Ahead of the Institute for Supply Management (ISM)’s 103rd annual conference that was held in Nashville, Tennessee last month, we sat down with Jim Barnes, ISM Managing Director, Customer Engagement, to discuss the ISM 2018 event theme of “Global Vision, Peak Performance.” We also discussed how ISM is refocusing its global strategy to optimize its services for its member and affiliate base.
Global Vision
In September of 2017, ISM leaders convened and completely rethought their global strategy. According to Barnes, they decided to reorganize ISM in order to “articulate [their] global capabilities and connect more with global companies.” A big part of this strategy is to be fluent in current global events, and to grasp how U.S. policies at home affect markets, economies, and corporations abroad. In this vein, ISM invited several major names in geopolitics and media to speak at its annual conference this year.
Arianna Huffington, world renowned author, businesswomen, Founder and Editor-in-Chief of the Huffington Post, and now sleep and wellness evangelist, presented a keynote address on Day 1. And on Day 2, John Brennan, former director of the Central Intelligence Agency (CIA), and Gen. Keith Alexander (Ret.), former director of the National Security Agency, participated in a main-stage panel discussion with ISM CEO, Tom Derry (click here and here to read our two-part recap).
When asked if this speaker lineup, which follows a prior CIA Director, Secretary of State, and UK Prime Minster at recent ISM Conferences, “speaks” to the global and increasingly geopolitical nature of supply management, Barnes was unequivocal. “Yes, absolutely,” he said. Alexander, Brennan, and Huffington are three unique public figures that captivated the audience at the ISM Conference, which has topped 3,000 attendees in recent years, representing many different countries, regions, and industries.
Peak Performance
Another part of ISM’s strategy is to ensure that the global supply management workforce is best equipped to handle the wave of digital transformation sweeping the globe. This means having the right mix of people with the right skillsets, the right processes and technologies, and the right education and training resources available to support the global supply management industry. To these ends, there were many different signature sessions at the ISM Conference that covered ISM’s six learning tracks:
- Direct procurement
- Indirect procurement
- People (how to engage the human side of supply management)
- Digitization (what is possible today vs. what is hype)
- Challenges
- Fulfillment
There was another Signature Session called the ISM Mastery Model®, which featured ISM’s signature economic forecast, and how procurement organizations can leverage data and the economic research that ISM does in group modeling. Project management – a core competency within the Mastery Model® – was another session Barnes highlighted. And a third session focused on “tackling the generational gaps to elevating employee engagement.” Barnes noted the large number of companies that have sought ISM’s expertise to better engage Millennial workers, and that the aerospace and defense industry, in particular, has been struggling to hire and retain this labor segment.
Revamping the CPSM Exam
This year, conference attendees learned about changes to the CPSM exam and study guides. A year and a half ago, ISM began its periodic rewrite of the CPSM exam by reviewing, line-by-line, over 2,000 job descriptions from 50 different countries. Barnes noted that the Chief Procurement Officer (CPO) level and equivalent is a different job today than it was before – that there is more demand for analytics and more involvement in demand management than there was before.
As a result of this review, ISM is coming out with new job specifications. They also introduced a pilot-version of the new CPSM exam at the conference that will involve 200 people taking an initial version of the new exam before ISM launches the official, final version on September 4, 2018. The new CPSM exam will change quite a bit from the old version and will require new exam courseware, which was available at the conference. But for now (and through August), CPSM exam takers will see the “old” exam, and could get their hands on legacy study materials at the conference, as well.
The Amazon Way: Writing the Book on Digitization
Another speaker, John Rossman, the former director of enterprise services at Amazon, was the Day 3 keynote speaker. Rossman literally wrote the book (The Amazon Way) on digitization, automation, and the Internet of Things, how Amazon views them, and how he believes other companies should view them, as well. Rossman’s keynote speech aligned with “what ISM preaches – what’s doable, what isn’t, because,” as Barnes admits, “there’s a lot of hype around it.”
To this point, Barnes believes that there is also a lot of cynicism about the state of technology today and its inherent paradox: that although there is an enormous and increasing array of innovative technologies being developed (i.e., Industry / procurement 4.0), a majority of procurement organizations still have not digitized or automated their processes. Put another way, as solution providers continue to advance the procurement techno-ball further downfield, many organizations are still struggling with the basic blocking and tackling. But Barnes sees hope on the horizon.
“We’re inching closer,” he said, to the dot.com-era notion of networked sourcing where one could easily turn on and off their supplier base depending on what happens in the world (geopolitically, natural disasters, supplier performance, etc.). But Barnes acknowledges that this “unconstrained sourcing model” stands in contrast to the idea of collaborating with strategic suppliers, nurturing relationships, and investing in them in the long run. “I think there’s a bit of a tug of war there,” he said.
And another thing about unconstrained sourcing: a CPO may not need as many people in their sourcing group, because machine learning and modeling provide them with answers that just need to be validated. “A lot of the hard work, the analysis,” Barnes said, “is being done by the machine. I mean, conceptually, that sounds wonderful, but I’d love to see how it’s working with other companies.”
That does not necessarily mean that machines will put anyone out of work in procurement. Barnes believes (as we do) that innovation will augment rather than replace workers. Citing Dr. Robert Handfield, Ph.D., a professor at NC State University and director of the Supply Chain Resource Cooperative, Barnes postulated that over half the tactical work in procurement will probably be gone in five years due to automation. As a result, while more machines will crunch data, more people will perform advanced analytics and communicate and collaborate with suppliers. Humans will still need to oversee the analytic process and manage supplier relationships and performance.
Acting Locally
According to Barnes, ISM is increasing its executive-level collaboration with its 110 regional and international affiliates, in part by having C-level roundtable discussions with them and by providing them with more resources from ISM’s global enterprise. And it adds value to the local affiliates, which have mostly been membership-only organizations, unlike ISM’s global organization. “I think our view is that membership’s important, but it’s not the only thing for a lot of people,” he said. ISM’s value proposition has to be more than its name; it has got to provide tangible value to its members.
“We’re working hard to increase the value – everyday, frankly – that we provide to every member,” he said, “whether it’s an individual member or a corporate member. And I think we’re seeing some good results – this year, in particular, now that we’ve reorganized.”
Final Thoughts
Our wide-ranging interview with Jim Barnes was a fantastic way to tee up this year’s ISM Conference, which ran the gamut from economic and geopolitical issues, to digital transformation and its impact on the procurement workforce, and to how ISM is helping its members get up to speed on Industry / Procurement 4.0. It also shed light on the dynamic between ISM’s global organization and its affiliates around the U.S. (and elsewhere around the world); and how ISM is becoming more involved in executive-level conversations beyond its annual conference. As always, it is an exciting time to work in the supply management space; and ISM is right there with us.
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