Elvire Regnier, Procurement Senior Advisor, Kearney: "It's worth betting on the business' ability to collaborate with suppliers"

Translation of an Interview by Fran?ois-Charles Rebeix from La Lettre des Achats, France

After a career in Purchasing at Colgate-Palmolive in the United States and Switzerland, Unilever in Switzerland and Bouygues Construction, Elvire joined the Avril group in 2013 as Purchasing Director. A new job creation. Seven years later, perhaps to escape the routine, she joined the strategy consulting firm Kearney. In the meantime, she had won two EIPM Awards associated with Peter Kraljic: the first, in 2018, in the Innovation category, the second, in 2019, rewarded "the organization of the decade" and a particularly collaborative model. Meeting with a key witness of the evolution of Purchasing.

What led you to enter the world of consulting? It seems to be the first time in your career?

You have to know how to renew yourself because in the long run it's a bit the same subjects that come up again and you can feel a lack of creativity. For my part, I need to discover new ideas, to take up new challenges. Beyond that, it was also a question of continuing to work in a job that has enormous growth potential: Purchasing. It's a beautiful job that unfortunately, or fortunately for that matter, has not yet reached its full potential.

Also, I have used some consulting support during my career. I have been able to progress in my career thanks to the contribution of the consultants. In particular, I worked at Kearney and each time it was very useful. There is of course a method for this: don't let consultants do their work alone and see the results at the end of the assignments. You have to accompany them, sometimes even leave them on backup, and put yourself on the front line to be the person who will deploy the project internally. That's how you can absorb expertise and ensure that it stays in the company once the consultants are gone. That's the way Kearney works and that's why I've now joined the firm in a Senior Advisor role.

What makes you say that Purchasing hasn't yet reached its full potential?

I often draw a parallel with Human Resources. When I first started working in France, it was called “staff manager” department: it was people who made employment contracts, pay slips and possibly notifications of layoffs. Then they “transfomed” themselves. Today, there is not a CEO who is not accompanied by his CHRO. However, we in Purchasing have not yet really managed to do the same. I have several hypotheses. The first is that we are not giving ourselves the means to impact the turnover when we could do so, through supplier innovation for example. So we are less well recognized even if we do impact costs. We could draw the parallel again with human resources by working better with suppliers, just as companies optimize the work of their employees in order to obtain a more solid revenue.

The second hypothesis I am making is that Purchasing maybe does not speak enough the business language. This is something to be developed.  

But today, with Covid and this economic crisis, what will be the reactions of companies? What are their expectations regarding Purchasing? And what will your future missions be for?

I can't guess the future. On the other hand, I can draw inspiration from the past to try to anticipate. Let's remember the 2008 crisis and its consequences. It led to a lot of acquisitions and company mergers. Many suppliers disappeared. Before 2008, as purchasing director, I decided who I wanted to work with. Since 2008, it has been the other way around. The good suppliers, at least the best ones, now choose their customers. Those who will resist, will continue to choose their customers. Customers will have only their eyes to cry! That's why I urge companies to support their supplier ecosystem as much as possible, otherwise there will be disasters. Unfortunately, I believe that what buyers are still too often asked to do is to squeeze prices. What we have to imagine is that the current situation is not going to last for ever. The promise of future vaccines has already boosted the stock market value of airline companies... Recovery is coming. And it will be better to have been on the side of the customers who have done well with a long-term and collaborative vision. Once again, when the recovery is there, I'm not sure it will be favorable to customers... There is a risk for some that they will not be served.

What could convince business leaders to make more and better use of their supplier ecosystem by relying more on their CPO?

As far as I'm concerned, I really encourage companies to bet on collaboration with their suppliers. And it's not the buyers that need to be convinced - they are convinced, it's at the highest level that the impetus needs to be given!  We must continue to inform company managers because I am not sure that they are aware of this and that the potential of Purchasing is completely in their minds. What I am advocating, I didn't invent, it was Procter who, nearly forty years ago, theorized it: 70% of innovation must come from suppliers. In other words, it has to come through Purchasing! All this has been around for a very, very, long time. Simply, the Purchasing function has so far not been able to transform the trial. We also need to look at our responsibility. Maybe we don't communicate enough? Maybe this permanent power relationship with suppliers is something exciting? But I really think we should move on, because otherwise we'll still be here in... forty years!

 So that's where we need to address the question of the talent that will join the function...

Normally, strategic and business profiles, rich of emotional intelligence, capable of leadership, should join this function because it is absolutely exciting when it comes to convincing stakeholders or suppliers, identifying innovations, and seeking them for the benefit of the company to give it a competitive advantage. In any case, you have to build throughout your career. Here, I'm talking to the youngest people: they need to show constant curiosity, demonstrate an ability to absorb and question themselves, not hesitate to seek new experiences abroad, and put themselves in danger. 

Then, as you progress in the job and take on more responsibilities, you need to know how to help your teams get out of their comfort zone. Try to diversify experiences. Companies often tend to recruit the same expertise.

What qualities are expected of you in your new position? How will you approach your peers? With what arguments?

Consultants have a very rich medium and long term vision. But having someone who has had a career outside of consulting can reassure clients. For a Senior Advisor, the fact of having been involved in both operations and strategy, of having been a CPO and therefore knowing what works or doesn't work, are all advantages.

My role is to meet with my Purchasing peers and see, for example, how to boost their innovation, understand signals coming from the market, help them develop and communicate their vision, measure their impact on the end customer, etc.

Customers are increasingly interested in understanding how a company positions itself in relation to its suppliers. Today, yet another parallel with human resources, there is a lot of talk about candidate experience, and many companies have inhouse talent managers. I think we should also make sure that the supplier experience is the best possible for a company. Its reputation now depends not only on its employees but also on its suppliers.

Innovating in purchasing also means thinking about digitalization. How do you assess its potential for transformation?

Digital is a tool. An innovative tool, but it is not innovation as we understand it here. Purchasing is a business that consumes a lot of resources. Conducting calls for tenders is time consuming, especially if you only use Excel. I think that digital will make it possible to reverse the pyramid of purchasing skills, i.e. there will be less need for junior profiles to process calls for tender because the tools will be able to do it automatically.

Negotiations will be the same, there will be much less time to spend doing them electronically. A very interesting task but with little added value. The systems do it very well instead of the human... I'm not talking about auctions but about online negotiation. The price is only one element, it is not the machine that will decide the allocation of the market but the human. Buyers don't like electronic negotiations because they feel they are losing some of their prerogatives. It's up to them to reinvent their trade. They need to confront themselves more with the other functions, meet the company's customers to better understand their needs. It may be more complicated than putting pressure on suppliers or spending three months negotiating, but it's much more exciting