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RESHAPE BUYING

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THE NEW VALUE PILLARS OF PROCUREMENT

Companies are paying unprecedented attention to buying practices. What tools can
help them thrive?

The last two years have brought a new focus on supply chains and the potential
for disruption for companies unable to maintain resilient, robust and agile
practices around procurement. The ability of the enterprise to execute on
strategic goals is dependent on employees having everything they need to
perform. It requires true visibility into spending processes and modern tools to
create efficiency and minimize disruption. Not surprisingly, in Deloitte’s 2021
Global Chief Procurement Officer Survey, while cost savings was still a
significant priority, respondents identified operational efficiency (78%),
digital transformation (76%) and innovation (73%) as key forward-looking
strategic goals.

For procurement professionals in industries from energy to retail, the
imperative is clear: The old ways of doing business are no longer an option;
future disruptions and a rapidly changing competitive environment require
rethinking purchasing practices and the tools that power them. “Digital
transformation is at the top of the priority list, and organizations are seeking
out best practices and key technology partners to help bolster their supply
chain strategy,” says Chris Costello, executive vice president, worldwide
strategic sales at Amazon Business. “Our customers are bringing it all together
to achieve spend visibility across every facet of their business.”


1. DIGITAL OPTIMIZATION

Digitizing procurement operations has allowed many organizations to meet
sourcing demands, boost productivity and optimize costs. Honeywell gained
superior spend visibility by integrating and automating its purchasing process
with digital solutions from Amazon Business. The benefits to employees are
clear, says David Canales, Honeywell’s digital procurement manager.

“Our employees are empowered to make purchasing decisions, because while
procurement is still part of the process, we’re not part of every transaction,”
he says. “We’ve been able to find repetitive items with very good prices,
excellent delivery options and a great buying experience as well.”



The ability to integrate existing digital procurement solutions is also critical
to instituting transformation in purchasing without excess disruption, says Don
Cloonan, global manager of sourcing at New Balance. “We have Amazon Business
integrated through Ariba as a punch-out. That makes the process pretty seamless,
and it’s the end users that really get the advantage,” he says. “We have more
visibility into what people are buying, it’s more controlled and everything is
automatically audited into Amazon Business.”


2. PURCHASING AGILITY

Like many large enterprises, energy giant Chevron must design procurement
strategies to keep different business units operating smoothly in often
radically different environments. “Chevron operates in many remote locations
like the Permian Basin in the southwestern United States, where our holdings
total approximately 2.2 million net acres,” says Natalia Vornic, global category
manager, MRO procurement optimization at Chevron.

Using the tools of Amazon Business, Chevron was able to construct ordering
solutions allowing regular, reliable delivery to this incredibly challenging
environment, where delivery locations often lacked any physical address. As a
result, orders once requiring weeks for delivery could now happen in days. At
the opposite end of the spectrum, “Chevron’s retail stations may be a lot easier
to get to,” Vornic says. “However, the stations do not have a lot of storage
capacity, so just-in-time procurement and product availability become critical
for us to manage our business effectively in these locations.”



This capability is central to the capabilities of Amazon Business, Costello
says. “Our customers can choose their preferred delivery options, and benefit
from our broad warehouse network to deliver what’s needed on an as-ordered
basis,” she notes, “so we’re serving as a strategic option across all categories
for our customers and are offering security, resiliency and continuity for all
types of operations.”


3. CORPORATE SOCIAL RESPONSIBILITY

In the 2021 Deloitte survey, 67.6% of respondents prioritize corporate social
responsibility (CSR) initiatives, a 22% increase over the 2019 survey.
High-performing companies are three times more likely to be measured on their
progress around CSR, making intentional and explicit connections to issues like
supplier diversity and environmental protection. Amazon Business, Costello says,
empowers companies to create coherent practices around any number of CSR
priorities. “Guided Buying means they can leverage our capabilities to direct
spend in preferred areas, whether in supplier diversity, local purchasing or
more sustainable supplies,” she says.

Volvo Car USA (Volvo Cars), for example, has made sustainability a major
priority across the company and has asked its network of retail stores to
reflect those concerns.

“We’re incentivizing our retailers to remove all single-use plastics, and it’s
important for us to have just one process across all retailers,” says Alex
Penning, senior buyer expert at Volvo Cars. “We’re helping out the retailers by
subsidizing a portion of the products that we’re encouraging them to utilize,
and we can track and make sure that they received them. It eliminates a lot of
the manual effort for the Volvo network development team.”

We’re serving as a strategic option across all categories for our customers and
are offering security, resiliency and continuity for all types of operations.
You get better results with better oversight, and that benefits everyone.
Chris Costello Executive Vice President, Worldwide Strategic Sales, Amazon
Business

It’s the ability to remove burden on internal procurement teams as well as end
users that provides value for companies purchasing through Amazon Business,
Costello says. Tools like curated shopping lists increase efficiency while also
providing guardrails and visibility enterprises need. “You get better results
with better oversight, and that benefits everyone,” she says.



Amazon Business Reshape 2022
Amazon Business Reshape returns on March 9th (United States) and March 10th
(Europe and Japan). Industry experts and Amazon leaders will share insights on
how to create organizational value using the latest in purchasing innovations.

Register today for a free half day of learning and inspiration through the
stories and strategies of your peers. You’ll leave empowered with new strategies
and practical ideas for saving time and money, accelerating digital
transformation, and building a more agile and responsible procurement function
for the long term.

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