The Purchaser Issue 12

FUTURE-FOCUSED PROCUREMENT

RAMAN I NATHANI ON TRANSFORMING PROCUREMENT IN THE HEALTHCARE SECTOR

FOR EXECUTIVES, BUSINESS LEADERS AND INNOVATORS

Tech-Exec explores the fundamental technologies, trends and leaders affecting business and enterprise, the c-suite and society. It provides insight, analysis and thought-leadership on those technologies driving change, and considers how emerging innovations are influencing the leaders of tomorrow.

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Purpose, complexity, a continuous drive to evolve, and a necessity to maintain the highest standards achievable across the entire supply network – the healthcare industry is as close to a checklist of the challenges and opportunities facing procurement and supply chain leaders as you’ll get. Throw in a global pandemic and its resulting disruption and… well, you get the idea.

through some of the most important considerations, including the power of diversity within teams, a changing mindset to modern procurement and the importance of ESG.

We speak to other leaders in the industry in this issue who relay similar messages. Take Alvotech’s Gerhard Helmerich, a vastly experienced supply chain professional who, at the biosimilars specialist, has spent the last year or so building a strong, modern and cross-functional supply chain from the ground up. His is a story built on dedication, a passion for improving lives, and a combination of people, technology and culture.

of the publisher except for the use of brief quotations in a book review.

To succeed requires a combination of skills and attributes, a steadfast commitment to putting the patient first, building a strong team and using all the tools available, says Raman I Nathani. Head of Strategic Sourcing at the largest GPO in the UAE, Nathani understands both the challenges that are likely on all leaders’ to-do lists, as well as the subtle nuances that make the healthcare industry both complex and rewarding to operate in. In this issue, he guides us

Content Director

Matt High

Creative Directors

That’s also the case for Jerome DrevonBarreaux and his procurement colleagues at BRISTOL MYERS SQUIBB. He discusses how procurement is evolving in the business, driven by an internal stakeholder-centric mindset and a singular desire to deliver the most innovative medicines and healthcare treatments.

We hope you enjoy the issue.

Matt

Project Director

Manuel Navarro

Project Director

Project Director

Katie Fedun

Managing Directors

Stroud & Clarke is a multichannel creative agency that produces exceptional business and lifestyle content for brands, leaders and pioneers.

Daniel Crawford

Steve Shipley

Marketing Director

Jack Pascall

Henry Allton-Jones

Project Director

Will Tottie

Charlotte Clarke

James Pepper

climate change with Dane Baker and Peter Twomey

Should you build a sustainable procurement programme?

42 | INTERVIEW ALVOTECH

On culture, mindset and putting the patient first

58 | DISRUPTOR FLEETZERO

Shipping, but not as you know it

60 | INTERVIEW COMDATA

On transforming procurement into a strategic value function

72 | INNOVATION LILIUM JET

A better, radical way of moving

80 | INTERVIEW

BRISTOL MYERS SQUIBB

On innovation, success and procurement with purpose

92 | CITY GUIDE

48 HRS: STOCKHOLM

Business and pleasure in the Swedish capital

102 | CALENDAR EVENTS

The best events for 2022/23

FUTURE FLIGHT

Alice, the zero-emission and all-electric aircraft developed by Eviation Aircraft has completed its first flight. The aircraft, which produces no carbon emissions, significantly reduces noise and costs a fraction to operate per flight hour compared to existing jet or turboprop aircraft, is targeted at the commuter and cargo markets and will typically operate fights ranging from 150 miles to 250 miles.

www.eviation.com

DRIVING CHANGE

Ikea, Unilever, A.P. Moller - Maersk, JSW Steel Limited and GeoPos/DPDgroup are the founding members of EV100+, a new road transport leadership commitment with the aim of decarbonising medium to heavy duty vehicles.

Together, the group has committed to transition their fleets of medium- and heavy-duty vehicles to zero emission versions by 2040 in the OECD, China and India markets.

www.theclimategroup.prod.acquia-sites.com

Four key components important to a successful supplier management strategy are rapidly emerging as organisations adopt new approaches, processes and tools to mitigate future disruption. According to Deloitte, they are:

> Strengthening existing relationships

> Pursuing multiple and regionally diverse suppliers

> Relying on digital supply chain tools for increased visibility

> Shifting from just in time methodologies to just in case

www2.deloitte.com

GREEN POWER

In July 2022 Porsche called on its approximately 1,300 direct series suppliers to use only renewable energy in new projects for the manufacture of its components. A year on, the sports car brand has outlined positive results, highlighting that its suppliers for new vehicle projects have committed to switching production to certified green power and are working collaboratively to reduce CO2 emissions in the supply chain. Said Barbara Frenkel, Member of the Executive Board for Procurement at Porsche AG: “We are implementing our clear sustainability strategy in procurement together with our direct suppliers. Procurement is a team sport. We can only achieve our ambitious goals together with our suppliers.”

www.newsroom.porsche.com

SuStainability, according to Ey

Many executives have long-term sustainability goals for their supply chains, with eight in 10 increasing their efforts towards sustainable supply chain operations, but few have the visibility, technology and comprehensive programmes in place to accurately measure progress. EY conducted a survey on sustainable supply chains, speaking to more than 500 large corporations in North and South America. It found that execs are focusing on initiatives such as decarbonisation, ethical sourcing and fair trade, while also looking to reduce risk, increase innovation and generate stronger return on investment for sustainable supply chain initiatives. EY recommended that supply chain leaders determine how sustainable supply chains fit into organisational-wide goals, improve visibility and traceability, and focus on capturing benefits across the end-to-end supply chain.

www.ey.com

BUILDING RESILIENCE

Under Secretary for Economic Growth, Energy, and the Environment for the U.S. Department of State Jose Fernandez says the State Department has been working with businesses, foreign partners and US Embassies to monitor supply chain disruption. Speaking with Forbes Fernandez, who recently led the 2022 Global Supply Chain Ministerial focused on building long-term supply chain resilience, highlighted supply chain shocks including COVID disruption, Russia’s war in Ukraine, natural disaster and extreme climate impacts. He said the State Department is working to encourage more diverse and resilient supply chains by improving transparency through information sharing, promoting supply chain diversification and boosting security through cooperation.

www.forbes.com

BREACHING THE CHAIN

Nearly one-fifth of data breaches analysed were caused by a supply chain compromise, and these compromises made breaches more expensive and resulted in longer lifecycles, according to IBM’s Cost of a Data Breach Report 2022. It found that organisations took an average of 235 days to identify and 68 days to contain a supply chain compromise – 26 days longer than the average data breach lifecycle. The average total cost of a supply chain compromise was $4.46m. www.ibm.com

Ford says that supplier costs will be $1bn higher in the third quarter of 2022 than previously expected as a result of ongoing supply chain challenges and rising inflation.

Levi Strauss & Co launches its AI and ML powered Business Optimisation of Shipping and Transport (BOOST) technology to streamline ecommerce fulfillment.

General Motors announces its partnership with Lithion Recycling, which will focus on validating recovered battery materials for new production, as well as recycling process R&D.

Amazon signs an extended partnership deal with hydrogen supplier Plug Power Inc. to provide more than 10,000 tons per year of hydrogen for powering long-haul trucks and forklifts.

A new emergency tool set out by the European Commission to protect supply chains in times of crisis will ensure that essential goods can circulate the EU during any significant emergency disruption, such as that during the COVID pandemic. The Single Market Emergency Instrument will give the EU executive new powers including requiring the stockpiling of critical goods and instructing companies to prioritise certain orders.

RAMAN I NATHANI PROVIDES INSIGHT INTO THE NUANCES OF PROCUREMENT IN THE HEALTHCARE SECTOR, TOUCHING ON KEY ISSUES SUCH AS DIVERSITY, TALENT AND TECHNOLOGY

FUTURE-FOCUSED PROCUREMENT IN HEALTHCARE

FUTURE-FOCUSED PROCUREMENT HEALTHCARE

WORDS TOM WADLOW

Every single dollar spent on healthcare is human-sensitive and carries risk because we deal with human lives every day.”

For Raman I Nathani, devising and executing procurement strategies in the healthcare sector is incomparable to other industries. Raman has amassed a wealth of experience, working 20 years in procurement functions for organisations operating in the manufacturing, entertainment, aviation and healthcare sectors during his career to date. As such, he is well-placed to cast this judgement.

“Healthcare procurement is different from others,” Nathani continues. “Our customers in the healthcare industry, as patients, are not coming with a happy mindset, unlike say in hospitality and entertainment industries. Hence, at the very least we as procurement need to provide environments that offer the highest level of comfort and best possible care to our patients to help them deal with

this challenge. Procurement is critical to achieving this.” Indeed, for Nathani, procurement strategies in healthcare must break the mould of working in silos and operate not just as a stakeholder-centric function, but also by being patient centric.

A PATIENT-FIRST APPROACH

As Head of Strategic Sourcing at a UEA based GPO, which is the largest in the nation, Nathani’s role is to ensure this happens. His GPO stands as the largest healthcare platform in the UAE with ambitions to be the ‘hospital in the cloud’

via a digitally integrated ecosystem. The company’s integrated network of 28 hospitals, 100-plus clinics, 25,000-plus employees, and 160-plus laboratories provides over 200 speciality medical services to 2.5 million insured members across the country.

This level of success is only possible by bringing together vital knowledge, process expertise, technology and analytics to deliver outcome-focused, high-quality services across all channels and touchpoints. With that in mind, The GPO’s model is grounded in a technology-focused approach and designed to put patient safety first. A central aspect of Nathani’s role is to drive ongoing strategic sourcing initiatives and procurement transformation across the organisation, making it vital he and his team stay atop of major trends.

Speaking about the digital agenda in procurement, Nathani explains: “Technology transformation is the key enabler for the

“

Every single dollar spent on healthcare is human-sensitive and carries risk because we deal with human lives every day”

future of healthcare. The digital landscape is complex, with many systems contributing to a somewhat fragmented operating model. From my experience, most of the time companies don’t realise where to begin when implementing technology, meaning that digital strategies and roadmaps are required to identify systems which are simple, userfriendly, and automated. In particular, I believe the use of predictive analytics is essential to help identify risks, leveraging different datasets to enable proactive risk management and planning.”

Nathani says that, as a healthcare digital ecosystem, some of the key initiatives are to build an AI-based intelligence system designed to join all the connected devices that enable the organisation to function on a daily basis – from scanners to smartphones. By connecting every piece of IoT-enabled equipment through a singular system, the procurement team will be able to leverage data to identify demand for products and potential risks in advance. This will underpin strategic sourcing of capital expenditure in an optimised way that delivers supplies to the right places at the right time, and with minimal risk.

THE POWER OF DIVERSITY

In healthcare, procurement is a very fragmented and complex matter. “Due to the high intensity of variables, it is extremely difficult for procurement leaders to work on total cost of ownership models because some products are produced with standard specifications, giving buyers and customers less leeway to customise and suggest an alternative,” Nathani explains. “On the other hand, distribution costs, insurance costs, and the general cost of short-term panic buying in the sector have made it challenging

“ Build a team of diverse expertise and experience and create a culture that encourages fresh thinking and ideas”

for procurement leaders to work on a valuebased approach.”

Technology alone is not a silver bullet that will be able to overcome some of these complex challenges. Nathani advocates for the importance of diversity of thinking to navigate the ever-shifting landscape, something which comes from building a team of people from different professional and cultural backgrounds. He explains that diversity of talent fosters creativity and propels innovation.

Procurement outcomes are no longer dependent on smart buyers. The next generation of procurement is focused on value chain integrators and, instead of process based, will follow an innovationbased approach. Following this approach, Nathani has built his procurement team of 16 virtually from scratch since joining the business around a year ago. One of the first actions he took was to identify talent across the world from different industries and different nationalities.

“Our team of 16 in the strategic sourcing function alone come from seven different countries and, between them, have worked across 25 different industries,” he explains. “You can either hire exclusively from within the healthcare sector and operate with a set and fixed attitude, or you can build a team of diverse expertise and experience and create a culture that encourages fresh thinking and ideas.”

FUTURE OF PROCUREMENT: SHIFTING MINDSETS

The golden age of procurement in healthcare is over. Recession and deflated based markets have now moved to inflated prices and shortages of goods in the world. “The last decade created a focus that was all about moving to the most economical, value for money products and services, which made the life of procurement easy and ever shining,” Nathani adds. “However, the

era of this greenfield environment is over as procurement organisations face up to different types of challenges.”

Speaking about the challenges in the future, Nathani says that, in these economic times of soaring inflation and cost increases, all categories are seeing a minimum of 5% underlying inflation, and traditional negotiation and cost levers are no longer in place to break the ceiling price. This isn’t helped by acute skills shortages which, as well as holding back the ability to leverage more

“ Predictive analytics will be essential to help identify risks, leveraging different datasets to enable proactive risk management and planning”

technology, limit the prospect of switching to a strategic approach.

Discussing how to overcome the inflated landscape, Nathani explains how CPOs and their teams must navigate the coming years.

“We need to see a shift in mindset – from cost to value and from value to innovation,” he says. “Category managers and heads of procurement need to focus more on building a forward-thinking and transformative approach rather than operating with a shortsighted lens.”

In addition, he explains the importance of a strong focus on sustainable procurement practices for the future – financially, socially and environmentally. Customers, he notes, are demanding sustainable outcomes which requires a growing demand for a rapid focus on sustainable solutions by the suppliers.

With this in mind, three trends, he says, can be focused on immediately. These are a shifting data intelligence model from a centralised base into the cloud, a decentralised management system with a human-centric approach that ensures patients or end customers are put first, and the development of ESG initiatives that will shift procurement in healthcare onto a sustainable footing. In Nathani’s eyes, the period ahead will be both fascinating and challenging – in his mind, the time has come for healthcare procurement to transition to the next level of maturity, digitisation and diversity.

“ Procurement outcomes are no longer dependent on smart buyers. The next generation of procurement is innovationbased”

EXCELLENCE IN SERVICE

Formed in 2015 as a part of ADNEC Services LLC, a premier hospitality service provider in the UAE that puts together everything from sensational cuisine to seamless planning and design for gatherings. From the beginning, the company embraced the philosophy of making an “extra effort” in everything we deliver. We aim to go beyond the expected and that is the reason we have emerged as a prominent player in the catering industry of the UAE.

Portfolio

i nnovative and ins P ired items for work, leisure and sustainable living

RAYVOLT EXXITE X ONE

The only thing better than saving the planet? Doing it in style. Retro, hand-crafted, custom leatherwork, high-tech style, to be precise. RayVolt, the Barcelonabased e-bike maker that promises ‘yesterday’s charm with today’s solution’ offers just that. X one pulls out all the stops. It’s a hugely innovative electric bicycle designed from the ground up to include technologies like photosensitive embedded lights that turn with the bike, gestureactivated turn indicators, a touchscreen user interface, facial recognition locking and proportional regenerative braking that can also charge the battery by rolling the pedals backwards.

xone.bike

Portfolio

i nnovative and ins P ired items for work, leisure and sustainable living

FINGERBOT PLUS

The problem with fingers?

They’re just not smart enough. Not so for Fingerbot plus, a smart ‘finger’ designed to bridge the gap between the few smart home innovations out there and the desire to make everything else catch up. It can, say its makers, help you smartly control 99% of existing buttons and switches, including scheduling your morning coffee, switching lights on and off, closing garage doors and more. Fingerbot is voice controlled and compatible with Siri, Alexa and Google Home, is controlled by a dedicated app, and has an eightmonth battery life.

www.kickstarter.com

Portfolio

i nnovative and ins P ired items for work, leisure and sustainable living

LUMINA DESK

The humble desk, the last bastion of good old fashioned craftsmanship and ‘proper’ materials. No more. At least if Lumina has its way. That’s because Lumina Desk is as digital as they come. Its 24inch OLED screen, embedded in an anti-glare reinforced glass surface, displays work screens, apps and other productivity tools. Other features include six power outlets and charging – lots of it; the whole surface wirelessly charges any device placed on it. It’s good for you too, thanks to smart and automated height adjustment [sitting to standing] depending on your schedule.

www.getlumina.com

Portfolio

i nnovative and ins P ired items for work, leisure and sustainable living

TOKENFRAME

Art, and a way to display it, for the modern era. Tokenframe is purpose -built to showcase digital NFT artworks in real time. The wooden frames are available in 2K and 4K options with vivid, anti-glare screens specifically designed for digital art. Sign into a digital wallet, make sure you’re connected to wifi and, through the Tokenframe app, you can control background colour, artwork size and more – there’s also builtin stereo speakers to make looking at your latest masterpieces as immersive as possible. Who needs a trip to the gallery?

www.tokenframe.com

Portfolio

i nnovative and ins P ired items for work, leisure and sustainable living

URBANISTA PHOENIX

The best things come in small packages. Like the super-innovative, solar powered Urbanista Phoenix, the world’s first selfcharging true wireless earphones. In this instance, the package is everything. The streamlined charging case is integrated with Powerfoyle solar cell material, which continuously recharges whenever exposed to all forms of light; the result is up to 32 hours of playtime. Phoenix is ‘virtually weightless’, features hybrid active noise cancelling technology, intuitive touch controls and intelligent voice assistance, custom-fit silicone tips, and a host of customisation options through dedicated app support.

www.urbanista.com

ARKESTRO

PREDICTIVE PROCUREMENT

Procurement processes are complex. Imagine, then, if you could simulate that process using automation and intelligent software before you’d even stepped into the negotiating room with potential suppliers and partners. That’s what Arkestro does.

The tech startup, founded in 2017 by Christian Ries, Rob DeSantis and Edmund Zagorin, is a predictable procurement platform that boosts sayings and supply

Edmund Zagorin at Optimal ‘22

chain performance by pre-embedding preferred outcomes in any system or process. Arkestro calls this ‘predictive procurement orchestration’, which involves the use of machine learning, game theory and behavioural science to simulate procurement processes, suggest pricing and commercial terms to all parties involved.

According to Zagorin – who was inspired to found the business after work as a

procurement consultant highlighted the frustration of collecting and comparing quotes from suppliers – the result is that “suppliers get faster purchaser orders. Procurement gets faster savings, and the business ultimately gets the parts and services they need to please their customers”.

www.arkestro.com

“ We help companies reach very fast agreements with their suppliers”

— EDMUND ZAGORIN, CEO AND CO-FOUNDER, ARKESTRO

Dane Baker and Peter Twomey

“On

a mission to make fighting climate change simple”

It always starts with a simple idea. In the case of EcoCart founders Dane Baker and Peter Twomey, the idea was that fighting climate change should be easy, accessible and affordable for everyone. To do so, they established the company to enable every consumer the opportunity to know the carbon footprint of their online shop at checkout and then offset it, thus making their order carbon neutral.

The company’s proprietary algorithm, downloaded as a web browser extension and used by more than 10,000 stores, estimates the real-time carbon footprint of each unique order by analysing things like shipping distance, weight, product type and more. Customers are shown this footprint, as well as the impact they’ll be making when they checkout carbon neutral in initiatives such as forest protection and afforestation, creating local jobs and helping local communities or protecting endangered species.

Since launching in 2020, users have offset more than 30 millions pounds of CO2, or the equivalent of saving one million trees.

www.ecocart.io

Building sustainable procurement

SHOULD YOU BUILD A SUSTAINABLE PROCUREMENT PROGRAMME? THE HACKETT GROUP’S NICOLAS WALDEN

DETAILS WHY NOW IS THE TIME

Procurement used to be about getting the best price and the best value. It still is to a degree. But now, buyers also need to use the company’s buying power to achieve its environmental, social and governance (ESG) goals, amongst others.

Increasingly, ESG is not just the concern of the Ikeas and Unilevers of the business world. Microsoft, Schneider Electric, and many other more traditional companies have also now made achieving ESG goals a priority. In fact, in a recent survey by The Hackett Group, 92% of executives we polled said that they expect they’ll soon need to develop a sustainable procurement programme in each of the three ESG categories.

The survey revealed the level of enthusiasm at executive level when it comes to ESG. For example, executives say ESG-focused procurement is a must-have to meet regulatory requirements (74%), to reduce risk exposure (69%), and to deliver benefits like emissions reduction (56%).

The benefit numbers are also enticing: top performers with sustainable sourcing initiatives are more than 3x better at reducing costs than their peers, and nearly 4x better at avoiding costs.

Clearly, building a sustainable procurement function is an opportunity organisations can’t afford to miss. But, we also found that 60% of companies out there don’t know how to go about it. In fact, chances are good – about one in three – that companies haven’t even started in a systematic way. Fortunately, it’s not impossible to catch up.

Over half of executives believe it will enhance their brand value, increase sales, save money by reducing waste and energy, and improve customer satisfaction.

“ALTHOUGH THE OVERALL OBJECTIVE OF A STRONG ESG PROGRAMME IS CLEAR, THE PARTICULAR PATH YOU TAKE WILL DEPEND A GREAT DEAL ON YOUR COMPANY, YOUR INDUSTRY, AND YOUR GEOGRAPHY”

FIVE STEPS TO SUSTAINABLE SOURCING

Building a sustainable procurement programme can be seen as a fivestep process:

1. DEFINE

Although the overall objective of a strong ESG programme is clear, the particular path you take will depend a great deal on your company, your industry, and your geography. A plastics manufacturer, for instance, will likely make reducing carbon emissions and promoting recycling a top priority. A clothing manufacturer might be most concerned about social issues such as workplace conditions and labour rights. A global bank, on the other hand, might focus on microfinancing and other ways of serving the unbanked.

Choosing a priority doesn’t mean that other concerns go away completely, just that to be the best company you can be right now, you have decided that you must tackle this particular issue first. Many leading companies have already made dramatic commitments that they intend to fulfil relatively soon. By 2025, Deutsche Bank aims to power its operations entirely by renewable energy while, by 2030, Microsoft plans to be carbon negative, and by 2039 Unilever intends to achieve net-zero emissions from all its products.

2. FORMULATE

In this stage, you need to prepare the strategy, a plan, and to find the right resources to reach the goals you have selected. This typically requires building a strong cross-functional internal organisation capable of integrating sustainability concerns with other mandates, a team that includes strong leadership, sustainability experts, and committed suppliers.

3. DRIVE

At this stage, the sustainability leadership team develops a more focused strategy to use data to intervene in the areas that will have the greatest impact. Coca-Cola Enterprises, for instance, looked for ways to reduce its carbon emissions and concluded that packaging represented the biggest opportunity. After assessing 140 key players in its supply chain, the team ranked the suppliers by impact, asking low-impact suppliers to measure their carbon footprint, medium-impact suppliers to measure and try to reduce their impact, and high-impact suppliers both to

measure and reduce and to share detailed carbon footprint information with the company, helping the Coca-Cola team assess their progress and refine their data.

The case of Schneider Electric is a good example of the depth and breadth of work needed to build a sustainable procurement programme. Ranked as the number one company on the Corporate Knights Sustainability Index, Schneider began building its programme in 2008. It started by bringing together a small central team of change champions from across the organisation, who were given the task of influencing buyers and suppliers.

After identifying their 1,000 most important suppliers and another 5,000 suppliers, Schneider’s sustainability team developed a supplier code of conduct that incorporated the company’s environmental goals for greenhouse gas reduction (which they wanted followed by all 1,000 strategic suppliers), and social goals (particularly encouraging diversity). After that, they worked with suppliers to include explicit KPIs within contracts that included metrics, not just on performance and cost but sustainability, ordered assessments and audits on suppliers’ social responsibility performance. They also encouraged them to follow ISO26000, the international social responsibility standard.

4. EMBED

The next step is to update business processes and procedures to incorporate sustainability as part of the standard ways of working – rather than something additional and separate. New supplier management capabilities may involve monitoring performance in ways that go beyond making sure that supplier contracts contain sustainability clauses (as 100% of advanced companies do), but that the supplier passes an assessment for sustainability compliance (a practice followed by 80% of top performers), and maybe even an audit (something 40% of top performers do for their direct expenditures, and 10% do for their indirect expenditures).

5. MEASURE AND REPORT

Finally, you need to build a capability for assessing and auditing what your programme is achieving and focusing on the areas that matter the most or may hide the greatest risks. Over 80% of top ESG performers

assess their direction expenditures for ESG, compared to 12% for the average peer. ESG assessments for indirect expenditures are much higher for top performers too – 48% compared to 6% for the average performers. When it comes to audits, the percentages are lower but the ratios are still dramatic: 40% of top performers audit their direct expenditures, compared to 4% of the peer group, while 10% at the top audit their indirect spend compared to 5% of the peers.

Far fewer companies, even top performers, have reached this point with their supplier audits. Thirty-seven percent of top performers audit their supplier base against 15% who take a check-the-box approach to making sure they are fulfilling their ESG commitments. Thirty-two percent audit their high-risk suppliers (as opposed to 11% identified by scorecard).

CREATE A LICENCE TO OPERATE

The era in which a company’s extrafinancial goals could consist of a smattering of good works and good intentions is over. These days, corporate ESG programmes are increasingly as strategic and actionable as any sales strategy or financial plan. Over the next few years, companies that have not made these plans part of their strategy may have a hard time keeping their license and funding to operate in a world where customers, investors, and regulators all have less tolerance for environmental degradation, social discrimination, and governance that facilitates such destruction of internal and external value.

Nicolas is a Senior Advisor in The Hackett Group’s Procurement Advisory membership programme, where he works continuously with senior executives of the world’s leading companies to provide top quartile performance insights, research, and networking. He has specific interests in effective sourcing, developing procurement’s internal brand, digital technologies, and operating models. With a broad background in consulting and industry, he has spent 20 years working with senior executives to address and overcome challenges to transform procurement and finance organisations. He holds two Bachelor Degrees in Economics and Law from Victoria University of Wellington, NZ.

“THE ERA IN WHICH A COMPANY’S EXTRAFINANCIAL GOALS COULD CONSIST OF A SMATTERING OF GOOD WORKS AND GOOD INTENTIONS IS OVER”

PatiEnt-FirSt tranSForMation

ALVOTECH’S GERHARD HELMERICH ON SUPPLY CHAIN SUCCESS, PUTTING PATIENTS FIRST, AND WHY CULTURE, PEOPLE AND MINDSET ARE KEY TO ANY EFFECTIVE FUNCTION

t ation

To discuss supply chain, in all its complexity and ever-evolving nature, with Gerhard Helmerich is to understand how hard-earned experience, a love of collaboratively achieving greatness and a passion for one’s subject matter can bring success, both personally and at an organsiational level. After all, in his own words Helmerich is ‘a doer’ who revels in the kind of environment where he can make a positive impact by driving change, bringing teams of people together to anticipate and overcome challenges collectively. With that in mind, it’s not difficult to see why he and Alvotech are the perfect fit.

Alvotech specialises in making biosimilars – biologic medicines that are highly similar to approved biologic medicines [medicines produced through biotechnology in living systems], but which typically provide a more cost-effective alternative to health systems, payers and patients. The business, which was founded in 2013, uses an innovation-driven and vertically integrated approach centred around a single key objective: to improve lives by expanding access to affordable biologic medicines.

“When the opportunity came to take the lead on global supply chain at Alvotech, it didn’t take long to say yes,” says Helmerich, discussing joining the company a little over a year ago. “The pharmaceutical supply chain is unique in that it brings you very close to the end user, the patient. It’s one of the most rewarding points of the job because you can see the direct impact of your ultimate supply chain goal of getting biosimilars to the patient. Here at Alvotech, it’s the perfect opportunity to achieve great things in an engaging and supportive environment.”

“THE PHARMACEUTICAL SUPPLY CHAIN IS UNIQUE IN THAT IT BRINGS YOU VERY CLOSE TO THE END USER, THE PATIENT”

GROUND-UP TRANSFORMATION

Helmerich assumed the role of Head of Global Supply Chain, VP in early 2021, a position focused on driving change across the function while positioning the supply chain as a key enabler of business outcomes. “I’m responsible for Alvotech’s end-to-end, cross-functional supply chain, which includes planning, warehousing, logistics, procurement, external operations and supply chain excellence,” he says. “When I started, I had the privilege of building a supply

chain organisation essentially from the ground up. A key consideration was setting up a capable team to bring one of the largest grossing biologic medicines, adalimumab, to the market while ensuring the remaining development pipeline could be supplied in parallel.”

Helmerich brough considerable experience to the task, having worked in the pharmaceutical industry for some 18 years, including at global pharmaceutical firm Novartis before joining Alvotech.

“CULTURE WILL ALWAYS DETERMINE THE SUCCESS OF A TEAM ABOVE EVERYTHING ELSE”

“I’ve worked across various functions during my career in the industry,” he notes, “including technical research and development, CMC (Chemistry, Manufacturing, Control) and commercial. I am a Food Chemist by training but decided to expand my horizons after completing my Ph.D. at the Technical University of Munich.

“I started in a small contracting lab as Head of Laboratory before moving to ‘big pharma’ at Novartis,” he continues. “There I advanced from specialist roles in Quality Control to broader operational and strategic roles. I realised I was passionate about working in matrixed roles, leading global teams, and helping to connect the dots to lead to improved and better-integrated processes. After 12 years in technical development, I transitioned into technical operations, further excelling in my supply chain expertise. To this day I still believe that the supply chain is one of the greatest places to work in, providing exposure to all key crossfunctional aspects of an organisation.”

Such varied experience has taught Helmerich valuable lessons, both directly in terms of the skills and capabilities necessary to succeed in the supply chain environment and, perhaps more importantly, in the value of effective leadership, the nurturing of a strong culture and team, and encouraging motivation and shared ambition – all of which influence the way he has approached the last year and a half at Alvotech.

“I STILL BELIEVE THAT THE SUPPLY CHAIN IS ONE OF THE GREATEST PLACES TO WORK IN, PROVIDING EXPOSURE TO ALL KEY CROSS-FUNCTIONAL ASPECTS OF AN ORGANISATION”

“Success starts with believing or not,” he states. “It’s very often about setting ambitious goals as a leader and then overcoming potential doubts by pushing outside your comfort zone – being comfortable with the uncomfortable. Starting with that belief creates a mindset that, in most cases, the solution is somewhere out there, you just need to find it. Of course, you also need to build a team around you that’s motivated by the same belief that we can achieve our goals.

“Supply chain is about agility, resilience, and the will and courage to follow through,” adds Helmerich. “So as a leader, you find ways to motivate and instill courage in your team. Today more than ever, that requires a future-looking strategy, but also the flexibility to provide solutions if plan A falls through. We’re always looking ahead and developing backup plans for our backup plans. Supply chain has two main currencies: communication and timing. If it’s given the opportunity to plan ahead, there’ll always be a solution to any challenge.”

“IF THERE IS A PROVEN BIOLOGIC MEDICINE, WE BELIEVE IT SHOULD BE ACCESSIBLE TO ALL PATIENTS IN NEED”

THE OIL IN THE ENGINE

Finding solutions to any challenges has been Helmerich’s focus at the business. First building the foundations of the future-facing supply chain function, then evolving it in line with an everchanging industry and the core mission and objectives at the heart of Alvotech.

“I see the supply chain as the oil in the engine of a company,” he elaborates. “Our objectives are very much in line with those of the business: to create a healthier world through affordable biologic medicines; we strive to become a global leader in biosimilars so we can reach as many patients as possible. If there is a proven biologic medicine, we believe it should be accessible to all patients in need.

“With that in mind, the role of our supply chain is to enable Alvotech to bring affordable biosimilars to patients at the right timing and quantity to match demand,” Helmerich continues. “Over the last two years, we’ve built a supply chain that has the core capabilities to support this target. We are currently supporting the first commercial launch of AVT02 (adalimumab) in the EU and Canada and will further expand into additional markets in 2023.”

Of course, the last years have been anything but straightforward with global conflict, pandemics, supply problems and increased risk challenging even the most robust of supply chains.

As a world leader in resin-based monoclonal antibody and recombinant purification we support our partners in improving accessibility and availability of cutting edge medicines, all around the world. Discover more at www.purolite.com

That Helmerich and his colleagues have continued to drive change within Alvotech is testament to the passion and commitment within the organisation. Still, as he explains, in order to meet continued success an approach based around continuous evaluation, improvement and evolution is essential.

“The last years have taught us that the only constant thing in the pharmaceutical business is change or continuous transformation as I see it,” Helmerich affirms. “The same applies for the supply chain. We need to re-evaluate our path regularly and see if our supply chain set-up helps our company to deliver on its mission. If not, we need to ask

ourselves why and be open-minded to adjust our course.

“It is even more critical that we benchmark progress frequently in the supply chain as it’s influenced by many external factors that are not directly in our control – customer needs, pipeline evolution, supplier landscape, and so on,” he continues. “Supply chain disruption might be the new normal for us, triggering a constant re-evaluation and partial evolution of the footprint. We need to accept, understand, and adapt to stay ahead of the game. That’s why I believe that thinking forward and creatively outside of the standard patterns that have worked over the past years is crucial.”

TECHNOLOGY, PARTNERS AND CULTURE

To mitigate some of these challenges, Helmerich advocates for the setting up of a broad supplier network in order to increase supply flexibility as well as the use of emerging and innovative digital technologies such as blockchain, IoT and AI. The latter in particular, he says, are critical components of remaining ahead of the game in supply chain, explaining that Alvotech has recently embarked on a digital transformation journey across all aspects of smart manufacturing to harness these technologies.

“For me, due to the sheer volume and scale of our operations, system and process automation is important to facilitate the level of detailed data capture

required,” he continues. “A true concentration on data means that on top of our current focus on analytics to uncover areas of opportunity in the supply chain through automated data capture and item tracking, we are also building a foundation for AI-assisted decision making and robotics in the future. Our mantra for Alvotech’s digital innovation journey is to keep it simple and scale fast.”

To do so, it is often necessary to collaborate closely with key strategic partners. This is certainly true for Alvotech and Helmerich, who explains the importance of collaboration with technical partners and deepening relationships that are true partnerships, rather than simply transactional.

“Many of our key suppliers have been on our journey from the beginning,” he says. “To us, true partners are those that engage with us in joint planning and proactive communication as well as by bringing innovative ideas to the table. We have found this type of relationship in partners like Purolite, Thermo Fisher Scientific and AsahiKASEI Bioprocess. Speed to market, cost-effectiveness, and supply security are all critical when it comes to delivering these important biologic medicines to patients.”

Of course, the right organisational culture is key to thriving with such ways of working. Helmerich is an advocate for the power of teamwork within the

supply chain environment, explaining that at Alvotech, the focus is on driving results, embracing change, being laserfocused on the needs of the business and adopting a ‘service mindset’ that’s driven by high-quality work. He explains: “As Peter Drucker famously said: ‘culture eats strategy for breakfast’. Culture will always determine the success of a team above everything else. It is powerful because culture and the resulting engagement are almost impossible to replicate.

“This is where an effective leader is important, acting as a connector, integrator and doer,” Helmerich continues. “A good leader should build trust, be transparent and timely in their communication, and act as servant leader above all. This means helping and encouraging the team, anticipating problems, and removing obstacles. I strive to be an open-minded and solution-oriented leader who is always learning. By strategising and thinking ahead, I can provide the support my team needs and activate back-up plans as necessary.”

“OUR MANTRA FOR ALVOTECH’S DIGITAL INNOVATION JOURNEY IS TO KEEP IT SIMPLE AND SCALE FAST”

DELIVERING THE FUTURE

Any leader’s remit is broad in the modern enterprise, but the supply chain leader’s is particularly so. Not least, they must drive transformation, digitalisation and evolution to mitigate potential disruption in an increasingly complex market, but other corporate responsibilities are also falling under the function’s banner. A good example is sustainability and environmental, social and governance (ESG) initiatives, which are essential to the future success of Alvotech.

“We believe a well-structured approach to sustainability is essential for long-term success,” says Helmerich. “It can help identify incremental risks that face us and new opportunities that may create longlasting benefits for all our stakeholders. Even though we are a young company and only recently publicly traded, we have been tracking Alvotech’s performance according to standard ESG metrics for some time and recently launched a dedicated web-portal, which will allow our stakeholders to access information

“SUPPLY CHAIN IS ABOUT AGILITY, RESILIENCE, AND THE WILL AND COURAGE TO FOLLOW THROUGH”

and assess our performance in meeting our commitment to sustainability.

“Along with this we have instituted policies to support proper governance and transparency, which have also been made public,” he notes. “We look at this as the beginning of a journey that we are excited to share more about as it evolves. ESG needs to be incorporated into company strategy, embraced and executed by everyone. It’s about changing mindset and creating awareness around how we

work together within the company to ensure sustainable ways of working. Supply chain can contribute considerably by choosing the right supply chain setups, including suppliers and external partners. As we progress, we will ask our external partners to fulfill certain ESG requirements. Another core pillar in our plans is to streamline the end-to-end supply chain by reconciling all manufacturing capabilities onsite in Reykjavik. We have capacity expansion projects ongoing to address this point that we are aiming to implement by 2025.”

Considering the future more broadly, Helmerich relates that there remains much work to be done. “The company is focusing on advancing its pipeline of biosimilar candidates and supporting successful commercialisation of our first biosimilar in the EU and Canada among other anticipated markets worldwide,” he says. “We also prioritise structural updates to support efficiency and growth. Our supply chain team is fully committed to these core priorities. Our main goal is to deliver products to the customer, and ultimately to the patient.”

www.alvotech.com

FLEETZERO SHIPPING ELECTRIFIED

When it comes to cutting emissions and taking swift action on the environment, there’s no time left for compromise. That’s certainly true of the shipping industry which, thanks to its continued reliance on diesel-powered megaships, is responsible for some 2.5% of the world’s total CO2 emissions annually.

But that doesn’t have to be the way. Not if Fleetzero has a say. The innovative maritime tech startup is pioneering a new, electrified approach to shipping that will offer zero emissions, protect the air and water and is more cost-effective than existing technologies. Its Marine Battery

System is an ultra-rugged battery designed for tough marine environments and autonomous, remote or synchronised operations; the company is converting existing diesel ships to battery-electric.

Alongside this work Fleetzero is developing OXV-3, the first long-range electric cargo ship due to launch in 2023. Battery powered ships, it says, can access smaller ports thus reducing congestion, are more economical to build, ripe for the development of unmanned ops, and easier to use as a platform for further innovation.

www.fleetzero.com

“BATTERY-POWERED SHIPS DELIVER BENEFITS TRADITIONAL SHIPS CAN’T”

PROCUREMENT: THE STRATEGIC ALLY

JAVIER BARANDA DISCUSSES TRANSFORMING PROCUREMENT FROM A SILOED, ADMINISTRATIVE OPERATION INTO A STRATEGIC FUNCTION THAT ADDS SIGNIFICANT VALUE TO THE BUSINESS

WORDS_ JONATHAN DYBLE

JAVIER BARANDA

GROUP HEAD OF PROCUREMENT COMDATA GROUP

Procurement at Comdata used to be very transactional,” says Javier Baranda. “It was in many ways an administrative function, used to place orders and communicate with vendors when deliveries were not as expected. The core value of purchasing has traditionally been savings, but that purpose has evolved significantly in recent times. Savings are still important, for sure. Yet procurement is also becoming more a source of innovation, a function that brings new ideas to the business, and an agent of risk management. The role has grown far beyond purely a team of negotiators.”

Baranda is a vastly experienced procurement professional, first engaging in purchasing back in 1997 by taking on his first procurement project shortly after becoming an apprentice at telecommunications giant Telefonica. With this foothold, he went on to enjoy an illustrious career with the firm for many years after, taking on a variety of procurement roles that saw him spend time outside his native Spain first in China, before eventually becoming Director of Strategic Alliances and Head of Procurement at the UK’s O2 operator.

After 20 years with Telefonica, Baranda took the decision to embrace a new challenge with the idea to lead its own procurement transformation project, joining customer interaction and process management specialist Comdata as the company’s Group Head of Procurement for Spain and LatAm in February 2019, adding soon after the responsibility to lead a procurement transformation across the entire group.

“The move made a lot of sense to me,” he explains. “The contact centre market is extremely competitive and has very tight margins, and procurement can make a real difference. There was an immediate fit with the vision from the CEO. I could see there was a desire to do something different, to innovate and improve, and that procurement appeared to be an area that had not yet been properly explored.”

EXPLORING THE WHY BEFORE THE HOW

In the three and a half years since, Baranda has overseen a complete transformation of Comdata’s procurement operations, a process that has been holistic and left no stone unturned. “It was important to start this journey with the why – why pursue a transformation of procurement at Comdata?,” he states, considering several driving factors.

“First is globalisation. Companies today are facing more competition than ever before, meaning margins are at risk of being deteriorated. In terms of cost efficiencies, you need to be always sure that you are optimising the bottom line,” he adds. “Second is the fact that procurement spend is a big chunk of the revenues. For a company like Comdata, it’s about 25% of revenue, but in other sectors it could represent 30-50% of the income, or even more in the manufacturing sector, so the benefits of optimising this spend can therefore be significant for the company.”

The third point that Baranda cites is the importance of mitigating risk through effective supply chain management. Pointing to COVID-19 and the war in Ukraine as examples, he explains that organisations must be able to react to disruptive or turbulent situations. “It is because of these risks that we need to be able to proactively monitor our supply chain,” Baranda affirms. “If you don’t have a clear image of your supply chain in the face of disaster, you won’t know how to react. Some vendors might shut down unexpectedly overnight – the more you can anticipate and respond to these scenarios, the better placed you will be in trying to ensure business continuity.”

CULTURE, STRUCTURE AND TECHNOLOGY

In pursuing these varied goals, Baranda and his team have instilled significant change. While the transformation was initially set to cover the Spain and LatAm markets, the scope was expanded a few months later, becoming a global project spanning the firm’s 22 countries of conduct. From the outset, a significant focus

for Baranda was placed on changing the culture and mindset associated with procurement at the company, as well as redefining the role of purchasing within Comdata so that it would align with the function’s contemporary purpose.

“I always try to explain to the team that we are not here to simply place orders,

“IF YOU DON’T HAVE A CLEAR IMAGE OF YOUR SUPPLY CHAIN IN THE FACE OF DISASTER, YOU WON’T KNOW HOW TO REACT”

have successful negotiations and reduce the purchasing price,” he explains. “Our role is to help the company maximise its results, and there are many ways in which that can be achieved. There is not a limited scope.”

For Baranda, the expectation is that all members of the company – procurement included – take ownership of their projects and explore them to the fullest extent to see how they can unlock the most value possible for the firm.

“For this to work, you need a companywide culture that incentivises innovation and promotes out of the box thinking,” he adds. “If you constrain this, you can have a good team of experts, but they will not be able to disrupt the business effectively. At Comdata, we have a truly entrepreneurial culture that enables a transformation project like this, starting from the CEO and fully embraced by the Executive Committee, and there really is a channel to push ideas through.”

“PROCUREMENT IS NOT JUST ABOUT COST, BUT ALSO ABOUT INNOVATION AND BRINGING NEW IDEAS TO THE BUSINESS”

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With the right building blocks to transform the firm’s mindset and culture, Baranda and his team have been successful in implementing a new purchasing model that has unlocked efficiencies and improved results. New common management policies and procedures were instilled throughout the entire group, alongside the introduction of a centralised global purchasing platform. At the same time, the firm’s local procurement operations were redesigned while a small global team was also created. The purpose of these changes being to establish a structure that would ensure the transformation would be embraced seamlessly, consistently and coherently into the company’s various markets of operation.

These critical adaptations have seen Comdata’s procurement efforts evolve dramatically. Not only have all key processes been aligned, but the aligning common procurement platform has also served to dramatically improve visibility and manage interactions between multiple stakeholders in a much more effective way.

“It was a sharp move away from the ERP tools that were previously used to a more comprehensive end-to-end digital tool capable of covering the entire procurement journey,” Baranda affirms. “The platform allows us to automate many processes, as well as collecting critical data to exploit the insights gained from a variety of interactions.

These analytics are critical because they give you direction. They provide visibility into performance, allow us to evaluate the spending profile and its evolution in the different areas of the company, and identify and share best practices across different markets, allowing us to make better decisions.”

A significant part of the success of this work comes as a result of close collaboration with key strategic partners including Palo Alto Networks and Vocalcom. For Baranda, the strength of these relationships is crucial: “Successful partnerships are centred around trust, reliability and solutionsfocused attitudes – something we see in

our cybersecurity partner Palo Alto,” he says. “We suffered a big incident in our company in late 2020 and had to react incredibly quickly. Palo Alto stepped in to prioritise that response and mitigate a disaster, spending months with us to ensure our protection at no extra cost. Only once the situation was stabilised and recovered did they want to sit down with us. This is a true partnership: solving the problem first and talking money later.

“With Vocalcom, I have a similar feeling,” says Baranda. “The company has been one of our main technology providers for contact centre applications for several years. At the beginning of the pandemic, we faced massive disruption.

Our sector is very intensive in people working on sites, and all our applications and infrastructure were on premise, yet almost overnight everyone had to begin working from home. For a company like Vocalcom to come in and set up a cloud solution at immense speed was a game changer. And the attitude was the same – let’s resolve first, and only then talk about price. For me, that understanding is critical. I need to feel that they will be there when we need them, and that’s my general experience with our vendors, and why our relationships are longstanding and I think very successful.”

EMBRACING NEW OPPORTUNITIES

Between a combination of culture, structural, operational and technological changes, Baranda and his team have dramatically enhanced the procurement function within Comdata. Through the transformation project, what was a previously decentralised function with a

transactional approach and administrative management has been turned into an integral part of the business, aimed at adding value through embracing collective goals.

“One of the main success stories so far is the credibility that we have gained from the c-suite and CEO,” Baranda explains. “We have evolved in such a way that now very few people in the organisation don’t invite or consult procurement when taking on a big project. I take great pride when a stakeholder comes directly to us to say, ‘hey, I really need your help on this’. This is not about enforcing a policy, but having stakeholders that proactively come to us as they recognise what we can contribute to them. I think that’s really telling of our progress.”

Indeed, such interactions are affirmation that Baranda and his team are firmly on the right track, the department also receiving recognition from the Spanish Association of Purchasing, Contracting and Procurement Professionals (AERCE), winning its annual Award in the category of ‘Transformation of the Purchasing Function’ in March 2022.

Moving forward, Baranda plans to build on these successes, further demonstrating the importance of efficient and effective procurement during what is set to be a critical period for Comdata as it merges with Konecta – a major competitor that has been performing really well in the Spain and LatAm regions.

“Konecta is very complementary to our existing footprint at Comdata,” Baranda explains. “Very soon the company will double in size through this merger, and we’ve been given the responsibility of rolling out our procurement model within the resulting group. It’ll be a challenge, merging the different cultures and different operations. Yet equally it presents a massive increase in the size of the opportunity to deliver value. It’s again

clear that the leadership team trusts our approach, and I’m really excited for the coming months to prove that they have been right to do so.”

www.comdatagroup.com

“OUR ROLE IS TO HELP THE COMPANY MAXIMISE ITS RESULTS, AND THERE ARE MANY WAYS IN WHICH THAT CAN BE ACHIEVED”

radiCallY better

LOW NOISE, VERTICAL TAKEOFF AND LANDING: WELCOME TO THE FUTURE OF REGIONAL AIR MOBILITY

Daniel Wiegand believes that, by 2030, electric vertical takeoff and landing (eVTOL) aircraft will be a part of everyday life. And, if the CEO of air-mobility company Lilium has his way, his and his team’s extraordinary Lilium Jet will be front and centre.

The business, which Wiegand formed with three fellow Technical University of Munich graduates in 2015, exists with a single mission: to build radically better ways of moving people and goods

and transform the future of mobility. Unlike many similar companies driving innovation in this field that focus on urban air mobility, Lilium is instead pioneering regional intercity transport that’s high-speed, zero emission, vertical takeoff and landing capable, and low noise.

The company envisions directly connecting towns and cities from ranges of 40km through to 200km at launch, extending this to up to 500km in the longer term.

ZERO-EMISSION,

“WE BELIEVE MOBILITY NEEDS A RADICAL TRANSFORMATION”

This Regional Air Mobility (RAM) is centred around carrying the highest payload of freight or passengers in the market in the most efficient manner, resulting in improved operating economics for operators and customers.

Its aircraft, Lilium Jet is as innovative in its exploration of technology as it is to look at. Lilium Jet, says the company, will enable faster travel than existing high-speed alternatives and open direct connections to create a new, sustainable network.

At the heart of the space-age design is Lilium’s proprietary Ducted Electric Vectored Thrust (DEVT) technology – electric jet engines

integrated into wing flaps that provide thrust vector control that moves Lilium Jet through every phase of flight, including vertical takeoff and landing. DEVT also improves payload capability and aerodynamic efficiency.

Its radical aesthetic brings several key advantages to future decarbonised air

Photos: Lilium

Photo: Lilium

“LILIUM’S MISSION IS TO BUILD RADICALLY BETTER WAYS OF MOVING AND IT STARTS WITH THE LILIUM JET – THE FIRST ALL-ELECTRIC VERTICAL TAKEOFF AND LANDING JET”

DANIEL WIEGAND, CEO, LILIUM

Photos: Lilium

travel, too. For example, its fixed wing, embedded distributed propulsion and no-tail profile make Lilium Jet highly efficient when cruising and, this combined with acoustic liners in its wings, mean any noise during flight is captured and dissipated into the environment.

And because the need for moving people and goods between cities isn’t going to decrease, Lilium Jet is designed for versatility and

a range of configurations and uses. These include the zero-emissions logistics market, where it’s suited for high-speed goods deliveries between locations, and sixseat passenger flights.

To date, Lilium has tested several iterations of the aircraft, the latest in May 2022 during which it became the first ever full-size electric jet aircraft to transition from hover to wing-borne flight.

www.lilium.com

“OUR JET WAS DESIGNED FROM THE START TO CREATE NOTHING LESS THAN A REVOLUTION IN SUSTAINABLE, HIGH-SPEED REGIONAL AIR MOBILITY”

DANIEL WIEGAND, CEO, LILIUM

Procurement with purpose

Jerome Drevon-Barreaux on procurement in the pharmaceutical industry, bringing

innovation to the table and enabling business success

rocurement has changed. Gone are the days of a function relegated to the back rooms, spending its time solely on contract negotiations, raising purchase orders and filling in spreadsheets. And for good reason, too. The complexity of modern organisations, global supply chains and industry sectors demands more from procurement professionals who, increasingly, are playing an integral role in business success. Today procurement must bring innovation, must drive value across a sweeping range of responsibilities and, perhaps most importantly, must contribute to the strategic objectives of the company.

It must also be driven by purpose. In the case of Jerome Drevon-Barreaux and his procurement colleagues at global biopharmaceutical leader BRISTOL MYERS SQUIBB, all of this is true. Since joining the business Drevon-Barreaux and team have been driving an internal stakeholder-centric procurement evolution that’s focused on collaboration and shared learning, refining and perfecting the procurement experience across the organisation, and actively bringing innovation and strategic thinking to the table. Underpinning this is a singular purpose shared across the entire business: to develop and deliver the most innovative medicines and healthcare treatments to patients with serious diseases.

“Compared to the various roles I’ve held in my career, that’s what really makes the difference,” says Drevon-Barreaux by way of introduction. “The pharmaceutical sector is complex, it’s challenging and, in terms of procurement, there’s a lot to understand that’s very specific to our industry. Looking from the outside in, you could easily think ‘you buy things, how are you helping patients?’, but that’s wrong. BRISTOL MYERS SQUIBB is driven by its patients, we see them, we are aware of what they’re facing, which makes our work very tangible and fuels our drive to innovate. If we’re finding ways to help healthcare professionals and doctors reach better outcomes, then that’s a real sense of purpose for our job. It’s about making a difference.”

“If we’re finding ways to help healthcare professionals and doctors reach better outcomes, then that’s a real sense of purpose for our job. It’s about making a difference”

PROCUREMENT EVOLUTION

Drevon-Barreaux joined BRISTOL MYERS SQUIBB five years ago, first in the role of Head of Procurement France before becoming Associate Director Head of Strategic Sourcing & Procurement France in May 2020. “Essentially, my responsibility is to oversee and lead on all the procurement activities that we conduct in France,” he elaborates. “BRISTOL MYERS SQUIBB is a global organisation and we have a very mature procurement structure within that consisting of dedicated teams across the various global categories. We have some interactions with these, but largely the role of the local teams like ours is to focus on internal stakeholder engagement, management and education, while

also working with them on their broader strategic activities. As part of that, our role is to make the entire procurement process and experience as easy and comfortable as possible for these internal stakeholders to enable business success.

“Within the wider BRISTOL MYERS SQUIBB business we work with external procurement teams who support us on key admin tasks such as handling tools, working on RFPs or on things like contract management,” he says “Personally, in terms of my leadership I consider that to be the best approach because it really enables us locally to focus on the real value-added services that we’re capable of delivering in France.”

While BRISTOL MYERS SQUIBB is his first pharma-specific procurement role, Drevon-Barreaux brought more than 20 years’ experience to the business having previously worked in senior procurement roles for major global companies including Accenture, BNP Paribas, Capgemini and AXA. Over this period, he says, the role and responsibilities of those working in the profession have evolved significantly. “It’s still something that I find very exciting,” he states, analysing the role in more detail. “We’ve evolved as the maturity of procurement teams has grown to a point where, today we’ve moved from being a support function to a true business partner.

“I certainly see that colleagues within the organisation expect much more from us than they did 20 years ago,” he adds. “They expect procurement to bring innovation opportunities to the business and to be an enabler of success; we do that by being agile, through engagement and ensuring the procurement journey is as simple as it can be. It’s a shift in mindset, too. I think everyone that works in procurement should be curious, proactive and have a willingness to understand their business’ needs. That’s certainly true in pharma; we work in a very technical industry, with highly skilled doctors, physicians and pharmacists who have to innovate and evolve very quickly, so there’s a real need to proactively engage across the organisation.”

JEROME DREVON-BARREAUX

INNOVATION, STRATEGY AND TRANSFORMATION

For the last five years Drevon-Barreaux and colleagues have done just that at BRISTOL MYERS SQUIBB. The business uses the most innovative science and technologies to help improve lives through the research and development of new medicines for serious diseases. Through this approach BRISTOL MYERS SQUIBB has made leading advancements in oncology, haematology, immunology and cardiovascular diseases while, at the same time, it continues to pursue therapies and innovations at the forefront of scientific discovery, with the objective of bringing next-generation life saving treatments to patients worldwide.

“I joined the business at a time when there was major change in the procurement processes, including new teams, so there was a lot of work to be done,” says DrevonBarreaux. “My goal from the outset has been to enable procurement to add greater value, facilitate innovation and to make the function the partner to internal stakeholders. The key has been to change the mindset in the organisation so that we really become essential to projects, and we’ve done a lot of work around that. To build very close relationships with internal stakeholders we’ve run education sessions in every department in the business to demonstrate what procurement can do, share best-practices and give practical tools and tips to help them understand how we can work together.

“Within our own team the emphasis has been on working closely with the business, so we have regular meetings across the organisation, have developed a very proactive set of processes that mean rather than wait for projects or internal stakeholders to approach us, we actively take part in the planning of their future projects pipelines and so on,” he continues. “We’ve also just launched a new supplier relationship management (SRM) programme to improve our collaboration with our supplier network. Within that, it’s about not only making sure we’re happy with the suppliers we engage with, but also challenging them to be more involved with our innovation processes and to encourage them to move from a purely transactional relationship to a true partnership model.”

PEOPLE AND PARTNERSHIPS

To make such a change requires an evolution in mindset, culture and approach to the task at hand. Accordingly, leadership has played an important role, with Drevon-Barreaux being a firm believer in nurturing team members. “I’m not here to just train people, I’m coaching them, and that requires a slightly different approach,” he explains. “With any transformation, or to achieve any lasting success you need a team of people that first and foremost love their jobs – and that’s not always the case for everyone. As a leader you need to restore that love for the job by challenging people, giving them new responsibilities or projects and helping them to grow within the organisation.

“Not just in BRISTOL MYERS SQUIBB, but in any business, procurement is one of the

few departments that’s truly cross-functional and has this ability to bring value and innovation,” he continues. “We spend a lot of time on soft skills training and working on transversal projects that often aren’t directly related to procurement in order to help people understand this bigger picture. What we’re doing has a true value, both for the company and for our patients – ultimately, that’s who we’re all working for and it’s important to remember that we’re very fortunate to work in an industry that has such an impact on our lives.”

Aside from internal evolution, DrevonBarreaux highlights the importance of working with key suppliers and strategic partners in driving success. When selecting such partners, BRISTOL MYERS SQUIBB places equal emphasis on relationships, potential collaboration and an alignment

of core values and ways of working as it does price, he says, highlighting recent work with Malt, an innovative recruitment platform that provides businesses with the very best freelance talent across areas such as developers, graphic designers, project managers and more, as a good example.

“Malt offers a very interesting approach to recruitment and the freelance world,” he explains, “and in particular it suits our need to be more agile, more cost-efficient and to change the way we work now and into the future. Working with freelance talent is an interesting activity. Increasingly in a fastmoving world we want the key skills, experience and expertise that might previously have been hard to source very quickly; with Malt you have quick and easy access to a large scope of skills and people and, for me, that brings a lot of value to the business.

“It’s also very efficient from a procurement and contractual perspective,” says Drevon-Barreaux. “Before, procurement would have to go through extensive market research to find the right supplier; we also don’t have to build new contracts every time we want to work on a new project, making it efficient and, because we’re using freelance resources, there’s also a lighter cost structure. Culturally, it’s a really interesting shift in the way people are working that I think is here to stay. Most companies now have the need for a certain set of skills or expertise for a specific project, rather than for the long term, and so using freelance talent is of really high value – you don’t need to wait for notice periods, dedicate time to training people in the ways the company works, or integrating them in the same way.”

“To achieve any lasting success you need a team of people that first and foremost love their jobs”

MEASURING SUCCESS

The corporate world doesn’t rest, particularly in fast-paced and ever-evolving industries like pharmaceuticals. After five years at BRISTOL MYERS SQUIBB

Drevon-Barreaux has already seen significant success in transforming the local procurement function in France, but there remains much work to be done. Part of that is focused on new developments and trends such as sustainability

and developing CSR initiatives across the business, he explains, recognising the important role that procurement can play in this area.

“CSR is a must-have,” he states. “But it needs to be real CSR, not an attempt at greenwashing or inflating claims, honesty is everything for me. I believe that if we’re going to announce action, it has to be real action with purpose, particularly

considering the type of industry that we work in. I think there’s a need for companies like BRISTOL MYERS SQUIBB to almost be a citizen-type organisation that has sustainability and CSR absolutely embedded in both policy and mindset.”

MYERS SQUIBB’ vision for procurement. “There’s several areas to address,” he says. “Innovation will continue to be important and we have to keep playing a role in it. But there’s also an increased need for speed and simplification, particularly around how we can bring innovation to the patient more quickly – and that’s something that everyone across the whole business has to play a part in.

“As a business we’ll continue to grow. Around three years ago we acquired Celgene, a pharmaceutical business that makes cancer and immunology drugs, in one of the largest ever acquisitions in our industry. They have an extraordinary pipeline of products and we’re now seeing those come to market, which is very exciting for us and for patients, because some are innovative new treatments in areas that haven’t seen development for some years. It’s exciting to play a role in this; I often consider how we measure success in the changes we’ve made in procurement and I think there’s already very positive signs. The mindset has shifted in the business and people not only now procurement exists, but actively seek us out to be involved in projects. It’s a great recognition of the hard work we’ve put in and shows the success we can have.”

www.bms.com

Moving forwards, this and the continued focus on internal stakeholder engagement while driving innovation will be central to Drevon-Barreaux and BRISTOL

S T O C K H O L M

Made up of 14 islands and known as ‘the Venice of the North’, Stockholm – ‘the world’s smallest big city’ –is famed for its contemporary, urban appeal balanced with centuries-old history and closeness to nature. Innovation has always been part of the city’s heritage: the first Nobel Prize was held here in 1901. Today, it’s a startup mecca known for breeding unicorns – after Silicon Valley, it hosts more tech unicorns per capita than anywhere else in the world including Spotify, Minecraft (Mojang Studios), Skype, Klarna, iZettle or King (makers of Candy Crush) to name a few. It’s the perfect place to be inspired, soak up some startup magic and be influenced by the music, fashion, architecture and beautiful surroundings.

WORDS JENNY AHNELL

If you are an entrepreneur or start-up, especially with a social impact purpose then Norrsken is the incubator, co-working hub you want to hang out at. Set up by the founders of Klarna, the Swedish fintech unicorn that has revolutionised how we pay for our online shopping, Norrsken is both an inspirational co-working space and a VC Fund for companies that set out to radically change the world. Work from its lobby/café to soak up the atmosphere, book a meeting room or host your company’s Stockholm event there. I’d also recommend checking out its event calendar; it’s open fireside chats or keynotes by members, founders or partners are always interesting and enlightening.

The newest star on the growing coworking scene in Stockholm is LAMB – the antiburnout space. LAMB opened this June and offers a stylish, calm, city center location for work, play and wellbeing. Apart from coworking and meeting rooms, it also has a gym, meditation/power nap rooms, infrared sauna, healing treatments and

a number of wellbeing classes that will help you get that sought after work-life balance. I just became a member and love their vibe. If you’re just visiting, it also offers day passes via its website.

If you just need to find an easy spot for some quick hours of work between meetings then Swedish hotel chain Scandic has opened all its city hotels for lobby coworking. My favourite is Downtown Camper where many of Stockholm’s hip tech professionals can be seen with a coffee and a laptop.

LAMB

SCANDIC

DOWNTOWN CAMPER STAY

I have to confess to not being a regular hotel visitor in Stockholm as I have my own place very near the city center yet with both nature and water at my doorstep. However, there is one place that has been on everyone’s lips since it opened last summer – Ellery Beach House. This 60’s/70’s inspired hotel sits on the tip of Lidingö, the beautiful island I live on. It is just 20 minutes by cab from the city center but offers an archipelago experience with sea, beaches, pool, cabanas, Padel, music, design and art. Who needs the city when you can unwind after your day of meetings at its beach club (in- and outdoor), cocktail in hand whilst the DJ spins the tunes! I would highly recommend extending your stay over the weekend to schmooze with the Stockholm it-crowd at their favourite staycation spot.

If sea and nature is not your thing then freshly opened Villa Dagmar is Stockholm’s newest boutique hotel in the chic and exclusive Östermalm area. My Instagram has been flooded with pictures from its breakfast and brunch of late and the rooms don’t seem too shabby either. Definitely

a place to be seen or have meetings over lunch or drinks.

If you’re an urban sporty type I would suggest you stay at Downton Camper –‘the perfect place for the intrepid urban explorer’. Right in the middle of the town, it offers daily activities like yoga, expeditions, a run club, kayaks, bikes and skateboards to rent, and a rooftop pool/spa to relax your muscles after. It is just a really cool lifestyle hotel near to Arlanda Express (airport train), city shopping and restaurants a plenty.

ELLERY BEACH HOUSE

VILLA DAGMAR

EAT / DRINK

The coolest, weirdest food experience you can have in Stockholm in my opinion is undoubtedly at Punk Royale . Here you get a dining adventure of delectable flavours, surroundings that play with your senses and a serving style you have never experienced. Better suited for small groups than an intimate dinner for two I’d say. Situated in trendy Södermalm you’ll have plenty of bars nearby for a nightcap.

If you are sweet talking investors or future business partners you will impress them if you get a table at 3 Michelin starred Restaurant Frantzén. You’ll have a once in a lifetime food sensation with its fixed menu and accompanying world class wines/beverages. Or so I’ve been told –I’m still trying to get a table... To secure a seat you need to think ahead. Tables for the upcoming months are released 10am local time on the first of each month and from experience I know they get snapped up fast.

My favourite place to eat? Copine by chef duo Jim & Jacob. I love their smaller serving menu of deliciousness, great to share or to indulge yourself. The kitchen is French with influences from all over the Mediterranean, and its wine list is both surprising and tasteful. I keep coming back for more. It doesn’t hurt that the service is great too.

If I’m in the mood for wine as my main meal

I head to either one of these wine bars, Tyge & Sessil in chic Östermalm or Vina in hip Södermalm, depending on what kind of vibe I want.

RESTAURANT FRANTZÉN

VINA

JENNY AHNELL

Jenny is a keen outdoors buff with a passion for mountains, water and nature, and throwing herself at snowboarding, skiing, surfing, kayaking, hiking and anything else. She also enjoys fashion, contemporary art, food and wine. Born in Stockholm, Jenny’s career began in action sports then moved into more conventional sports working within the UK, European and US markets at brands like etnies and Nike, ending up consulting for companies like Spotify after returning to Stockholm. Today, she is a brand management/strategy consultant at Mojang Studios, the creator of Minecraft. In 2020 Jenny drove the company’s rebranding as part of the brand team, today she works on developing its employer brand and social impact efforts.

TYGE

LEISURE

The most vibrant area of Stockholm when it comes to hip shopping, bars, neighborhood bistros and restaurants is Södermalm, which is one of the largest Stockholm islands. Make your way to the Sofo area and just go for a stroll to soak up the energy, stopping for a coffee here or a cocktail there. Some places worthy of mentioning are the world-renowned sneaker store, Sneakersnstuff , or ACNE and Grandpa for shopping, or Morfar Ginko, Nytorget Urban Deli and Folkbaren if you’re looking for a bar. The area is flooded with cool places to spend any downtime you might have.

Great for a late-night culture experience is Fotografiska – Stockholm’s famous photo museum. I’m in love with everything about this place and frequently visit as a yearly pass holder. It’s beautifully placed by the water, hosting great exhibitions, a photo gallery shop and a great restaurant /bar with an amazing view.

For a quick fix to recharge your batteries Stockholm is full of parks where you can catch your breath. In fact, it is a very green city with nature closer than you think. Take a stroll or rent a bike in the gorgeous Djurgården Royal Park , a large nature

SNEAKERSNSTUFF MORFAR GINKO

FOLKBAREN

DJURGÅRDEN ROYAL PARK

reserve/park/recreational area filled with museums that’s only a 5-10 minute walk from the city center. The beauty of this city, with nature and water all around, never ceases to amaze me.

Oh, if you, like everyone else in Stockholm, have caught the Padel bug then I’m convinced there are more padel courts here than supermarkets!! If you’re done relaxing, there’s plenty of social media groups for you to find a game or links to book a court.

NYTORGET URBAN DELI

AND THE REVOLUTION, SOFO

PROCURECON MRO

17–18 OCT 2022 | Atlanta, USA

Join 150+ practitioners for a collaborative discussion on how to move MRO into the 21st century. ProcureCon MRO will arm practitioners with strategies to modernise and benchmark against other companies.

https://procureconmro.wbresearch.com

SCOTLAND MANUFACTURING & SUPPLY CHAIN CONFERENCE

13 OCT 2022 | SEC Centre, Glasgow

A national forum for manufacturers and operators involved throughout the associated supply chains from across Scotland to gather and discuss pressing issues facing the industry. shorturl.at/bmrx8

IOSCM SUPPLY CHAIN CONFERENCE & EXHIBITION

20 OCT 2022 | Newcastle, UK

IoSCM is delighted to celebrate a decade of providing Ofqual regulated professional qualifications as it moves into its 10th year as a British Institute. https://allevents.in/mobile/amp-event. php?event_id=10000379220357297

PROCURECON MARKETING

2–3 NOV 2022 | Palm Springs, USA

ProcureCon Marketing is the only senior-level cross-industry event solely dedicated to the unique challenges of the procurement and sourcing of marketing resources.

https://procurecondm.wbresearch.com

PROCUREMENT SUCCESS SUMMIT 2022

17–18 NOV 2022 | Shanghai, China

Thinking ahead, making connections and overcoming challenges. Progressing procurement resiliency to drive agility and growth during disruptive times.

https://pss.beverf.net/en/

NATIONAL PROCUREMENT SUMMIT 2023

20 APR 2023 | Milton Keynes, UK

A gathering of over 1,000 procurement directors, sourcing directors, senior management and supply chain directors attend this procurement and supply chain conference.

https://www.nationalprocurementexpo.com

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