Worldwide expansion can be the defining achievement for a business – but such success doesn’t come easily.
Conquering each corner of the globe presents major challenges for every key stakeholder in a company, and those in the procurement division know better what it takes to ensure efficiency in very different markets.
Technology is a major help for supply chain leaders. Recent innovations have led to most procurement operations becoming obsolete only after a few years. With businesses in the midst of confronting the inevitability of the ‘Fourth Industrial Revolution’, technology such as artificial intelligence (AI) is now mission-critical for the compatibility of a supply chain.
As Global Procurement Head for Dabur International, the global expansion arm of Dabur Group India, Raman Singh is overseeing a technology-driven transformation of the company’s procurement strategy. Yet, while he is in no doubt about the impact AI has and will continue to have on his team’s work, Singh also values a different type of intelligence when it comes to taking the business and its suppliers to new shores.
“Emotional intelligence is also becoming very important,” explains Singh in an exclusive interview. “A person working in Egypt will have a very different work culture than a person working in India, a person working in Europe or a person in the United States.
“When you are operating on a global scale, each country, each culture is different to another and they have to be respected in the same way. You have to build confidence with them, within your team, and with your supply partners.
“What you are doing here or what is right here may be wrong there, and vice versa. Each of them will be different so they need to be treated differently. They need to be respected differently. EI is now a very important tool – it's what can make you succeed in global business today.”
Singh’s transformation plan for Dabur International’s procurement started 18 months ago, and there are a number of technological innovations that are already up and running.
As part of the division’s fully-integrated e-procurement platform, key processes are completely automated. Product demands are shared on the platform, supply of vital components for Dabur’s wide range of products is managed under one channel.
This efficiency model saves valuable time and money while creating the potential for microanalysis of every step on the e-procurement journey, generating data which can help inform Singh in his decision making.
“Our procure-to-pay system is completely digitised; there is no manual intervention in our procure-to-pay process,” he adds. “It automatically gives you the small and big listings and details of what you have been doing with your procurement, giving you the scope and areas of improvement to work on.
“I would say a decade ago, nobody had even thought of digitisation in procurement, or the role of e-procurement. Today, artificial intelligence in procurement is everywhere and e-procurement has become a much bigger platform than what somebody would have thought back then. Procurement has transformed; it is more intelligence, analytics and strategy based
“In the future, AI will play an even bigger role in procurement. It will help you crunch data in real-time and give you the input and an overview on what's happening today, and then how it's going to affect you tomorrow. Based on that, you're going to make your decisions.”
It’s evident that the procurement landscape has altered immeasurably since Singh began his career nearly 17 years ago as an executive in vendor development at LG Electronics. From there, he became an associate manager in supply chain at Electrolux.
Senior positions at Bausch + Lomb and Kohler followed before he became Head of Packaging Procurement for Reckitt Benckiser’s South Asia business, a role that provided the necessary experience for him to take on global procurement for Dabur International.
He currently manages a team of 25, but how has the importance of supply chain management to a business changed over the past two decades?
“CEOs are now looking at CPOs to support them in terms of the overall business success. They are looking at a strategy wherein CPOs are playing a really important role in terms of achieving the overall goals of the business.
“CPOs and CTOs (Chief Technology Officers) have never worked so closely as they have been working in the last four or five years either. The CPO goes to the CTO and says, ‘these are the things which I want to change in terms of the making it more technology-driven’. Today, they are working together to make important changes in the processes, methods and everything else.”
Dabur International, which is headquartered in Dubai, United Arab Emirates, manages a global portfolio of over 1,000 natural health and beauty products. Capitalizing on its strong reputation as an established company of over 130 years trading in its market, it has successfully seen the growth of its brands in over 80 countries across all five continents.
Established overseas markets include Africa, where it has seen particular prosperity in countries such as Nigeria, Egypt and South Africa. To make procurement effective in business expansion, Singh believes it to be essential for Dabur International to work on building meaningful and long-standing partnerships with its suppliers, so they can stand side-by-side with the company on its journey to worldwide growth.
Singh focuses on two aspects of the relationship to develop a sustainable business that will benefit both in the long term. Firstly, he emphasises that ‘the cheapest cost is not the best cost’, preferring to measure the ‘total delivered cost’ when choosing the right partner. Secondly, it’s crucial that the partner’s ambitions complement with those of Dabur International.
“Their growth and your growth have to go along,” he says. “You cannot grow and let them not grow, or you cannot grow at the cost of their growth. That will not be sustainable.
“At Dabur International in the last two years, we have drastically filtered our list of partners. We had been working with 200 or more suppliers, so we made a core group. In the core group, we have identified 15 or 20 who would grow with us. We have taken a challenge that in next year-and-a-half at least 15 of 20 will be growing just like us.
“With these suppliers, we work very closely, and then we formed a ‘we’ kind of structure, wherein we are investing in the goals which we have for both of us. Partnerships are more about ‘it's not me, it's we’.
“Technological transformation and the development of these partnerships are the two key things for me for the next five years.”