“Ignore smaller suppliers at your peril”: Procurement Trailblazers Q&A with Alex Jennings

Alex Jennings, CPO at DS Smith, discusses circular procurement, eliminating modern slavery in the supply chain, the perils of overlooking smaller suppliers, and how the pandemic has brought procurement to the front of everyone’s lips.

In our next Q&A of the series, we talk with Alex Jennings, Chief Procurement Officer at DS Smith. TL;DR? Scroll to the bottom.

You’ve been in procurement over 30 years. How do you approach leadership as CPO at DS Smith?

Leadership style comes from within, and we have a strong leadership culture that exists within DS Smith. So whether it’s me or other leaders in the company, there’s a consistent leadership approach. We spend a lot of time developing high performing teams, which drives a similar way of thinking on how you drive performance in itself.

We also have very strong values and we reward people and recognise performance to make sure people are supporting DS Smith’s values — to be caring, challenging, trusting, responsive and tenacious.

Everything we do tries to include those behaviours. That’s led to a very successful growth activity by DS Smith. We’ve acquired over 20 organisations in the last 11 years, and from both a business and cultural perspective, we’ve been able to absorb those organisations so that they become part of our entity very quickly — whether that’s finance, design, sales or procurement.

From my own style of leadership, one thing that’s very important to me is diversity — diversity of thought and behaviour. So having a diverse blend of people is key.

I know who I am and I know what my strengths are so I need a team that complements my skill set and ‘yellow’ work personality profile (strong on communication, co-operation and creativity). If my leadership team was made up of 11 versions of me, it would be a disaster. We’d have great fun but I’m not sure we’d have the delivery!

Thankfully, my leadership team is diverse, and not all members are from procurement either — my Head of Enablement comes from NATO, and has never been involved in procurement in his life but knows a lot about delivery. Eight of them have very ‘red’ work personality profiles too (driven by delivery), which means that while I have the creativity and communication skills, they make it happen.

I also recruit based on behaviours and thought processes because while I can easily teach someone to be a buyer, I can’t change who they are as a person.

How has the procurement function changed during your three decades in the industry? How have supplier relationships evolved?

I started as an apprentice at GE in the early days when procurement was ‘buying’ and ‘purchasing’. And when I took the CIPS training at the time, it was very much around process and less about creativity and strategy.

That training has evolved over the last 30 years as the expectation has moved away from someone handing you a decision and saying “go and buy me that cheaper” to one of you driving what the essential needs of the business are.

It’s now about thinking of the relationship with the supplier as far more than the price of the product — it’s how you interact with them, what you’re doing with regards to driving innovation of product and process, and making quality and supply improvements. It’s also focusing on the simple things around B2B and making those as effective and as streamlined as possible. That wasn’t a focus in the early days of procurement.

Procurement now sits at the centre of what a lot of organisations do and achieve, and plays a big part in value creation — whether they are driving innovative new solutions for their customers or acquiring companies.

The relationships with suppliers these days are less focussed on product pricing and more focused on the value that can be created through collaboration.

For example, I’m very happy talking to an ink supplier about the value their ink brings instead of the price of the product. I’m also happy to spend £2m more on an ink if it means we can turn the ovens down and save £5m on energy and emissions. What else can the ink do? Can it change colour with temperature?

In my old job on beverage cans, very different ink conditions had been created over the years, whether it was matte or sparkle or reticulated ink that looks like orange peel. This last example used to be a quality problem twenty years ago and then they learnt how to control it and it now gives you a different texture on the outside of the can. That ingenuity has come from procurement and supplier relationships, and nothing else.

Creativity and challenging ourselves is extremely important now, but it isn’t new. I was at Toyota 25 years ago, and many of the thought processes in how you drive creativity through the supply chain is not new. It grew into aerospace and into pharma, and all industry now is managing those supplier relationships to drive value rather than being so transactional.

Procurement has also become more of a career (and I encourage people to view it that way). Procurement professionals are getting to the top jobs with a number of CEOs coming through the procurement channel.

But to get to the top, it’s becoming more and more important to have different experiences in other parts of the business. This enables you to be commercially aware of where you sit in the chain.

I was originally going to be a designer but the pencil got replaced by a mouse and the flair went out of designing so I moved into the procurement team. I’ve also spent time in planning, logistics, sales, and marketing throughout my career. Instead of weakening my position, these roles have made me more effective as a procurement professional. So I would encourage people to get a breadth of knowledge during their career.

How do you and your procurement team approach transformation? What are some of your priority transformation goals?

When you look at trying to transform a department or function, a lot of organisations make the mistake of thinking that they can simply include a new piece of technology, layer it over their existing system, and everything solves itself. But it doesn’t.

At DS Smith, technology (and the part it should play as an enabler) is considered alongside process and organisation, which is all held together by governance. If any of these elements are out of kilter — process, organisational design, technology, governance — it all falls over.

When we were driving our transformation, we had four teams looking at each one of those elements. And where we didn’t have the same ERP system, we concentrated on having the same way of thinking and the same underpinning processes. Then we thought about what technology we needed to support those processes. What we didn’t do was spend tens of millions on a new ERP system. Instead, we looked at the things that we needed to drive that improvement as a performance.

In terms of organisational design, we ask ourselves what people we need, and what they need to be capable of doing. One of the fantastic things we have is 12 data scientists that sit out in Greece and take our technology and data from the 84 ERP systems we have around the world, and turn it into intelligence. And we take that intelligence and we turn it into actionable intelligence that enables our team to perform.

But we’ve also now got the right level of compliance and governance — the P2P policy, the training of everyone in the company to understand why it’s important to follow the decision that’s been made by the procurement function.

Risk plays a big part in what we do. And risk within the supply chain isn’t just about supply, it’s around the elimination of the things that we all find abhorrent. Modern slavery exists in the supply chain today, and it is procurement’s responsibility to stop it and remove it.

When an organisation doesn’t follow a professional, strategic supplier selection process and allows people in another part of the company to make those decisions without having the controls in place, you don’t just put your company at risk, you put your customer’s brand at risk.

As a B2B company, we are the custodians of our customer’s brands, and if we have a problem anywhere within our supply chain, the consequences will fall on the shoulders of our customers not on DS Smith. So it’s essential that we manage that, and you need to have that built into your company. That’s something that we focus on a lot.

From a sustainability perspective, we are working on creating a sustainable future. We are leaders in our industry through our Now & Next Sustainability Strategy and we’re looking to drive sustainable solutions for both our product and our customers. A key target for us is by 2023 we will manufacture 100% recyclable or reusable packaging.

As part of our sustainability strategy we are driving circular procurement, and we intend to be leaders in the field. This means we think about what happens to the products in our manufacturing process — where they come from, and how we make sure that they’re produced in the right way. Not just our end product, but everything within our supply chain.

We have a relationship with the Ellen MacArthur Foundation, the world leaders in circular thinking, and they will help us drive circularity in our business, and world with our supplier base is an important part of that drive.

Sustainability is in our DNA as a company. It’s why many of our customers are looking at recycled cardboard solutions to some of the things that have caused them a problem for a long time. Our new ECO Bowl for food trays, for example. They do the same job for frozen, chilled and ambient food, but have 85% less plastic in them.

We’ve also worked with the entire coffee to go supply chain on recycling coffee cups. We have a solution. We have the capacity to recycle every coffee cup that is consumed in the UK, we just have to make sure that the infrastructure is in place to be able to collect them and get them to our mill. That means separate collections of cups from other paper streams, because of the combination of fibre and a plastic laminate in coffee cups.

At DS Smith, we focus on opportunity instead of risk. We look for the opportunities that can be created for us, our customers, and the supply chain that we are in control of.

DS Smith is a huge logistics organisation moving 1.5 million trucks a year. How were your supply chains affected by the pandemic and what steps did you take to address the impact?

Throughout the pandemic, we’ve continued to produce around every site in Europe. We have 300 manufacturing locations and they haven’t stopped a beat.

In most countries we were given essential manufacturing status because without our product, you don’t get food, pharma or the vials of vaccine that’s transported in DS Smith boxes. We are an essential part of the day-to-day supply chain and we needed to keep everyone going.

The first thing we focussed on was keeping every one of our employees safe. We made sure they had the processes, the behaviours, and the PPE available to make sure they all went to work and felt safe during this period.

We then created a daily supply management call to consider our concerns and the opportunities within our supply chain, as well as how we should manage the flexibility our customers needed through this period of constantly shifting demand.

At the start, there were some industries (aerospace, heavy industrial, automotive) that slowed down, and that affected those parts of our business. But at the same time, FMCG, pharma, and e-commerce had a relative explosion of demand as we all changed our behaviours. The packaging industry is now in very positive territory overall and now it’s more about how to cope with the demand that’s out there.

Communication up and down the supply chain has been key. Communication within our function, communication with the business, communication with planning and with sales, communication with our customers to understand fluctuations in demand.

The level of flexibility and agility we’ve had to show as an industry has been remarkable. Had you asked me back in January 2020 if we’d been able to do it, I’d have said no — but we did do it.

The need for invention has resulted in us changing how we do things. A lot of what we’ve done during this period has been heavily focussed on people working extremely hard, and demonstrating the characteristics that we value — being tenacious, communicating and caring for each other. That’s got us through.

The challenge going forward is how we digitise the processes and decisions we had to make during that period so we don’t have to have daily calls.

With regards to risk: some of our supply chains went through a challenging period. If one of our suppliers has four other suppliers for the same product (blue pigment, for example), you’d think that would be a robust situation. But if all four of those manufacturers are in a single region in India that goes into lockdown, it doesn’t really help you. So we had to really think about what business continuity, planning and risk management really look like in this world.

We’ve invested in some strong relationships with Transporeon and SixFold that gives us close visibility on where our product is at any time we were able to see what the pinch points were around Europe, which were changing on a daily basis.

One day you’d have no issues on the border between Belgium and Holland, the next day you’d have 26km tailbacks (like we saw between Poland and Germany) because the paperwork requirements had changed — drivers weren’t allowed to travel unless they had a negative Covid test, drivers needed special paperwork that wasn’t needed the day before, drivers didn’t want to go to ‘red zones’ or drivers had to self-isolate due to country-specific requirements.

So there were incredible challenges that haven’t necessarily gone away but now we’re working with our customers and the supply chain to manage that more effectively.

Where do smaller suppliers feature in your strategy for recovery from the pandemic?

Our focus on creativity and innovation enables diversity and supply, it enables the opportunity for smaller suppliers to challenge their larger counterparts. We’re a multinational global company and we have some very important global relationships, but that doesn’t mean we don’t have some very important small supplier relationships that enable us to be more effective as a company and that offer them growth opportunities.

You have to have a blend of the relationships in any business. Not just in your department but in those relationships that you have. If you ignore innovative smaller suppliers and challenging start-ups, you do so at your peril, because someone else will listen to them and use them as a growth engine. We’re always on the listen to what’s going on in the market.

What is the most exciting thing about working in procurement as we look forward to the post-Covid recovery? And what have you learnt from this period?

Covid and its challenges have brought the procurement function to the front of everyone’s lips. Every problem and every solution has, in some way, gone through the procurement supply chain function. Whether it’s managing demand, updating forecasts or managing supply issues, we’ve been part of it.

Many companies have had to reflect different financial positions and they’ve done that through procurement. Some have had incredible growth that they’ve had to control. Sainsbury’s, for example, took 15 years to stand up an e-commerce business supply chain that represented around 8% of their sales. And then in 8 weeks they had to stand up something that represented over 15%.

Behaviours have probably changed forever. Will I go back to taking the 99 flights a year I was taking before the pandemic? Probably not. I’ve learnt a lot about myself and how to manage a team remotely — my team spans from North America across to Romania and Turkey, and I haven’t been with any of them for almost a year so I do need to see them and be connected.

I’ve challenged myself because I’ve never done home-working before and have always travelled at least 80% of my time. I suppose I didn’t trust or believe in working from home. But you can make it work so long as you develop the skills and capacities that allow you to stay connected.

My team does regular ‘town halls’ with the wider procurement population. We do regular weekly and monthly video calls to stay connected. We’ve had to help people through this period too as many have been affected by what’s been going on so we send the team personal messages as well as business messages. And despite having gone through a major transformation, our engagement level as a function has gone up. We’re very proud of that.

I’ve also only more recently learned about what I need to do as an individual to separate work from home. Because I used to travel, even if it was just going to London, I had that time of decompression between leaving the office and coming home. But now I can bump into my wife within 5 seconds of leaving my office and walking into the kitchen.

So now, when I switch off at the end of the day, I try to spend 10–15 minutes doing something non-work related like listening to music or reading a book so I’m in a better space when I meet my family.

TL; DR

• Procurement teams need a diverse blend of people with different strengths and experiences.
• Procurement used to be about ‘buying’ but now it’s about creating value through supplier relationships.
• Technology is only one part of transformation but it must be considered alongside process, organisation and governance.
• Risk within the supply chain isn’t just about supply, it’s about eliminating the abhorrent. Modern slavery exists in the supply chain and it’s procurement’s responsibility to stop it.
• Sustainability is in our DNA at DS Smith and one of our priorities is driving circular procurement (the consideration of a product from design stage through to disposal).
• The pandemic has changed the way we do things and communication has been key. The challenge now is to digitise the processes we’ve created.
• If you ignore innovative smaller suppliers and startups, someone else will use them as a growth engine.

Alex Jennings (FCIPS)

Alex began his career in Procurement at GE in the UK, where he joined as an apprentice, whilst studying to achieve an ONC/HNC in Mechanical Engineering, as well as a BA in Business Administration. After nearly 7 years, he moved on to work for Toyota Motor Manufacturing in the UK, setting up the first Supplier Association for the automotive industry in Europe to develop and share ‘Best practice’. During this time, Alex studied for his CIPS, attaining a MCIPS before later becoming a Fellow. In 1999 Alex began working at Rexam, a global packaging and container manufacturer, where he held various roles over 17 years in Sales, Marketing, Key Accounts as well as Supply Chain and Purchasing. In 2012 Alex was appointed Chief Procurement Officer at Rexam, where he was responsible for their global procurement, managing teams out of London, Rio, Chicago & Dubai.

In 2017 Alex joined DS Smith as Chief Procurement Officer, to transform the Procurement and Logistics operations in line with the expectations of a FTSE100 business. He has recently led a transformation program which has brought the divisional functions under one centralized hub. As a CIPS Fellow Alex is committed to help drive the improvement of the profession, has previously been a judge at the annual procurement awards, as well as becoming an elected member of CIPS congress. The Power 30, the annual list of Europe’s most influential Procurement leaders has selected Alex as one of Europe’s power 30 two years in a row.

Outside of work Alex and his wife Sharon enjoy volunteering at the Kings Arms Project providing hot food and drink for rough sleepers and those in need, acting as mentors on the pathways to work programme. His other passions are their 3 boys, 2 dogs, travelling, gardening, golf and Aston Villa.

About DS Smith

DS Smith is a leading provider of sustainable fibre-based packaging worldwide, which is supported by recycling and papermaking operations. It plays a central role in the value chain across sectors including e-commerce, fast moving consumer goods and industrials. Through its purpose of ‘Redefining Packaging for a Changing World’ and its Now and Next sustainability strategy, DS Smith is committed to leading the transition to the circular economy, while delivering more circular solutions for its customers and wider society — replacing problem plastics, taking carbon out of supply chains and providing innovative recycling solutions. Its bespoke box-to-box in 14 days model, design capabilities and innovation strategy sits at the heart of this response. Headquartered in London and a member of the FTSE 100, DS Smith operates in 34 countries employing around 30,000 people and is a Strategic Partner of the Ellen MacArthur Foundation. Its history can be traced back to the box-making businesses started in the 1940s by the Smith family.