Training - Contract Management
Let’s be frank – contract management isn’t the most exciting aspect of procurement. After all, who likes paperwork and minutia? Most people don’t. For those in the earlier stage of their career understanding legal jargon can be daunting and negotiating the contract with the supplier, harder still. More experienced professionals might not have even been taught this core skill properly and, with a desire to focus on more exciting activities, try to steer clear of contracts whenever possible.
Robust contracts are a key tool to manage your suppliers and minimise risk. So, like them or loathe them, you need to be good at them. Following some simple steps and with a bit of practice, I’ll show you that contract management isn’t nearly as arduous as you might think.
If you’re a Head of Procurement or Procurement Director you might have different needs. Perhaps you’re unhappy with the low level of spend under contract, the poor accessibility of contracts or that the full contract value isn’t derived. As a Procurement Director I’ve had this challenge myself and have some god ideas of how to help you.
Training - Contract Management
Let’s be frank – contract management isn’t the most exciting aspect of procurement. After all, who likes paperwork and minutia? Most people don’t. For those in the earlier stage of their career understanding legal jargon can be daunting and negotiating the contract with the supplier, harder still. More experienced professionals might not have even been taught this core skill properly and, with a desire to focus on more exciting activities, try to steer clear of contracts whenever possible.
Robust contracts are a key tool to manage your suppliers and minimise risk. So, like them or loathe them, you need to be good at them. Following some simple steps and with a bit of practice, I’ll show you that contract management isn’t nearly as arduous as you might think.
If you’re a Head of Procurement or Procurement Director you might have different needs. Perhaps you’re unhappy with the low level of spend under contract, the poor accessibility of contracts or that the full contract value isn’t derived. As a Procurement Director I’ve had this challenge myself and have some god ideas of how to help you.
Course Prospectus
Carlos Eduardo Dias Garcia
Procurement Adventurer®
Tell us about your current role
I head up the Procurement & Sustainability of EUR 5BN of packaging spend for Heineken globally. The key spend areas are: glass, cans, plastics, corrugated and paper boxes, labels, and upstream sourcing. I have a team of 28 and report into the Global CPO.
What is your sense of the mood about sustainability globally?
5 to 10 years ago, Sustainability gained in prominence, received significant funding and made major gains. However, today sustainability is proving more challenging across multiple sectors. Why? It’s that if a business’ revenue growth slows and profits get squeezed the natural tendency of a business is to focus on fixing these challenges and sustainability can slip down the agenda.
So, our job in Procurement is to ensure sustainability remains integral to our work and that we deliver results, regardless of the economic backdrop. Sustainability can require investment to make progress, but we should constantly ask ourselves, “How can we deliver excellent sustainability wins without adding cost?” Understanding the end to end value chain and taking intentional actions from upstream to collection was key to deliver sustainability wins, for minimal investment.
What are your top tips for sustainability?
Get commitment from the top – the senior team must be bought in.
Rightly, we were told there is no blank cheque for sustainability, so we must ensure every sustainability initiative has a robust ROI.
Go deep on building up sustainability knowledge and understanding the possibilities. Many topics can be very complicated – take glass for example: what is the life cycle economic model for a bottle from production, right the supply chain to feeding it back into the system as recycled material? By fostering a learning culture puts us in the best possible place to drive change.
"Our job is to ensure sustainability remains integral to our work"
"How to be competitive gives me massive energy"
What's the Procurement/Business problem you're obsessed with solving?
How to be competitive gives me massive energy. I believe we need to put our businesses in the best place to win against the competition. We need to be on the front foot and we shouldn’t be soft about going head-to-head against the competition.
How do you contrast how business is done in Europe vs Latin America?
Many European markets are mature and businesses have a fierce battle to win even a few percentage points of market share. Latin America still has significant headroom for growth. The vibe feels more positive as the entrepreneurial spirit still has space to give it a go.
How do you help your Team flourish?
I’m proud of the relationship I have with my team and this is validated by strong positive NPS scores. My key principles to leading a team are:
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Always be honest – have real conversations
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Be demanding but caring
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Be authentic and approachable
What skills and attributes does the buyer of tomorrow need to have?
Funnily enough I was discussing this exact topic with our CPO Hervé Le Faou last week. We concurred that our bread and butter will always remain the same: focus on costs and cash. We must continue to be brilliant at these basics. We then need to face into the big-ticket items like making major leaps forward with sustainability and navigating through our changing world in tech and new capabilities.
Will Procurement be obsolete in years to come?
Definitely not! The shift will be that as tech drives major efficiencies with transaction tasks, this will free up Procurement to put more emphasis on value added tasks.
Intro
I had the pleasure of working with Carlos Eduardo Dias (known as Cadu) and his Global Packaging Team at Heineken. With his international portfolio of roles and infectious and natural approach with people, he’s a classic Procurement Adventurer. At Heineken HQ in Amsterdam he shared his story…
How did you get started in Procurement?
Totally by accident - in 2004 I was offered an internship at Unilever Brazil as a logistics buyer – I declined this role as my passion is in food. They then called me back to offer me a role as raw materials trainee buyer. I jumped at it! In the early part of my career I work on starches for mayonnaise and on a famous Brazilian cheese bread called pão de queijo.
Where does your interest in food come from?
At University, I studied Food Engineering and growing up visiting farms in the country side of Brazil where my father comes from.
"My pivotal moment was joining the Global Procurement Team at Danone"
What was the pivotal moment of you career?
When I joined the Global Team at Danone, it opened my eyes up to the World of Procurement. I met a brilliant guy called Marc de Schutter. I signalled my intent to get a role in Europe and when a role came up in Paris, he invited me over to do it.
This was a pivot moment because it made me realise the importance in a Global Multi-National of balancing local and global. There is a risk that a central global procurement function totally loses site of what’s going on in the regions – eg in the region there may high inflation and forex challenges. Equally, there is a risk that regional procurement teams fail to see the bigger picture of leveraging global scale. I’m always trying to get this balance right. On the one hand as Director of the Global Packaging Team I ask myself: “what is right for the overall business?”. On the other hand I ask myself: “as a Brazilian national, what is the right solution for Brazil?”
"Heineken reduced packaging CO2 Emissions by 1MT since 2022"
What's been your biggest sustainability win at Heineken?
Heineken reached a significant milestone reducing packaging CO2 emissions by 1MT since 2022 (a reduction of 17%), for which we won the World Procurement Award. And we did it at zero cost We’re now targeted 25% reduction by 2030. The ways we delivered this are:
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Influencing Upstream Sourcing and supplier mix.
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100% Renewable Energy commitment from suppliers.
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Recycled content programs with supplier and partners
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It’s key to never give up. We’re now piloting how to recover waste in Mexico and Brazil
How can Procurement add value to a business outside the 4 walls of Procurement?
Procurement is well placed to do this, in particular how we bring a connection with the outside world – we can highlight to our business things they’re not seeing. Examples are:
How a business needs to adapt to the markets. As you know in the last 18 months, there’s been a switch from seller’s to buyer’s markets. In a seller’s market we need to secure supply and minimise cost hits. In a buyer’s market we need to maximise value and prepare for the next seller’s market.
Another example is regulations, for which there are lots of new ones coming out – this is especially relevant for waste management in the food & drinks industry. Here in Holland where I’m based, the state is very good at managing a collective approach to waste. Whereas in other countries the onus falls on our organisations such as supermarkets.
"It all starts with curiosity"
What's the trick to successful cost modelling?
It all starts with curiosity and a desire to be an expert in your field, to go really deep on the technical understanding of your category. Then use these insights to have fact-based discussions with internal stakeholders and suppliers.
Attitude matters too. Some categories can be extremely complex and data can be patchy. The category manager must live with this uncertainty and persevere towards an end point. We’ve had great examples in our team of category managers doing just this to unlock additional value.
Why is SRM so hard to get right and how do we master it?
The disruptions of COVID and geo-political unrest over the last 5 years have made SRM challenging as during this period it’s been about near term survival. SRM needs a longer-term holistic approach. You can’t just pick up and put down SRM when it suits. It needs a consistency whatever the circumstances.
What's the hardest thing you've ever had to source?
Two things:
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Glass during the energy crisis of 2021-2022 (I agree!)
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How to convince Brazilian farmers to continue producing milk when the milk price was low
If you could have one procurement system, what would it be?
A system that could deliver true insights about competitors
What language do you wish you could speak? (as well as the Portuguese, Spanish, French and English you already speak?)
Mandarin
What can't you do without in life?
Cooking on the BBQ. This is integral to our Brazilian way of life
Playing and watching football – I love to play with my sons, and I go to every World Cup since 2006 to watch few matches with my friends from University.
Rapid fire?
Beer from a glass, bottle or can? – draft Heineken from a glass
Brazilian Rainforest or Beach? Beach in Bahia State – the beaches there are beautiful
Samba or Salsa? Listening to Samba…but I can’t dance it!
Empanadas or Acai? Chilled Acai, Sao Paolo style
