Podcast: Consultant Jill Robbins on Modernizing Procurement

Highlights from the Conversation

You’ve had an amazing career up to date. I would love to hear how you got into procurement and walk through your journey.

• Well, I didn’t wake up one day and say “I want to be in procurement”! It kind of happened organically. I happened to be working in an IT department at a large healthcare conglomerate doing supplier RFPs and relationship management. This was back in the day when businesses were doing their own sourcing. I was in that role for just under a year and then the company outsourced our department to Deloitte.
• At that point in my career I’d already had some bumps in the road, and I felt that I didn’t want to be a consultant yet. So I went to Ingersoll Rand and had a role as a sourcing analyst in global strategic sourcing. I had a great boss there who mentored me and groomed me for the senior category manager role I grew into.
• I was an analyst, but I always see the big picture. I saw a lot of opportunities so I proved myself and moved up through the ranks. So that’s how I got into procurement and fell in love with it.
• I found out that I’m a hell of a negotiator—I enjoy it, and I love working with suppliers, and I love connecting the fragmented pieces that exist in organizations.

You used the term “strategic sourcing”. That’s a term I’m hearing more and more lately. Why did you use that term for the position that you had back then, and is it different from how people are using that term now?

• It’s kind of an elephant in the room. Some industries call procurement “global strategic sourcing” or “strategic sourcing”. Others still have a view of it being more tactical and call it procurement, and see the role as one where you’re the order taker.
• I feel like it’s coming back around because procurement is more than just taking an order and negotiating a contract and working with a supplier.
• It can depend on which industry you’re in. I find that healthcare and pharmaceuticals say “procurement” and more advanced companies or ones with tighter margins tend to say “strategic sourcing”. That’s my observation from my 20+ years.

Now that supply chain is more of a hot topic, a lot more people are wondering “how do I get into procurement?”. How did you develop your own career to get to where you are today?

• I was at Ingersoll Rand for just over three years. I did a lot of travelling, supported plant sites and business units. They’re a large industrial conglomerate, and at that time the management was all men, which was great because I love working with guys.
• I wanted to move up, so I knew I had to diversify and look elsewhere. I knew someone who went to Eli Lilly and Company, who is a large employer in Indiana. I started in R&D procurement there, and was sourcing for clinical trials and regulatory work, and really learned the ropes. It was a good place for me to start and learn the business and how it operates as a backbone.
• I quickly moved into IT sourcing, and ran purchase-to-pay operations. It was kind of a snowball of experiences at Eli Lilly and Company.
• I spent some time in Lean Six Sigma, and spent time in business development.
• Procurement reported up through finance, so in order for me to continue to progress to upper management, I was told I needed a core finance role. So that’s why I took a role in business development in corporate finance investment banking. Financial modelling was not something I ever saw myself doing; I was not an accountant and at that time I lived in Excel hell and hated my life! But what it taught me was how all the pieces fit together; looking at target assets and mergers and acquisitions.
• That’s where I got the entrepreneurial bug. My husband and I became entrepreneurs at that time because I understood how to value businesses. That’s when we opened a couple of Sky Zone trampoline park franchises, and I stayed in the corporate world. My husband’s an attorney, and he ran those businesses.
• From there I went into Lean Six Sigma and did some supplier master data transformation.
• After I had my son, I went to Elanco Animal Health, where I built procurement teams and transformed procurement teams. They had been a division of Eli Lilly and Company for over 60 years, and while I was there they did their IPO.
• So I built a procurement team from the ground up, and had people reporting to me from every continent.
• We had to implement our own ERP system. We were really starting from scratch and we had an opportunity to really brand procurement as being a trusted advisor versus someone you talk to before you engage with a supplier, or enter a purchase order request.
• It was a lot of fun and we made a ton of progress. We were able to consolidate the supply base, do a lot of great things, and lift up some rocks that hadn’t been lifted in many years because of other priorities.

So it looks like, at that point, you had already spanned multiple industries. Is there anything that you consistently saw through all that? I think procurement is a function a bit like finance, which really is similar from industry to industry, contrary to what some people think.

• I agree, they’re not two different things.
• I coach and mentor a lot of different individuals, and I’ve had a different lens than maybe most traditional procurement professionals. I think and act like an owner.
• When I coach, I often say that there’s no better seat in the house than sitting in a procurement or supply chain role. You have eyes across the business, especially on the indirect side, that really even finance doesn’t have. You see how the business is thinking, what the business is thinking, you can talk to customers in many cases. When you support sales and marketing, you can hear their perspective.
• I would say, don’t conform to a department that you sit in. Think across the value chain, and take the blinders off because many suppliers are used in a number of different departments in a number of different ways across multiple categories. The sooner you realize that, the better off you are.
• What I’ve realized as well is that some of your largest suppliers can also be some of your largest customers. So having that data available and looking at those contracts and leveraging on the buy side and the sell side is hyper-critical.
• And I can tell you that I got a lot of push-back in highlighting some of the opportunities. I would hear, “well we want to do it this way” or “we’ve never done it that way” or “we’re comfortable with this”. I would say, “well, are you comfortable giving away margin?”, and “do you want to run the business more efficiently?”.

I think the “we’ve always done it this way” mold is being shattered right now. But I think you were ahead of the game in seeing that procurement gives you a view of the whole business. What got you to see that?

• I’d say that it’s because I am very curious by nature.
• I’d also say that it’s because of the role I had in being a Lean Six Sigma Black Belt dissecting supplier data from close to ten thousand suppliers when I was at Eli Lilly and Company. At that time they had a very linear dataset versus parent-child relationships. So suppliers were managing the company versus procurement managing those suppliers, in the sense that suppliers knew more about what was going on than procurement or relationship managers did.
• That’s a huge problem. When you’re spending billions of dollars you really have to understand where that’s going, how it’s being optimized, what that contract compliance looks like.
• So as I started dissecting that, that became part of my DNA. In every role I had after that, I would dissect the category, the supplier, and look across the entire value chain. I would ask questions like, “are we using this supplier here?”, “why are we using this supplier here in this capacity?”, and “how accurate is that data?”.
• That’s another thing: you trust, but verify. I think that’s the root of the problem in some of the supply chain breakdowns we’ve seen in the last two years. It’s because the data is garbage in a lot of these very large companies.
• So you really have to govern proactively, on the front end and have that continuous cleansing going on so you can trust where things are at. You know what your payment terms are. You know what your SLAs are and your delivery terms are. Some companies have learned this the hard way.

Yes, definitely one of the core problems in procurement today is lack of data. You were inclined to go and find it and connect the dots between different data sources. What did you see as the biggest barrier in terms of why that data wasn’t all together in the first place? What were the biggest benefits that you saw once businesses went into optimization overdrive?

• So, finance looks at reconciling the books from a general ledger (GL) perspective. The business is looking at it from a budget perspective, i.e. “am I operating within my budget?”. And again, they’re operating within high-level GL targets, in terms of spending money here or there. And then you’ve got supply chain (or strategic sourcing or procurement—whatever you want to call it) operating from an external mindset in a category, i.e. “how is this spend categorized in the marketplace?”.
• The result is that you’ve got these groups and they’re passing like ships in the night. They’re not looking at how they can cohesively pull all this together. That’s the number one problem.
• The number two problem is, is the data right? Is the reconciliation (REC) entered right, and is the GL correct? Are the supplier category and industry correct? So many companies are relying on their internal accounts payable team to set the suppliers up in the system, but the suppliers will know this better than a person in accounts payable.
• It’s riddled with issues from a data integrity perspective. But I’d say that’s the baseline as to why there are disconnects and missed opportunities.

Were there common tools that were just not connected across these different departments?

• There’s no golden ticket, Richard. Everyone thinks that if they sink tens of millions of dollars into an ERP system it’s going to fix all their problems. They might have attractive features like a master data management (MDM) module, they have this, they have that. Wrong.
• Your processes, your governance, and your discipline have to support that.
• Systems don’t fix bad behaviour or decades of broken internal processes. It just does not happen.
• That’s what those guys sell. But then people realize the hard way that you have to hire name-your-marquee consulting firm to come in and implement or reconfigure it, because it’s not telling me what I thought it was going to tell me.
• It’s a house of cards, frankly, from a systems perspective.
• You have to be very intentional from an architecture perspective about defining what metadata needs to connect, how that metadata needs to be governed, what the outcomes are that you’re looking for. You have to start with the end in mind. I can’t emphasize that enough.
• Often these large transformational projects are based on the idea that if I just implement A, I’ll get B. But they’re not questioning if A will give them that proactive view.
• Everything is always backwards looking, and often even that can’t be trusted because there are huge errors in what you’re looking at.

Given these experiences, how are you now approaching things as a consultant? Is there a common theme you use when approaching supply chain or procurement teams?

• I do consulting from two angles. In one, I am helping pharma and biotech companies from a procurement perspective. Either they’ve raised a lot of capital or have recently gone public, and don’t have a formal procurement team. I help them build the right policies and frameworks, use technology—getting all those pieces lined up.
• I do that through a company called Matchbook. We often help companies execute RFPs from a clinical or RD perspective, or with HR. We’re basically an outsourced procurement department. We have decades of experience so we can just jump in and hit the ground running.
• Through the other angle of my consulting business, Business Fierce, I teach companies who are selling to and through enterprise supply chain and procurement organizations how to do so effectively. I teach them how to speak their language, do their homework, understand what the priorities are, and not just cold selling or selling what you sold to the last customer. So really thinking it through.
• I give them a playbook and make them procurement insiders. I teach them how procurement is negotiating with them, and how to prepare in the same manner, or risk giving away too much margin.
• I also teach them how to fine-tune their responses when they get a litany of RFPs, how to prioritize those RFPs, and how to stand out from the competition.
• I speak at a lot of sales kickoff meetings, I run breakout sessions based on industry verticals, and coach them on what’s important to these different industries. I teach them the buzzwords, and how to cultivate that relationship so that procurement is not hated.
• So many of my customers avoided procurement for years or decades, because their chief revenue officer or sales director told them to avoid procurement. But that’s the number one mistake! You may win one or two deals, but if you want to be a preferred supplier and be given every opportunity in the space to bid on, then you need to make friends with procurement quickly and become their trusted advisor. You’re not going to win every deal, but when you’re their trusted advisor you can also send opportunities you don’t want over to other suppliers in your network.
• My husband and I also have a warehousing business and a cryotherapy business, so we’re really serial entrepreneurs.

Procurement has often been thought of as a standalone, but it’s really part of a bigger supply chain organization. Let’s talk a little bit about how procurement and supply chain are re-introducing themselves as one cohesive unit today instead of as separate entities.

• I think that historically these silos have existed because that was the management chain or the HR structure or whatever. But supply chain, procurement, operations, finance, every function in the business is part of a value chain whether you’re delivering a service or goods. No matter what business you’re in, everyone has to work together cohesively.
• You can’t be territorial. For example, you may have defined responsibilities in supply chain, like making sure you’ve got the right inventory at the right time and monitoring all the aspects and the KPIs associated with an agreement. Whereas procurement can be looking at the big picture: the marketplace, the competitive landscape, and really being an ally to supply chain.

So do you think procurement and supply chain are separate organizations, or part of the same organization?

• My two cents is that they really should be under the same umbrella, but with very defined roles and responsibilities. They shouldn’t be competitive.
• You can even bring in warehousing and operations, and often real estate, which is often separate. I feel like all of that should be under the same umbrella.
• I’ve seen different organizations do things differently, but having an independent lens on a spend category or an opportunity is invaluable to every business.
• The sooner that procurement and supply chain become allies the more profitable and efficient they will become and the more revenue your organization will achieve.

Sustainability and circularity and carbon are hot topics right now, and that’s something that could directly affect procurement. Post-pandemic, there’s also a lot of considerations about where things are coming from and reimagining of things like supplier redundancy. How are you seeing these things now, and how are you advising the organizations you’re working with?

• Some of our clients on the Matchbook side are looking at developing environmental and social responsibility and tracking those commitments.
• I say it all goes back to what data you’re tracking, how you’re tracking it, and how it’s benefiting your business. You have to connect all of these dots. Otherwise it’s just information that you’ve paid too much for that’s sitting somewhere and not being actioned.
• If you’re going to make a formal commitment with sustainability, again, design how it’s going to fit into the bigger picture. Understand how often it’s going to be monitored, and what it means for the business, for the shareholders, employees and customers.
• Personally, I do think it’s very important. It’s all about understanding where products are coming from, where the raw materials are coming from.
• I believe in near-shore sourcing. The way we’ve always done it, especially here in the US, is broken. I think we’ve got to be better. Every country in the world needs to become more independent. Of course, we all need to work together and we all bring different value to the table, but everything we get shipped to our front porch from Amazon comes from China. That’s a problem. We can’t continue to do that.

So it looks like there’s two things in there. On one hand, there’s how goods are produced, for example, we want to know that our products don’t involve slave labour, as an extreme example, or carbon. On the other hand, when the end of life for a product comes around, that recyclability is starting to come into focus too.

• I could not agree more. I had a recent conversation with someone in the PPE business, about all of these nitrile gloves, all these masks, and everything from COVID, and where this stuff is going. We have more waste as a result of what everyone has been through for the last two years, and no one that I’m aware of (and I’ve talked to a lot of people about this) has had the foresight to think about the product life cycle. It’s got to be recycled.
• We’re throwing about things that could very well be recycled. While businesses are usually the largest consumers of some of this recyclable material, I think a regulation around that would be worthwhile.

Does sustainability come up more often in your consulting work today than in the past?

• It is growing, but there has been so much that has been unplanned in the last two years. So while, yes, it is a priority, getting a product to market or ensuring supply availability have risen to the top. Sustainability is important, but it gets pushed to the side more often than it should.
• A related issue is lack of staff. Procurement and supply chain have always historically been understaffed. But I see that changing: there are more and more opportunities available, even though there is often a shortage of qualified people.
• But you make a very valid point: leadership needs to make it a priority. And it can’t just be a “check the box”. You have to have the full bill of materials, with the information for everything that went into that product, plus what the end of life looks like for everything that it took to produce that product.

You’re clearly knee-deep in the data aspect, so it would be remiss of me not to ask you where you see today’s spectrum of technology solutions beginning to change procurement and supply chain. What has technology been doing that hasn’t been done before?

• My belief is that it is the innovators that are going to thrive from this point forward. It’s not going to be the legacy systems because they’re not agile enough. I’ve worked with the legacy systems for over two decades, and you don’t turn those ships quickly.
• That being said, I see technology as driving visibility, predictive analytics and proactive insights across the entire value chain. It’s not just procurement and it’s not just supply chain, as I’ve said a number of times already.
• Breaking down those silos and having actionable data will enable you to see, hey, my margins are slipping on this SKU line or in that market, what can I do. The alternative is seeing that you didn’t meet your targets at quarter-stop. You need those predictive functions in place: it can’t just be an after-the-fact moment and then you’re trying to put band-aids on everything. It just doesn’t work that way.
• That’s how I see the future of technology. It’s a cohesive environment, it’s very cloud-based, it’s best-of-breed. I’ve not seen a one-size-fits-all for anything, even though that’s what’s sold in many cases.
• When you talk about supplier discovery and supplier qualification, managing the contract, running competitive processes, managing spend on contract, issuing the purchase orders, receiving the payments and all the reconciliation—I see all of those as a cohesive group of systems that talk to one another and are able to provide all of those predictive data elements into operations, into procurement, into supply chain and into sales.
• Oftentimes, sales and marketing operate in one area, R&D operates elsewhere, and manufacturing is over there—all those pieces need to be tied together.

Is there a common data theme that you’ve seen that leads to success? We’ve seen the benefits of moving to the cloud from organizations like Amazon and Google. But if companies are moving to supply chain platforms, what are the core data elements that you think need to be the foundations of those structures?

• When focusing on supply chain and procurement it’s about which qualified suppliers are available, and what categories they play in. Then you get down to the competitive process, and then you get into the transactional data, the contract data, and everything that’s reportable. There’s also invoice data and then spend on contract.
• You’ve got the strategic data from a supplier perspective and how they’re performing, and then the transactional data. Everything needs to fit together because it all tells a holistic story.

Tell us a bit about what you’re doing coming out of the pandemic. What is your consulting practice engaging in, and where are you seeing the opportunities in the next year or two?

• We continue to see a lot of demand. Biotechs are growing by the minute, so we’re supporting that through the Matchbook business. I continue to grow my consulting practice, helping companies sell to and through procurement in supply chain. It’s really an untapped area and I have a unique lens because I’ve sat on the other side of the table for over twenty years, and I continue to see what the priorities are from a procurement perspective.
• There’s a huge opportunity to change that sales churn that exists. So many companies continue to think that if they throw ten more sales reps out there they’re going to close more deals. That is not the right approach.
• They need to change how you’re approaching your clients. They need to stop sending these emails that just get sent to the junk folder, and really invest in getting to know the right targets and the right clients.
• The best sale is an up-sale with an existing client. That’s the cheapest acquisition you’re ever going to get, so you need to invest in those existing relationships.
• That’s where I see the future of my business: continuing to help technology companies, contract labour companies, anyone selling to enterprise procurement.
• Since engaging me, one client’s business has grown 20% and they were a $500M business to begin with. They brought me in to help with different relationships that were on the rocks, and in situations where they didn’t have a relationship with procurement, so coaching them through that. Being proactive and tracking the right data led to them becoming the supplier of choice, and rather than them getting spanked now they have a seat at the table and can have those opportunities to share why they’re different. That’s the position every supplier should want to be in.

What trends do you see happening in the next few years? What do you see changing dramatically?

• Process automation, from a manufacturing perspective is at the top of the list.
• Optimizing warehouses and distribution. Getting raw materials and getting your goods to your customers at the right time, and not days or weeks or months late are hypercritical.
• We already talked about things from a technology perspective and about reporting and how to optimize an enterprise from an internal perspective, but those are the things that are going to change the game.
• Also, getting creative about sources of supply; not going to who you’ve always gone to, and investing in that automation, because we’ve all seen the port in LA, and that is going to cost all of us significantly. There’s a reason why all those ships are stuck there, but frankly I don’t see that changing. We’ve created that problem on our own, so what do we do about it? We need to start thinking differently, we need to start acting differently. That’s the future.
• People think it’s going to cost more, but I really don’t believe that. Maybe there’s a quality premium, but I’d pay a quality premium. But let’s stop making excuses and stop thinking about how to solve this onshore.

What about the people you’re coaching and mentoring? If someone’s coming into procurement or supply chain as a profession, what advice are you giving them?

• I tell them to understand the basics of the operation. You can get thrown into a category role or a support role or a supply chain role, but really understanding how all of the pieces fit together is so incredibly important.
• I’ve mentioned the silos before, but you’ve got to think beyond the silos and ask the tough questions. I’m a big fan of Six Sigma and asking “why” five times; by the third or fourth time you might start to get to the root cause. That’s what I think these new grads and early hires need to understand.
• I’ve seen some great young hires, and some that are really very very green and that just conform to the corporate way.
• They should think and act like an owner; it’s your business too.
• Ask the tough questions and don’t back down.

What about the executives who are looking at supply chain and asking you what needs to change to get the most out of supply chain and procurement?

• I think we’ve hit on a lot of that, but my advice is to get all those fragmented pieces of data connected.
• You’ve got to get all of those groups talking. There cannot be sacred cows. There cannot be “we’ve always done it this way” or “everything is fine this way”. There’s always a better way to do something. There’s always a more efficient process or a more efficient technology that you can bring in.
• Be curious. Ask the tough questions. If the priority is to maximize margins and minimize OpEx and drive revenue (which should be every business’ priority), then make employees part of the process.
• Stop hiring these marquee consulting firms, when all they do is come in and ask the same questions over and over again, and regurgitate what your employees already know.
• Talk to your employees. They have the best ideas because they see this day in and day out and they can solve the most complex and difficult problems that exist within your organization. Talk to them. Listen to them. They care because they’re your employees. And you don’t have to pay them tens of millions of dollars to get the best ideas and solutions in place. Sorry, that’s my rant!

Yes—we know things to change and we’ve been talking about that for years—what we need to know are the tactics that work. There are commonalities throughout different industries, and what we need is to be learning from each other. Collaboration is why open-source software beat closed-source.

• Sometimes we overcomplicate things. Executives overcomplicate things. Get back to basics, frankly, of what it takes, why you’re in business, what’s important.
• Something I learned a long time ago—I forget who the consultant was but it has stuck with me for over twenty years. It was the MBF concept: management by fact. It was a four-quadrant tool measuring categories, measuring operational efficiency. You can break down any aspect of the business, but managing it to those KPIs. It makes perfect sense to me and you don’t need a 20-slide deck or a 50-slide deck. Just get those metrics and put them on a couple of slides and track them.
• It can’t be smoke and mirrors. Stop telling the story you want to hear. And it’s going to get ugly, and ugly is OK because if you want to change you need to know the truth about what’s actually going on within your organization.

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