Sonoco leverages SRM techniques to build procurement team
By William Atkinson -- Purchasing, 12/11/2008 2:00:00 AM
One of the most important functions of a supply management organization is to develop long-term, productive relationships with suppliers. For Marc Ensign, director of strategic sourcing, international procurement and supplier diversity at Sonoco Products, the best procurement executives strive for the same relationships with their employees. In fact, some of the strategies used to develop supplier relationships can be used to develop employees.
Hartsville, S.C.-based Sonoco employs 18,600 people and manufactures industrial and consumer packaging at 335 locations worldwide. And while a lot of companies say that their employees are their most important resource, "We actually try to live that" says Ensign. And to put a finer procurement point on it, he says Sonoco firmly believes that, if it wants to have excellent relationships with its suppliers, then Sonoco needs to have excellent relationships with its procurement employees.
Ensign says the four main strategies to approaching employee relationship management are: source, select, develop and retain.
Sourcing. "First we identify the specific schools that we want to target," says Ensign. There are four universities that Sonoco has found to have the right kind of talent and diversity, where the students would not only have an interest in working in a small town in South Carolina, but would thrive in such a location. "At one time, we tried to recruit from other schools, but were less successful, because the students wanted to live in other areas," Ensign says.
Supply management at Sonoco pairs up with human resources to visit the four schools. The process is very traditional, such as setting up at job fairs. Where Sonoco begins to differ from other employers is that it offers a specialized internship program for students interested in procurement.
"We usually provide interns with higher-level assignments than they would find at many other companies," explains Ensign. "We are a $4 billion company, but we are very flat, which provides interns and new recruits with access to the upper levels of the organization immediately." This provides them with a lot of early experience in leading and managing.
Selecting. Sonoco tries to create a strong first impression when a new recruit arrives to the procurement organization—which may be as simple as a fruit basket in their hotel room but it's a gesture to set the relationship off on the right foot.
The next step is a formal interview process. Recruits interview with various people throughout the day. However, each person who conducts an interview has an assigned role and questions to ask the recruit so the recruit doesn't get the same questions seven times in a row. One person may assess the recruit's talents while another may assess outside interests. One might talk about a specific project while another might provide the "sales" part of the interview, taking the recruit to lunch, driving them around town and talking about the benefits of living in the town and working at Sonoco.
At the end of the day, the interviewers get together as a team and put all of the pieces together. This approach ensures the most thorough investigation, as well as putting forward the company's best face.
Developing. "We invest a lot of time in developing our procurement staffers," Ensign says. First, there is a new employee orientation process specific to supply management recruits. "In the old days, they would walk in, be given a desk, computer and an assignment, and told to start working," he says. But today, there is a 100-step process, which covers everything that a new employee would want to know: Where is the bathroom? What is a vacation day? What are the different projects?
The process also includes discussions with the new employees' managers, who discuss their supply management philosophies, what they think about SRM, how they conduct performance management and other similar points. "We also assign a coach to each new employee, who guides the employee through the 100-step process, and is also someone the employee can feel comfortable asking any and all questions," continues Ensign. The employee can also network with the coach after orientation is completed. The coach has a checklist and marks off each step as it is completed and determines how quickly the new employee progresses through the 100 items. "We also provide financial recognition to the coach, because it does take extra time for them to do all of this with the new employee," Ensign points out.
There is also a rigorous quarterly talent evaluation process, where a leadership team composed of the vice president of operating excellence and four directors (including Ensign) review all employees and monitor their needs and development. After spending a few minutes with each employee, the team ends up with an idea of how the person is performing, what their strengths and weaknesses are, and what opportunities may exist for that person as it relates to future development.
"In addition, once or twice a year, we ask the managers to come in and discuss the performance of the employees who work for them," continues Ensign. "This provides us with a closer view of their performance. We also get to see how our managers are developing their people."
The team then looks at the development plans for the supply management organization as a whole. Part of this is "skill gap closure" involves identifying skills that may be missing in supply management, and then using this information as the basis for the training curriculum for the following year.
There is also a future skills process, which looks ahead to where the business wants to be in five years. From there the supply management organization determines where it needs to be in order to meet the needs of the business. "We then look at the skills that we think will be necessary in five years and then identify major skill gap areas," he says.
While the skill gap closure process looks at skill gaps within supply management, the future skills process looks at how supply management will have to change its skills to meet the overall organization's business needs.
Retention. One result of the comprehensive development process is that employees appreciate just how much time the company spends working with them and expressing interest in their future. In addition, the company has quarterly business meetings where management talks about what is happening in the business in general.
Sonoco also has a "career tiering" chart. This gives employees the opportunity to consider some other jobs, either within supply management, or elsewhere in the company. The chart shows relative levels in the organization. For example, a sourcing manager is on the same level as a logistics manager, so if an employee wants to make a move from one to the other, it would be a lateral move and may be able to occur if the employee first acquires some new skills. Employees in supply management can also compare job levels for the IT organization, finance organization, HR organization, operations organization, and so on.
While lateral moves are often available in the lower levels of the organization, they may not be so easy to make further up in the organization. An employee who wants to move from supply management to another function may need to accept a position one or two levels below his or her current level.
As a result of its comprehensive program to source, select, develop and retain employees, Sonoco and its various departments don't achieve 100% retention. However, they don't want to. "For example, some of the people we lose in supply management are ones who move to other parts of the organization outside of supply management," explains Ensign. The department may also lose some people that, after awhile, it has become obvious that they just aren't going to work out. "In terms of voluntary resignation, I can only think of one or two in the last several years," says Ensign.
To read more SRM and strategic sourcing case studies, check out Purchasing.com's case study archive.
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