Walter Charles III is the Chief Procurement Officer (CPO) at Biogen. As the article below highlights, he is also a highly-successful innovator who has consistently over-delivered in every procurement role that he has held. He’s also been the CPO of three Fortune 250 companies. We are very fortunate to have Walter as one of the speakers at this year’s CPO Rising 2017 Summit (some tickets are still available – click to register), where he will deliver a keynote presentation on how to harness “Big Value” from “Big Data,” entitled The Next Productivity Gear.
Escape to Procurement
When I asked Walter to describe how he got into procurement, he laughingly told me, “I was trying to escape what would have been an otherwise boring engineering role on an island that would have been materially disruptive to my family.” Walter was completing his MBA from Columbia and had been asked by his mentor (one of several that he noted in our discussion) at Bristol-Myers Squibb (“BMS”) to take a role in Puerto Rico. With two young children and wife who was not eager to move, Walter kindly passed and asked if there were any alternatives. There was one – a productivity role (in procurement) – and the rest, as they say, is history.
Like many CPOs, Walter came from an engineering background enhanced by an MBA. He saw his pivot to procurement as a way to “simplify his life.” In his early career as an engineer, Walter said he had to “buy things and then put them together.” Walter frequently engaged with suppliers to negotiate and order materials, which he enjoyed greatly; putting them together was less fun for him.
In his new role, Walter found a new mentor (also his manager and a fellow Columbia alum), who didn’t know much about procurement but, was very wise in the ways of corporate politics and the BMS organization. As the first person in his family to enter corporate America, Walter felt fortunate to get such important and influential guidance so early in his career. “She said, ‘You teach me procurement, and I’ll teach you corporate politics.’ And she proceeded to get me onto several high-profile assignments over the next year,” said Walter. The plan was set and his mentor delivered on her promise. Walter also delivered and, within the year, became one of the youngest ever promoted to the Director level at BMS in Procurement.
Walter’s success at BMS led him to a senior role at Johnson & Johnson (“J&J”), where he was brought in to be the next in line to the CPO role within the medical devices business (spoiler alert: that’s exactly what happened). By the end of his first four months, Walter and team had delivered a contract that would generate over $100 million in savings, which was, at the time, the largest deal ever in the medical devices sector within J&J. The deal involved the first-ever stent that was combined with a drug coating. The negotiation was a complex one (a sole-sourced component, with numerous production bottlenecks) but also, an important one revenue-wise, for the J&J division (and J&J corporate – see below) and medically, for heart patients. Walter saw that the larger opportunity with this supplier would mean they’d have to challenge the current vendor framework used at J&J; needless to say, he convinced his superiors and this led to massive value creation.
That deal put Walter on the map (along with two team members, he received a J&J President’s award) and it led directly to his operating company doubling its profit contribution to ~ $1 Billion Dollars which accounted for ~8% of J&J’s entire corporate profit that year. With a massive net profit impact as the result of the team’s procurement negotiation, it was no surprise that Walter quickly became the CPO of that medical devices company.
At J&J, Walter maintained both his professional success and professional momentum and was ultimately named the CPO and VP, Supply Chain for J&J’s Consumer division (the largest procurement operation within the J&J ecosystem). But, Walter aspired to the top CPO at J&J and realized that the current CPO was a contemporary which meant that his desire to lead the entire corporate might not happen at J&J (at least, not in the near-term). So he started to look around. What he quickly found was that his J&J experience in regulated industries (medical devices and pharma) made him an attractive candidate to work in CPG and he moved from J&J to become the CPO at Kellogg’s (a company whose products are also highly-regulated).
Walter saw a huge opportunity in the food industry which had much lower margins than pharma and therefore a much greater percentage of supplier spend when compared to revenue. Walter felt that “procurement was the single largest lever to the business. And in fact, 72% of the supply chain lift came from the work we did in procurement during my tenure there.” He did it again. Through the use of Big Data analytics (his keynote topic at the CPO Rising 2017 Summit), he was able to propel savings to between 1.8 and 1.9 times their historical run rate.
“[At Kellogg’s,] the $10 billion scale and spend was profoundly different and the impact of our work as a procurement function on profitability was profoundly different,” Walter reflected. The procurement function at the company also required a massive team and heavy finance support and Walter loved it. It was a phenomenal experience. From Kellogg’s, Walter moved to Kraft and made a similar impact (by now, our readers should be seeing a clear trend) before moving to Biogen a few years ago.
Among the reasons Walter was attracted to Biogen was “its product portfolio which is absolutely game-changingly big….” Also, an old mentor from his BMS days was an executive at Biogen and heavily recruited him to come to Biogen to serve as its first-ever CPO.
At Biogen, Walter (and his team) are at it again – using Big Data analytics to increase savings rates by 250% with minimal headcount increase (talk about leverage!!)…. I’d tell you more but then that would spoil it for those of you attending the CPO Rising 2017 Summit.
As Walter says, ”Wouldn’t it be great if I could share with you how the procurement team at three major Fortune 500 companies (Kellogg’s, Kraft, and Biogen) used Big Data analytics to deliver between 1.5 and 2.5 their historical savings rates in an era when CPOs are trying to unlock the next gear of productivity.” Come to the CPO Rising 2017 Summit and hear Walter’s story first-hand.