Strategic Sourcing in a Changing World: Lessons from Adam Cummins
Welcome to another edition of Smarter Sourcing where we interview business leaders who share their experiences, strategies, and insights to solidify the position of sourcing and procurement at the decision-making table.
In our latest edition, we dive into our interview with Adam Cummins , Principal & Director of Portfolio Procurement at The Carlyle Group . Here are the top takeaways from the interview.?
#1: Balance Autonomy and Support for Clients
“Carlyle has always had this philosophy of making good investments, having good management teams, and then letting them do their thing. That's still very much in the DNA for Carlyle. But at the same time, we know that there's more support that we kind of want to be able to provide operationally, etc. We're not going to tell them how to do things, but we're going to be more encouraging, if you will, at times.?
“So it becomes an issue of which portfolio companies and which investment teams for those portfolio companies want the help, right? We're not going to go where we're not wanted. We're not going to go out and try to make everybody take the medicine, etc. It's going to be more of a, if you raise your hand and ask for help, we will come help you. But that keeps us pretty busy.”?
Actionable Takeaway: Encourage a balanced approach in managing portfolio companies by offering operational support without imposing on their autonomy. Identify and assist those who actively seek help, fostering a collaborative environment that respects the independence of each investment team while enhancing their potential for success.??
#2: Optimize Procurement with E-Sourcing Support
“Similar to what some of the other big firms do, we have the ability to pull our portfolio in building and running e-sourcing events for them at no direct cost to the portfolio company. So we have individual companies that either don't have the bandwidth or capability or the technology to be able to do that, who want to take advantage of that type of support. And we generally see a good return on that.?
“We're able to get quick and dirty events done for a variety of different things, whether it's freight, whether it's commodities, etc. And even in many cases now, we're at a point where we're doing that on a monthly basis. Same portfolio company will come back and say, I got to run steel for this month, I got to run aluminum for that month. Whatever it might be, we put it in. We have several suppliers committed to bid. They get their price, they lock it in and off they go. And they love it.”?
Actionable Takeaway: Utilize centralized e-sourcing events to support portfolio companies that lack resources or technology, such as smaller or medium businesses. By providing this service at no direct cost, you can achieve significant savings and efficiency improvements, allowing companies to focus on core activities while benefiting from competitive pricing and streamlined procurement processes.??
#3: Embrace AI and Automation in Supply Chain and Procurement
“I think it's a very valid point that what you would want to ask for and look for today in particular focused around the ability to leverage automation, leverage tech, to be conversant with those elements of the way that work gets done is really important and really critical. I think we're all figuring it out as far as what does AI really mean for the procurement space, for the supply chain space? There are some great use cases and examples where it's already being used, where it has been used for quite some time, and that really was more of a machine learning type of an approach, but that continues to be part of AI. And that's important for me.?
“I think the thing that's probably been most important is a combination of both the formality of what's important from a supply chain procurement person as far as understanding how to negotiate and understanding how to develop perspectives on most desirable acceptable outcomes and those types of things. And understanding the working is the inner component of what goes into why a supplier is going to have this particular perspective versus that one. But also how do you stop doing as much of the stuff that you might have previously done on your own and you let technology do that for you?”?
Actionable Takeaway: Invest in understanding and integrating AI and automation into supply chain and procurement processes. Focus on leveraging technology to handle routine tasks, allowing you and your team to concentrate on strategic negotiations and relationship management. Continuously explore AI use cases to stay ahead in the evolving landscape of supply chain management.?