This
month’s featured publication is Common Sense Supply Management – click here to read our review or to
order a copy from Amazon.com. Since we have worked with author Dr.
Tom DePaoli in the past, we took the opportunity of this new book being out to
get an update on his perspective of supply management as a discipline, how
social media is affecting the interactive dynamics, and on our role in the
larger organization.
If you are interested in learning
more about Dr. Tom’s work, visit the Common Sense Purchasing and Supply Management website here.
You can also read our review of ‘Common Sense Purchasing’ on The Point.
Buyers Meeting Point: Do you have a
working definition of ‘Supply Management’ in your mind? What changed in our
profession or in your career that caused you to focus this book on supply
management after writing Common Sense Purchasing?
Dr. Tom DePaoli: I did have a
working definition of supply management when I started the book. I emphasized
the relationship aspect. I somewhat agree with the ISM definition.
"The identification, acquisition, access, positioning, management of resources and
related capabilities the organization needs or potentially needs in the
attainment of its strategic objectives." Supply management is much more
strategic than the traditional concept of purchasing. Since I have transformed
many traditional purchasing organizations into supply management organizations
I understand the strategic nature of supply management. The other difference is
that in supply management, the relationship building is much more complicated
and at multilevels. It is not just a matrix but a multidimensional matrix of
relationships! The supply management professional needs versatility and
powerful relationship building skills. Their understanding of the business must
be broad and well grounded. Their understanding of the many marketplaces,
domestic and global, is also essential.
BMP: You give many examples of the
benefits of face-to-face interactions, both with suppliers and internal
stakeholders. Do you feel that supply management professionals have become too
reliant on virtual communication?
Dr. T: At times I
believe that they do become too reliant on virtual communication. These are
great tools but nothing beats face to face interaction, supplier site visits,
in person quality discussions, visiting internal stakeholders and asking for
their input, and just going out in the field and asking questions and learning.
In my experience, these actions yield a lot more useful data and more
importantly encourage collaboration. The issue is always time management and
which face to face interactions are critical.
BMP: What trends have you seen with
supply management professionals making use of (or missing out on) the benefits
of social media?
Dr. T: Supply management
professionals need to use social media more to network, share ideas and discuss
problems. There are various professional supply management organizations that
have running discussions that supply management professionals can participate in and share information. One of the
most valuable is asking for help on sourcing especially when you are cold
sourcing a new part or service. Supply management professionals will usually
give you a good honest answer on a supplier and share their supplier
performance data.
BMP: You make the comment that the
head of supply management must be at the vice president level (p. 50). When you
combine this with the need to get Finance’s sign-off on savings definitions (p.
115), do you feel that Finance is the best organization for supply management
to report to, or should we be positioned on the operational side of the business?
Dr. T: Supply management
should be independent of the finance organization in a company. They should
report directly to the CEO. Finance should sign off on the scorecard that
supply management keeps especially around savings. Many financial organizations
are still using standard cost techniques instead of activity costing. As you
know total cost of ownership savings include many qualitative savings that must
be valued fairly. Supply Management is strongly operational; no other internal
organization has a bigger impact on the bottom line. We provide the critical
tools, resources, services, and parts etc. that make operations possible. Often
we control or influence a very large percentage of the cost of goods sold.
About Dr Tom
Dr. Tom DePaoli
is an independent management consulting professional with over twenty years of
experience in all phases of purchasing, human resources, supply chain
optimization, strategic sourcing, organizational re-design, e-commerce, SAP and
e-procurement software. Dr. Tom DePaoli has extensive skills in, change
management, Lean Six Sigma, reengineering purchasing, supply chain
relationships, ISO9000, ERP and comprehensive international logistical
expertise. He is a Lean Six Sigma Black Belt.
Dr. Tom wrote a
groundbreaking study on pay-for-skills compensation systems for his doctoral
degree. He has extensive Human Resources experience and is a SPHR certified for
life because of his contributions to the Human Resources profession.
Tom has been
published extensively in Manufacturing Engineering Magazine, Purchasing World
and Purchasing Today. He has conducted highly rated seminars on Reengineering
Purchasing, Coping with Mega-Change, Win-Win Negotiating, Lean Six Sigma,
Supply Management, Pay-For-Skill Compensation, Dealing with Technological
Change, Motivational Techniques and various human resources topics with a
special emphasis on employee empowerment.
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