Well, The Doctor is at it again. Michael Lamoureux from the Sourcing Innovation Blog is coordinating another cross-blog series on “The Future of Sourcing.”
I am going to base my contribution to the series on a conversation that I just had yesterday with a veteran purchaser who expressed concern about some developments over the last few years in supply chain management which I, too, have watched with great interest.
With the recent mass adoption of the not-so-recent approach of supply chain management, we are seeing many historically separate functions grouped under the single supply chain management “umbrella”: purchasing, logistics, warehousing, inventory management, production scheduling, etc. This concept is definitely beneficial because it does increase coordination between related functions.
But as with virtually any trend, some people adopt it without understanding it fully. So what we are seeing now – and likely will see for a couple of years – are individuals who are not properly cross-trained taking responsibility for functions in which they have little expertise.
Production managers have become responsible for purchasing. Purchasing managers have become responsible for the warehouse. Logistics managers find themselves negotiating contracts. And, despite the coordination between functions, the results are not always stellar.
The principle of supply chain management is to have an operation running like a well-oiled machine – NOT to have workers be jacks-of-all-trades.
You know the old adage: jack-of-all-trades, master of none?
How would you like a “master of none” negotiating a multi-million dollar deal with your supplier?
That’s a rhetorical question, obviously.
So for the future of sourcing, I see a continued adoption of the supply chain management concept, just a smarter adoption of it. Supply chain management teams will have specialists for those areas requiring specialist-level expertise: strategic sourcing, negotiation, supplier management, etc.
With the various aspects of purchasing and supply management developing so rapidly and gaining new best practices and technologies, you really have to dedicate yourself to keeping up with them and achieving world-class status. Very few people will be able to spread themselves across the entire spectrum of supply chain management and expect to be at the top of their game on every component of supply chain management in this ever-changing world.
Sure, an understanding of how the other functions within the supply chain interrelate will become more important. But some of the somewhat ignored purchasing skills will resurface as people remember why strategic purchasing has become an elevated profession and how well-done purchasing really does contribute to organizational effectiveness and profitability.
The role of the purchasing manager or team leader will become more important as well, as it will be necessary to facilitate knowledge-sharing among the specialists. The purchasing manager of the future will be neither a jack-of-all-trades nor a master of none, but someone who may be a master of a few and definitely a master of facilitating a team of specialists.
But won’t this approach only apply to large companies with large purchasing staffs?
But I also feel that there will be a shift in the types of companies that are out there. Historically, the economy has been characterized by a pyramid structure: lots of small companies, a smaller number of mid-sized companies, and few large companies. In the future, I see more of an hourglass shape.
With investors seeking immediate gratification and mergers and acquisitions being one way to provide such immediate gratification, I think that larger companies will become increasingly aggressive at acquiring mid-sized companies. The $1 billion annual revenue mark will make mid-sized companies acquisition targets and the big companies will gobble them up as fast as they can.
The specialist concept will fit well with the larger number of large companies that will remain as this gobbling occurs.
So what area of supply chain management will you specialize in?
It’s not to early to think about it.
To Your Career,
Charles Dominick, SPSM
Next Level Purchasing, Inc.
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