Supply Chain Education
Let’s start on the education issue. What is the certification from the Supply Chain Management Association and why should professionals want it?
So, first a little history. The acronym used to be CPP, Certified Professional Purchaser. That’s been around for a long time. The organization that gave the designation was the Purchasing Management Association of Canada. So, the only thing that’s changed is the names. Now, the organization that gives the certification is the Supply Chain Management Association and the designation is now called the Supply Chain Management Professional.
If you want a job in the supply chain realm, in any major procurement area now, most companies are requesting you have the designation or that you be working on it. Or, companies want people to have a purchasing designation. The training is substantial – you learn everything there is to know about procurement, in a manner of speaking. I teach a course in global sourcing, which is all about outsourcing. You may or may not end up in a company that does that, but you’ll learn about it.
You describe supply chain management as a discipline. Why?
I put it in the realm of accounting as a discipline. There are a whole variety of skills needed because there are so many job titles – sometimes you’re called a buyer, sometimes a purchaser, an inventory control person or you could be a logistics specialist.
This work is going on and supply chain activities are going on. It is happening in every company as a function, whether it is identified with a title or not. That’s why I think of it as a discipline.
With all of your experience in mind, what do you think is the most commonly misunderstood aspect of the supply chain discipline?
I would say that the supply chain is thought of only as buyers. Also, many think only in terms of commodity, they usually overlook the services. People often think anyone can buy services, and there is no need for a buyer for that. A buyer buys pencils, not services.
Also, many in an organization, particularly small organizations, think they can buy pencils as well. That misses the competitive aspect, the commercial aspect and the strategic aspect of purchasing. Sure, people can buy pencils, but you have to understand why, what kind and why they fit in the function. There are many nuanced issues to purchasing.
What about industry issues? What are the critical issues being dealt with by supply chain professionals?
I recently taught a four-day negotiation workshop. It was enlightening. A lot of the students remarked they never understood the importance of relationships when dealing with people in the supply chain. And these are reasonably experienced supply chain people. Younger professionals are starting to view this as a purely paper exercise – using a purchase order, a contract and placing an order. That’s what it is all about to them.
As a result, we are losing the skill of understanding what you are really doing. It depends on your ability to negotiate and it depends on your ability to come to an arrangement with somebody. That is being overlooked. There is tendency to forget about learning how to interact with people and come to a deal. That is what I’m seeing. Relationships and trust are critical. The ability to deal with people will remain an important future issue as well.
Can you talk about the intricate role logistics plays in the supply chain?
Logistics is a subset of supply chain. Logistics is the oil that makes the gears go around. So, I may negotiate with an offshore company a contract to acquire a bunch of chairs from China. I can negotiate all the terms but between getting the stuff from there to here, I would normally hand that off to my transportation department – they’re the experts. Transportation is one of the biggest factors.
And logistics is responsible for getting things to their destinations in predictable ways. If I’m ordering something, the guy I’m ordering from should tell me I can’t have my stuff for, say, three weeks. But it’ll be there on the 21st day. So, now I know not to expect anything on the 14th day, it just won’t be there. That’s on time and predictable. I think that is the key. I think everybody would be perfectly happy if, even if transportation times are slower than they might like, times were predictable.