Today’s procurement and sourcing managers need to be whole-brained.
I’m simplifying here, but of all the informative commentary at DCAT Week ’17, none caught my attention more than that given by a number of Pharma procurement specialists, including parts of a presentation by Cecilia Luz Cariaga, Director, Sourcing Excellence, and R&D Sponsor, Capabilities Management for Sourcing Excellence at Bristol-Myers Squibb (BMS).
Let’s focus our minds for a few minutes on the minds of the modern-day procurement professionals in our industry.
First, many of the external factors facing pharma companies, and thus also impacting those taking up procurement and sourcing positions at drug makers, are familiar to us all: heightened competition; healthcare reform; political and public scrutiny on drug value/cost; more medicines at lower volumes per drug; advanced development and processing technologies; reams of data (more on this one in a moment); evolving global regulations; collapsing development timelines; increasing reliance on outsourcing.
When we add doses of internal forces such as organizational pressures and new business approaches, it becomes evident a new breed of procurement manager is needed. These are individuals who can design and execute tailored and advanced sourcing strategies. This ideal practicing professional today must fully utilize “right-brain talent and left-brain skills” to strengthen the supply chain.
Are we pointing to the two sides of human intellect as perfected in procurement?
Well, yes. We can first enumerate the more typical procurement skills that make up the science (right-brain) side of sourcing: analytical; logical; precise; repetitive; organized; detailed; scientific; detached; literal; and sequential. (Now that sounds like the sourcing folks we know and love, doesn’t it?)
But today’s professionals are just as much in need of these left-brain adjectives: creative; imaginative; business savvy; intuitive; big-picture; irregular; heuristic; empathetic; and figurative.
If this side seems a bit less recognizable in procurement professionals, we’ll just have to get used to it. In fact, we’ve heard over the past year or so from a number of professionals at pharma companies that the younger employees amongst us are actually well suited for this new, shall we say, perfection of the procurement personality. But young or experienced, the point is that only more well-rounded professionals will bring about today’s enlightened supply-chain and sourcing strategies. And this isn’t a “like to have.” It is a “must have.”
Among those strategies we find familiar items such as network optimization; focus on yield, cycle time, and reliability; sustainability improvements; innovative partnerships; and more robust cost management. These sourcing strategies themselves are accompanied with words like: robust, compliant, economical portfolio; risk management; world-class SRM, and a “fit-for-purpose leverage of procurement digitization.”
We’ll come back to this final element – digitization and data – after an important interlude to consider the day-to-day application of all the skills mentioned above.
Applying Science and Art
Cariaga of BMS says newly minted sourcing managers should specifically apply their brainpower to three areas of a “next-level capability development program.” This starts with the application of advanced “critical thinking” related to problem solving for “hypothesis generation, and data-driven decision-making.”
Next is the critical need for “advanced and big-data analytics.” This comprises spend visualization, statistical and predictive analytics, and robotic process automation.
The third next-level capability focus also involves data, and is deemed “digital and mobile technologies,” subdivided into two categories: process (re)design and agile approach.
Cariaga touches on a method of training sourcing managers and leaders to apply these skills (and this whole-brained mindset) to company-identified points of importance. “We use the 10-20-70 percent rule,” she says. “It’s 10% training, 20% learning from others – at times in immersion or mentoring – and then 70% on-the-job training.”
This can be accomplished by rotating people through different assignments in different categories, so new leaders learn and appreciate what the needs of the company are enterprise-wide. “And underpinning all that is a solid knowledge-management program.”
Pharma and bio companies, then, based on their individual company strategies and business needs, “really need to hire and develop ‘skills strategists’ and ‘dot connectors.’” These hires should be tech savvy and “capable of agile process redesign.” Employers also should concentrate on growing trusted advisors who are “critical thinkers and partners to the business – and ensure individuals have at least an appreciation of big data analytics, so they know how to harness all the data they’ll encounter.”
The Data Generation
Along with many other parts of drug companies, data and “digitization” are key words for those in procurement and focusing on supply chains. Digitization trends can be viewed as both creating and sustaining value, and one area specific to the value-added is “spend visibility.”
Most of us have at least heard the pitches of vendors and consultants offering new tools, databases, and other data capabilities for supply chain and sourcing management. All of these should in practice expand the concept of “spend intelligence.” Accordingly, these various tools are designed for both collaborating internally and with partners throughout the supply chain, and they assist in advancing overall sourcing and strategy development for procurement professionals. Also, we hear terms such as “clean-sheet cost-modeling” to help with decisions facing sourcing managers. Another focus is on the suppliers’ externalization in order to identify risk further back in the supply chain.
The Hackett Group did an industry study that compares the data analytics strategies that leading companies are putting in place, with those at peer companies. Some of the differentiators are the utilization of predictive modeling and multidimensional analysis.
But a major challenge is the ability to cleanse the data, so companies and individuals can actually perform those analyses accurately. Poor quality data has become a modern-day barrier to doing advanced regression analysis, cluster analysis, and similarly desired activities.
Which I believe brings us back to those scientific and artistic talents in procurement professionals. The questions for today’s pharma executives and managers as related to big data analytics is: Will new data-science techniques originate from your crop of new procurement and sourcing hires? Can these skills be taught? Can new recruits become your go-to employees in areas such as machine learning, robotic process-automation, and the other data sciences needed to decipher all the new data being generated?
The answers to those questions can be yes … if everyone involved is using both sides of your head.