THOUGHT LEADERS IN DEPTH, EXPERT VIEWS, KEY ISSUES
Thought Leaders are leading procurement and supply chain experts who stimulate debate by writing thought-provoking and instructional articles on key issues. The aim is to provide fellow executives with applicable content which will help them to improve their sourcing processes and techniques. If you are interested in becoming an author, please email editor@procurementleaders.com providing a short synopsis of the article in question. |
 Structuring a function for global challenges
 To be a global function and to have a global supply chain results in commodity volatility, cultural and economic friction and a diverse supply base. As Parag Deoras, director of global supply chain at pump and valve manufacturer Flowserve notes, having undergone a major transformation of the global supply chain group in the past two years, developing a coherent structure is a vital and challenging part of becoming a global function.
Authors:
Parag Deoras is responsible for the global supply chain function of Flow Solutions Group, Flowserve Corporation. He has 28 years of industrial experience, of which the past 18 years have been in supply chain management in major multinational corporations. He joined Flowserve Corporation in 2006 and is based in the Netherlands.
Co-founder, Melvin Jay was CEO and founder of the global consultancy Clear. Simplicity Partnership is a consultancy that works with companies to tackle value-destructive complexity. |
 The search for deeper value in outsourcing
Recent evidence suggests that outsourcing, once the new
wonder kid on the procurement block, has taken a bit
of a battering. Research by the market intelligence
specialist IDC showed that after a peak in the US in 2008
there was a decline in total value of new and renewed BPO
contracts in the following two years, including a significant
reduction in ‘mega deals’ of more than $1bn.
Authors:
Toby Munyard is vice president at Efficio. He has been with the firm since 2005 and has more than 15 years
experience in operations consulting, with a particular
focus on procurement transformation, strategic sourcing and procurement capability.
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 Navigating procurement complexity
Over the past 10 years, procurement has become an increasingly complex aspect of business. Fundamental change is now required in procurement, because this complexity is significantly reducing profitability.
Authors:
Simon Collinson is founder and research director of the Simplicity Partnership and professor of international business and innovation at Warwick Business School.
Co-founder, Melvin Jay was CEO and founder of the global consultancy Clear. Simplicity Partnership is a consultancy that works with companies to tackle value-destructive complexity. |
 Reinventing strategic sourcing
Strategic sourcing as a term and a discipline has been around for at least 25 years, having first been coined in the late 80s and early 90s by large management consultants. And, like many people of its age, it is still trying to find its way in the world. In many ways, it is still largely misunderstood because, while in isolation ‘strategic’ and ‘sourcing’ have clear definitions, together they create a concept that means different things to different people.
Author: Garry Mansell
Garry Mansell is CEO of sourcing solutions provider Trade Extensions. He joined the company in 2007 having had over 20 years experience in business-to-business sourcing and co-founded Freight Traders Limited – a company that specialised in designing and managing online tenders in the transport sector |
 Bringing certainty to project procurement
Trying to secure any certainty on notoriously unpredictable projects can be an unrealistic and frustrating proposition. But by managing the uncertainty, significant savings really are possible on major projects, without compromising on the scope and with little use of fixed prices. In this article, Ian Heptinstall, a procurement consultant with PMMS Consulting Group explains how this is achievable and provides examples of a number of large projects where the results speak for themselves.
Author: Ian Heptinstall
Ian Heptinstall is a consultant with PMMS Consulting Group. Prior to joining PMMS he was supply chain director with a major construction company in the UK. Quali ed as a chartered engineer, Ian worked as a project manager before moving into procurement over 16 years ago. |
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 New standards in sustainable procurement
Most organisations have the potential to use their spending power to influence more sustainable behaviour – but few do. To really make progress, organisations need a common set of standards to work from, they also need significant behaviour change to consider wider aspects of procurement, innovation and assurance.
Author: Shaun McCarthy
Shaun McCarthy is director for Action Sustainability, a social enterprise with a mission to inspire sustainable procurement. He is also chair of the Commission for a Sustainable London 2012, senior advisor to the Institute for Sustainability and a commissioner for the London Sustainable Development Commission. He has more than 20 years senior management experience with large companies, mainly Shell and BAA. |
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 Future sourcing philosophy
Procurement faces pressure to dramatically change its very nature. Former chief procurement officer at LG Electronics, Tom Linton delves into the ideas that will allow procurement executives to evolve and become business leaders on fundamental issues, such as sustainability.
Author: Tom Linton
Tom Linton is the former executive vice president and chief procurement officer of LG Electronics and has spent more than 20 years working in Asia. He is now chief executive officer of Linton Advisors, a supply chain business advisory aimed at improving profitability through effective transformation and sustainable sourcing. |
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 Professional service provider relations
Despite the importance of services spend to any large organisation, the relationships between service providers and procurement are rarely all they should be.. Paul Vincent, managing director of Insight Sourcing Solutions, explains how the savvy procurement professional can work to put it right.
Author: Paul Vincent
Paul Vincent is the managing director of Insight Sourcing Solutions, a procurement consultancy that was established in April 2009 to help organisations buy and sell professional business services more effectively. Paul was previously BT’s procurement director for recruitment, consultancy and professional services. |
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 Agricultural commodity management
Lessons learned in during the 2008 food crisis could stand organisations in good stead as they try to manage the current market volatility, argues VP of procurement at Fresh Start Bakeries, Ahmet Hepdogan.
Author: Ahmet Hepdogan
Ahmet Hepdogan is vice president of procurement at Fresh Start Bakeries, based in North America. He has been with Fresh Start Bakeries since 2008, before which he was with Monarch Foods, where he was director of category management. He has a focus on strategic sourcing with an emphasis on risk management and operational margin optimisation. |
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 Securing investment
In order for large scale procurement transformations to succeed, CPOs must gain the support of senior business leaders, writes president of Greybeard Advisors, Robert Rudzki.
Author: Robert Rudzki
Robert Rudzki, a former corporate nancial and procurement executive, is an adviser to leading companies in major industry sectors and is president of Greybeard Advisors. Prior to founding Greybeard Advisors, Rudzki served as senior VP for Bayer Corp, the North American subsidiary of Bayer AG. Rudzki also serves on the board or advisory board of several companies. He is co-author of the supply management best seller Straight to the Bottom Line® and is co-author of On-Demand Supply Management. He is also the author of Beat the Odds: Avoid Corporate Death and Build a Resilient Enterprise. |
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 UK Bribery Act
Procurement leaders find themselves in the line of fire when it comes to corporate corruption, especially relevant considering upcoming UK legislation, writes LexisNexis UK’s Dan Marshall.
Author: Dan Marshall
Dan Marshall is commercial director for news and business at LexisNexis UK, having joined the company in 2006 from Anglo American where he was group nancial reporting manager. Marshall is a chartered accountant and a former senior manager of PricewaterhouseCoopers and, along with organisational risk, specialises in strategic development, acquisition valuations and competitive analysis. |
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 Collaborative outsourcing
By aligning goals and sharing risk and reward, an outsourcing relationship is far more likely to succeed, writes author and business consultant Kate Vitasek.
Author: Kate Vitasek
Author, educator and business consultant Kate Vitasek is an innovator in the practice of supply chain management and outsourcing. Vitasek’s approaches and insights have been widely published in more than 100 articles, including her latest book Vested outsourcing: ve rules that will transform outsourcing. She is a faculty member at the University of Tennessee’s Center for Executive Education and is the founder of Supply Chain Visions. |
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 Should-cost modelling
Knowing how a particular price has been reached puts the buyer in a much stronger position to get a better deal, writes founder of consultancy Positive Purchasing Jonathan O'Brien.
Author: Jonathan O’Brien
Jonathan O’Brien is founding member and co-owner of Positive Purchasing, and has extensive experience working with executive teams to create and deliver purchasing transformation projects and global people-development programmes. His rm provides education and training, consultancy support, purchasing toolkits and online learning and resources. |
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 Effective benchmarking
Many procurement leaders strive for world-class status without really stopping to think about whether it is something that they, or their organisation, actually need , writes independent consultant Ian George.
Author: Ian George
Ian George is an independent consultant and business partner of the Procurement Intelligence Unit. Previous to becoming a consultant, George was a supplier development manager at BMW and latterly the head of strategy and process development at Royal Philips. During his time at Philips, George worked on a PhD which looked in depth at the various ways in which procurement can impact shareholder value. It forms the basis of much of his current thinking on procurement strategy. |
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 Price forecasting
Forecasting can offer a formidable competitive advantage and there are tools available which help procurement provide meaningful insight for the business, writes former vice president of global supply management at Unilever, Uwe Schulte.
Author: Uwe Schulte
Until January 2009, Uwe Schulte was the vice president of global supply management at consumer-goods giant Unilever. Having joined in 1980, Schulte has experienced all aspects of Unilever’s business, including product development, process development and quality assurance. He now works with smaller businesses to help them realise the benefits of professional procurement and has forged close ties with INSEAD Business School of Paris. |
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 Building teams
Ensuring teams stick around for long enough to make a meaningful impact on the company is a challenge but critical to the success of procurement, writes Paul Andrew, director of The Leadership Coach.
Author: Paul Andrew
Paul Andrew is director of The Leadership Coach, a consultancy which focuses on the development of leaders. Andrew has spent 20 years developing leaders and their teams and is a regular speaker at large events all over the world. He has also spent a lot of time in the not-for-profit sector, where helping team members to feel part of something was key to his success. The concept of sticky teams is just one of the strategies Andrew teaches and speaks about. |
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Managing transformation
Key to the success of any transformation is having the right people involved, not just in procurement but also in other influential parts of the business,writes Schindler Group CPO Jochen Weyandt.
Author: Jochen Weyandt
Jochen Weyandt is senior vice president at Schindler Management, responsible for the global purchasing operations of the Schindler Group. He joined the company in 2002, having previously held various positions within the automotive industry covering engineering, key account management and supply chain functions, latterly within Continental AG. He is a graduate in mechanical engineering and holds an MBA from Henley Management College. |
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 Talent development
Ninian Wilson, director of IT procurement at Vodafone writes about how Vodafone is establishing a supply chain management university in order to increase the general quality of the procurement function and to attract talent in the future.
Author: Ninian Wilson
Ninian Wilson is director of IT procurement for Vodafone, working at the Vodafone Procurement Company based in Luxembourg. Previously, he held senior procurement positions as director of procurement for Royal Mail Group and CPO for Cable & Wireless. He started his career with British Gas where he discovered his passion for people development. His teams have won numerous awards ranging from CIPS supply chain excellence, to the Institute Of Directors award for e-enablement and transformation. |
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Driving savings to the bottom line
By understanding three elements of the traditional procurement process, bucket-based budgeting, how strategic sourcing drives value and partner motivation, CPOs will put themselves in the position where they are able to drive savings to the bottom line, argues former MetLife and State Street CPO Roy Anderson.
Author: Roy Anderson
Roy Anderson has 30 years of experience working in leadership positions within procurement including chief procurement officer for State Street Bank, vice president of global procurement at MetLife, director of purchasing at John Hancock Financial Services, director of purchasing operations for Fidelity Investments and has worked as purchasing manager in commercial and military manufacturing facilities for Textron Corporation and Raytheon Company. |
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The CEO's view
Former CPO of MG Rover Larry Beard identifies three essential ingredients that CPOs must have if they are to successfully satisfy the CEO – performance measurement, business alignment and people management.
Author: Larry Beard
Larry Beard has wide experience as a senior procurement executive with global responsibility at major corporations in Europe, North and South America and Asia, including BTR, Premier Farnell, MG Rover and ESAB Holdings and Severn Trent Water. His latest role was as Interim Procurement Director at BAA. |
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Change management
New CPOs rarely have a mandate for change. It has to be secured in a way that is fit for purpose for an organization’s needs. Jon Hughes, executive chairman of Future Purchasing and Ken Friis, CPO of Lundbeck, outline ten approaches that can ensure a CPO builds the right platform to secure that mandate during their first 100 days. Creating a compelling strategy requires an appropriate mix of analytical, emotional and motivational elements.
Authors: Jon Hughes and Ken Friis
Jon Hughes is executive chairman of Future Purchasing, specializing in leadership and operating model design. He was awarded the CIPS Swinbank Award in 2006 for procurement innovation.
Ken Friis is vice president and CPO corporate sourcing for Lundbeck. He has an 18-year track record in operations management, particularly transformation of decentralised procurement into more robust, centrally led global strategic sourcing organizations. |
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Outsourcing
Unilever is in the process of implementing best practices in the area of outsourcing: cost transparency, contract standardization and simplification, improved governance and control, SRM and driving innovation and sustainability within the provider base. This, says Marika Lindstrom, VP of procurement NPI at Unilever, will create a more rigorous provider-selection process, leverage the company’s volumes for cost benefits and enable more efficient management of contracts and relationships.
Author: Marika Lindstrom
Marika Lindstrom is VP, NPI procurement at Unilever. She has experience in leading change management programmes in direct and indirect strategic sourcing functions and previously worked in indirect procurement at Advanced Micro Devices and Nokia. |
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Sustainability
Dr Joanne Meehan and Dr David Bryde from Liverpool John Moores University look at some of the challenges that CPOs need to overcome to achieve the triple bottom line of meeting economic, social and environmental targets through their sustainability agendas.
Authors: Dr Joanne Meehan and Dr David Bryde
Dr Joanne Meehan leads CESTA (Centre for Stakeholder Research in Operations) at Liverpool Business School. Before that, she spent 11 years in a range of procurement management roles for a blue-chip organization.
Dr David Bryde is a reader in project management in BEST (Built Environment and Sustainability Technologies) Research Centre, Liverpool John Moores University. Prior to that, he worked in a variety of project management-related roles in industry for 10 years. |
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Commodity-cost management
Commodities make up a significant share of a company’s total costs so, as Richard McIntosh and Sebastian Meyer of Inverto explain, a targeted management approach can provide significant tactical advantage.
Authors: Richard McIntosh and Sebastian Mayer
Richard McIntosh leads the UK practice of Inverto. he has more than ten years experience in leading major procurement projects for both private and public sector organizations in the UK and internationally.
Sebastian Mayer works as a principal for Inverto and leads the Inverto Excellence Centre for Raw Materials. He has more than seven years of consulting experience advising European industry clients. |
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 Agency renumeration
By looking at the advanced agency remuneration systems employed by Coca-Cola and Procter & Gamble, J Francisco Escobar provides a deep and practical analysis of the often-strained relationship between procurement functions, internal marketing teams and external agencies. As these innovative, profit-based remuneration models gain more traction, CPOs must be well versed in the benefits and potential problems that valuing intangible spend categories can pose.
Author: J Francisco Escobar
J Francisco Escobar is president and founder of JFE International Consultants, a business management advisory targeting major advertisers and service providers in the marketing communications industry. He spent 23 years at Texas Instruments in financial, marketing and procurement management and authored an Association of National Advertisers’ 2005 report Marketing communications procurement: Building value through best practices as well as a 2008 Council of Public Relations Firms whitepaper on agency compensation trends. |
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 Business alignment
As the executive director of procurement at Tarmac, a division of Anglo American, Adrian Cook has spent a great deal of time working on aligning procurement much more closely with the wider business. First, he argues, develop a meaningful strategy that is agreed on by all parties. But perhaps more important, communicate that strategy to the rest of the business in a straightforward and digestible format so that everyone – procurement or otherwise – pulls in the same direction.
Author: Adrian Cook
Adrian Cook is executive director procurement at Tarmac Limited. Over the past 12 months he has led the design of a new strategic framework as well as the deployment and cascade of a shared business plan across its main UK business. |
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 Price-led costing
In this thought-provoking article, Kris Timmermans explores how procurement can get more closely involved with the sales side of the business in order to minimize margin erosion of end products. Traditional procurement approaches don’t always apply here – total cost of ownership means that the cheapest option is rarely the least expensive and passing on variable input costs to customers can result in win-win situations.
Author: Kris Timmermans
Kris Timmermans is the global managing partner of Accenture’s sourcing and procurement practice, based in Brussels. During his many years at Accenture, Timmermans has led a large number of global procurement transformations for companies in numerous industries, such as Volvo, Caterpillar, Arcelor, FedEx, Glaverbel, SigmaKalon, Inbev, OceanSpray, FCI and TOTAL.
He has spoken at several Procurement Leaders Forums in the past and holds a master’s degree in mechanical engineering from the KULeuven and MIT, Boston. |
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 Supplier carbon management
A.T. Kearney principal Stephen Easton and partner Dr Daniel Mahler discuss the thorny issue of supplier carbon management. Having worked closely with the Carbon Disclosure Project (CDP) on a detailed study, the consulting firm offers several pointers on how to drive carbon reduction through supplier relations; from better training to supplier dumping and improved metrics. While there is evidence of progress, gaps remain between the performance of CDP members and their suppliers.
Authors: Stephen Easton and Dr Daniel Mahler
Stephen Easton is a principal of A.T. Kearney with more than 10 years experience in leading major procurement and supply chain projects for both public and private sector clients in the UK and internationally. He is also responsible for sustainability within the London office.
Dr Daniel Mahler is a partner with A.T. Kearney and the firm's global coordinator for sustainability. He has more than 12 years consulting experience with the firm and was named in a list of top-25 consultants by Consulting Magazine in 2008 |
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 Collaborative KPIs
Only by working closely with suppliers and internal stakeholders can procurement professionals hope to significantly improve performance. In this article, former Royal KPN CPO Willem van Oppen discusses the processes involved in developing the type of collaborative KPIs that pull people in the same direction and don’t encourage siloed thinking. And it’s a process that involves all stakeholders – both those in senior leadership positions and those on the shop floor.
Author: Willem van Oppen
Willem van Oppen is owner of Provoque Consulting, which helps organizations to achieve success by greater collaboration between stakeholders - both within the company and in the wider supply chain. He is the former chief procurement officer of Dutch telecoms company Royal KPN and enjoyed a long career in a variety of purchasing and sales roles in companies such as Philips Electronics and DSM. His work on collaborative KPIs won Van Oppen the 2008 ISM Gene Richter Award for Leadership and Innovation in Supply Management.
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 Demand management
Rather than manage cost, manage demand - it's a simple theory, but there are few organizations doing it well. Here, Michelle Perkins, head of research at the Procurement Intelligence Unit, takes us through some of the steps that CPOs can take to introduce a corporate-wide demand management process. The article is based on an in-depth research project carried out by the PIU, the findings of which point to a long, difficult road, but one which has a huge pot of gold at its end.
Author: Michelle Perkins
Michelle Perkins is head of research at the Procurement Intelligence Unit, an independent provider of strategic research and intelligence for its corporate subscribers. Michelle leads an analyst team delivering in-depth topic studies, such as Supply Chain Finance and Demand Management, in addition to a range of research-based services, including benchmarking, category-level operational reports and best practice case studies.
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 Supply Risk Management
In this enlightening article, Dr Uwe Schulte, the former VP of global supply management at Unilever, provides a straightforward methodology for implementing a risk-management strategy. It looks at how CPOs can develop a simple process for determining the suppliers and categories they should focus on and, in doing so, Schulte makes risk management more manageable.
Author: Uwe Schulte
Until January 2009, Uwe Schulte was the vice president of global supply management at consumer-goods giant Unilever, where he had spent a good part of his career dealing with the harsh realities of supplier and supply-chain risk. Having joined Unilever in 1980, Schulte has experienced all aspects of unilever's business, including product development, process development and quality assurance. He now works with smaller businesses to help them realise the benefits of professional procurement and has forged close ties with INSEAD Business School of Paris. |
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 Gifts and hospitality
Procurement is a natural place for suppliers to try and gain influence – often by way of lavishing gifts and hospitality. Most organisations have embedded gifts and hospitality policies deeply into their sourcing processes, however, in recognition that they not only have to stamp out corrupt behaviour but they also have to be seen to be doing it. In this article, freelance business writer Malcolm Wheatley looks at how some of the world’s largest companies approach the often thorny subject.
Author: Malcolm Wheatley
Malcolm Wheatley is a freelance business journalist and regular contributor to Procurement Leaders. He has written for a wide variety of publications during his career, including the Financial Times and Management Today, specialising in manufacturing, supply chain management, project management, procurement, technology and general management issues. Prior to his career in journalism, Wheatley enjoyed a career as a management consultant for global advisory firms PricewaterhouseCoopers, Deloitte and Haskins & Sells.
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 Global software contracts
Contracts can be complex at the best of times, but multinational organisations that enter into global software contracts must be extra vigilant. Here, Dirk Karl, CPO of financial services giant ING, talks us through the ‘seven deadly sins’ that procurement must look out for.
Author: Dirk Karl
Dirk Karl is general manager, global vendor management and chief procurement officer for ING Group, responsible for all IT-related vendor management activities at a group level. Karl joined ING in 2005 following spells at General Motors, where he was chief information officer for Europe and Latin America and Daimler Chrysler, where he was sector manager for financial services. He was also managing director in ING's operations & IT banking division in Amsterdam before joining the group finance team where procurement is based.
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