Procurement and Supply Chain - Case Studies

Techdata Case Study

The European arm of this Fortune 500 company needed a new purchasing director; or thought it did!

“Recruitment firms are all pretty similar in my experience, says Julian Hodge, Managing Director of the European Central Supply Chain business for Tech Data Europe. “Then you meet someone like Archer Mathieson’s David Morrison and you realise it’s the individuals in a firm that make all the difference.”

Julian is referring back to April 2010, when he first approached Archer Mathieson after being referred by an executive colleague at Brightstar, a sister company. Hodge needed an interim international procurement director for his Central Supply Chain (CSC) business, or so he thought.

“Not many people know us but we manage €2bn of Tech Data Europe’s €10bn sales volumes; and are part of a global $24bn US firm ranked 109^th on the Fortune 500 sat between the likes of Google and McDonalds.

I tell people we’re like a ‘cash and carry’ supplier of IT equipment. We’re a high-growth, fast-paced business buying and shipping thousands of product lines to thousands of trade customers in 16 countries. So my starting point was to hire someone senior who could excel in this kind of complex, high-pressure environment and help us to outpace rapidly-evolving service demands, both internally and externally, instead of simply responding to them.” 

Julian had been Finance Director of the business until he stepped up to his current role and candidly admits to having no prior experience in hiring executives outside of finance. It was only after talking to David that he began to have doubts about his original plan.

“David and I talked for about an hour and a half. Hearing me outline the challenges we faced and the people we had, he opened my mind to a different solution; one that turned out to be much better,” explains Julian.

That solution came in the guise of Michael Seymour, Director of a Management Consultancy firm specialising in procurement and supply-chain transformation, and with a ‘blue-chip’ background in both industry and consulting. David has known Michael since 2002 when he was procurement transformation programme manager at FTSE100-listed energy business BG Group. What David saw in hearing about Tech Data’s Central Supply Chain issues was the need for  a more comprehensive and sustainable solution.

“It quickly became clear that there was more to this than just a search brief for a new procurement head, he says.

“Julian had explained that everything his Central Supply Chain operation does has a significant impact on the performance of all Tech Data’s 16 European country operations.

He needed help to carry out a performance review of the CSC business, identify the issues and potential solutions, fill any new roles with the right people, as well as facilitate the cultural and operational changes. Any organisational re-design would inform the subsequent briefs for recruitment searches, so that had to come first. However, having realised the complexity and scale of the challenge, it was clear that a small team of highly experienced procurement turnaround specialists, rather than a single interim, would be the best solution, before any permanent recruitment could commence.”

An introduction was therefore made and Michael and a small team of associates from his firm Ad Alta Consulting began work at Tech Data CSC in September 2010. Phase one, completed before the year end, involved a comprehensive assessment of the previous CSC operations, the development of a ‘case for change’ from the bottom-up and the design of new ways of working with a new organisational structure. Two new director-level roles were identified and defined as a result, with Archer Mathieson briefed to fill the first; a procurement director for the company’s Enterprise business unit serving large, corporate clients. The chosen candidate was Peter McDermott, who started work in March 2011. Despite being from a very different industry – he was a former Supply Chain Director from a global jewellery manufacturer and distributor – Tech Data’s HR manager Rebecca Wallis says he made an immediate, positive impact:

“Until Archer Mathieson found Peter for us, it’s fair to say we didn’t know what good looked like. He’s not from our industry so was able to bring fresh ideas and make a big impact. In just a few weeks we’ve seen a lot of quick wins and great leadership. He also helped us clarify the role for his counterpart in our Broadline business unit and we were subsequently able to make an internal appointment.

“I think our big takeaways from this experience have been that clarity around the candidate brief, and ensuring that any hires are both appropriate and in the right organisational context, are critical to successful recruitment and retention,” she adds.

Phase two for Ad Alta Consulting started in January 2011. This was about piloting, testing and implementing the new ways of working in what Michael says was by then an entirely new cultural backdrop.  

“When we began the programme there was little recognition that things needed to change among many key individuals within the team. That demanded a lot of initial work to make the case for change and gain employee buy-in across the board. That achieved, with only a small team, we then had to drive and facilitate the changes. Plus, we had to do this whilst ensuring that the business didn’t ‘fall over’ given the relentless pressure to source, store and ship thousands of products all over Europe,” he explains.

Just three months later, under a completely different organisational structure and with fundamentally different ways of working, the CSC organisation produced a step-change in operational performance.

“The Tech Data project is a great example of what you can achieve with a small, specialist and focussed team working in tandem with client-side management to drive and embed change,” believes Michael.   

As Julian points out, it all started with David resisting the urge to provide the easier option of what he initially believed he wanted and instead challenge that belief and offer what the business needed.

“For me the standout point was that David could see the wider, underlying issues, make a quality introduction to an expert like Michael, as well as help us subsequently recruit an appropriate permanent director to take the business forward for the longer-term. This combined and phased approach ensured we could turnaround our CSC operation and put it on the right path to becoming a much better, high-performance function. David is a rare thing; a true consultant in recruitment who offers real added-value.”

Tech Data is one of the world’s largest wholesale IT distributors, with 8,000 employees worldwide. It sells over $22bn of IT products to over 125,000 re-sellers in over 100 countries. Julian Hodge is the Managing Director of the European Central Supply Chain function.

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