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
Procurement Adventurer®
Daniela Rocco
Intro
I was fortunate to work with Daniela on an exciting project for Mars who own the brand Bens Original. Through working together, it became clear that Daniela is a true adventurer in every sense of the word - her life's journey, resilience in the face of adversity and her ability to think through challenges to reach the destination. During the course of many chats over the last year, I listened to her tell her story. Here it is:
What attracted you to Procurement?
My route to procurement started in Venezuela where I grew up. My family is highly educated: My grandfather was a doctor. Mum is a chemist who forged a successful career in the 90s oil boom of Venezuela; not easy in those days given how male dominated it was. Dad was a university professor who specialised in reliability of electrical networks. They instilled in me an ethos to work hard and to be curious for any topic. A role for Deloitte in Caracas working on transfer pricing and supply chain piqued my interest for a career in procurement. Venezuela is rich in oil but poor in almost everything else so I was keen to work in international trade (ie Trade not aid) which is a good way to improve the wealth of impoverished countries and so I decided to a follow the route of procurement.
Caracas (below) is surrounded by beautiful mountains
Tell us about your current role...
I am the global category manager for sourcing all the rice for Mars Food who own the well-known brand Ben’s Rice. As rice is the hero ingredient for the brand, we need to get it right which requires optimising a number of areas: firstly, it goes without saying, the quality has to be spot on. There are lots of varieties and specifications of rice from a number of countries around the world which all have different characteristics. We select the ones that work best in our products and then mill the rice with precision cleaning and grading.
The role is truly transformational - over recent years, as a result of climate change, security of supply has become much more challenging so we are having to de-risk our supply chains. There are over 760M tons of rice grown in the world annually but it is surprisingly hard to get what we need! Sustainability is really important for rice, especially on water usage – this is the role I’ve truly understood what sustainability is all about.
The retail market is competitive too so we have to deploy price risk management tools to ensure that the price on the shelf remains attractive for our consumers.
"The role is truly transformational"
What is your favourite procurement technique?
I like to partner with people closely, such as my technical colleagues. For example, I’ll join the auditors on supplier audits as the flow of information is much freer than with the supplier’s sales team! And I work closely with R&D as they have invaluable insights about what works and what doesn’t – then we can find solutions that are more likely to work.
"Mars is amazing at teaching self- awareness"
Which procurement technique has been the best Mars has taught you?
Mars is amazing at teaching its associates (employees) self-awareness. For example, with self-awareness an extrovert understands why an introvert needs space. As an extrovert I didn’t at first understand this. I used to think introverts were weird! Now I get it. Also, I find having good self-awareness not only helps me get the best out of myself but also how to negotiate as you need to know your pit-falls when negotiating.
What is your greatest procurement success?
Without doubt the transformation I’m leading now. It has required big picture thinking to formulate the strategy as well as operational delivery to see it through.
"I particularly admire people who get things done"
Who or what has been your greatest source of inspiration?
There is no one person but rather the sum of a number of different people. I particularly admire people who get things done. I’m an extrovert and in the early days could talk quite a lot. One of my bosses in the early days of Mars, who recently retired, Paul Blackwell coached me to sit back and think – he taught me the power of silence and to give time for considered intellectual thought. One particular leader called Paul Gardner (CPO Mars Petcare) demonstrated to me ‘elegant simplicity’ in answering things clearly. I also cherish the lessons you get from all associates, and the good car chats with our auditors going there and back with suppliers.
How do you make change in a huge organisation like Mars?
Never waste a good crisis – amplify the magnitude of the crisis to a point where all your stakeholders realise they have no other option but to take a calculated leap-of-faith and make a wholesale change.
Total belief – ooze confidence even if you have your own doubts. Grit in and persevere through choppy waters. Rather than shy from doubters, actively engage them.
If you could be anyone for the day, who would you be?
Two people:
The first would have to be Elon Musk even if I don’t agree with everything he does. I would love to be at the forefront of spearheading the future. He’s so different from me so I´d like to understand what it would be like to be him.
However awful, it would have been extraordinary to live through the World Wars. My grandfather who I never met was a mathematician, born in Southern Italy. He was a captain in the army and fought both in Somalia during WW2 and Russia. He then emigrated to Venezuela where he married and worked in the gas cannister industry. His life must have been quite a journey.
"Relocating over from Venezuela to Europe has been a fascinating adventure"
Where's been your most interesting procurement adventure?
In itself, relocating over from Venezuela to Europe has been a fascinating adventure and I’ve learnt a lot in the process. Latin America is very emotional – I’m well versed in dealing with hot blooded suppliers balancing emotion with intellectual discussion! Being Latin American also teaches you to never take live too seriously and to remain positive: If robbed in Venezuela you’d say: “they took my wallet but not my car….or they took my car but didn’t highjack me.” You’ve got to keep your sense of humour. Now living and working in Germany, I’ve had to adapt to a very different style.
I’m fortunate to have worked in several procurement roles at Mars. Prior to rice I was sourcing animal proteins for Mars Petcare. It was a really smelly job! And one that brought me all over Europe visiting rendering plants, collectors and slaughterhouses. I really enjoyed partnering with our Eastern European suppliers, until then family-owned, and truly pioneering businesses as they evolved after the Soviet Union collapsed. I have a lot of admiration and respect for their drive and ingenuity.
Recently, I visited our American rice farmers. Over there, it’s less about ‘the romanticized farmers’. No - they’re real businessmen! They’re savvy and you want to learn from them how they drive their businesses. And they really love their land and the family heritage of their land.
How do you contrast and compare buying petfood and human grade materials?
Petfood is what we call ‘the fifth quarter’ – the materials come from all the same primary sources as human grade food whether it be cereals or animals. However, petfood uses the bi-products not used in human food – a key way to derive maximum sustainable value from the animal. Mars has very exacting standards and has had to lead the animal bi-products suppliers how to meet the required quality standards and thus transforming the industry
What should the procurement community be better at?
We need to be better at the business aspect of what we do. What I mean by that is that a lot of the time we are so focused on cost, quality and service, that we risk becoming a one-trick pony. For sure this is the bedrock of what we need to do. To take it to the next level the procurement community needs to be even better at the end-to-end overall holistic business aspect of business development. Eg not just thinking about the cost of the rice but rather how the rice interacts in the overall product from field to shelf.
"We are well on the way to achieving our 2025 target"
What's your current focus on sustainability?
We’re doing a lot of work on the sustainability of rice, particularly on two areas of water usage and carbon:
With carbon markets evolving, it's both an opportunity and risk in terms of how to manage this from the get-go. Otherwise, it is simply an on-cost. The governance and knowledge of this is evolving.
We need to understand the materiality of where the product impacts most whether it be environmental or social. For rice, it’s all about minimising water usage. We are well on our way to achieve our 2025 target of reducing by -50% unsustainable water use reduction.
For me I see sustainability makes you think about how businesses should be run in the future. If the supplier doesn’t care about sustainability, they likely don’t care about quality either.
If you could go forward or backwards in time, which year would you go to and why?
I would go backward to Venezuela in the 1930s when everything was possible. After the dictatorship, the country was buoyant with the discovery of oil and the GDP was one of the highest in the World.
What do you like doing outside work?
We have a lovely daughter called Laurita, who’s two. She’s helped me rediscover life again. Living in Germany I always think how she has 2 lives, one with us the other in the Kita - she is a lover of Leberwurst (German Pate) and Gurken (cucumbers)!
We love to travel and meet people. This summer we’ll be doing a road trip around Spain and Italy. Great because I’m a big wine fan too.
Rapid Fire
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Long Grain, Basmati or Jasmine rice? Jasmine all the way
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Curry or Paella? Paella
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German or French wine? German Riesling (but my husband is Spanish so it’s 100% Spanish red for him)