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®
Elodie Chavagneux
Intro
Elodie Chavagneux is the Head of Procurement at innocent drinks. She is absolutely passionate about procurement and sustainability. French by nationality, speaking Mandarin and in her own words 'super curious' Elodie is a natural adventurer. Here's her story...
Being born and raised in France, how did you come to work in procurement in the UK?
Since I was a child, my parents have been running the same lovely restaurant called “Au Relais de la Truyère” (or “La Capelette” for regulars) near Montézic in France. Unbeknown to me at the time this sowed the seed for my interest in procurement – I remember my parents were always trying to source the finest ingredients at the lowest price and they worked hard to foster great relationships with their suppliers.
Our house speciality is 'Truffade' - potato gratin with aromatic local cheese melted on top. It's delicious! I really like all the desserts homemade by the chef especially the tarte aux cassis.
As part of my Masters degree in Logistics & Procurement I did a summer internship in field sales in the South of France. In truth I hated the sales side of it but loved the negotiation part. The commercial acumen I learnt helped me land my first proper job working for Danone. Danone cemented my love of the food sector and led onto my current job at innocent drinks.
"The best part of the job is when we are boots on the ground, in the fields with the farmers"
Tell us about your role...
I am bias but I think I have the best job in the world leading the fruit procurement for innocent drinks. We have around 80 fruits and ingredients in total, sourced from 40 suppliers. I’m fortunate to have a talented and energetic team of seven people. Sourcing high quality fruit keeps us on our toes as harvests can be highly variable. Our biggest challenge is getting the right amount of stock – neither being short or long.
The best part of the job is when we are boots on the ground, in the fields with the farmers.
I will always remember my first fruit trip in Poland. I would have never imagined how much fruit and vegetables are grown there. It was also incredible to see the passion and knowledge of the farmers.
Travelling lots also mean you have to deal with jet lag, cancelled flights, long hours in the car to reach the factory and farms but that’s part of the job and even if it’s not easy every day, I would never change the experience I get on the ground for anything else.
What is the most interesting procurement adventure you have had?
Every fruit has its own unique story and each typically results in an adventure. There are three fruits that capture my imagination above all others:
Pineapple is the first stand out fruit for me. We buy ours mainly from Costa Rica. When I first saw how it grows, I couldn’t believe it! Contrary to what some people think, pineapples don't grow on trees — they grow out of the ground, from a leafy plant. The pineapple fruit grows out of the top of the central stem. The fruit is actually the result of dozens of individual fruit-producing flowers that have fused into a single fruit, which is capped with a "crown" sporting numerous short leaves.
At the pineapple farms, they have a special technique to cut the fruit. Straight off the field, the fruit tastes incredible and we are always trying to replicate that delicious flavour and experience in our drinks.
On the subject of tropical fruits we source our passion fruit from Ecuador. Passion fruit is best suited to smallholder farming. Farmers typically grow it as an additional crop to their mainstay of cocoa. Whereas passionfruit available at the supermarkets is the purple variety, Ecuador grows yellow passion fruit. It’s more acidic than the purple variety and a superb contrast to the mango we blend it with. The flowers are beautiful and the fruit hangs down delicately from the vines.
Not one of our biggest buys, but I loved sourcing goji berries from China. China is different and I realised that the rules I learned in Europe wouldn’t necessary work in China. Patience is key and you need to spot when a ‘YES’ from a supplier may not actually be a ‘YES’.
A good book to read before a trip overseas is “The Culture Map” by Erin Meyer. It gives great insights when people from different backgrounds are expected to work together and how cultural differences impact international business.
What is the most insightful thing a supplier has ever said to you?
One of our most strategic suppliers is a fantastic German supplier. Innocent has been working with them for over 15 years. They are wise, balanced and expert in their field.
The CEO recently said to me: “Always be yourself. Don’t try to be someone else. Stick to your values”. We trust them inside out as a supplier. Our values are totally aligned.
What advice would you give to any company launching a supply security programme?
3 things:
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Keep it simple – There may be many risks with different severity and likelihood ratings. Log them, quantify them and rank them. Then select the 5 key ones to focus on.
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Review regularly – risks never stop changing so review your risk log at a suitable frequency.
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Governance – ensure there is the right governance process in place to marshal resources to where it's needed most.
Be prepared for risks to play out! It’s all too easy to think ‘our suppliers won’t catch fire’. But it happened to us when a key supplier’s freezer had a major fire! ….more about this later.
"Be prepared for risks to play out!"
"The triangle of the company, consumer and supplier need to be equally balanced"
What does sustainable sourcing mean to you?
Sustainable sourcing is when there is a good balance between cost and sustainability and procurement acts as a force for good. The triangle of the company, the consumer and the supplier need to be equally well balanced.
At innocent, typical projects we are proud of where we have cracked sustainable sourcing are:
Mango (India): Mangoes are a fair-weather fruit. If there's too much rain or too little of it, they won’t grow properly. We get most of ours from India, a country with a whole season just for rain – so we wanted to help our mango farmers make the most of it. We did this by teaching them sustainable methods that save water. After talking more with our farmers, we found out that the way they were using chemicals was also a problem. Applying the right types of chemicals at the right time (and doing it safely) is really important and something we realised we could help with. To make sure our farmers were growing their mangoes as sustainably and safely as possible, we worked with them to tackle these problems. After a few years, we rolled out the FSA (Farm Sustainability Assessment) with a group of farmers to create a framework they could follow. Since then, we've seen these sustainable practices making a real difference. Bunding has been a great success and we’ve taught farmers how to apply better-targeted chemical sprays at the right time. Which means healthier fruit, safer farms and an 80% saving on chemical costs for the farmer.
We also introduced better working conditions on the farms by building toilets and arranging waste chemical container collections. This has made it easier for farmers to find pickers who want to stick around.The good news is that farmers who grew their mangoes in this way saw 48% higher yields compared to farmers who didn't.
Strawberries (Spain): We source our strawberries from south of Spain, closed to the Ferdonana National Park. Back in 2009, we started working with the University of Cordoba to try out different methods of irrigation. After some experimenting, they proved that it was possible to grow strawberries using 10-40% less water without affecting the quality. Most of this water was saved by carefully planning the amount each plant needs, watering when the weather was cooler and keeping irrigation equipment well maintained. It turned out that saving water also made it cheaper to run a farm’s irrigation system and apply fertilisers. Wasted water usually made the growing area slippery underfoot – but with less to go to waste, pickers didn’t feel like they were walking on a slip-n-slide and farm managers saved money. In 2014, we’ve extended the project and reached over 300 farmers, who grow 58% of the berries in the area. innocent won a Guardian Sustainable Business Award in 2016, and three years later, we managed to save 500 millions litres of water a year.
Baobab (Zimbabwe): We source our baobab from Zimbabwe. Knowing some of the challenges the country is facing around poverty and young girls not being able to school, innocent has decided to invest in supporting 30 children across 3 schools in Buhera district with the financial, material and emotional support they need to successfully complete lower secondary education. In 2019, through innocent’s investment, the 30 students in Form 2 received a tailored package of materials including all the exercise books they needed as well as sufficient sanitary wear for the school year. innocent’s investment is also helping to tackle wider common challenges for girls in rural areas, such as distances to school. 18 of the girls supported by innocent received bicycles this year as part of their packages of support. The bicycles speed up the journey to school, ensuring girls get more sleep and arrive ready to learn.
What is your vision for the procurement profession in 20 year's time?
I want Procurement to NOT be seen as a support function. There are many procurement professionals I speak to who feel the same way. It’s now many years since procurement was a dusty back-office, transactional function. Procurement can add so much to a business.
Furthermore, we need ‘1-click’ procurement. Through automation, it must be possible to make lower value-added work like contracts highly automated.
What are your 3 top tips to creating a high-performing procurement team?
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Trust, trust, trust
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Humility
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Communication
And I try to hire people better than me to make an even stronger team. This of course requires a high level of trust.
The plant-based revolution is gaining incredible momentum. What role is innocent playing in this exciting movement?
Almost all our drinks are plant-based so we have already been driving the plant-based revolution since innocent was founded in 1999.
We also offer an alternative to dairy milk with our almond drink. We’re looking to continue to expand in the dairy free category across Europe (we’ve just launched recently in France).
If you were to speak at the COP 26 Glasgow UN Climate Change Conference in November what would be the message that you would like to give delegates?
1) Act now! – Industry shouldn’t wait for governments to tell them what to do.
2) The Intergovernmental Panel on Climate Change (IPCC) has just published their updated report. It shows the state of climate change is even worse than previously forecast. As a procurement and business community we need to work together miles better. One way we can do this is being more open with sharing information and best practice. As an example of this, I met one supplier who said they had been asked more than 50 times for the same information on sustainability. This detracted them from actually doing the work on sustainability. That’s crazy!
3) Globally, CO2 is one of the top 3 areas we need to crack. I did a thesis on CO2 reduction. The topic is complicated. We need to distil and simplify the methodology and all own it.
What is the most successful achievement you have ever had in procurement?
It comes back to the 3PL warehouse fire we had. We didn’t short a single customer of stock. We worked tirelessly with the warehouse provider and all the suppliers who were storing our fruit there to get back on track. Once we’d established no-one was hurt, we went into crisis management mode and pulled together to work through all the issues.
What we learned from this experience was invaluable for navigating through Covid.
If you could give advise to your younger self, what would it be?
Don’t let the chimp take over. What I mean by that is how to recognise the inner voice in your head that might prevent you for trying new stuff, getting a promotion or being out of your comfort zone.
Don’t hold back - go for it!
Be prepared to fail
What makes you tick?
I love to travel and I’ve really missed it during the last 18 months. I’m super-curious especially learning about new countries and cultures. I was fortunate to spend 1 year studying in Taiwan in 2008. What surprised me most was the pre-conception you can have about a country (positive or negative) and how, spending time there, learning the language, the culture but also people habits will help you to really understand the real “face” of a country. I definitely cannot pretend I now know everything about the Asia culture, but these 12 months have definitely change my vision about this part of the world.
To wind down I like to read. Three favourite books are:
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A Promised Land - Barack Obama
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Doughnut Economics – Kate Raworth
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Never Split the Difference – Chris Voss
"Never never never give up"
What 3 world leaders would you like to have dinner with and why?
Barack Obama - for never giving up and always staying himself despite the challenges he has faced throughout his career.
Winston Churchill - for his charisma, presence and determination ("never never never give up"). Also, I am passionate about the WWII and I would love him to tell me his part of the story.
Lewis Pugh - amazing resilience and champion in preserving the oceans.
Rapid fire
French Peaches or English Strawberries?
French peaches
Greta Thunberg or David Attenborough?
David Attenborough
Arctic Swim or Jungle Camping?
Jungle camping