Implementing a New Procurement Operating Model during a pandemic
Daniel K. Nishida, Sr. Procurement Director - Americas and U.K., Compass Minerals
It’s never easy to implement Change Management in a large organization. Unforeseen factors made it even more challenging when we decided to create a new procurement model in early 2020.
We had a highly decentralized department focused on tactical purchasing on a reactive basis with limited vendor consolidation among sites and savings tracking tools.
Our initial actions were to centralize our reporting line and create a solid procurement foundation based on three main pillars to allow us a continuous and sustainable optimization to support our company’s growth for the following years.
Our Vision is to “work as a single high-performing procurement team that provides a competitive advantage to Compass Minerals”.
We created a 3-year roadmap plan to take us gradually and consistently to the highest procurement maturity level. The first year we paid particular attention to functional efficiency.
During the implementation, we faced some headwinds, including the beginning of the global pandemic. Like any organization, we needed to switch our attention to addressing an imminent crisis that would impact us, all supplier bases, and every person in the world.
We spent months looking for masks, hand sanitizers, and disinfectants to keep our employees safe. But we didn’t lose focus on our main goal to revolutionize our procurement department.
We created a strategic team following the Category Management concept bringing together Procurement with all relevant functions.
Each team in a category is cross-functional and cross-regional, aligned to business needs and extensive engagement with stakeholders. It has a depth of category-specific knowledge and expertise – market and technical.
We also optimized our Operational Procurement methods, updating our policies generating clearer roles and responsibilities for all members to succeed. Efficient inventory management became more vital during supply challenges due to COVID.
We invested internal assests in improving our spend classification and contracts consolidation focusing on tracking our processes and performance to ensure our progress was on track.
Despite all external and internal challenges, we achieved excellent results, being recognized as a key contributor to our enterprise-wide optimization efforts by our President and CEO, Mr. Kevin Crutchfield, during the company’s full-year 2020 earnings call.
We are just in the middle of our 3-year journey. In the second year, we will focus on cross-functional collaboration, value delivery and resilience. Where appropriate, we also plan to invest in digitalization and automation, providing operational and transactional discipline, cost transparency and agility, efficient contract management, better market intelligence platforms, and e-sourcing tools.
Lastly, we will continue to devote efforts to train and elevate our main asset, our people. We only can achieve our goals with a strong and committed team that shares the same vision. Our Procurement team is the key element for our success and continuous improvement.
We couldn’t predict facing so many external challenges during our first implementation year, which forced us to make several adjustments without losing sight of our goals. I will close by sharing a quote I read from Shane Parrish, which summarizes our ongoing journey:“Be stubborn on destinations, flexible on tactics, and relentless on progress.”
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