🌎 How to tackle procurement challenges • Procol
Insightful podcast with the global sourcing and procurement leader at Mars Inc.
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Brief Introduction
I am Gaurav Baheti, founder and CEO of Procol.
Procol is the world’s most easy-to-use spend management platform that increases spend under management, makes procurement 2x efficient, 50% faster, and ultimately delivers 2-10% overall cost savings. We’re a team of 125+ procurement enthusiasts, backed by tier-1 VCs, serving 100+ enterprises globally. Connect with me on LinkedIn.
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The Procurement Podcast
About Speaker - Vikram Mishra currently leads the strategic sourcing for one of the world's most loved food companies, Mars Inc., an American multinational manufacturer of confectionery, pet food, and other food products and a provider of animal care services. The company was ranked as the fourth-largest privately held company in the United States by Forbes. He leads strategic sourcing and operations of $500 Mn spend across Asia. Find Vikram Mishra on LinkedIn.
Covered in this episode
- Vikram's introduction and journey
- How does procurement practices change in different parts of the world
- Procurement challenges to be solved in 2024
- When should you evaluate digital procurement and sourcing tools
- Advice for young procurement professionals
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Full Transcript
Gaurav Baheti (Procol): [00:00:00] Hi, I'm Gaurav Baheti, the founder and CEO of Procol. Procol is the next generation procurement technology company. We are the fastest growing procurement technology company in Asia Pacific. Today I have Vikram Mishra with me. He's the strategic sourcing leader for APAC for Mars International. Just about Vikram, he's been a FMCG procurement leader for the last 18 years, earlier with GlaxoSmith where he led a team of about 40 people and about two, three hundred million dollars of spend and more recently Mars, where he lead the team of 16 category leaders with a spend of half a billion dollars across Asia Pacific. Uh, we are excited to have you here today, Vikram and looking forward to this conversation.
Vikram Mishra (Mars): Thank you so much, Gaurav. It's a pleasure to be here.
Gaurav Baheti (Procol): So I'd like to start off by understanding your background. I think our audience would be excited to hear more about you and how you got into procurement and your journey as a leader
Vikram Mishra (Mars): I'm an engineer by training. When I was studying, I loved studying.
Vikram Mishra (Mars): So there was a point in time in my life and as a graduate student, we had a T shirt that said overeducated, underemployed on the back, right? So I, I, I did my higher studies in the U. S. I got M. S. in electrical engineering and M. B. A. Um, and I started off as a consultant for Oracle. Actually the company was called Global Logistics and then it was acquired by Oracle.
Vikram Mishra (Mars): It was one of the most amazing jobs that you can think of as a beginner because it gave me an opportunity to work with Fortune 500 companies and work on their supply chain problems. So Coca Cola, DHL, FedEx, et cetera. This was while I was in Philadelphia. I had a chance to do like a two year leadership development program in a manufacturing company called Kena Metal, which was based in Pittsburgh.
Vikram Mishra (Mars): And that's where I learned about the function of sourcing and procurement. Now, this is more than 20 years ago, right? So, It was not called procurement at that time. It was called purchasing. So as I spent two years working in different functions from customer service, marketing, supply chain, procurement within the company I found procurement to be the conduit between the company and the outside world.
Vikram Mishra (Mars): And the way my brain is wired, I love new solutions. I love to bring something that is going to give us an advantage. Um, and later on in my career, I figured out that I have an aversion to bad cost, right? We [00:03:00] say there's good cost and there's bad cost. And I just don't like bad cost. So that put together with trying to design new solutions is how I ended up in procurement.
Gaurav Baheti (Procol): So I'm curious, you've worked across different parts of the globe. How does the vision of procurement change while working in emerging markets and developed markets in terms of dealing with external stakeholders, internal stakeholders, suppliers, technology?
Vikram Mishra (Mars): etc? Like I said earlier, I was very lucky to have found some really great Early, um part of my career opportunities that gave me exposure to pretty much the entire world.
Vikram Mishra (Mars): So in the second year of my management development program, I had an opportunity to visit China. This was in early 2000 and , it was building up. Um, we had set up a plant over there and then India understand how things are in Brazil, Germany, et cetera. You know, the [00:04:00] developed markets. Um, versus developing markets is from purely from procurement's lens you deal with slightly different problems.
Vikram Mishra (Mars): Developing markets, the inflation is usually high, and as a business leader, you've got to deal with that, right? So you've got to find ways to not just deliver savings, but also offset this inflation. Um, and as we went through the COVID cycle, some of the years, some of the categories like global ocean transport, The inflation was off the charts.
Vikram Mishra (Mars): You've got to work very closely with the business to make sure you're on top of numbers. You understand the shape of the PNL so that the business is ready to absorb this shock to the PNL. Um, [00:05:00] and so that's quite unique. Um, we also see risk. Uh, a little bit higher in the uh, you know, developing, I don't want to say developing necessarily, but certain markets there's a higher risk because the tail spend, it's really long tail.
Vikram Mishra (Mars): Yeah. And sometimes if the tail is unmanaged. It can lead to you know, something that, that you don't want. Have you got
Gaurav Baheti (Procol): into those challenges? Luckily,
Vikram Mishra (Mars): not. And I, knock on wood I don't want to experience it firsthand, but we certainly put a lot of emphasis on so number one is assurance of supply.
Vikram Mishra (Mars): Yeah. Right. Make sure that our factories are, you know, fully equipped and staffed and, and have all of the. material that is required. That's number one. Second is quality. [00:06:00] Third is cost. Fourth is innovation and fifth is service. That's the mantra that we go by. So when we talk about cost, when we talk about assurance of supply, that's all that risk profiling, right?
Vikram Mishra (Mars): So there are, you know, and we categorize risk in many different ways from reputational damage to Um, quality concerns to service levels to et cetera, et cetera. And then there is very defined strategy to make sure that we are, we first know the risk, where does it lie? And there is a mitigation strategy on it.
Vikram Mishra (Mars): So the focus on that allows us. to sleep better. In the developed markets, and I'm not saying that this is generally true for everything, but I'm just talking about my experience. Um, they're leading in many ways, the pack, right? So innovation is is the pace of innovation is faster, right? And, [00:07:00] um, technology adoption is faster.
Vikram Mishra (Mars): So
Gaurav Baheti (Procol): I'm also curious, at different stages of business, there are different challenges. You currently manage half a billion dollars of spend. How does the procurement challenges change? And what do you foresee as your three biggest challenges for
Vikram Mishra (Mars): 2024 roadmap? The challenge is the reason we have a job, right?
Vikram Mishra (Mars): Yeah. Uh, or, you know, yeah, if there's a problem, you need somebody to fix it. Now, many problems can be fixed by machines, but some problems you need humans to actually come there. Um, if you just take the context of the last couple of years one challenge we discussed was inflation, right? Uh, the second challenge during this COVID cycle was the supply uncertainty.
Vikram Mishra (Mars): At times, it was just the ambiguity was too much. And there was literally chaos. [00:08:00] Chaos across the board. Yeah. Um, containers are not available. Uh, if the containers are available, vessels are not available. And for companies that have sort of a hub and spoke model, you know, with a centralized manufacturing hub faced this challenge a little bit more especially in the global context versus those that had the decentralized supply chain, right?
Vikram Mishra (Mars): Um, and You know, CPG as an industry did face that challenge quite a bit. Um, and I think the solution, if I start talking to that, how did we actually deal with that challenge? Um, is agile mindset. Um, so what I mean by that [00:09:00] is you know, we would work on a certain priority that this is the priority for the business right now and go with it for three or four months.
Vikram Mishra (Mars): And then suddenly we found that the priority has shifted. So having the ability to very quickly change direction without losing pace is what I call agility. How did you do that? For me, it's just a mindset and, and, and being very integrated with the business. So you understand their challenge, you actually empathize.
Vikram Mishra (Mars): So when my CFO and I am sitting together, I empathize with what, what he has to do. So it's not a challenge for me to say. Oh, okay. Yeah. You know, the entire function has, was heading in this direction. Now we've gotta go in that direction. You have to do that. And I guess if you love your company and you love who you work for you, that's not a challenge.
Vikram Mishra (Mars): Um and that's where also leadership comes in. Uh, I'm blessed to have a great team working with me who displayed [00:10:00] amazing agility. Right? As we were maneuvering and navigating through this challenge, we did not know when we were sitting in early 2022 that this is how 2022 will shape up how 2021 is going to shape up.
Vikram Mishra (Mars): How long will this last? Right? Um, we also did not know the demand patterns, right? Uh, accurately. So So, you know, some of our products saw enormous growth, some of them saw decline, right? So the entire business, and I think I give a lot of credit to Um, to the leadership of my company that kept a very steady boat even though the waters were very choppy.
Vikram Mishra (Mars): Uh, and, and I think that gives you a lot of room to just think, right, how to deal with this challenge. What challenges come with
Gaurav Baheti (Procol): the year of growth
Vikram Mishra (Mars): in [00:11:00] procurement? Traditionally, procurement is looked upon as a function. savings. I always say procurement can decide where and how do you want to play. And As we grow there are investments that we make, right?
Vikram Mishra (Mars): So media, for example, so my, my team buys media. What is the most efficient way of buying media? Yeah, what kind of innovations are coming into it? Yeah, as we move into digital, how can we have more focus? So we do have a strategy, you know, that goes out a couple of years. And how do we want to invest in media?
Vikram Mishra (Mars): Um, we are also investing in building, you know or companies may be investing in building factories, right? And one of the challenges that comes with building factories is lead time. Yeah, some of the equipment manufacturers are seeing long lead times as [00:12:00] much as 18 months on big machineries. How do you?
Vikram Mishra (Mars): Um, prioritize and be proactive. Work very closely with your suppliers to reduce that that lead time so that you can have your factories up and running very quickly. Um, and I think the third one is,
Vikram Mishra (Mars): As the companies are looking at growth, there is a very important aspect of growth, which is quality growth, right? Um, and the quality growth, the quality part, procurement plays a big role in that. We may not play a big role in growing the company, because that's marketing and sales, but to make sure that we're bringing in the P& L savings that allows for the profitable growth to come in is, is great.
Vikram Mishra (Mars): So one of the categories that my team manages is distributor services, right? So how can we actually Um create the right route to market model [00:13:00] uh, that allows us or enables that growth. Vikram,
Gaurav Baheti (Procol): at what stage does a company start looking for a spend management solution?
Vikram Mishra (Mars): I think spend management is something that you need to have no matter how small you are as a company.
Vikram Mishra (Mars): Because you need to know where do you spend, how do you spend, and who do you spend with. So, solutions can be global, regional, local, etc. Um, integrated solutions. I'm not going to, to that, but you absolutely need to have visibility of where do you spend your money as a company. So I would say you know, small, medium, large enterprises, we need that solution.
Vikram Mishra (Mars): Um, but, but it is more useful when you are moving to sourcing and category management. If you're just doing tactical operational [00:14:00] buying. Probably no. Where do you spend money? Once you start to look at aggregating the spend and then having a strategy, three years etc, and then forecasting your spend, that's when it's more applicable.
Gaurav Baheti (Procol): What other solutions have you found?
Vikram Mishra (Mars): To elevate procurement um, one of the things that helps is If you can, um allow users to empower them to do their buying for all of the routine items, right? So it could be catalog, buying, it could be many solutions are available, right? Um, and, and whether it's an app or a web based tool.
Vikram Mishra (Mars): Uh, is something that helps in the context of Asia. We sometimes deal with language challenge a little bit. Um, but there are plenty of solutions available on that. [00:15:00] I think that's one thing that improves the efficiency of procurement function. The other thing that I look at. So I'm answering this question from an efficiency and effectiveness, right?
Vikram Mishra (Mars): So efficiency is that I think effectiveness is. Um, quite honestly, solutions like Procore, right, where you can actually take any auction that you have and just, you know, in a very user friendly way, use an app that that creates an environment and suppliers can come and submit their bid. And all you know is you're saving 7%, you're saving 10%.
Vikram Mishra (Mars): Oh, okay. Have you seen those results? I have seen so, one of the things that I did in, in, in 2010 to 13. Three years, almost four years. Um while I was with GSK is I was a global e sourcing lead. So my job was, and [00:16:00] my team's job, was to have people take on these tools. It was still getting popular at that time, yeah?
Vikram Mishra (Mars): And I remember doing an auction for one of our large spends in Egypt, yeah? A packaging material that we were buying. And I remember saving 21 percent on that. Wow, the team must have been, uh It was amazing. Yeah, so the, the, the, the results that are possible when you let the market decide. Yeah. Uh, okay.
Vikram Mishra (Mars): But of course, um you've got to have the right environment and also it's applicable for categories, certain categories, not necessarily all the categories, right? But leveraged categories, definitely yes. What
Gaurav Baheti (Procol): do you consider to be leveraged
Vikram Mishra (Mars): category? I think the traditional definition is there are many suppliers and many buyers, right?
Vikram Mishra (Mars): So it could vary. Depending on market, et cetera, situation. But yeah, [00:17:00] definitely not sold suppliers. Definitely not strategic long term suppliers, but leverage suppliers. Um, it's a it's it's something that has to be carefully articulated as a strategy. So as we write our category strategies. Part of that is, how would you buy?
Gaurav Baheti (Procol): So, Vikram, a lot of people watching this would be interested to know what are some things they should consider doing and what advice would you give to young professionals in procurement?
Vikram Mishra (Mars): I think the number one thing is you've got to have passion for what you do. If you have passion, if you love what you do, nobody has to tell you.
Vikram Mishra (Mars): Um, how to or what? You're just gonna invent yourself new ways. You're gonna find solutions. You're actually gonna find problems worthy enough for you to be in the game. Yeah. And so that's number one. And I think procurement, you know, over the last 20 plus years that I've been in procurement, I've seen it evolve from purchasing.
Vikram Mishra (Mars): to sourcing, to [00:18:00] procurement, to now strategic sourcing category management, right? And it is a function that is going to continue to evolve. The next step as I see procurement is it is going to be the differentiator for companies that are going to be That will deliver sustainable growth over a period of time versus those who won't.
Vikram Mishra (Mars): Uh, and, and what the differentiation will be, how do you manage your supplier ecosystem? Yeah, how can you effectively get the best out of that ecosystem? It is not, in my view, and it is not any different from Your company, right? You know, when you look at 25, or 5, 000 people working in your company, right?
Vikram Mishra (Mars): You want to create an environment such that they have an opportunity to give their best every day. Same thing with your suppliers. Right? You've got to have those strategic partnerships and relationships. You've got to [00:19:00] have that mutual beneficial relationships for that to thrive. Um, and if you look at the best examples, you know, if you look at companies that have completely transformed their business models.
Vikram Mishra (Mars): Nike or any of them, right? They're not manufacturing anymore. It's all outsourced, right? Um, so I really think that procurement Is a fantastic function. Um, learn your basics. Um, love the numbers. Yeah. Um, and also love learning something new every day. Well, this is all
Gaurav Baheti (Procol): that I have today. Thank you for joining us today, Vikram.
Gaurav Baheti (Procol): I really appreciate you taking the time for this. Thank you for watching the procurement podcast. Keep watching this space for more interesting procurement podcasts by the global procurement leaders. Visit Procore. io [00:20:00] for interesting updates on the procurement technology in the world.