Our “Procurement Experts on CPO Rising” series continues today with an excerpt from my 2021 episode of the Procurement Rising Podcast — Chris Shanahan, Vice President Global Sustainability – Supply Chain Operations for Thermo Fisher Scientific (click to listen to the full interview). Note that this excerpt has been edited for readability.
This installment with Shanahan explores working with employees as well as suppliers (incumbents and new entrants) during the pandemic. It also serves as a prime example of how procurement as a profession — in the face of adversity — is elevating itself within the enterprise.
Andrew Bartolini: In terms of strategic sourcing projects and general engagement with the different lines of business and the different units that comprise Thermo Fisher Scientific, did you spend significant time with your team on changing the approach of how you execute projects?
Chris Shanahan: What we did last year and are continuing this year is having rigorous governance around key programs and making sure we’re doing more check-ins than normal. If you have people in an office, you can just go knock on the door and ask about the status of things. However, when you’re virtual, that’s not as easy to do and you find yourself putting more meetings on the calendar. This is something that’s happened to us and I’m sure it’s occurring in most companies. The days get longer, and there is a piece of that that comes into play when you do work in the virtual world.
AB: Agreed, the work-life balance becomes very different when you’re working from your living room or home office. As we begin to come through this phase of the pandemic and into the next stage of the economy, have you and your team and the larger organization started to model what the approach is going to be? Do you see yourself moving to a hybrid model on a permanent basis? Is the plan starting to take form or is it still in development?
CS: When it comes to our workforce, I think there’s a piece regarding being connected. The idea of bringing people back and getting people reconnected and into a sense of community is something that we’re thinking of as a company. And then, as you think about the future of an office and how you work, that’s going to evolve as you go forward. So, we’re not making a clear statement on that. But we are looking to get people back to connect, whether it’s two, three, or four days a week. Our focus is getting people back in a safe environment to connect. We acknowledge that people can be effective virtually and there needs to be a mix in there.
AB: Staying on the topic of community, let’s talk about a larger community that you manage and that’s your suppliers. I know you’ve got a couple of current supplier management initiatives focused on risk, sustainability, and diversity. Share with us what you’re doing today and this year.
CS: Our supply base in the last year has been tremendous. They stepped up and really helped us with scale testing, helping us support the multiple companies out there with vaccines and vaccine development. We have to really acknowledge the strong supply base that has supported us over the last year and a half in particular. In terms of specific areas that we’re looking at this year, supplier diversity is something that we do as a company. We’re clearly elevating that even more, as well as looking at a mentoring program and developing that theme across the company.
When we look at sustainability and carbon emissions, we have commitments as a company for Scope One and Scope Two. From a procurement point of view, we have an important role to play when you look at the internal operations of energy and everything that goes into that. As we look toward Scope Three, the focus is on the supply base and what those emissions look like for the future. It’s about working on a plan to address those issues as we go forward.
Shifting to risk, one of the things that came through last year is the scalability of the supply base as we grow. And can they grow with us? How do we work together? We’re really pulling the thread and looking at all the risk factors that come into play with having a robust supply chain as well as the reputational aspects. Areas like child labor and human rights are important topics for us as a company that we’re looking to address.
AB: When you’re dealing with suppliers during this process and engaging with or evaluating new suppliers, was it more challenging or less challenging to consider switching from an incumbent? Was there a general strategy that you employed in the short term? We know, for example, that we’re staying with these suppliers versus some newer entrants.
CS: Well, we did both. We did bring a number of new suppliers into the system. We worked very closely with the quality registry and the operations and business teams to make that happen — and do it in a pretty efficient fashion. We did a lot of parallel processes where we could without impacting quality. So, along with bringing in several new suppliers, we also grew a number of suppliers as well to build out the capacity to support the growth that we’re anticipating.
AB: Let’s look forward 12 months to two years. I was recently speaking with another group of CPOs who said within their organizations that procurement and its role increased significantly during the pandemic. While we certainly don’t want to see another pandemic, it’s important to note that when organizations are challenged, they start to focus on things that can be controlled. And procurement can play a major role in that. Thinking more broadly, what’s your perspective on how this has impacted procurement as a profession? Any lasting impacts?
CS: It’s an interesting topic for me. I’m very passionate that procurement has a seat at the table with the business to resolve business problems. And that’s the platform that we’re trying to drive. When we think about growing revenue, we enable revenue. You enable revenue through assurance of supply. And we need to work with the business, thinking through its demand profile to convert it into requirements and drive it out. Typically, we see that procurement is seen as a transaction. It’s our job to cut a contract or cut a purchase order. When really, our job is to say no to that. We’re here to resolve business problems.
A seat at the table is important. The acknowledgment and recognition within this company by the leadership on the role procurement played in supporting the scaling to testing and scaling to support vaccines has been tremendous. There is clear recognition. There’s probably more recognition now than there was two years ago regarding the importance procurement plays in resolving these problems.
