Journal of Purchasing and Supply Management 26 (2020) 100621

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Journal of Purchasing and Supply Management

journal homepage: www.elsevier.com/locate/pursup

Notes and Debates

Where we are heading and the research that can help us get there – T
Executive perspectives on the anniversary of the Journal of Purchasing and
Supply Management
Remko van Hoeka,∗, Vijay Sankararamanb, Thomas Udesenc, Ton Geurtsd, Donna Palumbo-Mielee
a
University of Arkansas – Walton College of Business, Fayetteville, USA
b
Walmart Supply Chain, USA
c
CPO, Bayer, Germany
d
BISCI, the Netherlands
e
The Walt Disney Company, USA

ARTICLE INFO ABSTRACT

Keywords: Procurement is a young field with much potential for further business impact in industry and insight generation
Technology through research. In this article four executives from different industries and continents offer their perspective
Talent on procurement, purchasing and supply management (PSM) capability development potential and research that
Sustainability can support this. These executives each addressed one of the following important themes and provided candid
Supplier enabled innovation
comment regarding the nexus between academia and practice. (1) Emerging industry 4.0 technologies that can
Future
enable new PSM capability development. These technologies should be evaluated in terms of what PSM chal-
lenges they can help resolve, not just in terms of how technically promising they may be. (2) PSM talent is key to
the realization of new PSM capability and the development of this talent will require executive engagement in
creating lifelong learning opportunities for PSM professionals to ensure new competencies and capabilities. (3)
Sustainability efforts that are often housed in PSM organizations have much potential to expand these efforts
more comprehensively throughout the supply chain and to expand the scope of the efforts. (4) Supplier enabled
innovation (SEI) offers a pathway for PSM to meet current business needs with suppliers but also to collaborate
with suppliers to create new revenue and customer value. The successful achievement of future PSM capability
will require leadership in industry and research to help close the gap between known opportunity areas and
actual real-world accomplishment. These executive perspective help us to realize that simplified roadmaps and
maturity models underestimate interrelations between these four areas of opportunity and no “single path”
currently exists.

1. Introduction www.worldprocurementcongress.com), highlights four areas of oppor-

In the foreword to Mena et al.'s (2018) recent textbook, Peter Kraljic
reflects on the field's progress towards becoming more strategic over
the 35+ years since the Harvard Business Review published his (1983)
seminal article ‘Purchasing must become Supply Management’. He
concludes with a call to focus on talent development, innovation and
sustainability as major topics for the future and to explore ways to “…
turn thought leadership into action. Precisely what we need for the next 35
years!” These priorities for the future are mirrored by Procurement
Leader's CEO who, reporting on the May 2019 World Procurement
Congress (the World Procurement Congress in London is a conference
that brings together hundreds of procurement executives annually -
tunity:
(1) Technology and digitization: Accelerate experimental pilots from
start up to scale;
(2) Talent: Advocate for, and develop diverse next generation teams
now, be brave in redefining roles, structures and workflows;
(3) Sustainability: Deliver social and environmental impact;
(4) Supplier enabled innovation: Find the courage to change the model.
This article contributes to the Journal of Purchasing and Supply
Management's 25th Anniversary Special Issue by bringing the ‘voice of
the practitioner’ to look forward at procurement and supply

∗
Corresponding author.
E-mail address: rvanhoek@uark.edu (R. van Hoek).

https://doi.org/10.1016/j.pursup.2020.100621
Received 5 March 2020; Accepted 18 March 2020
Available online 19 March 2020
1478-4092/ Published by Elsevier Ltd.
R. van Hoek, et al.
Fig. 1. Drivers for future procurement capability development.
management (PSM) capability development across these four themes.
For each theme, the lead author invited a highly experienced PSM
leader to discuss the theme and propose research priorities. These four
contributions are reviewed within the overarching strategic change
perspective. In combination, the insights from each element lead to the
summary in Fig. 1. This figure shows how future PSM capability will
require technology and talent development and will enable greater
sustainability and supplier enabled innovation contributions from PSM.
By collaborating with industry leaders, the intent is to develop a
research agenda that focuses on the key issues faced by practitioners.
PSM is a practical field, and researchers have the opportunity (argu-
ably, an obligation) to help solve ‘real’ problems and support industry
progress. Developing research in line with this agenda will allow for the
opportunity to advance capability in industry. Writing this article was a
significant opportunity to partner with procurement leaders, to benefit
from their engagement and to support research efforts.
The four topics in Fig. 1 are not new to PSM. Though the details will
have changed, at a headline level, they have been recognized as key
areas for development for some years (see for example Wynstra and ten
Pierick (2000) for supplier enabled innovation, Carter and Ellram
(2003) for talent and education in PSM, Tate et al. (2012) for sustain-
ability in PSM and Knudsen (2003) for the role of technology in pro-
curement strategy). A PSM researcher with experience of these themes
might be disappointed that these are all familiar themes, possibly
questioning the aim of this article. However, instead of being a dis-
appointment, this familiarity is a foundational, crucial aspect of this
article. The fact that executives still call for research on topics that have
received much attention both from industry and academe points to
what Pfeffer and Sutton (2000) refer to as a ‘knowing – doing’ gap.
While there may be a level of capability developed in industry, change
inertia is holding the profession back from achieving aspired con-
tribution levels. As a result, leadership of the change management
process aimed at developing future capability may be a key factor.
Furthermore, since these executives are calling for research that may be
(partially) underway already suggests there is also a ‘research –
knowing’ gap in PSM just like the one previously identified in supply
chain management in general by Waller et al. (2012). If knowledge is
failing to reach those who can make good use of it, this implies a re-
search dissemination challenge which needs to be addressed to improve
the value and impact of research in supporting capability development
in industry. These gaps, and the actions that they imply for both in-
dustry leaders and researchers, are discussed further following the re-
view of each of the four themes, as summarized in Fig. 2.
Fig. 2 elaborates the point made previously, showing how the four
themes – familiar at the headline level – have in fact shifted in their
emphases. Based on the insights from the four contributing executives,
the original (left hand column) and the changed (right hand column)
perspectives are shown, with the implications this has for research
avenues. The next sections explain each of these four areas.
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Journal of Purchasing and Supply Management 26 (2020) 100621
2. Areas of opportunity
Technology and digitization (Written with input from Vijay
Sankararaman, Head of Digital Product, Walmart Supply Chain).
2.1. Context
In PSM, technology has enabled development of capabilities
throughout the decades, in particular in the ordering process and in
strategic sourcing (Mena et al., 2018). A number of technologies, in-
cluding cyber-physical systems (CPS), industrial internet of things
(IIOT), cloud computing, cognitive computing and artificial intelligence
are emerging and gaining a lot of interest. Frederico et al. (2020)
conduct a systematic literature review that uncovers a wide range of
papers in recent years covering these technologies with several
common themes, the most important being that these technologies offer
opportunity for new capability development in business and they may
enable a new industrial revolution called industry 4.0. Additionally,
industry 4.0 technology may impact further capability development in
PSM (Bienhaus and Haddud, 2018), logistics (Barreto et al., 2017) and
supply chain management (Ardito et al., 2019; Brinch, 2018). More
specifically, industry 4.0 technologies can potentially create new levels
of transparency and visibility across tiers in the supply base, enabling
faster information exchange in supplier relationships (Bienhaus and
Haddud, 2018). This might enable closer collaboration with suppliers
on supply chain issues and enable capability development beyond
strategic sourcing and the ordering cycle, into the supplier relationship
management process.
However, effective deployment of the industry 4.0 technologies
requires integration of these technologies into existing supply chain
processes, with considerable managerial engagement and leadership
support (Frederico et al., 2020). Without organizational readiness,
technology may not be much more than a “shiny new object” (van
Hoek, 2019 I). There are substantial barriers to implementation to na-
vigate (Bienhaus and Haddud, 2018) including a lack of understanding
of the technologies (van Hoek, 2020) and the need to enhance decision
making frameworks for evaluating these technologies (van Hoek, 2019
II). Additionally, Treiblmaier (2018) calls for research that embeds the
evaluation of newer technologies in theory. Taken together, these re-
present a strong call to move beyond the hype surrounding Industry 4.0
technologies to a thorough analysis of their potential.
2.2. Executive perspective
The list of technologies associated with industry 4.0 is long. Robots
are enhancing productivity in warehouses and scanning shelves in
stores. Drones are delivering critical medical supplies to doctors in
Africa. Several technologies hold the potential to change and enhance
PSM capability specifically. The key to moving forward will be how to
identify and evaluate options, while avoiding supplier-driven hype and
unrealistic expectations.
While technology has enabled PSM capability development in the
past, it has done so with limitations. Experience has shown that e-
auctions and private exchanges have not had the universal applicability
that was once assumed. There are many categories of external spend in
which human factors and interactions are too important to automate.
The selection of professional service providers, for example, is different
from buying office supplies and the deployment of technology has to be
considered with nuance and perspective. This equally applies to newer
technologies today.
Internet of things technology has recently been piloted successfully
in an inbound warehousing setting in a grocery supply chain. However,
while the technology worked and proof of concept was generated, the
pilot actually revealed raw data integrity issues. This resulted in the
need to fix the foundation underneath the proposed adoption of the
technology first. Doing so before evaluating if the business case
R. van Hoek, et al.
Fig. 2. Future procurement capability framework with research avenues.
supporting the application was feasible. The fact that the technology
exists, or even the fact that the technology works, is not sufficient to
drive meaningful PSM capability development.
Blockchain, as another example of a newer technology, can provide
real-time operational visibility about products in the supply chain. The
essence of many blockchain applications in a supply chain setting is that
information is shared with multiple supply partners instantly, through
its distributed database. This means that information no longer travels
from one tier to the next. Instead, information can be shared with all
tiers, and the customer instantly (van Hoek et al., 2019). For PSM, this
means that a company may know about shipments when they depart
the supplier, or even further upstream suppliers, not only upon arrival
at the facilities. Perhaps more importantly, it means that supplies can be
traced back upstream at the individual product level, enabling buyers to
address product issues in a very targeted manner. However, applica-
tions today are only in a limited range of product categories and sup-
pliers, and scalability is still being tested (van Hoek, 2019 II). Coupling
blockchain with sensors and the Internet of Things could provide an
even more powerful set of options for new visibility and a source of
intelligence and analytics.
The key insight is that more research and managerial consideration
are warranted to help explore emerging technologies in the context of
supply chain problems. The question that needs to be asked is not so
much ‘what is this technology?’ but rather ‘what supply chain and PSM
problem can it help solve?‘.
Fig. 3 offers a framework relating the depth of the impact of a
technology as the horizontal axis (from achieving visibility into existing
PSM process to driving improvements of PSM processes) to the scope of
the impact as the vertical axis (from impact on information available
internally to information available across supply chain relationships).
When technology is used to get better line of sight into existing internal
processes exclusively, not into the supply base and the supply chain
(bottom left quadrant), the impact of the technology is limited to just
the one organization. However, if new information is shared with the
supply base (top left) it can be leveraged more widely to potentially
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Journal of Purchasing and Supply Management 26 (2020) 100621
impact the supply chain. Alternatively, in the bottom right quadrant,
new information visibility is used to inform process improvements in-
ternally, the depth of impact of the technology grows. And finally, on
the top right, if process improvements are focused on jointly with other
parties in the supply chain, such as key suppliers, the scope and depth
of impact of the technology may reach supply chain improvements.
The diagonal line running from top left to bottom right marks the
distinction between scope and depth that can be achieved by tech-
nology (bottom left) vs the scope and depth that crucially requires
human involvement (top right). If new technology is to deliver more
than just creating visibility into existing processes, there is a key role for
procurement and supply managers to play. Whereas industry 4.0
technology can indeed enable visibility, using this visibility to improve
PSM processes and capabilities requires collaboration and process op-
timization. While technology can enable progress in PSM, the question
is how to use this to create meaningful new capabilities. This impact of
industry 4.0 technologies on PSM may be larger than that of more es-
tablished technologies such as AP automation that help drive automa-
tion of transactional activities and e-sourcing suites that drive staff
productivity. This impact may enable new PSM capability to drive
supply base impact and supply chain results.
There is a lot of experimenting and learning involved in assessing
new technologies. Even when pilots are successful, they offer little in-
sight on the wider adoption of industry 4.0 technologies. Many ques-
tions remain unanswered, for example: will it be feasible to scale pilots
across the supply base to ensure true supply chain-wide visibility? Will
the technology be interoperable with alternative and other technologies
already adopted, and will it complement existing technology or replace
it?
2.3. Forward looking research agenda
The potential of new technology is exciting; procurement and
supply managers and researchers need to assess these technologies
thoroughly in relation to the supply chain objectives to which they may
R. van Hoek, et al.
Fig. 3. Framework for considering the role of humans versus the role of the machine in adopting emerging technologies.
contribute, and the role of the human versus the machine in capability
development. For research there is tremendous opportunity to inform
technology evaluation and decision making, in ways that helps man-
agers see past the ‘hype’ (Bienhaus and Haddud, 2018; Ferdows, 2018).
Specific research questions can include:
➢ What PSM challenges and problems can be addressed with industry
4.0 technology adoption? It is likely that industry 4.0 technologies
will not be as relevant and similarly relevant for all procurement
strategies (recall Knudsen, 2003). Blockchain for example, may help
improve visibility into high-risk supply lines while robotics may be
most helpful in further automating operational processes, including
in request-to-pay, and sourcing processes. Artificial intelligence may
be most helpful in supporting the management of ongoing supplier
collaborations by flagging potential supply issues and re-
commending potential proactive remedies.
➢ Further to that, which sourcing strategies for which sourcing cate-
gories should be adopted to capitalize on emerging technologies,
and how will the supply base by impacted? For example, in sourcing
strategies focused on speed and in relationship with bottleneck
suppliers, the early visibility and transparency that blockchain may
provide could be relevant. For further volume concentration and
negotiation with leverage suppliers this may be less the case.
➢ How can procurement and supply managers partner with IT and
other key stakeholders in technology adoption, and how can further
investment in PSM technological capability be justified? A lot of
technology introduced in PSM in the past (in request-to-pay and
strategic sourcing) was justified based upon productivity impact on
PSM teams and automating routine tasks. While similar arguments
may be made for robotics, other technologies such as sensors and
IoT may drive visibility, responsiveness and agility. If that is the
situation, different types of business cases, from those made in the
past in PSM will need to be developed, basing the case on respon-
siveness instead of productivity.
➢ How to balance executive enthusiasm for newer technologies, re-
sulting from a degree of hype in the market, and the need to thor-
oughly analyze potential impact on PSM performance? While ex-
ecutive interest can make it easier to make the case for a new
technology project, if this project is not centered around PSM
challenges and opportunities, it may be short lived in the end as
business contributions may be modest and executive interest may
quickly evaporate.
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Journal of Purchasing and Supply Management 26 (2020) 100621
➢ Finally, what will be the impact of industry 4.0 technology on the
roles and responsibilities for the PSM department as a business
partner – empowered and more impactful, or less needed and au-
tomated? And how may this vary from one emerging technology to
another?
Talent of the future (Written with input from Thomas Udesen, CPO
Bayer).
2.4. Context
The transformative skills that procurement and supply managers
bring to work every day (including soft skills) are increasingly needed
in modern business and it is not surprising therefore that the Bureau of
Labor Statistics predicts continued growth in procurement jobs for at
least the next decade. The emergence of industry 4.0 has driven a rich
debate about “the future of work”. It is expected to affect the style of
work, free up time and enable diverse and flexible career paths (Xu
et al., 2018; Branger and Pang, 2015), enhance productivity and effi-
ciency, and enable lifelong learning and workplace-based continuing
professional development (Liao et al., 2017). But industry 4.0 will also
automate or even make redundant certain jobs (OECD, 2017). While it
is recognized that industry 4.0 will drive change in supply chains (Liao
et al., 2017; WEF, 2018), the question that is not addressed in literature
is what the future of work implies for talent and talent development in
PSM.
2.5. Executive perspective
The need for procurement skills continues to increase in industry,
and there is plenty of research focusing on the development of relevant
curricula for procurement. However, in its 2018 Future of Work report,
the OECD states that 34% of jobs can be automated by 50% or more, 9%
jobs can be automated by 70% or more. McKinsey Global Institute,
(2017) indicates that about 60% of all occupations have at least 30% of
constituent activities that can be automated. The World Economic
Forum (WEF) (2018) found that 59% of respondents to its survey expect
to have significantly modified their supply chain as early as 2022. The
transition to industry 4.0 means that there is a need to retrain em-
ployees into changed or new jobs, and the future ways of working may
need to involve lifelong learning for employees to be able to remain
appropriately skilled in the changing industrial environment.
R. van Hoek, et al.
According to the same WEF study 54% of workers will need res-
killing before 2022. Technological proficiency will only be part of the
skill requirements. Human skills such as creativity, originality and in-
itiative, critical thinking, persuasion and negotiation will increase their
value, as will attention to detail, resilience, flexibility and complex
problem solving (WEF, 2018). While one may argue that these skills
have been important in the past also, the point is that thanks to the
enabling role of technology they are becoming more important. Ac-
cording to the OECD (2017) for example, there is evidence that the
labor market is increasingly rewarding soft skills such as the ability to
communicate, working in teams, solving problems and self-organizing.
Flothmann et al. (2018) point at the need for digital and IT skills and
much greater need for interpersonal skills and an analytical and pro-
blem-solving ability. Negotiation, change management, effective com-
munication, analytical, decision-making, organization and planning are
among the more detailed skills listed is being in greater need.
The fact that the skills (including soft skills) that a good procure-
ment and supply manager brings to work each day are growing in
importance is no real news. What is new is that the amount of change
and the pace of change creates a growing need for these skills and for
the ability to create lifelong learning opportunities. This challenges
today's model for talent development. Not only is there a need for more
talent of the future to come out of universities, there is also a need for
courses and trainings to reskill existing teams for the future of work in
procurement. And once qualified, the learning journey toward the fu-
ture of work in procurement continues, likely involving lots of in-
novation and new capability development throughout the global PSM
organization.
This means that talent development cannot be limited to training
and courses only. There is a need to create learning opportunities in the
PSM organization, fitting within the organization's journey towards the
future of work. And learning is no longer a gift for the employee; it is a
key strategic imperative for the company. Obviously, this means that
procurement executives will need to personally engage in creating a
lifelong learning culture, in which experimenting is encouraged and it is
safe to learn from failure. This means generating learning opportunities,
sponsoring stretch projects for team members, and coaching. It requires
a consistent attention and substantial time commitment. Most im-
portantly, in addition to enabling industry 4.0, it also ensures that
procurement can be positioned as an attractive source of talent of the
future in the internal talent market.
2.6. Forward looking research agenda
Competencies in PSM are changing. While strategic sourcing, stra-
tegic thinking, sustainability and analytical skills are and will remain
important, new competencies for the future include big data analytics,
automation and e-procurement and holistic supply chain thinking (Bals
et al., 2019). This ties back to the prior section on emerging technology
opportunities and the role of the human in capturing those. There is
plenty of research that focuses on how curriculum design in PSM uni-
versity programs can support the development of critical competencies
in talent (Birou et al., 2016; Sinha et al., 2016; Fawcett and Ruttner,
2014; Lutz and Birou, 2013; van Hoek and Wagner, 2013; Lancioni
et al., 2001). There is also research into specific teaching tools and
techniques such as university – industry collaboration (Gibson et al.,
2016) and the use of guest lecturers (van Hoek et al., 2011). But clearly
the key to developing talent of the future will not only be in curriculum
design and on the university campus alone. While university programs
and offerings need to evolve, so do company approaches to talent de-
velopment in a lifelong learning setting (Kotzab et al., 2018).
2.7. Relevant research questions in this context include
➢ How to achieve lifelong learning in the industry 4.0 PSM organi-
zation? Clearly this should entail more talent management efforts
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Journal of Purchasing and Supply Management 26 (2020) 100621
than just sending teams to trainings. Nor can lifelong learning be
fully “outsourced” or delegated to training departments or uni-
versities only. Other mechanisms that can be used include lunch and
learn sessions, job shadowing and job rotations, 360° feedback and
peer feedback. PSM is in a unique position to benefit from peer
feedback and learning opportunities because PSM staff typically
support a comprehensive stakeholder network with multiple peer
functions. Of course PSM is in a great position to engage the supply
base in learning and talent development mechanisms that may be
worth exploring include job rotations between suppliers and buying
firms, joint research and learning projects and knowledge sharing
sessions between supplier and buying firm teams.
➢ To what extent and how can executives engage directly in providing
learning opportunities, coaching and developing PSM team mem-
bers to ensure relevance and impact? Specific questions to be an-
swered include the time this may take from executives, how this
may vary with their seniority and what forms of engagement can be
considered, from sponsoring to personally engaging in coaching or
mentoring for example.
➢ Beyond the changes in PSM competencies in general, how will PSM
leadership competencies specifically need to change? Engaging
suppliers in lifelong learning may be a newer manner of engagement
with the supply base and certainly is different from negotiating
another saving or continuous improvement efforts. Equally so, while
a lot of focus of leadership in the past may have been on stakeholder
engagement and communication skills (Bals et al., 2019) the man-
agement of industry 4.0 workforce that is more focused on analytics,
for example, is likely to be different.
Sustainability (Written with input from Ton Geurts, Development
Director BISCI, the Netherlands, former CPO Akzo Nobel, former CPO/SVP
Supply Chain Excellence of Bekaert and former Chairman of the Board of
Solidaridad).
2.8. Context
Sustainability has received plenty of attention in PSM research (Tate
et al., 2012; Reuter et al., 2012; Igarishi et al., 2013) and a main trend
has been to broaden focus from parts of the supply chain (reversed
logistics or tier 1 suppliers for example) to be more supply chain wide.
Ecovadis (2019) for example, calls for the inclusion of all areas of ex-
ternal spend, not just in the direct engagement with tier 1 suppliers, but
also tier 2 and tier 3 suppliers. While in the past perhaps there has been
a degree of “putting the burden on suppliers”, increasingly procurement
and supply chain leaders such as Ton Geurts see sustainability as an
essential area for PSM to grow its efforts to partner with internal
business stakeholders and suppliers, enabling larger contributions to
the future of the company, the supply chain and the societies in which
they operate.
2.9. Executive perspective
PSM departments have been in the midst of corporate efforts to
improve the sustainability of business. Procurement has direct influence
over the upstream tiers in the supply chain where the majority of en-
vironmental impact may be realized. It makes sense therefore that PSM
is in a position to help make the world a better place. At Akzo Nobel
(the Dutch global leading paint and coatings company) and Bekaert (the
Belgian global leading metallurgy company), the PSM teams have
substantially contributed in achieving top industry benchmark ratings
in two very different industries, following the methodology of the
Ecovadis rating agency and the global reporting index (GRI). Looking
forward, procurement and supply chain professionals face several key
challenges and research can play an important role in enabling progress
and inspiring innovation in sustainable thought and implementation.
For some companies, sustainability initiatives may have started for
R. van Hoek, et al.
the wrong reasons. For example, if the company received negative press
over its environmental and supplier practices (reputational integrity is a
nice term for avoiding bad press) or because there was pressure from
stakeholders to ‘do something’ to look engaged in the topic. For most
companies sustainability started small and with perhaps more of a
‘front page’ than a ‘heartbeat’. Many companies articulated lofty goals
for a 5–10 year horizon, built beautiful websites and created staff de-
partments that organized very public, but often one-off, events. Early
PSM efforts often mirrored this; for example, adopting a code of con-
duct, and requiring suppliers to sign up. All of which are good starting
points but no guarantees that change will really happen.
In order to achieve industry leadership, much more effort is needed,
including a commitment from the CEO and the Board, and a measurable
approach that is tied to performance targets and incentives around the
company. Perhaps even more importantly, a focus on consistent pro-
gress and hands-on engagement and embedding in all critical processes.
Sustainability can be included in every request for proposal and sour-
cing decision matrix, on supplier scorecards and in every sourcing
strategy, making it a sine qua non and part of day-to-day practice, as
opposed to a website with aspirations for the future. Consistent progress
and hands on engagement can be achieved via the establishment of a
continuous improvement methodology and culture.
At AkzoNobel and Bekaert, sustainability is incorporated in the
mission of the procurement function to: “continue to create a cutting
edge function where we are a business partner in the company and for
our suppliers, pursuing ongoing value creation, optimal costs, sustain-
ability and innovation, and creating real career paths for our em-
ployees.” In order to achieve this new level of business partnering in
sustainability, there are two keys: (1) the development of a program-
matic approach with annual goals that are raised year after year with a
longer term time horizon (5–10 years minimum) in order to continue to
drive progress over time and (2) this needs to be done across a multi-
tude of aspects of sustainability.
There are no simple, discreet solutions. The complexity of sustain-
ability means a longer term time horizon is essential and is worthwhile
approaching change as a continuous improvement program. Many
companies begin by developing a code of conduct that articulates ex-
pectations of supplier sustainability practices and commitments; these
are often an annex to supplier contracts. At the organization level, there
are targets for the percentage of spend covered by the sustainability
program, as a measure of the firm's commitment. Additionally, audits of
suppliers' and buying firm practices and capabilities can be conducted.
A focus on helping suppliers develop and jointly driving continuous
improvement are among the most meaningful levers, demonstrating
genuine hands-on engagement. Finally, tracking supplier performance
and public reporting are made available through a growing number of
metrics, driving a degree of visibility about actual achievements, in-
stead of just lofty ambitions and future objectives.
What is not yet widely achieved in major firms, and where research
can assist, is driving sustainability across multiple tiers upstream in the
supply chain, beyond immediate suppliers into their suppliers. While
the Ecovadis benchmark considers it a key factor, today it is not clear
how to effectively and practically achieve this. Blockchain technology
will help, but clearly targeting rollout across a buying firm’ spend but
also throughout the multi-tier supply chain will amplify efforts and
progress.
2.10. Forward looking research agenda
PSM plays a vital role in boosting a firm's sustainability perfor-
mance. This role is not just about protecting against sustainability risks;
it is more about collaborating with suppliers to innovate and advance
performance (Lintukangas et al., 2019; Gualandris et al., 2014). Mea-
suring sustainability performance is complex, in particular because it is
multi-faceted and involves many stakeholders (Gualandris et al., 2014;
Bai and Sarkis, 2014), and becomes more challenging as ambitions and
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Journal of Purchasing and Supply Management 26 (2020) 100621
capabilities develop.
Several research questions can be asked:
➢ First, where and how to expand the scope of sustainability pro-
grams, not just in terms of the buying firm's direct spend but also
beyond first tier suppliers toward multi-tier and more extensive
supply chain coverage (Ecovadis, 2019; Schaltegger and Burrit,
2014)? It is difficult to establish visibility beyond the direct tier 1
supplier, let alone drive a sustainability agenda upstream into the
supply base. Perhaps there are opportunities to start in categories of
spend where relationships are more collaborative and where there is
greater willingness in the supply base to share across tiers. Con-
tinuous improvement programs may provide vehicles to do so. Risk
management efforts may also be useful as these often involve col-
laborative efforts to map out extended supply chains and jointly
establish improvement plans.
➢ Additionally, how to continue to broaden efforts beyond environ-
mental sustainability into social sustainability (Bai and Sarkis,
2014)? There is an important transition in shifting from a focus on
waste elimination and corporate citizenship considerations in sup-
plier selection, to also consider the broader impact on the societies
in which our supply base and our supply chain operates. This relies
on an evolution of PSM from a gatekeeper role (“don't buy from
suppliers that pollute”) to that of an innovator (“how can we posi-
tively impact sustainability improvements beyond our company,
into the supply chain?”) (Lintukangas et al., 2019; Bai and Sarkis,
2014).
➢ How to measure and evaluate sustainability capability and perfor-
mance? In particular, how to sustain this as sustainability initiatives
grow in scope and complexity? Whereas reduction in CO2 emissions
and compliance with conflict mineral law are concrete and mea-
surable, what other metrics need to be added? How can double-
counting be avoided (do all tiers of suppliers report results sepa-
rately or is this done once, on a supply chain basis?) and how to
avoid too many metrics and keep the focus on continuous im-
provement, not dashboarding?
Additionally, initial experience of several companies is indicating
that more sustainable products sell more, in particular in mature and
competitive markets. This raises the question of which sustainability
practices can be most directly drive revenue growth in mature markets
and how far upstream in the supply base these practices may reside. If a
tier 3 supplier is introducing more environmentally friendly manu-
facturing processes, is this as valuable for revenue growth as a buying
firm's efforts to contribute to the society in which it does business?
Clearly there are opportunities to further leverage upstream supply
management capability for end market impact and studying this con-
nection is a meaningful research avenue.
Furthermore, what will be the impact of a sustainability focus and
capability on attracting PSM talent? It may well be that successful social
and environmental initiatives help in becoming an employer of choice
in a scarce labor market. Continuing to move beyond today's leadership
position into tomorrow's new standards will be an exciting journey for
both academics and industry.
Supplier Enabled Innovation (Written with input from Dr. Donna G.
Palumbo-Miele, former Global Procurement leader, Bloomberg LP, Johnson
& Johnson, the Walt Disney Company).
2.11. Context
Innovation has long been viewed as the lifeblood of sustained
competitive success (Lengnick-Hall, 1992; Ragatz et al., 1997; Wowak
et al., 2016). Early supplier involvement is a core aspect of successful
end-to-end new product innovation processes (Gee, 1978; Clark, 1989;
Birou and Fawcett, 1994; Bonaccorsi and Lipperini, 1994). It is no
surprise that over the past few years, supplier enabled innovation (SEI)
R. van Hoek, et al.
has become an important focus in PSM practice and PSM literature
(Akins Ates et al., 2018; Sjoerdsma and van Weele, 2015; Luzzini and
Ronchi, 2011; Wynstra and ten Pierick, 2000). SEI is about engaging
suppliers in the buying firm's innovation efforts. These contributions
may be joint innovation efforts between the buying firm and supplier,
and supplier innovations may become integral part of new product/
service combinations brought to the market by the buying firm. Despite
highly publicized success stories, few companies have learned how to
leverage supplier ideation and resources to consistently and quickly
bring better products to market (Lynch et al., 2014; Laursen and
Andersen, 2016). More research is needed to support future progress
with SEI.
2.12. Executive perspective
Supplier enabled innovations can be seen as the next big and va-
luable supplier collaboration opportunity. What is key however, is to
avoid the risk of SEI being viewed as a new elegant way to ask for the
next discount. If procurement approaches innovation with the tradi-
tional strategic sourcing toolkit or, even worse, uses it as a bargaining
tool, the effort is set to fail. SEI has potential for greater impact beyond
cost savings.
There is a natural point in the journey to procurement maturity to
initiate SEI efforts and more and more companies are reaching this
point. As a result, SEI is being given more significant consideration and
is more widely practiced by leaders in the field. SEI holds the potential
to have transformational impact to the future supply chain and in-
novation process. Put simply, in today's and tomorrow's markets it will
be very hard, if not impossible, for companies to meet all innovation
needs for remaining competitive strictly on its own. Engaging suppliers
and turning to the supply-base is an obvious option for growing in-
novation potential and capabilities. Targeting suppliers for innovation
contributions alters the type and nature of PSM engagement with
suppliers and innovation stakeholders.
Once a procurement organization has reached the maturity level at
which the majority of spend is influenced with category sourcing
strategies that have been implemented through stakeholder engage-
ment and collaboration, sourcing events, and rolled out into day to day
spend management, supplier relationship becomes a natural focus area.
While sourcing is never fully done, and while supplier markets and
businesses need to evolve, a procurement organization can reach the
point where it becomes vital to start engaging in the many supplier
relationships it helped create and implement. These engagements are
more meaningful and demonstrate greater return on value when select
suppliers are identified and engaged with at a different level than has
historically been the case. This does not mean at a specific leadership
level. Instead, it refers to changes in the engagement between both the
buying firm and select suppliers. Engagement will move beyond stra-
tegic sourcing aimed at identifying suppliers that can meet current
business needs. Beyond that, engagement will include new collabora-
tive initiatives that impact end-customer value, not just meet current
business needs in the buying firm.
Initially supplier engagement may be focused on performance to
contract however, over time this may evolve into an improved buyer-
supplier relationship. Once procurement has established the credibility
with their internal stakeholder that the PSM team can do more than
support a tender and a negotiation, they can advance the supplier
conversation. Equally, if procurement has demonstrated to suppliers
that it continues to commit to the relationship, past the negotiation of a
deal, procurement becomes a more relevant stakeholder in the eyes of
the suppliers. If alternatively, procurement is seen as a negotiator that
leaves implementation to the business it will not be able to engage in
innovation efforts; it simply will not be seen as a credible partner in this
process. This does imply that the PSM team has to grow into this role
and that it may have preparational steps to take at first, including the
development of a methodology and a process for SEI.
7
Journal of Purchasing and Supply Management 26 (2020) 100621
An example from practice is that when Unilever first started their
SEI efforts in 2011 they may have gone too far too soon. Having met
with one of the suppliers that was in the original event a few years ago,
the supplier shared concerns over the lack of business and engineering
participants. There was a lack of clarity about what would happen with
the innovation that suppliers shared, and what would happen after the
meeting. In the eyes of the supplier, it was a purchasing event turned
tradeshow without much follow up. Good intentions were likely;
however, taking the initiative forward needed additional support and
focus. At the World Procurement Conference, May 2019, Unilever's
chief procurement officer shared that now 72% of its innovation ori-
ginates from suppliers. So, what changed?
Beyond needing to ensure sufficient maturity in PSM capability to
have the confidence of the business and the suppliers, several key
changes to the procurement toolkit and capability are needed. First,
spend orientation shifts from optimizing past and current spend to
creating new spend with suppliers and from economizing in existing
relationships and optimizing historical spend toward creating new
revenue collaboratively. The stakeholder environment for the PSM
team expands from spend generators (business users) to much more
prominently include engineering and product development, as key
stakeholders in the innovation process. The role of procurement ex-
pands from guardians of company spend, to stewards of suppliers’ po-
tential contributions to innovation and future spend. It is no wonder
therefore that for a procurement department to drive SEI, it needs to
develop effective process and tools, to educate buyers, possibly invest in
new technology, and enhance its key performance indicators.
2.13. Forward looking research agenda
SEI is a key opportunity for the further advancement of academic
knowledge, and PSM practice (Schoenherr et al., 2012; Narasimhan and
Narayanan, 2013; Legenvre and Gualandris, 2018). The move of PSM
into innovation represents some fundamental shifts not to be under-
estimated from a change and absorptive capacity development per-
spective. If innovation is going to be a major business contribution of
procurement several research questions can be asked:
➢ What preparations internal to the company are needed before en-
gaging with suppliers? Clearly senior leadership support, and a SEI
process and toolkit are needed. There is very little research on laying
the foundations for effective SEI; the focus is more commonly is on
supplier – buying firm interactions. Tracey and Neuhaus (2013) call
for research that digs into the “how” of ideating, scoping, and in-
itiating an effective SEI program including a project-based approach
and an approach to selecting suppliers and to need for commu-
nication to engage multiple internal stakeholders. D'Antone and
Bonomi Santos (2016) identify the need for mobilizing internal re-
sources and establishing a process for SEI and they call for more
research into the role of the PSM function and the associated in-
novation outcomes. The PSM team needs to have a certain level of
functional maturity and capability in order to be able to engage well
with internal stakeholders and suppliers (Akin Ates et al., 2018;
Hartman et al., 2012) and PSM departments' need to organize to
support innovation (Luzzini and Ronchi, 2011). However, to what
degree does the buying firm need to have broad engagement of
executives or is engagement of the CEO and R&D sufficient? Does
the SEI process need to be highly developed or is there room for
joint-development with suppliers?
➢ What is the role for the PSM team to play in the SEI process? There
are several key internal roles the PSM team could play, including
building internal organizational alignment and identifying suitable
suppliers (Tracey and Neuhaus, (2013).
➢ What are the resource requirements for effective SEI on the part of
the buying firm, and by supplier partners? Are dedicated team and
new roles needed or can SEI be added to strategic sourcing and
R. van Hoek, et al.
Fig. 4. Interrelations between driver of future procurement capability devel-
opment.
supplier relationship management staff roles?
➢ How can the buying firm derive exclusive benefit from SEI efforts
while maintaining competition among suppliers? Are SEI engage-
ments limited in time with the option to return to a supplier eva-
luation and selection process once the innovation project is con-
cluded or is more comprehensive exclusivity in the relationship
needed for success? And if so, what type of exclusivity? Would it be
in the buying firm's market only, with the supplier retaining the
option to market the innovation in other industries?
➢ What lessons from innovation research can inform PSM research
into SEI? The expansion of procurement practice by leading firms to
include innovation is not yet met with an equivalent extension of
procurement research into new product development. A greater
cross fertilization between new product development (NPD) and
procurement research might enable a ‘procurement step up’ and
enriched NPD toolkit.
➢ Which different types of innovation can be targeted with SEI and
how does the SEI toolkit vary from one innovation type to the next?
There are many different types of innovation in supply chains and
the SEI toolkit can be enhanced by distinguishing between supplier
continuous improvement and buying firm improvements, incre-
mental and fundamental research, and process and product in-
novation. And there are different innovation domains, from pro-
ducts to services to sustainability (Lintukangas et al., 2019) and
process improvements. Innovation may also vary between different
external spend categories and business environments (product vs
service for example), different industries, and perhaps regions of the
world. Relevant questions include: how do SEI capability require-
ments and programs vary from one industry to another and from one
part of the world to another? To what degree are there transferable
practices from one industry to another and how to mine innovation
potential with suppliers outside of the industry of the buying firm?
➢ Finally, the creation and implementation of metrics to track in-
novation progress and value generated deserve further research as
well. Cost savings are still the most widely used key performance
indicator in PSM (Mena et al., 2018), because it enables demon-
stration of concrete and measurable PSM return on investment. In-
novation is harder to define and measure, in particular at the cross
roads between suppliers and the multiple stakeholders involved in
the buying firm. But given PSM's track record of delivering concrete
and measurable returns, developing a set of metrics to track SEI
progress and capability development will be important. Questions to
consider include: how to measure the impact of SEI? Should it be by
revenue, growth, or accelerated product launches? How can non-
product related innovations such as sustainability improvements
and cycle time acceleration be included? How to consider gain
sharing and how to evaluate supplier contributions to buying firm
results? How to balance measuring the pipeline of potential in-
novations resulting from SEI efforts as forward indicator of future
8
Journal of Purchasing and Supply Management 26 (2020) 100621
success with the measurement of innovation results?
3. Change management and leadership for future PSM capabilities
Considering the executive perspectives offered on the four themes in
combination, as summarized in Fig. 2, highlights four important issues.
The first is just how closely intertwined these opportunities are and the
lack of a ‘single path’. The second is that we – the PSM community of
practitioners and academics – face a knowing-doing gap, and third that
this community must also address a research-knowing gap. The fourth
is that in this process leadership in research and industry will be a key
factor, deserving specific attention.
Beginning with the first point, there are several interaction effects
between the four drivers of new PSM capability development from
Fig. 1. And while it is often suggested that there is a roadmap to PSM
maturity and capability, these interrelations reveal that there is no
“single path” and that a more comprehensive approach that acknowl-
edges interrelations between drivers is needed. Fig. 4 illustrates a few of
these interrelations. Technology and talent for example, are related in a
bi-directional way. While industry 4.0 technologies may change the
way PSM organizations works, it is PSM talent that will pick up the role
of the human in turning technological potential into PSM impact
throughout the supply chain. Without talent, technology is just that;
promising technology. Equally so, industry 4.0 technologies may enable
talent to grow PSM impact into the supply base and accelerate new
capability development. Sustainability and innovation initiatives both
place new demands on PSM talent, and when successfully delivered can
attract new talent to the firm. Students going through the university
programs right now are increasingly keen on sustainability considera-
tions as they evaluate which company to apply to.
Experienced professionals will appreciate the status accorded to
PSM in organizations where it plays a central role in innovation and
business success and be attracted to join the firm, and high performing
staff will be more inclined to stay. Technology and innovation cap-
ability can enhance progress with sustainability. Suppliers increasingly
will use sustainability innovations in their customer discussions (see
also Lintukangas et al., 2019). This enables them to move beyond early
day focus on code of conduct compliance and into sustainability as a
driver for growth and sales and the deployment of new technologies
such as blockchain can enable more proactive and less wasteful supply
management.
These interrelations evoke a further set of research opportunities
including:
➢ The need to understand the interrelation between drivers of PSM
capability development. For example, technology as an enabler of
new capability development increases the need for lifelong learning
capabilities in order to be able effectively capitalize on technologies.
And SEI and sustainability may be complementary drivers of cus-
tomer value.
➢ The discussions above show there is no uni-directional and se-
quential path for the development of PSM capability. Unlike com-
monly used maturity models that recommend a harmonized se-
quential path toward maturity, the future of procurement may be
more dynamic, interactive and involve change in multiple key areas
simultaneously. This opens up interesting research opportunities to
study PSM organizational maturation paths and the contingency
factors that influence which path may be most feasible or relevant
for a PSM organization to follow.
It seems fitting to note, in this anniversary issue, that PSM is a re-
latively young field, and that the PSM discipline in many companies
still has much to achieve in terms of business contribution. The four
drivers discussed in this article are not new to PSM. Despite a long-
standing healthy focus on innovation and sustainability among many
leading firms, most businesses still aspire to make a lot more progress
on all four dimensions. For many companies, the topics are still early
R. van Hoek, et al.
days or talked about more than they are practiced. Mena et al. (2018)
discuss several barriers to supplier relationship management and in-
novation and the top reasons found in their survey include team cap-
ability, the need for tools and the need to engage internally with the
business more. Those reasons can be influenced by leadership, and
engagement with the business is one of the oldest and most funda-
mental critical success factors in PSM. Perhaps counter to Bals et al.
(2019) who found stakeholder engagement and communication be-
coming relatively less important, these will still be key to the future
competencies in PSM.
Clearly, there is a need to improve firms' learning capability, a focus
on turning knowledge into action. Leadership in PSM, and especially
change leadership, is another important research avenue. It is notable
that – based on anecdotal evidence, including from some specialized
headhunters – the tenure of procurement leaders is often short, at some
3–5 years. Furthermore, for a fair portion of people appointed at very
senior levels, this is their first role in PSM. New leadership coming into
the field and a dynamic talent market can be a benefit. It is however not
common for CFO's or heads of sales to come into such a leadership role
as their first experience of finance or sales; this raises questions about
how PSM is perceived.
Pfeffer and Sutton (2000) decoded the ‘knowing-doing’ gap into a
range of factors still relevant today. They point at the gap between
investment in training and consultants and actual change. They also
highlight that building IT infrastructure only goes so far and that a
leadership focus on developing talent, new competencies and knowl-
edge are key to actually achieving progress. These gaps align with the
focus on technology and talent management introduced in this article
but miss the role of suppliers and sustainability in innovating. There are
research opportunities in applying their framework to PSM, enriching
our understanding of the gap, why it occurs and how it can be ad-
dressed. An important aspect is leadership to enable talent development
and achieve engagement for capability development in the complex
multi-stakeholder environment in which PSM operates.
This article has focused on identifying research avenues through the
engagement through co-authorship of industry PSM leaders. It is no-
teworthy that many of the themes mentioned can be linked to published
research; this points to a ‘research-knowing’ gap. If executives are
calling for research in topic areas where there is a healthy stream of
research already underway, we – the PSM research and practitioner
community collectively – should ask ourselves why. Why are findings
from research not reaching those who need the knowledge generated?
How can the community address this gap, to ensure research-derived
insights are shared with PSM leaders, and PSM research does impact
managerial thought and action? Studying ways for more collaborative
research with industry is in itself a research opportunity. Additionally,
research into the degree to which innovations and research findings are
being adopted, and how, would be informative. For an applied field like
ours, where there is so much potential for progress and innovation,
research must support managers' efforts to turn knowledge into action.
And just like industry leaders need to personally engage in developing
talent, considering technology for PSM contribution and the advance-
ment of sustainability and SEI capability, so do academic thought lea-
ders need to engage in industry to ensure relevant research and re-
search dissemination. This will be for the good of the PSM profession
and for the long term value of our research.
4. Conclusion
PSM is a young field with great potential for further business impact
and innovation in the next 25 years. Several interesting areas for PSM
capability development and research to inform this were introduced by
the executives contributing to this article. They include:
- The need to evaluate emerging industry 4.0 technologies with a
primary focus on PSM challenges, not on the technological features,
9
Journal of Purchasing and Supply Management 26 (2020) 100621
and with explicit consideration for the role of human interaction in
addition to the role of machines in technology adoption
- The need for executives to personally and consistently engage in
talent development with a lifelong learning focus, not just in re-
cruiting and funding training
- The opportunity to focus sustainability efforts more broadly and to
grow the scope of these efforts with real revenue impact potential
- The need to prepare internally for supplier enabled innovation first,
before engaging suppliers and the migration from ensuring supply
against current business needs to also develop supply that can create
new revenue opportunities
In addition to the specific research opportunities related to these
four areas our analysis highlights critical opportunities related to PSM
leadership, especially change leadership in industry, and to dis-
semination of insights from PSM research. This may reduce change
inertia and address the gap between what ‘we know we need to do’ and
‘what we actually do.’ In this process uni-directional and simplified
roadmaps to PSM maturation serve little purpose. Commonly used
maturity assessments tend to evaluate the degree of mastery over
commonly accepted good practice. The path forward however requires
a future orientation in leadership on at least the four areas covered in
this article and their interrelations, simultaneously. While this may
challenge industry leadership and thought leaders in research, if the
field is not going to build a stronger bridge between aspiration, po-
tential and well-intended ambition on the one hand, and real-world
implementation and results delivery on the other hand, the next anni-
versary issue of this journal may not look very advanced from this one.
More importantly, the profession may slip back on the maturity curve
from value delivering strategic business partner to price negotiating and
ordering only, uninvolved with strategic business decision making. We
hope, instead, that the suggestions offered here will be outdated soon,
due to the progress made in industry and research!
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