current and future skills requirements of the category manager

1 Confidential Bayen K – MBA Research 2010

Current & Future Skills Requirement of

the Category Manager

By: Kay Bayen, June 2010 EIPM MBA Project

2 Bayen K – Current & future skills requirement category management

Research Questions

1. “What would be the updated pool of skills for category managers across industry sectors?”

2. “Will there be a difference in the core skills of category managers in Europe from today’s (2010) requirements vs the future requirements in 2015?”

3. “What will be the most appropriate and up to date definition of the role of the Category Manager according to the perspective of leading academics and senior purchasing executives?”

4. “Is there a gap between the “average” vs “best in class” category managers?”

Objective


“Good talent outperforms good

processes by a factor of 1.5x.

Talented people produce economies

of skill. Flexible & adaptable …they

can apply themselves broadly

throughout the organisation”

Dr Nicolas Reinecke, McKinsey

“People are at the heart of change. Skills & talent is a key issue. Many people can do operational sourcing, only a few can manage SRM & strategic sourcing.” Rob Savelkoul, Philips,Senior VP

“Attracting & Retaining supply

management talent is amongst the

top 7 key strategies that should be

pursued in the next decade.”

Carter & Monczka

CAPS Research 2007


Literature Review


Year Lit Research Authors Topic

1983 Kraljic Purchasing must become Supply Management

1993 Kolchin and Giunipero Purchasing Education & Training 1 (Senior executives)

1996 Carter and Naraimhan Future Purchasing Knowledge

1999 Giunipero Skills based Analysis of the World Class Purchaser

2000 Durand Competency Model

2000 Carr and Smeltzer Relationship between Purchasing Skills & Strategic

Purchasing

2000 Giunipero and Pearcy World Class Purchasing Skills

2002 Bouwmans Purchasing Knowledge & Purchasing Performance

2004 Giunipero Future Purchasing Manager Skills Set

2004 Giunipero Purchasing Education & Training 2 (Senior executives)

2005 Axelsson, Bouwmans, Rozemeijer

& Wynstra Developing Sourcing Capabilities

2005 van Weele Purchasing & Supply Chain Management

2007 Carter & Monzcka Succeeding in a Dynamic World

2007 Bassi and Mc Murrer Maximising Return on People

2008 Bironneau & Le Roy Quelles Competences pour le Responsable Logistics?

2009 Bichon, Kamann & Merminod A Contingency Approach of Procurement Competencies

& Attitudes

Lit Review


Gaps identified in Lit Review

1. Few studies on Purchasing skills have been extensively

researched in Europe.

2. Skills are paramount in accelerating the successful change to

adapt to external challenges. Top executives are turning to the

purchasing function in tough economic times. But what skills are

important for the future?

3. No studies have focused on the category manager profile. This

profile lacks a definition in literature.

Lit Review


Methodology of Research I have adopted the approach of

(Giunipero (2004), Kolchin &

Giunipero (1993).

Methodology

My contribution :

• Applied above framework

to EU context

• New scope: Utilised data

of (EIPM) skills assessment

to analyse the gap between

av vs best in class.


Job Profile of

respondents

Focus

Group Interview

Qualitative

Survey

Quantitative

Survey

CPO Level

20

19

23

28

Vice President

Director

Manager

Buyers

HR, Academics, Consultants

Profile

Participants of my research


19 interviews with Academics & Senior

practitioners

• Dr Arjan Van Weele Chair of Purchasing & Supply Management Eindhoven University of

Technology

• Dr Michael Henke Chair of Financial Supply Management, European Business

School, Munich.

• Dr Michael Dickmann Head of Human resources, Cranfield University

• 15 In-depth Interviews with senior purchasing executives

Interviews


Part One: Focus Group discussion 20 participants

Published: CPO Agenda Jan 2010

Focus Group


Objectives of focus group

1. Validating the qualitative and quantitative research

questionnaires

2. Updating the list of skills for the research purpose

3. Developing a definition of the category manager

Focus Group


Contribution: Definition of Category Manager

The category manager is someone who is in charge of defining a

strategy for the category, a market intelligence expert in

this category and is capable of communicating this strategy for implementation

in a regional or global level. In the course of his role, he or she should work

upstream in a cross functional/cross organisational manner to

influence important decisions while being updated on important input

from internal and external sources for strategy definition.

Focus Group


Contribution: Updated Skills Pool for

Quantitative Research

Focus Group

Original List

77 Skills

Kolchin &

Giunipero, 1993

Final

Skills List

69 Skills

Bayen K, 2010

- Removed certain skills

which are obsolete

+ Added new skills which are

growing in importance

Focus Grp participants

+ Multiple skills combined


Findings: Core Skills & Existing Gaps

MANAGEMENT SKILLS • Change Management

• Entrepreneurial skills

• Strategic Thinking

PERSONAL DEVELOPMENT • Teamworking skills

• Empathy

• Creativity

• Stakeholder engagement

COMMUNICATION SKILLS • Cross cultural skills

• High level communication skill

• Selling & influencing skills

DECISION MAKING SKILLS • Risk Management

• Working Capital Management

• Financial Acumen

• Make or Buy

• Outsourcing

BUYING TECHNIQUE SKILLS • Functional Specifications

• Total Cost of Ownership (TCO)

• Purchasing strategy

• Supplier Market Intelligence &

• Category expertise

• Supplier relationship management (SRM)

PERIPHERAL TECHNICAL • Project Management

• Corporate Social Responsibility &

environmental regulations

Focus Group


Part Three : Qualitative Survey results

23 participants

Qualitative Survey


Qualitative Survey Structure

Part 1) Present Context

Challenges & main purchasing objectives

KPIs

Purchasing organization & structure

Qualitative

Survey

13 questions Part 2) Future Outlook

Role/mission & objectives of Purchasing in

5 yrs time

Key activities for purchasing in the next 5

yrs

Part 3) Talent Management Successful Talent Development programs

Evolution of the Purchasing Job profile

Qualitative Survey


Findings: Company Challenges

External

• Changing market players: mergers & acquisitions on both customer and supplier side

• Growing competition brought about by globalisation and emerging markets

• Shorter product lifecycles

• Supply market fluctuations and supply risk.

Internal

• Changes in top management

• Managing the cultural differences in a large global organisation

Qualitative Survey


Findings: Main Purchasing Objectives

• 8 Purchasing objectives identified

Value Generation

Cross Functional Collaboration

Alignment of corporate purchasing initiatives with internal users

Risk Management

Getting Indirect spend under control

Optimising & developing supplier base

Sustainability & responsible sourcing

Develop Talent Organisation & process

Purchasing Objective

N = 1 …. 8

KPIs identified

Qualitative &

Quantitative

Key Activities

Qualitative Survey


Findings: Purchasing’s Future?

• Shift from price negotiation to Total Cost Solution approach facilitating the involvement of key suppliers in innovation and along the entire value chain.

• Move away from the traditional role of the “policeman” or “controller” to ….a „value-creating‟ role.

• Be perceived as an expert advisor to internal stakeholders, be more influential to become more strategically involved with the rest of the organisation.

Qualitative Survey


Part Four: Quantitative Survey 28 respondents, rated 69 skills

Scale of 1 (not important) to 5: very important

Quantitative Survey


Key findings

Quantitative Survey

Ranking in 2015 Ranking in 2010

Strategic Thinking 1 24

Teamworking 2 11

Supplier market analysis 3 19

Influencing & persuasion 4 12

Total cost of ownership 5 23

Integrity,Professionalism 6 1 Listening 7 5

Purchasing category strategy 8 6

Market Knowledge 9 8

Change Management 10 50

Skills are changing …


Top 10 Rank: 2015 vs 2010

Skills future Mean 2015 Skills current Mean 2010

1. Strategic Thinking 4.69± 0.47 1. Integrity, Professionalism 4.27±0.67

2. Team working 4.69± 0.47 2. Negotiation 4.19±0.75

3. Supplier market analysis 4.69±0.55 3. Cost Management 3.96±0.77

4. Influencing &persuasion 4.50± 0.76 4. Category Expertise 3.92±0.93

5. TCO 4.62± 0.57 5. Listening 3.85±0.92

6.Integrity,Professionalism 4.58± 0.50 6. Purchasing Category

Strategy 3.85±0.73

7. Listening 4.58± 0.58 7. Conceptual thinking 3.84±0.80

8. Purchasing Category

Strategy 4.58±0.58 8. Market Knowledge 3.81±0.80

9. Market Knowledge 4.58±0.58 9. Problem Solving 3.80±0.85

10. Change Management 4.42±0.64 10. Analytical thinking 3.81±0.71

Quantitative Survey


Skills that increased the most in rank

Skill

In descending order

Rank 2010 to 2015

Rank +

1. Change Management 50th to 10th rank 40 pts +

2. Networking 41st – 12th rank 29

3. Risk Management 42nd – 14th rank 28

4. Strategic Thinking 24th to 1st rank 23

5. Environmental Reg & CSR 61st – 38th rank 23

6. Cross Cultural 44th – 22nd rank 22

7. TCO 23rd – 5th rank 18

8. Supplier market analysis 19th – 3rd rank 16

9. Customer Focus 32nd – 17th rank 15

10. Financial Analysis of Supplier 48th – 35th rank 13

Quantitative Survey


Top 10: Yr 2015 Strategic thinking

Team working

Supply Market Analysis

Total cost of ownership

Influencing, persuasion

Change Management

Evolution of the Top 10 Skills

Common Listening

Cat strategy

Mkt Knowledge

Integrity

Top 10: Yr 2010 Negotiation

Cost management

Category expertise

Conceptual thinking

Problem solving

Analytical thinking

Quantitative Survey


Part Five: Average vs Best in class Data analysis of 1040 category managers

from period of 2007 – 2010

Av vs Best in class

Measurement

Scale

0 - 3 3 - 5 5 - 6,5 6,5 - 8 8 - 10

Skill

Area to Reinforce Strengths


TOP 10 (2015) PR KN ATT

1. Strategic thinking

2 Ability to work in teams

3 Supply Market Analysis

4 Influencing, persuasion

5 TCO

6 Integrity

7 Listening

8 Purchasing category

strategy

9 Market knowledge

10 Change Management

Av vs Best in class

TOP 10 (2015) PR KN ATT

1. Strategic thinking

2 Ability to work in teams

3 Supply Market

Analysis

4 Influencing, persuasion

5 TCO

6 Integrity

7 Listening

8 Purchasing category

strategy

9 Market knowledge

10 Change Management

Average

(Mean population scores)

Best in class

(Top 25% pop’s av score)


Human Capital Management (Original HBR Bassi & McMurrer Model applied to purchasing)

Examples : Sited from the Qualitative Survey

HCM

Drivers

Leadership

Practices

Employee

Engagement

Knowledge

Accessibility

Workforce

Optimization

Learning

Capacity

HCM

Indicators

Involvement

&

Transparency

& Respect

Employee

engagement

evaluation

Knowledge

Availability:

Required job

information &

resources.

Well defined

Processes, reporting

structure Support high

performance

Open

Communication

Channel &

Learning Culture

Regular

Feedback &

Supervisory

Work Clarity

Teamwork

encouraged &

enabled

Salary: Individual,

Team, Group

Efficiency of

training

programs : Non

Budget holders,

X-Functional

Top Mgt

Commitment

Job Design

(Profiles & Roles)

taps skills

Knowledge

Management

facilitate

collaboration

Skills based

Recruitment

Formal career

development

plans

Leadership

Transition

System

Individual sense

of Achievement,

Recognition &

Appreciation

Job Orientation

Mentor &

Coaching

Opportunities

Job Security &

Work Life Balance

Aligned & effective

KPIs : Quantitative &

Qualitative

Competency

development

plans


Conclusion & Discussion

1. “What would be the updated pool of skills for category managers across

industry sectors?” …. 69 skills Focus Group findings

2. “Will there be a difference in the core skills of category managers in Europe from today’s (2010) requirements vs the future requirements in

2015?” ….Yes, Quantitative Survey findings

3. “What will be the most appropriate and up to date definition of the role of the Category Manager according to the perspective of leading academics

and senior purchasing executives?” …Focus Group findings

4. “Is there a gap between the “average” vs “best in class” category

managers?” Yes ….

Conclusion


JF Baril,Senior VP Purchasing, Nokia

BRAIN

GUTS

HEART

HANDS

Individual

Highlight: Interview


Limitations & ideas for further research

• Long-term impact (€€) ROI of company’s Human Capital

development with revenue, brand, innovation …not studied.

• Skills of category manager with relation to 1) direct vs indirect

segments, 2) specific purchasing maturity or 3) Kraljic category

segment not studied.

Limitations

Indirect Direct

Leverage Strategic

Non

critical

Bottlenec

k

High

Lo

w

Hig

h

Low

Value

Creation

FUNCTIONAL FOCUS CROSS FUNCTIONAL FOCUS

Focus Purchasing

coordination

Transactional

orientation

Commercial

orientation

Internal

integration

External

integration Value chain

integration

TODA

Y

FUTURE


Thank You Special thanks to all the participants of my

research.

current and future skills requirements of the category manager

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