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Nestle CPO Goncalves: Procurement in action #wpc.

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Marco Goncalves, CPO at Nestle, as well as football goalkeeper, provided us some of his lessons on keeping procurement in the game. After a 30-year career in procurement, Goncalves provided some key lessons to the World Procurement Congress in London to place the purchasing function at the centre of the business.

 

Understand the business deeply and anticipate changing plans

“The company defines its business plans between three and ten years,” Goncalves notes. “As procurement, we need to be extremely well connected to the business to understand these plans, as well as anticipate changes of demand in the future. Nestle’s procurement team employs a specialist group of buyers to ensure that purchasing plans are aligned with the business. In respect of innovation, for instance, Nestle ensures that every innovation project has a procurement person embedded into the team. As for early involvement, Goncalves defined this as “as soon as the project starts.”

 

Understand the supply chain and extend influence to lower tiers

Given the agricultural nature of many of Nestle purchasing, the value chain can be highly fragmented and complicated. Yet, the organisation is trying to reach deeper into the value chain to unlock value and enhance visibility. “The upstream value chain is extremely complex,” Goncalves told the WPC. “You can’t do this alone. You have to use all of your suppliers and all of your tiers: not just the first suppliers.”

 

Trust is key – both inside the business and externally

Trust is one of procurement’s key resources. In respect of internal stakeholders, in that they trust buyers’ ability to deliver on their promises. But also, and most crucially as the function grows in importance, in representing the company’s supply chain to the consumer level. “We sell 1 billion products every day, if the consumer trust isn’t there, we’re not going to deliver this.” As the general public becomes more away of supply chains, they want to know more information about them and have assurance that the manufacturing organisation is acting ethically and transparently.

Jonathan Webb
Posted by Jonathan Webb

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