Executive Q&A with Craig Reed, DuPont: To Run Faster, You’d Better Harness that Data

Craig Reed

Spend Matters conducted this interview with Craig Reed, global director for raw materials, energy and packaging at DuPont, during the Global Procurement Tech Summit. We thought practitioners would benefit from reading how a procurement leader at a Fortune 500 firm approaches his work.

Taras Berezowsky: Craig, with such a broad-reaching title, tell me in a nutshell — what do you do?

Craig Reed: I have responsibility for driving value for all the direct materials that are procured by DuPont for all of its six businesses.

TB: In that role, what are the two to three biggest challenges you face?

CR: I think the biggest challenge for me right now is probably the same for the rest of the industry — it's the volatility in the current markets that are creating challenges in terms of being able to continue to drive the value for the company. We've been successful in doing it, but the volatility tends to continue to create a challenge for the [entire] organization, and the risks associated with it. The supply base right now is strong in areas but fragile in others, and so being a global company, we will also continue to be challenged with making sure that we have the right solution providers globally to be able to meet our businesses’ demands. Those are the two biggest challenges for me.

TB: Is it the external volatility, i.e. what's going on in the markets, that mainly creates the challenge? Or is it how your technologies, your processes and all of that are set up to deal with that external volatility? Or a healthy mix of both?

CR: It is a mix of both. It starts with, for example, the key issues. If you take a look at what's happening in the markets today, you've got oil and gas that are at much lower prices than we have seen in a very long time. We have the other commodity markets that have been ultimately depressed as well, we have currency exchange rates [to contend with]... all of that creates a different requirements in your organization.

So for businesses like mine, it's about how fast you can react to those changes. That's when technology, processes and systems come to bear, and that's when you're looking at those things to help you execute on those requirements in a fundamentally different way. Think of what's most important today: you want to go a lot faster than you have in the past. With time, you can do anything, but you don't have the same amount of time anymore; things are moving at a much faster speed — you cannot wait.

TB: Since DuPont is a 200-year-old company, how would you characterize your own firm’s agility in the adoption that you spoke about in your presentation at our Global Procurement Tech Summit? Relatively, how quickly do you guys adopt new processes, tech or anything else?

CR: Let me just say that the adoption piece isn't something that's happening readily. It's not like, ‘Let me go out and find something that I think is the best solution and now I'm going to buy and deploy it across the organization.’ In a company like ours, it takes study because there are implications in multiple different areas that you basically have to weigh into.

If you're going to do something, you have to do it in a way where you ultimately understand the overall value long term. For a technology solution — or any solution — it has to be vetted and tested first. Otherwise the implementation will be flawed and [the solution] won't get used. You have to have that buy-in from the [internal] community to make sure they're going to execute, leverage it and get the benefit of it, from an organizational standpoint.

TB: You like to mention the certain “silo” effect that can prevent supply chain organizations from effectively achieving an integrated supply network; in essence, e-sourcing, S&OP, commodity management, network design and other aspects of the business all operate as free-floating, isolated tech “islands.” I’d imagine a lot of companies deal with that kind of thing. Can you talk more specifically on how you guys are meeting the challenges of integrating your entire supply network?

CR: It’s interesting, because today, as you look at our team members, we utilize a lot of manual interfaces. We have processes in place across the organization that allow us to be able to integrate. So you have what I would call “islands” of information, data or even technology solutions. But the integration occurs in a manual way today. You're carrying information from one place to the next, and you're marrying it; but when you do manual intervention, you tend to have a slower process — and also opportunity for more errors.

The key here is wanting to go faster and not spending a lot of time massaging data, yet still making sure that you can analyze the information. That's really where we want to spend our time. So for us that's what the ultimate value is around — really consolidating. As you continue to shrink the resource pool in the organization, you've got to find the efficiency someplace else. I think that's why we tend to take a look at what solutions can allow us to best optimize and bring together these islands of information and data into a centralized hub to be able to allow us to better execute and manage on it.

TB: How critical is the relationship between your team and the company’s CIO and CTO?

CR: In our organization, it's a [true] partnership. If you think about it, everything we do has some impact to technology. For example, if I'm sourcing for my HR organization, typically it's going to require some solution along with it; or if we're going to change some process internally, or developing solutions for other functions in the organization, it requires IT partnership. [For] your manufacturing footprint, the technology that the rest of your company stands on is the bedrock.

But every time you implement a new opportunity or change, it can have an implication to technology. So it's very important to make sure that you’re aligned with your IT organization and your staff because that alignment allows them to understand that you are making decisions for the benefit of the corporation and which are also aligned with the overall strategy of the organization. Then also, when you're executing on your own behalf, they’re in alignment with that as well, because they understand the overall thought process of how you go about making decisions to drive value for the company.

TB: Are there any surprises for you within the tech space these days, as they would relate to your day-to-day job?

CR: Some of the new technology that's really more cognitive-based, that gets very interesting. The wave of what that potential could be for companies, I think it's pretty phenomenal. Think about what's happening on the consumer side: you’ve got the Siris of the world, that are now starting to think, or the [Amazon] Echos of the world that are now starting to be cognitive engines for individuals. Imagine if you can apply that to processes in companies and corporations — that has huge potential and I think that's probably the most interesting thing for me to kind of see how that's being applied now to what we do.

TB: With these cognitive technologies that are coming about, do you foresee use cases and implications for DuPont itself, of the [IBM] Watsons of the world? In what ways?

CR: I do. It will start with allowing us to get smarter on the data piece. Everything starts with information. Right now, what's interesting is that there's more information available to an individual than ever before. The question is how do you decide what information is good information? This cognitive opportunity that's coming out now from a technology standpoint, I think fundamentally allows you to really tailor what it is you're looking for, positive or negative.

Ultimately, in order to ‘go faster’ today, you’re going to need to first be able to take that data and derive the strategies necessary to execute on the business’ overall value proposition — because there's just too much information for any individual to go through. [Of course], you don't want to miss anything, so if you have [a technology] that can go out and read 10,000 pages a minute, that's a lot faster than me reading 2 pages a minute! I think that's going to be the biggest benefit from the cognitive side.

Read more about DuPont’s relationship with data and procurement technology, including why it uses Microsoft SharePoint.

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