Technical Supply Chain Demands Refined Procurement Skills

Today's supply chain is digital, and increasingly, artificial intelligence (AI) and data intelligence are vital priorities, with organizations investing heavily to stay ahead of the technology curve. A looming challenge bears equal attention: training personnel using the systems to make strategic procurement and supply chain decisions.

Gap analysis

Concern about talent has been a topic of conversation throughout our industry for decades, and many strides have been made in addressing talent shortages. More colleges and universities offer supply chain degrees, and associations and industry organizations are stepping up by providing ongoing training. The problem, however, has evolved.

Until recently, the concern was getting bodies into programs to become part of the supply chain workforce. The fear was not having enough workers. Now, existing and new workers must push hard to attain new skills as demands shift and change. The concern needs to be how to get everyone up to speed on leveraging the promise of transformative technology and ensure they know how to use the data provided by the systems to advise the organization about strategic future directions.

A study from Gartner published in 2023 found that only 14% of procurement leaders surveyed thought they had adequate talent to meet the upcoming needs (Figure 1).¹ Gartner expects this will become a bigger problem over time.

Figure 1 : Fewer than half of procurement leaders believe they have the talent to meet the requirements of the procurement function. (Image source: Gartner)

More than two-thirds of those surveyed (69%) said business acumen has gained importance in the last year. Meanwhile, a similar number (68%) said technology and data skills have become more critical. Procurement pros will need to use the technology to get better data while also understanding how to translate that data into actionable business strategies and programs. That’s a tall order. Only about a quarter felt that traditional skills had gained importance.

Forging the new road

To meet the changing needs, procurement organizations will have to spend time defining these new competencies in ways that will help find new talent and upgrade the skills of existing workers. Organizations can focus on other critical initiatives by combining efforts to improve the available data with efforts to acquire skilled talent.

While improvement initiatives traditionally taken by procurement organizations, such as category management and strategic sourcing, remain essential, The Hackett Group’s 2024 Procurement Key Issues research pointed to these two types of initiatives as going hand in hand (Figure 2).²

Figure 2 : Technology and talent top the list by a solid margin as organizations try to ensure that people and data work together to strategic advantage. (Image source: The Hackett Group)

The skills that will top the list in 2024 are what you would expect. Career guidance site Teal offered a list of the most essential skills for supply chain workers this year, and more than half include these technology and people elements:³

• Strategic planning and systems thinking: This skill requires understanding how elements of the supply chain work together and optimizing the total system.
• Operational and technical proficiency: Supply chain managers must understand logistics, procurement, inventory management, and the technology that supports these areas.
• Global and cultural awareness: There's a need for knowledge of international trade regulations, customs, and diverse business practices, as well as sensitivity to cultural differences.
• Analytics and problem-solving: This career demands an ability to collect, analyze, and interpret large data sets to make strategic decisions, identify potential issues, and develop creative solutions to complex supply chain challenges.
• Leadership and relationship management: Relationship management skills are crucial for inspiring and coordinating teams, as well as building and maintaining solid partnerships with suppliers, customers, and internal stakeholders.

One critical tool, according to Gartner, will be competency-driven interviews. By asking how a potential candidate might approach (or better yet has approached) a particular problem, task, or challenge, finding candidates who can do the job will be more likely.

A second and equally important effort will be helping employees increase their skills and knowledge to get the most out of digital technologies.

Technology and people are both important. To reach the future promise of the supply chain, OEMs will need to blend human and digital capabilities toward something more effective than either can accomplish alone. People, like technology, will need to evolve and “upgrade” themselves to better engage with digital environments and make optimal supply chain decisions.

1: https://www.gartner.com/en/newsroom/press-releases/2024-03-20-gartner-finds-46-percent-employees-are-satisified-with-career-development

2: https://www.thehackettgroup.com/insights/2024-procurement-key-issues-2401/

3: https://www.tealhq.com/skills/supply-chain-manager