The Business Profile 01/23

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Welcome

The current climate has seen many businesses grapple with the trials and tribulations of the supply chain transformation journey.

Hewlett Packard Enterprises Vice President for the Service Supply Chain, Danny Berry emphasises why transformation has required an all-encompassing, whole-of-organisation approach at HPE. Our headline feature is packed with content and can be seen on pages 72 to 81.

Kyndryl can likely be deemed the world’s biggest start-up. Their CPO Graham Wright outlines the emphasis on procurement as it evolves into a commercial facilitator.

Nina Kivioja describes UPM sourcing’s ambition to be the customer of choice, we hear about how Resideo’s sourcing function is leading the companies sustainability charge, and Sofiya Poland discusses transforming Al Masaood’s procurement function from administrator to best in class.

Plus we have content from AB-InBev, National Grid Ventures, and Workato.

Plenty to be getting on with so…… Enjoy!

The Business Profile Team

06 | Leadership

Kyndryl

The ‘Kyndryl Way’ flatter, faster, focused

Possibly the world’s largest startup following its spinoff from IBM in November 2021, Kyndryl (NYSE: KD), is a $19 billion independent IT infrastructure services firm with operations in more than 60 countries. It designs, builds, manages, and modernises complex, mission-critical information systems supporting the digital transformation activities of 75% of the Fortune 100 companies and more than half of the Fortune 500 companies.

Procurement at Kyndryl is certainly not simply a back-office support function. In fact, procurement plays a significant role in business strategy, decisions, and outcomes. Graham Wright Kyndryl’s CPO discusses how a change in culture combined with a revamp of tools and solutions will push Kyndryl and its clients further than before.

Kyndryl is noted as the world’s largest IT infrastructure provider. A truly global

–focused

business. What does your role as CPO cover and how is the procurement function structured?

My responsibility as CPO covers all third party spend across the firm. I am very fortunate to have leading subject matter experts, with both deep technical and commercial expertise across Global Software, IT Hardware and Maintenance, Networking and Services, who are uniquely qualified to have a business strategy view

and significantly influence in-source, outsource decisions. This talented group is known as “tower focals” and combined with category aligned strategic sourcing experts, their role is to optimise outcomes across our worldwide business (Kyndryl segregates geographies into “Time Zones”). It’s in these time zones where the category alignment shifts fully to a country agile squad designed execution model, aligned around stakeholders for both Kyndryl and our clients. Execution here includes local stakeholder liaison, local source selection, contract negotiations, order and vendor lifecycle management.

As mentioned above, the tower focals bring a business strategy view that enables the team to be decision influencers on “make or buy” decisions. They are expected to develop strategies for overall cost reduction for the firm and working with the global practices and account teams ensure these strategies support proposed go to market sales offerings and actual delivery strategy for our existing customers and to ensure Kyndryl’s costs are optimised both globally and locally.

Working in close coordination with the tower focal teams is global strategic sourcing. This team creates the global category strategy from sourcing through to delivery. They optimise leverage of Kyndryl’s 3rd party spending, through codified sourcing strategies and structured supplier selection processes, delivering competitive advantage to the firm and significant value to our customers. They manage key global supplier relationships and facilitate collaboration on common strategies between our sales and procurement teams.

Finally, we have our country teams that are established across many of our 60+ markets. Their role is to execute the category strategy working in close collaboration with internal stakeholders, delivering competitive advantage and enabling them to succeed in the marketplace, aiding revenue and profit generation. They have a key role in managing effective and influential supplier relationships across their time zone and protecting the Kyndryl brand.

What have these initial stages of going it alone been like for the business and more specifically of course the procurement function?

The planning to ensure a successful “spin” started a long time before the launch in November 2021. The pre-planning stage ensured sub-project teams were established to identify and work through the specifics of each area of the Source to Pay process.

For example, we had to assess the Supplier contracts that would need to be “shared” with Kyndryl on Day 1, and the respective PO’s that would need to be set up or migrated. We had to assess what resources were required in the new company ie. people, real estate, systems and what could initially be “bought-in” while Kyndryl was establishing itself. We were required to understand what activities could be migrated to Kyndryl on Day 1 and what activities could wait until Kyndryl had provisioned its Procure to 2 Pay systems.

Graham Wright

The status and overarching mission of procurement has been elevated as a result and this is reflected in the investment in the people, tools, and processes that we are now seeing within the function.

We had to ensure our suppliers (of which there were more than 4,000) were informed of our plans and kept up to speed on what this would mean for them and where relevant, we had to secure their agreement to novate contracts for example.

All of this would have been difficult enough under normal circumstances but of course here we were putting all this together in the middle of the global pandemic with the challenges that brought to teaming and delivery across our global organisation.

As the business revamps its processes and

and what time frame has been given to finally moving away from legacy systems?

First and foremost, our strategy is to redefine processes and then to apply technology to the redefined processes. We are designing and plan to deploy industry standard and best in class processes and tools and remove historic customisations and legacy systems. There are a number of focus process areas for improvement and developing solutions. These include: Sourcing (order management, consumption based processes, networking and cloud), end to end workforce lifecycle management, end to end asset lifecycle,

Work is already underway on the design of the process areas earmarked for improvement as mentioned, to be completely separated from all our former systems/ environment and moved on to the Kyndryl strategic environment. We will start to put our new systems in place with a phased roll-out starting early 2023 with a complete phase out shortly thereafter.

Having moved away from IBM’s shadow, Kyndryl now has the opportunity to participate in the much broader multivendor ecosystem as opposed to solely supporting the products and technologies that IBM offered. This will in turn create a massive growth opportunity. It also opens

the business up to working and collaborating with new partners and vendors. From a procurement perspective what opportunities have you seen in this regard?

Global Procurement and Strategic Alliances & Partnerships teams are partnering on the broad ecosystem strategy and execution. Our existing supplier relationship expertise brings immediate value to the Kyndryl partnership strategy. Together we co-create unique solutions with our partners to generate new market opportunities and solve challenges for our customers. We do this by combining our knowledge and expertise in complex infrastructure with access to our partners’ business-critical technologies.

Empowering businesses and careers through applied human intelligence

At Artech we see ourselves primarily in the business of human intelligence. No two challenges are ever the same and we leverage the analytical, problem-solving, and creative abilities of human intelligence to meet them, with a focus on understanding the business outcomes.

Artech’s thirty-year journey has been one of growth marked by long, steady client relationships. Now, with nearly billion dollars in revenue, Artech is proud to be Preferred Supplier for more than a 100 of the Fortune 500 companies in our stellar client list. We have a global reach with offices across the US, Canada, China, and India and over 11,000 employees/consultants.

As the largest women-owned IT staffing firm in the US, Diversity is in our DNA. With Women, Black and Latinx representation in our workforce well above the average for the IT sector, you could say we walk the talk.

Artech’s core offerings include Staffing Services, Project Delivery and Managed Services, NOC Services, RPO Solutions and Diversity & Inclusion Programs with verticals across Accounting & Finance, Clinical & Scientific, Compliance, Engineering, Human Resources, Information Technology, Managerial & Professional and Marketing.

At Artech we build relationships. As partners to our clients and as enablers of the professional growth of our people and these are the strengths that will stay constant as we reinvent ourselves for the post-pandemic world.

To know more about us and how we can help your organization, visit our website at www.artech.com or email our team at contact@artech.com . Click the play button to view our corporate video.

The Kyndryl partner model enables new opportunities in existing accounts via an expanded ecosystem from alliances. Enabling expanded Go-To-Market reach across new logos, industries, and regions. In addition, it supplements our capabilities and builds new IP across practices with partners.

Kyndryl signed major Strategic Alliances with companies like Microsoft, AWS, Google Cloud, IBM, SAP, Cisco and many others. Together with Kyndryl’s Global Alliances & Emerging Partners team, we will continue to unleash possibilities for customers by combining

our expertise and IP with capabilities across ecosystems and with emerging technology partners.

Culture. ‘The Kyndryl Way’. It cannot be understated the significant changes that have taken place since November 2021. Systems and processes can be changed almost at will it seems, but a key determining factor in the sustainable growth and success of a business is culture. What has been the big shift since November 2021? Do you believe this change in culture and attitudes has benefited procurement?

GEODIS

Empowering Kyndryl Supply Chain Through Strategic Outsourcing

How did the relationship start?

Kyndryl looked for a global Transport and Logistics provider with proven expertise to build together the most efficient supply chain solution.

What does GEODIS solution consist of?

From an early stage, our expert teams, worked together to design and implement the most suitable logistics process and network solution - adapting models over time to complex, fast changing, vital ecosystems.

What are the benefits of GEODIS’s collaboration?

Our Supply Chain Optimization Line of Business is a neutral body that integrates and manages comprehensive supply chain solutions on behalf of the different partners involved. Through our partnership, Kyndryl benefits from a complete range of global transportation services, backed by control tower and customs classification capabilities.

About GEODIS

GEODIS is a leading global logistics provider acknowledged for its expertise across all aspects of the supply chain. As a growth partner to its clients, GEODIS specializes in five lines of business: Supply Chain Optimization, Freight Forwarding, Contract Logistics, Distribution & Express, and Road Transport. With a global network spanning nearly 170 countries and more than 44,000 employees, GEODIS is ranked no. 7 in its sector across the world. In 2021, GEODIS generated €10.9 billion in revenue. For more information, visit geodis.com

“Building on a firm foundation of collaboration, GEODIS supports Kyndryl Logistics by leveraging experience in tailored supply chain management solutions and advanced visibility.”

Eric Gerbi Executive Vice President GEODIS | Supply Chain Optimization

The changing culture is both an opportunity and a challenge. We have been spun off from a 100+ year old company with a very different culture to the one we have identified as being essential for Kyndryl.

Continued from page 13

There are several very important cultural changes that have a significant impact on procurement. This starts with the fact that the role or scope of procurement in Kyndryl is significantly broader as it has a more direct influence on the business strategy, decisions, and outcomes. It is expected that procurement brings solutions to the account teams that will help improve competitiveness and margins. The status and overarching mission of procurement has been elevated as a result and this is reflected in the investment in the people, tools, and processes that we are now seeing within the function.

There has also been a significant shift in the attitude and culture to drive simplicity, speed to market and ease of use across all of Kyndryl. This too has helped procurement as it has enabled a different discussion with tax, finance, trust and compliance and audit which starts at the highest level of the organisation. Allowing procurement to collaborate with key functions to drive the right balance between managing risk in sourcing processes and making it simple for our business stakeholders to do business with our suppliers

The guiding principles for Kyndryl as an organisation are flatter, faster and focused - flatter in terms of Kyndryl’s new operating model; faster related to speed in delivery through simplification; and focused on providing innovation and value through agility.

In a short space of time a lot has happened, the opportunities for growth and creating a business with a sustainable

and collaborative ethos are apparent. On every journey there are of course obstacles. What would you suggest as the primary challenges to your ongoing evolution?

The changing culture is both an opportunity and a challenge. We have been spun off from a 100+ year old company with a very different culture to the one we have identified as being essential for Kyndryl. As a start-up firm we need to embrace an entrepreneurial spirit and openness to try new things, fail fast, learn from mistakes, and quickly move on.

We are driving customer centricity throughout the firm and this mindset of understanding value in everything you do and being prepared to question processes that don’t deliver value is absolutely critical to success.

It will take time for people to feel comfortable with and embrace these new cultural tenets, and we need to show through words and deeds that this is the new norm. We are empowering the team and rationalising controls where needed, to reflect a strong controls culture from the past but also moving at the pace of a start-up that is needed for our success. We are challenging and being challenged daily to ensure that our processes and systems are suitable for a 21st Century global IT professional services firm. Our goal and expectation is we will be fully prepared and able to further accelerate process and systems transformation for customers around the world.

Procurement Chain

National Grid Ventures –Transforming Energy

National Grid Ventures is the competitive division of National Grid, operating outside of the core regulated part of the business (such as Electricity Transmission and Electricity Distribution).

NGV develops, operates, and invests in energy projects, technologies, and partnerships to accelerate the development of a clean energy future. With a diverse portfolio of low carbon and renewable energy assets across the UK, Europe and US, NGV is pushing the boundaries of a new energy horizon.

Kristian Hollowood, NGV’s Head Of Procurement provides the details and explains why NGV is a great place if you want to have a hand in making a multigenerational difference.

Hi Kristian, please offer a snapshot of your role and responsibilities.

I lead the procurement function that support National Grid Ventures (NGV) and the High Voltage Direct Current (HVDC) portfolio across National Grid Group. I report into the Director of UK Procurement who then reports into our CPO.

This includes understanding the key priorities within NGV and then setting the strategic direction for our team, enabling the team to deliver the key outcomes we’ve committed to our stakeholders through implementing our category management principles. We’re working on a significant level of expenditure across a range of asset classes, business units and stakeholder groups, so plenty of opportunity to get

involved in some large scale, complex stuff. In terms of the team itself, we have a team of around forty, with eight of those being my leadership team in addition to category leads who each have their own category ownership or project specific responsibilities.

We have a blend of both category management teams (who are accountable for setting the category strategy for our core category areas such as; HVDC cable, convertor stations and Liquid Natural Gas (LNG equipment))and then our project specific procurement teams, who will execute these strategies for some of our biggest project procurements, with some of the biggest HVDC projects costing in excess

of a billion pounds to build and around 18 months to deliver.

Owing to the strong experience my team have in the (HVDC) category, we have recently started supporting the Electricity Transmission business on a growing HVDC offshore asset portfolio. This is great as it allows us to apply our category knowledge to a new and growing spend base.

In addition to my core responsibilities, I also sponsor our procurement people strategy within the UK and own the National Grid relationship with CIPS which is a key focus area for us to ensure our people continue to get the right opportunities to continue to progress with their development.

Procurement & Supply Chain | National Grid Ventures

National Grid Ventures operates a broad mix of energy assets and businesses in the UK and US. With many activities bordering and crossing between regulated and non regulated. What complexity does this mix of geography, variety of assets, and regulation add to the procurement function?

Well, it can make it a little more complex. The NGV business is a little different to the core business as you’ve rightly pointed out, often wanting to work at pace and with a degree of uncertainty that a new venture will come to fruition, but that’s what makes this role interesting and varied. I’ve got a great leadership team who really know their stuff which becomes extremely useful when trying to pick up some of the technical intricacies of each category area.

In regard to regulation, that’s fairly straight forward for us in procurement as we try to apply a common set of best practice principles to both category management and strategic sourcing regardless of how category spend is regulated (or not) and whether utilities procurement regulations apply. However, there is a perception that regulated procurement processes can be overly complex so it’s still important to think laterally and be agile in our approach wherever we can be. Funding mechanisms also vary meaning our Category strategies will need to consider how each funding mechanism works and whether that limits our options (such as an inability to commit to suppliers post final investment decision) or provides further opportunity (like leveraging multi-year portfolio

commitments). In some cases, we engage with OFGEM around what is happening in the supply chain with a view to amending the way we’re funded if we think it will provide us with additional strategies that will benefit the end consumer.

It’s important that my team can understand all of the various business drivers at play within the business units we work with and assimilate those insights to create coherant category strategies that utilitise our category management principles and exhaust a full range of value levers in order to deliver value for the organisation..

Interconnectors are enabling the UK to connect to Europe and drive towards a net zero future. With an estimation that 90% of all energy via the interconnectors by 2030 will be from zero carbon sources the ongoing expansion of the interconnector network is key to National Grid and the UK’s goals. The latest Interconnector – North Sea Link has just come online. Connecting the UK to Norway is a significant feat, this six-year project is a great example of partnership and collaboration. It is also a great example of the role procurement plays in driving complex projects. Can you offer an insight into this project and why procurement had the seat at the table from day one?

NSL is certainly a project the NGV Team is really proud of, currently the longest subsea Interconnector in the world, powering 1.4m homes, which after six months in operation has already imported enough green energy to offset the carbon cost of construction.

Kristian Hollowood

In addition to the key suppliers we currently work with, we have also identified emerging suppliers from around the world and will be investing effort in them in the near future to try and improve the resilience in the supply chain.

has already imported enough green energy to offset the carbon cost of construction.

As you will appreciate, building a new Interconnector takes time, approximately six years from start to finish when considering the Business Case, Planning, Consenting, Surveys, Design, EPC Procurement, Construction, and all being well, Operations. Therefore, the procurement for NSL was delivered a number of years before my time so unfortunately, I can’t take any of the credit for all the hard work the Procurement team put in, however what I can say is, all of our Interconnectors in NGV and HVDC links in the ET business are in collaboration with JV partners and therefore the relationship with our partners is essential. Delivering a procurement event of this size and scale requires a number of key ingredients to make it successful; a common purpose and set of clear outcomes, and a team ethic along with a willingness for collaboration when navigating differing opinions along the way!

Timelines for these large scale projects are also imperative and with procurement being one of the largest lead time activities outside of planning, consenting and construction it’s really important procurement lead the sourcing process exceptionally well, introducing the right business skills and expertise from around the organisation throughout the event whilst also engaging with members of the Joint Venture Executive Group at the critical points in time to influence and advise on key decisions and risks.

NSL is certainly a project the NGV Team is really proud of, currently the longest subsea Interconnector in the world, powering 1.4m homes, which after six months in operation has already imported enough green energy to offset the carbon cost of construction.

Procurement & Supply Chain | National Grid Ventures

Procurement also plays a vital role in projects of this scale in regard to bringing insight from the external marketplace into the project, which involves getting out there and seeing suppliers, visiting factories and attending exhibitions in order to get a true picture of what’s really happening. As you will have read, many European Transmission Owners are supporting their own respective government 2030 renewable energy targets which means a change in the supply/ demand dynamics in the HVDC marketplace. This requires procurement to not only identify this in the first place but mitigate the consequential effects of this market change through the category strategies and sourcing strategies we deploy.

As we can see, operating in a business that is primarily focused on mega projects (or projects of significant magnitude) somewhat elevates the role of procurement, allowing early access to the challenge ahead. This is often not the case with many of your procurement peers in other industries. However, the nature and complexity of such projects must mean in most situations that the pool of potential partners (suppliers) is quite small. Does a smaller supply chain result in firmer more collaborative relationships?

You’re right in that our supply chain tends to be a smaller, more niche set of suppliers –particularly in our LNG and HVDC category areas. Focussing on HVDC as a category, there are just over a handful of recognised suppliers for HVDC subsea cable suppliers and onshore converter station suppliers around the world. Previously, projects like this happened every

4/5 years, primarily led by ourselves in the UK or some other transmission owners in Europe. Now owing to multiple governmental net zero targets around Europe and an aspiration to introduce as much renewable offshore wind into our energy system as possible it now means there is an unprecedented demand for this particular equipment. That means that there is an even greater focus on supply chain collaboration going forward; whether that be simply securing factory capacity through longer term strategic relationships, increased transparency and visibility of upcoming demand to enable better planning, working together to standardise specifications or using our key OEM cable and converter suppliers to act as advisors in our early design phases to ensure delivery is executed as efficiently as possible.

In addition to the key suppliers we currently work with, we have also identified emerging suppliers from around the world and will be investing effort in them in the near future to try and improve the resilience in the supply chain.

Sticking with the

collaboration theme. The world class Grain LNG facility was the first of its kind by National Grid Ventures. Another significant project in terms of investment and complexity. Did you utilise the expertise of vendors in shaping this project?

Grain LNG facility was initially commissioned in 2005 and can provide up to 25% of the UK’s gas demands, which makes it a critical part of the UK’s energy infrastructure, non-more so than right now consideration current geopolitical events.

supplier

The most recent development at Grain, called ‘Capacity 25’ will expand the facility to be able to provide up to 33% of the UKs gas supply with its new 190k m3 LNG Storage tank (the fifth to be built on site) and an increased unloading facility making it the only LNG facility in Europe allowing two ships to unload at any one time.

The decision on the procurement strategy for ‘Capacity 25’ did require a significant amount of market intelligence gathering, particularly as this type of facility hadn’t been built for a number of years and the market had inevitably moved on from the last time we built something similar. During that engagement we spoke to the supply chain to gain insight into what they believed would make both the project and the procurement event appealing to them, this included risk appetite, contract form, scope of the contract and who in the market was best placed to deliver which scopes of work, supply chain risks and bottlenecks (The market at this time was very constrained and suppliers were being particularly selective as to which projects they bid on). This feedback was a key reason for deciding to split out the tank build and the subsequent main site works owing to the appetite of the suppliers to take on such a large project.

We are now into construction phases on the project and since awarding contracts for both our tank and main site works, the teams continue to collaborate through design phases and construction deliverables to ensure the project is delivered in the safest, most efficient way possible.

We have previously stated the complex nature of most projects, but like any construction project whilst there may be a need for the latest technology and equipment there will also be a requirement for more traditional services. From a local content perspective is there a big push to ensure that where possible, contractors and suppliers in the local area (region) are involved in the development phase?

I think it’s really important that the communities we are working in benefit from our presence in the area, whether that is increasing opportunities for SMEs, local suppliers or social enterprises so that the local economy can thrive, driving an uplift in local skills and employment whilst also creating opportunities for disadvantaged people and support social mobility.

National Grid has a responsible business charter which looks at driving an increase in ‘Responsible Business’ measures and we are also pushing this thinking into our Category Strategies to ensure our teams are considering how we can build social value into all our relevant procurement activity,

In regard to local content specifically, we have supplier diversity strategies in place within the US and plan to integrate our community impact strategies within the UK, these all help provide guidance on our ambitions as I’ve mentioned above.

In addition to National Grid driving this because we believe it’s the right thing to give back to the communities we serve,

on the regulated side of the business we are starting to see more regulatory requirements to support local content, this is particularly prevalent in the US and is a really key driver for jurisdictions to support upcoming offshore community wind developments in the North East of the US whilst creating local content and jobs for many.

Energy consumption is rising, and the net zero drum becomes louder every day. The energy sector has maybe never had so much exposure. Does this increased awareness reflect in the number of new entrants in the vendor space who are vying to work with National Grid Ventures? What opportunities exist for start-ups and SME’s?

I wouldn’t necessarily say we’ve seen an increase of suppliers that are looking to work with us, however with the challenges National Grid face in regard to delivering the energy transition means we are more reliant on our supply chain than ever, whether that is because of wanting to increase our supply chain resilience, innovating current practices and procedures or looking to secure increased capacity in a constrained marketplace.

Specifically in relation to start ups and innovation, NG Partners is National Grid’s corporate venture capital and disruptive innovation group, which works to nurture and grow innovation inside National Grid while scanning the market for technologies and companies with the potential to disrupt our existing business models.

NG Partners works with all business units and support functions to tackle complex, technology-driven problems and find solutions that make our company more efficient, digital, and entrepreneurial through NG Partners with start-ups, internal innovation projects and cultural acceleration programs. Procurement work with partners wherever possible to identify business opportunities for innovation during our category strategy activity. We’ve also been working on our current procurement procedures and identifying where our barriers to entry for start-ups have been unnecessarily high and therefore worked to simplify them wherever possible to allow pilots and proof of concepts to develop and flourish in collaboration with startups to help resolve some of our common business issues with the creation of new technologies, software or innovations. By making these changes to the way we procure allows us to drive value by accessing markets we’ve not previously been able to access.

Whilst a significant portion of your focus is towards the highly intensive projects there is still a considerable asset base that requires your teams daily attention. Capex is significantly different to Opex in your world. Do you think that this complex mixture is what makes working in procurement at National Grid Ventures so rewarding?

I do think working at National Grid as a whole gives you a great opportunity to experience a range of categories whether that be Construction, Operations and

Maintenance, IT, Indirects and Fleet. I believe it’s also a great time to be working within National Grid as we are at the heart of the energy transition, so this gives you a feeling of greater purpose and pride, working on the development and maintenance of assets that are going to be crucial in the UK having a resilient, sustainable energy network for the future.

Within NGV specifically, having responsibility for the procurement of the whole life cycle of assets we build, means the team have a fantastic opportunity to be exposed to a mix of both large infrastructure construction procurement (which is high profile, complex and often with a JV partner) but ultimately a single tender event, or working in our category

Procurement & Supply Chain | National Grid Ventures

teams which is all about understanding the category, the asset base and deploying a series of supply or demand levers in order to drive value and efficiency from the cost base whilst continuing to delight our stakeholders with the level of support we provide them with. Either type of role offers great experiences and challenges in equal measure.

Procurement is certainly evolving industry wide. How do you see procurement developing within your organisation? What do you believe you are doing well at and where do you feel there is scope for improvement?

Procurement within National Grid has certainly come a long way in my eight years here! On my arrival I felt we excelled in tactical sourcing or spot market tendering – albeit on a very large scale dealing with some huge projects, to now where we are a much more strategic function, deploying category management principles with really strong relationships within the business and a CPO with fantastic credibility and support around the organisation. Due to our experience in large scale construction procurement that means we have some incredible talent and expertise in this space, meaning it can be difficult to keep hold of our talent when many organisations are looking for similar capabilities. Our investment in people is also something that has continued to impress me, I’m currently sponsoring all of our people and capability initiatives within procurement at present and its fantastic to see the joint aspiration for everyone to continue to learn, develop and build their skills and experiences

to become more rounded both from a professional and personal perspective.

Our category management capability is an evolving story and we are challenging our category leads to have a more mature, robust understanding of their categories. However we’re pleased with the progress we’ve made in this space and its certainly giving our function and people further kudos and credibility the more we hone our craft and demonstrate the value we bring to the business.

There are areas of improvement we have identified within the department and have a keen focus on bringing these in-line with best-in-class procurement functions.

Being at the heart of energy infrastructure in the UK our supply chain resilience has certainly fallen into the spotlight over recent years and we are seeing more questions and reassurances being requested from our Executive Team and also external stakeholders such as BEIS and OFGEM to ensure we keep the lights on. Within procurement we’ve invested in some automated systems to help us identify key risks, specifically on supplier health, however there is still more work we can do on automating our supply chain mapping activities, identifying risks and proactively tracking this, rather than it be a responsive activity to an external event like Covid, Brexit or the situation in Russia.

It is fair to say we are still on a journey when it comes to digitisation, we’ve made some great progress in moving to a digitised

contract repository and report system, and have recently implemented a tool to provide us with a greater level of analysis and insight on our cost data, but I believe there is still opportunity to explore digitising our processes further on areas such as tactical sourcing to allow our teams to spend more time on category management and strategic activity.

Finally, the last area I’ll mention is the hot topic for most organisations – ESG. We’ve got some fantastic experts in National Grid who really understand in great depth what we need to do in order to meet all our aspirations in regards to being a responsible business, and one of the benefits of working at National Grid (and a key attraction for our graduate schemes) is employees can see the tangible link to sustainability and social good – particularly with us being a huge enabler the Governments UK Net Zero targets by bringing renewable energy onto the grid.

As a regulated utility we already have requirements for our supply chain such as implementation of the modern slavery act, real living wage etc but we are now at the phase of embedding sustainability into our category management thinking and becoming a key performance indicator for a successful procurement function, whether that be measuring improvement via our Carbon Interface tool, understanding Scope 1,2,3 emissions or understanding community impact through our activities as a business. We see sustainability as a key business outcome comparable to cost efficiency or supply chain risk and that will only become more embedded in the way we operate over time.

AB InBev raises a glass to digital transformation on a global scale

AB InBev is the world’s leading beer company, with operations in nearly 50 countries, and with an evergrowing product assortment to distribute. Made up of 17 ERPs, its digital operation has always been critical to such a vast supply chain operation, but its complexity has ramped up even further over the past three years. Fortunately, Ednaldo Jacome took up his post as Global Logistics Director just in time to convert this challenge into a golden opportunity.

Hi Ed. Please begin by introducing yourself and your evolution within AB InBev, as it seems to reflect what is a very sizable and complex supply chain operation across the organisation?

I’ve worked for AB InBev within the supply chain for more than 15 years, here in Brazil, with this actually being my first job straight from university. I have also been responsible for the company’s excellence programme in supply chain, called Distribution Process Optimization, across Latin America, which serves as a handbook for operational procedures. This led to a corporate manager position in Latin America which later became a global role.

Over the past four years, I have been Global Director for Logistics Transformation, focusing on Supply Chain Planning, Transportation and Operations management.

My career path is an example of the scope of the supply chain for a company like AB InBev. And, therefore, how we continue to

work to make it more resilient, agile and sustainable as we adapt to the operating environment.

I’m currently in charge of implementing each phase of our transformation programmes; including the biggest ERP transformation we have had in our company through implementing ERP S4HANA.

It seems you entered this role at quite a critical and, perhaps, difficult time. How have supply chain priorities evolved within the food and drink sector over the past three or four years?

COVID-19 of course accelerated this, but even without the pandemic, a main challenge has been the fast scaling up of ecommerce and digital sales. COVID also added a new set of supply chain challenges across the world.

As sales across our digital platforms grew, we had to quickly adapt to the growing demand – from our infrastructure to our technology needs. We needed to rethink about how to plan inventory, how to organise our warehouses and how to structure shipments. Our teams operated in an efficient and nimble way to meet these challenges.

How much of this step change was already being planned for within the company? Were these transformations you already had in place, only accelerated; or did this period bring to light completely new ways of thinking?

In this Global ERP solution S4HANA and Cloud Decoupling, Accenture is our main partner, leveraging our technology and bringing expertise for this transformation. Cooperation with our operations across the globe is also key, as we seek their local knowledge and experience which are critical to implementing such programs.

Ednaldo Jacome

Overall, these strategies were already in place, but we did have to fast-forward them. Also, we built on them and expanded as we learnt more and more about how the future sector was looking to evolve.

The main thing we have adapted during this period is our mindset. People talk about the importance of being agile, but we really have taken that agile methodology to a new level. This mindset shift has allowed us to integrate changes and technologies faster, and to try and experiment on a continuous basis.

When such quick changes are implemented it’s always vital to ensure the workforce are onboard and equally enthused by it all. How much of this transformation strategy has been focused on the happiness and buy-in of your employees?

The technological evolution had to go hand in hand with a new people management strategy. For instance, we are using artificial intelligence (AI) to perform critical tasks and to train our colleagues through our partnership with DeepHow, an AI-powered training platform for manufacturers and field-service teams. Further, we have implemented planning tools to provide visibility across the full supply chain from supplier to customer. This gives us the ability to react to the many challenges of the COVID-19 pandemic and manage our revenue while supporting the more than six million pubs, restaurants and family-run retailers that sell and serve our products.

Chief among your successful technological integrations has been your S4HANA ERP transformation? Please do explain the significance of this investment…

We kickstarted this ERP transformation back in 2019 to support, empower and embolden our teams. Since then, we have learned and improved our main interfaces and implemented key solutions to better integrate our functions and boost our team’s performance.

COVID allowed us to plan for a ‘new normal’ through our planned digital transformations. This was important as it gave us the opportunity to evaluate our strengths and needs, and to adapt accordingly to the new operating environment.

How significant were your business partnerships during this period? It’s one thing to bring your own internal personnel on this journey with you, but presumably you needed equal alignment across your own value chain?

Absolutely, and we work with partners across the value chain. We can share lessons learned, benchmark and identify opportunities that can better fit our business needs.

In this Global ERP solution S4HANA and Cloud Decoupling, Accenture is our main partner, leveraging our technology and bringing expertise for this transformation. Cooperation with our operations across the globe is also key, as we seek their local knowledge and experience which are critical to implementing such programs.

Cold drink for football games

From production to delivery, digital transformation partnered with Accenture revolutionizes AB InBev’s supply chain and guarantees cold drinks at the right time to watch football games.

The match is about to start. Your team is now ready to enter the field. The occasion calls for an ice-cold drink – and it needs to be on time to keep up with the game. It is in this mission that Accenture has helped AB InBev with the structuring and implementation of the Aurora Program, that leverages digital transformation to the world’s leading brewer’s supply chain and helps ensure that cold beer is provided at goal time, or on any other occasion that deserves to be celebrated. “Our partnership’s mission is to create a global ERP solution, a management system for AB InBev’s supply chain, based on SAP S/4HANA and cloud decoupling”, says Marcelo Soares, Director of Innovation and Technology at Accenture Latin America. Starting in Brazil, the program is expected to expand globally..

Accenture provides change management, technology expertise and strategic vision, guiding the paths to follow throughout the project. “The Aurora Program brings the opportunity for scalability and speed to meet the demands of the digital market and the supply chain challenges in an agile and structured way”, says Luciano Fanti, Managing Director at Accenture Latin America. The digitalization of FMCG market has allowed new types of connection with customers, without the need for a third party to intermediate. Applications enable direct real-time interactions. This connection generates insights to customer demand. It is necessary to adapt and change to respond quickly. In addition to speed, quality is fundamental – that is, delivering the cold drink. “AB InBev engages with costumers regularly, and this project has been an opportunity to increase types of delivery modes to serve quickly and with the desired quality”, says Victor Muniz, Director of Technology and Innovation at Accenture Latin America. All this happens in harmony with AB InBev’s internal controls, taking care of suppliers and carriers. There is also the sustainability layer. “Growing with the community is at AB InBev’s core. Sustainability has also been core to this project. Using technology is critical to promote a more sustainable and inclusive supply chain management.”

Learn more at: accenture.com/sap

With over 40 years’ experience in revolutionizing businesses, Accenture and SAP know what it takes to win in your markets and industries

See how our award-winning partnership can unlock value for your business through the power of intelligence.

With over 40 years’ experience in revolutionizing businesses, Accenture and SAP know what it takes to win in your markets and industries

See how our award-winning partnership can unlock value for your business through the power of intelligence.

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Continued from page 35

To change subject slightly, while companies were juggling supply chain challenges brought about by ecommerce, there was a simultaneous, growing demand from consumers for providers to become more sustainable. Did this expectation add another layer of complexity for you?

Really, it’s all been part of the same process. When looking to introduce new technologies for faster shipments, or better warehouse management, or improved transport management, sustainability is one of the considerations that gets filtered into the final solution.

Going remote has accelerated the use of mobile gadgets and the need for more workforce optimisation tools. Ultimately, sustainability is embedded across our business. From considering how we can be more fuel-efficient to reducing emissions, we are taking important operational steps to meet our 2025 sustainability goals.

Your international footprint must be helpful in signposting future improvements?

While we’re a global business, we always talk about how beer is inherently local. In this context, it’s my job to try concepts based on feedback and data from around the world, and then scale that for wider adoption in a way that allows us to have a global common template. I visit warehouses and operations around the world to map what individual areas need, and therefore what might work on a global scale.

One great example of how this global approach leads to improvement is in how we now manage transportation costs together with transportation operations. Following an evaluation, we proposed the implementation of SAP TM (transportation management), enabling us to monitor the operational performance matrix in alignment with financial metrics so we can understand the cost of our business decisions, and so we can also adjust any volumes or operations in less than five days.

All in all, it has been quite an intense period of change for such a large organisation, especially when it comes to supply chain management. What would you say are the key learnings you’ve taken away from the process so far, and that you’ll take forward with you into the future?

The key learning is that this is a global transformation. We’re not trying to make every country fit specifically into a single design, because we understand the local realities. What we can do is define an approach and establish a foundation that will support our business strategy.

Technology should not build the co mpany culture. Rather, it must be adapted to fit the business culture and need. Across AB InBev, we use technology to help optimize our ways of working across our teams and functions, while delivering on our purpose and strategy.

While we’re a global business, we always talk about how beer is inherently local. In this context, it’s my job to try concepts based on feedback and data from around the world, and then scale that for wider adoption in a way that allows us to have a global common template

Al Masaood lays out Transformation Plans an already established

Sofiya Poland is Al Masaood’s Head of Procurement – a title that takes on more than just one revenue stream or one sector. The nature of the Group’s crosssector interests and multi-stakeholder involvement means that transformation has to be about more than technology. People, processes, sustainability and a whole lot more combined will dictate the future success of this prestigious Middle Eastern company.

Hi Sofiya. Al Masaood’s history goes back around 50 years from its origins as a humble trading house. How would you define its market and regional status in the present day?

Al Masaood is a privately held and highly diversified business Group based in Abu Dhabi; its numerous companies and partnerships spanning multiple market segments. Since those early days mentioned, the Group has grown to become one of the largest integrated industrial, commercial and services organisations in the United Arab Emirates.

In the present day, Al Masaood still represents the collective business interests of the Al Masaood family, in serving both public and private sectors. We do so through a philosophy to constantly strive for growth, excellence and customer satisfaction. Our business divisions deliver global brands

out its Plans to build on established legacy

and award-winning services to leading companies and public agencies in the UAE and Bahrain.

As a part of this philosophy, Al Masaood management has decided to enhance its core support services, including procurement. And, in April 2019, I joined the group to transform the procurement function from a tactical and administrative process, to a best-in-class procurement department practicing excellence and integrity in its support of a highly complex business structure. We have sought to deliver, through this effort, value-added services, tangible savings, positive bottomline impacts, and a robust governance

structure to ensure compliance, transparency and innovation in the future.

Over the course of 50 years, any company would have faced some tough and diverse challenges. How have the past few years compared, and how important has it been to keep reinventing the Group despite its age and legacy?

Al Masaood’s legacy in Abu Dhabi echoes throughout the UAE, and as the nation undergoes its own transformation, we must do as well. Moreover, we must also be agile to respond to each respective transformation in every sector we operate.

For example, in the automotive vertical we are an exclusive dealer for many brands and have had to navigate inventory shortages, the rise of ecommerce, the surge in demand for EVs, and constantly new competition. We have to indulge and involve ourselves in these new streams too, as we’ve done with the EV market and our increasing online portfolio.

Then, on the industrial front, we are working hard to get ahead of the curve when it comes to sustainability, to become a market-leading net-zero aspirer and ESG pioneer.

Of course, with each new product, service and transformation we require greater resources and new skills. And procurement has played a vital role in that process too, as we seek greater agility and resiliency to varying market trends. That being said, the skills challenge and ‘the great resignation’ has been particularly challenging, largely because millennials see these industrial settings as quite archaic.

The responsibility is on us to prove this is not the case, and to adapt where possible.

When trying to encourage such complex transformation, how much emphasis do you place on the mindset of the Group and your procurement team?

I’m not a person who sits comfortably just working the way that has always been done in the past. I encourage my team to be agile and to think forward. However, it is not my personality that is driving change necessarily – it is the ecosystem we operate in

that is so demanding that it drives this need for flexibility, and an appetite for risk.

Within procurement specifically, employee mindset is very important, as it is those people who are the unseen heroes of the company. They’re sometimes easy to overlook but they’re on the frontlines every day, working in one of the quickest-changing functions of an organisation. Yes, we’re undergoing a digital transformation, but there are still those who buckle up their boots everyday and give their best in a very manual and intense way.

So, reading between the lines, it’s about ensuring these new technologies and existing people work harmoniously together.

Like others, we’re dealing with a rapid adoption of technological advancements and I’m tasked with putting in place the appropriate structures and culture to keep stakeholders happy, while also getting the best out of a satisfied workforce… a workforce that can perform its duties to a high standard, but that can also have their voices heard when needed.

This all fits within a dedicated best procurement practice strategy across the Group’s verticals. Using Chartered Institute of Procurement & Supply (CIPS) guidelines, the team is sustainably delivering key procurement performance across metrics including cost minimization, sustainability, strategic sourcing, contract management, risk management and supplier relationship management (SRM).

To that end, what have been the main transformations enacted across procurement in recent years?

Al Masaood Procurement has undergone numerous changes in terms of people, processes and systems over the past four years. The team has grown from a small tactical organisation of five people in 2019 that was responsible for transactional tasks like converting PRs into POs; to a team of 15 procurement professionals who are in charge of various streams as part of a hybrid structure. Al Masaood’s hybrid model of centralised procurement performs admirably in delivering value to the organisation’s stakeholders at every stage, thanks to the engagement of committed business partners.

From a tech perspective, although many individuals might disagree, I think the COVIDD era was a disguised gift. It encouraged a lot of businesses who were hesitant to digitally transform, to rethink their processes. For us, it meant switching from a procure to pay (P2P) process that was entirely paper-based, to one that is now entirely online. Online approvals have been introduced, and in collaboration with IT and finance, we have developed a data management strategy to maintain records and data in a secure and open manner. In addition, a very complex procurement dashboard was introduced for the executive committee and higher management’s monthly procurement reports.

ERP is another particular area of progression into 2023 as we continue to

move at a pace that keeps up with the wider industry, without negatively impacting existing operations and employees. This evolution is as much about preparing people for the change, as it is the actual investments.

How would you assess Al Masaood’s digital status at the beginning of this year?

We now have a variety of powerful platforms and software in place for use across various business requirements; including HRMS, DMS, leasing, property, P2P and much more. Many of these platforms are bestin-class and all are scalable based on our own expansion plans. ERP would fall in the category of a process still in the process of being digitised, to show that the continuous improvement never ends.

In collaboration with a consultant, we have mapped the overall architecture of our business to see where gaps exist and where technology could enhance in line with future demands and industry trends. Based on the findings of this mapping and study, a tender was released at the end of 2022 and we are currently evaluating worthwhile solutions in preparation for the 2023 stage of our digital transformation journey.

How has the company’s workforce responded to these ongoing changes?

Digitalisation is accelerating in most corners of industry, so it’s no shock to employees that they need to be adaptable and open-minded to new ideas around efficiency and streamlining. They need to

not only use these new technologies but learn from interactions and change their behaviours to get the best out of them each and every day.

It is my role to motivate my team in this way, concentrating on their training and development so they are better equipped to perform in their current roles; and in their future careers. Even right now, seven people are undergoing CIPS Level 4 exams, and two have already achieved this level and will be pursuing the next level this year. Beyond that, I’m planning to enrol junior staff for CIPS Level 2 this year, so the entire team has a more thorough understanding of procurement best practices and the new tech we’re bringing into the organisation.

A good sign of this effort being successful already is the Al Masaood procurement team being awarded the corporate ethics mark by CIPS – a highly regarded certification after we passed tests in relation to areas of fraud, corruption, bribery and the environment across the supply chain.

This award demonstrates our dedication to professional conduct, integrity and morality; and I am so proud to see the Al Masaood name mentioned alongside these attributes.

Looking ahead to the rest of 2023 and beyond, what is your vision for how you want Al Masaood’s procurement function to evolve further?

Procurement & Supply Chain | Al Masaood

More generally, procurement needs to transition from being a cost-cutting and regulatory function to being a customercentric and business-enabling role that is agile enough to adapt to a world that is perpetually changing.

my

As a final question, I wondered if you could reflect on your own journey with such a prestigious organisation? What are you most excited about in the future?

I am thrilled to be a part of the Al Masaood Group’s transformation journey, and in particular the transformation of the procurement team. Although the past few years have been disruptive and uncertain, we have persisted and, in spite of the challenges, have evolved into a larger, stronger team that will work with the company to support its growth and new revenue streams. My emphasis will continue to be on people and their growth since I think that people are our greatest and most valuable asset.

In this respect, greater strategic responsibility for procurement needs to be assumed – it needs to be at the centre of organisational strategy and future goal-setting. Our best practice approach has already kickstarted this process of integration, but transformation doesn’t always mean ‘digital transformation’. I am similarly aware that the team must also develop its non-technical skills, including stakeholder management, SRM, consultative work, initiative taking and project management.

Therefore, looking forward, we are striving to maximise connections with third parties, to innovate, to integrate, to cooperate, and to make the best of our large pool of data to optimise business decisions.

As a personal focus and priority, I will keep advancing my team’s and my own knowledge of sustainability. Contributing to the company’s ESG performance is so necessary from a business perspective of course, but it also strongly aligns with my own beliefs.

All of these priorities are interconnected. The new and exciting path of the organisation’s digital transformation will encourage the team to pick up new skills across all different strands of a futureproofed business. Whether it’s sustainability, data management, process alignment, communications or any number of continuous improvement areas, procurement has the potential to help set an example for positive business change.

As a personal focus and priority, I will keep advancing

team’s and my own knowledge of sustainability. Contributing to the company’s ESG performance is so necessary from a business perspective of course, but it also strongly aligns with my own beliefs.

48 | Sustainability

UPM Resideo

Sustainability

UPM Sourcing –becoming the customer of choice

As a front runner in the forestry industry, UPM provides renewable solutions for various end uses from its 6 business areas. A seeker and investor in sustainable growth, and innovator for a future beyond fossils, UPM’s ethos is built around responsibility. Nina Kivioja UPM’s VP Sourcing, Indirect Materials & Services discusses how sourcing & procurement has been transforming, how it embodies the ethics and ambitions of the business, and why becoming the customer of choice is important to the organisation’s ambitions.

Hi Nina, UPM is a significant business in size and scale and also diverse in respect of business units. What does Indirect Material & Services cover within UPM and how is your role (function) structured?

Indirect Category Sourcing supports globally all our businesses with a group wide platform, having a responsibility for strategic sourcing across indirect materials and services, capex, major maintenance, outsourcing spend & supplier innovations.

We aim to leverage and identify synergies across business units and geographies, with a mission to improve UPM business performance through excellence in spend management.

In our sourcing and procurement community we have a systematic roadmap and steps to increase and protect UPM’s values. We work as a “one team” according to our renewed Source-to-Pay taxonomy: category sourcing, tactical sourcing, procurement, and invoice to pay teams, supported by source to pay development. We have a matrix organisation including our regional BA specific sourcing and procurement teams as well as sourcing operations teams in the business hubs.

What complexity does the geographic footprint and also diverse nature of the business units create for procurement?

UPM has a diverse business portfolio under strong rotation towards bioeconomy driven business with sustainability as a central unifying theme. The positioning of

customer

the sourcing function needs to match each business to drive the right value agenda. Our businesses are facing different markets in terms of customer expectations, trends, business logic, and growth outlook.

Within the indirect supply market there are hundreds of service and product groups, all of which require deep knowledge to source effectively. It is a fragmented landscape with tens of thousands of suppliers and thousands of stakeholders (internal and external).

Sourcing contributes bottom line savings and adds to top line by acting as a commercial function, extracting value from the suppliers, and pursuing business opportunities, with good knowledge of the business, the suppliers’ capabilities, and the markets.

In recent years, UPM has also faced a highly turbulent operating environment with for example, the pressures of covid, geopolitical crises, regulatory changes, and economic volatility. While tremendously supporting UPM to weather the storms, sourcing and procurement has also driven an ambitious development agenda anchored in our recently created source-to-pay vision and process, indirect sourcing being a pilot and frontrunner in many areas.

The ongoing push into new markets and deeper dive into existing areas has seen procurements stock rise. The business has long since realised the value of procurement and so three years ago UPM embarked on

its sourcing transformation. What does this transformation journey look like and what was the catalyst for this move?

We clearly think that sourcing can provide strategic value when it expands beyond traditional boundaries. We want to enable world class efficiency in source to pay processes and ensure full supplier base value for UPM businesses. Develop digital solutions supporting source to pay process activities end-to end and enabling full transparency in the supplier base.

We want to unlock the potential of automation, industrialisation of reputable sourcing and procurement tasks, and

strengthen capabilities for category sourcing to focus BA’s / SBU’s strategies and profitability.

Three years ago, UPM sourcing and finance changed operating model and updated source to pay processes for strategic sourcing, tactical sourcing, and procurement. Service centres for tactical and operational activities were set up in Wroclaw and China.

Process efficiencies and quality were approached through a digital platform renewal, target to have a simple, automated, and error-free source to pay process. Digital solutions (main ones SAP Ariba, Basware, SAP S/4) are being rolled out and related

development actions ongoing to support our vision.

Within indirect sourcing the focus was first to renew and implement our STP processes and business rules. Increase compliance by implementing operative procurement platform and ramp up procurement organisation. Category focus gradually shifting more on the development of the strategic category plans and setting targets, identifying applicable opportunities and relevant value levers. New spend areas have been taken under management. By gathering relevant MI from the new markets and building a risk screened supplier base we are supporting the UPM ‘growth and beyond fossils’ strategy.

Lindström is a family-owned textile service company whose business is based on circular economy. Our company was established 175 years ago in Helsinki, Finland, where our head office is located. We offer a wide range of textile services to our customers in Europe and in Asia – ranging from workwear and cleanroom textiles, mats, industrial wipers and washroom products to textiles for hotels, restaurants and healthcare.

Our customers can focus on their core business, as we take care of their textile needs with our easy-to-use services. The comprehensive services include textiles, their washing and maintenance, as well as recycling in the end of their lives. Our digital service enables efficient textile management and smooth, transparent service.

Sustainability is at the heart of who we are. It is also our business interest to avoid overproduction and optimise the use of natural resources. We always strive to raise the bar to make our service more sustainable. That’s why we are committed to reducing our emissions and reaching carbon-neutrality by 2035. All our decisions are guided by our purpose of caring for people and our planet by inspiring people to shine and businesses to grow in a sustainable way.

www.lindstromgroup.com

Transformation will continue, there needs to be a continuous evaluation and development of our operating model to assure quality and user experience. We need to develop our competencies & gain new skills, understand what is needed in the future. This year’s target setting includes headlines like, next level supplier management, partnerships, collaboration, and co-creation, being a customer of choice, digital trade.

UPM puts sustainability at the forefront, it is ingrained, and the business has been recognised for many years as true investor and innovator in sustainable practices. For many businesses going through a sourcing transformation it would also incorporate a

full overview of its sustainability actions. Given the maturity of sustainable practices at UPM what is procurement doing to drive the agenda further?

UPM’s Biofore strategy drives our transformation as a bioeconomy frontrunner. UPM seeks sustainable growth by enabling our customers and consumers to make more sustainable choices. High performance, innovations, and world-leading responsibility are the cornerstones. We create a future beyond fossils. EcoVadis recognised UPM on a platinum level based on its sustainability performance.

Impact on our own operations: Our ambition guides us to improve our own

operations continuously. It shows in how we manage forests, treat people, innovate products, and reduce emissions.

Impact on our value chain: Our positive impact is larger when we work together with our suppliers and partners. This means collaborating to produce more with less.

Impact on society and the planet: Together with our suppliers and partners, we build a future beyond fossils. Since 2018 topics like innovating climate positive products with our partners and collaborating with value chain to reduce emissions have been on the sourcing and procurement agenda.

In February 2022 we received a supplier engagement leader position in CDP’s Supplier Engagement Rating. The rating shows how

effectively companies are engaging their suppliers on climate change. Only the top 8% of companies who disclosed to the full climate questionnaire received this recognition.

As an example, we have launched a -30by30 program which focuses on emissions reductions in the three most significant sources in our value chain. We want to make climate a key factor in our product development and procurement decisions. We strive for even closer collaboration with our value network and want to engage our suppliers and partners.

In sourcing and procurement, we can embrace our unique position to orchestrate internal and external networks. We enable UPM’s vision, building a sustainable future. We want to embed sustainability in everything we do.

Nina Kivioja

UPM’s Biofore strategy drives our transformation as a bioeconomy frontrunner. UPM seeks sustainable growth by enabling our customers and consumers to make more sustainable choices.

Staying with the innovation theme. To drive sustainability, create value, agility, and resilience, supplier innovation and collaboration is key. How are you addressing this with your suppliers?

UPM Value Chain - roots on forest biomass

Leading suppliers and innovation are one of our key themes for 2023. We want to boost understanding that this is not just a “cost saving” program and we want to cover aspects of availability, efficiency, quality, sustainability, risk management, geopolitical/economical volatility and innovation with suppliers and businesses. We have many innovation projects at different stages of completion. Best

Sustainable work in partnership with UPM.

practices need smart adoption: one size does not fit all, ‘Customer of choice’ is the focus. It is important to share experiences between different teams and BAs.

External insights and successful tactics will enrich UPM’s Innovation journey by; growing the innovation network beyond the organisation, create a learning culture to increase comfort with change, identifying strengths to build on and weaknesses that slow down the progress, building a supportive innovation network within UPM and developing competences of the future, introducing modular approach in framework implementation to ensure scalable processes and agility.

Whilst many aspects of your supplier base can be described as mature, for a business that is keen to stay on the front foot and also explore new sectors there is a big opportunity for new vendors (large, SME, niche) to partner with UPM. How exciting is this as a procurement professional and what opportunities would you say exist for any potential new vendors?

We want to be a reliable, future-oriented business partner with high expectations and clear requirements for our suppliers. Globally, we have roughly 20,000 b2b material and service suppliers and we collaborate with a diverse group of partners: customers, inventors,

universities, start-ups, research institutes, manufacturers and technology suppliers

Next level Supplier Relationship

Management: becoming customer of choice “re-defined” is exciting for any sourcing professional. We have an objective: secure the most innovative ideas for the business. Gain access to game-changing ideas, strengthen supplier relationships by close, mutually beneficial innovative collaboration, align strategic plans to create opportunities to deliver further innovations, turn ideas into business value. Category managers need the right skills and capabilities to deliver this. You need a clear distinction about the types of innovation they go after. We need to have an open communication

Sustainability, a part of our daily operations

ISS is a global business employing hundreds of thousands of people. In Finland we have almost 8000 employees. We are driven by our purpose: connecting people and places to make the world

We are committed to delivering our services and carrying out our operations in sustainable way. ISS helps to protect and maintain places –buildings and the assets inside them. We also help our customers minimize their impact on the planet by reducing the carbon footprint of

TOP RATINGS IN ASSESSMENTS

Our stakeholders expect transparency, engagement and evidence of environmental initiatives. ISS is highly rated in both Ecovadis and HSEQ- supplier assessments. The latest Ecovadis evaluation highlighted ISS as the top 1% companies in Environmental sustainability.

In 2023 Kiwa Inspecta HSEQ-supplier assessment, we are the highest rated company in our segment.

CHEMICAL-FREE AND WATER SAVING CLEANING

In 2019 we started to calculate the carbon footprint of our services and since then we have been able to provide data for our customers. We started to provide chemical-free cleaning already in 2018 and this method is also used in UPM. With resource efficient cleaning machines, we have saved more than 13 million liters of water. Every year, our professionals in energy center make around 20,000 observations to develop the energy efficiency of our customers’ buildings.

We are committed to continue the hard work together with our customers and our supply chain: We make places that are sustainable – now and in the future.

with suppliers and treat them as an extension of the business offering new exciting opportunities.

Given what we have discussed, what would you point to as your personal aims and aspirations for procurement over the next 18-24 months?

Changes in business environment are setting increasing challenges for inbound supply, impacting value chains and in turn sets new expectations for sourcing. Mastering the business environment more cleverly and executing better than the competition is the key success factor for business profit. The vision for the 2025+ is for sourcing to become more forward looking contributing to business

profit, support innovation and growth beyond fossils, become proactive and collaborative in supplier management, and automate procurement operations. We want to place UPM as the customer of choice position in the strategic supplier base.

In the era of the digital revolution, sourcing will also have to prepare for the future. Data and analytics are one of the main levers that will allow sourcing to develop its strategic vision. To master this new environment, the purchasing department will have to acquire new skills. A combination of technical knowledge and soft skills will become the main strength of the sourcing professional of tomorrow, along with agility and resilience.

CULTIVATING FIBRES FOR THE FUTURE

Mills are provident. While producing pulp, they generate renewable energy for grids and side products for biofuels and other bio industries.

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Resideo –technology for the good of the ‘planet’

Resideo is a leading global manufacturer and distributor of technology-driven products and solutions that provide comfort, security, energy efficiency and control to customers worldwide. The company is focused on its vision to imagine a world where homes and buildings are good for the planet, where technology works to simplify life.

With 130 years of innovation behind them Resideo has a presence in more than 150 million homes globally, with 15 million systems installed in homes each year.

Zoltán (Zoli) Kiss is Sourcing Director for the EMEA & APAC regions. An excutive with extensive operational experience across many verticals, he joined Resideo in late 2018 in his first fully fledged sourcing role.

Sourcing team selects and defines the partners we engage with, and the buyers in the manufacturing sites carry out the operational role.

I am the EMEA Sourcing Director and I have a particular focus on Outsourcing. I report to the VP of Sourcing and my team are based in both EMEA and China – as I also have several vendors from the APAC region.

My role includes both EMS and BTS Sourcing. An EMS supplier is a company which manufactures a product for us that we have designed. A BTS supplier supplies its own products to us which are labelled with our requested trademarks.

One of the company achievements that I am most proud of is our silver rating from EcoVadis. This represents a strong demonstration in environmental, ethics, and human rights categories. We have a score of 59 and the EcoVadis industry average score is 43.

Zoltán (Zoli) Kiss

Part of my responsibilities include being the ESG SPOC for Sustainable Procurement. This involves coordinating the companywide initiatives aligned to the procurement strategy.

One of the company achievements that I am most proud of is our silver rating from EcoVadis. This represents a strong demonstration in environmental, ethics, and human rights categories. We have a score of 59 and the EcoVadis industry average score is 43.

Resideo is a global business. Are their global synergies or do business units run autonomously?

There are both global synergies and individual regional requirements. The focus is on making most efficient use of both aspects depending on the commodity. For example, electronics are used across all regions so it’s important to have a global focus. However, with specific parts that are used in a particular region taking a local approach is best. This includes targeting dual sourcing where possible and having access to low-cost regional supplies with a local source to handle variations in demand. Overall, to get the best outcome sourcing needs to work hand-in-hand with operations and product management.

You have been with Resideo since 2018 within the sourcing function having

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previously dedicated the majority of your career to manufacturing and operations. Why did you move across to sourcing and what was the remit when you joined Resideo?

I joined Resideo at the beginning of its sourcing refinement journey in 2018 and my key task was to drive consolidation of the vendor base and select strategic partners for future key projects.

You are correct that much of my career before Resideo was in Operations. My time in operations has certainly shaped me and it also allowed me to engage with many different types of vendors. My journey has

also been significantly influenced by the companies I have worked at. For example, Jabil, is one of the leading global EMS companies. I think they have a unique model, which nurtures entrepreneurship. It was a great learning opportunity in a very challenging environment. I think Jabil has a great customer focus.

What attracted me to the Resideo role was the chance to sit on the other side of the contracts table and negotiate the terms and conditions. It is quite a challenge to pull everyone’s expectations together and make sure the end result is beneficial for both parties. This was a new challenge for me. Throughout the contracts process you also

Jabil Applauds Resideo for Sustainable Procurement

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Siterwell, to create greater value for customers with quality products and services

Why Siterwell?

As far as the security industry is concerned, international enterprises have been far more developed than Chinese companies owing to their competency in cutting-edge technology and years of experience. Therefore, when it comes to cooperation with Chinese companies, they tend to be more cautious and have more rigorous requirements, higher standards, and a longer inspection time. So why is it Siterwell that among thousands of peers, wins the favor of Resideo, the industry-leading enterprise on the globe?

Agile delivery

Agile delivery is one of Siterwell’s core strengths. While the average time taken for delivery in the security industry is six weeks, it takes half only for Siterwell to have the order delivered, which enables the company to stand out in the international market.

Quality products

Contributed by a comprehensive system of production management and quality control, Siterwell has kept its record of zero product recall worldwide since

it was founded in 2010. To ensure its productivity and capacity of delivery, Siterwell established an automatic production base, which boasts an annual output of 36 million as far as the smart security product is concerned. Besides, the operation mechanism conducted by the factory has been widely recognized by customers. Both testing conducted for certified qualifications and factory audits by customers are scored high without a second attempt. Concerning the quality of products, Siterwell spends hundreds of thousands of dollars on sampling inspections, full inspections, and third-party inspections to ensure the reliability of product quality.

Cost efficiency

“To have value created maximized with the most appropriate cost”, with such a business mantra learned by heart, and experience acquired since the company was established, Siterwell performs a series of measures to optimize its production cost, including integration of upstream and downstream resources, construction of global supply chains, and chipset

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development and customization, which enables the production cost of Siterwell to be 20% lower than local manufacturers in Europe and America.

Who is Siterwell?

Siterwell Electronics Co., Ltd. was established in 2010. As a world-renowned supplier of fire protection solutions and products, Siterwell is integrated with R&D, production, and sales capabilities. Owing to its innovation of product designs, cutting-edge sensor technology, as well as reliable software and hardware strengths in both production and quality control, the comprehensive competency of Siterwell is outstanding in the industry. From time to time, Siterwell has jointly formulated industry standards, and therefore seized the opportunity in the market to improve its strengths with the latest product ideas.

With business relationships established across the globe, the brand value of Siterwell continues to rise in the international market, where Siterwell is trusted by an increasing

number of enterprises, and its growth of regional market share has once hit a 50% high. What’s more, whatever has been achieved so far by the company does not compromise its faith and pursuit of making its fire protection career better.

A high-efficient and stable supply chain partner of Resideo

Driven by the dual effects of a profound accumulation of technology and a good market reputation, Siterwell explores further in the global security industry and continuously enhances its competency, which finally enables the company to win the favor of Resideo and a series of cooperation. Orders deliveries of home security products across all categories in Europe and America have also marked record highs one after another. Besides, owing to years of exchange and partnerships, a “direct channel” towards successful cooperation has been built between Resideo and Siterwell, and the bonds in between have therefore been strengthened.

A reliable enterprise

Regarding the application and registration of certifications, there is a group of professionals in Siterwell. Healthy cooperative relations have been established with major testing institutions over the years, with annual strategic cooperation achieved to ensure the testing priority of Siterwell products, which can effectively shorten the launch cycle of its customers’ new products.

The intrinsic urge of Siterwell for “quality first” has won the company good names in both Chinese and international markets. Besides to have been presented as industry-standard products on CCTV in China, Siterwell products have also been honored as the best quality and most recommended product on ZDF in Germany, the most cost-effective product in France, and won multiple awards of STIWA testing and champion of ETM testing in Germany.

Concerning the brand trust of Siterwell, in addition to business relationships

established across the globe and good word-of-mouth spreading among its customers, Siterwell excavates the market with its quality products and has exported to five continents with more than thirty countries and regions. Moreover, strategic business relationships have been built with ten-plus Fortune 500 enterprises to bring alive the IoT product lines, which are worth up to ten billion US dollars.

An innovative enterprise

Regarding the construction of the R&D team, Siterwell attaches great importance to the recruitment of technical professionals and the cultivation of team members. Therefore, an R&D team with experienced professionals dedicated to the field of home security has been built, and the former vice president of Honeywell, who was dedicated to the home security product line, has even been recruited for technical consultancy. With multiple core technologies of the industry commanded, Siterwell is capable of developing more than 200 new models each year. As of 2022, Siterwell has more than

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300 patents of invention and has assisted its customers in obtaining 400-plus patents.

Efforts paid for technical breakthroughs have been lasting for decades on end, which makes the smoke-detecting product of Siterwell become the first to be certified by Vds in Asia. What’s more, the latest industrystandard UL217 that Siterwell is certified in 2022 has made the company become the third in the world to get listed under UL217, and the company with the most industry certifications on the globe. Therefore, Siterwell will become quite an accelerant for the development of the global security industry.

An enterprise that follows its original intentions

Since the establishment of Siterwell, the company has always been following its original intentions, to accelerate the highquality development of the global security industry through actions, including picturing the landscape bigger, investing bigger, and developing its capabilities better. Over the

years, it has become a tradition for Siterwell to invest big in R&D, which takes up more than 7% of its annual turnover, and such a level of investment is beyond the reach of most of its Chinese peers and even some of the international magnates. In terms of facility and lab constructions, there are 8 themed R&D labs in Siterwell, of which the UL lab is the most precious. Siterwell invited the original expert team from UL in the US for directing and training in the construction of Siterwell’s UL lab, which takes 3 years in total to duplicate the one located 20 thousand miles away in Chicago. Upon rigorous inspections conducted by UL Solution of the USA, Siterwell has been formally authorized, and data collected in Siterwell’s UL lab will also be synchronized to the database of UL Solution, which marks the international recognition of Siterwell’s testing capabilities.

In the years to come, besides pushing forward its three core business sectors steadily, including smoke detectors, sensors, and gateways, Siterwell will also develop new products relentlessly, and map out a competitive core product matrix in the industry. While expanding the product lines and further researching fire alarms, Siterwell will also explore energy-saving smart home products to fulfill customers’ requests of various kinds.

Sustainability | Resideo

Continued from page 63 have to make sure that you build strong and trusted vendor partnerships.

How far along your set of objectives have you progressed? Have you achieved everything you wanted to achieve by this point on the journey?

I am pleased with the progress we have made as a team since my first days with Resideo. We have worked hard to develop our comprehensive vendor portfolio which includes new partnerships.

However, COVID changed the procurement landscape for every sourcing team in every company. Just like everyone else we had to face the extraordinary and sustained challenges of the worldwide supply chain shortages of certain commodities. However, by working as a team of teams we managed to navigate through the headwinds.

As mentioned, the covid pandemic forced the sourcing operations to go back to basics and deep dive into the processes and supply chain. However, when you joined in 2018 one of your objectives revolved around this subject anyway so the task was not new to you. With a background in manufacturing and operations do you believe that looking at sourcing with a ‘fresh pair of eyes’ has assisted your transition and enabled you to bring new ideas to the table?

This is a very interesting question. In operations you want to: keep building on the line continuously, focus on your transformation cost and keep the volume as steady as possible.

Moving to sourcing meant a changing set of KPIs. However, I kept in mind my operational background, and way of looking at things, to help when negotiating with vendors.

Sourcing plays a key role in driving innovation. To achieve this there needs to be open and transparent dialogue within the strategic supplier base. Does Resideo look to involve suppliers at the early stages of development? What did you learn about the value of these strategic partnerships during the worst of the covid pandemic? What opportunities exist for new suppliers with Resideo?

We absolutely involve our strategic partners in our development plans and actively look at partners, who can support our vision. The roller coaster of the COVID pandemic really underlines how important it is to have trusted and transparent relationships with your suppliers, and be in regular dialogue about future plans.

Resideo was recently awarded the Ecovadis Silver award. Sustainability is of paramount importance to the business but from a personal perspective you also have a great desire to drive this. What responsibility do you hold within Resideo for this subject matter?

At Resideo, we are focused on having a positive impact on the planet and making sustainable business decisions. Our goal is to operate in sustainable and responsible ways alongside our supply chain partners.

As I mentioned, I am the ESG SPOC in Sourcing, so I coordinate the activities with

EcoVadis and other partners within the Sourcing team. We have started to roll out the sustainability ratings for our largest vendors and will continue to expand the list over time.

Since my childhood, I have had a keen interest in protecting the environment and reducing waste. Once I had children it made me even more aware of the importance of taking care of our planet for future generations. The new generation seems to care a lot more about the environment than

previous ones. We all can feel the changes in the climate across the globe. Making positive change starts with the individuals, and then communities acting together.

I’m proud to work for a company that really cares about the impact of our global business operations on our planet.

Technology

Hewlett Packard Enterprise continues to leave a legacy in tech transformation

What is a supply chain? And, in the current climate, what constitutes a successful supply chain transformation? For a company that has made its name through technical ingenuity, it could be expected that digital enablement has been the priority. But Hewlett Packard Enterprise’s Vice President for the Service Supply Chain, Danny Berry emphasises that transformation has also required an all-encompassing, whole-of-organisation approach.

Hi Danny. Many people are familiar with the Hewlett Packard Enterprise brand, but could you give us a brief overview of the company and organisation’s area of expertise specifically?

Hewlett Packard Enterprise (HPE) is a multinational edge to cloud IT company that has been around a long time and founded Silicon Valley. Today, it does more than $28 billion in revenue and has around 60,000 employees globally. We support enterprise customers through a classic buy-sell model as well as through an on-premises, cloud-

based subscription model called HPE GreenLake.

I lead the supply chain organisation that supports HPE’s service customers and channel partners. We have three distinct but highly integrated teams. The first supplies HPE spare parts across 170 countries in support of customer service contracts. The second sells certified HPE spare parts to non-contract customers. And the third provides IT services that help to turn individual server, storage and networking products into complete, customer-ready IT

solutions. We have employees around the world focused on delivering an excellent customer experience daily.

Overseeing global supply chain operations, from an outside perspective, has seemed like something of a thankless task in recent years. What has it been like in the eye of that storm?

I think any supply chain professional across any industry would say they’ve been navigating a period like no other.

The COVID pandemic challenges required very fast tactical responses to ensure our parts were still flowing to customers, while at the same time, our people were

adapting to the new norms of hybrid working. Everyone across the IT Industry has seen waves of IT component shortages in many categories, and with unbalanced supply and demand it’s typical to see pricing fluctuations. Logistic network challenges around the world have been well documented in the media, and then of course there is the ongoing situation in Ukraine. Any supply chain professional has had their fair share of headaches over the past few years. That being said, I’m very proud of how my organisation has navigated these external headwinds.

It’s also interesting how these challenges have put the supply chain onto centre stage for many companies and industries.

I see reports suggesting that supply chain courses are now among the most popular across universities, and future crops of CEOs will come from the supply chain domain. I am not sure I would have read things like that five years ago.

What specifically has been your approach to transformation during this period?

So, at top level, we thought about our journey in three, one-year phases.

Year one was really all about establishing a strong organisational and performance baseline across all areas. When your metrics are in good shape, that is actually the best time for a change. We also built our case for change, which focused on the changing needs of customers, more expectations around self-solve, product fails becoming rarer, and therefore less replacements being needed. In essence, phase one was really about preparation for our transformation.

Year two was the guts of our transformation programme. We targeted more than 80% of our activities to be completed in that timeframe and we drove strong programme governance and management of change right across the organisation. Driving a lot into one year puts pressure into the system, but we did not want our organisation to become fatigued by multi-year efforts, so it’s always a risk trade-off. We did all the typical programme things - structured workstreams, empowering our workstream leads, getting early wins for momentum, regular execution tracking, and spent a lot of time on communications activities to both share and receive feedback.

Then, finally, year three is all about optimisation and fine tuning to close out the remaining activities and tie up loose ends.

The workstreams sound particularly interesting, can you give us more detail on these?

Sure, our most foundational workstream was focused on getting a very clear understanding of our process landscape. Processes are the way we do things on a daily basis, and are really a mindset thing. We have promoted a process mindset through lean skills training and Kaizen process improvement work, so we have developed good process DNA across the organisation overall. But we decided to set up a team of handpicked experts from different areas to conduct widespread process assessments.

Once we had a better and deeper understanding of our process landscape, we began driving each process through a decision tree: Should we leave the process as is? Should we simplify or standardise it? Does it need a broader redesign? Can we drive automation into process steps to improve it? Should we migrate it between locations or should we outsource it to a partner? These are all important operational decisions.

A good example of this was in forecasting and planning, which is probably one of our most important process spaces. Essentially, if you want the right part in the right place at the right time, you have to have a solid planning backbone, otherwise you spend a

Once we had a better and deeper understanding of our process landscape, we began driving each process through a decision tree: Should we leave the process as is? Should we simplify or standardise it? Does it need a broader redesign? Can we drive automation into process steps to improve it? Should we migrate it between locations or should we outsource it to a partner?

Danny Berry

Technology | Hewlett Packard Enterprise

lot of time band-aiding mistakes. We have redesigned our processes to give planners end-to-end responsibility for planning parts at a total network level and for all lifecycle stages of a particular part. We have also removed logistics and IT systems roadblocks to allow free movements of parts between all locations. These types of process changes allow us to remove distortions in planning signals, better manage any expediting or rebalancing situations, and finally reduce inventory excess and obsolescence in our network – all of which are very beneficial.

Clearly these workstreams seem to have been the bedrock of recent transformation efforts. Are there any further activities under this banner that you can share with us?

There was quite a few!

We had a workstream focused on process outsourcing, which I always find interesting as it gets to the heart of supply chain strategy and core competencies. Thinking through our processes and deciding what should we do ourselves (“a make decision”), versus, what should we outsource to a partner (“a buy decision”), is always a great debate. All the process analysis work we did helped to ensure we were outsourcing well defined processes, and that’s critical. You never want to outsource a badly defined process! And then, if you add that to solid partner selection, you have a good chance of outsourcing success.

Next, we had a workstream focused on process automation, basically looking for ways to replace manual steps with automation within our processes. For this workstream, we took one of our analytically orientated teams and refocused and retrained them in automation/RPA skills. We have seen some good progress here and it’s all been good development for our employees. I am not sure complete endto-end process automation is realistic in supply chain environments, but a lot of progress can be made on manual steps within processes, and we keep pushing and learning in this area.

We also had another workstream to add a new strategic hub in our APJ Region, to complement the hubs we set up for our EMEA and AMS Regions. We decided to co-locate our new APJ hub with other parts of the broader service delivery organisation to tap into great local talent, and also give employees more career path options.

The next workstream I will describe was really built on top of the others just mentioned. The combination of process outsourcing, process automation, and our new operation in APJ created capacity at the hub layer of our supply chain. We then used our process landscape investigations to identify processes and roles to move to the hubs, and utilise all the capacity we had created. We actually called this part of our transformation programme, ‘Relay’; because our processes were like relay race batons moving from strategic hubs, onto outsource partners, and then from a variety of our global locations into our strategic hubs.

How significant has the ‘digital’ part of transformation been in your recent efforts?

The simple answer is impactful, but it’s an interesting discussion. Digital transformation can mean different things to different people, plus there’s a gap between media hype and deployed reality in my opinion. I would say we have taken a focused approach in the digital space and looked at ways to deploy key proven digital technologies like automation and artificial intelligence, but very much in a process context.

I touched on automation earlier and we have also been working a roadmap of AI investigations in our supply chain. We have formed a strong relationship with our expert AI consultants in HPE, and we work on joint projects in our internal supply chain environment. We get supply chain improvements, and our supply chain employees gain deeper AI skills working with the best. In parallel, our AI consultants get insights and use cases for external customers, so it’s a win-win.

We have undertaken projects in a whole range of areas including data quality improvements on bills of materials and contracts data, inventory modelling, process improvements in parts ordering, identifying situations where parts may be erroneously ordered and returned unused, and in aspects of supply chain network design. I would say all have been insightful, and some have been very impactful.

In addition, we are also heavily engaged in a programme to deliver a digital services experience to our customers. They can

assess the health of their IT environment, they can also get knowledge if they want to self-solve problems, or alternatively they can use an AI-guided bot to troubleshoot issues. In the near future, customers will be able to extend their digital services experience to order parts after troubleshooting, to track a shipment, to return a defective part, to buy a part, and finally, to run the spares management solutions we sell today.

So, I typically frame things as “supply chain transformation”, where we utilise a range of different operational and digital plays, to improve customer experiences and operational performance. Transformational work in the supply chain space will always be a combination of things, in my opinion.

How challenging has it been to maintain a positive culture for employees at a time of industry supply chain challenges and intense transformation?

I think all supply chain professionals would say it’s been a tough environment recently and then we added a very large transformational programme, with process changes, outsourcing, automation, role moves, organisation restructuring, new site startups and more. Bottomline there’s been a lot going on, to state the obvious.

We had to spend a lot of time thinking through our management of change plans and I think that paid dividends through the transformation. We did many things in this space. We shared information on all employee meetings and the case for

change and direction. We did many informal lunchtime sessions to share info on specific topics. We provided clear one-page summaries called ‘Transformation and Me’ to clarify specific changes and impacts per team. We set up a global Q&A mailbox to take questions at any time on any topic, and many other things as well.

Basically, lots of ways to keep employees informed and gather feedback from across the team, as we progressed. In parallel, we are strong advocates of ‘development by doing’. Giving employees opportunities to do new roles or the same role with new responsibilities is development by doing, and we have encouraged numerous examples of this across the organisation. This is career goodness in my opinion.

We do a very in-depth employee survey each year across HPE and we saw no volatility in supply chain employee feedback numbers, and in general, HPE maintains industryleading levels of employee engagement overall. So yes, it was tough, no debate, but also with many people positives.

Continuing the people theme, we hear about companies striving to drive improved equity and inclusion in the workplace. What has been your approach in that area?

We have a long history of doing the right thing at HPE. As far back as the 1960’s we were rolling out equal opportunity policies and we had resource groups (RG’s) for under-represented demographics across the company.

Over time we have continued to do the right thing. We provide training and education right across our workforce, we have more RG’s globally now, we run special forums, set managerial goals and KPI’s, and many other dedicated activities. Each year we produce a very detailed and transparent summary of HPE’s Environment, Social and Governance (ESG) activities in a report called Living Progress, and we have picked up many awards for our progress along the way.

But it’s not just an ethical thing – it makes complete business sense. If you want to sell into a diverse set of markets, having a diverse company that reflects those markets is a no brainer for me. Plus, customers around the world are much more vigilant to these issues and increasingly look for suppliers and partners with strong ESG credentials.

When I look at my supply chain organisation, our ratio of female to male employees is significantly above the industry average; we have diverse representation across our managerial and executive teams; we provide great training and education to employees; we drive improvements through targeted activities like our female development programme; and we encourage a lot of volunteering work across the world.

All of those things give us enormous pride.

And of course, when mentioning ESG, I presume sustainability is an equally prominent focus for HPE?

Well, it’s vitally important for everyone. But at a company level we are working hard to achieve net zero emissions. Last year,

we announced that we will accelerate our commitment to zero emissions to 2040.

We were one of the first in the industry to set targets aligned to climate science – or our ‘science-based targets’ as we call them. This gives us a more standard way of tracking emissions – a more rigorous, data-driven approach, which I like.

The second thing I like, is how we take an end-to-end value chain approach – not just looking at ourselves and how we generate emissions, but also looking up the value chain into our vendor base, at things like part manufacture and logistics; as well as looking down the chain into our customer base and their usage of our products. When you take an end-to-end approach, a small percentage of emissions come from HPE’s actual operations. The majority of emissions come from products and then from manufacturing and logistics processes.

So, if we want to drive decarbonisation, we need to look at things like our product and solution design. That could mean driving efficiencies in power supply for example, or rightsizing CPU’s/GPU’s in IT solutions and ensuring IT estates are not over-provisioned. It’s also why the company’s strategy around HPE GreenLake is so vitally important. HPE GreenLake solutions can be flexed up and down, and customers pay for the outputs they use. Then, when parts of the IT estate are coming to an end, we can pull them back and refurbish them in some of the biggest refurb facilities in the industry, to find a second life for IT equipment. It’s circular supply chain in action.

It also means we need to partner with the right manufacturing and logistics vendors who show the same levels of commitment as us. Partners who are investing in sustainable production technologies, low emission vehicles, sustainable fuels and the like. These types of considerations are very important to us in terms of identifying the right partners now, and in the future.

Taking everything into account, what have been your biggest takeaways from all of this transformation, and how does that translate into a forward-looking mission for the future?

That’s

a great question to end on.

When you think about transformation you often gravitate towards the techy stuff. It could be the process analytics, aspects of automation or AI, the changes in IT infrastructure, and so on. But the bottom line is, transformation is centred on people and it’s easy to forget that fact, particularly in a tech environment. People need to stay central to your thinking.

I would then say that, realistically, you don’t know everything at the start of a transformation journey and it’s important to be authentic with your people, both at the start, and throughout the journey. On top of that, the journey is never a straight line. There are bumps in the road and progress is as much driven by team tenacity and attitude as it is great programme skills. It’s an align and grind mentality, that they don’t tend to tell you on programme management courses. Fostering the right mindset across a team is half the battle, in my view.

And then it all boils down to execution. Whether it’s transformation, strategy, delivering a budget number or a great customer experience, it’s all about the execution. And it’s the culture and mindset that drives your probability of execution success.

Regarding the future, we think in terms of a few key phrases. Being Customer Obsessed and providing the best customer experiences we can, will always be on our minds. When done well, the supply chain can be a very strong Competitive Weapon for any company, and that is a constant driver for us as well. Similarly, if we are not thinking about smart, Digitally Enabled process opportunities, then we are not thinking about the right things.

Furthermore, as leaders, we have to deliver the numbers of course, but creating a Diverse & Inclusive environment gives us the best probability of delivering those numbers. We all have our role to play in Zero Emissions whether, it’s inside or outside work. And then, finally, the supply chain can be a great career choice or a great career stepping stone, where you can pick up a range of transferrable skills for different areas. So, we want to ensure we are providing Valueadding Development for our people.

That is our mission, and that is our legacy as a supply chain team. I am lucky and blessed with a fantastic organisation, that leaves me in no doubt we will get there.

Workato is “Drinking its Own Champagne” on the Anniversary of its Procurement Transformation

Procurement is a specialised field that plays a crucial role in delivering tangible value that supports growth, promotes innovation, builds resilience and drives value through efficiency,” notes Ashim Kapai, Senior Director and Head of Strategic Sourcing and Procurement at Workato. Since arriving in early 2022, he has aimed to merge the best of the company’s innovation with market-leading platforms, to revolutionise Workato’s procurement approach.

Hi Ashim. Perhaps you could begin by introducing Workato, its core service mission, and how you came to be a part of its ongoing evolution?

Workato is a unified integration and automation platform that allows an end user to connect many disparate systems and to facilitate them talking to each other. As such, it is a low code/no code platform that enables individuals with no technical knowledge to navigate the automation landscape.

I have almost completed a year here at Workato and was brought in specifically to build and scale the procurement organisation, and it’s definitely been a fun

ride. 2021 was certainly different to 2022 which was a whole new ballgame. It has been exciting, but has added a certain pressure to evolve our procurement function in a way that allows us to navigate the uncertainties of 2023.

You mentioned 2021 and 2022 there, and I’m sure the impacts of 2020 are still lingering too. To that end, what were the specific challenges and bottlenecks you encountered when entering the organisation a year ago?

You’re absolutely right – it’s been a trickledown effect of the past three years as a whole, in terms of supply chain disruption

which highlighted the vulnerability of traditional operating models that many procurement professionals are trying to navigate even today. These shortcomings include a lack of reliable long-term planning, growing concentration of supply, limited insight into supplier economics, a lack of collaboration across functional teams, and a failure to adopt and scale proven technologies that could reduce transactional loads.

However, we know from studies related to the financial crisis of ‘08/’09 that companies who invested during the downturn were the ones who outperformed post-downturn. How companies respond today positions them to outperform in the future. It is not about bringing spending to a standstill.

Ashim Kapai

Technology | Workato

For us, it was more around embracing and executing a mindset shift that focused on growth with efficiency, rather than ‘growth at all costs’.

At this time, inevitably, there is more scrutiny of investments – how we spend money, how new technology is actually influencing operations, and how new adoptions are optimising work across lots of different categories.

So, where did you start?

Procurement is a specialised field that plays a crucial role in delivering tangible value, supporting growth, promoting innovation, and building resiliency for governments and organisations. We proceeded under

the strategy of enacting a responsible procurement transformation. I’ve been in the procurement space for a long time and have worked through similar challenges and transformations in the past, but every organisation is different and requirements can be quite specific and unique.

We knew that we had to address two distinct fronts as we built out our core procurement infrastructure: move decision-making upstream, via a centralised procurement intake system; and across the approvals and finance processes through a dedicated procure-to-pay (P2P) solution.

First, we needed a structure around this end-to-end concept. In the absence of

a core procurement infrastructure, it’s difficult to navigate the space. Absence of a centralised procurement intake workflow causes teams to rely on emails for legal, business technology and security approvals; or indeed on spreadsheets and ad-hoc storage of contracts. Both increase the likelihood of something falling through the cracks while also increasing administrative work. So, really, the starting point was putting a structure and framework in place around the whole procurement process. Our team knew we had the innovation in-house to help with that.

So, you looked internally to kickstart the process?

There is extra pressure around any form of digital transformation, because we ourselves are a facilitator of innovation –we have to be seen to be getting this right. Workato is an integration and automation platform that allows companies to automate processes through recipes, tasks and connectors rather than having a specialist sit down and build those connections or to make integrations work.

In turn, the platform allows more people within their organisation to become experts in their fields, creating a trickle effect of efficiency and interconnectivity, through automation.

That’s what we did – we have deployed our own automation solutions to connect the platforms and solutions brought into Workato’s ecosystem. Rather than building an integration to multiple point solutions, we are leveraging Workato which allows these best-in-class solutions to talk to each other and make information flow seamless, without the need to engage IT resources to build those integrations.

You’ve mentioned the importance of structure, and how some of your own tools could fit within it. But how did you go about beginning to fill the gaps within this idea of a structure?

It mostly revolved around a need to put some guardrails up around how we spend, so that when we assess ROI, there is a clearer rationale and path behind our decisions, and what they resulted in.

For context, when I arrived in January 2022, the tool of choice in the market for putting a P2P platform in place was Coupa – the undisputed leader in the space. I’m saying this as a customer of several years and also as a former Director of Strategic Sourcing & Procurement Operations at Coupa. No other platform can deliver what it can from a procurement perspective, and I had familiarity with it.

And if that’s what we’re offering to our clients, why not practice what we preach and deploy our own solutions to improve our procurement function, too?

Immediately, through this addition, we achieved that structure around P2P, implicating operations like invoicing and expense management. What it also did was bring governance and control around spending and investments.

Technology | Workato

This immediately makes you more efficient as you always have the right teams weighing in on necessary spending categories.

And you mentioned the importance of centralised intake processes as the second core aspect of this transition?

Absolutely – centralised procurement intake workflow serves as an orchestration layer enabling cross-functional teams to collaborate successfully. The centralised intake process helps organisations

gain visibility and control over spend and liquidity, prevent unplanned spend, mitigate third-party risk through proper due diligence, and increase agility to adapt as supply chain priorities change through diversification. The way we have deployed this at Workato - while leveraging the power of Workato - is providing access to users to put in procurement requests as a direct pathway to the due diligence, data analysis, legal and business justification processes. That immediately follows through the P2P platform, by leveraging Workato connectors.

In order to coordinate these upstream checks and balances outside of Coupa, I relied on a centralised procurement intake process that I initially put in place in 2017, and then evolved in 2020. In 2022, as I searched for a scalable platform to support the centralised procurement intake workflow, I chose Expent.ai, who - based on my previous work and feedback - have built a platform to support the centralised procurement intake process. The Expent. ai founders have built a platform that is scalable and customisable for all kinds of

organisations with unique requirements. It has AI capabilities on supplier recommendations, contract and renewal management as well as application utilisation tracking.

Expent.ai has been vital in helping us with upstream reviews and due diligence, renewal management, contract tracking and application utilisation, while Coupa assists with finance and business approvals.

An intelligent procurement platform designed to save time and money

Expent consolidates the end-to-end procurement process into a single platform so you can spend less time on the software that makes your business run and more time on the parts you love. To do the job properly, you need to know what software your company already owns, spend hours searching and evaluating new options, and vet new software so you pick a solution that works as advertised.

Vendor Discovery: Browse through 100,000+ vendors across 2000+ categories, or let our personalized recommendations help you find the software that meets your needs in a few clicks.

Vendor Selection: Implement your vendor selection process seamlessly using Expent’s questionnaires and smart templates. Expent is very flexible, be it the ability to run RFx or Proof of Concepts (PoC), Expent can help you evaluate vendors through your requirements with recommended templates. These expertdeveloped templates consider how the vendors have been assessed by companies similar to your own so you know what vendor will work best for you.

Intake to procure: Expent’s no-code workflows allows you to centralize the initiation of vendor and purchase requests.

It is built with end user experience in mind in a way that’s simple for employees to understand and use. Expent’s sourcing workflows help you automatically loop in all the right stakeholders (Security, IT, Legal, Finance, Business and the vendors too) every time by configuring the workflow once and repeating it for every purchase request.

Risk Management: Expent is the only solution that focuses on reducing the overall number of questions that you need to ask vendors to assess their security posture. While sending questionnaires to the vendors, you can set up auto scoring rules to enable risk scoring based on the vendor’s responses. Manage the lifecycle of the risk using Expent’s risk register that automatically calculates the Likelihood score, Impact score and Overall risk rating using OWASP Risk Rating Methodology.

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Vendor Catalog: Our vendor catalog centralizes all vendors and their data in one central location helping you build your Vendor Master. Expent does this by integrating with different finance and business applications. By giving you access to built-in tools to manage vendors, their performance, their risk and their relationship, Expent helps you make datadriven renewal decisions.

Performance Management: Track vendor performance to see if they continue to meet your requirements and business goals. Oneclick surveys let you collect vendor feedback from your internal stakeholders as well as vendors. Visualize vendor performance over the course of the contract to understand if the performance is trending up or down. This

also gives vendors an opportunity to work with you to make the solution work for you, preventing vendor churn.

Contract Management: Expent helps you store all your contracts and invoices in the vendor catalog. Expent’s AI also automatically parses out key data fields from the contracts and saves them as part of the vendor record.

Renewals: Never miss a renewal with Expent’s renewal calendar. Get notified of upcoming vendor renewals as well as key contractual terms so you have time to review vendor performance and negotiate a contract that’s best for your business.

Srikanth Veeraraghavan Co-Founder

Harikrishna Narayanan Co-Founder

Technology | Workato

Continued from page 87

When turning to one or more tech providers as part of a new digital transformation effort, how challengingbut vital - is it, to get buy-in from existing employees?

Change management is difficult, right? Certainly, in regard to the Expent.ai deployment, it required us to invest time with the teams to explain our vision, and to lay out the path of how procurement would work in the future as a result. This led to more of a co-creation of the workflow that dictated the end system we deployed.

The team has been so passionate about it though, as they knew it was a challenge in need of solving – connecting siloed

operations with a view to optimising spending amid a tighter economic environment.

Of course, it helps that they saw Workato’s involvement in our own evolution as well. To explain, Expent.ai is powered by Workato. Once a request is approved in Expent.ai, Workato connectors then create a requisition in Coupa thereby improving the end user experience of not having to resubmit the same preliminary information more than once. Leveraging Workato automation, the business owners can connect best-in-class point solutions to each other without requiring the need to buy a suite of applications from one provider.

Our founding team helped build some of the earliest integration platforms. Now they have reimagined Integration and Automation to enable companies to tap into the growth mindset and transform their organization with Workato.

This allows business stakeholders to either work in Expent or their respective point solutions but still create an ecosystem of interconnected solutions leveraging the power of Workato.

Have you seen the culture around procurement change as a result?

Certainly, investment in the right tools and technology along with good enablement to leverage these technologies empowers teams to work in a more collaborative and efficient way. Take Legal for example, who would have been communicating via emails, but now have the ability to perform reviews and share documents in Expent. Previously, things could easily fall through the cracks, but now an end user has end-to-end visibility as to where their requests are and who is dealing with them.

That visibility is key to sparking a positive culture and strong buy-in, all with the knowledge that automation is adding a layer of security and protection against manual error or system disconnection. And the more and more we see success stories and people’s jobs become easier to manage, the more and more positive they become.

Moreover, what the platform as a whole enables, is collaboration and visibility. Even for basic workflow management, working across multiple teams can become challenging or frustrating. But not being restricted by licenses and being able to connect those who need connecting, there is more method to everyone’s roles. It also provides us with analysis of license utilisation, renewal management and contract management along with

the flexibility to enhance workflows and communication levels even more moving forward.

You’ve touched upon aspects of finance and legal as two beneficiaries of this new procurement approach. Do you have any other specific success stories you’d like to bring to light?

When I came in, we had a separate tool for contract lifecycle management (CLM), a separate tool for application management, and no centralised place to track and manage approvals.

So, as you can imagine, when I arrived I was having to deal with four or more different systems with overlapping functions. As a procurement leader, tech stack optimisation is always top of the mind, and investing in a platform to create a more comprehensive single pane of glass view that supports collaboration and capabilities, at a fraction of the cost, was a major selling point. On top of that, we’re cutting down on the amount of manual intervention needed to update these different tools, which frees up the time of employees and teams – this is especially important considering we’re still quite a small team.

I’d also say these areas epitomise procurement as a whole. We need scrutiny, but without these controls in place, spend will be signed off without proper due diligence or targeted decision making around budget approvals. So, by putting in these processes we’ve been able to guide stakeholders towards optimised decision

making, because we have connected expertise with all pertinent data to hand.

Presumably you’ve set a bit of a benchmark for yourself now, as a procurement function?

I would say so. You don’t want to sell something you wouldn’t use yourself, so why not ‘drink our own champagne’? If we’re happy to power our own evolution and investment decisions, then we can use that as a positive gauge that the products we’re offering to market are also fit for purpose. We’re our own best case study to prospective customers.

It gives us an air of future-resilience too. We’re using our automating, connecting capabilities as a way to deploy platforms that centralise and optimise procurement. And we’re doing so in the knowledge that digital transformation doesn’t stop. We’re taking this approach and using these technologies because we believe they’re scalable. And that’s good for customers to see as well.

And on your one year anniversary with the company, how would you reflect on the first 12 months? And, indeed, what’s in store for the next 12?

I knew very quickly upon coming in that we needed to get a P2P platform in place, and we needed to get centralised intake in place. Having done that with employees onboard, it’s now a case of becoming more digitally mature. Digitisation is a journey and not a destination.

By that, I mean a digitally mature procurement function not only focuses on cost efficiency, balance sheets and shareholder value, but also on the enterprise’s role in driving a fairer and more socially responsible world. These objectives are not mutually exclusive and can be achieved through effective procurement strategies.

We are technically sound from an operational standpoint and will continue to find ways to improve procurement. I would like to believe we have a put a solid foundation in place to withstand challenges, while at the same time being agile enough to pivot as business needs evolve. Now it’s a case of becoming an example and a resource for customers to learn from us.

Of course, we are always learning too, and I still get excited by new evolutions. But in terms of the next year, our primary goal is to drive value-maximising decisions thanks to a more stable, efficient and connected procurement structure.

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