Dan Bartel is the Chief Procurement Officer at Schneider Electric, which provides energy and automation digital solutions for efficiency and sustainability. Schneider combines world-leading energy technologies, real-time automation, software and services into integrated solutions for homes, buildings, data centers, infrastructure, and industries; with combined revenue of about 26 billion euros.
Dan joined Schneider Electric at the beginning of 2019 and is based in Hong Kong. In his current role, Dan is leading the 13B€ procurement spend that encompasses 200+ manufacturing factories and 100+ distribution centres in 44 countries. He leads the establishment of processes, tools, systems and organizational competence to manage change towards a supply base as an extension of the company enterprise.
Prior to joining Schneider Electric, Dan held several roles in Procurement and Logistics at ABB, ultimately serving as the group’s SVP and Head of Procurement & Logistics, based in Zurich, Switzerland. Dan has 24 years of global experience in Procurement and Supply Chain Management, primarily in the Energy and Automation industries.
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Some of the highlights from the podcast:
- Three main pillars of Schneider’s procurement
- Where is Procurement heading in 3 years
- How Schneider is building relationships with startups and vendors
- Key KPIs on how they measure success
- Procurement and the CEO agenda
- Helping suppliers be more efficient
- Skills procurement professionals should have
- “Take chances and never stop learning”
- [01:34] You contributed in an article three years ago which you were talking about industrial revolution 4.0 The topic focuses on the effects of the latter on procurement and what can leaders at the procurement function do to lead the change. What has happened in the span of three years? How have things changed?
- [02:09] The first thing that comes to mind is the Amara’s Law, which says that we tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.
- [05:28] When you think about a company like Schneider, one thing we want to be really good at is a current interruption. So we want to develop the latest and greatest circuit breaker.
- [06:28] What would be the evolution of procurement three years from now? Are there any big pointers and areas where you see it evolving and how exactly do you see the next three years from now?
- [08:42] If you ask the right questions of your data and you apply these advanced analytics tools to answer those questions, you can unlock the value that you didn’t know existed before. So digitization is absolutely something that’s on the core in the next few years.
- [10:54] What’s your take on CEOs seeing procurement in the equation of adding it to the success of the company? How is the procurement agenda in itself linked to the overall company in general?
- [11:39] I selected Schneider because of the level of commitment the company has to the function of procurement. They see the value that we can bring in supporting the top line and the bottom line of the business.
- [12:00] 50% of the revenue we have is weaving the company through procurement and external purchases and roughly 70% of the costs of goods sold are managed by our function.
- [14:21] What is the current organization design of Schneider procurement?
- [15:01] Everyone in the company is now kind of conditioned to expect procurement to do its job. And how we do that is we have three main pillars in the organization.
- [17:25] How are you contributing to the sustainable agenda of Schneider from a procurement perspective?
- [17:46] Our mission with respect to sustainability is to provide energy and automation, digital solutions for efficiency and sustainability.
- [19:51] Previously Schneider had the commitment to be net-zero carbon by 2030 and we’ve recently announced that we’ve moved that up to 2025. In addition to that, we’ve made a commitment to have our entire supply chain a net-zero carbon by 2050.
- [21:24] You mentioned agility and the innate challenge between the agile and flexible type of an approach, how do you manage this conundrum? And maybe if you can share some examples of where sourcing processes are still agile whilst maybe streamlined in some other ways.
- [25:21] We have to digitize as much as possible to get rid of that transactional stuff. Partnering with suppliers and raising that level of trust between us and the suppliers is an important aspect. And then we have to change the business processes themselves to make them more agile and streamlined.
- [26:18] Do you have particular ways to connect with startups to make sure that you don’t miss out on the rich innovation coming through the startup environment?
- [27:11] The team that is managing those relationships needs to have the right level of experience in managing these complex relationships. They need to be more business professionals than procurement professionals, with a real business and entrepreneurial mindset so they can communicate well.
- [28:34] We check much more closely with startups on the strategic fit. We don’t assess their business processes because usually, they don’t have many. We assess instead of their business plan just to make sure that it’s well-aligned with, how we see that technology in that relationship developing.
- [30:40] What are the metrics that you use to measure the success of procurement in Schneider Electric?
- [31:49] We talk about all these interesting and sexy things about growing the top line of the business, sustainability and all of that, but if you’re not getting the cost production then it’s hard to engage in all those other discussions with the business.
- [33:45] We free up resources and energy in our organization. So for example, we went from a couple of hundred packaging suppliers in Europe a couple of years ago to today we have one, just one.
- [36:22] As a procurement professional, the last thing you want to do is complicate the relationship of your supplier with cross trading topics. So we really kind of doing this strictly on the basis of helping our suppliers become more efficient.
- [39:33] What do you see are the skills that procurement professionals will need in the future increasingly to stay relevant?
- [41:26] We have to be business people. We have to understand what is it about our business model that creates value for shareholders and what are all the things that procurement could be doing to enable that.
- [23:19] So to have people that are willing to do one step beyond the boundaries of the traditional procurement function and be brave to just step into that world is important and I am something that can really differentiate a procurement team.
- [44:06] What are you doing at Schneider Electric on the topics of developing and retaining talents.
- [45:39] Schneider is delivering to the market digitized solutions that result in very tangible and substantial improvements in energy efficiency. So it’s being a part of something that is meaningful and very fundamental to the engagement of employees.
- [46:36] What was the best career advice you ever received that helped you most in your progress so far to becoming a Chief Procurement Officer?
- [49:42] ”Take chances and never stop learning are my two biggest pieces of advice.”
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