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Towards the end, I met an inspiring senior procurement manager who encouraged me to complete my last assignment in the function. I accepted and couldn’t believe how fast real responsibility and decision-making authority came. I joined the cocoa team, forecasting global supply and demand as well as trading futures in London and New York.
My work took me from West Africa and South America to the US. The early 1990s was a time of change in the commodity markets. Futures trading volume was dominated by speculators and no longer by producers and users looking to hedge pricing risk. This made the market less predictable and we had to develop new tools to maintain our competitive edge. I learned a couple of vital lessons here.
First, the importance of getting into the field and learning everything you can about what you are buying. Second, even if you get your forecast of supply and demand spot on, a commodity market may have very different ideas about where it’s going.
After sourcing cocoa, I moved over to media buying. At that time, Mars was one of the biggest TV advertisers and we were dealing with growing numbers of channels. But, the promise of targeted and more efficient advertising was evaporating because audiences were fragmenting into smaller pieces – the market model was broken. As well as negotiating with media owners and our agencies, I soon got my first taste of crossindustry lobbying, working with other companies for more effective market operation.
After buying media services, I moved into food materials, such as dairy and sugar, and this brought a whole host of new challenges. The European Union support framework for these commodities was being reformed and slowly lifted. The European sugar industry was being tenacious in trying to retain the position it had enjoyed for decades, sheltered from competition behind a wall of regulation. As the market slowly opened up, my team and I were able to drive huge savings.
I probably missed opportunities to drive them harder. To source competitively we need to sell ourselves to the supplier as much as they sell themselves to us. Selling starts with listening carefully. But even the most collaborative and positive of supplier relationships requires as much toughness as they do openness and trust.
When I moved to Beiersdorf, I found there were more similarities than I expected. Mars and Beiersdorf have a different heritage, scale and culture, but I worked with strong and smart people in both businesses, found good levels of compliance with procurement’s processes and discovered well-established procurement excellence and skills programmes. The main difference lay in the attitudes to procurement at the top of the companies. At Mars, I enjoyed top-table status as a core part of the business’s operating model. At Beiersdorf, that was not the case. My team and I had to earn visibility and recognition through a rapid step-change in negotiated results.
First, they understand supply markets better than any internal stakeholders. Second, they can negotiate better than the client ever could. In my view, not enough attention is paid to either. Buyers often face much more highly trained negotiators from suppliers. This needs to change
Angus McIntosh is associate director at Total Negotiation and former Beiersdorf CPO
This contributed article has been written by a guest writer at the invitation of Procurement Leaders. Procurement Leaders received no payment directly connected with the publishing of this content.