16.4 Purchasing's Visionary Role

You may be wondering, "What are the cutting-edge skills you will need to not just survive but also thrive in tomorrow's purchasing and supply world?" To set up this discussion, let's quickly review the three eras that depict the evolution of purchasing practice (see Figure 16-2).

1. The Clerical Era. Before World War II, supply managers were viewed as nothing more than clerks. Colleagues often referred to purchasers as, "those guys that ‘place and chase' orders."

2. The Transactional Era. Materials shortages from World War II through the 1970s transformed purchasing into a vital—if overlooked—managerial function. If you failed to manage transactions carefully, you could easily raise costs and maybe even shut down a production line (at thousands of dollars per minute).

3. The Strategic Era. By the 1980s and 90s, lean management and outsourcing had made supply management a strategic activity. As an enlightened supply professional, your job was to acquire the best inputs—goods and services—available worldwide to support global operations.

To stay on the cutting edge, you need to ask, "What comes next?" Let's call the next era "The Design Era." Why "design," you ask? Answer: Design connotes both purpose and vision. In the design era, your job as a supply professional is to develop and coordinate the capacity and capabilities of a world-class supply team. Simply put, your job will look very similar to that of a sporting team's general manager. Let's take a closer look at this metaphor.

The NFL, NBA, or. . . (pick your favorite sports league) draft offers an apropos metaphor for the work you need to do to proactively design a world-class supply team. The draft is the mechanism you use to select the players who will join your team (if they are good enough). Before draft day, you perform an intensive analysis to define your team's specific needs. Then you assess various athletes' abilities to fill those needs. Initially, let's focus on defining your team's needs. You conduct analysis to answer two questions:

1. What are the "unwritten" rules of the game?

2. How ready is your team to compete in the existing and emerging environments?

In sports, as in the business world, the "unwritten" competitive rules are always in flux—evolving in response to rivals' strategic experimentation and emerging talent.1 Consider the following three examples:

• Strategic Experimentation. In American-rules football, more teams play purposively fast—employing no-huddle, hurry-up offenses. To avoid having to adapt, coaches of opposing teams have sought (unsuccessfully) to use official rules committees to ban such offenses.

• Emerging Talent. In basketball, the traditional shooting guard has become an endangered species—replaced by more athletic scorers who slash to the basket.2 This new athleticism spaces the floor, providing more action, and higher scores.

• Hybrid. In soccer, teams that still rely on crossing the ball to generate scoring opportunities have very little chance of winning a World Cup.3 The traditional cross has been replaced with ball possession schemes that rely on pinpoint passing and greater athleticism to score more points.

Emulating the sports team's general manager, you need to grasp how the rules—and thus the nature of the game—are evolving. Then, you must assess your own team's readiness to compete and win. To do this, you ask and answer key questions: What does your team do well? Does it have any unique advantages? What skill gaps do you face? What complementary capabilities are most needed?

Now, let's touch on the second type of analysis you perform in order to conduct a successful draft. Again, following the general manager's draft plan, you assess prospective players' (i.e., suppliers) readiness to play. For each prospective player, you answer the question: "How will this player contribute to team success—both now and in the future?" Think about what this means for the general manager. This analysis involves hours and hours of watching film, talking to former coaches, interviewing players, and running drills. Decision makers collect, collate, and compare vast quantities of detailed data. The outcome: Each player's profile is mapped to team needs to forecast how well the player will fit the team's needs and whether the player can help the team win. For strategic buys, you need to be as careful and meticulous in your supplier evaluation.

Ultimately, having performed "rules" analysisThe process of examining how the unwritten rules of competition are changing. and "readiness" analysisThe two-step process of examining how ready your team as well as evaluating the complementary capabilities potential suppliers bring to the team. , you are ready to set "draft-day" priorities. Your goal: Identify the right players, position them in the right roles and responsibilities, and build the right relationships. Visionary general managers don't stop here. They take the team-building process to another level. They use their grasp of the evolving competitive landscape to disrupt the status quo. They come up with new strategies (e.g., no-huddle offense for an entire game) to give their team an advantage. They look for new types of players (e.g., the slashing shooting guard) to change competitive dynamics. Simply stated, they exploit "game changers" to disrupt—and win—the game. Let's take a look at some of the game changers that you are likely to encounter over the next 5-10 years.