SAEED ANDE, the procurement director for Lafarge Africa Plc, a top cement manufacturing company and a member of the Holcim group, in this interview with BUNMI BAILEY discusses evolutions in the procurement industry, and how it can contribute to growth in organisations.
Considering your work experiences, how different is procurement in the Fast Moving Consumer Goods (FMCGs) industry to that of a firm like Lafarge?
Looking at the procurement processes and the values you want to drive – the controls and ethics required are very similar and the capabilities that we try to build for procurement teams are also very similar. I think the major difference is that these are very big industrial companies where we have a lot of capital spent on logistics related capacities as well as industrial equipment and spares.
Therefore, due to the huge financial outlay, we need to invest a lot of time and resources in building the right partners to ensure that we are more focused on long term strategic partnerships. You can see that it is imperative to innovate and digitize to ensure that you are taking everybody along, that no part is falling through in what we do. Basically, for me that will be the major difference.
What has the transition been like from logistics management to procurement?
I would say it has been seamless for two key reasons. When I came in, I delved into procurement related projects in Nigeria even before I took on the logistics role. I am quite conversant with the procurement terrain and being a people person.
Also I built a lot of collaborative relationships with the internal stakeholders. Ninety-five percent of people I work with now are people I have already built relationships with over time during the project and during my role as Head of Logistics Operation.
The second point is not something I did but what I attribute to the current chief financial officer, Lolu Alade-Akinyemi, who took time to invest in a high performing organization. I inherited a very capable, high performing organization. When I was taking the role, the CEO and the Group said to me “Oh Saeed, in this role you are pretty lucky, you really are working with very intelligent guys who have a lot of passion”.
It has been five to six months now and I have seen these guys drive their results by themselves. They have personal leadership traits and they have passion for the business. They just own and drive results with the spirit of entrepreneurship. So, when you have people like that, it is easy for you to deliver results.
I have seen the level of ownership these guys have even at that junior level, it is really outstanding. I am a people person who loves work-life balance, seeing that showcases the rare opportunity one has and the results we have delivered in the past couple of months speak for us.
In your opinion, how does procurement management contribute to organization growth and shareholders’ value?
When people talk about procurement generally, they refer mostly to cost savings. I have a different view of what procurement delivers. For me, procurement is an enabler to drive shareholders’ value. We are not all about cost savings alone. For me I think there are six key things that procurement does to deliver business growth and shareholders’ value.
Cost: Obviously this is what we are known for. We work on innovation that delivers reduced cost to the bottom line to ensure that we are delivering goods to the consumers at affordable rates. By doing that, we are also learning from some of our member organizations within the Holcim Group, what they do well and what we can learn etc.
Revenue – the top line: The work that we do in partnership with the logistics team to ensure that we have the right capacities, be it on fleet or on warehousing. What that does is, it helps accelerate our market share ambition and growth plan and we have seen very good growth in volume driven by the things that we do together with the logistics team. We are also making sure that we have the right materials available at the right time, ensuring that there are no breakdowns at the plant.
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Innovation: In today’s world, and with the current realities posed by the Covid-19 pandemic, if we don’t innovate, we will fall aside and cannot compete. We cannot afford to put all of the cost on our consumers so we definitely focus on innovation. For instance, we partnered with a local organization to fabricate tools and spares to ensure the seamless running of the plant. That is one of the ways through which procurement also adds to shareholders’ value.
Sustainability: We keep bringing sustainability to the fore because it is about caring for the future generation. We care about building progress for people and the planet, for a greener and smarter world.
Risk mitigation: We need to mitigate risks. We read trends, analyze possibilities and observe global economies. We are constantly questioning what is happening and what can we do? We need to keep the right level of inventories.
Supplier assurance as well as service delivery because that is what we do. We are the wheel that ensures all other departments are functioning well, ensuring that we provide the right supplies at the right time in order to ensure the business meets its goals and objectives.
How is procurement relevant to the United Nation’s Sustainable Development Goals (SDGs) given Lafarge Africa’s role as a member of the Holcim Group?
For us sustainability is a core value and also at the core of our strategy. We pride ourselves as the company that not only sells products but delivers solutions as well as build a greener and smarter world, and a world that works for all.
We place a lot of emphasis on sustainable and cost-effective procurement. In doing that, we build long lasting relationships with partners who have similar values with us so that together we can drive the SDGs. We focus also on working with local suppliers, especially those within the communities where we work.
For example, in 2020, 86 percent of the procurement budget was spent on local suppliers, most of whom are suppliers in our local community. What we then do in essence is build their capability. We empower them and we help them build sustainable livelihoods. In addition to this, we also focus on the climate. Reduction in CO2 emissions is a big commitment for us.
Recently, we partnered with a supplier to procure Liquefied Natural Gas (LNG) trucks. The impact of that project is a significant reduction in CO2 emission whilst at the same time reducing the cost to serve our customers and therefore, the distribution cost is dramatically reduced. In addition, we are delivering service on time.
Another point to note is that at Lafarge, we focus on the health and safety of our employees, our partners and the residents of the communities where we operate. During the heat of the pandemic, we procured ambulances, generating sets and medical supplies, Covid-19 test kits, nose masks etc. to our host states as well as the communities where we operate around Lagos, Sagamu, Ewekoro, Mfamosing as well as Ashaka. You can see that for us, sustainability is a way of life.
How is procurement management evolving in Lafarge and what are the factors driving these changes?
For us, procurement management is moving from procurement as a cost saving function to a more value driven procurement organization. So, in this phase, we are empowering the organization and the team to build more innovative ideas and embark on digitization as well.
We are also trying to move procurement employees and leaders from being just procurement managers/leaders to being business leaders. Procurement team members have become integral to strategy meetings, sales and operational planning meetings and more meaningful stakeholder engagements.
There are more visits to the plant, teaming up as the leadership to support those who work from the sites. The objective is to ensure that we are seeing things differently from our internal stakeholders’ perspective. When you do that, it then becomes easy to drive the type of result that is required.
When we innovate, we contribute to the bottom line of the company.
How is your work changing during this covid-19 pandemic?
The world is changing and some people say that Covid-19 is here to stay. My work and the team’s work now require a lot of flexibility. We have to trust our people to do their jobs remotely without follow-ups and also for those who work from the sites we have to provide on ground leadership support. Secondly, for the suppliers, normally we would visit, look into the processes and procedure.
Today, we have to do those online. Communication is online which then again falls back to my point on digitization because you need to digitize, measure and evaluate your work. You also need to look at some Key Performance Indicators fundamentally.
You need to delve into more analysis and all of that can only be done via digital tools. Focusing on digitization has been one way we have been able to suppress whatever changes we are seeing with Covid-19.
Thirdly, Lafarge is a company that is really focused on the health and safety of its employees, partners and communities. We do more awareness, more education to employees, stakeholders and partners. Our stakeholders no longer question our health and safety protocols because today, they are witnessing the effects of the pandemic.
Finally, one of the complexities that we have seen with covid-19 in the supply chain globally includes longer lead times, accelerating prices and widespread disruptions. These teach us to plan better, to be more agile, to be more innovative, and to move with the trend of the world and digitization because fundamentally, we are here to ensure we provide value not just for ourselves and the employees but also for Nigerians.
Q: We are the wheel that ensures all other departments are functioning well, ensuring that we provide the right supplies at the right time in order to ensure the business meets its goals
