Procurement Magazine - September 2021 by procurementmag

September 2021 | procurementmag.com

BCG: Procurement of the Future Round Table: A Best-of-Breed Approach to a Digital Ecosystem Circularity; Plastic Bank and The Renaissance Brigade

BEYOND THE DEAL:

THE POWER OF

BRAND VALUE Larry Phelan, EY Global CPO, shares his philosophy on the future of procurement and why value goes far beyond doing deals and cutting overheads FEATURING:

UK GOVERNMENT

VODAFONE

DOLE INTERNATIONAL

Gain control over contracts and manage obligations efficiently GTAA achieved smooth operations and automated its manual contracting processes with SirionLabs’ contract management solution. The airlines breezed through the constant changes brought on by the pandemic owing to continuous, uninterrupted flow of data between GTAA and Wipro. Explore smarter contracting solutions

GTAA & Wipro: Partnering with SirionLabs for Success

Canada’s airports are coming back from COVID stronger than ever—thanks to SirionLabs’ automated solutions “It’s not an exaggeration to say that the pandemic brought the aviation industry to its knees,” says Angella Dikmic, Manager of IT Vendor Management at Greater Toronto Airports Authority (GTAA). But with the help of SirionLabs, she and Anudeep Kambhampati, Director & Global Client Partner at Wipro, have successfully maintained their operations. “As Canada’s largest airport, a variety of passengers from around the world depended on us. That meant we had to innovate and return stronger than ever. With partnerships like Sirion and Wipro we are able to achieve this.” she adds.

GTAA: Flexing A Future-Oriented Mindset

When the world was facing the height of the pandemic, GTAA relied on SirionLabs’ automation solutions to manage its contract renewals, negotiate savings, maintain relations and mitigate risks. “We used SirionOne, Sirion’s CLM platform, to report demand to our IT leadership team in a time of crisis,” says Dikmic. “Through it all, Sirion was responsive, flexible, and aware of the latest trends in contract management.”

Wipro: Maintaining Core Airport Operations In addition, Sirion’s end-to-end CLM platform caters to all functions and levels—and helped Wipro maintain its close technology partnership with GTAA. Even prior to the pandemic, Wipro helped GTAA manage its core operations with artificial intelligence and automation. “Now, every manager on our team uses Sirion on a daily basis,” says Kambhampati. “Because SirionOne handles most tasks, we can easily pull up our contract clauses, review our obligations, and provide GTAA with weekly status updates despite industry disruption.”

Overall, GTAA intends to work with SirionLabs to make Canada’s airports more efficient, effective, and successful. The journey ahead is an interesting one. “We want to take advantage of economies of scale,” says Dikmic. “Our vision is to develop an airport framework that promotes consistent, data-based interactions. We want to drive effective outcomes. We want to draw upon our strengths. And we believe that our partnerships with Wipro and Sirion will allow us to give our passengers a transformative air travel experience.”

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The Procurement Team EDITOR-IN-CHIEF

LAURA V. GARCIA DEPUTY EDITORS

RHYS THOMAS GEORGIA WILSON EDITORIAL DIRECTOR

SCOTT BIRCH

PRODUCTION DIRECTORS

GEORGIA ALLEN DANIELA KIANIČKOVÁ PRODUCTION MANAGERS

OWEN MARTIN PHILLINE VICENTE JENNIFER SMITH

PRODUCTION EDITOR

VIDEO PRODUCTION MANAGER

CREATIVE TEAM

DIGITAL VIDEO PRODUCERS

JANET BRICE

OSCAR HATHAWAY SOPHIE-ANN PINNELL HECTOR PENROSE SAM HUBBARD MIMI GUNN JUSTIIN SMITH REBEKAH BIRLESON DUKE WETHERILL JORDAN WOOD

KIERAN WAITE

MEDIA SALES DIRECTORS

JASON WESTGATE JAMES WHITE

SAM KEMP EVELYN HUANG

JORDAN HUBBARD

MOTION DESIGNER

MARKETING DIRECTOR

MARKETING MANAGER

MANAGING DIRECTOR

PROJECT DIRECTORS

CHIEF OPERATIONS OFFICER

TYLER LIVINGSTONE KAYLEIGH SHOOTER TOM LIVERMORE MIKE SADR

EXECUTIVE ASSISTANT

ROSS GARRIGAN

LEWIS VAUGHAN STACY NORMAN PRESIDENT & CEO

GLEN WHITE

FOREWORD

Code red Code red for humanity means code red for procurement

Perhaps one day we really may achieve Jeff Bezos’ notion of moving all heavy industry and its resulting pollution off of earth and into space.

Perhaps one day we really may achieve Jeff Bezos’ notion of moving all heavy industry and its resulting pollution off of earth and into space. Until then, it’s hard to argue that Procurement plays an important role in lowering carbon footprints and designing sustainable supply chain models. And as the brilliant hombre araña once said, with great power comes great responsibility. However, Procurement can’t go it alone. As the UN climate change report sounds 'code red for humanity,' the time to put the world first has long since past. May we dare to aspire to more than subletting the impacts of our greed onto neighbouring planets and rather, learn to do more with less. And may we unite in our efforts, offer and ask for help where it is needed, because the world’s problems are bigger than any one company, and are sure as heck bigger than Procurement— however digitised.

LAURA V. GARCIA PROCUREMENT MAGAZINE IS PUBLISHED BY

laura.garcia@bizclikmedia.com

procurementmag.com

CONTENTS

Our Regular Upfront Section: 10 Big Picture 12 The Brief 14 Trailblazer: Michael Cadieux 16 Five Mins With: Ryan Nied

Procurement Strategy

Catching Up with Mark Raffan - The Negotiations Ninja

Beyond the Deal – The Power of Brand Value

saving lives with NHS Test & Trace

UK Government

Digital Procurement

Vodafone

BCG: Procurement of the Future

Shaping the future of procurement

Round Table: A Best-of-Breed Approach to a Digital Ecosystem

A Fresh approach to Indirect Procurement

Technology

Dole

108

120

Circularity; Plastic Bank and The Renaissance Brigade

The Ultimate Procurement & Supply Chain LIVE Event

ESG

Live Event

The World’s Biggest Sustainability Event February

23rd - 24th 2022 REGISTER FOR TICKETS

STREAMED LIVE FROM TOBACCO DOCK LONDON A BizClik Media Group Brand

Creating Digital Communities

BIG PICTURE

September 2021

Global Economic Growth Earth

After reaching a 15-year high in May, the JPMorgan Global Composite Output Index™ (compiled by IHS Markit) retreated 1.9 points to 56.6 in June, signaling a cooling of global economic growth. The US and Europe remained bright spots, while Asian economies struggled in comparison. For a third consecutive month, global services outperformed manufacturing.- Source: DGF Global Forwarding | OFR Market Update | August 2021.

procurementmag.com

THE BRIEF “TECHNOLOGY IS GOING TO PLAY A MAJOR ROLE IN NEGOTIATIONS GOING FORWARD. AND TO THINK THAT IT'S NOT WOULD BE VERY NAIVE, LIKE HORRIFICALLY NAIVE”

BY THE NUMBERS According to research conducted by TealBook and Wakefield Research:

Of procurement leaders are concerned that their supplier intelligence has still not improved enough to prepare supply chains for future disruptions.

Mark Raffan,

Founder, Negotiations Ninja

“What we're looking at over the years and into the future is an organisation that can help you transform, can help you be more strategic, and add value in a different way” Larry Phelan,

Global Chief Procurement Officer, EY READ MORE

70% 30% Of procurement leaders fear they are missing out on supplier innovation as a result of failing to diversify their supplier lists.

EDITOR'S CHOICE THE SICKNESS OF CAPITALISM “This is a capitalism issue. It's not a societal issue. It's not entrepreneurship. It's the sickness of capitalism” David Katz, Plastic Bank READ MORE

“THE DAYS WHEN YOU FOCUSED ONLY ON HITTING SUPPLIERS WITH A STICK TO GET COST SAVINGS ARE CLEARLY OVER” Daniel Weise,

Managing Director and Partner, BCG

September 2021

DIGITAL TRANSFORMATION “Digital transformation may scare people... Basically, everything will change. This is something positive, and we need to convey that message to teams.” Dr Wolfgang Schnellbächer, BCG READ MORE

FROM COST TO VALUE “A true digital procurement model is one that enables procurement organisations to focus on more differentiating, value-adding activities and strategic decision-making, augmented by advanced technologies” Omer Abdullah, The Smart Cube READ MORE

 STRIPE

Stripe isn’t doing too shabby, at least in part, thanks to the rise in eCommerce. After raising $600 million in its latest round of funding, the company’s valuation now sits at a pretty $95 billion— making Stripe one of the, if not THE biggest IPO in history.

 VICI PROPERTIES

Circularity; Plastic Bank and The Renaissance Brigade Sustainability is having more than a moment; it’s a movement, a renaissance, if you will. The world is transitioning from greenwashing and GenZ placating to verifiable, science-based sustainability and now, regenerative efforts in a desperate attempt to save our earthjust as the buzzer is about to ring. Heading the charge in tackling two of the world's biggest challenges against climate change and sustainability by creating a circular economy for plastics and helping to close the plastics circularity gap is David Katz. David Katz is CEO and Founder of Plastic Bank, a global network of micro recycling markets that empower the poor to transcend poverty by collecting plastic from the environment before it ends up in our oceans. The man himself lays it out for us, “Plastic Bank is best expressed as a global chain of stores for the poor and for the ultra-poor, those that make less than $2 a day. Everything in the store is only available to be purchased using plastic garbage by weight to pay for school tuition, medical insurance, WiFi, cooking fuel and everything the poor truly need and struggle to afford...

Casino owner Vici Properties buys MGM Growth Properties, gaining an additional 15 entertainment properties for $17.2 billion. The deal may just make the casino owner the largest landowner on the Las Vegas Strip.

 ZOOM

In settlement of a lawsuit which claimed the company violated users’ privacy rights by sharing personal data with Facebook, Google and LinkedIn, Zoom Video Communications Inc agreed to pay $85 million and improve its security practices.

 ACTIVISION BLIZZARD

The California Department of Fair Employment and Housing is suing Activision Blizzard, the maker of Call of Duty. The lawsuit claims that Activision fostered a “‘frat boy’ workplace culture,” that executives sexually harassed women and that women were routinely paid less than man for similar work and were less likely to be promoted.

W A Y U P SEP 21

W A Y D O W N

procurementmag.com

TRAILBLAZER

Michael Cadieux Job Title: CEO and Founder Company: Procurement Foundry

Making Procurement Cool

edicated to ‘making procurement cool’, Michael Cadieux defines himself as a procurement industry fanatic. With more than 20 years of industry experience in indirect sourcing, Cadieux is a community developer focused on improving the industry through collaboration allowing practitioners to gather, learn, and grow. With such passion in his heart, Cadieux founded the Procurement Foundry in 2019, a world-leading procurement and supply chain management community. “We are building the collaboration hub of the future for our industry. There has never been a place where practitioners can come together, network, discuss, and engage at this scale,” said Cadieux. Reflecting fondly on his college years in study groups that helped to drive his education and memories of his son, Cadieux explains that it was these two things that inspired the founding of Procurement Foundry. “After starting my own firm, I delivered a pizza to my son’s room where he and his friends were playing their favourite video games over a snowy weekend. I asked what they were doing and got a quick, ‘we are Squading up Dad’ response. It hit me like a ton of bricks. We all need to ‘Squad up’!!! So began the vision behind Procurement Foundry,” said Cadieux. Procurement Foundry strives to build the largest community of procurement and

September 2021

supply chain management professionals in the world to gather, share and grow from the collective knowledge, much like the study groups that got him through the early days. “We want to make a community where you can ‘Squad up’ have fun, network, make procurement cool, find some new colleagues, possibly find a new job, expand your knowledge, get answers to problems you face daily, and take advantage of all we can offer you,” added Cadieux. With both members at the beginning of their career, through to c-suite executives willing to share insights and leverage the community, Procurement Foundry is a welcoming group with members in more than 37 countries. “Our community membership is a wellbalanced mix of Indirect Procurement, Supply Chain Management, Governmental and Independent Procurement & Sourcing Professionals [...] there is no single source of expertise within our industry.” Day to day, Cadieux is also a Managing Partner at AMPlify Resources Group, a leading strategic consultant with advisory expertise in digital technologies, helping clients optimise their spending and minimise their costs. Prior to AMPlify Resource Group, Cadieux worked for Publicis Groupe, DigitasLBi, Dockside Bait & Tackle, Boston Financial Data, and Northern Wind Seafoods.

Number of years in the industry:

20+

Founded Procurement Foundry:

2019

“Procurement Foundry begins and ends with its members. Without the incredibly diverse membership and their willingness to engage and participate in our community, we don’t exist. PERIOD, End Of Discussion…” procurementmag.com

FIVE MINUTES WITH...

Ryan Nied Ryan Nied is Commercial Transformation Director, Digital and Talent Supply, within bp’s recently integrated group-wide Global Procurement function. He leads an agile-enabled team that drives category strategy and supply transformation initiatives for bp’s $6B+ of digital, talent and corporate spends Q. HOW DID YOU GET YOUR START IN PROCUREMENT, AND WHAT ARE YOU PASSIONATE ABOUT NOW IN YOUR CAREER?

» I became interested in

Procurement as a college intern in the beverage industry in 1997 when I worked with suppliers on value engineering programs. That early experience has led to a very fulfilling career journey in CPG, food, beverage, consulting and ultimately joining bp in 2017. These days, I’m passionate about the stakeholder capitalism movement and Procurement’s role within it. Procurement practitioners today have an extraordinary opportunity to expand the impact of their roles by leading their organisations to serve customers, employees, communities, and suppliers. 16

September 2021

Q. WHERE ARE YOU AND YOUR TEAM AT BP CURRENTLY SPENDING YOUR ENERGIES?

» Our company just completed its

largest transformation in its 112-year history to pursue a new strategy. The magnitude of change in how we work with stakeholders and suppliers this year has been massive. Mobilising agile squads to deliver value in areas of sustainability, cost, revenue, and digitalisation has been a huge focus. With our net-zero ambition, we are practising a mindset shift in how we identify, prioritise and accelerate projects that advance bp’s sustainability aims. Developing 'touchless' digital buying channels and building great supplier partnerships are also important priorities. All of this has required us to reframe our category strategy framework and how we deploy talent against our largest opportunities.

“ ” I ’m passionate about the stakeholder capitalism movement and Procurement’s role within it

FIVE MINUTES WITH...

“

ith our net-zero W ambition, we are practising a mindset shift in how we identify, prioritise and accelerate projects that advance bp’s sustainability aims

”

Q. ANY ADVICE FOR PROCUREMENT LEADERS LOOKING TO DRIVE COLLABORATIVE, MUTUALLY VALUEGENERATING PARTNERSHIPS?

» I’ve found that using an empathy map

is a powerful way to explore the needs and perceptions of the stakeholder groups on both sides of a new partnership. Another approach is for both sides to write vision statements for the partnership and then jointly merge them in a live collaboration. Both exercises help uncover shared values and establish mutual goals for the relationship.

Q. WHAT BUZZWORDS WOULD YOU LIKE TO HELP BRING CLARITY TO?

» Many of us are seeking clarity on

what 'agile working' means to the Procurement discipline. To me, it represents a major inflexion point. No longer are there rigid swim lanes for a category manager to operate in a defined space. With increased digitalisation and e-marketplace solutions, developing talent with deep category expertise and sourcing proficiency has become less of a focus. Procurement’s future leaders will have high learning agility, excellence in digital collaboration, compelling storytelling skills, deep data fluency and progressive views of how to deliver value against company aims.

Q. GUILTY PLEASURE?

» All throughout my 30’s, it was

training for marathons while balancing work and family. Nowadays, I’ve traded in a lot of those miles for time on the golf course – although I’ve not seen any improvement in my golf game with increased repetition. procurementmag.com

In Association With:

THE ULTIMATE PROCUREMENT & SUPPLY CHAIN EVENT SEPTEMBER

28th - 30th STREAMED LIVE FROM TOBACCO DOCK LONDON A BizClik Media Group Brand

Confirmed Speakers Include: Sheri Hinish

Global Executive Partner and Offering Leader IBM

Ninian Wilson

Group Procurement Director & CEO, Technology Procurement Director Vodafone Procurement Co Sarl

Jim Townsend

Chief Procurement Officer Walgreens

Mark Bromley

Director of Sourcing, Supplier Management Mastercard

Chris Shanahan

VP Global Procurement Thermo Fisher Scientific

GET TICKETS HERE

Creating Digital Communities

BEYOND THE DEAL – THE POWER

OF BRAND VALUE 22

September 2021

WRITTEN BY: RHYS THOMAS PRODUCED BY: MIKE SADR

procurementmag.com

September 2021

Larry Phelan, EY Global CPO, shares his philosophy on the future of procurement and why value goes far beyond doing deals and cutting overheads

Larry Phelan, EY Global CPO

arry Phelan is on a decadeslong journey, the destination of which has just appeared upon the horizon. The EY Global Chief Procurement Officer moved into this position in the professional services giant in July 2009, hot on the heels of the 2008 financial crash, and after spending 10 years in the EY Mergers and Acquisitions service line. In the intervening 12 years, he has reshaped procurement’s value proposition and led a diverse group of professionals across the globe. He has also dedicated his time to the pursuit of one big question: how to elevate procurement as a strategic advisor to the board. “I think it's really important that procurement is seen as more than just doing deals and saving money,” he says. “It's about the transformation that companies are going through and getting the board to feel comfortable with procurement's unique role. That is to me a big bet.” It is a quandary that has shaped his approach to leadership and, in recent times, become a wider talking point in procurement circles. Phelan admits he is not alone in working toward this goal, however he does believe EY is well-placed to achieve it. In many businesses, procurement is a bureaucratic function that sits somewhere in the middle of the organisational structure, reporting to a department that reports to a department, and so on. It is a difficult procurementmag.com

We’re helping organizations connect strategy, risk and operations through technology to transform into a resilient workforce, enterprise and ecosystem that future-proofs the entire business. Reframe your future | ey.com/transformation-realized

Are you prepared for change or reacting to it?

EY Consulting: building resilience to supply chain risk Strengthening supply chain resiliency and forging true supply partnerships is a key imperative that today’s procurement organizations must tackle.

NOTE: Video screenshot appears here.

Written by: Rhys Thomas

No organization is immune to the challenges that threaten supply chains and operational continuity. But risk can be mitigated by building resiliency as an imperative — an objective for which procurement organizations are uniquely placed to achieve.

“

You have to be a good customer to your vendor — especially with regard to mitigating risks throughout the supply chain. Chris Windfelder Managing Director EY-Parthenon Ernst & Young LLP

“

Procurement is expected to create resiliency for certain risks that exist within the supply chain. Vijay Yalamanchili Partner Supply Chain & Operations Consulting Ernst & Young LLP

This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Member firms of the global EY organization cannot accept responsibility for loss to any person relying on this article.

“Procurement is expected to create resiliency for certain risks that exist within the supply chain,” says Vijay Yalamanchili, Ernst & Young LLP Advisory Services Partner. “We’re seeing a shift of those organizational capabilities in procurement, going beyond sourcing and starting to differentially invest in other areas, including contracting excellence and supplier risk analytics.” Risk comes in many forms, but can largely be defined under five categories, as identified by Chris Windfelder, EY-Parthenon Managing Director: changes in customer preferences; adoption to technology and associated cyber vulnerability; geopolitical turmoil and governmental regulation; brand perception and social media; and unforeseen supply shocks, such as COVID-19. “Building resiliency in your supply chain helps to mitigate, or at least understand, where your risk may be across those five overarching profiles,” Windfelder says. Tabletop exercises and stress tests can be invaluable tools in understanding where an organization’s biggest risks lie. He adds: “It really all starts with trying to laser in on which risks are most likely to occur, while also understanding that there’s always an unknown.” Strengthening partnerships is also key in today’s market, where the more stretched supply chains and procurement ecosystems become, the more options suppliers have. “You have to be a good customer,” says Windfelder. “Providing a true understanding of how you as a customer can add value to your vendor is equally as important as your vendor adding value to your own market — especially with regard to mitigating risks throughout the supply chain.” Data is the final tool that procurement organizations must leverage when building true resiliency. “We’re working with many of our clients to understand how they capture data, how they enhance the data that they already have with automation and AI, and then how they bring in the external information that is most valuable to their organization, because there’s a cost in doing so,” Yalamanchili explains. “These are the key elements of data and analytics that are absolutely critical for driving all the outcomes that are related to risk and building that resiliency.”

Beyond the Deal - The Power of Brand Value

position from which to enact change of any real significance or scale. “It's harder for many procurement organisations to make that jump,” he says. "At the EY organisation, procurement has a seat at the Global Practice Group table (top 125 partners at EY) and is at the top of the organisational structure because of its value proposition. So, it's appropriate for us at EY and other procurement organisations to be thinking and pushing for that change as a logical step in our evolution.” For Phelan, while organisational structure is important, it is equally “about the philosophy”. Traditionally, procurement organisations are tasked with the two core objectives of sourcing the right goods or services and closing a deal that saves the organisation money. Once the job is complete, they move on to the next. Fundamentally, these objectives are why procurement exists, and many organisations excel at them. This is quantitative value, 28

September 2021

simple to track on a quarterly basis, and rooted in the core financial principles of business. But Phelan is driving procurement at EY toward another form of value, which he calls “brand value”. “Brand value is tracked under the four (4) main pillars of Client, People, Social and Financial that define the EY Next Wave strategy,” he explains. “Procurement is driving deals beyond the aforementioned quantitative value in support of transformation, user experience, employee well-being, diversity, sustainability, revenue growth, and serving and advising clients with internal procurement team members. It's bringing forward what we do to help EY client servers, to work with clients in a better way. It's understanding the sustainability environment that's out there and working with our supplier ecosystem. It's a combination of all those things to support that goal.”

COMPANY NAME EY

Larry Phelan TITLE: GLOBAL CHIEF PROCUREMENT OFFICER INDUSTRY: CONSULTING

EXECUTIVE BIO

LOCATION: UNITED STATES Larry joined EY as a partner in June 1999. He is an experienced transaction advisor, professional services consultant and, currently, the EY Global Chief Procurement Officer. In this role, he is responsible for travel, meetings and events, real estate and facilities management, technology and talent sourcing as well as the Environmental, Sustainability and Governance Services group who drives supplier diversity for EY across the globe. Larry is a member of the EY Global Practice Group, which is made up of approximately 125 of the most senior and influential EY professionals, and serves as the Functional Transformation sponsor,a programme to redesign functional operating models across the enterprise to establish a leading-class enablement platform to drive revenues, growth, and earnings. Larry is an authentic, inclusive and inspirational business enablement leader focused on innovation. He is a keen supporter of diverse teams and suppliers and has been presented with several awards for his work in this area. Larry is a member of multiple procurement professional organisations, including the “by invitation only” Procurement 50, a World 50, Inc. international group, which provides, organises, and operates an exclusive organisation of procurement officers composed of global members from a variety of fields and industry sectors, namely, providing business networking services.

“ I think it's really important that procurement is seen as more than just doing deals and saving money” LARRY PHELAN

EY GLOBAL CHIEF PROCUREMENT OFFICER

How will business leaders set in motion a better working world? Environmental Social Governance Services

ESGS is driving an inclusive and sustainable mindset across the EY organization through our procurement strategy. Our purpose is to drive sustainability and economic impact for EY and the communities we serve.

“ To drive this procurement as a business, to get that board-level visibility, it has to be about value return. If procurement costs you a dollar, the reporting needs to show that you get US$5 in value back” LARRY PHELAN

EY GLOBAL CHIEF PROCUREMENT OFFICER

The group provides 500 brand value submissions annually, which contribute to top-line growth, innovation, and people engagement, to name but a few. But there remain hurdles in realising the true goal, one of which is a challenge as old as the profession itself: procurement has an image problem and is fundamentally misunderstood by many stakeholders outside its often tight-knit community. “Those same stakeholders will look in and say, ‘Well, what does that matter? Just do the deal for me, save me money,’ or whatever it might be,” Phelan says. “Well, I think, no, that's yesterday's organisation. What we're looking at over the years and into procurementmag.com

the future is an organisation that can help you transform, can help you be more strategic, and add value in a different way. So, we are working through that with stakeholders every day.” Family Matters Larry Phelan is an experienced business leader at one of the world’s largest and most influential professional services networks. His procurement group is collectively responsible for US$8 billion in annual spend across a multitude of categories, from travel, events, and talent management to technology and every piece of EY real estate. He is also a proud New Yorker of Italian and Irish heritage, who loves nothing more than a hearty serving of lasagne washed down with a limoncello, and whose prized possession is the Bronze Star medal awarded to his grandfather for service in the Second World War. His colleagues, peers, and direct reports already know all of this about him. They may also know he loves going to the opera and, rather conversely, counts AC/DC among his favourite bands. None of this is a coincidence; Phelan is an open and approachable professional, a mentor to many, and a source of knowledge and experience for many more. He is a major proponent of enacting change from within, and that begins with what he considers the “procurement family”. “These are the individuals who sit within the procurement organisation, and we absolutely consider our suppliers part of that procurement family,” he says. “What we're trying to do is instill a consistency of how they interact with stakeholders, how they should bring data to stakeholders, how they bring transparency of issues to stakeholders, and how they are proactive in solving problems 32

September 2021

“ What we're looking at over the years and into the future is an organisation that can help you transform, can help you be more strategic, and add value in a different way” LARRY PHELAN

EY GLOBAL CHIEF PROCUREMENT OFFICER

for stakeholders. So, it's making sure that the family acts and thinks and reports and brings data the same way.” Engendering a familial atmosphere is no easy task given the fact Phelan’s procurement group speak 47 languages and are situated in 35 countries. “The EY organisation is centre-led by design so that our stakeholders feel that each and every one of their goals and objectives are satisfied by the people who sit in their country, speak their language, and understand their culture,” Phelan says. “That also means we have key performance indicators and reporting that get set from the centre and then rolled out to all of our global teams. “But it's about making sure that members of our team are healthy and that their wellbeing is looked after,” he adds. “Especially over the last year and a half — with the COVID-19 pandemic — making sure that we're bringing some levity to their lives has been more important than ever. And even before the COVID-19 pandemic, getting connected on a regular basis, hearing what's on their minds, and introducing opportunities for them to raise concerns about certain issues throughout the organisation makes you truly feel like you're a family.” procurementmag.com

How do you bridge the gap between your strategy and the real world?

Learn more about Real-World Strategy

EY-Parthenon designs and delivers actionable strategy to reframe your future.

Transformative Change Extending the procurement family philosophy to suppliers is a natural extension and one that forges stronger connections and leads to better results. “We put a lot of pressure on our suppliers to bring innovative ideas to us. I mean, that's what they are supposed to do, and they are doing that because we have a number of true success stories,” Phelan says. One example is a sustainability drive in the hotel sector. “How often does one really need to have the towels in the hotel room or the sheets on the bed washed? You go into a hotel today, and they’re washed every night. Well, now you can check that card and opt out,” he says.

To enhance well-being for their travellers, procurement family members in the talent category worked with suppliers to provide stretchy resistance bands on longhaul flights to relieve tension. These are ostensibly simple projects, but, as with the handful of other examples Phelan shares, they belie the nuance of the procurement teams that worked diligently and tirelessly on them behind the scenes. “Getting that mobilised across an organisation of our size is a tough task, but it's an important thing to do,” he says. "So, there are examples like that, where we're trying to go beyond the quantitative value into the brand value.” procurementmag.com

It all folds into Phelan’s brand value philosophy, the key to the overarching goal of elevating procurement beyond black and red ink. “I'm not saying that procurement should have a seat on the board. What I'm saying is the content of what procurement brings to the table, for me personally, needs to be packaged differently so that the board fully understands the risks of something not happening, to the value that's being sacrificed,” he says. Driving procurement forward as a business — Phelan considers EY his foremost client — will be key to this elevation. He adds: “To drive this 36

September 2021

procurement as a business, to get that board-level visibility, it has to be about value return. If procurement costs you a dollar, the reporting needs to show that you get US$5 in value back. It's the transparency through the reporting that gets that in front of people, to showcase those examples.” Procurement is at the crossroads of major change. The COVID-19 pandemic redefined the importance of an organisation’s sourcing professionals, just as geopolitical turmoil, natural disasters, and terrorist attacks have in the past — and will continue to do in the years ahead. But Phelan senses the road is levelling out.

“ Brand value is about driving user experience. It's bringing forward what we do to help EY client servers, to work with clients in a better way. It's understanding the sustainability environment that's out there and working with our supplier ecosystem”

“The future goal for the procurement organisation is to make sure that the global executives on our board at the EY organisation fully understand the value proposition beyond the quantitative value, getting into the brand value and the transformation value,” he says. "If we're sitting here a year from now, two days before the end of fiscal 22, I would expect to see more of a regular cadence with our global executives on a number of the transformative events that we have active right now. If we're doing that, then I think we’ll have had a good fiscal year.”

LARRY PHELAN

EY GLOBAL CHIEF PROCUREMENT OFFICER procurementmag.com

PROCUREMENT STRATEGY

CATCHING UP WITH

MARK RAFFAN THE NEGOTIATIONS NINJA

PROCUREMENT STRATEGY

We talk procurement, and of course, negotiations with the Ninja himself, Mark Raffan WRITTEN BY: LAURA V. GARCIA

f you’re in procurement, there’s a good chance you’ve heard of him. A serial entrepreneur and lover of marketing and thought leadership, Mark Raffan, a.k.a the Negotiations Ninja, is an expert in negotiation, influence, and persuasion. His popular Negotiations Ninja Podcast consistently ranks among the top negotiation podcasts in the world and lands on Feedspot’s #1 spot. Mark has also coached executives and teams in some of the world’s largest companies. He has been referenced in Entrepreneur, Forbes, Thrive Global, has appeared on dozens of podcasts and was a Supply and Demand Chain Executive Magazine 2019 and 2021 Pro-to-Know. Mark and I met only a few short years ago in the small world of procurement and supply chain content creation. When it comes to negotiations, Mark is one of the worlds leading voices, and he loves to talk about procurement. Given the shifting nature of the industry, I thought there was no better time to catch up and garner his valuable thoughts. LVG: “As we know, it all rolls downhill,” I say. “Procurement leaders are finding themselves having to flip the script and start asking more of their suppliers. Advice for those looking to shift from status quo to excellence?”

MR: “Technology is going to play a major role in negotiations going forward. And to think that it's not would be very naive, like horrifically naive. Artificial intelligence (AI) is progressing so fast that there are now companies that are using AI to negotiate tail spend. Tail spend typically has been an area where most organisations have not really paid attention to because it represents 80% of the volume of transactions, but only 20% of the spend. So the number of line items that are required to be able to get a good deal done is significant. Going through that one by one is substantial; adding in technology such as AI makes that more efficient. “For example, Walmart is basically negotiating much of their tail spend right now using AI called Pactum [Pactum’s platform provides autonomous negotiations at scale.] So, typically, a procurement professional would negotiate sequentially, one deal at a time. However, this technology negotiates in parallel, which means that they can negotiate hundreds and potentially more than thousands of negotiations at one time.

“ Technology is going to play a major role in negotiations going forward. And to think that it's not would be very naive, like horrifically naive” MARK RAFFAN,

FOUNDER, NEGOTIATIONS NINJA procurementmag.com

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PROCUREMENT STRATEGY

“ A lot of procurement people believe that they're getting it all, but they may have conceded on things that they shouldn't have conceded on” MARK RAFFAN,

THE NEGOTIATIONS NINJA

This also means that it can optimise not only for the single deal but for the span of the deals, which drives more efficiency, which means they can save more money. So, it's going to happen. At what point in time it becomes beyond that tactical spend level, I don't know, but starting to integrate technology earlier rather than later, is going to save you a lot of headaches, especially when it comes to fast-moving items that you have good data on.

LVG: “They say that the days of beating the supplier over the head for better pricing are behind us. Do you agree or disagree with that?” MR: “I would agree in the sense that it should never be and should never have been only about pricing. It should be about significantly more than that because if we're arguing over price, then, generally speaking, that's a series of diminishing returns. If I beat someone up consistently over price, they may give me the price that I'm looking for, but then what are they giving me in return for that? Originally we may have contracted for the AA team to be able to come in and do the work, but now are they giving me the DD team as a result. So I think it needs to be about significantly more than price. It's about the total value that the organisation can provide.” procurementmag.com

PROCUREMENT STRATEGY

LVG: “So, we've gotten to my favourite question. Maybe because I've found myself in this position before, and it's a tough one to be in, but due to the pandemic, many are finding themselves in the unfortunate position of being late on payments while at the same time having to ask for it all, the best possible price and all the value adds everybody is asking for. Do you feel it's possible to negotiate our way into having it all?" MJ: “That's a really good question. A lot of people in procurement believe that concessions are something that are not required. One of the biggest things that I teach first is that one of the initial things you have to understand about yourself and about the negotiation that you're going into is what am I willing to give away? Because you are not going to get everything that you want, which means that you have to know what it is you're willing to give away. “The response that I get from a lot of procurement people is, 'well, I'm actually not planning on giving anything away.' The downside to that line of thinking is that when you think that way, you end up giving away a lot more than you actually should. A lot of procurement people believe that they're getting it all, but they may have conceded on things that they shouldn't have conceded on. I would be very cautious with having those people lead any types of negotiations whatsoever, or just bring me in to train them because they don't know what they're talking about.” LVG: “Procurement is reskilling, but as much as the function of procurement is changing, negotiating, and SRM will always be critical. Advice on hiring during these times?” I ask. 42

September 2021

MJ: “If I'm looking for the right type of person when it comes to negotiating, I'm looking for someone who's curious, and I'm looking for someone who asks really good questions and also has good listening skills. Those are the three main traits that I would look for within someone that would help me to understand whether they have the natural inclination to be good negotiators.” LVG: “So we're almost the end, a couple of quick ones for you. Biggest negotiation mistake?” MJ: “I've personally made so many that we would sit here for another half an hour to go through all of them, but the biggest negotiation mistake that I see consistently over and over and over again, with all the teams that we train is the lack of preparation. Most people think that they can wing it. This might sound shocking to a lot of people, but for people who have been in the game for like 15 plus years, they're still winging it purely because they've done it that way for a long time. The problem with that is you lose track of the fundamentals that are required to produce good results., “I'm a big fan of John Wooden's approach to basketball where he focused on the fundamentals with top-tier athletes. He retaught them how to dribble and even how to tie their shoes. And that's not an exaggeration. He was reteaching people how to tie their shoes so that they wouldn't get blisters and could play for longer. That's the kind of stuff that a lot of people forget about in negotiation, and so they're missing out on massive opportunities as a result." LVG: “I love that. Ok. And lastly, guilty pleasure?” I ask. MJ: “Scotch and fried chicken,” he answers… I knew I liked this man.

PROCUREMENT STRATEGY

“ One of the initial things you have to understand about yourself and about the negotiation that you're going into is what am I willing to give away?” MARK RAFFAN,

THE NEGOTIATIONS NINJA procurementmag.com

UK GOVERNMENT

UK GOVERNMENT: SAVING LIVES WITH NHS

TEST & TRACE WRITTEN BY: SCOTT BIRCH

September 2021

PRODUCED BY: GLEN WHITE

UK GOVERNMENT

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UK GOVERNMENT

September 2021

UK GOVERNMENT

Jacqui Rock, Chief Commercial Officer for

NHS Test & Trace for UK Government, on leading the response that’s winning the digital war against COVID-19

Jacqui Rock CCO for NHS Test & Trace

ll the executives that feature in the pages of this magazine have earned their place through hard work, dedication, and a huge dose of the X Factor. That said, you’d be hard pressed to meet anyone with more personality, drive and passion for service than Jacqui Rock. Officially designated Chief Commercial Officer for NHS Test & Trace for the UK Government, she is simply the person you turn to in an hour of need. Someone who Gets Stuff Done. Just the person, in fact, to help the UK in its fight against COVID-19. This sense of duty is something that has stayed with Jacqui throughout her distinguished career. “I would work all day on the trading floor then go out and put on a police uniform,” recalls Jacqui. “I have always felt a strong desire to give something back and make a difference. We write our legacy every day and, in the words of Heather Small, ‘what have you done today to make you feel proud?” procurementmag.com

THE EXCEPTIONAL EVERY DAY Proud to support the UK Government to help Britain get Back to Business

MITIE COVID-19 CHECKLIST ASSURED

Mitie: Frontline Heroes in the COVID-19 Response MITIE COVID-19 CHECKLIST ASSURED

Mitie, a key partner in the UK government’s COVID-19 testing programme, is also supporting businesses to return to the workplace safely and seamlessly. Most adults in the UK will have been impacted by the vital work carried out by thousands of Mitie colleagues in the past 18 months. As the UK’s leading facilities management company, Mitie is a key supplier to the UK government’s COVID-19 testing programme, and has played a pivotal role in helping communities monitor and control coronavirus infections.

“We have more than 11,000 Mitie colleagues working in our test centres across the length and breadth of the UK, and 65,000 colleagues in total on the frontline” says Simon Venn, Chief Government and Strategy Officer, Mitie. “We call them our frontline heroes, and they’re delivering everything from cleaning and clinical waste management, to security and intelligence services.” Mitie is already running more than 138 test centres but that figure is expanding to 175 regional and local fixed testing centres in the coming months, alongside a further 105 mobile testing units across Great Britain. “It’s a huge capability,” Venn says. “And now that lockdown restrictions have eased and we enter a new phase of the pandemic, we stand ready to support local communities as and when they need to respond to potential outbreaks.” Alongside infrastructure and boots-on-the-ground services, that also means intelligence. Mitie leverages AI and ML technology to analyse a variety of data streams to predict spikes and outbreaks at both the micro and macro level. “Horizon scanning is a key component of our ability,” Venn says. The company also tracks developments in other countries such as Israel, which shares many parallels with the UK’s situation. “That puts us in the best possible position to act proactively,” Venn says. “Everything we do has a scientific thread running through it. Cleaning, for example, is no longer about mops and buckets. It’s about nanotechnologies, sprays that leave antibacterial films on surfaces, and UVC air handling technologies that kill airborne pathogens. It’s this underlying science that gives us a real edge when it comes to turning the tide on the pandemic.”

As the economy reopens, Mitie is extending its expertise and support to the business community. “We’re really proud to share our expertise, to help get Britain back to business as quickly and as safely as possible,” Venn says. Mitie’s research shows that more than half of British employees working from home say they are ready to return to the office, but a third are concerned that their office’s aren’t COVID secure.

“In that vein, we've created a comprehensive guide called Getting Britain Back to Business, to help companies prepare for a safe and seamless return to the workplace and our guide is all about facilitating that.” “Many of us have experienced working from home, and the one thing that the pandemic has proved is that it is possible to do so,” Venn explains. “But it's also highlighted how difficult it is to build genuine social rapport. That's where you really need that face-toface time with your colleagues.” The Mitie COVID-19 Checklist Assured mark takes that one step further. “This is really about us working in genuine collaboration and partnership with our customers. It’s been developed based on our experience of creating and managing efficient workplaces, as well as leading organisations through the current pandemic,” Venn says. “For me, to be declared Mitie COVID-19 Checklist Assured is a way for all of our customers to demonstrate that they've taken the strategic and responsible steps to provide a safe, secure workplace for all of their people." Written by: Rhys Thomas

UK GOVERNMENT

UK Government: Saving lives with NHS Test & Trace

Jacqui worked for 30 years in the Financial Services industry where she held multiple executive positions with the likes of Credit Suisse, JP Morgan, Barclays and Bank of America Merrill Lynch. She then followed her calling and joined the Ministry of Defence as director for the Defence Infrastructure organisation – where she was responsible for £4 billion annual investment across the whole military estate for the Army, Navy, Royal Air Force and Joint Forces Command. “When the call went out across Government for a chief commercial officer, I felt compelled to stand up and be part of the solution,” says Jacqui. “I have never been a good observer, always wanting to be in the thick of it, and this was the most challenging situation our country and the world has faced for decades.” 50

September 2021

“ I found myself managing the most complex delivery challenge across government” JACQUI ROCK

CCO FOR NHS TEST & TRACE, UK GOVERNMENT

NHS (National Health Service) Test & Trace was established in May 2020 as a government-funded service in England, in response to the crisis to track and help prevent the spread of COVID-19. NHS Test & Trace forms a central part of the country’s recovery strategy, which seeks to return life to as close to normal as possible, for as many people as possible, in a way that is safe and protects the NHS and social care.

UK GOVERNMENT

EXECUTIVE BIO JACQUI ROCK TITLE: CHIEF COMMERCIAL OFFICER FOR NHS TEST & TRACE COMPANY: UK GOVERNMENT Jacqui Rock is the Chief Commercial Officer for NHS Test & Trace. She is a member of the NHS Test & Trace Executive Team of trusted directors in the Government’s strategic defence against COVID-19. She is the driving force behind dynamic and rapid innovation and technology development in the supply chain. Jacqui is formerly director for the Defence Infrastructure Organisation at the Ministry of Defence: where she was responsible for £4bn annual investment across the UK and Overseas Defence estate with a total value of £35bn. She led delivery on hard & soft FM, construction projects and major programmes across the full military estate for the Army, Navy, Royal Air Force and Joint Forces Command. Jacqui is a member of the Cabinet Office Commercial Function and joined the UK government after 30 years in the Financial Services industry where she held multiple Executive positions in companies including: Credit Suisse, JP Morgan, Barclays and Bank of America Merrill Lynch. Previous positions included International Chief Procurement Officer for Bank of America Merrill Lynch, where her passion and leadership style delivered procurement and risk management for US$22bn of spend

across 42 countries. As an experienced Commercial Executive, Jacqui brings subject matter expertise, an extensive global network and a proven track record of complex start-ups and transformation delivery.

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Baringa: Defining the COVID-19 Response Ecosystem Baringa has been instrumental in defining and establishing the ecosystem and supply chain that underpins NHS Test and Trace and the UK’s vaccination programme Baringa has served at the forefront of the UK’s COVID-19 response since the outset. Teams led by Sarah Ashley, Government Partner, and John Calder, Partner and Practice Lead for Supply Chain and Procurement, have been instrumental in the past 18 months. As a commercial partner to NHS Test and Trace, Sarah Ashley, worked early on with Jacqui Rock, CCO, NHS Test and Trace, “building the pipeline, working with different suppliers, and putting in place the commercial agreements that have allowed Test and Trace to deliver”. That involved providing commercial assurance for over £1bn in spend, engaging with 150+ suppliers, negotiating rates, working with business owners to challenge requirements, and executing 300+ contracts, Ashley explains. “This has resulted in multimillion pound savings for NHS Test and Trace.” It is a high-pressure, high-stakes environment, and one in

which Baringa’s most senior teams drew upon all their experience to deliver the required outcome. “What you don’t want is teams of consultants writing decks all day,” Ashley says. “Our clients needed experienced people to have conversations with them as peers, to define the risks, the knock-on impacts, and the logical next best step. That’s why we’ve been successful.” In the UK’s vaccination programme, Baringa was integral in establishing and rapidly scaling a supply chain at a pace. “Today, more than sixty million vaccinations have been delivered and 75+% of all adults in the UK have received both vaccinations,” Calder says. “The supply chain has been a key contributor to that. It has stood up to all the challenges thrown at it, delivered 99% on time, and all with minimal damage or loss of the precious vaccine, which has been a key part of the mandate.” As the efforts to combat COVID-19 evolves, so too will Baringa’s involvement. “It’s really important for us to hand over and not do these roles forever,” says Ashley, who has placed great emphasis on building resilient processes and frameworks. “Handing back to the whole health ecosystem is vital,” adds Calder. “We’re building a legacy, and making sure that when the consulting engagements end, we’ve transitioned to an up-skilled client team to run this going forward.”

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“In July 2020, we set out the plan for NHS Test & Trace to take us through summer and into winter,” says Jacqui. “When the Test & Trace service began, we were still learning about the virus. We did not fully know how prevalent COVID-19 was, or the number of people who had the virus but did not display symptoms. “To help stop the virus, we stood up an integrated system at extraordinary speed so we could test at scale and trace the contacts of people who tested positive to advise them to self-isolate. We also created the Joint Biosecurity Centre which, with public health England, the Office for National Statistics and analysts from across government and academia, has deepened our understanding of the progress of the virus, allowing us to intervene early and with evidence.” As with any effort of this scale, it was essential that the UK Government drew on both public and private sector expertise and experience to try to deliver an app that would meet the unprecedented needs of the pandemic response. The NHS COVID-19 app was launched in September 2020 and is currently the second most downloaded exposure notification app in the world. “This was made possible by working in partnership with others,” says Jacqui. “We were striving to be ‘teams of teams’ made up of local authorities and Directors of Public Health, the NHS, Public Health England, public, private and not-for-profit sector partners and the devolved administrations [the Scottish Government, Welsh Government, Northern Ireland Executive]. It is thanks to them that as a country, we have made such unprecedented strides in developing our testing and contact tracing capacity and systems.” 54

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UK GOVERNMENT

“ I am immensely proud of the work and achievement of Test & Trace and being part of the COVID response team. We often remind each other when it gets tough that this is something you can be proud of for life” JACQUI ROCK

CCO FOR NHS TEST & TRACE, UK GOVERNMENT

The stats are staggering. By May 2021, the first anniversary of NHS Test & Trace being established, it had achieved: • 5 million lateral flow test provided a week • 92 million PCR tests conducted • 1 million+ antibody test kits delivered • 22.2 million app downloads • 180 million+ tests carried out across the UK • 3.9 million positive cases identified (as of 2 June 2021) • 87% of cases traced and asked to provide close contacts • 82% of close contacts identified reached and asked to self-isolate • 1,390 asymptomatic and 1,100 symptomatic testing sites • 600,000 PCR tests conducted a day Many of those 180 million tests were conducted at 1,200 test sites. Within two weeks, 14,000 staff were hired to establish contact tracing – the largest call centre in UK history. Lighthouse Labs across the UK now process more than 2 million tests per day. procurementmag.com

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Testing times for 4C Associates Executives from 4C Associates explain how they worked as a team to support the NHS Test & Trace efforts to combat COVID-19. When the call went out to support NHS

“There was no precedent, there was

Test & Trace in the UK’s hour of need

no infrastructure and the only thing

as it prepared to combat COVID-19,

certain is uncertainty. And this is where

procurement and supply chain experts

our knowledge of transformations

4C Associates were the natural choice.

really came to the fore. The ability to

With more than 20 years of international experience and extensive knowledge to draw on, coupled with the latest technological innovations and processes, 4C were able to provide a transformative, sustainable solution. “Our focus is procurement and supply chain, that is where our deepest expertise lies,” says 4C Managing Partner Allison Ford-Langstaff.

deal with ambiguity is something we consider to be a real strength of ours.” Ford-Langstaff says she feels immensely proud to have been part of this mission and how the entire 4C Associates team have worked together in incredibly difficult circumstances. “We have to remember that we are people dealing with people in a very, very difficult time,” says Ford-Langstaff.

“When we were first contacted by NHS

“Any of us sitting in our rocking chairs,

Test & Trace it was a couple of months

looking back on our lives and telling

after the pandemic started and we were

tales of our times, we will be able to

asked to deliver their procurement

bring out the scrapbook and show

agenda and deliver to the mission –

our grandchildren all the amazing

to control the spread of COVID-19.”

things that we’ve achieved.”

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With the world clamouring for solutions to combat COVID-19, and an ever-changing, uncertain landscape, the procurement and commercial challenges Jacqui and her team faced were immense. They had to establish effective commercial support, a robust commercial function and a sustainable Commercial Operating Model in a matter of weeks. Flexible contracting and speed of commercial delivery was vital to support an emergency response organisation and enable protection of public health. “I found myself managing the most complex delivery challenge across government,” recalls Jacqui. “We created a new organisation without systems infrastructure and domain experience to deliver at scale which procured more than

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“ We used a modern, 21st-century solution to connect with a modern public in a way that resonated and was easy for all to use” JACQUI ROCK

CCO FOR NHS TEST & TRACE, UK GOVERNMENT

1,000 contracts across 600 suppliers in three months – and all of this was done remotely as it was during lockdown. “We created a volatile demand with a short window of confidence where we faced supplier resistance to deliver without committed growth. I could write a book on the procurement and commercial challenges, but we stayed focused on the mission and executing the appropriate government commercial governance to deliver a service that is compliant and auditable.” Like so many responses to the pandemic, NHS Test & Trace was reliant on digital solutions beyond the development of a user-friendly app. From the supply chain solutions that manage the provision of tests to the lab systems that manage the analysis, to the test digital reporting systems, contact tracing systems and data analytics platforms – all underpinned by cloud platforms. However, it is the app, Jacqui believes, that made the most significant contribution and demonstrated the power of digital. “We used a modern, 21st-century solution to connect with a modern public

Rock Salutes Suppliers “There was an army of more than 50,000 people delivering NHS Test & Trace services (including the Army). Suppliers made valuable and innovative contributions towards the delivery of the pandemic response. They delivered multiple service, capabilities, tech and manufacturing solutions including test sites, labs, contact tracing, building the app, executing community testing, workforce and schools testing, and new testing technology. “Our suppliers acted in an outstanding way, bringing ideas and innovation to the table. It was a joint effort and the best example of supplier collaboration and engagement I have ever witnessed.”

procurementmag.com

in a way that resonated and was easy for all to use,” she says. “At its peak, the digital solutions were processing 300 test results per second. “We worked closely with Google and Apple, scientists within the Alan Turing Institute and Oxford University, medical experts, privacy groups, at-risk communities, and teams in countries across the world to bring a state-of-the-art testing and contact tracing product to market that is safe, simple to use, and secure. 60

September 2021

“ When the call went out across Government for a chief commercial officer, I felt compelled to stand up and be part of the solution” JACQUI ROCK

CCO FOR NHS TEST & TRACE, UK GOVERNMENT

UK GOVERNMENT

“We will continue to work closely with academia and the science industry across the world. This was a global pandemic and needed a global response.” It’s fair to say that when Jacqui began her role in NHS Test & Trace, it was a crisis response unit. There was no end-to-end process, no operating model and no team. They started from scratch and had to scale activities to contain the virus and then test the entire UK population. This already pressurised situation was magnified by constant pressure and scrutiny.

“We have been under relentless scrutiny from the media, audit committees and legal challenges,” says Jacqui, “but we knew that what we were delivering was the roadmap out of lockdown and we were saving lives. “I am immensely proud of the work and achievement of Test & Trace and being part of the COVID response team. We often remind each other when it gets tough that this is something you can be proud of for life.”

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PROCUREMENT OF THE FUTURE 62

September 2021

DIGITAL PROCUREMENT

Daniel Weise and Dr Wolfgang Schnellbächer on leveraging AI for Procurement excellence and how they see procurement developing WRITTEN BY: LAURA V. GARCIA

Top: Daniel Weise Bottom: Dr Wolfgang Schnellbächer

ummer has just arrived in Mannheim. Germany, and Daniel Weise, Managing Director and Partner at Boston Consulting Group (BCG) and his business partner and co-author of "Jumpstart to Digital Procurement: Pushing the Value Envelope in a New Age," Dr Wolfgang Schnellbächer, Managing Director, Partner and European Leader of Procurement Practice at BCG are sweating their way through it. I have a sneaking suspicion I may be one of the lucky few who get to see these men sweat, although only literally. These men are true industry leaders— having written THE book on digital procurement. Yet, I always find myself fascinated by their lack of airs. They possess a superb blend of smiles and congeniality, words spoken with the passion of an industry newbie but grounded by the unwavering confidence that comes from vast experience and in-depth knowledge. These men know their procurement, and they love to talk about it, even with the likes of me. So, of course, I took full advantage. Let’s dig in, to what I dug out. The Future of Procurement Wolfgang shares what he believes procurement will look like in the not so distant future. “In five years, procurement will look completely different versus today. procurementmag.com

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“ Digital transformation may scare people… Basically, everything will change. This is something positive, and we need to convey that message to teams” DR WOLFGANG SCHNELLBÄCHER

MANAGING DIRECTOR, PARTNER AND EUROPEAN LEADER OF PROCUREMENT PRACTICE, BCG

Let’s start with how it looks today. Today you could differentiate three types of procurement functions. You have strategic buyers defining categories and, of course, leading the big negotiations and alignment with business partners. On the end, you have the transactional buyers executing the defined strategy. And then you have the third category of people who are primarily working on topics like research, data gathering, and so forth.

“In the future, the strategic buyers will still be there at the same size, but they will be working completely differently, very much steered by AI and working on wider value generation topics versus just savings. The second group will shrink. A lot of operational tasks now performed by the group will be retasked to bots and other more seamless, integrated systems between buyers and suppliers, but also between buyers and the overall company and business partners. “When you look at what the operations people do today, there is a high share of redundant activities. And lastly, the third group of cross-functional people will expand massively. You will have more people dealing, for example, with master data in order to fulfil the needs that we just laid out. You will have AI programmers. You will have people who deal with robotic maintenance procurementmag.com

DIGITAL PROCUREMENT

engineering. That is where the new capability is going, and that’s where companies should invest overall. When you look at the total size of the function, it will shrink because of the loss of these operational people. But it's going to be a completely different function, with stronger value generation, different roles, and overall more strongly led by digital.” Leveraging AI for Procurement Excellence Daniel explains how Big Data is helping procurement sift through it all and is bringing a whole new meaning to strategic procurement. “In the past, procurement has been very much limited to only driving savings. Companies didn’t ask for innovation or sustainability the way they asked for quality, which is, for us, one of the core factors. Now today, big data is making this possible. Why? Because today companies have large supplier bases. Even smaller companies tend to have thousands of suppliers, and large corporations get into the hundreds of thousands. “Big Data is providing us with the right insight on which suppliers, in particular, are most relevant and best suited for the objective, whether it be innovation, better quality control, etc.” A) Supplier Selection As an example, Weise explains that big data is capable of telling us which suppliers have the most potential for innovation by looking at determining factors such as size and legal entity. “It turns out that core innovation fields are oftentimes triggered by medium-sized companies.” Weise points to BioNTech’s development of the COVID vaccine, outsourced by Pfizer, as evidence of the power of medium-sized companies to innovate. 66

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“ The days when you focused only on hitting suppliers with a stick to get cost savings are clearly over” DANIEL WEISE, MANAGING DIRECTOR AND PARTNER, BCG

It also turns out that family-owned companies typically spend more on innovation than non-family owned companies, hence why they look at the legal entity as a determining factor. Proving that innovation is born out of necessity, Weise says high-cost regions typically have to be more innovative than lowcost regions. Much like a love matching service, big data will take all the relevant factors and data points and help you find just the

Digital Procurement

right supplier with the right characteristics by providing you with a supplier ranking and thereby increasing your potential for success in finding a meaningful connection, I mean, an effective and mutually beneficial partnership. On the flip side, it can also help you mitigate risk, highlighting the suppliers that have the highest risk of quality failure, for example. Of course, the men aren’t talking hypothetically. Weise says that after seeing

many books on procurement and game theory, they wondered why it wasn’t making its way into applications within corporations. This led them to create BCG’s AI-based Negotiation Coach. Which, you guessed it, does all of the above. And more. B) Go-to-Market Approach Defining the best go-to-market approach is another area where BCG’s AI Negotiation Coach helps to level up procurement. Wolfgang says, “oftentimes, an RFP is not procurementmag.com

DIGITAL PROCUREMENT

the right solution. Sometimes it's just too complex for what we want to achieve. The classic face-to-face negotiation is better. Sometimes we may even want to hold an auction or issue a concept tender where instead of asking the supplier to answer predefined questions, we ask for a solution.” Even within an RFP, there are varying degrees of complexities. BCG’s “This is where the coach is helping. It's giving us the intuition of what is the right tool at the right moment in time.” Of course, it’s AI-based, so the tool becomes increasingly proficient as it analyses outcomes and accumulates experience from each of the organisations buying situations and actions. “If you want to put it this way,” says Daniel, “because it can store that memory, it becomes a little bit like the brain of your procurement department. If new people come in, they can take a look at how you’ve dealt with situations before and what the result was. And so you can take some lessons from it. It's not only a coach for a specific situation, but it's a coach for running the human procurement process overall in a company.” It’s kind of cool stuff. Autonomous Sourcing- The Way of the Future? I ask the gentlemen if autonomous sourcing is the wave of the future, as many suggest. “This is partly correct.” Responds Weise. “Autonomous sourcing is a great idea, but we think at the moment that it is limited in its applicability to non-mission-critical items, such as office supplies.” So, essentially, your C items can safely be put onto an automated procurement track, from identifying requirements through to invoice payment. He argues, “If you, let’s say, want to invest a billion dollars in new semiconductor 68

September 2021

DIGITAL PROCUREMENT

fabrication, that’s not something you’re going to put on an automated purchasing track because it involves smart thinking. Automatisation of strategic procurement processes will take place, but more so on the tail side of spend.”

“ Procurement is in having a great journey of increasing importance. And that journey will not only be continued but boosted through digital” DR WOLFGANG SCHNELLBÄCHER

MANAGING DIRECTOR, PARTNER AND EUROPEAN LEADER OF PROCUREMENT PRACTICE, BCG

Coming up Short, But Stepping Up Big Yes, there is a talent shortage, but the men at BCG see things in a much more positive light for procurement. “I think one of the needs we see, Wolfgang and I, is to help procurement organisations become much more attractive to young talent. The days when you focused only on hitting suppliers with a stick to get cost savings are clearly over. Quality, innovation, speed, minimisation of risks, sustainability, are all things that are run by human teams. And that has many effects. Not only is the spectrum of work broader and much more interesting, but also the procurement function itself has elevated. There’s much more direct reporting into the board, oftentimes to the CEO. There’s much more responsibility in the company, co-driving innovation processes, getting production up and running and things like that. “Yes, there’s an overall shortage, but the attractiveness of the function has certainly increased over the years. You also see that Procurement functions typically pay more these days as they expect different talents. So I think overall, it’s actually good news on the procurement side.” Procurement’s Stumbling Blocks It’s not clear sailing yet, however. Wolfgang says there are two main stumbling blocks for procurement to overcome. “Number one for me is the most important, and it’s our internal business partners. The rest of the company outside procurementmag.com

September 2021

DIGITAL PROCUREMENT

“ Quality, innovation, speed, minimisation of risks, sustainability, are all things that are run by human teams.” DANIEL WEISE, MANAGING DIRECTOR AND PARTNER, BCG

of procurement need to understand our world better. They need to understand, we’re no longer just the savings guys, but in alignment with the overall company strategy, we can deliver very big valuebe it in innovation, sustainability, risk, or quality. If we get that acknowledgement, of course, our mandate will increase. We will get better talent, and we will get funding for digital resources. This leads us to stumbling block number two, obtaining the necessary resources to get where we need to go. “Of course, the future we are laying out will be based on new resources, stronger data collection and processes which allow that we gain different data points. This, of course, is offset by the wider value generation and an overall higher contribution.” Before the men depart in search of a cold drink, or a cooler place to be, Wolfgang shares some closing thoughts. “Digital transformation may scare people. The procurement function will change. The work of the function will change. The interfaces will change. Basically, everything will change. This is something positive, and we need to convey that message to teams. “Procurement is in having a great journey of increasing importance. And that journey will not only be continued but boosted through digital. Therefore, it's important we maintain a positive mindset and that we communicate this positive stance to the overall teams. That way, we ensure that the teams perceive it as something which is good for them and will engage and actively give their input and help to shape it. And this, we believe, is one of the core tasks standing in front of CPOs for the next year.” It seems, if these dos amigos have anything to say about it, procurement’s future looks bright. procurementmag.com

VODAFONE PROCUREMENT COMPANY

September 2021

VODAFONE PROCUREMENT COMPANY

SHAPING THE FUTURE OF

PROCUREMENT WRITTEN BY: RHYS THOMAS

PRODUCED BY: GLEN WHITE

procurementmag.com

VODAFONE PROCUREMENT COMPANY

Reinhard Plaza-Bartsch, Global Head of SCM Development, Operations & Digital

September 2021

VODAFONE PROCUREMENT COMPANY

Reinhard Plaza-Bartsch, Global Head of SCM Digital & Operations, Vodafone on empowering procurement through digital transformation

efining the efficacy of a digital transformation in procurement seems straightforward on the surface. You can consider the facts by measuring efficiency and productivity metrics or tally up the black ink on quarterly financial results. But the full story is written in the detail. In making areas of user experience and ESG commitments tangible, reportable and manageable. As Global Head of SCM Digital & Operations at Vodafone, Reinhard PlazaBartsch is driving the telecoms giant’s supply chain digital transformation journey. His vision is that digital will transform the way we work, fostering a culture of innovation and driving more sustainable value creation. It will empower individuals to do more, through outstanding user experience, boost productivity and reshape how we collaborate across organisations. “Digitalisation will unlock exponential value for our business,” he says. “As a function, we want to push the boundaries of what can be achieved through technology and innovation. Having a vision and lining up a clear roadmap of new capabilities interlocked with the business is an essential part of the journey. “You need to start from the basics - typically opportunities that will free up capacity of commercial teams so that they can devote more time to more value-adding activities. However, you need to shift gears quickly, go beyond simple automation, and equip teams with new digital solutions that go beyond bridging process gaps and providing data procurementmag.com

VODAFONE PROCUREMENT COMPANY

Title of the video

insights to enable business foresight. In other words, enabling fully end-to-end connected solutions that provide transparency about what is happening in their area of spend. Extending the reach to identify external factors that will influence the business and leveraging artificial intelligence to advise and recommend the best course of action to minimise risks and maximise the value for the organisation.” Plaza-Bartsch joined Vodafone 14 years ago in the nascent era of digitalisation, when centralization and standardization were the buzz words of the hour. That initial unification process took some years to accomplish but resulted in “a data foundation for the supply chain organisation” that has been instrumental in accelerating the digital transformation over the past five years. “The degree of insights that we can get from the data that we've created over those years is tremendous,” says Plaza-Bartsch. “We can see how our operations perform in realtime, identify patterns and behaviors in our business and take laser sharp actions to drive performance. We can see how our users are 76

September 2021

“ Digitalisation needs to be very much linked to the actual expected business outcome” REINHARD PLAZA-BARTSCH

GLOBAL HEAD OF SCM DEVELOPMENT, OPERATIONS & DIGITAL, VODAFONE

leveraging certain datasets, what is becoming more relevant to them and how they are unlocking value for the business. Beyond our operations, we are helping our suppliers and partners improve their performance through our insights and the actions we have taken. “We are now also using some predictive models to proactively manage and mitigate risks, although this is an area where there is still a big opportunity to scale further. Getting access to data has been one step in our journey; this has now moved towards

VODAFONE PROCUREMENT COMPANY

turning data into business insights that are meaningful and relevant. This has enabled us to achieve world-class performance and drive consistency across all categories and regions. “What’s great in our function is that no matter where you are in the business, you will have access to the same information, same dashboards and analytics, and enjoy the same and unique user experience across our processes.” While business insights are a great asset to give you a view of what is happening, we are already leading into applications that provide business foresight. We want to take a more proactive and long-term perspective to potential risks and issues that may impact our supply chain. This can range from simple business trends being contextualised for category teams, to more advanced risk modelling solutions that enable our business to take data-driven decisions on more complex scenarios. The next step in the journey is to make data actionable, and where possible autonomous. You can think about this being a “companion or assistant” for a category manager, PlazaBartsch says, which equips them with the information they need to make decisions based on empirical evidence, rather than relying on heuristics or decontextualised data. “Going a step further, we intend to leverage artificial intelligence to autonomously identify

REINHARD PLAZA-BARTSCH TITLE: GLOBAL HEAD OF SCM DEVELOPMENT, OPERATIONS & DIGITAL INDUSTRY: TELECOMMUNICATIONS LOCATION: LUXEMBOURG Reinhard is currently the Head of Digital Supply Chain & Operations at Vodafone. He is spearheading the digital transformation of Vodafone’s supply chain by accelerating innovation and adoption of new technologies, driving operational excellent performance and unlocking new sources of value for the function. His career spans across a number of different industries with roles ranging from managing large scale logistics operations to leading complex transformation programmes along the supply chain. At Vodafone, Reinhard has been pivotal in the establishment and operation of the Vodafone Procurement Company and the transformation of the global supply chain (which now oversees Vodafone’s 25bn€ global spend). He has successfully delivered major transformation programmes that have delivered multimillion Euro in benefits for Vodafone and have also gained external recognition Reinhard is passionate about the role that

1982

Company founded

€44bn+

Revenue in the 12 months to 31 March, 2021

EXECUTIVE BIO

technology can play in shaping the future of procurement, and is actively engaged in customer advisory boards for a number of procurement technology solution providers.

Vodafone in partnership with Block Gemini Has created a commercial contract management (CCM) platform based on blockchain Since 2016 when Chris Fernandez founded Dubai-based Block Gemini, it has been meeting a growing demand for blockchain implementations particularly in the supply chain and fintech space. “The fact that we are now working with a company like Vodafone on a truly innovative blockchain project is testament to what we’ve been able to achieve in such a short span of time,” he says. Any industry that deals with transactional ecosystems that are tracked and monitored digitally can be greatly improved through the use of blockchain technology. “The project we’re currently deploying for Vodafone, using blockchain and smart contracts to manage complex contractual agreements with their suppliers, is an example of the value that blockchain can create. Of course, managing procurement contracts is not specific to the telecoms industry, but there are many other areas specific to the telecoms industry that can benefit from the use of blockchain.”

Over the last two years the collaborative relationship between Block Gemini and Vodafone has grown steadily. “From consulting and advisory services, to design and development, every aspect of the project has been managed and delivered by our dedicated in-house team - I believe this has been the strongest driver for our continuing partnership with Vodafone on this project. I see Block Gemini bringing a great deal of value to the future growth and expansion of this solution across Vodafone’s internal procurement systems.” Blockchain has the power to transform the global telecoms ecosystem, Chris Fernandez concludes: “Take the example of fixed-line leasing services - huge amounts of bandwidth are bought and sold across millions of customers worldwide. “These transactions need to be negotiated and settled discretely between many telecoms service providers, and that’s a very resource-intensive process. With blockchain, the entire manual settlement could be replaced by a smart contract settled instantaneously!”

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VODAFONE PROCUREMENT COMPANY

“ Supply chain is a key contributor to Vodafone’s purpose agenda” REINHARD PLAZA-BARTSCH

GLOBAL HEAD OF SCM DEVELOPMENT, OPERATIONS & DIGITAL, VODAFONE

September 2021

VODAFONE PROCUREMENT COMPANY

patterns and prompt action, and eventually… enable our systems to autonomously take decisions,” he adds. While all the new tech is great, securing a consistent and outstanding user experience is a cornerstone to any successful digital transformation. “You need to keep a close focus on user experience to drive adoption,” says Plaza-Bartsch. Enhancing user experience has been a long objective of Vodafone’s supply chain digital transformation. As far back as 2017 the company began measuring user experience across all its procurement processes and systems. Using a net promoter score - a simple but effective questionnaire, that is automatically triggered when people interact with the digital solutions, asking users to gauge how likely they would be to recommend the SCM solutions - the results were underwhelming. On a scale from -100 (everyone hates the system) to +100 (everyone loves the system) the score came back at -37. “Naturally what this told us was we needed to do something, and so we did,” Plaza-Bartsch says. “While we couldn’t find any company trending on the positive side of user experience with procurement systems, we are strong believers that improving user experience helps our organisation to become leaner and more agile. It also helps us drive operational excellence and attract talent. People want to work with companies that have great tech, where they can unlock their potential and procurementmag.com

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SIRIONLABS, EMPOWERING TRUE COLLABORATION AND PARTNERSHIP Ajay Agrawal, CEO & Co-Founder of SirionLabs, discusses their fruitful partnership with Vodafone and how CLM enables smarter contracting enterprise-wide. Ajay Agrawal, CEO & Co-Founder of SirionLabs, shares how the alignment of values and the power of CLM have made for an effective partnership with Vodafone. “We believe in the power of cost savings and superior customer experience, and therein lies the synergy between our organisations. What started out as a post-signature value realisation exercise back in 2016 has since grown into a full suite CLM solution encompassing customised pre-signature features to cater to local markets spread over more than 40 countries. Nothing gives me greater happiness than a customer who has been able to gain increased visibility and get a tighter grip over their contracts.” “Vodafone has today around 2000 strategic supplier contracts managed through SirionLabs, which oversee a spend of close to 6 billion euros annually. Through our initial discussions, we saw great potential in addressing Vodafone’s commercial engagements, tracking and realising value at scale through a myriad of systems that were retrofitted to suit existing infrastructure.” “Our four-way automated invoice matching solution has contributed to Vodafone’s bottom line, enabling them to save hundreds of millions of dollars. It has also reduced the friction in their supplier landscape,

ranging from missed commitments or complaints to disputes or disagreements. Automation also reaps many benefits and has enabled Vodafone to cut costs in contract management and supplier governance by more than 60%, reducing manual effort by almost 50% and generating further savings through reduced headcount cost. Post signature activities have also become smoother and a lot more efficient, with one enterprise contract repository across all suppliers and managing them according to their footprint.” By leveraging AI and extracting valuable data, SirionLabs’ CLM solution empowers collaboration and continued cooperation and partnership long after contracts have been signed. Agrawal explains, “Collaboration is essential to any partnership. That is really the heart and soul of any SirionLabs project. Unlike many conventional contract management systems that create, store, and maybe extract information from contracts, SirionLabs is unique because it allows both contracting parties to have continued access to the system, even after the contract is signed, while giving a single, consolidated view of data, further enhanced by rich dashboards and insights which help make quick business decisions. The purpose of that continued access is true collaboration across multiple business functions.”

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VODAFONE PROCUREMENT COMPANY

actually maximise their contribution to the organisation, rather than being consumed by administrative activities.” Today that score sits 117 points higher at positive 84. “User experience is and will always be something to chase, PlazaBartsch admits. “This is basically because our expectations as individuals continuously evolve. We are all exposed to great user experience in everyday applications we have in our private lives, so naturally our expectations will not be different at work.” The improvement achieved in user experience represents a complete turnaround in the course of just three years. That development will continue as Vodafone continuously influences the innovation roadmap of its partners, but also through a new approach to partnerships which is taking shape through the development of new 84

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“ Customer experience will continue to be an uncompromised priority, combined with an obsession for speed and simplicity across all our user journeys” REINHARD PLAZA-BARTSCH

GLOBAL HEAD OF SCM DEVELOPMENT, OPERATIONS & DIGITAL, VODAFONE

SCM systems. Instead of buying ready-made solutions, Vodafone is driving innovation by teaming up with a number of partners to develop new capabilities, including software firms outside the traditional sphere of procurement software solutions. One good example of this drive for innovation is Vodafone’s vision of autonomous journeys across the whole supply chain.

“This is a very ambitious project we are doing with Pegasystems. Today we call it Autonomous Procurement, however, we expect it to quickly expand beyond procurement to a truly integrated and automated supply chain ecosystem” PlazaBartsch says. “We’ve worked hand-in-hand with our category teams to shape the user journeys in the procurement space as a start,

and on this basis we are beginning to add on the capabilities that make buying simpler and faster for the business, while also creating competitive tensions. Our ambition is that this becomes a fully autonomous, end-toend solution, where everything from supplier selection, to contracting and risk management happens automatically, all on the platform. We are moving here clearly from a digital-first to a digital-only mindset. “We are very proud to have launched our MVP (minimum variable product). This is truly agile development where we are getting to see how the product shapes every other week” Plaza -Bartsch adds. “The platform is still in its early stages and needs greater human oversight to function properly than when it is complete, but having an MVP up and running has been an important step in solidifying Vodafone’s leadership position. procurementmag.com

Pega & Vodafone: Procurement’s Digital Transformation Pega and Vodafone are partnering up to build futureready procurement processes. With 6,000 global employees across North America, Europe, Latin America, and AsiaPacific, Pega has joined forces with Vodafone, a leading British technology communications company. We recently spoke to Joaquin Reixa, Pega’s Vice President & Managing Director, EMEA, to see what this partnership will hold. ‘This is a joint digital journey’, he told us. ‘To accelerate Vodafone’s digital transformation, Pega is focused on leveraging our unique and complementary technology and skill sets’.

Why Collaborate? Both Vodafone and Pega bring unique strengths to this new partnership: Pega will provide the digital foundation; Vodafone will provide the procurement expertise. With

Pega’s simple yet sophisticated architecture, Vodafone Procurement Company (VPC) can rapidly build, deploy, and automate global operations to scale. In addition, Pega’s solutions are perfect for complex supply chains. With Vodafone experts manning the controls, Pega will help create a streamlined, intelligence-driven supply chain engine. As Reixa explained: ‘You want to have a global common process, but couple it with the flavour of the local country and culture’. Overall, Pega and Vodafone’s partnership will drive agility, optimise supply chains, offer customers a personalised experience, and accelerate Vodafone’s operations. Reixa summed it up: ‘In these moments of chaos, companies must speed up their digital transformation. If you’re not prepared, you stand the risk of irrelevance. This is the time to pursue change’.

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KEY PARTNER: BLOCKGEMINI

“We have big ambitions around our autonomous procurement journey, and we are keen to push the envelope further” REINHARD PLAZA-BARTSCH

GLOBAL HEAD OF SCM DEVELOPMENT, OPERATIONS & DIGITAL, VODAFONE

September 2021

“We exchange a lot of pricing information with partners and suppliers, and we wanted a solution to manage that activity in a much more seamless manner,” says Reinhard Plaza-Bartsch. “So we decided to work with BlockGemini, a late-stage startup partner and Tomorrow Street portfolio company, which is not part of the traditional procurement tech space, because we had a vision of what we wanted, and it was clear that it wasn't available in the market. “The partnership is about commonly investing from both ends to develop this solution and eventually productise it. It is already live within our ecosystem across 11 markets, with around 30 different partners operating on the platform, and we are now aiming to scale this rapidly towards the end of our financial year across all our supplier base. It has been successful so far, enabling us to track price fluctuation and identify areas of opportunity for reviewing price on an on-going basis.”

VODAFONE PROCUREMENT COMPANY

“When we set our vision, we initially went to market to find an off-the-shelf solution that will meet our objectives. We invited 30-plus different partners and came to realize that the landscape wasn't ready. That gave us an indication that this is an area where we should invest more time and develop something to maintain our leadership position for the future. We believe such a solution will be relevant not just for Vodafone, but also for our partners.” Alongside evolving the core functions of its procurement division, Vodafone is also leveraging its digital transformation to encompass environmental, social and corporate governance (ESG) objectives. PlazaBartsch says: “Supply chain is a key contributor to Vodafone’s purpose agenda. This is by embedding planet and society objectives across everything we do, from how we make decisions (policies) and how we run our business (processes and systems), enabling us to influence and align our more than 10,000 global suppliers around common objectives.” Sustainability, diversity and inclusion have become core concerns for the private sector, but many businesses continue to grapple with exactly how to quantify them, and how to link them to business objectives. At Vodafone, Plaza-Bartsch’s approach is to make them tangible and transparent so that they can be managed. “For example, we have embedded purpose commitments in our sourcing process,” he says. “When evaluating suppliers for new work, 20% of our scoring criteria will account for their commitments to diversity, inclusion and the environment. Enabling this through our systems has been key to secure a consistent implementation across our spend.” Likewise, to support a reduction of carbon emissions objectives, Vodafone is leveraging big data to access and create full transparency of its CO2 footprint. "For us the use of

technology is essential to understand and predict CO2 emissions growth through our supply chain” Plaza-Bartsch says. “By creating this visibility, we can be more targeted when selecting areas of opportunity to actively drive a reduction in emissions on a year-by-year basis by working with our partners on greener technologies and solutions. “It’s the same for ESG. We expect that the demand for information and transparency across our supply chain will continue to rise. We will see larger and more connected ecosystems that will contribute richer information to enable business foresight at scale. “Innovation has become the new normal across our digital transformation journey and our culture. Customer experience will continue to be an uncompromised priority, combined with an obsession for speed and simplicity across all our user journeys. This will enable us to scale commercial and operational value to Vodafone, and beyond that, enable lasting and impactful improvement to society and our planet.”

procurementmag.com

TECHNOLOGY

ROUND TABLE:

A BEST-OF-BREED APPROACH TO A DIGITAL ECOSYSTEM Why a best-of-breed approach to procurement digital transformation? We give the floor to some of the best-inbreed to tell us just that WRITTEN BY: LAURA V. GARCIA

best-of-breed approach to digital transformation can, at first, seem daunting and perhaps, not worth the effort. How could juggling a myriad of different tools ultimately provide better outcomes than their long-standing powerhouse competitors offering full suite solutions? Sure, you enjoy specialised functionality, which can increase adoption rates and make for faster ROI. But what about the data challenges that come with multisystem integrations and the disjointed user experience? Yet, many procurement functions are now choosing to take exactly this approach. Why? To help us answer that question, we gave the floor to the admittedly bias experts to share their thoughts. 90

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Mark Perera, CEO of Vizibl

Omer Abdullah,

Co-Founder and Managing Director of The Smart Cube

Sheldon Mydat,

Founder and CEO of Suppeco

Tai Alegbe,

CEO and Co-Founder of Contingent

Jennifer Bisceglie,

Founder and CEO of Interos

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“ This combination of best-of-breed providers unlocks agility and speed – and ultimately competitive advantage” MARK PERERA CEO, VIZIBL

Mark Perera, CEO of Vizibl “Agility becomes even more important as procurement receives a wider mandate. While contract negotiations and cost savings remain staple responsibilities, procurement’s KPI portfolio is expanding fast, and businessas-usual won’t build a best-of-breed procurement organisation. “By favouring a best-of-breed approach, procurement organisations have the opportunity to implement digital platforms

developed during a time when an incredibly rich data and technology landscape is the norm. Now that open API capabilities are standard, they are able to cherry-pick to their exact requirements, easily integrating multiple small providers who excel in their area of expertise. This combination of bestof-breed providers unlocks agility and speed – and ultimately competitive advantage.” Omer Abdullah, Co-Founder and Managing Director of The Smart Cube “Digital procurement transformation can indeed become a competitive advantage, but it needs to be carefully considered if it is to transform procurement into a vehicle that not only manages costs but unleashes the potential of the supply base and market to significantly improve business performance. procurementmag.com

“ We know from working with our customers that simplicity is everything when it comes to technology, especially when navigating legacy systems and processes” TAI ALEGBE

CEO AND CO-FOUNDER, CONTINGENT

“The first challenge around digital procurement is ensuring everyone is on the same page with what that means and what the vision looks like. A true digital procurement model is one that enables procurement organisations to focus on more differentiating, value-adding activities and strategic decision-making, augmented by advanced technologies. Agreeing on this vision from the outset is key. “A second challenge is with regards to the roadmap, which is heavily influenced by existing levels of digital maturity. There's no point in an AI-driven category management solution if the function is still working off Excel spreadsheets. Digital transformation, and the pace of change, has to be contextualised in order to ensure buy-in and adoption. Change management has to be a prime consideration. 94

September 2021

“A third challenge is around the tech model itself, such as whether one should implement end-to-end solutions versus best-of-breed. The former brings simplicity and consistency, while the latter brings depth and focus in a specific niche. Concerted thought and analysis - and then expectations setting - about the optimal approach (which can never be a one size fits all) are essential.” Sheldon Mydat, Founder and CEO of Suppeco “There is an energy and a hunger for change, for transformation. There is, however, a limited appetite for intrusive or disruptive change. This best describes the era of the best-in-breed connected ecosystem, the startup. “Indeed, our very own Suppeco requires zero customisation, zero intrusive

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Abid Yousuf, Senior VP of Professional Services at Avetta Abid Yousuf, offers key points for successful digital transformation • A digital transformation initiative has to be rooted in the overall corporate objectives and should be aligned with stakeholder goals. • Goals can include earnings improvement, cost management, asset reliability, improved quality, user experience, etc. • Aligning with corporate objectives and stakeholder goals ensures higher adoption across the organisation, which results in higher ROI. • Having a well-defined/documented purchase-to-pay process is a prerequisite to selecting the right technology partner. • Clean master data and consistent taxonomy for spend categorisation are essential. • A cross-functional team that includes representatives of the various stakeholder groups promotes early buy-in and part ownership of the initiative.

• Executive sponsorship is key. • Depending on the maturity of the organisation’s capabilities, it’s best to take a phased approach starting with the highest priorities (solve the most critical problems first). • A realistic and transparent assessment of legacy systems is important in order to avoid implementation and integration challenges. • Cloud-based solutions provide faster ROI and can be easier to integrate if the appropriate API’s are available. • Third-party integrators play a value add role if they know the technology, business process and have sector experience. • Build in a mechanism to measure progress and promote continuous improvement. • Prioritise dashboards and self-managed reporting over advanced analytics and automation since most organisations manage what they measure.

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TECHNOLOGY

implementation and is more than likely to create value on its first day on the pitch! Don’t get me wrong, Suppeco’s an open API pin cushion! It plays well and is complimentary of its neighbours across the landscape. But it’s also a turnkey solution and a great candidate for what’s best about democratised software.” Tai Alegbe, CEO and Co-Founder of Contingent “We’re seeing the top teams adopt technology that helps them become more proactive, easing the burden with real-time and relevant insights across their entire supply chain. The delivery of these insights at the right time, so teams can make the right strategic choices, is what enables Procurement to fulfil its strategic role in driving the business forward. The value to the business is huge, with Procurement able to negotiate better, source more effectively, reduce risk, identify opportunities and meet the myriad of regulations. We know from working with our customers that simplicity is everything when it comes to technology, especially when navigating legacy systems and processes. That’s why we believe in equipping teams with simple to use, lightweight technology that plays nicely with existing tools and furthers collaboration across the whole business. Jennifer Bisceglie, Founder and CEO of Interos “While the ‘single platform’ approach to procurement digital transformation has its appeal, I’m a believer in the need for bestof-breed technology. Single-platform approaches that claim to integrate everything from contracts to supplier management are not always best-suited to deliver on digital 96

September 2021

transformation and the integration of data from disparate systems, primarily because of their reliance on point-in-time, manual processes. “Digital transformation in procurement is driven by the need for efficiency, speed, better decision making, cost optimisation and risk reduction. These benefits are better delivered by advanced, best-of-breed technology that gathers more data, processes that data intelligently via AI, NLP [Natural Language Processing] and Machine Learning, and provides actionable intelligence and insight. This empowers procurement teams to become trusted advisors to the business.

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“If you look at my company’s focus, supply chain risk and operational resilience, you find that single-platform solutions are marketed as providing “cleaner” insights across procurement organisations areas of focus but are typically only able to do so using data you already have, that’s had time to be collected normalised to the system. A process that often takes weeks or months ignores data that doesn’t easily fit the system and is far slower than the breakneck pace of modern business. “Meanwhile, best-of-breed solutions in supply chain mapping, monitoring,

and modelling leverage AI and NLP to transform the way that organisations view their supply chains. Using emerging solutions to create real-time visibility down to the nth tier, uncovering hidden risks across multiple factors in a way that provides proactive, actionable insights into supply chain risk so that procurement can better anticipate and mitigate risks to their business. In this way, best-of-breed focus on key challenges of digital transformation by diving deeper into the problem areas and providing more robust tools to deliver better outcomes.” procurementmag.com

DOLE SUNSHINE COMPANY

September 2021

DOLE SUNSHINE COMPANY

A Fresh Approach to Indirect Procurement & Procurement Excellence WRITTEN BY: RHYS THOMAS PRODUCED BY: GLEN WHITE

procurementmag.com

DOLE SUNSHINE COMPANY

The digital transformation of Dole Sunshine Company’s indirect procurement promises a more sustainable, visible and profitable value chain

“ Sustainable procurement is a priority at this moment” NAISSA VON PEIN

DIRECTOR, GLOBAL CATEGORY INDIRECT AND PROCUREMENT EXCELLENCE, DOLE SUNSHINE COMPANY

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new era is dawning at Dole Sunshine Company, a world-leading food and beverage company on a bold mission, representing the global interests and combined efforts of Dole Asia Holdings, Dole Food & Beverage Group and Dole Fresh Produce. The company’s extraordinary history of quality and innovation stretches back to 1899, when James Dole, a newly minted Harvard graduate with a fascination for agriculture, began growing pineapples in Hawaii. In 2012 Dole Asia Holdings was established, as Itochu acquired the Dole global packaged foods and Asian fresh produce business. Flash forward more than 120 years and Dole remains a byword for pineapples, bananas, and packaged fruit products, and retains a high reputation for freshness and quality. From the perspective of a company as old as Dole, the world is changing rapidly, but Dole is up to the challenge to catch up by focusing on developing formal standard procurement and sourcing processes, while driving digitalisation. In June 2020, Naissa von Pein joined the company to spearhead a programme dedicated to those objectives. The Global Director for Indirect Categories and Procurement Excellence is leading a fundamental overhaul of indirect sourcing practices, while building Dole’s procurement centre of excellence, tasks which she says are “quite different in their scope of work, but complementary due to the nature of indirects being very fragmented and locally managed. Fragmentation of information being the greatest challenge to a strategic procurement approach.” “We are going through a period of evolution at Dole, which is a company that in the past has been traditional with a decentralised structure and limited visibility

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Naissa von Pein, Director, Global Category Indirect and Procurement Excellence procurementmag.com

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Dole Sunshine: A Fresh Approach to Indirect Procurement & Procurement Excellence

due to the lack of systems,” she adds. “We’re now working towards centralisation and process standardisation, while driving automation through procurement tools and focusing on a more strategic procurement approach for relevant categories. Our procurement teams are receiving the support they need for strategic transformation initiatives, aiming to keep supply lines flowing smoothly while delivering the necessary cost savings.” Dole is still in the early stages of its digital transformation, von Pein admits, and much of the focus of her first year at the company has been spent crystallising the fundamentals of indirect category management’s best practices, while using e-sourcing strategies to digitalise and accelerate strategic sourcing processes. But great early strides have been made through the implementation and strengthening of Ivalua’s platform, Dole’s primary digital investment and its central procurement tool. 102

September 2021

“ We’re now working towards [...] digital automation to create the efficiencies which we as a procurement team need” NAISSA VON PEIN

DIRECTOR, GLOBAL CATEGORY INDIRECT AND PROCUREMENT EXCELLENCE, DOLE SUNSHINE COMPANY

“Implementing Ivalua’s software has enabled us to prioritise bottom-line cost savings through procurement-led spend management and competitive sourcing initiatives. We’ve also been able to further enable automation and standardisation for supplier qualification, as well as contract management,” von Pein says. “My current

DOLE SUNSHINE COMPANY

focus from a procurement excellence standpoint relates to process streamlining, automation, and elevating procurement’s profile and visibility within the company. We are reviewing procurement processes to identify ways of eliminating time-consuming tasks through the use of automated systems and analysis, as well as identifying weak links in the existing supply chain, strengthening us as a function and freeing up time to focus on longterm initiatives. We must ensure that the team is using Ivalua to the best of its capabilities, while drawing the digital roadmap for further enhancements to achieve our automation and efficiency goals.” The Ivalua system was implemented before her appointment, initially at three production sites in Asia, and has been key in achieving procurement’s short-term objectives. But von Pein has a more ambitious vision. “I want to ensure that our team is using the tool to its full capability. It comes back to change management, and as with every new tool implementation, if this is not properly led by the management, and if we do not emphasise the benefits to the people and teams that are using it, then ultimately we will not achieve the results that we are expecting. I have seen this happen in the past, but we have already been seeing great results this year.”

US$2.6bn Revenue

25,000 Number of employees

Dole unified its commitments to a more sustainable and equitable supply chain with the launch of the Dole Promise initiative in 2020

DID YOU KNOW...

2012

Year founded

THE DOLE PROMISE

“We launched Dole Promise last year with the key words being: people, planet and prosperity. One of our main goals is to deliver shared value for all stakeholders within our value chain,” Naissa von Pein, says. “As a leader in our procurement excellence programme, I’m also in charge of building our sustainable procurement process. We have engaged BSR as a partner, a very well-known sustainability consultant, to support us in this journey. The success of Dole’s business depends on many thousands of people. Farmers, communities and suppliers must all see the value of working with Dole, and shareholders must see ongoing corporate value in our business.”

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DOLE SUNSHINE COMPANY

With the fundamentals improving rapidly, von Pein is turning her focus to procurement excellence, Dole’s overarching objective for the next two to four years. “One of the key pillars of building our centre of excellence surrounds defining our category structure, based on the spend and risk profiles within our supply chain. We’re taking a proactive step on supply risk management, and building mutually beneficial long-term partnerships with suppliers,” she says. 104

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One of the biggest developments in the past year stems from a new strategic approach to indirect categories, reassessing the structure and efficacy of local, regional and global suppliers. Beginning with local suppliers, where procurement teams were already in place, von Pein says the initial challenge was in bringing indirect spend back under the control of procurement. “Through continuous engagement and proving the benefit of procurement’s involvement with the other stakeholders,

DOLE SUNSHINE COMPANY

we managed to take ownership of that indirect spend,” she says. “The different categories were previously managed locally across various functions, with a limited strategic approach, but by bringing it under our control, we now have a much better understanding of the opportunities, with a mature approach on strategic sourcing and spend management.” “On the regional levels we managed to consolidate spend in categories such as logistics, MRO, PPE, office supplies, professional services and others. On a global level, the focus is primarily on logistics, financial services, legal services, and IT. Of course, we haven’t had the time to address all of them within the last year, but just by having this new visibility and building a strategy, we have a clear roadmap.” As with any other business in the past 18 months, the COVID-19 pandemic presented its own unique set of challenges that threatened to derail these roadmaps and development plans. “It was a surprise factor and we all struggled,” von Pein admits. But it did act as a catalyst for implementing a “supply chain risk resilience and business continuity framework”. Von Pein’s goal is to identify possible changes in supply chains and create the ability to implement

NAISSA VON PEIN

DIRECTOR, GLOBAL CATEGORY INDIRECT AND PROCUREMENT EXCELLENCE, DOLE SUNSHINE COMPANY

TITLE: D IRECTOR, GLOBAL CATEGORY INDIRECT AND PROCUREMENT EXCELLENCE INDUSTRY: FOOD & BEVERAGES LOCATION: SINGAPORE Naissa is a German-Brazilian national and Singapore Permanent Resident with a strong background in Procurement and Project Management. Since moving to Singapore in 2010, she has worked for four MNCs in the area of Supply Chain, Procurement, Reporting and Performance, as well as Project Management, with global and regional responsibilities for Americas and Asia Pacific. Before starting with Dole as Director for Indirect Categories and Procurement Excellence in July 2020, von Pein was with Lafargeholcim for four years as Head of Projects and Development, within the regional procurement department.

EXECUTIVE BIO

“ One of the key pillars of building our centre of excellence surrounds defining our category structure”

NAISSA VON PEIN

DOLE SUNSHINE COMPANY

treatment plans and re-engineer procurement processes to mitigate risk. Suppliers are now rated on a number of factors based on their geopolitical, supply, demand, and environmental impact, among others. "Based on that outcome, we work closely with the suppliers on a business continuity plan building necessary partnerships to ensure that our supply chain cannot be disrupted by any further surprises,” von Pein explains. The system has already paid dividends through monitoring and managing 106

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“ I fully believe that by becoming automated and digital, we get the visibility that our teams need to make the right strategic decisions” NAISSA VON PEIN

DIRECTOR, GLOBAL CATEGORY INDIRECT AND PROCUREMENT EXCELLENCE, DOLE SUNSHINE COMPANY

DOLE SUNSHINE COMPANY

ensure that we develop the right process to onboard our suppliers and get proper visibility about the sustainable risks that we have in our supply chain. That way we will be able to mitigate and act on them as we go along. “Digitalisation again plays an important role, as we access thousands of suppliers in a transparent and efficient manner. I fully believe that by becoming automated and digital, we get the visibility that our teams

DOLE - The Growing Distance

supply chain events, with attention paid to potential risks (such as recent peaks in commodity markets, for example packaging) leading to general improvements in supply chain performance. In the 18 months to come, von Pein hopes to further exploit the many efficiencies of digitalisation, and how it can impact Dole’s sustainability drive, a pledge under the Dole Promise banner. “Sustainable procurement is a priority at this moment,” she says. “We want to

need to make the right strategic decisions. Leading back to indirect procurement, I think the biggest challenge is poor quality of information, as I have little visibility today on how much and where we are buying, and for what cost. It's still a lot of manual work but, two years down the line, we will be in a much better position to increasingly benefit from the elusive opportunities of procurement-led, business performanceimprovement projects.”

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ESG

CIRCULARITY; PLASTIC BANK AND THE RENAISSANCE BRIGADE

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We talk plastics circularity, capitalism, and the power of the new renaissance brigade with David Katz, CEO and Founder of Plastic Bank WRITTEN BY: LAURA V. GARCIA

ustainability is having more than a moment; it’s a movement, a renaissance, if you will. The world is transitioning from greenwashing and GenZ placating to verifiable, science-based sustainability and now, regenerative efforts in a desperate attempt to save our earthjust as the buzzer is about to ring. Climate change is, in scientific fact, widespread, rapid, and intensifying. In the first instalment of their 6th report, the Intergovernmental Panel on Climate Change (IPCC)- a UN panel that assesses the science around climate change- warns the earth is seeing “unprecedented rates of change” and that the report should stand as a “code red for humanity.” Heading the charge in tackling two of the world's biggest challenges against climate change and sustainability by creating a circular economy for plastics and helping to close the plastics circularity gap is David Katz. David Katz is CEO and Founder of Plastic Bank, a global network of micro recycling markets that empower the poor to transcend poverty by collecting plastic

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ESG

“ This is a capitalism issue. It's not a societal issue. It's not entrepreneurship. It's the sickness of capitalism” DAVID KATZ

CEO AND FOUNDER, PLASTIC BANK

from the environment before it ends up in our oceans. The man himself lays it out for us, “Plastic Bank is best expressed as a global chain of stores for the poor and for the ultrapoor, those that make less than $2 a day. Everything in the store is only available to be purchased using plastic garbage by weight to pay for school tuition, medical insurance, WiFi, cooking fuel and everything the poor truly need and struggle to afford. Now, using what would have entered a Marine

ecosystem— a waterway, a canal, a river or a stream— we've created a monetary standard for the appropriate value exchange for material resources. We've built a global supply chain that returns the material that we call Social Plastic back into manufacturing. So the consumer themselves have the power. When they go to buy something, they can buy something that truly ends poverty and helps save the ocean simultaneously.” Shifting the Paradigm; The Unfavourable Economics of Plastics Recycling The unfavourable economics for plastics made from recycled resins compared to virgin resins has long detoured the increased usage of recycled resin. And yet, it doesn’t need to be this way. In partnership with procurementmag.com

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What is Social Plastic® and how does it make the world a better place.

“ Shareholders have to seat themselves second to the world” DAVID KATZ

CEO AND FOUNDER, PLASTIC BANK

AFARA and IHS Markit, Google has issued an executive summary, “Closing the Plastics Circularity Gap”, which reported that on average, between 2020- 2040, circular supply chains could produce plastic at a lower cost ($1,122/metric tonne) compared to virgin supply chains ($1,694/metric tonne). Having been in plastics procurement for over 20 years, and having seen with my very eyes the hoards of plastic littering the 112

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beaches of Thailand, it’s an issue that’s close to heart. And it’s no small problem. According to the report, under a businessas-usual scenario (BAU), recycled plastics reentering the economy are projected to more than triple to 77 million metric tonnes (14%) by 2040, but over the same period, 86% of plastics are projected to be landfilled, incinerated, or leaked into the environment. Without comprehensive and large-scale interventions, we can expect that there will be more plastic than fish in the ocean by 2050. Katz, with his hypnotic tone and passionate stance, was kind enough to spend some moments getting into with me.

ESG

Did you know?

“If we actually want to change the world and engage more collectors to collect and exchange the material, price consistency and price buoyancy are the two key factors that will change the world. Plus, we need reliability and consistency in the supply chain. So when our customers are looking for the material, we know it's there. Lower prices do not mean more material. On the contrary, lower prices mean less material collected,” says Katz. “Here's the plastics issue summarised. If every piece of packaging… all plastics, every bottle you saw, was five US dollars, how many would you see in the street or in the waste bin? None… It's not a plastics problem.

86% of plastics are projected to be landfilled, incinerated, or leaked into the environment. Without comprehensive and large-scale interventions, we can expect that there will be more plastic than fish in the ocean by 2050. Since 1950, only about 9% has been recycled and returned back into the economy. The equivalent of $426 billion$544 billion in net present value (NPV) needs to be invested over the next 20 years to achieve the projected plastics circularity gap reductions.

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“ Mix and match the size of the quote. Keep the style consistent within the same article” NAME SURNAME JOB TITLE, COMPANY NAME

“ You either get on board with the Renaissance, or you get out of the way” DAVID KATZ

CEO AND FOUNDER, PLASTIC BANK

It's an ‘us’ problem. It's the way we view the material that has received us here, to look at it as free or disposable or worthless when it's not. And I'd argue that when you buy a bottle of water, the highest cost of goods in that product is the bottle. But yet, we discard it. So how do we shift the paradigm to have that material look like it is truly valuable?” “In the Western world, the economics are not working, so it's not being recycled. It's not because the material is not recyclable. Economic equation is paralysis. Chemical, [mechanical] recycling, all the technology we need to fix all of this is available today. Companies will succeed by investing in what will be and not what is; if you overinvest in what is, you're doomed.” Katz isn’t wrong. Investment in recycling infrastructure is exactly what is needed as existing global supply chains are equipped 114

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to produce and use virgin plastic, but not so much to take it back. In fact, since 1950, only about 9% has been recycled and returned back into the economy. The mentioned study calculates that the equivalent of $426 billion-$544 billion in net present value (NPV) needs to be invested over the next 20 years to achieve the projected plastics circularity gap reductions. For the time being, however, personal experience has shown me all too well that economics are most certainly getting in the way of increasing the use of recycled content. As much as end-users have begun vocalising their want and willingness to pay for more sustainable options, not everyone is on board if the math doesn’t add up, which it often doesn’t. Depending on where the markets are, there is little to no price disparity between

ESG

*Certified B Corporations Certified B Corporations are businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose.Bcorporation.net

prime virgin and recycled resin, whether it be Post-Consumer Resin (PCR) or PostIndustrial Resin (PIR). Yet recycled resin is harder to use, can increase your cycle times, cause wear on your machines, and inconsistencies in end products. All issues can be dealt with, yes, but only if the motivation is there. Conscious consumerism aside, shareholders demanding retailers and the need for profits remain in the middle. Katz couldn’t be more right, economic

equation is paralysis, and that’s exactly where we’re at. It seems, however, that might be about to change. The Sickness of Capitalism “What has to be on board are the [shareholders]. Shareholders have to seat themselves second to the world, right now it's a fiduciary. There is a fiduciary duty to return materials at as low a price as possible. That's what's received us here. So, okay, it's capitalism that might have to shift a little bit. So we’re enlivened by B Corp*, by a movement towards conscious capitalism, creating a space for the world to do well in the world and be rewarded for it. It's deeper than the recycled content.” THIS. The man knows how to make an old girl smile. It’s my hope, I say, that even shareholders will ultimately be led by the end consumer, so conscious buying may

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ultimately have the effect that’s intended. Katz responds, “Exactly. And in fact, I would actually argue that it's not even the consumer because what I witnessed is this; the corporations are having trouble hiring staff. They're not getting great minds anymore because Gen Z, and the next generation after them as well, are not going to be working at an organisation that's killing the earth. It's a purpose economy that we're entering. “Look at the tens of millions of students that march through the streets against climate change. Do you think that generation is going to work for you if you're just putting chemicals in a bottle and killing the earth? No, they're going to protest against you. You either get on board with the Renaissance, or you get out of the way.” Henkel, for one, is getting on board. “Henkel is a family company. That's why they were such an early adopter because they just did it because they knew it was right. There's a fiduciary duty in a publicly held company. The CEO must steward the return of the shareholder above all else. They could be jailed if they don't. So they don't risk that. They make commitments, ‘in 20 years from now we'll use a hundred per cent recycled content’. But you're not going to be there. So it's safe for you to make that commitment because the CEO who takes over the role after you is not bound by that. This is capitalism. This is a capitalism issue. It's not a societal issue. It's not entrepreneurship. It's the sickness of capitalism. “Ultimately, what we need to do is tax virgin plastic and redistribute the taxation from the virgin material to have recycling become more profitable and more efficient and create a greater reward for it all. That's what has to occur. It's very simple.” 116

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ESG

“ It's not a plastics problem. It's an ‘us’ problem. It's the way we view the material that has received us here, to look at it as free or disposable or worthless when it's not” DAVID KATZ

CEO AND FOUNDER, PLASTIC BANK

David Katz 2 Minute TED Talk

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“If virgin plastic was at parody with recycled content, everyone would be using recycled content, period. They would just make the shift because they know it's a good thing as well and price parody. And then we'd have more investments into appropriate infrastructure that returns the material to virgin state, and all of that would then become available for the world. And we see it occurring. We see new taxation occurring in the EU and other places. So 118

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it's coming. It's coming slowly. It should be much faster.” Perhaps it really is just that simple, or, at least, it’s one piece of the puzzle. According to the above-referenced study that gives a roadmap for closing the circularity gap, “pricing the negative environmental impacts through a virgin plastic production tax can close the gap by 13% through the decreased demand for certain packaging and product use cases.”

ESG

“ We're going to see a rapid acceleration because we're not really waiting for corporations to provide the space anymore… It's a Renaissance. The power is coming back into the hands of the people.” DAVID KATZ

CEO AND FOUNDER, PLASTIC BANK

The Regeneration Economy REDUCE. The first R seems to have long since been forgotten, an inconvenience in a world built on overconsumption. As the summary states, humanity is consuming natural resources at an astonishing rate. During the 20th century, global raw material use rose at about twice the rate of population growth. In 2020, global demand for resources was 1.6 times what the earth’s ecosystems can regenerate in a year. “We have to reduce, no question. We have to reduce anything that demands virgin plastic production. That's number one. We have to create a greater demand for materials that are regenerative. It's not about sustainability. It's not about saying let's do less damage this year than we did last year. That's a thin veil. It's just a line,” says Kratz. “What we're entering is a regeneration economy. The regeneration economy is those companies that are going to repair the damage that they and their competitors have done. And they show up and say, look at what's occurred in the world. We're beyond sustainable. We're so far into the damage that we need to repair the damage. Which companies will exhibit that? Those are the ones that will win. That's the blue ocean strategy of today.” “We're going to see a rapid acceleration because we're not really waiting for corporations to provide the space anymore. I can't use the word Renaissance enough. It's a Renaissance. The power is coming back into the hands of the people.” Let’s hope it comes fast enough. As Google says, “each of us, every day, can keep the circular economy turning by choosing circular products and services for our own lives and playing our part to keep resources in use longer.” procurementmag.com

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EVENT PREVIEW

The Ultimate PROCUREMENT & SUPPLY CHAIN

LIVE EVENT Procurement & Supply Chain Live, the industry’s ultimate event, launches this month alongside our celebration of the Top 100 Leaders in Supply Chain and Procurement WRITTEN BY: RHYS THOMAS

his September, BizClik Media Group launches a new platform to connect our digital communities, combining the strengths of in-person and virtual discussion, networking and access to the industry’s leading voices. Procurement & Supply Chain Live, a brand-new event, takes place 28-30 September 2021, giving you the opportunity to network with C-level executives, gain insight from industry pioneers and walk away with actionable insights to accelerate your career. Taking place and streaming live from Tobacco Dock in central London, it is a unique opportunity to reconnect with the supply chain and procurement community after such a prolonged period of disruption.

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EVENT PREVIEW

“ Our aim is to provide professionals with the tools, techniques and innovations they need to be at the forefront in our everevolving industries” JAMES CALLEN

MANAGING DIRECTOR, AT BMG CONNECT

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This event is the next step in placing our digital community at the heart of the supply chain and procurement industries. Organised by BizClik Media Group, Procurement & Supply Chain Live is shaped and influenced by the thousands of professionals who interact with our magazines, websites, live streams, podcasts and exclusive industry reports every day. “With over 120 speakers confirmed, our agenda for September is shaping up to be spectacular, with three days of insightful content from some of the best in industry,” says James Callen, Managing Director, at BMG Connect. “Our aim is to provide professionals with the tools, techniques and innovations they need to be at the forefront in our ever-evolving industries. “We are partnering with online platform Brella to deliver the event however you choose to participate,” Callen adds. “Whether attendees decide to attend virtually or in person, they will still be able to interact with industry pioneers and participate in discussions

on topics that are affecting their business, allowing them to walk away with an actionable framework to implement into their strategy. “Procurement & Supply Chain Live is ultimately about delivering value and insights to elevate your career and further your organisation’s objectives. Whether that’s navigating global disruption, achieving vital ESG commitments, or strengthening the partner ecosystem that makes your value chain unique, we look forward to welcoming you later this month.” World Leading Speaker Line-up Procurement & Supply Chain Live will bring together global industry leaders to discuss the challenges, opportunities and issues facing supply chain and procurement across a variety of formats, including keynote addresses, panels, and fireside chats. Confirmed speakers for Procurement & Supply Chain Live include: • Ninian Wilson, Vodafone Procurement Company • Daniel Weise, Managing Director and Partner at Boston Consulting Group (BCG) • Sheri Hinish, Global Executive Partner and Offering Leader, Sustainable Supply Chain at IBM, & Supply Chain Queen • Chris Shanahan, VP Global Procurement/ CPO at Thermo Fisher Scientific • Jacqui Rock, Chief CCO, NHS Test and Trace • Jim Townsend, Chief Procurement Officer at Walgreens Boots Alliance • David Cho, CPO at University of Massachusetts • Robert Copeland, CPO at G4S • Nick Jenkinson, CPO at Santander • Mark Bromley, Director at Mastercard • Javette Hines, Director and Head of Supply Chain Development, Inclusion, and Sustainability at Citi

Join us at LIVE In a COVID-disrupted era, we understand that travel is not always possible. As such, BizClik Media Group has decided that Procurement & Supply Chain LIVE will offer the best of both worlds through hybrid accessibility. In Person For attendees who wish to join the event in person, the venue is working to governmentendorsed AEV All Secure Framework, alongside mia’s AIM Secure and ‘Good to Go’ accreditation, to ensure a COVIDsecure environment to facilitate all of your networking needs. Virtually Our physical Tobacco Dock venue is both historic and stunning, but it has no bearing on the information that you and your peers can gain from the event. Absorb it all, interact with other attendees, and enjoy the conference experience on our virtual platform, powered by Brella, featuring live feeds from all of the stages, as well as virtual networking areas.

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Confirmed Speakers Include: Sheri Hinish

Global Executive Partner and Offering Leader IBM

Ninian Wilson

Group Procurement Director & CEO, Technology Procurement Director Vodafone Procurement Co Sarl

Jim Townsend

Chief Procurement Officer Walgreens

Mark Bromley

Director of Sourcing, Supplier Management Mastercard

Chris Shanahan

VP Global Procurement Thermo Fisher Scientific

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“ The Top 100 Leaders are individuals championing everything that we love about supply chain and embracing best practice that’s good for business” SCOTT BIRCH

EDITORIAL DIRECTOR, BIZCLIK MEDIA GROUP

Top 100 Leaders in Supply Chain and Procurement To coincide with the launch of Procurement & Supply Chain Live, BizClik Media Group will also celebrate the industry’s leading executives from around the world. Our Top 100 Leaders in Supply Chain and Procurement supplement will champion professionals of all disciplines, backgrounds, and regions, from Global CSCOs and CPOs, to lesser-known innovators and influencers who elevate the supply chain day in, day out. Executives already nominated include, Tom Wolff, Vice President, Demand and Supply Planning, Nestlé; Jacquelyn Howard, Vice President, Global Supply Chain - Direct Sourcing, Starbucks; Lizeth Cardenas, Deputy Supply Chain Director, Huawei; and Meghan Nicholas, Vice President, Supply Chain Development, Peloton.

The definitive list of leading executives and influencers will be announced at the event and shared across social media channels, our websites, and presented in a special supplement that honours all of those named in our annual list. “The Top 100 Women, which we shared to coincide with International Women’s Day 2021, recognised the incredible and influential women driving our industry,” says Scott Birch, Editorial Director, BizClik Media Group. “The success of that initiative encouraged us to recognise the Top 100 Leaders – individuals championing everything that we love about supply chain and embracing best practice that’s good for business.” Tickets are still available for Procurement & Supply Chain Live, just click the button below.

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SupplyChain Digital Magazine is proud to launch a celebration of women in Global SupplyChain. Brought to you in association with:

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