Ian Billson, MCIPS
Ian Billson, MCIPS, Director, ADR International Purchasing Consultants, Bracknell, Berkshire RG12 1RP,+44 01344/303078.
Tom Raspet, Senior Consultant, ADR North America LLC, Ann Arbor, MI 48106-0366, 313/930-5070.
The Challenge. Few can doubt that business thinking, business processes and business needs will continue to change as we move towards and into the new millennium. The consequences for purchasing are significant. As businesses demand sourcing strategies that truly reflect business needs, fundamentally different ways of working with suppliers, and reliable processes for collaboration with internal customs, traditional purchasing skills will no longer suffice. Such change needs to be supported by training and development, not just for full time purchasing staff but for the considerable number of staff in R&D, marketing, engineering, planning, operations human resources and so on, who will influence sourcing and relationships with suppliers. There will need to be a move from generic courses and workshop based training to small group and individual coaching, related to the specific role and tasks individuals have to achieve to fully contribute to the businesses' needs.
The requirement is for an integrated and continuous process, as illustrated in Figure 1. (Figure is not available in text version of this paper.) A process which links business requirements to individual development needs, with systematic, and regular evaluation review and updating is necessary to meet the rapidly changing requirements of today's and tomorrow's organizations.
Linking purchasing development to business needs. For many organizations, linking business needs to purchasing development needs will be the most challenging part of the development process. In its simplest form, there are three steps.
Step 1 is to define the business aims, strategies and drivers which could be influenced by the supply base. Examples could include improve market share, develop one or more niche markets, build a technology advantage, improve cash available for acquisition, and improve operating margin.
Step 2 is to define improvement themes and / or process changes required if suppliers are to be managed to maximize their contribution to the defined business needs.
The final step is to broadly define what this may mean in terms of individual competence development.
Figure 2 illustrates this process for one business driver: to be the lowest cost producer in the sector. (Figure is not available in this text-only version.)
Defining roles and responsibilities. Having defined the purchasing development needs in broad terms, the next stage is to define:
Drawing on the analysis which links business and purchasing competence needs, a Purchasing Competence Needs Profile can be developed for all staff who are critical to delivering business orientated purchasing outputs.
Assessing Individual Competency Gaps. After the ideal competencies each key individual will require to perform their role over, say, the next 12 months, have been identified with some precision, the next stage is to identify the gap between each individual's current capability and required capability. This can be done in a number of ways, through, for example:
ADR International Purchasing Consultants have found the development center route to be a very effective way of identifying the true development needs.
Providing JIT Tailored Development. The fourth stage is to design, resource and deliver tailored training and development to deal with the purchasing competence gaps of all the key people involved in sourcing and post-contract supplier management. As illustrated in Figure 3, traditional training methods are unlikely to meet the development needs of business focused purchasing functions. (Figure is not available in this text-only version.) New approaches are required. This has major implications for purchasing directors and purchasing managers. Increasing amounts of their time will be allocated to:
While third party support can be used in developing concepts, materials and the communication media, responsibility for closing the competency gaps rests with those who manage the purchasing process.
Measuring Progress. The final stage is to review the progress of individuals, not through annual appraisals, but through on-going review and challenge into what has changed and what really is being done differently.
While many managers would acknowledge this as an important activity, it is often one that is done ineffectively. As a result, the necessary change to the training approach are not made and the competency gaps remain.
Summary. With business and market conditions in constant change and increasing expectations for the supply base to maximize its contribution to business aims and needs, the competencies needed by those working on sourcing and supplier management will continually change.
Purchasing training and development processes need to be adapted to deal with this change.
|Current Approach||Future Approach|
|Training for training's sake||Training to deliver the real business needs|
|Ad hoc assessment of training and development needs||Rigorous and structured assessment of capability gaps|
|Generic purchasing skills development||Development of business, behavioral, purchasing skills to meet specific short and medium term job needs|
|External courses and internal workshops||Individual / small group action (learning on live and challenging business situations|
Those organizations who recognize the needs and are prepared to develop the necessary processes have the potential to secure a competitive advantage.