Art of Procurement

Today's podcast is part of a special two-week series, our second annual sponsored StartUp and Growth Series, where we aim to shine a light on the early stage and growth companies who are changing the way that leading procurement teams are driving outcomes that truly align with corporate objectives. We will ask an entrepreneur from seven different companies questions about what gap in the market their solution addresses, how they differentiate their technology and what their tools look like in action. It's a great way for you to get to know those who are leading the way. In today's episode, I speak with Costas Xyloyiannis, CEO of HICX.

Good negotiation skills are fundamental to procurement. They allow us to maximize value while simultaneously building resilient, low-cost supply chains. But now that procurement is moving towards collaborative partnerships with our suppliers, many are concerned that reducing direct competitive pressure will inadvertently allow higher pricing. Cost transparency allows procurement to balance collaboration and negotiation. By focusing on the primary material and service cost drivers of what is being negotiated, and using trends and should cost modeling, it is possible - and effective - to have fact-based pricing discussions with suppliers. Procurement can keep their prices in line with supplier costs and preserve the relationship by acknowledging the need to allow them overhead/gross margin and building both into the model. In this podcast, based on an AOP Live session, Rod Sherkin, Founder and President of ProPurchaser and a former CPO, answers live audience questions about: Whether procurement needs to take their relative size and buying power into consideration when using should cost modeling to manage a spend category If there is an approximate or ballpark overhead margin percentage procurement can use when building a first-pass should cost model How to introduce should cost models with incumbent suppliers where they have not been applied in the past

If you are relatively new to the field of procurement, there is a good chance you've never experienced an auction first-hand. With all of procurement's focus on moving towards value and away from cost-only decision making, that's understandable. Unfortunately, however, auctions are a valid tool in procurement's vast toolbox, and in many cases we may be dismissing them - and their potential in a negotiation - without sufficient evaluation of the opportunity. Jacob Gorm Larsen is the Head of Digital Procurement for Maersk and the author of the newly published book, "A Practical Guide to E-Auctions for Procurement: How to Maximize Impact with e-Sourcing and e-Negotiation." From his perspective, an auction is simply "an online, market-driven negotiation, based on total value and with commitment." That's certainly not something procurement should take off the table when the conditions are right. In this conversation, Jacob and Host Philip Ideson discuss: The history of auctions as part of the longer timeline of procurement technology development How and when to use auctions to create maximum value for the business How to improve communications with suppliers so that both parties achieve their goals and to promote the creation of a lasting relationship The ways procurement organizations can structure themselves to ensure they get maximum ROI from their investments in technology

Traditionally, procurement has been focused on driving corporate profitability by putting pressure on suppliers, rationalizing specifications, and managing demand. While these strategies have delivered some benefits to the business, their diminishing returns came at the cost of procurement's internal reputation. As procurement's focus turns to top-line growth, they will have to change more than just their strategies and tactics before they can be successful. This podcast is the last in a 4-part series focused on how procurement can contribute to efforts to restore corporate growth. In this episode, Host Philip Ideson shares why a focus on growth is so important to the future of the procurement profession before concluding the podcast series by sharing some of his key takeaways from the first three episodes. In this episode, Philip wraps up the series by considering points such as: Why procurement doesn't need to fix how we are perceived, so much as we need to address the attitudes, styles, and behaviors that have led to that perception How procurement can pivot to a focus on corporate growth, and what we need to understand about our organization before knowing which actions to take The opportunity associated with a partnership between procurement and sales, and which corporate KPIs this will allow procurement to contribute to

The pandemic has caused a rethink of many past assumptions, from just in time inventory to offshored supply chains. Moving forward, leaders need to avoid jumping from one extreme to the other. Traditionally accepted priorities such as efficiency and cost containment suddenly must be assessed against the risk involved. Success will increasingly depend on how well organizations strike the optimal balance among such priorities. This podcast is the third in a 4-part series focused on how procurement can contribute to efforts to restore corporate growth. In this episode we welcome Alex Saric, Ivalua's Chief Marketing Executive. For over 15 years he has evangelized spend management, shaping its evolution and working closely with hundreds of customers to support their digital transformation journeys. In this episode we will look into: What risk factors are most critical and how can procurement best manage them? What strategies can best minimize the tradeoffs between risk and growth? What can procurement / supply chain leaders learn from investors by taking a portfolio view of supply chain risk?

As organizations look beyond Covid-19, restoring growth is top of mind for many. Specific strategies vary by industry and company, but suppliers often play an integral role. This is especially true as organizations have become more dependent on the supply chain than ever before and their innovation is increasingly key to growth and success. This podcast is the second in a 4-part series focused on how procurement can contribute to efforts to restore corporate growth. In this episode we welcome Vishal Patel, VP of Product Marketing at Ivalua, where he is focused on ensuring product - market fit, understanding customer needs and driving market trends. In this episode we will look into: What are the best ways for suppliers to contribute value? What does procurement need to improve their collaboration with suppliers? How can organizations establish themselves as customers of choice so suppliers are willing to collaborate and share innovations?

Procurement's stature has grown during the COVID-19 crisis as costs, cash flow and supply continuity quickly became top priorities and homepage news. To maintain its slot on the boardroom agenda going forward, procurement leaders must show that they can contribute to restoring growth beyond the pandemic and support a longer list of objectives. There are ample opportunities for procurement to contribute to this broad enterprise growth, but unfortunately, few procurement teams have experience doing so. In order to be successful in this new endeavor, procurement will have to expand their influence in the organization through effective engagement of and collaboration with other parts of the business. This podcast is part of a series focused on how procurement can contribute to efforts to restore corporate growth. In this episode we welcome Sylvie Noel, CPO at Covéa Group, the #1 in property and liability insurance provider in France. She has held this role for nearly a decade, and in that time she has led a complete overhaul of Covéa Group's purchasing process, including new systems implementations and a change effort involving new manager priorities, procedures, and compliance. In this first installment in the 4-part series, we'll dive into : What are the top opportunities for procurement to contribute to growth? How can procurement leaders effectively expand their influence in the organization? How can you best collaborate with other departments? Key to gaining executive support for required investments? What are the requirements from a people and technology perspective?

Risk management may not always be a formal part of procurement's scope, but it is a natural extension of our current work. As a result, the difference between procurement's ability to effectively manage risk may be as simple as officially declaring that it is in scope and embracing all of the activities and metrics that come with it. Canda Rozier is a multiple-time CPO with experience working across a number of leading global organizations and the President and founder of Collabra Consulting. She has always regarded risk management as important as part of the supplier life cycle, but it has risen in both priority and prominence since the start of 2020. In this conversation, Canda speaks with Host Philip Ideson about: How to measure and set expectations for the ROI associated with a formal risk management program How risk management efforts change for product v. service categories Where data security and cybersecurity intersect with more traditional supply chain risk management efforts

Marketing is just one of the functions that procurement has a somewhat 'rocky' history of past relationships with. When you extend that existing internal friction into the relationship with creative agencies, the problems and disconnects seem to compound. Leah Power is the EVP, Strategic Operations Consultant at the Institute of Communication Agencies. Prior to this, she served as the COO at Grey Canada and the Finance Director at DDB Canada. Her primary focus is helping agency executives resolve business issues related to new business growth, finances, procurement, and agency remuneration. In this conversation, Leah speaks with Host Philip Ideson about: Why RFPs are not the best sourcing strategy for creative agency spend Why a 'price first' approach drives innovation in standardized product categories but inhibits it in value-based service categories like marketing How procurement can help determine a good or 'best' fit between a company and the capabilities of a range of creative agencies

Despite the fact that the need to manage tail spend is hardly a new idea in procurement, it continues to be one of the greatest challenges we face. Tail spend is messy, risky, hard to analyze, and - if you take the wrong approach - very costly to address. Merck was faced with a huge, global tail spend management problem, but they refused to let it fester or get the best of them. Starting with a U.S.-based pilot in their life science division, they partnered with WNS Denali to get a grip on their tail spend without alienating the business or breaking the bank. Tom Cicale is the VP of Procurement for Merck KGaA, where he is responsible for global plant services consisting of MRO, CAPEX/OPEX, site services, utilities and logistics, and Sameer Sharma is a client engagement leader in WNS Denali's delivery organization. They have worked together to design and implement a truly unique tail spend management program. In this podcast, which is based on an AOP Live session that one attendee described as "the most impactful webinar I have ever been on in my entire career," Tom and Sameer candidly answer questions such as: How do you measure the impact and success of your tail spend program in such a way that procurement showed positive ROI and secured finance's validation for your numbers? Did Merck's global footprint (and complex technology landscape) present a problem in the wider program rollout and, if so, how did you overcome it? If you had to do something differently, what would it be?