It’s been a challenging year for procurement. While 2020 was a year of firefighting, the past 12 months have seen the function continue to deal with uncertainty as has inflation soared and logistics face continuing disruption due to the Covid-19 pandemic.
At the same time, procurement organisations have had to balance these short-term challenges with continuing to deliver on long-term projects to drive the function forward. Here are 10 transformative projects members have been working on that Procurement Leaders has documented this year.
E.ON: Merging two procurement functions after an acquisition
Undertaking a merger between two procurement functions is one of the most challenging tasks a leader could face, especially they must deliver to stretching synergy targets in a difficult market environment. Read how E.ON successfully integrated the procurement team of energy company Innogy, finding savings that totalled hundreds of millions of euros while ensuring a smooth transition from day one.
MGM Resorts International: Taking supplier diversity to the next level
Supplier diversity has remained high on the agenda this year, with many functions looking to bolster their efforts following the murder of George Floyd and subsequent Black Lives Matter protests of 2020. MGM Resorts International has been going beyond measuring supplier diversity and setting targets, reaching out into the community to help diverse suppliers develop their businesses and giving them an opportunity to influence its procurement processes.
JLL: Selling procurement services
Procurement teams are growing increasingly close to their wider organisations to forge strategic partnerships, but the function’s expertise does not have to only be applied internally. Real estate services provider JLL, seized the opportunity to market its procurement activities externally, creating a Sourcing Services business that caters to a variety of requests – from running data analysis to identifying savings opportunities and creating supplier performance frameworks.
Cargill: Transforming procurement for 2025
As demands on the function continue to grow, procurement finds itself in a continuous state of reinvention. The team at agricultural giant Cargill recognised this and, since 2018, has been engaged in a sweeping transformation project that has delivered massive improvements in its use of technology, alignment with the wider business’s objectives, agility and its approach to talent development, ultimately resulting in a step-change in procurement ROI.
Rolls-Royce: Managing change during a digital rollout
New technologies are transforming procurement’s capabilities, but the human aspect of managing these changes is often overlooked. To drive internal engagement with a new platform deployment, aerospace giant Rolls-Royce developed a recognition system that would reward employees for learning to use and gaining experience with the new tool, eventually allowing them to gain professional accreditation.
UCB: Measuring procurement sustainability progress
Sustainability is an increasingly critical focus area for procurement, but it can be challenging to measure meaningful progress. To understand how its efforts were translating into a more sustainable culture, the sustainable procurement team at pharmaceutical maker UCB devised a maturity assessment that examines a variety of factors from the top to the bottom of the function.
LVMH Wines and Spirits: Reshaping the supplier ecosystem to drive out new revenue streams
The ways that businesses engage with their suppliers are increasingly blurred as multi-directional ecosystems replace traditional understandings of supply lines, providing new opportunities for procurement to drive value. To make the most of these opportunities, LVMH Wines and Spirits created a supplier activation programme that has allowed it to generate revenue by selling directly to suppliers and their employees, enhancing the function’s internal reputation as a strategic partner.
Metropolitan Museum of Art: Setting up a procurement function
While some procurement teams are pushing the boundaries of technology and supplier collaboration, getting the fundamentals right is a vital first step in building a modern and mature function. The Metropolitan Museum of Art’s CPO joined with a mandate to take procurement from a mostly administrative unit to a strategic partner that is deeply integrated with the rest of the organisation.
Bank of America: Graduate talent development
Procurement teams in large organisations require a steady stream of talent as they grow and find the need for an increasingly diverse set of skills. But new graduates face a number of challenges before they can develop into the dynamic and skilled operators the function needs. To help its graduate hires become integrated and valued members of the business, Bank of America’s procurement team developed a programme of training, experience and networking that has enabled it to build a team of talented and engaged staff.
Unilever: Supplier partnering for growth
Driving substantial progress in sustainability increasingly requires a collaborative approach that goes well beyond measuring emissions and setting targets. Unilever’s Partner with Purpose programme, which develops a collaborative ecosystem that fuels 4G growth, protects and regenerates nature and makes sustainable living commonplace, is already making big strides in this regard – for instance, with the development of the world’s first laundry capsule made with carbon captured from carbon dioxide, known as ‘purple’ carbon.