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
Richard McGinn
Procurement Adventurer®
What's your current role?
I am currently Category Sourcing Manager at Ecotone, a European leader in organic and plant-based food, guided by a mission to protect and nurture biodiversity. The company owns purpose-driven brands across multiple categories in the UK and Europe, including Clipper Teas, Kallo, Bjorg & Zonnatura to name a few.
My team and I manage third party manufacturer procurement for the group for Tea, Coffee, Cereal Cakes, Gluten Free Cakes, Savoury Snacks, Breakfast Cereals plus some other smaller categories.
Our key focus is delivering value for money for our customers on sustainable (mostly organic) products from third party suppliers. One of our key focus areas is SRM and building long term relationships with suppliers to ensure we maintain supply of quality products and innovation for Ecotone in a sustainable way.
How do you go about sourcing food products?
When working for a food retailer like Waitrose or portfolio of brands like Ecotone, you must have a clear brief from the Marketing Team, otherwise it’s so hard to know what they want. Once you have the brief, the trick then is to provide a suite of options in terms of suppliers and different packaging options, with the different costs and let them choose what they feel best matches their initial idea.
"You must always keep a curious mindset."
What advice would you give to those just starting their Procurement Career?
Two things:
1) Procurement touches so many parts of a business and can make a massive difference to the bottom line. So, it’s a great place for a career.
2) You must always keep a curious mindset
"Most of our products at Ecotone are organic"
How do you balance a good price with sustainability?
The challenge is that if the consumer doesn’t see the value in sustainability you are offering, they won’t buy the product. Most of our products at Ecotone are organic – we have to position the positive sustainability benefits well, so the consumer sees the value for the organic premium. Besides organic, there are so many claims and different certifications that the consumer is easily confused by – having a clear message is important.
When we’re sourcing organic products, we need to quantify the cost to make the organic product from the yields in the fields, to segregation right through the supply chains to the organic certificates.
A good example of a sustainability win we have had is with our Clipper Teas Brand. We removed the plastic in the tea bags and replaced it with a plant-based, fully biodegradable material (most consumers probably wouldn’t know there is plastic in the tea bag filter paper). We also removed the foil around the bags and the cellophane around the boxes, making our packaging fully recyclable or compostable.
The entire food industry needs to be much tougher at removing as much packaging as they can and Ecotone is always looking at what we can do to reduce this.
What’s the most fun thing you’ve bought?
For sure it’s ice-cream. There are so many different flavours and qualities. Most consumers don’t realise that high-quality, highly-flavoured ice-creams such as made by the Italians don’t contain whole cream. Why? Because the high fat content of whole cream coats the tongue and inhibits the ability to taste the flavours. These sorts of ice-creams are made from milk derivatives and vegetable fats.
Favourite ice-cream flavours? Chocolate, Cookie Dough, Salted Caramel
If you could install one procurement system, what would it be?
I seldom find good systems but I’ve found co-pilot useful. Recently, it created a good cost model for oats from field to flakes for me and also has been a pretty good tool to help with supplier searches.
What language do you wish you could speak and why?
French – as I spend so much time in France for work
What’s the funniest thing that’s happened on a work trip?
On a work trip in Zimbabwe I once stayed in a hotel with no windows. In the morning, I woke up to find 3 goats in my room!
What item can’t you do without?
My calculator – I’m old-school!
Three famous guests for a supper party?
Martin Johnson, Rik Mayall, Bono
Rapid Fire
Football or Rugby? Rugby
French Bread or Italian Cheese? Cheese
South America, Africa or Asia? Africa
Intro
I first met Richard when I had the pleasure of working with him and his team in 2025. Richard has a passion for food, Africa and procurement and that makes him a natural Procurement Adventurer!
How did you get started in Procurement?
I’m the classic ‘fell-into-Procurement’ person! I spent 2 years in Zimbabwe when I was 8 and decided to go back there in 1990 for a gap year. I landed a job at a wholesaler, after travelling around Zim for a year with a friend, specialising in textiles. My manager then left and at the age of 19 I found myself running a whole trading floor. I loved it: doing the negotiations, selecting the range of fabrics and finding new products. I was trading – ie buying and selling but realised I liked the buying most so that’s what a settled on.
"We'd be up at 5am milking the cows"
How did you transition to Food Procurement?
I’ve always loved food! Mum’s family were farmers. We’d be up at 5am to milk the cows or collect the eggs in the summer holidays, 7 days a week. When we came in there’d be a big cooked breakfast waiting for us and a roast on the table every lunch time. For me, food is everything as it brings people together and creates social occasions. I first transitioned into food courtesy of my wife who I met in Zimbabwe. Her father is Greek and after doing the textiles role, I ran their family restaurant for a few years.
During this period, I was approached by a local retailer with 200 stores. I became a procurement manager with a team of 8 buyers. It was fun but tough as Zimbabwe in the 00s had hyper-inflation. Bank notes were in the quintillions (1 quintillion has 18 zeroes!). As the inflation was so high it was hard to get suppliers to sell to us, as by the time we’d paid them, their money was in effect worthless.
In 2008 we moved back to the UK. I then spent 6 years with Waitrose, initially in merchandising and then buying poultry and ice-cream. Much simpler not having to worry about the inflation.
What’s your toughest negotiation?
It was in my previous role at Waitrose with a big ice cream brand – we needed them as their products were popular but always margin diluting. It was hard to get them to budge. After a year of trying to improve the margin with them and failing we decided our best lever was to not list their NPD for the next summer. Knowing it was a risk to sales we put in some strong plans with another brand and developed our own label innovation. We then dropped the news we wouldn’t take any of their NPD.
Long story short, the negotiation carried on for a year with many escalations and a couple of account managers. We didn’t take their NPD, but by the following summer we had improved their margin to be enhancing to the category, plus they got the next year’s NPD listed!
Which nationality is the hardest to negotiate against?
It’s got to be the Germans. They’re real sticklers for detail and try to mitigate all risks in contract negotiations and are prepared to take their time to get the agreement they want.
What was it like growing up in Zimbabwe?
Zimbabwe was a great place to grow up, it was an outdoor life and sport was a way of life. Every day school finished at lunch time (7.15am start though!) and we were back at school every afternoon for sport. Summer was swimming, cricket, athletics and in winter rugby, football, tennis and cross country. It’s no wonder they produce so many good sportsmen and women from a small population.
The outdoor life continued at the weekends too with trips to game reserves, walks in the bush, or fishing at friends' farms or the local dam all followed by a Braai of course!
What’s the trick to cost modelling?
Be prepared to have a go.
Be prepared to be wrong.
Be prepared to make estimates.
You can always refine it later.
Don’t try to go after everything.
Don’t start on challenging the suppliers margin. Look at things like specifications first.
What makes an A-Star buyer?
Be curious and be prepared to ask a lot of questions.
Good listener
Tenacious
Good communicator
Pragmatic
My view is not to worry too much if new starters don’t have procurement expertise – if they’re
curious and energetic, they’ll fly
What skills and attributes does the buyer of tomorrow need to have?
I’d say soft skills – it’s about relationships more than ever. The buyer who gets the product isn’t just the one who’ll pay the most; it’s about the relationship the buyer has with the seller. These soft skills also come in useful to explain to internal stakeholders the multitude of problems such as shortages and price hikes.
"Look no further than cocoa"
What impact do you see weather having on products you buy?
Look no further than cocoa! Chocolate has been so expensive these last two years due to drought in West Africa and other factors such as Swollen Shoot Virus.
Coconut has also been tough – with drought caused by El Ninio/El Ninia and then multiple typhoons that followed. One of our team visited Asia to source the coconut and the massive warehouses, usually full of coconuts were empty.