As Vice President for Strategic Sourcing and Procurement at global food company Dole, Arindam Sengupta is on a mission to eradicate many of the manual, paper-based and time-consuming processes that accompany the purchase of fresh fruit and vegetables from growers around the world, along with the packaging in which they are sold to customers.
So on a trip last year with his CEO to the company’s offices in the Philippines, he was dismayed – but perhaps not entirely surprised – to discover that employees working late into the night were members of his own team, busy preparing and sending out purchase orders (POs).
That was not a great thing to see. I would rather have my team working with suppliers and negotiating prices than simply raising POs. We’re still chasing paper and spending an enormous amount of time doing admin work that needs to be automated and really should be touchless.
The prospect of touchless automation at the company is still a few years off, he says, but Dole has made significant progress in standardising and streamlining its procurement processes over the past two years, thanks to its implementation of a cloud-based procurement platform from Ivalua. This project has run alongside the roll-out in Dole’s Asia-based operations of a new SAP ERP platform, with which Ivalua will eventually be integrated.
Perhaps best known for its fresh bananas, tinned pineapples and its fruit cups, Singapore-headquartered Dole Asia Holdings sits at the helm of the worldwide Dole Group of companies, owned since 2013 by Japanese multinational Itochu Corporation. The supply chain associated with both its fresh and processed foods is extremely complex and fragmented, says Sengupta, and, prior to the company’s shift to Ivalua, it was a struggle to make sense of procurement data based on numerous outdated legacy systems and spreadsheets, scattered about offices around the world:
Senior stakeholders wanted more visibility on data and procurement needed more insight into the activities of key strategic procurement teams. We wanted Dole to be a more data-driven organization, where we knew exactly where we were spending money, who we were spending it with and what needed to be done to get the most from our spending.”
Pick of the crop
Given the SAP roll-out at Dole, an implementation of SAP’s Ariba procurement platform might seem like a logical move. It was considered, says Sengupta, but based on his own previous experiences in the oil and gas sector at Shell (an Ariba customer), he felt that Ivalua would be a better fit for Dole, in terms of flexibility and ease of customisation.
The Ivalua roll-out began cautiously, encompassing the company’s operations in the Philippines and Thailand, and with a focus on just three modules, to tackle the sourcing-to-contract side of procurement: E-sourcing (incorporating e-auctions and e-marketplaces); Supplier Management; and Contract Management.
These were the modules that Sengupta felt would deliver the most immediate savings in direct procurement of raw materials and goods for production – in this case, mostly fruit and packaging. Indirect procurement – the purchase of goods and services that keep the business running but don’t make a contribution to the company’s bottom line – is scheduled to be tackled in a later phase of the Ivalua roll-out.
In the first year alone, he reckons, Dole saved around 6% on its total direct spend using the platform. When it comes to categories bought via e-auctions, the savings over two years have been between 30% and 35%.
Now, Senguta is looking ahead to new plans for Ivalua. Incorporating indirect spend is a priority, as is automation of the purchase requisition/purchase order (PR/PO) process. Integration with SAP will be a must-have and he’s looking to explore data analytics, which was never possible when procurement data was so fragmented:
It’s been eye-opening already and we haven’t even implemented yet for indirect, which is a big space with plenty of potential for big savings. And we want to move towards more predictive analytics, so that we can dig deep into our spending, understand how various decisions affect it and how we can make better decisions in future.
All this, in turn, will free up my time and the time of my team members to start exploring more strategic activities. That’s not easy, because traditionally, the agribusiness sector has lagged behind in terms of procurement. But that’s the vision. That’s where we want to go as an organization.”
