During my travels through Europe last month, I had the opportunity to get reacquainted with Geraint John, editor of CPO Agenda. For North American readers that may be unfamiliar with CPO Agenda, it is the leading U.K. procurement journal published in association with UK’s Chartered Institute of Purchasing and Supply. Sort of a Harvard Business School Journal for the supply management profession. (And not to be confused with the recent Aberdeen Group report.)

Unlike the general industry trade press, CPO Agenda digs deeper into the theory behind supply management practices and provides practical approaches for mastering some of the more advanced supply strategies. You can trial some of these articles online. But, as with most journals, you must subscribe to get full access to the most current issue and the complete online archives. A wise investment, in my opinion.

Below is the first of a two-part interview I conducted with Geraint on the state of supply management in Europe (and how practices there vary from those employed in the U.S.).

Supply Excellence (SE): Although a relatively young publication, CPO Agenda has made quite an impact with its coverage of the supply management discipline in Europe.Briefly describe the CPO Agenda’s mission.

We launched CPO Agenda in the spring of 2005 because we felt there was a need for a strategic, CPO-focused publication, not only in Europe but in North America and the rest of the world too. The feedback and take-up we’ve had since has confirmed that CPOs in major companies value a more thoughtful and in-depth look at the key issues and challenges they face. Several have commented that they see CPO Agenda as “the Harvard Business Review of procurement” - which is great, because that’s exactly what I set out to create.

I want procurement leaders, and those aspiring to reach the top level of the profession, to identify the high standards we set in publishing and content terms with their own business objectives and career goals. In other words, we aren’t trying to produce something that’s purely of academic interest - every article has to have have a strong practical focus and give readers ideas that they can apply and develop in their own environment.
 

SE: While supply management is truly a global discipline, leading approaches and strategies have variants by region. How would you describe the differences between supply management approaches in Europe versus North America?

I actually think that CPOs on both sides of the Atlantic face very similar challenges and aren’t that far apart in terms of professional and functional maturity, although obviously this varies from industry to industry and goes right down to the individual company level. When I carried out a straw poll among about 20 leaders in the US and UK earlier in the year, this message came through very strongly.
Having said that, there are some differences in culture and approach that are reflected in the way people conduct procurement and supply management. For instance, the US probably has a more bullish and outwardly confident (some would say “aggressive”) style of doing business and a short-term results/performance orientation. Americans are also often quicker to adopt and use technologies and other tools that can help them - e-auctions, for example.

However, some European CPOs would say this is a disadvantage when it comes to the sort of longer term nurturing of key supplier relationships that are becoming highly strategic and critical to competitive advantage for a growing number of firms. In reality, though, I don’t think the European approach is significantly more partnership orientated, which is probably why it’s a Japanese firm - Toyota - that is generally cited as the model of tough-but-collaborative supplier relations.
It’s also important to remember that procurement approaches, and maturity, varies widely within Europe. I would say companies in the UK, Netherlands, Germany, France, Switzerland and the Nordic countries are generally most advanced, with those in southern Europe, such as Spain and Italy, further behind.
 

SE: What are the hot-button issues for chief procurement executives today?
 
Finding and keeping talented people is high on the list. When I chaired a roundtable of European CPOs in Brussels last month there was a consensus that this is the biggest challenge, particularly when it comes to expanding procurement’s role and influence. Collaboration and supplier relationship management is another hot topic, particularly in terms of how you ensure that your company benefits most from your suppliers’ innovations.

I think that’s a big change for many procurement people; the notion that you have to position yourself as a “customer of choice” and make your company “attractive” for suppliers to want to do business with isn’t how the game has been played in the past.
Driving additional cost savings by getting more spend under management and moving into new or underdeveloped categories is clearly another. That means getting much better visibility of spend data, of course, and ensuring that procurement systems are as integrated with other IT systems as they ever can be, and that they are widely deployed and user-friendly.

Risk management is also a key topic, and within that I would include the whole issue of corporate social responsibility and brand reputation, as well as supply chain risk and compliance with regulations such as Sarbanes-Oxley (which, by the way, directly affects hundreds of big European companies too).
Outsourcing, offshoring and low-cost country sourcing are also high on many CPOs’ agendas.
 

SE: You mention low cost country sourcing (LCCS). Sourcing supply from low-cost regions has emerged as a top priority for North American procurement organizations. European companies appear to be less aggressive in their LCCS initiatives. What is behind this discrepancy?

If that’s true, it’s because US companies and business people are generally more aggressive period, as I said earlier. However, I haven’t seen any real evidence to suggest that American firms and procurement organisations are more advanced when it comes to sourcing from countries like China or India.
Europeans tend to be quieter and more modest about what they are doing, and don’t forget that we’ve been trading globally for centuries! It may be a cliché these days, but there are still Americans who regard global sourcing as buying from companies on the opposite coast!
 

Touche, Geraint. Global trade is indeed in your roots. Who could forget Britain’s initial colonization of today’s economic hot spots — U.S. and India. And let us not overlook how Britain opened up trade with the Far East when China’s hot export was tea.

But seriously, thank you for giving us the pulse on supply management trends and practices in Europe. You’ve really illustrated how Europe is adopting the best strategies from both the West and the East. It really is a small world, after all.

Tomorrow, Geraint will dissect the talent crunch in Europe and provide his predictions for the future of supply management in the region.

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