CPOstrategy – Issue 16 by B2e Media

HOW SMART PROCUREMENT CAN KICK- START SUSTAINABILITY INITIATIVES

I s sue 16 • www.theinterface.net

AUTHENTICITY IN PROCUREMENT Lizan Molmans, CPO of Eneco, tells us how openness and authenticity have been the key to success in her procurement journey

Fearless Business Leaders and Trusted Partners who bring The Outside in to Win Alexandre Turolla, VP Procurement Global Raw Materials at Mondelēz International, explores how procurement at Mondelez can drive real change for the business and the world around us...

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At es eam that creates valu

Covid 19 and the future of procurement

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Welcome to issue 16 of CPOstrategy! GR ACIN G OUR FRONT cover this month is Alexandre Turolla, VP Procurement Global Raw Materials at Mondelēz International. In this feature, we take a deep dive into the company as it looks to leverage its procurement function and drive real change for the business and the world around us. Powered by a simple mission to turn procurement at Mondelez into “Fearless Business Leaders and Trusted Partners who bring The Outside in to Win”, Turolla speaks of a “constant and positive dissatisfaction” as he and his team continue to seek out the next stage of procurement evolution. Also in this issue, we explore the background and mindset of Lizan Molmans, CPO of Eneco, to discover how openness and authenticity play a key role in achieving any form of success in procurement, and we look at sustainability as we detail five key learnings from the recent Ivalua report: Gaining The Green View: How Smart Procurement Can Kick- Start Sustainability Initiatives.

EDITOR IN CHIEF Andrew Woods

EDITOR Dale Benton

SOCIAL MEDIA MANAGER Callum Rivett

CONTRIBUTING EDITOR Kevin Davies

CREATIVE LEAD Wrapping up, we also have Part two of our Q&A examining the future of procurement in a post COVID19 world, and Iain Campbell McKenna returns to take a closer look at how we can win the war on talent by redefining the interview process. Sulaiman Abdulla, Manager- Procurement & Contracts at UAE’s TRA speaks exclusively to CPOstrategy about the telco

Mitchell Park

VP GLOBAL FINTECH & INSURTECH Alex Page

VP TECHNOLOGY

regulatory authority’s procurement transformation.

Andy Lloyd Craig Daniels

Enjoy the issue!

VP PROCUREMENT Heykel Ouni Greg Churchill

PRESIDENT & CEO Kiron Chavda

Dale Benton, Editor content@b2e-media.com

PUBLISHED BY

CONTENTS

Mondelez

Covid19 and the future of procurement

WIK Group

TRA

70 Authenticity in procurement

Sourcing Solved

GAINING THE GREEN VIEW: HOW SMART PROCUREMENT CAN KICK- START SUSTAINABILITY INITIATIVES

Procurement at Mondelez: Fearless Business Leaders and Trusted Partners who bring The Outside in to Win Alexandre Turolla, VP Procurement Global Raw Materials at MondelÄ&#x201C;z International, explores how procurement at Mondelez can drive real change for the business and the world around us...

WRI T T EN BY PRODUCED BY

D al e Bent on Hey kel Ouni

hen we talk about the evolu-

the business and becoming an enabler

tion or transformation of

to what the business wants to do. This

procurement, we often

has really opened up a large avenue for

speak in broad terms. “Procurement has

procurement that was never there before.”

‘moved from a back-office function’, or it has obtained a ‘seat at the table’, and

Procurement and Mondelēz

while these sentiments are, in fact, true,

So, what does procurement mean to

they often diminish the real change in

Mondelēz? As the global conversation

procurement,” says Alexandre Turolla –

continues to be defined by stories of

VP Procurement Global Raw Materials at

companies recognizing (at last) that the

Mondelēz International.

function can and should be a key strate-

“The real change in procurement is

gic driver of growth, on what side of that

about how we can do that together with

conversation does Mondelēz find itself?

M O N D E L E Z I N T E R N AT I O N A L

“Mondelēz procurement has always been highly valued. Since my very first day, I have experienced a company which

and looking for the next stage of evolution.” Mondelēz was created as a spin-off

really understands the value of the func-

from Kraft Foods in 2012, with a clear

tion and brings it along with a high degree

vision to be a ‘growth engine’. The first

of appreciation. The function’s relevance

years of the journey were focused on

to the business comes from its ability to

getting the organization fit to win. Every

connect and steer both the supply land-

process and spend was streamlined

scape and Mondelēz business as part of

and benchmarked against the best in

a two-way value creation. It keeps evolv-

the market. 100% of the company spend

ing, and this is the exciting part of being at

was managed through a process called

Mondelēz Procurement,” says Turolla.

“ZBB – Zero-Base Budget”. Robust

“We are always positively dissatisfied

category management processes and w w w . c p o s t r a t e g y. c o m

Driving Change, Delivering Advantage Will Rook, Director of Refined Sugar, Ingredients and VIVE at Czarnikow, talks about how to drive change and deliver advantage across supply chains. Czarnikow has a legacy spanning over 150 years in the food ingredients industry, bringing strong relationships and a wealth of experience to its modern supply chain service offering.

CLI CK TO LE A R N M O R E

www.czarnikow.com www.viveprogramme.com

What is the most important element in optimising supply chains? The reality is that there is no single solution. As a supply chain encompasses many stages, processes and people, it’s important that a range of solutions can work together to optimise it. But in order to do this effectively, it is important to have a team of people who are willing to invest time understanding a client’s business, and then working creatively to implement a bespoke plan to really drive change; recreating the status quo is never an option for us. Czarnikow recently expanded its product portfolio – what was the rationale for this? While best known for sugar, Czarnikow has expanded its product offering to include other food ingredients, packaging and renewable energy. It was actually our clients who asked us to do this – the expansion gives us the ability to implement our service offering across a portfolio of over 50 products, allowing clients to build a richer relationship through a single service provider.

“ Sustainability is absolutely critical for all businesses to thrive and is increasingly present on the global agenda” What role does digitisation play in ensuring supply chain efficiencies? Digitisation is vital for any organisation’s ability to communicate directly with clients and partners, and to facilitate trade in an efficient manner. At Czarnikow, we have built our own proprietary operations software which allows us to seamlessly integrate with client systems

where needed. We also launched Czapp, a mobile app that enables users to share the company’s unique market view and generate the latest prices, explore our product offering and track current trades. What role does sustainability play in successful supply chains? Sustainability is absolutely critical for all businesses to thrive and is increasingly present on the global agenda. Through the VIVE Sustainability Programme, Czarnikow is able to facilitate fully sustainable supply chains, through our continuous improvement and commercially-driven programme.

With global supply chains comes increased complexity – how do you manage working across so many countries and cultures? We certainly think that local knowledge is crucial. Czarnikow has ten global offices and a local presence in a further six countries, and we have ambitious plans to increase our presence in a number of other important markets – all to give us a vital on-the-ground presence to support our clients. The ability to manage this is strengthened by what we have previously discussed: a diverse service, digitisation, strong client relationships and sustainable development.

structure were implemented to achieve an impressive 650 BPS margin improvement and 60+ days improvement on Cash Conversion Cycle. “We are finally ready to grow and win. We needed the fuel to climb the summit,” beams Turolla. In 2018, Mondelēz launched the current “Snacking Made Right” strategy, based on three key foundations: growth, execution and culture. For Turolla, it was important to recognize that Procurement not only played a fundamental role during the margin expansion phase but continues to play an equally important role in growth and “is deeply embedded into the three pillars of our Snacking Made Right strategy,” he says. Turolla highlights that the procurement function is guided by its mission statement

ordinary,” explains Turolla. “We try to make

(launched in 2017) of becoming “Fearless

a connection with business performance

Business Leaders and Trusted Partners

and the personal growth of our people.

who Bring the Outside in to Win.” As a

The idea is to ask ourselves: How to have

procurement man at heart, having forged

fun in going beyond our comfort zone?

his career in various procurement and

What is in it for the people? By stretching

supply chain disciplines, Turolla knows

our limits, one can become better, learn

well the value of the function and insists

new skills and push to go beyond. “We

that communicating this in a broader busi-

have only one career. Do you know what

ness language is an ever-evolving chal-

to do with yours? We do,” adds Turolla.

lenge for any CPO. So, what does it mean to be “Fearless” in Procurement at Mondelēz? “Simply put, it’s about going beyond the 12

M O N D E L E Z I N T E R N AT I O N A L

Fearlessness comes from moving away from the traditional incremental approach to change. Turolla leads by example and is always looking for the next “Thinking

Big” idea or opportunity and invites the

wins in the end, these are the best games

team to join. The secret is to invest in the

and the ones we learn the most because

change management required to excite

you pushed and pushed hard.”

the team to enable them to focus on the possibilities ahead. “We don’t just jump on target-setting, we invest precious time on

Establishing and maintaining a position of true “Business Leaders”

creating a joint ambition at the start,” says

Procurement is transitioning from func-

Turolla. “What do I and others gain from

tion excellence to become a true busi-

that? Increased capabilities. We get to

ness partner. Cementing this position is an

work with exciting people that challenge

ever-pressing challenge and Turolla is no

and support each other, ever expanding

stranger to this.

the boundaries. “It’s like sport, when the

The business landscape and consum-

game finishes on a tight six to five and

ers exigences continue to evolve. Turolla

you sweat like crazy, regardless of who

believes that what once was competitive w w w . c p o s t r a t e g y. c o m

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will no longer be affordable in the future.

procurement always starts with the busi-

At the same time, speed and agility have

ness and not with the function itself,” he

fast become the essence of success. No

says. “I normally use the analogy of a

company will be able to address or afford

bridge. Imagine that we have a bridge

to develop and maintain a consumer

between suppliers and the business. We

winning proposition on its own. “Forget

need to cross that bridge and hold the

about reinventing the wheel. You need

business’s hands. We then invite them to

to be with the best suppliers and hold

cross the bridge back together. It’s about

hands with the people who will keep the

being genuinely interested in the stake-

momentum going,” says Turolla.

holder’s agenda, opportunities, dilemmas

On paper, this may seem easy but Turolla is keen to stress the importance

and pain points.” These conversations and the actions to

of investing in fostering and maintain-

create “that bridge” speak to the “Trusted

ing effective connections with the busi-

Partners” component of the mission

ness leaders and suppliers alike. “Good

statement. Trust and credibility are often

M O N D E L E Z I N T E R N AT I O N A L

recognized as the most significant compo-

getting to know people we deal with.

nents of a successful leader. Mondelēz

Then we can be more flexible and more

certainly recognizes it and uses its own

forgiving of the not so good moments

approach to nurture and improve trust.

and inspired by the good ones.” Turolla notes that all these good

The “Trust Equation”:

intentions and investments can easily

“Our Credibility has been built over

fall down the drain if perceived as

the years by being able to deliver and

driven by the wrong motivation; “We

to thrive when we are needed,” says

need to be clear and loyal to what

Turolla. “Reliability is about putting your-

makes us thrive and what our purpose

self in the shoes of others. Do what you

is and keep it front and center as our

said you would be doing; always think-

motivation.”

ing about how to enhance the work and potential of others.” “When it comes to Intimacy, it’s about

Bringing the best of the “Outside In”: Procurement is an open door to the

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

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“ The function’s relevance to the business comes from its ability to connect and steer both the supply landscape and Mondelēz business as part of a two-way value creation. It keeps evolving, and this is the exciting part of being at Mondelēz Procurement” — ALEXANDRE TUROLLA, V P P R O C U R E M E N T G L O B A L R AW M AT E R I A L S AT M O N D E L Ē Z I N T E R N AT I O N A L

outside world. Turolla and his team

Mondelēz chooses who and how to invest

strongly believe in the power of co-cre-

its resources. “We invest heavily on the

ation and leveraging the complementary

partners that are aligned with our vision

capabilities of its suppliers and partners

and we hold each other accountable for

together with the Company to arrive at

driving mutual value,” adds Turolla.

the best outcome. A genuine interest

“Through our Supplier Partnership

and investment in the suppliers is a must,

Excellence program, we develop a mutual

understanding them better and a realiza-

value program and review it periodically.

tion that Mondelēz simply cannot do it all

Are we growing with the right partner?

alone.

How many projects have we developed successfully? How well are we aligning

“To Win”

our future supply chain needs? How are

The final part of the mission statement

we progressing on our service and quality

is perhaps the most important and most

excellence program? The ever-evolving

fluid. “Managing our holistic value chain

quest for the cost leadership and the joint

as one, from shelf to field, is the key to

sustainability complement our ambition.”

success,” says Turolla. “We try hard to

This approach allows the suppliers and

foster greater relationships and to under-

Mondelēz to openly and honestly give

stand a uniqueness and sweet spot

each other the chance to feedback and

between Mondelēz and our suppliers,” he

react to the positives and negatives.

says. Through supplier segmentation,

Innovation plays a key role in Mondelēz’s Supplier Partnership w w w . c p o s t r a t e g y. c o m

Excellence (SPE) supplier proposition and

more attractive, catching the attention of

it has pioneered a number of approaches

our suppliers, start-ups and innovators.

that deliver bold results:

Likewise, the suppliers also adopted the new approach, using highly effective short

Ecosystem Approach:

videos that easily reach different decision

“We teamed a few SPE suppliers with

makers at Mondelēz globally.”

complementary capabilities and raised a

For Mondelēz, Turolla notes that the

business challenge,” says Turolla. “From

winning is when the wheel is spinning in

more than 100 ideas that were presented,

the right direction. “It’s about ensuring that

11 new products are on the launch pipe-

all the connections are working in a way

line spread over three years, starting from 2020.”

One complementary Network footprint (make vs. buy) “We started to holistically manage our manufacturing footprint with our SPE suppliers, generating several improvements to eliminate inefficiencies and optimize assets on the combined (Mondelēz + SPE suppliers) footprint.”

Innovation fairs “Through multiple innovation fairs, SPE suppliers had a stall at Mondelēz offices to present their capabilities applied to real specific open opportunities.”

Digital platform for innovation “We learn with the influencers how to be “catchy” and make business briefings

M O N D E L E Z I N T E R N AT I O N A L

that enable success for all involved,” he adds.

“Our global food system is facing numerous challenges and calls for solutions that require coordinated efforts

Sustainability and Mondelēz

by governments, industry and scien-

When discussing how winning is defined

tific, social and environmental experts.

by Mondelēz, it opens the door to the

Smallholder farming communities need

Sustainability conversation. The compa-

support to increase their resilience.”

ny’s sustainable snacking vision is focused

“The Sustainability agenda grew from

entirely on creating a future where people

being the cherry on the cake to become

and the planet thrive and win.

the cake itself,” shares Turolla. “It is a

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

M O N D E L E Z I N T E R N AT I O N A L

fundamental component of every sourc-

us at the leading edge of technology and

ing strategy and we are leveraging our

partnerships. These experts in turn build

market presence and relevance to foster

sustainability into the core competence

the right attitude, actions and responsibili-

of our buyers. As a result, our buyers are

ties from all payers in the value chain.”

sustainable sourcing experts who seam-

Mondelēz recently updated its “Snacking Made Right Report” that each

lessly blend sustainability and commercial strategy into sourcing.” We would be remiss to explore the

year tracks the progress made against its ESG (environmental, social and govern-

procurement journey of Mondelēz and not

ance) strategy, objectives and programs..

look at the role that digital and data solu-

Its signature community program

tions are playing. Turolla is first to admit

“Cocoa Life” is a great example of

that there is still a lot of testing and learn-

Mondelēz engagement with communi-

ing on this front but make no mistake that

ties at the origins. “We are committed

for Mondelēz the digital journey is fast

to working with the suppliers that share

gaining space and enhancing success. While Mondelēz leverages digital solu-

our values and thrive by doing things the ‘right’ way; fighting climate change,

tions in cost modeling, recipes compari-

preserving forests, improving water and

son, and complexity, spend and revenues

energy efficiency, and respecting human

simulations and market insight to equip

rights,” says Turolla.

procurement for better decision-making,

“To accelerate our journey, we have

Turolla is keen to stress that he is much

a small team of sustainability experts

more interested in approaching the digi-

embedded within Procurement who keep

tal equation in reverse. “We spend time at

“ It [sustainability] is a fundamental component of every sourcing strategy and we are leveraging our market presence and relevance to foster the right attitude, actions and responsibilities from all payers in the value chain” — ALEXANDRE TUROLLA, V P P R O C U R E M E N T G L O B A L R AW M AT E R I A L S AT M O N D E L Ē Z I N T E R N AT I O N A L

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

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the problem stage first,” he says. “Only when we clearly define the

plan in place, expediting deliverables and qualifying and booking alternative

Problem Statement, we move to create

suppliers. Through a massive cross

fit-for-purpose analytics and dashboards.

functional endeavor, Mondelēz success-

Once those are created, we push hard

fully executed >200 BCPs (Business

on democratizing the data to all buyers

Contingency Plans), monitored supplier

and R&D researchers. This means making

performance, OTIF and managed to antici-

reporting tools simpler and more effective

pate tier-2 disruptions ahead of time, gain-

for the category and research managers,

ing precious days to react as well as rais-

as well as looking further into the realms

ing inventory for critical unique materials.

of artificial intelligence for data analytics.”

These decisions were driven by data,

There is no better example to illus-

focusing on origination from turbulent

trate the Mondelēz digital journey than

areas and suppliers with difficult upward

its Covid-19 crisis management. Within 48

chain or constrained supplies. In taking

hours of the COVID-19 outbreak in China,

these steps, Mondelēz avoided disruption,

Mondelēz was able to map all materials

securing particularly admirable service

originated in China and delivered to all

levels throughout the crisis. “The Covid-

other countries and put a contingency

19 crisis accelerated the way we leverage w w w . c p o s t r a t e g y. c o m

“ Be curious about the world around you, have courage to operate out of your comfort zone and the confidence to lead the change then add a bit of self-confidence” — ALEXANDRE TUROLLA, V P P R O C U R E M E N T G L O B A L R AW M AT E R I A L S AT M O N D E L Ē Z I N T E R N AT I O N A L

data and analytics,” says Turolla. “We are moving fast on our digital transformation and we are only at the beginning. The value creation of a digitally enabled category management and sourcing strategy is immense.” Since joining Mondelēz, Turolla has witnessed an incredible amount of success and growth as part of this procurement journey and he excitedly beams that the best part is that Mondelēz are “only half way through it”. For him, the next phase of procurement is all about moving from functional excellence to living and breathing the business agenda, bringing all the different elements of excellence together to form a truly integrated approach from shelf to field. “We want to be agents of change for a thriving ecosystem,” he says. “This makes a good link to our renewed commitment to fully integrate supplier diversity and economic inclusion into Mondelēz Global strategies,” “We believe that healthy thriving communities need to include everybody and so we are expanding our business to small, diverse suppliers that have often been 26

M O N D E L E Z I N T E R N AT I O N A L

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

disadvantaged in the opportunity to

says. “It’s an ever-changing world.

engage with multi-national and/or other

Get excited to be out of your comfort

mid to large corporations.”

zone.” In order to achieve this, Turolla

In a world where obsolescence is happening faster and faster, success

has his very own formula. “It’s all about the three Cs and one S,”

is no guarantee. But Turolla reflects

he adds. “Be curious about the world

on the original mission statement of

around you, have courage to operate

procurement at Mondelēz, particu-

out of your comfort zone and the confi-

larly when it comes to being fearless.

dence to lead the change then add a bit

“Think big, don’t think ordinary,” he

of self-confidence. This formula will give

M O N D E L E Z I N T E R N AT I O N A L

Alexandre Turolla VP Procurement – Global Raw Material Mondelez International Alex leads the procurement function for global Raw Materials ($6.1Bn spend). He joined MDLZ in 2010 as the LATAM Procurement Lead and moved to different global positions co-creating the current globally-led and locally-executed procurement function that saw the connection with the Business Units and suppliers strengthened. An evolving data driven agenda, together with sustainability, has moved to the centre of the sourcing strategies. Prior to MDLZ, Alex held several positions in Procurement and Supply Chain at Unilever, Bitron Electronics and General Electric. Alex has a dual Brazilian and Italian citizenship, lived and worked in Brazil and France and is you a lot of fun creating the

currently based in Zurich, Switzerland.

future and keeping obsoles-

Alex earned an MBA from Fundação

cence far out of your way.”

Dom Cabral, a specialization from Kellogg and Insead Business School and an Engineering degree from the Federal University of Rio de Janeiro. He was born in Rio de Janeiro, is married and has a 17-year-old daughter

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

PART TWO

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

D a le B e n t o n

COVID19 AND THE FUTURE OF PROCUREMENT

PART TWO OF A DI SCUSSI ON BETWEEN IAN THOM PSON, R EGI ONAL DI R ECTO R OF I VALUA, I AI N CAM PBELL MCK ENNA, M ANAGI NG DI R ECTOR OF SOUR CI NG SOLV ED, AND JON H ANSEN, WR I TER AND SPEAK ER FOR PROCUR EM ENT I NSI GHTS, OF COVI D A ND PR OCUR EM ENT

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

How important is it to celebrate successes even during times of challenge? Ian Thompson: With the passage of some time, what will be some of the positive impacts from this? I think that’s a good mental exercise for all of us. It is a tough time, and I wonder if people will now understand the supply is an ecosystem. When we’re doing business, it’s not just

IAN THOMPSON, REGIONAL DIRECTOR OF IVALUA

oh they’re a small supplier so we can treat them in the transactional manner. We can try and squeeze their margin, but actually we might remember the time when we realized they were a key part of an ecosystem that actually delivers for our society. Seeing things in a more holistic way. People will understand that sometimes innovation isn’t just an option. It’s something that is essential and there’s been times, Plato said it thousands of years ago, that neces-

IAIN CAMPBELL MCKENNA, MANAGING DIRECTOR OF SOURCING SOLVED

sity is the mother of invention, and we’ve really lived that. We’ve really seen it through. Looking at the importance of our profession and what we do, it’s now a family conversation about how we’re managing to use different processes or websites and when that’s going to be delivered. So both the activity of us buying what we need and the heroes that are working in the distribution centers, who are driving the vans. Procurement and supply chain has become a family conversation. 32

JON HANSEN, WRITER AND SPEAKER FOR PROCUREMENT INSIGHTS

COVID19 AND THE FUTURE OF PROCUREMENT

Iain Campbell McKenna:

changing. If you look back, and stop

The crisis has really enabled us to

moving forward and stop learning, I think

highlight what we are doing, why are

that’s where it ends. So what COVID has

we doing it, and are we doing it well?

done for us is not so much a return to the

Looking at improving our supplier rela-

way things were, but an embracing of the

tionships and I think moving away from

way things could be.

email and spreadsheets, these are inher-

We’ve certainly shown that we can

ently flawed. I don’t think in this crisis we

operate on a remote basis through

really need the new rule book. We just

many of the things we’ve talked about.

need to form a commitment to actually

The reality is, the technology is there to

act on the ones that we’ve been doing

work remotely. The efficiency of working

and have more meaningful practice and

remotely is that productivity is on the rise.

focusing on what we can do right, and

We’re creating new cost models and new

what we can improve. This has really

efficiencies of doing business and that is

enabled procurement leaders to take a

just a normal part of the progress.

step back and think; how is my procure-

There are markers in time that move us

ment function formed? What can we do

forward and build on what we’ve learned

to improve it? I think it’s given people

and this is a more dramatic one.

the breathing space that they needed to have insightful conversations internally to improve things that might not necessarily

What will be the ‘new norm’ for the CPO?

work.

Iain Campbell McKenna: With the notion of a ‘new norm’, can procurement ever go back to what it was pre pandemic?

When organizations are searching for a CPO or a procurement director, they do very much have an onus on strategy and implementing technology and

Jon Hansen:

facilitating technology at their disposal.

Through time, there’s always progres-

I think what COVID-19 has taught us is

sions of change. Some have obviously

having a high level of EQ for our lead-

not been as traumatic and dramatic as

ers is imperative. Because being able to

COVID-19. The world is progressively

have empathy, to be able to self regulate, 33

to build relationships, and build relationships not only on a face-to-face basis, but remotely is something that I hope that we’ll see a shift on and companies will really see the value in having a leader who’s got a high EQ. At the end of the day, you can learn how to implement a process, you can learn how to use technology, but it’s very difficult for a leader to learn how to be emotionally intelligent. Because for many, it comes very natural and others it doesn’t, and it’s not the norm.

What about the vendor perspective? How has the procurement vendor’s ideas and practices changed? Ian Thompson: I think the emphasis and prioritization of technology will continue and perhaps be stronger. I think you can move it away from necessarily, you can evaluate technology and do some of that technology in general. There might also be a clearer understanding of priorities of what matters. What is the enterprise trying to implement? What is it they’re trying to do? What outcome do they need? Technology is the facilitator of that, and I think those ideas may have been crystallized for a lot of businesses. I also think we’ll see more steering away from transactional and looking at supplier innovation. There’ll be companies that are cash stressed who are going to be driving their procurement departments back to cost and transaction, transaction cost and margin squeezing. There’ll be other companies who will see this as a moment to really drive forward on that value and

COVID19 AND THE FUTURE OF PROCUREMENT

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

COVID19 AND THE FUTURE OF PROCUREMENT

innovation piece, and looking at the supply chain and the supply base as an ecosystem.

Will Covid19 define the future of procurement? Jon Hansen: The extent of impact of the supply chains, and its impact on the economy is so critical. If you think about the overemphasis on low cost country sourcing and concentrating the supply power into one or two countries, that creates challenges in of itself. I remember reading a New York Times article not that long ago where they said, when SARS hit, China was really relied upon for that country for T-shirts and sneakers. Now of course, when COVID hit, we are so reliant on them for everything. When you look at the permeation of procurement in our lives, we realize now that beyond the supply chain, we are now dealing with the economies of the world and the stability of these economies. This is a warning light for that, but it is also laying the groundwork for what I believe the true battles of the future will be. Supply is going to become even more important in such a world where trade is increased, where supply chains are extended, and when those supply chains are interrupted, lives are permanently affected and altered. Itâ&#x20AC;&#x2122;s created a watermark awareness of the nature and depth of how supply chains influence beyond what we, even in our profession, understand and know to get into areas of economic growth and prosperity.

What advice would you give to procurement w w w . c p o s t r a t e g y. c o m

professionals to try and succeed in a constantly evolving landscape?

think those things are genuinely impor-

Ian Thompson:

of this period.

There are some principles that I work

tant and will lead to successful navigation You can look at it with a business

by all the time which were taught to me

brain and try to wargame the situation

by my first boss; assistance, politeness,

and what’s going to happen, but it’s so

preparedness and positivity. Simple

important to also remember that this is

mantras which don’t solve your problem

impacting real people in terrible ways

day to day, but if you try to live by them

and maintaining that awareness is super

in business, you do suddenly realize that

important.

you’re having a degree of success. Living in challenging times, you are, at

Iain Campbell McKenna:

the end of the day, living a dramatically

It really has given people a chance to

different lifestyle. That’s a challenge. It’s

reflect and I have seen a real shift in

about making sure I’m talking to my team

people’s willingness to have an open

every day, showing them concern and

conversation and I’ve definitely seen a

compassion. It’s easy to be cliché, but I

nice side of humanity that have open and

COVID19 AND THE FUTURE OF PROCUREMENT

enjoyable conversations with procure-

challenges the status quo thinking. That

ment leaders whose previous mindsets in

respectfully understands the other party’s

procurement were very different. I do see

point of view without making it some-

quite a shift in people’s way of engaging

thing that is personal. What this crisis

with me and I’ve got a team that works

has shown us is our better angels and

for me and I’ve had to obviously show a

our worst angels. I think what we have to

different side of me that I do try to show

focus on is the fact that there are checks

on a day to day basis. I’ve really opened

and balances. I think what we need to

up more and we have more of a deeper

do is adopt that through all avenues of

relationship, and I’ve been able to shift

life, not just in this crisis, but in the way

my management style to become more

we work. That we shouldn’t strive for

empathetic.

consensus or to win an argument or get people over to our side. I would rather

Jon Hansen:

focus on getting it right, than being

One of the things in a crisis that’s impor-

right. I think this whole thing has created

tant is not to look for consensus, but

a sense of humility and humbleness

to create a respectful dialogue that

and realizing that we don’t have all the

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

COVID19 AND THE FUTURE OF PROCUREMENT

answers, but we do have the tools if we are very much willing to collaborate and work together towards a mutually beneficial outcome. This has become very crucial in the procurement buyer and supplier relationships. It begins internally and extends to external partners. If we take that approach, then we will find the answers. We will find the right path to go. We won’t always get it right and that’s why many senior executives, especially on the high tech side, say if you’re going to fail, fail fast, but don’t be afraid of failure. Move in that progressive direction. That’s what I’m taking away from this overall experience. Better communication, collaboration, meaningful discussion and debate, versus forced consensus.

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

At es eam that creates valu

HOW WIK GROUP POWERS ITS PROCUREMENT THROUGH SUPPLIER RELATIONSHIPS Daniel Chua, Head of Global Sourcing at WIK Group, discusses how supplier relationships are the cornerstone to success... WRI T T EN BY PRODUCED BY 42

D al e Bent on Gr eg Chur c hi l l

hen we talk of a procurement

on both internal and external relation-

transformation, we often focus

ships and what’s key to any relationship?

on a shift in process or the

Communication. By having clear, open

implementation of new technologies and

and constant communication across the

platforms in order to embrace a much

entire organisation and across your entire

more agile and “leaner” operation. More

supply base, only then will you truly

recently, organisations have started to

begin to see the real value that’s hidden

realise that all the best laid plans require

throughout the supply chain and procure-

the right talent and the right skill sets

ment ecosystem.

throughout the organisation, not just the

“Relationship management, for me, is

procurement function, to be able to fully

key,” explains Daniel Chua, Head of Global

realise the savings potential or the inno-

Sourcing at WIK Group. “I think that is one

vation and true value that procurement

of the very important factors and by rela-

can bring. But take it back even further,

tionship management I mean not only to

procurement and supply chains of all

the suppliers but also to my internal stake-

sizes, scope and complexities, are built

holders.”It’s also about understanding

WIK GROUP

what we are going to be able to do to

responsible for creating and develop-

get support from suppliers, both finan-

ing hundreds of system solutions and

cially and non-financially. By non-financial

producing millions of products world-

support I mean in times of crisis, like right

wide. Perhaps most notably, WIK Group

now with Covid-19. If you have a good

has evolved into a global, full-service

relationship with suppliers, they actu-

development and manufacturing partner

ally allocate more resources to support

to many leading international brands. By

you. Procurement is all about relationship

its own admission, WIK Group believes

management that you build for a long

that “corporate challenges can only

time. You get returns when it is needed,

be managed by leveraging synergies

not simply on a daily basis.”

between capable people and financially

Founded in the early 50s, WIK Group

solid partners, driven by responsible

is a privately held German contract

sustainable change and innovation. We

designer and manufacturer (ODM/OEM/

focus our resources on personnel devel-

CM) for electrical appliances and devices.

opment and process excellence based on

Fast forward to 2020 and WIK Group is

a value-creating company culture.”

w w w.t h e i n t e r f a c e . n e t

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As part of this corporate belief, WIK

Vodafone and Phillips, Chua was brought

Group embarked on a procurement trans-

in to deliver real change. Perhaps most

formation journey that will realign the

importantly for Chua, upon entering the

procurement function to collaborate more

business back in 2019, he wanted to make

with wider business units in order to be

it clear that the change he sought was not

able to generate greater cost savings,

a change of personnel.

unlock better efficiencies and drive inno-

“I wanted people to know from the

vation all while continuing to deliver its

outset that I’m not here to fire anyone. I’m

products and services to the highest

here to try to work with all of you, to bring

possible standards. This is where Chua

in and collaborate on new ideas together

comes into the picture. With a career that

with my experience from the bigger, inter-

has seen him take on senior procure-

national companies,” he says. “Let’s try to

ment roles for some of the leading multi-

work together. I needed to instil that mind-

national companies in the world, such as

set into my new team, because there are

w w w.t h e i n t e r f a c e . n e t

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WIK GROUP

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“PROCUREMENT IS ALL ABOUT RELATIONSHIP MANAGEMENT THAT YOU BUILD FOR A LONG TIME. YOU GET RETURNS WHEN IT IS NEEDED, NOT SIMPLY ON A DAILY BASIS” Daniel Chua, Head of Global Sourcing, WIK Group

going to be changes. At the same time,

going to be valuable for WIK,” says Chua.

there will be a lot of coaching required

“I want everyone to adopt a mindset of

towards a different way of thinking around

thinking outside the box and being far

procurement. Simply put, the only two

more vigilant and experimental in terms of

things that are normally discussed with

bringing different things to the table.”

suppliers are either cost or quality. End

To highlight his point further, Chua

of story. We need to explore the relation-

points to a more traditional approach to

ships further and so I want them to look at

the bill of materials (BOM). Previously,

it from a different angle and in much more

and much like many procurement func-

depth.”

tions, WIK Group would have a team

In order to achieve this, Chua would

focused entirely on BOM. Chua wants

accompany his team on supplier meet-

these people to input the BOM numbers

ings and gain an understanding as to the

but also to be able to think about those

way in which these supplier relationships

numbers, to analyze them and to under-

are handled. Only then, he feels, can he

stand more about the materials and parts

leverage this supplier base for greater

themselves. “Then they can ask and ulti-

insights which will then translate directly

mately answer the question as to why we

into greater relationships and ultimately,

are buying these parts at this particular

greater savings. “I’m slowly coaching my

cost?” he says. “Once upon a time that

teams that you need to bring in ideas

was a question that would be passed onto

about what the suppliers are doing for

the sourcing teams and forgotten about

other customers and how this is also

until next time. Now, we have people w w w.t h e i n t e r f a c e . n e t

asking more questions and understanding the business more.” Changing a mindset and a culture within a business is no small feat, particularly when that business has been extremely successful operating in a specific way for a long time. This is a challenge that Chua has faced and will continue to face throughout this journey. It’s easy to say on paper that you will come in and instil this innovative cultural mindset that will guarantee success and cost savings, but being able to achieve that is a different story. Chua is a firm believer in being able to walk the talk and being able to practise what he preaches. Every step of this journey, every decision he makes and process he changes, he does so with purpose in order for both his people and his management to be able to see real value and benefit from those changes. Any feedback he receives from above he shares with each and everyone of his team members. “It’s about reinforcing the notion that; all their efforts and hard work are being recognized by senior management. Not just by me,” he says. “This is important in building up a shared mindset so that we work as a team and move away from working independently in silos. We work as a team and have shared responsibilities because ultimately, those 50

WIK GROUP

responsibilities will impact the entire business, not just one particular function.” “We can’t operate to an out of date mindset of; once you’ve done your bit you move onto something else. If a mistake is made in your processing or it comes from the sourcing engineers, if you spot it and fix it you’re saving two people or even more. We’re working together and for one another. This is incredibly important for what I want WIK Group to achieve.” This is also key in establishing a sense of integrity for procurement. As with many organizations the world over, procurement has changed dramatically in the eyes of senior w w w.t h e i n t e r f a c e . n e t

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management and in the eyes of the busi-

complete the tasks but to complete them

ness. Chua and his team have witnessed

in a ‘better’ way than others.

this first-hand through this transformation

“The best way that we can see that the

journey. Where procurement was almost a

business now has complete confidence

business add-on, now Chua and his team

in our abilities is that we used to have key

see the other business units coming to

account managers being directly involved

them and wanting to become more like

in almost every part of our process,” says

them. The procurement responsibility of

Chua. “But now, after only six months,

WIK now takes on much more responsibil-

they don’t need to. They have confidence

ity. Historically, tasks would be transferred

in our abilities and they leave us to it as

away from procurement but now the tasks

much as possible.”

are coming into procurement because

As Chua has already noted, relationship

procurement now has the capabilities, the

management is key and as he continues

processes and the mindset to not only

to build competencies and drive change

w w w.t h e i n t e r f a c e . n e t

“ I INTRODUCED MYSELF TO EVERY SINGLE ONE OF THEM [SUPPLIERS] AND I SAT DOWN AND SPOKE WITH THEM OVER DINNER. OUTLINING WHERE WE WANT WIK TO BE IN THE FUTURE AND THE ROLE THEY CAN PLAY IN THAT” Daniel Chua, Head of Global Sourcing, WIK Group

internally, he must also look further at the way in which the supplier relationships are

and the role they can play in that.” “Again, it’s about better understand-

handled from the supplier’s perspective.

ing the relationships so that we can grow

To best approach this, Chua kept things

these relationships together. Now, you’ll

simple. “After I looked at internal systems

see my team (where possible) travelling

and I looked at improving the way we at

around and meeting with suppliers and

WIK dealt with suppliers, I spent a month

sitting down with them and talking through

travelling outside the business to speak

our strategies and how we can better help

with all of our key suppliers,” he says. “I

each other. It’s all about rethinking what

introduced myself to every single one of

we think about our supplier relationships.”

them and I sat down, I spoke with them

At the time of writing, the world is

and I listened to them. It was about outlin-

currently gripped by the COVID-19

ing where we want WIK to be in the future

pandemic which has and will continue to

WIK GROUP

define and redefine business practices

with regards to that changed mindset and

indefinitely. Risk and crisis management

shared responsibilities,” he says. “How we

is nothing new to procurement, but when

progress relies entirely on everybody’s

discussed it is often theoretical risks and

discipline.”

theoretical worst-case scenarios. As we

This discipline is crucial in reporting a

are currently experiencing a worst-case

process of Resume Work Status that Chua

scenario, businesses are now having to

has implemented, a process in which

act. Chua believes that the COVID-10

WIK can identify and better understand

crisis is actually giving credence to the

how and when its suppliers can return to

changes he has made and will continue

limited or full operating capacity. Given

to make to WIK’s procurement practice.

governmental restrictions and a number

“This situation has actually put us into a

of external factors, each supplier’s

spotlight that shines on us as individuals

status will vary and so the responsibility w w w.t h e i n t e r f a c e . n e t

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“THE BUSINESS AND INDEED OUR CUSTOMERS HAVE THE CONFIDENCE IN US TO BE ABLE TO DELIVER THAT INFORMATION TO THEM IN THE RIGHT WAY SO THAT THEY CAN BETTER UNDERSTAND WHAT’S GOING ON AND HOW WE ARE MANAGING THIS SITUATION IN A WAY THAT WORKS FOR EVERYONE” Daniel Chua, Head of Global Sourcing, WIK Group

rests with WIK’s procurement teams with regards to collecting the right qualitative

operate.” “It goes back to what I said about confi-

data on these suppliers so that they can

dence. The business and indeed our

report back to key stakeholders with the

customers have the confidence in us to be

right insights in order to make the right

able to deliver that information to them in

decisions for the business. “These key

the right way, so they can better under-

stakeholders are external,” explains Chua.

stand what’s going on and how we are

“On a weekly basis we report back to all

managing this situation in a way that works

our external customers about the status of

for everyone.”

the current situations and what is going to

On paper, it seems as though this trans-

impact them and the number of suppliers

formation journey and indeed the meas-

that are working for their products,”

ures that Chua has looked to instil have

“Right now as an example, we are moni-

been entirely pain free. He is keen to admit

toring around 400 suppliers and my team

that this is not the case and that it’s impor-

can tell you exactly how many of those

tant for anyone enabling change to stop

suppliers are relative to just one of our

and look at the pain points you experience

customers. They can also tell you how

along the way a little deeper. “We still have

many of those suppliers are located in

a journey to go,” he says. “But what we are

areas that have different levels of lock-

doing is fine-tuning each and every step

down restrictions and how many can still

of the way so that people can get up to w w w.t h e i n t e r f a c e . n e t

WIK GROUP

speed.” The future of this journey is very bright for WIK Group and Chua breaks that future down into a number of key elements. Firstly, he wants his procurement teams to be producing qualitative data while also bringing more valuable information into the business such as terms of technologies and new forms of supply base back into WIK Group. Ultimately for Chua, it will always be about the people and the relationships. Over his entire career he has always valued the importance of having key relationships built by people with the right mindsets. “What has been and will always be crucial to any form of success that I and WIK experience as part of this journey is that my team trust me in what I’m trying to deliver,” he says. “My team trusts that I’m willing to showcase their achievements and their success to our key stakeholders. What’s also key for me is that I have been blessed with management and senior stakeholders that truly support ideas and initiatives. This will only continue to enable great success for WIK Group from a procurement standpoint now and well into the future.”

w w w.t h e i n t e r f a c e . n e t

AUTHENTICITY IN PROCUREMENT We dive into the background and mindset of Lizan Molmans, CPO of Eneco, to discover how openness and authenticity have contributed to her successful career

WRI T T EN BY

N el l Wal ke r

rocurement isn’t necessarily an area that’s thought of as particularly human-cen-

tric, yet it does go hand-in-hand with the concepts of co-operation and organisation. As such, a touch of humanity can go a long way – and Lizan Molmans, CPO of Eneco, has it in spades. Driven and enthusiastic, Molmans is the type of person who, in her own words, assumes that “the fastest way to the other side of the lake is straight through it, even if going around it is safer,” when she’s excited about a solution. And creating and carrying out solutions requires openness, communication and self-belief – things which Molmans learned to hone the hard way, through her career. Like many procurement profession-

I like to do my job. At that time, I was still

als, Molmans fell into her current role

very young and naive, but I realised I

as a mid-career option. Previously, she

was not the perfect person for that job. I

was in sales – a role in which she was

became unhappy, and complained to a

perfectly happy, because she knew the

former manager of mine, who was head

products inside-out and was a real asset

of procurement. She said, ‘Why don’t you

to her business. However, the factory

do the same job you’re doing in sales

supplying those products hit difficul-

but on the other side of the table?’ That’s

ties, one year, and couldn’t deliver them;

when I discovered that procurement was

Molmans found herself in a position

a perfect fit for me.”

where she had to repeatedly tell clients

After years of varied roles, this one

the unpleasant news, meaning they lost

finally clicked. As part of a centralised

faith in the business. “I could not be truly

procurement team, Molmans and her

authentic,” she says. “That’s not the way

peers looked after procurement for the

AUTHENTICITY IN PROCUREMENT

entire IT business she worked for, and it

next step to be a horizontal one. So she

suited her because it allowed her to buy

moved on, but found that in her next

at a higher level. “Eventually, though, I

role, nobody cared whether she worked

got a bit stuck on the idea that having a

hard or simply did nothing. She moved

boss who makes choices about how I do

on again, but this time, she wanted to be

my job or how a department is arranged

in a position where she had influence. “I

didn’t suit me, because my opinions were

realised I wanted to improve everything I

different. It was time to take the next

could see,” Molmans explains. “My circle

step.”

of concern is very large and my circle of influence is a bit smaller, so I’m always

The next step

trying to push the latter and show that,

By her own admission, Molmans didn’t

when I believe I know better, I will stand

necessarily have the ambition to shoot

my ground if someone disagrees.”

for top positions, she expected that

Molmans needed to be part of a w w w . c p o s t r a t e g y. c o m

“ A COMPANY HAS A LOT TO GAIN BY PUTTING DIFFERENT PEOPLE IN PLACE WHO MIGHT QUESTION THE STATUS QUO” – LIZAN MOLMANS, CPO OF ENECO

business which, in turn, needed her. “I

I want to split up the company from a

was with this executive search bureau

procurement perspective and I want to

and they asked me what kind of job I was

partner from a procurement perspective.

looking for. I said that I needed to be in

I thought that would be a nice challenge,

a management position because I’d had

and they agreed.”

too many bosses where I could have done better. I needed a company on the

Facing the challenge

move, that had a sense of urgency to

Molmans spent over 10 years with this

change. They suggested I approach one

business, eventually becoming inter-

of the three Dutch energy companies,

ested in mediation. She even studied

and I said, okay, I want to be a manager;

to become a mediator, but then Eneco

AUTHENTICITY IN PROCUREMENT

head-hunted her to lead its procurement

organisation, wasn’t particularly mature,

function; it was a dilemma, for Molmans,

but Molmans saw this as a challenge

who had been thinking of starting her

she could fix for the betterment of the

own company and being a full-time medi-

company. “Operational excellence is very

ator, but she reasoned that she could do

important, but it took Eneco some time to

that later in life – this was an opportunity

really embrace that.”

that couldn’t be refused. “Eneco is a very smart, intelligent, stra-

Now, Molmans has found her place and embraced how who she is affects her

tegic company,” she says. “The culture is

role, and vice versa. She has discovered

one that celebrates great planning and

that while she wants influence and to

innovation.” Eneco, as a decentralised

make big changes, she isn’t driven by the w w w . c p o s t r a t e g y. c o m

limelight; if she was, she’d have stayed in sales. She is more than content to be making waves in the background, driving innovation from within.

The value of authenticity “The older I get, the more okay I am with who I am – and that’s very valuable,” she explains. “I’ve become integrated with myself. People feel very liberated when they have honest conversations with me, and they allow themselves to be vulnerable and courageous. This is what, I think, is key for companies to be successful – if a company isn’t vulnerable, if people are holding their cards too close to their chests, how can you fix or change that business? The main purpose of an organisation is to let people co-operate as an organic entity, to create value, to work efficiently. The key to that is vulnerability and openness. You can’t work together if you’re not open.” It’s easier said than done, of course, and some people struggle with vulnerability to the extent that they become argumentative and defensive, but Molmans does her best to communicate the importance of it to her team and her superiors to make company-wide change. In her experience, with procurement being a fairly male-dominated 66

AUTHENTICITY IN PROCUREMENT

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

“ T HE MAIN PURPOSE OF AN ORGANISATION IS TO LET PEOPLE CO-OPERATE AS AN ORGANIC ENTITY” – LIZAN MOLMANS, CPO OF ENECO

AUTHENTICITY IN PROCUREMENT

arena, keeping one’s cards close to the chest is sometimes seen as being strategic and intelligent, where openness may be considered naive – but this is where a little diversity of thought can go a long way. “A company has a lot to gain by putting different people in place who might question the status quo,” Molmans says. “We shouldn’t be trying to compete; we’re meant to co-operate, and competition doesn’t bring profit.” Molmans firmly believes that it takes courage to be vulnerable, because vulnerability can mean risk. To her, if you’re not being yourself and not being vulnerable, you’re not doing the best job you can do; you’re not contributing to the organisation as much as you could by not being your authentic self. So, if Molmans had with this extensive knowledge in how to promote a successful, open, efficient organisation through honesty, innovation and openness, early in her career, would the journey have been different? “Yes,” she says, “because I would have felt able to stand up and admit when I wasn’t the right person for something. Our experiences are a combination of environment, society, upbringing and the time period, and I didn’t know anything about what I’ve learned now, back then. But, if I wasn’t a good CPO – if I couldn’t understand procurement and how to move this organisation forward – I wouldn’t be where I am now.”

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

The importance of supplier engagement We spoke to Sulaiman Abdulla, Manager of the Procurement and Contracts Section at the UAE’s TRA, to monitor the company’s procurement transformation WRI T T EN BY

Andr ew Woods

PRODUCED BY

Hey kel Ouni

ided by new technology,

occurring thanks in part to the work of

and supported at boardroom

bodies such as CIPS (Chartered Institute

level for its deep insights into

of Purchasing and Supply), which has

every strata of a companyâ&#x20AC;&#x2122;s operations,

spent ten years highlighting the strategic

procurement is now seen as a vital stra-

value of procurement in the region. Now,

tegic aid. Across the globe, traversing

certain companies and CPOs are leading

every industry, the CPO is fast becoming

the way in bringing procurement into a

a visionary with a 360-degree holistic

new dawn.

insight that can truly help businesses to strategize and accelerate growth. Traditionally, the Middle East has taken

Technology has increasingly become a major focus for the Middle East, with many nations vying to make the area

a little longer than most to adapt to the

a global center of technological excel-

evolution of procurement, but change is

lence and digital transformation as seen

TRA

in the sector and reflecting the level of development of ICT in the UAE. The UAE has also remained first, globally, in the mobile broadband subscriptions index and advanced from second to first, globally, in the Mobile Broadband Internet Subscription Index. In terms of Internet users, the UAE moved up to 5th from 13th globally, while rising to 29th from 68th in the world, in the Fixed Broadband Subscription Index. TRA is working hard to achieve a number one ranking in this index in order to achieve the goals of the National Agenda: to be the first in the world in TII by 2021. In short, the role of TRA is to “encourage, promote and develop the ICT industry in the UAE”. And to facilitate an endeavor of this scale, you need a smart and agile in projects such as the upcoming Expo 2021, Dubai. The Telecommunications

procurement function. The procurement function at TRA

Regulatory Authority (TRA) of the United

is headed up by Sulaiman Abdulla,

Arab Emirates (UAE) was established in

Manager Procurement & Contracts, who

2003 to regulate the burgeoning tele-

joined in 2016 with a wealth of experi-

communications sector in the UAE and

ence having worked for different govern-

enable government entities in the field of

ment and private sectors. TRA is dedi-

smart transformation. The UAE is ranked

cated to developing and modernizing the

first in the Arab region and seventh

telecommunications system in the UAE

globally in the Telecommunication

through training, enabling and establish-

Infrastructure Index (TII), according to

ing related educational institutions, and

the UN E-Government Survey 2020 –

obtaining the latest ICT devices, equip-

surpassing many developed countries

ment, and facilities. w w w . c p o s t r a t e g y. c o m

UAE EMBARKS ON A DIGITAL JOURNEY

Infosys has been working closely with UAEâ&#x20AC;&#x2122;s public sector, which has reposed trust in us to implement missioncritical projects. Infosys partnership has gone from strength to strength, and we have rolled out several countrywide e-governance initiatives

www.infosys.com

INFOSYS TO DRIVE E-GOVERNANCE How does a government save 45,600 working hours, 10 million person hours of waiting time, and 1,011 tons of carbon? The answer lies in Smart Governance. UAE Smart Government has been focusing on smart governance since 2015 to increase the efficiency of the government services by eliminating the physical visits for the citizens and residents. Infosys, a global IT consulting company, has been a key partner for National Plan initiatives launched by the Key Public Organizations Government Service Bus (GSB) Infosys has implemented several smart initiatives starting with Government Service Bus (GSB) backbone built in 2015. GSB delivers more than 200 services across 60 government entities, providing direct access to UAE residents.

New Baby Born Registration This initiative simplifies the process of registering newborns. a process that took six to eight weeks. parents can apply for the service once, and access several services in two weeks: • Issuance of birth certificate • Adding the baby in the family book • Registration of baby in the population register • Issuance of passport • Issuance of Emirates Identity Card

Ease of Doing Business digitize government services related to registering a business in the UAE. It is an integrated e-service that enables an investor to access several services within 15 minutes, including: • a trade license • a membership number in the Chamber of Commerce • a quota for three work permits • Establishment Numbers The initiatives reduced the number of visits by investors to government entities from 10 to 0 and reduced processing time from 2-3 weeks to 15 minutes. Also, the number of duplicate documents required by Government entities was reduced from 30 to 0.

UAE PASS National Identity Solution The UAE Pass, a national digital identity and signature solution, enables users to identify themselves to government service providers via smartphone-based authentication. It allows users to sign documents digitally. Find out more about how Infosys have been helping clients in transformation journeys. Reach out to us at askus@infosys.com

w w w. cp o stra te g y. co m

“ Sometimes, people don’t really understand the CPO, procurement and negotiation. It’s not a transactional role anymore. It’s more about quality, new ideas and flexibility” —

S U L A I M A N A B D U L L A , M AN AGER, P ROCUR EM EN T & C O N T R AC T S , T R A

Upon his appointment, Abdulla initiated a massive procurement transformation at TRA by establishing a roadmap that would see procurement becoming much more than a merely transactional aid at the regulatory authority. “I wanted us to start developing people, governance and partnerships,” he explains. Abdulla initiated an extensive round of market research to gain feedback and insights from TRA’s internal and external stakeholders. “I really wanted to understand their requirements with an

TRA

increased focus on supplier engage-

perspective of operations outside the

ment,” he says, adding, “After all, they

standard quarterly timeframes that many

understand the market better than

departments adhere to. “I am interested

anyone else.” There has been a real shift

in looking at partnerships over 20, 30,

in the sharing of information and insights

40 years,” he explains. “Sometimes,

within the regulator, and externally

people don’t really understand the CPO,

with partners, since Abdulla took over.

procurement and negotiation. It’s not

Focused on collaboration with bodies

a transactional role anymore. It’s more

such as CIPS, TRA wants to increase

about quality, new ideas and flexibility.”

awareness and knowledge of the strate-

Transformation of procurement func-

gic value of procurement and now places

tion is a process, not merely a project

a massive value on supplier engagement

you start and finish. “We started this

and collaboration to create a longer-term

journey four years back by focusing on w w w . c p o s t r a t e g y. c o m

LEADING GLOBAL EXCELLENCE IN PROCUREMENT AND SUPPLY CIPS, THE CHARTERED INSTITUTE OF PROCUREMENT & SUPPLY, ISâ&#x20AC;¦

CIPS CLIENTS IN MENA INCLUDE:

THE PROFESSIONAL BODY A not-for-proﬁt organisation that exists for the public good, promoting and developing high standards of skill, ability and integrity among procurement and supply chain professionals.

QUALITY GUARANTEED CIPS qualiﬁcations are recognised by regulators across the world, including the Knowledge and Human Development Authority (KHDA) in Dubai, demonstrating that they meet speciﬁc quality standards.

THE GLOBAL STANDARD CIPS Global Standard in Procurement and Supply sets the benchmark for what good looks like in the profession.

A COMMERCIAL ORGANISATION CIPS helps businesses and governments around the world to excel in procurement and supply, supporting them to improve and deliver results and raise standards.

A GLOBAL COMMUNITY We are the world’s largest professional body dedicated to procurement and supply with a community of over 200,000 professionals in over 150 countries, and oﬃces in Africa, Asia, Australia, the Middle East, Europe and the USA.

WWW.CIPS.ORG | MENA.ENQUIRIES@CIPS.ORG w w w. cp o stra te g y. co m 79

technology enhancement, process re-en-

(internal and external) and includes a

gineering and people development in

commitment to add value to supply

skill set capabilities. You always start

chain management. “Most procurement

small till you reach big. Procurement

professionals are focusing more on

professionals and leaders have to under-

the internal stakeholders by having an

stand that success is a journey. You can’t

internal engagement plan with stake-

simply just jump from a manual work-

holders and an effective communica-

ing environment to artificial intelligence.

tion plan to understand their needs and

Transformation starts with automating

requirements. On the other hand, we

your manual processes, then shifting to

often see that the level of collaboration

digitalization and the analysis of the infor-

and engagement with the suppliers is

mation and data to reach to AI.”

low. Chief procurement Officers need to

The mindset of CPO, according to Abdula, should change from “competition to completion” in order to achieve greater value and sustain the growth of the organization. “This means, we as procurement professionals, should work more collaboratively with our internal stakeholders and suppliers,” he explains. “We complete each other in the process of supply chain in order to achieve a win-win strategy.” Abdulla has placed an increased importance on supplier engagement and collaboration at TRA, but why is supplier collaboration so important to TRA’s activities with regards to strategic procurement? According to Abdulla, it has become essential for companies to extract the best possible performance of the supply chain involving all parties 80

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realize the value and the importance of supplier collaboration.” Abdulla details a number of benefits from this form of engagement. Project

“We have started engaging our strategic partners to develop the staff by closing the skills gap and providing a self-learning environment” —

S U L A I M A N A B D U L L A , M A N AG E R , P RO C UR E M E N T & C O N T R AC T S , T R A

timelines can be accelerated and project outcomes improved; for example, boosting business expectation and requirements while minimizing risk. There can be a massive development of staff by closing existing skill gaps which also boosts operations with regards to staff retention which, according to Abdulla, will relieve dependency on contractors and suppliers. Plus, value addition and cost optimization by reducing inventory levels will significantly improve the customer journey, allowing better visibility into customer demand, supplier performance and faster decision-making. “Effective collaboration with partners is all about sharing valuable information and transparency to achieve a common goal or target,” he says. “It also means that both parties are extending their efforts to achieve the value that both parties wish to reach. A ‘win to win’ strategy.” Recent studies highlight that organizations engaged with suppliers are 38% more likely to achieve their expectations and goals towards cost optimization and value driven procurement. According to Abdulla, levels of engagement or collaboration can often start w w w . c p o s t r a t e g y. c o m

with the transactional level where both

is power,” Abdulla explains. “And it is very

parties share transactional data includ-

important for the organization to map its

ing purchase orders, invoices payments,

strategic planning towards a strategic

work orders, sales orders, inventory

level of engagement and collaboration

and contract terms to help the partners

with suppliers to achieve greater value

automate business processes and trans-

and outcome from the supply chain.”

actions and help in making best decisions. The level of engagement can also increase to a ‘strategic level’ where both parties are taking part in joint planning, redesigning of business and products by sharing high levels of value information. In this level, both parties share levels of risks and reward that can lead to better forecasting and planning that can reduce risk and enhance quality and better pricing plans, while boosting sales and operational planning and resolving critical issues and events. Collaboration is dominating many conversations in every conceivable industry and procurement is starting to truly benefit from the sharing of information. Abdulla is a true devotee to the collaborative way of working and believes that a network of shared information can unlock true potential from procurement and the supply chain while driving innovation through the discussion of ideas and suggestions. Staff capabilities can also be improved greatly through sharing thoughts and ideas. “Knowledge 82

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Supplier relationship management or as Abdulla terms it, supplier value

Sulaiman Abdulla Manager, Procurement & Contracts, TRA A strong believer in Completion rather than Competition Methodology, Sulaiman has led different teams with different initiatives in value adding to organizations in the field of Cost Optimization and Supplier Management Particularly. Procurement is not Purchasing. Procurement is the main function (asset) for any organization to drive cost optimization and innovation by adopting best practices such as â&#x20AC;&#x2DC;Supplier Collaboration and Early Engagementâ&#x20AC;&#x2122;. Change is the only constant in any organization to sustain so it is very important for procurement professions to adopt best practices in all industries from technology, to people, to processes. Sulaiman and his team have worked accurately towards predicting business demand to anticipate the market changes and develop the right approach to source products and services in a competitive way. They have achieved excellence in this domain through encouraging the use of practices and behaviors that enhance trust with partners and championing suppliersâ&#x20AC;&#x2122; innovation capabilities and getting them involved early and actively.

management, requires an organization to shift from the traditional method of cost saving and negotiation to focus more on a ‘win–win’ approach which will empower the procurement team to be a business partner rather than a mere facilitator. In order to increase the collaboration level, organizations are required to get a holistic view across all suppliers before segmenting them in different approaches to identify the key suppliers who are adding value to the supply chain. “Segmentation of suppliers should not be focused on spend only,” he states “If you are going to increase the level of engagement and collaboration, then you need to consider different aspects while segmenting your suppliers. Some examples to consider are nature of projects, industry, spend, risk, innovation, performance and value. You also need to identify the supplier touch points in the supply chain processes. There are different areas where you can expand the supplier collaboration and engagement efforts to drive continuous improvement to the process. Apply an 80/20 methodology; focus on the 20% of your suppliers who generate 80% value to the organization.” Supply chain or procurement processes are always centered around long-term business, and not short-term relationships, according to Abdulla. “This how the CPO differs from the CFO. There are always challenges faced in any collaboration, especially for procurement professionals who are responsible for managing internal stakeholder, and supplier, collaboration while maintaining the different mindset of spending and saving the budget. As a public organization, I believe there are great stories of success we have achieved through early engagement 84

TRA

of our strategic suppliers on a national

just one supplier, but many suppliers or

level.â&#x20AC;?

consultants.â&#x20AC;?

TRA practices different types of early

Early engagement with suppliers offers

engagement, based on the way it cate-

benefits to both TRA and its suppliers

gorizes and segments its vendors. â&#x20AC;&#x153;Early

and enables the government to better

engagement with vendors for new tech-

plan for, and mitigate, risk. Complex,

nologies, allows them to communicate

innovative or high-risk programs can

the desired responses and narrow down

be adapted to better utilize ICT indus-

on a specification to advise us as to

try capacities, providing government the

the nature of the subsequent procure-

opportunity to realistically measure and

ment. Another type of early engage-

analyze the capacity of the ICT indus-

ment is when we need advice on a new

try to contribute to strategic programs

market, product, or service from not

and engage early problem recognition. w w w . c p o s t r a t e g y. c o m

TRA

Suppliers might also know more about what is possible or not when facing technological uncertainty. Early involvement provides maximum opportunity for enhanced outcomes in terms of cost, quality, delivery and design. Early engagement with suppliers also allows the procurement team to leverage on supplier capabilities and achieve advantageous positions in the innovation and development processes. “Early supplier involvement not only enhances outcomes, but also enables suppliers to bring new innovations to the table. If technology is complex, we bring suppliers in and discuss design ideas issues and challenges. Early supplier involvement assists in both the quality and cost of the initial finished good, but also in the ability to keep the product in service after the sale,” he says. According to Abdulla, it is important to engage early and widely with the supply side, to give a supplier an opportunity to shape the requirement. Suppliers who are involved earlier can have a better understanding of the requirement, reduce time to market, create better business forecasting and better resources planning that can lead to a long-term business relationship.” Operating under TRA’s ‘newborn’ w w w . c p o s t r a t e g y. c o m

strategy, one of TRA’s strategic level

in the workplace culture is seen by many

projects was achieved within 100 days by

as disruptive, but necessary. Among the

getting the strategic suppliers engaged

challenges Abdulla has faced, he cites a

earlier in the prototype phases. “There

lack of vendor’s cooperation, intellectual

was a daily collaboration with the differ-

property conflicts with vendors and the

ent strategic suppliers who were on our

overestimation of the development skills

premises to achieve the target,” Abdulla

of the supplier. Political issues arise too,

explains. “Clarity is very important while

such as, the reward structure for suppli-

engaging the supplier. In this project,

ers and a degree of fairness to those

the goal was clearly transferred to all

not involved as early as other vendors.

suppliers and changing the deadline was

“Understanding is so important,” he says.

non-negotiable.”

“There needs to be understanding on all

Abdulla believes that developing internal capabilities is a key factor to success.

sides.” With a procurement transformation

“We have started engaging our stra-

fully under way at TRA, Abdulla and his

tegic partners to develop the staff by

team have 36 KPIs to monitor its success.

closing the skills gap and providing a self-learning environment that leads to bringing different values to the organization; from knowledge adoption to applying best practices and utilizing the tools and toolkits. Regarding new tools and techniques, Abdulla can see a time in the not-too-distant future when artificial ‘emotional’ intelligence could be fully harnessed by the procurement function. As with any new business practices, there will be challenges during implementation. Change management is often number one in the most common challenges facing new processes and operations. A new way of working and a shift 88

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“Early supplier involvement not only enhances outcomes, but also enables suppliers to bring new innovations to the table” —

S U L A I M A N A B D U L L A , M A N AG E R , P RO C UR E M E N T & C O N T R AC T S , T R A

However, how does Abdulla encapsulate procurement excellence? “Data is important. After all, without data you can’t improve anything. I place a high value on people, too. After all, you can have the best technology in the world, but if you don’t have the people and the brains, it’s useless. Procurement excellence is a continuous evolution and it’s all about driving value to the organization,” Abdulla explains. “Right now, people need to truly understand the procurement process to allow it to work at its full potential.”

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

Interviewing for success: A recognition of the hiring process as a two-way street and key to winning the talent war The war for talent is a challenge faced by many, but what more can we do at the interview stage to succeed in hiring the right talent for our business?

WRI T T EN BY

Iai n C am pbel l M c Ke n n a

S O U R C I N G S O LV E D

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

72% of job seekers that had a bad experience told others about it, either online or in-person - CareerArc

moving on to the next opportunity.

Unlike any other time in recent history,

conducting an interview, it is essential to

the current competition for top-level

understand the reasons why top candi-

procurement talent is intense.

dates usually turn down job offers – even

A Word (Or Two) of Caution Before we get into the finer points of

High-performing, senior candidates with

from large and prestigious companies.

a proven track record for delivering results

To start, having to endure a series of

have seemingly unlimited career oppor-

interviews that, in some cases, are more

tunities. As a result, selling your brand as

interrogation than they are a meaning-

an employer of choice is more critical than

ful dialogue to determine fit, makes the

ever before. Beginning with the early stages of the recruiting process through to the interview stage and hopefully a successful hire, progressive organisations realise that the selection process is a two-way exercise. At no other step is this two-way dialogue more evident than it is during the interview. Our focus today is to highlight the key points that result in a successful interview session, keeping in mind that a successful outcome will not necessarily result in a hire. In other words, the interview session goes beyond the resume and corresponding qualifications to focus on “the fit” between employer and candidate. A successful outcome, therefore, is either finding the right fit between an organisation and a potential candidate or determining that there isn’t a fit with both parties 92

S O U R C I N G S O LV E D

hiring process an elongated, time-consuming exercise. A lack of preparation in which unimaginative and perfunctory questions like asking a candidate where they see them-

“ ...the interview session goes beyond the resume and corresponding qualifications to focus on “the fit” between employer and candidate” Iain Campbell McKenna, Sourcing Solved

selves in three to five years is a surefire way to get a procurement leader to move on to another opportunity. Finally, and this is a far more common occurrence than you would think, sending in a junior or inexperienced representative to interview a senior-level professional. While it is not our intention to slight anyone within the organisation, a candidate will judge the prospective employer’s level of professionalism and interest based on the seniority of the person conducting the interview. In short, it is not just a matter of what you ask, but who is doing the asking that sets the stage for a successful meeting. With the above in mind, let’s get to the tips that can help you to land your organisation’s next great procurement leader.

Essential Tips for a Successful Interview Regardless of experience, top HR executives proactively look for new insights into conducting a successful interview. While you will likely recognise some of the interview tips that follow, in conjunction with the ones with which you are not w w w . c p o s t r a t e g y. c o m

familiar, you will gain some added value insight. Social media platforms such as LinkedIn, Twitter, or even Facebook can provide you with a needed window into both the professional and personal life of a prospective candidate. For some, checking out the candidateâ&#x20AC;&#x2122;s social footprint is done before scheduling an interview. However, even if you have already set a date, be sure to do your homework by checking out their social accounts. Ask candidates if they have had an opportunity to research your organisation and if they have any questions. Top candidates always view the job search process as a two-way exercise and are therefore interviewing you as an employer, as much as you are interviewing them as an employee. If they have not done their research on your company, then that should be a red flag. Ask them how they would envision fulfilling the responsibilities of their position, including a high-level strategy and establishing performance metrics by which to measure their success, including a career progression path. The tone and tempo of the interview should be conversational focusing on getting to know one another beyond the resume and job description. Enthusiasm is contagious. When you talk about your company, speak with passion delivering a clear message regarding culture, mission, and vision. Do not be hesitant to tell the candidate why you are excited about your career working with the company. Always professionally present yourself in both verbally and business attire (open collars, without a tie, tend to help someone relax). During the interview session, put your mobile phone on mute â&#x20AC;&#x201C; not just vibrate and leave it in your desk drawer. If someone in your office interrupts the interview let 94

S O U R C I N G S O LV E D

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

them know you are in a meeting and you will get back to them later. The key here – especially with a senior-level candidate is to show them that you respect both their time and the process. If acceptable to the candidate record the interview for later review. Doing so will enable you to stay in the moment without distractions while providing you with an opportunity to review later. At the end of the interview, make sure you are clear regarding the post-interview steps. Start by asking if the candidate has any further questions. Provide feedback regarding your take on how the interview went, and if you feel there is a fit. It would help if you also asked the same of the candidate. If both you and the candidate feel there is a fit, then provide them with the process for bringing them on board. If, however, there is not a fit, thank them for taking the time to meet with you and indi-

81% of hiring organisations fail to do, which

cate that you will follow-up with them when

is to write a thank-you note to all candi-

there is a final decision providing compre-

dates – even the ones you do not intend

hensive feedback for said decision.

to hire. Remember, your brand as an

The key when you find the right candi-

employer is one of your company’s most

date is to move quickly as a candidate’s

valuable assets and showing respect and

enthusiasm will wane if they feel that the

consideration for all candidates will build

company is not being proactive in turning

your reputation as a quality organisation.

a successful interview into an appropriate job offer. Finally, and this is an essential step that 96

S O U R C I N G S O LV E D

Remember Your ABCs Perhaps the best way to conclude is to

“ The message you send will go a long way towards telling the candidate that you are not only happy but enthusiastic to be a member of your organisation’s team and why they would be glad to join” Iain Campbell McKenna, Sourcing Solved

encourage you to remember your ABCs

but enthusiastic to be a member of your

– Always Be Closing.

organisation’s team and why they would

There is a famous line from a great

be glad to join.

comedian who said: “I would not want to

(NOTE: As someone who has been

belong to a club that would have me as

hiring people virtually for more than a

a member.” Everything you do from your

decade – with a 98% success rate, Iain

level of preparation and dress to your

Campbell-McKenna can show you how

manner during the interview is a selling

to apply his proven interview prepa-

point for your company. The message you

ration techniques to ensure that you

send will go a long way towards telling

identify the best candidates for your

the candidate that you are not only happy

organisation. Contact Iain today at iain. w w w . c p o s t r a t e g y. c o m

GAINING THE GREEN VIEW: HOW SMART PROCUREMENT CAN KICK- START SUSTAINABILITY INITIATIVES Sustainability has become a key talking point for procurement professionals and organisations the world over. In recent years, where sustainability once found itself low down the priority lists of the CPO, many organisations now see themselves building their entire procurement function around sustainable initiatives and agendas. Here, we take a look at five key learnings from Ivalua’s recent report into sustainability….

WRI T T EN BY D a le B e nt o n

CLICK TO READ the report

COVID19: taking a toll on procurement and sustainability Procurement has and will play a vital role in collaborating with the wider business and suppliers to address any and all environmental concerns. While a recent study by Forrester showed that 41% of procurement professionals believe sustainability is the area offering the greatest potential to unlock value through improved collaboration with suppliers, Ivaluaâ&#x20AC;&#x2122;s research actually revealed that 60% of UK businesses say the coronavirus outbreak has decreased investment in sustainability initiatives. Of course, this isn't to say that these organisations will never focus on improving sustainability and contributing to global efforts to reduce environmental impact in the future, but it is undeniable that COVID-19 offers businesses a chance to reset their priorities to focus on more than just cost and help reshape the world in a more sustainable way.

Digital maturity vs digital immaturity: the key to unlocking sustainable change The digital conversation is an ever chang-

Why not read our exclusive interview with Dan Bartel, CPO of Schneider, as he tells us just how procurement represents the key to sustainable success for the company!

ing beast so it is of no surprise that digital maturity is significantly impacting the sustainable agenda for many businesses. The report revealed that 93% of UK businesses say it is challenging for them to gain visibility into their suppliers to track the environmental impact of their supply chain. Why? Poor data quality,

100

organisational prioritisation on cost, and

in the supply chain, while 28% and 26%

difficulty collaborating with suppliers still

have plans to tackle chemical waste and

represent the biggest challenges when

carbon emissions. While the report is

addressing environmental concerns.

based on a study of 200 UK businesses,

Ivalua also looked a little deeper and

it's not outside the realms of possibility

went beyond simply asking “why” (or in

to imagine this is an issue shared and

this case, why not) but also at the “what”.

recognised the world over.

What are businesses planning to do on the sustainability front specifically from a technology perspective? Well, less

There’s no two ways about it: Sustainability is key

than a third (29%) of UK businesses have

To address environmental concerns being

plans in place to tackle electronic waste

raised by consumers and legislation from w w w . c p o s t r a t e g y. c o m

101

the UK government, the pressure is on for

plans in place to address environmental

businesses to be seen to be saying the

concerns in the supply chain in the next

right things and taking action. “It’s vital

12 months.

that they look to build more sustainable

We’ve already seen that digital matu-

supply chains and ensure high stand-

rity takes its toll on this, but it's also inter-

ards are being applied by their suppliers.

esting to note that these plans are being

Not only does this help the planet and

held up by a “continued focus on cost

address consumer concerns, but it also

and quality from suppliers.”

benefits the business;” says Ivalua. To that end, 87% of UK businesses

The most important factors that businesses consider when it comes to work-

said making their supply chain greener

ing with suppliers are quality (38%) and

can actually become a key competitive

cost (31%). Sustainability crosses the line

advantage. Which should make it a no

with a third place finish, thanks to 15% of

brainer. With that in mind, it is no surprise

UK businesses considering it the most

that 95% of UK businesses say they have

important factor.

102

As we look to the future, eight in ten (80%) UK businesses say there will be a

be able to gather insights from the wider business as well as our suppliers.

trade-off between cost and sustainabil-

Alarmingly, not all of the businesses

ity when selecting suppliers. When this

surveyed are able to do this, with just

future will be is a different story, as a

over half (51%) saying they arenâ&#x20AC;&#x2122;t as

separate study by Forrester revealed that

prepared as they could be to monitor for

79% of UK procurement professionals

environmental concerns in the supply

said cost dominates supplier selection in

chain. Again, why? Well, they face multi-

most sourcing events.

ple challenges in gathering the insights they need to improve sustainability, with

There are always a hundred and one million reasons to say no

more than a third (39%) of UK businesses

When we look at addressing environmen-

poor data quality. Is this a result of legacy

tal concerns, much like how we assess

laden data silos between organizational

cost savings or efficiency, we need to

systems? Or is it a lack of consistency

admitting that the biggest challenge is

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

103

between data sets? Regardless, businesses must be able to draw on reliable data to build a solid foundation from which they can evaluate sustainability. What other challenges do we have? An organisational prioritisation on cost (38%) and difficulty collaborating with suppliers (38%) are often problems walk hand-inhand. The most important thing to remember is that being able to collaborate with suppliers on sustainability initiatives is absolutely vital for success but focusing on cost means conversations about sustainability often fall by the wayside.

A window into sustainability Procurement by its very nature is defined by visibility. It HAS to know what the business does and all of its key metrics in order to act on those metrics and ultimately improve those metrics. So in order to drive environmental action, it is critical that UK businesses build a complete picture of their suppliers and the supply chain. Easy right? 93% of UK businesses reported that it is actually challenging for them to gain visibility into their suppliers to track the environmental impact of their supply chain. The key challenges there are; a lack of visibility into supplier risk (30%), a lack of visibility into tier 2/3 suppliers (28%), and 20% struggle to gain visibility into tier 1 suppliers. Itâ&#x20AC;&#x2122;s clear then that businesses are struggling to implement sustainability initiatives across the business and supply chain simply because they donâ&#x20AC;&#x2122;t know who to speak to. This is reflected in how prepared UK businesses are to plan and manage key environmental 104

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

105

concerns. Just 29% say they have

at all for environmental concerns. Almost

comprehensive and fully developed plans

a third (29%) said they have no current

in place to tackle electronic waste in the

plans to address deforestation, while 24%

supply chain, 28% for chemical waste,

had no plans to address water pollution.

and 26% for carbon emissions. The

Given the attention surrounding sustain-

majority of UK businesses appear to still

ability, it's essential that UK businesses

be implementing their plans or develop-

act now, and work with the business and

ing them.

suppliers to develop plans that address

Perhaps a greater worry is the number of UK businesses with no plans in place

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these environmental concerns. â&#x20AC;&#x153;By insisting on high environmental

standards, companies can demonstrate the

efficiency and waste reduction, while

importance of sustainability in the purchas-

turning being â&#x20AC;&#x2DC;greenâ&#x20AC;&#x2122; into a competitive

ing process, and even encourage suppli-

advantage.

ers to make changes in their business. This will help create a dialogue with suppliers to identify new opportunities for innovation that will drive green initiatives and

By making procurement smarter, UK businesses will be able to react to and proactively address these concerns in a post-COVID-19 world.â&#x20AC;?

processes throughout the supply chain. This opens up the entire procurement operation to change, allowing for greater

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