PROCUREMENT HEADS BLOG

The Big Interview with Rory Lamont

Rory was appointed Group Chief Procurement Officer for Hitachi Rail in 2018, after joining the business as UK Procurement Director in 2017.

He started his career in Aberdeen, working for BP and gained experience in the procurement of goods and services as well as procurement processes and technology in the subsequent four years. Following this, he joined Accenture where he had wide-ranging exposure to many industries, whilst developing a professional focus on procurement and supply chain management.

In 2009, Rory worked across Libya, Syria, Holland, Canada and the UK, as part of Petro-Canada’s Procurement leadership team, before re-joining BP in 2011 as the Head of Category Management for their Refining and Petro-Chemical businesses.

In 2019, Rory was made a Fellow of the Chartered Institute of Procurement & Supply and an Executive Officer of Hitachi in 2020, for our latest Big Interview, he spoke with Dan Goodson.


Watch Rory’s conversation with Dan here

How did you get into procurement?

I applied for BP’s graduate scheme in 1999 and was fortunate to join the procurement team in the North Sea, it was a very lucky first choice and the first step on my career ladder. 

I did a procurement elective at university in my honours year and really loved it and my passion grew from there. 

I loved the supplier interface and loved working in the business and the technical interface.

I am now lucky enough to find myself in the customer interface; it really is a wonderful career. 

What are you most passionate about when it comes to procurement?

I think at the moment there are a couple of things that have got me charged up the scope three emissions piece around sustainability is the next area that this function has got to lead its businesses to help understand and form a plan on how to work the supply chain to improve and remove carbon as we go forward, so I love that.

When I start to look at our supply base, we have about 12,000 suppliers. Everything from the FM supplier here for our office in London to the engine supplier looking at batteries, the challenges are very different, but the procurement team has a massive role to play to make sure that we understand what the opportunities are and that we take them.

The other thing I love is the fact that I get to go into factories to walk the line, to see how our goods and services are coming together, to do the first article inspection.

There is just such a range of things you can get involved with in this profession, which is why I love it.

What are the challenges that you and your team are currently facing?

I think some of the common challenges that any supply chain team in a manufacturing business is going to be faced with, we are still making sure that our operations are Covid safe and that our supply chains are managing it. 

Brexit is still there, Brexit mark two is around us and new HMRC obligations which came into force in January, we are now in anger using the tools and processes that we put in place about 18 months ago to deal with that. 

Even with the new fleets that we have available in the UK we still have a long supply chain for some systems going back to Japan, so with that reliance of the business, we took a long look at which routes we bring goods and services in from, and we took a very deliberate strategy to avoid Dover and the Kent corridor.

We are lucky that our factory is in County Durham and a lot of our operational hubs are up and down the country, so coming in through a different port was an opportunity for us. 

We built up the team, put in place the systems and processes and now the customs checks so it has been a long piece of work, almost 24 months of work, but it has paid dividends.

What are your team and the organisation doing currently in terms of sustainability?

We’ve been really public on where we want to be, which is carbon neutral across the Hitachi group by 2050 and we are acting on that now. 

We reduced our CO2 footprint by 30% last year, increased the reuse of water, reduced the energy intensity of our facilities. 

The role that my team is playing though is to look at scope three. 

Within the organisation, we have a CSR committee which has our COOs on it, myself, CHRO and the Head of Sustainability and Environment and across that group we have working groups sitting underneath, and each is on scope 1, scope 2 and scope 3. 

My supplier management team has been working quite closely with EcoVadis, which we have spoken about publicly, taking through our top 250 suppliers to the EcoVadis registration process, which if any of our suppliers are watching this it is really important that you do that as it helps give us the insight into how you are performing. 

The next step after that is to have a heat map of the supply chain.

My philosophy here is that I am pretty comfortable that a lot of my suppliers are engaged in this topic already, and are actively managing their scope 1 and scope 2 emissions. 

Ultimately what I want to know in the next six months is to know in detail where the hotspots are, so my guts tell me I am making a train from aluminium – the extraction and refining of aluminium is going to be a challenge that we have to take on.

The question is am I going to do that as Hitachi, am I going to look to do it as a rail industry initiative talking with Network Rail, or do I want to approach Boeing and Airbus because they have the same aluminium tubes, they just happen to make aeroplanes from them and I make trains.

That is where we are going and there is some great technology out there that can help you take big jumps, quickly and effectively. 

The view I have is that the more the supply chain engages that the quicker we get to solving the difficult challenges while the shift that is happening in society in general help us address a lot of the easier to get carbon-intensive processes that are around us like lighting and energy.

What is the biggest risk you have taken?

I’ve taken a couple and luckily they’ve all paid off.

One was leaving BP to join Accenture, I left a very stable business environment and came into Accenture and the change was huge, I went from being part of the business to an advisory role, having to help sell, having to really work as part of big integrated teams and that was a big shift from where I had been and I think I was probably a bit naive and didn’t fully understand the shift I was making.

For anyone making a second or third job move, take a step back and think, what does it mean, what does it mean not just for my job but for my personal life. 

The second one is the shift out of oil and gas and into rail. 

Again, it was a big personal move to go from one heavy engineering environment into another but a really big change in product. 

I think the shift gave me that real link to a product I was invested in, again it has been a big personal challenge to take on a CPO role for the first time, a big function with global responsibility and have really enjoyed it.

What do you think are the current procurement trends and hot topics and what emerging roles do you think we will see as a result?

I think the CPO role has been shifting during the pandemic and Brexit, there has just been so much more focus on what has been happing in the supply chain, and I think CEOs are now looking at the CPOs or Chief Supply Chain Officers as a role they can see the value in, the risk protection and the risk mitigation. 

We are going to go into or we are in an inflationary cycle. 

There is still the P&L protection that we have always offered but I think we need to offer it in a much more integrated way, can we drive a more efficient effective infrastructure in the business and therefore reduce our exposure to energy. 

The Supplier Manager role is becoming more and more important.

It is fitting together what is the supply base we want to use and what is the performance of the supply base and how do we keep the supply base qualified with understanding the environmental impact of that supply chain. 

I don’t think it is any longer acceptable not to know where your supply chain is or isn’t performing in terms of ethical point, financial point or business delivery.

What are your thoughts on social values?

A lot of businesses are wrestling with that, not just the return to the shareholder or stakeholder but also the return to our environment or society.

For us, as a function, if that is something our business is wrestling with, we had better be trying to understand what the market and supply chains think of that, I am not sure we are really getting to the bottom of that yet.

What skills do you consider essential to be a procurement leader?

There was a great Harvard business review called the T-shaped leader. 

It was a leader with deep functional capability, but with the ability to reach across to all the other functions. 

If you are a procurement leader you have got to be able to talk in a linked up way with the CFO and the CEO, you need to be able to understand the CHRO’s agenda and you must be able to be absolutely intimate with the Chief Supply Chain Officer and the Chief Operating Officer. 

That ability to represent your function and understand the other functions in your business is essential. 

I see some great business analyst type skills and commercial skills coming up into the category management and sourcing space and the people I see succeeding there come with great interpersonal skills. 

If you are early in your career, develop the ability to listen, to synthesise down what you’ve heard and come back with a couple of options and a recommendation. 

Who has had the most influence on your career and why?

The first-ever boss I had was someone called Granville Clutterbuck. 

He was a great leader, very humble and really approachable. 

He shared his experiences very freely but had very high standards.

I can remember him taking me to task on stuff in a great way. 

He sticks in my memory and I think in some of my time as a Consultant there are a couple of clients that really stick in my memory, those clients decided to treat me as an individual and part of their team, despite the fact I was working with an external company. 

I think that is an important skill to know how to build a team from different parts to give you something better than the sum of those individual parts.

What role have you and the procurement function played in enabling the company to face the pandemic?

Our main focus was sustaining the supply chain, so we started off using some pretty good analysis we had through one of our spend analysis tools to we took the supplier file and correlated it against the instances of Covid cases recorded by Sir John Hoskins Hospital, that gave us a really good first cut of where our supply chain was impacted and was a very powerful picture to show the exec team. 

We saw a 96% correlation between where our suppliers were based and where the cases of Covid were emerging and that got the focus of the business and where we need to be paying attention to our suppliers. 

From there we went into tracking key suppliers to key projects are they sustaining operations? 

Are they seeing tier one or tier two disruptions? 

We started to report that regularly along with mitigation plans we had put in place, pretty core really. 

When you are trying to manufacture trains, which we are really proud that we continued to do when a lot of our manufacturing base is in Italy we did a really great job in being able to maintain the manufacture and operation of our trains. 

We played a really big role in obviously getting the PPE that we needed and we continue to play a role as things shift around that we are on top of where we have supply risk and where we don’t.

Personally, it was a pretty difficult two years. 

You know I ended up from being in Japan once a month to not being on an aeroplane in two years, running a global team from my spare room.

It was not at all the way I was doing it before, so it was a really difficult period. 

I hope everybody has come through it having learnt a lot about how to operate globally, remotely, but I am really looking forward to not having to do it anymore!

What impact has it had on the organisation?

Our organisation is 9,000 people a large number in Japan, Italy and the UK and a team that is ever-growing in the US. 

We used to be together a lot and we have not been together as much as we would have liked to have been. 

That’s led to some of the global thinking slowing down, we need to get back to that we are a global company.

It has meant the opportunities to move around for our talent hasn’t been there and again everybody is dying to get to that. 

We had an opening party this week for the UK office to welcome everybody back and as a leadership team, we are really committed to more of that. 

As we emerge out, we are ready to really get going again.

What has worked well and what would you do differently with the benefit of hindsight?

We were rightfully very cautious about coming back to the office, I think with the benefit of hindsight I may have led slightly differently. 

As the government restrictions calmed down the office was open but we were still quite resistant to come together and some of the things we have been clear on is that planning and performance reviews can’t be done over Zoom. 

We had been getting a team together in Italy in the UK and in Japan and getting them together via the technology, we have now got we have got to keep that going and we have got to grow that, we have just finished budgeting for this year we are in the middle of planning and we are hopefully going to find the time to get together in Italy.

That has been a really big miss, managing a supply chain when you can’t go to your suppliers is very hard. 

You have to rely a lot on trust, on asking the right questions and on data. 

I think the availability of data in the supply chain has not been as advanced as we would have liked it to have been, but there have also been some big strides in that area because of the pandemic.

What does Equality, Diversity and Inclusion mean to you?

It comes down to three key things, one is a team that is made up of different points of view, another is a team that listens to those points of view and is trained to do the listening and finally a team that forms a decision and executes a plan. 

That, for me, is what true diversity and inclusion are really founded around. 

Then there are the lenses you can put on that around sex, sexual orientation, ethnicity and those are equally important, but I think the benefit of looking at it through the lens of have I got opinions and experience around this table and is the table listening to those, pushing itself and then forming a plan and getting after it is where the power of that diversity comes from and benefits the business. 

I am really lucky that my leadership team has different nationalities, it has different points of view, it probably doesn’t have the gender mix it could use, which could be a source of criticism, but I am happy to defend the position as I see the listening and execution because I see it coming through and the benefit. 

It is really important to me, I was really good at fencing as a kid, I fenced for Scotland but I fenced at a school that was a rugby school and I didn’t get the same credit for what I achieved in fencing as everybody thought rugby was the best thing since sliced bread and that is what fuelled my passion for diversity. 

As leaders, if we are not helping bring in different nationalities and different points of view we are stifling our organisations.

Do you think your ED&I approach has changed since the pandemic?

I think it has really suffered if I am honest, as we weren’t able to bring people together to generate ideas and plans. 

It will come back but it will need more work from us.

From a cultural perspective, it is more of a struggle now?

Yes, that is one of the great things about Hitachi, we have got this cultural mix of Japanese, European, American it is a heady mix and one of the great challenges of my job is how to harvest that mix to get the business results we need.


Click here to Listen to Rory’s conversation with Dan.


How do you engage your key stakeholders around sustainability?

It is a conversation we are right in the middle of and there are a couple of key areas it has to come from, we talked about the sustainability of our operations so clearly we are talking to planning managers about solutions to giving you green energy, we have just signed a green energy contract for the UK with Scottish Power. 

We have different conversations with the sales teams.

What are the requests from the customers, we want a more recyclable train, we want an energy-efficient train, a train that generates much less noise. 

We then take those requirements, work with engineering and look to the market to find solutions. We have got this vision of being a mobility company rather than being a train, singling and maintenance company so how are we going to create that product that goes from ticketing, signalling, transportation, there is a lot to it, going to stakeholders listening to their needs and going to the market. 

Can the market do it no?

Do we need to do it ourselves?

Do we need to partner with another company? 

It’s all about getting into those conversations.

How do you measure the success of the sustainability programme?

We have some very clear targets around energy, water and waste. Then for me with the supply chain, the measures I have got are how much of my suppliers by spend do I understand the scope of the emissions. 

The target I have is this year to understand 70% of my spend based on what their position is on the scope of the emissions, next year that will move to 85% of spend.

Has there been anything you would have done differently with the benefit of hindsight?

I think with the benefit of hindsight I would have gone into conversations within the rail industry and within parallel industries more quickly. 

I could have picked up a lot of learning, I would be really keen to talk to more companies about what we are doing and to learn from them.

Are you aware of the Sustainable Procurement Pledge and what does that mean to you?

I am yes. I think it is a useful construct. But, for me, signing up to that pledge must be followed by action, it is a whole promise. 

As a company, I think we are much more aligned to setting targets and measuring them than signing up to a pledge. 

It is not that I don’t believe in it, we have a vehicle in place to drive change which is the obligation of each CEO to have a plan in place and to see that that is delivering is much more powerful.

What are your visions for sustainability?

I would be very proud if I could see the clear link between the different functions within the business pulling in one direction. 

I would then be encouraged to see the same level of dedication within the supply chain.

I would love to see the supply chain working on the tiers to help the smaller companies. 

They don’t have the same resources as the bigger companies and I think that is where we could focus our help. 

What changes have you seen in sustainability in your career?

I have a very clear memory of walking through a warehouse full of valves when I was in the North Sea and just the amount of paper, wood, pallets, packaging, skips outside and a lot of that was getting recycled but now what I see is the packaging we are using is a lot more thought through. 

Also, length of supply chain, what we think about now is for some of the systems and assistance that come from Japan is a way to bring that in country – it is good for the economy we work within. 

Just seeing that grow and grow is really where I would love to see a much clearer picture. 

It is being taken on at all levels it is not just a discussion at the top table anymore.

What do you like to do in your spare time?

As a father of two, I spend a lot of time moving children from one place to the next. 

I am very much enjoying the 6 Nations, which obviously started off with a great result. Cooking is a passion; I just try to be a good dad and husband. 

Music is a big passion; I really enjoy Don Letts’ podcast on a Sunday. Films too, I saw the Courier recently which is a cold war thriller.

Tell us an interesting fact about yourself.

I actually left home when I was 17 and went to live in France for four months. 

I have a very clear memory of leaving Waverly Station with my rucksack and making my way down to the south coast and coming off the ferry from Portsmouth and spending four months finding my way in France as a 17-year-old, which was very informative!

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Dan Goodson