CPO Catalyst: Supplier Innovation at Scale

DPW roundtable in partnership with Globality

Like Comment


Discussion attendees:



Chris Holmes
SVP Global Sourcing
Avantor



Paula Martinez
CPO
Novartis



Gilles Neron 
MD Strategic Procurement
Air Canada



Keith Hausmann
CRO
Globality



Martin Fijman 
CPO
Brightstar



Angela Qu
CPO
Lufthansa



Stephen Cobham
CPO
Sanofi



Roger Gonourie
Head of Global Sourcing
Swiss Re



Eric Cohan
CPO
HCL Technologies



Michaela Mayrhofer
CPO
Austria Telekom



Thomas Udesen
CPO
Bayer

 


Supplier Innovation at Scale

For the procurement operating model of the future, continual innovation is going to be crucial. But making that happen requires a significant shift in how the function goes about its work and what work it does.

The aim for the majority of CPOs is clear: to transition procurement from being a traditional savings-based function, focused mainly on transactions, to one that delivers broader value and innovation for the organization by working collaboratively with value-chain partners and start-ups—and by harnessing the power of technology to help the function and the business operate better.

However, although the goals are clear, the path there isn’t an easy one. For our latest CPO roundtable, we gathered a select group of procurement executives to discuss how they can make that vision of the future procurement function a reality, including what obstacles they are encountering along the way. 

Although there’s a great deal of optimism about the process, many stressed the fact that they are still very much on the journey toward building the procurement function they want and ultimately need to have. 

As one participant noted, “The glass-half-empty view is we’ve still got a long way to go. The glass-half-full view would be there’s some really fantastic stuff that’s being done out there, and the opportunity to take that next step is definitely there for all of us. It’s just how we go after it.”

Chris Holmes, senior vice president of global sourcing at chemicals and materials company Avantor, kicked off the discussion and shared four key takeaways for procurement executives aiming to deliver consistent innovation:

  • Take a hard, honest look at all of procurement’s activities and change what’s not working

One point a number of our participants made is that many longstanding aspects or practices within procurement—or even how the function itself is organized—are not designed to encourage the kind of innovation businesses need and, in some cases, are in fact a hindrance. 

To get the function to where it needs to be, a lot of traditional procurement practices will need to be transformed or jettisoned, whether that’s traditional supplier segmentation that doesn’t truly reflect business priorities or RFP processes that are too slow and too structured to allow for the calculated risk and ambiguity of an innovation-led project. 

  • Find the right metrics to measure procurement’s innovation impact

To drive innovation, procurement needs to move beyond focusing solely on the bottom line and incremental increases in savings, year-on-year. As our participants commented, such a cost-focused approach can lead to dealings with suppliers that are more adversarial than collaborative. 

If your relationships with suppliers are purely transactional, and suppliers feel they were pushed into poor deals, you won’t get the best from them—and you’ll certainly not get access to their latest R&D projects.

There isn’t one single way to measure the impact of innovation, but, by embracing broader metrics that reflect sustainability, long-term business value, and innovation, CPOs can take an important step in changing both the mindset of their teams and also their organization’s relationships with suppliers.

  • Make time and space for your people to innovate

Many of the participants at the roundtable drew attention to the need to find “white space”—the time, resources, and flexibility that their people need to innovate. Whether that necessitates setting up specific innovation units within procurement, to get people away from the daily round of tendering and supplier relationship management, or whether something more integrated is required, remained a point of debate. 

However, if you don’t have procurement people with the freedom and the responsibility to drive new ideas and approaches, then innovation won’t happen.

  • Consider using SPOCs to better understand the business

Along with the need to get to know suppliers better, many of our roundtable participants pointed to the fact that, to serve the business more effectively and deliver innovation where it’s truly needed, procurement functions need to know their business far better.

Some of our participants recommended appointing a SPOC (single point of contact) for different areas of the business, allowing procurement to obtain a more direct understanding of exactly what challenges were being faced, as well as how procurement can help. 

However that understanding is generated, it is going to be increasingly critical. Because, in a world where humans are freed from doing routine processes due to the rise of automation and AI, it is going to be procurement’s understanding of the business’s objectives and issues and supplier innovations that differentiate and deliver competitive advantage.



This event is held in partnership with Globality

Globality is revolutionizing how companies buy and sell services with the world’s only AI-powered Smart Sourcing Platform and Marketplace. Globality’s Platform automates the demand creation, supplier identification, proposal evaluation, and statement of work processes, matching companies with outstanding suppliers that meet their specific service needs. Globality has enabled Global 500 companies to shorten the sourcing process from months to hours while delivering savings of 20% or more. For more information, visit Globality’s website at www.globality.com.




DPW

DPW is the global innovation and mission-based ecosystem for digital procurement. We are driven by our purpose: To unlock the true power of procurement through excellence in digital.
130 Contributions
2 Followers
2 Following