[ NORDIC SUPPLIERS ]
Arla procurement with focus on the company Arla Foods Procurement handles procurement totalling 3.6 billion Euro, across 1.600 supplier agreements. Quality, volume, Code of Conduct, and certifications are key when entering into new procurement agreements, Steen Hedegaard Madsen says , Senior Vice President. Arla Foods is the world’s seventh largest dairy with an annual turnover of just under 10.7 billion Euro. As a cooperative, the bulk of the turnover lands in the farmers’ pockets, with around one third being spent on procurement of energy, packaging, ingredients, mechanical equipment, logistics, and other services – basically, distributed by one fifth in each category. Spearheading these procurement activities is Steen Hedegaard Madsen, Senior Vice President Procurement, with his 120 employees. About half of the staff are based at the group headquarters at Sønderhøj, Viby, close to Aarhus, 20 employees handle various back-up functions are in Poland – and the remainder of the staff are distributed over the countries where Arla Foods has production,
4 Mælkeritidende 5 / 2021
i.e., the majority in Sweden, the UK, and Germany. Add to this, five employees located at the Hong Kong office which handles large proportions of the procurement in China. In fact, Arla Procurement has the primary responsibility for the 1.600 procurement contracts currently existing in Arla Foods. Procurement must match vendor requirements The boss holds a dairy engineer degree from 1993. This means that he has had hands-on experience relative to both cheese vats and most piping and mechanical equipment of the primary production. And although he has primarily worked with logistics and procurement in his Arla Foods career, it remains a relevant prerequisite for functioning optimally
in procurement that you are professionally well-equipped when entering into multimillion-Euro contracts. Therefore, it applies to everyone with procurement responsibility that you must be either directly trained within a field or have relevant hands-on experience. - We are negotiating with professional vendors. Therefore, it is important that we can match their knowledge and mindset when attempting to obtain the best quality for as little of the farmers’ money as possible, Steen Hedegaard Madsen explains. At the same time, he underscores that Arla Foods’ procurement is more complex than just price and quality. In fact, quite a few requirements need to be met to be the perfect Arla Foods business partner.