I’ve known Chris Shanahan, Chief Procurement Officer (CPO) at BD for nearly a decade; what follows is the first of a two-part profile based upon a recent interview.
Like many procurement professionals, Chris Shanahan, Senior Vice President of Global Procurement at global medical technology provider Becton Dickinson (BD), sort of “fell” into the space. After earning a degree in purchasing and materials management from the Limerick Institute of Technology, Chris began his career with Essilor, working in a warehouse where he essentially packed lenses into boxes. After six years of progressive responsibility, Chris graduated to a purchasing role, which is how he arrived in procurement. He became a purchasing officer and was responsible for buying for the plant.
In 1990, Chris moved from Essilor to Sterling Drug (now SmithKline Beecham) and became a purchasing planning coordinator in the production planning space. Despite the title, purchasing was never his primary role, as his responsibilities were supply chain-focused. But in 1997, while on assignment in the UK, Chris met a Vice President of Procurement, the person who would ultimately recruit him to BD and into a pure procurement role. In 2000, he joined BD as the Director of One Company Procurement for Europe, where he was tasked with setting up BD’s procurement operations in the region.
Driving Global Change at Becton Dickinson
At the time he joined BD, the procurement organization was neither centralized nor center-led. Chris, and his colleagues in Europe who joined with him, focused on driving change across the organization. They directed their efforts primarily on consolidating spend and gaining leverage, mainly within production and direct spend. Bolstered by his and his team’s success in Europe, Chris would next be tasked with setting up procurement offices in Singapore for BD’s operations in Asia in 2003. For two years Chris continued to grow procurement in the regions, and build trust in the services they delivered. In 2005, he came to the US to lead Global Procurement and evolve it into an even more comprehensive and rigorous function, which at the time had more staff focused on the direct side of BD’s spend. Chris and his team expanded their operations, and developed an effective matrix structure to address direct and indirect spends at global and regional levels. The structural changes required continual assessment, communication, collaboration and refinement to bring the best value to the company while meeting the needs of the businesses and their leaders. It is an evolution that continues to mature.
Today, BD’s procurement team manages source-to-pay, real estate, corporate facility operations, aviation, and global construction management. Its procurement operations manage all indirect transactions that go into a shared services team; a center-led sourcing / category management team; and site-related activities that involve buyers/planners, price-setting, and any issues that may arise between buyers and suppliers.
According to Chris, his team is disciplined in their use of a regimented, five-step process for sourcing strategies. They conduct ratings and reviews, drive cross-functional engagement, address risk and other key requirements, and will not execute a sourcing strategy if they believe that the integrity of the process has been compromised. Chris acknowledges that it is part of building out the capability in the function: “It takes time and it can be quite a tedious process” to apply the rigor of the process. He sums it up nicely when he says that “we’re not here to do contracts. We’re here to drive a process to manage spend for the company in the best way possible.” They are also careful to ensure that they have “a sustained, three-to-five year pipeline of opportunities in the space that they are working,” while recognizing that they always prefer to realize savings in year one.
Aside from the technical needs of the job, like negotiating contracts, the procurement function in Chris’s view boils down to answering the question: “How do you execute, how do you ensure that you sustain and drive some kind of governance and make people aware of the demand factors that they influence?”
Procurement Transformation: Where You Stand Depends on Where You Sit
Change can elicit different responses depending on one’s perspective. For people who initiate change, it can excite, motivate, and fill them with purpose and satisfaction. But for people who have change thrust upon them, it can create anxiety, fear, and resistance to that change. Chris knows this dichotomy better than many.
In 1995, when SmithKline Beecham acquired Sterling Drug, Chris remembers when the corporate procurement group came to their plant and told them they were going to centralize procurement operations. He and his team challenged the rationale for doing it, believing the procurement team could not get better value or drive better service and meet the needs of the plant. It was an apropos learning experience because five years later he was charged with doing this same activity at a different company. In the interceding years, Chris realized that rather than fight this transformation, he and his team would be better off joining and enabling a successful change. As a result, he grew into a bigger role at SmithKline and helped his plant operations by “jockeying between the plant environment and helping corporate be successful.” Through that experience, Chris was able to understand plant and corporate-level thought processes, which he leveraged when he came to BD in 2000, particularly when driving change.
Thus, as BD’s Director of Company Procurement for Europe and Asia, and especially as Sr. Vice President of Global Procurement, change management has been “foundational” for Chris and his team. There are many dynamic questions to address regarding how to conduct good category management, how to conduct quality risk management, how to build up associates and their capabilities, how to drive innovation, and how to ensure that the organization has sustainable supply and a good corporate social responsibility program. “When you look at all of these factors, fundamentally, the big question is, ‘how do you drive change, manage change, and ensure that you’re meeting the expectations and needs of the business?’”
Preparing for the Road Ahead
For Chris, the overall challenge is to know how to communicate and drive change, and stay connected with his business partners to ensure that they are not blindly going down a path that does not meet the needs of the business. For him, change management and communication are vital to be successful. In the part two of this series, we will take a look at just how things have changed in the last 20 years, and what Chris believes is in store for enterprises, in general, and procurement teams, in particular. Stay tuned.