Massmart Brochure 2019

Leveraging data analytics for procurement transformation

Leveraging data analytics for procurement transformation

WRIT TEN BY

DA LE BENTON PRODUCED BY

S TUART IRVING

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Melanie Pike, Indirect Procurement Manager of Massmart, talks digital disruption amidst a procurement transformation

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s a globally-based competitive regional management group, with a portfolio of differentiated, complementary, focused

wholesale and retail formats, Massmart is well and 04

truly a market leader across South Africa. With nine wholesale and retail chains, as well as a buying division, the Group has more than 400 stores and 500 buying group members across 13 countries in sub-Saharan Africa. Each and every one of those outlets and members is aligned to a shared vision; high-volume and low-cost distribution. Key to cementing this position and a successful, seamless operation across such a vast portfolio, is a solid and robust procurement and supply chain function and a fine understanding of the significant value that direct and indirect spend can bring. “I think that, particularly in multinational companies like Massmart, direct spend has been much more prevalent in everybody’s mind. But I also think a lot of multinationals are quite au-fait in terms of control spend and accountability with regards to direct spend,� says

R91.5bn Approximate revenue

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10,000

Approximate number of employees 05

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CLICK TO WATCH : ‘MASSMART WALMART HQ VISIT’ 07 Melanie Pike, indirect procurement

from my early days at the lower levels

Manager for Massmart responsible for

and that allowed me to understand the

Masscash Retail and Wholesale division.

demands and the requirements at an

“On the indirect spend side of things

operational level,” she says. “I know what

we are still very far behind with regards

I’m talking about and it’s not just a wish-

to recognising the importance and the

ful thinking sort of attitude. I can do it

value in what it can bring to a business.”

with a bit more empathy for the relevant

Over the course of her career in

operational and internal stakeholders,

procurement, one that she openly admits

as well as for external stakeholders.”

she “fell into,” Pike has worked at all

The very idea of procurement, and

levels of procurement in an organisa-

the value it can unlock, has undergone

tion. This she feels has gifted her with

a major transformation over the last

an understanding of the key areas of

decade. Technology has proven a key

a business and more importantly the pain

driver of this change, particularly when

points. “I fought in the trenches a lot

it comes to visibility and accountability. w w w.ma ssma r t . co. z a

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“ On the indirect spend side of things we are still very far behind with regards to recognising the importance and the value in what it can bring to a business� — Melanie Pike, Indirect Procurement Manager for Massmart responsible for Masscash Retail and Wholesale division

Businesses all over the world now have greater access to data and analysis as to how, where and why they are spending.

Massmart is no different to this, undergoing something of a procurement transformation in order to consolidate its spending and unlock cost savings and greater efficiencies across its entire multi-division portfolio. The company has looked to upgrade its existing procurement platforms and implement a new ERP from SAP to act as one central core system. This centralised system will allow each and every division

to access spend data from one consoli-

happens seamlessly within that division.

dated platform in order to align to one

But it is sort of a staggered approach

shared path that is in line with interna-

that manages the risk and disruption to

tional best practices.

business,” says Pike. “It is quite a process

Implementing a new system across

to manage with lots of people involved

multiple business divisions is not without

at any given time. But I think to have

challenges. Pike recognises this and

a central ERP system of this size,

so Massmart is currently rolling out the

it’s essential for us to all pull together

new ERP system separately across

as a group.”

each business through consolidated

In any form of technology transfor-

teams overseeing each implementa-

mation, it’s easy to become fixated on

tion. “This is so we can look at all the

the technology and the data and neg-

data analytics from each rollout then

lecting the one key component that is

the team engages with each relevant

central to any business, its people. As

division to ensure that that rollout

Pike has already alluded to, collabora-

E X E C U T I V E P R OF IL E

Melanie Pike Melanie is a results oriented, commercially focused supply chain professional specialising in indirect, CapEx/OpEx spend with a proven track record in building and leading a high-performance team across the end-to-end supply chain to improve business unit performance in dynamic, global environment. Centralization of spend, delivering significant cost-saving strategies coupled with sustainable service improvements across a complex global supply chain are her expertise. Melanie has a vested interest in environmentally focused, sustainable green procurement across the construction and property sector.

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“ It is quite a process to manage with lots of people involved at any given time. But I think to have a central ERP system of this size, it’s essential for us to all pull together as a group” — Melanie Pike, Indirect Procurement Manager for Massmart responsible for Masscash Retail and Wholesale division

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tion and pulling together as a group is

from a very hands-on traditional way of

crucial and so Massmart has created

doing things to a modern, digitally

a number of centres of excellence across

empowering way has been embraced

each business division. These centres,

wholeheartedly across the business.”

along with project teams, ensure that

“They can see the analytics coming

each and every person is trained in the

through. Insight is coming through and

right way, equipped with the right skills

it’s enabling everybody to do their jobs

and brought along this transformational

much faster and it’s just much more

journey. “The incentives alone speak for

user-friendly. I think that alone has been

themselves,” says Pike. “The ease of

a great driving force for the business to

information and the ease for everybody

come on board.”

to actually process their work and move

Technology has also transformed w w w.ma ssma r t . co. z a

the stakeholder perspective and experience and once again data is king.

Through data, the stakeholder is able to see first-hand the efficiencies and both the existing and potential cost saving opportunities that are enabled through technology. For Pike this represents a true turning point, both in indirect spend and in being able to build procurement as a service portfolio.

The tools are there to show that procurement and indirect spend is bringing true value to the business like 12

never before, it’s no longer just hearsay.

“Procurement needs to be seen as a service department to the business, especially in terms of indirect spend management, which had not been the case previously,” she says. “Technology has enabled a rebranding of procurement. With that comes all the good stuff that we’ve brought to the table in terms of the digital transformation, such as a capex tool that we are looking to implement in the new year that provides complete visibility and live access to the budget approval process.

“Again, this is improving the stakeholder experience. Its more efficient and provides them with quality data

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15 and analytics and for me it’s a total

ties to grow together. “I think we can

rebrand of what procurement can

listen more to our suppliers in terms of

enable for the business.”

seeking the potential opportunity that

A supply chain and procurement

we’re missing. You need to build your

function can only be as strong as its

relationship, so I believe in going to task

supplier and vendor network. Pike

for my vendors or suppliers just as

understands this and is a strong believer

much as I expect them to do the same.”

in Supplier Relationship Management

2019, Pike admits, is both an exciting

(SRM). Early in her procurement career

and challenging year for Massmart as

she was driven by one message; you

it will see the final stages of the SAP

are nothing without your vendor.

implementation as well as the continued

“Without a good supplier, you don’t have

transformation of the procurement and

a business,” she says. Pike believes

indirect division. Massmart will look to

that everything needs to be done in

better manage its capex spend through

collaboration and that Massmart along

e-auctions and reverse auctions as well

with its vendors must seek opportuni-

as continuing to embrace the digitisation w w w.ma ssma r t . co. z a

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“ It’s more efficient and provides them with quality data and analytics and for me it’s a total rebrand of what procurement can enable for the business” — Melanie Pike, Indirect Procurement Manager for Massmart responsible for Masscash Retail and Wholesale division of its processes while moving services online.

“We will continue to gather more information and data and make sure that from a strategic point of view, we’re leveraging Massmart as a group and focusing on total cost of ownership rather than just each individual vendor and a price. We areooking at restructuring our relationships with our key vendors at Massmart as a division,” she says.

“It’s just using strategic sourcing as a division to drive value creation, not at some divisional level but at group level. I think what’s going to be the key driver for us over the next year, is to change that mindset from divisions to group.

So, using consolidated data and standardisations as a group, and using that to consolidate, leverage and drive all the good practices.”

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T +27 (11) 517-0000 | www.massmart.co.za