Sourcing

The Magical CPO

Chief Procurement Officer

My first Op-Ed, Open Letter to the C-Suite, appealed to the C-Suite to hold Procurement accountable for not investing in technology.  The blog referenced a Gartner perspective that only 22% of procurement leaders have a long-term digital strategy.  I touched a nerve, invoking comments from a few readers suggesting there are procurement leaders - the Magical CPO - that understand how to navigate the C-Suite to get the budget for technology investments.

To give credit where credit is due, Nikesh Parekh, CEO of Suplari (Now Microsoft), is the source for the term Magical CPO.  It describes a procurement leader that understands how to build business cases and secure budgets for technology investments that improve their department's efficiency and effectiveness while supporting the needs across all business disciplines. The Magical CPO persona, by definition, is juxtaposed with the technology laggard. If you saw my first Op-Ed, I noted that 78% of procurement leaders are technology laggards without any digital automation strategy.

The Magical CPO persona

Let’s unpack the Magical CPO persona to agree on common qualities. My views are based on my observations and experiences over a 30+ year career in procurement. There is no Wikipedia page for Magical CPO nor a Google search that prompts any relevant hits - I checked.  While I understand there are more sources than Wikipedia and Google, the point is that there is generally no standard persona for the Magical CPO. Here’s my interpretation of what the Magical CPO must possess: 

Greg Tennyson, SVP of Strategy & Procurement, Fairmarkit

This Month at SIG – June 2022

Here's your monthly update on the latest thought leadership, networking events and training with SIG.

The second half of 2022 is here but constant supply chain problems are diverting procurement’s attention from other business-critical areas. We have a host of resources, insights and events to get you prepared!


June CPO & Executive Virtual Series

SIG's CPO & Executive Virtual Series is an opportunity for the most senior procurement executives to gather with their peers in an interactive virtual environment to discuss their most pressing issues. On June 8, Keith Learn, Vice President of Procurement & Supplier Development at Mary Kay Inc., will deliver a thought leadership presentation that will leave you with many new tools and strategies! Nick Heinzmann, Vice President of Research at Spend Matters will also be presenting his latest learnings. Nick will discuss ESG, regulatory forces, and inflation.

Join us for this collaborative and very personal conversation!

 
 

Power Hour Webinars

ESG Regulation and its Impact on Sourcing

Join John Bree, Chief Evangelist & Chief Risk Officer from Supply Wisdom on June 9th to explore the impact of ESG on supply chains and operations.

Desmond Williams, Digital Marketing Manager

Using A GPO Model To Fight Inflation? Insights From Our Second Interview With A Senior Procurement Executive

How to Use A GPO Model To Fight Inflation

In the last article, we heard from Senior Vice President & Global Chief Procurement Officer at Cigna Express Scripts, Tony Abate, regarding his steps for dealing with inflation.

In this article, we hear takeaways from a recent CPO Roundtable discussion from Michael Koontz, VP, Strategic Sourcing & Business Leader for American Tire Distributors (ATD) Sourcing Solutions. I think you will find his approach to battling inflation innovative and unique.

Before we get to Michael’s fight-inflation strategy, let’s first provide some background information on his company. ATD operates more than 130 distribution centers, including 24 in Canada, serving close to 80,000 customers across North America. Employing 4,000 associates in the U.S. and 600 north of the 49th, ATD offers an “unsurpassed breadth and depth of inventory, frequent delivery and value-added services to tire and automotive service customers.”

Their selection as one of Forbes’ 2021 America's Best Mid-Sized Employers and the reception of a Gold Stevie® Award in the Transportation Company of the Year category of the American Business Awards® provides testimony to their high level of service and success as a company.

An Innovative Model

According to Michael, inflation is “five times more difficult for small businesses.

Dawn Tiura, President and CEO, SIG

This Month at SIG – May 2022

Here's your monthly update on the latest thought leadership, networking events and training with SIG.

As the first half of 2022 comes to a close, procurement faces the reality of inflation and what that means for their supply chains. We have a host of resources, insights and events to get you prepared.


May CPO & Executive Virtual Series

SIG's CPO & Executive Virtual Series is an opportunity for the most senior procurement executives to gather with their peers in an interactive virtual environment to discuss their most pressing issues. On May 4 Brian Roche, CPO from Westfield Insurance, will deliver an exciting keynote session on the potential for AI in procurement at the May CPO & Executive Virtual Series. He will be followed by Karen Coker, Director of Third Party Risk & Vendor Management at LendingPoint for A Day in the Life presentation.

Join us for this executive-level conversation with actionable takeaways!

 

May Microlearning by SIG University

On May 18, Canda Rozier CIAP, Sourcing Executive & former CPO, will share her digitization journey as a CPO. That session will be followed by Daryl Hammett, Global Head of Demand and Operations at Amazon Web Services (AWS), who will lead an exciting deep-dive discussion on the importance of professional development in sourcing. 

Join your sourcing, procurement, and risk management colleagues in this two-hour interactive virtual environment to be challenged with topics related to our industries!

Desmond Williams, Digital Marketing Manager

How Procurement Has Bridged The Gap With Finance

Procurement and Finance

Let's start with a bit of a history lesson. Have you heard of Robert Rudzki?

As the co-author of the 2005 book Straight to the Bottom Line®: An Executive's Roadmap to World Class Supply Management, Rudzki knows a thing or two about the subject matter about which he confidently writes. Between 1977 and 2005 – 28 years, he was SVP and CPO for notable brands Bayer Corp. and Bethlehem Steel Corp. Be sure to note his dual finance and procurement role.

Based on his expertise – which includes an MBA in Finance from the world’s oldest and most prestigious business school, Rudzki identified the five critical finance terms every purchaser should know. In short, his bridge between finance and procurement was to have the latter refocus on areas such as ROIC, Cost of Capital, and P/E Ratio.

His reasoning was supported by a 2006 article that asserted, “Too often, finance executives in Corporate America simply don’t believe that purchasing departments are really bringing in the savings they claim" because “financing and purchasing don’t speak the same language.”

This linguistic disconnect was further emphasized in a 2007 news report indicating the following:

  • Less than 20% of CFOs consider the work of CPOs and their staffs as having a very positive impact on competitiveness.

Additional insights from an excerpt of the research paper referenced in the same news report also indicate that:

Mary Zampino, Vice President – Content, Research & Analytics

Two Senior Procurement Executives Weigh In On The Best Way To Deal With Inflation

procurement inflation

One of the significant advantages of the Sourcing Industry Group (SIG) is that members have unparalleled access to industry insights and expertise through our vast and diverse community of practitioners and thought leaders.

Recently we conducted interviews with two senior procurement executives regarding their innovatively practical approach to dealing with inflation and its impact on supply chains.

In the first instance, we talked with Tony Abate - Senior Vice President & Global Chief Procurement Officer at Cigna Express Scripts.

When Cigna closed its $67 billion acquisition of Express Scripts in December 2018 to become what the media called a “$140 billion revenue healthcare colossus,” Tony’s responsibilities expanded considerably.

Responsible for “transforming and integrating two procurement departments into a global, world-class international team, he is accountable for the CIGNA taxonomy research, analysis, and development, including identifying 8000 suppliers with an annual spend of $4.5 billion.

Our second executive is Michael Koontz. Michael is the VP Strategic Sourcing & Business Leader for ATD Sourcing Solutions, whose unique approach to battling inflation we will discuss in a follow-up post.

Creeping Into Supply Chains

Shortly before his interview with SIG, Tony gave a speech to 1500 employees at Cigna on inflation and its impact on supply chains.

Dawn Tiura, President and CEO, SIG

One Source Of Truth: Tearing Down The Silos Of Sourcing Inefficiencies

Seven Steps to Success in Sourcing

Thrust into the spotlight due to the pandemic and now the war in Ukraine, the demand for sourcing professionals to deliver maximum value has never been greater.

To start, "maximum value" is no longer about getting something at the best price – if it ever was. I base the "ever was" on the words of a 20-plus-year industry veteran who has held senior executive positions with a major global brand and stressed that it has never really been about cost savings alone. If it were, they added, they would have left the industry a year and a half after they started.

So, if it isn't about cost savings, what is it about?

It is about agility, resilience, and being strategic. It is also about breaking through existing barriers to achieve optimal outcomes through digital transformation. In other words, the merger of people skills with emerging digital tools such as Life Cycle Contract Management (CLM) solutions.

The Seven Steps to Success in Sourcing paper was written with the above objectives in mind.

Beyond providing an outline of the challenges with which sourcing professionals are now contending, in this article, I will review the paper's "seven steps" within the context of a CLM framework. Included will be a deeper dive into one of the steps – Improving transparency.

Barriers To Agility

The paper talks about the challenges of "cumbersome siloed data" and points out that sourcing professionals are weighed down (and slowed down) by "outdated traditional systems" and "complex, often manual" processes.

While these have been significant issues, they take on new meaning in a post-pandemic world, a new meaning in which supply chain resiliency is being stretched to the breaking point.

As a result, the risk of "slow, inflexible sourcing processes" reduces agility and, with it, the ability to adapt to the at times, unpredictable changes in the marketplace.

Mary Zampino, Vice President – Content, Research & Analytics

This Month at SIG – March 2022

Here's your monthly update on the latest thought leadership, networking events and training with SIG.

2022 is already shaping up to further depend on procurement's expertise in transforming sustainable supply chains. We have a host of resources, insights and events to prepare you for procurement's transformation!


Procurement Technology Summit

Prepare yourself and your team for the future of business at the SIG Procurement Technology Summit April 4-6, 2022! Are you registered?

Get ready for amazing keynote sessions, a chance to engage and learn from the brightest industry experts, speed networking, and experience live solution deep-dives from best-in-class providers.

 

Future of Sourcing Awards

Do you hear that? That's the sound of the SIG Future of Sourcing Awards making a return! The FOS awards are held to honor and celebrate individuals and organizations that show innovation, leadership and transformation in critical areas to the sourcing industry. The next Awards will take place in Rancho Mirage, California, on October 19, 2022, the capstone evening at the SIG Global Executive Summit. Attendees will enjoy dinner, networking, entertainment and an awards ceremony delivered in the most innovative ways imaginable. This event will bring together some of the brightest minds, the best insights and the most relevant topics to create a truly remarkable experience.

Desmond Williams, Digital Marketing Manager

The Inflated Supply Chain: How To Navigate The Complexity Of Doing Business During A Period Of Rising Inflation

Supply chain Business During Inflation

A timeless saying is that "life is 10 percent what happens to you, and 90 percent how you react to it."

I was reminded of these words when I recently read the PBS News Hour article How the supply chain caused current inflation, and why it might be here to stay.

According to reports, the 6.2 percent increase in prices over last year was unexpected and, therefore, a shocking turn of events to many experts. Even more troubling is that there is a growing belief that higher consumer prices will become the "new normal." In short, while the rate of inflation may nominally fluctuate over the coming months, its fastest rate of increase in "more than three decades" is a trend that will likely continue in the coming years.

I intend to understand the "why" of what is happening and highlight the consequences of the current crisis - including the means and tools at your disposal to deal with it.

Supply Chain Mess

While there is no single reason for the inflation we are experiencing today, it seems that the catch-all reason given by experts is that our supply chains are a mess.

Starting with the "severe shortages of goods and labor in supply chains," pundits point to a dramatic increase in people buying online due to the pandemic as an exacerbating factor.

For example, industry projections that orders would hit 4.7 million packages a day during this recent holiday go well "beyond what the system can possibly absorb or deliver." However, that is just one part of the story, which brings us back to my opening comments about our reaction.

When The Chips Are Down

The strained relationships between buyers and sellers due to inflation are making headlines around the globe.

Dawn Tiura, President and CEO, SIG

This Month at SIG – February 2022

Here's your monthly update on the latest thought leadership, networking events and training with SIG.

2022 is off to a fast start and the future of procurement is squarely in view. We have a host of resources, insights and events to prepare you for procurement 4.0!


February Microlearning by SIG University

Stakeholder Engagement has shifted dramatically over the last few years, making way for Procurement’s traditional tasks to become automated. So what should you be armed with to be a vital asset for the business? Join Anita Weise, former VP of Procurement at Vail Resorts as she gives a thought-provoking discussion about the new lens into Stakeholder Engagement! She will be joined by Daryl Hammett, Global Head of Lead Management and Operations Amazon Web Services (AWS), who will lead an exciting deep-dive discussion.

Join your sourcing, procurement, and risk management colleagues in this two-hour interactive virtual environment to be challenged with topics related to our industries!

 

A Flexible (and Fast!) Way to Get Certified Now

Did you miss our 2021 open cohort start dates? We have fast-track and self-paced options for all programs if open cohort semester timings do not work for your schedule! Have a large group from your organization interested in taking the program together? We also offer closed cohorts for groups of 20 or more that can start when it is best suitable for your team, and volume discounts are available!

Desmond Williams, Digital Marketing Manager

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