Supply Chain Now Talks to Alun Rafique

Alun Rafique, Co-Founder and CEO of Market Dojo, had the pleasure of joining hosts Scott Luton and Greg White for Supply Chain Now’s livestream webinar “Looking to stay ahead of the curve when it comes to supply chain strain?”

Talk covered everything from football memories, falling into procurement, trends taking place in the Source-to-Pay landscape, the importance of data, to the impact of the baby boomers leaving the procurement workplace and how not to lose their years of tribal knowledge!

Here are the highlights of the lively and insightful discussion with these industry titans.

Looking to stay ahead of the curve when it comes to supply chain strain?
Livestream event hosted by Supply Chain Now

Scott: We got a great conversation tee-d up. I think it’s going to help lots of business leaders and Alun and Greg that’s where we want to dive in. 

So Alun, you’re new to Supply Chain Now, you started your career as a procurement practitioner in 1999 with Rolls Royce and founded Market Dojo in 2010 which has provided critical market intel to thousands and thousands. It’s got to be pretty rewarding to look back on that journey and especially with what’s to come.

“I fell into procurement!”

Alun: Absolutely! My background is an aeronautical engineer. I started in Bristol when I went to work for Rolls-Royce as an engineer and then fell into procurement, and I think that’s a common story about people falling into procurement, as one of the buyers for one of the assembly shops. 

Since then I did a few different things in my career from consultancy to sales and marketing, then I sold engineering simulation software (fluid dynamic simulation software) across Europe and ended up in a boutique consultancy selling what you might know as managed reverse auctions. 

It was there that myself and a few friends came up with the idea to develop an easy to use, pay-as-you-go, online solution called Market Dojo. Since then, we’ve broken the barriers around licensing models and procurement models on e-sourcing and supplier engagement and now we’re part of Esker to embrace the whole S2P journey, so it’s been a very exciting last 12-14 years or so.

Scott: Now Greg, I saw your eyes light up at the beginning of his response there – what do you know that we don’t know maybe?

Greg: How many people have fallen into procurement and supply chain. There didn’t used to be degrees for it you know, it was one of those “hey, we have a problem in this area, you seem like somebody who could take it on.” So, it’s a very common thing and I think we need to think about that, and continue to consider that, as we try to evolve the practice going forward because so many people didn’t study for this, they got all of their training on the job.

Scott: Alun, what a great career that led up to founding Market Dojo. I want to get a couple of observations in terms of what are some of the current priorities that you’re seeing out there for business leaders regardless of the sector?

What are the current priorities for business leaders? 

Alun: That’s a really interesting question. I think it’s really around the drivers for change that have gone ‘up a notch’. 

I think after Brexit, Covid, the looming recession, financial challenges, ESG and so on it’s really stepped up the driver for change for procurement in a lot of ways to start looking at better training, better processes, better technology. 

Scott: That’s such a great one, a lot of folks, a lot of leaders, a lot of organisations, they don’t have time to stop what they’re doing to embrace that better way. Greg, what are you seeing as priorities out there across global leadership?

Greg: We’ve had a few other things happen, one, as an outgrowth of Covid, is that people now know what procurement and supply chain is, so as much as we’ve wanted to be brought into the spotlight and have equal footing in the executive suite we got it! Now there’s nowhere to hide because everybody understands how these things work and the impact that they have on supply chain and ultimately the availability of goods that they want, whether they’re a consumer or whether they are an airline or whatever, they get it now so that awareness is incredible. 

And then this little thing called inflation – that has been I think a global issue but certainly an issue in the UK and the US – has accelerated the imperative to start to take on technology and do something about this, to be able to source better or more broadly, to be able to pull goods through your procurement process, have better relationships with your vendors, all of that is really important now.

Scott: Excellent point and that certainly adds up to more and more overwhelming impetus for change which goes back to what Alun shared there. When we think about one area in particular – Source-to-Pay, S2P, the Source-to-Pay landscape, identify a couple trends that are taking place there that maybe more folks should know about Alun.

What are the trends taking place in the Source-to-Pay (S2P) landscape?

Alun: I’ve been in this game a few years now and what we’ve seen is that people haven’t really been receiving the benefits that they want from the larger ERP systems or the large S2P systems, and what we find is that the ‘S’ side of S2P tends to get a bit forgotten about. We’re very fortunate to be part of Esker as we’re very similar in terms of mindset and in terms of methodology and we’re working collaboratively to focus on the procurement side of S2P so I think that’s really important. 

On the S2P side, we’re seeing a focus on amalgamating S2P from a procurement and finance perspective and digitising the pathways between them so that procurement and finance together can tackle supply chain resilience, tackle the cost pressures that we’re seeing from inflation, and really turn procurement from a reactive function to more of a strategic role within the company.

I think companies have been quite disenchanted with investing in larger systems and the procurement side of it, the ‘S’ side of it, hasn’t been up to scratch.

Scott: I think that squares with a lot of what we’ve been seeing – amalgamation, digitisation, the function becoming more strategic – Greg respond to what Alun just shared there.

Greg: The ‘awakening’ that Alun talked about – that regardless of what anyone tells you, your ERP can’t do it all right, that there are certain tasks that I think we’ve all recognised in aspects of the business that deserve to go deeper than a generalist transaction system like an ERP can really afford to do. 

Alun: I have many conversations about the trends and I think it’s all about change management and what we’re seeing is a more of a driver from procurement to enforce the proper processes in technology. What I mean by that is when companies start, they always have a sales person, they always have a finance person, but they never start with a procurement person… and that applies to the systems as well. You always have a CRM system when you start, you always have a finance system when you start, do they use the word ‘mandating’? No, not really, but they need to use it. But in procurement we’ve traditionally been very happy to say well let’s use emails and spreadsheets and ‘we’ve got a sourcing system and you can use it if you want to’. 

But I think now companies are realising to get the competitive edge, they need to drive an adoption of these kinds of professional systems so you can react in times of crises and, as you say, procurement is now at the forefront and need to drive that change. 

Scott: So, where I want to go next Alun and Greg, remember the good old Venn diagram, and this may be too simplistic but between the trends that you’re talking about, the challenges, that’s the backdrop right, and then the opportunities in the middle that’s the core that businesses are working their way through – some really well and some very poorly. So my next question is, at the higher level, how are business leaders navigating that centre part of the Venn diagram given everything that we’re fighting through?

How are business leaders navigating the opportunities given the current climate?

Alun: I think it comes down to something we touched on earlier, we need to find the right people, (or you’ve got the right people we just need the right training), we need to look at the processes within procurement, we need to look at the technology that they use with respect to improving the business resiliency – coming back around to supply chain resilience and inflationary pressures – you’re going to be ahead of your competition if you can react more quickly, they’re embracing better technology stacks, and future-proofing them with best-of-breed systems.

Scott: Greg, your thoughts?

Greg: We have to acknowledge that times have changed and the technology or your approach to the process and the technology has to change as well. As we’ve acknowledged, so many people fall into procurement and then happily accept spreadsheets and email or probably, if you fell in it long enough ago, a spreadsheet was an advancement back then right! 

But these were not targeted solutions for this business problem and it’s still a drag on how people perceive the process, not just technology but also the process, there’s a lot of “if it ain’t broke don’t fix it”, “what’s wrong with the way we’re doing it, this is the way we’ve always done it”. 

I think we have to acknowledge how much of a drag that [mindset] has been on the advancement of the practice and that the practice can be accelerated and accentuated and, not just efficient but, more effective with technology out there and I think more and more people are coming to that recognition.

It’s important to recognise why so many business leaders have had difficulty as you said, so many companies are challenged in improving their practice or embracing technology. I think that’s the recognition that so many business leaders have had forced on them since Covid and in the turbulent times since. 

Scott: I think this is what y’all have been speaking about – the gigantic push on that impetus for change – is making things easier for your team to succeed and do things better and focus their time on more valued work. We’re going to dive into practical examples in just a second but Alun, at a high level, your response to Greg’s thoughts?

Alun: We’re in a very unique position in terms of how we can help these kind of issues that are being faced in the supply chain and we’re equally have a very interesting proposition that, as part of our offering, people can run a reverse auction with us for £500 pounds or $700 which means that actually if you want to negotiate cost down or you want to mitigate cost rises you can use an auction to get really fast ROI from a particular activity which is really important. Also, getting the data, helps you to address supply chain resilience so actually the market that we’re in is an opportunity for us to help. 

Scott: Practical examples, I think really help folks see the light and they speak to some of the folks that maybe haven’t reached that tipping point, it’s not become compelling enough for them. So Alun, in this current environment we’re all speaking about, give us some practical examples of how that ‘S’ in Source-to-Pay can help you tackle rising inflation and reinforcing your ability to go out there and grab supply chain resilience and help your organisation.

How can the ‘S’ in Source-to-Pay help tackle rising inflation and improve supply chain resilience?

Alun: Let’s start with the data. The first thing that e-sourcing gives you is helping to manage the data. We all want to talk about AI and we all talk about the next big thing but if you’re not doing the basics you can’t do much. So, what we saw during Covid for example, is a lot of people wanting to manage their data to be able to react to the oncoming issues that were happening around supply chain resilience, now it’s inflation, so we found our customers were using e-sourcing first of all for the data.

The next thing it gives them is, by using e-sourcing applications, the ability to scale at very little extra cost in terms of your time. You can send emails and use spreadsheet when you have three suppliers, it’s easy, but to send to up to 10 suppliers, it’s a nightmare. Everyone asks different questions, different formats, it’s crazy. We’ve had people run tenders on our tool with 500 suppliers, and even though you don’t need 500 suppliers necessarily, by doing that you not only get a market price or a better price but you also get more information. Then, if something happens later on and you need to change your strategy – e.g. nearshore rather than offshore – you have the information (coming back to the data) to be able to react more quickly. We saw this a lot during Covid and it continues in these inflationary times – the ability to source more effectively is key to react faster than the competition.

We’ve had tenders run on our tool where an OEM manufacturer spent £500 to run an auction and saved $50 million. And we’ve got large multi-enterprise customers who have hundreds of users who use our tool to make sure that they’re embedding the right processes across all their users so they have visibility about what they’re spending to have better relationships with their suppliers and encourage better supply chain resilience. 

Scott: I’ve just captured a four-point list starting with better management of data or better able to scale successfully, to react effectively. I know we’re pushing things proactively but still things happen, we still have surprises, and we gotta react accordingly. So Greg, react to some of those things that Alun just shared there.

How can we future-proof the role of procurement?

Greg: Well in 30 years of emails, first of all it’s hard to imagine that we’ve been using email for 30 years, but I think that the data is the key thing that is part of the challenge. 

One of the other challenges that we really haven’t talked about since Covid, and it was already impacting the workforce even prior to Covid, and that is baby boomers retiring. They’re leaving the workforce at 10,000 a day in 2021, an additional 3.1 million above what was expected left the workforce and the data went with them. Why? Largely because it was tribal knowledge, a lot of the processes that were undertaken in those days had evolved from paper into spreadsheets and then into this amazing thing called email. 

So it was tribal knowledge and that data is incredibly valuable and needs to be captured and the way to capture it is to get hold of technology that can impart all the knowledge that’s kept in the heads of those who are now exiting the workforce and teach the technology or give the technology, the data, to be able to do the job as well or even better and probably more consistently with all that knowledge. 

For me, that is the most important thing and one of the most important catalysts, or should be one of the most important catalysts, for taking on a technology initiative right now. The subsequent generations, Gen X, have survived a period where there were no computers and there wasn’t this big abundance of data or the ability to process it but we’ve also been spoiled by having experienced that entire transition and yearning for the day when exactly what we’re talking about could happen.

Then our children, Millennials and Gen Z’s, were raised on technology so they expect technology to do things right and it takes data to do that, so we have to enable the enterprise for this next generation who expects technology to do technology things, and humans to do human things. And we better do it quickly because, as Alun pointed out, a lot of that expertise is leaving the workforce.

Scott: Our hair’s on fire and, if it’s not, it should be! 

Enjoy the full webinar on Supply Chain Now’s website or listen to the Podcast episode

Learn more about how to support the new generation by transforming procurement into a collaborative, strategic, and high-profile enterprise resource with The New Rules of Procurement Engagement