Making the shift from tactical to strategic procurement requires more than a plan—it requires the right staff with the right skills to implement and execute on the plan. And sometimes, finding the right staff is like "using a second sheet of blank paper."

At least that's how John Gundersen, group executive, global supply chain management and contracts at Newmont Mining in Denver, refers to it. The first blank sheet is used to design the new organization while the second one is used to identify the skill sets that the staff will need to actually make the transition succeed.

Newmont is a gold mining company with operations on five continents. Its supply chain department is responsible for more than $4 billion in total spend and works with more than 15,000 suppliers globally. In recent years, Gundersen has helped restructure the supply chain organization from a decentralized one to a hybrid model. The hybrid model includes a new supply chain that is centralized for all global, high-dollar categories of spend; as well as decentralized via defined processes, procedures, and best practices that all site operations utilize, which has helped to increase operational efficiency.

Gundersen's department started down this path with the incumbent group of people it had, building the requisite systems and protocols that were required to expand to strategic procurement. "However, once we got these in place, it became apparent that we didn't have all of the right skill sets within the existing organization," Gundersen says.

Management pulled out a second blank sheet of paper and designed how it wanted all the jobs to look and what the skill sets would be for those jobs. "We realized that we needed not only technical skills, but skills to make the necessary connections with our business units and outside of the supply group," he continues. "We needed to gain acceptance from all of our internal customers, so they could help us define their business objectives."

Supply chain management created written job descriptions purely independent of the staff it had. "We didn't want to start out with assumptions about how we might fill certain positions," Gundersen explains. The job descriptions focused on detailed duties and responsibilities, as well as required experience. The job descriptions were supplemented with competency profiles, which focused on the required knowledge, skills, and abilities, as well as levels of proficiency (see sidebar).

"We then looked at the people we already had on the team to see who might have the skill sets that would be required for the new positions," continues Gundersen. Management conducted assessment processes of these individuals, followed up by interviews.

Management then conducted a gap analysis to see where commonality existed. "We then talked with each person about the gap analysis covering the skill sets we needed, what skill sets they had, where the gaps were, and how we could fill the gaps," he says.

Management matched skill levels against position requirements, identified pools of qualified candidates, interviewed the candidates to select the best individuals for the position, and then made offers to those candidates. In some cases, they needed to find the skill sets from outside of the department. Conversely, management created options for nonselected incumbents, such as other internal opportunities or severance.

Of course, when there is a transition from tactical to strategic supply chain management, it is still necessary to keep some people working on the tactical side. "We talked with our people and found out what their personal ambitions were," he notes. The department had some talented people that it didn't want to lose, and many of these individuals who did not have the desire or qualifications to shift to the strategic positions ended up fitting well on the tactical side.

As a result of expanding from tactical to strategic supply chain management and staffing the function appropriately, the department is now able to maintain an internal dialogue with its customer base on a level that it has never had before. "We are able to get them closer to the process and also get their buy-in to the process," states Gundersen.

The department has also been able to create strategy statements around its top 10 spend categories, which represent about 50% of its spend. "This is the first time we've been able to get consensus in this area, such as who our global suppliers would be and why we selected them," he reports. Before, people could bypass these suppliers on a whim. Now, while there are still some alternative options, there is more governance around not allowing these things as easily, according to Gundersen.