Stéphane Morel is Global Process Owner for Strategic Procurement at Novartis, one of the leading companies in healthcare. During a career of 25 years in procurement, he has gone through several management roles of increasing responsibility and scope within Retail, Automotive and Pharma sectors. He is expert at driving procurement upgrades to enable sustainable growth and performance by leading and upskilling the teams for the creation of value to the business through better spend and supplier network management.
He is also lecturer in several business schools in Spain, author, blogger, mentor, and speaker.
We grabbed a few moments to talk about the procurement function of today and tomorrow.
Stéphane how did you get into Procurement?
I didn’t get into procurement by chance. At university, I was lucky to listen to a great presentation from a buyer, so I decided to investigate a bit more. Eventually, I decided to finish my studies with a one-year full time master in procurement. My first job was in procurement. That was 25 years ago. I am still just as passionate about this function.
What do you love about Procurement?
Procurement is an amazing function. We are a “360º connector” as we link the strategic business needs and imperatives of the company to the most capable suppliers from so many different markets or spend categories. By effectively connecting internal & external worlds, we generate value to the business/shareholders, our suppliers and hopefully to society.
Procurement is so diverse in term of activities:
- 50% Human: strategy, collaboration & people to align with the business & co-create value.
- 50% Machine: process, data & tech, in this order, to improve operational performance and strengthen business intelligence
We have great challenges to tackle: ESG, supply risks, fight against inflation, digital, innovation, SRM and talent management, being the most recurrent topics.
Procurement is best suited to, curious, passionate, courageous and resilient people, as procurement life is full of ups and downs, full of great victories and also set backs.
How has procurement and the expectations placed upon it changed over time?
Among the profession, we have a good understanding of our maturity roadmap and what should be our ideal contribution to the company. It’s all about becoming strategic, focusing on spend and cash optimisation, sustainability, risk management, innovation, time-to-market, etc. We read it and hear it everywhere in the social networks. We also understand we have to automate and digitise as much as we can the transactional and tactical aspects of our job.
The reality is that, in the vast majority of the companies, the board and the top executives do not get it yet. As clearly explained in the book “Profit from the Source” by our colleague Christian Schuh, CEOs and top executive leadership teams spend quite some time focusing on sales and customers but tend to ignore procurement and top suppliers in their agenda.
CFO’s are still far too much asking for price savings, payment term improvements and compliance; instead, they should support much more beneficial levers (e.g. productivity, spend efficiency, ZBB, hedging, outcome-based incentives, procurement digitisation for smoother procurement E2E processes, etc).
COO’s are still expecting fast results in term of quality and quantities (on time delivery and inventory mgmt.); instead, they should support more beneficial approaches (e.g. joint process continuous improvements, TCO, VA/VE workshops, make or buy studies, design to cost, design for availability, design for manufacture, collaborative capacity mgmt., supply chain integration, etc).
There is a big gap between how we see our contribution and what our stakeholders expect from us.
To reduce this gap, what can/should procurement do better?
The first thing is to understand, accept and feel responsible for this gap. It is so easy to wrongly consider our stakeholders as the “guilty” ones.
We also need to see the amazing opportunity we have to continue to evolve & position our function despite this gap and also despite the last 2 years of high pressure on all Procurement teams.
Our teams are exhausted and any upgrade will come from our associates. It’s really time to take care of our people.
Finally, we need to continue to work on our successful procurement transformation by focusing on our key building blocks despite constant challenges and changes of priorities in the daily operations.
We need to revise and evolve our ESSENTIALS:
STRATEGY: ambition & roadmap
PEOPLE: rethink, retrain, retain
PIPELINE: tools & programs
OPERATING MODEL: guiding principles, org. chart
DIGITAL: process, data & digitisation
It’s about progressing on those workstreams without mixing everything.
Procurement needs to evolve. The pace of change often calls for new skill sets and disciplines within a team. What are the top competencies and new profiles for a top procurement organisation?
Last year, I was lucky to contribute to a study in Spain on procurement capabilities. Not really new, neither surprising, we came up with these top 10 competencies (no specific order): Strategy, Sustainability, Risk Mgmt., Innovation, Category Mgmt., Internal and External Collaboration, Data Analytics, Digital, Agile.
In term of profiles, for sure we need to integrate new roles like data analysts, digital savy (expert in data visualisation, programming advanced excel files or bots or no/low code solutions), social network community manager, lean expert, sustainability expert, outsourcing expert, risk manager. We will have to change some traditional roles like the tactical buyers: today, they launch several quick biddings on a daily basis; tomorrow, they will manage buying channels (catalogues, marketplaces, specific category tools, forms, SOW mgmt. tools, v-cards, etc.)
We need much more diverse teams (on all aspects) and this is a big challenge for procurement.
Evolution or revolution in front of us?
In my 25-year procurement career, it’s not the first time I am hearing that it’s “time for procurement to shine”, and “time for procurement to go big on digital” or “time for a procurement revolution”. Those are nice titles used by many software companies, consultants, and professionals to get attention. There is nothing wrong here.
A revolution? Is it really realistic to suggest that we can replace 100% of an existing organisation while changing 100% of the systems? Maybe if we would start from scratch with a huge blank check from the CFO!
My strong belief, and it has been driving my career so far, is that we just need to continue to work hard with a clear direction and with passion, evolve, learn, benchmark and always try new things to contribute more and more to the success of the company and our key partners while taking care of the planet and society.