Global

Details

  • Service: Advisory, Management Consulting, Business Performance Services
  • Industry: Financial Services, Telecommunications, Life Sciences
  • Type: Video
  • Date: 2/21/2014
  • Length: 4:54 Minutes

Procurement Operating Models: A vision for the future 

Detlef Schultz, Vodafone:

KPMG
cutting through complexity


EXECUTIVE TALKS


PROCUREMENT OPERATING MODELS
A vision for the future


DETLEF SCHULTZ
CEO Vodafone Procurement Co.
& Global Supply Chain
Management Director


in conversation with


THORSTEN MARTIN SCHIEFER
Partner
KPMG in Germany


PROCUREMENT OPERATING MODELS
A vision for the future


Becoming a net profit contributor is the procurement vision of the future


DETLEF SCHULTZ: My personal vision for the Vodafone procurement company is to become a net profit contributor to Vodafone. And why do I say this? An operating company has customers, and the customers pay for the services, so the operating company creates a profit, and with that, contributes to the success of Vodafone. If I want to become a net profit contributor, then I mean this through third party business. Roughly 50% of my OpEx across


[00:01:00]


the entire supply chain department in Vodafone gets covered through third party business already. 50%. So if you ask me what is your personal vision, my personal vision is to cover the entire 100% of my cost, of the supply chain cost, and become a net profit contributor to Vodafone, and I guarantee that that will happen. And if that happens, that would make me very, very proud.


PROCUREMENT OPERATING MODELS
A vision for the future


As internal growth becomes limited, 3rd party businesses can be pursued


DETLEF SCHULTZ: Now the question you could ask yourself is, how do you grow the volumes in the procurement company? In the current fiscal year, which ends in April 2014, we will do more than €10 billion, so if the internal growth is limited, and you only can go up to a certain percentage, we’re asking ourselves whether there are opportunities outside of Vodafone.


[00:02:00]


Maybe you really walk into the area of third party business and support customers out of areas which might not be traditional telecommunications.


PROCUREMENT OPERATING MODELS
A vision for the future


Balancing expansion without neglecting customer focus is imperative


DETLEF SCHULTZ: It could be a little itchy if you move into third party business, because first of all, you cannot neglect your own operating companies. The whole purpose of doing this is to beat the competition, so therefore, the question on third party business is always, it has to match, or it has to align with your natural doing anyhow, so I would not go and buy ABS resin, for instance, because there are people out there whose specialty it is to buy ABS resin and plastic materials, or raw materials, right? But if it comes to the point of, could you buy IT equipment on my behalf? Yes, because I do that anyhow.


[00:03:00]


Can you buy notebooks on my behalf? Absolutely, because we do it anyhow.


PROCUREMENT OPERATING MODELS
A vision for the future


Functional expertise and entrepreneurship enables procurement value delivery


THORSTEN MARTIN SCHIEFER: When you’re talking about procurement, a lot of people say you have just to be a specialist in procurement, but I think in modern days, the CPO, or here, CEO of the procurement company must be a salesman. On the one hand, to the stakeholders and the own organization, to deliver first class services, to make them satisfied, and to deliver real value to the organization, and on the other hand, and I think here, the Vodafone procurement company makes it very good, because they first have concentrated in making the stakeholder internally satisfied, and then looking on third party business, but if you’re looking then on third party business, convincing another organization to give a part of their scope to,


[00:04:00]


for example here, the Vodafone procurement company, you have to be a sales guy. You have to convince them that you have a lot of knowledge about categories, that you can deliver clear value, savings, and on the other hand, you have also the trust of the external customer to bring the scope over to the procurement company here at Vodafone.


KPMG
cutting through complexity


[Disclaimer]

 

How do procurement organizations assure they are ahead of the curve and do not get left with an ineffective model? Detlef Schultz discusses his vision to become a “net contributor” to the company and the steps he has taken to achieve this – including an expansion to 3rd party business to successfully cover full operating costs and achieve even greater savings leverage.

Detlef Schultz, Vodafone

Detlef joined Vodafone in March 2003 to lead the Global Supply Chain team. His responsibilities include strategic and operational leadership of Vodafone’s Supply Chain Management across the globe in the areas of Technology and commercial Services. Detlef also leads the Luxembourg-based Vodafone Procurement Company, which is the strategic purchasing centre for the Group and now serves third parties.


Prior to Vodafone, Detlef spent more than 6 years in California with the world’s largest semi-conductor equipment manufacturer, Applied Materials where he held various Supply Chain, Planning and Operations Management responsibilities. Before moving to the US, Detlef was a Member of the Board of Management for Babcock-BSH AG in Germany where he led the area of Supply Chain Management and financial controlling. Detlef also worked for Siemens for ten years, more latterly as Purchasing Director based in Bocholt and Kamp-Lintfort, Germany.


He started his Supply Chain career with Siemens in 1985 in the area of Materials Management in Germany, Korea and Singapore.

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