In any enterprise, inefficiency is an anchor that holds it back. And the disjointed, opaque processes often surrounding procurement, particularly indirect spend, represent exactly that, dragging down otherwise efficient organizations. If purchasing is to be targeted and strategic, it needs to be transparent and aligned with larger objectives. “I think of a sailor with a periscope. He’s looking out at the horizon to where the business is headed, then back at the supplier base to identify who can help get there,” says Joanna Martinez, founder of Supply Chain Advisors, LLC. “That’s where procurement can add great value.”
To gain that kind of strategic efficiency, enterprises can’t get bogged down trying to build deep relationships with every supplier, whether essential or not, slogging through a series of independent negotiations. “Pretty soon what you realize is the marginal gain that you get from negotiating each one of those contracts is very minimal relative to the amount of bandwidth from people’s perspective that you’re putting into doing that,” says Moz Thomas, director, Business Prime, at Amazon Business.
And for large businesses that can have tens of thousands of suppliers, negotiating with each one individually may not even be possible.
In 2018, ExxonMobil spent more than $25 billion with over 100,000 unique suppliers on capital and exploration expenditures—of which over $2 billion were with diverse suppliers and small businesses in the United States. The inherent complexity—both in dollars spent and number of suppliers—made supplier management and relationships between buyers and sellers especially critical.
“Our procurement footprint is global. We’ve got thousands of procurement personnel and clients that all have different needs,” says Nassim Kefi, procurement manager at ExxonMobil. “For example, the priorities for an offshore facility versus a refinery on the U.S. Gulf Coast will be different. As procurement professionals, we need to accommodate our internal clients and make sure that they get the services they need at the most cost-effective price, and that the materials are delivered in full and on time so there is no downtime, which is very costly in our industry. And we do all of that safely.”
Given the incredible volume of business transacted, he notes, even “the slightest dent” favoring efficiency and savings brings significant business value.
Optimizing procurement at ExxonMobil meant finding a team with both the technological capability to drive digital transformation in purchasing, reforming processes, and fueling genuine innovation, and the ability to scale to meet ExxonMobil’s needs. It turned to Amazon Business, a division of Amazon serving businesses and organizations.
A top priority was to provide employees with a robust, competitive shopping experience with clear data to help drive smarter purchasing decisions. “You’re looking at hundreds of millions of products to choose from,” Kefi says. “From a business perspective, Amazon Business also offered quantity discounts and analytics dashboards capable of extracting historical purchase data, along with dedicated customer service. The value proposition was there, and we recognized it from the outset.”
"From a business perspective, Amazon Business also offered quantity discounts and analytics dashboards capable of extracting historical purchase data, along with a dedicated customer service."
— Nassim Kefi, Procurement Manager, ExxonMobil
Ensuring Amazon Business works not only for large enterprises like ExxonMobil but also midsized and small buyers alike starts with Amazon’s customer-centric focus, with the understanding that a business-to-business model requires focusing on different challenges to form a different kind of partnership, says Petra Schindler-Carter, director and GM at Amazon Business.
Business customers, she notes, need tighter controls and greater visibility to control rogue spending, and work and information flows that integrate with existing procurement systems. They also require the ability to guide purchasing to strategic or regulatory interests, whether centered around sustainable products in the private sector or diversity and local supplier requirements in the public sector. It’s the framework of services underpinning Amazon Business, driven by data. “Insights and learnings on purchasing trends. Looking at historical sourcing data from the customer and forecasting out. Predicted patterns that will allow them to be much more streamlined in their procurement and ultimately also cut down on costs,” Schindler-Carter says.
“Automated, seamless, touchless,” Kefi says. “That’s the Holy Grail for procurement.”
A quality partner also must be responsive to what differentiates one enterprise from another. One size (or solution) does not fit all. As Martinez notes, not every company defines value the same way, and enterprises make purchasing decisions based on any number of criteria. “You care about quality, about reliability and cost. You want a partner that shares your ethical standards, has sound financials, can innovate,” she says. Some priorities are always important; others shift quickly as the business landscape changes.
It’s an environment where flexibility, adaptability, and a focus on customer needs is crucial. Schindler-Carter points to Amazon Business service teams designed to support customers, whether in their initial onboarding, in the rollout of features or certain permissions, groups or workflows set up to meet compliance priorities and guardrails as defined by each business.
“In not just accepting the status quo, we feel pretty strongly that we have tremendous opportunity to reshape the way businesses buy,” she says. “And we’re excited to be part of the journey with them.”
ExxonMobil’s Kefi agrees, and sees an even bigger opportunity. “Today, procurement is at the forefront of digital transformation,” he says. “I’m talking about innovative ways to generate new business value, about new technology solutions, about new processes and cultural transformation. And procurement is in the middle of that.”
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