CPO’s offten operate in difficult challenging environments. So we produced a list of the sins to avoid:

1. No strategic clarity

A strong business case, driven by a clear set of objectives owned by the key senior stakeholders, should be an essential pre-condition for any supply management leader.

2. Lack of sustained leadership at senior management level

Supply management fails to achieve the sustained attention they need at the highest levels in the organization, or those in leadership positions do not have the skills they need to exercise effective leadership of supply management change.

3. Ineffective engagement with stakeholders

Supply Management involves managing a complex set of stakeholders – users, suppliers, senior management, etc. Stakeholder management activity is often squeezed for time and priority. However, failure to engage closely with stakeholders and failure to understand their needs on a sufficiently segmented basis can result in damaging tensions and a failure to meet key business needs.

4. Narrow skill base

Purchasing executives must attract, retain and motivate great people. In addition to standard supply management and program/project management skills, transformational supply management programs require a broad range of skills.

5. Poor supplier management

The impact of poor supplier performance is felt across the enterprise. Poor supplier performance translates into lost profits, increased requirements for sales revenues, and tops the list of contributors to the organizations ability to deliver service excellence to its customers. Supply management must ensure it excels in managing its suppliers.

6. Make your numbers believable

CEO’s and CFO’s strongly complain they cannot find the savings claimed by purchasing executives. This lack of credibility is deadly, and unfortunately still happens today.  “Cost avoidance” and soft, inapplicable cost benchmarks, such as “PPI,” should be avoided.

7. Failing to define the right performance metrics

Too often, performance metrics are defined in isolation of the business. Procurement leaders should involve the CEO and CFO when establishing metrics to measure supply performance. Best-in-class company metrics require both top and bottom line measures, such as innovation from suppliers and cost out.

Let us know your list.