Sure, there may be reasons to look at Heinz’ report of 14% growth in operating income with scepticism, or attribute it to any number of factors. But the fact remains, its procurement function has made a consistent show of the transformation it has been undergoing and you’d be hard-pressed to say it isn’t paying off.
It doesn’t seem like that long ago that Procurement Leaders was talking with John Hans, recently appointed VP of purchasing at Heinz, about the measures he would be undertaking to leverage value out of the European supply chain.
Equally, back in October, Procurement Leaders blogged on a speech by the food giant’s chief of procurement Christopher Stockwell, which highlighted the journey from bottom quartile purchasing function in 2004 to second quartile function in 2009. Delivering top-line growth was his target then.
It’s little surprise then that this latest announcement comes with no small nod to the part procurement played. Still, reading that Heinz chairman, president and CEO William R Johnson said that the business has “established a goal of delivering better than $1bn in incremental cost savings over the next five years though our global supply-chain initiatives”, does merit pause for thought.
Yet this isn’t so much an advert for Heinz as an advert for the benefits of well-targeted transformational procurement. Having a CEO enthusing about the good it has done and it’s role going forward is about as good as it gets.
The recent appointment of Bob Ostryniec as chief supply chain officer is perhaps as great a testament to this as any – Heinz means business.
And what may be better for procurement is that it genuinely seems to see supply-chain optimisation as the best way of doing it.
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