing rules, country outsourcing requirements, – what does not change in Supply chain daily? Keeping on top of it is a headache for most. Yet, most SC professionals cannot be only mired in details. A strong focus on the strategy of managing the company’s critical assets is key. Not too many people in the talent poll can do both with aplomb.

What do yo think? What makes your job more challenging to recruit for?