Q2 - 2020
INSIGHTS FOR TODAY’S PROCUREMENT LEADERS
SLAVERY
IN Supply Chains a Clarion Call to Procurement Automation and Digitalization
Why It’s Important to Rebalance Your Strategic Sourcing Approach Blurred Lines Means Bad Business Technology in Procurement
2 Slavery in Supply Chains 6 Blurred Lines Means Bad Business
8 Why It’s Important to
Rebalance Your Strategic Sourcing Approach
12 Technology in Procurement
16 Marketing Procurement and Beyond
Q2 - 2020
INSIGHTS FOR TODAY’S PROCUREMENT LEADERS Editor-In-Chief Andy Beth Miller
Design Laura Sawyer Messing
Writers Ronald Hedley Andy Beth Miller
Outside Contributor Stephen Catalina, CEO Expense Management Solutions
Advertising Branden George: 940-230-5830
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procurising.com No part of this publication may be reproduced without written permission from the publisher Real Sourcing Network (RSN). This publication is intended to provide accurate, authoritative, and detailed information in regard to the subject matter covered. All written materials are disseminated with the understanding that the publisher is not engaged in rendering legal advice or other professional services. Under no circumstance should the information contained herein be relied upon as legal advice, as it is designed to be a source of information only. ProcureRising strongly encourages the use of qualified attorneys or other qualified experts with regard to the subject matter covered.
LETTER FROM THE EDITOR Successful Founder and CEO Gerhard Gschwandtner once said that “Problems are nothing but wake-up calls for creativity.” Along this theme of tackling problems with creativity, this issue is filled with a wide array of exciting information that covers a diverse range of subject matter, much of which procurement professionals constantly find problematic. As such, although it sometimes feels impossible for me to try and coral all of the insights offered into a single motif for each magazine issue, if my hand was forced, I would hazard to dare that demystifying puzzling things could perhaps encompass the gist of what our featured experts are mostly “getting at” in these articles (and we are certainly grateful for their turning on the flashlights where our paths have felt depressingly dim). Not only do the experts interviewed in this issue help us solve myriad procurement quandaries, but they each do so with insight and their own unique flair. Read on and discover how contributor Steve Catalina ingenuously infuses a clever My Cousin Vinny film reference to reiterate why re-balancing your strategic sourcing approach is so vital for success. Keep reading as Ron Hedley shares insights gleaned from Barry Byrne, Head of Global Marketing and Retail Procurement at Adidas, who has an upliftingly optimistic outlook for the future of procurement, one that calls for the proverbial firing of the old guard to transition from a a cost cutting to a value generation. Author and entrepreneur Justin Dillon adds some definite fire to the mix when he boldly declares how supply chains conduct twenty-first century slavery, not being shy about facing this problem head-on. Expert Steve Fisher expounds upon the critical component — and rare unicorn — of financial integrity within the procurement realm, specifically explaining why this character trait is so vital to possess. Procurement expert Christopher Robert, Director of Procurement at Comcast NBC Universal, then shares how embracing technology can revolutionize your world and present you with stellar results that allow you to find the most optimum solutions in the best, most efficient, and modern way. Now, as I end this letter, it’s time for you to begin taking these insights, getting out there, and solving your own procurement puzzles. Piecing It Altogether Alongside You,
As the publication does not guarantee the accuracy of the information, it is therefore not liable.
Andy Beth Miller
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SLAVERY
IN Supply Chains a Clarion Call to Procurement By Ronald Hedley
In 1833, a sixteen-year-old slave from Maryland was sent to work for a poor farmer and self-proclaimed slave-breaker named Edward Covey. True to his reputation, Covey beat the boy regularly. The sixteen-year-old slave was nearly broken. But on one memorable occasion, as Covey began to beat him, the young slave fought back. The struggle lasted more than two hours until Covey, bloodied and humiliated, gave up the fight. Covey never tried to beat the young slave again. In his autobiography Narrative of the Life of Frederick Douglass, author, orator, statesman and abolitionist Frederick Douglass shared the significance of standing up to his cruel overseer: “This battle with Mr. Covey was the turning point in my career as a slave. It rekindled the few expiring embers of freedom, and revived within me a sense of my own manhood. It recalled the departed self-confidence, and inspired me again with a determination to be free.
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“ Are we helpless? Can anything
be done to reduce slavery in factories, fishing boats, and sweatshops? Can we stop the exploitation of children? Dillon is certainly trying.” – Hedley
The gratification afforded by the triumph was a full compensation for whatever else might follow, even death itself.” Justin Dillon is an entrepreneur, musician, director, producer, and like Douglass, Dillon is an author, orator, and (modern-day) abolitionist. His book, A Selfish Plan to Change the World, is a must read for all procurement professionals. In Selfish Plan, Dillon writes about how he learned of twenty-first century slavery (forced labor, human trafficking, the abuses of child labor) and what he has done about it since. He writes about how his lifelong mission, his “soul dream,” was realized, and he writes about how you, dear reader, can also change the world.
“ We built an algorithm that can determine the risk of slavery in almost any product, down to raw materials, such as cotton and petroleum.” – Hedley
Prior to the Civil War, in Douglass’ era, there were 3,953,762 slaves in the United States. Those numbers are small compared to the number of slaves that are in the world today. Dillon writes, “Twenty-first century slavery affects more than forty-million men, women, and children who are forced to work without pay, and endure unspeakable violence. This illicit trade and exploitation of humanity is the fastest-growing crime on the planet” (2017 p. 28). What is twenty-first century slavery? Perhaps President Obama said it best: “When a man, desperate for work, finds himself in a factory or on a fishing boat or in a field, working, toiling for little or no pay, and beaten if he tries to escape - that is slavery. When a woman is locked in a sweatshop, or trapped in a home as a domestic servant, alone and abused and incapable of leaving – that’s slavery.” (September 24, 2012, Sheraton Ballroom, New York) Are we helpless? Can anything be done to reduce slavery in factories, fishing boats, and sweatshops? Can we stop the exploitation of children? Dillon is certainly trying. In 2018, he founded FRDM a software as a service platform. Dillon shared his reasoning for creating the start-up. He wrote, “We believed we could reduce slavery globally by influencing something that happens every nanosecond of every day. Consumers, business, governments and organizations are purchasing goods and services constantly without knowing whether or not that purchase was produced by slavery. We determined that if we can influence those purchases with intelligence about the likelihood
of slavery, we could eventually impact tens of millions of lives” (2017 p. 67).
Changing the World To that end, FRDM was developed to help procurement professionals make informed decisions about choosing suppliers. Dillon writes, “Slavery and child labor are buried deep in supply chains, but previously no one had a way to look for it. So, we built a software business intelligence tool called FRDM that companies can use to identify risky purchases” (2017 p. 67). He continued, “We researched all the goods, services, and commodities a business might purchase, from steel to lightbulbs, apricot jam to industrial refrigerators, and palm oil to Wi-Fi routers. We built an algorithm that can determine the risk of slavery in almost any product, down to raw materials, such as cotton and petroleum” (2017 p. 209). In his book, Dillon waxed specific, “When FRDM analyzes a generic kitchen blender, it doesn’t just look at the factory where it was assembled. It looks for the risk of slavery where the metal for the blade is made, in the copper wiring on the inside, and in the rubber components. We designed the tool to help businesses see what they might be missing. This kind of data empowers companies to be the heroes by working with their suppliers to protect the freedom of their workers” (2017 p. 209).
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“ Dillon believes it is procurement’s responsibility to know which of their products exploit slaves.” – Hedley
Dillon continued, “When a company identifies a risk (through FRDM), they can then interrogate certain suppliers that might be benefiting from slave labor. This long-form, upriver approach is designed to make it hard for bad guys hidden deep in supply chains to profit from slavery” (2017 p. 67). Dillon knows you have to hit ‘em (exploiters) where it hurts: in the pocketbook. He wrote, “When I decided I wanted to make a scalable impact on slavery, I knew it had to be done in the marketplace. We estimate that the annual global profits reaped by slaveholders exceeds $150 billion. We knew we had to leverage a much larger amount of money to fight slavery, and those kinds of numbers only exist in the marketplace. On average, global commerce from consumers to business and business to business (B2B) is more than $80 trillion a year. So, we focused our efforts on leveraging that number to end slavery” (2017 p. 128). What is the impact of FRDM? Dillon explained, “On pure numbers, our platform is influencing over 24 billion in B2B spend. What that means is that we’re helping [businesses] understand the risk of forced child labor inherent in those purchases and services. We’re monitoring a tremendous amount of spend.” FRDM provides procurement professionals with the tool they need to know every aspect of their supply chain. Dillon believes it is procurement’s responsibility to know which of their products exploit slaves. He explained, “[Procurement is] the one place where companies can really affect change. Marketing, finance, sales and operations can’t affect change [like] procurement can because a dollar over a barrel is the best motivator of behavior. Companies can express their values through procurement, and that’s hugely valuable.”
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The Power of “Buycotting” Dillon connects with business, education, entertainment and government leaders worldwide to promote his cause. He wrote about one such connection and subsequent positive result. “I met with Kelly Miller at his company’s headquarters in Cupertino, CA. His company, SAP Ariba, is a procurement software company. Together, we decided on a plan. We would find a way to integrate our FRDM tool into their platform, empowering millions of companies to protect freedom in their supply chains” (2017 p. 210-212). Dillon and Miller once again knew to hit ‘em where it hurts. Dillon wrote, “Our mission was clear. If we can wield the power of the global marketplace, we can change the world at scale. We knew we had to build a new way for humans to be humans. Instead of boycotting companies for what they aren’t doing, we decided to build a network of ‘buycotters’ who buy better. We committed to applauding efforts that led to transparency, rather than requiring impossible perfection” (2017 p. 210-11).
New Anti-Slavery Laws FRDM is influencing governments and helping to implement laws that are affecting change worldwide. Dillon wrote, “[In 2012,] the Obama administration issued Executive Order 13627 requiring companies that do business with the United States to increase their efforts to remove slavery from their supply chains. The White House highlighted Made in the Free World, the non-profit organization Dillon founded, as the organization that can assist business in this process. The United States is the largest purchaser in the world, which means that this executive order has the power to protect millions of people” (2017 p. 212).
The proverbial dominoes began to fall. Dillon wrote, “Soon after, the UK passed the Modern Slavery Act, requiring businesses to produce proof that they were looking for slavery in their supply chains. Other laws were being passed as well, and companies were beginning to be prosecuted in court for slavery in their supply chains, some cases reaching as high as the Supreme Court” (2017 p. 212). Laws were passed in Australia as well, requiring companies to know where slavery is in their supply chains. In 2016, President Obama signed the Trade Facilitation and Enforcement Act of 2015. In Section 910 of the Act, a loophole in the Tariff Act of 1930 was closed. The Tariff Act of 1930 (also known as the Smoot-Hawley Act) permitted the use of “forced labor” in products entering the U.S. if the product was not produced in the U.S., and if Americans needed the product. The new law, the Trade Facilitation Enforcement Act of 2105, which was signed by the President, prohibited the use of forced labor in all products, needed or not, that were imported into the U.S. The Act also mandated that U.S. Customs and Border report to Congress every September how many goods and what kinds of goods have been denied entry due to the Act. Dillon said, “What’s been interesting in the journey is seeing how governments come on board. The U.S. Customs and Border Patrol recently (Oct. 8) stopped shipments of baby pajamas coming from China because they knew it was [the merchandise] made by Muslim minorities in slave labor camps in China.” The media has entered the picture too. They have begun to report on slavery. Dillon stated, “Journalists were uncovering slavery in seafood, even discovering a remote island in Indonesia where slaves were being kept in cages. The world was quickly changing its view on slavery supply chains, moving it from a remote problem to a high priority in business.” What is the long-range effect? Dillon said, “What the laws have done is made it something that [companies] have to pay attention to. How much is up to [them]. My job is to help companies create more value for themselves, which means I’m either helping increase their value on who they are as a company, or I’m reducing costs. If I’m doing those two things, then I’m providing value for companies.”
A Challenge to Procurement Professionals Dillon shared another important aspect of his work, stating, “My job is to not only create value for companies, but also to create value for the people who work in those companies: the value of being able to go to your job and contribute to something bigger than yourself. It is an opportunity that doesn’t come along too often in a career.” Justin Dillon and Frederick Douglass are kindred spirits. Both abolitionists stood up to the machinations of slavery and have made a difference. Let’s revisit Douglass’ thoughts following his fight with his oppressor. He added this to his words shared at the beginning of the article: “He only can understand the deep satisfaction which I experienced, who has himself repelled by force the bloody arm of slavery. I felt as I never felt before. It was a glorious resurrection, from the tomb of slavery, to the heaven of freedom. My long-crushed spirit rose, cowardice departed, bold defiance took its place; and I now resolved that, however long I might remain a slave in form, the day had passed forever when I could be a slave in fact.” Dillon challenges every procurement professional to “repel the bloody arm of slavery.” He stated, “Procurement is being given an opportunity to do something they have never been able to do before, which is to change the world.” Dillon added, “Addressing slavery in supply chains also addresses something we all struggle with, the question about why we are here, [aka] the poverty of meaning in our lives.” Dillon then framed his words to represent the thoughts of the quintessential procurement person. “I (the procurement professional) can actually influence the way the world works in my own way from where I sit at my desk. I know that by using FRDM, I am able to help illuminate where my spend is going, and [I can] direct that toward the suppliers.” One can’t help but feel Douglass’ spirit resonating in his words.
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Blurred Lines Means Bad Business: Why Financial Integrity is Vital to Procurement Success By Andy Beth Miller When I was approached by Steve Fisher with writing an article covering the subject matter of financial integrity, specifically in the procurement realm, I was immediately on board. Not only was I on board, but I was excited, as integrity — of any kind — is a rare anomaly these days. As we jumped into the interview, Fisher, who is a Procurement Advisor for Emerald Textiles, began telling me about the journey that first brought him to the procurement field. It was a tale that began with the requisite college degree, followed by grad school, and as Fisher extolled his evolution, it quickly became clear how motivated, self-aware, and mindful an individual he is. “After college, I became a customs broker/freight forwarder and learned the nuts and bolts of moving and storing goods globally. After realizing how little I knew, I went back to graduate school,” Fisher explained of his progression.
But, as he soon assured me, Fisher has never—and will never—cut corners or cross any ethical lines in order to get there. Indeed, there are no shortcuts or kickbacks allowed here, as Fisher explained one example of where he often sees colleagues allowing fringe benefits to muddy the waters of financial integrity, “One thing I [have] learned, among many, is that no matter a person’s title, if that person has pictures of golf or trip outings between company members and suppliers, the company is not getting the best pricing because they are spending at least something on keeping decisionmakers happy outside the confines of real business.”
Following his graduation from grad school, Fisher decided to learn the third major component of the global supply chain: buying. For five years, he worked as a consultant and advisor for a company whose business was to reduce indirect spend and to optimize categories.
And for those that will assure Fisher that this is just the way the world—and business—works, Fisher will readily assure you that it is not, or certainly should not be. “I know [that people say] it’s just ‘part of the game,’ but it is not,” Fisher stated flatly. He then directly follows this statement with a declaration that does not mince words, while pointing to the accountability of every single individual in this scenario, “I believe that everyone involved in buying decisions, directly or indirectly, must treat spending company money as if it were your own. If you do that, you will always hold the best interests of the company first.”
As he described this season of his career to me, I couldn’t help but imagine him on one of my favorite game shows that rewards such acumen. The iconic “Let’s Make a Deal” came to mind as Fisher admitted with a grin, “I have always enjoyed reducing costs and negotiating.” Fisher’s revealing words and infectious smile were telltale signs of his intense affection for altering that bottom line and finagling his way to a better financial reward for his company, and the fact that achieving such a feat was intensely satisfying to him was clearly evident.
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He continued to bring his point home via this summation, “In a nutshell, it means spending every dollar as if it were coming out of your own pocket. It means putting the best interests of the company before your own wants. It also means being a professional,
honoring the ‘code’ of ethics requiring procurement professionals to always keep supplier/customer interactions at arms length. This way, as a procurement professional, you always make the right financial decision that is in the best interest of the company. This is the right thing to do.” Fisher then offered a perfect real world example of how to do just this using a common situation that many of us many have already have found ourselves in during our own procurement process, “If a vendor offers you tickets to a game, just because you want to go—you should not. Having a few drinks paid for by a potential supplier—don’t do it. Actually, if you want to do it, pay for it out of your pocket. Then you won’t be beholden to that vendor.” Simply put, Fisher is cautioning us from blurring the lines in our business practices and extracurricular activities outside of the office. “Those in buying decisions should only [make decisions based on] what is best for the company, and [they] should never be influenced by who they like because [that individual or company] offers great meals/tickets/gifts.” Speaking of lines, Fisher reminds me of that really ahead of the curve kid whose crayon portraits in kindergarten were out of this world, all because he was the one ingenue who colored inside the lines versus all the rest of us, whose Picassoesque portraits portrayed much more slapdash strokes. This “stay inside the lines” mentality clearly marks this professional’s no compromise MO. For Fisher, Picasso’s abstract out of bounds masterpieces may be prized in the art world, but when it comes to procurement, precision—and self-discipline—is key. And although Fisher is heavy-handed when it comes to insisting that all of us tow the ethical line and does not allow any lee-way for our shirking that responsibility, he does realize that this world’s corporate culture does not make it easy. Fisher pointed out the main problem areas that he sees facing us today, the ones that really can trip us up and lead us out of bounds quickly: 1. Being unaware of basic situations that can influence buying decisions. “I was once offered an allexpense paid trip to Vail with my wife. I politely said no, but my boss took it. I think many people just don’t associate the two (accepting a gift and being beholden to a vendor).”
2. Being apathetic about ramifications. “[People] let their desire for personal satisfaction get in the way. Case in point—I was offered courtside seats to the championship basketball team the Warriors, which, of course I turned down. But my boss (actually the CFO of all people) took the tickets. He knew what he was doing—he just ignored the impropriety and the company had no policy against it.” 3. Having a lax company policy. “If a company has both a policy and has leadership that en-forces good procurement behavior, there will be less possibility of improprieties. Stiff penal-ties for not adhering to policy are also important.” 4. Lack of leadership. ”It takes leaders to influence the behavior of others.” Luckily, Fisher did not leave us hanging after hearing all of the obstacles facing our accomplishing this balancing act of walking the line when it comes to financial integrity, but instead provided us with several proactive steps that any one of us can take in order to keep in stride and succeed. The best part is, they are suitable for any pace: 1. Be the role model you want everyone to be by doing the right thing. Specifically, always remain focused on the primary mission, which is to buy the right products at the right prices. Also, remember procurement is a support function —it is generally not our function to decide which are the right products/services, but to present options that enhance the financial viability of the company. 2. Ensure strong procurement governance that limits process holes that allow improper behavior to occur. 3. Communicate to your supplier community the rules concerning proper (and improper) behavior. “One of my favorite quotes comes from a man who, you could argue, literally saved the world, Dwight Eisenhower,” Fisher stated. “[Eisenhower said,] ‘The supreme quality for leadership is unquestionably integrity. Without it, no real success is possible.”’ While speaking of success, Fisher then pointed to one of his mentors, entrepreneur Mark Bressler, who was instrumental in instilling ethics and integrity in all of his procurement decisions. Fisher also credits Bressler with showing him how to “not let integrity get in the way of doing great business.” In fact, according to Fisher, “The two can coexist very nicely—and should.”
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Why It’s Important to Rebalance Your Strategic Sourcing By: Stephen Catalina, CEO, Expense Management Solutions
Rebalance, as defined on merriam-webster.com, means “to restore balance to, or adjust the balance of (something); to balance (something) again.” For many, the aftermath of the 2008 financial crisis required a reassessment and perhaps, a rebalance of their investment strategy and approach. Although investors rode the profitable growth wave for an extended period prior to the collapse, many of them learned that a stagnant model, due to the lack of periodic rebalancing, ultimately set them back. At a very young age, my cousin Joey (not Vinny… I digress, but do highly recommend the fan cult classic movie) introduced me to what he referred to as the “5 P” rule, which stands for proper preparation prevents poor performance. Although this did not resonate with me much in my younger years, as time passed, I began to understand how this rule could apply to life, more broadly. As a strategic sourcing and expense management professional, I have come to learn how this rule applies to (a) achieving internal efficiencies, and (b) optimizing external third party relationships. Ultimately, both parties’ (companies and vendors) desire to build strategic partnerships that align with their goals and objectives. Although the focus of this article is the financial services space, in most industries, companies are using third party providers to support both core and
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non-core services. Examples include technology (i.e. hosted, cloud-based, SaaS), process automation (i.e. robotics, online auctions), artificial intelligence (AI), data analytics (DA), business process outsourcing (BPO) and the like. Ideally, key business stakeholders collaborate with their sourcing partners to execute some form of a competitive bid process to determine the best option for their requirements. In some instances, however, those who are allergic to change (I say this tongue in cheek), simply maintain an auto-renewal state with their current provider(s) for a variety of reasons, all of which are likely valid. In either scenario, an underlying question we often hear is “How do we know if we have a good deal?” Although the criteria for how each company defines a “good deal” may vary, a consistent theme across the board is how do you find the optimal balance of cost, flexibility, risk and performance?
The
5P
Regardless of the sourcing approach (i.e. a competitive bid process v. a direct renegotiation), understanding procurement intelligence and how to best optimize your third party relationships is critical. Most companies (although some are not shy to admit they do not) have the internal intelligence, knowledge, skill sets, and subject matter expertise (SME) that enables them to negotiate a deal that meets their business requirements. Others, however, utilize their internal resources but also opt to partner with third parties to leverage “external industry knowledge and benchmarking expertise� in order to achieve the best outcome.
Proper Preparation Prevents Poor Performance
This type of strategic collaboration enables companies to reassess and rebalance their strategic sourcing strategies and approach periodically to ensure they achieve and maintain process efficiencies, optimize third party vendor relationships
rule:
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“
that are based on current conditions (thus improving service levels and contract terms), and achieve optimal cost structures as their business, and the competitive landscape, continue to evolve.
...companies need
With today’s economic uncertainty and a potential market correction looming in the future, I suspect investors are better positioned this time around due to rebalancing their previous stagnant investment strategy and approach. Similarly, companies need to understand that as their
to understand that as their business and the market change ( be it a progression
or regression ), it is equally important that they periodically reassess and rebalance their strategic sourcing efforts and contracting principles. – Catalina
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�
business and the market change (be it a progression or regression), it is equally important that they periodically reassess and rebalance their strategic sourcing efforts and contracting principles. In today’s environment, companies of all sizes are challenged to do more with less, and to do it faster and with more efficiency. Leveraging external industry knowledge and benchmarking expertise will help proactively identify sub-optimal third party relationships and ensure that you achieve the best outcome, thus definitively confirming “you do have a good deal.”
“
In today’s environment, companies of all sizes are challenged to do more with less, and to do it faster and with more efficiency. – Catalina
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Technology In Procurement:
How Embracing It Can Make Procurement a Change Partner By Andy Beth Miller It all began with a most fortuitous fall. As I sit down to interview procurement expert Christopher Robert, Director of Procurement at Comcast NBC Universal, he shared with me how he inadvertently stumbled into the world of procurement. “I somewhat fell into it. I did not realize that I was going to be in the procurement world at first,” Robert recalled. “I went down the business track, and the University that I went to had a great opportunity in this new field that had a major called business logistics, which had logistics and procurement, and was an area that I had never heard anything about.”
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His curiosity sparked, Robert then described how he excitedly rocketed down that proverbial procurement rabbit hole, soon discovering that he had quite an affinity—and penchant— for it. Robert described how, after falling into this business logistics course of study, he also fell head over heels for the procurement niche in particular. “I really started to enjoy [procurement]. I found myself working, even as an intern, with colleagues from around the world, identifying and qualifying new suppliers, and I said, ‘this is the field I want to be in,’ because I had an opportunity to really understand the business, received global exposure, and I was able to go out and really make a difference.”
“ In the past, contracts often sat on someone’s desk, and you would have to go and manually root through them to find the expiration date and the anticipated spend. Trying to figure out who had approved them was a challenge, and even if you had that digitized, many organizations had multiple databases.” –Christopher Robert
Once Robert knew that he had found his preferred profession, and what some may even call his calling, he wasted no time in doing just that —making a difference. Specifically, he set his mind and efforts to achieving the most optimum procurement results possible, every day. In order to achieve this lofty goal, Robert has found —and still finds— technology to be an invaluable tool. “Technology in procurement has been huge. For a long time, procurement and supplier negotiations have taken place with face-to-face contact between buyers and suppliers. Purchase orders were written on carbon paper and there were three or four copies based on who approved it, and each person retained a copy in their respective organization,” Robert recalled the now seemingly archaic practice with a slight chuckle. “Now, many items have already been digitized, but I think we are still early on in that stage.”
It is clear by Robert’s tone and words that he sees that there is much work to be done when it comes to convincing the current procurement world to embrace technology and the near limit-less possibilities it offers. Of these almost infinite possibilities, Robert shared just a few that he has personally incorporated into his procurement practices, finding them to be highly beneficial, the first one being streamlining data. “In the past, contracts often sat on someone’s desk, and you would have to go and manually root through them to find the expiration date and the anticipated spend. Trying to figure out who had approved them was a challenge, and even if you had that digitized, many organizations had multiple databases,” Robert shared. “The ability to go in and use one electronic contract database with reportable fields for all data, including commitments made to suppliers, anticipated total spend, spend type, spend location, termination terms, and a host of other fields was revolutionary. Digitizing this data enabled senior management to clearly see the obligations they had made to suppliers. It also helped the organization from a buying standpoint to better understand past relationships, including spend history, and use that [data] in spend category management.” Unsurprisingly, according to Robert, such centralized contract databases enabled by technology are now one of the primary drivers of world-class procurement practices, and with such impressive results clearly shown in hard data, it is a wonder that everyone has not already jumped to adopt every technological tool that they can in order to streamline their operations and achieve optimum efficiency. “I have seen some resistance in folks to completely adopt full digitization,” Robert admitted, his voice revealing his own surprise by the seeming no-brainer of adopting the wonders of technology.
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Luckily, Robert has found a way to introduce these tools to the somewhat reluctant recipients by utilizing a creative holistic approach, assuring the oldschool clientele that they do not necessarily have to relinquish their cherished, tried and true practices, such as the personal touch details that have been their bread and butter since day one. “The best way to address that is by understanding what their real pain point is, and how to over-come that,” he explained. “For example, I know a lot of folks that have made a strong push toward pursuing almost all of their negotiations electronically. For smaller items and routine items, a lot of that works well, but I do think occasionally, there’s an opportunity to add in a little face-to-face interaction [a nod to the old school mentality of personalizing business] in order to really get the value out of it for the supplier and yourself, but within that context, basically taking that agreement, and then digitizing all other aspects.” How is this possible, you might be wondering, as was I? Robert is glad we asked: “The best way to address that is to mix styles a bit, and if you do it right, you can have an optimal outcome. You give them one small piece of the sourcing process, then they are able to say, as long as I get that little face-to-face piece in there, I will agree to all the other digitization initiatives.” Quick and easy translation: Everyone will buy in. Everyone will be satisfied with the outcome. And the baby will NOT have to be thrown out with the bathwater.
“ ...I know a lot of folks that have made a strong push toward pursuing almost all of their negotiations electronically.” –Christopher Robert
It’s this kind of ability to achieve creative compromises, while adapting and growing with evolving technology, that has made Robert such a success. Having been fully convinced that technology really is the face of procurement’s future, as well as being a lead contender for the role of “change partner,” as Robert termed it, I had to ask him about simple, proactive steps that we can all take to try to stay aware of — and in step with — the ever-changing technological tools and advances in procurement. He provided these helpful tips and suggestions:
* * *
vail Yourself of Publicly Accessible Resources, A Such as ThomasNet® : Allows you to go online and find specific suppliers for category spend that you may not already know, giving you access to a plethora of other products tilize Tools Like Google Earth, Dun & Bradstreet, U and Institute for Supply Management (ISM)’s Purchasing and Supply Guide: Allows you to identify, qualify, and validate information provided by suppliers when you are sourcing S tay Abreast of Information Provided by ISM, an Organization of Which Robert is in Charge of Programs at the Philadelphia Chapter: Allows you to stay abreast of latest information, including details about Blockchain, Bitcoin, economic forecasts as they relate to technology, and much more
According to Robert, it’s not rocket science, and it certainly does not have to be scary. Instead, i’s all about achieving “operational excellence and technology implementation.” And if there is ever any doubt about technology being the means to reach this ideal, the data results of technology-driven operations speak for themselves. Simply put: The proof is in the (procurement) pudding.
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Marketing Procurement and Beyond By Ronald Hedley
In late summer, as the northern hemisphere commenced tilting away from the direct rays of the sun, Barry Byrne, Head of Global Marketing and Retail Procurement at Adidas, shared his sanguine vision of marketing procurement’s luminous future. His quintessential belief is that people have an innate capability to be great and that procurement’s future is bright. The following compilation of Byrne’s thoughts (in italics) captures his message:
The Capability to Be Diverse I firmly believe in the importance of diversity, particularly when it comes to creating a winning culture. It takes diversity to see the world from many different angles. Diversity is critical.
The Capability to Be a Family Treating your team like family, engaging emotionally isn’t the wrong thing to do; it’s the human thing to do. People are people. We have many differences, but, at the end of the day, we all want to be recognized, to be a part of something bigger, to drive change, and to grow and develop. (Excerpt taken from Byrne’s article “Make Your Team Your Family”)
The time’s right to be more progressive, to actively promote female leadership within our industry. I know that diverse teams are healthier, happier places to work. They drive an equal share of competitiveness and collaboration. Teams working together deliver great personal and business outcomes. (Excerpt taken from Byrne’s article “Diversity--The New Procurement 2.0--My Experience”)
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The Capability to Inspire Empower them! I hire people who are stronger than I am in their particular area of marketing expertise. I support them to drive change. I believe it’s a natural human condition to want to change things, improve, and become stronger. I also believe that it’s important to have fun. Life’s too short to not enjoy what you do. The Capability to Think Outside the Box It takes courage to hire marketing people into procurement functions. The Capability for Growth Marketing needs a different type of procurement, now more than ever. The focus is growth. Growth drives sales and volume. Marketing needs growth to maximize their investment. Price is important but return on investment is where you get the real value required to grow. We need to break down the silos that exist between procurement and marketing and work together to collaborate and increase ROI.
The Capability to Transition Marketing Procurement needs to transition into the marketing organization. I believe in KPI’s transitioning from cost out to value in. A major barrier to this capability is that procurement is all too often focused on strong procurement capability, but the reality is that the function requires strong commercial marketing capability. I believe a marketing person can learn procurement in-job. The Capability of Marketing Excellence Teams The best marketing procurement teams will evolve and become Marketing Excellence Teams, focusing on process and working to maximize value. It is important that we manage the demand side of our organization from an end-to-end perspective. It is important that we understand consumer trends and about selling our products online and in retail stores. This transition has already commenced at some leading FMCG (Fast Moving Consumer Goods) organizations. As the earth spins on its axis and the sun inevitably sets in the West, Byrne’s optimistic, perspicacious words, like the last rays on the horizon, linger with us: Thankfully, today we are on a new journey. We are building a strong marketing procurement team, one with great marketing and procurement skills, a team that can bring real marketing insights and solutions, frameworks and structures to improve the return on our marketing investment. We are building a partnership with our marketing stakeholders, a sustainable partnership that creates the fuel for reinvestment behind our brands. (Excerpt taken from Byrne’s article “Creating a Winning Marketing Procurement Function”)
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Price is important, but return on investment is where you get the real value required to grow. – Byrne
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5-6 November 2020 | Mandarin Orchard, Singapore
PROCUREMENT: A TRUSTED BUSINESS PARTNER
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