Jeroen Harink is general manager at NEVI. He talks about the three major challenges he sees in the procurement landscape, the importance of the quality of procurement professionals, and what role NEVI plays in all of this.
Eighteen months ago, NEVI developed a new strategy: NEVI NEXT. Can you explain this?
In 2018, before I started at NEVI as General Director, NEVI decided to thoroughly review the existing policy vision. At that time, the board had partly been replaced, so a great moment to reassess – with those new people – whether the strategy still ties in with what NEVI should focus on. Two main questions are addressed here.
- What do you need as a purchasing professional – or as a person, or from the role you hold in the organization? It concerns both individual needs and organizational needs that you have to realize from your position. All kinds of needs emerged here.
- To what extent do you see a role for NEVI in this regard? Then you saw that some needs really lie with NEVI, some not and with others the desire to work with partners as a NEVI.
With that input, i.e. the needs and the extent to which NEVI is assigned a role in this, the existing policy vision was looked at and it was updated to NEVI NEXT, which is currently the revised strategy for NEVI and has been implemented for a year and a half. .
What should you as NEVI do something with and what should you stay away from?
If you make it very concrete, we received confirmation that we should continue with education and training and bringing purchasing professionals into contact. So that they can network, exchange ideas, share issues and think about it together. To this end, we will continue to organize conferences at national and regional level.
One of the needs that emerged, which NEVI has not yet addressed, are tools. Practical tools that procurement professionals can use in the performance of their work, to perform this either more efficiently or better. Seven tools have now been introduced that are available to everyone.
Something that NEVI did do, but where the research made it clear that there is no primary role for NEVI here, is recruitment and selection. If the professional group does not see a role for NEVI here, it must be organized differently or disposed of. We are now busy organizing this with another party.
That's quite a change. How do you see your role in this? Because you did not come up with this strategy yourself, but you are the one who has to radiate it, implement it and implement it. How do you look at that?
This was considered extensively in the application procedure, so that a general manager was hired who fully supports this strategy. In all the conversations I had with the board, there was extensive discussion about what the board means by the strategy, what I thought of it, and whether I could support it. The advantage is that I have known NEVI very well since the late 1990s and was on the board myself from 2011 to 2017. So, when I was in the process of applying for the position of General Manager at NEVI in early 2019, it was a well-known organization to me. This way I have sufficient insight into what the strengths and points for improvement are. The strategic course has been set, this direction is certain, I recognize it and I really stand behind it. But giving concrete form to it, you have all the freedom within the frameworks and I can do my thing in it, which makes it great fun for me.
Is that where your strength and added value lie, precisely in furnishing?
Yes, there too. My strength lies in directing and organizing. Determining strategy is good, but the strategy is never completely 'finished', it also grows. There was some really good material with NEVI NEXT, now I'm working on taking that material further, which also occasionally leads to additional strategic direction.
“Supply chain visibility, especially for the critical purchasing packages, is something that requires attention and where the corona crisis has put its finger on the sore spot.”
NEVI has also talked a lot with purchasing professionals when determining the strategy, and you also have extensive experience within purchasing. How do you view the purchasing landscape, how is it going?
If I look at where purchasing comes from and where we are now, then – from my perspective – a nice development has been made. At the same time, there is also a lot of potential for professionalization. One of the challenges 20 years ago was spend visibility (where and to whom do you spend money), this is now in order at most organizations. That also applies to contract visibility (who do you have contracts with). You now see that there is a next challenge: supply chain visibility. Looking back at the past months of the corona crisis, this is immediately clear. Many purchasing organizations have the spend and contract visibility in good order and know what they are spending money on and with whom they have a contract. But there is still very little insight into what the supply chain looks like, who the suppliers behind their suppliers are, and where the bottleneck of supply and supply chains is. This can cause many problems, for example in times of the corona crisis when the purchasing department is at a loss, the supplier does not know where to get the items from, because somewhere further in the chain a supplier can produce less or not at all. So those supply chain visibility, especially for the critical purchasing packages, is something that requires attention and where the corona crisis has put its finger on the sore spot.
I recognize that. But you also notice that a part of digitization is emerging, also within purchasing. Do you already see steps in that? Both the purchasing landscape and the world around it are of course changing.
As a purchasing consultant at PwC, I was given the 'Internet' area of interest in 1997, to see whether the Internet could do anything for purchasing. The word “e-procurement” didn't even exist then. That was actually the beginning of ICT technology that made its appearance in Europe and certainly also in the purchasing profession. I was able to take my first steps in that in all sorts of ways. This has only intensified in recent decades. In 2020, for example, blockchain and AI are related to comparable technological developments that are taking place and that ultimately should also facilitate and make the lives of procurement professionals easier. Compared to a few years ago, there is now a multitude of data: how can you extract the right and relevant management information from it? Big data, fed by digitization and developments such as the internet and blockchain, therefore definitely play a role in the contemporary purchasing profession. As NEVI, we also respond to this, because we also have to ensure that the purchasing professional is fed with these kinds of new developments. That is why, for example, there are training courses in this area for buyers.
In my opinion, the purchasing department and CPOs / directors have a huge opportunity there to make the purchasing department even more important for such an organization. Because so much data is available within purchasing. Is that already being used or do you think there are still great opportunities there?
There are still great opportunities in many areas, and also in this area. This opportunity has been around for a while, and is being addressed, but it is quite difficult to make the most of it. At Imtech I also spoke about procurement intelligence and that perhaps an “intelligence team” should be set up within the purchasing department. Ultimately, with data you can put many good purchasing facts on the table, with which you can indicate much better where the opportunities lie to professionalize, reduce risks, improve quality and realize savings. All of this can be fed by the right information, which requires good data. But on the other hand, you often have to deal with problems such as the completeness of the data. You still meet often missing data indicate that the data is simply not available, or that the data is incorrect and low quality has. That makes it a challenge to ultimately use the data that is in all kinds of systems intelligence to distill out.
Ultimately, you want to have insights from the data, so that you can make your organization perform better.
Data in itself is of no use to you. But data is the source of intelligence from where you get the actual steering information that you can really do something with. Americans don't call it for nothing “intelligence” instead of information, because you really connect intelligence to it to make something useful out of it. On raw data you have little, but you really need this to eventually get the intelligence to get to the right level. It starts at the source to fully and properly record the data. And that your data from different systems in one kind data warehouse together into a complete package of data that you ultimately intelligence pulls out.
Indeed, quite a few steps are required. Is it go big or go home or can it also start small and develop further?
An old slogan that I still use often is: “Think big, start small, scale fast”. So it's best to think big about the vision you have and where you want to go. Then start with small steps forward, in light of that vision, on the right path forward. Once you've demonstrated and realized that initial success and others see that this is the right path, then the trick is to be able to scale up quickly.
“Creating that agility in organizations, that purchasing for the benefit of the business deals with the supply base, that places high demands on purchasing professionals.”
You mention two things: supply chain visibility and digitization. Where do you see more opportunities?
What you also see more and more, which sounds simple, but is really a challenge in practice: purchasing organizations must become increasingly agile. Organizations think about the course they want to take. This is happening in an increasingly dynamic world. So organizations are constantly working on: what is the direction, what is the course, where do we have to go, and what goals do we set. Purchasing should be based on such objectives as much as possible aligned to be able to connect to and contribute to this as much as possible. The challenge of purchasing is: how do I realize a supply base with which the goal can be served in continuity and to the maximum.
In many organizations that go for cost reduction, you see that the purchasing organization focuses on standardization, volume bundling, and supplier reduction, and the supply base on furnishings. This was also the course of Vanderlande for a long time, where I worked as CPO. But when Vanderlande started to grow quickly, especially outside Europe, the goal changed and the art became supply base to facilitate that growth. Then it is no longer about supplier reduction, but in this case precisely about supplier increase in order to achieve the desired growth. The existing parties were able to facilitate some growth, but not the growth that Vanderlande had set as its ambition. So additional parties were needed to be able to achieve the objective. Creating that agility in organizations, that purchasing for the benefit of the business deals with the supply base, which places high demands on purchasing professionals.
To the left or to the right, you see that organizations increasingly have to change course from one moment to the next, as is now the case, for example, because of the corona crisis. At such a moment it is no longer relevant what the lowest costs are, but the availability of goods and the speed of delivery – i.e. security of supply – suddenly the challenge. For purchasing this means that they are very manoeuvrable supply base have to turn to another goal: from cost down nasty security of supply. They must therefore be manoeuvrable and the supply base from today to tomorrow differently. This places very high demands on the purchasing organization and creates a major challenge, especially for CPOs.
Do you see an opportunity here for NEVI to prepare and develop procurement professionals for these three major challenges of supply chain visibility, digitization, and agility?
At the start of my career I thought: if you have described the Purchasing manual well and clearly, you have provided the right tools with which you can do it, and you have set up the organization chart clearly, then almost anyone can get the job done. That was originally my – somewhat naive – view of the procurement profession when I was just starting out. Through my experience at different organizations, I found out that it's not about that manual, or the systems, or the organization chart at all. It ultimately stands or falls with the quality of the purchasing professional. If you have the right man or woman sitting there, he or she can do the job that needs to be done. It is really a motivation for me to work on that, and therefore also one of the reasons for choosing NEVI. Because what NEVI does pre-eminently is to work on the skills, knowledge and behavior of purchasing professionals, in other words on the quality of that purchasing professional.
“Quality of the purchasing professional is the key to good performance of the individual, but also of the purchasing team and organizations.”
What would you like to pass on to your purchasing colleagues?
Quality is key. It's about the quality of your professional and of the entire team. A purchasing professional has his or her own ambition and idea for his or her career, whereby he or she works on his or her own quality, aimed at that ambition. At the same time, the professional also has a role to play in the team and in the organization, which hopefully matches that ambition. If you have good football players on the field, who also want to work together as a team, you can play a nice game of football together, both when it is sunny and when the grass is soggy with rain. This also applies to buyers and the purchasing team. Quality of the purchasing professional is the key to good performance of the individual, but also of the purchasing team and organizations.
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