Dole International August 2019

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Strategy and technology power supply chain efficiency


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Strategic deployment of technology for procurement transformation

WRITTEN BY

WILLIAM SMITH PRODUCED BY

CHARLOTTE CLARKE


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D O L E I N T E R N AT I O N A L

Arindam Sengupta,VP Strategic Sourcing & Procurement at Dole International, details the strategic and technological solutions powering supply chain innovation in the agribusiness industry

A

s Vice President for Strategic Sourcing and Procurement at fruit and vegetable giant Dole International, Arindam Sengupta

sees the potential for a revolution in the way sourcing and procurement in agribusiness are carried out. “Traditionally the agribusiness sector 04

has been behind in terms of procurement practices,” he explains. “Partly that’s due to its complexity, but also to the fact that new technologies, digitalisation and everything else which has been applied in other industries has not been as developed on the agribusiness side.”

A WINNING STRATEGY With this in mind, Dole has implemented a number of strategies geared towards improving efficiency and benefitting the bottom line at the business. Such an approach is vital given the nature of the industry. “Strategic procurement is critically important for Dole’s bottom line,” says Sengupta. “Essentially, we are a commodity business where we buy commodities and then process them to sell as branded products. Given the fact that 70% of


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D O L E A S I A H O L D I N G S ( P T E ) LT D

our costs lie in procurement, we have to be competitive and make sure that our supply chains are very affordable.” One such measure has seen the exploitation of seasonal differences around the world. “The peaches that we buy are typically from Greece and China,” says Sengupta. “The problem is that they have similar seasons in the same hemisphere. Peach season is between one and one and a half months, so we had to buy a whole year’s supply in that time, placing

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a constraint on quality and a risk with climate. Now we look at different hemispheres strategically. Typically, the same fruit is grown in the northern hemisphere in a different season

“ Using technology we can much better predict the volumes and the pricing of our crops” — Arindam Sengupta, VP Strategic Sourcing & Procurement

compared to the southern hemisphere, so we’ve gone out to South America and South Africa to locate, identify and develop new sources to mitigate that risk.” Another development has been the streamlining of Dole’s procurement structure, supported by its procurement excellence team. “We are moving from a very decentralised procurement structure with a lot of buyers to a much


CLICK TO WATCH : DOLE - GROWING PINEAPPLES 07 more centralised, centre of excellence

both a moral and a business perspec-

model. That’s ensuring the different

tive. “How do we make our procure-

Dole entities have a standardised

ment organisation fit for the future?

approach, while still maintaining

It’s clear the sustainability agenda

flexibility at the local level for all the

looms large in the minds of our consum-

operational and tactical buying.” Dole

ers. Focusing on sustainability will

is also implementing a category

affect how much customers

management approach. “Our category

are willing to pay for our

managers think strategically to develop

products compared

new products and ways of buying using

to our competitors.

the external resources of suppliers and

To achieve that

partners, developing our business

we’re going to

for the future.”

need to build

Sustainability, too, has become a critical part of Dole’s strategy, from

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aspects including a competitive price guarantee and price stability based on contracts signed. It is also always striving to create best value for partners such as Dole with cost down opportunities together with a volume loyalty incentive program. In addition, with just-in-time supply chains vital to the food industry, Hypac offers short lead time delivery perfect for such cases. Much more than just a vendor, Hypac offers sales and technical support to many of its clients. In order to operate sustainably and encourage more consumers to purchase Dole products, Sengupta acknowledges it’s vital to work end-to-end with marketing and sales organisations to stay ahead of the curve. With packaging as the fifth ‘P’ in the marketing mix, relationships with organisations like Hypac and the added value it offers are vital. Hypac looks to add value by assisting customers in the development of packaging rather than just supplying it, and takes pride in the tailor-made solutions it offers to meet specific packaging needs.

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D O L E A S I A H O L D I N G S ( P T E ) LT D

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allotments and new marketing agendas,

and a new generation of buyers and

and work end to end with marketing and

consumers, it’s going to become more

sales organisations to stay ahead of the

and more important.”

curve.” Sengupta is clear that a sustainable approach can add value to Dole’s

TECHNOLOGY

business by acting as a selling point for

To achieve the potential sourcing and

customers. “Consumers are more likely

procurement efficiencies identified

to buy products from companies who

by Sengupta, the company has put

have sustainable practices,” says

to work numerous technological

Sengupta. “That’s in terms of how they

solutions. Sengupta gives the concrete

source, make or package things.

example of pineapple, which like other

Sustainability is a big focus as we build

commodities operates on a boom

relationships with external partners and

and bust cycle. “When prices are high,

suppliers, and as we head into the future

farmers rush to grow the crop in larger


E XE CU T I VE PRO FI LE

Arindam Sengupta, VP Strategic Sourcing & Procurement Sengupta joined Dole in 2018 with a mandate to lead and transform its global procurement organisation and make it ‘Fit for the future�. He is responsible for leading procurement across four factories and multiple co-packer locations globally and leading a team of 100 procurement professionals with a multi billion dollar spend.His previous background has been at Royal Dutch Shell, where he demonstrated extensive Procurement leadership and business impact over the past 13 years with a proven track record of performance. His previous leadership role at Shell was as Global Procurement leader for their Multibillion annual procurement of Materials, Equipment, Fabrication and EPC services businesses. Sengupta worked with diverse teams and over 30 significant suppliers globally to lead strategic transformation initiatives, manage procurement strategy development, innovation, benchmarking, procurement implementation and maintain market beating pricing for the categories in scope. Prior to working at Shell, Sengupta had extensive International Leadership experience across multiple organ-isations at a regional and global level, and has lived in seven countries across three continents. Sengupta holds a MBA degree in Finance & Strategy with Distinction from University of Oxford, an MBA degree in Marketing from the Indian Institute of Management, Ahmedabad, and a Bachelor Degree from the Indian Institute of Technology in Kharagpur.

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D O L E A S I A H O L D I N G S ( P T E ) LT D

£ 2.5bn+ Approximate revenue

2012

Year founded

20,000

Approximate number of employees 14


volumes, depleting other crops. When prices are low due to demand or oversupply, then they shift to other crops because they’re not getting enough profitability from their farms.” To manage this, Dole has implemented advanced predictive models that help it to better understand supply and demand of a particular commodity. “To come up with a predictive model of demand and supply patterns globally and regionally is always a challenge. We have recently been working to develop a much more sophisticated model which not only uses historical data but incorporates many other factors. That includes farmer behaviour, demand in the market, inventory being held in different locations and markets, and how trends are changing in the industry in terms of consumption and crop growing, et cetera.” To collect the data that is put in to the models, Dole is pioneering yet more digital solutions. Future technology investments will look at using drones to replace physical surveys, using AI for better demand forecasting from the field and implementing more modern practices in farm management and irrigation. w w w.do l e a s ia . com

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“ Creating the right talent, having the right mindset and the right approach with empowered and motivated people will drive the organisation forward” — Arindam Sengupta, VP Strategic Sourcing & Procurement

different legacy systems. One of the first things that we decided, which has already been rolled out, is a single ERP from agri to marketing – end to end. That will enable us to capture and make visible data on what we are doing, where we are spending and what we are and aren’t doing correctly.” The more decentralised nature of agribusiness compared to other industries makes the inherent scalability of

Software solutions have also been implemented across the business. Such unified

software solutions attractive, as has been the case with digital purchasing at Dole.

systems have brought

“On the back of ERP, we are also

increased clarity and

implementing new procurement

understanding of busi-

software from Ivalua. Ivalua is very

ness operations. “We took

suitable for us, very flexible and

the decision to roll out a

caters to our needs. What we are

brand new enterprise resource

trying to do is not only digitalisa-

planning (ERP) system across the

tion and analysis of the entire experi-

entire supply chain, which enables us

ence of interaction with suppliers,

to have critical visibility on data,” says

vendors and partners, but also the

Sengupta. “Data is one of the most

development of an eMarketplace.

important factors behind making

The dream is to move towards a

decisions, but that was one of our weak

more Amazon-like user experience

points. Our data was very segmented,

for the end users, who are our end

mostly very manual and driven by

customers internally, where they can w w w.do l e a s ia . com

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seamlessly input the items that they want, the standards and specifications, and then have a list of fruit suppliers.� With clear strategies guiding the deployment of technology to fulfil its aims, Dole is in the midst of a purposeful and effective digital transformation of its supply chain functions. Having presided over these developments, Sengupta is clear about just what it takes to deliver on the promise inherent in a properly managed supply chain. “There are four pillars of sustainable advantage to empower strategic sourcing and procurement


C OM PA N Y FACT S

• 70% of Dole’s costs lie in the cost of procurement • Dole uses AI, better forecasting models, technology driven surveys and modern farm & irrigation technologies to deliver a higher predictability of supply

in any organisation. The first one is affordability: we have to continuously improve – if we are just standing still, even if we are ahead we will be caught up to. Second is sustainability: all of our supply chains, all of our activities, all of our products, everything should be sustainable at the end. That’s key for the future, from a regulatory, environment and consumer point of view. Third is reliability: do we have the alternative sources we need? We have to have reliability in our supply chains, meaning that we have to provide our customers and our consumers with products no matter any adversity in the supply chain. The fourth part is people: that is always the most important thing because anything can be done if you have the right people. Creating the right talent, having the right mindset and the right approach with empowered and motivated people will drive the organisation forward. With these factors in mind, the procurement and sourcing function at Dole can deliver a sustainable, predictable & profitable growth.”

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Dole Asia Holdings (Pte) Ltd Wallich Street #32-01, Guoco Tower Singapore 078881 T (+65) 6716 9073 www.doleasia.com