It has long been said that procurement has a unique 360-degree view of the value chain and that is especially true of Tim Snow, CPO and VP of procurement, commercial contracts and insurance at satellite service provider Inmarsat. As the individual in charge of money coming in and money flowing out, it’s only natural that Snow has set his team up in a way that differs vastly from many traditional procurement functions.
“Procurement is structured based on the stakeholders we work with, rather than distinct categories,” he explains. “What we found is if you build strong relationships with stakeholders and an understanding of what they need, now and in the future, you’re more likely to be able to do epic procurement deals and have a solid, robust strategy that continues to evolve over time.”
It is perhaps fitting for a company with operations 24,000 miles above the earth’s surface that this is not the only area in which Inmarsat has zoomed out to take a different view. In this interview, Snow talks to Procurement Leaders’ chief product officer David Rae about his approach to risk, the company’s evolving geographic footprint and how he prepares his team to deal with the ongoing polycrisis.
Watch the interview in full or read highlights, below:
Pinpointing where risks lie
While Inmarsat had what would have been described as a rigorous approach to Tier-1 supply chain risk, looking at factors such as look at their financial stability credentials, current clients and innovation to build a rounded picture, those days are gone, Snow says.
“Two years ago, driven by component shortages we had to start looking all the way down the supply chain – we go as deep as Tier-7 now – so we understand where to pinpoint risk. Often the smallest, cheapest little thing – a 20-cent chip – can prevent us from launching a satellite and earning billions of long-term revenue. So, we need to understand how we can mitigate them and the strategies we can employ in that mitigation.”
Segmenting by the money
When dealing with thousands of suppliers, it’s impossible for businesses to adopt such a granular approach to risk management. Like most organisations, Inmarsat follows the money to help segment the supply base. But buyers do not focus on the value of spend with each supplier – they consider the revenue impact. “There are many suppliers that buy things that enable us to sell to customers and generate revenue and profit. So, we’ve looked at which of those suppliers are most important to ensure we protect that revenue over points of time. It is a weekly process of talking to and listening to those suppliers about what’s happening on the ground in their supply chains, together with our colleagues across the business. We’re not on our own; it’s a team effort… We think profoundly differently about this and think about what we can do to bring things into our control,” Snow says.
A more logical approach to logistics
Inmarsat has a diverse global supply chain with that stretches from Thailand to California. To reduce the risk of logistics delays, Snow says: “We’re looking at how we can consolidate in hubs and those hubs need to be as close to the customer demand is as well, so we can be as efficient as possible. This isn’t cost-led, this is about fulfilment and reliability of fulfilment – what the customer needs. There’s also sustainability to consider. By looking at the supply chain, we’re trying to reduce our carbon footprint… It’s not an afterthought – it’s part of the decision-making process.”
L&D is important, but you can’t teach DNA
Although the company may have a “perfectly formed” team of less than 25 procurement staff with a global remit, but Snow says Inmarsat’s procurement function succeeds because it is “underpinned by a basic DNA of positive, passionate, energetic, can-do, go-getters. We are seen as the people that make stuff happen in the company with our stakeholders”.
To ensure employees’ ongoing development, learning and development is a key focus for Snow. The business offers individual growth opportunities, such as funding MBAs, and also hosts fortnightly learning sessions hosted by colleagues from across the business to keep his staff as fresh as possible. “We invest heavily in behaviours – the ‘how’ we do things, as much as the ‘what’. I can generally teach someone the ‘what’, but I can’t teach someone the how, that’s your DNA. I just need to make sure I’ve got the right DNA. Of course, we need a mixture of people across the team to deliver what we need,” he says.