The Mondelez journey to world-class digital procurement
Mondelez Supply Chain Strategy & Vision
Last week saw the conclusion of World Procurement Congress 2020, which was rounded off on the final day with a discussion on supplier experience management. For this session, moderated by David Rae, Chief Product Officer at Procurement Leaders, HICX was joined by Stephane Sacherer, Associate Director Global Procure to Pay at Mondelez International. Mondelez sits among a new class of leaders, who are putting supplier experience at the heart of their digital transformation. The Mondelez project, of which Supplier Central is an integral piece, leverages the HICX platform to deliver not only a single supplier portal across the entire global organization, but also to be the backbone for supporting a whole new, transformative experience for suppliers.
In the session, Stephane explains to us first-hand how Mondelez embarked on its supplier experience journey and where they have reached to date, providing insight into three areas:
- The Mondelez digital procurement supply chain strategy and vision
- The role of Supplier Central in driving world-class supplier experience
- Practical advice and lessons learned from the Supplier Central transformation project
Supplier Experience Management
Supplier experience management itself represents a step-change in how relationships with suppliers are approached, as Costas Xyloyiannis, CEO and Founder of HICX, explains during the discussion:
“Procurement is looking at supplier management through a different lens. It is no longer a case of only seeking better prices, beating suppliers down and squeezing them as much as possible, based on the mentality that, for a customer to win, its suppliers must lose.
What we’re actually seeing is the opposite. Best-in-class organizations are recognizing that if their suppliers are really successful, then they are going to be very successful – and it’s this idea that’s absolutely key to supplier experience management.”
Digital Procurement Supply Chain Strategy & Vision
During the interview, Stephane Sacherer explains that the vision at Mondelez is built upon putting the buyer and the supplier at the center of everything that they are doing, as he explains that the objective is, “to rethink how we do innovation with our suppliers, how we do sourcing differently to be more efficient and how we can review our digitalization so that we can [give] the right information [to] the buyers, so that they can do a great job for the company.”
As for putting supplier experience at the forefront, Stephane adds that it is, “really about how we can increase the collaboration with our suppliers and make sure that they are part of the Mondelez ecosystem and that we work in partnership together. And that’s what we call Supplier Central, that’s where we partner with HICX, to develop this solution.”
As revealed in a recent HICX survey, the quality and accuracy of supplier data is one of the biggest obstacles to overcome, a challenge that also confronted Mondelez. Stephane explains, “ We had old ways of doing that, so via email and Excel, and things like that, which was really difficult to maintain. And we had difficulties collaborating with suppliers because we had multiple systems that they needed to connect to. We wanted to find a different way to connect and to find a single point of contact, or a single point of entry, for our suppliers.”
Regarding the partnership with HICX to combat this challenge, Stephane concludes, “On top of managing data properly, they were offering a lot of functionality to allow us to go above and beyond the vendor master data, which a platform that will allow us to manage the collaboration with [suppliers].”
The role of Supplier Central in driving world-class supplier experience
During the interview, Stephane describes three major use cases relating to Supplier Central:
- Enabling better management of collaboration with suppliers
- Driving higher rates of innovation with suppliers
- Sharing information with suppliers and working together on action plans
In terms of managing collaboration, Stephane highlights the importance of encouraging suppliers to engage frequently with Mondelez, which includes providing them with a portal where they can log-in and check information, such as the status of invoices or purchase orders. This is a win-win, as it makes doing business with Mondelez easier for suppliers, while suppliers themselves have more incentive to ensure that their details and data are kept up-to-date for Mondelez.
However, collaboration does not stop there. It opens the door to wider programs. Stephane points to initiatives such as the sustainability program at Mondelez. He explains, “Sustainability within a company is not only the company, but it’s also all the ecosystem.” He underlines, therefore, the importance of, “making sure that our suppliers are a part of our journey to sustainability,” adding, “we are planning to build some processes within the tool so that we can share information with the suppliers, they can send us information about their sustainability journey and we can send them feedback about where we stand at Mondelez – and where they stand as a supplier in that journey.”
A similar ‘open communication’ approach is being taken for innovation. Stephane describes how, by connecting through the platform, “we will open ways for suppliers to promote or to push innovation from their side,” which can be leveraged, “if they want to propose something to Mondelez about a new product or about a new capability that they have.”
In the interview, facilitating these two-way conversations is highlighted as the core objective of information sharing. Stephane continues, “We will start to share some dashboards with them from directly within the tool,” a feature which also brings additional benefits to the buyers and to the relationship with the supplier overall. “[When] they have their quarterly meeting, for example, they can, instead of first starting to understand the data, have that data already with them. They are then able to do much more work in terms of how we can achieve something, how we can solve an issue and things like that. Instead of doing much more admin or discovery work with the supplier, they can have a better meeting and discussion about the main objective that we face in those types of meeting, which is really improving the relationship, increasing the relationship and making sure that we deliver for the companies.”
Another benefit here is that it is also far easier to initiate communications to all or action plans to certain types or segments of supplier, such as those categorized as strategic. “We can trigger a communication to all of them at the same time, or, buyers will be able to collaborate one-to-one with the supplier on a specific action plan.”
Outcomes and practical advice
Being able to prove a speedy return on the value of such transformation initiatives is critical, which is why it is important that implementation is swift. Stephane notes, “We signed the contract and started the project in October last year and within one year we have deployed the solution globally. That’s in 75 countries, across the world. We now have all the old and new suppliers, and the existing suppliers, starting to connect to the tool. And, what we are doing now, is trying to expand.” Expansion includes areas such as supplier collaboration workflows and functionalities.
From a success metrics point of view, one important measurement is engagement. Stephane likens this to how this is approached in marketing, as he explains, “The same as when you look at marketing, about the buying and about the repeat buying, what we are looking at, is the repeat connection to the tool from the suppliers’ standpoint. So making sure that the supplier is staying up-to-date in the system, and is coming once a month, twice a month to update data.” The aim is to ensure that suppliers stay engaged by visiting several times a month, whether that be for invoice status information, dashboard review, or participating in the wider collaboration initiatives.
Another aspect of engagement to be tracked will be supplier contributions to innovation and other programs, as Stephane specifically aims to, “measure how often the tool is used to trigger those types of things – and how the tool has helped to increase the number of innovation ideas that we receive from our suppliers.” This is an important distinction between a pure data driven project and one that is truly transformative, as Stephane concludes, it is all about “really adding value with our suppliers.”
Mondelez’ commitment to the overall project and for the work they have done within their Procurement function saw it nominated for a number of categories in the World Procurement Awards 2020, emerging as the winners for the Internal Transformation and Establishing the Function award. We offer our congratulations from HICX to Stephane and the team for this achievement and we are looking forward to going further on this journey with them into 2021 and beyond.