At cruise giant Carnival, Julia Brown is transforming procurement, using teams to buy mattresses and lettuce, and dealing with the consequences of Hurricane Matthew
Julia Brown puts communication high up her list of priorities, and doesn’t let much get in its way. From her home in Miami, the first ever CPO of cruise giant Carnival answers emails in the early hours, and travels from Southampton to London to join networking dinners despite jet lag and a brutal travel schedule the following day. That focus has served her well: she has won most of her jobs through contacts, including her current role at Carnival, which she started in 2015.
“Every opportunity I have had came to me,” she says. She sat beside Arnold Donald, Carnival’s CEO, during an executive networking dinner. Their conversation led to a job being created for her to coordinate spend across the group’s ten cruise lines.
Carnival’s cruise lines operate out of North America, Europe and Australia, and claim to account for 85% of the world’s cruise passengers. Brands include Carnival Cruise Line, Princess Cruises, P&O and Cunard in the UK, Seabourn, Aida and more, and offer all kinds of experiences from clubs, open-air cinema screenings and piazza-style street venues, adventure parks or fine dining, spas, ultra-luxury and relaxation.
Each brand already had a procurement leader and a supply chain organisation responsible for the goods with a different strategic sourcing structure, priorities and scope.
“We were optimising at the brand or group level, but the intent was to think how are we really able to optimise at the enterprise level on things where it makes sense,” says Brown.
“It is a delicate dance, because for the most part we have 105 ships that are pretty much in motion every day, and the supply chain responsibilities mean that none of those ships leave without the goods and services it needs. Some groups have shore excursions as part of the sourcing responsibility, in other groups they are sourced outside our company. So I looked at how we partner with them in a different way, how we could standardise on a sourcing process to more effectively have transparency to leverage our scale – while exceeding our guest expectations,” says Brown.
She is responsible for a spend of around $9bn, covering most of what is needed for what are essentially floating cities: from medical equipment, entertainment, shore excursions, retail, food and wine, to fuel and toilet rolls.
“The thing that impacted me when I came into the industry is the extent which it’s a logistics business. Anything that goes on the ship has to be done typically in eight hours and everything that comes off the ship has to come off in eight hours while it’s in port – and that includes the passengers,” she says.
Getting it right means coordinating sourcing and supply to ports around the world to match the ship’s schedules and meet all the needs on-board. The devil here really is in the detail – the toilet paper has to break down in a way that doesn’t disturb the ship’s plumbing.
“I am amazed at how proficient our shore-to-ship people are in running this business because if you think about how many things could go wrong every day and the fact that they don’t and that when it does it is news, that’s pretty impressive.”
Until she joined Carnival, Brown had worked in fast-moving consumer goods. As head of global procurement at Kraft Foods, she led a worldwide transformation, diagnosing spend, reducing the number of global suppliers, and coordinating strategies with Cadbury when it was acquired by Kraft in 2010. She transferred to spin-off Mondelez as CPO, and then moved into a role running a transformation programme for a Latin American division.
“What motivates me is the desire to do what most think is impossible and to create. Several of the roles that I’ve been in were newly created. This was not dissimilar to that,” says Brown.
Reprioritising the work of the procurement teams across Carnival was essential to align the brands and capture the benefits of scale at an ‘enterprise’ level. “It is extra work for those teams that were already busy before I joined. No one was sitting around twiddling their thumbs,” she says.
And this had to be done without taking their eye off the ultimate goal: exceeding guest expectation. “We are about ensuring that for every cruise guests take it is their best experience, and when they come off they want to sail again – within the same brand or at least within Carnival.”
Salads and sleep
Focusing on advantages of scale while meeting individual brand needs affects every area of spend, she says, from the number and variety of lettuce offered with an evening meal to the making of a mattress.
“People go on cruises because they want a good rest and want their beds to be comfortable. On our fun ships you may not be in the room that much, but if you are sailing another brand where it is all about rest and relaxation that sleep experience is critical.
“After my first 90 days we had a global meeting here in Miami, where we had representatives from each of the groups,” she says. They talked about if and how they really could operate as a team, and painted a picture of what this could look like in 2020. “Everyone said yes, because there was a benefit.”
They set financial targets for five years and then looked at what they needed to do year by year to deliver value, while meeting and exceeding expectations of internal and external stakeholders. “We branded the initiative GUEST (growing, utilising, enterprise, spend, teams) to signal a change inside the company and brand the change outside the company to let our suppliers know we were going to operate this way,” says Brown.
“We had programmes in the technical space, marketing and media spend – in that instance we consolidated from nine agencies in the US down to one. That was a huge undertaking because for us that was a new area for sourcing influence. It was also important that our marketers and sales people felt an alignment to our agency.
“I am a firm believer that unless it is a straight price negotiation, there is very little that purchasing does on its own. Everything we do is in partnership, internally, cross-functionally and externally. Marrying those together in a way that is seamless is a core part of any purchasing person’s responsibility.”
Brown created sourcing teams and ambassadors – people considered thought leaders and influencers in particular areas – from around the company, selecting roles including a guest experience leader in one of the brands, a master chef, a marketer, a sponsor, a chief strategy officer, and a brand president, to help drive the programme.
“We did that for each part of the spend, and we said we want to be brand agnostic and do what is best for the enterprise. That doesn’t mean everybody goes to one supplier, it means we are going to understand everyone’s need and go from there.”
They also looked externally for the best solutions. “The year prior to my arrival we had done some sourcing in airlines looking at crew and guests and corporate air travel, and there was some really good value there,” she says.
The first focus for the GUEST initiative was mattresses, as the Princess brand was already looking at the quality of passengers’ sleep.
“We carved out part of one of the floors of our building and we had samples of all the mattresses that each of the brands had. We looked at the hotel industry – what does Intercontinental do, what does Westin do…? And we looked at their costs and construction. We looked at the inner workings of the mattress, the coils, the thickness, the padding. Of course, every brand was using something different,” Brown says.
They set up a mattress forum to talk to all the people responsible for that guest experience, including housekeepers and hotel operators. “We were able to streamline the number of suppliers and look at where our suppliers were, and where the ships were docked. So, if a ship based out of Europe was doing a dry dock in the Caribbean, not only were we sending the ship, we could be sending mattresses back and forth. So we said we need to more effectively align that.” This led to double-digit percentage savings on that spend.
Damage and deliverables
Disruptions in the ships’ schedule demand urgent response from the sourcing team, too. “Last year, there were a series of international incidents that required us to change where our ships were going – and some of them were midstream. With Hurricane Matthew, some people who were prepared to sail south into the Caribbean were coming out of Baltimore and going up into New England and Canada.
“That’s a very different cruise. The supply chain teams are required to figure that out and work with different ports on how to get stocks to the ships. My team was working with several of the brands. We had some damage in the Bahamas [where the company has a private island and ports], and were sending food and water on ships because the airports were closed. It is a 24/7 business.”
Brown’s enterprise team in Miami operates centrally, interacting with their brand counterparts, driving accountability with shared objectives. “We create virtual teams based on spend. Each brand builds in financial deliverables, we own them together jointly and we figure out if we have sufficiency to deliver for P&O, for Carnival etc, and we drive all of that from the centre,” she says.
With such a dispersed workforce and product, she says, her team have to travel frequently. “So much of our work is really understanding our customers – our brands – understanding our suppliers, getting on the ships and speaking to the captain and hotel directors and food and beverage directors. You cannot effectively source without understanding that.”
Although it might seem to be a perk of her job, she doesn’t often travel on the cruise liners. “It is hard to get many days away, and regulation prohibits people from getting on a ship at one port and off at another, so most of the time I talk to them while in port. That is when you get to see how goods are loaded.”
Travel and conference calls keep Brown’s team communicating broadly. “I have only ever worked for global companies so for me it is the natural way to work. Yet it was quite new for some who had been solely focused on their brand before. But I think people find it pretty interesting.”
Opening up communication increases diversity and helps the whole business, she says. Her new strategic head of food and beverage is Italian, having transferred from the European brand Costa to the corporate centre in Miami.
“Having someone who has actually worked in the brands and understands them just changes the dynamics in the communication around how things are done. So that has been pretty effective. The gender and racial diversity on the team brings a very different way of thinking about the business,” she says. “When you can tap into different points of view, that’s where breakthrough and transformation comes.”
People and communication continues through her leadership style. “My management mantra is when the leader’s job is done the people say we did it ourselves – my job is to remove the barriers. For people who might have sourcing experience it is talking about how do we change the game and create a new future in this particular spend.”
She has the ear of the board too. “When all of the brand presidents come together quarterly, I am part of that meeting. I am very proud of the relationships I have been able to build with each of the presidents and their teams,” she says.
Her drive to completely transform Carnival’s procurement strategy has made a productive start, but it is not over: people, process and collaboration remain a focus.
Change and collaboration
If people are going to drive through a major change, Brown believes, they need to be engaged and clear about how it relates to their career goals. “They need to want to be there.”
Training will help them engage with the multi-step sourcing process, which the company is looking to weave together across the enterprise, from contract management, spend analytics, and electronic RFID system.
“In other industries these are more commonplace, but this industry is new,” she says. “The cruising industry is less than 50 years old. I’ve seen these systems in other industries, but it will be significant change management here.”
She stresses that this is still being trialled and will be dealt with, brand by brand, when the time is right. “We are at different points in different organisational models, and if it doesn’t fit then it becomes a conversation.”
Which leads to the third strategy, collaboration; how her team works with the brands. “Nobody was sitting around waiting for a CPO to turn up and say these are our priorities,” she says. “What we are trying to do is to do this organically, to say, ‘here’s the destination, we’d like you to be part of the journey. Does that fit with your priorities?’”
A corporate-wide Gallup engagement study has proved very helpful, “because it is really important to see where we are in sourcing”, and she holds a monthly Q&A forum.
“I bring everyone together and we talk about what is going on in the business, what questions do they have, what they are hearing, what are they seeing? I also have office hours where anyone can come in and pretty much ask any question that they have if they don’t want to ask it in a more public forum.”
Public or private, early hours of the morning, or late at night, Brown is determined to keep the communication going so she – and her team – can deliver: “Because things change daily, right?”
Julia Brown’s Route To Carnival
From fast moving consumer goods to cruise liners
1991 Joins Procter & Gamble and works in various purchasing roles.
2001 Director of procurement Diageo.
2004 Director of strategic sourcing Gillette.
2005 CPO at Clorox.
2008 Senior vice-president and CPO at Kraft Foods.
2012 Senior vice-president and CPO at Mondelez International.
2014 Business transformation leader at Mondelez Latin America.
2015 Joins Carnival Corporation as the group’s first ever CPO.