Earlier this month, we hosted an event in collaboration with LOGY (the Finnish procurement and logistics organisation). In the event Luis Peluffo Johansen, Global Category Director from ROCKWOOL International, spoke about the journey of the multinational company’s indirect procurement department – from formidably decentralised and locally isolated procurement to a professional and process driven organisation.
Luis has more than more than 14 years of experience within indirect procurement and in private sector procurement in general.
Here are a few things that we took away with us from his session in Helsinki on the change programme Luis has been running at ROCKWOOL for the past year:
Be business focused rather than procurement oriented. A uniform methodology in procurement processes and in how to communicate with stakeholders is essential in presenting the function as professional and organised. Procurement objectives must be aligned to the businesses goals and they must be agile enough to adapt to the organisation quickly. You should upskill your teams and move to a focus in business acumen, leadership and emotional intelligence.
Accept that transformation is continuous, it is the change that counts, not a particular destination. Being agile and innovative is the next frontier for procurement.
Good stakeholder relationships are key. Luis advised to join projects that are of personal interest to the stakeholders that you are trying to win over, even if the project wouldn’t be as exciting to you. It is worth it!
People, process and technology are the building blocks of a good procurement function. Assess what is feasible with the current skills, capabilities, and abilities. He recommended making the job descriptions clear, ensure that people have visible career paths and that your employees are informed and trained – after all, there’s little point of having efficient processes if nobody knows about them or how to use them.
Align culture with new process integration. The rollout, for example, should be matched to the organisational appetite for change. Also make sure that you know what you want to achieve because if you don’t know, how are you going to measure it? And if you can’t measure your KPI’s, get rid of them as they are of no use.
You should have undisputed governance and a technology solution that supports your procurement processes. Ownership of all procurement processes need to be held by procurement before setting objectives and planning for implementation. Think, how far is it possible to implement processes without the supporting technology? For example, certain processes (P2P) rely to a high degree on technology for consistency, other processes (sourcing and contract management) rely on documented gates, which is less technology prone than P2P.
Procurement is more than savings. Luis described the benefits of using a single, procurement controlled travel provider to ensure the safety of the employees. He used an example of recent natural disasters and asked his stakeholders if they knew how many of their employees were in the area at the time, they said no, which was Luis’s point – he did, thanks to the single travel company they use. If they’d let employees book through random travel companies they would not know where they were in case of emergency.
Another example he gave was on the ability to exclude unsuitable hotels from their list. He told a story about an employee that had fallen almost fatally ill during his stay in a hotel. Thanks to their reliable booking system, controlled by indirect procurement, Luis and his team were able to contact all employees that were due to stay there and book them into a different hotel. They were also able to exclude that hotel from their list of approved hotels to avoid this happening to anyone else.
In summary, to be successful in procurement you need to be business focused and have the perfect blend of people, process and technology.
To get the slides for Luis’s presentation click here