Category Management with Sander Korving | Chief Procurement Officer | Van Oord Maritime Contractors

Welcome to this podcast, Splendid Tiger Academy of Destination. My name is Anil Joshi. Today I have the privilege and honor of having the Chief Procurement Officer of Fanord Maritime Contractors with me, Mr. Sander Corving. Sander, welcome. Thank you very much Anil. It's really good to have you on the podcast. Thank you for making the time for our listeners. Thank you very much. I'm very honored to be here. I think it's excellent to exchange some ideas with each other. I can learn from you how you look at the world of procurements, and I can share some ideas with myself. You have a ton of experience, Sander, so I'm pretty sure I can also learn from you. And the listeners hopefully benefit from the presence of both our experiences and insights. And to the listeners, the reason we make these podcasts is to just share the power of knowledge and experience with you so you can benefit. We're here to share. What do they say? Sharing is caring? It's okay. Thank you. And we'd like to inspire the procurement world with some ideas and experiences and make it available to everyone. Fanord is a global leader in dredging, offshore wind and marine infrastructure, combining a lot of innovative solutions with sustainable practices to be able to tackle some of the most complex marine challenges. So what you do is from constructing offshore wind farms to safeguarding coastlines against rising sea levels, so you're actually shaping the future of maritime engineering. Very important point for Fanord is creating a better world for future generations. We did that already for 150 years. We hope to do that for another 150 years. And you're the cheaper procurement officer? What keeps you busy? That's a very good question. We're busy with 100 things at the same time, but we always try to make sure that we have a clear goal to focus on, because you can imagine that in practice, if you don't have a goal, you're only focusing on reactive stuff, because we spent about 2 billion euro annually. We have 180,000 transactions, and we have four 5,000 active suppliers. So if you don't have a clear goal where to go, you only are reactive on certain parts. To come to your question, what keeps me busy is making sure that we're on track on becoming more mature with procurement, to investigate new possibilities, new techniques in our world, and to implement that also in our way of acting, and to make sure that we use the right systems and tools to do that. Today's podcast is going to be about category management. It's a hot topic. I'll give you my two one-liners that I have around this one. The first one I say is, procurement is cool. Second, category management is hot. It is such a complex area where you sometimes feel like it's so huge, where do I even start as an organization? It has so many opinions around it, of the good, the bad and the ugly. It has so much of hidden and explicit value. Is it tough? Oh yeah, category management is not easy. Is it worth the effort absolutely yes, without any doubt? What does category management mean to you, Sunder? I always say category management is like a container definition. It really depends on which flavor you give it. For me, procurement is category management, because I don't believe in procurement as in transactional department where we only make the P.O. purchase orders. I really believe in that our department should be the ears and eyes towards the external market where you have sales is looking at our customers, we're looking at the complete supplier market. And in order to steer that complex and huge market, because if you're talking about supply chain management, that is not only looking at your first-tier suppliers, but also your second and third and that expands quite fast. You can calculate that. You have 5,000 active suppliers, your second tier is maybe 100,000, you're talking about your third tier, you're talking about a million suppliers. In order to make sure that you steer that process in the right way, I believe in that you have to define categories, because you want to be specialist on that category, you want to understand what happens there and you want to know the parties, you want to know the developments, and it only is going to happen if you put somebody on top of it that is really connected to that category, a category management. So category management is for me, is your horizontal line through the organization that really everything is involved with that category. But this is also not only suppliers, but is also engineering, is also talking with demand, is also talking with your customer. For instance, we are now having workshops this year, where we're not only inviting our suppliers, but we're also inviting our customers, our commercial guys, because we think that in order to steer the supply chain, you would have to be aware of everything that happens in the value chain. And it's upstream and downstream, and that's for me, category management. It's an end-to-end way of thinking and working. I love that when you said procurement is category management, I'm sure this will ruffle some feathers here and there if somebody who hears this, you know, people may agree disagree and it depends on the context in the company. Category management has so much of impact on procurement as an end-to-end way of thinking working, that when we then say make a category strategy and somebody happens to be a little bit operational-minded, they might disconnect strategy, wait a minute, I'm busy with inventories, I need this factory to run, I need this delivery tomorrow, I need to tender, but we do need to tender sometimes. We, of course, it's a part of the job to contract and do the right things. When you look at adding tremendous value, category management is an end-to-end process end-to-end way of thinking, where we're connecting the dots from the customer value chain down to the supply chain, I call it down, but equally horizontal, but in the supply chain, to whatever tier we need to be at, especially now when we start to talk ESG. Yeah, that's a good example, all the changes on rules and regulations and also the intrinsic demand we have from our company, we want to be the green company that means that you also have to change in your supply chain and that only can happen if we connect customers with our supply chain and the category manager is the player in that game, he's connecting the dots to each other, we're looking for alternatives in our supply chain, so we're talking to suppliers and we're saying you're only going to work for us if your second and third tier are changing as well, those are games that are crucial for a company like for North, if we're only transactional oriented where we are buying the things that are specified by others and you're never going to change, you're only going to be a reactive procurement organization. Yeah, you're only be creative on a very limited part of your value chain and you need procurement to enable that transaction and to be innovative. Innovations are important and embedding these into how we make category strategies makes it a bit more controlled to say, okay, you have a category, let's call it category X, and within the scope of the category, you can then decide on who the suppliers are, how many should we have, more or less, what type should they be, but how do we also manage those relationships? Because more and more, the interdependency between customers, suppliers has increased, there are certain categories where you may just have one, two or three suppliers, even as global players, and that means we have to work differently. You can't think about replacing them, we'll talk about SRM, supplier relationship management as well, but sometimes I say be careful folks, it's about supplier and relationship management, it's not supplier replacement management. And that's a mindset, I'm not saying procurement does anything wrong with that, no, sometimes you have to replace when one doesn't perform, the same time it's like seeing each other as extended families, so if 70% of our company's revenue are costs, those costs need to be managed through categories by scoping, and that management within the category can be orchestrated by a category manager who's more like a spider in the web in many ways, bringing in subject matter experts, left, right, and center, wherever they're required, internal and external, to be able to make a plan that's good for one, two, three years, maybe even longer, and break it down to short term objectives. No, and in order to do this, you need to have an installed base where there are trusting your organization that you're trusted to do this, because if you start, and that's some of the advice I already have for the listeners, don't think that you can start with this level, because if you get somebody in and category manager who directly goes on this level looking how to improve the supply chain and making strategic plans, et cetera, and he or she doesn't have the connection to the business, you're empty handed. So it is a very difficult game to play because you have to be connected to the tender phase where you make assignments for the. customers, you need to be connected to the operational site where you're going to resolve some issues, the project managers and counter. We're going to be focusing on cost reduction because our board is interested in reducing overhead costs. You want to be involved in ESG, like you said. And that's a big topic for our supervisory board. So you're playing on different chess boards at the same time. And that's the difficult part of category management. Because what I saw in in the past is that somebody is or very much in a strategic part and doesn't have the connection to the operational site or somebody is very operational, minded and doesn't have an include about the strategic long-term view. So that's a difficult part. And therefore the category manager is always say it's an horse with five legs. So what you just mentioned Thunder is you need somebody who's multifunctional, someone who can fit into the operational as well as going to strategic way of thinking. So some very flexible, I call them also almost multi-lingual. The speak different languages depending on the stakeholders they need to engage with. And I fully buy into I've had the privilege to support many organizations in starting category management from the ground up to others who have had programs that are very successful and they want to take at the next level. And others who said it didn't work. Some time back we want to reignite the passion for category management. Starting small with categories that you know I say small I don't mean low impact, but categories where the scope can be managed well and you can bring it to the end. You can actually make it happen. Start to create the buzz. That's the trick. You really need to find some practical and concrete topics which can be broad to net and which the business or your customer internal customer recognizes. And that's important because if they recognize this they will ask you for the next level. And you never should forget that. You always need that internal customer. Even though that you see gold at the end of the horizon, you need to bring in your internal customer. If you don't do that you're lost. Yes. And some you call it internal customers. Some organizations call them internal stakeholders, internal subjects matter experts right, cross functional experts. You need them and wherever they are that's my starting point. So if they and the thing is what questions do they ask me are a signal of how they also see procurement? For example they say well I've had this discussion with a supplier and I pretty much hammered out everything all the specifications etc. Could you make me a contract please? Exactly. Now this is forever recognizable. It's recognizable for anyone in procurement who say oh boy it's late called procurement in early. But this also presents an opportunity at least the doors open. Yeah. You can go in, do that stuff, sort it out, help them with that and in that process start to build relations and then to I call it pitch or present or show and illustrate that procurement can actually have much much more value. So why don't we bring structure to a little bit of this what it looks like mayhem. And let's call that a category plan if you don't like the word category strategy. Exactly. And what do we just sit down for a few hours? Don't make it too heavy that they need to you know bring in a whole bunch of people for a whole week. Nobody will make the time if they don't see the value. And that's where if you start with these small wins. Yeah. Is that how you've approached it as well? Absolutely. Yeah. Because I came from an organization where I took over procurement. They installed their category managers at a very high level. But that was too high level. So there was no connection between the internal stakeholder and what the category managers were doing. So they were in an ivory tower. And at a certain moment the board said okay we have to reduce costs. What are who are the first ones that they go out? Those were the category managers. So I started with zero. Right. Wow. And I heard what the the history had brought us. So I never used the word category manager because at the moment I talked about category management. Everybody had a sort of puff of reaction. Right. And they said okay not again. Not again. So I called them strategic sources. It's all in the name. Good. Yep. Strategic sources in category management. Same same. So I know people will say no it's not. Yeah. But it's what in terms of terminology works in the organization. And we started to build relationships by resolving issues from the from the operation. At a certain moment there were installed. Everybody was happy with them. I even said during a flow where we had to let go people. I'm going to resign this person, this category manager. Are you happy with that? And no everybody said no. This is the last one had to go. So that was my big. They want to keep them. That's very good. Yeah. And that was due to the fact that they really connected to the operational side. And that was the basis where we can build. Some of the tips we've shared so far is one start small in terms of from where your internal stakeholders are. Yeah. In working on categories. Get connected with them. Yeah. Solve the problems that they currently see. Yeah. Don't come in with new ones. No. Now and but you still have to have your own vision. That's it. But only following you're not going to bring a lot of things. But it's it's a very delicate process where you have to use the problems they're bringing to you and introducing your solutions that you already thought of in a very subtle way. Sometimes we have the challenge in categories that category managers say the internal stakeholder does not know what they want. I believe that it's a challenge if they don't know what they want or what they need or where they could get. No. Those three things are three opportunities because if then they don't know what they want yet. The specifications depending on the category are unclear. They may not even know what they're spending and what that looks like. It's a great opportunity to bring in procurement excellence, procurement expertise and show them a little bit more about the category. So they start to think and then using a methodology helps. Methodologies have a good taste and a bad taste. People say, "Oh, templates, here we go again." Templates are just merely there to give structure in thought. The power, Sander, is when you as procurement bring in cross-functional team, whoever they are for a specific scope category and say, "Let's talk about the issues you have today." No. Let's talk about tomorrow. Let's talk about the day after tomorrow. And you're going to see where it becomes a bit more abstract as they go forward. And then you know, "Okay, that's where I can add value." Do you understand the supply base? Do you know how they look at us? Do you understand why they do business with us? What they don't? Are we getting value? Of course, procurement, board level, you said, wanted cost reduction from procurement, which is many a case, how procurement is many times. How procurement is seen, unfortunately, that one says procurement is a tender machine or procurement is a savings machine. Now, those two statements are quite polarizing. I realize that. I believe the category management can also help procurement to be seeing, to go beyond savings and add tremendous value, challenge here lies, Sunder. We don't know what that value is going to be because we're going to sit down with other subject matter experts. So I can't even go in with the solution yet. And the difficulty part is, of course, that once you start, if you start from zero and you don't have that installed budget, it is true that a lot of experts in the company who are not a part of procurement are better in category management than the category managers you want to install. Because they are doing it for years. They're talking to the suppliers. They understand what is happening in supply chain. But they have a different role. And that's the difficult part that you are, when you're introducing category managers, you need to convince people that it is a discipline that needs full attention. You can't do it next to your job as a project manager, next to your job as commercial or next to your job as MD managing director. Yeah. So that's the reason, again, that you need to build up very slowly that trust, but also the knowledge from your own side. Yes. Because also I'm still sometimes in areas within this company where I'm very slow in introducing market core manager. Because I know that that is in discipline that is for years already within a department. And if I'm saying, I'm going to do that for you. Yeah, they are going to prove them that I'm wrong. And they're absolutely right also in doing that. Because I can't do it from zero to the level I want. That takes years. So if that scenario I don't have any knowledge about yet, I'm first going to say, I'm going to help you. Help you make the PO. Yeah. Make sure that the suppliers are on board in the right way, making sure that we have the right mirror when we have the different proposals from the suppliers. Etc. from the more the administers side. So that's really the lowest side of category management. But we start to build up, we start to build up that knowledge. But it takes years. I've seen this happen where the start has been rough, you know, to just gain acceptance. Firstly, for the person from procurement, who wants to work with subject matter experts who are absolute experts, who probably interact with the suppliers more often than procurement would be interacting and they might have those jobs much, much longer in those areas than the procurement professional they're dealing with. Once that gets started and you get that acceptance, you get little wins, small wins. They add up, the little big wins become big wins. And then a little bit of marketing around that certainly helps, which is a very important thing. in some functions feels like, oh, not the place. You don't do selling, you know, of ideas and these types of functions, it's going to backfire. - Absolutely. This is also very delicate process. You're too breaking too much about your successes and everybody's, oh, there's procurement. And by the way, procurement's only spending money, yeah? So if we're saying we saved a lot of money, you get it back in your face because we're spending money. We're not creating a bottom line money. We're going to spend less, of course, which is better for your profit and lose account, but we're still spending money. - And Sandra, I've also had categories that I facilitated where it wasn't about saving. It was about revenue generation in the category. Cost management, of course, is an item to always keep in mind. On the other side was if we invest more in this technology, and in this area with a chosen set of suppliers and internal stakeholders who are experts in an area, it's going to impact the top line of the organization. - You're addressing a very important question, and that's also still a challenge I have until today. How do you report your success? Because sometimes you create value which creates new revenue, because introducing a new supplier with a new solution can create business, which creates revenue. Sometimes we introduce a solution which reduces cost, but it's only on the tender side. So your offer is more attractive to our customer, but in your profit and lose, you don't see anything, because you use that smart offer on the tender side. So sometimes it has something to do with efficiency, because we're, for instance, if you have a supplier which in the past presented you 50,000 invoices per year which you reduce to four, now that there's a huge impact on your efficiency in your company. And sometimes you have bottom line savings that you have a contract, and you negotiate a 10% of that contract which is profit and loss, bottom line improvement. What you see is that a lot of procurement organizations are combining those savings. And I don't believe in it, because you'll always be judged by your weakest link. So if you're saying, for instance, yeah, we have introduced this way of working and that reduces the risk on compliance sheet and if we use the risk on compliance sheet, sometimes that can be 100 million per year. If you've put that in your saving overview next to your contract benefit, it doesn't work. So what we have done is make a distinguishment between efficiency saving, hard saving and cost avoidance. And we also gave it free phases. So we say money in the air, and that is something which is a plan, money in the table, you execute it and it is implemented, but you don't know how much it saves yet. We call it money on the table. And the first one is the actual saving that's money in the pocket. And that's the way that we try to get our business with us in achieving our saving. - That's a good way to see it, Sunder. The air, the table, the pocket. When it comes to measuring success of a category that when the objectives are purely procurement objectives, it feels like a procurement only party. And cross-functional stakeholders tend to, maybe after the first round, they'll say, great, it's you are showing your success. What does it mean for me? I've also found that when you take these air, table, and pocket example that you gave, you can take it to a level where in each category, when the category objectives are being set, that if there's a cross-functional team, I want to ensure that every participant of that cross-functional team gets something out of that category in terms of value for them, which connects to their scorecard, their objective, their department's objective, whatever their scope of activity is. - But it has to be clear then. - Yes. - And that's difficult part, especially in companies like us, which is project that oriented, not process oriented. Nobody knows exactly what to expect. And that makes it very difficult to express your added value. And since we're still a staff department, we always say it's not the core business. There's also always a risk that when there's new CEO, for instance, that he says, okay, what is the added value of these departments? Because within the north, I have 150 people in my department. - And growing. - And still growing. So that means that, yeah, if you want to cut costs, it's very easy, because everybody can procure, everybody can make a PO. - Well, something that, yes, a PO may be. - But not get the correct management. - Exactly. - Yeah. - The category management is one of those things. Of course, you need to have the tools and you have to have some data and, you know, and know your stuff what's going on and do that number crunching and stuff. - Yeah. - But that's spider in the web function, that connectivity. - Exactly. - That a true strategic category manager does, which is either strategic sourcing or category management, whatever name was to give it. That's someone who walks and talks with others in the organization. I would dare to say, and I know it's cheeky of me, maybe to say this, Sander, that procurement, too, is a business. - Absolutely. No, that's absolutely for sure. But the only reason that I'm investing so much time in proving that I fell, you, is to make sure that it is very easy for me to convince everybody. Because if somebody comes from an outer, from a different business where procurement is not that important, I want to avoid that they make very simple choices. - Or not see the value. - Exactly. - That procurement could have for them. - Exactly. - So that's always the game. And also on my part, we have 20 different categories within the North and every category is different. If you're talking about travel, this is very sure cycle. We have to approve that we realize cost-cutting and it's very easy to measure. But we also have very strategic categories on steel, which are much more long-term vision. So they have different stories. And I always need to make sure that I have a good combination between very short cycles, cost-cutting, and the long-term vision where we're going to present that to the board. Because then I know that I will get their attention. - Yeah, well said, Sander, and I find this in the trainings when I talk about category management, an important aspect of that is stakeholder management and selling the whole concept idea, the value, not of procurement only, of developing category plans, category strategies, together with cross-functional engagement from the start. And that means that it's okay, I call it okay. It's understandable when the other colleagues in a company do not yet fully comprehend the value of what a category manager or strategic sourcing does. It's okay if they don't get it. My job then in procurement is to be able to sell it. And selling is a content-based thing. Of course, the data accounts, the process, showing the numbers, having the right KPIs, keep performance indicators. But it's also about showing the passion behind it to say, come on this journey with us. It's going to be all right. We're going to find something that none of us know yet. When we come together. And that's why in some categories, organizations have said, and we'd like to run a category program, but here's what we want out of it before we even start. We want to know that we'll get at least this. Unfortunately, they hear something, they may not be interested in hearing, my answer is, how do you know you're going to get that? Result or whatever, upfront. Now there's some number crunching you can do in preparation to know, okay, we can cut costs, maybe in some categories and et cetera. Of course, that's going to be done upfront. And how can you predict the outcome of a category workshop if there are subject matter experts in that workshop who come in at that moment first to share what their true challenges, issues, and visions are and then to make a plan together. It's so difficult to get people in into the first, I call it, workshop session, but once they're in Sunder. - Boom, they see the value. - Absolutely, yeah. And it also resonates a little bit with my idea about the future way of doing business. Because I think that in the past, we had very strict and simple one-dimensional lines where we had a company who did business with a certain set of suppliers. But I think that the world is changing very rapidly and you need to be aware of all the innovations that are going on in your supplier on network because supply chain, somebody explaining that supply chain management is already outdated because it's not a chain, it's network, yes. And I think I really strongly believe in that the company who is best in coordinating that network, combining the knots together. This supplier has this specialty. This is what the customer wants. I can combine that. The one that has that vision on that network is going to win the game. That's also in my company is still something I need to sell every day. And therefore, I have a lot of different instruments. And that's a really interesting game, man, because you can't yet go fully for what you believe. You always need to have that attachment with the basics of what everybody sees. I promote the ecosystem thing in looking at categories and working with partners. In an ecosystem way of thinking, applied into, for example, developing a category strategy means that I need to contribute to someone else's value for them to have value and they need to contribute to something that has value for me. So if it's internally and I'll have engineers and maybe product development and other folks in a session, sometimes procurement says I need to be careful not to be to push in a session. I said no go and push. It's all right. Because you too are part of that team. If that team doesn't add value to you as procurement and you don't add value to them, there's a challenge we need to figure out. Something is up there. And when you have that ecosystem, we have thinking and behaving. There's a lot of behaviors that go with this. It takes a while, but then really cool things happen. I dare to say magic happens that people come up with ideas that other people pick up on in that session. And it's almost like how can I stop this train now? We got enough ideas. That's going to a focus. But if you can pull that off with suppliers, customers, cross-functional internally or externally, ecosystem means keep contributing to each other and the value is then multiple. I strongly believe in it. But you already see how complex this world becomes. And again, I already said it, but finding the right people, I think that's the main challenge. Let's talk about people. What type of competencies or skills do you think and believe are necessary to be splendid category manager? I have clear vision on. I think first, it has to be somebody who connects. So if you have a 100 percent specialist that wants to be most of his time or her time in her room, you don't have a good match. So it has to be somebody who is intrinsically possible of connecting to suppliers, to see if he wants to sell something, also your ideas, changes, but also to the internal organization and even to the customer. So a commercial vision, somebody as well. And also eagerness and curiosity. If I'm looking now at my supply chain and I have no borders, what can I change? What possibilities are laying there? What is the actual question of our customer and the customer of the customer? Really looking in change and how can we improve that? So the eagerness must be there. And of course, and I think that is a bottom line skill or capability that somebody needs to have is good strategic and analytics. So they should be capable of analyzing data, analyzing supply chains, analyzing rules and regulations, possible geopolitical developments. They should read that and translate that to their category. So that means that it has to be an open-minded, emotional, strong person that can connect with a lot of analytical skills and preferably also a specialist. Because then you have somebody who makes connection to the operational side of the company very easy. For me, when somebody has a technical background, it's much easier to connect to the business than somebody who has more general business administration education. Certainly in your scope of work. Exactly. It's a technical knowledge that depends on the area. Yes. I think sometimes the role of a category manager feels like a CEO of the category. On the other side, the skill sets are skill sets around being able to lead by influencing without hierarchy with the different people they work. So that means that whether it's a supplier or an internal stakeholder, they have to see value in wanting to work with you because they have that freedom of choice of trying not to work with you. Even if they have to comply, they'll still try to go around that and avoid you. Being connected to the category, really knowing your stuff, is important. There lies a challenge in these skills when there's rotation of category managers. I would say a certain type of especially technical categories would require somebody to be in that domain a bit longer and stay longer. That's the difficult part because nowadays everybody wants to be in a category for three years and then move on. Yeah. And you're absolutely right. How are you looking at category management? Because you see a lot of people following your trainings. You have a vision about category management. So I'm very curious how you look at this. Category management is here to stay. Category management and developing category strategies. It's at different phases depending on the organizational context. A company can never be too small to use category management in the context of the organization. For procurement, it's a tremendous opportunity in a way of having and building structure to how certain scopes, scoped product services of solutions are required, procured, utilized and upgraded, connecting the internal organization and even the company's customers to the supply base. There are very few jobs that have almost a 360 degree thing in it. It comes with its challenges and headaches, of course. I call them headaches, you know, the things you didn't want. And that's where the migration, the shift takes place from being called in because there's a problem and solving that problem within the scope of that category. To then being called in and say, okay, let's make a category strategy again. I've had that happening where cross functional stakeholders say, we did it last year when we're going to do it this year. So instead of pushing, you get the pull. And then procurement is like, oh, I need to make time for this. Oh, yes. But it's a beautiful thing that can happen. Absolutely. My view of category management requires a whole bunch of skills. So don't be too hard on yourself and don't try to grow too quickly. But what are the essential skills for you that the category manager needs to have? The ability to quickly dive into any domain and make it proportionately yours. So you know enough about it to be able to have discussions with others who are the experts in it to be able to ask the right questions. Strategy strategies are not built by the answers. They're built by the questions that you ask people. And through the questions, you can build credibility. So that's another thing that's important. The ability to build credibility in an organization and outside the organization towards the supply base. Because the category manager is still a strong connector to the supply base. Business acumen is something that a category manager can tremendously profit from from. And that means also understanding business models. Any organization has an operating model has a business model. If you're going to interact with 5, 5,500 suppliers, they are working from their business model to deliver services. Understanding how those business models either strengthen each other or collide and clash really helps to look at performance ways of managing performance. The ability to then make tough decisions, whereas you're not the person that a cross functional team of experts reports to say, no, we're not going to do this. We need to take a left turn here. It's based on the things I just mentioned that people will then listen to you to say, oh yeah, well, this person, you know, this person knows, knows the stuff. Yeah, but you're just not an expert. You're describing really a leader. And that's, yeah, that's a little bit the problem I encounter as well. If I'm looking at the skills and qualities I'm seeking, and the candidates I'm looking for, those are you just mentioned it. Those are mini CEOs, so that they are directors or managers. And that's the difficult part, because you're talking about such a high level. You really need somebody who is intrinsically motivated to do this, because it is not in line with the traditional path of a leader, or it's somebody at the end of the career that wants to do something which is really interesting, because I always say that if I have to choose a job now, I would choose to be a category manager, because it's the nicest job that that there is, but it's not in line with my ambition in the in the career perspective. So that's how do you look at that? Because that's really posing a problem for me. There is a certain ceiling, which you can't exceed, because then you're at another job. Right. That's not a job level. Then somebody chooses then to be director of a unit, but it's the same profile you're almost seeking. How do you look at it? If categories are not the same, a category manager is also not the same. So when if you need somebody who is going to run a category globally, that's going to require a significantly different level, higher level of complex, have complexity with it, but also leadership skills to be able to influence in an intercultural, multifunctional environment, but you can also have a category manager who's in a factory, in a location or on a site. And that's a another set of stakeholders to deal with. That person may not require such a high intensity of these leadership skills. Then someone who works globally where purely because of job changes in the company every year, your stakeholders change by 5 to 10 percent. And in another environment, it might be more stable or more controlled. So the type, the maturity of a category manager, and depends a lot also on the maturity of the stakeholders that we have to deal with. And the complexity of the category. And one of the things I've developed is an alignment model. I call it the Joshi alignment model. Jam. Let's jam together and the idea behind it and it took a while to make it to go from like three slides to 80 slides and back to about three four slides and now down to two Yeah, in terms of how do I if I'm thinking of categories the alignment of which categories to start with so if we have one category Let's say IT could be one category, but it may have a sub category a sub sub sub and a sub sub sub category in scope You can't make a category strategy IT is going to go level deeper to say okay Let's make a category strategy for hardware software services or something else or we're doing this yeah So that's scoping presented a challenge So one of the and the question you just asked me how on on on what's required can be driven by first understanding What's the categories scope breakdown with but what's it contribution to the business? Yeah, so the spend access is our access and then we look at how will this impact the business now the thing is a category managed doesn't do this I do this together with others with cross-function stakeholders to decide the roll out Yeah, and say what's complex? Where should we what should we do now this quarter next quarter et cetera? But if before you hire someone you think of okay Let's at least do the category tree. We all love that in procurement and connect that to the impact It could have on the business so we don't just focus on high spend it could be low-spend item with tremendous impact For example, that is valuable to stakeholders then looking at how heavy got it you know how senior should a category manager be to be able to Be successful in that domain is then a very good way of connecting it to the categories Yeah, I fully align with you What I see is that if you want to go to that highest level and that you want to be that spider in the web connecting the network with each other and translating that to actual business cases That everybody in organization understands that yeah, that that requires so different set of tools and skills of somebody I didn't find it yet. So that is also for me if I'm very honest I see that I'm heading a ceiling of what I can hire even though when I pay a lot of money for my category managers I see that I have to do some concessions about what I'm requiring from from them So that is I always say that there is always one part of what a category manager can deliver which I need to fill in So there are some category managers who's very good in connecting to the business who's very good in understanding his category You're good to the suppliers, but it's not good with translating that to actual business cases I'm doing that part and question to you is it do you recognize that? Yeah, and is that something which is also something unavoidable that you're filling always gaps as a leader Or do you think that we have to strive for perfect 100% complete category managers? No, good is good enough as well, it's under And when it comes to leadership, we cannot expect any one person to have so many things in the skill set and be good at all those skills Typically in leadership we would say if you're a good leader, make sure you have people who work with you to do things that you're not so good at And that's cascades downwards, usually people say that to somebody who runs a company, a team, or a CPO, or anybody who's a team leader But I would flip it upwards as well If you're a category manager, be aware of what you're not so good at And ensure that you have the people, sources, tools, others around you including your manager or manager's manager wherever you need to go to get the help you need Whether it's in your case, to make a business case for somebody else it could be, well I can interpret data but I'm not so good with Excel or an ERP system to pull out data Okay, get somebody an analyst who can help you do the crunching And that's what I think a category manager who is at whatever level of operation, whatever the complexity has to realize what they can do themselves and what they can, and where they need others to do it That's something we also introduced last year, we saw that we had all individual category managers which were required to deliver the whole package And now we have category teams where there is one team lead, the senior category manager that is responsible for the whole package So they should look at what parts I'm not good at and what parts I'm not good at and they should resolve it that way but still I see that sometimes also that super category manager doesn't see certain visions for you And I'm struggling with that and that's also the reason that I'm asking you for instance to help us train on certain aspects But it's always something that I need to make concession on There comes a tipping point where what the skill set is of a category manager you have, you can't find them So sometimes chop up the category, you split it Yeah To make it easier To make it easy to manage Because it becomes way too big Making a category too large and too complex could be setting up somebody for failure Yeah Because they need too many to organize too many things to make it happen And effectiveness will depend on the organizational impact as well So can the organization is it also ready for this or not? A manager is as good as the team one has A leader is as good as the team one has but the team is as good as the leader they have So now that's why I mentioned in the start of when you asked me what I believe are the skill sets It's about being able to lead through influencing without direct hierarchy on the people who are working there Exactly, that's a good definition Yeah And that means also realizing and having the vulnerability to say hey listen Sander I know I have this category I have a lot to do But right now here's some cracks in the wall this stuff is not working Help me with that Help me with that That's what I'm asking And that's true leaders Yeah The ability to say I need some help for now The interesting part is also if I have somebody who's applying for a job as a category manager And they ask me what is my mandate or at this directly end of the conversation because if somebody asking that They don't understand what the true essence is of category management Yeah Influencing without hierarchy A major part of the work I'm doing these days when it's around category management, supplier management Or stakeholder management revolves around getting people engaged who don't necessarily have to engage with you Exactly Yeah It's not as difficult as it sounds No No It's not No, just by proposing things where you absolutely know for sure that they're interested about And the cultural context plays a role Sander for example if it's fun or if you have a Dutch heritage in a company No A manager saying take left turn to somebody they're going to say left turn I'll think about it No, I'm going to go right to even have that Just on words I even disagree with you, no And that's the beauty of being so open Absolutely And transparent to each other in another organizational context where hierarchy does play a role culturally their differences It's going to be important for and even a bigger challenge for someone who says I work through influence No And I don't have those stripes I don't have the title but I need to talk the job title that is sounds very senior But I need to talk to somebody who's very senior and get their attention How do I do that without the title? And that's where I believe that even though type job titles are important they will always be They come with the authorization responsibility and accountability The true movers and shakers in category management or in any procurement function are the ones who can really exercise leadership by influencing Knowing they don't have the hierarchy they may not even have the funky job title And I say so what? I don't even have a job title I get fired every day at five o'clock by my customers And I'm done with the workshop And we'll see if we come back tomorrow So that's my answer to your question, Senator Thanks It's still a big challenge because you often hear of all your customers that finding the right talents is I think the main question now Yes, and we'll be there for at least another 20 years And you are looking for more talent because you're growing in your procurement organization Yeah, and we're not only growing in revenue but we're also growing in maturity Excellent And we ask a lot more from our categories managers now than five years ago And that's where I feel so privileged to support you and the organization in the growth of the team A pleasure and really an honor to be able to do that Thanks very much, you're new We're coming to the wrap-up part of this podcast, Senator Any last words for the listeners? We have a lot of things already said but my strong advice is When you think about starting category management Don't make it too big Make it very practical And listen to your internal customer Use that as a hook to start it Try to build up that relationship and the things you submit to your internal customer That is really my advice I'm going to repeat something you said at the start of this podcast Procurement is category management Absolutely Yeah, so if you're starting an organization where they're only looking at the transactional part of procurement So making sure that the contracts are there Always do that for your internal customer But with every contract you make you make also a suggestion how to improve and slowly they will get used to it and they will ask you for more. And I think that's the first part. Excellent thank you. Nani, you heard my last tip. What is your tip for us? As a category manager, as a procurement professional, it's like a rough diamond. People have to see that there's much more to this diamond than what they see right now. So ensure that you have a well articulated value proposition or value propositions to talk about your job, to talk about your function, talk about what you've done and do not hesitate to do a little bit of appropriate marketing around it. Because if you don't sell yourself and explain yourself and what you're all the things you can do, who's going to do that for you? Exactly. You're the best to do it in your own way and that keeps you authentic, unique, and a leader is as good as the people who accept them. Procurement is cool and category management is hot. And maybe to stick to this idea, what I've done in past job, I had always 10 examples of catcure management optimizations in my back and it was classified on one page and I can always throw them on the table if somebody asks what is procurement now adding towards this business. So have your pitch ready, excellent, you have it laminated even, right? Yes. Yes. Have it ready and do not hesitate to explain all the cool things that procurement does and can do. It's a very sexy job. It is, it is. I sound like a broken record but procurement is cool. Sander, thank you very much for being on this podcast, for taking the time to share your insights, your experiences. Okay, thank you. I mean, I think it was a very interesting dialogue. I learned also a lot from your vision and I hope we can bring this over to our listeners. Rock and roll. Procurement is cool. Absolutely. Category management is hot and for the listeners, this was Sander Corvink the Chief Procurement Officer of Fun Ord Maritime Contractors. Listeners, thank you very much. Stay open-minded, stay curious, stay splendid. Follow us, give us a like and stay updated for future podcasts where we share the power of knowledge and experience. [BLANK_AUDIO]