CPO Crunch: Contending with the complex new world

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With CPOs’ to-do lists growing ever-longer, building trusted relationships is proving ever-more valuable

Many years ago, I interviewed the CPO of a well-known consumer goods company. The CPO in question was relatively new to the role, full of enthusiasm and laser-focused on extracting innovation and value from the supply base, as you might expect.

We spoke a lot about value creation, about supplier relationship management and about how he was structuring his team with that purpose in mind.

With a global supply base adding up to tens of thousands of individual organisations, designing an operating model that could successfully drive compliance while extracting innovation through a true partnership approach was a major challenge.

And it’s the reason why he shared that fewer than 20 suppliers were embedded formally into the company’s supplier relationship management (SRM) programme. Better to focus where the strategic value can be realised, he argued.

This made sense at the time, but it struck me more recently, while listening to a community Cohort Call on the topic of embedding data risk management into SRM, just how much has changed and how much more complex an environment CPOs are now having to manage.

During the call in question, a member of the community shared how they were addressing the challenge, working with enterprise risk management and business stakeholders to tackle myriad risks; from cyber attacks, to modern slavery to data leaks and everything in between. The conversation highlighted the need for a robust process to protect sensitive data, as well as the importance of having a safe space for suppliers to share information about potential data breaches.

This led to the need for supplier relationship managers – of which the company in question had 450, with 80% sitting outside of procurement and 20% within the function. A formal programme of training and engagement has been developed to ensure that the cohort is kept updated with process, know how to respond and ultimately provide the impact they are there to deliver.

And this is just to manage third-party risk. No mention of innovation. No mention of sustainable growth.

It was a reminder of how the complexities facing procurement continue to spiral – risk, sustainability, innovation, best cost, quality, efficiency, social impact…

The list of where CPOs are expected to bring value grows almost by the day. Depending on your point of view, this presents either a daunting challenge or an enticing opportunity.

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