CPOstrategy – Issue 12 by B2e Media

I s sue 12 â&#x20AC;˘ www.cpostrateg y.com

Is your approach to hiring top procurement talent a game of hide-and-seek?

empowering people through procurement

Fearlessly expanding through procurement transformation Piotr Teodorczyk, VP, Head of Global Procurement at Olam, discusses breaking down silos in a procurement transformation

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Welcome to issue 12 of CPOstrategy! THIS MONTH’S COVER star is Piotr Teodorczyk, VP, Head of Global Procurement at Olam, as he outlines how breaking down silos and changing mindsets as part of a major company wide procurement transformation allows Olam to fearlessly expand. We sit down with Mahmood Shah, VP of Procurement and Supply Management, as he tells us that the key to succeeding in a transformation is creating an environment that promotes collaboration and enables innovative thinking. As the COVID19 pandemic continues, we speak with one company that is seeing its procurement function play a major role in weathering the storm of today in order to survive. and thrive, in the world of tomorrow. Mohamed Habib, VP of Supply Chain Management at Tabreed, tells us how at a time of crisis, procurement maturity is key to supply chain resilience. We also asked global procurement professionals about the steps they’ve taken to mitigate the impact of COVID-19 for The Big Debate, Iain Campbell Mckenna of Sourcing Solved explores recruitment strategies, Waleedi AlSaeedi of the Department of Tourism Abu Dhabi tells us why we need digital procurement now more than ever.

EDITOR IN CHIEF Andrew Woods

EDITOR Dale Benton

SOCIAL MEDIA MANAGER Callum Rivett

CONTRIBUTING EDITOR Kevin Davies

CREATIVE LEAD Mitchell Park

VP GLOBAL FINTECH & INSURTECH Alex Page

VP TECHNOLOGY Stay safe, and enjoy the issue!

Andy Lloyd Craig Daniels

VP PROCUREMENT Heykel Ouni Greg Churchill

PRESIDENT & CEO Kiron Chavda

PUBLISHED BY

Dale Benton, Editor content@b2e-media.com

CONTENTS

Olam

6 SGS

34 Is your approach to hiring top procurement talent a game of hide-and-seek?

Covid-19 and the need for Digital Procurement

The Big Debate: How are you and your company mitigating the risks of the coronavirus pandemic?

Covid 19: How the pandemic should shine a spotlight on risk management strategies

Tabreed

Fearlessly expanding through procurement transformation Piotr Teodorczyk, VP, Head of Global Procurement at Olam, discusses breaking down silos in a procurement transformation WRI T T EN BY PRODUCED BY

Dal e Bent on Gr eg Chur c hi l l

s a leading food and agri-business supplying food ingredients, feed and fibre to over

25,200 customers ranging from multi-national, world famous brands to small family run businesses, Olam is all too aware of how each and every one of its customers depends on the company to provide goods and services on time and high in quality. Recognised as one of the fastest growing food and agri-business firms, Olamâ&#x20AC;&#x2122;s involvement in the commodity value chain spans from upstream to downstream and encompasses selective upstream (perennial tree crops, broad acre row crops, dairy farming, and forest concessions); supply chain (global origination and sourcing, primary and secondary processing, inland and marine logistics, merchandising, trading, value-added solutions and services, risk management and commodity financial services) and; selective midstream/ downstream (value-added manufacturing, branding and distribution in Africa, ag logistics and infrastructure). Needless to say, Olam leads a complex product portfolio and so it requires a supply chain and procurement function that can support its global network across more than 60 countries. In 2018, Olam embarked on a massive 8

OLAM

transformation journey, one that would see the function become a more strategic unit that delivers additional value to the wider Olam group. “The goal was to move from a position of decentralised traditional buying, where each business unit and branch buys for itself,” explains Piotr Teodorczyk, VP, Head of Global Procurement at Olam. “The existing function could very much benefit from having a more solid and sharper mission and adequate strategy, as well as greater line of sight on performance metrics and deliverables.” The initial stages of Olam’s transformation journey saw the company implement a true hybrid globalised procurement model that consists of category

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management practices embedded within the operating model. These practices are guided by a clear vision, strategy, and mandate to cover and influence non-agri commodity spend, set-up a hybrid procurement organisation and implement category management best practices in top categories. In the first two years, Olam also successfully launched a training academy, deployed an IT helpdesk, and launched Ariba across the board. “We are heading now, in the next two years, into what we call our Fearlessly Expand remit,” he says. “This will see us reach out to new geographies and categories through team expansion while deepening current team knowledge, supplier relationships and internal stake-

“ There’s still a long way to go for it to become a part of company culture,” he admits. “But it’s a continuous process requiring constant commitment, focus and persistent messaging across every part of the organisation” Piotr Teodorczyk, VP, Head of Global Procurement at Olam

only strategy, but business growth. As a procurement professional,

holder happiness by leveraging digi-

Teodorczyk has seen this evolution

tal tools. The key elements of this will

unfold firsthand. While he feels that there

include the expansion of organisational

has already been incredible change,

alignment and remit to new geogra-

Olam is now witnessing the most excit-

phies and categories, focusing on inno-

ing journey in procurement. “We have

vation and leveraging digitalisation as a

a unique opportunity to move from

key enabler all while establishing a P2P

a service function to becoming truly,

opportunity through shared services.”

trusted business partners,” he says. “By

Olam’s reorganisation of its procure-

building trust through delivering our

ment function aligns with a global busi-

core numbers of savings and cash flow,

ness shift that has seen procurement

we are now going very much beyond

become integral to business strategy.

simple material cost optimisation, moving

Once viewed as a back office function, it

procurement into end-to-end value

is now well and truly a key driver for not

creation.”

OLAM

In his own words, there are two key

expanding their value proposition and

enablers of becoming a world-class

focusing on five areas to differentiate

procurement organisation: technology

themselves: being trusted advisors to

and collaboration. “Today, many organi-

the business, driving suppliers inno-

sations are running in an extremely lean

vation, providing (big) data analytics

fashion, after years of self-cost optimisa-

insights, and proactively managing risks

tion. That might come at the cost of the

exposures.”

ability to reduce spending, levelling out

“A procurement, sourcing or supply

cost reductions and decreasing savings,”

chain function is only as strong as its

he says. “But world-class procurement

supplier base”, Teodorczyk says. “This

organisations are able to offset that by

journey is also impacting our supplier

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relationships for the better.” According to Olam, the concept

“We do realise the value of supplier collaboration. We very quickly estab-

of collaboration within the supply

lished our SRM programme, with a target

management means much more than

of enhancing, formalising and structur-

the concept of open communication.

ing relationships with our most important

Collaboration involves the hand-in-

partners,” Teodorczyk says.

hand development (and execution) of

In his view, supplier relationships are

cross functional processes and capa-

assets that grow in value. For instance,

bilities. Procurement’s collaboration

suppliers can conduct needs-wants anal-

with its suppliers is a critical attribute

ysis to help prioritise and optimise spend

of leading-edge sourcing programmes

as well as provide a risk assessment of

and helps enterprises grow and adapt,

their own markets and solutions to help

consistently drive results and enable

sourcing teams mitigate various levels of

greater influence on strategic decisions

risk. Olam also uses suppliers to educate

by the entire procurement team.

sourcing teams on new products, price

OLAM

fluctuations and volatility as they often

generation within procurement. For him,

have a better understanding of the

the most important (and missing) piece

markets, risks, and customer needs.

of technology is spend analytics and this

“We have a strong desire to be

is something he is looking to address.

regarded as a “customer of choice” and

“Admittedly, we do not have perfect tech-

thereby gain access to the best offers

nology integration and we can struggle

from the highest-quality, most in-de-

with data quality internally, which can

mand suppliers,” he says. “We want to be

lead to lower efficiencies and high trans-

viewed as a company that’s easy to do

action costs,” he says. “We want to make

business with and operate with buyers

big data and spend analytics the crux of

that are easy to work with because it

all sourcing programs.”

helps them manage their own costs.” With regards to the technology compo-

“Making sense of the data is the key issue, both driving actionable insights,

nent, Teodorczyk recognises the grow-

and accessing them when needed. We

ing reliance on automation and insight

will continue to make further investments

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int the right people and the right technology.” The most critical requirement for Olam’s procurement organisation was to adapt its service delivery model to an extremely diverse set of budget owners and functional partners in the Olam value chain and create a level of agility. “Delivering this level of agility required us to take a lot of time to understand the business culture and context of each business unit and country, the scope, requirements and the needs and wants of our various stakeholders across multiple business units.” he explains. “That helped us to define the most efficient way to implement the change and sustain it.” For this, Teodorczyk looked closely at the business, particularly around understanding the business culture and context of each business unit and country. This process looked at the scope, the requirements and the needs and wants of its various stakeholders across multiple business units. This helped Teodorczyk be able to define the most efficient way to implement the change and sustain it. Olam is a truly global business, or as Teodorczyk describes it, it had been a “coalition of very independent business 16

OLAM

“ From a procurement staffing perspective, my goal is to have people that feel comfortable being uncomfortable, understanding and embracing that real world-class performance begins where one’s comfort zone ends” Piotr Teodorczyk, VP, Head of Global Procurement at Olam

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OLAM

units”.

These are:

In response, the procurement team

1) Aligning the organisation to create

took on the mission of working across

bridges between different business and

the business units and became a light-

synergise where possible by bench-

house of making the change in ways of

marking and building spend cube/ spend

working, embracing ‘ONE Olam’ as a

analysis

new approach. “There’s still a long way

2) Providing best practices and

to go for it to become a part of company

processes to develop and deliver stand-

culture,” he admits. “But it’s a continuous

ardised, scalable tools; map needed

process requiring constant commitment,

capabilities and ensure strategic sourc-

focus and persistent messaging across

ing process are scalable, repeatable, and

every part of the organisation.”

effective across enterprise

The concept of ONE Olam covers four

3) Developing holistic sourcing strat-

strategic principles that the company

egies to support Olam’s growth and

uses to operate within an enterprise

savings plan; collaboration is key and it

wide, holistic procurement function.

is important to build relationships and w w w . c p o s t r a t e g y. c o m

influence without authority across all business units 4) Building a strong network, procurement identity and a feeling of belonging to a single procurement organisation measured by unleashment survey; develop measures to track overall performance In order to break the siloed approach, a common goal for many procurement organisations across the world, Teodorczyk sought to deliver quick wins and use them as user (business) cases to help people understand the benefits and how they can apply this new norm. As for the end-to-end transformation of the procurement function, Olam took a holistic view of establishing key building blocks in 2018. These building blocks saw Olam look at its operating model, spend management, supplier management and collaboration, and the concept of procurement value. â&#x20AC;&#x153;We looked at how our procurement team is organised to serve internal and external stakeholders and how it aligns and underpins the procurement functions and wider organisational objectives,â&#x20AC;? says Teodorczyk. â&#x20AC;&#x153;When looking at procurement value we asked the question: How does our procurement function engage key stakeholders in the development of 20

OLAM

Piotr Teodorczyk Vice President, Head of Global Procurement at Olam Piotr Teodorczyk is Vice President, Head of Global Procurement at Olam International, driving the transition from generating savings to creating business value. Prior to this, he worked at Mondelez Asia Pacific and Mondelez International for 16 years and was at other renowned food companies such as Masterfoods, Effem and Mars Inc. Piotr has 17 years of experience in leading procurement and supply in Global FMCGs in EU, GCC and Asia and is an expert in leading cost-effective procurement and achieving significant savings through strategic procurement processes, upstream innovation pipeline, end-to-end supply chain optimisation, and manufacturing productivity improvements. He has deep experience negotiating and partnering with vendors to improve total delivered costs, quality and service and is a visionary leader with strong business acumen and ability to elaborate and implement strategies for business development.

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procurement strategy, and how aligned is it to the wider organisational strategy?” To that end, Teodorczyk looks to obtain an executive mandate to engage all business units and leverage team members to develop the procurement organisation and continue to measure stakeholder happiness through a number of means. “We established 360-degree feedback for the procurement function to measure success against set objectives and scored 4/5 in the first assessment. We call this our MeasureSatisfaction,” he says. “Through the use of steering committees, we established cross-functional, cross-business-unit steering committees to drive individual projects. As for our

“ We focused so much on getting the small wins chalked up, getting people onboard and winning their trust. To be successful in this game, it’s about making sure that differences we make continue to be visible and noticed” Piotr Teodorczyk, VP, Head of Global Procurement at Olam

‘status quo’. But what does he mean? “From a procurement staffing perspec-

executive mandate we were supported

tive, my goal is to have people that

by our Group CEO and Group COO to

feel comfortable being uncomforta-

include all non-agri third party spend to

ble, understanding and embracing that

procurement.”

real world-class performance begins

The final building block was centered

where one’s comfort zone ends,” he

around organisational alignment, which

says. “We have been extremely lucky

saw the support of individual business

and blessed to have teams like this in

unit CEOs and presidents to implement

procurement and that’s the most critical

the procurement strategy.

element of breaking the status quo. The

Teodorczyk truly believes that procure-

other typical characteristic of procure-

ment can be the change lighthouse

ment, enabling the change, is taking

that steers the transformational agenda

a customer centric approach and truly

across the wider organisation. He feels

understanding how you can make their

that procurement can in fact, break the

lives better, simpler and easier so we

OLAM

can all rest easy at night.” One of the key objectives for

so far. He does recognise, however, that there is still a long way to go and that

Teodorczyk and Olam when breaking

the journey is far from over. Still, he can

down the traditional siloed approach,

reflect on what were the key moments to

was to embrace a culture of innovation

get to this point.

and a truly global cross pollination of

“We are living in an age of constant

ideas from across the business. In setting

change, innovation and collaboration,

out the key procurement building blocks,

where the speed and complexity of busi-

working in unison to the ‘ONE Olam’

ness will only continue to accelerate,”

vision and obtaining buy-in from CEOs

he says. “The truly winning businesses

and COOs across the world, Teodorczyk

will be agile organisations that can tap

can look back on a successful journey

into expertise and find value wherever

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it exists in the market. Connecting the people, process, and technology ‘dots’ will be mission critical to achieving both a sustainable advantage and overall enterprise success.” Teodorczyk is keen to highlight that regardless of the increasing complexity, the real secret to success can be broken down into three key areas: connecting the “sourcing dots” to ensure that strategic sourcing processes are effective and repeatable across the greater enterprise, making spend analysis the crux of the strategic sourcing program (or as Teodorczyk describes it “the gold that runs through the walls of an enterprise”) and understanding that collaboration is the key to the future. One thing that can be said of Olam’s procurement journey is that in order to get to its current position where it is ready for any future challenges, Teodorczyk had to take those small steps early on to make the giant gains it has achieved to date. “Small wins lead to large gains,” he says. “We focused so much on getting the small wins chalked up, getting people on-board and winning their trust. To be successful in this game, it’s about making sure that differences we make continue to be visible and noticed.” 24

OLAM

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Is your approach to hiring top procurement talent a game of hideand-seek? Are you using the right methods to attract, identify and hire the right person? WRI T T EN BY

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

Which recruiting strategies are companies using to attract the best talent, and how does it align with what senior procurement candidates are doing to assess if the company they are considering is the right fit for them?

the general marketplace to fill their imme-

Whenever someone asks me this ques-

fies the challenges considerably. In other

tion, I always say that the hiring process

words, it isn’t that the right talent isn’t out

should not be a game of hide-and-seek

there, it is that the methods used to find

between a company and candidate,

and engage candidates at a senior level

but a communicative process of mutual

are not in alignment with the positions an

discovery. Specifically, are you using the

organisation is looking to fill.

right methods to attract, identify and ultimately hire the right person within the needed timeframe. It is an important question and based on the ongoing challenges companies are having in finding their next procurement leader; there does not appear to be a ready answer. The purpose of this article is to provide you and your talent sourcing team with that answer.

Understanding the gap When we discuss the ongoing topic of the war on talent and the growing talent gap, what exactly does that mean? In other words, is it the result of an external reality or an internal strategy? Most people think of a talent gap as being solely a lack of qualified people in 28

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

diate needs. While this is true to a certain extent, what we have also found is that in addition to any external “general” shortage, a misaligned recruiting strategy magni-

Finding a needle When you are looking to fill a senior position, you need to engage at a level that recognises the fact that these individuals are not likely to be randomly posting

“ Most people think of a talent gap as being solely a lack of qualified people in the general marketplace to fill their immediate needs” Iain Campbell McKenna, Sourcing Solved

their resume using keywords on an indiscriminate number of job sites. Unfortunately, and with the advent of technology which utilises AI and keyword searching, there is a potential perception that these low-cost high-volume activities are “silver bullets” capable of finding a niche expert in a sea of general practitioners. Of course, it would be far easier to find the proverbial needle in a haystack than hire your next Director of Procurement using this method. At this point, it is important to stress that leveraging technology and emerging AI capability to sift through a vast job marketplace using keyword searches can be useful when hiring entry or mid-level positions. The reason is simple; you are better able to assess candidate qualifications within the framework of a functional position versus a strategic one in which there are greater demands and risks. When you consider that in their efforts to hire for a senior position many companies, after 6 or 9 months (and some even longer) are still looking, you can see the point we are trying to make. w w w . c p o s t r a t e g y. c o m

Research proves the above to be true. According to a March 11th, 2020 article, less than 10 percent of jobs at a senior level is the result of candidates being on a job board. Conversely between 80 and 90 percent of hires are the result of networking.

Itâ&#x20AC;&#x2122;s all about the network Almost every person in business has read the book The Art of War. Of the many great words of wisdom or sayings, one that seems to stand out the most is the assertion that most battles are won or lost before the fight begins. When it comes to recruiting senior or niche talent, in which success is not due to what you know but whom you know, these are wise words. To start, the best and brightest candidates tend to research the market to identify potential employers rather than trawling through a sea of advertised job adverts. At this level, it is all about aligning career aspirations with the right organisation. So, long before you find them, they have probably engaged their network or been in contact via a headhunter. What this means is that if you are not in their network of contacts, youâ&#x20AC;&#x2122;ve lost the competitive advantage. Many top-level candidates with 30

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

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

increasing frequency are also seeking advice from a career or executive search professional. These search professionals usually come from a similar background, sometimes having held senior executive positions themselves. The point here is that the strength of your network will impact your success in hiring someone for a senior position.

Building your network Regardless of where you are with your current network, you can take proactive measures to build it so that you are not in a hide-and-seek situation when looking to hire a senior-level procurement executive. In addition to connecting with an established executive search professional, through whom you will gain access to a highly cultivated and strategically focused network, you can also research as to any movement within your industry sector. You may also want to consider tapping into the networks of executives within your organisation for possible referrals. Remember, you are all on the same team and statistics show that

“ The current job market is highly competitive, and when there is a perception of a talent shortage, it is a “sellers” market”

30 percent of all hires overall came through a referral from someone working within the same company. 32

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

Iain Campbell McKenna, Sourcing Solved

Download the keynote here

Aligning with success

but answer challenging questions. They

The current job market is highly compet-

must also project confidence by convey-

itive, and when there is a perception of a

ing a clear message regarding the posi-

talent shortage, it is a “sellers” market.

tion’s expectations and opportunities.

What this means is that as a company

In this regard, the words of the Head of

looking to hire top talent, you have to

Talent Sourcing for a global management

adopt a proactive strategy that not only

consulting company are worth noting;

seeks the candidates but knows where

“when my company is trying to hire at

to find them.

Director level or above, we will dedi-

Then once you find them, your team must be well equipped to not only ask,

cate a well seasoned and senior talent specialist to make the right hire.” w w w . c p o s t r a t e g y. c o m

EMPOWE RI N G P EOP L E THRO UGH P ROC U R E M E N T

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

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

top me if youâ&#x20AC;&#x2122;ve heard this one before; procurement has changed and has found itself

moving beyond a simple cost center and has firmly secured a seat at the table in business. While that may be true, the conversation surrounding procurement has moved beyond simply pulling up a chair at the high-level meetings to answering the question: what more can procurement do to make businesses become leaner and more agile organizations? Organizations that are powered by smart technologies in order to mitigate risk and improve sustainability? This is certainly the case for Mahmood Shah, Vice President of Procurement and Supply Management at SGS. As the worldâ&#x20AC;&#x2122;s leading inspection, verification, testing and certification companies, SGS is the global benchmark for quality and integrity. With more than 94,000 employees, SGS operates a network of over 2,600 offices and laboratories around the world. It becomes very clear then, just how integral procurement is and has

supply chain and procurement disci-

always been to SGS. The challenge is

plines. He was brought into SGS to help

taking it further.

improve the maturity of the procurement

Shah joined the business back in 2019

function of SGSâ&#x20AC;&#x2122; North American region.

having spent some of his younger years

He intends to achieve this through

working for the likes of British Airways,

process improvement, technology and

BMW Group and MetLife in various

improving the culture.

SGS

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

growth. We have access to use cases

to improve the maturity of anything, is

that procurement leaders can refer to,

to understand what is actually meant by

and can gain an understanding of, tactics

maturity at all and how it can differ from

and strategies that are proven to work,â&#x20AC;?

company to company. Or, perhaps most

explains Shah. â&#x20AC;&#x153;Procurement leaders

importantly, how the different levels of

can use benchmarks that may not have

maturity can offer valuable insight. â&#x20AC;&#x153;There w w w . c p o s t r a t e g y. c o m

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been previously available, to help build

challenge the norms and facilitate the

business cases within the organization to

collaboration between suppliers and

improve the efficiency and effectiveness

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

of their function.”

enabled through insight. “You have to be

Shah points to a notion of being a

prepared to do your homework by under-

trusted advisor for procurement and how

standing your company and business line

it is one of the key ways to add value and

goals and objectives, the challenges they

to be seen as a forward thinking func-

are facing and the industry trends as well

tion. For him, it’s about understanding

as accepting you may never know the

that role as there are often assumptions

current state of the business as well as

that ‘having a seat at the table’ means

your stakeholders,” he says. “Having that

that procurement does everything the

insight helps build your credibility with

stakeholder asks of them. The reality is

the business, especially where you’re

that procurement should be the one to

talking about the future state. Most

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

procurement leaders focus on the pres-

what is deemed to be best-in-class using

ent state statistics only, which can lead to

similar industry benchmarks. “As with any

business stakeholders feeling as though

transformation program, you have three

you’re not adding real value because

areas of consideration: people, process

you’re not telling them anything that they

and technology and these are the three

don’t already know.”

areas that I really focus on,” explains

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

Shah. “Together we explored how the func-

done it and are considered trusted advi-

tion was being managed, the way we

sors within their own organizations, and

engaged our business stakeholders, how

using your network is one the quickest

the operations were being managed

and most effective ways of acquiring that

and our effectiveness in managing and

knowledge.”

developing talent. These questions

Shah set out with a three-year strat-

were digging deeper and deeper into

egy that was developed by interviewing

each one of those areas. This approach

stakeholders in order to understand their

allowed the individuals in my team to

business challenges, their goals and

provide an accurate assessment of

objectives and their pain points. Then, he

the current state of our procurement

assessed the skills and the capabilities of

and vendor management function and

his team using benchmarks to ascertain

provided a heatmap of opportunities for

the maturity gap. Something he feels is

improvement.”

very important to note. Attention then turned to understanding SGS’ procurement performance versus

It’s incredibly important to Shah to acknowledge that this roadmap and journey isn’t based on his understanding, w w w . c p o s t r a t e g y. c o m

but the understanding of each and every person doing their job. It allows Shah to create themes that he will then look to improve upon across both sourcing and vendor management so that he can then explore the culture, the standardization, streamlining and the optimization of the sourcing and vendor management operations. He wanted to underpin all of that with a plan to develop and manage the procurement and supply chain management talent. At the time of writing, Shah is only seven months into this journey. In that time, he has completed the analysis and has an outline of the current state. SGS now has a plan in place for the next three years and has already begun making changes. One such change is the introduction of regional category strategies. Shah has moved away from individuals managing multiple categories, to develop subject matter experts, by assigning one category per person and assigning them regional responsibility. â&#x20AC;&#x153;This really helps my team to enhance their skills and their understanding of the category,â&#x20AC;? he says. â&#x20AC;&#x153;It helps to align these roles and their associated responsibilities with what one would find in the labor market and provides the opportunity for individuals to develop a deeper skill sets 42

SGS

within category management, which is an area that I want my team to focus on.” This also provides an opportunity for Shah as a leader to be able to provide members of his team with greater opportunities for their own career paths. He now has the ability to ‘increase the skills in their toolbox.’ It becomes clear that for Shah, people are incredibly important to procurement. Again, stop me if you’ve heard this one before: people power procurement. For Shah, it really is more than words. The roadmap he has planned out for SGS champions the people for it is entirely dependent on them. This stems back to a sentiment he has carried with him throughout his entire career. “Early on in my career a manager asked me; what can I learn from the best leaders I’ve worked with? And what kind of working environments they had created,” he says. “I want to recreate that for the teams that I manage. This whole transformation will only succeed if there is an environment that promotes collaboration where everybody gains value from the constructive discussions that take place.” Sometimes, that discussion can involve reluctance and pushback against what Shah is looking to implement. He takes this in his stride and finds that in most w w w . c p o s t r a t e g y. c o m

cases, some of the greatest value comes from those pushbacks. “You’re always learning from others. You may have a certain picture in your mind, but it won’t be the same as someone else’s,” he says. “Do you correct it? No. It’s about talking it through and making sure that we move forward together.” While it is imperative for Shah that his procurement team are brought along this journey, the importance of having the right technology cannot go unnoticed. Often seen as the ‘sexy’ part of a procurement transformation story, the approach to technology can make or break the whole process. SGS already utilizes e-procurement and e-sourcing suites and analytics tools. What Shah’s working on is a collaboration with the global procurement excellence team that is looking at pushing the technology processes even further. As such, SGS is currently working with Tradeshift to improve the efficiency of invoice processing by 25% as well as SHI International to help streamline the process of securing IT software (such as laptops and desktop suites), a process that previously took up to six weeks to complete and now takes just 3 days. One of the more significant technology partners has been Alekstra. SGS required a dispersed wireless service management process as a result of issues such as low user satisfaction, long lead times, poor customer service levels and high costs. “We partnered with Alekstra to introduce a more holistic process framework,” says Shah. “We now have a browser based online portal running on Alextra’s platform which is very customer-centric. That’s a key theme of what procurement’s trying to establish.” 44

SGS

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

As an example, SGS no longer requires

reducing our wireless bill by about 31%.

anyone to pick a mobile phone plan

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

or remember to activate international

case for us when it comes to technology

services when working. Elsewhere, it’s

leadership and it’s something that we can

finance department can automatically

share with some of our affiliates across

upload invoices to their ledgers through

the globe in terms of what we could do

this portal.

when we have good partnership.”

“As a result of working with Alekstra, we have seen a tremendous benefit in 46

SGS

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

also the global benchmark for quality and

goes without saying how that responsibil-

integrity. Sustainability runs deep within

ity is only magnified within SGS.

the companyâ&#x20AC;&#x2122;s very veins. But sustaina-

In fact, the companyâ&#x20AC;&#x2122;s very own

bility is often the one topic that gets lost

Paula Ordonez Crespo, Global Head

in the stories of procurement transfor-

of Corporate Sustainability, described

mation. Technology, people and process

what sustainability means to her.

take all the plaudits, but sustainability is

â&#x20AC;&#x153;Organizations must recognize that their

becoming increasingly important to how

role is no longer delivering shareholder

a procurement function operates, and it

value alone but creating value for all w w w . c p o s t r a t e g y. c o m

SGS

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

stakeholders and giving back, at the very

will achieve this by replacing fleet vehi-

least, what their operations take from

cles, recycling technology hardware,

society.”

implementing energy efficient lighting,

For Shah, this is a powerful statement

and exploring the use of renewable

that creates a truly noble cause for him

energy sources. “We are also integrating

and his teams to follow. “Our continued

sustainability into our sourcing process

leadership in sustainability is something

and have set ourselves high standards

that everybody at SGS is proud of and

as an organization,” says Shah. “We

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

have a comprehensive list of metrics that

part of the very fabric of what we do

quantify and demonstrate our value to

and has resulted in SGS being recog-

society.”

nized as an industry leader in the Dow

Despite the considerable successes

Jones Sustainability Index for six years in

achieved so far and the changes imple-

a row” he says. “Our mission for global

mented, Shah and SGS still find them-

procurement is to maximize value and

selves at the very start of this procure-

innovate with our suppliers and stake-

ment journey. Over the course of the

holders, to drive efficiency and support

next three years, much more will change.

profitable growth in a sustainable way.

Some of those changes will be antic-

Sustainability really is an integral part of

ipated, with processes factored in to

the procurement mission statement.”

mitigate and embrace these changes,

So how is sustainability reflected within

but others may be unforeseen. These

this three-year procurement strategy?

changes will be the ones that Shah feels

SGS will look to reduce over 5% of all

will truly empower SGS’ NAM procure-

greenhouse gas across North America. It

ment function. “You need to take a w w w . c p o s t r a t e g y. c o m

long-term view of where you are headed, but still be agile enough to pivot at any point in time,” he says. “You have to be flexible. It would be great to just move from accomplishing one milestone to the next but things rarely work out that way.” When all is said and done, it will always boil down to people for Shah. As noted above, he is a firm believer of surrounding yourself with the best people, learning from them and then stimulating that environment so that you continue to learn together. In procurement, professionals now have a position in which they can influence change and drive innovation, but only if they do what’s necessary to enable that. “If you actively participate in the change management programs, you get to influence it, rather than sit on the periphery and wait for the impact to happen to you,” he says. “That’s how you actually navigate through the changes that take place. The benefits are many, you gain a better understanding of the challenges you are facing, you learn from your mistakes and successes, and you move forward, together as a team.”

SGS

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

COVID-19 HOW THE PANDEMIC SHOULD SHINE A SPOTLIGHT ON RISK MANAGEMENT STRATEGIES Alejandro Alvarez, Partner: Operations Performance at Ayming, looks to explore the impact of COVID-19 on the global supply chain and how risk management strategies should be the top priority now, and in the future WRI T T EN BY

D al e Bent on

TELL US ABOUT YOUR EXPERIENCE IN SUPPLY CHAIN AND PROCUREMENT? I’ve been in the procurement and supply chain space for the last 15 years, both in industry working fast moving consumer goods (FMCG) and over the last 10 years, more on the consultancy side of things. I’ve been working for different different types of clients across many industries

“ I THINK THEY SAY THAT THERE’S NOTHING POSITIVE ABOUT WHAT IS GOING ON. WHAT’S INTERESTING FROM MY POINT OF VIEW IS ACTUALLY LEARNING FROM WHAT IS GOING ON SO THAT BUSINESSES CAN TRY TO PROPEL ON FORWARD”

and that allows me to have a view as to the importance of supply chain risk assessments in the context of what’s going on today, around the world.

Alejandro Alvarez, Partner, Operations Performance at Ayming

LOOKING AT THE EVOLUTION OF PROCUREMENT, HOW WOULD YOU SAY THE CONVERSATION SURROUNDING RISK MANAGEMENT HAS CHANGED?

carried out periodically to make sure

I think it certainly hasn’t been prioritised

to small or large businesses. A smaller

for some types of businesses. However,

medium sized business will typically be

I do believe that there’s quite a long way

focused a lot on the day to day delivery

to go if you look at the procurement func-

and making sure that their clients are

tion becoming more strategic and having

satisfied that the goods and services that

a seat around the senior management

they provide are indeed meeting the

table. One of the challenges that we will

needs of their customers and not neces-

have spoken about with professionals

sarily thinking actively around potential

is the need to prioritise the short term

risk. Whereas for large businesses you

benefit or savings on top of more value

will typically have a more mature risk

adding activities. For example, making

management approach to procurement.

sure that there is a clear risk assessment 54

that in the case of a world event the companies are prepared now. To what extent the conversation has changed will also be slightly different when it comes

I do believe that when it comes to

H OW T H E PA N D E M I C S H O U L D S H I N E A S P OT L I G H T O N R I S K M A N AG E M E N T S T R AT E G I E S

priorities, with a few exceptions in very

from China to the rest of the world are

special industries a risk assessment is

affected. I think it is very hard to say to

not necessarily the top of the list. So,

what extent the different supply chains

from my point of view, one of the key

around the world will be disrupted. But

lessons we can take from what’s going

what is clear is that the risk management

on now is that a thorough approach

topic is currently one or two in terms of

towards managing risk can be much

priorities around boardrooms. I think they

more valuable than a short term priority

say that there’s nothing positive about

to deliver quantitative effects.

what is going on. What’s interesting from my point of view is learning from what is

WHAT WERE SOME OF THE INITIAL IMPACTS THAT COVID-19 HAD ON THE GLOBAL SUPPLY CHAIN?

going on so that businesses can try to

I think we’re already starting to see the

HOW IMPORTANT IS IT AT A BOARD LEVEL TO STAY IN TUNE WITH WHAT’S GOING ON AND NOT TO FALL VICTIM TO PANIC?

real impact now. You might recall I think the whole outbreak started before or during the Chinese holiday season, right?

propel on forward.

So many manufacturing businesses

Panicking doesn’t help anybody. It also

would have already planned for reduced

serves no purpose. I think what this will

workers or reduced workforce and so

highlight is the need to have transpar-

on. At the same time, the lead times

ency across the supply chain. I think that

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

H OW T H E PA N D E M I C S H O U L D S H I N E A S P OT L I G H T O N R I S K M A N AG E M E N T S T R AT E G I E S

is a key word because for many busi-

It doesn’t matter who you are, your

nesses, we have a clear view around

suppliers want to make sure that you are

who they are getting the main raw mate-

delivering according to contract and if

rials and services from and who are their

then you start to establish that is not the

key tier one, suppliers. The challenge

case, they risk losing their business. So I

that many businesses have is a disability

think it highlights the need to work closer

from the tier one to the tier two vendors.

in particular with key tier one suppliers to

But those vendors that may be procur-

aim to make sure that transparency exists

ing and or requiring goods and services

across the supply chain. Risk manage-

from, in this case, China. That is where

ment strategies have been together for a

the main risk could be found.

number of reasons, but one that comes

So what can procurement profession-

to mind is your tier one supplier, we know

als do? Well, again, when it comes to risk,

the market more often than not, they

there’s one very old strategy that has

know the market potentially better than

been there for a while, which is called

us as a buyer. They are the ones that can

dual sourcing, right. I think what we’ve

potentially suggest risk mitigation strate-

seen and carried over the last few weeks

gies that can result in a win win for both.

with all of our clients is that they ask; can you please do a quick brief assessment on our supply chain? That’s the first question. Second, do we have alternative sources of supply? I think that strategy will be something that will be prioritised going forward, if not, in the short term more in the medium and long term.

COVID-19 HAS WELL AND TRULY CAUGHT MANY GLOBAL ORGANISATIONS BY SURPRISE, BUT JUST HOW MUCH CAN AN ORGANISATION POSSIBLY PLAN FOR THIS? HOW COULD ONE EXPECT THE UNEXPECTED AS BEST AS POSSIBLE? No one has no one has a crystal ball,

HOW IMPORTANT WILL SUPPLIER RELATIONSHIPS BE IN THIS?

but I think organisations can plan for

I think it highlights the importance of

for potential situations that could arise.

having a good supplier relationship

Having alternative sources of supply can

management activity. If you think about it,

be a strategy that you put in place due to

it is in the main interest of your suppliers.

economic reasons. However, in the event

different types of risks or they can plan

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

of an emergency, where a key supplier in specific markets may have some difficulties, then that same risk management strategy that was put in place for a known risk also helps you mitigate some of the unknowns that may arise as well. I would say it’s about being as thorough as possible in the risk management strategy, but also realistic that you know there will be a time where the organisation will just have to be quick and react in order to meet potential risks that were not forecastable.

WHAT ADVICE WOULD YOU GIVE TO TRY AND HANDLE THIS SITUATION AND ANY SUPPLY CHAIN RISK AS BEST AS POSSIBLE? One is get transparency across your supply chain.

“ WHAT IS IMPORTANT GOING FORWARD IS NOT TO PUT THIS IN A DRAWER IN SIX MONTHS AND FORGET ABOUT IT” Alejandro Alvarez, Partner, Operations Performance at Ayming

Have a relatively good understanding of the supply chain of your key materials, you know raw materials, components, whatever that you’re buying. Understand the market and then get close to your suppliers and talk to your suppliers. In particular, the larger ones, they will be keen to work with you to develop strategies together.

H OW T H E PA N D E M I C S H O U L D S H I N E A S P OT L I G H T O N R I S K M A N AG E M E N T S T R AT E G I E S

IS IT POSSIBLE TO LOOK FOR SUCCESSES AND STORIES OF GOOD IN AMONGST ALL OF THIS? Organisations at this moment in time have prioritised risk mitigation activities and they have worked internally with their operations supply chain procurement departments to put in place certain studies that will help them overcome the current situation. What is important going forward is not to put this in a drawer in six months and forget about it. Itâ&#x20AC;&#x2122;s important to remember that unfortunate situations happen and therefore, periodically reviewing these strategies pays for itself many many times over as opposed to not having a thorough approach towards managing risk and then suddenly being in a position where you cannot fulfil the needs of your customers.

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

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

D al e Bent on Hey kel Ouni

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

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

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

talks, and the global financial crisis of

were a lot of business cases from the

2007-2009 had forced the hands of

period of 2008, 2009 and 2010 within

many businesses the world over.

the academic circle. These success

One of the key learnings from this

stories of how businesses survived

crisis was that the strongest businesses

thanks to the agility of their supply chain

were held up by their supply chain

management really kickstarted a major

and procurement maturity, and thus a

elevation of status, so to speak, of the

TA B R E E D

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

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

of Supply Chain Management at Tabreed.

exposure within the high-level manage-

“Today, using my experience at Tabreed,

ment decision making and that’s a good

people appreciate technology and

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

supply chain management. As a func-

component to the success of any organi-

tion we have access to many platforms

sation today.”

where a lot of key strategic decisions are

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

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TA B R E E D

www.taurusgcc.com

“Be sure to focus on more than simply the supply chain management function. Look at the business and understand it. Only then by working handin-hand with the internal stakeholders and the suppliers can you begin to leverage on the advances in technology and processes that you are trying to implement” Mohamed Habib, VP, Supply Chain Management

not only needs a mature supply chain

a few. The company currently supplies

management function, it requires a resil-

more than 1.338 million refrigeration tons

ient one that can withstand great risk

of cooling across 83 plants and with

and crisis as well as cater to the incred-

cooling demand in the GCC expected

ible demand that rests upon its shoul-

to nearly triple by 2030, the pres-

ders. As a deliverer of award-winning,

sure placed on Tabreed’s supply chain

high quality, efficient and environmen-

management function to be able to be

tally friendly district cooling developer in

ready for that increased demand is clear

the UAE and across the GCC, Tabreed

to see.

has played a pivotal role in a number of

Joining the business in June 2019,

milestone projects that have been at the

Habib was given a clear mandate: to

heart of infrastructure development and

achieve significant maturity in supply

have set the standard for the industry.

chain management so that it is up to the

These include cooling infrastructure for

required standards in order to support

the Sheikh Zayed Grand Mosque, the

the growth required of Tabreed. “It was a

Burj Khalifa and The Dubai Mall; to name

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

in and gradually transform the procure-

chain management professionals face is

ment and progress the function to the

proving the credibility and speaking the

next level as part of the growth strategy.”

language of the business. “There are a

Empowered by a clear mandate, and

lot of qualified people at Tabreed who

a career spanning 15 years in supply

understand supply chain, so it was pretty

chain management, Habib’s first chal-

simple,” he says.

lenge was to change the perception

“We had to bring credibility very

surrounding procurement. As a supply

quickly, we did that by creating a lot of

chain man by trade, he understands the

awareness on what the supply chain

nuances and complexities but in order to

actually is and by changing the way

even begin thinking about achieving the

we developed our operational reports,

required level of maturity he had to work

making them more contextually inform-

to bring the wider business units into

ative. So, we’re constantly engaging

that same level of procurement conver-

with our businesses through workshops

sation. To him, the biggest component

to help them understand the impact of

and the biggest challenge that all supply

supply chain management, what are the

TA B R E E D

market risks that we face and then we

around a topic, we bring in very objective

develop plans together to mitigate them.”

thinking around it by using a lot of data

Despite the title, supply chain manage-

because, to put it bluntly, data speaks.”

ment at Tabreed isn’t solely centred

Habib is creating a function that is

around managing the transactions and

truly supportive of the business and

issuing orders out to the suppliers. For

how it provides this support must be in

Tabreed, it’s a complete assessment of

a manner that is flexible and respon-

the market, the business needs and how

sive to the various requirements of the

they run together. “When it comes to the

business. Habib and his team look to

communication part, I believe people

connect through both physical and virtual

will listen to you if you have credibility,”

meetings, regular face to face conversa-

explains Habib.

tions, and through emails. This, he feels,

“One of the things we have done at

enables them to get closer to the busi-

Tabreed is improve the quality of our

ness and hence better understand the

reports and improve the quality of our

needs and eventually know how they can

data. So, every time there is a discussion

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

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

we are a support function and we have to

Since he joined, Habib has been

provide services at best possible levels

blessed with very supportive manage-

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

ment as well as a strong team around

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

him. Tabreed has been successfully

internally first within the supply change

operating for more than twenty-two years

management, and then it would auto-

and this kind of legacy can be perceived

matically portray itself outside to other

as one with a culture that is reluctant to

departments.â&#x20AC;?

change. After all, one would think, why fix

TA B R E E D

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

management the right away.” he further

not the case with Tabreed. ”When I came

explains.

here, my approach was to understand

Habib notes that, sometimes profes-

what was the mindset of the company

sionals make a big mistake by embark-

and what I pleasantly found is that the

ing onto a role with the approach of

people are extremely welcoming to the

completely transforming their function

idea of change. They were open to find-

without truly understanding its current

ing new ways of doing things,” he says.

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

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

impact that change is going to have on

as any procurement and supply chain

a larger ecosystem i.e. the organization.

professional wishes they could, nobody

“Supply Chain management should be

can truly predict the future. There is

looked at as a vital organ. We carefully

a major element of risk management

collect, analyze, process then propose.

involved, expecting and preparing for the

If a complete change takes place too

worst as best as possible. But when the

quickly, the ripple effect could be cata-

worst hits, sometimes even the strong-

strophic. The link between the supply

est resilience cannot handle the impact.

chain and the rest of the company could

At the time of writing, the COVID-19

break resulting in a long road of synergy

pandemic has taken a huge toll on both

recovery.” He says. “Change that is

human life and the global economy. All

driven organically and in complete sync

the best laid plans have been hit hard

with other functions are the ones found

and businesses have been severely

to be the most effective.”

affected.

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

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

are going to be changed forever. They

deliveries and services and so an imme-

will be impacted financially, economically,

diate action was taken to refocus and

socially and of course medically,” says

regress the business to core operations.

Habib. “To look at it from a supply chain

Thanks to a move towards virtual plat-

perspective, this is the ultimate test. This

forms, Tabreed has been able to work

is the time where we shine. This is where

remotely without disrupting the business.

we put our best foot forward and say,

Being an existing transaction-based func-

“Yes we’ve been ready for this for years

tion, the supply chain is readily prepared

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

for this change as it often reacts to the

as best as we can, at the positives.”

business needs by utilising this virtual

And shine Tabreed has. “Resilience is

system. “Our policies and procedures

one of the five core values of Tabreed,

allow us to find creative ways of doing

and one we cascade to all levels in our

things,” says Habib. “Yes, processes can

day to day work.” Given the nature of

be prescriptive in some areas, but we are

the business, Supply Chain Management

not completely shackled by them. Hence,

knew that there would be delays on

we were able to move quickly on to the

TA B R E E D

virtual platforms.” This is but one exam-

relationship and network that would

ple that highlights the internal readiness

assist in withstanding challenges of all

of Tabreed and Habib believes that the

scales.”

business has only been able to respond

At a time of crisis, Habib believes, it is

and continue to operate to the best of its

only then you truly realise, and indeed

abilities thanks to the culture it has at the

appreciate, how good a relationship one

organisational level where people under-

has with their suppliers can help weather

stand each other’s limitations. “They

the storm.. He can point to firsthand

understand the direction of the organi-

examples where the suppliers proac-

sation and it makes it very easy for us to

tively reached out to his team to address

then accommodate for gaps and chal-

the situation and commit to full collab-

lenges,” he says.

oration. “You have to realise that at the

“At the same time from our supply

end of day what really matters is your

point of view, when I joined Tabreed I

relationship in the organisation and in the

immediately arranged meetings with

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

our key suppliers in order to build that

which Tabreed establishes and maintains

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

relationships with its suppliers so that we can collaboratively understand what is changing from their perspective, within their organisation and within their sector and market. We can then be quick to react, but the key component should always be that we are proactively looking at our suppliers and the changes in the market that might impact them; and they respect that.” A key part of this successful response to such an unprecedented crisis, and indeed a key part of a modern-day maturity journey, has been Tabreed’s implementation of digital tools. Technology has of course created greater collaboration and a more seamless way of operating and there is surely no greater time for that to come good than now. “One thing that this crisis has highlighted was the importance of investing in technology ahead of time to upgrade our systems to be at maximum potential. We are now utilising that potential so that we can maximize our business operations,” he says. “As a result of that the management is more appreciative of these steps as we’ve been able to build a really strong case to move us very quickly to look at cloud systems for document management and knowledge management.” While Habib admits that there is still 74

TA B R E E D

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

Mohamed Habib, VP, Supply Chain Management

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

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

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

COVID-19 AND THE NEED FOR DIGITAL PROCUREMENT The current COVID-19 pandemic has revealed many vulnerabilities in procurement operations and supply chains across the world. WRI T T EN BY Waleed AlSaeedi, Supply Management Director at

Depar tment of Culture & Tourism (DCT) Abu Dhabi 78

t is fitting in the Abu Dhabi

which organisations have successfully

Government’s initiative

harnessed the power of technology and

‘Digital Month’ to ask how

which organisations have not.

Government Departments’ procure-

In the aftermath of the current crisis

ment functions are coping during the

– procurement leaders must embrace

current crisis, and whether some have

the inevitability of Digital Procurement

coped better than others, and if so, why?

and lessons learned about the advan-

COVID-19 has given procurement leaders

tages of remote communication, stream-

the opportunity to realise that different

lined on-line operations and better risk

ways of working are possible. We should

management in the supply chain.

capitalise on this opportunity and make concerted efforts to improve and re-de-

What is Digital Procurement?

fine what is really needed. Critically,

According to Deloitte*, Digital

we must capture ‘lessons learned’ to

Procurement is the application of disrup-

modernise and standardise our procure-

tive technologies that enable Strategic

ment operations.

Sourcing (S2C) to become predictive,

The need to work remotely has

Transactional Procurement (P2P) to

favoured those procurement operations

become automated, and Supplier Risk

which had established paperless opera-

Management (SRM) to become proactive.

tions, e-Sourcing platforms and invested

The prospect of harnessing the power

in technologically literate staff - while

of digital procurement is impossible if

others have struggled to play catch-up

organisations are not fully utilising their

with inefficient and outdated practices.

ERP system’s capabilities and maintain-

There has had to be a new pragmatism

ing clean and accurate data in a shared

around the need for original paper docu-

system - rather than departmental silos.

ments, sealed bid envelopes, wet signatures, stamps and associated logistics to

What do we need, right now?

enable core P2P operations to continue.

We need to reconsider “how” we work.

The crisis has not only shone a light on

Many of us have been following the

which organisations had effective busi-

same principles of procurement for too

ness risk and continuity plans in place,

long plagued by over-governance and

and which organisations did not, but

bureaucracy. We need to rewrite our

C O V I D - 1 9 A N D T H E N E E D F O R D I G I TA L P R O C U R E M E N T

standards and allow for more flexibility

decision-making and approval processes

and agility in our procedures. We need

are unnecessarily protracted and repet-

platforms where buyers and suppliers

itive â&#x20AC;&#x201C; and it is an area that needs to be

can handle all requirements from devel-

exponentially improved upon. And, of

oping scope of works to dealing with

course, we need to be more sustainable

variation orders and conducting negotia-

in our approach.

tions freely. The days for sealed-envelope

Many of us are overdue for digital and technological solutions which are

tender submission should be behind

user friendly, comprehensive and fast to

us and technologically advanced solu-

implement. Currently, the implementa-

tions should be replacing them. Many

tion process can take far too long and by w w w . c p o s t r a t e g y. c o m

â&#x20AC;&#x2DC;The need to work remotely has favoured those procurement operations which had established paperless operations, e-Sourcing platforms and invested in technologically literate staff - while others have struggled to play catch-up with inefficient and outdated practicesâ&#x20AC;&#x2122;

C O V I D - 1 9 A N D T H E N E E D F O R D I G I TA L P R O C U R E M E N T

the time implementation is completed,

live together, as a global community.

a newer technology is available in the

Issues of risk, accountability and trust will

market.

have a lasting effect on the management

Government Departments’ Procurement

of supply chains to meet the needs of

and Contracts operations need to work

businesses, communities, organisations

together in a proactive and coherent

and countries. News coverage of the

manner with each other, and with key

crisis has often focused on trade rela-

stakeholders such as Finance, Audit

tions and supply chain vulnerabilities,

and Legal to invest in a well-planned

bringing the procurement profession

and comprehensive digital transforma-

into sharp focus. Governments are now

tion based on integrated data sets and

acutely aware about supply security and

compatible technology platforms.

the risks around the global mobility of

This will not only accelerate innovation

people, products and services - there-

but also reduce costs as well as create

fore it is an opportunity to re-examine

efficient delivery models.

the whole of our procurement practice – one immediate step is investment in

Questions for the future

technology and people and coordinated

We may ask different questions – about

improvements for all stakeholders in the

time spent travelling to work, and partici-

procurement cycle

pating in meetings, the potential of video conferencing, the future of online working, reduced hours and social interaction. What would a prolonged online workforce mean for corporate culture? After COVID-19 - What will it take to re-design our decades old practices and promote transparency, agility and flexibility with the right level of governance?

Final thoughts In general terms – the lasting impact of COVID-19 will be on how we work and

About the Author: Waleed Al Saeedi is the Supply Management Director at Department of Culture & Tourism (DCT) Abu Dhabi. w w w . c p o s t r a t e g y. c o m

The Big Debate: How are you and your company mitigating the risks of the coronavirus pandemic? We asked procurement professionals from all over the world to share the business steps theyâ&#x20AC;&#x2122;ve taken to cope with the impact of COVID-19 WRI T T EN BY

D al e Bent on

Iain Campbell Mckenna Managing Director, Sourcing Solved â&#x20AC;&#x153;I think that the reality of the situation from the standpoint of being more than a temporary interruption of business, as usual, is starting to sink in for most organisations. As a result, and for the companies with whom I am working, they now recognise and are proactively transitioning to a remote working environment for the longer term by focusing on critical areas of their procurement practice, including recruiting top talent. When it comes to hiring procurement leaders, they are working on acquiring and perfecting the skills to do things such as online interviews that include body language and emotional intelligence assessment, as well as assess a candidateâ&#x20AC;&#x2122;s ability to work independently from home effectively. In short, a highly resilient and adaptable supply chain is more important than ever before, and as such organisations require top talent to ensure they stay that way.â&#x20AC;?

T H E B I G D E B AT E

Philip Ideson Founder & CEO, Art of Procurement I donâ&#x20AC;&#x2122;t think those new skills are any different than the skills that were in high demand before Coronavirus. Having said that, I think we have to be disciplined not to just revert back to what we are comfortable doing (savings money with a short term perspective) which is what we will be asked to do. Or should I say, when we do that, we still have to do it with a lens on the future, because if we revert to type, it will cement the perception that procurement is a tool to take out of the box when cost savings are needed vs. the broader value proposition to which we aspire.

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

Fidel Sesumaga Executive Consultant; Procurement, Strategy & Business Transformation We will see a lot of changes in supply chains across the world, old solutions may not work with new problems... creativity will be key and adaptability and agile teams will be a must...for that strong procurement and supply chain management leadership will be needed

T H E B I G D E B AT E

Vivek Saluja Project Manager, SAP We have refocused and now; Source locally, source from suppliers offering innovative and robust supplies management, review inventory and fill rates of Bought Out Parts of your suppliers, review and update the inventory reorder points of your own items. Basically stock up items seen under threat, consider innovative solutions like Ariba for future of your sourcing, procurement and supplier risk management

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

Mahmoud Al Alawi Director of Procurement and Contracts, Higher Colleges of Technology, Abu Dhabi Dealing with this emerging situation showed how important the Procurement & Supply Chain is for the organization. Are we ready as a procurement & supply chain to deal with this emerging situation? We have dealt with it on three levels; Technology optimization to work remotely, strategic alignment with senior management to prioritize requirements and prompt decision making and strategic partnership with our vendors to deal with this penadimic situation. Technology infrastructure is really important in such situations to ensure business continuity regardless of our staff location and to handle different operations smoothly with different stakeholders. Management is depending on data provided to make emerging strategic decisions and to make forecasts for the coming few months. We need to ensure proper handling and reaction for the situation and then proper recovery with minimum impact on the business. Finally, our partners and their readiness to maintain and survive. Our role is vital here. Making decisions in such time must be studied carefully. An example is using Force Majeure articles to reduce or stop some services that may damage those businesses and make it difficult or impossible to recover again.

T H E B I G D E B AT E

Dana Small Senior Category Manager, Head of Commercial Global Strategic Sourcing Weâ&#x20AC;&#x2122;ve proactively reached out to all of our suppliers to maintain open lines of contact and ask for their help to maintain our supply chain (in support of our patients).

John Hansen Sales Strategist Effective risk mitigation requires a balance in decision-making between immediate response and longer-term transformation. In other words, know the consequences of your decisions both now and on the other side of this crisis.

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

Inga Fircks Associate Principal, Partners in Performance Everyone is emphasizing ‘getting ready’ and conducting strategic reviews for critical parts outages - well this is really important but it may not be enough. The closer we are moving to the red zone and supply chains experience failures (with a potential for systemic knock on effects) the more nimble businesses need to be. As things change in this hyper-fluid environment a brilliant plan will quickly become yesterday’s outdated plan. Being able to react quickly and decisively is the difference between continuous production and a significant outage. The protracted/rolling nature of this crisis (as opposed to a singular/finite catastrophic event) means that you will need to manage variables that are constantly changing and very difficult to anticipate i.e. supplies that aren’t considered critical today, may well be critical in a few weeks’ time. By all means, plan and prioritise critical supplies today, but at the same time make sure you put rapid execution capabilities in place, so you can roll with the punches. We have already seen various examples of this where people lose their spot to purchase equipment/get stock from the next delivery from critical production runs because decision making was not fast enough.

T H E B I G D E B AT E

Sarah Monroe Group Category Manager- Indirect Property Procurement, Walgreens Boots Alliance All those business continuity plans we put together? They are getting their time to shine. Still, a pandemic is unlike any other natural or man-made disaster that we have seen before. Since Walgreens has a national footprint across 50 states, each state may be responding to the crisis differently. For instance, some states have implemented shelter in place while others have not. This presents disjointed challenges in managing labor and store operations. We also have to ensure the safety of our staff and customers. Walgreens recently announced the partnership with Postmates for OnDemand Delivery and we have waived delivery fees for medications. We are one of the first retailers to secure PPE for our staff and use tape markers for 6ft. distancing in the queue. The situation is rapidly evolving. Flexibility is necessary along with positive acceptance to change mindset in order to drive critical business initiatives forward. While we must make quick business decisions, itâ&#x20AC;&#x2122;s also imperative to maintain proper cost benchmarks for spend approvals. Securing optimal value for the company without service interruption continues during the pandemic.

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