Helene:
Welcome back to another episode of the Procurement Game Changers. I’m thrilled to have Ozan Hazir on my cast today. He’s a purchasing guru, currently working for the BSH Home Appliances Group, serving as the head of EM local purchasing production sites.
Ozan has led and coached regional purchasing teams, created cost opportunities and initiated debt cross-country sourcing initiatives. His expertise in continuous improvement and supplier sourcing has been honed through his previous roles as purchasing expert at BSH Turkey and category buyer for services at Bosch and Siemens Home Appliances group. Buckle up for an insightful conversation with Ozan. All right, welcome to the show, Ozan.
Ozan Hazir:
Hello. Thank you having me here. Nice to be here.
Helene:
Right. Ozan, could you tell us what led you to procurement?
Ozan Hazir:
My first inspiration about procurement was actually my big brother. He was also a buyer and leading a region Europe in FMCG company. After my work experience in a bank in headquarter in Turkey and Volkswagen Group in Germany, I joined the procurement community in Mondelez International company former called Kraft Foods.
I decided to be a professional on procurement at the very first time. It was like a love at the first sight, what attracted to me actually a wide range of categories which enables continuous learning, intensive communication with different parties and dynamism of the job. Every day you may wake up to new challenges.
I work in direct categories, direct categories, purchasing, joint lead, lots of procurement, interesting projects in procurement area more than a decade. And now I am working as a procurement leader in emerging market production sites with a focus point investment and services. Once a buyer, always a buyer.
Helene:
Right. Today we’re going to dive into a very important topic, the foundation of procurement actually. It’s the procurement leader toolbox and what are the skills and the tools that they need to master. In this digital age, procurement leaders need to be familiar with a variety of tools and technologies to improve their processes from sourcing to contract management, payment, supplier performance.
There are so many new payment software that are there and it’s key to understand all of them and what they can bring to your organization. As our host, Ozan will guide us through best practices, challenges in implementation and much more. Get ready to level up your procurement game.
Let’s jump right in. We are looking to equip you with the knowledge and insights to make informed decision in this transformational time for procurement. Let’s jump right in. Ready?
Ozan Hazir:
Yeah.
Key Tools and Technologies that all procurement leaders should be familiar with
Helene:
Let’s go with the first question. Can you explain a little bit what are some of the key tools and technologies that procurement leaders should be familiar with and how they can be used to enhance procurement processes and results?
Ozan Hazir:
Procurement leaders needs to have an overview to end-to-end process, a so-called procure to pay process. Which is basically understanding the company outsourcing needs, market structure, sourcing, contract, delivery, payment and supplier management, performance and risk management.
They need several tools in their toolbox for each and every step such as category management, market analyze tools, request for quotation, tender tools, ordering system, catalog management, contract management, stock level revolution, risk management, lots of tools. However, the most important thing is the high level of integrity and growth test tools. Once the integrity level is increased, more efficient the process will be. Tools should be able to speak within each other.
Helene:
Yeah. It’s true that we need at the same time clean data, accurate data and we need integration so you don’t have to jump from one tool to the next, but we could imagine having different specialized tool that talk to each other so you have the best in each of those categories. What are some of the best practices that you’ve seen in terms of implementing those procurement softwares and tools?
Ozan Hazir:
Tools are enabled for best buying options. The best practices that I can say as example, firstly for instance, spend analysis tools, which creates bundling options and brings better negotiation results. It is on economic scale of effect. If you know what you buy, what you are going to buy or what you bought, you can bundle the quantities and make negotiations at once.
And secondly, catalog management, for instance. Catalog management provides tail management spent. The burden point each and every indirect category buyer is the C group spend because which means the high quantities of purchase order, low values of the orders. For instance, such as stationary orders. With catalog management, the buyer can relieve from the capacity and focus on more added value projects.
And thirdly, contract management tools provide high-speed process for contract signatures. But I would like those underlying a hidden effect, hidden positive effect of implementing software or a tool because you need to make analysis for whole process before implementation. You will have a holistic approach for the process and different areas where you are good at and where you have a room for improvements.
Helene:
Yeah, that’s a very good point. I think that we often talk about the tools, but we forget that there are only enablers, just like you mentioned at the beginning. The real challenge is improvement of processes and ways of working.
And it’s true that when you decide to implement a tool, you need to just pause for a moment and say, “Okay, how do we do it? How can we do it better?” And that’s what we want in that tool. You need to have immediate improvement in the tool. That’s a very good point.
The digital procurement slowly but steadily is replacing traditional procurement practices. We’ve seen that it’s not only a trend, it’s a reality. Can you tell us more about the benefits and the challenges of using e-procurement platforms in the procurement process?
Ozan Hazir:
Sure. E-procurement platforms mainly provides a e-bidding, e-auction functions. There are two main benefits from my point of view. Firstly, giving equal conditions to supplier. Same information level, same time for offer preparation, et cetera. This transparency created transfer for the suppliers and both side feel comfortable about the process.
Secondly, of course, high competitive among suppliers. I can easily say real-time auctions provides better negotiation results, but the key point is giving commitment to suppliers to have the job after they window the auction. Therefore, they know rule of the game, can follow up real time and give their best to win.
Besides these benefits with any new technology come its own set of challenges that must be overcome. One of the main challenge that in this area might be lack of infrastructure, especially in developing countries such as stable internet connection, electricity connection.
Another challenge is ensuring that all participants, all candidate suppliers are onboard with the system, with the negotiation method. It is important to provide all suppliers with a clear, concrete instruction, how to use e-procurement platform so there are no misunderstanding later on down the road.
Long story short, there is no one size fit all solution for awarding process. Procurement professionals should choose the best option approach by considering their dynamics.
Helene:
Yeah, that’s a very good point. And the point that you’re making on developing country, that’s very good because as Europe and I live in the US as well, I never thought about it as an obstacle to that because you feel like internet is everywhere. And it’s not obviously. That’s a very good point.
I also think that you’re right in saying that there’s no one fits all solution. And when we talk a lot about auction, e-auction software, and we have that question coming a lot in our consulting category. Typically, it’s not a category where e-auction works for many reasons. But just to bounce on your point, saying that you have to have typical thinking as a procurement leader that all those software that are available can bring value.
And that depends on the maturity of your organization, your infrastructure, and also the maturity of your suppliers and the category you want to apply them on. And all of this should help you decide how you are going to approach this implementation. Are you going to use that tool or not, and are you going to use it on everything or just on some of the categories?
I think that’s a very fair point. How do you believe the integration of digital tools can aid in the development of a regional strategic sourcing strategy and ultimately contribute to entering competitiveness on a total cost of ownership basis for factories, facilities, and services?
Ozan Hazir:
First, a real strategy needs sufficient data, which can be provided by digital tools easily. Integrated tools enable collecting demands over region, transparent market status, good overview of supply base and their performance. Within these inputs, I believe a mean sourcing strategy can be developed. In addition, that implementation follow-up is possible. For instance, one, if you have a one procurement organization in the region, one organization can release orders, follow up deliveries, regardless the location.
Helene:
Okay. I think also that as you mentioned, digital tools are treating data. And what is interesting with data is that when it’s well collected and it’s accurate, then you have access to a granularity in the analysis that you didn’t have before. That’s where it’s much easier to build a regional report based on only the data here. And then compare with other regions and have some benchmark, which was difficult before because we were not necessarily using the same tools, we were not necessarily collecting the same things, having the same policies to do and have the same processes.
In that sense it gives some harmonization of practices in an organization and also in the way you collect the data. But I agree that everything comes from the data. I’m a big fan of that. Could you share any example of you or other procurement leaders that you know have used special skills or tools to overcome a particular challenge or achieve a specific goal?
Cultural differences in procurement
Ozan Hazir:
I can summarize main procurement leader cycles as a negotiating ability, relationship management building, change and project management. I think everyone is familiar with pandemic and supply chain crisis, so I skip that type of challenges. But I would like to underline cultural challenges.
Cultural difference can occur between supplier across different countries, also across suppliers between family and corporate companies. Our goal as a procurement professional buyers, leaders is to achieve good negotiation results at the end of the day. However, standard procurement approach differs case by case. Some cultures are open to direct communication, some are not.
I had the case once directly asking a discount from a supplier and they got disappointed and were ready to leave the negotiation. And they were single source on that project. After lots of effort and intensive communication, I convince them come back to the table. On the other hand, in some sectors, supply base are mostly family companies. There is a always big post discount who has the final decision?
Helene:
That’s a good point. It’s interesting that… Sorry. It’s interesting that you are mentioning cultural differences, but all in all we’ll see that a lot of the skills for procurement leaders are soft skills as opposed to technical skills.
There’s a need for knowledge of the category and technical knowledge, but we often see procurement as those obscure function that is mainly doing tactical work. But what I hear more and more is that actually there’s lots of influence, there’s a lot of negotiation, of building relationship, of managing change and so on. And that’s something that is not necessarily super clear in the head of the top management in when they recruit people for procurement. It’s changing though.
And what you’re mentioning about cultural differences is really true. And if you have lived in another country than yours, you’ll see that even when cultures seem close. Western countries for instance, you could think that German and French people were neighbors and we’re the same. Not really. Not really. And depending on people who are from the north of France or south of France, there’s already a difference.
I think it’s a very fair point and that is often overlooked in negotiations. And it can come to an extent, for instance, when you’re discussing with some Asian countries where the culture is completely different and the way to… You cannot base your work on body language because it’s completely different and so on. I think that’s a very good point.
Now, we are at the end of the interview and that’s takeaway time. What would be the takeaway from today’s interview?
Ozan Hazir:
I would say be an excellent person in communication. It’s not enough nowadays to be in advanced negotiation with TCO approach, financial acumen. We need to be a digital acumen. As a takeaway, implement professional tools today, your daily work and be robust about it. And never give up because each step counts for the change.
Helene:
Nice. The last interview I did was we discussed about category management. And we said that generally category managers need to have digital acumen, have very good in soft skills and have a good knowledge of the category. you see, here you go. We all agree on that.
Ozan Hazir:
Exactly.
Helene:
Well, thank you, Ozan, for your insights. It was extremely interesting. Thank you.
Ozan Hazir:
My pleasure.
Helene:
And there we have it. Another episode of the Procurement Game Changes comes to an end. A huge thanks to our phenomenal guest, Ozan, for lending us their insight on the procurement leaders toolbox.
Before we conclude, I want to invite our listeners to join in. Do you have triumphs or hurdles relating to the tools structure for procurement leaders? Don’t hold back. Drop us a line in the comments section, your experiences, your wisdom, your questions, your suggestions. Make a stronger community by learning from each other.
And if this episode hit the right notes for you and you found the conversation meaningful, we’d appreciate your support. Give us a thumbs up, click and subscribe. Spread the word about this podcast among your colleagues and friends. Together we can spread knowledge and inspire others to change procurement for the better. Till then, stay safe and happy sourcing. Bye. Au revoir.
PS: To watch our previous video CLICK HERE!
; 
