The Analytical Skills Challenge -- Procurement, Supply Chain and Beyond

November 14, 2011 9:01 AM | Categories: Analytics, Jason Busch, Procurement

Over on Supply Chain Matters, Bob Ferrari penned a great post examining a much broader topic than simply the analytical skills challenge facing many procurement and supply chain organizations today. In his discussion, Bob references a recent McKinsey Quarterly article framing the opportunities (and challenges) of "harvesting" what has proverbially become known as "big data" to make better and more timely decisions. As Bob opines, "we would add that the recent major supply chain disruptions precipitated by the tragedies in northern Japan and now Thailand, have also provided real-time reminders on the importance of having the right information."

Yet the more insightful perspective that Bob layers in later in his argument focuses on the need for better analytical skills and raw horsepower within procurement and supply chain organizations. Citing McKinsey's own statistics, he quotes that "demand for skilled analytical people can outstrip supply by 50 to 60 percent." Relating this to the current training and certification programs within procurement and supply chain offered by groups like APICS, CSCMP and ISM -- to this list we also add IACCM and Next Level Purchasing -- Bob suggests that "there needs to be more exam content devoted to candidate understanding of these evolving data-driven and predictive decision-making processes vs. those that sufficed in the prior times of sequential based planning such as MPS and MRP."

While I don't doubt Bob's argument that there's a shortage of key analytical skills within procurement and supply chain, I do take issue with one of the solutions offered -- better training and education. Having spent a good deal of time throughout my career as both a roll-up-your-sleeves staff guy running models and building slides late into the night as well as an executive advisor and confidant, I can say with near certainty the issue inside most procurement organizations is not one of a lack of skills – it's a lack of the right talent. I believe that analytical rigor can't be taught. It can be honed, of course. But no certification program or training organization can teach people without an innate comfort level with both numbers and statistical analysis to change.

If we want to bridge the analytical talent gap within procurement and supply chain, we'll need to convince analytical thinkers who might otherwise go to Wall Street, consulting or another field to join our mission. Then, we can shape them in our ways and leverage their core talents. You can't change someone's DNA in turns of raw analytical horsepower. Having mentored and managed a number of fellow "staff-types" in my life, I'm 100% sure of this.

- Jason Busch

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Jason, I do agree with your conclusion. I have worked in and with Procurement organizations for upward of eight years now. In my experience, the "analytical stuff" is a big divide: there is the camp of people who are passionate about it, and that of folks whose eyes glaze over when they hear the word "data". It would be an oversimplification to say that all category / commodity managers are more interested in developing strategies and negotiating with suppliers than in digging through data, but I think that it's a directionally correct statement.

I agree that finding and developing the right talent is the way to go. In addition to having great analytical skills, this talent also needs the ability to analyze and present data such that it becomes a basis for decision-making, and that it can be easily incorporated into sourcing strategies. Analysts need to show the implications of the facts, and create insights.

# Posted By Susanne Wrage | 11/16/11 9:07 AM

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