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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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

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.

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.

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.

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.

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.