Kellogg

Kellogg
Kellogg’s brands are household names across the globe, but it faces intense competition. To fully leverage supplier innovation and to be more agile in response to market opportunities, it decided to relaunch its SRM programme, as Shelly van Treeck, Chief Procurement Officer, Kellogg Company, explains.
While Kellogg Company had had a supplier relationship management programme 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. We could do this 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 programme: improving supplier relationships by having the right discussions, with the right people, at the right level, in support of Kellogg’s 2020 Growth Plan.
 
Earlier this year, we launched K Partners Advantage at our Supplier Day. K Partners Advantage is the culmination of crossfunctional feedback, external benchmarking, supplier segmentation and stakeholder input into the design, planning and governance of a re-energised SRM programme. The approach moves us beyond traditional performance management and scorecards, and it was further enabled by globalising roles (and the programme) for scale, and
organising work under the umbrella of ‘supplier engagement and development’
(SE&D). SE&D encompasses SRM, supplier diversity and responsible sourcing. It
provides a ready way to integrate and connect suppliers to strategies, processes, goals, and activities more effectively, and 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 programme would deliver value and benefits for all parties.
 
We selected several supplier relationships from across our business with crossfunctional
‘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 affected and openly involved them in the change process.
 
We worked with our procurement category managers to lead the new supplier relationship programme, just as they did before, but to a different standard. Now they were leveraging skills that went beyond traditional category or subject matter expertise: for example, 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 has ambitious growth plans and we are simultaneously making significant changes to our business. Therefore, we need to have suppliers who understand and are 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 programme 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. It’s early days in our programme but we’ve completed over 50 joint business plans with key suppliers and the expected outcomes include product innovation, cost reduction and avoidance, operational improvements and CSR
enablement. 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 realised through a different approach to supplier relationships – relationships that help the business grow.
 
"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.” Shelly van Treeck
Kellogg CPO
 

 

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