Procurement - May 2022 by procurementmag

May 2022 | procurementmag.com

THE STANDARD:

Achieving financial wellbeing and peace of mind

WERFEN:

How significant are long-standing suppliers to navigate the complex medical device industry?

SNAM:

The move to net zero, preparing for the use of sustainable energy sources

TOP 10:

Global consultancy firms

Centralising

procurement with technology Global Chief Procurement Officer, Leonardo DeCandia, reflects on Johnson & Johnson’s centralisation of procurement in its operations

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The Procurement Team EDITOR-IN-CHIEF

GEORGIA WILSON EDITORIAL DIRECTOR

SCOTT BIRCH

PRODUCTION DIRECTORS

GEORGIA ALLEN DANIELA KIANIČKOVÁ PRODUCTION MANAGERS

ELLA CHADNEY PHILLINE VICENTE JANE ARNETA

CREATIVE TEAM

OSCAR HATHAWAY SOPHIE-ANN PINNELL HECTOR PENROSE SAM HUBBARD MIMI GUNN JUSTIN SMITH REBEKAH BIRLESON JORDAN WOOD CALLUM HOOD

DIGITAL VIDEO PRODUCERS

EVELYN HUANG MARTA EUGENIO ERNEST DE NEVE THOMAS EASTERFORD MOTION DESIGNER

TYLER LIVINGSTONE MARKETING MANAGER

KAYLEIGH SHOOTER

VIDEO PRODUCTION MANAGER

KIERAN WAITE SAM KEMP

PROJECT DIRECTORS

MIKE SADR CRAIG KILLINGBACK

MEDIA SALES DIRECTORS

JASON WESTGATE JAMES WHITE MANAGING DIRECTOR

LEWIS VAUGHAN

CHIEF OPERATIONS OFFICER

STACY NORMAN CEO

GLEN WHITE

FOREWORD

Procurement & Supply Chain LIVE returns for a second successful year Following a triumphant return to the Tobacco Docks for our second LIVE event, we start May on a high with this month’s issue of Procurement Magazine, focusing on digitalisation, strategy and sustainability

“Procurement & Supply Chain LIVE was jammedpacked with amazing speakers"

Did you attend Procurement & Supply Chain LIVE this year? What an amazing turn out we had! The two-day event was jam-packed with amazing speakers providing their thoughts, insights, innovations and trends from the world of procurement and supply chain. In this latest issue of Procurement Magazine, we take a look at the highlights from the two-day hybrid event and speak to leading executives from the likes of EY, The Hackett Group, Gartner, Johnson & Johnson, SAP, Ivalua, OpenSeas, and Premise. These executives discuss procurement’s demand for digitalisation; when it's the right time to seek a consultant to navigate the complex industry; and how common ‘greenwashing’ really is in the industry. Read on to discover all this and more in our latest issue! Unable to attend Procurement & Supply Chain LIVE? Keep an eye out for upcoming Procurement Magazine and Supply Chain Digital events later this year and in 2023!

PROCUREMENT MAGAZINE IS PUBLISHED BY

GEORGIA WILSON

georgia.wilson@bizclikmedia.com

procurementmag.com

CONTENTS

Our Regular Upfront Section: 12 Big Picture 14 The Brief 16 Timeline: The history of the procurement industry 18 Trailblazer: Anna Spinelli 22 Five Mins With: Koray Köse

The Standard

Achieving financial wellbeing and peace of mind

The Risk & Resilience Conference

When is the right time to bring in a procurement consultant?

Event Review

Procurement Strategy

Werfen

The importance of suppliers in the medical industry

Digital Procurement

Johnson & Johnson: Centralising procurement with technology

Snam

Snam is powering its way to a sustainable future

110 118

Technology

What is driving digitalisation in S2P and P2P?

Scottish Government Harnessing eCommerce in Procurement

134

144

Is ‘greenwashing’ commonplace in sourcing and procurement?

Powering Purposeful Sustainable Sourcing

Sustainability

Rolls-Royce

Performance. Accelerated. ▶Role-based, practical eLearning for procurement and supply chain teams. Created by experts and powered by science for you to apply in everyday workplace situations. Visit Skill Dynamics

156 Top 10

Global consultants in sourcing & procurement

214

Guy's and St Thomas' NHS Foundation Trust

Procurement shared services are essential to support healthcare

168

Ikano Bank

Procurement - the heart of every organisation

232 182

Asahi Beverages

With enterprise resource planning, less is more

TealBook

Solving Supplier Data For Procurement Leaders

194

244

Visa Europe’s ESG on a roll in Procurement and Supply Chain

The time for flexible work environments is now

Visa

WeWork

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BIG PICTURE

May 2022

Turning over a safer, greener leaf in building construction

Global

Changing an industry’s culture is no easy task. Despite construction in the UK recording £119bn of new work in 2019, the industry remains notoriously dysfunctional. In the wake of recent events regarding the safety of materials, the industry is in need of a more connected approach. “Improving the procurement process will play a large part in setting the tone for any construction project. This is where the drive for quality and good outcomes, rather than lowest cost, must start,” said Dame Judith Hackitt. procurementmag.com

THE BRIEF "AS A PROCUREMENT LEADER, I STRIVE TO BE A STRATEGIC PARTNER TO THE BUSINESS. MY GOAL IS TO DRIVE MEANINGFUL IMPACT TO THE BUSINESS" Alisa Bornstein CPO, VISA Europe

BY THE NUMBERS Top priorities for procurement professionals to navigate in 2022 and beyond? Source: LinkedIn Poll

22% Supply & Talent

32% Sustainability

Shortages

& ESG

"WE’VE GOT SUCH A LOT OF DATA THAT HAS A POWERFUL STORY TO TELL" Lynn Wisener

Deputy Director of eCommerce and Procurement Best Practice, Scottish Government

“MY APPROACH IS SIMPLE: BE CONSISTENT, BE FIRM, BE FAIR, BE NICE, AND BE AVAILABLE” Don Perigny

Senior Manager, Global Procurement, Werfen

May 2022

22% Risk

24% Resilience

Management

& Agility

EDITOR'S CHOICE THE TIME IS NOW TO RETHINK SRM IN PROCUREMENT Procurement software company, Ivalua, urges procurement professionals to rethink their supplier relationship management (SRM) strategies. READ MORE

ORGANISATIONS MUST ADOPT SUPPLY CONSERVATION STRATEGIES If supply chain and procurement functions are to successfully navigate today’s challenges, Gartner emphasises the importance of adopting resource conservation strategies to mitigate these operational risks. READ MORE

HOW CAN CONTRACT INTELLIGENCE HELP ORGANISATIONS TO NAVIGATE GEOPOLITICAL UNREST? Leading contract management software company, icertis, breaks down the benefits of contract intelligence when navigating times of geopolitical disruption. READ MORE

Five critical areas of development according to The Hackett Group & Ivalua Source: CIPS

By now, the supply chain and procurement sectors are no stranger to complex environments and disruptive events. In a recent report by The Hackett Group and Ivalua, the two outlined five critical areas of development for the function warning: “If procurement cannot overcome challenges in these areas, it may be difficult to address critical priorities like supply risk objectives.” The five critical areas included: 1. Enabling corporate sustainability to meet the growing demands and expectations from all stakeholders. 2. Accelerating digital transformation to navigate constrained budgets and continue to deliver new services. 3. Improving analytical and reporting capabilities due to the correlation between a data and insights driven organisation and success. 4. Aligning skills and talent with changing business needs, with a focus on retention following ‘the great resignation’. 5. Improving procurement agility to ensure that an organisation is well equipped to anticipate, predict and rapidly react to shifts in the markets.

 YOKOY Switzerland-based startup Yokoy, has raised US$80mn to help its customers better manage their corporate spend with AI and API integrations. To date, the company has raised US$107mn. Its latest funds will be used to drive its international expansion, product development and expand its headcount.  SHIPSTA Based in Luxemburg, pioneering digital platform provider SHIPSTA has raised US$9.8mn in funding. Led by Dubaibased Tricap Investments, the latest funding will be used to further its fast growth and accelerate its global reach.  COUPA SOFTWARE Following Coupa Software’s announcement of its January quarterly earnings report and management guidance for the fiscal year, the company’s shares have dropped by 25%.  MCDONALD’S Leading fast food chain McDonald’s has been hit with supply issues, rationing its tomatoes after supply chain issues resulted in a shortage of fruit.

U P MAY

2022

D O W N

procurementmag.com

TIMELINE The history of the procurement 3,000BC

1914 - 1945

The first trace of procurement Throughout ancient history, there are many examples of a procurement concept. Whilst the process was far from what it is today, the Egyptians used scribes to manage the supply of materials when building the pyramids.The scribes recorded the amount of materials and workers required to complete the task, tracking orders through to fulfilment.

Word War I and World War II Despite making positive headway in solidifying its importance in the industry, the World Wars stunted efforts to drive procurement initiatives. Efforts shifted from adopting a strategic procurement approach to focusing efforts on obtaining enough raw materials, services and supplies during the depression.

1800s Procurement starts to gain recognition Despite being recognisable in a base, crude form for many years, procurement’s role in organisations wasn’t recognised until the 1800s In 1887, during the industrial revolution, procurement began to solidify its importance. Marshall Kirkman’s book, The Handling of Railway Supplies, details procurement’s strategic contribution to the railroad industry. 16

May 2022

industry

Procurement Magazine walks through time, taking a look at where procurement began and where it is now

1980s Supplier competition grows By the 1980s, procurement experienced an increase in supplier competition, allowing organisations to focus on supplier quality and dependability. Supplier management and strategic sourcing became important factors in procurement, something which remains true today. This transition marked the shift to modern day procurement.

1960s

2000+

Procurement enters the spotlight again Approaching the mid-’60s, the concept of materials’ management took hold on a wider scale. An emphasis was placed on competitive bidding, and a rise in trained professionals helped to solidify procurement’s status within a business.

Procurement becomes the key to success In today’s organisations, it is clear to see the significance of procurement. In the wake of pandemics, geopolitical unrest and other growing supply chain disruptions and complexities, organisations can no longer deny the integral role that this function plays in business continuity and the navigation of such murky waters. procurementmag.com

TRAILBLAZER

Anna Spinelli

JOB TITLE: CHIEF PROCUREMENT OFFICER (CPO) COMPANY: DEUTSCHE POST DHL (DPDHL)

Deutsche Post DHL (DPDHL) is a world-leading logistics company, founded in 2002 when Deutsche Post AG acquired DHL

nna Spinelli is a strategic thinker with a practical mind. As an experienced executive leading multicultural and diverse organisations, Spinelli’s career spans more than 20 years. Spinelli has a proven track record of driving transformation while enhancing performance sustainably. She is passionate about developing meaningful supplier

May 2022

relationships and engagements, building a competitive ecosystem. Constantly looking for ways to enhance a company’s success beyond functional and personal boundaries, Spinelli began her career at Fiat Chrysler Automobiles. Over the last two decades, Spinelli has climbed the corporate ladder working for multiple organisations in the automotive, consumer goods, telecommunications and logistics industries. Such companies include Adam Opel AG, General Motors, BMW, Phillips, TIM, and Enics before joining Deutsche Post DHL. In March 2022, Deutsche Post DHL announced one of Spinelli’s proudest moments since she began working for the logistics company: the signing of two of its largest Sustainable Aviation Fuel deals with BP and Nestlé. Working with her cross-functional procurement team, Spinelli has been contributing to the company’s sustainability roadmap, working to boost its decarbonisation efforts. Spinelli’s peers describe her as a ‘natural born leader’, with both ‘astonishing technical

procurementmag.com

TRAILBLAZER

skills and interpersonal skills’. She has experience with multiple skill sets including purchasing, supply management, global sourcing, supplier development and supply chain management. She is also a graduate from the Università degli Studi di Udine - with a degree in Management Engineering - and is fluent in four languages: English, German, Italian and Spanish. Sustainability in supply chain and procurement It can be clearly seen from her career that Spinelli is a firm believer and advocate for sustainability. In a recent report from The Procurement Initiative, Spinelli spoke about her thoughts on the value sustainability has in procurement. Spinelli highlighted the correlation between sustainability and long-term value creation among partners, and how building resilience to be more decisive in procurement can accelerate the value stream in business strategies. As such, procurement stands to benefit from the supply chain increasing its transparency and supporting sustainable and ethical sourcing strategies. Spinelli said: “Concerning Sustainability there is a sense of urgency. The expected actions and behaviours need to be part of your company’s strategy, which means where you put focus needs to be meaningful and fit to the company’s Purpose – in our case, 'connecting people improving lives'. Communication is therefore absolutely key and setting meaningful targets can also create focus on the critical topics.” Top 100 Women in Procurement In honour of International Women’s Day and Women’s History Month, Procurement 20

May 2022

Magazine launched its debut Top 100 Women in Procurement in March 2022. Among many of the well deserving leaders in the supplement, Spinelli sits at the very top of our list. Empowering women in business is something we ardently support and track as a publication. Each and every one of those mentioned in our Top 100 has earned their place and the respect of their peers through hard work, talent and determination. The role of procurement has never been more critical. In a world defined by its hyperconnectivity and then rocked by the challenges of the COVID-19 pandemic, the importance of procurement decisionmaking is hard to put into words. But it does come in the form of people incredible women like Spinelli and the many others on our Top 100 list.

By 2024, 12 of the Alice aircraft will form an unparalleled electric network of cargo planes flying for DHL Express

“Concerning Sustainability there is a sense of urgency, the expected actions and behaviours need to be part of your company’s strategy” procurementmag.com

FIVE MINUTES WITH...

KORAY KÖSE KORAY KÖSE, SENIOR DIRECTOR, SUPPLY CHAIN RESEARCH AT GARTNER DISCUSSES THE IMPACT OF GEOPOLITICAL UNREST IN PROCUREMENT AND SUPPLY CHAIN FUNCTIONS

May 2022

Q. WHAT IMPACT DOES A CRISIS SUCH AS WAR HAVE ON THE PROCUREMENT AND SUPPLY CHAIN INDUSTRY, PARTICULARLY WHEN THESE FUNCTIONS ARE MORE INTERLINKED AND INTERDEPENDENT THAN EVER BEFORE?

» Globally complex geopolitical and

economic dependencies and other unresolved tensions can severely impact global trade and further complicate the supply chain gridlock that economies started to experience since 2019. Ongoing imbalances and the global supply chain gridlock require companies to stay on top of the emerging issues that vary, from impacts on costs to nonavailability of materials, logistics and changing legislations. Reverberations are already being felt. Given the volatility of events — pandemics, inflation, energy supplies, war and more — the ability of the enterprise to detect rapid shifts in information and then act on it quickly is of utmost importance. It is now intolerable for one department to ‘sit on’ information and slow its dissemination throughout the organisation to ensure all can respond to the same information, at roughly the same time, with the same sense of urgency. So, there are not two separate functions – procurement

Imbalances global supply chainchain gridlockgridlock mbalances and and thetheglobal supply require companies to react to emerging issues equire companies to react to emerging issues

and supply chain. Procurement is supply chain is procurement.

Q. WHAT HAS HISTORY SHOWN US WHEN IT COMES TO PREPARING AND RESPONDING TO SITUATIONS SUCH AS THESE?

» Most organisations have focused on risk

mitigation rather than risk management and often created more exposure and vulnerability by doing so. Risk management is a holistic view on the organisation’s activities, risk appetite, risk capacity and vulnerabilities. Risk mitigation, however, is much more single issue focused and reactive in nature trying to solve specific risk events or vulnerabilities one by one. This created fragile supply chains without supply ecosystems developing towards higher purpose over time. Those supply chains can be stuck in cost efficiency stages - or worse even in long term single or sole source chains. Events of the last few years have created significant impacts operationally

but carry a bigger issue that is impacting strategic objectives like profitability, market share, competitive position and share price. Strategic performance indicators are harder to recover and often require significant additional investments that add to the opportunity costs.

Q. WHAT ARE ALSO SOME OF THE MODERN CHALLENGES THAT PROCUREMENT AND SUPPLY CHAINS NEED TO CONSIDER?

» Many organisations struggle with having

insights and visibility into their supply chain. The 2021 Gartner Supply Chain Risk and Resilience Survey found that visibility improvements were among the top three most important areas of improvement to supply chain risk management at 70% (and 83% among enterprises that have revenue above US$1bn). 40% of respondents mentioned visibility as the top area of improvement. This is based on the lack of a complete view into the supply network. procurementmag.com

FIVE MINUTES WITH...

Only 53% of companies have at least 90% insights into their Tier 1 suppliers. That drops to merely 4% of companies achieving a 90%+ visibility for Tier 2 and only 3% of companies claiming this level of visibility for lower tiers. Investments into people, processes and technologies that enable better supply chain visibility, information gathering, analytics (including a strong focus on leveraging advanced analytics, predictive and prescriptive) and decision making will be the differentiators of a successful — or failed — risk-management initiative. A welldefined response strategy is critical to get ahead with short, mid and long-term action plans for this and future risk events.

Q. WHAT SHORT-TERM, MIDTERM, AND LONG-TERM RECOMMENDATIONS WOULD YOU SUGGEST TO THE PROCUREMENT AND SUPPLY CHAIN INDUSTRY?

» Short-term: Immediately start creating

first-tier visibility into the existing supply networks in order to evaluate potential risk exposure and determine vulnerabilities. Follow through with n-tier visibility, although results will likely only be visible mid-term to long-term. This is key to enable effective response strategies. The event implication can span much further than direct supply chain ties into the conflict region. It is critical to find the best options to get around potential obstacles and to make timely and tough decisions that will keep your organisation moving forward. Mid-term: Continue to commit and secure volumes as a risk response for the most fragile supply chains, including inventory, manufacturing capacity and labour. Diversify sources and routes where possible. Evaluate the ‘catastrophe on top 24

May 2022

of a catastrophe’ scenario and go beyond the initial direct impact and down to the raw material level even outside of the region. Long-term: Increase resilience in highvalue, at-risk, concentrated supply networks by deploying strategic redundancies that drive competitiveness and cascade down. .

Q. WHAT IMPACT CAN ALREADY BE SEEN IN PROCUREMENT AND SUPPLY CHAINS?

» Supply chain leaders should brace for

‘a catastrophe on top of a catastrophe on top of catastrophe’ beyond what we have experienced thus far from trade wars, COVID-19 and the war in Ukraine. organisations will continue to commit and secure volumes as a risk response for the most fragile supply chains, including inventory, manufacturing capacity and labour, as well as diversify sources and routes where possible. Evaluate the ‘catastrophe on top of a catastrophe’ scenario and go beyond and down to the raw material level even outside of the region. Among other critical commodities like metals and hydrocarbons, Ukraine and Russia produce 30% of the world’s wheat supply, 20% of its corn supply and 80% of its sunflower oil, with much of it going to countries in Africa and the Middle East. Intra-African trade is also limited in scope to replace imports from Russia and Ukraine. Regional supply of wheat is not significant with other complexities like the lack of efficient transport infrastructures and storage capacity. Increased costs of fertilisers like urea and phosphate and energy shocks for energy-intensive inputs increase further pressures for global supply

chains. Prices for wheat, corn and barley have recently soared so much that even higher price producers like India are now competitive in the global grain export market for the first time after 2012, a year that Russia and Ukraine suffered from a severe drought. Putting this into context with countryspecific dynamics like corruption, climate change, export restrictions and irrational buying, food insecurity is the ticking time

bomb that will quickly turn into the most important raw material crisis yet stemming from the most fragile regions by summer/ fall 2022. This is a seismic shift in globalisation that will not revert back to pre-invasion global supply chains. Multi-polarisation, that isn’t yet defined well in many value chains based on composable and fluid supply ecosystems will dominate the future in supply chain! procurementmag.com

23 - 24 JUNE 2022 STREAMED & IN PERSON TOBACCO DOCK, LONDON

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EVENT REVIEW

LIVE

The ‘Risk & Resilience’ Conference WRITTEN BY: SEAN ASHCROFT

BizClik Media Group hosted the Procurement & Supply Chain LIVE show from April 27-28. The hybrid digital event brought global procurement and supply chain leaders together, to share their expertise on mitigating risk and building resilience. 28

May 2022

irst it was the COVID-19 pandemic. Then came the Suez Canal blockage, followed by the Great Resignation. And now there is war in Europe, with Russia’s invasion of Ukraine seeing struggling supply chains take another hit. As if this weren’t enough, inflation is now also running riot. There is a lot of risk in today’s business world, and the need for resilience has rarely been greater. And so it was that some of the world’s leading figures from procurement

and supply chain gathered at London’s iconic Tobacco Dock from April 27-28, to share their experiences and knowledge of how to navigate today’s volatile and unpredictable world. Technology played a significant role in helping save lives during the pandemic, and attendees heard how it continues to play a vital part in mitigating risk and building resilience, as businesses continue to adopt technological change to manage supplier relationships, mitigate risks of cyber attack, encourage seamless and lucrative

procurement processes, and ensure that commerce continues in a sustainable, uninterrupted fashion. The event included two in-person stages and two digital stages for the hundreds of attendees to enjoy. Thousands of virtual attendees were also able to watch remotely. Speakers fielded questions both from their live and remote audiences, with digital viewers posting questions via the event-networking app, Brella. Here is summary of highlights from across the two days. procurementmag.com

DIAMOND SPONSOR

TACKLING THE RESILIENT AND SUSTAINABLE SUPPLY CHAIN IMPERATIVE With organisations striving to build resilient and sustainable supply chains after a seemingly endless stream of black swan events, many turn to SAP for their knowledge and expertise.

ohn McNiff is Vice President, Global Center of Excellence focusing on Sustainable Supply Chains and Operations at SAP. He believes these topics are more challenging and in-demand than ever. “Now is the time to become sustainable,” he says. “There is a need to adapt the processes, systems and methods to become more resilient in a time of digitalisation. “Historically supply chains were optimised for cost and customer service, without considering carbon footprint or circularity of products. It is encouraging to see that today there is an increasing focus around sustainability.” McNiff says ultimately organisations recognise that, in an increasingly networked and digitalised environment, visibility and collaboration are key. There are solutions and capabilities that can help – tools like AI, 30

May 2022

Blockchain and IoT become vital enablers for an autonomous supply chain. The challenge is understanding where and how to adopt.

“Right now there's a drive towards the cloud, we can deploy faster, we can set up more agile environments and landscapes, enabling companies to be more responsive. However, interoperability enabled by a consistent business technology platform through the supply chain process remains vital.” John McNiff, Vice President, Global Center of Excellence, Supply Chain

SAP

Bringing Visibility and Agility to Supply Chains

SAP is rightly proud of the solutions that it has brought to the market for a number of years in the supply chain arena. The strategy is to deliver best-of-breed components that are modular and cloudbased, an example being SAP Integrated Business Planning for Supply Chain, a solution adopted by over 1,000 companies globally. “Also, it's super important that it's not just about having one big, integrated stack of products,” he says. “It's about bringing the right capabilities to the right users.” Looking ahead, McNiff believes there will be continued disruption to the supply chain and fresh challenges, such as inflationary pressure, but access to quality data can help mitigate these risks and make the organisation more resilient. “These disruptions will continue and so resilience becomes an imperative and an

operating model. If your information flow is slower than your physical product, you've got a problem. And for me, that's one thing that I think we are trying to help address,” says McNiff. “We need to make sure that the information gets to the right people in a timely fashion so they can make accurate decisions and deliver against dynamic business outcomes.”

SAP CEO: CHRISTIAN KLEIN INDUSTRY: SOFTWARE & TECHNOLOGY HQ: WALLDORF, GERMANY

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EVENT REVIEW

12 - 13 OCT 2022 STREAMED & IN PERSON QEII CENTRE, LONDON

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Jonathan Colehower, UST

Risk & Resilience Conference: Day 1 Frank Soudan, SAP SAP’s Head of Digital Supply Chain Industry 4.0 Frank Soudan spoke about the importance of technology in building a resilient supply chain and procurement network “There is no time to lose,” he said. “Organisations will have to invest in order to grow, and the journey to resilience starts with technology.” But he warns: “Beware a quick win. Don’t create a Frankenstein enterprise. Platforms need to integrate with the wider organisation.” Daniel Weise, BCG Daniel Weise, MD and Partner at BCG, spoke about a book he has co-authored with other BCG colleagues, called Profit from the Source. “The world is fundamentally changing,” said Weise.“While the cost of procurement

will be the same, teams will be smaller and much more effective as a result, driving greater value from the investment made.” He said procurement can offer benefits to organisations beyond cost savings which can be derived from three building blocks to maximise value: the CEO, the company, and the company’s ecosystem. Risk & Resilience Panel The panel comprised Daniel Weise of BCG, Interos Resilience Lab VP Geraint John, and David Shepherd, Global Head of Strategic Partners Director and Risk at LSEG, with BizClik Chief Content Officer Scott Birch putting the questions. The panel was asked if risk and resilience is ‘the only story in town’, to which Shepherd said: “No but it is the highest priority now. It is definitely the main story.” “The spotlight is on supply chains as a profession, which presents an opportunity for us to step up,” added John. procurementmag.com

UST Diamond Editorial International retail group focused on fast fashion adopts supply chain digitization

The retail group recognized the need to evolve its supply chain to keep pace with the rapidly changing preferences and demands of the contemporary shopper. The retail group soon realized that it was jeopardizing customer loyalty and retention by being unable to react to its customers' needs quickly enough.

THE CHALLENGE Lack of visibility and coordination among partners.

SOLUTION UST Omni™ provided clear visibility into the group's global end-to-end supply chain operations by connecting all trading partners on a single network and removing the manual processes inhibiting the retailer's ability to speed up its supply chain.

RESULTS Following the implementation of UST Omni™, the company was able to demonstrate some significant improvements to key operational measures:

UST 30% Diamond Editorial

Since the company's team could collaborate in real-time on one digitized platform with product vendors, agents, and logistics providers, it could to make more insightful decisions on where and how it bought and moved its products to meet its customers' expectations.

Reduction in lead time from product concept to store (25 weeks)

91% Full sell-through of seasonal ranges (increased from 88% to 91%)

32% Reduction in cash conversion cycle ust.com

EVENT REVIEW

NHS supplier panel

May 2022

David Loseby, Aquitaine

EVENT REVIEW

Asked if sustainability was taking a back seat to risk and resilience, Shepherd disagreed, saying the ESG story “is incredibly strong” and that sustainability “is becoming a mature topic.” George Laurie, Forrester Research Laurie - VP and Principal Analyst at Forrester Research - took to the Main Stage to deliver his keynote on how smart manufacturing technology is reshaping global trade patterns. He said: “Rigid supply chains must become adaptable and collaborative supply networks. Smart organisations build test responses to risk into their operations to drive resilience and maintain a competitive advantage when they occur.” Jonathan Colehower, UST Colehower is Global Supply Chain Strategy Practice Lead at UST, and he discussed the importance of private trading networks. He asked why the world was so shocked by major events, such as the pandemic and the Suez blockage. “We’ve had pandemics before, and the Suez has been blocked five times before.” The best response to such disruption, he said, was private trading networks, in which all tiers of the value chain have visibility of one another Risk & Resilience Conference: Day 2 Sheri Hinish, IBM Opening the second day on the main stage was Sheri Hinish, Executive Partner, IBM Sustainable Supply Chain, Finance and Circularity. Hinish - widely known as ‘The Supply Chain Queen’ discussed how businesses can break down barriers to environmental sustainability.

Sheri Hinish, IBM “Sustainability is not someone else's problem,” she said. “Over half of CEOs believe that business leaders must take responsibility for the business impact on communities in which they operate.” She said: “Sustainability trailblazers and strivers are breaking the barriers, and with digitalisation, organisations can make sustainability visible, actionable and operational.” Panel discussion: Risk mitigation in the supply chain BizClik’s Scott Birch was joined by: Richard Jowers, Director at SAP; PwC Partner Tom Woodham; and Andrea Ricciarelli, SAP Domain Advisor of Supply Chain Logistics and Sustainability. procurementmag.com

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BUILD RESILIENCE WITH GEP As a global leader in supply chain and procurement technology and consulting, GEP helps Fortune 500 and Global 2000 enterprises worldwide create and manage agile, resilient supply chains that drive sustainable growth.

gile, flexible, resilient — today’s supply chain and procurement organizations must be all this and more to adapt to disruptions such as inflation, supply shortages, political instability and climaterelated risks. Add to that the pressures of delivering amid rapidly changing market dynamics and supply chain and procurement leaders have their work cut out for them.

IS YOUR ENTERPRISE PREPARED FOR THE NEXT DISRUPTION?

Today’s enterprises need highly responsive and flexible supply chains to create and maintain competitive advantage amid an increasingly volatile, risk-prone business environment. With strategic insights from subject matter experts and a low-code, AI-powered unified platform, GEP enables 38

May 2022

companies to develop high-performance, intelligent supply chains that can adapt to changing business needs and help meet critical ESG goals.

KEY CAPABILITIES FOR RESILIENCE

A resilient supply chain can not only help enterprises respond swiftly and effectively to economic, technological and market disruptions, but also gain a competitive advantage. The goal of a resilient supply chain is to minimize the negative impacts of these disruptions on revenues, costs and customers. GEP’s unified end-to-end platform helps build resilience by offering realtime visibility; AI-informed insights and intelligence; and multi-tier collaboration. GEP SOFTWARE integrates supply chain and procurement to seamlessly connect

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GEP: SMART Technology at GEP

your data, processes and partners across your supply network. GEP helps enterprises create and manage high-performing procurement and supply chain organizations that can mitigate risks and drive sustainable and profitable growth.

GEP sustainability team is well-positioned to accelerate climate-related reporting, particularly for Scope 3 GHG emissions.

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As the world leaders and governing bodies pivot toward a more sustainable planet, business leaders, pressured by their investors and boards and policy changes, are adopting specific ESG strategies and deadlines to achieve net-zero and supply chain sustainability goals. Having analyzed trillions of spend dollars and hundreds of billions of supplier contracts on behalf of our customers, the

GEP CEO: SUBHASH MAKHIJA INDUSTRY: SOFTWARE, MANAGEMENT & CONSULTING HQ: NEW JERSEY, USA

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EVENT REVIEW

L-R: Tom Woodham, PwC; Andrea Ricciarelli, SAP; Richard Jowers, SAP; Scott Birch, BizClik

Asked how technology can help to mitigate risk, Woodham stressed that “technology is not the only answer”. He added: “People, processes and data are also key, but technology can certainly help with the identification of issues before they exist.” Modern procurement has a key role in mitigating risk, said Jowers. “With procurement sitting on vast quantities of data the function will be crucial to help suppliers tackle the pressures to meet requirements,” he said. 40

May 2022

Looking to the future, Ricciarelli said: “Everything that has happened in the past three years was unexpected, so emphasis will be placed on whether an organisation has enough speed and agility to react to the future challenges.” Mark Perera, Vizibl Speaking about how supplier collaboration can help solve procurement's ‘carbon crisis’ Vizibl CEO Perera said: “There is no greater crisis than climate. We’re not far enough along

EVENT REVIEW

the journey to achieve 2030 goals. We need to make a more of a collective effort to increase the pace of change. “Pressures are rising to address value chain impact. We don’t have time to wait for the perfect data or to construct a perfect baseline. Control the controllable, and prioritise around what you do know.” Stephany Lapierre, TealBook Wrapping up the two-day event was Lapierre, CEO and Founder of supplier-data specialist

Tealbook. She discussed how to transform procurement with dynamic supplier data. “We all have a data problem,” she began. “Just because you have implemented a technology doesn’t mean you will have clean data. It’s poor data quality that leads to failed digital transformation.” She added: “The supplier base is the biggest untapped asset. If optimised properly, it can deliver hundreds of millions of dollars in value, provided that supplier data is dynamic and available across systems and people.” procurementmag.com

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VISUALISING RISK

Interos is leading a revolution to reinvent and recharge the world of global commerce and trade. Its breakthrough SaaS platform leverages the power of artificial intelligence and the world’s largest database of supplier relationships to provide unprecedented visibility into global supply chains, down to the nth tier. By utilising AI, Interos helps reduce months of backward-looking manual spreadsheets that are still too often used to track supplier relationships. While it once was normal to check in with suppliers once a year, organisations now are looking for more enhanced tools to map, monitor and model supply chain relationships continuously and in real time. Interos creates instant visualisations with continuous mapping, monitoring and modelling tools. It ingests and analyses 42

May 2022

tens of thousands of public and proprietary sources to pre-emptively identify and eliminate risks before they occur. The company’s platform monitors for both physical and digital supply chain issues and assesses supply chain risk factors across six critical areas– finance, operations, regulatory, geopolitical, ESG, and cyber.

MAKING THE SUB-TIER VISIBLE

Interos has eliminated last-mile issues by using the same profiling criteria for all 345mn entities on its platform and the billions of inter-relationships among those entities. Never has the need for greater visibility been such an imperative. Today, supply chain disruptions cost large companies, on average, US $184M annually and among 83% of those affected report material reputational damage. Demand for Interos’ breakthrough solution

INTEROS

Jennifer Bisceglie, CEO & Founder Interos

is soaring (300%+ growth in the past two years) and comes at a time when billions of consumers around the world are feeling the effects of a severely strained global supply chain firsthand. We need intelligent tools to build agility and resilience into supply chains to achieve trust and transparency, and to prevent the

next crisis. Interos has cracked the code for protecting the supply chains of the world’s largest companies and governments with its first-in-class, AI-powered, multi-factor, multitier, third-party risk management platform.

Interos CEO: JENNIFER BISCEGLIE INDUSTRY: INFORMATION TECHNOLOGY & SERVICES HQ: WASHINGTON, USA is the average annual revenue loss companies face from supply chain disruption

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WRITTEN BY: GEORGIA WILSON PRODUCED BY: MIKE SADR

May 2022

THE STANDARD

ACHIEVING FINANCIAL WELLBEING AND PEACE OF MIND

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THE STANDARD

An employee from The Standard volunteered for Habitat for Humanity

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May 2022

THE STANDARD

The Standard’s Rachel Henney details the company’s approach to ESG, commitments to simplicity in its procurement processes and strong third-party governance

ounded in Portland, Oregon, in 1906, Standard Insurance Company (The Standard) is a leading provider of financial protection, insurance, retirement, and investment products and services for both employees and individuals. Under its holding company name, StanCorp Financial Group Inc., the organisation has four primary subsidiaries: Standard Insurance Company, The Standard Life Insurance Company of New York, Standard Retirement Services, Inc., and StanCorp Mortgage Investors, LLC. When it comes to The Standard’s core mission, Rachel Henney, Head of Procurement, Supplier Management and Governance, explains her love of its simplicity. “The Standard is a family of companies dedicated to helping our more than eight million customers achieve financial well-being and peace of mind,” she says. Since joining the company in 2015, Henney reflects on the incredible growth of the group: “When I arrived, revenues were at US$2.9bn. We ended 2021 at nearly US$4bn,” says Henney. She adds: “We’ve also deepened our investment in technology. And in doing so, we came to understand that we cannot be experts in everything. So, we partner with strategic, best-in-class vendor partners to deliver value to our businesses and customers. procurementmag.com

HCL Technologies helps The Standard achieve their vision Ananth Subramanya, SVP of Digital Business at HCL Technologies, details how the company’s helping The Standard digitally transform now, and in the future

Helping The Standard to digitally transform Like any other insurance company, The Standard is focused on investing in its customer experience. The Standard offers a variety of solutions, including those for retirement, disability, dental and healthcare.

In recent years, technology has taken a central role pretty much everywhere. As a key enabler for many organisations, having advanced technology within core operations has become a key differentiator for businesses. “Organisations are no longer simply using technology as a substitute for labour to drive productivity,” says Ananth Subramanya, SVP of Digital Business at HCL Technologies. He adds: “Technology has become a core conversation in the boardroom. Now they are figuring out how technology can advance the business and drive the important aspects of the agenda. Investment in technology is becoming as important as the products an organisation sells.”

Helping organisations achieve their digital transformation vision With COVID-19 accelerating the pace of transformation for many organisations, technology has resulted in significant positive disruption to many regulated industries. “If you consider dynamically priced insurance industries, there is significant consolidation in the industry that is driving better experiences and modern capabilities; this can also be extended to the optimisation of functions such as underwriting. Those in the industry are using technology to improve the experience and value a customer gains.” says Subramanya.

“Ensuring that they deliver frictionless solutions so that customers don’t suffer from long wait times, as well as innovating and improving fast are key components for the Standard,” says Subramanya. He adds: “In order to achieve this, HCL Technologies is providing The Standard with significant optimisation capability for their current processes including infrastructure, development processes, and QR automation. With these capabilities, they are able to adopt and improve much faster. “The Standard has also invested a lot in improving its operations and driving efficiency throughout its local platforms with RPA. HCL is helping to ensure that the entire process in the backend is optimised so that the customer experience continues to remain valuable.”

Learn more

THE STANDARD

“Deeper storytelling will be a core element of the report. We’re committed to sharing stories — many of which have not been shared publicly — about ESG activities” RACHEL HENNEY

HEAD OF PROCUREMENT, SUPPLIER MANAGEMENT AND GOVERNANCE, THE STANDARD

“But particularly in the last two years, during the COVID-19 pandemic. We’ve really seen great success with our shift to working remotely while continuing to provide the superb customer service that sets us apart from our peers.” The Standard and its ESG commitment In the early stages of its environmental, social, and governance (ESG) related work, The Standard’s approach to ESG has always been driven by its vision “to support a healthier environment for all, to strengthen communities, to align corporate values, and ensure we always take the high road,” says Henney. She adds: “ESG is important and it will continue to be a focus for us.” Yearly, The Standard reports on its ESG activities, sharing details on its plans to ensure the long-term sustainability of the company as well as its measurement and management of its impact. While Henney can’t share many specifics in regards to its upcoming 2021 report, she can say: “The 2021 report will be focused on how we ensure the long-term sustainability of the company, and measure and manage the impact our company has on our customers, communities and environment. It will also continue to highlight how we create a workplace culture in which each employee is valued and respected.” 50

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When asked how the 2021 report will compare to 2020, she adds: “Deeper storytelling will be a core element of the report. We’re committed to sharing stories — many of which have not been shared publicly — about ESG activities inside our various business units.” The Standard is committed to multiple United Nations Social Development Goals (SDGs), the adoption of which will help the company to not only track and report on its work, but to tell a more complete and transparent story when it comes to its sustainability. The Standard’s dedication to supplier diversity With supplier diversity being a core pillar of The Standard’s ESG model, this approach offers the company an opportunity to support its communities. “Supplier diversity is a business imperative; we take this very seriously and promote inclusion of diverse suppliers with our standard workflow for procurement and sourcing events,” explains Henney. She adds: “We continually grow and promote our supplier diversity efforts by benchmarking activities with industry peers for best practices, leveraging the advocacy organisations that certify companies as diverse (NGLCC, NMSDC, MBENC) for future matchmaking events to grow our portfolio of diverse suppliers.”

THE STANDARD

EXECUTIVE BIO RACHEL HENNEY TITLE: HEAD OF PROCUREMENT, SUPPLIER MANAGEMENT AND GOVERNANCE Rachel Henney is the Head of Procurement, Supplier Management and Governance for Standard Insurance Company. Henney is responsible for leading the supplier management division and for ensuring ensuring a strong and capable supplier base is in place

to support the company’s suppliers of products, professional services, software, hardware and outsourced services. Henney joined The Standard in 2015 and has over 25 years of experience in procurement, supplier management and enterprise shared services. She has held previous roles in business consulting and solution delivery, focusing on programme management, simplification, business case realization and strategic vision & planning.

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Business transformation

Human elevation We don’t just create real-world transformation. Driven by our purpose, we amplify the impact insurers have on the world empowering employees and helping communities thrive. Discover how we can make a difference together.

Genpact helping its clients to insure customers for life Sameer Dewan, Genpact’s global business leader for insurance, discusses how the insurance industry is embracing a new age of data and lifetime customer journeys

is a key partner in helping organisations connect, predict, and adapt to become instinctive insurers and lifelong protectors in their customers’ lives,” adds Dewan.

Genpact is a global professional services firm delivering business transformation by putting digital and data to work to create competitive advantage.

Partnership with The Standard

It’s guided by its mission – the relentless pursuit of a world that works better for people. Genpact is focused on delivering ESG outcomes for both itself and its ecosystem of shareholders, stakeholders, employees, and the communities it operates in. As global business leader for insurance, Sameer Dewan partners with insurers, brokers, and MGAs to drive transformation, develop digital and analytics capabilities at a fast pace, and deliver business growth and efficiency. State of flux from transactional to lifelong customer journeys The role Genpact plays - as detailed in its report Insurance In The Age of Instinct - is to help the insurance industry tackle challenges such as changing consumer expectations, the explosion of data, and a fast-moving technology landscape. “How insurers respond today will lay the foundation for future resilience, and Genpact

The Standard provides insurance, retirement and investment products and services, with total assets under administration of USD$45.36 bn. Genpact creates value for them as an extension of The Standard’s team, creating growth with agile operating models that can scale up to meet demand and running operations to ensure they deliver value. “We started by assessing the current state of operations and customer journeys and the choke points in each. This led to a redesigned operating model, with customer journeys at the heart of designing the new process - driving a better customer experience and growth. But transformation is not a ‘one and done’ project, we also created a transformation roadmap to consciously and continuously drive improvements, meeting The Standard’s goals of growth and profitability over the long term.” said Dewan.

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THE STANDARD

Allegis Global Solutions Allegis Global Solutions (AGS) is a managed service provider of contingent worker procurement for The Standard. “In the last year, the amount of contingent worker diversity spend was just over 27%,” says Henney. She adds: “AGS as a company is focused on three Sustainable Development Goals for 2022, including climate, work and economic growth, and reduced inequalities, all of which align with The Standard’s core values as well.” Dun & Bradstreet Leveraging several services from Dun & Bradstreet, the company provides The Standard with third-party insights. “With information from their internal certified data, we include unique businesses that have been classified using can be segmented to specific socio-economic classifications, such as minority, women, veteran, LGBTQ, and disabled-owned businesses,” explains Henney. With this information, The Standard can understand the composition of its existing third-party catalogue. Genpact As one of The Standard’s primary suppliers, Genpact supports business process delivery across the policy lifecycle. “We share a deep commitment to three key objectives,” says Henney. “Improving our business through simplification, collectively serving our customers’ needs, and increasing diversity. “They parallel our focus around prioritising diversity and inclusion as published on their website” says Henney. “The results of our strategic engagement with Genpact continue to support not only our company’s vision and mission but also our culture.”

May 2022

Commenting on the partnership with Genpact, Brenda Smith, senior director of Workplace Possibilities at The Standard says: “Genpact has been supporting our area for many years now, starting with two important business processes: both case and invoice set up. Through a solid partnership, our relationship has grown and the team has taken on additional processes including document creation and components of correspondence. All members of the team are hardworking and conscientious, bringing forward ideas for improvement, questions and issues as they arise. Their attention to detail shows in their most recent metric results: 99.41% accuracy and 100% timeliness.” HCL Technologies Working with HCL Technologies since 2016, The Standard continues to grow its strong partnership with the company. “Our collaboration with HCL Technologies brings significant value, operational efficiency, and thought leadership to The Standard,” says Henney. “Their operations are well-aligned to The Standard’s culture of transparency, trust and openness.” During the COVID-19 pandemic, HCL Technologies was a vital partner for The Standard to pivot its operation in the ‘new normal’. “With HCL Technologies alongside our other strategic partners we experienced no loss of productivity, expanded our network capacity, and transitioned to 100% remote working,” says Henney. She adds: “The partnership between HCL Technologies and the Standard has helped the organisation tap into a larger skill and talent pool enhancing our company’s competitiveness in the market.”

THE STANDARD

The Standard simplifies its processes and drives effective governance When it comes to the simplification of its processes, Henney explains that The Standard leverages a methodology called ‘lean management system’. She says: “Lean at The Standard is a set of tools and behaviours that focus on continuously improving the value we provide to our customers, with an engaged and empowered workforce.”

The Standard’s goal is to maximise the performance of its systems or value stream to eliminate waste in the value chain. “Asking ‘why’ each step is required, it serves as a baseline for simplification opportunities,” adds Henney. Choosing a third-party risk governance approach, The Standard uses subject matter experts from across the enterprise covering multiple risk areas — geopolitical,

The Standard’s annual Volunteer Expo in Portland, Oregon

Achieving financial well-being and peace of mind

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Business-led and cloud-forward transformation. Meet a new kind of digital transformation that helps drive value for insurance organizations faster. Learn more

© 2022 PwC. All rights reserved. PwC refers to the US member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

THE STANDARD

“ Change is inevitable, it is one thing that remains constant” RACHEL HENNEY

HEAD OF PROCUREMENT, SUPPLIER MANAGEMENT AND GOVERNANCE THE STANDARD

technology, compliance, fraud, and legal, to name a few. “This provides a holistic governance approach for our third parties,” says Henney. “These ‘Risk Domain Owners’ work with our centralised TPRM Governance group who act as the central clearing house for TPRM risk monitoring and information management.” In 2021, The Standard further evolved its Third-Party Risk Management Governance group by leveraging leading practices to expand its TPRM programme. “Using a risk-based approach, the TPRM Governance programme monitors third-party providers across a wide number of Risk Domains,” says Henney. She adds: “One of the current focus areas for the programme is to provide enhanced reporting capabilities so business stakeholders have improved visibility to current risk information about their third parties. The Third-Party Risk Management Governance group works with both business and third-party stakeholders to ensure that risks are monitored and appropriately managed throughout the engagement lifecycle.”

The Standard's strategic suppliers help to simplify processes PwC When it comes to quality, cost and control, strategic suppliers at The Standard work with business leaders to determine where the group should focus its outcomes. “While we want to improve all of these, it’s not possible,” explains Henney. She adds: “You can’t require that a supplier is fast, inexpensive and delivers sustainable solutions. Choosing two of these as primary outcomes and objectives together help focus operational results that meet expectations. Our strategic suppliers are integral to core operations and our customer satisfaction.” As a Strategic and Preferred Supplier, PwC works with The Standard to enable and enhance business intelligence and analytics, transforming our end-user ecosystem. PwC and The Standard defined a strategy to simplify our operating and governance model, modernising technology to complement business strategy. PwC’s approach helped The Standard support sustained internal growth and adoption of transformation, including the creation of an internal delivery structure focused on strategy realisation. “Change is inevitable,” says Henney, “It is one thing that remains constant. PwC assists The Standard with the pace of change, and as we progress in our transformational journey, we leverage PwC’s insurance industry experience as well.”

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THE STANDARD

“ Over the past couple of years, the pandemic has reshaped our industry and its perception” RACHEL HENNEY

HEAD OF PROCUREMENT, SUPPLIER MANAGEMENT AND GOVERNANCE THE STANDARD

The Standard’s outlook for the future Looking to the future, Henney expects the industry to continue to be impacted by the current global landscape including the pandemic, geopolitical unrest, and employment retention challenges. She says: “These next couple of years will focus on a deeper evaluation of our supply base, looking at how we can optimise the utilisation of strategic, preferred partners to mitigate inflation impacts.” She adds: “Future trends are in part defined by a reflection of the recent past; over the past couple of years, the pandemic has reshaped our industry and its perception. We sell a promise to be there for our life and disability insurance customers when they need us. “The pandemic, sadly, gave us the opportunity to be there for many people and families experiencing the worst. We're proud of our capability to provide income replacement for people experiencing a disability, and funds to cover expenses and mortgages for families who lost a loved one. The pandemic showed how critical our products are and will continue to be.”

May 2022

A group of employees from The Standard volunteered for Habitat for Humanity

THE STANDARD

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WHEN IS THE RIGHT TIME TO BRING IN A PROCUREMENT

CONSULTANT?

May 2022

PROCUREMENT STRATEGY

Procurement Magazine speaks to Hackett Group’s Nicholas Walden & Bob Derocher; EY’s Vijay Yalamanchili; and Gartner’s Michael Dominy to answer this question WRITTEN BY: GEORGIA WILSON

ow more than ever, procurement and supply chains are under the microscope and gaining considerable air time – both in the media and round the boardroom table. Following the trend set by the last two years, disruptions in the industry will continue to come from multiple directions, including not just the traditionally expected and prepared-for challenges – such as cost savings, commercial excellence and overall spend management – but also inflation, talent gaps, sustainability, and materials shortages, too. It’s times like these that an organisation may turn to a consultant to help them navigate such murky waters. At a macro level, procurement consultants can fall into one of two categories: ‘broad procurement transformation’ or ‘deep subject matter experts’. Vijay Yalamanchili, Global Procurement Transformation Solution Leader at EY, explains: “Similar to the role of primary care physicians in medicine, broad procurement transformation consultants have the responsibility and acumen to effectively diagnose all challenges in procurement. These consultants understand both the procurementmag.com

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#TheFutureIsNow

PROCUREMENT STRATEGY

“ ONE OF THE GREAT THINGS ABOUT BEING A CONSULTANT IS THE CAPACITY TO WORK WITH A WIDE VARIETY OF COMPANIES” BOB DEROCHER

PRINCIPAL, PRACTICE LEADER FOR STRATEGY AND OPERATIONS PRACTICE (NORTH AMERICA) AT THE HACKETT GROUP

end-to-end process and technology landscape, as well as having the ability to support clients through the prioritisation and implementation of improvements. “In comparison, deep subject matter specialists are called upon based on the specific procurement challenges and activities required. Continuing with the medicine analogy, this would be the equivalent of specialists such as cardiologists or surgeons, who are called upon to treat precise patient symptoms.”

But what makes a good procurement consultant? A good procurement expert is one that truly understands the industry: “One of the great things about being a consultant is the capacity to work with a wide variety of companies,” says Bob Derocher Principal, Practice Leader for Strategy and Operations Practice (North America) at The Hackett Group. He adds: “By working with a variety of organisations, we can capture the best practices and identify benchmarks.” procurementmag.com

PROCUREMENT STRATEGY

EY Supply Chain Intelligence Platform

Yet, while it is important to understand an organisation’s operating market, what makes a good procurement consultant is the ability to understand and navigate the challenges in the function. “Ultimately, our customers are looking for solutions, so it’s important to be able to provide a tailored solution to the procurement challenges they are experiencing,” says Derocher. “We need to become a trusted business advisor for each company that we work with,” adds Nicolas Walden, Senior Director of Procurement Executive Advisory, Membership Programmes. Agreeing with Walden, Michael Dominy, VP Research Analyst in Gartner’s supply chain practice, comments: “A good procurement consultant not only helps an organisation to understand what they should do from a strategic roadmap perspective, but also helps procurement teams to do their jobs by offloading some 64

May 2022

EXPERT PANEL MICHAEL DOMINY My name is Michael (Mike) Dominy, and I am VP Research Analyst in Gartner’s supply chain practice. I specifically focus on helping clients with their overall supply chain strategy including the procurement and vendor space. I advise clients when they are going through the sourcing evaluation in the selection process for selecting their partners. BOB DEROCHER Based in Boston, United States, my name is Bob Derocher I am the Principal, Practice Leader for Strategy and Operations Practice (North America) at The Hackett Group. I have been at the group for 12 years, in the consulting industry 32, and roughly 25 years of those have been in the procurement and supply chain industry. NICOLAS WALDEN Based in the UK, my name is Nicolas (Nick) Walden, and I am the Senior Director of Procurement Executive Advisory Membership Programmes. In my role, I work continuously with leadership teams to share our insights and research to help lead and drive change in procurement. VIJAY YALAMANCHILI I’m a partner at EY, currently acting as the Global Procurement Transformation Solution Leader. I am responsible for overseeing the services and assets that teams take to market for procurement consulting initiatives. After earning graduate degrees in law and business, the majority of my career has been focused on procurement, from acting in the role of a sourcing associate in industry to over 12 years in procurement consulting. procurementmag.com

PROCUREMENT STRATEGY

“ SIMPLY PUT, GOOD PROCUREMENT PRACTICES SHOULD BE INTUITIVE, CONSISTENT, AND TIMELY” NAME SURNAME

VIJAY YALAMANCHILI, GLOBAL PROCUREMENT TRANSFORMATION SOLUTION LEADER AT EY

of the burdens of the role, as well as be a guiding figure in the implementation of new technologies and processes.” Whilst the reasons for bringing onboard a consultant vary from company to company, Yalamanchili details three core reasons: Speed to outcome – “Organisations often look to procurement consultants to expedite outcomes, whether that includes savings and value generation, risk mitigation, or implementation of new technology,” he says. Capability gap – “Procurement consultants can frequently fill in critical skill set gaps which exist in an ongoing client transformation in addition to business-asusual activities,” adds Yalamanchili. Access to innovation – “Strong procurement consulting firms are continuously innovating, providing an avenue for organisations to gain access to pre-developed solutions, experience, and assets that fit into a client’s landscape,” comments Yalamanchili. What makes good procurement practice? Seeing through the eyes of a procurement and sourcing professional, Walden explains that good procurement practices are ultimately the ones that are proven to improve outcomes in regards to 66

May 2022

effectiveness and efficiency. “There are lots of ways to solve problems,” explains Walden. Derocher echoes these thoughts: “Clients will come to us and ask for us to ‘come in and implement the best practices’ – they simply want all the best practices. However, the challenge with that is there are multiple best practices for each element of the procurement function; you need to choose the right one for the function, the scenario, and the organisation’s in-house skill set.” Agreeing, Yalamanchili says: “Simply put, good procurement practices should be intuitive, consistent, and timely. Procurement end-users and stakeholders today are asking for a stronger enduser experience (intuitive), reliable process outcomes (consistent), and have

procurementmag.com

“A GOOD PROCUREMENT CONSULTANT NOT ONLY HELPS AN ORGANISATION TO UNDERSTAND WHAT THEY SHOULD DO FROM A STRATEGIC ROADMAP PERSPECTIVE, BUT ALSO HELP PROCUREMENT TEAMS TO DO THEIR JOBS BY OFFLOADING SOME OF THE BURDENS OF THE ROLE” MICHAEL DOMINY

VP RESEARCH ANALYST IN GARTNER’S SUPPLY CHAIN PRACTICE

May 2022

PROCUREMENT STRATEGY

expectations around service levels and performance (timely).” Navigating today’s procurement challenges, driving transparency, visibility and intelligence When it comes to transparency, visibility, and intelligence, Walden comments that organisations often state that they want to be ‘world-class’, “but they are not sure how to get there.”. He adds: “This is where a consultant can add value to an organisation, to identify strategic priorities and implement a roadmap to adopt best practices.” When it comes to visibility, in particular, a common finding among procurement functions is poor data quality, especially in relation to understanding spend. “There is still a lot of procurement activity that occurs outside of the function,” says Derocher. He adds: “You have the marketing department or HR, for example buying their own goods and services so procurement doesn’t have direct visibility into the spend data of the entire organisation.” But it doesn’t stop there. Derocher explains that “this process is a continuum of collating data, turning that into good data that can then be analysed and provide meaningful insights that an organisation can take action on.” Agreeing with Derocher, Dominy is seeing a rise in the use of procurement technologies: “Spend analytics technology for sourcing and procurement is commonly incorporated into strategic procurement transformations for consultants to help drive visibility. The use of technology today has broadened into the entire source-topay (S2P) process, tackling areas where there are any kind of bottlenecks to streamline operations.” procurementmag.com

THE

IMPORTANCE OF SUPPLIERS IN THE MEDICAL

INDUSTRY WRITTEN BY: GEORGIA WILSON PRODUCED BY: MIKE SADR

May 2022

WERFEN

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WERFEN

Don Perigny, Senior Manager, Global Procurement, Werfen discusses the significance of longstanding suppliers to navigate the complex medical device industry

oining Werfen in 2003 as Senior Manager, Global Procurement, Perigny today holds the position of Director of Strategic Procurement and Supply Chain Compliance. Loving what he does for a living and the great company that he works for, Perigny explains that he doesn’t compare himself with other professionals. “I always want to be in the middle of it, pushing buttons - that’s what makes me tick,” he says. “I think the old athlete in me is what drives me; I want to be the go-to guy, the guy out there on the pitch.” Being a part of Werfen for almost 20 years, Perigny explains that, in that time, the organisation has evolved from one that had 10 suppliers with whom they spent more than US$100,000, to having over 50 suppliers that the company spends more than US$1mn with. “That’s huge growth,” says Perigny. Over the years, Werfen has continued to add new policies and governance to ensure optimal quality in the manufacturing process: “Today, we have very strict requirements for installation qualifications (IQ), operational qualifications (OQ) and performance qualifications (PQ).,” explains Perigny. “We are in an environment where minimising risk is essential, so we continuously ensure that our processes are tight and stringent. Operational 72

May 2022

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PLAX@PLAX.IT

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WERFEN

“ BEFORE THE PANDEMIC, WE THOUGHT WE WERE BUSY; BUT, ONCE IT HIT, OUR DEFINITION OF BUSY CHANGED” DON PERIGNY

DIRECTOR, STRATEGIC PROCUREMENT & SUPPLY CHAIN COMPLIANCE, WERFEN

excellence is our mandate. Data drives us.” Procurement challenges for the medical device industry When it comes to procurement, Perigny explains that the days of pounding your fist on the desk and demanding suppliers bow to your every whim are long gone thankfully something that was never his approach, anyway. “We don’t have vendors, we have suppliers,” he says. “In baseball terms, a

vendor is the van outside selling hotdogs; we want our partners to be an extension of our company, and I think this approach has driven our success.” Like many other organisations, 2020 saw Werfen go head-to-head with its greatest challenge yet: COVID-19. “Before the pandemic, we thought we were busy; but, once it hit, our definition of busy changed,” says Perigny. “Much of this was due to a loss of the control we previously had on our procurement process. We had to compete for labour with our suppliers, and as the pandemic rolled out across the world, we faced this over and over, due to our global supplier base.” procurementmag.com

WERFEN

Title of the video

He adds: “Many companies were forced to close with little notice, and every country dealt with it slightly differently - from Europe to Mexico, to Canada, to the United States. And by 2021, we weren't only competing for labour, we were competing for virtually every part. Suppliers were constantly de-committing, and without notice.” Perigny emphasises that the strength of the relationships Werfen built with its suppliers was a key differentiator. “Many manufacturing companies in the US particularly the Northeast - were forced to close because they simply couldn’t get the materials needed to maintain their manufacturing. But we didn’t stop. It was a significant challenge, a lot of late nights, weekends, and no vacations, but we made it,” says Perigny. He adds: “Instead of focusing on ‘here’s 76

May 2022

why we can’t', we focused on ‘here’s why we can', and that positive focus was huge. But ultimately, getting ahead of those material issues is what really made us successful. We jumped on the shortage issues as soon as they surfaced.” Werfen and its suppliers When discussing suppliers at Werfen, Perigny stresses that “I always see our suppliers as a part of the Werfen family - I truly believe that we are in this together”. When it comes to finding the perfect supplier, he explains the importance of due diligence first. Are they legitimate? Are they ISO-approved? Who are their customers? What is their reputation? “Once your due diligence is completed, it is important to determine whether a potential supplier can meet the business’s

WERFEN

Don Perigny TITLE: D IRECTOR, STRATEGIC PROCUREMENT & SUPPLY CHAIN COMPLIANCE INDUSTRY: HEALTHCARE

EXECUTIVE BIO

LOCATION: USA Graduating in 1999 from the University of Massachusetts Lowell in Business Management, Don Perigny is the current Senior Manager, Global Procurement at Werfen. Perigny is a proudly married father of three, who transitioned from a career as a professional athlete, into the corporate world. Perigny describes how he found himself in the medical industry as “getting lucky.” Prior to working at Werfen, Perigny worked for two organisations KLA-Tencora and Imaging Automation as a Materials manager. Perigny describes himself as an experienced global strategic procurement professional with a demonstrated history of working in the medical device ISO/IVDR/ MDSAP regulated industry. His skills include: purchasing, supplier management, analytics, medical devices, Lean Six Sigma (LSS) Green Belt Certified and Project Management Certified.

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“ I ALWAYS SEE OUR SUPPLIERS AS A PART OF THE WERFEN FAMILY - I TRULY BELIEVE THAT WE ARE IN THIS TOGETHER” DON PERIGNY

DIRECTOR, STRATEGIC PROCUREMENT & SUPPLY CHAIN COMPLIANCE, WERFEN

quality expectation all day, every day, every year,” explains Perigny. “And, can we get that written down in a quality agreement?” He adds: “Change management is hugely important in the medical industry; even simple changes that may be insignificant to a supplier can be catastrophic to us. Any change could be a big change. So, it’s important for companies to ensure they have written agreements with their suppliers to ensure that no changes will occur without notification and approval.” Other key factors for Werfen when selecting suppliers include whether they will allow Werfen employees or a thirdparty regulatory body to conduct audits

procurementmag.com

WERFEN

WHO IS WERFEN? Founded in 1966, Werfen is focused on Specialised Diagnostics. “We develop, manufacture and distribute instruments, reagents and data management solutions for Hemostasis and Acute Care and Autoimmunity diagnostics,” says Perigny. Werfen is currently the number one company in the Hemostasis testing market, with eight production lines, and a leader in the Acute Care testing market with three production lines. Perigny explains: “Our Hemostasis lines comprise very large instruments for hospital laboratories, while our Acute Care systems are smaller, designed for use at the hospital point

of care. Last year, we shipped 7,700 instruments and almost 700,000 cartridges, a consumable for our blood gas testing systems.”Not only is Werfen a US $2bn company, but last year the company achieved 11% growth. “During the pandemic, when other companies weren’t facing supply-chain issues, failure was not an option for Werfen - we were passionate and dedicated to ensuring a continuous supply of products to our customers,” added Perigny. Werfen’s core mission: Using its passion and long-term vision, Werfen strives to develop meaningful innovations that truly enhance patient care and help to create healthier societies worldwide.

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at their locations, as well as their longterm partnership potential. “I don’t like switching suppliers; validation of new suppliers requires significant time and is a costly process. So we look for long-term partners,” says Perigny. Werfen’s ‘newest’ suppliers have been working with the company for five years, while its ‘oldest’ suppliers have worked

with Werfen for 40 years. “On average our suppliers have a 24-year business relationship with us,” says Perigny. “They have been with us for a long time, they all know us well and they know how to work with us.” Every year, Werfen conducts a group supplier meeting either on location in Bedford or in recent years, virtually. “This meeting gives us the opportunity to update procurementmag.com

WERFEN

our suppliers on our current operations, as well as receive updates from them on new improvements and capabilities. We discuss our five-year plan and make our suppliers a part of it,” says Perigny. He adds: “On top of that, we have a supplier portal where they can see their real-time delivery performance and quality performance, and access non-conforming reports. Additionally, we have a complete supplier engineering team available to answer suppliers’ calls, ensure clear communication, and provide support. It’s a teamwork approach. There’s a lot of work that goes into it, but the results speak for themselves.”

May 2022

procurementmag.com

Centralising

procurement with technology Johnson & Johnson’s Global Chief Procurement Officer (CPO), Leonardo DeCandia, reflects on the company’s centralisation of procurement in its operations WRITTEN BY: GEORGIA WILSON

rocurement in ‘the era of digitalisation and massive inflows of data’ stands on the precipice of a digital revolution. The greatest opportunities to utilise the insights generated from such digital solutions to advance strategic contributions are happening right now. The Global Chief Procurement Officer (CPO) of Johnson & Johnson, Leonardo (Len) DeCandia, believes digitalisation is an opportunity for procurement to contribute beyond its traditional scope of supplier-led innovation, customer-centric services, and reputation enhancement. Decentralised procurement becomes an enterprise function Historically, Johnson & Johnson has been comprised of three core businesses:

May 2022

consumer health; pharmaceuticals - its largest business; and medical devices. Operating for over 130 years, its business functions - such as procurement - had a history of being decentralised. But that is all changing. DeCandia explains: “About six years ago, we recognised that more strategic value could come from procurement if it was better managed as an enterprise function. We looked at our governance responsibilities around the world and how we could conduct these in a more harmonised, collective way. Johnson & Johnson was one of the early adopters of strategic sourcing.”

DIGITAL PROCUREMENT

“Through this pandemic, we have seen supplier relationship management elevated in importance” LEONARDO DECANDIA GLOBAL CPO, JOHNSON & JOHNSON

“ TealBook has been proven to make an even bigger impact on our customers’ supplier diversity goals, increasing targets by as much as 100%, representing

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DIGITAL PROCUREMENT

“ About six years ago, we recognised that more strategic value could come from procurement if it was better managed as an enterprise function” LEONARDO DECANDIA GLOBAL CPO, JOHNSON & JOHNSON

When DeCandia took on the role of Global CPO in 2016, he was brought in to lead the brand’s procurement transformation. “I was tasked with redefining the function,” he says. “I looked at how the organisation could introduce digital technologies, better processes and practices into its operations, as well as how it could bring in more advanced skills. In 2016, we began the transition from over 130 years of decentralisation into a best-in-class procurement function for the entire enterprise.”

Three critical pointers on creating a central digital ecosystem When it comes to digital transformation, DeCandia’s thoughts are simple and clear: “It always comes down to people, processes, and technology.” Tasked with centralising procurement, DeCandia and his team set out to take the procurement ecosystem of around 200 entities across the three businesses and transform them into a single, strategic enterprise function. DeCandia says: “Each of those systems had their own unique processes, so the starting point for our transformation was to determine what the value proposition would be, as well as introduce meaningful governance for our broader, long-term objectives. procurementmag.com

“Technology is a key enabler, so we deployed it across our procurement function, to integrate and harmonise our global spend.” From a process standpoint, the company introduced new ways of engaging with its business partners to make itself easier to work with. “Decentralisation and complexity created a lot of frustration in the supplier community,” says DeCandia. “It was difficult for them to know who to go to and, more importantly, if they had 90

May 2022

success in one part of Johnson & Johnson, it helped them understand how that success could be translated to other areas of the brand. Before, we were overly complex to do business with.” Reworking its supplier-relationship process allowed the company to take innovation, value, and insights, and scale them up with speed. “This provides more value for our customers and patients around the world, and also makes it easier for suppliers

DIGITAL PROCUREMENT

Welcome to a World of Well | Johnson & Johnson

Leonardo (Len) DeCandia

to connect with the right people in the business quickly and at scale,” says DeCandia. By digitalising and harmonising its processes, Johnson & Johnson not only benefits from a centralised, more efficient and more valuable procurement function, but its people also benefit. With the help of a central digital platform, procurement professionals can benefit from the automation of low value and timeconsuming tasks.

Leonardo (Len) DeCandia is Global Chief Procurement Officer at Johnson & Johnson, a US$92bn maker of pharmaceuticals, medical devices and consumer health products with 140,000 employees around the world. Len rejoined Johnson & Johnson in 2014 after a previous tenure from 1982 to 1996. He assumed his current role in 2016. As Chief Procurement Officer, he is responsible for all global procurement policies, including supplier base strategy development, practices such as relationship management and functional headcount. He also serves as a member of Johnson & Johnson’s enterprise governance and corporate governance councils. procurementmag.com

DIGITAL PROCUREMENT

“Automation freed-up time for our people to focus on more strategic and valueadded tasks, which helped to further our mission to create a centralised, best-in-class procurement function,” states DeCandia. He adds: “We created a matrix that focused on what we believe to be the three critical areas of excellence: category management, supplier relationship management, and business engagement. This approach has allowed our procurement professionals to become better businesspeople.” Maintaining resilience during the pandemic healthcare crisis During the height of the COVID-19 pandemic “failure was not an option”, according to DeCandia. Johnson & Johnson needed to keep its suppliers and sites operational due to the life-saving nature of its devices and pharmaceuticals. But how do you keep a business up and running when it has over 50,000 suppliers and a workforce of over 100,000? DeCandia explains: “It has certainly been an interesting journey, to say the least. We were fortunate to have already started our transformation ahead of the pandemic, so we were poised for full deployment. Our centralised procurement system was essential to our resilience. “We had ‘future-ready procurement’. We were fortunate to have the foresight to digitally enable our operations and were agile enough to scale up around the world.” Being the largest healthcare company in the world, and faced with the challenge of navigating the first global pandemic in more than 100 years, DeCandia explains that having a well-defined and harmonised approach to supplier relationships was “an incredible enabler of resiliency”. 92

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He adds: “Through this pandemic, we have seen supplier relationship management elevated in importance. We started to see procurement as having the ability to elevate supplier practices across the entire brand. “Through digital enablement, we wanted to go beyond digital literacy to create procurement and sourcing literacy. Prepandemic, procurement’s role was to achieve the best costs. Today, it is much more sophisticated. It is about getting the best value, driving resilience, and reframing the critical role of suppliers.”

procurementmag.com

WRITTEN BY: SEAN ASHCROFT PRODUCED BY: TOM LIVERMORE

May 2022

SNAM S.P.A

SNAM IS POWERING ITS WAY TO A

SUSTAINABLE FUTURE

procurementmag.com

SNAM S.P.A

Snam is one of Europe’s leading energy infrastructure providers and is undergoing a profound transformation that will see it able to deliver sustainable sources of energy.

he move to net zero carbon emissions is a focus for all businesses right now, but for giant energy companies such as Snam, sustainability is about far more than greening-up internal working practices and encouraging staff to reduce their carbon footprint. Snam is a world-leading energy infrastructure operator, and one of Italy's largest companies. Sustainability for Snam is about transitioning its entire operation from fossil-based gas to sustainable sources of energy. This is why Snam is in the midst of a business transformation programme that is seeing it deploy data-driven Industry 4.0 technologies across its supply chain. Along the way, it has not only transformed its processes but also its mindset, from one of ‘cost’ to one of ‘value’, especially when it comes to efficiency and sustainability.

May 2022

Example of an image caption procurementmag.com

SNAM S.P.A

Snam is powering its way to a sustainable future

Leading the Company’s digital transformation is Claudio Farina, Executive VP of Digital Transformation & Technology (DT&T). Farina was once with Boston Consulting Group, where energy was one of the sectors on which he focused, as well as spending 9 years with Vodafone. He says innovation and digitalisation has been a “leitmotif” throughout his career. Snam’s digital transformation is being built on artificial intelligence (AI) and an Industrial Internet of Things (IIoT) infrastructure, comprising networked sensors, instruments, and devices – all of which feed data into 98

May 2022

“ The speed of growth of Industry 4.0 tech is exponential” CLAUDIO FARINA

EXECUTIVE VP OF DIGITAL TRANSFORMATION & TECHNOLOGY, SNAM S.P.A

hybrid cloud-based solutions, to give Snam end-to-end visibility of its supply chain. “Our role in DT&T is as an enabler for transformation and digitalisation,” explains Farina. “It’s our job to make core processes more effective, efficient, flexible and fluid.”

SNAM S.P.A

In terms of technology-driven changes at Snam, he says the key has been de-bottlenecking the value chain of data, from harvesting it in the field, to gaining insights from it and then storing it. “The speed of growth of Industry 4.0 technologies like AI and digital twins is exponential,” he says. “Our ability to process and store data is incomparable when compared with early 2000.” Data is increasingly supporting the way Snam manages its assets,” Farina continues. “It is also making our assets intelligent, so that they are increasingly capable of self-diagnostics and self-regulation.”

Thanks to digitlisation, assets in the Snam energy supply chain can even suggest courses of action, based on available data. “Although people have the final decision,” Farina says, “data is helping us to preserve operational integrity and to optimise emissions and consumption”. It is also supporting Snam in its transition away from fossil-based gas to sustainable energy sources, such as biomethane and hydrogen. Farina adds: “It’s an ambitious multiyear programme, and it needs deep and broad footings to succeed. The ongoing transformation processes comprise 55 staffed projects and planned investment of €500mn.” He says that although data-harvesting technology is what defines the transformation, the most important factor will always be Snam’s people. “Paradoxically, thanks to digitalisation and automation, our people are even more at the centre of everything we do. I think that ultimately this is what will truly make the difference.” He continues: “Supported by technologies and data, our supply chain colleagues will be able to strengthen the entire value chain, because they’ll be better placed to manage tenders, offers and negotiations with our partners.” Specific ways in which technology is helping Snam streamline and automate its ways of working include a solution built on robotic process automation (RPA) - also known as ‘software robotics’. This helps it generate shorter vendor lists on tenders, but without the endless hours of clerical spadework. The RPA solution applies different criteria, such as geo-referencing, analysis of relevant certifications and also of turnover. This cuts down workload in this area from days to minutes. procurementmag.com

REPLY HELPS SNAM TRANSFORM THE ENERGY AND UTILITY SECTOR ELENA PREVITERA, SENIOR PARTNER AT REPLY, DETAILS THE COMPANY’S SNAM PARTNERSHIP AND HOW IT IS HELPING TO TRANSFORM THE ENERGY AND UTILITY SECTOR Globally, the energy sector is undergoing a profound transformation. The way that energy is being produced, distributed and sold is transitioning to complete decarbonisation to achieve climate neutrality by 2050. Elena Previtera, Senior Partner at Reply, explains that in order to meet these targets, “an unprecedented acceleration in public and private investments, aimed at supporting research and industrial-scale implementation of new technologies for the generation, distribution and efficient use of energy” is needed.

assets that best represent Snam’s attention to sustainability” says Previtera. TRADITIONAL BUSINESS: “From the introduction of drones and artificial intelligence to the design of cloud and edge computing solutions and the development of process automation solutions, Reply is assisting Snam’s traditional business lines and operational departments,” adds Previtera. CYBERSECURITY: “Reply supports Snam at all stages, from technological initiatives to organisational projects. Specifically, the design and implementation of a CyberSOC for continuous incident prevention, detection and response, as well as other solutions to prevent threats,” explains Previtera.

REPLY’S ROLE IN THE INDUSTRY TRANSFORMATION Reply combines its in-depth knowledge of the energy and utility market with its unique processes and distinctive ability to design, implement and manage application and technology solutions, in order to support the industry in its transformation. REPLY AND SNAM’S COLLABORATION Over the years, Reply has initiated and consolidated important collaborations with Snam, both in support of traditional business lines and in order to meet the needs of new businesses supporting the energy transition. ENERGY EFFICIENCY: “The platform dedicated to monitoring energy consumption and performance developed with Renovit, the group’s company operating in the energy transition business, is definitely one of the

Reflecting on Reply’s partnership with Snam, Previtera says: “It is fundamental for a company like Snam to be able to count on partners to guide the adoption of new digital solutions on a large scale and from an international perspective. “Reply’s value is the result of its strong process and technological specialisation and its capacity to create solutions oriented to meet the needs not only of the specific business but also to consider sustainability aspects.”

SNAM S.P.A

“ Despite Covid we succeeded in improving – organisationally and in terms of technological development” LORIS SPALTINI

EVP CORPORATE SERVICES, SNAM S.P.A

LORIS SPALTINI TITLE: EVP CORPORATE SERVICES LOCATION: ITALY Loris Spaltini has been Executive Vice President Corporate Services of Snam since November 2019. Prior to this, in May 2018, he joined Snam as Senior Vice President Supply Chain. With a degree in electrical engineering at Politecnico di Torino and a master’s degree in business management, Loris began his career in consulting, and then continued with positions in the automotive sector: CEO of Fiat Group Purchasing (JV between General Motors and Fiat), Chief of Purchasing worldwide for IVECO and CNH, General Manager of MV Augusta. Loris worked also in the steel sector as Purchasing and Supply Chain Director of ILVA S.p.A. Main experiences are related to business management, purchasing and industrial management, in international and highly complex contexts, in Italy, in Europe and abroad in North America, Brazil, China, India, Russia and North Africa.

EXECUTIVE BIO

SNAM S.P.A

CLAUDIO FARINA

GUIDO AMENDOLA

TITLE: EVP DIGITAL TRANSFORMATION & TECHNOLOGY

TITLE: SVP CORPORATE & GROUP SUPPLY CHAIN

LOCATION: ITALY

Claudio Farina has been with Snam since 2017, and is Executive Vice President Digital Transformation & Technology leading technological roadmap, ICT and digital transformation. Previously, he was Head of CEO Office. Before Snam, he spent 9 years at Vodafone, as Head of Financial Planning & Analysis and Business Intelligence and Head of Strategy, leading spectrum auctions, reduction of digital divide, fibre strategy. From 2000 to 2008, he was Principal in BCG, leading 25 projects. In 1999 he was Researcher on technological innovation, at the German Institute of Economic Research. Passionate about innovation and start-ups, he is also an alumnus of Aspen Institute.

Guido Amendola has been with Snam since December 2018 and is Senior Vice President Corporate & Group Supply Chain, leading Procurement and Material Management. Previously, he held the role of Head Corporate & Group Procurement, managing Indirect and Operational Services spending of Snam Group. Before Snam, he spent 6 years in BNP Paribas, as Group CPO Italy, responsible for leading a Procurement Shared Services Hub. Prior to this, he was Supply Chain Director at PosteMobile and Head of Project Procurement at Siemens IT Solutions & Services. In 2010 he earned a Master's in Procurement at Supply Chain Management Institute in Munich adding this expertise to a post-graduate MBA and a degree in Economics.

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SNAM S.P.A

“ The ongoing transformation process comprises 55 staffed projects and planned investment of €500m” CLAUDIO FARINA

EXECUTIVE VP OF DIGITAL TRANSFORMATION & TECHNOLOGY, SNAM S.P.A

Snam has also rolled out an AI admin solution that automates the checking of vendor documents, including Supplier contracts. This saves huge amounts of time for staff in Snam’s Sourcing, Legal and Risk Management Teams. Another important figure in Snam’s transformation is Guido Amendola, Senior VP Corporate & Group Supply Chain. Amendola has broad-based procurement experience, having been Group CPO

at BNP Paribas bank in Italy and Supply Chain Director at telecoms company, PosteMobile. On sustainability, Amendola says that, in procurement in general, there needs to be a change from the old ways of working to “a new, more entrepreneurial approach where innovation becomes the norm”. This is a journey that starts on a consistent people’s consciousness about the new role of supply chain departments. To do this, he says, Snam launched the Supply Chain Academy, a programme that provides buyers, senior managers and directors with business-led strategic coaching around most important trends and topics in supply chain. And when it comes to sustainability, Amendola is passionate. He says that procurementmag.com

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EVOLVING GAS TRANSPORTATION THROUGH AI & ADVANCED ANALYTICS

SNAM AND ENGINEERING CO - DESIGN THE FUTURE OF THE GAS SECTOR BY TRANSFORMING METER - READING PROCESSES

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SNAM S.P.A

Snam’s energy transformation model

“ It’s important that Stakeholders continue to be engaged and involved in every step of the way” GUIDO AMENDOLA

SENIOR VP OF CORPORATE & GROUP SUPPLY CHAIN, SNAM S.P.A

“helping drive the company’s net zero carbon programme has been exciting” – as has supporting Snam’s ongoing transition from fossil-based gas to sustainable energy sources. He believes that an important part of Snam’s sustainability drive is that stakeholders “continue to be engaged and involved every step of the way”. This is why Snam has launched a Change Management Initiative in its supply chain with an incubator team called ProcuLab which, says Amendola, “is an ideas booster composed of people from across our supply chain, who

The Snam Group is one of the world's leading energy infrastructure operators and is one of Italy's largest companies. It guarantees the security of the Country’s gas supply and is one of Europe’s key enablers in the energy transition movement. Snam operates in Austria, France, Greece, Italy and the UK, and has a presence also in Asia, the Middle East and the US. The Group has the largest natural gas transportation network in Europe, with over 41,000 km, as well as 3.5% of the world’s gas storage capacity. In recent years, Snam has begun to play a major role as an enabler of the energy transition, in line with EU net zero targets. Its 8.1bn euro strategic plan is expected to be complete by 2025, and it says it is on course to achieve carbon neutrality by 2040. The backbone of the energy transformation is to make its supply infrastructure ‘hydrogen ready’. It is also planning to support energy transition businesses such as biomethane from organic urban waste and agriculture and energy efficiency for buildings. The Group's business model is based on sustainable growth, transparency and the promotion of talent and diversity.

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SNAM S.P.A

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Snam on course for net zero by 2040 Snam has set itself the goal of achieving carbon neutrality by 2040, with an intermediate target of reducing direct and indirect CO2 equivalent emissions (Scope 1 and Scope 2) of 50% by 2030. The Group is committed to making its network ready to transport fully decarbonised gas (biomethane and hydrogen) by 2050. In its 2021-2025 strategic plan, Snam foresees investments of 8.1bn euros for developing assets that meet hydrogen-ready standards, as well as net zero investments and speeding up of energy transition initiatives.

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have a balanced mix of gender, skills and experience”. He adds: “In ProcuLab there is no hierarchy, no rules. All that matters is valuable ideas. As well as generating ideas that continue to help us, I think it has also helped with morale, because it brought our people closer together when remote working during the pandemic”. Amendola also feels strongly that having the right mindset will continue to be the bedrock upon which the process of change is built. “Our culture is to challenge ourselves daily, so we can improve profitability and operating efficiency,” he says. A third Snam executive who has been important to its ongoing reinvention is Loris Spaltini, Executive VP of Corporate Services, who reports to Snam’s CEO. Spaltini joined the

company in 2018 and has prior experience in the steel and automotive sectors. Although the transition process has gone well, Spaltini admits it has been hugely challenging at times – not least during the height of the pandemic, when Spaltini and his team “had to guarantee supply continuity by supporting critical suppliers, as well as reinforcing procedures and supplierverification compliance.” They also had to ensure the security of Snam assets, including not only gas pipelines and plants but also the software applications that allow it to control the Italian gas network. “Our cyber team did an amazing job,” Spaltini says. As well as keeping operational matters on course at the height of Covid, Spaltini’s team were also tasked with ensuring its own people were taken care of. He said: “This meant not only developing internal health protocols to safeguard our workers’ safety but also ensuring they were getting the psychological support they needed.”

As well as providing personal support and medical care for its own people, Snam also took on responsibility for helping the wider Italian public, by donating much-needed medical equipment and supplies to healthcare providers across Italy. Now, as the pandemic is beginning to ease its grip, Snam’s supply chain is in a good place, says Spaltini. “Despite Covid, we’ve succeeded in continually improving, in terms of organisational and technological development, as well as in terms of the growth of our people and our attention to sustainability issues. In Europe, we are a fundamental player in the energy transition movement.” “Sustainability is no longer seen as an added benefit,” Spaltini adds. “It is a core operational and corporate goal. We have moved away from a ‘cost’ mindset, to a ‘value’ mindset – not just on sustainability, but in everything we do.”

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TECHNOLOGY

WHAT IS DRIVING DIGITALISATION IN S2P AND P2P? SAP’s Etosha Thurman and Ivalua’s Alex Saric speak to Procurement magazine to outline the driving force behind S2P and P2P digitalisation WRITTEN BY: GEORGIA WILSON

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n order to understand the drivers and benefits of digitising source-to-pay (S2P) and procure-to-pay (P2P), we must first understand the difference between the two. Etosha Thurman, Chief Marketing and Solutions Officer, Intelligent Spend and Business Network at SAP, explains this well: “In my mind, source-to-pay (S2P) encompasses procure-to-pay (P2P), and yet they really focus on two different things. S2P focuses on the strategic procurement side of things. It starts with the process of finding a source of supply in a cost-competitive manner, navigating the finding of suppliers, negotiating rates, signing contracts, fulfilling contracts, and payments.

“ Since the start of March 2022, we have already had 852 suppliers raise their hand to support Ukraine.” ETOSHA THURMAN

CHIEF MARKETING AND SOLUTIONS OFFICER, INTELLIGENT SPEND AND BUSINESS NETWORK AT SAP procurementmag.com

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TECHNOLOGY

“ We have SAP Ariba Discovery, a solution that allows buyers to identify and match with suppliers from around the world that meet their needs” ETOSHA THURMAN

CHIEF MARKETING AND SOLUTIONS OFFICER, INTELLIGENT SPEND AND BUSINESS NETWORK AT SAP

“The difference in P2P is the introduction of compliance and efficiency when executing strategic decisions. This side of the process is really about building excellence across an organisation, developing a best-inclass operational procurement.”

Where to start when implementing a digital solution? Alex Saric, CMO, Ivalua: The optimal starting point when planning a S2P digital transformation varies from one organisation to another, depending on their priorities, team structure and other factors. What’s important is to start where you can deliver tangible benefits to maintain the momentum and to plan for the broader journey. When projects hit obstacles, it is often due to having only considered their immediate requirements when selecting an S2P platform and, as a result, making a selection that can’t support their full journey. The common obstacles differ at each step so you must plan for them from their start.

So where is the value for procurement functions in implementing an S2P or P2P solution? Put simply, “S2P and P2P are much more than a series of process”, according to Alex Saric, CMO at Ivalua. “They can add tremendous value to organisations.” Streamlining processes through an intelligent S2P or P2P solution can improve efficiencies, create more effective negotiations, reduce costs, and enhance both the purchasing experience and employee satisfaction. Saric emphasises that the value doesn’t stop there. “There is also tremendous strategic value in how organisations manage their spend and suppliers ‒ and S2P can deliver a competitive advantage. Visibility into and collaboration with suppliers can reduce risk, drive product innovations, and increase sustainability. procurementmag.com

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What is stunting the move to digital solutions? Alex Saric, CMO, Ivalua: “A few factors are hindering digital transformation. Upfront, some organisations still struggle to obtain the executive support and budget required. Organisations that gain this initial support often then face challenges with adoption, by both users and suppliers. It is essential to engage the business users when planning the transformation and select technology that provides the consistent, modern experience people expect from technology today. At the same time, solutions must make it simple for suppliers.” Once solutions are deployed, the key challenge lies with data. Too often, organisations struggle with poorquality, dispersed data that is spread across multiple departments. While S2P technology can address these issues, too many solutions lack the right foundation, having been built via acquisition or silos. This limits access to, and trust in, information and prevents the 360 degree visibility required to improve

“ The need for greater visibility across the supply chain has been the dominant driver of digitalisation, particularly since the pandemic” ALEX SARIC

CMO AT IVALUA

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S2P technology can help unlock that value in three primary ways: improved transparency; greater scalability and effective collaboration; and organisational agility.” What is driving the push for digitalisation? In today’s modern organisations, the role procurement plays in restoring growth and ensuring resilience postCOVID is gaining vital recognition. As such, the investment in advanced technologies to streamline a traditionally manual process is evident to see. “The need for greater visibility across the supply chain has been the dominant

TECHNOLOGY

driver of digitalisation, particularly since the pandemic,” says Saric, adding: “Such technologies provide the transparency required to better assess risk of disruptions and mitigate the effects when they occur. Adding to Saric’s comments, Thurman explains that, with the increase in regulations and governance, “digitising the S2P and P2P processes can help organisations to strengthen their compliance, supplier visibility and collaboration. Digitalisation allows organising to drive agility across their supply chains and mitigate supplier associated risks with validation solutions”. She adds: “The case for digitalisation has been there for a long time but, particularly in

the last two years, has ramped up the need to remove manual processes and drive both greater visibility and simplicity ‒ benefits that come from digitalisation.” Advanced technologies can also help organisations stay ahead of the curve. “AI and automation enables organisations to gain added visibility across the supply chain, which in turn helps them to spot new opportunities, manage supplier risk, and make more informed decisions,” says Saric. He adds: “Organisations are increasingly seeking innovation in procurement as digitalisation brings a huge competitive advantage. Delaying your digital transformation could risk missing out on procurementmag.com

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“ Delaying your digital transformation could risk missing out on critical opportunities to innovate, losing out to more forwardthinking competitors, and being unprepared for future disruption” ALEX SARIC

CMO AT IVALUA

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critical opportunities to innovate, losing out to more forward-thinking competitors, and being unprepared for future disruption.” How technology can help to navigate geopolitical disruption With supply chains becoming longer and more global, organisations could be at risk of exposure to geopolitical disruptions as well as other risks, and Saric believes that “often, organisations are unaware of their exposure”. He adds: “Even if a business does not have direct suppliers in these regions, it’s very possible that their suppliers work with vendors there, creating a risk of disruption. That’s why it is so essential to have 360 degree visibility into suppliers, including the sub-tier.” Thurman explains that this is where an organisation can benefit from a digital solution: “As an organisation, we have always been focused on taking steps to provide our customers with solutions that help them to find supply.” She adds: “Supply chains have been severely disrupted at the moment; they are fragile. But one thing we are committed to as an organisation is creating a solution that allows our customers to find suppliers that may not be within their current community. We have SAP Ariba Discovery, a solution that allows buyers to identify and match with suppliers from around the world that meet their needs. “Specifically, in terms of the current crisis in Ukraine, we have modified our solution to give suppliers the ability to raise their hand if they are able to help with humanitarian aid. Since the start of March 2022, we have already had 852 suppliers raise their hand to support Ukraine.”

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WRITTEN BY: GEORGIA WILSON PRODUCED BY: CRAIG KILLINGBACK

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Scottish Government’s Lynn Wisener, Deputy Director of eCommerce and Procurement Best Practice, discusses the government’s use of eCommerce in public procurement

s Deputy Director of eCommerce and Procurement Best Practice, Lynn Wisener, has been a part of the Scottish Government, and the Scottish Procurement and Property Directorate, since 1999. “Like most graduates, I just applied for every job going,” says Wisener, “and 23 years ago, the Scottish Government was recruiting for procurement graduates and I was appointed as a Procurement Officer.” She adds: “I have held quite a few different procurement positions during the last 23 years from operational procurement, to establishing one of the procurement Centres of Expertise, to the position that I hold now as Deputy Director of eCommerce and Procurement Best Practice.” 20 years of the eCommerce & Procurement Best Practice Shared Service In the last 20 years, the Scottish Government, in collaboration with public sector bodies across Scotland, has been deploying its national eCommerce and Procurement Best Practice Shared Service to support, embed and underpin public procurement processes and procedures. When she first joined the Scottish Procurement and Property Directorate there were pockets of collaboration across the public sector but, as Wisener explains, “there was recognition that there was duplication 120

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Scottish Government harnessing eCommerce in Procurement

“ We’ve got such a lot of data which has a powerful story to tell” LYNN WISENER,

DEPUTY DIRECTOR OF ECOMMERCE AND PROCUREMENT BEST PRACTICE, SCOTTISH GOVERNMENT

of effort and fragmentation of approach in how public bodies were engaging with the supplier base, how requirements were being tendered, and how contracts were being managed.” “But we didn’t have a full picture,” says Wisener. “We didn’t have the data to support it, and it was a very laborious process to build an accurate picture of what was being bought, from whom and for how much, identify opportunities for future collaboration, and understand risk 122

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profiles across different commodities. So we created an eProcurement Strategy and put in place the national eCommerce & Procurement Best Practice Shared Service to digitally transform procurement, enable the gathering of vital supply chain data and intelligence and make it easier for suppliers to do business with the public sector.” She adds: “In the last 20 years, we have gone from simply offering e-tendering (PCS-Tender) and purchase-to-pay (PECOS) capability, to providing a contract advertising

LYNN WISENER TITLE: D EPUTY DIRECTOR OF ECOMMERCE AND PROCUREMENT BEST PRACTICE INDUSTRY: ECOMMERCE LOCATION: SCOTLAND

portal (Public Contracts Scotland - PCS), spend analytics capability (the Procurement Information Hub), e-invoicing (PECOS), and enhanced catalogue management functionality (PECOS). We have also embedded Open Contracting and Open Government commitments via PCS where there is now a separate section that allows anyone to download contract opportunities and awards in a variety of different formats, and we are continuing to enhance procurement transparency through the

EXECUTIVE BIO

Lynn joined the Scottish Government over 20 years ago as a procurement graduate and has held a number of senior procurement and commercial roles within Scottish Procurement & Property Directorate where she is currently the interim Deputy Director for eCommerce & Procurement Best Practice. She was part of the management team that established Advanced Procurement for Universities & Colleges (APUC) the centre of procurement expertise for higher and further education in Scotland. Lynn is a Member of the Chartered Institute of Procurement and Supply (MCIPS) and has been accredited at the UK Government Commercial Organisation assessment centre.

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The Scottish Government partners with ELCOM for its Purchase to Pay (P2P) services Grant Smith, Chief Operating Officer, discusses the Scottish Government’s partnership with ELCOM for its P2P services as well as their future plans. Founded in 1998, ELCOM is a provider of supply chain solutions. The company has offices across the UK and in the US. ELCOM’s journey began as a hardware reseller, developing its backoffice systems with MIT in the US. That software was the beginning of ELCOM’s PECOS solution. After selling the hardware business in the early 2000s, ELCOM centred its focus around its PECOS P2P solution. Since joining the company in 2019, Grant Smith, Chief Operating Officer and Project Director for the PECOS P2P service for the Scottish Government had significant input into the growth of ELCOM’s product offering into a modular end-to-end supply chain solution — which is often referred to as a spend management software-as-a-service (SaaS) solution. “The modular aspect of the solution means that the software can be deployed a module at a time, or as an entire end-to-end solution,” says Smith.

ELCOM and its partnership with the Scottish Government Working with the Scottish Government, ELCOM provides the software, and in conjunction with Leidos, the supporting services for the PECOS P2P shared service for the Scottish Public sector. Smith comments: “The Scottish Government’s eCommerce shared service is internationally regarded as the world’s most successful e-procurement service, and PECOS is a core component of that service. PECOS covers the whole process from requisition through to purchase order, receipting, invoice matching, delivering catalogue content management and electronic trading.” ELCOM and its future with the Scottish Government Over the last 20 years, ELCOM has developed a strategic partnership with the Scottish Government. “This partnership has resulted in innovative solutions that deliver value for the Scottish public sector, the Scottish taxpayer, and local Scottish communities.” says Smith. “We don’t stand still though. We plan to work on further innovations in the form of data analytics, supplier services, supply chain funding, and the practical application of artificial intelligence that we’re certain will deliver even more value for the Scottish Government and the wider Scottish economy.”

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“ We have over 200 public bodies using our Shared Service, and we have thousands of suppliers interacting each day with these public bodies” LYNN WISENER,

DEPUTY DIRECTOR OF ECOMMERCE AND PROCUREMENT BEST PRACTICE, SCOTTISH GOVERNMENT

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THE PURPOSE OF THE SCOTTISH GOVERNMENT

DID YOU KNOW...

The purpose of the Scottish Government is to focus on creating a more successful country with opportunities for all of Scotland to flourish through increased wellbeing, and sustainable and inclusive economic growth.

Scottish Government’s Open Government Action Plan.. We are also improving our data and reporting capabilities through the delivery of a management information (MI) platform to provide enhanced business intelligence on procurement activity across Scotland.” That’s not all, though: the Shared Service also provides procurement best-practice guidance for buyers and suppliers through the Procurement Journey and the Supplier Journey, which provide step-by-step support and advice on how to procure through the public regime. Wisener and her team also work closely with the Supplier

The National Performance Framework sets an overall purpose and vision for Scotland. It highlights the broad national outcomes that support the purpose and provides measures on how well Scotland is progressing towards them.

Development Programme, which provides free training to Scottish SME suppliers and third sector organisations on how to win public contracts and grow their businesses. And it’s not just the Scottish Government utilising these capabilities, as Wisener explains: “Our Shared Service is available to the entire public sector - health boards, local authorities, central government bodies, universities, colleges and third sector bodies. So we’ve got a huge amount of procurement activity operating across our entire service.” It’s safe to say, this is no typical procurement solution. “We have over 200 public bodies using our Shared Service,” says Wisener. “And we have thousands of suppliers interacting each day with these public bodies.” Over the course of last year, the Service published over 11,000 contract opportunities, issued over 2,000 invitations procurementmag.com

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Resilient operations and logistics from glaciers to galaxies. It takes Leidos.

Digitally transforming supply chains

The success of supply chains has become a key concern for industry. The COVID-19 pandemic has highlighted the criticality of resilient logistics and supply chain management, with speed and efficiency being key in delivering urgent provisions worldwide. For much of the last decade, efficient supply chains were seen as key in running profitable global businesses. Inefficient supply chain systems cause disruption to operations, to customers and profitability and many are starting to creak under the environmental factors not limited to COVID-19, staffing, and global delivery. To be more resilient supply chains require digital transformation, designed to be agile to respond to the unexpected. Leidos has repeatedly demonstrated its ability to transform logistics through digital transformation and an ability to deliver anywhere in the world and beyond. Examples include: • NASA Cargo Mission Contract – planning, processing and packing critical cargo to the International Space Station. • National Science Foundation’s Antarctic Support Program – running the world’s longest supply chain to Antarctica, covering 20,000 miles. • Scottish Government’s Purchase to Pay Shared Service – Facilitating over 60% of Scottish public sector purchasing. Processing approximately 230,000 monthly supplier orders, worth over £5B per annum. • The UK MOD Logistics Services Transformation Programme – A £6.7B, 13-year The success of supply chains has become the a keyDefence concern for industry. The COVID-19 has contract to digitally transform supply chain, building pandemic cutting-edge highlighted the criticality of resilient logistics and supply chain management, with speed and efficiency technology to manage 200+ supply contracts and deliver to over 600 locations

Digitally transforming supply chains

being key in delivering urgent provisions worldwide. To be more resilient supply chains require digital transformation, designed to be agile to respond to the unexpected.

Leidos has repeatedly demonstrated its ability to transform logistics through digital transformation and an ability to deliver anywhere in the world and beyond. Examples include: ►

Scottish Government’s Purchase to Pay Shared Service – Supporting 101,000 registered users and processing over 2 million orders with combined value of circa £7.6Bn.

►

The UK Ministry of Defence Logistics Services Transformation Programme – A £6.7Bn, 13-year contract to digitally transform the Defence supply chain. The programme has assisted in national crises, such as the Ministry of Defence support of the NHS supply chain during the COVID-19 pandemic.

►

National Science Foundation’s Antarctic Support Program – Running the world’s longest supply chain to Antarctica, covering 20,000 miles.

►

NASA Cargo Mission Contract – Planning, processing and packing critical cargo to the International Space Station.

During times of adversity, you need resilience, collaboration and a partner who can deliver digital transformation. You need Leidos.

FIND OUT MORE

ENSURING DATA QUALITY The Scottish Procurement Information Hub provides the national analysis of spend by over 100 public sector organisations in Scotland. This has been a key enabler for the public sector reform programme, which has facilitated collaborative procurement between public bodies, maximised efficiency and delivered savings. DXC’s dedicated team of procurement data specialists has deep domain knowledge of the complexities of public sector procurement data. The team has built technology solutions, reference datasets and automated data cleansing and enrichment processes that combine and enrich data from over 250 source systems. Using an optimum balance of human machine teaming, the high-quality data analysis delivers answers to key business questions that drive business outcomes. This trusted data foundation, which is accessed through a purpose-built user interface, is available for over 500 procurement professionals to self-serve. A spokesperson from the Scottish Procurement MI and Reporting Branch said, “It is essential to have access to

high-quality data because it is used to provide accurate public spending information to Scotland’s regulatory bodies, politicians and the media, and to fulfill freedom of information requests. Through collaborative working and DXC’s efforts to ensure data quality, the time and effort required for the Scottish Government to respond to information requests has been reduced and transparency of Scottish public sector procurement spend has increased”. “It is important that public bodies in Scotland have confidence in the data. The data has been thoroughly analysed and classified to ensure that the content is of the highest quality, and that makes a big difference,” they said. “Having easy access to a national view of spend, across multiple years, that drills down to an individual buying organisation level, provides us with huge benefits and is something the Scottish Government is very proud of. International governments look to Scotland as an exemplar in this regard.”

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SCOTTISH GOVERNMENT

LYNN WISENER,

DEPUTY DIRECTOR OF ECOMMERCE AND PROCUREMENT BEST PRACTICE, SCOTTISH GOVERNMENT

to tender, processed over 2 million purchase orders with a combined value of approx. £7.6bn, validated over 323k e-invoices and analysed more than £13.3bn of public procurement spend. “As you can see, the Shared Service manages a significant amount of procurement activity, supports a huge number of procurement professionals and suppliers, makes processes easier, streamlined and efficient, all of which maximises the impact of procurement to deliver a greener and fairer economy,” says Wisener. She adds: “It also supports the four strategic objectives of public procurement in Scotland (#PowerofProcurement) which are: good for businesses and their employees; good for society; good for places and communities; and open and connected”. With it not only being the Scottish Government utilising the solutions provided, Wisener and her team are constantly looking

THE SCOTTISH GOVERNMENT HARNESSES ADVANCED TECHNOLOGIES

DID YOU KNOW...

“ We have managed to deliver huge efficiencies to procurement processes and procedures not only for public sector professionals but for suppliers as well”

“We have AI in most of our solutions, particularly for repetitive tasks such as e-invoicing and running some activity reports,” explains Wisener. “We are now piloting further automation and robotics in P2P processes, to completely remove manual intervention within the invoicing process, to ultimately reduce processing times, and free up individuals so they can focus their efforts on more high-value tasks.”

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THE SCOTTISH GOVERNMENT AND ITS PARTNERS When it comes to the Scottish Government’s eCommerce & Procurement Best Practice Shared Service, Wisener explains that there are five core providers, all of whom play a crucial role in the success of the Service. Elcom This partner provides PECOS, the purchaseto-pay (P2P) solution that manages catalogues, transactional websites, orders, receipts and invoices. “They have been with us from the very beginning,” says Wisener. “The very first purchase order was raised on 25 March 2002 and since then over 32 million orders have been processed with a total value of £73 billion. They have been with us throughout our entire journey and have been heavily involved in our transformation.” LEIDOS This partner provides the infrastructure, hosting and service support for PECOS. Wisener says: “Leidos ensures that the operating environment for PECOS is maintained to the highest standards, supporting continuity and stability of service and delivering continuous improvements in how the service is utilised by user organisations”. Proactis This partner provides Public Contracts Scotland (PCS) - the contract advertising portal - which has revolutionised the way that the Scottish public sector interacts with its suppliers when it comes to advertising opportunities. Wisener says: “Traditionally, suppliers would look through trade magazines or newspapers to find the opportunities they wanted to bid for. But PCS provides a onestop-shop and free access for suppliers

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wishing to do business with the public sector in Scotland. It provides suppliers with alerts to opportunities that are a good fit for their business and allows prime contractors delivering a public sector contract to advertise sub-contract opportunities. It is mandatory for all contract opportunities over £50k (for supplies and services) and £2m (for works) to be advertised and awarded on PCS.” DXC This partner provides the Procurement Information Hub which provides spend analytics capability. Wisener says: “It enables public procurement teams across Scotland to gain visibility into where money is being spent and with whom; identify spend at a local, regional and national level; identify local suppliers and SMEs; and identify further collaborative opportunities. It also supports Community Wealth Building projects where local and regional spend is assessed to identify opportunities to increase spend with local suppliers, build local supply chains and identify where local areas or suppliers would benefit for economic support.” JAGGAER This partner provides PCS-Tender, the national eSourcing platform. Wisener says: “It enables public sector procurement teams and suppliers to manage procurement exercises in a controlled environment. The Procurement Journey has been embedded in workflow to ensure that tender exercises adhere to legislation, policy and best practice. It also provides contract and supplier management capability which helps to bring consistency and standardisation in how we manage our contracts and how we monitor and record the delivery of key outcomes and measures such as Community Benefits and Fair Work.”

SCOTTISH GOVERNMENT

at how the Shared Service can refresh, enhance and evolve through innovation such as robotics and artificial intelligence. The government is also looking at how it can make reporting and management information more robust and accurate to support enhanced supply chain analysis as well as identify and evaluate associated risks and opportunities. What’s next for the Scottish Government? For the Scottish Government, the next stage of procurement transformation is going to be all about MI and data. “We’ve got such a lot of data which has a powerful story to tell,” says Wisener. She adds: “But at the moment, it’s located in different solutions

which makes it difficult to extract and bring together in a cohesive manner. So we are working on introducing an overarching Procurement MI Platform where we can bring data from key sources into one place and provide powerful business intelligence and enhanced reporting capabilities to enable public bodies to demonstrate the impact of their own procurement activity on their organisations as well as in the delivery of key outcomes at a local and national level.” For the next 12 to 18 months, the Scottish Government will be working to refresh its eCommerce and Procurement Best Practice Strategy, consulting widely with its user base and the market in relation to what comes next in eCommerce and procurement solutions to ensure that the Service continues to deliver best-in-class capability, embeds innovation and enables public bodies and suppliers to maximise the #PowerofProcurement.

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IS ‘GREENWASHING’ COMMONPLACE IN SOURCING AND PROCUREMENT? Build understanding of greenwashing's role in procurement to help your organisation avoid common pitfalls and instead promote sustainable practices WRITTEN BY: GEORGIA WILSON

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reenwashing is a term that was originally coined by activist Jay Westerveld, when it was realised that hotels purporting to be ‘saving the environment’ with their practices were merely urging guests to reuse their towels. In actual fact, while such organisations were claiming environmental concerns had spurred their actions, the real focus was on saving laundry costs - but the climate-skewed PR was beneficial, nonetheless. “It’s a dangerous form of misleading marketing that distracts from the

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challenging reality of the climate and biodiversity crises,” says Nick Underdown, Head of Communications and Campaigns at OpenSeas. He adds: “There are multiple different types of greenwashing and, while there is no formal typology for establishing different categories, various attempts have been made, such as the ‘Seven Sins’ of greenwashing, which include: hidden tradeoffs; worshipping false labels; vagueness; lack of proof; irrelevance; lesser of two evils; and outright fibbing.” As individuals become more environmentally conscious, companies

SUSTAINABILITY

“ Unfortunately, greenwashing is rife within many sectors” NICK UNDERDOWN

HEAD OF COMMUNICATIONS AND CAMPAIGNS, OPEN SEAS

Nick Underdown My name is Nick Underdown, I work for Open Seas, a charity based in Scotland dedicated to promoting sustainable seafood and improving fisheries management for the protection and recovery of the marine environment. As a former journalist and past contributor to Ethical Corporation Magazine, I have a longstanding interest in corporate social and environmental responsibility. Every business has an environmental and social footprint, either positive or negative, and contributes to some of the key issues of our time: climate change, inequality, ocean plastic or air pollution and biodiversity loss.

Ted Pardee My name is Ted Pardee, and I am the Chief Revenue Officer at Premise, where I am responsible for all topline revenue, business development, customer success, and marketing. Before joining Premise, I was Vice President of Sales at Accela, the leading Permitting and Business Licensing Software provider for the state, local, and federal governments. I have a broad scope of experience in technology, operations, and market development with more than 30 years of software industry experience, including two decades of senior executive management within venture capital and private equity-backed businesses. procurementmag.com

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SUSTAINABILITY

“ All companies should have strong environmental policies and their employees at all levels should be empowered to implement them” NICK UNDERDOWN

HEAD OF COMMUNICATIONS AND CAMPAIGNS, OPEN SEAS

have quickly realised the profitability gap in the market, in which ‘green’ products can be sold at a slightly higher price so they appeal to the environmentally-conscious consumer. Similarly, organisations can boost their brand image by shaping themselves as environmentally conscious - even if they’re not. However, despite many organisations taking their commitments to sustainability seriously, Ted Pardee, Chief Revenue Officer (CRO) at Premise, explains that there are

still many that would rather “invest their resources into marketing their product as 'green', instead of using those resources to develop a product sustainably to cut cost and in turn, maximise profit.” Underdown adds: “Unfortunately, greenwashing is rife within many sectors. Our organisation, Open Seas, focuses on the seafood supply chain and its related fishing, processing and retail businesses. Greenwashing is such a common practice that the words ‘sustainable’ and ‘responsible’ are used routinely to describe many seafood products, despite the continued overfishing and marine habitat damage caused by some fishing practices. “A recent survey of over 300 UK supply chain managers by the Chartered Institute of Procurement and Supply (CIPS) found procurementmag.com

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that 19% didn’t know how sustainable their own products were, whilst almost 50% didn’t believe their organisation was being sufficiently transparent with consumers, clients and regulators about sustainability. 5% of supply chain managers also felt that their businesses were actively misleading clients or customers about sustainability. A sad indictment on the current state of play.” Nevertheless, on a more positive note, Underdown believes that “sustainability is, thankfully, becoming a big deal in both public and private sector procurement”. “More and more, ethical leadership within a boardroom is taking root, alongside the fact that ‘being seen to be green’ helps companies to sell their goods and services. Not only is sustainability increasingly driving consumer behaviour, there is a raft of new industry guidance and regulations that are pushing sustainability up the agenda.”

Damage to broader efforts to solve environmental challenges By conducting greenwashing activities, organisations can also impact broader efforts to solve environmental challenges within the industry. Underdown says: “If a sector leader claims to be taking leadership in terms of reducing its environmental impacts, it just serves to distract media and public attention from issues within that sector and reduce consumer awareness of perhaps the more sustainable activities of real market innovators.” 140

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How can procurement functions ensure that their operations are actually sustainable? There is no doubt that trying to ensure your organisation is actually sustainable is a challenge, particularly when most organisations have to balance a number of spinning plates simultaneously – and each one represents a different set of challenges. Underdown explains that a good starting point is to ensure you have solid information and a thorough understanding of your supply chain. “Unless you understand what you are buying and who you are buying from, you cannot easily make a claim about the product you sell,” says Underdown.

“Taking advantage of the opportunities created by the need to tackle the world's social and environmental problems is likely to be ‘disruptive’ in many industries” TED PARDEE

CHIEF REVENUE OFFICER, PREMISE

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“ Going forward, natural and social capital will likely be ‘expensive’, in the sense that they cannot be taken for granted” TED PARDEE CHIEF REVENUE OFFICER, PREMISE

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He adds: “Talk to your suppliers, build a checklist of questions and a process for verifying any claims you make. A key principle is transparency. If a business commits to fully transparent declarations about their sourcing, then it makes it harder for them to greenwash and consumers will respect that.” Making sustainable procurement mainstream Although organisations could take the approach of ensuring sustainability managers have sufficient standing to have the casting vote in sourcing and procurement decisions, Underdown believes that mainstream is the way forward. “All companies should have strong environmental policies and their employees at all levels should be empowered to implement them,” he said. But mainstream sustainability is an approach that requires top-down support. Underdown adds: “Mainstreaming sustainable procurement needs strategic direction and buy-in across the business. By committing to transparency, completing a full life cycle assessment of what you are sourcing and understanding your supplier’s suppliers’ suppliers, you can be sure to make any claims with confidence.” Adding to Uderdown’s comments, Pardee says: “Taking advantage of the opportunities created by the need to tackle the world's social and environmental problems is likely to be ‘disruptive’ in many industries. If handled poorly, disruptions have the potential to destroy successful firms. If handled well, they can lead to sustained competitive advantage. Understanding this will help companies make a case for investing in sustainability as an essential strategic response in the face of accelerating change.” procurementmag.com

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P O W E RI NG PU R P O SE F UL S U S T A IN A B L E S O UR C ING AD FEATURE WRITTEN BY: SCOTT BIRCH PRODUCED BY: GLEN WHITE

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ROLLS - ROYCE

Pearl 15 – Intelligent Engine procurementmag.com

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Rolls-Royce Singapore employees

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ROLLS - ROYCE

Digital transformation of procurement at Rolls-Royce has ushered in a new era for the function to extract value that benefits people, profit and the planet

enn Godfrey’s day begins with the morning school run. It is one of only two non-negotiable parts of every weekday, the other being the return journey when he picks his children up later that afternoon. For everything else, the rest of his day revolves around negotiation. As Vice President Procurement – Raw Material and Forming, he leads billions of dollars worth of annual contract and sourcing projects – quite often, these days, in the comfort of his living room. He estimates around 95% of the past two years have been spent working from home, a far cry from the pre-pandemic days of factory visits, in-person supplier meetings, and face-to-face contracting and dispute resolution around the globe. It’s a very different work-life balance that has taken some getting used to, he says and one he knows he is fortunate to have. RollsRoyce has swiftly adapted to the demands of the current global situation, embracing digital and the emerging supply chain business imperatives of resilience and sustainability. “There’s a physical mundanity that comes from working from the sofa each day, but actually the work is hugely varied,” he says. “We've just had to be bold, to pivot and think about how to do that in an environment that was thrust upon everybody.” Prior to the COVID-19 outbreak, supply chain planning cycles at Rolls-Royce would culminate in a week-long sourcing event, where suppliers and the firm’s sourcing teams would meet and negotiate the next turn of contracts for quality, cost and delivery. Today that is all managed procurementmag.com

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“ I personally spend as much time on sustainability as I do anything else” BENN GODFREY

VP PROCUREMENT – RAW MATERIAL & FORMING, ROLLS-ROYCE

Powering Purposeful Sustainable Sourcing

through technology, with up to 300 negotiations actors able to be coordinated in one sourcing event, remotely and digitally. “We had to change how we did things and move it to a completely digital method of communication, management, and decision-making,” Godfrey explains. “We had to completely build out new digital 148

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tools, and we are now able to source billions of dollars as a team, effectively, all while sat on our own sofas.” The shift may have been prompted by the necessity of the pandemic, but it has resulted in “some really good, outsized outcomes in terms of quality, cost, delivery from mature supply chains”, the core pillars

ROLLS - ROYCE Rolls-Royce Small Modular Reacto

BENN GODFREY TITLE: VP PROCUREMENT – RAW MATERIAL AND FORMING LOCATION: GREATER DERBY AREA

Digital Agility A greater focus on digital-first processes has brought added agility to all areas of Rolls-Royce’s sourcing function. Its physical supplier network is vast and geographically dispersed. It is a complex ecosystem with a similarly intricate digital fingerprint. To effectively manage this network, the firm’s

EXECUTIVE BIO

of procurement, Godfrey says. Each contract can now be fully analysed and wired into Rolls-Royce’s processes. “We’ve been able to codify that approach to make it repeatable such that we don’t actually have to do that physical interaction and planning anymore,” Godfrey adds. “We're able to be a lot more agile in the way that we approach those sourcing events.”

An expert in procurement, operations and supply chain, Benn has bought everything on an aeroplane engine with responsibility for elemental hedging, alloy, castings, forgings and revert recycling. His diverse experiences include breakthrough multibillion-dollar digital sourcing events, leading cost out control towers, managing the biggest supplier relationships in aerospace as well as responding to acute crises and improving large operational supply chains through lean production systems. An advocate for value-based procurement with purpose, Benn co-chairs the sustainable procurement group defining the sustainability agenda for Rolls-Royce and is active in the wider aerospace supply chain with the International Aerospace Environmental Group.

ROLLS - ROYCE

“ The very best thing you can do from a cost perspective and from a sustainability perspective is not buy the thing at all” BENN GODFREY

VP PROCUREMENT – RAW MATERIAL & FORMING, ROLLS-ROYCE

procurement professionals leverage SAP and Ivalua as their core digital platforms, both bringing scale and a multitude of functionality to the table. This is now enhanced through the introduction of new digital tools. “What we've reflected on is that those platforms alone are not agile and flexible enough for us to go after some of the areas of value that we identify,” Godfrey says. “Whether that's understanding our risk profile in a more real-time environment, or allowing us to start a conversation with EcoVadis regarding their services.” The new partnership with EcoVadis, a platform that analyses and rates the sustainability credentials of vendors and businesses, has opened up fresh opportunities and value for Godfrey and his team. He admits that Rolls-Royce, a firm globally renowned for engineering excellence, can sometimes fall into the trap of thinking it can build a better solution internally. “This EcoVadis conversation is a realisation that there are lots of really smart partners out there,” he says. “They can give us access and leverage to the scale of their platform, 150

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Power Gearbox for Ultrafan

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as well as supporting us in wiring that throughout the business so that it touches everything from processes to policies and contracts, and allows us to fully embrace things like sustainability, for example." Sustainability has risen to the top of Godfrey’s agenda. “I personally spend as much time on that topic as I do anything else,” he says. And for good reason. Sustainability has become a business imperative intertwined with the other demands placed on supply chains, whether it’s “a big boat stuck in a big canal”, geopolitical uncertainty, or the ongoing ripple effects of new viral variants. Godfrey alludes to Blackrock chief Larry Fink’s famous annual letter, and his recent assertion of the ‘triple bottom line’: profit, people, planet. “The point that I want to reiterate is exactly that's the work that I'm doing, and the work that we're doing at Rolls-Royce, is about those things,” he says. Godfrey is a member of the International Aerospace Environmental Group (IAEG), an industry body founded by Rolls-Royce and some of its closest rivals and customers, such as GE, Safran, Boeing and Airbus. “The reason for joining that and forming what's called Working Group 11 is to say, ‘We have to take sustainability seriously across our supply chain and this again has to be a digitally enabled approach to have the right breadth and impact to be effective,” he says. The core purpose of the IAEG is to harmonise and standardise critical aspects of aerospace as an industry, sustainability being just one example. “What we shouldn't do is all ask our suppliers to do something different. We can all agree that this is the way we're going to approach this topic,” Godfrey says. “We’ve done it before in aerospace – with safety and quality – but it's the first time I've seen what could be viewed as a competitive procurementmag.com

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environment actually being truly collaborative. I think this is because we're recognising the power of those third-parties who are not aerospace experts, but are able to bring something to the party.” The Sustainability Imperative Rolls-Royce’s sustainability programme includes a broad array of initiatives that further epitomise the procurement function’s digitally-enabled thinking. One example is managing recycled material to repurpose in Rolls-Royce engines. “We've been doing that for a long time, but we've never talked about that as anything other than as a financial benefit,” Godfrey says. “We're now able to talk about that as contributing to our net zero aspirations by not digging large amounts of metal out of the ground for a second time. It also de-risks our supply chain, because, for example, every unit of nickel that you can recycle, you don't have to buy one from the market and be exposed to either shortages in material or speculation in price.” In energy, the firm has leveraged internal innovation from Rolls-Royce’s power system business – something the company is open to sharing with other organisations – to decarbonise two of its largest footprints in the UK. “Thinking about our overall energy mix is important and not everybody today can buy green energy nor can they build cleaner, mega power plants at scale,” Godfrey says. “Our approach is to take standard technology that exists and package it up to make it modular and smaller. Relatively speaking, it’s as big as a football stadium, but nonetheless, making it smaller and more accessible is part of the solution." Godfrey also points to Rolls-Royce’s core products, and the advances it is making in the electrification of flight. 152

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The reality is, for moving large numbers of passengers on long-haul flights we are still going to rely on gas turbine engines for decades to come, but as they become more efficient and more Sustainable Aviation Fuel is introduced into operations, the impact on the environment will be reduced. However, for smaller numbers of people, for shorter distances, the electrification of flight, whilst catching up with the electrification of other modes of transport, is very exciting. For example,

Spirit of Innovation – World's fastest all-electric plane

ROLLS - ROYCE

“ We had to change how we did things and move it to a completely digital method of communication, management, and decision-making” BENN GODFREY

VP PROCUREMENT –RAW MATERIAL & FORMING, ROLLS-ROYCE

our all-electric ‘Spirit of Innovation’ aircraft is now officially the world’s fastest allelectric aircraft, having set two new world records – at 15.45 (GMT) on 16 November 2021, the aircraft reached a top speed of 555.9 km/h (345.4 mph) over 3 kilometres, smashing the existing record by 213.04 km/h (132mph). And this is something my procurement role has allowed me to be involved in, buying and securing the rare earth metals that make electrification a reality.”

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Advance and Ultrafan engine

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Prolonging the life of a product is another way that sustainability meets profit, Godfrey says. “The very best thing you can do from a cost perspective and from a sustainability perspective is not buy the thing at all – our motto is reduce, reuse and recycle.” Digital transformation has empowered Godfrey and his team to extract value far beyond the scope of procurement’s traditional transactional responsibilities. Smart use of technology and a willingness to evolve mindset and processes as much as software packages and video platforms will come to define where the function is headed next, Godfrey believes. It is a future of increased digital agility, data and the maturity of AI and other emerging technologies. “From what I’m seeing, it's not fully there yet,” he says. “But if I think about some of the solutions that are out there for some of the topics that are important to us, in terms of cost and supply chain visibility, and the conversations I'm having; whether supporting the development journey of small, half-a-dozen-people start-ups to working closely with our own in-house AI team to conversations with the very biggest household names in digital, it’s close. “Couple that with the vast array of competing green technologies out there, which will drive the net zero agenda, and from a technology perspective, I think we're probably closer than many of us may realise to an era-defining change with some really interesting technologies, tools and systems being available to support the buyer to do their job effectively, drive huge value and really make a world of difference.”

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GLOBAL CONSULTANTS IN SOURCING & PROCUREMENT Discover Procurement Magazine’s list of Top 10 global consultants from the sourcing and procurement industries

WRITTEN BY: GEORGIA WILSON

ith no signs of the procurement and supply chain sectors reducing in terms of complexity, it’s times like these that an organisation may turn to a consultant to help navigate today’s challenges. Faced with the need to not only save costs, manage spend and be

more sustainable, organisations are navigating growing disruptions such as inflation, talent gaps, and materials shortages. Here is our list of Top 10 global consultants that can lend a hand to procurement and sourcing organisations in need of a clearer, more strategic path.

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10 Infosys

Since its founding in 1981, Infosys has committed itself to helping clients navigate their digital transformation journeys with ease. As a global leader in nextgeneration digital services and consulting, Infosys – under its BPM brand – provides the function of access to advanced AI-based solutions to enable smarter and faster decision making. Infosys’ holistic solutions allow organisations to achieve ‘best-inclass’ procurement status. Infosys’ services for procurement include: • Category plans and execution • Sourcing support and tail spend management • Supplier relationship management • Contract management administration • Spend analytics • Procurement strategy and consulting services

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The Hackett Group Founded in 1991, The Hackett Group is an intellectual property-based strategic consultant and leading enterprise benchmarking firm. When it comes to sourcing and procurement, The Hackett Group helps its clients to transform the function into a world-class operation. The Hackett Group’s services for the procurement function include: • Sourcing and procurement executive advisory • Sourcing and procurement benchmarking • Sourcing and procurement transformation consulting • eProcurement • Third-party risk management

TOP 10

“Founded on its purpose to build trust in society and solve important problems in 1998”

Kearney

Founded in 1926, Kearney has, for almost 100 years, been a trusted advisor to the world’s foremost organisations.The consultant is driven by the principles outlined by its founder, Andrew Thomas (Tom) Kearney: “Our success as consultants will depend on the essential ‘rightness’ of the advice we give and our capacity for convincing those in authority that it’s good.” For the procurement function, Kearney offers benchmarking surveys, new approaches and tools that drive the most value from the function, and the ability to facilitate large scale transformations.

07 PwC

Founded on its purpose to build trust in society and solve important problems in 1998, PwC’s operations are entirely driven by this purpose informing the services it provides and decisions it makes. PwC offers its services to many industries, including procurement and sourcing, with its operations driven by five core values: • Leveraging technology • Delivering exceptional client outcomes • Empowering our people • Committing to high quality • Sustainable, profitable growth procurementmag.com

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When you can have a global footprint without the carbon footprint. That’s Economics. SAP can help optimize your supply chain for lower emissions and greater profit. sap.com/economics

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05 BCG

06 Deloitte

In 1845, Deloitte set out to be a leading global provider of audit and assurance, consulting, financial advisory, risk advisory, tax, and related services. Dedicated to making an impact that matters, Deloitte’s procurement and sourcing services have a proven track record of navigating these challenges, enabling clients to sustain measurable, impactful results.“We support our clients’ sourcing aspirations by partnering to create and execute tailored strategies through approaches that consider short- versus longterm value tradeoffs, knowledge transfer, culture change, and capability building,” says Deloitte.

Dating back to 1963, Boston Consulting Group (BCG) has been partnering with leaders in business and society for more than six decades to tackle the most important challenges and capture the greatest opportunities. BCG’s procurement consulting experts help those in the function ‘chart a course to buying differently—and better’. BCG does this by blending deep sector knowledge with expertise in best practices and digital transformation. Don’t miss out on Daniel Weise, managing Director and Partner at BCG, speaking at Procurement & Supply Chain LIVE, discussing: ‘Transforming your business by putting suppliers at the core’ and ‘Supply chain risk & resilience’.

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Accenture

Gartner

For over 30 years, Accenture has been providing consulting services to hundreds of organisations around the world from its headquarters in Dublin, Ireland. Committed to making its clients procurement a value powerhouse, while continuing to get the basics right, Accenture helps those in Finance, Supply Chain and Procurement to transform their function, from being an untapped strategic asset to a source of competitive advantage.

Founded in 1979, Gartner is a leading global technological research and consulting firm. Headquartered in Connecticut (US), Gartner offers its expertise to deliver actionable, objective insights to executives in a number of industries. In procurement, Gartner helps its clients to drive greater business value alongside cost savings. Recognising the support needed in the complex function, Gartner helps its clients to:

“For over 30 years, Accenture has been providing consulting services to hundreds of organisations around the world from its headquarters in Dublin, Ireland” 162

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• Establish a long-term digital strategy to foster smart decision making • Make procurement and sourcing faster, easier and more disciplined • Develop procurement talent • Influence business decision making with indispensable insights, advice and tools Don’t miss out on Gartner’s Fareen Mehrzai, Senior Director of Supply Chain, speaking at Procurement & Supply Chain LIVE, discussing: ‘The future of work - Hybrid workforce’.

TOP 10

Since its founding in 1989, EY has been helping organisations to transform their supply chains. With the consultant’s solutions, organisations can more effectively balance business needs with growing customer expectations. EY states that it can help those in the industry “move from linear to connected ecosystems of partners, suppliers and alliances, towards fully autonomous supply chains that drive innovation and business growth.” Modern procurement and supply chain functions continue to face growing pressure for visibility, cost savings, quicker delivery times, sustainability, agility, and business continuity. With many organisations struggling with one – if not more – of these challenges, EY provides its clients with solutions to help with integrated business planning, customer collaboration, and order fulfilment, distribution and logistics transformation, as well as product innovation and product lifecycle management.

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“ Bain & Company has been providing its consulting services for almost 50 years”

Bain & Company Helping organisations to develop sourcing strategies for a sustainable future, Bain & Company has been providing its consulting services for almost 50 years. Working closely with procurement teams, Bain & Company helps to identify and realise savings across all spend categories and procurement levers. The company offers its clients a strategic procurement planning process to chart an effective path, based on in-depth cross-functional alignment and a dedicated focus on overall business strategies. Bain & Company’s strategic procurement planning process includes a four-step approach: 1. Budget and target-setting 2. Defining the operating plan 3. Executing the operating plan 4. Tracking and validating EBITDA impact And it doesn’t stop there. Bain & Company offers its clients consulting services for ‘buy better, spend better’, ‘closed loop saving capture’, ‘capability building’, and ‘digital foundations and enablers’.

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PROCUREMENT - THE HEART OF EVERY ORGANISATION 168

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IKANO BANK

WRITTEN BY: GEORGIA WILSON PRODUCED BY: CRAIG KILLINGBACK

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Åsa Stoije, Head of Sourcing and Procurement, Ikano Bank, discusses the value effective procurement can provide, and the need for strategic partners

wned by the Kamprad family, Ikano Bank can be traced back to the home furnishing company, IKEA (founded in 1943). Ikano Bank founded in 1995 creates possibilities for better living by offering simple, fair and affordable services, enabling a healthy economy for the many people. Ikano Bank’s offer includes savings and loan products for consumers, sales support services for retailers, and leasing and factoring solutions for businesses. Åsa Stoije, Head of Sourcing and Procurement at Ikano Bank spoke of the company’s business idea: “We create possibilities for better living by offering simple, fair and affordable services, enabling a healthy economy for the many people..” Ikano Bank’s offerings consist of credit cards, loans, mortgages, sales financing, factoring, and leasing. “We have roughly 1,100 employees in eight European markets, including the Nordics, Germany, UK, Poland and Austria,” says Stoije. She adds: “But what is interesting right now and for the coming years is that we are in the middle of a transformation - building a completely new digital bank alongside our existing operations.” Sourcing and procurement at Ikano Bank Having 20 years’ experience in international and progressive functions, Stoije’s focus has been on sourcing and procurement at all levels. procurementmag.com

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Ikano Bank: Procurement the heart of every organisation

She says: “I joined Ikano Bank in 2019, as Head of Sourcing and Procurement. It’s very exciting to be a part of the sourcing function. We are a central support function that helps the wider organisation to make the right strategic decisions and investments.” Stoije and her team is responsible for indirect purchasing of materials and services

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- essentially everything the bank needs to ensure a smooth running of the business. Such as external resources, consultants, R&D projects, outsourcing, hardware, software licenses. “Or it can be hosted services and software-as-a-service (SaaS),” she says. “It’s quite a broad area. We are also in charge of negotiating the best deals for the company, while continuing to meet company standards and industry regulations as well as client and public expectations.” Sourcing is a wellintegrated function in Ikano Bank’s operations, and as such, Stoije e says it’s vital that sourcing processes are both followed and understood. “Sourcing is a multifaceted and multidimensional function with various tasks

IKANO BANK

ÅSA STOIJE

6bn SEK

TITLE: H EAD OF SOURCING AND PROCUREMENT

Business volume

INDUSTRY: BANKING LOCATION: SWEDEN

1995

Year founded

Åsa Stoije leads the company's purchasing organization, its change and transformation.

1,000+ Number of employees

Before joining Ikano Bank in Nov 2019, Stoije served as Director Global Indirect Procurement at Arjo (Getinge Group) and she has also had several global positions at Tetra Pak and Ericsson for many years.

EXECUTIVE BIO

and responsibilities. We are in the middle of everything, a support function and a service function, where we are more and more becoming an internal business partner providing advice on investments and purchasing decisions.” Stoije says that while the focus on optimisations and cost in sourcing is understandable the job is also about stakeholder management - building relationships, supplier development, risk mitigation, and responsible sourcing. “And there are a lot of new regulations to take into account,” says Stoije. “It is important for sourcing and procurement to help the wider company to be compliant to rules and audits.” She continues: “As a sourcing function we should know what we spend, where we spend, how we spend, and why we spend. It is also important to be able to show how we secure the best value for money, as well as balancing spend risk dependency and value.” The sourcing process is fundamental, she says, and runs through the entire company. “Nothing can be bought, purchased, sourced without the procurement and sourcing function being involved,” she explains.

Åsa Stoije holds an Executive MBA, International Management and Leadership programme. She has also studied economics, marketing and law, graduating at School of Economics and management at Lund University.

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Working at the heart of business transformations Capgemini, a key partner of Ikano Bank, is enabling business transformation for its global clients - working together with passion and energy Capgemini, a key partner of IKANO Bank, has enabled business transformation for more than 50 years for its global clients. “We are fortunate to work at the heart of all these major transformations, and contribute to the development of Ikano Bank,” said Sujit Karkera, Account Executive and Delivery Partner at Capgemini. Karkera is responsible for the company’s partnership with Ikano Bank and leads a global team of 250+ people from his office in Sweden. “I believe in building winning teams, being bold, and thinking out of the box.” Capgemini is a global leader in consulting, technology services and digital transformation with the focus on building technology for an inclusive and sustainable future. “Our industry has been evolving at a very fast speed especially given

the pandemic. Digital products and services are now even more relevant than ever before. We have our focus on being the top partners for cloud and data,” said Karkera. “We also focus on cybersecurity and Artificial Intelligence (AI). Our ability is to provide scale and speed with our large pool of global talent which makes us a trusted partner.”

Trusted partner of Ikano Bank Capgemini has been a key partner of Ikano Bank since 2017. “We provide technology services that drive the core banking platforms, we also partner in their New Bank transformation journey. “It has been a privilege to contribute to Ikano Bank’s vision and their journey of a New Age Digital Bank. At Capgemini we are a global team of experts with niche skills and deep domain knowledge.” “The secret to our sustained, strong partnership is the common values we share. I see many similarities, such as being bold with daring to be different, and team spirit with working together. “We are fortunate to work at the heart of all these major transformations. We will do this, as we have always done at Capgemini, with passion and energy, and all together.”

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IKANO BANK

Where can sourcing’s value be seen? Stoije says that sourcing is about multidimensional value creation: “Value can be seen from a cost perspective, from a supplier insights perspective, but also from a business growth and increased profitability perspective. Sourcing has strong knowledge in so many different areas. It is vital for an organisation to harness the function’s capabilities in these areas.” Beyond the value of cost reduction, Stoije says sourcing also looks to create value by bringing in new technologies. “It’s about how to improve the function,” she says. “How can we further use external input in our own product development so that we can continue on our journey to becoming a fully digital bank offering simple, fair, and affordable financing for the many.” procurementmag.com

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Helping financial institutions build a resilient and adaptable business At TCS, we believe in creating sustainable growth for our stakeholders. Our innovative framework, digital capabilities, agile business model and ecosystem, are helping forward-looking financial institutes in their transformation journey and enabling them to stay ahead in the market.

Rabi Panigrahi, TCS’ Head of Banking, Financial Services and Insurance, Nordics values co-creative relationship with Sweden’s innovative Ikano Bank Tata Consultancy Services (TCS)’s Banking, Financial services and Insurance (BFSI) practice has been partnering with many of the world’s largest financial institutions in their business growth and transformation journeys for over 50 years. In the Nordic countries, Rabi Panigrahi leads this key segment of the business, engaging with key clients like Ikano Bank (founded by Ingvar Kamprad the founder of IKEA). TCS focuses on supporting their customers in taking a clear-sighted perspective towards digital transformation and reimagining their businesses. For this, TCS leverages comprehensive investments in products & platforms, as well as disruptive technologies like AI, cloud, cognitive computing and the like. “We bring these technologies on board, so the customer does not have to enter the innovation journey from zero,” says Panigrahi. “Ikano was a digital bank from its outset, without high-street branches, so it had little legacy burden. We have empowered it, with technology solutions to reimagine

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the digital banking experience coupled with a robust IT4IT platform to enhance Ikano Bank’s development life-cycle and speed to market. The new platform is enabling Ikano to further enhance their growth and transformation journey, with focus on broadening their customer base & customer experience by creating an ecosystem through retailers and distribution partnerships rather than depending solely on the financial segment of the business.” The vision TCS offers is very much in tune with that of its client. Åsa Stoije, Head of Sourcing and Procurement at Ikano Bank says: “TCS is an important supplier for Ikano Bank. We work in close collaboration with them as part of our strong partnership. They are a part of many development projects and integrations, and provide us with key capabilities. They fit our needs and requirements as a business, providing us with expert knowledge and helping us achieve our goals.” A statement that neatly sums up the advantage of working with the world’s leading banking consultancy.

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IKANO BANK

INSIGHT...

Ikano Bank and its partnerships Ikano Bank believes it is important to have partners that are willing to invest in the business. “Now more than ever, because we’re on our transformation journey, it is important for us to have partners with whom we can have a strong relationship,” says Åsa Stoije, Head of Sourcing and Procurement at Ikano Bank. She adds: “You can compare it to a marriage. It is important for us and our partners to have transparency and work together towards the same goals.

RISK MANAGEMENT AT IKANO BANK Risk management in any organisation should be treated with care. From a sourcing perspective, Ikano Bank has a detailed checklist of different requirements. It conducts annual reviews, follow-ups and risk assessments, and it has multilevel of approval chains and security assessments.

It’s about give and take throughout the journey, because this allows us to grow our business and to build at scale.” Given the nature of the sourcing and procurement market, it is also vital for Ikano Bank’s partners to navigate a disruptive market. “They need to be global, she says “They need to have agility, flexibility, and to provide us value for money. They must also be able to work in a multi-vendor environment, and be willing to take risks in order to get rewarded in meeting our business goals..” Stoije adds: “I think those are key foundations for a good partnership. 180

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But our partners are also experts in their field, so it’s important they challenge us. We need them and their expertise, in order to collaborate and improve our offerings.” Two such partners include Capgemini and TCS “In 2017 after a competitive tender process, we entered into a partnership with Capgemini,” she says. “As part of this partnership a large number of Ikano Bank’s IT functions were transitioned over to Capgemini. This enabled us to strengthen our IT capacity, and to further embark on

our digital transformation journey, as well as secure existing bank operations.” Stoije adds: “TCS Tata Consultancy services is another important partner for Ikano Bank. We work in close collaboration with them as part of our strong partnership. They are a part of many development projects and integrations, and provide us with key competence incl. consultants. They fit our needs and requirements as a business, providing us with expert knowledge and helping us achieve our goals.”

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LVING PPLIER DATA FOR PROCUREMENT LEADERS AD FEATURE WRITTEN BY: ALEX TUCK

PRODUCED BY: JAMES WHITE

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TEALBOOK

CTO Arnold Liwanag describes how he and TealBook tackled the problem of bad supplier data to help procurement leaders make better decisions

ealBook is a specialist in the procurement space as a subset of the supply chain; a deeply complex network of relationships, and multiple data sets, where workforces depend on longstanding relationships and frequently enter information manually. With his deep understanding of the supply chain and the core business challenges around that, Chief Technology Officer Arnold Liwanag saw a great opportunity to apply this sector knowledge with his artificial intelligence (AI) background, when he joined the Toronto-based startup in August of 2021. Previously a student of the works of Geoffrey Hinton, a renowned British-Canadian cognitive psychologist and computer scientist most noted for his work on artificial neural networks, Liwanag was one of a lucky few in the world to be studying such a nascent topic in the early 2000s, which led to an early career of cleaning data, integrating it, and ensuring it was of good enough quality to input into the early AI systems that were in development at the time. He has led AI strategy at PwC and overseen many largescale technology implementations. His mandate at TealBook is to drive the engineering and implementation of the product and ensure the business is constantly innovating, relative to the technologies that are available in the market and inserting that into the TealBook platform.

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TealBook: Solving Supplier Data for Procurement Leaders

“I own Data Ops and within this, Data Governance, Data Quality and the processing of information to complement where the shortcomings are. A big part of my role is also to decide how we're using artificial intelligence technologies and be able to train those models to perform better over time,” said Liwanag. The problem of bad data Particularly in the procurement space, supplier data is about the collection of the information. Liwanag explains: “It's very difficult to convince the universe of suppliers out there to deliver that information in the same way. With the landscape as it stands today, suppliers work with many buyers, and all these buyers want specific information to be able to transact with you. And then, in that situation, each individual buyer is asking that one supplier the same question 30 or 40 times.” 186

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This tireless process causes supplier fatigue as they enter this information in multiple portals and maintain this information over time. Liwanag added: “People change, situations change, and information changes. So you can see how that problem gets out of scale very quickly. We’re talking about a dynamic environment where things are constantly changing in terms of your buyer landscape, the technologies they're using, and the supplier itself is changing constantly in different dimensions, so then maintaining data across those different systems consistently, in the manual fashion, essentially becomes unsustainable.”

TEALBOOK

According to Liwanag, it's about the ability to maintain accurate records over time: “That's really the big data problem and we call it portal fatigue from the supplier perspective, in the sense that they're just inundated with forms,” he said. The data foundation and benefits to CPOs Within the walls of TealBook, its data foundation is vital. The company has set up the data foundation to be perfect for the needs of chief procurement officers (CPOs). The data points alone do not have a significant value until combined into one global view, which drives high-value insights that CPOs can use to build better sourcing strategies. “For CPOs, their mandate is often savings. So with the data foundation, they have the ability to extract and integrate information, and data from multiple poll systems, that they may have within their technology environment to execute various processes. By leveraging TealBook and merging that information with our data set, they can drive additional insights that they weren't able to do previously. The data foundation integrates these silos of information within typically large technology environments and drives these cross-system insights through an enterprise view,” said Liwanag.

Year founded

136

Number of employees

TITLE: CTO INDUSTRY: SUPPLY CHAIN LOCATION: TORONTO, CANADA

EXECUTIVE BIO

2014

ARNOLD LIWANAG

Arnold Liwanag joined TealBook as the new Chief Technology Officer, adding an impressive background to TealBook’s C-suite. Arnold brings deep supply chain industry knowledge to enable TealBook’s mission of AI-powered supplier data and intelligence. In prior roles, he led the Artificial Strategy and Transformation practice at PwC/ Strategy&, and has also held technical leadership positions at Scale AI, Hewlett Packard and Sybase. He is a talented and coveted speaker at industry events that include CogX, Elevate Toronto and AI4. Most recently, Arnold served as the CTO at IVADO Labs, where he served as the authority on AI for the company. Arnold has the technical depth, experience, skills and understanding of supply chain issues to position TealBook as the only supplier data foundation that powers the digital enterprise.

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TEALBOOK

“ People change, situations change, information changes. So you can see how that problem gets out of scale very quickly” ARNOLD LIWANAG CTO, TEALBOOK

TealBook’s singular centralised ‘source of truth’ provides CPOs with an excellent opportunity to get a global view within their enterprises, and even within different departments and divisions. TealBook also possesses a super set of information on supplier data that it can inject and merge with internal operational system data sets, further enhancing systems that CPOs are already invested in. TealBook in the procurement ecosystem According to Liwanag, procurement, as a function in an organisation, has been transformed from being more cost-centreoriented to now being innovation-driven, guiding or driving transformation within the business in a more proactive sense. The scope of impact that a modern procurement function has on the organisation is massive. “The amount of spend that procurement is responsible for is enormous. And often it can run up in the billions. The expectation is now to drive innovation with the supplier 188

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base, using data as the foundation for being able to do that. A very important trend and it’s what we're bringing to the table for procurement leaders,” said Liwanag. He added that outside of the portal approach, which is the typical model that a lot of technology players in the procurement space use, TealBook also uses AI methods and engineering techniques to autonomously collect a lot of that information, from public, private, and proprietary sources. “We're very strategic and creative about how we apply these different methods. We aggregate, integrate, and normalise that data set into a strong source of truth. And then,

on the dissemination side or the distribution side through data foundation, we can ingest or push that information into the different technology environments for our client host. That way, they are getting accurate, realtime information on a consistent basis, as the supplier landscape changes and the client changes as well,” he added.

Download our 2021 Global Supply Chain Agility Report

Important considerations for procurement leaders Liwanag insists that the most important quality for an enterprise procurement leader is a data-first mindset. Even outside of procurement, he believes this is the trend procurementmag.com

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“ The expectation is now to drive innovation with the supplier base, using data as the foundation for being able to do that” ARNOLD LIWANAG CTO, TEALBOOK

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to help make intelligent decisions for the company, or for the strategy. “Having reliable, trusted information at their fingertips and feeding that into important decisions and processes that procurement leaders are faced with every day, to make mission-critical decisions or activities, ensures these are executed effectively and with the quality that they want. Without good data, you can't make good decisions and without good decisions, you can't be highly competitive in the space that you're trying to compete in,” he said.

TEALBOOK

Agile may be a buzzword, according to Liwanag, but he says the theme or the principles behind agile are very relevant in a highly dynamic world, especially when there are major disruptions: “One method to become more agile is to not only maintain and maximise good relationships with existing suppliers, but also to tap into insights from a broader supplier network to maintain agility as things change,” said Liwanag. Liwanag insists there will always be extraneous factors contributing to the changing landscape. This forces companies to understand who they need to work with and how they need to work with them. “I call that the extended enterprise, which these days is critical to enabling that agility,” he said.

“ Without good data, you can't make good decisions and without good decisions, you can't be highly competitive in the space that you're trying to compete in” ARNOLD LIWANAG CTO, TEALBOOK

TealBook CTO Arnold Liwanag discusses what’s happening in technology and digital transformation within the procurement space

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“ The mandate for me is to really strengthen and scale what we have” ARNOLD LIWANAG CTO, TEALBOOK

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A highly innovative future with technology at the fulcrum Continuing the theme of the data foundation at TealBook, Liwanag is effervescent in his praise of the technology he has inherited and how that can transform the procurement space. “The mandate for me is to really strengthen and scale what we have. Then also layer in additional innovations to really drive better outcomes in terms of data at scale. The ability to autonomously ingest

information from more unstructured sources”, he says, “which is a very difficult task, quite frankly, when you're doing it at scale.” As the TealBook client base grows, more people use the tools and more suppliers are integrated into its system, the level of scrutiny also continues to grow. “A lot of the decisions that we make from the technology roadmap are rooted in data quality. I’m always asking myself: ‘How can we ingest and disseminate information at scale, for numerous supply buyers and buyers, while retaining the quality of our information for our supplier base?’,” said Liwanag.

The CTO adds that TealBook is delivering valuable insights now, but these may be known as “targeted process enablement activities” in future. “If we become the trusted source for supplier information, at a global scale, with the types of insights and information we can glean from that data and provide for our various stakeholders, it will be unprecedented,” he said.

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VISA

VISA EUROPE’S ESG ON A ROLL IN PROCUREMENT AND SUPPLY CHAIN WRITTEN BY: SCOTT BIRCH

PRODUCED BY: GLEN WHITE

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Visa Europe CFO Rob Livingston and CPO Alisa Bornstein explain how a focus on procurement and supply chain is driving the payments giant’s ESG strategy

he Chief Procurement Officer’s engagement with the C-Suite is growing, and increasingly Chief Financial Officers recognise the value that a close relationship between the two executive functions can bring to the business and its commercial goals. “Over the past two years of the pandemic, we've had the opportunity to take a closer look at the resilience of our supply chain and how closely connected that supply chain is with the communities where we are,” says Rob Livingston, Visa Europe CFO. “During that time, there have been two elements that have leapt to the forefront in terms of how we think about procurement. The first one is around sustainability and making sure that we have a supply chain that is going to reflect our goals as a corporation in terms of our environmental and other impacts on society. “The other element that we really focused on is the diversity of our supply chain – making sure that we were resilient and support diverse and small businesses. Having backup suppliers for the most critical functions is key, as is thinking about diversity in terms of ensuring that we're supporting businesses that are owned by women, or led by women, and minority-owned businesses here in Europe and around the world.

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ROB LIVINGSTON TITLE: CFO INDUSTRY: INFORMATION TECHNOLOGY & SERVICES LOCATION: UNITED KINGDOM

Rob Livingston is Chief Financial Officer for Visa Europe. In this role, he oversees Visa’s financial strategies, planning and reporting, in addition to all finance operations and corporate real estate in Europe. He is based in London. Prior to this role, Rob was SVP for Strategic Initiatives in Beijing. From 2013-2017, he was Visa’s Country Manager for Canada, where he oversaw the strategic direction, key relationships, marketing, operations and financial performance of Visa’s Canadian business. Before joining Visa in 2013, Rob worked at Capital One for 18 years in the US, UK, France and Canada, most recently as President of Capital One Canada. Rob is Past Chair of the Board of Directors of the Boys and Girls Club of Canada. He received his degree in Economics from Yale University.

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“People trust Visa because of what we bring to the global economy” ROB LIVINGSTON CFO, VISA EUROPE

EXECUTIVE BIO

COMPANY: VISA EUROPE

VISA

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“ At Visa, we are focusing on sustainability and diversity in our supply chain. That's the highest priority” ALISA BORNSTEIN CPO, VISA EUROPE

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“This work is central to our purpose – everyone deserves an equal chance at economic prosperity.” Livingston joined Visa in 2013 to lead Visa’s Canadian business before then moving to China in 2017. He became Visa Europe’s CFO in July 2019 so the majority of his tenure in this role has been set against the backdrop of the pandemic – which has transformed the nature of payments and procurement. “We were looking to bring procurement more to the centre of our business strategy,” says Livingston. “So I was thrilled to be able to hire Alisa Bornstein to join Visa Europe as our Chief Procurement Officer. She's got a fantastic background and a deep knowledge of procurement.” procurementmag.com

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ALISA BORNSTEIN TITLE: CPO COMPANY: VISA EUROPE INDUSTRY: INFORMATION TECHNOLOGY & SERVICES LOCATION: UNITED KINGDOM

“Procurement is not my profession – it is my passion!” ALISA BORNSTEIN

EXECUTIVE BIO

CPO, VISA EUROPE

Alisa Bornstein is Chief Procurement Officer for Visa Europe. Alisa has more than 25 years of international procurement experience, most recently as global CPO at semiconductor leader Arm, before joining Visa Europe in January 2021. Alisa has also held senior leadership roles at BT, Millicom, and Eriksson, to name just a few. She has a strong track record of leading and transforming procurement organisations, operating effectively cross-borders in mature and emerging markets and functions. She is a passionate advocate for value-creating and business-focused procurement, utilising its unique position within the value chain to deliver new sources of value to the business.

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Bornstein made a name for herself in procurement while CPO of UK semiconductor and smart technology design company, Arm, based in Cambridge, England. While at Arm, Bornstein designed and executed a procurement transformation, from maturing the function to digitising and automating end-to-end source-to-pay (S2P) processes.

Bornstein joined Visa Europe in January 2021 and has been tasked with elevating procurement in line with leading practices and standards, including state-of-theart business support. She embarked on a transformation of the function, and continues to advocate the importance of procurement and supply chain as a strategic part of the business ecosystem. procurementmag.com

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“This is not about having a seat at the table,” says Bornstein, “but to ensure that we, as procurement professionals, listen, understand and support the business and use the power of the supply chain to deliver value to our organisations. True procurement leaders have shifted from being operational in the past to becoming strategic business partners. Collaboration and partnership is my passion. This is something I believe in, and this is what we have at Visa.” 206

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The importance of third party suppliers Going back to sustainability and diversity, they are key drivers of the changes being seen in procurement at Visa Europe, and Bornstein says these are big opportunities for many organisations who haven’t yet leveraged their supply chain. Visa Europe has literally thousands of suppliers and one key area of focus for Bornstein is to better understand the thirdparty suppliers’ ESG credentials to support company-wide objectives and initiatives.

“We were looking here in Europe to bring procurement more to the centre of our business strategy” ROB LIVINGSTON CFO, VISA EUROPE

INSIGHT...

BACK TO BUSINESS The sixth edition of Visa’s Global Back to Business study published earlier this year showed that 90% of small businesses surveyed with an online presence said they were optimistic about the future, with nearly three quarters (73%) saying accepting new forms of digital payments was fundamental to growth in 2022. Since the start of the pandemic, Visa has launched a variety of programmes to help small businesses accept digital payments and gain greater access to the digital economy.

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“As a procurement leader I strive to be a strategic partner to the business. My goal is to drive meaningful impact to the business” ALISA BORNSTEIN CPO, VISA EUROPE

Visa Europe’s ESG on a roll in Procurement and Supply Chain

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“Procurement can drive innovation by utilising suppliers’ knowledge in their own space,” says Bornstein. “It's very well positioned to drive ESG, sustainability and diversity. Visa recognises that third-party suppliers are important stakeholders. “Today they provide services and products to us, tomorrow they might become our partners and ultimately, as both businesses and individuals, they use our payment solutions.”

To support Visa Europe in its ESG initiatives, the Procurement team has entered into a partnership with EcoVadis to help assess their supply chain. The aim is to provide a better understanding of suppliers: who they engage in their business from an ESG perspective, and how Visa can together improve the communities in which they operate. That partnership with EcoVadis helps to provide insights into Visa’s supplier base, which procurementmag.com

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is more important than ever when it comes to risk mitigation – something demonstrated by the pandemic. However, this spotlight on suppliers goes beyond highlighting potential problems – it has benefits for the suppliers too, with Visa being able to identify those that may need extra assistance or support in these unprecedented times. “We are focusing on sustainability and diversity in our supply chain,” says Bornstein. “That's our highest priority. Working with and supporting small businesses is extremely important to Visa Europe and Visa overall, and procurement as a function has a role to play.” One example of that supportive role is the aspiration to operate in line with the UK Government Prompt Payment code and change SME payment terms to 30 days, to help small companies through tough times and recognise their importance to Visa Europe. “The pandemic has been incredibly tough on small businesses more than anyone else,” adds Livingston. “What we are trying to do at Visa is to support small businesses as they recover from the pandemic and then accelerate their business in the future, and the main way we can help them do that is by helping them go digital.

“ What we are trying to do at Visa is to support small businesses as they recover from the pandemic and then accelerate their business in the future” ROB LIVINGSTON CFO, VISA EUROPE

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“Even today, less than half of small businesses in Europe have a digital presence for ecommerce, and that's something that creates tremendous opportunity for a rebound in the future. We've made a multiyear commitment to digitise 50 million small and medium businesses around the world and we're already halfway there.” Visa is able to implement this farreaching initiative by combining its global strength with local knowledge. Operating in more than 200 countries gives Visa unique

1958

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insight into what’s important to clients, consumers and merchants in each of those locations. Visa’s sustainability ambitions go far beyond supporting SMEs and promoting ecommerce. “Visa as a company is committed to achieving net-zero carbon emissions by 2040, which is 10 years faster than the Paris Agreement,” says Livingston. “The way that we're doing that is the way that all companies do – through offsets and changing behaviour of our employees and

our suppliers. But at Visa we can also provide sustainable products and solutions that our clients’ banks can offer consumers to help them manage their carbon footprint. This has incredible power over the long term.” The future of digital payments The payments ecosystem witnessed an acceleration in digital transformation during the pandemic, and it is important for Visa to maintain some of the benefits for the future – from contactless payments procurementmag.com

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“Driving ESG in our supply chain means we can influence some big changes in the culture, attitudes and behaviours around it, to protect the planet” ALISA BORNSTEIN CPO, VISA EUROPE

to online shopping – while also making preparations for the global recovery. “We're just at the beginning of cross border travel starting to come back,” says Livingston. “People are feeling confident enough to go overseas on holidays, and those are all good for the global economy and they're good for Visa. “The speed of that return of business as usual is going to be important, but we can't lose sight of the fact that so much has changed.” When you accept payments in more than 80 million locations, and process thousands of secure transactions every second, everybody knows your name – but does everyone fully appreciate what Visa does? “This is what we bring to the table,” says Livingston. “We are a global brand operating locally. We're one of the most ubiquitous brands in the world, but not everybody knows exactly what we do. What Visa does is facilitate commerce each and every day, all around the world. “We enable consumers to buy things in person at stores or online, and we facilitate money transfer from businesses to businesses, from banks to banks. “People trust Visa because of what we bring to the global economy. We offer

extraordinarily fast and secure transactions for everyday use and we have the world’s leading security infrastructure governing digital payments. “There's nothing more important to us than ensuring that Europeans are able to use their card anytime and everywhere they want to be.”

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GUY'S AND ST THOMAS' NHS FOUNDATION TRUST

PROCUREMENT SHARED SERVICES ARE ESSENTIAL TO SUPPORT HEALTHCARE WRITTEN BY: TOM SWALLOW PRODUCED BY: GLEN WHITE

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GUY'S AND ST THOMAS' NHS FOUNDATION TRUST

David Lawson, CPO of Guy’s and St Thomas’ NHS Foundation Trust, highlights the challenges and opportunities of healthcare procurement shared services

he coronavirus pandemic took a struggling National Health Service (NHS) and imposed even further pressures on the organisation that was already stretched to its limits. One important lesson that COVID-19 taught us is that supply chain resilience is critical to maintaining services. The procurement shared service team played a key role to ensure the Trust maintained supply and supported other hospitals across the region, from setting up a 3D Print Farm and air freighting PPE from China to providing over one million items as mutual aid to over 40 healthcare organisations. The organisation’s procurement team, comprised of around 200 employees, is responsible for sourcing, systems, and supply chain operations across four NHS Trusts with responsibility for over £500mn direct spend. With just over 20 years at the organisation, David Lawson, Chief Procurement Officer at the Trust divulged the developments in the organisation’s procurement strategy throughout the pandemic and his team’s contribution to procurement programmes and initiatives. Leading procurement strategy to streamline healthcare Over the past few years, Guy’s and St Thomas’ has worked to transform procurement and supply chain from

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Procurement shared services are essential to support healthcare

“ The challenge for the NHS was to try and return back to a business as usual footing” DAVID LAWSON

CHIEF PROCUREMENT OFFICER, GUY’S AND ST THOMAS’ NHS FOUNDATION TRUST

deployment, the largest implementation of automated inventory management systems in Europe to leading major complex commercial initiatives. Procurement and supply chain is critical to the day-to-day running of healthcare services. In 2021 for example, the team led the re-procurement of Pathology Services across South East London, covering a patient population of two million, processing over 35 million tests per year, and 218

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with an annual spend of £135mn. The new 15-year contract worth £2bn involved a major service transformation with the consolidation of 70% of test activity from four hospital sites into a new pathology hub together with the adoption of new digital systems. Lawson commented that “it would be difficult to imagine a more complex procurement.” He explains: “You had an incumbent joint venture supplier that the two Trusts — Guy’s and St Thomas’ and King’s College Hospital — part-owned under a joint venture structure, you had a major service transformation in terms of service consolidation, and you had a mission-critical service which touched almost every patient that interfaced with the local health system from GP Surgery to Acute Hospitals.”

GUY'S AND ST THOMAS' NHS FOUNDATION TRUST

DAVID LAWSON TITLE: CHIEF PROCUREMENT OFFICER INDUSTRY: HEALTHCARE LOCATION: LONDON, UK

EXECUTIVE BIO

Understanding the criticality of the process and the involvement of procurement, Lawson set about leading his team to streamline proceedings, which, through competitive dialogue between bidders, led to a change in supplier and a novel “buy-out buy-in” approach into the Joint Venture to avoid the need to TUPE transfer over 1,500 staff and ensure a smooth service transition. Lawson highlights the three main challenges of the process, which were stakeholder engagement to achieve agreement on the new operating model, ensuring robust bids despite gaps in key data sets, and despite the complexity and scale of the procurement, keeping the evaluation simple and manageable.

Procurement lead for Guy’s and St Thomas’ since 2001 and procurement shared service including three other NHS Trusts. Double winner of the Supply Chain Excellence Award for Supply Chain Innovation (2008) and Urban Logistics (2021) and led the deployment of the largest implementation of automated inventory systems in Europe (2009) and establishment of an off-site supply chain hub (2019). Led the procurement for the £2bn South East London Pathology Transformation awarded in 2020 and the £10bn NHS England Increasing Capacity Framework awarded last year. Member of the GS1 Health Advisory Board. Accredited at Senior Commercial Specialist level in 2021 by the Government Commercial Function.

Connected thinking. What does it mean and why is it vital for your supply chain? ‘Connected thinking’ is working hand in hand with customers to help them join up their business areas, simplify their buying processes and maximise the impact on their sustainability goals.

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Make the connection between supply chain and sustainability Esther Murdock and Isabel Spence of Banner highlight shared values with the SmartTogether consortium and the Guy’s and St Thomas’ procurement partnership Guy’s and St Thomas’ NHS Foundation Trust has chosen Banner as a key supplier for their SmartTogether procurement initiative. As the UK’s largest provider of business-critical supplies and services, Banner provides cleaning, catering and PPE supplies, furniture, printed goods, technology and Managed Print Services to organisations across the private and public sectors. To gauge why the NHS was so keen to partner with Banner, we spoke to its Merchandising and Marketing Director, Isabel Spence, and Esther Murdock, Public Sector Sales Director. “We started with an official tender process, which was then followed with the award of the contract to Banner for office products and electronic office supplies.” “We’re now assessing a new pilot programme to

find ways to help the SmartTogether team with a managed procurement service that addresses contract leakage and any in scope expenditure within that. This provides a compliant supply route whilst also reducing the carbon footprint of Guy’s and St Thomas’ and other participating Trusts”, Murdock said. Connected thinking is the key to success “Our aim is to build strong and effective relationships by connecting with suppliers, colleagues and customers who have high standards and share our values,” says Murdock. “In the future, we’re going to see a greater expansion into partnerships, consolidation of supply and into a digitally enabled work life,” Spence says. “We are supporting customers and innovating with smart solutions to solve the business challenges that our customers face.” Murdock closes: “Evidenced by the work with Guy’s and St Thomas’, our customers, suppliers, and Banner are on a journey of reimagining how we do business. In this post-pandemic era, we are becoming more and more of an embedded solution for our customers and a lead service provider. It is this connected thinking that leads to improved sustainability and consolidated supply.”

Connect with Banner

GUY'S AND ST THOMAS' NHS FOUNDATION TRUST

GUY’S AND ST THOMAS’ Guy’s and St Thomas’ is one of the UK’s largest NHS Trusts. The procurement shared service, SmartTogether hosted by the Trust also supports neighbouring NHS Trusts, Lewisham and Greenwich, Great Ormond Street, South London and Maudsley, and later this year Oxleas.

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“ Our aim is very much to look for opportunities to innovate and scale it up across the shared service” DAVID LAWSON

CHIEF PROCUREMENT OFFICER, GUY’S AND ST THOMAS’ NHS FOUNDATION TRUST

The procurement team also recently led the £10bn Increasing Capacity Framework Agreement on behalf of NHS England to support reducing the current backlog of elective activity by making available independent sector capacity to the NHS. The new framework agreement replaced a capacity model in which block contracts were agreed upon with the main independent sector providers irrespective of whether the capacity was used or not. The framework was set up in under 12 weeks with over 100 providers listed. “While the rest of the NHS was tied up with treating COVID patients, the challenge for the NHS was to try and get to a point

of business as usual, in order to avoid or mitigate a growing backlog of elective cases. To secure funding from the treasury, there was a need to move away from direct awards and the previous capacity model to demonstrate value for money,” Lawson says. “So, I was asked to support NHS England setup. A new national framework where independent sector providers bid against all procedures that are available on the national tariff,” Lawson says. “My role was to set up the procurement strategy and work out a timetable to deliver the framework within quite a short period of time — within about 12 weeks — and make that ready for the new calendar year in January when the existing block contracts were due to expire.” SmartTogether transforms the NHS with access to procurement and supply chain expertise When it comes to procurement in the NHS, the siloed nature of its operations has presented weaknesses over the years due to the lack of scale and investment. Five years ago, the SmartTogether shared service was established to scale up both procurement and supply chain capacity and capability. “It was very much formed on the back of the hospitals, around us asking for help procurementmag.com

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Apogee: enabling NHS healthcare supply chain efficiency Discussing the contractual benefits for Guy’s and St Thomas’ NHS Foundation Trust, Matthew Hale provides details of Apogee’s partnership in healthcare Apogee Corporation, an HP company, provides managed workplace and print services to the public sector and wider corporate healthcare environments. Its partnership with the Trust allows Apogee to supply, monitor, and maintain NHS printers and related machines to minimise component stock levels and ensure print machines work at their optimum. Creating a regular and cost-effective print supply “We were able to achieve the savings that we’ve delivered to Guy’s and St Thomas’ through a due diligence project management programme where we have looked at their current infrastructure,” says Matthew Hale, Regional Sales Manager for Healthcare at Apogee. In analysing the Trust’s technology ecosystem, Apogee is “able to design an optimal solution based on their current requirements. This led us to be able to reduce the number of devices and the amount of volume going through the account that, in turn, drives out the contractual savings.” “We take that headache away from IT departments because every device

that will sit within the Trust, ranging from a single function desktop printer to a print room device, will be managed and supported by Apogee from top to bottom.” The process of procuring managed services As a subsidiary of HP, the corporation leverages its digital capabilities to respond quickly to the needs of its clients and, in the case of Guy’s and St Thomas’, alleviate any unnecessary strain on the workforce. “We’re able to predict what that carbon efficiency gain will be, by the nature of the auditing that we’ve done,” Hale says. “With the redesign process that we went through, where we’ve rationalised that amount of machines down, we can figure out — based on data and kilowatts of energy — how much that fleet will cost to run over a three to five year period,” Hale explains. “Because we’re underpinning the fleet with environmentally friendly devices from the HP range, it allows us to achieve even more beneficial carbon savings for the trust as well.”

L E A RN M O RE

“ In response to the request for help, we decided to expand the team and create SmartTogether” DAVID LAWSON

CHIEF PROCUREMENT OFFICER, GUY’S AND ST THOMAS’ NHS FOUNDATION TRUST

and support to transform the procurement service,” Lawson says. “In response to the request for help, we expanded the team and created SmartTogether.” SmartTogether was able to apply common performance standards for order management, inventory management, and CIP delivery. In the first year of Lewisham and Great Ormond Street joining the shared service, CIP delivery increased five-fold. Lawson explains how this helps improve procurement: “We have a scorecard with key metrics and we compare each of the member trusts against national benchmarks, as well as benchmarks within the shared service to drive that performance.” He also spoke about some of the resulting effects of SmartTogether: “We're seeing process improvement, expansion of inventory management systems, and cost improvement delivery as well. So we've been able to influence more spend.” Channelling NHS contracts through select strategic partners Without its partner organisations, the SmartTogether service would not have been as well-received as the team has experienced. The organisation works closely with selected strategic partnerships 226

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to encourage efficiency and more sustainable operations across its network of healthcare services. SmartTogether partners with Apogee, an HP company specialising in print services, to funnel its printing resources and technology solutions through the company, which supports all the member Trusts of the shared service. Partnering with Apogee resulted in an organisation-wide revamp of its printers, creating an ecosystem of manageable and more sustainable machines, and also allowed SmartTogether to leverage Apogee’s managed print services at scale. Lawson explains how the Trust has negotiated better solutions across all operations. “It means that we've been able to negotiate better technology and better processes as well,” he says.

GUY'S AND ST THOMAS' NHS FOUNDATION TRUST

“So, from a sustainability perspective, benefits around energy efficiency, and from a cost perspective, double-digit percentage savings in terms of having a larger single contract, a multi-year contract and developing a partnership with Apogee going forward.” Following this, Lawson delves into another strategic partnership as he talks about some of the challenges that the Trust faces in terms of risk management, particularly in its supply chain, which is a critical phase in ensuring fast and reliable patient care. CEVA Logistics works with Guy’s and St Thomas’ to manage its offsite Supply Chain Hub: a necessary response to the coronavirus pandemic that supported deliveries to the hospital and supported the wider London Region. To help gauge the scale of the task, Lawson says: “We

previously had over 40,000 trucks arriving into the two Trust campus sites, which equated to a truck delivery hitting one of our loading bays every three minutes.” While the offsite Supply Chain Hub, based in Dartford, was primarily a response to COVID-19, the organisation has now set up an in-house wholesaler within the facility, a process that was implemented based on new insights from the pandemic. “For just over 1,000 high-risk product lines, we hold about a month’s worth of inventory to enable a same-day delivery service to over 50 Main Theatres,” says Lawson. The logistics firm is also working to support the Trusts sustainability strategy with the adoption of bio-fuel and electric vehicles for bulk consolidated deliveries, together with a pilot of a river cargo service procurementmag.com

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Safe, Effective, Durable NEW OPCS CODE / TARIFF Rezum ™ Launch

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“Following lots of great work between Boston scientific and NHS Supply Chain Tower 6, I’m pleased to report that we have had our first ever Value Based procurement methodology signed off, which shows how the Rezum Prostate treatment delivers nearly £1000 in value to the NHS every time it is used through reduced theatre time & length of stay for patients. This is a fundamental step for industry and NHS procurement as we seek to recognise and capture the benefit innovative technologies are bringing to the NHS.” -Lee Taylor, Clinical and Analytics programme lead, NHS Supply Chain

“Value based procurement in healthcare is regularly discussed as a way in which the healthcare system and industry can collaborate

to show the benefits of technology from both a patient and system perspective, quantifying measurable and tangible financial savings beyond price reduction. However, there are relatively few practical examples. With the Rezum value based case study, undertaken at Guys and St Thomas’, Boston Scientific were delighted to collaborate on a pilot to treat Benign Prostatic Hyperplasia patients with Rezum, to prove that our claims are not just aspirational but demonstrate tangible benefit to the system and patients. We showed improved efficiency and outcomes, which released much needed capacity in both theatre and realisable bed stay” – Stephen Sutcliffe, Head of Commercial Partnerships, Boston Scientific

NHS England MedTech Funding Mandate 2022/23 “The MedTech Funding Mandate is an NHS Long Term Plan commitment to give patients access to selected NICE-approved cost-saving devices diagnostics and digital products more quickly.” Rezūm included on the 2022/23 MedTech Funding Mandate policy as a NICE recommended cost saving alternative compared to standard treatments such as TURP.

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GUY'S AND ST THOMAS' NHS FOUNDATION TRUST

“ We compare each of the member trusts against national benchmarks, as well as benchmarks within the shared service to drive performance” DAVID LAWSON

CHIEF PROCUREMENT OFFICER, GUY’S AND ST THOMAS’ NHS FOUNDATION TRUST

for rapid parcel deliveries from the Supply Chain Hub at Dartford into Guy’s Hospital via Butler’s Wharf. The Supply Chain Hub is also being used to support current work to provide urgent medical supplies into Ukraine. Working in partnership with the Ukrainian Medical Association the hub has acted as a staging point to ship deliveries into Lviv and Kyiv hospitals. 230

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Sustainable sourcing of products and procuring high-end medical devices One of the themes that could be picked out from the SmartTogether service is the commitment to core values and how this plays a critical role in sourcing goods and, ultimately, finding suppliers with similar core values. For such large-scale operations, the Trust has begun to select products more carefully. A prime example of this can be

seen through its partnership with Banner, an expert provider of workplace supplies, as the organisation focuses a lot of its attention on its environmental, social, and governance (ESG) impacts. Lawson further explains the importance of social value when it comes to engaging with suppliers: “When we carried out the tender process, we weighted social value at 20%. So we weighted it quite high and

set up some specific requirements from a sustainability perspective.” He continues: “We pulled together the different sustainability managers from each trust to set out the standards from an environmental perspective in terms of product, but also in terms of delivery model.” Ultimately, this process is governed by its partner organisation’s ability to provide transparency, which is something the Trust is also aiming for with Boston Scientific, a leading global provider of medical devices. “We buy a wide range of their devices across a number of clinical settings,” says Lawson. “Boston is an example of a medical device company that we're trying to establish a strategic partnership with and that's looking at different elements or different initiatives. This really sums up the core activities of Guy’s and St Thomas’ that we can expect to see over the next few years. As a provider of local healthcare services with specialist capabilities required by the nation, the Trust will continue to develop the way it operates to improve patient care. The coronavirus pandemic has highlighted some of the key areas in which the organisation must innovate to meet the demands of an evergrowing population, strengthening its strategic partnerships and streamlining procurement and supply chain activities to ensure that patients receive what they need when they need it. “PostCOVID, we’re now trying to learn from the experience of COVID-19 and understand the benefits in the sense of being able to make changes for the good and to use that as the catalyst for more change.”

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LEADER IN

SUSTAINABLE

BEVERAGE PRODUCTION WRITTEN BY: GEORGIA WILSON

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PRODUCED BY: TOM LIVERMORE

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David Baxter, Group GM of Direct Procurement, Asahi Beverages, breaks down the company’s approach to sustainability and maintaining resilience during COVID-19

avid Baxter’s career journey in the beverages industry began over 20 years ago, working for Southcorp Wines in supply chain planning. Following this, Baxter worked for many beverage companies - including Foster’s Group, Carlton & United Breweries, and Treasury Wine Estates - before joining Asahi Beverages. Today, Baxter is the Group General Manager of Direct Procurement of Asahi Beverages. “I could not think of a better industry to work in,” says Baxter. He adds: “I'm responsible for leading an incredible team whose core role is to identify, contract, and manage suppliers to meet Asahi Beverages’ manufacturing requirements.” Being the leading beverages company in Australia and New Zealand, Asahi Beverages produces quality alcohol and non-alcohol beverages. “We have a strong portfolio of established household brands, as well as innovative new products,” says Baxter.

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He adds: “Our company's vision is to bring enjoyment and connection to everyday moments in life.” In the last two years, Asahi Beverages has evolved significantly. Its acquisition of Carlton & United Breweries scaled the company, making Asahi Beverages the leading beverages manufacturer in Australia & New Zealand. “Our footprint literally

“ OUR COMPANY'S VISION IS TO BRING ENJOYMENT AND CONNECTION TO EVERYDAY MOMENTS IN LIFE” DAVID BAXTER

GROUP GENERAL MANAGER OF PROCUREMENT, ASAHI BEVERAGES

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doubled in size to produce more than two billion litres a year,” says Baxter. Asahi Beverages and its approach to sustainability As a market leader in the beverage industry, Asahi Beverages is committed to ensuring Australians and New Zealanders are enjoying and connecting with its products in a sustainable way that protects the planet. Baxter says: “We have some key strategic initiatives that we've put in place. As a market leader, we feel it's imperative to lead on sustainability and set key targets to not only protect our planet, but in a way that also grows our business and shows the world that we are leaders in sustainability.” Following its acquisition of Carlton & United Breweries, Asahi Beverages began to grow significantly overnight. Due to its portfolio, volume and spend the challenge for Asahi Beverages was to become one team. “We did remarkably well,” says Baxter 236

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He adds: “Due to COVID-19, most of the transition occurred within a virtual environment, but we are very fortunate to have a young and dedicated team of procurement professionals focused on implementing and delivering key strategic initiatives that meet our Mid-Term Plan and have a huge positive impact on delivering our sustainability goals.” This year, Asahi Beverages has been working on a number of sustainability initiatives including its barley programme, raspberries programme, and packaging strategy. Baxter says: “Developing our barley programme gave us oversight into the growing process to ensure the best quality barley is used in our beers. This programme allows us to track provenance of barley and gives us direct relationships with more farmers. “With this relationship, farmers have a direct link to our strict quality parameters,

DAVID BAXTER TITLE: GROUP GENERAL MANAGER OF PROCUREMENT INDUSTRY: FOOD AND BEVERAGE

EXECUTIVE BIO

LOCATION: AUSTRALIA Having been in the Beverage industry for over 20 years and working across Australia, Europe and the US, David Baxter takes pride in developing and sustaining strong strategic partnerships with all suppliers. Currently Procurement Group General Manager (Directs) for Asahi Beverages, Baxter leads a talented and dedicated team who is goals & results driven, and focused on sourcing the best ingredients, packaging and equipment that brings Asahi’s amazing brands to life. Baxter is also very passionate about sustainability and delivering on the targets Asahi have set themselves. Studying in both Brewing and Wine, Baxter has a good technical understanding that allows him to collaboratively work with internal and external stakeholders. Knowing the importance in developing and retaining talent, Baxter ensures he dedicates ample time in supporting his team. “In Procurement, everyone talks about building relationships with your suppliers, I think you should build your relationships with your team first”.

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“ DEVELOPING OUR BARLEY PROGRAMME GAVE US COMPLETE OVERSIGHT INTO THE GROWING PROCESS TO ENSURE THE BEST QUALITY IS USED IN OUR BEERS” DAVID BAXTER

GROUP GENERAL MANAGER OF PROCUREMENT, ASAHI BEVERAGES

and we can link on-farm practices to beer quality, and we can monitor other important factors, such as water usage, soil health and fertiliser usage to ensure we meet our sustainability targets.” Asahi Beverages has also adopted ambitious goals around sustainable energy. To help achieve this, it recently installed Australia’s largest solar project at their Australian brewery at Yatala in Queensland, with around 7,000 solar panels now harnessing the Queensland sun. Baxter says: “We will source 100% of our purchased electricity from renewable sources by 2025. We will then reduce emissions across our entire supply chain to net zero by 2050 - from the farmers who grow our ingredients through to our manufacturing sites and the vehicles that deliver our beverages. Making the decision to switch its current raspberry supply chain and start using locally-grown raspberries, Baxter explains the benefits: “We made the switch to Tasmanian-grown raspberries because of their quality, their more reliable supply and Asahi’s commitment to supporting Australian farmers.” He adds: “Asahi Beverages’ products are made with the best raw ingredients, so it really doesn’t get any better than sourcing fresh world-class produce while supporting local farmers.” procurementmag.com

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Finally, when it comes to Asahi Beverages’ packaging, the company is committed to designing its bottles, cans, and other vessels to be sustainable. Asahi Beverages has committed to making all its packaging 100% recyclable, reusable or compostable by 2025. Working with suppliers in possession of visions and goals that align with its own, Asahi Beverages works with multiple bodies where improving sustainable packaging is a core focus. Baxter says: “We have recently formed a cross-industry joint venture with Pact Group, Cleanaway Waste Management Ltd

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and Coca-Cola Europacific Partners to build and operate two PET recycling facilities, one in NSW and one in Victoria. These will massively boost Australia’s PET recycling capacity. They will help transform recycling in Australia by providing a new, local source of high-quality recycled PET which we’ll use in products like our Cool Ridge water bottles. This is a major step towards helping us deliver a truly circular economy. “Each facility will be capable of processing the equivalent of around 1 billion plastic bottles - collected via Container Deposit

ASAHI BEVERAGES

Schemes and kerbside recycling each year. This will be converted into more than 20,000 tonnes of high-quality recycled PET bottles and food packaging by each facility, which will use state-of-the-art sorting, washing, decontamination and extrusion technology. Both facilities are receiving Commonwealth funding while each is also receiving support from its respectiv State Government.” In addition, Asahi Beverages has recently switched all of its 450ml and 600ml soft drink bottles to 100% recycled plastic. Navigating modern challenges in the beverage industry Like the stories of so many other people, the last two years have been some of the most challenging times in Baxter’s career. “With global shipping delays, labour shortages, high

BEING BOTH SUSTAINABLE NATIONALLY AND INTERNATIONALLY Asahi Beverages, as part of the Asahi global network, is demonstrating massive benefits in conducting its sustainability initiatives globally. Baxter explains: “Operating on a global scale means that we can leverage experience and initiatives that have been executed in other Asahi regions. We can also share those learnings and implement them in our region.”

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“ WE FEEL IT'S IMPERATIVE TO LEAD ON SUSTAINABILITY AND SET KEY TARGETS TO NOT ONLY PROTECT OUR PLANET, BUT IN A WAY THAT ALSO GROWS OUR BUSINESS AND SHOWS THE WORLD THAT WE ARE LEADERS” DAVID BAXTER

GROUP GENERAL MANAGER OF PROCUREMENT, ASAHI BEVERAGES

commodity prices, changes to consumer preferences, and all during a pandemic it has definitely built up resilience. It also shows the importance of business continuity planning and strategic relationships in the supply chain,” says Baxter. In order to stay ahead of these challenges, Baxter says: “There is risk in everything we do, but it's about understanding the level of risk you and your organisation are comfortable with, and then ensuring clear communication internally and externally. “This limits potential surprises, and helps to incorporate robust business continuity plans allowing organisations to react with speed should an issue occur.” Asahi Beverages and its suppliers Asahi Beverages works with thousands of suppliers in order to conduct its operations. “It is our responsibility to ensure that we build on those relationships,” says Baxter. He adds: “We share our strategic initiatives with our suppliers so that they can be a part of our journey, to meet our goals, and to ensure a strong focus on quality. We need partners that can work with us long term, those who have similar sustainability goals and can bring innovative ideas to the table so that we can work collaboratively.” Operating within Australia and New Zealand, Baxter explains that the company’s distance from both Europe and the US limits the suppliers it can choose from, stating: “We need to make sure that we are developing relationships with the suppliers we do have. Ensuring communication while delivering on strategic plans so that not only do we grow as a business, but our suppliers grow, too.”

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WRITTEN BY: GEORGIA WILSON

PRODUCED BY: MIKE SADR

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Gary Levitan, Global Head of Procurement, Sourcing and Supply Chain, WeWork on why the time is now for flexible working and the need for procurement talent

n the wake of the pandemic, organisations are looking for more flexibility. The Great Resignation has begun: according to US Bureau Of Labor Statistics, 4.3 million people left their jobs in December 2021 in the US alone. In 2021, many employees began to rethink their relationship with employment, chasing higher wages, better work-life balance, better childcare, better safety and more flexibility. Gary Levitan, Global Head of Procurement, Sourcing and Supply Chain at WeWork, says that the pandemic has increased its appeal as a flexible working space and solutions provider.

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WEWORK

WeWork, 6001 Cass Avenue Detroit procurementmag.com

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“ Our vision is to provide flexible office solutions that better people and the environment” GARY LEVITAN

GLOBAL HEAD OF PROCUREMENT, WEWORK

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“Employees are demanding flexibility and that is our value proposition at WeWork,” he says. ”Our vision is to provide flexible office solutions that are better for people and the environment.” WeWork services are categorised under three pillars: Space-as-a-Service; WeWork Access; and WeWork Workplace Since he joined the business back in 2021, WeWork has become a public company.

WeWork, 312 Arizona Ave Santa Monica

GARY LEVITAN TITLE: GLOBAL HEAD OF PROCUREMENT INDUSTRY: REAL ESTATE

“We are becoming a more mature organisation,” says Levitan. “We are creating processes and systems that are allowing us to scale and grow. But it’s not an easy transition from being a startup to being a company able to expand products and solutions to meet growing demand, in order to secure our long-term viability. This process is a day to day reality at WeWork.”

EXECUTIVE BIO

LOCATION: NEW YORK, US Gary is a veteran Procurement leader with a deep passion for Corporate Social Responsibility and Sustainability. Gary is currently leading all procurement and supply chain efforts for WeWork with comprehensive responsibility for owning and managing spend across all Direct and Indirect categories globally. Gary has 15 + years’ experience efficiently and effectively enabling spend owners, business units, and functional partners to maximise the value they receive from suppliers to meet and exceed their objectives. Gary has been recognised as a respected leader and mentor of crossfunctional teams of senior sourcing and procurement professionals for recognisable global firms such as JPMorgan Chase, The Hudson’s Bay Company, and Saks Fifth Avenue.

WeWork, Friedrichstraße 76 Berlin (Below) WeWork, 419 Park Avenue New York (Right)

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WEWORK

“ We are creating processes and systems that are really allowing us to scale and grow” GARY LEVITAN

GLOBAL HEAD OF PROCUREMENT, WEWORK

Data’s role in organisational efficiency In his role, Levitan is not only responsible for managing the company’s global furniture-and-fixtures supply chain but also for procurement, category management, sourcing and spend control.

Of data, Levitan says: “It’s incredibly important. I know everybody says this, but we want to use data in a different way. Typically within procurement, sourcing and supply chain data is often underused in designing an efficient organisation and the employees needed to effectively run its operations.” He adds: “Typically, building a procurement organisation is based on spend under management. There are industry benchmarks that most chief procurement officers use to guide staffing needs. So for example, a common industry metric is that for every US$50mn that you manage, there are benchmarks to say that you need X amount of full-time employees, then on top of that, the complexity of the category dictates the level of experience but typically that is then the end of the data. The major weakness of this analysis is that procurementmag.com

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it doesn’t take actual transactional volume, organisational nuance or product delivery into account resulting in a mismatch between bandwidth and headcount. “But employees that are not engaged, busy, or working towards a goal - even if you have the best culture, leaders and benefits, become complacent. People want to keep busy, feel valued, learn new things and then move on. So this traditional 252

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benchmarking method doesn’t really work.” Instead, Levitan is trying to incorporate into WeWork the practice of gaining as much ‘real world’ transactional data as possible. He says: “If you base the staffing plan of an organisation on this practice you are able to create volume levers in the future, balanced workloads, and airtight business cases for decision makers when you need to grow.”

WeWork, Carrera 7 Bogotá

WeWork: The time for flexible work environments is now

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“ I realised that industry expertise and subject matter expertise is not as critical when it comes to category management as I used to think and is often a detriment” WeWork, 450 Lexington Ave New York

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GARY LEVITAN

GLOBAL HEAD OF PROCUREMENT, WEWORK

4K+

number of employees

700+ locations globally

150 cites

countries

590K+ physical memberships

45K+

All Access memberships *As of Dec 2021

WeWork, 155 West Street, Johannesburg

Category management: ‘It’s all about processes’ Throughout his career Levitan has been driven by different business strategies, many of which have fallen out of favour. “At the beginning of my career, category management was a function that very few understood. I led some very specific categories - including sustainability and renewable energy - but then I started to oversee more commodity-based

categories, such as OPEX consumables, which are products and services that support day-to-day business. It was then that I realised industry expertise and subject-matter expertise is not as key to category management as I once believed. Now, I actually think it can be detrimental,” says Levitan. He adds: “For example, I had stakeholders with the same subject-matter expertise as me, and that created friction procurementmag.com

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because I was too focused on finding the perfect solution, instead of understanding their goals and delivering on their needs.” “But I learned that if you have a great end-to-end category management process, all you need to look for is talented, like-minded, eager, and passionate people. With the run on talent right now, this is more important than ever.” To this end, WeWork’s has a fivestep category-management toolset that allows Levitan to identify anybody with a desirable profile. “Simply filling out various templates, conducting market research, and putting that information into graphs, is a category strategy in itself,” he says. “This in turn organically develops expertise that wasn’t there before.” But the fact remains that - although the pandemic has raised the stock of procurement in boardrooms procurement and sourcing are not typical go-to college topics. “There is no educational framework for it,” says Levitan.

“Partnerships are critical [...] by leveraging partnerships organisations stand a chance in mitigating risks” GARY LEVITAN

GLOBAL HEAD OF PROCUREMENT, WEWORK

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WeWork, 123 Eagle Street Brisbane

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“It’s not something kids are typically passionate about. This means we are missing out on like-minded people with the right talent attributes. So we can help the industry by creating these opportunities for people who may not necessarily know about procurement, sourcing and category management.” How technology is changing procurement When it comes to technology in the procurement function, Levitan predicts there will be a shift in how technology is used in procurement. “I think we are going to move away from self-contained procurement and supply chain ecosystems to best-in-class technology providers for each portion of the end-to-end process. Complete supply chain ecosystems are notoriously difficult to deploy, because not every function in supply and procurement is necessarily deeply related or integrated, especially in certain matrixed organisations.” procurementmag.com

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THE DIFFERENCE BETWEEN CATEGORY EXPERTISE, SOURCING EXPERTISE AND GENERALISTS Gary Levitan, Global Head of Procurement, Sourcing and Supply Chain at WeWork outlines the difference between the three: •

DID YOU KNOW...

•

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Being a category expert is to be an industry subject matter expert. Whether it’s experience in buying, sourcing, or managing, being a category expert the person really owns the product. Sourcing expertise is less about specific industry expertise and more about having competitive process expertise. It’s about knowing how to find suppliers and how to rate and grade them. It is also about how to run an effective and competitive process, how to get stakeholders engaged, and how to make proper recommendations. A generalist is someone who can flex into different categories and situations. They have broad industry, category and process experience and an eye for value.

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WeWork, Designer Club, Seoul

WEWORK

But one tool to do all that can leave gaps in the functions. Rest assured, Levitan sees emerging technology such as smart contracts, AI-supported demand forecasting, long tail spend management software, and intake and approval workflow platforms filling the gaps for each of these functions in procurement and supply chain. When it comes to deploying any kind of technology, Levitan is a firm believer in looking before you leap. “You need to assess what is most important, then deploy best-in-class tools that serve your organisation best.” He also stresses that organisations must not forget about change management. “I have seen too many supply chain platforms fail because the change-management project plan was too light.” WeWork, 80 Strand Street Cape Town

WeWork and its partnerships “Partnerships are critical,” says Levitan. “It’s a bit of a cliché, especially in the procurement world. Our global supply chains are posing never-before-seen complexities and only by proactively leveraging true, collaborative partnerships do organisations stand any chance of mitigating these potentially existential risks.” Empire Office “Empire Office is an example of a partner who helps us buy furniture directly from multiple global manufacturers. Although our product is space, that space comes furnished with fixtures and technology, and we need to get those products to our customers and members on time,” says Levitan. “Our partnership with Empire allows us to deliver fully furnished space on time and on budget.” This partnership helps WeWork create clear communication and clear expectations on both sides, at a time when having a reciprocal relationship is more critical than ever. Cushman & Wakefield Cushman & Wakefield - a global commercial real estate services firm - believes in flexible office space as a viable option. They are invested in WeWork and the kind of service and amenities that it offers. They are going to be a valued collaborative partner going forward, especially since they have a lot of experience in large real-estate portfolios. There will be a lot of synergy between WeWork and Cushman & Wakefield.

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Supplier performance. Supplier risk. Supplier diversity and ESG. You've got big plans; Vendorful has the tools to help you execute. -

Procurement - May 2022

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