Many corporations have centralized their procurement operations over the past several years. Typically, the switch is from a local or regional procurement structure to a centrally led organization headed by a chief procurement officer (CPO).
Through their recruiting work for Spencer Stuart's Supply Chain Practice, Stewart Lumsden and David MacEachern have observed a recent trend toward CPO searches not only in manufacturing but also in service industries. These new CPO roles in service-driven organizations focus not only on spending across marketing, travel, information technology, consulting, real estate, security, transportation, and similar areas but also on enhancing customer satisfaction, quality, and on-time delivery. In many cases, the CPO has become a key strategic leader and advocate for greater operational effectiveness in everything from inventory to manufacturing, product design, cash flow, outsourcing, workflow, quality, and customer service.
To successfully effect a transformation to centrally managed procurement, Lumsden and MacEachern say, the CPO needs a number of critical capabilities, including:
- Outstanding strategic skills. The chief procurement officer must be able to take a global view of the entire business and marketplace to develop a procurement strategy that aligns with the company's business needs. The CPO also needs a comprehensive understanding of the ramifications of different strategic options, and he or she must be able to help decision makers understand the advantages and disadvantages of different approaches and models.
- Superior leadership. The CPO must be able to play a guiding role in early-stage discussions on how to implement core business strategies in an effective, economical way. He or she will then be called upon to engage the wider organization in the overall procurement opportunity, build cross-functional teams, and communicate procurement strategies and priorities across the organization.
- Influencing skills. The CPO must become a valued partner who collaborates effectively across different organizational levels, functions, businesses, and geographies to realize procurement goals and objectives. He or she also must be able to influence top-level management to keep executives from putting up "fences" that can stall a procurement initiative.
- Results orientation. The CPO cannot accept "no" for an answer and must demonstrate a drive and passion for continuous improvement in processes, relationships, and cost savings. He or she must be creative, persistent, and always setting goals for the team. Most importantly, the CPO must produce definitive metrics that demonstrate the success of procurement initiatives to the chief financial officer (CFO) and chief executive officer (CEO).
- Organization building. A global procurement leader must be able to assess the organization's existing capabilities and attract experienced leaders to fill any gaps. He or she must be able to create global transparency where it may have been only regionally available before, and be capable of aligning practice and policy across the function as well as across the broader organization.
To learn more about supply chain career development, read the "Career Ladder" column in each issue of CSCMP's Supply Chain Quarterly.
