Responsible Chemistry made easy with procurement P ROJ E C T PA RT N E R S
Responsible Chemistry made easy with procurement Nathan Fisher, Executive Vice President, Chief Procurement Officer, at Hexion, reflects on a global procurement vision that empowers people to make sustainable change
WRI T T EN BY PRODUCED BY
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D al e Bent on K i r on Chav d a
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hat does sustainability truly mean to a procurement function? A number of procure-
ment professionals and organizations are increasingly shifting their focus toward sustainability and how procurement can play a key role in achieving key sustainability goals and driving real change, but how do we actually quantify what it means to procurement? For an organization like Hexion, a leading manufacturer serving the global adhesive, coatings, composites and industrial markets through a broad range of thermoset technologies designed to “address the most pressing issues of our time,” sustainability is the very beating heart of the company and this is reflected in each and every facet of its business strategy through its “Responsible Chemistry” ethos. Hexion is dedicated
compete in any market. Period. If we're
to the safe manufacturing and supply
not doing our job right then the busi-
of its products and so the company has
ness can't do what they need to do in
successfully positioned its procurement
the markets and with the customers they
function as one of the key driving forces
want to serve.”
behind this commitment. “We are a critical element of our value
“We have plants all over the world and many types of materials, so we have
creation strategy,” explains Nathan
to keep the plants running. It all starts
Fisher, Executive Vice President, Chief
with that commitment to the environ-
Procurement Officer at Hexion. “Our
ment and to safety. So, I don't just go get
business partners understand that we
cheap products from suppliers who run
have to do our job right in order for us to
cheap sites. Materials we buy must be
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competitively priced, but you must also
from this unique position he has seen
adhere to high levels of safety standards
firsthand the evolving perception and
and environmental standards to be a
indeed the evolving role that procure-
supplier of ours.�
ment can have in an organization. For
Fisher is a rarity in the procurement
him, one of the biggest changes first
space in that he has been Executive
and foremost is one of accountability. “If
Vice President of Global Procurement
you go back to when I first came into the
at Hexion for 15 years. Where most
leadership role, procurement was more
find themselves moving from company
of a function and it was kind of an Island.
to company completing procurement
People went into procurement and they
projects within a specific timeframe,
stayed in procurement. You didn't get a
Fisher has remained with Hexion and
lot of visibility from within the company,� w w w . c p o s t r a t e g y. c o m
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he says. “We have our raw materials,
a major function and this paved the way
which represents over 70% of the cost
for greater visibility and accountability,
of goods sold. If you put in our indirects
something of a double edged sword
in logistics, it's even more. For some
for Fisher. This move represented a
companies that same metric is under
big change for Hexion and a clear sign
50% or under 30% in some cases, which
that procurement would become a true
breeds this notion that procurement is
accountable and impactful organization
just a function.”
that needed to perform at a high level.
Fisher points to senior leaders at the time recognizing that procurement was
Another big shift for Fisher has been the collaborative efforts of business
“ If we're not doing our job right then the business can't do what they need to do in the markets and with the customers they want to serve” — N AT H A N F I S H E R , E X E C U T I V E V I C E P R E S I D E N T, CHIEF PROCUREMENT OFFICER, HEXION INC
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leaders and sales leaders with regards
information,” says Fisher. “Now there is a
to raw materials and how the teams
lot of transparency, visibility, and collab-
understand and align with one another.
oration. There are real value driven
Compare this to 15 years ago and, by his
conversations between sales leaders
own admission, the island approach was
and business leaders, not just with the
very much the law of the land. “It was a
procurement leaders and commodity
case of having one guy over here doing
managers. We are talking collaboratively
one thing and they hand over informa-
with the people on the frontline about
tion, and the business team then does
what's happening in the markets.”
their own independent review of the
With accountability and visibility comes
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clarity and efficiency, but there is also
looked to install a more collaborative
an increased pressure. More voices in
culture. “We broke that island mold very
the mix means more eyes on the perfor-
early. We just threw it out and said that
mance, something that Fisher is happy
is not going to be the way it is. You have
with, but admits that this is something
to be very comfortable with collaborating
that people need to get on board with
with everyone further,” says Fisher.
as a regular part of the strategic plan-
“When we are talking to people in
ning approach to global procurement.
other companies, it's becoming more
“Once again, if you want visibility, you're
common to find former procurement
going to be comfortable with the fact
leaders in leading roles. We do the same
that you're going to be transparent and
thing too. As an example, the leader of
have a lot of conversations and be open
our formaldehyde business, which is one
in sharing,” he says. “It's about sharing
our three major business groups used to
your commercial strategies, what you're
be in procurement. When we, the chem-
trying to do and how you want to be as
ical industry, get to a position where that
a partner. If you really want to be a value
crossover is more commonplace, the
adding component of the company, you
collaboration between partners is going
should want that.”
to increase exponentially because every-
Fisher admits that this was a big change in procurement and process
body's starting to work together.” As previously mentioned, Fisher has
for Hexion, but is keen to highlight that
been with Hexion for 15 years and when
over time the company’s procurement
asked what it is that has kept him there
staffing has changed in that where once
for such a long time, he muses and
upon a time it was very much engineer
admits that it’s a good question. What
and technically driven, it’s now made up
has kept him so motivated and engaged
of different mindsets and varied experi-
for so long? “I love to develop people,”
ences. This speaks to a key part of what
he says. “I like to coach them and I enjoy
makes procurement at Hexion different.
watching others develop, move up and
Fisher highlighted the traditional ‘island’
move on, and achieve success. If people
approach to procurement and soon
become other CPOs and business
after he joined the business this was
leaders and other high-level leaders in
“completely thrown out” as the company
companies then I think that's fantastic. I w w w . c p o s t r a t e g y. c o m
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have a passion for what I do and I have a
“We're going to do this on all the core
passion for that development.”
skills that you're here to learn and to do
An admirable and honest approach,
better. And people get invested in them.
but why Hexion? Many CPOs the world
We have to put the time and energy into
over talk of training and developing
that and it's not just me. All the leaders
their people, so what makes Hexion an
and teams do it.. We don't bring external
environment worth sticking around for?
people to do that. We're invested in this
“I spoke of accountability and valuing
and our people see that.”
procurement, but where others simply
Another key area that Fisher is proud
say that, Hexion is absolutely there as a
of is its leadership opportunities. The
company,” beams Fisher. “Hexion recog-
procurement leaders regularly get
nizes the value of the position. If I were
together and collaborate and share the
to look at this as just a building block
processes, the initiatives they are running
to get to my next salary, most people
and the skills required to be in those
wouldn't stick around. Hexion knows this
positions. When people have an inter-
and truly values their leaders and they
est in learning leadership skills, Hexion
want them to succeed and they want
creates a situation that allows these
them to stay.”
people to lead teams in order to learn,
Hexion focuses on the development
so they're comfortable in those environ-
of commercial skills through its own
ments. “That's what our whole purpose
training programs, which vary from day
is,” explains Fisher. “Whatever this
long training sessions to multiple day
procurement professional is, how can we
long workshops. The company actively
develop and give them the experiences
supports rotating people into and out of
so they are comfortable in whatever they
procurement to drive a diverse mindset
have to face, whether it's in their current
and experience. Fisher personally leads
role or more of a leadership role within
some of these programs. “It is impor-
procurement or other commercial teams,
tant to the people; we're going to spend
that's how we're investing.”
our time investing in you, not just to sit
Focusing specifically on that procure-
through this. We're going to have lots of
ment lens, Hexion leverages a procure-
conversations about what you experi-
ment compliance review board. This
enced out there in the world,” he says.
global team partners with legal experts to w w w . c p o s t r a t e g y. c o m
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focus on compliance areas that procurement will face across the world. This group works to develop and provide the right education to procurement members as to how they should conduct business anywhere in the world. “It’s about asking whether we are given the right education, the training, the processes in order to succeed?” he says. “We put on a number of sessions every year that look at the problems facing a commercial/ procurement person in the world and we talk through it, we do scenarios, we play them out and then we say, ‘How would you handle this or how would we do this?’ As leaders we're invested in that.” For Fisher, this is all focused on enabling an environment that shows the procurement teams of Hexion that their leadership supports them. This becomes a network in which they can immediately ask for advice and check in and use it as a sounding board, and one that is actively developing them through new training and development work. For a global company like Hexion, the value of this is priceless. “The key is to do the right thing,” says Fisher. “We're trying to develop them so they understand what to do when they get to those scenarios.” Investing in people is a very clear vision for Hexion, but Fisher will be the w w w . c p o s t r a t e g y. c o m
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U N D E R S TA N D I N G E Q A N D H I R I N G F O R I T I N A P O S T- PA N D E M I C W O R L D
first to admit that this has to generate
Cost is another focus, for it is the tradi-
results in one form or another. At its
tional mission statement of procure-
very core, procurement is results driven
ment. Fisher again points to the ways
and so Fisher and procurement have
in which his teams use key metrics for
to be able to reward that great faith
this but more importantly for him there
placed upon them by the company with
is a spotlight on how well his teams are
successes, cost savings and tangible
buying the materials and this speaks to
results in line with the company’s stra-
that investment in people. “You have to
tegic goals. One category that he, and
be transparent and you have to show
many in the business proudly discuss, is
these metrics and how we are driving
environmental results. Fisher points to
these results," he says. “You work with
the number one line of questioning from
your commodity manager, your leaders
him and his team: “If I've got my logistics
and your businesses to show how we
carriers, am I having too many incidents?
need to get better or to show how we
What's happening? Am I seeing a lot of
are performing well. Hopefully, all of this
injuries? What is happening in that area?
and having a better equipped team of
Are we seeing this across more carri-
people who are engaged with procure-
ers?” he says. “There is a major focus
ment is translating into better sales and
in our company on those things and we
better customer relationships. We go to
need to perform to that and track those
that next level to show, have that deeper
incidents.”
conversation of finding out how well
Naturally, supplier relationships are
we're buying material in the markets
the key to procurement and by invest-
against our competition, or how we’re
ing in its procurement people, Hexion
performing on the sustainability and
has people that are switched on and
safety perspective. Ultimately In the end,
engaged. This is particularly key to
we have enabled an environment that
another success for Fisher; supplier
allows us to have the conversation with
assurance. “Are we getting materials to
people that says we are performing really
our plants, quality materials at the right
well in this area but also, here's an area
time?” he says. “Again, we track to that
that we're currently focused on to make
very well. You have to have that focus to
better.”
do that.”
The supplier relationships are w w w . c p o s t r a t e g y. c o m
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incredibly important from the outset for Fisher. He and his team ensure that these are relationships built on honesty and integrity. Fisher goes as far as saying that no amount of money in the world would make him and his team violate either of those things. “Suppliers see that and they know that we are ethically-driven,” he says. “In the chemical industry, it's more about building strategic relationships. We are still hard negotiators. We bring expectations when there is something changing but there's a respect for our suppliers.” Through its Responsible Chemistry ethos, Hexion takes its sustainability responsibility incredibly seriously. The sustainability conversation has changed incredibly so in recent years, and so the company has ensured that it is both structured and positioned itself in markets that allow it to look at its sustainable approach to its operations and make active changes. “As a procurement organization, we are actively supporting Hexion’s initiatives. However, sustainability flows along with community enhancement and involvement. We're connected with the external world. 80% of our job is external with suppliers and carriers and we leverage partners in the world on sustainability,” 18
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says Fisher. “For Hexion, before we talk sustainability, we always talk about safety. It’s very important to care for your associates, their families and caring for all our stakeholders and our plants and our environment, that has always been a part of our culture.” After what has been 15 incredibly successful years, building and enabling a procurement function that truly drives Hexion forward, the future still represents one of opportunity for Fisher and his team. With a digital architecture program on the near horizon, one that will reshape and digitally enable the user experience in procurement through data analytics and contract management, Fisher is excited to see this next chapter of procurement unfold.” “We’re just looking to improve the way the professional procurement person does their role, and make them better at what they're doing,” he says. “It's very exciting for us, for the users and for the suppliers.” Fisher is a man that very much believes in the power of leadership and using that power to develop others and empower them. It’s what he’s done his whole career and what he will no doubt strive to do until the day he retires. For him 20
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“ We have to put the time and energy into that and it's not just me. All the leaders and teams do it. We don't bring external people to do that. We're invested in this and our people see that” — N AT H A N F I S H E R , E X E C U T I V E V I C E P R E S I D E N T, CHIEF PROCUREMENT OFFICER, HEXION INC
there is no secret to success, no silver bullet or lightning in a bottle. It’s always about learning. “The most important thing a leader can do is put the right team in place and understand how you can support them,” he says. “Put in something that says people feel good to come work in your organization because you're going to support their development and their future. “In doing that we get very good people that come to procurement. They go off and do very good things, whether it's in another organization or another company, they do good things. I think that's the key; having an environment where people feel that they are supported in everything they do.”
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www.hexion.com