SUPPLY CHAIN DIGITAL TRANSFORMATION FROM THE GROUND UP
UILDING A ROCUREMENT EPARTMENT ROM THE ROUND UP WRITTEN BY
HARRY MENEAR PRODUCED BY
JUSTIN BRAND
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APPLUS+
MONTSE EMPEZ, CHIEF PURCHASING OFFICER AT APPLUS+, TELLS THE STORY OF BUILDING THE COMPANY’S PROCUREMENT DEPARTMENT FROM THE GROUND UP, AND OF THE DIGITAL TRANSFORMATION OF ITS SUPPLY CHAIN
A
decade ago, the role of a procurement department and its Chief Purchasing Officer (if the role existed at all) was often
relegated to a monthly meeting of the accounting 04
department in order to briefly discuss the cheapest possible way to acquire products and services. Today, the business community has “moved on from the idea that procurement is just a cost cutting department. Now, it’s a department that adds value to the company and is capable of driving change inside the organisation,” says Montse Empez, Chief Purchasing Officer at Applus+. Founded in 1996 and headquartered in Madrid, Applus+ is one of the world’s leading testing, inspection and certification companies. It provides solutions for customers in multiple industries to ensure that their assets and products meet health and safety, quality and environmental standards and regulations. Applus+ operates in more than 70 countries and employs 22,800 people.
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APPLUS+
“ IT’S THE HOT TOPIC RIGHT NOW. EVERYONE IS TALKING ABOUT PROCUREMENT DIGITAL TRANSFORMATION” — Montse Empez, CPO, Applus+
Joining the company in 2011, Empez was tasked with a unique and engaging challenge: building Applus+’ procurement department from the ground up. “Since I joined the company, I have seen tremendous change in the perception of procurement and the involvement that we now have in strategic decisions. It has not been an easy path; we have had to show we’re adding value to gain that confidence,” Empez recalls. Touching on the long-term digital transformation of Applus+ procurement department,
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Empez discusses her journey so far, how the growing importance of the procurement department has led to increased challenges, and the ways in which digital transformation is instrumental in overcoming them. The pervasive digital transformation of the business landscape is, Empez asserts, the touchstone by which every procurement department will be judged by history. “It’s the hot topic right now. Everyone is talking about procurement digital transformation,” she notes. “We are trying to integrate all the companies to access data via either API or web services, so that we can gain access to information
CLICK TO WATCH : ‘APPLUS+ BRANDCLIP VIDEO’ 07 incredibly quickly. That sort of imple-
made was to internalise that function,”
mentation will hopefully allow us to
Empez recounts.
be proactive rather than reactive.”
Outside of Spain, she quickly
Gathering data from the 70 countries
discovered that Applus+ operations in
across which Applus+ operates has
most countries lacked a procurement
been no mean feat for Empez, who
process, and those that did have one
faced initial challenges at home and
weren’t standardised. “We had no
abroad. “When I joined Applus+, the
spend visibility and no global deal or
first thing I found out was that there
agreement in place for our fleet.
were no procurement specialists in
Applus+ has over 5,000 vehicles,
Spain. The company had an external
which represent one of the most
procurement department that was just
important requests for proposal (RFPs)
processing local purchase orders and
in the company, so that was the first
invoices, not doing any procurement as
thing I tackled,” says Empez. After
such. So, one of the first decisions I
reworking Applus+ fleet management, w w w.a ppl u s . com
APPLUS+
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“ I’D LIKE APPLUS TO BE AHEAD OF THE MARKET, NO MATTER WHAT KIND OF CHANGES ARISE” — Montse Empez, CPO, Applus+
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“ WITH THE NEW SYSTEM, I STARTED GETTING INFORMATION THAT MEANT WE COULD MAKE SMARTER DECISIONS AND ENSURE COMPLIANCE” — Montse Empez, CPO, Applus+
ensure compliance.” Now, Applus+ is in the process of migrating its procurement department again, this time to SAP Ariba’s service. “Ariba is a much more robust system than our previous deployment,” Empez explains. “It gives us additional advantages with regards to our procure-to-pay process, and it allows us to implement rules with procurement to be more consistently compliant. We are very satisfied with the Ariba deployment and what we can get out of the system.” Empez maintains that, regardless of the solutions in use, one of the greatest challenges of the digital transformation of procurement is an increased focus
Empez worked on developing procure-
on compliance. “Procurement is
ment policies to demonstrate which
coming under more and more scrutiny,”
software solutions system would best
she says. “There are increased controls
suit the company’s needs. “A year after
and compliance standards on the
I joined the company, I raised the
procurement process now, especially
department’s needs with the board of
relating to things like Corporate Social
directors, and they agreed to launch an
Responsibility (CSR). Procurement is
RFP. I’m proud to say that six years
something that can, if done poorly,
after the first implementation, we now
really hurt a company’s reputation.”
have 13 countries using it. It’s not
Sustainable practice across the
complete, but it’s a great start,” says
procurement department is another
Empez. “With the new system, I started
avenue through which responsibility
getting information that meant we
increases alongside importance.
could make smarter decisions and
“Sustainability in the supply chain w w w.a ppl u s . com
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APPLUS+
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is taken much more seriously than 10 years ago,” says Empez. “We’re doing a lot of things: we want to make sure that we work with suppliers that are
€1,676mn Approximate revenue
sustainable in the way they operate, so we have a pretty strict evaluation and qualification process. The same goes for our products.” Looking to the future, Empez sees emerging technologies like Big Data, prescriptive analytics and the Internet of Things (IoT) as key to overcoming the challenges facing procurement departments. However, she observes,
1996
Year founded
22,800 Approximate number of employees
APPLUS+ DIVISIONS
•E NERGY & INDUSTRY DIVISION: leading global provider of non-destructive testing, inspection, quality assurance and quality control, project management, vendor surveillance, certification, asset integrity services and technical staffing services. •L ABORATORIES DIVISION: testing, certification and engineering services to improve product competitiveness and promote innovation. The Division operates a network of multidisciplinary laboratories in Europe, Asia and North America •A UTOMOTIVE DIVISION: global leading provider of statutory vehicle inspection services in several markets in which the periodic vehicle inspection is mandatory for the compliance of safety and environmental standards.
•D IADA DIVISION: IDIADA A.T. (80% owned by Applus+ and 20% by the Generalitat of Catalonia) has since 1999 been operating under an exclusive contract at the 331-hectare technology centre near Barcelona (owned by the Generalitat of Catalonia), which includes the most comprehensive independent proving ground, testing laboratories and vehicle development centre for motor vehicles in Europe. The contract runs until 2024 and is renewable until 2049. The Division provides services to the world’s leading vehicle manufacturers for new product development activities in design, engineering, testing and homologation.
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“ ARIBA GIVES US ADDITIONAL ADVANTAGES WITH REGARDS TO OUR PROCURE-TO-PAY PROCESS” — Montse Empez, CPO, Applus+
while the majority of companies are, in some way, adopting artificial intelligence (AI) and predictive analytics, this investment is not being seen enough in the supply chain and procurement departments. “These technologies will play a significant role in procurement. My question is ‘when?’ I don’t think the market is ready yet. Applus+ has implemented AI tools in its systems for checking things like the procure-to-pay process. But the reality is that only maybe 1% of our suppliers are ready for
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an AI integration.” This is something
transformation. Of course, there will
that Applus+ is putting a great deal
always be new things,” she laughs.
of emphasis on going forward. “In all
“I’d like Applus+ to be ahead of the
our new RFPs we’re looking for digital
market, no matter what kind of changes
players,” Empez explains. “Through this
arise. By next year, I hope we have a
intelligence, we can definitely improve
consolidated structure and are ready to
efficiency and cost.”
take on new challenges and projects.”
Empez relishes the ongoing challenge and dynamic nature of her role. “Right now is a fantastic time, because my role and department are changing the organisation. By 2020, I hope we will finish our department’s digital w w w.a ppl u s . com
C/Campezo 1, Edificio 3 Parque Empresarial Las Mercedes, Madrid Madrid 28022, ES T +34 912 080 800 www.applus.com