SGS – Brochure 2020

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Mahmood Shah, VP of Procurement and Supply Management, explains how surrounding yourself with the right people brings real change in procurement WRI T T EN BY PRODUCED BY

D al e Bent on K i r on Chav d a

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top me if you’ve heard this one before; procurement has changed and has found itself

moving beyond a simple cost center and has firmly secured a seat at the table in business. While that may be true, the conversation surrounding procurement has moved beyond simply pulling up a chair at the high-level meetings to answering the question: what more can procurement do to make businesses become leaner and more agile organizations? Organizations that are powered by smart technologies in order to mitigate risk and improve sustainability?

This is certainly the case for Mahmood Shah, Vice President of Procurement and Supply Management at SGS. As the world’s leading inspection, verification, testing and certification companies, SGS is the global benchmark for quality and integrity. With more than 94,000 employees, SGS operates a network of over 2,600 offices and laboratories around the world. It becomes very clear then, just how integral procurement is and has

supply chain and procurement disci-

always been to SGS. The challenge is

plines. He was brought into SGS to help

taking it further.

improve the maturity of the procurement

Shah joined the business back in 2019

function of SGS’ North American region.

having spent some of his younger years

He intends to achieve this through

working for the likes of British Airways,

process improvement, technology and

BMW Group and MetLife in various

improving the culture.

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remains a wide spectrum in levels of procurement maturity across every industry and harnessing the lessons learned from other companies can help the less mature functions to accelerate their The first challenge for anyone looking

growth. We have access to use cases

to improve the maturity of anything, is

that procurement leaders can refer to,

to understand what is actually meant by

and can gain an understanding of, tactics

maturity at all and how it can differ from

and strategies that are proven to work,�

company to company. Or, perhaps most

explains Shah. “Procurement leaders

importantly, how the different levels of

can use benchmarks that may not have

maturity can offer valuable insight. “There 5

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been previously available, to help build

challenge the norms and facilitate the

business cases within the organization to

collaboration between suppliers and

improve the efficiency and effectiveness

the business. But it can only do this if it’s

of their function.”

enabled through insight. “You have to be

Shah points to a notion of being a

prepared to do your homework by under-

trusted advisor for procurement and how

standing your company and business line

it is one of the key ways to add value and

goals and objectives, the challenges they

to be seen as a forward thinking func-

are facing and the industry trends as well

tion. For him, it’s about understanding

as accepting you may never know the

that role as there are often assumptions

current state of the business as well as

that ‘having a seat at the table’ means

your stakeholders,” he says. “Having that

that procurement does everything the

insight helps build your credibility with

stakeholder asks of them. The reality is

the business, especially where you’re

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“This whole transformation will only succeed if there is an environment that promotes collaboration where everybody gains value from the constructive discussions that take place” Mahmood Shah, VP of Procurement and Supply Management

procurement leaders focus on the pres-

what is deemed to be best-in-class using

ent state statistics only, which can lead to

similar industry benchmarks. “As with any

business stakeholders feeling as though

transformation program, you have three

you’re not adding real value because

areas of consideration: people, process

you’re not telling them anything that they

and technology and these are the three

don’t already know.”

areas that I really focus on,” explains

“I believe lessons can be learnt from people that have already been there and

Shah.

“Together we explored how the func-

done it and are considered trusted advi-

tion was being managed, the way we

sors within their own organizations, and

engaged our business stakeholders, how

using your network is one the quickest

the operations were being managed

and most effective ways of acquiring that

and our effectiveness in managing and

knowledge.”

developing talent. These questions

Shah set out with a three-year strat-

were digging deeper and deeper into

egy that was developed by interviewing

each one of those areas. This approach

stakeholders in order to understand their

allowed the individuals in my team to

business challenges, their goals and

provide an accurate assessment of

objectives and their pain points. Then, he

the current state of our procurement

assessed the skills and the capabilities of

and vendor management function and

his team using benchmarks to ascertain

provided a heatmap of opportunities for

the maturity gap. Something he feels is

improvement.”

very important to note.

Attention then turned to understanding SGS’ procurement performance versus

It’s incredibly important to Shah to acknowledge that this roadmap and journey isn’t based on his understanding, 9

but the understanding of each and every person doing their job. It allows Shah to create themes that he will then look to improve upon across both sourcing and vendor management so that he can then explore the culture, the standardization, streamlining and the optimization of the sourcing and vendor management operations. He wanted to underpin all of that with a plan to develop and manage the procurement and supply chain management talent.

At the time of writing, Shah is only seven months into this journey. In that time, he has completed the analysis and has an outline of the current state. SGS now has a plan in place for the next three years and has already begun making changes. One such change is the introduction of regional category strategies.

Shah has moved away from individuals managing multiple categories, to develop subject matter experts, by assigning one category per person and assigning them regional responsibility. “This really helps my team to enhance their skills and their understanding of the category,� he says. “It helps to align these roles and their associated responsibilities with what one would find in the labor market and provides the opportunity for individuals to develop a deeper skill sets 10

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within category management, which is an area that I want my team to focus on.”

This also provides an opportunity for Shah as a leader to be able to provide members of his team with greater opportunities for their own career paths. He now has the ability to ‘increase the skills in their toolbox.’

It becomes clear that for Shah, people are incredibly important to procurement.

Again, stop me if you’ve heard this one before: people power procurement. For Shah, it really is more than words. The roadmap he has planned out for SGS champions the people for it is entirely dependent on them. This stems back to a sentiment he has carried with him throughout his entire career. “Early on in my career a manager asked me; what can I learn from the best leaders I’ve worked with? And what kind of working environments they had created,” he says.

“I want to recreate that for the teams that I manage. This whole transformation will only succeed if there is an environment that promotes collaboration where everybody gains value from the constructive discussions that take place.”

Sometimes, that discussion can involve reluctance and pushback against what Shah is looking to implement. He takes this in his stride and finds that in most 11

cases, some of the greatest value comes from those pushbacks. “You’re always learning from others. You may have a certain picture in your mind, but it won’t be the same as someone else’s,” he says. “Do you correct it? No. It’s about talking it through and making sure that we move forward together.”

While it is imperative for Shah that his procurement team are brought along this journey, the importance of having the right technology cannot go unnoticed. Often seen as the ‘sexy’ part of a procurement transformation story, the approach to technology can make or break the whole process. SGS already utilizes e-procurement and e-sourcing suites and analytics tools. What Shah’s working on is a collaboration with the global procurement excellence team that is looking at pushing the technology processes even further. As such, SGS is currently working with Tradeshift to improve the efficiency of invoice processing by 25% as well as SHI International to help streamline the process of securing IT software (such as laptops and desktop suites), a process that previously took up to six weeks to complete and now takes just 3 days.

One of the more significant technology partners has been Alekstra. SGS required a dispersed wireless service management process as a result of issues such as low user satisfaction, long lead times, poor customer service levels and high costs. “We partnered with Alekstra to introduce a more holistic process framework,” says Shah. “We now have a browser based online portal running on Alextra’s platform which is very customer-centric. That’s a key theme of what procurement’s trying to establish.”

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As an example, SGS no longer requires

reducing our wireless bill by about 31%.

anyone to pick a mobile phone plan

It’s really helped us, because it’s a show-

or remember to activate international

case for us when it comes to technology

services when working. Elsewhere, it’s

leadership and it’s something that we can

finance department can automatically

share with some of our affiliates across

upload invoices to their ledgers through

the globe in terms of what we could do

this portal.

when we have good partnership.”

“As a result of working with Alekstra, we have seen a tremendous benefit in 14

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SGS is a world leader in inspection, verification, testing and certification. It is

also the global benchmark for quality and

goes without saying how that responsibil-

integrity. Sustainability runs deep within

ity is only magnified within SGS.

the company’s very veins. But sustaina-

In fact, the company’s very own

bility is often the one topic that gets lost

Paula Ordonez Crespo, Global Head

in the stories of procurement transfor-

of Corporate Sustainability, described

mation. Technology, people and process

what sustainability means to her.

take all the plaudits, but sustainability is

“Organizations must recognize that their

becoming increasingly important to how

role is no longer delivering shareholder

a procurement function operates, and it

value alone but creating value for all 15

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“If you actively participate in the change management programs, you get to influence it, rather than sit on the periphery and wait for impact to happen to you” Mahmood Shah, VP of Procurement and Supply Management

stakeholders and giving back, at the very

will achieve this by replacing fleet vehi-

least, what their operations take from

cles, recycling technology hardware,

society.”

implementing energy efficient lighting,

For Shah, this is a powerful statement

and exploring the use of renewable

that creates a truly noble cause for him

energy sources. “We are also integrating

and his teams to follow. “Our continued

sustainability into our sourcing process

leadership in sustainability is something

and have set ourselves high standards

that everybody at SGS is proud of and

as an organization,” says Shah. “We

it’s a great motivator for us as well. It’s

have a comprehensive list of metrics that

part of the very fabric of what we do

quantify and demonstrate our value to

and has resulted in SGS being recog-

society.”

nized as an industry leader in the Dow

Despite the considerable successes

Jones Sustainability Index for six years in

achieved so far and the changes imple-

a row” he says. “Our mission for global

mented, Shah and SGS still find them-

procurement is to maximize value and

selves at the very start of this procure-

innovate with our suppliers and stake-

ment journey. Over the course of the

holders, to drive efficiency and support

next three years, much more will change.

profitable growth in a sustainable way.

Some of those changes will be antic-

Sustainability really is an integral part of

ipated, with processes factored in to

the procurement mission statement.”

mitigate and embrace these changes,

So how is sustainability reflected within

but others may be unforeseen. These

this three-year procurement strategy?

changes will be the ones that Shah feels

SGS will look to reduce over 5% of all

will truly empower SGS’ NAM procure-

greenhouse gas across North America. It

ment function. “You need to take a 17

long-term view of where you are headed, but still be agile enough to pivot at any point in time,” he says. “You have to be flexible. It would be great to just move from accomplishing one milestone to the next but things rarely work out that way.”

When all is said and done, it will always boil down to people for Shah. As noted above, he is a firm believer of surrounding yourself with the best people, learning from them and then stimulating that environment so that you continue to learn together. In procurement, professionals now have a position in which they can influence change and drive innovation, but only if they do what’s necessary to enable that. “If you actively participate in the change management programs, you get to influence it, rather than sit on the periphery and wait for the impact to happen to you,” he says.

“That’s how you actually navigate through the changes that take place.

The benefits are many, you gain a better understanding of the challenges you are facing, you learn from your mistakes and successes, and you move forward, together as a team.”

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