Last week on the Procurement Rising Podcast, I had a great conversation (click to listen!) with John Dickson, the Chief Procurement Officer at AstraZeneca on the Procurement Rising Podcast Series. During our discussion, we talked about John’s career in procurement, including his five-year plan of establishing the “brand” of the procurement function at AstraZeneca. We also talked about work during the pandemic, and what were he and his group’s four key elements that drive a successful procurement operation. These four distinct elements supported AstraZeneca and helped them with their vision to maximize patient outcomes as a company. I go into more detail on what those elements are below:
- Generate financial value – This is a critical element of what a procurement group can deliver for an organization. For John, they were looking to support the delivery of that sustainable growth through increasing cash flow and through driving savings. But John was also looking at how they could help the organization maximize its budget efficiency. For many CPOs, conversations with the CFO (who may only care about the bottom line), can be affected by that. But procurement organizations need to be motivated beyond that. Of course, the bottom line is important, but if you are able to get more for your budget or reinvest into a program in addition to your spend, it is a critical part of what procurement can do. It is important to recognize all of the value elements that you can bring to the organization, and position them accordingly.
- Optimize supply collaboration – This element of the procurement department has a lot to do with generating innovative thinking and collaborating with external strategic suppliers. This is very much in service of creating the most competitive supplier ecosystem across the enterprise. This aspect was especially critical for John and AstraZeneca as the company worked through the pandemic. It is an element that is connected to financial value, because sometimes optimizing supply collaboration may end up costing the company more, but over the long-term it may also end up driving a different revenue stream for the business as well.
- Achieving a sustainable business – At AstraZeneca, like it is for many businesses around the globe, sustainability has been top-of-mind. But for John, this is more than just lowering greenhouse gas emissions and the carbon footprint. It is also about how the company is going to manage risk. How will they assess key sourcing decisions with ethical suppliers? AstraZeneca has made a goal of getting to zero carbon footprint by 2025 and negative footprint by 2030. While this is ambitious, John looks at the connection to between the element of achieving a sustainable business and the previous element of optimizing supplier collaboration. This will be a big challenge, but CPOs that can step up and bring those two elements together should see the long-term benefits.
- Enabling business agility – This is an element that I and my team at Ardent Partners have long written about. For John specifically, business agility is about creating a Best-in-Class procurement environment that really anticipates and reacts to the many changing business requirements that come up. This can be done through leveraging innovative digital solutions. First and foremost, the streamlining and simplifying of the processes of the procurement function is key. But there are a whole range of other processes that procurement engages with (third-party risk management, the onboarding of vendors, managing P2P process) that should be looked at as well. Agility is the characteristic that will help procurement departments advance and thrive in this new age where innovation continues to expand beyond mere products and services to core business processes and entire business models.
Chief Procurement Officers and other procurement leaders must take deliberate steps to build these elements into the DNA of the staff and operations, or they risk being left in the dust as more nimble and versatile organizations find value and opportunity before they do. Click here if you want to listen to my full discussion with John. The Procurement Rising podcast series is also available on Apple, Spotify, Stitcher, Google, or wherever you get your podcasts. Please consider giving us a follow.
