Peering down the road, Kull and Choi look for these executives to be expected to take additional responsibilities within a company and take a full step or more outside their traditional supply chain boundaries.
They add that these power players will continue to be tasked to “hold the line” on cost efficiencies in the face of heightened expectations and be made responsible for better meeting the ever-changing needs and wants of its customer base.
Proactive. Integrator. Keeper of the core. Source and disseminator. Meet the future procurement professional. That’s among the highlights of what those in the industry collectively feel the supply chain manager will look like by the year 2020, according to a recent research study by the two business professors.
“What we found is that the supply chain professional needs to stop being a supply chain professional,” says Kull, an associate professor at ASU’s W. P. Carey School of Business. “That means they need to get out of their skin and strictly out of their function and be more proactive. They need to say, ‘Here’s what we see now, and this is what we can do about it.’ Sort of a take on the role of being an internal consultant.”
The need to adopt a broader role from inside the company’s confines to help make for a successful future was a trend driven home by those responding to the roughly year-long survey that began in 2015. Kull, Choi, and then-research assistant Rama Srinivasan conducted the research on behalf of the nonprofit CAPS Research, a chain supply management partnership between members, the business school, and the Institute for Supply Management in Tempe, Ariz.
Responses from 113 top-level supply management professionals, including vice presidents, directors, and managers make up the research. Those responding to the detailed questionnaire came from a broad range of large and medium-size companies.
The goal of the study was to add to the knowledge gained from a similar effort by the group in 2007; a survey meant to crack open the window and offer professionals a real-world glimpse of what they might want to prepare for in the upcoming years.
This time, Kull says the survey faced more scientific vigor than the 2007 study. Questions were more narrowly defined. They shortened the questionnaire a bit. Still, researchers said it took about 30 minutes to complete. Researchers stated that they wanted to create a robust, repeatable structure that would enable the survey to be conducted more frequently, whittling the time horizon for the forecast to every five years.
“Our intuition was that chief procurement officers who were going to be consumers of this study wanted to know about the next five years,” says Kull, who came to the ASU business school in 2007. “After that time frame, we’re beyond planning — it’s almost to the point of science fiction or making things up. That’s not helpful at all.”
To proceed, the researchers quizzed procurement professionals about an array of nuts and bolts issues spread across four different categories. Participants were asked to offer their thoughts on external forces of change, critical business strategies, supply function mission and goals, and supply strategies and practices.
Among the more dramatic differences from the last survey came in the first category, researchers said, with respondents saying that their top external force to be dealt with was changing customer requirements. That item had placed fifth in 2007, with executives then citing changing oil prices and shortages of raw materials as their top choice.
Kull says the findings signal the need for companies to adapt their business model to meet what will be the biggest driver for change, setting their sights on the customers downstream in the supply chain.
What hasn’t changed, researchers said, was the impact of the government regulatory changes to be felt by these procurement professionals. This item continued to occupy the second spot in the category. “When you’re thinking of customer satisfaction at the same time you’re thinking about regulatory compliance, those two don’t always match,” says Kull, during a recent interview. “That’s an interesting paradox to try to square with and a big challenge to deal with.”
In the business strategies category, respondents placed achieving high service quality for customers as the No. 1 factor followed by reducing the cost of purchased goods and services. Garnering the top two slots in the supply mission area were achieving consistent cost savings from suppliers and ensuring continuity of supplies.
Respondents also said aligning supply strategies with company’s goals and employing a formal process to develop and manage these plans throughout the organization would be top-of-mind by 2020.
Armed with this rankings, Kull and Choi came away with five over-arching takeaways from the survey results for the major supply managers to ponder. Researchers found that:
- Customer-centric supply management has the potential to be the most significant driving force soon.
- Rapid technology changes are driving integrations and visibility.
- The importance of supply disruption has de-escalated.
- Supply managers must further the organization’s strategy, not just supply management’s plan.
- Big picture changes involving customers, government, and technology directly influence micro-level supply schemes.
Choi, an ASU professor since 1998, says the project has been well-received during presentations before various groups in the United States and across the world, providing a healthy dose of “Ah, hah” moments for individuals in the field. “People may have seen bits and pieces of this going on in their company, but this puts it all together,” says Choi, who also serves as the executive director of CAPS Research. “It paints one big picture, and they say, ‘Ah, I understand what is happening now.’”
Take the chief procurement officer (CPO) of a large U.S. consumer goods company who struck up a recent conversation with Choi. Choi says the executive was asked by his chief executive officer to take the lead in transforming the company’s internal functions to handle the downstream demands of its customers better. Not the chief operations officer. Not the company’s chief marketer. But the chief procurement officer. “When you think about it, it makes sense,” he says. “Supply management people are used to working with people at other companies. What better person is there to work on crossing these different functional boundary lines to address the downstream market better?”
Choi is quick to caution about setting the findings in concrete, saying that making crystal-ball predictions can be difficult, to say the least. But he feels confident the research could be of help to those in the profession because of the way in which the survey was conducted — learning lessons from the past and tapping the opinions of those in the know.
“The best we can do is pull together this collective intelligence of very well-informed people who don’t have selfish motives to respond to the survey,” he says. “I think we’ve captured what most people believe will happen in the future. And that’s all you really can do.” Choi says he hopes to begin the formative stages of a new futures study next year and plans to focus more on the technological changes being felt by chain supply managers.