How to Train Supply Managers – Necessary and Sufficient Purchasing Skills Leading to Success
Klaas Stek and Holger Schiele
About the main author
Dr Klaas Stek combines an assistant professorship in purchasing and supply management with a trailblazer role in establishing EL-IPS, the European Lab for Innovative Purchasing and Supply at the University of Twente (UT) in the Netherlands. Coordinating a master course Purchasing Management at the University of Twente for Industrial Engineering Management students, he combines a mix of cognitive and non-cognitive learning objectives in his classes; for instance, he formalised creativity and inventiveness and added appropriate didactics and assessment tools.
Short abstract
The success of purchasing and supply management (PSM) largely depends on PSM professionals’ skill levels. Past research assumed that one universal PSM professional type exists, and they have proposed one-size-fits-all PSM skill sets. However, PSM professionals have different objectives. Based on the data of an extensive survey conducted amongst European PSM professionals (n =366), this study presents skillsets for seven objectives (reducing costs and improving delivery, quality, sustainability, strategic competitive advantage, supplier satisfaction and innovation). A differentiation is made between “necessary” and “sufficient” conditions for each objective’s effectiveness. Within a new PSM-skills taxonomy, a hierarchy of skills is detected as one of the first categories that provide quantitative evidence that soft or personal skills are necessary for carrying out hard or professional skills. University educators and firm trainers can draft teaching plans that support the intended outcome based on the proposed skillsets. At the same time, individual PSM professionals may get an orientation on developing their skills further.
Extended abstract
The success of purchasing depends mainly on the quality of skills purchasers have. However, which skills are vital for successful purchasers' education? Therefore, this study identifies 15 skill types categorised into soft, year-cycle, leadership, and special skills. Further, seven purchasing objectives are identified – cost cutting, in-time delivery, quality improvement, sustainability improvement, increasing strategic competitive advantage, supplier satisfaction and improving innovation-sourcing.
Achieving each of these objectives requires a different skill set. Hence, there cannot be just one type of purchaser; a differentiated skill set is needed depending on the intended target. The ideal PSM competence set does not exist; it depends on focus and culture.Based on the proposed skillsets, university educators and firm trainers can draft teaching plans supporting the intended outcome, while individual purchasers may get an orientation to develop further.
Training and education focus on per purchasing objective
Cost-cutting
For a purchaser to succeed at cost reduction, an "overlap" target relevant for more strategic or operationally oriented profiles requires a series of necessary skills. For this objective, soft skills in networking and imagination, neither automation nor technical skills, are unnecessary. Interestingly, successfully cost-cutting purchasers did or did not have particular contracting skills. Specific training in cost reduction methods, such as, for instance, lever analysis requirement, is a medium-strong differentiator.
In-time delivery
A particular "generic skill portfolio" and, hence, a training set emerges for the more operationally oriented purchaser, who has to ensure prompt delivery at the right quality and sustainability level. The delivery expert adds analytical skills, forecasting, cost focus and automation skills. Surprisingly, contract management shows a negative sign, indicating that, at least for the moment, legally well-trained delivery managers are not more successful.
Quality improvement
The quality target is the only target where technical skills make a significant difference. It is an exciting finding supporting the challenge to the often-expressed claim that purchasers should have strong technical skills. If purchasing respectively, the firm is emphasising quality insurance from the supplier or the quality control is hosted in purchasing and not as a department of its own, technical know-how is required. Cross-functional skills are necessary, as well as SRM and analytical skills. Not surprisingly, a negative relation to cost-cutting skills is evidenced, whereas contracting skills are a weak differentiator.
Sustainability improvement
On the other hand, contracting is a necessary skill for the sustainability objective, reflecting the solid regulation-driven character of sustainability considerations. Also, in the factor analysis, the item "corporate social responsibility" grouped itself to the contracting cluster, emphasising the solid legal connotation of sustainability. Likewise, sellership skills are necessary (as the sustainability targets are not always complementary to corporates' business requirements). Interestingly, cost skills show a robust and highly negative sign in the regression. On average, significant skills in cost reduction, global sourcing, and negotiation-oriented purchasers do not achieve sustainability targets better.
Increasing competitive advantage
Process and sellership skills are complemented by SRM and, as a differentiator, innovation sourcing skills. Market analysis, category strategy planning and the diverse innovation-oriented subskills are grouped. Interestingly, in terms of soft skills, being "result driven", i.e. showing self-assurance, poise, and proactivity, is characteristic of such persons. The training programme for innovation purchasers and strategic purchasers will show considerable overlap. Likewise, the soft skills profile and training are similar, though with a slightly different focus on the one hand, imagination and the other hand on what Hofstede calls "masculinity".
Improving supplier satisfaction
A fascinating skills profile emerges for the target "supplier satisfaction". It is part of the strategic block, as the pre-condition for both innovation and strategic competitive advantage by privileged supplier access is supplier satisfaction, which may lead to preferred customer status, which the ultimate strategic target purchasing can achieve. With this target, however, 12 out of 15 skills have the character of necessary conditions. A purchaser who acquires supplier satisfaction has a good level in almost all skills. No single target is as demanding. Effectively, supplier satisfaction seems to be more a question of the purchaser's maturity level. Put it differently: a poorly trained purchaser will likely generate unsatisfied suppliers.
Improving innovation-sourcing
The innovation purchaser shows a similar profile as the purchaser can achieve a competitive advantage for its company. Hence, the innovation purchaser may also be the CPO of the future, as this type can contribute to the entire firm's strategic positioning, thus fulfilling the new strategic role of purchasing. Purchasers successful in the objective "innovation" from and with suppliers typically rely, as necessary conditions, on a proper level of selling, process and project skills and the soft skill "imagination", which is also a differentiator. The latter is unsurprising, as this skill comprises creativity, inventiveness and holistic thinking. Business innovation is a very project and process-driven activity; firms typically have implemented any variant of a stage-gate model in innovation management. Hence, purchasers need to acquire process & project skills to succeed in innovation. Another necessary skill is sellership, for any novelty needs to be "sold" in the organisation. The more SRM and innovation sourcing skills a purchaser has, the better this type performs. Advanced skills include innovation sourcing and innovation implementation planning. Interestingly, a negative relation between cost and innovation skills has been found
Additional/further reading
· Link to the article (open access): https://www.sciencedirect.com/science/article/pii/S1478409221000303/pdfft?md5=dd01342aa7a7898d073a533113f5f31c&pid=1-s2.0-S1478409221000303-main.pdf
· LinkedIn: Click this link
· Website: https://www.utwente.nl/en/bms/el-ips/