Carel Aucamp is the Group Head of Procurement for New Categories at BAT and leads a global team located in the United Kingdom, US and China. The team is determined to transform BAT's products to reduce the health impact and expand the portfolio beyond nicotine.
For Procurement Heads‘ latest Big Interview, he spoke with Dan Goodson, Head of Practice for the Industrial sector.
How did you get into procurement?
I started at BAT in South Africa in a supply chain role in 2007.
It was during a period when several organisations, including BAT, were transforming their procurement functions towards a centralised solution.
During this role, I had the opportunity to work as a Consultant and set up sub-Saharan procurement.
To be more clear, when I say Consultant, I was the Analyst looking at opportunities and managing spreadsheets, this was my first experience or understanding of procurement.
I got really excited about the impact the procurement community had on the business, how they engage the stakeholders and how their results not only impacted the P&L but also the future strategy of an organisation with the right supply partners.
In my career, I have been fortunate to start in the procurement strategy, transfer to indirect procurement and now into direct procurement, with a big portion focusing on future products with R&D, which gave me a great view of the procurement function in different dimensions.
In my current role as Head of Procurement for new categories, I lead the procurement team responsible for transforming our organisation towards harm reduced products, vapour and heated tobacco products, as we build a transformed BAT.
Looking back, I have been to 67 countries, engaged many suppliers and met wonderful people along the way and it is an honour to sit on the BAT procurement leadership team.
Tell us about some of the challenges you have faced?
Many big organisations are keen to transform and, certainly, understand the urgency for change due to several different aspects – be it sustainability, consumer preference changing or the introduction of innovation disrupting the landscape.
BAT, as an organisation, always has one eye on the future and have been on this journey to drive transformation and innovation.
In 2016 we stepped up the innovation gear to transform our combustible business into vapour and THP. At that stage, it was very new to BAT procurement and we had two general procurement team members providing support and ensuring governance.
In August 2017, our CPO gave me the opportunity to lead the function; it was a great chance to look at it as a blank sheet of paper. The vision at the time was to build a multi-billion-pound operation.
It gave us that start-up feeling and, at the same time, it also meant that from a procurement point of view we could reimagine our stakeholders, supplier and process relationship and build a solution putting us in the driver seat.
To put it into context, in our combustible business, we own our factories and now in new categories, we found ourselves working with third parties for a large portion of our supply. It was a new environment, with new challenges which we had to educate ourselves and move forward – it is, and has been, an amazing transformation to be a part of.
It was a great four-year journey, going from a complete function of two people to a function of 30 people today. Growing the agility of the team from a compliance-based approach to a stakeholder partner inventing our future through innovation, category management and incorporating ESG.
Over to business as usual, supplier relationship management, how do we build and work with suppliers, which is a great thing as it covers all angles, and the opportunity to build it from the start in different geographies.
And even thinking about what we can do more regarding supplier diversity.
Was it difficult to find the right people in that four-year period?
Definitely, finding 30 people sounds easy now, but building the right team with the right culture and capability for an agile organisation has taken a large effort and focus on people and talent.
The approach we took was clear – build the basics right.
What is the biggest category, what is the right capability fit for now and 18 months and how do we find the talent that brings new categories experience to BAT in relation to electronics, mechanical parts etc.
I think electronics was our greatest challenge, where we had to understand what to do, what we need and what will drive us forward. Once that was established, we could build on mechanical, our contract manufacturing in China, on the innovation piece and our maturity changed.
One of the good things which helped is that we are flexible where people are located, we were happy to have people in the UK, but also in China, where our suppliers are based.
You need to be close to the supplier to build a good relationship for collaboration, so we built a good team in China, which was a bigger challenge, as we had cultural elements to consider – yet the heart of the electronics device community is there and that is where we focused.
At the same time, we are fortunate to have America and a talented team there where we can access innovation.
It has been a good journey building the team from generalist Sourcing Managers, to category experts and now expanding the boundary of procurement into supplier-led collaborative innovation.
Being a global entity how has ED&I embedded itself within your recruitment process?
I am pro-inclusion and pro-diversity.
Considering this topic from a procurement point of view we by nature like to challenge the status quo, but you can only do that if you have a team with diversity embedded into their thinking and problem-solving.
BAT is present in 185 countries, we get exposed to diversity from day one and often this is a big reason for employees to join BAT, it is certainly one of our strengths.
Therefore, it is part of our DNA, but we focus on maintaining it and building it even strong. You are never at the end goal with regards to ED&I.
In my team, I have considered many elements as a large part of my team are STEM-educated. The talent pool in this area looks different.
Originally, when I looked at the structure, it was a male-dominated structure and I was conscious that I wanted to incorporate more female talent, but I didn’t want to just tick the box, I wanted to make sure people could lead through their strength.
We embarked on a process where we identified the top female talent in procurement and gave them six months to be part of the leadership team on a rotation basis. As a result, we had a great pool of female leaders that we could promote after 12 months.
This is the first year we have seen those promotions and my leadership team has two great female leaders driving transformation with new dynamism. Within the team there is a lot of diversity, we focus heavily on getting the thinking correct.
I also like the idea that we have different nationalities on the team.
I am always conscious there should never be a majority, to be able us to contribute better and bring in innovation, it helps to have different nationalities thinking about the same problem and coming to an inventive solution.
Tell me about R&D and how that has affected the way that you do Procurement and achieve new technology.
When I started in procurement a lot of it was about understanding the business requirement, creating an RFP, finding 20 suppliers to send it to, creating a long list and funnelling through the process to get to three.
In my view, that process is outdated and does not add value to the next generation of business leaders who are all capable of searching on the internet.
We need to redefine our process.
We need to be more open-minded.
As a result, we are creating a team that can join R&D and collaborate with suppliers. We are trying to unlock the element that not all ideas will come from BAT and that there are thousands of suppliers out there that could bring innovation forward, it is a true network of supplier collaboration and innovation.
Working with R&D we have identified suppliers we are aiming to create strategic partnerships with, exploring our 5 to 10-year pipeline and linking strategies together.
Internally we call this team “Procurement Engineers” or the explorers, who are spending their time on the frontline with suppliers saying what does innovation look like.
It is working, it is exciting, and we are bracing ourselves for the impact of success.
There is an element of risk naturally with regards to new technologies, how are you covering that?
Four years ago, when we started new categories of procurement, that same risk was prevalent, so we created a strategy with organisations specifically to introduce strategic preferred suppliers and asked the business to trust us.
We would create preferred suppliers for categories, we would create big EMS providers and we would work with them, and in the last two years, we have changed 76% of our suppliers, which is phenomenal.
We have introduced better quality suppliers. It also released a lot of savings and competition helps.
This strategy forms the bedrock for people to trust the system can work.
Our mindset is that we want to work with start-ups and scale-ups, at the same time we are very clear with our supplier relationships we are a big company with even bigger global dreams, therefore, we work on 1-1 relationships, but will always aim to dual source and create competition.
We have tried to work with our suppliers to say we will secure a certain portion of the business for you, if you want more you will have to win it. The right suppliers out there take the opportunity and run with it.
How difficult has it been to sustain sustainability practice throughout this process?
Sustainability is front and centre at BAT and we have got big ambitions to make sustainability even bigger.
As a result, we have communicated our sustainability targets publicly.
Focusing on our suppliers it is really important to bring our partners with us on the journey.
I don’t think sustainability is a “HERO-story” where one or two people are going to make a change, I think all of us will need to make changes to get it right. We need to take a collaborative approach.
Last year we held our first supplier summit and laid out the importance of sustainability to more than 200 of our suppliers. Sharing our vision and requesting them to join us for a more sustainable future.
Fortunately, a lot of our suppliers have a similar vision.
Last year we analysed our lifecycle impact for all our products to understand our baseline and educate ourselves on the impact of our decision making.
Internally we follow a menu card approach to evaluate our decisions and their cost impact.
Informed decision making is key, as a result, we will follow the same approach for ESG or sustainability to say there is a material we use and here is what a different material would do with things like the offset on CO2, really start the conversation and focus the discussion as there are some quick ones and some that have a much bigger impact that will take more resources to reach.
We are starting the conversation with our suppliers saying you need to be with us on the journey. We also introduced a sustainability portion into our supplier selection criteria, so that we are starting on the right page, with a 10% weighting allocated to sustainability in our RFP selection criteria.
We are not there yet, but the plan is solid and now we can focus on the delivery.
What does the future look like?
Digital, or should I say META.
For us the future will become more digital and more activities we do today will be removed and rebuilt with more data to increase our decision making.
This will remove the unnecessary time spent on administration and governance releasing teams to work with suppliers and opening the door to innovation.
Agility will be a big driver for us together with digital to drive our agenda and be faster.
One of our key focuses is to get a team that will be able to go fast through a procurement process that fulfils all the needs we have.
Tell me about some of the key things you think are most important as a whole in procurement right now.
For me, procurement has transitioned from being a cost savings function to being a value-added function.
For many stakeholders, procurement was seen as a bottleneck, but the view is historic and the bar has been set much-much higher.
In the last 18 months, I have had more management board presentations than I ever thought I could have in an annual cycle. The importance of a strong procurement team has not been more visible than during the crisis.
The question is, “How do we change procurement to be more strategic to occupy more key business influence?” I think all companies are going through a form of transformation, for us specifically, we are going through a transformation and that is something that I get very excited about.
How do you occupy that seat at the boardroom table where you know your cost structure and the savings are coming in and cover the risk?
How do you enable the business to leverage resources better?
How do you get the right partners and what does that partnership look like?
It is no longer just a supply partnership.
You need to invest in those partnerships.
As procurement professionals this is the future, having that seat at the table to influence the business and building a collaboration with your partners proving your organisation with more access to innovation and capable resources.
Who has had the most influence on your career?
As we grow through our careers, we have different people influencing us in critical growth phases and I am always reminded that as a leader our role is to make new leaders develop people to be their best.
Through this lens, I would like to answer your question: Who has influenced me to reach the next development phase to be a better leader?
I can think of three individuals that played a critical role.
Patricia Naidoo. When I started my career in South Africa, I was fortunate to report to Patricia, she was the Head of Procurement at that time for South Africa.
She had the most fantastic energy about her, believing in her team and always empowering every team member to be part of the success. She instilled in me from an early stage that there is no reason to be a superhero, instead build a strong team, build a process, and spend your time to nature young talent who has the ambition to grow. This mentality of the team first has been a strong element in my leadership arsenal.
I like to spend a lot of time thinking about team dynamics and even taking that structure and thinking about how the individual relates to the supplier and I promote the idea that the Supplier Account Manager and Sourcing Manager should match from a character fit.
Luiz Conde. My international career started in London reporting to Luiz, a Brazilian Head of Indirects. It was a fantastic experience as Luiz was in the last leg of his career and took the time and energy to coach, provide passionate feedback and expect the best in all of his team.
I learned from him that whatever you do, are timeframes of your career you are in, or how little time you have – you always give 150%. Your last work is what people remember and it needs to be best in class.
Luiz instilled in me a sense of pride which you convey to your team; not an imposed standard to meet, but an awaking of each individual of what “best” could be.
Zafar Khan. I have been fortunate to work very closely with our current Group Operations Director, Zafar Khan. It is like walking with a man living years ahead of us and with a strategic eye in all conversations. I have learned from him that the detail counts to make the best decision and within the understanding of the detail you can make the bold and strategic decision.
This guidance helps me consider how to practically set up my team to better equip the future leaders whilst understanding strategic data points that will lead to success.
These three very diverse individuals have shaped me to dream bigger and always consider that my role is to build future leaders and create a culture where people can grow.
What do you consider to be essential skills to be a procurement leader?
I think an essential skill is connectedness and being able to really, connect not only with the stakeholders but also with the outside world and technology. To understand what the digital frame looks like.
I also think a procurement individual needs to have a vision, although, in some areas people consider it a support function, you need a bigger vision as you are supporting growth you are not supporting the client.
I would put those two very strong leadership attributes when I am interviewing people.
At the end of the day, a procurement person is doing more than just servicing a cost, they are also taking their stakeholder on a journey.
I think practically, storytelling is key and analytical skills have never been more important, the amount of data that surrounds us is important for a Sourcing Manager to be able to go through that and be agile with their data.
What advice would you give someone embarking on a career in procurement?
Procurement is what you make of it.
You can make it a very dynamic role, or you can make it passive. I hope that you choose the first and you drive change and new business growth for your organisation.
A tip to be successful – I would say sit and observe. By sitting back and observing the stakeholder, the supplier and the environment before you talk, you can make an informed decision and be better equipped to add value.
Sit in a meeting and be the last person to speak, you will have a much stronger stance and a stronger point of view.
Tell us a bit about you outside the world of work
I am married with two young kids, who keep us very busy! You can’t imagine what working from home looked like in my house, I think my whole team have met them a few times by now.
We have been living in the UK for 10 years. We love travelling and exploring new countries’ food and tourist attractions to see if they look like the photoshopped version.
So far, I have been in 67 countries and that is a count that I would like to keep ticking over.
Recently four friends and I started a new venture to create our own wine in South Africa, called Draaiboek. We have bottled two vintages of beautiful Chardonnay called Onskuld. It is an exciting venture outside of the day job and gives me an opportunity for other creative energy to flow.
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