Digitizing Procurement to Develop a World-Class Supplier Experience
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At both the Americas Procurement Congress and World Procurement Congress 2023, we took a deep dive into the world of the supplier portal, dispelling some myths and hearing from Johnson & Johnson and Heineken about their views on this topic.
In this video, Stephane Sacherer, former Director Global Procure-to-Pay at Mondelez International, shares his first-hand experience in digitizing procurement and implementing a supplier portal at Mondelez.
As part of the global strategy and capability team at Mondelez, Stephane walks us through their digitalization efforts, the objectives behind the implementation, and key learnings from the process.
The article will cover:
- The digitalization journey at Mondelez
- Supplier Central: How to enable supplier collaboration
- How to implement a supplier portal
- Results and benefits of implementing a supplier portal
- 3 key lessons learned when digitizing procurement
Digitalization journey at Mondelez
Mondelez embarked on this global transformation project to revolutionize their procurement practices and enhance productivity. As Stephane puts it, “We really wanted to improve our way of working, to optimize and standardize our procurement.” From the outset, this included re-evaluating their work methods, their tools, and their processes to achieve efficiency.
As part of the project, the procurement team reviewed all the processes, end-to-end, and identified the three main systems they wanted to invest in to increase efficiency and standardization:
Caption: Three key systems Mondelez wanted to invest in to increase efficiency in procurement.
- One portal for suppliers
- One repository for suppliers’ data
- One way to communicate with suppliers
- One portal for buyers
- One workflow to ensure compliance
- One tool to manage productivity
- One data lake to store all company data
- One visualization tool to simplify navigation
- One group of data scientists to ensure coherence of the reports.
These tools aimed to streamline collaboration, provide a single source of truth, and simplify data exchange between users.
In the session, Stephane focuses on the one portal for suppliers, Supplier Central.
Supplier Central: How to enable supplier collaboration
Mondelez recognized several pain points with their supplier management processes that they wished to address. These challenges included slow and complex processes, a lack of a unified data source, inadequate information sharing, outdated technologies, and time-consuming interactions between buyers and suppliers.
As Stephane puts it, “The process to manage our supplier before was very slow. If we look at the process side, it was complex. We didn’t have a single source [for data] at the time. We had no better way to share information than just an email to the suppliers.”
To address these issues, Mondelez identified the need for a centralized supplier portal that would enable self-service for suppliers, consolidate data, and grant procurement teams direct access to supplier information.
“Our objective was to change that and to have one central portal where both the buyer and the supplier will be able to connect and share information together,” Stephane explains.
Objectives of Supplier Central
The objectives behind implementing Supplier Central were to empower suppliers with self-service capabilities, establish a consolidated data repository, simplify processes, enhance collaboration, and enable procurement teams to access detailed supplier information.
By offering self-service options, suppliers could manage their own profiles, thereby reducing errors and improving data accuracy. Stephane explains, “They [the suppliers] know their own data, they are less likely to make mistakes because, again, they know what they are doing. So, for us, it was a key starting point.”
The centralization of supplier data facilitated better process management, while improving ‘technology-automated’ data synchronization and eliminating manual efforts. He continues, “Our goal was to make sure we have a ‘consolidation point’ in this single portal. To make sure we are able to manage the supplier in one place.”
How to implement a supplier portal
Mondelez selected HICX as the platform for their Supplier Central Solution. The project began in October 2019 and achieved a swift implementation due to their clear process understanding.
In May 2020, the system went live in the Americas region and was fully implemented in 75 countries by September 2020.
In Stephane’s words, “The only thing we didn’t carry out at that time [between October 2019 and September 2020] is the SAP integration. That was on purpose, as we wanted to make sure that we could support a good integration with SAP, which is our ERP.
When we made sure that everything was correct, we started this phase of integration. So, we first started in October 2020, and we finished all regions by June 2021.”
Team and User Adoption
Mondelez’s project team included a project manager, three SMEs that were not full-time, a change manager, who handled communications, a consultant, and support from the HICX side. Additionally, regional change support teams further facilitated communication and training for their users.
User adoption has been strong, with 2,500 monthly supplier connections and 1,500 business users connected per month.
On the importance of user adoption, Stephane clarifies, “This is important, because if you want your data to be accurate, we need to make sure the suppliers are going to the tools.”
Results and benefits of implementing a supplier portal
Enhanced Collaboration and Transparency
Supplier Central enabled Mondelez to share scorecards and collaborate more effectively with their suppliers. The scorecards, which evaluate performance and quality metrics, were previously shared quarterly or annually.
With the new system, scorecards are accessible online, providing real-time updates for suppliers to assess their performance and address issues promptly.
“This ensures we are continuously improving our collaboration,” Stephane explains.
Mondelez also leveraged Supplier Central to collect sustainability data, facilitating more efficient and standardized information gathering.
Invoice Status and Policy Sharing
Suppliers now have access to invoice status information, eliminating the need for frequent inquiries. Additionally, Mondelez uses the platform to share policies and obtain supplier acknowledgements, ensuring alignment with quality and compliance standards.
Mondelez tracked four key performance indicators (KPIs) to measure the success of Supplier Central and found:
- Supplier creation time – dropped from 3-4 weeks in some regions, to less than 11 days.
- Time to implement a change requested by the supplier – dropped to 3 days.
- Supplier request rejections due to incorrect data – dropped from 12% to 1%.
- User adoption – reached over 99%.
Three key lessons learned when digitizing procurement
Stephane concludes by highlighting 3 key lessons learned when digitizing procurement.
One, he emphasises, “look at your data first.” Data cleansing and standardization are critical. It’s important to do this upfront.
Second, suppliers are not always tech savvy. Ensure you build the proper support channels and speak their language.
Third, expect a lot of communication and requests. Business users love being able to connect easily with their suppliers and it opens the door to new ideas.
Mondelez’s digitalization journey and the implementation of Super Central revolutionized their procurement processes and Supplier Experience Management. By leveraging self-service capabilities, centralizing data, and enabling collaboration, Mondelez improved efficiency, accuracy, and supplier engagement.