Investing time in developing proper business relationships is the key lesson of Ian Harnett’s career in procurement.
Harnett, who will retire from his role as executive director of human resources and global purchasing at Jaguar Land Rover at the end of July, said it was a tricky skill to teach because it required give and take.
“It’s a difficult skill to pass on because you’re asking people not to want to win all the time – you have to lose some of the time,” he told SM.
“It’s about spending quality time on making connections and dealing with people in a fair, open and honest way. It’s all about that human relationship, ‘I’ve got some goods and some bad news’, and they both have to be dealt with in the same way.”
Harnett, who started out as a buyer at British Leyland in 1982, said he had received an email from a supplier congratulating him on his retirement, which read: “I will always remember being in your office in 2002 in Cologne when you told me I had lost all the business. It was probably the most memorable meeting of my life because you did it in such a nice way. Everything you said was true. We needed to go away and do things better and we did.”
Harnett added: “They have all survived, just not with us.
“A robot could never do that and you can’t teach it by numbers. You just have to go out and practice it.”
Harnett said it was critical for organisations to have procurement at the top table because purchasing spend accounted for so much of the business. “[Procurement] will pay for itself ten times over,” he said.
He said procurement had to be involved in product development from the off to achieve true efficiencies, working alongside engineers and designers.
“The best way to do it is to design it [procurement efficiency] in from day one. If you get the right design, with the right attributes and features, in the right quantities, with as much reuse and commonality as possible, with as little complexity as possible, then if you can hit it from day one, that’s how you get a good deal.”
Harnett said suppliers had to make a margin in order to stay in business and make investments, and “you treat everything else as waste”.
“How much can I get rid of without affecting quality, without affecting the end product that ends up in the customer’s hands?”
He told SM the automotive sector was in a period of great change but the fundamentals remained, though the challenge now was finding buyers who could speak the same language as software engineers.
“That traditional role of mechanical engineering and physical components will never change,” he said. “The cars themselves are changing, they are becoming almost like computers on wheels. The big challenge now is software. I need software buyers.
“You are transitioning from buying physical components to buying code. I need buyers who can sit alongside the software engineers and talk the same language.”
Harnett said he believed industry would get through the coronavirus crisis, which had similarities to previous disasters but of course differed in scale, time and impact on lives.
“We managed to keep the lines going until we had to shut down due to government advice,” he said. “We’re starting the factories up again now. I think there will always be demand for premium products. Our demand is not going to go away. It may take a while for that demand to come back but we are starting to see recovery.
“It’s a matter of getting the wheels turning again. Yes there will be some more supplier casualties I’m sure, but we will get through this.”
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