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Joanna Martinez
Executive Managing Director and CPO Cushman & Wakefield
Randall Clark
Senior Strategic Buyer Volvo Group Trucks Technology
Bill Michels
Senior Vice President, ISM and President, ADR North America and ADR-ISM China
Craig Demarest
Senior Director, Chief of Procurement R.J. Reynolds
Jeffrey Smith
Global Indirect Sourcing Director DuPont
Roger Gossett
Senior Director, Indirect Procurement Flextronics
Deborah Stanton
CPO and Group Executive, Global Supply Chain MasterCard Worldwide
Linda Guzzi
Head of Indirect Sourcing and Procurement Applied Materials
Susan Avery
Editor in Chief My Purchasing Center
Jim Mangan
Director, Corporate Services Procurement United Airlines
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minerals issue. One customer asked us to investigate their supply chain for them, and now we offer that as a service, one way Procurement demonstrates leadership in the organization.
the efforts theyre leading. They are very strategic and are at the highest level. Thats Stantons group today. Looking ahead, she said, we will be involved in projects in an entirely different way, beyond the boundaries of sourcing, projects for the entire operation that really affect some of our processes. One project in which Procurement takes a leadership role at many companies that quickly came to mind for the Roundtable is Corporate Social Responsibility and other sustainability initiatives. Especially timely for Procurement at technology companies is the role of the supply chain in meeting regulations on use of certain electronic components that may contain conflict minerals. Citing costs associated with ensuring compliance to the regulations along the supply chain, Linda Guzzi, Head of Indirect Sourcing and Procurement at Applied Materials, pointed out that in her role, We are seeing a whole lot more collaboration on sustainability, conflict minerals and Corporate Social Responsibility. At Flextronics, Roger Gossett, Senior Director, Indirect Procurement, said Procurement set up a group within the companys quality department to address the conflict
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with the supplier, Roundtable participants agreed. Executing the agreementand managing the relationship with the supplieris another matter. It depends on the size of the category, its complexity and the business partner youre working with, their skills and capability to hand it off to them, said Quave Burton, Vice President, Global Expense Management at Abercrombie & Fitch, and member of the My Purchasing Center Editorial Advisory Board. Its a fine line. We struggle with it because what ends up happening is we do a great job negotiating the deal, getting it all set up and then there isnt anyone to hand it off to in the business, she said. The business tells us, You did a great job. Keep going. But we really need to be off sourcing another category. Part of it is communicating expectations up front, Burton continued. Were going to go through this process and then when were done, You are going to own it. Its about being clear about that up front and reminding them along the way to be ready to catch the ball. Jeffrey Smith, Global Indirect Sourcing Director at DuPont, asked the group for their thoughts on an organization creating a Strategic Sourcing team to support its Category Managers, a concept popular with some procurement consulting companies. While not a bad idea, the Roundtable dismissed it for several reasons including difficulty in separating out complex negotiations and the additional strain on already stretched resources. What I hear you say is that you want strategy and execution from your team, Michels said of the group. You want them to build strategy and execute that strategy, in cooperation and conjunction with the stakeholders.
The best way to do it, he continued, is the procurement team owns the commercial relationship and the technical team owns the requirements. As long as you have that separation, it works well.
Getting to Success
Indirect Procurementand Category Managershas worked hard to get to this point. While theyve had to break through barriers to demonstrate their value, there are still some hurdles to overcome. One the Roundtable brought up is managing their companies spend data. In some cases, theres simply too much of it and in others theres not enough. Collecting the data, cleansing it and interpreting it continues to prove a challenge. Speaking for many in the group, DuPonts Smith said, Technology needs to be an enabler, not a barrier. So much time is wasted, looking for data, making sense of it. At MasterCard, Stanton said that a corporate initiative for integrating mergers and acquisitions at the company makes her job a little easier. Often times, these companies have different procurement systems and different ways of presenting spend data. We have a single instance of Oracle worldwide. Theres no choice. For smaller businesses becoming a part of the financial services company, her team provides an option of using an e-payables system instead.
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So maybe the trend is really procurement now assisting Finance, Mangan continued. We are helping finance with their own reporting, so were getting a stronger seat at the table at that level. This gives credibility and helps us support the business.
Joanna Martinez, Executive Managing Director and CPO at Cushman & Wakefield, took a different view. Sometimes we get hung up on not having it all, she says. Sometimes there really is a good enough. Theres enough to be able to have an intelligent conversation, allowing for some adjustment later on. Allowing Indirect Procurementand Category Managersto take on more of a leadership role at the organizations is their evolving relationship with Finance, the Roundtable agreed. Many, in fact, said they report to the Chief Financial Officer. Whats more, companies are beginning to measure Procurement performance on metrics other than cost savings. From an organizational standpoint, one of our biggest strengths is our partnership with Finance, said Craig Demarest, Senior Director, Chief of Procurement at R.J. Reynolds. We really work well them. They are a big advocate for us and really help us when we sell the business case to the client. At United Airlines, Jim Mangan, Director, Corporate Services Procurement, and his team develop their category plan, align with the business on the budget they have for the coming year, and work to deliver savings or opportunity against it. They track against variance as well. We start to have an even closer relationship with our finance folks, and they can have the discussion with the business on reinvesting the dollars, he said.
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