CPOstrategy – Issue 15 by B2e Media

I s sue 15 â&#x20AC;˘ www.cpostrateg y.com

Why procurement should be the hero in your business

Why procurement is even more important to Uber than you think with Brish Bhan Vaidya, Head of Strategic Sourcing & Supply Chain at Uber APAC

Five things we learned from Procuriousâ&#x20AC;&#x2122; How Now? Whitepaper

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

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Welcome to issue 15 of CPOstrategy! AS THE YEAR continues to fly by, we continue to bring you some of the biggest stories tackling the real heart of the procurement and supply chain landscape, and this month’s cover star is a true testament to that. Nathan Fisher, Executive Vice President, Chief Procurement Officer, at Hexion, has a story that might make you do a double take. In a world where we are constantly moving from job to job, delivering transformation projects, realigning procurement functions and moving on to the next challenge, Nathan has been at Hexion for 15 years. Why? A commitment to results, responsible procurement and most importantly - investing in people. “I love to develop people,” he says. “I like to coach them and I enjoy watching others develop, move up and move on, and achieve success (...) Hexion knows this and truly values their leaders and they want them to succeed and they want them to stay.” Be sure to read this incredible interview as Nathan tells us that one day he would love to pick up a copy of CPOstrategy and find one of his own prodigious talents gracing the front cover! Elsewhere, Brish Bhan Vaidya, Head of Strategic Sourcing & Supply Chain at Uber APAC, tells us why procurement is even more important to the ride sharing company than you think, and how it continues to drive the transformation of the business. We examine the results of Procurious’ How Now survey on the impact of COVID-19 on supply chains, and what’s next for procurement and supply chain leaders, we have part one of a fantastic Q&A on the future of procurement, and David Brittain of Amazon Business tells us why procurement should be the hero in your business in digital transformation.

Enjoy the issue!

EDITOR IN CHIEF Andrew Woods

EDITOR Dale Benton

SOCIAL MEDIA MANAGER Callum Rivett

CONTRIBUTING EDITOR Kevin Davies

CREATIVE LEAD Mitchell Park

VP GLOBAL FINTECH & INSURTECH Alex Page

VP TECHNOLOGY Andy Lloyd Craig Daniels

VP PROCUREMENT Heykel Ouni Greg Churchill

PRESIDENT & CEO Kiron Chavda

Dale Benton, Editor content@b2e-media.com

PUBLISHED BY

CONTENTS

Hexion

Covid19 and the future of procurement

Uber APAC

Digital transformation: Why procurement should be the hero in your business

Tabreed

Five things we learned from Procuriousâ&#x20AC;&#x2122; How Now? Whitepaper

62 80

WRI T T EN BY PRODUCED BY

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

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

HEXION

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.â&#x20AC;?

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. â&#x20AC;&#x153;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

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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

HEXION

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

w w w . c p o s t r a t e g y. c o m

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HEXION

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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HEXION

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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

HEXION

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

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,” 22

HEXION

w w w . c p o s t r a t e g y. c o m

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 24

HEXION

“ 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.”

w w w . c p o s t r a t e g y. c o m

PART ONE

Covid 19 and the future of procurement WRI T T EN BY

D a le B ent o n

PART ONE OF A DI SCUSSI ON WI TH I AN T HOM PSON, R EGI ONAL DI R ECTOR OF IVALUA, I AI N CAM PBELL M CK ENNA, MANAGI NG DI R ECTOR OF SOUR CI NG SO LVED, AND JON HANSEN, WR I TER A ND SPEAK ER FOR PR OCUR EM ENT INSI GHTS LOOK TO EXPLOR E THE CRUCI AL R OLE THAT PR OCUR EM ENT IS PLAYI NG I N THE COVI D19 PANDEMIC A ND TRY TO I M AGI NE WHAT THE F UTUR E OF PR OCUR EM ENT WI LL LOOK LI K E

Looking at the strategic evolution of procurement, what are some of the key trends you have seen throughout your career? IAN THOMPSON: There’s almost a trend over 20 years where it was very much about costs and driving out costs, and then an aspiration

IAN THOMPSON, REGIONAL DIRECTOR OF IVALUA

to understand how you can get value and innovation from your supply base. Then more laterally, and very recently driven by COVID, seeing more of that innovation and viewing suppliers for their capabilities and what they might be able to do for you, and do for your go to market. It’s a more exciting space, year by year. I would say that for the first three quarters of my career, you go to a procurement conference and one of the key topics is,

IAIN CAMPBELL MCKENNA, MANAGING DIRECTOR OF SOURCING SOLVED

how do we get at the top table? How do we really have the attention that’s the true C-suite? More recently, businesses are starting to understand the criticality of procurement.

IAIN CAMPBELL MCKENNA: I read a really interesting report in Harvard Business Review, and it reported that 30% of all organisations had a remote working strategy in place before 28

JON HANSEN, WRITER AND SPEAKER FOR PROCUREMENT INSIGHTS

COVID19 AND THE FUTURE OF PROCUREMENT

COVID19. Now, if you think about those

a Crossroads, and one of the things Kelly

stats then, and look at now, virtually

extracted out from many years ago is

everyone at the moment is working from

that procurement was the place you sent

home. It’s interesting, in the initial weeks

people when you didn’t want to see them

I had spoken to many CPOs and they

anymore. In my early days of procure-

reported that they’ve seen productivity

ment people didn’t choose it as a profes-

increase, some of which had seen up to

sion as they do today. They fell into it.

a 60% increase in productivity from their employees, which is amazing. From the supplier side, they’ve had

It was very much a transactional approach to procurement of achieving the lowest price and being able to

more regular face-to-face contact via

deliver value was measured in how much

web conferencing, so it made us talk

you didn’t spend. These things evolved

about stronger relationships with the

over time and so now as the profession

suppliers. From the standpoint of the

has moved forward, and as technology

skill set for procurement professionals,

has advanced, procurement has moved

as well as everyone else, we’re really

out of the back office. We’re not no

having to acquire a different mindset and

longer an adjunct to finance.

people having higher levels of emotional

The big change that’s happening,

intelligence and their ability to moti-

inspired by the COVID-19, is that a lot

vate and work efficiently. It’s easier said

of the practices that we say we have to

than done, because not everyone has

improve on we’ve gone beyond that now.

the ability to work from home. I think as

Now we’re looking at it from the stand-

procurement leaders, they need to reas-

point of saying supplier relationships

sess how their teams are structured and

aren’t just a nice idea, they’re becoming

how to modify that as well as the CEO

essential. We have to manage contracts

or the CFO’s criteria when they’re hiring

more effectively. We may have to extend

new procurement leaders and how they

DSOs. All of these things, the financial

can adapt.

risk and gain of the suppliers become the buyer’s financial risk and gain. What this

JON HANSEN:

has done is magnified the importance of

I’ve got a smile on my face. Kelly Barner

some of those long standing things.

and I wrote a book called Procurement at

If we progress towards a new tomorrow w w w . c p o s t r a t e g y. c o m

“ From the standpoint of the skill set for procurement professionals, as well as everyone else, we're really having to acquire a different mindset and people having higher levels of emotional intelligence and their ability to motivate and work efficiently” –

IAIN CAMPBELL MCKENNA MANAGING DIRECTOR, SOURCING SOLVED

for lack of a better word, procurement and supply chain management are being called to step into the light and take leadership, not only in the areas of procuring or acquiring goods and services, but managing and setting the tone for

Technology has evolved and with that comes a plethora of buzzwords and solutions so how do you cut through that noise and apply a procurement lens to it?

budgeted savings. Managing payables, managing risk, rather than talking about

IAN THOMPSON:

risk and dealing with it, actually getting

I think there’s just so many buzzwords

ahead of risk.

from Procurement transformation,

COVID19 AND THE FUTURE OF PROCUREMENT

Blockchain and AI, but what does all

conversation with CPOs about Blockchain

this mean? There’s a couple of things

and I actually started off by saying that

you can do. One is actually being brave

my 13 year old son had asked me the

enough to be honest and say, “Well,

night before what Blockchain was and

what is procurement transformation or

that was a challenge. I actually put the

digital transformation? What does that

challenge out to those CPOs; imagine I’m

actually mean? What’s the benefit of

13 and explain why we as procurement

that? Is it a journey or is it something

professionals are even talking about

that you can achieve?”

Blockchain. Be brave enough to be the

I was actually asked to lead a

one that calls the emperor’s new clothes w w w . c p o s t r a t e g y. c o m

in some of these things. Because if

Those 2% who do have a strategy relat-

there aren’t outcomes, and it’s not clear

ing to their supply chain, according to

what you’re trying to achieve, then the

a Deloitte 2019 survey, are dissatis-

technology is irrelevant.

fied with the results from their digital

It is massively about people and rela-

transformation. Now why am I sharing

tionships. That is the core of it. A CPO,

this information? Because the failure

with their experience and their relation-

of digital or e-procurement initiatives

ship skills is not going to be replaced

has little to do with technology. Talking

by AI anytime soon. Yes, some relatively

with CPOs today, it has more to do with

simple tasks might be taken out of the

the fact that it is people that drive the

transaction side of procurement. Think

transformation within an organisation.

honesty about these things, from our

The cultures within the organisations

understanding of them and the vendor’s

have to shift before technology can

understanding, and think about the

be fully leveraged. I don’t care how

community and what can be achieved

advanced it is.

and what can’t be.

No one questions whether the technology will work. What they’re

JON HANSEN:

questioning is how do we make it

I’m going to put on my high tech hat,

work? That starts with things like how

because I go back to the days of

do you develop teams to progress

punch cards and chads and CPM and

procurement from a practical side,

pick commands, long before DOS and

beyond the technology?

Windows and high tech was what it

It isn’t a question of technology

was. From a technological standpoint,

anymore, it’s a question of the ability of

the progression of technology has

organisations, both on the practitioner,

been nothing short of amazing. No one

and the provider side, to focus on what

can dispute that the technology works.

needs to be done from a people stand-

McKinsey did a survey which said that

point, to facilitate change and full utiliza-

out of the 1650 executives of incum-

tion of that technology. Until we address

bent companies, globally, only 20% had

that majority who aren’t satisfied with

a digital strategy. Only 2% of those had

their digital transformation results, it will

a strategy relating to their supply chain.

continue to be a problem.

COVID19 AND THE FUTURE OF PROCUREMENT

“ Be brave enough to be the one that calls the emperor’s new clothes in some of these things. Because if there aren’t outcomes, and it’s not clear what you’re trying to achieve, then the technology is irrelevant” –

IAN THOMPSON, REGIONAL DIRECTOR OF IVALUA

w w w . c p o s t r a t e g y. c o m

COVID19 AND THE FUTURE OF PROCUREMENT

Tell me about the reaction you have seen from CPOs with regards to the early days of the COVID19 pandemic?

going to fix it overnight. What’s going to fix it is society working together on the problem.

IAIN CAMPBELL MCKENNA: IAN THOMPSON:

I spoke to one CPO who, as soon as

It’s been impressive. I sat on a round-

COVID-19 happened and their govern-

table get together with CPOs from

ment actioned that everybody’s got to be

across the UK and there was the

in self isolation, he set up groups for his

delivery network of a big manufac-

teams that saw weekly training and dress

turer of food, there was a construc-

up sessions and about 95% of the staff

tion company that’s keeping the roads

attended. He put a real effort into making

and sanitation going and there were

sure that his whole team felt inclusive

people involved in entertaining the

and they felt that they weren’t in isola-

nation. When I heard what they’d

tion, they were still part of a team. I think

been through to make sure there was

procurement professionals really require

continuity of supply to make sure the

new skills now and so do new procure-

country was getting the things that we

ment leaders. As a result, I think assess-

need and the cooperation with each

ing where both current and prospective

other was genuinely impressive and

leaders are from a standpoint of being

heart warming, I thanked them then

able to manage a remote team is really

and I thank them now.

essential and provide some sort of char-

Instead of seeing a supplier as some-

acteristics as to what makes an excel-

body who has a set of products or

lent remote leader, and how that differs

services that are line items, people are

from the standards of managing teams

actually seeing suppliers and asking;

in the office from nine to five. I have

what can they do? Thinking what’s

seen quite a dynamic shift in these lead-

possible, what can be done. I think

ers being able to manage those teams

it’s really important that none of us

effectively and that was a surprise that

say we’ve got the answers. It’s a very

they’ve stepped up to the plate and they

big, serious, and sad situation and no

took the bull by the horns and made that

vendor module or Big Four advice is

happen, and done it really well. w w w . c p o s t r a t e g y. c o m

JON HANSEN:

Think of that. That’s before COVID hit.

I think the inherent skills we’ve needed

Now, what we’re dealing with is the

to do the job, not only before now but

transformation of procurement and that

through this crisis and other crises, we’ve

means that the skills have always been

all been aware of them. But we haven’t

there to some degrees with a great deal

acted on them. That’s the general consen-

of latency, but certainly compromised by

sus. A survey found that 63% of CPOs who

the continuing insistence that we are a

responded to the survey indicated that

cost reduction vehicle rather than a stra-

they didn’t think their current procurement

tegic vehicle for an organisation. Within

teams possessed the necessary skill sets

the ranks of the CPO in the procure-

to deliver on their strategic objectives.

ment world, I think the realization is

COVID19 AND THE FUTURE OF PROCUREMENT

that we’ve known what we need to do.

it’s elevated the awareness of just how

We even know in many instances the

important procurement is. With this eleva-

skills we need to have. But we haven’t

tion comes a new recognition of how we

developed them. We’ve been confined

have to further capitalise on those skill

by the definitions of external factors, of

sets which we already have and build

how our role in the enterprise has been

on the ones that we know we have, but

traditionally even though there’s been

haven’t utilised.

the general recognition of procurement strategic importance over the years has

Stay tuned for part two of our discus-

increased gradually.

sion on the future of procurement in

What COVID has done, if anything, is

“ No one questions whether the technology will work. What they’re questioning is how do we make it work?” –

JON HANSEN, WRITER AND SPEAKER FOR PROCUREMENT INSIGHTS

next month’s issue of CPOstrategy!

HOW TO SURVIVE AND THRIVE IN THE VIRTUAL INTERVIEW WORLD In the next issue of CPOstrategy, Iain Campbell-McKenna of Sourcing Solved will share the preliminary results of his recent survey on virtual interviews and provide useful tips on what you can do to maximise the opportunities of a virtual interview to land your dream position. Whether you are a candidate or an employer, there is something in this article for you so stay tuned.

w w w . c p o s t r a t e g y. c o m

Maximum impact Brish Bhan Vaidya, Head of Strategic Sourcing & Supply Chain at Uber APAC, discusses why procurement is even more important than you think, and how it continues to drive the transformation of the business

WRI T T EN BY PRODUCED BY

N el l Wal ker Gr eg Chur c hi ll

or a relatively young company, Uber hasn’t wasted any time becoming a house-

hold name. Our media is flooded with the ride-sharing giant’s name, as it sweeps the globe with its expanding roster of services, and it’s even become a common benchmark, with startups all over the world describing themselves as ‘the Uber of (insert service here)’. The name has become a mark of expertise and good business sense, and allowed the business to find exciting footholds in rapidly growing markets, such as the Asia-Pacific (APAC) area. Brish Bhan Vaidya, Head of Strategic Sourcing & Supply Chain at Uber APAC, was one of the early members of the sourcing function, globally, and the first

lost on him. “When companies want to improve

of the sourcing function’s employees in

upon their revenue, the method is to sell

the India South Asia region (and second

more, and if they want to reduce opera-

in APAC region, including ANZ). At the

tional expenses and get into profit mode,

time, the company was experiencing

the largest contributor to that – after

rapid growth in India; now, the business

sales – is always the procurement func-

has expanded into every APAC coun-

tion,” Vaidya explains. “Sales can define

try. It is thanks, in part, to procurement

what the margin is, but it’s generally the

experts such as Vaidya that this level of

procurement function which has the

growth has proven possible, which is

significant impact.”

why many other branches are repositioning themselves to invest in and prioritise

A spotlight on procurement

strategic sourcing. This importance of

Traditionally thought of as a back-of-

shining a spotlight on procurement is not

fice function, procurement is now much

U B E R A PA C

something which holds hands with every

and my team meet a lot of decision-mak-

other function in a business – but that

ers, including the CXOs from the supplier

doesn’t mean those partnerships are

side, and we don’t forget to pitch Uber for

necessarily straightforward, and a great

Business (U4B, the team catering to the

deal of strategic thinking has to go into

ground travel needs of the corporates) to

making it seamless. For Uber, this meant

them in our discussions,” Vaidya explains.

a top-down approach – something which

“I was doing a deal with a large telco in

is made easier thanks to advanced tech-

India and we asked if they would accept

nology – and, for Vaidya, it helps to work

us as a partner when their employees

closely with operations and other teams

travel. Those kinds of deals can become

and ensure that both sides of the busi-

very easy to negotiate, and management

ness operate in equal harmony.

is very supportive of such ideas.”

“One of the interesting partnerships I

Vaidya believes this is one of the

can mention is the 360-degree approach

unique features of the way Uber marries

that we have with our suppliers. Myself

its various functions (e.g. sales, safety and w w w . c p o s t r a t e g y. c o m

U B E R A PA C

quality, community operations etc.) and

the procurement team brings to their

procurement – it’s something not many

business, where procurement not only

companies do. “I’ve rarely heard of sourc-

possesses procurement acumen, they

ing people pitching their company’s prod-

have business acumen too. In Vaidya’s

ucts to suppliers, but here at Uber, we

experience, many businesses think their

have a product that’s used by every type

procurement is of world-class quality, but

of company, because everybody trav-

in his experience, that’s not always the

els.” This kind of pitching of the compa-

case. “They might claim to have great

ny’s offering, between two procurement

procurement, but the moment you start

teams, helps to support what the sales

benchmarking them against the stand-

teams does and stimulate new avenues

ards and comparing to other organisa-

of growth.

tions, they realise there is a lot to achieve still,” he says.

A question of procurement maturity

“As a simple example, most organisa-

One reason the procurement and other

tions run multiple enterprise and func-

operations - including sales and BD -

tion level tools which do not talk to each

partnerships have been working so well

other, and, even if they are integrated, the

for Uber, while others might still keep the

information is either not used by all or not

two segments more separate than they

used fully. This is not the sign of a mature

need to be, is the trust that they have

organisation. Similarly, if a procurement

built with each other. Most of the busi-

organisation claims to manage 100%

ness stakeholders know the value that

of the spend effectively, they still keep

“This people-centric focus extends, of course, to suppliers. Uber’s strong supplier relationship model focuses on collaboration, and showing suppliers what the value is for them” — B R I S H B H A N VA I DYA , H E A D O F S T R AT E G I C S O U R C I N G & S U P P LY C H A I N AT U B E R A PA C

w w w . c p o s t r a t e g y. c o m

running analysis to understand the tail-end spend from time-to-time.” For Uber, the last four years have marked a turning point in its own procurement maturity. Back when Vaidya joined the business, there were only seven or eight sourcing and procurement employees working for the company in the entire world – prior to that, every major deal was happening within the US and the rest of the world simply followed. “Now, we’ve done a lot of optimisation, where processes are set, tools are available and talent is at work,” says Vaidya. “The initial challenge, when I joined and happened to be the first in the region, was introducing myself to businesses by saying, ‘this is my role; this is what procurement looks like’. Almost four years ago, when I joined Uber, the average age of Uber employees in India was 28 or 29 with a lot of them in their first ever job. For a lot of the employees, there were 2-3 major functions which were core for the organisation’s success, and procurement was not a known function at all. It was difficult, going in and saying, ‘okay, let’s work together and I can help you get the right suppliers in place to reduce risk for the organisation, and do price benchmarking so that we can improve our procurement costs’. As the focus was only business growth rather than cost, they weren’t worried about that. That’s where the top-down approach works, because the management was convinced that to stay in the field for a long time, cost, compliance, and risk needed to be focused on.” When some of the potential risks include the possibility of getting into legal challenges, mature stakeholders do listen. If something does happen – for example, an 44

U B E R A PA C

w w w . c p o s t r a t e g y. c o m

SMS sent without knowing what the local

Asia, but the entire APAC region across

regulations are – the recipient can lodge

all the functions, thanks to the business

a legal complaint against the sender;

gaining confidence. This was bolstered

that’s not just the loss of a customer, but

by Vaidya’s ability to cut costs, improve

the brand reputation as well as the right

control and compliance and help put

to send any further customer communi-

supplier relationship management

cation through the same channel. Now

processes in place. By the third year of

that attracted the attention of the rest of

the sourcing team’s existence in India, he

the functions, and the procurement func-

was invited to be part of the core leader-

tion’s determination, under Vaidya’s lead-

ship team focusing on cost optimisation

ership, to change attitudes towards itself

across the region. Today, anything that is

slowly increased engagement across the

done in India, which involves either the

company and allowed him to focus on

spend or the requirement of a supply

pure strategic sourcing.

base, he is part of, and the country leads

Now, the sourcing function is experiencing great success not just in South

U B E R A PA C

the way for the organisation in APAC. Now, other large markets – like Australia

and New Zealand – have begun looking

Building trust with stakeholders

to India to shape the way Uber operates

Clearly, the journey Vaidya has under-

for them.

taken with Uber APAC has been a wind-

“Transformation is happening, in Uber’s

ing, shifting and constantly-evolving one.

procurement, now that we touch almost

Now in an enviable global position, this

every function,” says Vaidya. “There are

segment of the business is inspiring its

some regions where we still have do

many other arms to be better – but the

slightly more. We have the demand from

original approach to the roadmap-plan-

the business and we are focusing there

ning process was actually fairly simple.

slightly more now. APAC as a region is

Vaidya and his team looked at the high

little ahead in terms of procurement matu-

spend areas, to begin with, research-

rity. Thanks to the stakeholders in the

ing what supplies should cost and which

region who have not just trusted us, they

areas in the supplier engagement could

have cooperated too. And, thanks to the

be improved, which is what some of the

wonderful talent in the team too, who

early benchmarking centres around.

have delivered per expectations.”

“I remember one of the initial sourcing

w w w . c p o s t r a t e g y. c o m

projects I started working on, and had

direction in 2017; the plan included what

huge success in, not just bringing the cost

the India and South Asia region wanted

down, but putting a strong governance

to achieve in 2017 in terms of trip count,

process around,” he explains. “These

the number of cities it wanted to launch

initial successes helped build a great

Uber products in, what the guidelines for

level of trust with the regional leadership

spending were for each of those cities,

team. One of them was to do the bench-

and what procurement policy and compli-

marking of telco rates for cloud telephony

ance needed to be put in place. Now,

against what Uber was paying for. After

thanks to the formulae and processes the

connecting with some major suppliers in

sourcing team has implemented, the past

the country to understand their operating

two-to-three years of Uber APAC have

model, costs, et cetera, and then doing

been very straightforward.

business review meetings with the incum-

“I don’t think we’re facing any major

bent supplier(s), the plan was almost clear

issues, as such, except that the pace of

and it needed just a couple of rounds of

growth is changing, new product lines

negotiations to bring the cost down by

from business are being introduced and

almost 60-70%. Needless to say, a lot of process efficiencies were the added value to the project.” After this project, doors were open to explore more spend areas and sponsorship from the region’s president came automatically. The thing that came out clearly was that the earlier negotiations were led from the US, and there were a lot of local nuances and knowledge which was missing in the previous deals. Those early discussions were very tactical, and we built a strategy around that.” That strategy was put in place by December that year, as the business wanted to throw itself into the new 48

U B E R A PA C

“Uber allows a lot of empowerment for every single person, regardless of their job level” — B R I S H B H A N VA I DYA , H E A D O F S T R AT E G I C S O U R C I N G & S U P P LY C H A I N AT U B E R A PA C

the organisation is becoming more matured,” Vaidya explains. “The sourcing team has access to most of the information it needs, be it the spend around the procurement category or the growth numbers of a country or a city at product line level. We see how the plan is being built today.”

Teamwork That sharing of information, of keeping everybody on the same page, only works when a team works well together – and that only happens when a team is content and empowered. According to Vaidya, this is a defining part of Uber’s culture. “In previous organisations, when defining the job description for a particular position, the intention was always to bring in someone who has prior experience doing that,” he explains. Simple as that. “I always followed that process because w w w . c p o s t r a t e g y. c o m

that’s how the organisational culture was,

what the value is for them – but it wasn’t

but Uber is very different. It allows a lot

always like that. Four years ago, it was

of empowerment for every single person,

not matured enough; the business was

regardless of their job level, so when I

frequently switching suppliers for the

was building my team over two years

promise of a slightly reduced cost, which

ago, I made sure to choose people who

eventually meant that a lot of vendors did

could not only deliver the sourcing and

not have high engagement with Uber.

procurement objective, but work closely

“They used to tell us that we changed

with stakeholders, believe in the organi-

our minds too often, but things have defi-

sation’s vision and are mission-driven.”

nitely changed there,” Vaidya explains.

This people-centric focus extends,

“We’re not perfect, but what we do on the

of course, to suppliers. Uber’s strong

supplier relationship management, espe-

supplier relationship model focuses on

cially with the top vendors, is make sure

collaboration, and showing suppliers

we’re transparent with them. We expect

U B E R A PA C

them to be flexible and fast-paced, wherein our business volumes can change drastically on either side and they should be ready to execute the supplies and services with no SLA breach. But a lot of our vendors understand our business and they’re happy to deal with the potential risks.”

Crisis management Speaking of risks, it would be impossible to discuss Uber’s continuous improvement journey without discussing how it dealt with the current COVID-19 pandemic. As Uber’s everyday ride-sharing business ground to a halt, suppliers were quick to get in touch and ask: how does this affect our relationship? Some difficult discussions had to happen, but ultimately, everybody involved was and is affected by something that couldn’t be foreseen. So Uber worked closely with its partners to help identify new directions and revenue streams; for example, one supplier that would have normally provided facilities management products to Uber’s offices was asked to, instead, source PPE for them, and Vaidya’s team assisted the process by talking the business through some manufacturers to approach. “Similarly, another company was doing background checks for drivers. Knowing what the capabilities of the company are, we asked them to provide certain field based services which had no relation with their existing services portfolio. There are a couple of more examples where the ask from Uber, from its supplier, utilised their core capabilities to innovate better for the suppliers. On one side, a supplier in the field of BTL activations was w w w . c p o s t r a t e g y. c o m

asked to manufacture and install safety

maintain our reputation; suppliers have a

shields in the vehicles; on the other hand,

great respect for Uber, because it’s not

a company in the domain of physical

all about price with us – it’s also about

security services was made ready to do

innovation.”

the physical distribution of PPE kits across

And if COVID-19 hadn’t happened

multiple cities. So we were able to show

when it did? Vaidya’s team was ready to

some vendors new ways of working,

support the growth in the currently oper-

and new ways of making revenue while

ational cities, expand its existing prod-

being associated with Uber, so that those

uct verticals in the new cities and work

relationships stayed strong. It’s helped

with business in launching new products

U B E R A PA C

across the region, but that didn’t happen.

through this period, its core values,”

Fortunately, the inherent agility of the

says Vaidya. “It helps that everybody is

business has meant that it has adapted

empowered to make a decision, and that

as necessary and changed its priorities.

has been key to all of our successes.”

Right now, the company is talking to each of its vendors, large and small, counting every dollar it spends and preparing for a new normal before, inevitably, returning to its initial plans. “Uber’s culture has allowed us to get w w w . c p o s t r a t e g y. c o m

Digital transformation: Why procurement should be the hero in your business Many businesses are cautious of the risks taken in making the digital transformation business shift, but there are many reasons why they should - the least of which is that B2B online shopping impacts businessesâ&#x20AC;&#x2122; bottom line for the better.

WRI T T EN BY

D av e Br i t t ai n, H e a d o f A m a z o n B u s in e s s U K

here’s no question that businesses in the UK are experiencing digital change. When

it comes to procurement teams, the evolution is especially pertinent – and the transport and logistics sector is no exception. Digital transformation is changing the way businesses operate. According to an Accenture report freight and logistics companies that embrace digital technologies can significantly enhance their competitiveness and boost earnings before interest and taxes by up to 13%. With over a quarter of logistics providers citing their biggest growth threat as

DAVE BRITTAIN, HEAD OF AMAZON BUSINESS UK

competition, as stated by EFT’s global logistics report, digitization is clearly helping to address a core industry issue. Procurement, unmistakably, plays a vital role in the growth and digital transformation of organizations, providing substantial benefits that shouldn’t be overlooked. According to a McKinsey survey, CPOs expect their digital procure-

talent development too. While the rewards of shifting to digi-

ment programs to increase annual

tal are clearly substantial, there are still

savings by 40%, reduce transactional

barriers to change. Issues relating to

sourcing time by 30% and reduce value

budget, organizational urgency and intro-

leaks by as much as 50%. Routine

ducing new technologies, are the biggest

purchasing automation not only saves

hurdles – according to 50% of the CPOs

money and time, but it creates the oppor-

surveyed in the Amazon Business and

tunity for more strategic projects and

WBR Insights report.

W H Y P R O C U R E M E N T S H O U L D B E T H E H E R O I N YO U R B U S I N E S S

So how can transport and logistics providers utilize the power of online purchasing to stay on top?

and customers – and can make up as much as 20% of all expenses across as much as 80% of the supplier base. This happens as a result of buyers

Deal with the tail spend to recover costs

being spread out across the organization,

Focusing on tail spend is a good way

ment teams to manage and therefore

to address budget constraints. The tail

disproportionately expensive.

spend comprises everyday purchases

making the process tricky for procure-

Money, time and effort costs in tail

that aren’t needed for production - such

spend can add up rather quickly.

as office supplies, IT accessories, staff

Considering what goes into making a

kitchen items and gifts for employees

purchase – for instance, the number w w w . c p o s t r a t e g y. c o m

of products, dealers, contracts, state-

time, they must manage lean, well

ments, payment terms and conditions,

considered processes to secure the

complaints, etc. – it’s fair to say that

resources and financial wellbeing for the

transport and logistics companies could

broader organization.

risk spending precious time and money

For this reason, integrating digital

resources on tail spend purchases if they

buying into an existing environment

are not controlled.

should be as uncomplicated or non-dis-

However, if a procurement department

ruptive as possible. There’s no need for

simply buys its tail spend items online –

overly complicated technical implemen-

using a central transparent and efficient

tation or time-consuming IT maintenance,

system - it can recover the unbalanced

as it can be relatively straightforward. For

loss and put the surplus towards other

example, a B2B online shop like Amazon

digital efforts.

Business offers a familiar user experience, similar to the consumer version,

Keep it simple and focus on productivity

making it easy to use. Integrating with

One third of respondents in a shipping industry survey (https://unctad.org/en/ PublicationsLibrary/rmt2018_en.pdf) revealed that they see automation as a way to increase productivity by up to 50%. With this in mind, teams that onboard new purchasing systems should do so in a way that further supports productivity. As transport and logistics businesses become more digital, the purchasing function plays a dual role in integrating new and modern processes. Firstly, procurement teams need to go through their own internal processes of implementing digital change and at the same 58

W H Y P R O C U R E M E N T S H O U L D B E T H E H E R O I N YO U R B U S I N E S S

existing systems such as SAP Ariba is

in addition to time, which is especially

generally quick to implement – so it’s

useful in transport and logistics where

possible to set things up without incur-

speed of response and flexibility are

ring high costs.

often indispensable. There are operational benefits to

Don’t take your eye off the goal

online buying too. For instance, buyers

It’s fair to say that going through the

from different locations and offices within

mild disruption of implementing change

the business will have their own sub-ac-

is worthwhile if the end goal is to keep

counts with customized names and

your business moving forward. So, keep

invoice addresses. These will stem from

focused on the value that using an

one central account overseen by the

online shop could ultimately add to your

CPO - who will also be able to set local

business.

budget limits, define automated approval

Digital buying can save businesses a

processes and maintain a reliable over-

substantial amount of money and effort,

view of all expenses through automated

w w w . c p o s t r a t e g y. c o m

analysis and reporting functions. Authorized employees and operational purchasers will benefit from easy and fast access to a wide range of products without having to carry out substantial research in advance. As a result, through better control and visibility, procurement processes will become more transparent and significantly more efficient. Moreover, they’ll have access to a wealth of new data that allows CPOs to make sound recommendations and demonstrate value to internal stakeholders. While the benefits of digital purchasing should be tangible enough to speak for themselves, procurement may not be at the top of every CEO’s list of priorities. It may not be “sexy” – but cost saving and innovation certainly are. With digital procurement as a strategic partner, your organization will be better placed to continue moving towards a new era of working. Bringing purchasing options under one digital roof offers many benefits. However, making the leap to address the associated challenges is the only way to really know how online buying can advance your business.

W H Y P R O C U R E M E N T S H O U L D B E T H E H E R O I N YO U R B U S I N E S S

w w w . c p o s t r a t e g y. c o m

Tabreed: supply chain maturity Mohamed Habib, VP of Supply Chain Management at Tabreed, tells us how at a time of crisis, procurement maturity is king WRI T T EN BY PRODUCED BY

D al e Bent on Hey kel Ouni

n the current procurement landscape, the dial has well and truly moved. Over the

course of the last decade the procurement conversation revolved around how procurement could be positioned more centrally towards the strategic growth of a business with major companies around the world over investing millions into restructuring their procurement and supply chain management functions. More often than not, these investments would see organisations build from the ground up to become an organisation defined and powered by a true world class procurement function. Procurement has traditionally taken a backseat in the evaluation of an organisation thanks to a major focus on sales and business function, followed swiftly by operation. In an ideal world, the conversation would change due to natural progression, but it often takes a moment of crisis or a fluctuating market to dictate where the spotlight will shine on a business. Money

procurement evolution was born. â&#x20AC;&#x153;There

talks, and the global financial crisis of

were a lot of business cases from the

2007-2009 had forced the hands of

period of 2008, 2009 and 2010 within

many businesses the world over.

the academic circle. These success

One of the key learnings from this

stories of how businesses survived

crisis was that the strongest businesses

thanks to the agility of their supply chain

were held up by their supply chain

management really kickstarted a major

and procurement maturity, and thus a

elevation of status, so to speak, of the

TA B R E E D

supply chain management function,” explains Mohamed Habib, Vice President

made.” “We [procurement overall] have a good

of Supply Chain Management at Tabreed.

exposure within the high-level manage-

“Today, using my experience at Tabreed,

ment decision making and that’s a good

people appreciate technology and

thing. It’s pretty evident that this is a key

supply chain management. As a func-

component to the success of any organi-

tion we have access to many platforms

sation today.”

where a lot of key strategic decisions are

Tabreed is an organisation which w w w . c p o s t r a t e g y. c o m

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not only needs a mature supply chain

a few. The company currently supplies

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to nearly triple by 2030, the pres-

ders. As a deliverer of award-winning,

sure placed on Tabreed’s supply chain

high quality, efficient and environmen-

management function to be able to be

tally friendly district cooling developer in

ready for that increased demand is clear

the UAE and across the GCC, Tabreed

to see.

has played a pivotal role in a number of

Joining the business in June 2019,

milestone projects that have been at the

Habib was given a clear mandate: to

heart of infrastructure development and

achieve significant maturity in supply

have set the standard for the industry.

chain management so that it is up to the

These include cooling infrastructure for

required standards in order to support

the Sheikh Zayed Grand Mosque, the

the growth required of Tabreed. “It was a

Burj Khalifa and The Dubai Mall; to name

clear message,” he says. “I had to come w w w . c p o s t r a t e g y. c o m

in and gradually transform the procure-

chain management professionals face is

ment and progress the function to the

proving the credibility and speaking the

next level as part of the growth strategy.”

language of the business. “There are a

Empowered by a clear mandate, and

lot of qualified people at Tabreed who

a career spanning 15 years in supply

understand supply chain, so it was pretty

chain management, Habib’s first chal-

simple,” he says.

lenge was to change the perception

“We had to bring credibility very

surrounding procurement. As a supply

quickly, we did that by creating a lot of

chain man by trade, he understands the

awareness on what the supply chain

nuances and complexities but in order to

actually is and by changing the way

even begin thinking about achieving the

we developed our operational reports,

required level of maturity he had to work

making them more contextually inform-

to bring the wider business units into

ative. So, we’re constantly engaging

that same level of procurement conver-

with our businesses through workshops

sation. To him, the biggest component

to help them understand the impact of

and the biggest challenge that all supply

supply chain management, what are the

TA B R E E D

market risks that we face and then we

around a topic, we bring in very objective

develop plans together to mitigate them.”

thinking around it by using a lot of data

Despite the title, supply chain manage-

because, to put it bluntly, data speaks.”

ment at Tabreed isn’t solely centred

Habib is creating a function that is

around managing the transactions and

truly supportive of the business and

issuing orders out to the suppliers. For

how it provides this support must be in

Tabreed, it’s a complete assessment of

a manner that is flexible and respon-

the market, the business needs and how

sive to the various requirements of the

they run together. “When it comes to the

business. Habib and his team look to

communication part, I believe people

connect through both physical and virtual

will listen to you if you have credibility,”

meetings, regular face to face conversa-

explains Habib.

tions, and through emails. This, he feels,

“One of the things we have done at

enables them to get closer to the busi-

Tabreed is improve the quality of our

ness and hence better understand the

reports and improve the quality of our

needs and eventually know how they can

data. So, every time there is a discussion

best assist them. “At the end of the day,

w w w . c p o s t r a t e g y. c o m

we are a support function and we have to

Since he joined, Habib has been

provide services at best possible levels

blessed with very supportive manage-

to our internal stakeholders,â&#x20AC;? he says.

ment as well as a strong team around

â&#x20AC;&#x153;That shift in paradigm needs to happen

him. Tabreed has been successfully

internally first within the supply change

operating for more than twenty-two years

management, and then it would auto-

and this kind of legacy can be perceived

matically portray itself outside to other

as one with a culture that is reluctant to

departments.â&#x20AC;?

change. After all, one would think, why fix

TA B R E E D

“My team had some really good ideas and so we decided rather than adopting a big bang approach to transformation we’d take small steps to improve our operations and to improve our mandate.” This approach encompasses a wide number of areas of the business, including the upskilling of people and the changing of mindsets in order to bring in a culture of innovation. Habib analyzed the different policies and procedures to unveil opportunities of further optimization. “We scoured the market for new technologies that we can utilize as a company. The core idea behind it all was to bring in efficiencies to manage day to day supply chain operations”” He says. “Obviously, there’s always a challenge around how quickly you can obtain endorsements from the management to give you additional resources to spend on things like technology, consultants, or marketing.. But with a clear vision in place, you are able to sell these things to what isn’t broken? Fortunately, this was

management the right away.” he further

not the case with Tabreed. ”When I came

explains.

here, my approach was to understand

Habib notes that, sometimes profes-

what was the mindset of the company

sionals make a big mistake by embark-

and what I pleasantly found is that the

ing onto a role with the approach of

people are extremely welcoming to the

completely transforming their function

idea of change. They were open to find-

without truly understanding its current

ing new ways of doing things,” he says.

position, maturity, dependencies and the w w w . c p o s t r a t e g y. c o m

“Supply Chain management should be looked at as a vital organ. We collect, analyze, process then propose” Mohamed Habib, VP, Supply Chain Management

impact that change is going to have on

as any procurement and supply chain

a larger ecosystem i.e. the organization.

professional wishes they could, nobody

“Supply Chain management should be

can truly predict the future. There is

looked at as a vital organ. We carefully

a major element of risk management

collect, analyze, process then propose.

involved, expecting and preparing for the

If a complete change takes place too

worst as best as possible. But when the

quickly, the ripple effect could be cata-

worst hits, sometimes even the strong-

strophic. The link between the supply

est resilience cannot handle the impact.

chain and the rest of the company could

At the time of writing, the COVID-19

break resulting in a long road of synergy

pandemic has taken a huge toll on both

recovery.” He says. “Change that is

human life and the global economy. All

driven organically and in complete sync

the best laid plans have been hit hard

with other functions are the ones found

and businesses have been severely

to be the most effective.”

affected.

As Habib has noted, data and numbers speak in procurement and as much

“What’s happening right now is truly disturbing. For a lot of people, their lives w w w . c p o s t r a t e g y. c o m

are going to be changed forever. They

deliveries and services and so an imme-

will be impacted financially, economically,

diate action was taken to refocus and

socially and of course medically,” says

regress the business to core operations.

Habib. “To look at it from a supply chain

Thanks to a move towards virtual plat-

perspective, this is the ultimate test. This

forms, Tabreed has been able to work

is the time where we shine. This is where

remotely without disrupting the business.

we put our best foot forward and say,

Being an existing transaction-based func-

“Yes we’ve been ready for this for years

tion, the supply chain is readily prepared

now.” This for me is where we can look,

for this change as it often reacts to the

as best as we can, at the positives.”

business needs by utilising this virtual

And shine Tabreed has. “Resilience is

system. “Our policies and procedures

one of the five core values of Tabreed,

allow us to find creative ways of doing

and one we cascade to all levels in our

things,” says Habib. “Yes, processes can

day to day work.” Given the nature of

be prescriptive in some areas, but we are

the business, Supply Chain Management

not completely shackled by them. Hence,

knew that there would be delays on

we were able to move quickly on to the

TA B R E E D

virtual platforms.” This is but one exam-

relationship and network that would

ple that highlights the internal readiness

assist in withstanding challenges of all

of Tabreed and Habib believes that the

scales.”

business has only been able to respond

At a time of crisis, Habib believes, it is

and continue to operate to the best of its

only then you truly realise, and indeed

abilities thanks to the culture it has at the

appreciate, how good a relationship one

organisational level where people under-

has with their suppliers can help weather

stand each other’s limitations. “They

the storm.. He can point to firsthand

understand the direction of the organi-

examples where the suppliers proac-

sation and it makes it very easy for us to

tively reached out to his team to address

then accommodate for gaps and chal-

the situation and commit to full collab-

lenges,” he says.

oration. “You have to realise that at the

“At the same time from our supply

end of day what really matters is your

point of view, when I joined Tabreed I

relationship in the organisation and in the

immediately arranged meetings with

market,” he says. “It speaks to the way in

our key suppliers in order to build that

which Tabreed establishes and maintains

w w w . c p o s t r a t e g y. c o m

relationships with its suppliers so that we can collaboratively understand what is changing from their perspective, within their organisation and within their sector and market. We can then be quick to react, but the key component should always be that we are proactively looking at our suppliers and the changes in the market that might impact them; and they respect that.” A key part of this successful response to such an unprecedented crisis, and indeed a key part of a modern-day maturity journey, has been Tabreed’s implementation of digital tools. Technology has of course created greater collaboration and a more seamless way of operating and there is surely no greater time for that to come good than now. “One thing that this crisis has highlighted was the importance of investing in technology ahead of time to upgrade our systems to be at maximum potential. We are now utilising that potential so that we can maximize our business operations,” he says. “As a result of that the management is more appreciative of these steps as we’ve been able to build a really strong case to move us very quickly to look at cloud systems for document management and knowledge management.” While Habib admits that there is still 76

TA B R E E D

much more that he can do and use in the future, having a management team that is highly supportive of the idea allows him and his teams to assess different technologies on the corporate level to see how they can mature their systems and procedures moving forward. Habib is a firm believer of using this as an opportunity to reflect not only on the response to a crisis but as a way of showing how far Tabreed has come on this journey of procurement maturity.

Mohamed Habib, VP, Supply Chain Management

After all, he believes it is a time to walk the walk, in procurement. To that end, he has been able to identify and highlight key successes as part of this maturity journey as well as looking at potential gaps and room for further improvement. â&#x20AC;&#x153;I think the most important thing for me has been the way in which my team has been and are extremely adhesive, so everyone is right there whenever there is a need, whether they are in operations or in projects or the finances or legal, we are always accessible. As a business, this has allowed us to stay composed and be able to tackle the situation head-on, instead of panicking,â&#x20AC;? he says. â&#x20AC;&#x153;Obviously, there are so many other things and gaps and challenges that we are dealing with one day-to-day basis. Because what we are going through right w w w . c p o s t r a t e g y. c o m

now is abnormal. There are lessons to be learned and it’s only going to help contribute to the maturity of the people in the organisation.” This journey into maturity will never truly end and the same applies to anyone in procurement and supply chain management. Habib believes that the key to succeeding, while not guaranteeing success, rests in the hands of the supply chain management professional. “The most important thing working in supply chain management is to understand where you stand internally within the business,” he says. “Be sure to focus on more than simply the supply chain management function. Look at the business and understand it. Only then by working hand-in-hand with the internal stakeholders and the suppliers can you begin to leverage on the advances in technology and processes that you are trying to implement.”

TA B R E E D

â&#x20AC;&#x153; Weâ&#x20AC;&#x2122;re constantly communicating with our businesses through workshops to help them understand how supply chain management works, what are the risks that we face and then we try to mitigate themâ&#x20AC;? Mohamed Habib, VP, Supply Chain Management w w w . c p o s t r a t e g y. c o m

FIVE THINGS WE LEARNED FROM PROCURIOUS’ HOW NOW? WHITEPAPER How severely has COVID-19 affected supply chains, and what’s next for procurement and supply chain leaders? To find out, Procurious surveyed over 600 procurement, supply chain and business leaders earlier this year. Here, CPOstrategy looks at five key takeaways...

WRI T T EN BY

D al e Bent o n

“ ONLY 17% BELIEVE THE SUPPLY CHAIN DISRUPTION TO BE SEVERE” DISRUPTION. DAMAGE. An incredible 97% of organisations surveyed revealed that they had experienced a supply chain disruption directly related to COVID-19. The report also revealed that 50% of respondents said the impact was minimal or moderate and only 17% believe the supply chain disruption to be severe. Procurious dug a little deeper to reveal that the biggest impact of COVID can be broken down into four areas: 1. 31% of respondents saw a decreased demand for their products and services 2. 26% felt a real lack of available supply due to production downtime and shutdowns 3. 21% suffered logistics and transportation delays 4. A nd 19% experiencing significant capacity and productivity issued as a result of travel, social and work restrictions being imposed

F I V E T H I N G S W E L E A R N E D F R O M P R O C U R I O U S ’ H O W N O W ? W H I T E PA P E R

w w w . c p o s t r a t e g y. c o m

F I V E T H I N G S W E L E A R N E D F R O M P R O C U R I O U S â&#x20AC;&#x2122; H O W N O W ? W H I T E PA P E R

THE WORST IS YET TO COME? While the world continues to work together to move on and overcome the pandemic, there is still a belief that while the damage done has been incredibly severe, the worst may still be yet to come. 34% of business leaders said that they had already seen the biggest impact, 15% believed June was going to see the worst of and 21% believed that the period of July and August will be the worst. Could it be September through to December? When the traditional flu season rears its head? 13% of people believe so as they fully expect us to experience the peak damage of COVID during this time. The challenge that we all face is that quite frankly, we just do not know. There is no right or wrong answer, we just donâ&#x20AC;&#x2122;t know for sure and 13% of respondents echo this sentiment saying that they simply do not know what the road ahead is going to look like. One interesting note here, which we at CPOstrategy are particularly intrigued by, is that 1/5th of CEOs believe the biggest impact will be between September and December meaning they actually do not align with the CPOâ&#x20AC;&#x2122;s thoughts. Is this a sign that a lot of work is still needed in order for the CEO to truly believe in and engage with the CPO and procurement function?

w w w . c p o s t r a t e g y. c o m

“...MORE GEN XERS (40%) AND BABY BOOMERS (41%) CLAIMED ‘IT’S TOO EARLY TO SAY HOW THEIR BUSINESS WILL BE IMPACTED THAN MILLENNIALS (25%)”

F I V E T H I N G S W E L E A R N E D F R O M P R O C U R I O U S ’ H O W N O W ? W H I T E PA P E R

WITH AGE COMES EXPERIENCE. RIGHT? In the age of information it is perhaps most frustrating that we can never truly have all the answers we need. Experience teaches us many great things about handling crisis and downturn, but does experience mean that some can handle this situation more successfully than others? Does it mean some have a better grasp as to when this is likely to fade away and ‘normality’ can resume? Looking at the different age groups across the procurement board tells us an interesting story. Millennials were most likely to assume it already peaked (44%), followed by Baby Boomers (34%) and Gen X (31%). In actual fact, more Gen Xers (40%) and Baby Boomers (41%) claimed ‘it’s too early to say how their business will be impacted than millennials (25%).

w w w . c p o s t r a t e g y. c o m

WHAT DO WE KNOW ABOUT THE SO-CALLED ‘NEW NORM’? The phrase “the new norm” has been used and overused almost every single day of this pandemic, and much like anything with regards to the future we simply do not know what that ‘new norm’ will even look like, especially in the supply chain ecosystem. The survey has tellingly revealed that 29% of respondents, at the onset of the crisis, did not understand the upstream supply chains of their suppliers. With 6% of organisations saying that they had a key supplier go out of business and 30% of CEOs admitting that they have had a supplier enacting force majeure, this new norm will be a very different landscape. In response to this, 65% of organisations were forced to find new suppliers. So what have organisations learned already? Over half (58%) are still operating and paying their suppliers per their contract, 14% of organisations are speeding up payments to suppliers and 6% are providing direct financial support. Looking at it from a different perspective, more than 20% are providing less favourable payment terms for their suppliers – with 10% reporting that they are delaying payments to all suppliers, and another 11% reporting delayed payments to non-strategic suppliers. Whatever form it ends up taking, the new norm will be a very strange and uncertain beast for many.

F I V E T H I N G S W E L E A R N E D F R O M P R O C U R I O U S ’ H O W N O W ? W H I T E PA P E R

“ WITH 6% OF ORGANISATIONS SAYING THAT THEY HAD A KEY SUPPLIER GO OUT OF BUSINESS AND 30% OF CEOS ADMITTING THAT THEY HAVE HAD A SUPPLIER ENACTING FORCE MAJEURE, THIS NEW NORM WILL BE A VERY DIFFERENT LANDSCAPE” w w w . c p o s t r a t e g y. c o m

“ T HERE IS AN EXPECTED INCREASE IN INVESTMENTS IN TALENT DEVELOPMENT AND NEW OPPORTUNITIES FOR PRACTITIONERS TO RISE THROUGH THE RANKS AND MAKE THEIR MARK AT THE EXECUTIVE AND BOARD LEVEL” 90

F I V E T H I N G S W E L E A R N E D F R O M P R O C U R I O U S ’ H O W N O W ? W H I T E PA P E R

THE CPO AND THE SCO: THE FUTURE STARTS NOW Garnering and sustaining interest in procurement and supply chain careers in a pre pandemic world was a constant challenge when looking at the younger and future generation. Naturally, given the key role that procurement has and will continue to play in this pandemic, this has changed dramatically with nearly 62% of all respondents and 71% of millennials saying that their interest in procurement and supply chain has increased. Would a pandemic decrease interest? Well, 2.5% of respondents said the stressful and chaotic nature of managing supply during a pandemic caused their interest in the function to decrease. So letâ&#x20AC;&#x2122;s look at Generation Next (Gen X). There is an expected increase in investments in talent development and new opportunities for practitioners to rise through the ranks and make their mark at the executive and board level. When asked to reflect on personal job performance, millennials were most apt to believe they stepped up and delivered (36%), followed by Gen X (27.62%) and Boomers (21%). The overall positivity and energy from the profession is very promising, as the impending structural changes needed to make the supply chain more resilient will require a massive commitment from all key stakeholders. For more information on the How Now? Whitepaper or for more great insights on the world of procurement be sure to check out www.procurious.com Why not listen to our exclusive chat with Tania Seary, Founder of Procurious? or read through our fantastic interview with her, where she tells us what made her fall in love with procurement

w w w . c p o s t r a t e g y. c o m

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