Business Backwards – Putting the Customer at the Heart of Procurement
Everyone knows that the customer is always right. And it’s time for procurement to put them at the heart of their work.
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They say every day is a school day. And today is no different for the 250 procurement and supply chain professionals in the room.
Far from focusing on the supplier relationships (though there is plenty of that too), one panel discussion got the assembled masses considering a relationship that doesn’t always get the focus in procurement.
The internal customer interactions have not traditionally treated procurement well. Blamed for late deliveries, for complicating processes, and for being a “roadblock”, the profession takes its fair share of flak.
However, a change of thinking, to put the customer at the heart of the relationship, could change all this.
Don’t Stray too Far from the Customer
Titled ‘5 Changes to Make to Your Procurement Teams to Transform to a Higher-Performing Organisation’, the discussion showcased some great ideas about how procurement could change its focus.
The panel, chaired by Richard Beaumont, former CPO at Prudential Digital Services, consisted of:
- Antonia Wanner – Director Global Commodities Procurement at Nestlé
- Axel Horst – Operational & Commercial Excellence Manager at Shell Global Solutions
- Celia Sanchez San Juan – Director Group Procurement at Adidas
The overwhelming message from all three procurement leaders was that there needed to be a greater focus on the customer. According to Sanchez San Juan, the right business plan should put customers at the centre. If procurement is too far from its customers, then it’s too far from the core of the business.
Antonia Wanner gave an example of the focus that Nestlé gives to its customers in procurement. In the past, the organisation had used 10 types of topping for its chocolate ice cream (competitors used 2).
However, procurement established that its customers were more interested in having natural vanilla in the ice cream, than the chocolate toppings. By reducing the number of chocolate toppings, it allowed Nestlé to procure the natural vanilla, ultimately meeting an important customer requirement.
Business Backwards
Axel Horst then shared the strategy that Shell are using the help drive a customer focus – “Business Backwards”. The strategy takes the traditional top-down process model, and turns it on its head, starting with the customer requirements.
Once these are known, strategies can be defined as to how to deliver this, and then finally, leaders know what they need to do to make the strategy a reality. And it’s not just in process that Shell are demonstrating the drive for serving the customer.
Each Shell employee, including the procurement function, is required to work one full day each quarter on the retail site. According to Horst, this helps each employee understand the customer more, and, for procurement, what they need to consider when buying for the retail side of the business.
Advice from the Future
Beaumont finished the panel by asking the three leaders what advice they would give to their past selves. Though they focused on the key to current success, all three showed that customers were still at the forefront of their thinking.
Wanner highlighted the constant innovation required to stay ahead of the game, with the key being to “try, fail, and learn fast”. Horst built on this by saying that if you were going to fail, fail fast, so that innovation wouldn’t be held up.
Finally Sanchez San Juan said that she would tell herself to push harder for what she really believed in, which was key to driving great innovation across the business.
Will customer-centric procurement really take hold? Or will we be looking back in three years at an opportunity lost? Sadly, without a crystal ball, only time will tell.
ProcureCon Europe, now in its 17th year, is Europe’s most strategic procurement conference for CPOs and senior procurement executives. See the full range of topic and speakers at the event here.
