Whether managing costs, quality, or continuity, for procurement it’s all about the relationship — with management, stakeholders, and, perhaps most important, suppliers.
That’s the word from Eric Walsworth, director of supply management at LexisNexis and a chairperson at the recent ProcureCon for Manufacturing event, which took place in Milwaukee. Managing relationships also was a theme that recurred during many of the event’s education and networking sessions.
“That’s really what procurement is all about,” said Stephan Cloutier, vice president of global procurement at Mercury Marine. “Procurement’s success will rely on the alignment of the organization.” Cloutier led a session called “Managing Sole Source Relationships to Develop Win-Win Partnerships.”
Steve Brownfield, senior director of enterprise procurement at ConAgra Foods, described for procurement professionals attending the event how he and his team ensure they are aligned with colleagues who work in the company’s plants during the discussion, “Defining the Role of Procurement in 2014 and Beyond–What is Procurement’s Next Business Model.”
To do so, he said he and his team visited more than 80 plants in one year and suggested other procurement professionals do the same to not only communicate procurement strategies but also to better understand the company’s business and needs of internal stakeholders.
In response to a question on senior leadership’s understanding of category strategies, Rob Hubbard, chief procurement officer at HB Fuller, recommended using multifunctional teams and naming a “champion” or “assigning ownership” to someone on the team who is not in procurement. “It’s not just sourcing. We are all working together to deliver value to the company,” he said.
During the session, both Brownfield and Hubbard addressed another topic that’s of interest to procurement practitioners: recruiting and retaining talented individuals, especially recent graduates of schools with supply chain management programs.
For Brownfield and many others in attendance, it’s not so much about procurement as it is about “creating leadership for the company.” And it all goes back to alignment: ensuring that a job candidate will find satisfaction in the company’s culture is key to success in hiring. It was agreed, too, that the task is too important to leave up the company’s HR function.
Developing talent for future leaders in procurement is the self-proclaimed life focus of Matthew Saviello, global sourcing director at Dover Corp., who detailed the company’s plan to recruit and train college graduates in the case-study session, “Making the Next CPO: Constructing a Professional Development Program to Attract, Motivate and Retain Next-Generation Talent.”
Dover’s two-year program, called STARS (for Special Teams and Resources), supports the company’s sourcing organization by providing analysis of categories generated by the recruits. These analysts who are assigned a project to research are being mentored by managers who have experience working as consultants. A supply chain academy that offers eight courses provides additional training in sourcing and other related topics.
“We are investing for the future,” said Saviello, who, like his peers in procurement at ConAgra and HB Fuller, added that the company’s culture, or lifestyle of its employees, is one selling point when recruiting young procurement talent. Another draw is an opportunity to travel to support procurement at this global diversified manufacturing company.
Brownfield and Hubbard also led the discussion, “Risk Management in a Center-Led Organization–Strategies for Extending Procurement’s Reach to Manufacturing Plants.” Both echoed their earlier comments on alignment. “People do business, not companies,” Brownfield said, suggesting procurement “build relationships face-to-face by visiting plants.”
Cathy Kutch, director of supplier relations and diversity at Kellogg Company, moderated a discussion, “Leveraging the Supplier Performance Process to Take Supplier Relationships to the Next Level.” The discussion included representatives from two of Kellogg’s suppliers: Jim Kelley, corporate account leader at Cargill, and Graphic Packaging’s Dan Engelhard, director of sales, and Julie Burton, national account manager.
Kutch shared with ProcureCon attendees that procurement at Kellogg is a center-led organization and that the team is transforming to become more global.
Graphic Packaging’s Engelhard spoke about the importance of aligning perceptions between procurement and the supplier. “There is no substitute for truthful feedback,” he said. “It’s invaluable. It helps us stay current with the needs of our customer.”
Kelley at Cargill said he uses feedback to create internal competition among the 12 business units at his company that supply Kellogg plants. Graphic Packaging’s Burton agreed, adding that they share performance data with management. “They will help us drive change,” she said.
Kellogg’s Kutch suggested rewarding suppliers for good performance. “If they’re doing well now and you congratulate them, wait to see what they do next,” she said. “When they see us invest in them, we will be first in mind for them.” Holding a supplier day is another way to encourage suppliers to come forth with new ideas, added Cargill’s Kelley.
Procurement practitioners who attended ProcureCon for Manufacturing even discussed encouraging suppliers to work together to provide goods and services to their companies. In a session, “Achieving Success in Identifying and Qualifying Supplier Value,” Carlos Dones, head of indirect global sourcing solutions at Applied Materials, brought up the idea of asking multiple suppliers to bring forth one solution.
“It’s a tremendous opportunity for a reduction in total cost,” he said. Applied Materials has outsourced much of its indirect spend; Dones referred to his team as “trusted advisors to internal customers” who work to ensure that they have “the right suppliers.”
Relationships Extend to Logistics
In the session, “Managing Complex Manufacturing Supply Chain Logistics,” Scott Morgan, vice president of strategic partnerships at DSC Logistics, said that “tightening transportation capacity and rising rates will create an even greater need for collaboration.” Craig Demarest, senior director and chief of procurement at RJ Reynolds, added that “developing partnerships to share information will help the supply chain to be as efficient as possible.”
Millar Kelley, research analyst at the Reshoring Initiative, described the organization’s capabilities during a session, “Trend or Fad: Can Reshoring or Nearshoring Drive Efficiency in Manufacturing?”
Roundtable discussions covered such topics as renegotiating and lengthening payment terms, unlocking savings in the tail-end spend, and strategies for tackling inefficiencies in MRO (maintenance, repair, and operations) spend.
My Purchasing Center is a media partner to ProcureCon for Manufacturing and hosted an executive roundtable discussion on supplier relationship management at the event. A white a paper on the roundtable will be produced.
The next ProcureCon event, ProcureCon Indirect West, is planned for September 15-17 in Phoenix.
This article was originally published at My Purchasing Center and has been republished with permission. For more stories, visit MyPurchasingCenter.com.