Logitech - Procurement with purpose: An engine for societal impact

PROCUREMENT WITH PURPOSE: AN ENGINE FOR SOCIETAL IMPACT

PROCUREMENT WITH PURPOSE: AN ENGINE FOR SOCIETAL IMPACT

David Latten,

Head of Global Indirect

Procurement at Logitech discusses how he and his team wield procurement strategy as a force for global good.

FOUNDED IN 1981, LOGITECH IS A CONSUMER ELECTRONICS COMPANY THAT MANY PEOPLE MIGHT KNOW FOR THEIR HARDWARE PRODUCTS LIKE COMPUTER MICE AND KEYBOARDS, BUT THE BUSINESS OFFERS FAR MORE THAN OFFICE ACCESSORIES.

ogitech has expanded into the gaming sector and has positioned itself as an industry leader at the final touch point between people and their digital experiences – for instance with video conferencing or meeting room setups.

The company sells products in almost every country in the world and turns over $4.5 billion in annual revenue, but Logitech is a lean enterprise with a comparatively small workforce of 6,000 people.

David Latten, Head of Global Indirect Procurement and

Diversity & Equality, shares insights into how he and his team deploy Logitech’s indirect

procurement strategy as an engine for societal impact, to drive value with external relationships and do more with less.

Indirect procurement strategy

So how do David and his team approach indirect procurement at Logitech?

David explains that it starts by identifying your purpose as a department.

says David. “Our

procurement

Supplier

“It's always fundamentally important for a department to ask why do we exist, what are we looking to do for the business and what is our wider societal impact too?”

value proposition for the business in

is looking to drive value for Logitech in terms of making sure that we're purchasing things at a very costcompetitive price. That's a huge, obvious competitive advantage and we're doing the same for supplier performance, making sure that the right partners are really performing well for us. There's an element of risk management too. These are the

traditional procurement values we work towards.

“But the other big value driver for us is progressing our core values at Logitech around equality and the environment with our suppliers. Here, what we mean is that we're going to have an impact on this world. We want to make sure that impact is a positive one. We want to make sure that we're finding new solutions so we can progress on those big societal challenges with our external relationships.”

How do David and his team do this at Logitech?

“Our strategic priorities partly come from where in the business we are as a team. If you think about the concept of procurement, it's being able to achieve impact because of the position we have in the business,” says David. “When our team is working at its best, we should know all the challenges and priorities for the years ahead from our internal business partners which is a strong pivot point to those external solutions and the suppliers that are out there. But for this to work, we need the fundamentals of people, processes and tech to collaborate effectively.

“Logitech is a very autonomous company. So in 2023, for procurement to succeed at

David Latten, Head of Global Indirect Procurement at Logitech

“We want to make sure that we're finding new solutions so we can progress on those big societal challenges with our external relationships”

Logitech, and probably all other companies as well, you have to have a really strong answer to this idea of why should the business work with me and my team?

“During my early days in procurement, I almost envied companies that are a bit more traditional where there is a mandate that you must work with procurement for all supplier interactions. But, that's not really us at Logitech and I think my position has changed because now I have the mindset where I wake up every morning thinking why should the business work with us? Every team should be thinking that way.”

So what are some of the goals David and his team are working towards?

“Our priorities for the years ahead are that ultimately our compliant core technology processes for procurement at Logitech need to also be the easiest and quickest way for the business to engage with us,” explains David. “There's such a high level of expectation now when it comes to tech and purchase processes.

“In our private lives, we can buy flights in seconds and we can purchase everything we want from various different commerce sites.

But until very recently B2B technology has lagged a long way behind. If it’s significantly more difficult for people to buy things compliantly at work when they're used to smoother purchasing processes on their personal purchases, the discrepancy can be jarring. So I think we must really set ourselves that high bar of making the compliant corporate purchasing process to also be the easiest and quickest way for the business to select and purchase goods or services from suppliers. But all of that can only get you so far. You need your team to be trusted high-impact business advisors to our partners. That's why procurement exists as a team.”

David observes that procurement priorities are starting to shift as the Covid pandemic and subsequent lockdowns fall further away in the rear-view mirror.

“For the year ahead, I think it's interesting coming out of the post-pandemic world because margin optimisation and savings, two of the traditional procurement value levers, are coming back to the fore. In more recent years we focused on the source of

supply, supplier performance and managing risk. But making savings has now become a huge topic again. The economy is flatlining and making savings has become a huge topic again for procurement again in 2023.

“Supplier diversity continues to be a huge topic for us too,” adds David. “We're trying to work with as many suppliers that are owned, operated and controlled by underrepresented groups. That's always a huge priority for us. We've grown on that front well in the US, but we want to go global with it and we aim to do it with our product-related spend in future which is mostly in Asia.

“We also want to drive our values forward with large shareholder companies. Supply diversity traditionally gravitates around privately owned, smaller businesses. But large companies will always spend more with other big companies. It's a crucial topic for us. If our core values are around that positive impact towards equality and environmental sustainability, we have to find a way of doing that with our largest, most strategic suppliers.

“Lastly, technology cuts across all our value drivers and priorities. The business won't engage with us and

our lean team cannot provide value to Logitech without a great tech experience. We're a team of 15 people working with hundreds of people across the business whilst managing thousands of suppliers. Technology is the only way we can perform in a scalable way with our business partners.”

Procurement with Purpose

Logitech, as with any company, can exert full control over its own operations in terms of driving sustainability and working towards progressive goals.

However, David admits the reality here is that the internal influence is finite. The concept of ‘procurement with purpose’

addresses Logitech’s drive to elevate the endeavours of their partners and suppliers along the way, where the impact can be limitless.

“With spend comes a huge amount of potential leverage and impact with our suppliers,” says David. “Operating expenditure can be multiple hundreds of millions of spend, up into the billions of spending each year.

“The potential for impact with large companies is enormous. These large companies employ millions of people across the globe and accrue trillions of dollars of revenue. If you can get these businesses to move on globally important topics there is massive potential for societal impact. To my

mind, that is the ultimate aim of procurement with purpose.”

Logitech also challenges its supplier and partners to join them in pursuing progressive societal goals too. As David puts it, partners become allies and these alliances allow companies to make more of an impact together.

One such alliance is the Coalition For Gender Fair Procurement.

“We’ve co-founded the Coalition For Gender Fair Procurement to inspire suppliers to advance

“To support their efforts in promoting gender equality, Logitech works with a women-owned startup called 17ways”

gender equality by leveraging the power of corporate procurement as a lever for change. To provoke this change, in coalition with Gender Fair, Logitech has started assessing their high-impact suppliers for gender fairness using the Gender Fair assessment based on the UN WEPs. The ultimate coalition goal is to engender an industry-wide change in procurement practices whereby all organisations assess all their high-impact suppliers for gender fairness as a matter of course as we do today for risk, privacy, data security etc,” says David. “We won’t get there alone, we need allies. Which is why we co-founded the coalition with Gender Fair and a number of founding allies like Andela and Zoetis.”

To support their efforts in promoting gender equality, Logitech works with a womenowned startup called 17ways which has helped the company direct spending to positively impact businesses and allowed Logitech to start reporting on the societal impact of some of their suppliers.

David reiterates the importance of technology for promoting procurement with purpose. When large global companies connect through supplier relationships or partnerships, the network as

a whole becomes incalculably extensive. In order to create an impact in such a vast system, the tech solutions used to promote procurement with purpose need to be innovative and impactful.

Logitech has made tremendous progress in its procurement technology over the last decade, and David explains that for his team it was a pivot towards technology that allowed his lean team to offer more value to the wider business.

“We ask ourselves two simple questions when it comes to technology,” David says. “Can it empower our own procurement team to do a better job – for instance, undertake projects with bigger impacts and do them quicker? And secondly, can any technology we work with remove any barriers to the business engaging with procurement and

“We won’t get there alone, we need allies. Which is why we cofounded the coalition with Gender Fair and a number of founding allies like Andela”

make it easier for them to do the right thing?”

Looking to the future

So where will Logitech grow in the coming years?

David identifies four key trends that will become increasingly important at the company:

1. The rise of e-sports

“E-sports are becoming one of the largest spectator sports in the world and it’s only going to explode in the years ahead,” predicts David. “Logitech are very well placed with that trend because we’ve been there for a number of years.”

2. Video everywhere

“During the pandemic everyone wondered how long it would take to adapt to a virtual lifestyle,” says David. “With some exceptions it took most companies no more than a few days. But this was already a trend we were working on and will only continue to grow in the future.”

3. Learning and working anywhere

Connected to the video everywhere trend is the shift towards hybrid learning and working, explains David. “Where we learn and work will increasingly spread from outside the office or classroom. But for the people that return to these physical spaces, there’s an

opportunity because a lot of working environments aren’t designed, optimised or equipped for hybrid working.”

4. Democratisation of content

David sees a shift in the distribution of content away from large media companies towards user-generated content streamed by millions of

ADDED VALUE

Read

David highly recommends The Art of Captaincy: What Sport Teaches Us About Leadership by former England cricket captain Mike Brearley.

“Mike Brearley wasn’t the best player in that team, which had Ian Botham and other great players in it – he was one of the weaker players on paper, but he was captain,” says David.

“Brearley was essential to the team and what he was brilliant at was getting the most out of some quite powerful, difficult characters in some cases. So he’s a really interesting character who has written an excellent book on leadership that you can easily relate to your career.”

people around the world. “At Logitech we offer the right hardware and some exciting software solutions around empowering those streamers and creators as well,” summarises David.

For more information about Logitech, visit their website logitech.com.

Watch

If you have a spare few minutes, David recommends watching Derek Sivers’ TED Talk ‘How to Start a Movement.’

“In the talk, there’s footage showing one guy in a park doing a crazy dance and by the end of it, everyone is joining in. It highlights that it isn’t the first person who matters, it’s the first allies who are important. The video was really powerful for me on the importance of allyship when trying to start movements.”

Event

David is thrilled to be attending the National Minority Supplier Development Council (NMSDC)

Annual Conference in Baltimore, USA from October 22-25, 2023.

Connect with David