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PERSPECTIVES


Procurement in chemicals

Accenture's Chris Pesci explains why cost reduction and embracing digital are key to transforming procurement in chemicals.

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Chris Pesci Chris Pesci
Managing Director, Chemicals
Accenture
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Describe the procurement function for chemical companies. Are there any unique elements that distinguish it from procurement in other industries?
Like any manufacturing company, chemical companies need to be masters at purchasing raw materials in order to produce their end products. However, there is one major difference—the materials bought by chemical companies can be more complex to source and ship, and sometimes they can even be dangerous (think a toxic substance vs. sugar). So, being a master in the chemical industry requires procurement personnel to have a strong understanding of what they are buying and how they buy it.

Cost reduction is key for chemical companies as they seek to maximize profitability. How do new procurement technologies, processes and supplier collaboration lead to cost savings?
An executive at a chemical company once told me that buying indirect materials was like buying canned goods at home. You always pick up more when you are out, regardless of how much you may have. The issue with this approach? The cost of all those materials and accompanying services can add up quickly.

To save on indirect purchases, we are seeing chemical companies move to supplier networks, cloud-based catalog buying tools and more streamlined collaboration processes. The idea is to still drive towards buying compliance—and eliminate maverick spend—while making it quick and easy for employees to get what they need. These new tools and processes help with faster delivery for the right price from the right supplier.

What does digital transformation in procurement look like for chemical companies?
In addition to the cloud-based tools already mentioned, there is a big push for mobile procurement. For example, more than one chemical plant manager has found that it is faster to buy things online with a smartphone while walking around the plant than to write down what is needed, walk back to a computer at a desk and enter the order into the company’s procurement system.

Additional mobile procurement options include bar code scanning technology to confirm a match when buying materials. There is also the ability to perform mobile receiving, which allows for real-time inventory updates.

Predictive analytics is another exciting prospect for digital transformation in procurement. By understanding possible buying trends, demand for certain materials/services and operational metrics, chemical companies could save more through better planning.

You’ve taken an active role in supporting Accenture’s recruitment efforts at your alma mater, Carnegie Mellon University. Why is this important to you?
I have served as a campus champion at Carnegie Mellon University for 14 years, working with our recruiting organization and a superb recruiting team to help ensure Accenture is a key corporate face on campus. I’m pleased to say we just finished two successful recruiting seasons in a row. Whenever I visit the campus, I am immediately energized by the innovation and determination of the students I meet.

Tell us about the urban garden you’ve started with your children.
As a hobby, I like to tend to my vegetable garden with the help of my daughters, ages 5 and 2. Recently I read about a program in Pittsburgh that allows people to adopt vacant lots and make good use of the land. Given our family interest in gardening, I decided to start a program that uses the adopted lots to grow vegetables that can be donated to local food banks. Thus far we have adopted one lot and will begin planting in the spring of 2017.