For Procurement Heads‘ latest Big Interview, he spoke with Kane Nurse about his procurement career.
How did you get into procurement?
It’s an interesting story, procurement wasn’t a predefined career choice by any means.
I actually fell into procurement.
It was presented to me as an opportunity and challenge at the same time in my very first role by the Managing Director I was reporting to at the time, this followed a two-and-a-half-year stint in front-line operations.
I had proven myself in that role and come back to head office when he said, ‘Right, I want you to form a procurement team alongside one another, the brief is for you to save three times the collective salary between the two of you’.
That is where my initial journey into purchasing, as it was, began.
I guess, after 10 months in that role, I found that I enjoyed it, I had a talent for the retention of commercial facts and really enjoyed the psychology of negotiation.
That is really where my career path into procurement began and my introduction to CIPS.
When I actually left that employer I then took a step into my first procurement management role.
It wasn’t a pre-planned situation, I guess one of the advantages was the degree I did had a number of core sections: management studies, finance, and economics all of the elements CIPS could initially look for it really set me up really well in procurement.
My dissertation was on procurement, so ultimately, I think I was destined for this career.
I think much has been said about the negatives that have come out of the pandemic, particularly in the early days when we saw how many of the world’s supply chains were literally falling apart because they weren’t set up properly.
I think at that point many businesses had to rethink their procurement strategies and the pandemic really shone a spotlight on procurement as a function and actually what we do as a function to contribute to bottom-line profitability.
I certainly know in past roles that the actions of the teams that I have been responsible for have actually been what has kept the businesses afloat at difficult times.
I think the pandemic has given a real wake-up call, you’re not just the people sitting there placing orders, there is a much bigger picture.
It has actually allowed me to be able to educate people and give procurement a voice.
If people understand what you have to do there is some realisation and some further consideration into the challenges which we face.
That is one of the positives that has come out of the negative.
A lot of people at a lot of different levels in a business don’t understand the savings that we make to the bottom line.
If we save £100,000, that saving goes directly to the bottom line, how many products do we have to sell and pay tax on to realise the same return?
The contribution we can make is more widely valued now, I will also say from a recruitment perspective that has also been recognised in the somewhat uplifting salaries and remuneration we are now seeing in the industry.
What are the roles and responsibilities the procurement department holds at your current organisation and how do you split the function?
My past roles have included responsibility for direct and indirect expenditure both at the UK and a group level.
And within a national as well as an international spectrum.
Obviously, that has been predominantly within the FMCG and appliance manufacturing, but predominantly within the manufacturing sector, all be it I have worked in occupational health, retail and obviously now in retail and engineering within the water industry, so my current role holds the same responsibility for expenditure and budgetary control and the management of all the related price pressures.
I think much of the commercial landscape of the business is now governed by the need to be able to forecast and mitigate risk.
More and more of the Procurement Lead’s role is now about risk management for exactly the reasons we have just talked about.
That forms a significant part of my current position, it is as much operationally biased as it is strategically biased.
As you would expect with the number of inputs and outputs in my role I have to collaborate with every single function in the business it is certainly the most collaborative role I have ever had.
Every single function within the business has some sort of connection or communication with my team.
It is also about being a champion of change and continuous improvement, particularly, policy, procedure, and process.
Systems particularly automation and digitalisation, in particular, underpins a very significant part of the wider responsibility for the role.
It is about trying to become leaner, fitter, faster and better at what you do.
From a leadership perspective, it is about leading motivating inspiring and developing the people that report to me and the people that I support.
Leading by example, setting high expectations and standards and also about consistency but it is also in a leadership context about not just your own function.
As a leader and director of a business, it is about inspiring others outside your function.
It applies to everybody, not just the people who specifically report to me.
I think one other thing which is starting to form a more significant part of my role now is reviewing best practices, industry trends and how we can become more profitable while ultimately being able to deliver on time and to specification on behalf of an increasingly wide and global client base.
What are the challenges that you and your team are currently facing?
I think from a macroeconomic perspective or global position clearly accommodating some level of fallout from Brexit, I wouldn’t necessarily say that is a big one for us as most of the supply base is now UK-based, and the subcontractors that we use will and are still suffering.
Clearly recovering from the pandemic will be a second point, the biggest thing now is the increasing risk of supplier insolvency, which is a massive issue, there are many firms that are now on the edge of bankruptcy or administration, and there is an increasing number and when you have only got a limited choice, we are all competing for the same resource within the construction industry so it is more difficult.
I think at a more localised level one of the biggest issues we have got is within the water industry you are mandated to the suppliers you can use so in this industry you are effectively told, the water authorities have their own contractual relationships with the vendor to which we aren’t party to.
There are a lot of complications commercially and contractually that come out of that situation.
So, it makes the negotiations and contractual side of things much more combatant rather than being a partnership.
It is not a long-term view and another driver for that is that the water industry works in 5-year cycles so there isn’t that long-term view.
It is basically price now and it is here today gone tomorrow, for someone who has come from a background where I have predominantly focused on the development of partnerships and strategic alliances to come into an industry where people actually just don’t care about that, that has been a real adjustment for me.
What are you most passionate about when it comes to procurement?
I think in the past my response would have been what we call being a hard-as-nails negotiator and negotiating the lowest cost.
Nowadays, with the benefit of maturity and years of exposure, to me, it is more about value.
It is not about driving cost reduction, it is about value, but the biggest passion for me is about developing partnerships it is about growing business relationships, I have taken a lot of pride in that in a lot of roles I have had.
Obviously, I get a thrill out of any of the key negotiations I am involved in particularly if the stakes are very high as it is more meaningful I have certainly been involved in negotiating some really high-profile deals in the past and there is a lot of pressure and responsibility that comes with that as if you get it wrong you are potentially looking at the closure of the business, but that is what gives me a buzz.
Culture is absolutely vital, if you have a good culture good behaviours come from that if you have a toxic culture then it just breeds further negativity and you don’t get the performance you want.
I have had conflicts with board members where their mentality in terms of how I should be managing the supply chain has been very much ‘if you squeeze a dry towel hard enough it will still yield water’ and I don’t believe that at all.
It is not about driving your suppliers into the wall because it takes time and effort to build those relationships it is like being married!
It is about give and take and achieving that win-win, mutually agreeable relationship.
When it comes to the crunch it is the relationship you have with the person on the phone that will determine whether you come in on Monday and get what you need or whether you come in and find they haven’t worked all weekend for you, so you have to shut your production line down and cost you tens of thousands of pounds an hour in lost production.
What do you think are the key focus areas for procurement right now?
For me, there are a number of focus points, number one is quality – the quality of the service you provide and the product you manufacture.
Number two is focus on the customer, again no customer no business.
Number three, teamwork, what I mean by that is driving out silo mentalities. I have worked for many businesses where people say ‘oh no that is not our job’ – I don’t buy that, step up whether it is your job or not we all work for the same team.
A very obvious one is communication – the single biggest cause of conflict in a business is communication.
Poor communication and the outcome from that are usually misunderstandings, misrepresentation, and the list goes on.
Good communication is essential.
I think an element of forward planning and thinking, certainly being able to forecast and mitigate risk we have touched on in the earlier questions but that is absolutely essential now.
Another one would be having a very good understanding of the markets that drive the price points of whatever it is you are manufacturing or selling as well as understanding the composition of the final product.
From a leadership perspective, it is about setting the vision and establishing standards and maintaining a level of consistency.
And for me, it is about building the teams, I am only going to be successful if the team is developed.
What do you look for when hiring?
I have a really short answer!
I look for behaviours – I look for attitude and behaviours, if you have the right attitude and the right behaviour to start with the credentials always come second.
You can teach the credentials but what you can’t teach is the behaviour. If you have the right attitude to start with then you have the right person, much of today’s recruitment is based on cultural fit – so for me attitude and behaviours first, credentials second.
What are you doing in terms of sustainable procurement?
Number one we have an established Corporate Social Responsibility policy and we work towards the various things we need to do to make sure that works.
I have introduced an ethical code of trade, and we have developed a very robust and comprehensive modern slavery programme even though currently our turnover doesn’t legally oblige us to comply.
I guess because we are an engineering, solutions-based business for us the focus is always on whole life cost, that is because the plants we make will last decades so the customer is more interested in what the long-term cost of operations will be rather than oh we got it cheaper by £250,000.
That is a real driver in terms of our sustainability focus.
There are the obvious ones like your carbon reduction initiatives and energy management these are also programmes we are heavily invested in.
Hybridisation, looking at, for example, the on-site set-up where you have generators rather than having generators running 24/7 365 days a year you have battery walls and those sorts of technologies.
Our clients actually require us to sign up for a social value charter so again this comes back to ISO 26000 which is social value.
Within these there is a list of minimum expectations and requirements so by expectation if we weren’t able to demonstrate compliance within these charters, we wouldn’t actually be allowed to tender.
It is a two-fold driver, one is we are doing it because it is the right thing to do and the second driver is we are doing it because the customer expects us to do that.
What is your biggest achievement?
I’m not going to talk about commercial success, even though I have had lots of that.
For me, it is about being recognised as personally contributing to business success, which is the most important.
Recognition is number one, I think being a manager who really cares about the teams that I am responsible for that is another big achievement for me being recognised by them, particularly when I have decided to move on, the response I have had from team members has been positively eye-opening.
Other achievements have been building world-class procurement functions, also achieving, exceeding and delivering results.
In a broad-brush sense, those are my biggest achievements.
What would you say is the biggest risk you have taken in your career?
I think any risks I have taken I have always strived to make a decision based on data rather than emotion or some other value or judgement.
That is not always possible but for the most part, I like my decisions to be informed rather than uninformed.
You can always take a punt on some things based on experience but the biggest risks have been driven by data – so it is a calculated risk.
In my current role if you think about the biggest contribution to me it is making the right decision and getting it right the first time if we make the right decisions at the grassroots level if you think of the example of a supplier then further down the line when we are actually at the point when we are delivering a solution to the customer we are not going to be at the point where that vendor goes into liquidation and then we have to pick up the damages as a consequence.
It is all about having the systems and data to drive important decisions.
What skills do you consider essential to be a procurement leader?
There are a few I think, firstly self-awareness, and understanding the implication of actions both verbally and in writing can have a big impact on people’s perception.
Good communication, second, leading by example third.
Being able to lead, inspire and motivate the people that you are working with as a function lead.
Visualisation is another one, you have to be able to visualise the goals if you can’t do that you won’t be able to deliver them.
Then, for me, it is about recognising and rewarding good performance as well as curtailing bad performance.
The other thing I would suggest is continued learning.
What advice would you give to someone who is embarking on a procurement career?
I think if you have already decided on procurement as a career choice, especially as a graduate make sure you have a proper development career plan laid out when you start with your employer, based on tangible smart objectives.
If you want to be successful you need to have a career path.
Second, if the business is static, move on.
If you want to be successful in procurement you have to drive it, procurement is more at the forefront of business thoughts.
The final bit of advice I would give is always to work towards education, if you haven’t got some level of CIPS and other professional qualifications you will hit a glass ceiling at some point in your career, and your ambitions will outweigh your capability or education.
What supply challenges are you currently facing?
In addition to what I have mentioned earlier, internally the biggest challenge at the moment is actually recruitment.
The skillset I need in the organisation I work for now is very niche, I need more than somebody with commercial and procurement experience I also need somebody who has a level of engineering or quantity surveying experience.
It is a two-fold skill set I need and to find that is difficult, so recruitment and team growth is a massive one for me internally.
Externally, the obvious one is inflationary price pressures, within the industry one of the biggest challenges is the fact that we are all competing for the same subcontract resource, it is a finite resource that there are only so many suppliers out there that are approved to work within the water industry.
We haven’t got a choice of millions it is much lower than that, that is the key one.
In terms of actions taken from a recruitment perspective, it is about long-term planning and trying to get long-term visibility in terms of what our future requirements are going to be on projects and then obviously using your own forecasting tools to then figure out your current capacity and when is that going to be at the point that needs to start looking.
So, it is about forward planning and working with other stakeholders such as your HR team.
In terms of inflationary price pressure, there are contractual price pressures which are ours to accommodate with our clients, that is not a straightforward negotiation as the client will always defend any position to take on an additional cost.
That comes down to effectively what is the core skill in procurement, it is about understanding what makes up the final delivered cost, understanding that value analysis is not price it is cost.
It comes back to the real basics and knowledge is power.
The more you understand about your supply chain and its strategic directions and how they’re financially structured and what the corporate structure is, and the more knowledge you accrue about the industry you work in the more leverage that will give you first to get a better overall relationship and secondly to get a better overall deal on the table.
It also allows you to then push forward.
Which direction do you see your industry heading in?
This is a very blunt response but water is essential for life, so there is always going to be a water industry.
That is the answer.
What do you like doing in your spare time?
I don’t have any elaborate hobbies!
In simple terms I have three dogs I spend a lot of time walking; I have a son sitting his A Levels who is studying to go to university.
I have an extensive wider family; family always comes first so spending time with them.
I enjoy films, going out for a meal with my wife and friends socialising.
What advice would you give to your younger self?
I think everybody has a path in life.
I have never regretted anything I have done.
I’ve been in situations where I wished I had got certain jobs or positions but looking back I think I am actually glad I didn’t get that job because of the position I am now in.
I think this probably applies to anything rather than just me but speak to as many people in the profession as you can to get as much advice, you need to network, any business is about people.
A Managing Director once said to me – ‘business is easy, it is people who make it difficult’.
Can you tell us an interesting fact about yourself?
I was born in San Francisco.
My parents are both British, their parents initially moved to Canada in their respective jobs in the 1950s.
So, my mum ended up in Calgary and my father ended up in Vancouver.
Then when they were teenagers both respective parents moved to San Francisco, where I was born.
They decided they’d had enough of the States when they got married and brought me back and I am glad they did.
I think I’ve had a much better upbringing here than I would have there.
