By Susan Avery
One of the more critical skills procurement and supply management professionals need is the ability to speak with leaders, colleagues and customers. Equally important is the ability to listen.
Communicating--and being receptive to--new ideas on hot topics in procurement and supply management was the order of the ISM2015 Annual Conference held recently in Phoenix, Ariz. The event, which commemorated 100 years of the Institute for Supply Management, featured keynote addresses by such luminaries as Former U.S. Secretary Robert Gates as well as education sessions, an exhibit hall and networking.
After transforming procurement at Russell Investments, Chief Procurement Officer Viet Ho and his team began a conversation with their internal stakeholders about offshoring relationships for the financial services company’s professional services buy. Like many services companies, Russell Investments had been outsourcing the category to other regions of the world such as India for years.
The team sees Vietnam as “the next hot outsourcing location,” Viet told supply management professionals gathered for his presentation, Delivering 50% Cost Savings to Your Business Leaders. “The value proposition for doing business in Vietnam is really strong.”
The team conducted research on the market and potential suppliers, evaluating different geographies, and came up with a short list of three locations that included Vietnam. The others are Philippines and Malaysia. As they see it, Vietnam has cost advantages and is a politically stable country that’s experiencing economic growth. It has a highly skilled young workforce.
Viet, who received the 2015 EPIC Individual Award for his work at Russell Investments, and his team like an “India plus one” strategy for professional services, introducing competition into the relationships with suppliers. The team also is looking at the potential for sourcing MRO goods and services in Vietnam.
Continuing the conversation in her presentation, Vested: Five Rules that Transform Outsourcing, The University of Tennessee’s Kate Vitasek shared with attendees her thoughts on how procurement and its partners can attain more value from a relationship. Suggesting that the fundamental nature of how partners work together is broken, she recommended procurement approach the relationship by aligning economic interests with providers, focusing on outcomes. “Paying suppliers for achieving outcomes motivates them to improve processes,” she said. It also helps to encourage innovation.
Innovating and managing costs are ways that Sankalp Navjivan, Global Director, Strategic Sourcing and Supply Chain at MSA Safety and his team are adding value to the mid-sized organization that counts Honeywell and 3M as competitors.
Navjivan shared with supply management professionals at his presentation, Transforming Strategic Sourcing to Support Profitable Revenue Growth, that MSA’s leadership team told procurement to focus on both cost and innovation, “to be ambidextrous.”
As part of the procurement transformation at MSA, Navjivan created a center-led organization and embedded sourcing managers on the product teams to work with engineering at the company's sites in Berlin, Suzhou, and Pittsburg. He also assigned dual roles to members of the sourcing team.
The team began to use sourcing tools available through Directworks which Navjivan says helps with target costs, going to market faster and keeping pace with target volumes. The results, he said, show in the numbers; sourcing is able to help drive operating margin expansion for the company. Navjivan is a member of the My Purchasing Center Editorial Advisory Board.
At Intel, Frank Sanders, Vice President, Corporate Strategic Procurement, is transforming the organization’s strategy for sourcing complex indirect categories such as product development services. Sanders and his team have received much recognition for their results, including the 2015 EPIC Team Award.
Sanders told supply management professionals at his presentation, Expanding Procurement Value and Relevance, that five years ago “employees could see no connection between what they do and the organization’s success. We were not meaningful.”
Today, he says that corporate procurement at Intel is “a powerful competitive advantage.” How’d they do it? “By taking the time to better understand their business partners,” and by moving to outcome-based contracting. The team has since recorded successes with professional services and healthcare benefits. They’ve also taken a lead on sustainability and rebuilt procurement so that now it’s a destination organization within Intel.
MolsonCoors Brewing Company CPO Bill Dempsey moderated a panel discussion on Achieving Sucess as an Emerging Professional. On the panel were: Meghan Fiore-Truchan, Procurement Director at Bain Capital; Katy Conrad Maynor, Category Manager, Finished Lubricants/B2B at Shell International Petroleum Company Limited; Jami Bliss, Director, Global Procurement Program Management at Teva Pharmaceuticals and Doug Truchan, Manager, Operations Strategy at PwC.
All the panelists are in the first 10 years or so of their careers in procurement and supply management. Asked how they’ve achieved success so far, Bliss, replied that it “takes time and hard work.” Doug Truchan attributed it to “working with a diverse group of people (while in procurement at Boeing) and listening.” Conrad Maynor agreed, adding that she takes time “to ask questions” and was willing to take risks, assignments that no one else seemed to want. Conrad Maynor is the 2015 “30 Under 30 Rising Supply Chain Megawatt Star”.
The emerging professionals also discussed ISM certifications and the value these play in their careers, among other topics. Fiore-Truchan, Bliss and Truchan all have earned the Certified Professional in Supply Management (CPSM). Truchan said that he’s dedicated to a growing ISM and what it stands for, while Bliss added that it demonstrates an individual is “willing to go the extra mile.”
ISM2016 takes place May 16-18 in Indianapolis. For information, go to www.ism.ws
Payment terms, supply chain risk management, supplier diversity supplier relationship management are among conversation topics heard in the exhibit hall at ISM2015.
At the Wheels booth, Norman Din, Vice President of Sales and Business Development, described the evolving market for fleet services, which perhaps illustrated the importance of procurement involvement in the strategic sourcing process, particularly its dligence at evaluating the industry and supplier capability.
“Everything is changing,” Din tells My Purchasing Center.“There’s something to be said for looking closely at the partners you pick. You need to find stability in this enviroment.” Wheels recently celebrated its 75th year in the fleet management services business.
Din also looked at the heated topic of extending payment terms out to 120 days, a practice that affects suppliers all along the supply chain and the damage it can do to relationships. Wheels is the recipient of the 2013 EPIC Supplier Award.
Staples Advantage’s guest, Chris Sawchuk, Principal and Global Procurement Advisory Practice Leader at The Hackett Group, was on hand to provide insight into the 2015 Key Procurement Issues Study to supply managers on the show floor
Addressing the term “trusted business advisor,” which is used in the Hackett study, Sawchuk said that procurement doesn’t define itself in that way. Rather, what an advisor does “is an important piece of Supplier Relationship Management.”
As Sawchuk sees it, SRM requires that procurement segment its supply base. From there, procurement can manage its supply base for performance, risk and innovation.
In that same vein, Mark Fortney, Facility Supplies Area Vice President at Staples, added that he’s seeing more procurement teams working to consolidate their supply base, which is helping to contribute value to their organizations. He and Sawchuk partnered for the presentation, The Role of SRM in Procurement’s Transition to Trusted Advisor.
Sticking with the theme of supplier management, Rose Kelly-Falls, Senior Vice President, at Rapid Ratings International, recounted the importance of considering the financial health of the supplier—including private companies—as early as the RFP (Request for Proposal) process. “It sets the tone for the relationship,” she said, suggesting that procurement work with colleagues in finance on this. Kelly-Falls served as leader of the risk management education track at ISM2015.
Moreen Romans, Senior Director, Global Risk Solutions, Supply Chain and Supplier Diversity at Dun & Bradstreet, engaged My Purchasing Center in a discussion on supplier diversity, specifically women-owned businesses, pointing out that such suppliers are a valuable source of innovation because of their agility and ability to get to market quickly. She also said that from her vantage point she is seeing more procurement teams taking a lead on CSR initiatives, particularly businesses that help organizations to meet their environmental goals.
Deem took the opportunity to unveil and demonstrate its new business shopping application that provides users with a consumer-like experience with the controls and compliance tools procurement requires. Deem Shopping helps ensure employees are buying the products the company needs at the best prices while providing real-time visibility on project spend against the budget.
In addition to the keynote addresses, education sessions and exhibit hall, the ISM2015 Annual Conference was the venue for several important announcements of special interest to procurement and supply management professionals:
Also see the blog by Russell Investments’s Viet Ho, The BPO Industry in Vietnam—A Focus on Process Outsourcing and NOT IT Outsourcing and the the article, Attracting Supply Chain’s Next Leaders: Filling in the Gaps with Millennials
Susan Avery is Editor-in-Chief at My Purchasing Center. She writes articles, blogs and white papers and manages and creates other content for the online procurement and supply management publication. She produces and moderates roundtable discussions, podcasts, webcasts and video interviews. Susan has 30 years experience covering procurement and supply management for Purchasing magazine and Purchasing.com.
George E. Krauter
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