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BUILDING BRIDGES within the business Tasked with restructuring Holcim Australia’s procurement practices, Kelly Irwin transformed her team from a disjointed ‘complaints department’ to an engaged and integral part of the business
Written by Adam Turner Produced by Erika Kracer
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olcim Australia is a contracts and rarely left the office,” leading supplier of Irwin says. “The business didn’t aggregates, concrete leverage the potential strengths of and precast concrete products to the procurement department – if support projects from residential and there was any interaction with the commercial developments to major procurement team it was only to infrastructure. When management complain about something. identified the opportunity to improve “Today we’ve turned that around procurement processes in the and procurement has gone from a business, it handed the complaints department to an job of turning things effective unit which is really around to Kelly aligned with the business Year Founded Irwin – Head of and adds value. I’ve Procurement implemented what for Holcim I call the ‘the bums (dates back to 1901 in Australia and off seats’ policy Australia previously operating New Zealand. – you can’t be a under the well known Irwin’s good procurement ReadyMix and Humes brands) success saw person if you’re sitting her recently at your desk all day, awarded the CIPS every day: you need to Procurement and Supply get out there in the thick of it.” Chain Management Professional Irwin believes firmly in the of the Year, while her procurement importance of spending time building team has been awarded the strong and strategic internal and Holcim Australia Internal Customer external relationships. She adds: “A Excellence award three years in a row. successful procurement function “Previously there was no real must clearly understand the needs engagement with the business, the of their stakeholders, both internal procurement team just handled customers and external suppliers
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and this can only be done by regular engagement either face to face or by telephone - not simply sitting in office emailing. This is what the ‘bums off seats’ approach is all about.” The transformation included centralising procurement processes, taking away the ability for staff members throughout the business to raise purchase orders without approval. The procurement team now manages the purchasing of everything from pencils to explosives, along with services such as travel. Centralising purchasing decisions and processes presented change management challenges for the business, which Irwin approached in a ‘consultative fashion’. It helped to have the top-down support of senior management – not just locally but also from the LafargeHolcim head office in Zurich – but Irwin says this isn’t enough to ensure success if you can’t engage the various stakeholders, win them over and get them to come to you willingly. “The change management process was around communicating
Kelly Irwin Head of Procurement for Holcim Australia and New Zealand
CIPS Procurement and Supply Chain Management Professional of the Year, Irwin is responsible for a spend of over $900m at Holcim Australia and New Zealand. She has implemented a centralised structure and process aligned with the global business, as well as developed a highly effective procurement team which has been awarded the Internal Customer Excellence award three years in a row.
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with people, making the business, which requires getting sure they understood out of the office and talking to people, what was happening and the even if it means acknowledging your escalation procedures in place mistakes and learning from them. If if there was an issue,” she says. you’re just trying to put a positive spin “We had to sell ourselves to the on things and pretend everything is business and a big part of it was also perfect then you lose that credibility.” ensuring they could see the benefits of To help establish the procurement the changes and how we were adding department’s credibility within the value, which we supported by business, Irwin vowed there developing some really was no problem that good reporting tools to was too small for the improve visibility into team to address. the procurement One of the first process.” issues it tackled Number of employees For such a was complaints transformation regarding work to succeed, it pants being is important to too hot for some engage with the outdoor projects. wider business to prove “It might seem like a your worth, Irwin says. little thing but I knew we needed “That means truly understanding to show that we could get things the business – understanding what all done and it was a stepping stone in the stakeholders need from your team strengthening our relationship with and also how you can proactively the wider business,” she says. add value, streamline processes To take things to the next level Irwin and deliver synergies,” she says. recruited staff strategically, looking for “You need to establish and maintain people who had specific experience your credibility and integrity within in the area they’d be working with
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rather than just generic procurement skills. A mix of procurement experience and wider business expertise, with a cross pollination of skill sets within the department, ensures the team has the skills to connect with the business. Holcim Australia primarily has a direct spend base, purchasing directly from suppliers, rather than an indirect spend base via third parties such as consultants – meaning the procurement team needs to really understand the business and its purchasing requirements. “They were a fairly new team who were, in some instances, coming into quite a challenging environment because they were taking procurement authority away from some staff and becoming a more integral part of their business processes,” Irwin says. “It was crucial that our procurement people really understood the business areas they were working with, in order to gain respect. “Despite these challenges our staff engagement score within the procurement department was very
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high at 80 percent. When we asked the team why they were so satisfied they said it was because they could see the difference they were making and felt like we had their back when they found themselves in a difficult situation. From my perspective, it’s much easier to sell yourself to the business when your staff are engaged and love what they do.” The procurement transformation program coincided with the downturn in the mining sector, which forced the business to refocus its sales pipeline as well as its spending practices. A drop in spending power means a drop in negotiating power, but procurement’s closer integration into the business offers more opportunities to deliver value through process improvements, efficiencies and improved supplier relationships. Centralising and standardising procurement practices, while increasing visibility, afforded Irwin’s team the ability to rationalise the supply base and gain leverage with suppliers where practical. The shift allowed Irwin to emphasise the importance of the procurement
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department and encourage business units to view the procurement team as a powerful tool at their disposal. In the last few years the business has increased its focus on sustainable procurement, including the kind of suppliers it works with and how it works with them. Today sustainable procurement is integrated into Holcim
Australia’s and New Zealand’s dayto-day operations and Irwin says it’s always looking for ways to identify and manage risks in the supply chain – whether that be around health and safety, social and corporate responsibility, or the environment. Lessons learnt during Australian implementation greatly assisted when integrating Holcim’s
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Holcim - Kelly Irwin and Team
New Zealand business into its centralised procurement approach. Again, engagement was key as the business was different and had different pain points. “Now that we’ve got centralised
control, standardised data coding and more granular visibility we’re in a much stronger position to make informed procurement decisions and back them with solid numbers,” says Irwin.
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Level 8, 799 Pacific Highway Chatswood, New South Wales, Australia, 2067 Tel. 02 9412 6600 Fax. 02 9412 6601 www.holcim.com.au | www.holcim.co.nz