Major transformation and a global footprint provide their own challenges, but robust procurement practices and good supplier relations are key, says Nick Dobney.
Strong procurement is a key contributor to any successful global business. It can take many forms, whether to improve productivity, increase efficiency or secure partnerships with high performing suppliers.
Last year, I joined Puma Energy as the global head of procurement, and it has been a fascinating initiation getting to grips with a portfolio of goods and services that spans dozens of countries. It’s a far cry from my previous role at a multinational retail organisation with long-established practices.
Making the change from retail to energy has been a memorable transition, not only because of the industry shift but the speed at which the company is growing. This includes sectors such as engine oils, jet fuels and the bitumen that goes into thousands of miles of new roads each year across rapidly growing markets.
Recently, I’ve been considering the procurement challenges facing companies that operate across continents, but also in some of the most intricate and complex countries in the world. With that in mind, I’d like to share my five ideas for what good procurement looks like.
1. Alignment to supply markets
Working out where the market is for the goods and services being procured is vital. That may seem obvious, but it is essential that an organisation is fully aligned with what is possible from each market. The procurement approach has to be flexible to adapt to the relevant supply market to ensure that the best value is always delivered.
2. Having a global mindset
At Puma Energy, we operate in five continents and almost 50 countries. At this level of diversity, everything will only work properly and effectively if local regulations, duties and intricate customer requirements are respected at a country level and built into global sourcing activities. This knowledge layers up into the procurement function and also to senior management to showcase how the supply market can meet Puma’s requirements. My first few months on the job involved getting out to our countries to hear about the individual country requirements of our key markets, and it was fascinating and invaluable to build that insight into our procurement strategy.
3. Respecting best practice ethics
With such geographic diversity it’s vital to set out a strong code of conduct that clearly states how relationships with suppliers are governed. Plus, businesses should vocalise the behaviours they expect of suppliers and what they expect in return. Our Puma Code of Conduct outlines our commitment to transparent ways of working.
4. Appreciate variety
At Puma Energy, the work we do varies, as is the case with most large businesses. One day you’re discussing CAPEX investments, the next it’s ensuring you have the right safety equipment for staff. My tip is to embrace the challenges, stay flexible, and focus on business requirements.
5. Establishing common ways of working into business culture
Our organisation has come through a period of rapid growth, and we’re now putting in place a culture that brings our functions together, underpinned by transparency. We are working to establish this robust approach throughout the business, so we can increase operational effectiveness, profitability, and deliver value for money for customers and investors alike.
Procurement is an evolving function and the move towards a more strategic position within organisations is not simple. For many of us it’s the relationships with our suppliers that will ultimately decide whether our approach is a success. From here, it is about continuing to develop a strong relationship with senior management, one that values the importance of modern procurement.
There are huge opportunities for our procurement function to evolve with the business, and for our suppliers to demonstrate how they can support us both now and into the future. I recommend that if you are given the chance to shape a department, you seize it with both hands. Every day is a new challenge and it is a great feeling to sweep away outmoded practices and usher in the new.