Kevin Nash is the Vice President Chief Procurement Officer at Health Care Services Corporation, a Blue Cross Blue Shield Company. As an experienced executive in procurement, sourcing and supply chain operations, Kevin manages over 100 people who oversee a wide range of functions from sourcing and contracting to regulatory requirements. Kevin shares his tips to keep a large team organized, his outlook on the growing role of procurement in organizations, and his advice for those looking to be better procurement professionals and team leaders.

Can you talk about your background and education--how did you get involved in procurement?

Like many procurement professionals, I stumbled upon procurement early in my career and found it to be an interesting and exciting area to work. After graduating with a degree in engineering, I started my career at GE supporting a manufacturing process. While in manufacturing, I began to focus on supply chain because we were experiencing frequent supply chain and inventory issues that were significantly impacting the ability to meet the production schedule. After finishing my MBA and leaving GE, I joined a consulting firm and continued to focus on supply chain with an emphasis on procurement. While in consulting, I transitioned from focusing on the supply chain for direct material to supply chain and procurement in service-orientated companies.

In 2018, cost reduction still tops the list of priorities for procurement. As nations engage in trade wars and protectionist policies and extreme weather continues to cause disruption in supply chains, procurement will need to adopt new strategies to meet business objectives and goals.

Procurement can efficiently manage spend and continue to achieve cost savings through the adoption of category management, which is the process of categorizing goods and services and then managing these categories as "business units" to achieve improved outcomes in the most effective and efficient way. 

Category management was developed in the 1980s and takes a project management approach to sourcing to achieve improved outcomes, which is structured, measurable and drives continuous improvement. It is used in both the public and private sector, and while there is no standard categorization or grouping requirements, a general rule is to group goods and services that have similar characteristics. Organizations can use the United Nations Standard Products and Services Code to group categories or it can develop its own homegrown models.

Category Management is Not Strategic Sourcing

Category management is not to be confused with strategic sourcing, although category management evolved from the overall strategic sourcing approach. Some of the main differences between category management and strategic sourcing include the following:

Investors. Consumers. Employees. Suppliers. They all want­­—even expect—the companies they associate with to operate with transparency and trust. But lately, trust has been in short supply. In the U.S., for example, trust in institutions—government, business, media and NGOs—declined a record 23 points in the annual Edelman Trust Barometer survey, which covers 28 markets around the globe. Business alone saw a 10-point, year-over-year decline. Clearly, companies in America need to focus on rebuilding trust, but how? 

Embrace Corporate Social Responsibility

Corporate Social Responsibility (CSR) and Environmental, Social and Governance (ESG) criteria can play a significant role in establishing or regaining trust. What do CSR and ESG entail? CSR involves implementing a business model that includes accountability—to stakeholders and consumers—on a range of societal and environmental issues. Similarly, ESG focuses on how companies tackle key issues such as climate change and human rights, which financiers increasingly consider alongside traditional financial factors when evaluating investment portfolios.

Ever heard of a thing called inertia? Inertia is the resistance of any physical object to a change in its state of motion, or the tendency to do nothing. In business speak, this phenomenon is often characterized as analysis paralysis. In a corporate world of business cases, business plans, strategic roadmaps and the push to constantly sell, align and achieve, it’s no wonder procurement leaders are drowning in what needs to be done, but struggle to scratch the surface. How can it be that a top procurement leader whose very career path has been the result of their outstanding productivity and accolades suddenly faces a precipice of declining performance and the disastrous stagnation of innovation?  Simple. Because their knowledge impedes creativity, causing inertia. 

Procurement leaders who have spent the entirety of their career in one industry, one company, or one function, namely procurement, subconsciously experience limiting beliefs—and by limiting I mean success-hindering, momentum-killing beliefs—about themselves and the procurement function. Without ever intending it, procurement leaders often poison their potential by allowing their knowledge and experience to cloud their creativity and vision of what they can imagine going forward.  They often resist any change to the current state of operations because they are so focused on delivering in the here and now. Even if they manage to recall their vision for a world-class procurement organization, the age-old question emerges: where do I even begin? The path of least resistance is to simply do nothing, to change nothing; the alternative could lead to failure. To these skeptics wary of innovative change, I’d like to pose the question: isn’t the very act of doing still far more productive than the act of thinking or talking about doing something, regardless of the outcome?   

Industry Challenges

When it comes to Robotic Process Automation (RPA) within a digital transformation project, the clear objective is to move all processes into a controllable, fully-automated workflow. This is achievable when processes need to use structured data. However, the most expensive and business-critical processes involve human workflows using complex, document-based information. Achieving the same levels of automation realized from structured RPA-enabled processes becomes much more challenging because the needed information isn’t always easy for a system to locate—much less successfully extract—from a document. Without a precise solution for getting access to document-based data, automation is adversely affected.

Finding the Right Solution

The answer is to approach cognitive RPA projects by understanding the level of “maturity” required with respect to the level of document automation your project requires and compare that with your peer’s experience within your industry.

This includes getting a solid foundation in what are current best practices regarding automation and understanding the various options for injecting document automation into RPA projects. Not all vendors approach a solution in the same way and not all capabilities are equal.