Giles Breault At eWorld – Procurement Must Change Focus

At the recent eWorld event, the keynote speech was delivered by Giles Breault. He was CPO in a number of Pharma firms and ended up at Novartis where his role encompassed both procurement and other "productivity" initiatives. I first met him a few years back at an industry dinner, where he made a brief speech and I ended up furiously scribbling down notes on the menu, as his comments were so perceptive and incisive.

He now leads the Beyond Group with Sammy Rashed - we wrote about what they are doing here. Working mainly with firms in the pharma sector, they have been looking to help those firms address really fundamental issues - most of which are not just "procurement" in nature, but moving on to wider business issues around innovation and efficiency more generally.

Breault covered quite a range of topics, all well linked, and also presented survey results from their work with Beyond Group clients. Indeed, he  packed so much content into his 30 minutes, it's quite hard to summarise his thinking, and our only criticism is that he really needed longer or could have focused on about half the content to tried to get over to us!

He was particularly interesting in talking about why procurement is finding it so hard to move to that strategic level of operations that most professionals and functions aspire to reach. He puts the obsession about cost savings at the heart of the problem. "We can't seem to achieve value based relationships without escaping the focus on cost savings".

Those basic cost focused goals and targets still dominate thinking, and the vast majority of procurement executives still have "savings"  as a key (or even as the only) metric on which they are judged. And in a related issue, he argues that metrics management and the constant measuring of supplier performance crowds out more important issues. That is a systemic issue.

It is a sign of the conflict he sees between  "control versus collaboration" - our processes simply don't encourage suppliers to look on as customers of choice, which should be our aim. And "our own staff don't have the time to engage in value adding discussions with suppliers".

Moving on, Breault talked about his vision for the role of the function.  Procurement needs to be more customer focused (we think he means both the internal customers of procurement and the ultimate organisational customers). Yet at the same time, we should be more market facing with greater and deeper true category expertise. But perhaps his central message is this change of focus from cost to innovation, and the development of different sources of value - which might include managing reputational risk, for example, as well as seeking innovation.

We will come back in a further article to his more detailed comments on innovation - as we said earlier, he packed an awful lot into his 30 minutes! We've had some excellent keynotes over the years at eWorld - I remember Jim Carter, Remko van Hoek (then at PWC) and Eva Wimmers (ex Deutsche Telecom) immediately - but this was right up there with the best in terms of Breault's ability to get us thinking about what procurement should really be about.

 

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