12 Jul 17

SRM aims to underpin growth at Kellogg

SRM aims to underpin growth at Kellogg

In the second of the SRM leader interviews, Shelly Van Treeck, Chief Procurement Officer, Kellogg Company shares why it is strategically important to pursue a higher level of engagement with Kellogg's supply base and how they went about doing this. 

While Kellogg had a supplier relationship management program for more than 15 years, given marketplace changes and in the spirit of continuous improvement, we decided in 2015 that we could drive greater end-to-end value through a broader supplier engagement and development approach by expanding category coverage and thinking bigger and beyond traditional performance management. 

When you’ve managed costs, innovation, and supplier service performance--and done that well for years-- it was time to ask ourselves how we could increase the benefits, relevance, and impact for all players in our supply chain, internally and externally. The answer was that we needed to partner differently, change the conversation, include all spend, and build the case for how better supplier relationships could achieve greater value and returns for all involved. “Playing to Win” is part of our culture, and that’s why it became increasingly important to pursue a different level of strategic engagement with our supply base.  It underpins our new-and-improved SRM program:  improving supplier relationships by having the right discussions, with the right people, at the right level, in support of Kellogg’s 2020 Growth Plans.

Earlier this year, we launched K Partners Advantage at our Supplier Day.  K Partners Advantage is the output and culmination of cross-functional feedback, external benchmarking, supplier segmentation and stakeholder input into the design, planning, and governance of a re-energized SRM program.  The approach moves beyond us beyond traditional performance management and scorecards and was further enabled by globalizing roles (and the program) for scale, and organizing work under the umbrella of “Supplier Engagement and Development.”  SE&D encompasses SRM, Supplier Diversity and Responsible Sourcing, and provides a ready way to develop, integrate and connect suppliers to strategies, processes, goals, and activities more effectively and efficiently, with mutual benefits.

In the year leading up to the launch of K Partner Advantage, supplier segmentation was completed and various pilots were conducted to validate the business case and ensure the program would deliver value and benefits for all parties. For the pilots, we selected several supplier relationships from across our business with cross functional “owners.”  We secured 360-degree feedback from stakeholders and suppliers alike before proceeding with any new activities.  Change management was at the forefront of our approach as well, as we looked at who would be impacted and how (both internally and externally) and openly discussed and involved them in the change process.

We worked with our procurement category managers to lead the new supplier relationship program, just as they did before, but to a different standard:   leveraging skills beyond traditional category or subject matter expertise such as storytelling, marketing, and leadership to create a more long term, strategic, and value-creating path forward, with the intent of embedding and integrating the new ways of working to deliver the future needs and requirements of our business.

Kellogg’s has ambitious growth plans and we are simultaneously making significant changes to our business; therefore, we need to have suppliers who understand and aligned to our objectives, and who are ready to go when we are. The foundation needs to be fully established so when a new project comes up, we are able to leverage the right partner right away, without questions or renegotiating the basics. We can be agile and deliver value for the business with the right partners, as we will be focusing on the future and growth, in addition to the urgent here and now. 

Being a customer of choice with Top Tier suppliers is an absolute priority of K Partners Advantage, and executive sponsorship of the program is strong.  Agility, speed and value come from relationships that are open and strategically focused – whether it’s being first to have a new idea, product innovation, or service enhancement. It’s equally important that we’re open to dialogue so that suppliers are able to tell us what we are doing to slow them down, what we’re missing, or what we could do to be a better customer.  

Supplier Engagement and Development is a team sport, and we’re doing all we can to make K Partner Advantage a “recipe for shared success!”  Done well, this partnership demonstrates to internal business stakeholders, external suppliers, and others that there is untapped value within our supply web that can be realized through a different approach to supplier relationships - relationships that help the business grow!