Procurement Best Prac ces Op mizing Efficiency and Cost Savings VOL 05 I ISSUE 13 I 2024 Mirko Kleiner Lean-Agile Procurement - How to Get Twice the Value in Half the Time! Mirko Kleiner Thought Leader & President Lean-Agile Procurement Alliance Top Iconic Leaders in Procurement to Watch, 2024 Risk Management in Procurement Mi ga ng Challenges and Ensuring Supply Chain Resilience
"The function of procurement is not to spend the least amount of money but to make the most amount of value.” - Peter Drucker
Editor’s Note
EIconic Leadership in Procurement n the realm of procurement, visionary leaders pave the way for innovation, I efficiency, and resilience. In our editorial note highlighting the "Top 10 Iconic Leaders in Procurement to Watch, 2024," we bring forth the individuals driving transformative change within their organizations and across industries. These leaders demonstrate exceptional strategic acumen, a keen understanding of market dynamics, and a relentless commitment to excellence. In a modern age defined by rapid technological advancement and global interconnectedness, these leaders leverage cutting-edge tools and analytics to optimize procurement processes and drive cost savings. They embrace digital transformation, harnessing the power of artificial intelligence, blockchain, and predictive analytics to unlock new opportunities for efficiency and innovation. These iconic leaders prioritize collaboration and partnership, recognizing that successful procurement outcomes rely on strong relationships with suppliers, stakeholders, and internal teams. They foster a culture of continuous improvement, encouraging creativity, diversity of thought, and a relentless pursuit of excellence. We anticipate that these visionary leaders will continue to inspire and shape the future of procurement. Their unwavering dedication to excellence and resilience in the face of uncertainty will undoubtedly leave a lasting impact on the industry and drive positive change for years to come.
Mi ga ng Challenges and Ensuring Supply Chain Resilience Articles Procurement Best Practices Op mizing Efficiency and Cost Savings Risk Management in Procurement 30 20 Profiles Transforming Supply Chain Excellence with Innova on and Exper se Amy Brown Bolstering Powerful Business Partnerships Tiffany MacKinnon 24 14 CXOs Key Players and Innova on The Leadership Odyssey of Kiva Allgood Exploring the Supply Chain Industry 28 18
Mirko Kleiner Lean-Agile Procurement - How to Get Twice the Value in Half the Time! C O V E R S T O R Y Mirko Kleiner Lean-Agile Procurement - How to Get Twice the Value in Half the Time! 08
May, 2024 Pooja M Bansal CONTENT DESIGN SALES TECHNICAL FOLLOW US ON WE ARE ALSO AVAILABLE ON CONTACT US ON Editor-in-Chief [email protected] SME-SMO
Company Name Brief Diana Long Corporate Board Director Executive Marketing Consulting with an unrelenting focus on consumer value and experience to drive business performance. Skilled in managing teams of experts and business processes to bring the 'voice of the customer' data and analytics alive. Audrey Izard Chief Purchasing Officer Experienced Senior Vice President Sourcing with a demonstrated history of working in the cosmetics industry. Skilled in Organization, Negotiation, Strategic Negotiations, Spend Analysis, Strategic Sourcing, and Management. L'Oréal www.loreal.com/en/ SKEMA Business School https://www.skema.edu/ Amy Brown Regional Director of Operations and Commercial Lines Amy is the Regional Director of Operations and Commercial Lines a global frontrunner in the insurance brokerage landscape, with special expertise in industry-specific insurance solutions for both businesses and consumers. AssuredPartners www.assuredpartners.com Matthew Quimba Co-Founder, Board Member Matthew currently serves as Head of Procurement for ICT for Manila Electric Corporation. In his role, Matthew leads a team of strategic leaders in Category Management handling Information Technology, Telecommunications and Distribution Utility related Platforms. MERALCO www.meralco.com.ph/ Mirko Kleiner Keynote Speaker, Author, Serial-Award Winner, Thought Leader & President - LAP Alliance, and Co-founder An Agile Enterprise Coach, Lean-Agile Procurement thought leader, and serial entrepreneur with a passion for transforming businesses and empowering individuals to embrace change and co-create value, while exploring innovative concepts. Flowdays www.flowdays.net/ Featured Person Wieteke Dupain CEO Driving the creation and implementation of innovative solutions and initiatives and supporting, engaging and connecting entrepreneurs, investors, decision-makers, networks and organisations with each other in order to increase purpose-driven opportunities. Tiffany Mackinnon Head of Global Supply Chain Services Senior logistics and supply chain professional possessing extensive knowledge in import/export regulatory requirements, global logistics and compliance program development. HCL Technologies www.hcltech.com Euclid Network (EN) www.euclidnetwork.eu/ Richard Crane Chief Procurement Officer Experienced Executive with a demonstrated history of working in the Hospital & Healthcare, Consumer Products, Industrial, and Telecom Industries. Skilled in Procurement, Operations Management, Cost Modeling, Pricing Strategy, Professional Services, Category Management, and Strategic Sourcing. Haleon www.haleon.com/ Zhiyong Xu Supply Chain Solutions, Logistics Zhiyong is the leader at CTS, the company is one of the earliest first-class international freight forwarding companies in China after the reform and opening up. CTS Global Supply Chain Solutions www.ctsfreight.com Kiva Allgood Corporate Board Director A seasoned strategist and mentor, adept in operations, robotics, and digital transformation, with a passion for empowering Women in Technology and driving CleanTech innovation, while envisioning Smart Cities through connectivity and entrepreneurship. World Economic Forum www.weforum.org
Mirko Kleiner Lean-Agile Procurement - How to Get Twice the Value in Half the Time! Unleash co-innovation with third parties, fostering a win-win culture to solve today's “ problems. “ Cover Story
Mirko Kleiner Keynote Speaker, Author, Serial-Award Winner, Thought Leader & President LAP Alliance, and co-founder flowdays.net
I n the modern digital world, the focus is shifting towards solving problems through AI, digitalization, and automation. These tools liberate businesses from more operational tasks. However, amidst technological advancements and digital transformation, a fundamental truth remains steadfast: the basis of success lies in understanding and utilizing the power of human connection and collaboration across companies. The person at the forefront of this shift is Mirko Kleiner, a Keynote Speaker, Author, Serial-Award Winner, Thought Leader & President LAP Alliance, and co-founder . flowdays.net With a diverse background spanning cultures and industries, Mirko’s journey underscores the central role of people in driving organizational success. Embracing the ethos of Agility, he has led initiatives to empower teams and foster a culture of innovation, culminating in innovative achievements that challenge conventional norms. Mirko’s pioneering efforts lie with the Lean-Agile Procurement Alliance, an organization committed to reforming strategic sourcing on a global scale. Through innovative practices and a reliable commitment to collaboration, the alliance has gathered acclaim for its ability to deliver unique results in record time. As organizations both from public and private sector face increased complexity and uncertainty, Lean-Agile Procurement emerges as a ray of hope, offering a pathway to accelerated time-to-market and sustained success for all parties involved. In this exclusive interview, Mirko shares his vision of embracing Agile principles to transform procurement! Your bio emphasizes the importance of cultural exposure in shaping your perspective. How have your experiences in diverse cultures influenced your approach to entrepreneurship and leadership? I’ve been lucky enough to meet people from different cultures all over the world. All my travels and business relationships have taught me that it’s always been and will always be about people! Today, we’re trying to reduce today’s problems to those that can be solved by AI, digitalization, or automation. Don’t get me wrong, these are powerful tools that will free us from more operational tasks. However, I’m a firm believer that creating a common ground of respect for each other’s cultural backgrounds and beliefs, including psychological safety, will unleash the power of innovation, co-creation, and adaptability needed to solve today’s problems. Tell us a little bit about yourself. How have you ended up disrupting procurement? As a former software vendor, we’ve scaled quickly to more than 200 employees and applied Agile working to our organization. This improved our satisfaction and lead times by more than 100%, not just in software delivery. From this experience, I decided to focus on people and their impact and co-founded flowdays.net, the Agile corporative in Switzerland and Germany. Back in my days as a software vendor, I’d already realized that current procurement approaches weren’t designed to deal with uncertainty. Especially in software, a customer just knows what he wants when he sees it! - Try to specify and contract for such a scenario. 9 years ago, as Business Agility wasn’t yet a term, I reminded myself of this challenge and started to look around to see if there was a more Agile way of strategic procurement. There wasn’t! Knowing nothing about procurement at the time, we started with the powerful question, “What if we only have one day?” and “How can Agile ways of working help us to close a strategic deal faster and with better outcomes? “ “ All my travels have taught me that it’s always been and will always be about people!
Do you mean that your ambition was to create a new approach to strategic procurement where multimillion-dollar sourcing cases could be done in one day? I’m told that today it takes 6–12 months. We’ve become famous for sourcing a new ERP system in just two days! - And yes, this would easily take 12 months using traditional strategic procurement. This sourcing case was recognized by Procurement Leaders and won the World Procurement Award 2020. Wow, how was that possible in just two days? Well, what would you do if there was a restriction of only two days? We’ve put everyone in one big room! - Imagine all relevant people from the buyer side together with key people from the shortlisted vendors in one room, simultaneously co-creating their proposals, solution designs and improving a draft of an Agile contract in parallel. Of course, there’s more to it than that, which we’ve defined in Lean-Agile Procurement, the new global standard for strategic procurement. Being recognized in “The Procurement Magazine,” receiving the CIPS Awards 2018, the Global Procurement Award 2020, and the WordCC Innovation & Excellence Awards 2023 are notable achievements. What do these accolades mean to you, and how do they validate your contributions to the fields of Agile and Procurement? First, I’m grateful for the great people and organizations that have had the courage to try LeanAgile Procurement - something disruptively different. It’s more their achievement than mine. For the global movement, publicity is very welcome because it acts as a catalyst. It’s our goal to get more people to know about a new tool in their toolbox. Congratulations on your new book, “Lean-Agile Procurement: How to Get Twice the Value in Half the Time.” What struck me, apart from the incredible speed, was that you wrote that it’s less about savings and more about impact. Could you please expand on that? Indeed, or as Marc Benioff, CEO of Salesforce, recently said, “Speed is the new currency for business.
Procurement could also be seen as an investor for the company or government.”. To deal with the uncertainty and complexity in strategic procurement we have to act more with an angel investor mindset. We want to invest in the most promising hypotheses first, with the intention of a quick return. Imagine a strategic sourcing case that is worth spending $100 million on. We need the best people and the best product within the given budget to be as fast as possible. Because when we reach our market window, it could be billions over a few dollars for a discount. You’re also a global keynote speaker, which showcases your commitment to sharing knowledge and fostering collaboration. How do these engagements enrich your own learning and development as a professional? I love to inspire audiences with our stories from all industries, both public and private. It is in my DNA to share knowledge with other communities. I have spoken globally at conferences and internal leadership workshops in areas such as leadership, supply chain management, ecosystems, procurement, sales, legal, commercial, and sustainability. Would an investor ever spend all at once? No! But that’s exactly what we do in todays procurements. Instead, 10% would be invested to test the market and our hypotheses. This startup/investor mindset is good for business and procurement because it fosters a culture of quick impact or quick return. This goes back to the 20/80 Pareto principle that we all know. On the other hand, cost and negotiation become less important.
As the world becomes more complex and interdependent, I’m a strong believer that we also need to connect the different communities, professions, etc. What are the latest trends in procurement, and where are you yourself pushing the boundaries now? I could repeat all the latest trends, such as AI, ESG, Diversity, Circular Economy, etc., but honestly, I’m more focused on how we can incorporate all these new topics into our day-to-day ways of working. People in commercial roles already have a lot on their plate, and with each new trend, it gets more. I recently told the head of sustainability that the organization doesn’t become more sustainable just by introducing a new function! To establish sustainability for the organization, it must become a capability. Lean-Agile Procurement gives some answers on how all of these topics could be incorporated and scaled. Therefore, we are also supporting organizations in their Agile Transformation in commercial roles. Furthermore, we are taking Business Agility to the next level by incorporating strategic partners in Agile adoption. Similar to Lean, most businesses are dependent on their suppliers and partners, so all of them have to become Agile. Your current focus on topics like De-Scaled Business Agility and Adaptive Partner Ecosystems sounds intriguing. Could you provide some insights into these areas and their potential impact on businesses in today’s dynamic environment? I was once involved in a huge program with over 20 teams that had been going on for two years. I asked about the business objectives and the required skills. We ended up with two cross-capability teams that delivered 80% of the scope in 4 weeks. In other words, we need to de-scale even so-called Agile organizations and directly involve third parties. With Lean-Agile Procurement we’ve learned that maximum speed can be achieved when the boundaries of the company become fluid and the people with the necessary expertise can work together without unnecessary bureaucrazy. Over the last nine years, we’ve seen the emergence of various movements such as Agile Leadership, Extreme Manufacturing, AI, 3D-printing, Scaling Agile, LeanAgile Procurement, etc. As a result, we’ll be able to build a multi-party Adaptive Partner Ecosystem in hours and days rather than months and years. What’s more, if we start to apply Agile values based on a win-win culture, we have the chance to even develop a more fair economy where ecosystems become the new supply chains to solve today’s problems faster together. In conclusion, do you have any tips or recommendations to share with our readers? Remember, it’s always about people. You’ll find the solutions together. So, build the necessary trust and share your goals, concerns, etc., openly. It’s never about a new approach, framework, or tool. Think like an angel investor and try to solve today’s problems instead. “ “ An Adaptive Partner Ecosystem will always out-perform a traditional supply chain. Find out more: www.lap-allianance.org
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Procurement Best Practices Optimizing Efficiency and Cost Savings n today's competitive business landscape, organizations are continually seeking ways to optimize efficiency I and reduce costs to maintain their competitive edge. One area where significant gains can be made is in procurement. Procurement, the process of acquiring goods and services, plays a crucial role in the success of any business. By implementing best practices and leveraging innovative strategies, organizations can streamline their procurement processes, improve efficiency, and achieve substantial cost savings. Strategic Sourcing Strategic sourcing involves identifying the best suppliers for goods and services based on various factors such as quality, price, reliability, and location. By taking a strategic approach to sourcing, organizations can negotiate better terms with suppliers, consolidate their vendor base, and establish long-term partnerships that drive efficiency and cost savings. Utilizing data analytics and market intelligence can help identify opportunities for cost reduction and optimization. www.ciolook.com | May 2024 | 20
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Supplier Relationship Management (SRM) Building strong relationships with suppliers is essential for procurement success. Effective SRM involves regular communication, collaboration, and performance evaluation. By fostering a collaborative environment with suppliers, organizations can gain insights into market trends, negotiate better pricing, and identify opportunities for innovation and process improvement. Strong supplier relationships can also lead to preferential treatment, better service levels, and increased flexibility during times of disruption. Procurement Automation Automation can significantly improve the efficiency of procurement processes by reducing manual tasks, streamlining workflows, and eliminating errors. Technologies such as e-procurement systems, electronic invoicing, and digital contract management platforms can automate routine procurement activities, allowing procurement professionals to focus on strategic tasks such as supplier relationship management, cost analysis, and risk mitigation. Automation not only saves time and resources but also improves accuracy and compliance. Cost Analysis and Benchmarking Conducting regular cost analysis and benchmarking exercises is critical for identifying cost-saving opportunities and optimizing procurement spend. By analyzing historical spending data, organizations can identify areas of overspending, negotiate better pricing with suppliers, and implement cost-saving initiatives such as volume discounts, alternative sourcing strategies, and value engineering. Benchmarking against industry peers and best-in-class organizations can provide valuable insights into cost-saving opportunities and best practices. Inventory Management Effective inventory management is essential for minimizing carrying costs, reducing stockouts, and optimizing working capital. By implementing inventory management best practices such as demand forecasting, safety stock optimization, and just-in-time inventory replenishment, organizations can achieve significant cost savings while ensuring product availability and customer satisfaction. Leveraging technology such as inventory management software and RFID tracking systems can improve visibility and control over inventory levels. Contract Management Proper contract management is essential for ensuring compliance, minimizing risk, and maximizing value from supplier contracts. Organizations should implement robust contract management processes and systems to centralize contract storage, automate contract renewals and notifications, track contract performance, and enforce contract terms and conditions. By effectively managing contracts, organizations can identify opportunities for cost reduction, renegotiation, and consolidation while mitigating risks such as price fluctuations, delivery delays, and non-compliance. Continuous Improvement Continuous improvement is a fundamental principle of procurement excellence. Organizations should regularly review and optimize their procurement processes, policies, and performance metrics to identify areas for improvement and drive ongoing efficiency gains. By soliciting feedback from stakeholders, monitoring key performance indicators, and benchmarking against industry standards, organizations can identify best practices, implement process improvements, and achieve sustainable cost savings over time. In conclusion, optimizing efficiency and cost savings in procurement requires a strategic approach, leveraging technology, fostering supplier relationships, and embracing a culture of continuous improvement. By implementing best practices such as strategic sourcing, supplier relationship management, procurement automation, cost analysis, inventory management, contract management, and continuous improvement, organizations can streamline their procurement processes, reduce costs, and achieve significant competitive advantages in the marketplace. www.ciolook.com | May 2024 | 22
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Risk Management in Procurement n recent years, global supply chains have I become increasingly complex and interconnected, presenting new challenges and vulnerabilities for businesses. From natural disasters and geopolitical instability to supplier bankruptcies and cyber-attacks, the risks facing supply chains are diverse and ever-evolving. In this article, we will explore the importance of risk management in procurement and discuss strategies for mitigating challenges and ensuring supply chain resilience. Understanding Supply Chain Risks The first step in effective risk management is understanding the potential risks facing your supply chain. These risks can include supplier disruptions, transportation delays, quality issues, geopolitical instability, regulatory changes, natural disasters, and cyber threats, among others. By conducting a comprehensive risk assessment, organizations can identify and prioritize the most significant risks to their supply chain operations. Supplier Risk Management Suppliers play a critical role in the success of any supply chain, but they also introduce risks. Organizations should implement robust supplier risk management processes to assess supplier risk factors such as financial stability, geographic location, production capacity, www.ciolook.com | May 2024 | 30 and Ensuring Supply Chain Resilience Mitigating Challenges
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quality control measures, and compliance with regulations and industry standards. By conducting due diligence on potential suppliers, monitoring supplier performance, and diversifying the supplier base, organizations can mitigate supplier-related risks and ensure continuity of supply. Supply Chain Mapping Supply chain mapping involves identifying and documenting the various tiers of suppliers and subcontractors involved in the production and delivery of goods and services. By creating a visual representation of the supply chain network, organizations can identify potential bottlenecks, single points of failure, and dependencies that could impact supply chain resilience. Supply chain mapping also facilitates transparency and collaboration with suppliers, enabling proactive risk management and contingency planning. Diversification and Redundancy Relying on a single source for key components or materials exposes organizations to significant risk in the event of supplier disruptions or shortages. To mitigate this risk, organizations should diversify their supplier base and establish redundancy in critical supply chain components. By working with multiple suppliers and maintaining safe stock levels, organizations can minimize the impact of supplier disruptions and ensure continuity of supply during times of crisis. Collaborative Risk Management Effective risk management requires collaboration and communication across the entire supply chain ecosystem. Organizations should engage with suppliers, customers, logistics providers, and other stakeholders to identify and mitigate supply chain risks collectively. Collaborative risk management initiatives such as joint risk assessments, information sharing, and contingency planning can strengthen relationships, improve resilience, and enhance overall supply chain performance. Technology and Data Analytics Technology plays a crucial role in enabling proactive risk management and enhancing supply chain resilience. Advanced analytics, machine learning, and predictive modeling can help organizations identify emerging risks, forecast demand, optimize inventory levels, and detect anomalies in supply chain data. Realtime monitoring and tracking technologies such as RFID, GPS, and IoT sensors provide visibility into supply chain operations, enabling organizations to respond quickly to disruptions and minimize their impact. Contingency Planning and Business Continuity Despite proactive risk management efforts, supply chain disruptions are inevitable. Organizations should develop robust contingency plans and business continuity strategies to mitigate the impact of disruptions and ensure the rapid recovery of supply chain operations. Contingency planning involves identifying potential scenarios, developing response plans, establishing alternative supply sources, and conducting regular drills and simulations to test the effectiveness of the plans. Regulatory Compliance and Ethical Sourcing Compliance with regulations and ethical sourcing practices is essential for managing supply chain risks and safeguarding brand reputation. Organizations should ensure that their suppliers adhere to relevant laws, regulations, and industry standards regarding product safety, labor practices, environmental sustainability, and ethical conduct. By conducting audits, assessments, and certifications, organizations can mitigate compliance-related risks and build trust with stakeholders. In conclusion, risk management is a critical component of procurement and supply chain management, particularly in today's complex and volatile business environment. By understanding supply chain risks, implementing robust risk management processes, leveraging technology and data analytics, fostering collaboration, and developing contingency plans, organizations can mitigate challenges and ensure the resilience of their supply chains. Effective risk management not only minimizes the impact of disruptions but also creates opportunities for competitive advantage and sustainable growth in the long term. www.ciolook.com | May 2024 | 32
"Procurement isn’t just about buying stuff. It’s about managing supply chain risk, driving innovation, and enabling growth."