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®
Angela Pryce
"Most recently I worked in Uganda, Burundi and Kenya"
Tell us about your current role...
As an independent consultant, I work with a range of businesses and products around the world. I am passionate about global trade, and love bringing the product story to life, from field to retail shelf.
Most recently I was working on a 3-year capacity-building project for the UN’s International Trade Centre in East Africa (Uganda, Burundi, Kenya, Tanzania) and Eastern Europe. The objective was to assist SMEs in developing countries achieve sustainable development through increased exports. I was brought onto the team to provide EU retail market insight, supply/demand analysis of the global tea markets and strategic direction for the businesses and governmental bodies to enable better alignment with the global trends impacting the tea sector. Mentoring individual businesses was highly rewarding helping them develop their product range, improve product quality and negotiate better deals.
Besides this, I assist tea start-up businesses to develop new products, select suppliers and create the right range architecture of flavours, strength and every day ‘go-to’ vs speciality.
I’m an external advisor to McKinsey as a member of their Culinary Excellence Centre, supporting start up brands launch new products. And one of the really fun things I sometimes do is create and host tea-based corporate events. Most people love tea, so it lends itself well to use as a basis of a teambuilding day!
What is the best procurement adventure you have had?
There’s been a few! The scariest has got to be a flight from Kuala Lumpur to Borneo. I was travelling with a procurement colleague from the Bangkok office to visit the cocoa plantations and meet with a potential new supplier of cocoa powder. About an hour into the flight we hit turbulence, so bad the chap behind me began to recite his prayers, whilst the lady beside me began to count her rosary beads. The praying continued for another 45 minutes, until we landed to much tears and applause. I’ve never experienced turbulence like it, and never want to again. Feeling happier to be on solid ground, queuing for passport control only to find a tarantula on the wall just 30cms from where I was standing…quite a day!
But the best has got to be my first overseas trip as a buyer, on a 6-month training trip to Assam, north east India. After travelling from London to Kolkata, then transferring onto Guwahati, I was met by the pilot of a small 2-seater Cessna plane. With no highway, the 500km trip up to the tea estates of Upper Assam by road would’ve taken at least a day, therefore a flight being the most efficient way to travel. The flight path follows the the mighty Brahmaputra River, up the valley and over the Kaziranga National Park. The park is an UNESCO site. It’s one of the last areas in eastern India undisturbed by a human presence and has a rich biodiversity. Home to tigers, elephants, and the endangered white rhino - we were lucky enough to see one in the distance. Landing soon after on the lush gardens of a tea bungalow, with a welcome cup of tea in hand…it’s a memory I’ll treasure.
"The lady beside me started counting her rosary beads"
What are the three most important skills for the procurement professional?
Being a great listener - important in so many ways not least in gathering data, but also in being able to communicate effectively and in building successful relationships.
Influencing skills - being able to see things from another person’s perspective is so important, especially when preparing for a negotiation or a difficult conversation. I’ve found the Myers Briggs personality type indicator helpful in many situations, particularly when coming together as a new team, or when working with cross-functional teams where there are different objectives at play.
Being a devil for the detail - it’s an obvious but important one. Can come into good use during negotiations, when it’s helpful to consider benefits (other than price) that might not be immediately apparent.
I know you have a couple of interesting examples about how Procurement can reduce waste. Tell us more...
One my favourite products is Dash Water, I love how they’ve been able to champion waste (using wonky fruit and veg to create a delicious flavoured sparkling water).
During my time at Fortnum and Mason, I set up a relationship with Bio Bean Coffee – whereby they collected our waste coffee grounds from the restaurants and took them away to be manufactured into coffee logs. Recycling our waste coffee grounds gave a second life to something otherwise destined for landfill, and offered a sustainable alternative to burning coal or imported wood.
In a similar vein, I’ve recently worked with a tea supplier in East Africa to help find them a buyer for one of their waste dry leaf grades (BMF a fibrous material, a by-product from the tea production process). We established contact with potential new customers in the natural paint industry as BMF makes a fabulous natural pigment (rich red/brown in colour). The natural paint industry in Europe has boomed in recent years, so I’m hopeful it will be a great fit!
What procurement skill do you most like to use in your home life?
With 2 children, a husband, dog and 5 chickens life seems to be a constant negotiation…over the years I’ve found toddlers to be the toughest negotiators!
Rapid fire
Darjeeling or Lapsang Souchong ?
Both - Darjeeling in Spring. Lapsang Souchong in Autumn - peaty flavours like woodland walks and open fires
Tea pot or tea bag?
Definitely a Tea Pot for flavour
Milk before or after pouring tea?
After, to determine amount needed
Intro
When I was first introduced to Angela, I knew instantly that she is a true Procurement Adventurer. She exudes procurement expertise, a passion for her career and wisdom that comes from having worked with many materials, suppliers and cultures around the world. With her wealth of knowledge and skills she set up as an independent consultant eight years ago. Over fish pie for each of us at one of our favourite pubs, The Peat Spade in Longstock (www.peatspadeinn.co.uk), she shared her fantastic Procurement Adventure with me.
How did you come to work in procurement?
I started my career 22 years ago, when I joined Twinings as a Trainee Tea Buyer and Blender. The early days involved lots of tasting, sometimes 700 cups a day, sometimes blindfolded! The training programme was a lengthy 5 years. Valuing a tea is predominantly a sensory process of the tea’s organoleptic profile (visual, taste, aroma). In addition one needs a deep knowledge of the markets, to ensure you’re buying at the right time, at the right price. It's essential for a buyer to know their product, so a detailed knowledge of product manufacture from the field right through to shipment goes hand in hand with the job – I’d say the same would apply for a buyer in any industry.
After 9 years I moved into a role with the Ovaltine Procurement team - TwiningsOvaltine being the same organisation, under the parent company Associate British Foods. It was a new central role, the main objective being to recommend the global buying strategy for c.£90m ingredients spend across global manufacturing sites. The role was created with the desire to co-ordinate buying activity and to maximise leverage by merging our global spend where applicable. I developed deep analytical knowledge of commodities markets such as cocoa, milk powder and sugar, assessing global price drivers and translating this into meaningful action. It’s the area of procurement that I really enjoy.
For a few years I also headed up the European Packaging Procurement team for Twinings, managing a team of 6 buyers and sourcing materials such as cartons, tin, laminate and teapaper. It was fascinating to learn that tea paper is made from abaca fibres derived from a species of banana plant.
Brexit, Trade Tensions, Covid and Climate Change have made securing supply tough. What are your top tips for others to navigate these choppy seas?
Difficult times most definitely highlight the importance of buyer-supplier relationships. Well executed Supplier Relationship Management comes into its own…lean hard into Strategic Relationships to get maximum benefit during times of critical supply. Of paramount importance is ensuring you’ve secured supply – even more important than price.
Remember stakeholders within your own business. Through appropriate and timely knowledge sharing, Procurement can really help a business navigate uncertain times. Communication done well, can raise the profile and visibility of the Procurement team across the business. Nobody likes sharing bad news, but transparency builds trust and can help solve problems before they become unmanageable.
What is your biggest procurement achievement?
I’m really proud of the work achieved in setting up and establishing the new role and ways of working for Ovaltine Ingredients. It was challenging in many ways, in that I was indirectly leading a team of buyers, across global boundaries but also by influence alone – and for commodities that were entirely new to me. Time, stakeholder management and much hard work paid off and the end result was a truly global buying team. We had the benefit of local supply chain insight and global strategic knowledge, working together definitely gave us a stronger position.
A new method of reporting financial data (variance vs. budget by manufacturing site and/or ingredient spend) was developed and presented to the senior leadership team on a quarterly basis, detailing year to date performance and year-to-go risk or opportunity. It sounds simple, but it was vital through the turbulent commodity price crisis of the time and gave the business valuable insight ahead of any cost impact (or benefit!).
We also worked on improving the budgeting process. As a global team we worked together to set consistent standard prices across regions, based on actual prices paid and on an agreed market outlook. The process delivered more accurate and transparent budget prices and therefore a truer product cost for our internal customers. It also helped to flush out new supply source opportunities that previously might not have been visible.
...what did you learn from a time that didn't go to plan?
Waking up to the news that your packaging supplier’s warehouse had suffered a devastating fire overnight, destroying all stock, definitely wasn’t in the plan - the supplier was our main carton supplier at the time, and held the lion’s share of stock for our UK business. Never underestimate the importance of accurate data and teamwork.
Having detailed visibility of stock within the system and at various locations, and demand by day, by product type was essential. We micromanaged the situation as a supply chain team for a number of weeks, working hand in hand with planning and production colleagues.
"Never under-estimate the importance of accurate data"
"Waste fibres from tea processing can be used to create a fabulous natural pigment"
How can procurement drive sustainability forward?
Knowing your supply chain is a must; by this I mean supply chain mapping beyond tier 1 suppliers to the origin of the raw materials - your suppliers’ suppliers. In the case of branded goods, upstream mapping is particularly critical in avoiding potential damage to the business.
As an example, relating to worker welfare, at one stage I was sourcing wooden boxes. Through supplier visits it became clear that the supplier of wood into our tier 1 supplier (responsible for treating, cutting, sanding, and printing) was operating with insufficient health and safety procedures. Our risk assessment resulted in immediate improvements in ventilation and safety equipment. It was really rewarding to pass on knowledge and exert a positive influence beyond our own supplier.
Looking more holistically, it’s important for the wider business to be on board in exploring the resources used within every step of the production process (not only in direct manufacturing sites, but also throughout the entire supply chain). Only then is it truly possible to understand the environmental, social or economic impact of the total product.
Procurement can really help deliver positive change through dialogue and collaboration with the supply base and exerting influence to enable positive change…I use the word influence as it’s got to be a win-win for both supplier and buyer alike, with a mutually agreed motivation for change.
Apart from your current role if there was anything you could source in the World, what would it be?
A career as a ‘Perfumer’ sourcing extracts and ingredients would be the job for me. It’s an industry I’ve often pondered, the creativity and complexity of perfume creation is appealing. I love scent, it’s truly mood changing and very personal.
The appeal might also be due to the fact that I can’t wear perfume most of the time as it affects your ability to taste (when I’m wearing perfume, it’s definitely a day off!). Similarly citrus fruits, cigarettes and curries are not great for the palate.