Increasing revenue through innovative procurement
Mondelēz International’s (formerly Kraft Foods) decision to put an emphasis on innovative procurement across the supply chain has resulted in a significant increase in revenue for the business. The company’s procurement policy ensures it extracts the maximum possible benefit from suppliers, procuring innovative goods that are used in each sector of the business. Mondelēz International comprises several sectors (coffee, chocolate, biscuit, etc), each of which had previously coordinated its own procurement activities, often leading to the same suppliers being overloaded with requests and projects.
To address this problem, procurement innovation managers were hired to work closely with the company’s Innovation R&D team and Marketing team. They ensure that all requests to suppliers are related to strategy and focused on business priorities. The managers also link the R&D department with the right supplier, depending on their needs.
Today, at least 50 percent of the company’s growth in net revenue comes from supplier contribution. Another role of the procurement innovation managers is to collect innovative ideas put forward by suppliers and submit them to decision-makers. If the idea is interesting, resources will be put towards it. For its procurement policy, Mondelēz International was awarded first place in the Innovation category at the 2012 Procurement Leaders Awards.
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