Staffing your Supply Team
Get the skills you need, to scale quickly and with high quality
As your product launches, the challenges for a Founder and team can change pretty quickly. When your launch is successful, all of a sudden, the production and shipping of your product, and dealing with the suppliers and even the warehouse, really becomes a lot of work. And you need someone to take care of it.
But who? If your starting team does not have the interest or skills, you need to hire. But do you need to go straight for a COO or VP of Supply Chain? Will they do the work you need? Or can you hire at a lower level and if so, what is their function?
Certainly you can hire an executive immediately, if you have the funds. You need to make sure she knows how to build an effective team, and you have the time and runway for her to do so.
But if you don’t have this kind of funding, or need tasks managed at a lower than executive level immediately, you are going to need some team members. And many Founders can hesitate here, only because they don’t know the supply chain and materials worlds and so aren’t sure how or who to hire.
And what if you don’t have a full time need? Outsourcing is a great and flexible option, but how do you know you are getting people with good skills?
Having managed a variety of such teams in the past, let me give you some tips on how to effectively identify and hire such a team.
First lets go through some typical roles : what do these people actually do?
Buyer — Per ASCM (www.APICS.org), they manage supplier selection, negotiation, order placement, supplier follow-up, measurement and control of supplier performance, value analysis and evaluation of new materials and processes.
What makes a good Buyer? The best Buyers I had on my teams were relationship people. They were great at negotiating, they liked talking to the suppliers and building a connection, and they liked representing the company to the suppliers. They felt a personal responsibility to get the best deal for our company, but at the time to be honourable to the suppliers.
(Production) Planner — Per ASCM (I am paraphrasing here from their longer definition) they develop plans based on setting the overall level of manufacturing output, to best satisfy the current planned levels of sales, while meeting business objectives like profitability and customer lead-time. These are the folks creating work orders, planning capacity and inventory, and giving ship commitments. For companies that are manufacturing, you will need a Planner sooner than later. Especially if you have a lot of components on your BOM, or have a lot of SKUs.
What makes a good Planner? Analytics. Good Planners have to distill an enormous amount of information during changing situations and times, and create something organised and efficient for others, while satisfying customer needs. The best I have worked with also had high levels of initiative and liked control — they liked “owning” something and making sure it is running right.
Buyer/Planner — The two roles are often combined. There is some logic that if the person planning the need for the items then orders them, you have a nice continuity. There is no blaming each other if something goes wrong. However, the skills remain different, so you need someone that has a mix of the skills above.
Materials Manager & Purchasing Manager- The Materials Manager typically leads the team that has the Buyers, Planners and can include other material-related tasks like the Warehouse team, or Receiving team. If you not manufacturing, you may simply have a Purchasing Manager, to whom all the Buyers report.
Those are the big ones. I am leaving off other key positions like Warehouse Lead, Traffic Manager, etc, because what they actually do seems to be more obvious to people. There are also Demand Planners, Distribution Planners, but these are usually hired later in the company’s life. (But I could be wrong, let me know if I should explain these, or any other roles.)
What are some tips around hiring these positions, especially for the first time?
First tip, be aware that the job titles change a lot company to company. I have heard huge arguments at companies as to what “Procurement” does versus “Purchasing”. And don’t get me started on what is or is not in the “Supply Chain” department. So don’t focus on your candidate’s previous job titles, focus on the content and scope of the work they did.
Second tip, there are certifications for these roles, and they are indeed valuable but not required. I have seen excellent performers without them, and unsatisfactory performers with every certification you can get. Don’t rely on certifications but also don’t discount them completely.
Third tip, for your first hire do not hire a recent graduate, go with someone with experience. New graduates everywhere, I am sorry, I am wholeheartedly recommending you for all the other jobs. But for a startup hiring their first supply-team member, the company is better off hiring someone who knows the ropes and can avoid expensive (and time consuming to fix) mistakes. They can then train all the others that come on board.
Fourth tip, you do not have to have a Supply Chain degree to work well in Supply Chain or in any of these roles. Engineering, Accounting, Business, Psychology, and many more — I have seen people with a huge variety of backgrounds work well and be happy in such roles. I have also worked with a large amount of great performers that have no college degree. It is the skill, not the education level or degree, that is important.
Okay fine, I am ready to hire, what are some questions I can ask them in an interview?
What has worked best for me in interviews, is the method of asking for a specific time someone did something, and then discussing that experience with them. Get a sense of not only how they will work, but also how they handle problems. Here are some to get you started :
Questions for Buyers :
- Have you ever had to work with a supplier that you did not like to work with? What did you not like? How did you handle the situation?
- What is an example of when you negotiated a difficult price decrease? What was the situation? What made it difficult? How did you resolve it?
- Have you ever had a supplier who argued about the quality of a shipped part? What happened? How did you handle it?
- What do you consider an excellent supplier and why? Have you paid more to work with an excellent supplier, if so how much and how did you know it was worth it?
Questions for Production Planners :
- What is a time the shop floor disagreed with you on a production plan? How did you resolve it?
- (After a shop floor tour) What did you see on our shop floor? Did you notice anything immediately that could be improved? Did you notice anything that you thought was good about how we are set up?
- What is your approach with backorders? How do you handle irate customers/sales people? How do you allocate capacity and materials when orders are overdue?
- What do you think is a reasonable amount of Finished Goods inventory to keep on hand and why? What about Work In Process inventory, how much is too much?
Questions for Materials / Purchasing Managers :
- How do you keep a supply team motivated, when there are backorders, manufacturing and delivery problems? What are specific examples?
- What was a point of conflict you resolved between your team and the plant manager, the warehouse head, quality, … some other peer department that was not part of your team?
- What was a time that a customer and/or sales asked for something really unrealistic for delivery, and how did you deal with the situation? (See how they describe the customer and what effort they took to try to make the customer happy.)
- What do you look for when you hire in your team? What qualities are most important?
We can outsource these roles?
Yes, like other support functions, outsourcing Supply and Purchasing roles is growing to be more common. Typically Purchasing roles do not require any special on-site capabilities and work well with remote employees. Production Planning is more challenging, as it is often tightly connected to shop floor activities. But there are many tasks that simply require analysis, and those can easily be done via an outsourced team.
Companies today can use outsourced supply professionals as their main team, or to augment their internal team. For example if someone is on extended leave, or they need to bridge a period of time until finding a permanent hire, it can be a great solution. And if you don’t have the need for a full time person, having a professional immediately available at an hourly rate is a way to get the expertise without a fixed investment.
Final thoughts
Only you and your team will know when the timing is right to start hiring these colleagues. Typically, the tasks are done at first by founding teams, by engineers, even by just whoever has the time to do them. But at some point, the tasks become overwhelming, the costs start increasing, too much cash is spent on inventory, risk gets higher for customer quality and shipments, and you know you need professionals.
If you have not done the job yourself, and don’t immediately know what role is needed, then get expert advice during your staffing process to assure you have the right person for the job. At Supplino, we can help with this, as well with outsourcing and other support.
Good supply professionals can save your company immense amounts of money, time and risk. Hire wisely, and scaling will be much easier, and both your customers and your CFO will thank you.
