National Sporting Goods Retailer desired to build a highly functioning Strategic Procurement organization. They hired Kas Chupa, a member of the OnDemand Professional Network as the new Chief Procurement Officer to drive this effort. Kas was tasked to build a procurement organization with the capability of sourcing $550M of Indirect Goods & Services, Capital Equipment and some Direct Goods for resale and implement year over year savings programs.
DISCOVERY & EVALUATION
As the new CPO, Kas interviewed all business unit leaders to introduce himself and to get their perspective on what they expected from Strategic Procurement, to understand their business goals and objectives for the coming year(s) and discover how their respective procurement activities were being executed currently. Part of the evaluation phase was to uncover quick win opportunities, prepare the business for the upcoming organizational changes and the timeline for those changes, as well as the Mission and Vision for Procurement within the company. The interviews and data collection revealed the following:
- All buying was being executed within the various business units by non-procurement individuals.
- All contracts we being negotiated and signed by the business units with limited to no legal review.
- There were multiple payment channels, and close to 100 different payment terms.
EXECUTION & BENEFITS
The CPO quickly engaged external consulting support while he was building internal procurement capabilities. The key focus of the consultants was to work with the business and build strawman sourcing plans and pipeline of quick wins.
While focusing on quick wins to demonstrate the value of strategic sourcing and procurement, the CPO built the procurement team with internal resources, with a net zero increase in costs for the company, quickly implementing teams to lead professional category management, supplier relationship management, order execution, buying and contract management.
Other key steps taken included segmenting suppliers to more acutely manage them based on criticality to the business, normalizing payment terms by supplier category and implementing procurement review process of all contracts. Additionally, the Finance team was engaged to reflect all procurement savings in divisional budgets.
External consultants helped to drive the initial execution of category sourcing plans, creating year over year savings strategies resulting in $25M in savings over the first 2 years. The strategic sourcing projects quickly moved to the internal team, using the consultants for change management.
Procurement took over all contract reviews, negotiations and signatures, resulting in previously outsourced legal work moving back in house with $10MM in savings realized in the first year and $25MM in 24 month period.
The organization implemented the Zycus Contracts Management Module, including contracts authoring and signature workflow to ensure contract visibility and compliance.
Meet Kas Chupa – OnDemand Network Member since 2013
Kas Chupa is a Procurement executive with 20+ years of experience in strategic sourcing and supply chain focused on developing and procurement and payables strategies to deliver bottom-line savings, increase service quality, improve processes and reduce risk for private and public sector companies. He has specialized category knowledge across Indirect & Direct Categories and Capital Equipment in multiple industries on a global basis. Additionally, he has broad knowledge of procurement operations including accounts payable, supplier management, contract management, supplier risk mitigation and P2P systems including Ariba, Zycus, SAP and Coupa. Kas prides himself to have strong people leadership skills and proficiency leveraging technology to optimize procurement processes. He is a respected, influential leader; a trusted change agent who is effective in collaborating with others to tackle complex problems and implement creative solutions to improve the bottom line. Proven track record of designing and implementing strategic transformational initiatives, delivering high level supply base performance and building empowered high-performance teams. In additional to his CPO role with the retailer, his experience includes roles with UNUM Insurance, Accenture, IBM, Vodafone and Eaton Corporation.