When it comes to procurement and supply chain, a chief procurement - - PDF document

Page 1 of 10 When it comes to procurement and supply chain, a chief procurement officer (CPO) is deemed to be one

• f the top roles for professionals in the field. Their role is that of an executive focusing on strategic

sourcing, procurement, and supply management of an enterprise. The current situation, globalization and compliance pressures have only elevated the profession of procurement and the role of a CPO in an

• rganization.

The global world of procurement in general, MENA & UAE has seen a remarkably diverse leadership in procurement and supply chain. In this session we, CIPS Northern Emirates Branch feature to our members and readers, Dr. Arafat and Eric van der List where in they explain their perspectives on the profession and a day in their professional life as a Chief Procurement Officer (CPO).

• Dr. Arafat El Mourad is Vice President – Head of Strategic Sourcing at Emirates NBD

Bank, which is one of the leading banks not only in UAE but also globally, based on a recent global survey. He possesses nearly 2 decades of experience across diverse

• rganizations with core experience in Digital Banking & Digital Marketing. He is a

Procurement Lecturer (Author & Doctor of Business Administration (DBA), Fellowship of Chartered Institute of Procurement & Supply (FCIPS), Master of Applied Business Research from SBS Swiss Business School, Master of Business Administration from University of Atlanta as well as Master of Technology - Project Management from Chifley Business School - Torrens University) Eric van der List is Senior Director of Global Procurement and Sourcing at Future Pipes Industries, which is also a global company based in UAE. Eric possesses nearly 2 decades of experience in strategic sourcing and procurement and has extensive knowledge and practice in the field of international negotiations, contracts, and multidisciplinary and innovative projects.

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Contents

The Journey of a CPO .................................................................................................................................... 2 A day in the life of CPO ................................................................................................................................. 4 Recommendations to the current situation ................................................................................................. 5 The CPO’s outlook ......................................................................................................................................... 7 Talent Acquisition ......................................................................................................................................... 8 Recommendations to professionals ............................................................................................................. 9 Acknowledgments ....................................................................................................................................... 10

The Journey of a CPO

Q1 What are some of factors you look back has shaped you what you are today? Determination, discipline and commitment to achieve my personal and professional goals First of all, I landed in Procurement by coincidence. I graduated as a Master of Chemical Engineering and right after leaving university I bumped into the world of buying (Procurement/Sourcing/Purchasing). The first thought was: “buying is what you do on a Saturday in Spinneys”, but in my first year a whole new world opened for me. In that time, I got a job in Saint-Gobain, world’s largest building materials manufacturer, and in the business unit I was in, we started with cooperation and

• globalization. I loved the international aspect and linking with people from other

cultures and backgrounds, experiences, and thoughts. During my studies I learned how to get to the bone of issues/problems/questions and form an answer with the information at hand. This means sometimes making an educated guess, assumptions, etc. Factors which you were asking: persistence (never give up!), agility, clear and open mind, language (more than English) and common sense.

Page 3 of 10 Q2 What has it taken to be a CPO and what will it take to remain an outstanding CPO? Having cross functional knowledge to speak the language in the organization and building relationship and trust with my internal and external stakeholders. Maintaining knowledge and stakeholder relationship while having the characteristics

• f a visionary and influential leader.

Keep developing yourself and keep learning, either through courses, trainings, etc. but also on the job and outside of the office. Active listening and without judgement Q3 For aspiring professionals, please help us explain your way up the career ladder. What challenges, sacrifices and compromises are they likely to face on the way up the ladder? It takes patience and time to make it and achieve what you want to be. I started my journey bottom up and outside procurement domain. My experience in IT field was a factor in entering procurement field as an IT procurement Manager. From here and with determination and many learning helped to become where I am today. Procurement reality and mandate is to ensure control, compliance to corporate policy and processes, risk mitigation and cost reduction which we usually face push back from our stakeholders due to preferences, therefore procurement leaders are tasked with the difficult role of change management in the organization. As you progress the ladder you need to learn the political landscape and understand your stakeholders and become stakeholder savvy. My first job was a RM buyer at 23 and at 26 I became Purchasing Manager, but the company thought I was too young to be named like that and branded me “deputy”, like the sheriffs and cowboys in movies. I was working 24/7 to keep the regular stuff running (operationally) and moreover to do what I do best: touch the tactical and strategic level, go outside of the box, etc. when I became the Deputy, I was so angry that within 12 months I resigned and moved to my next position. That always haunted me. Never decide based on emotions but see how to turn the tide. I feel that I did not do this enough back then. There are not a lot of sacrifices but time: good work needs time and there is always work and plenty to do, so I sacrifice time and enjoy it at the same moment.

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A day in the life of CPO

Q4 How does a CPO time manage, split his workday? Time spent with the team, strategic sessions, new projects, suppliers, stakeholders, etc. Just to understand the role. To manage my time, I prioritize my daily and ongoing activities. I set a side sometimes

• n monthly basis to review the long-term strategy and objectives to ensure that they

are relevant and attainable. Stakeholders occupy most of my time between managing our relationships and addressing their demand, challenges and prioritize their requirement to deliver the best outcome to them and to the organization. The rest of the time is ensuring my team is equipped with the right tools and skills to perform their job with high quality and empowering them to become strategic

• thinkers. I Also spend an adequate time with strategic vendors to ensure their

roadmap is aligned with our organization’s objectives and that they can add value. Nice question. The good thing of Procurement is that no day is the same, never a dull

• moment. In this interesting time of WFH, I make overtime in calling people to see

how they are doing both personally as business wise. This goes from team members, suppliers, and other business partners/colleagues. Obviously out of interest in my circle of (business) friends but also to understand how it impacts the business, what we can do to support, etc. I am in the GCC since 2013 and I do not think there is a lot of time to sit on strategy, if it is not in my evening hours. The mindset and way of doing business is very underdeveloped compared to other parts of the world and there is still a lot to be

• done. This causes daytime to be very operational and evening hours to uplift it to

tactical/strategic.

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Recommendations to the current situation

Q5 How can we and CPO plan on forecasting and budgeting for the future in uncertain times like now? Should we be changing policies or procedures? Demand management is a key in determining the priorities of the organization’s initiatives and vendor engagements. We can also look at current policies and procedures and amend as required depending on the situation. For example, emergency purchasing policy was introduced to cope with the purchasing requirement related to Covid-19. Digital signature solutions are also explored to replace wet signatures in remote working conditions. Simple: we cannot. When one door closes, another one opens and sometimes it

• pens completely the opposite side of what the latches tell you. Either change the

policies or procedures or temporarily work on the given situation and prepare your supply base and the internal organization. Management of expectation is key. Q6 Most of the organizations are relooking into re-scoping their contracts. In the long run is this beneficial from a CPO perspective? Procurement leaders are advised to relook at all their contracts and amend as they think suitable to address the situation they are facing. Time is changing and the impact of new technology (automation & robotics processes) will have an impact on many agreements, Contract Renewal, Annual Maintenance Contract (AMC) Service Level Agreement (SLA) with our vendors Yes, re-scoping to bring it in the current context is a must. In the long run it can be beneficial for sure, since nobody is being untouched in the current COVID events. One key item is: it all depends on how you bring it, how you deliver the message, how you get the buy-in from the other side. I have re-scoped a contract with a 17% reduction and doubled the payment term: it doesn’t make me a champion or superman, it just shows that the supplier understands the current circumstances and that the relation we have been building shows off. He supports now that we need it and this will be reciprocated in the future.

Page 6 of 10 Q7 What level of preparedness you had already planned to handle any unforeseen event like COVID’s ? Was this kind of disruption ever considered in risk planning? In the current environment most of our process is automated and therefore the impact on our services was minimal. Having a Business Continuity Plan (BCP) and Supplier Risk management Policy has helped us minimize the risk exposure, disruption of services and cost impact. When I joined my current company, I implemented the BIRA: Business Interruption Risk Assessment, a tool to analyze the business from a procurement side and makes you aware of the vulnerabilities, etc. based on the outcome we created a solid mitigation plan and worked on this continuously. The reason for action, in this case COVID, you never know but you can predict the impact to a certain extend and know what to do. Obviously, we did not predict COVID, but based on my experience with the aftermath of the Tsunami in Japan some years ago, which had a similar impact albeit at a smaller scale, we had good mitigation plans. Till now, we did not have 1 single standstill because of raw material shortage in none of our 14 plants globally. Q8 What is your action plan for when one of our critical suppliers goes down? Vendors Risk management policy dictate the risk and impact associated with our suppliers, and the result of this assessment allows us to put in place contingency plan. It depends on your definition of critical. We segmented our suppliers in Strategic, Value, Important and Tactical suppliers, based on several criteria. Our biggest supplier in terms of spend, volume and impact, is based in China and was impacted by Covid when it was around there. We saw the issue on time, and shifted to sourcing from other parts of the world, which was possible since we maintain a certain amount of business with others (of course) and we made sure we have at least 3 suppliers approved for those materials.

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The CPO’s outlook

Q9 What changes in Business to Business and Sourcing to Supply would you expect looking ahead? The ability to build a high-quality relationship in a noticeably short time frame becomes more and more important. In the business world that is increasingly becoming more volatile in every dimension (running business itself, the people in

• rganizations and the business and companies strategies), it is of utmost importance

to be able to liaise with the right people to get the right things done at the right

• moment. I know a lot of colleagues in Procurement field from Linked In and other

media with digitalization and technology etc., but Procurement, Sales, Business without the human aspect is impossible. Q10 Do CPOs plan for any redundancy measures? What are your thoughts on this as a CPO? Yes, redundancy measures are planned and addressed mainly when processes are automated and we become less dependent on human intervention. Due to this automation, procurement leaders will now be able to focus on shifting their focus from transactional procurement to strategic procurement I reorganized the Procurement organization (+ the plant Purchasing which reports functionally to me), 2 years back so there is nothing to reorganize. Q11 Right now technology along with other decision making tools, are there circumstances where CPO will take decisions independent of these tools and if so what. Availability of data through different tools is critical, so when data is not available. CPO decision will be made independent of tools. We see this in the case of new technology & Fintech when data is not yet available Technology never decides. Technology and tools are enablers and supports, but never a decision maker. Decision are being made by people based on facts, and supported and enabled by Technology and tools.

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Talent Acquisition

Q12 With the world of supply chain and business evolving, what skills are you looking forward in your team going forward? The first skill I look in my team is emotional intelligence to support them in managing their internal and external stakeholders. Another important role of the job is

• negotiation. So negotiation skill is a key attribute specially in challenging times that

we face today such as global crisis and Covid-19 situation. Skills and behaviors: Open mind-set, “we can do this!” mentality, teamwork goes above individual stars & stripes, networkers, eagle eye for the triangle data-info- knowledge, business minded. Q13 What are the key attributes / skills / competencies you look for in a procurement and supply chain professional? As answered earlier, I believe it stands what I said. Having cross functional knowledge to speak the language in the organization and building relationship and trust with my internal and external stakeholders. Maintaining knowledge and stakeholder relationship while having the characteristics of a visionary and influential leader. Q14 How do you see the availability of Talent and the right talent in the coming year with so many professionals losing jobs and on the hunt? We will obviously see a lot of competition in the coming year with a higher supply in

• talent. Talent will need to work on differentiated factors aside from the required job
• skillset. Talent advised to strengthen their emotional intelligent and soft skills.

A painful moment in history. So many companies make a short-term decision to either polish up their figures or out of fear for the unknown, rather than retaining

• talent. This is painful for the company itself. And obviously for the professional losing

his or her job, it is a terrible challenge since they need to prove/show that they truly are a talent in a (job) market where Supply & Demand are completely out of balance. Q15 As a CPO, would you consider selecting professionals from different industry sectors and cross functional business organizations

Page 9 of 10 Definitely – it is always beneficial that the buyer understands the stakeholder function to build credibility in delivering the service. In fact, I encourage hiring from different industry sectors. A candidate selection process should focus on the right mindset, behavior, basic knowledge, and future

• employability. I am against hiring people from the same industry who are burdened

with knowledge and ways of working in the same industry. Outsides, assuming they have the Can Do mentality and endless energy to getting things done, will bring in new looks and views on existing issues and matters. Hiring cross functionally has a lesser priority for me. I have seen this many times in the past where people were so blinded by their previous job and role, that it was hard to start thinking “the procurement way”. I would rather work cross functionally to get their and to give my input on business challenges

Recommendations to professionals

Q16 Good global Certifications versus Rich Experiences. Which one would you choose going forward post-COVID? What are your recommendations for Professionals on building professional qualifications and gaining work experiences? In my opinion both are equally important in this region where certifications are highly regarded. Rich experience is also important to be able to deal with different situation Always have plan for growth and career development and ensure to have diversified and transferable experience that will allow you to move up the ladder. I was hired from Technical University based on mindset and what they taught me there: to flip and turn problems to come up with a solution. And, since I did not have any certification as it pushes you in a certain direction. I vouch for Rich Experience but in the Middle East I found out that Globally Recognized Certifications have a value and of course it enables you to build a network. For this reason, I became CIPS member, looking to boost it to FCIPS (based on my experience). I have gone through CIPS and its certification and comparing to what was there 20 years ago, not necessarily CIPS, it has become so much more than ‘a direction’. It is a true asset and

Page 10 of 10 recommended to all people interested in professionally exercising whichever role in Procurement. Q17 What is your recommendations for professionals who have now lost jobs and/or are long forced leave without pay? I advise professionals to be patient and look for opportunities in industries with least impact and work toward being certified and qualified in this domain. Stay strong, stay healthy, stay mind-fit… never ever give up! Just don’t shoot applications and your CV as a mad (wo)man into the world, but diligently look where you want to work and why, and of course where there are openings. Q18 What are your recommendations on how professionals from other countries / continents can move across borders to UAE / Europe Visa-wise … get a job at a multi-national with presence in the UAE or Europe and get a transfer in the future. There is hardly any company that would hire you from the moon to do a job at Saturn since there are so many Saturnati already

• Acknowledgments

We also extend our gratitude to Mr. Shakti Arora, Mr. Adil Al Mulla and other prominent supply chain leaders for their commitment to the Branch, CIPS MENA, its volunteers and our members for providing the platform & visibility to this work.