Procurement Pros Lack Risk Management Skills

What skill set is particularly strong for a typical procurement team? Negotiation.

Where do procurement pros generally lack expertise? Risk management.

At least that's what ADR International found when it compiled data provided by more than 3,000 individuals at 40 companies and public sector organizations worldwide.

The results of detailed self-assessments using ADR International's Development Needs Analysis (ADR DNA) tool show that essential skills including negotiating, soliciting bids and contracting are the highest-scoring on average, while risk management and supply market analysis rank lowest.

If you're like me, you're not particularly surprised by this new data. But, I'm pointing it out because I do feel that this gap in know-how is unfortunate, to say the least.

Globalization means today's supply chains are more complex and more vulnerable than ever before. And, even though companies are increasingly recognizing the critical strategic importance of procurement, this new awareness simply won't bring maximum benefits unless it's coupled with comprehensive risk management. Companies need to provide the training and resources necessary for procurement teams to be skilled in supplier risk management especially now, as the economy begins to rebound and firms are looking to regain their footing.

I also found it intriguing that ADR International identified supplier relationship management as another key skill required by successful procurement professionals today. Most sectors in the study showed relatively strong results in this area except for two: the public sector and health care. Telecoms and packaging industries scored highest overall in supplier relationship management.

The full 25-page report, titled The ADR DNA Story: What Development Needs Analysis tells us about procurement skills, is available here.