The speed of business is dramatically accelerating. Procurement teams need to be able to react quickly and pivot within their operating model to keep up with changing demand. What’s more, they need to build stronger relationships with the suppliers that empower them to adapt at a moment’s notice.
According to this week’s podcast guest, that’s only achievable when procurement steps outside the mindset procurement has held for so long and focuses their efforts on genuinely helping those they work with. Eric Dulin is the Director of Procurement, Digital & Technology at Yum! Brands, the world’s largest restaurant company that includes approximately 1,500 franchisees operating more than 55,000 restaurants in over 155 countries and territories.
Eric will be the first to tell you that “nothing is more fun than doing procurement—having a small team that makes such a huge impact on the bottom line, that can influence everything the business is trying to do to be successful in the marketplace.” His experiences throughout his career have shifted his mindset about how procurement manages itself.
That brought us to the first major point of our discussion: transactional procurement versus strategic procurement. Any procurement professional knows that saving money has traditionally been one of the role’s biggest mandates. However, focusing solely on cost savings has often led to a bigger churn in clients and suppliers.
“Yes, we were doing sourcing, and we were hitting our targets, but we weren’t building relationships, and we weren’t showing support to our client,” said Eric. Rather than take this transactional approach to procurement, a strategic approach offers much more to both sides of the relationship. It’s about truly understanding the client’s project and how you can help them.
“If you think about it, we are a service organization. We can either be a service organization that sits in the office, and someone comes to you and says, ‘Can you sign this contract for me?’, or you can be a service organization that is constantly meeting with your customers, meeting with your stakeholders, understanding what their needs are, building out that pipeline, and delivering that pipeline. “
By taking that strategic approach and engaging with clients early on, Procurement not only builds those relationships and has a stronger impact, but they still achieve the cost savings they’d want to see, to begin with.
As Eric puts it, “If you take that approach, if you really focus and truly believe in your customer support organization, and you are here to build relationships with your stakeholders, that will dramatically give you the ability to drive more and more savings.”
As our conversation continued, I was curious to get Eric’s perspective on how his former sales roles impacted how he approached his current procurement role. After all, it’s no secret that the two teams often view each other as adversaries and approach the negotiation table with a lot of tension. Eric’s answer was one many professionals across our industry can take to heart.
“You start to realize it’s a roundtable…and you are working for the same goal.” Accepting that as the fact results in several wins across the board.
The customer wins when procurement and sales do their jobs
The supplier company wins because they are selling their service or product
Procurement wins because their unit cost goes down as they build that strategic relationship.
Our episode wouldn’t be complete without my highlighting Eric’s latest achievement: his book, Win-Win-Win: Collaborative Approach to Procurement in the Era of Digital Metamorphosis.
Citing a need for books specifically about procurement in the current marketplace, Eric wanted to give back to the industry he loves and provide something of value for future procurement leaders. When so many procurement professionals fall into the industry and “no one gets a degree in procurement,” Eric wanted to “give the kids something.”
While the book offers great advice and strategies for winning deals and keeping customers, one thing stood out to me—the title itself. So I had to ask: “What do you mean by ‘the era of digital metamorphosis’?”
Working in the restaurant industry, Eric is all too familiar with the rapid changes that procurement can experience overnight—and, to him, simply “transforming” is not good enough.
“Transformation is dead. It’s like evolution—it takes too long. We’ve got to move faster. How do we dramatically change that business model overnight? That ramification hit every industry. That was such a big change. The technology and business requirements immediately changed. That’s why I titled it that way – because of the pace. That’s what digital metamorphosis means. It’s digital transformation [at an] overnight pace”, he said, speaking of how his industry needed to adapt during COVID-19.
As we closed out the conversation, Eric left listeners with a line that surely should light a fire under everyone in procurement. “Today’s market leader may not exist tomorrow; tomorrow’s market leader may not exist today.”
