In this part 2 of the series we will share Sean Smith’s thoughts on the future of procurement and supply-chain.  It is the second and the last of this two-piece blog, and like the first one, comes from the exciting interview I had with him a few weeks ago.

Sean Smith & Zycus – special conversations on procurement and sourcing.

About Sean Smith
A forward thinker and a visionary leader, Sean Smith, the Director of Strategic Sourcing at Agropur Ingredients, has acquired well over a decade of hard core experience in the field of procurement, sourcing and supply-chain.  Sean was named a 2014 Practitioner Pro to Know by Supply & Demand Chain Executive Magazine and a 2014 Future Leader Award Finalist by Procurement Leaders ^TM.  He has worked in the US Army for about 7 ½ years.  One of his major accomplishments during his US Army years was management and leadership of a 12-man team, providing all supply chain and logistical services for a 5,000-man Humanitarian Disaster Relief Force in New Orleans following Hurricanes Katrina and Rita. He is skilled in multicultural communications and interaction, having lived, worked and traveled in 24 countries worldwide. He is currently pursuing his Masters in Predictive Analytics to add more specialized expertise to his MBA in Supply Chain Management.

1. Where do you see it going, the world of Procurement, Sourcing, and Supply Chain?

“I feel Predictive Analytics is the next big thing in supply chain.  Being able to see the problems even before we have the problems is the objective.  One example of an area this impacts is Predictive Maintenance versus Preventive Maintenance. Today we have the same person being hired for both, hence there’s no incentive to ‘keep it from breaking’.  You take an example of a car belt and consider the ultrasonic sound it makes.  Just before it is going to break or to fray, it makes a different kind of sound. If you have technology pieces in place, they will tell you ‘hey this is going to break’ or ‘something is about to go wrong’.  I am even taking a master’s degree in Predictive Analysis myself!

There was a Forbes article recently that said there will be a shortage of about 1.4 million people in the field of Supply Chain Management, even after exhausting the recruitment from colleges offering these degrees. This clearly indicates how ‘In-Demand’ the field is and the huge scope it offers.”

2. How do you see the procurement and sourcing professionals delivering this long-term vision of the procurement and sourcing fields, while de-prioritizing the short-term objectives of cost-savings and efficiency?

“For me it has never been about savings alone, but about VALUE.  I would gladly pay more for something if it decreases my defects by 1%.  My rationale is, it’s going to break less and cost less long term.  But yes, it is really hard to sacrifice that in the short-term.  The average tenure of a procurement leader is two to three years.  Such turn-over of leadership creates a possibility that they become short-sighted and tend to miss the long-term vision.  Their attitude is like, ‘never mind what happens later’.  They just want to deliver results while they are still in the company.   This is to the detriment of the company.

It’s a shift of mindset. After a point, there’s really no cost left to reduce.  It is part of Natural Evolution.  Then years from now we might be sourcing something that’s going to be very rare.  It talks about the maturity phase of a company.  Companies like Unilever, Kimberly Clark Corporation are pushing, pushing and pushing for sustainable sourcing.  They are investing all this money to sustain longer, because they realize that there’s going to come a time when it will become difficult to source all these materials, because the world is going to be different in the coming years.  When that time comes, these companies will benefit many times over what they are spending today.  They are investing in relationships with sustainable suppliers, who will willingly offer them a decent price, while others will have to pay through the nose when tomorrow comes.  They are willing to sacrifice today, for tomorrow.

3. How do you see Procurement and Sourcing technologies helping this vision?

The human mind can do a lot, but computing power is not one of its core strengths.  Taking the example of an RFP process itself, there is a huge scope for computational automation- scores of plans, thousands of line-items – you start hitting barriers even in Excel.  You need technology to analyze something within hours while taking into account non-price factors like location of manufacturing plants and so on. I am very adamant about technology.

The Part I of this blog series was published a few days back. It had some of Sean’s thoughts on the world of procurement and supply-chain and how they developed today’s sophistication.  You may subscribe to our blog if you wish to receive instant updates on our blog posts.