Challenges of Global Procurement
Rob Handfield, Co-Director of the Supply Chain Resource Cooperative at North Carolina State University (SCRC), recently spoke to John Zapko, Vice President of global procurement for technology company Lenovo, about what’s going on in the world of global procurement. Zapko has procurement authority over all software, Latin America, and emerging markets.
R H: What do you see as big challenges facing Lenovo as you look at global procurement in the areas that you work in?
J Z: We’ve discussed this in strategy sessions with our management team: as we’ve grown our global organisation and positioned the people around that global organisation, we’ve found that as we drive Lenovo towards more success, our biggest challenge is talent that supports what we’re trying to do in the industry and the marketplace.
Without question, attracting talent, bringing it on board, being able to hire this talent and, especially, retaining the talent around the world is really critical for us, and it is clearly the biggest challenge we have. As we push forward in this complex world, having “that” level of talent is crucial in some of our most important positions; not only at management levels and senior management levels, but also in commodity management and the people that really focus on the procurement activity, who drive the supplier-based management, negotiations, contracts, etc.
The importance of talent in procurement
R H: How does your procurement function create talent and why is it so important in a complex world? Why is talent so important in procurement as you work through issues such as global complexity and the challenges in dealing with governments and with regulations?
J Z: Global complexity is becoming more significant for us. For anyone really. As we drive our growth, in emerging markets especially, and as we drive our activity into those emerging markets, it is important to have people who understand the procurement role, who have experience in delivering professional procurement activity, and who are able to do that in a more complex environment such as an emerging market, where government regulations’ specific uniqueness is around contracting.
Our ability to manage new, emerging suppliers is a critical skill and an experience set that is a serious lack if we don’t have it. When we find those people (whether we build them internally through activity, growth and development, or we hire them in) and we’re driving the advantages with them, then it is crucial that we retain them. And so that becomes the major initiative for us as we work in this complex world.
R H: A few years ago Lenovo partnered with the SCRC. We do a number of projects every year with you. You’ve hired several of our graduates. What do you see as the role that organisations such as universities and the SCRC play in Lenovo’s search to recruit and retain the best talent?
J Z: SCRC has been an important function and activity for us. At the time we were searching for an association to focus on, to network with, and to attach ourselves to locally. With all of the recruiting that we do and the base that we’re trying to build and that we have built in Morrisville (which is centrally located in this area of North Carolina), we wanted to make sure that we attached ourselves to a professional supply chain organisation, which is what we’ve done with SCRC.
Beyond the corporate networking and attachment to local education, clearly the biggest thing for us has been the practicums and our ability to attract students, both graduate and undergraduate students, to work with us in a variety of projects for which we’ve found a way, working with SCRC’s team, to improve the deliverables and the experiences – the students’ and ours’. We’ve learned how to bring these guys in, work with them specifically, achieve good deliverables out of those projects and capitalise on that investment. And we plan to continue to do this for some time because it’s really been a value for us.
Characteristics of employees
R H: What would be your advice to young people looking to have a career in supply chain management at a company like Lenovo? What characteristics do you look for in young people seeking careers in that area?
J Z: The first thing would be to recognise that supply chain is a very specific and important function. It’s been proven over the years that supply chain is becoming an increasingly important role in the capabilities and the advancement of, especially, global organisations. Lenovo has pushed this recognition internally and we’ve raised the level of supply chain in our company. From the perspective of advising young talent; I would say that they must state their interest. Come into it as a business proposition, whether young people land in procurement or logistics, or supply management or planning, supply chain is big and broad. And from a business perspective, it has lots of challenges, through which people can find their way to a career of their liking.
From a procurement perspective, I always coach my new hires to think of it as your business management. You’re delivering the procurement responsibilities and the procurement professionalism, but you must also focus on delivering spend management, finding your supplier base and operating in a professional way; if you’re thinking about that, then you are more likely to become a procurement professional built, developed and broadened to take other roles within the business, other roles within the supply chain and other roles within the corporate structure.
The Supply Chain Resource Cooperative SCRC is the first major industry-university partnership to integrate student projects into the MBA classroom in an integrative fashion, and now provides real-world supply chain/operations experiences for both undergraduate and graduate students. The SCRC currently has 15 major Fortune 500 companies participating as industry partners.