The concept of supply chain is already consolidated in the corporate and academic environment as the set of companies that promote successive additions of value by transforming raw materials into intermediate products, which in turn will be used in the preparation of the final product that reaches the consumer.
The companies in this supply chain need to be aligned and synchronized so that the flow of products and services happens efficiently with regard to the use of resources for this purpose. Examples of resources can be inventories, productive and distribution assets, and activity processing time.
The integration between the links in the supply chain has become a key condition for the pursuit of efficiency. Cooperative relationships, effective business processes and high information sharing are necessary requirements for integration to become a reality.
All this is easy to say, but difficult to execute because the reality is getting more and more complex due to the challenges of a lack of infrastructure, more government regulations, greater pressure for innovation, increased consumer expectations and a reduction in talent for supply chain management, pressure to reduce costs and demands for sustainability.
In addition to the aforementioned aspects, the expansion of globalization adds extra factors to the complexity of supply chain management. Brazil, Russia, India and China are fast-growing markets and are considered difficult to distribute internally and internationally due to the limitations of the existing logistic structure in these countries. Chain expansion, which together with other chains form an expanding network, impacts supply risk, which potentially increases due to the risk added by global expansion.
Floods, tsunamis, earthquakes and acts of terrorists are examples of occurrences that affect the globalized supply chain. In addition, the increasing variability in regulatory aspects defined by governments, associated with the difficulty of predicting how these regulations will be enacted, brings an extra spice to the difficult and complex task of managing the globalized supply chain.
Thus, it is necessary to develop mechanisms that can be used to deal with the commented complexity. This goes through the use of alternatives and capabilities that are flexible, due to the need to adapt to different situations and circumstances generated by the complexity factors listed above.
Logistical integration, supply chain integration, cooperation and collaboration between supply chain participants, total management, talent management and joint work with universities in search of new ideas and talent are some examples of mechanisms that can be used.
The issue of talent is the central theme of this article, which will be divided into two parts. In each segment, aspects related to the skills that specialists in charge of supply chain management need to have to deal with the complexity outlined in this introduction will be discussed.
People as the central point of the supply chain
In a recent survey conducted by the German Logistics Association with supply chain directors from their respective companies, where various management strategies were analyzed, it was concluded that managing the people who move the chain is the most important strategy among the alternatives. considered. Figure 1 shows the average score assigned by executives to each in the current scenario and in the scenario five years from now.
Figure 1 – Supply chain management strategies
Source: Adapted from Handfield, R., 2014
It is observed that integration between the links in the chain, exchange of information providing visibility and integrated planning were well-marked strategies and that are related to the concept of synchronization and collaboration in the supply chain, fundamental for reducing complexity. Even so, these strategies appear after talent management, demonstrating the relative importance of the latter.
Still from another angle, we can see the supply chain as a network of collaborative relationships, supported by technologies that provide platforms for exchanging information, processes that are flexible and adaptable depending on the regions where they will be executed. And at the center of it all come the professionals who manage this chain. In other words, people form the core of the chain.
Skills of the buyer of the future
The scenario of current and future complexity of the supply chain highlights once again the strategic role played by the purchasing/supplies area, as this area contributes significantly to reducing the impacts of the factors that influence the mentioned complexity.
Aiming at attesting to the contribution of the Purchasing area, North Carolina State University conducted a recent survey with 168 Purchasing/Supply directors, who identified the most important points that should be on the sector's executives' agenda for the evolution of the area over the next ten years. The result is shown in Figure 2.
Figure 2 - Aspects to be developed by the Purchasing area
Source: Adapted from Handfield, R., 2014
The content of Figure 2 shows the optimization of relationships with suppliers as the measure most indicated by the interviewees, and it is in line with the need for collaboration previously discussed. The second measure deals with the increased use of technology in the Purchasing area, but carried out centrally. The other aspects pointed out by the interviewees are related to the management of the supplier base.
Leading the Purchasing/Supply area on the way to its evolution and contribution to reducing the complexity of the supply chain necessarily involves employing qualified professionals to deal with the complexity scenario and deliver more value to the business than what has been happening in the past. current days.
Thus, North Carolina State University carried out another survey, with 25 Purchasing/Supply directors from companies in the segments of consumer goods, finance, heavy machinery, health, pharmaceuticals, energy and telecommunications. Among the aspects ascertained in this survey is the set of skills that, in the view of these professionals, the Purchasing/Supply department must possess in order to enable its evolution over the next ten years.
The opinions of the interviewees converged on a set of skills unfolded below. The order in which they appear does not indicate the relative importance of each in relation to the whole. They comprise buyer skills in the role of financial expert, internal consultant, relationship agent, integration agent, risk mitigator, intelligence agent, environmental protector, and legal expert.
Buyer as a finance expert
In this case, buyers are expected to have knowledge of the different accounting segments that comprise cost, financial and managerial accounting. Some concepts that need to be mastered are analysis of the loss and damage statement, impact of the balance sheet, interest rate, exchange rate, variability in raw material prices with a special focus on oil fluctuations and the corresponding impact on the budget of these variations. In short, understand the financial implications of these issues.
Figure 3 – The buyer as a finance expert
Source: Adapted from Handfield, R., 2014
Still along the same lines, the buyer should be concerned about participating in the organization's spend analysis, in order to identify the expenses incurred in the different categories and where the money is going; look at the number of suppliers in each category and question the real need for this quantity; and look for indications that point to the need for management action to correct existing distortions in the dynamics of Purchasing/Supply activities.
The spend analysis work should facilitate the understanding of the spending pattern carried out in the organization in the time window established for analysis, as well as the identification of discrepancies in the patterns of these spending, such as, for example, excessive prices of purchased products and services.
Professionals in the Purchasing sector must have the ability to align the concepts of cost reduction, price variability of purchased products and services, avoided costs and total cost with the financial impacts provided by each initiative, in order to be better understood by the sector the company's Finance department and facilitate communication with this sector.
This will be important in the process of motivating Finance to validate the savings obtained by the Purchasing sector and also to ensure a common language for discussing the strategies of this last sector. This level of engagement can help with early development and validation of baseline and savings calculations.
Buyer as internal consultant
The buyer needs to be focused on listening and trying to solve the problem of their internal customers. It is not enough just to process requisitions or purchase orders that are forwarded to buyers. It is necessary to understand to what extent the real need of the internal customer will be satisfied.
The buyer must be an agent who seeks alternatives and solutions to the root causes of his clients' problems. It should not only focus on price reduction, but also on solutions that bring more value to customers. The idea is to work with information technology, sales, marketing, human resources, production and other segments of the organization as if they were your partners, listening and helping these sectors with their problems.
Figure 4 – The buyer as an internal consultant
Source: Adapted from Handfield, R., 2014
Buyers can even forecast their internal customers' needs based on past customer spending, question current sources of supply, and bring other perspectives and suggestions that are emerging from trends to decision makers for consideration. This is a type of initiative that can bring value to decision makers who might not be aware of the suggested alternatives.
A characteristic example of this situation is the presentation, by the buyer, of a new technology developed by the supplier that can be very useful for the internal customer, who did not know of its existence.
Buyer as an intelligence agent
Intelligence activity is already part of the Purchasing professional's routine, but what is intended here is to draw attention to the need for this activity to be carried out in a structured and methodological way, in order to obtain the greatest possible benefit from this undertaking. .
In this segment, the buyer must be concerned with collecting information from different sources, which will feed the possible analyzes of the supplier market of a given category that is intended to be investigated. This involves the development of mechanisms that obtain data, both government and private, that allow the identification of trends in the supplier market that can guide the purchasing/supply process.
Initiatives of this nature make it possible to define the category's strategy, manage supply risk, forecast demand and cost, monitor technological innovations and establish predictive models.
In addition to the Purchasing or Supplies sector preparing its analyzes for its own consumption, it must be concerned with disseminating them to the other sectors of the company interested in knowing the forecasts made about the supplier market. This can help Purchasing's internal customers understand potential supply risks and facilitate the preparation of their respective quotes.
Figure 5 – The buyer as an intelligence agent
Source: Adapted from Handfield, R., 2014
Structuring the ability to carry out supplier market intelligence involves setting up a group of analysts dedicated to collecting, synthesizing and translating market data into meaningful information for category managers and also for the company as a whole. The possibility of making predictions that help category managers is a key point in the development of this initiative.
Conclusion
This first part of the article draws the reader's attention to the complexity of the future environment of the supply chain and initiates the discussion about the skills that need to be present in the Purchasing/Supply sector so that this segment of the organization can contribute to the reduction of complexity of the chain and, additionally, bring more value to purchasing and supplying companies.
So far, finance, internal consultant, and intelligence agent skills have been covered. In the next part of this article, the remaining skills to be required from buyers in the next ten years will be discussed.
References
Handfield, R., 2014. Strategic Procurement & Supplier Alignment: The Future Faces of Procurement, Presentations materials and notes
KPMG, 2013. FutureBuy: The Future of Procurement, Research Report.
To reference the article in your publication, use:
HANDFIELD, R.; BRAGA, A. The buyer of the future – Part 1. Tecnologística Magazine, São Paulo, Year XX, n. 233, p. 104-108, Apr. 2015.
Robert Handfield
Professor of Supply Chain Management
North Carolina State University
Ataide R. Braga
teacher and researcher
Institute of Logistics and Supply Chain
Tel .: (21) 3445-3000
Ataide Braga
https://ilos.com.brAtaíde Braga is a Leader in Purchasing and Supply Practices at ILOS. He has been certified by the International Society of Logistics as a Professional Logistician. He is the author of several articles published in magazines and conferences in Brazil and abroad. His research area is focused on the relationship between customers and industrial suppliers. His professional experience includes responsibility for the acquisition of equipment and spare parts in the international market for maintenance of critical reliability systems.
