CASE STUDY CARGILL
WORK WITH US TO BRING SRM TO LIFE IN YOUR ORGANISATION AND DELIVER SRM VALUE FASTER AND MORE EFFECTIVELY.
We are doing this so we can grow with our customers. Sometimes that involves a new product or a new geography. Sometimes we have an innovation we want to introduce, and we would like them to be a foundation customer.” Jenny Verner commercial leader of Cargill’s centre of excellence
in the relationship, she says. “It starts with genuine readiness by both companies to want to partner and needs to be based on a foundation of trust. When we first agree to work in partnership, the senior leaders may be ready and trusting but the operating people in both companies may be sceptical. So the initial customer scorecard metrics are often performance based – on time, spec, competitive price, for example. “From our perspective as a supplier, we think about whether the customer is paying on time; whether they are honouring their terms and performing on the contract. We may measure whether they are needlessly rejecting and returning products and whether they create demurrage when we send deliveries. At some point, the partnership evolves to a level where you have confidence that things that are supposed to happen, happen. Then we can start to focus on joint growth goals,” she says. Verner says Cargill works with the customers to put some form of governance in place. They have to agree on objectives, measures and how they are tracked. They usually have a steering committee made up of leaders from both companies. “Both companies need to be honest about what works and does not work and work together to achieve joint success,” she says. In procurement, there is increasing discussion about how to move beyond price towards greater business value. With the right relationship with suppliers like Cargill, there’s a way to find out.
taste, texture, value proposition and price. If buyers do not have this knowledge or the time to acquire it, working with Cargill can help them develop products more rapidly than if buyers simply specified a product and negotiated over price, she says. Verner says Cargill can help clients with other objectives. It can help them take out costs, without affecting their margin, by suggesting ingredients in which it has greater economies of scale, or are better sourced locally or seasonally. If the buyer has problems with product shelf-life, Cargill can suggest ingredients to help better withstand heat, for example. Cargill can also help businesses with their CSR objectives, through ethical sourcing programmes developed by its own procurement team (see box). Cargill makes no secret of its self-interest in wanting a deeper relationship with the right customers. “We are very transparent. We are not a non-profit organisation; we are doing this so we can grow with our customers. Sometimes that involves a new product or a new geography. Sometimes we have an innovation we want to introduce, and we would like them to be a foundation customer. But when there is not the right fit with the customer, we don’t force it. The goal is to end up with two equally engaged and committed partners.” NOT ALL CUSTOMERSWILL BENEFIT FROM A DEEPER RELATIONSHIP Cargill takes care deciding who it will work with more strategically. It has to know the customer has selected it as the right supplier to work with and is willing to invest
CARGILL PROCUREMENT TEAM HELPS SELL CSR UP THE SUPPLY CHAIN Interest in food provenance is growing among consumers. But for food manufacturers, especially smaller firms, providing accurate information about complex, global supply chains can be near impossible. Using its size and resources, Cargill realised this was a service it could provide. Cargill’s Jenny Verner says: “Often customers need to meet government regulation or have specific goals around CSR. That’s something our procurement team has been able to help with.” To this end, procurement helped develop the Cargill Cocoa Promise, which aims to help farming communities in Côte d’Ivoire, Cameroon, Indonesia, Ghana and Brazil. For customers, the initiative supports value chain transparency and makes it easier to measure the return on investment in CSR.“Our customers have a certified sustainable supply source which they can communicate to consumers. Our procurement team has been part of that initiative from the start”, Verner says.
→ 360 relationship assessment → Value release initiatives → Joint account planning → People and skills development → Implementation coaching
State of Flux supports and facilitates implementation helping you deliver SRM value faster and more effectively. Some of the areas that will help accelerate value are:
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90 CASE STUDY STATE OF FLUX
2017 GLOBAL SRMRESEARCHREPORT
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