In the last of our Decade of our Lives webinar series, who better to join us than procurement legend and former CPO of Johnson and Johnson, Len DeCandia. During this session, Len drew from his wealth of experience at global enterprises to offer his insights into the future of global supplier management. And in an enlightening Q&A with our founder, Mark Perera, DeCandia offered a unique insight on both the past and future of the function.
Given DeCandia has been involved in procurement for the best part of forty years, few people are better placed to talk about the revolution that has taken place in the function since he started his career. Now, he believes procurement stands on the cusp of a brand new era – one which could shape the function for generations to come.
“What I saw in the 90s and the early 2000s was the ability to really translate technology into better execution and productivity,” he says.
“We’re at a phase now, where we need to go and look at some of those fundamental practices and see if some of the investment we’ve made in technology has really translated into greater productivity. We’re on the threshold of a new era of next generation transformation and restructuring.”
It’s not just the role of procurement that has changed since the 1990s, the whole infrastructure of the corporate world has altered beyond all recognition.
For his part, DeCandia believes that this revolution means it is now necessary for internal investment to reflect the nature of the organisation’s external relationships.
“If you go back to my early years, organisations were a lot more vertically integrated,” he says. “In the last 15 years or so, [we’ve seen] globalisation, more collaboration and more innovation, and more openness to innovation coming from outside your four walls.
“That has really translated into procurement having a wider net in organisatIons, beyond just the traditional supply chain. A lot of organisations have really had to make some important decisions around what competencies and capabilities they’re going to invest in internally, in order to deliver their products and services. They need to complement that with external relationships.”
DeCandia readily admits that in his early days in procurement, risk was a key consideration, but one which could be mitigated and managed with relative ease. It was, he says, fairly simple to identify a threat and put plans in place to counter it, should the worst come to pass. A ‘mono-crisis’ world, though, has developed into something very different, as 2022 has once again proven. And that fact has thrown up questions that he’s not entirely sure every procurement organisation is prepared for.
“Now we’re starting to really experience a world with the pandemic, with geopolitical issues impacting our ability to do business around the world, as well as labour and the ability to source and keep talent - we live in a poly-crisis world,” he says. “Have we structured our business plans to be able to manage that level of complexity and look beyond just driving efficiency?”
Since 2020 and the onset of the pandemic, there has been an understandable increase in the focus on individual health, as well as that of the wider business. This is, Decandia believes, a welcome development. And one which has refocused procurement’s approach to relationship building in every sense.
“Obviously the way you treated constituents before the pandemic really manifested itself during the pandemic,” he says. “What we’re finding is that there are winners and losers within the various industry groups.
"Share is being lost and share is being captured. What role are supply chain, employees, and suppliers playing in your ability to capture and maintain share in a world where there is so much unpredictability?”
It’s a phrase that DeCandia used in a previous assignment to describe how the sustainability focus had shifted from shaping events between the four walls of a company, to the influence that companies can have on their wider supplier ecosystem.
“There’s a lot more ‘ands’ in that relationship now,” he says. “There’s value, and there’s innovation and there’s good and there’s positive impact on the world. You get into things like the environment and things like the social impact of procurement.”
He goes on to say that if supply chains were traditionally looked upon merely as a point of execution, then that’s no longer the case.
“At the end of the day, when you’re providing your goods or your service to a particular customer, they’re completely blind to all the partners that are needed to do that,” he says. “It’s your name and your reputation that’s tied to that brand.”
All of which shines a light on just how critical it is we operate with transparency, and for businesses to know exactly who they’re working with across their supply chain.
Despite its growing sphere of influence, procurement can only do so much on its own. “You have to make your sustainability goals and some of your broader positive impact goals be beyond the purview of the procurement function,” says DeCandia. “They have to engage the budget holders because, in reality, the budget holders are the place where you can make that difference.”
DeCandia talks about his own experience at Johnson & Johnson, when he was parachuted in as the company’s CPO seven years ago, and the focus he placed on diversity within the firm’s supply base. A central ambition was to double the spend with diverse suppliers while, at the same time, turning that aim from one that was US-centric into something truly global. Based on the three principles of people, process, and technology he set to work.
After launching a global e-marketplace, he kicked off a project that aimed to integrate a diverse supplier marketplace within this wider framework.
“Could we create technology enablement to be able to direct buying from diverse suppliers globally from any budget owners’ seat?” he says. “In many cases these suppliers were very local. This was rolled out in countries like the UK, South Africa, even China. The local internal business owners who own the budget had greater access to positive social impact within their own communities. What we saw was a 100% growth globally in diverse supplier spend.”
Keeping things simple and putting the power in the hands of the hands of budget owners delivered enormous and lasting change. And it’s a model DeCandia believes can be rolled out elsewhere.
His voice is one of the most influential in procurement; even in retirement, his views carry considerable weight. While the role of the procurement function decades from now remains uncertain, DeCandia offers the function a window into not only its past but also its future.