The Digitalization Journey at Mars DPW Amsterdam 2022 – Sam de Frates
Table of Contents
On September 21 & 22, over 5,000 people from numerous leading global corporations came together for DPW Amsterdam 2022 to share their experiences about a wide range of topics in Procurement and Supply Chain.
One of the leading experts at the 2022 conference was Sam de Frates, formerly Global VP – Commercial Performance, Capabilities & Services and subsequently Vice President, Procurement, Europe, CIS & Turkey at Mars, who led the HICX-sponsored session, “The Digitalization Journey at Mars.”
This article summarizes the main talking points from that session, including:
- How to plan your digitalization journey in Procurement
- How to conceptualize the digitalization of Procurement
- How to successfully scale digitalization in Procurement
- How to scale the digitalization value beyond Procurement
- How to set up your digitalization teams for success
- 5 crucial ingredients for success in digitalization
- The role of best-of-breed technologies
How to plan your digitalization journey in procurement
Sam starts by explaining the mission at Mars, stating, “We want to put Procurement at the center of enabling our procurement function to occupy that space between the supply chain and the business.”
He then explains that at Mars they planned their digitalization journey in three distinct phases:
- Phase One: proving the opportunity of digitalization
- Phase Two: tackling Procurement’s pain points
- Phase Three: going beyond ‘our four walls’
How to conceptualize the digitalization of procurement
Phase One focuses on identifying pilot projects that can prove the opportunities, which fall into two categories around the themes of ‘automate the simple’ and ‘simplify the complex.’
Automate the simple
As Sam explains, “We need to break our procurement teams free from the day-to-day tasks that burden them.” To do this, Sam talks about how they needed to have the core systems in place, as well as learning new skills in automation.
Sam admits that there is still a lot to do. However, they have, he says, made some major steps in the right direction. For example, the master data is now in place and they have managed to eliminate over 1,000 spreadsheets and reports over the past three years.
Simplify the complex
Sam continues, “There are a few pilots that we have done. Particularly around risk listening. But here, really, the opportunity is around analytics.”
He explains, if you can’t see it, you won’t know how to fix it. In his words, “If we don’t have visibility of it, we don’t know where to go at it.” Analytics, on the other hand, done correctly, can provide this visibility.
How to successfully scale digitalization in Procurement
Phase Two is all about scaling these initial pilots across Procurement. In order to scale successfully you need to select the areas on which to focus. Sam explains that they identified five areas in Procurement where improvements could be made:
- Risk and master data processes
- Increasing insights and value from the data in the supply chain
- Reducing reactive risk management and moving to proactive risk management.
- Driving supplier performance through increased collaboration
- Reducing inconsistent adoption of sourcing and contract tools
How to scale the digitalization value beyond procurement
Sam shares how, in the third phase, they are really moving away from this being a ‘Procurement’ or ‘digital’ transformation into becoming a business transformation.
He gives an example in the area of supply chain resilience. Buyers, he says, are spending a lot of time trying to get materials to their factories. Sam explains that buyers don’t always necessarily have perfect business plans – it’s not always possible to know all the specifications; they may not always be able to collaborate with their R&D teams how they might like; and they may not always know where or how to requalify a vendor quickly, so they would have a backup plan.
This illustrates that these problems are not just procurement issues. They need to be handled as holistic supply chain resilience digital transformation issues, he advises.
How to set up your digitalization teams for success
Sam explains that, rather than putting together one big team to tackle this 500,000-dollar problem, they have to approach it differently, using cross-functional teams with a clear understanding of what business problem they wish to solve.
As an example, Sam says they built teams who have an ‘identity.’ Their identity is not Procurement and Supply Chain. In each case, it’s around the problem statement. For example: ‘How do you digitalize information?’ Or, ‘how do you get real-time decision-making?’
5 crucial ingredients for success in digitalization
Sam moves on to explain the lessons learned and the 5 crucial ingredients for success.
- It takes time to land the ‘why’ – and don’t forget to do it. If this is not clear, it is very difficult to succeed.
- It is a People, Process, Technology and then MORE PEOPLE transformation. You are doing this for people.
- Understand the maturity of the solution. Be clear about whether you are working on an early-stage idea or a core system. Failing to do this will cost you a lot of time and money.
- Stay focused on delivering against the outcomes. Nobody is interested in your progress or output. You have to show outcomes that really improve things for people.
- Be human-centric. Never forget that the processes and tools are always used by humans. Involve them early and often, to ensure you are human-centric.
We need best-of-breed technologies
During the talk, Sam shares much about the digitalization journey at Mars. He focuses on this systematic approach to digitalization with those three distinct phases with their different areas of focus: proving the opportunity, going after Procurement’s pain points and scaling beyond the four walls of Procurement, and indeed the enterprise.
Concluding the presentation, Sam shares a story of being at a conference in June and hearing a CPO saying, ‘We need an end-to-end solution. There are too many apps out there,’ and himself thinking in return:
“No, no, and no.”
“We cannot go back to those last 10 years of implementing multimillion-dollar projects that don’t demonstrate value in the end. We do not need an end-to-end solution. We need best-of-breed and we need to get our data strategy sorted,” he adds.