Name: Beyond Cost – Elevating Procurement From Cost Center to Profit Engine
Uploaded: 2026-02-17T16:16:06.710Z
Duration: 1 h 12 s
Description: Beyond Cost – Elevating Procurement From Cost Center to Profit Engine

Transcript for "Beyond Cost – Elevating Procurement From Cost Center to Profit Engine": Hello everyone and welcome to today's webinar. I'm your host, Ella Wilkinson, and today we're looking at elevating procurement from a cost center to a profit engine. Historically, procurement has been viewed through a very narrow lens, usually as a cost cutting function tucked away in the back office. But in today's volatile global market, the function has shifted into a core value driver. Today, we're discussing how to reposition your procurement team as a profit center. And joining me is someone who lives this every day, Curt Schafer, Senior Director of Global Procurement at Jabil. Curt, it's a pleasure to have you with me today. Hi, Ella. Great to be here. Thanks for the invitation. I'm looking forward to the conversation. So you have a long history in procurement. I would love if you could just tell me about yourself and a little bit about Jabil. So yeah, so maybe I'll take a minute and just introduce Jabil real quick. So Jabil is an engineering led supply chain enabled global contract manufacturer. We build product for 400 of the most premier brands throughout the world within multiple sectors, including data centers, healthcare, automotive and transportation, and many other sectors beyond that. We have over 100 manufacturing sites globally. We're based in more than 25 countries, and we have over 140,000 employees within our organization. This year marks a really unique year for Jabil. We were founded in 1966, so this is our sixtieth anniversary of being in business from our small beginnings back in Michigan, where we were predominantly really solely a PCBA manufacturer. A little bit about me, as you mentioned, I'm currently the senior director of global procurement, really focused on our indirect spend portfolio. I've been in Jabil for more than ten years, all in the indirect procurement space. Currently, I'm based in St. Petersburg. I'm a Tampa native, born and raised. Outside of spending four years in Singapore on an international assignment that Jabil had me do. That was from 2019 to 2023 in which I focused on really expanding our Asia Pacific procurement organization and really kind of leveling up that group over there during those four years. I have the privilege to lead a really dynamic team of around 400 practitioners based globally. We manage somewhere in the tune on a given year around 4 to $5,000,000,000 and so it's a pretty healthy amount of spend that we have to put some cost controls around. And of those folks on my team, we're divided into three core groups. The first is our strategic sourcing organization. And as the name sounds, we're really focused on more of the strategy side of procurement. We look at what we consider high dollar spend, and that's really anything over $10,000 either annually for a specific good or specific service. So it's unique in the sense that that clip level is very, very low for when our strategic procurement organization gets involved. But what they're really focused on is collating all this data, consolidating suppliers, going through both regional and global negotiations and sourcing activities, generating category strategies, executing contracts, and the list goes on, more of the front end of the procurement engagement process. The second group that is within the organization is our operational procurement team. Again, I think by the name of it, it kind of tells you exactly what they do. So they're more of the downstream procurement activities. So post sourcing, post contracting, when we start to place POs, they manage the full PO management process end to end all the way through goods receipt. They also have inventory requirements for inventory goods. So they're setting min max and ROP positions for all the inventoried items that we manage. And then they're also working with invoice discrepancies, returns and things upon that nature. And then the last group within our organization is quite unique. This is actually a procurement services organization that we started roughly five years ago. In this organization, really the principal service behind this organization is this team provides indirect material distribution for customers. What we do is, as I mentioned, we manage somewhere between 4,000,000,000 to $5,000,000,000 of spend in which we feel that we've got best in class pricing on. So what we do is we provide customers with alternative sources of supply at cost reductions. And really, this is a unique organization since it is a business unit. So it's a profit engine for the company. It's bringing in net new revenue and margin streams. And it's a pretty incredible mind shift that we've made within the organization. I'm sure we'll touch on this later. Wow, so you have a very holistic bird's eye view of the entire procurement chain. Yeah, you could say that. So obviously today we're talking a lot about the old versus the new functions of procurement. So in your ten plus years of experience, what is one of those biggest changes? What's the fundamental change you've seen in strategic procurement and sourcing? Right. I had the opportunity to kind of be an early employee of our global indirect procurement organization development. I joined Jabil about a year after the indirect procurement organization was created and there's kind of an interesting story. And I'll tell you the story and then we kind of get to the transformation piece because I think this really sets the foundation. Historically, our indirect procurement was really managed at the site level. So if you can imagine there was a 100 plus manufacturing sites globally, each site had their own buying team and all the spin that they were allocated for indirect through the budget allocation beginning of the year, they had full autonomy to go off and do whatever it is that they wanted to do. They had their own supply base, they had their own selection process and selection criteria. None of the sites were speaking with one another. So it was very, very decentralized. And about thirteen years ago is when the indirect procurement organization was created. And there was this catalyst moment, I think, when our CFO and CPO came together and were like, hey, how much do we spend annually on indirect goods and services? And because it was so decentralized, they really couldn't rationalize it. They couldn't really kind of see the big picture. So we had to really put some processes in place and bring some consultants in to help us with data rationalization and paint this full picture. And what we ended up finding after that whole execution process was we had at that time $2,000,000,000 of spend. And obviously, as you can imagine, knowing that you have $2,000,000,000 of spend that isn't centrally controlled, we're not leveraging our scale and our size as a company, I think it was a very quick snap decision to go, okay, hey look, we need to adopt the same rigor that we have on the direct procurement side, which we've been doing for twenty, thirty, forty years, where we've got it down to a science on how we manage the supply chain procurement activities on the direct side. We need to adopt that same rigor on the indirect side. So obviously the decision was made to create the team. So when I joined, was employee probably number 10 or somewhere around there, So it was early days and eleven years ago, I would say our baseline was we were doing 90% reactive work and maybe 10% proactive work. So it was more about, hey, we have this mind shift or this structural shift that's not changed. We now have stakeholders across the world that we have to service and maintain. And it was just a fire drill constantly. Requests coming in, we needed to be quick and swift in the way that supported our stakeholders. And so we were being very, very reactive or very transactional. But fast forward to where we are today, I think really the fundamental change that I've seen over the last eleven years is kind of that evolution from being reactive to being more proactive and strategic. So today we are deeply integrated with the business. We're operating with robust sourcing strategies. We're using technology to enable agility and speed and pace to keep up with the business needs. And the last thing that we really focused on, I mentioned I was employee number 10. I think I was employee number 10 out of maybe like 15 or 20 people. And now we're north of 400. What we've really focused on also is really kind of staffing the organization with the right talent and the right capabilities. So it all kind of started by bringing those silos together under one umbrella to have a common goal. Exactly. I mean, that's the general principle, Is Jabil, we're a big, big company and we have a lot of moving parts. So anytime we can capitalize on unifying the spend and bringing some synergies within the company, we'll definitely do that. So let's talk about procurement teams becoming the strategic center of business. So we talk about strategic ambition, but that doesn't really mean anything unless our core capabilities are world class. So why is it essential for a procurement team to master the fundamentals like sourcing and risk management before a procurement team can even have a seat at the strategic table? Honestly, fundamentals are table stakes these days. If you haven't mastered the fundamentals, then you're just not going to be able to get that seat at the table. You're just not going be viewed as a mature enough organization to really bring that value that the table requires if you could follow. Would I say eleven years ago, we had mastered the fundamentals? Absolutely not. Eleven years ago, we had a lot of problems. But because of that, we were really struggling to get the stakeholder engagement. We limited on being able to kind of market and communicate procurement's value. And just the perception of moving from the sites into one global unified organization was under a lot of scrutiny. So we had to spend many, many years really focusing on the fundamentals and mastering the fundamentals and we had a lot to overcome. But if you look at it and you look at procurement in the most simplest form, procurement is a service based function. We provide a service, this is what we do. Whenever I talk to the team, try to kind of brown the team a little bit and I use very basic analogies. I'm an analogy guy. So I love to kind of spin off conversations and kind of like just simplify it. Use the KISS model just to simplify my thought process so everyone can go, okay, I understand. So I like to use the analogy of you going to a restaurant for the first time. And you're going out to dinner, you show up to the restaurant and the hostess is bad in mood. And then they seat you at the table and the waiter never comes or the waitress never comes. Then when they finally come and you get your food, the food is very poor, it's not great tasting. I mean, when you leave that restaurant, you're gonna be like, man, can't wait to go back. I can't wait to have that experience again. You stop. This is not gonna be something you're gonna be interested in. So when you think about getting a seat at the table, it takes years and years and years of really customer centric performance, executing at an extremely high level the needs of your stakeholders and your customers. You gotta have that service mindset at your core. And then on top of that, you have to really have consistently strong KPI performance and you have to have really strong financial performance. So to me, I think that's what it takes to get a seat at the table. And then obviously when you get to see at the table, it's like, hey, welcome the group. Now expectations are even higher now that you're here at the table. So you've got to be ready for that as well. So you've to make sure the food's good, the service is good and you've That's got some friendly it, yeah, absolutely, definitely. So how would you yourself define procurement excellence? I think the response or how I would define it at core basis would be just a combination of people, process and technology that enables procurement to be a strategic business partner to our stakeholders and to the company. I think at the core, at basics, this is kind of that definition. But this definition is an evolution. And that's super basic and I think you could definitely expand upon that, but it really kind of depends on what's happening in the macro. So if you were to ask me this question ten years ago, I could expand upon it, I want to bring in things like near shoring or on shoring. I want to bring in things around resilience and supply chain because ten years ago things were pretty stable, pretty easy. Five years ago, if you asked me this question, I wouldn't be talking about artificial intelligence so much. Specifically, I wouldn't be talking about AgenTeq AI. Now, if you ask me this question today, all of that's relevant, right? And all of that's part of that core procurement excellence definition is having that resilience, adjusting your procurement strategies and making sure that you have continuity of supply, bringing in AI tools to really accelerate the organization and the overall performance. So procurement has to continuously adapt to external influences, implement strong core processes, leverage technology to keep pace. These are kind of all the basis of core procurement excellence. So if you were to summarize all this and kind of expand on that definition, it's really mastering the ability to move at pace with your business while exceeding sourcing metrics and stakeholder performance. I think if you just kind of collate all that together, that's how I would define procurement excellence. Yeah, and the world is changing and the tech is changing every day. So just having the ability to adapt to that, I guess, is so important in a procurement team of twenty twenty six and beyond. Oh, for sure. There's this element of constant change within procurement and if you're idle, you're going to fall behind very, very fast. So obviously we've spoken about Jabil's scale, but with such a big company, with 400 people in your team, how do you ensure that the procurement excellence isn't just a phrase that we talk about, it's actually a daily practice across all of those teams? Over the past thirteen years, we've already talked about, we've really focused mastering the fundamentals, investing into talent, integrating procurement technology. All of this process and all this investment is with the ultimate end goal of driving meaningful impact to the balance sheet and keeping pace with our business needs. So is a very dynamic company in which our stakeholders often are looking for POs to be placed yesterday. And if you talk with any procurement practitioner, every single one of them is going be like, thankfully Jabil is in the same situation as I am. This is absolutely a common theme or a consistent element of procurement, which is last of the party, shortest time to do our jobs. And we can fight that as much as we want, but the reality is at the end of the day, we have to adjust with the needs because it's not that we're last to the party for a poor reason, we're last to the party because we're the last step before a PO gets placed. And it just requires that amount of time in advance of getting to our organization to really get everything in order before we place an order. We have short project timelines and the most critical thing that we have to focus on though is maintaining policy and compliance execution and meeting those necessary requirements. So what we've really built is a highly responsive procurement team that's well equipped to deliver strong sourcing metrics and high stakeholder performance. And when I say well equipped, what I mean by that is, we've invested into a procure to pay solution, which is Coupa. Coupa is our procure to pay solution. And what that provides is it provides that end to end procurement requisition traceability. It also automates the approval flow. So we kind of move away from more of a manual into more of an automated approach. On top of that within Coupa, we invest into catalog development, which again is providing our stakeholders with this Amazon like experience. Search something, you find what you need, you click on it, you add it to your cart and you place an order. It's very, very seamless. And so that experience is positive. We sit in business strategy meetings with our key stakeholders. We leverage our e sourcing tools to really enhance the way that we go and do our strategic sourcing events. And we're looking to invest heavily into AI, specifically agentic AI, to augment some of the procurement processes that we do today. So as I mentioned before, it's really a constant evolution to ensure we live this every day in that procurement excellence isn't just a phrase, but it's absolutely something that's ingrained in us. And like you said, if we had this conversation six months time, it would be a different conversation. Possibly, possibly for sure. Every single day is moving very fast. So shall we move on to shifting from savings to profit? Sure, So when you talk about procurement as a profit center, which is obviously the webinar title, and you spoke earlier about KPIs, what are these new KPIs that actually matter to businesses and how has that conversation changed in the boardroom? Yeah, so this is a great question because I think that people think in order to be perceived as a profit center, you have to come up with all these new elements of your business or these new KPIs to really excite people about, oh yeah, okay, makes sense. The reality is when we were going through this progression of a cost center to a profit center perception, our KPIs never changed. What really changed was how procurement was being positioned and kind of more around the narrative of the why, like why procurement should be considered a profit center. Within Jabil, when you have 4 to $5,000,000,000 of spend that you manage on an annual basis, you're gonna drive pretty meaningful results. I mean, we drive hundreds of millions of dollars in cost reductions and avoidances. We drive tens of millions of dollars in incentives, we drive cash flow improvements by looking at payment deferrals and things upon that nature. So everything that we're driving on a daily basis has significant and measurable impacts on the balance sheet. But yet, if you look at the first eight to nine years of indirect procurement, the evolution or starting from ground zero to where we were about eight or nine years after inception, we were considered a cost center. We were considered, hey, our cost needs to be budgeted out to the other groups where we're a corporate function, and that's all we are. So I think what really turned the corner for Jabil and our procurement organization and perception is, again, the story behind the why. Why should you view procurement as a profit center? Why should you invest into procurement? And then obviously, you need to have a tangible ROI on the back of that. So what is that? And so we started telling the story three to four years ago and we really positioned procurement as a viable option to invest into. We have demonstrated on an annualized basis, ten, fifteen X return on every dollar invested with us. So that really excited our leadership team and that really excited the board. And today is, I think the way we're structured within Jabil is quite unique compared to other organizations. Our CPO and our CSCO, they report directly to our CEO. And in most organizations, that's not the way it is. And most organizations procure a supply chain either reported to the COO operations or the CFO within finance. So to me, signals that our organization is now being viewed as a very, very important, vital organization for the performance of the company. And there's a lot of expectations from the board and the organization and our leadership that we continue to perform at a high level. And there's a level of trust there as well. It's almost like your company believes in you, so you can go ahead and make these deals and build your stocks. So I think that that's obviously very important. Do you think it's more helpful to have that direct line to the CEO? Well, definitely helps with decision making, that's for sure, right? It also provides our leadership with the, I think, the necessary autonomy to be creative and think about how they want to structure the organization and where they want to take the organization long term. So let's talk about the role of supplier relationship management. So how does a deep partnership that you have with the supplier actually help with the company's end revenue? If I was in a supplier negotiation right now, I probably wouldn't say this in front of them. But really without suppliers, we don't actually have a company. We need suppliers to deliver product and be consistent in delivering product to us day in and day out. And by delivering product that allows our operations to run and as long as our operations is running, we're building product and we can get this sent out to our customers and essentially get paid and make money. So to me, suppliers are a critical element or attribute of procurement and something that we focus a lot of our attention on. Take the pandemic for example. Seventy five percent of companies globally experienced supply chain constraints, including us, including Jabil. But we weren't unique in this situation. We had a lot of challenges as well. But I can confidently say that if we had not invested into strong supplier relationships prior to the pandemic, we would have struggled and probably suffered pretty dramatically from 2019 to 2022. But because of the groundwork that we did and the importance that we placed on supplier relationships, we proved to be very resilient during that time period. And we use these relationships to unlock allocation. Again, as I mentioned, to keep operations running, to allow us to build product, to be able to ship the product out to the customers and at the end really sustain investor confidence. Because we're a publicly traded company, knowing that we've got a robust supply chain and a very resilient supply chain and procurement organization speaks highly into the market and to the investment community. So on both the direct and indirect side, we do have levels of focus around SRM activities or supplier relationship management activities. It's a little bit more robust on the direct side. They actually have a fully dedicated team, but they also have $20 ish billion of spend per year that they have to manage. So it does require a really good foundation from a supplier level. On the indirect side, we don't have a dedicated team, but it is a top priority within our strategic sourcing organization to maintain these relationships. So to me, the bottom line really is supplier relationships are not optional. They're critical to resilience. They're critical to the continuity of a company, and really they're critical to the long term success of Jabil. And again, it's just about building that level of trust really, isn't it? It's not only internal, it's also external facing. Absolutely. So this probably also came up during Covid, but strategic sourcing, this is when a lot of companies refought their procurement strategies. So how do we move from buying for less to buying for better? As I mentioned, Jibold is a publicly traded company and so I can share this with you. We're a 5.5% margin company. Ella, I'll tell you, we never turn our attention away from driving costs down. This is our heartbeat internally. This is absolutely what we focus our attention on and the value that we want to bring to the organization. So the buying for less element will always be there for us, but you bring up an interesting term of buying for better. And this is something that we've really been kind of transitioning to in our maturity curve. Thirteen years ago, it was absolutely gung ho, buying for less. Now it's, as we're maturing as an organization, it's buying for the better. Today, we're focusing more on quality and TCO versus just general costs. And you mentioned it, adjusting our sourcing strategies to drive down costs without sacrificing our quality. And so, how does this look? How can you buy for less and buy on quality? One of the things that we focus a lot of attention on internally is really ensuring that what we go out to buy is well communicated. And it's well communicated either in a statement of work or some sort of scoping activity because what we found historically is ambiguity drives confusion and then confusion drives higher cost projects and reduced control of outcomes. An example would be, again, here we go with my examples and analysis. One of the things that we focus a lot of our attention on within Jabil is expansion. So we're constantly in this mode of expansion, expansion and we need to buy a new building. I can't go to a general contractor and say, 'Hey, I need a building. It just needs to have four walls and a roof.' I need to be explicit. I be need able to tell the general contractor every requirement and every detail to ensure that what they quote is what we need and nothing else. So when you think about having a clear scope or clear communication with your suppliers, you're going to reduce costs because what you're going to do is you're going to reduce the amount of that contingency or that fluff that's within the quotation. But it's also going to improve the quality in the sense that what it is that you need is what you're going to get and you're not going to get anything that's significantly higher or significantly lower. So there is a way that you can kind of amalgamate the two in your processes to be able to buy for less and then always be able to buy for better or what it is that you need. And again, during the early days of our organization, was this a mindset that we had? No, it wasn't. And this is something that we've really looked to transform over the past few years. So I do encourage other organizations to kind of think through that process during their growth and their development as an organization. Early days, it's all about driving cost reductions and showing the value of the organization. And then I think as you grow further in your journey as an organization, it's more focused on stakeholder delivery and stakeholder satisfaction and kind of driving that sourcing or buying for better. So let's move on then to helping that next generation of procurement team be excellent. So what is the secret in Jabil's procurement model that separates them from the traditional organizations? When I think about the term traditional or siloed, what really comes to mind is organizations that are in kind of in the beginning of their transformation journey. I don't think you would hear those terms in an organization that's been kind of on the journey for ten, fifteen, twenty years. And so within Jabil, we've evolved over the years, but as we've evolved, we've implemented an expectation. And you say, hey, what's the secret? There's no secret sauce in Jabil. I just think it's more of just kind of that foundational mindset approach and just being very, very consistent. And so within Jabil, we've implemented an expectation on how we operate as a team across the enterprise. And this expectation is underpinned by what we call our four C strategy. And the four Cs are communication, consistency, credibility and collaboration. These are the four Cs. And so if we look at each one individually, we kind of dissect that down a bit further. Communication really touches on transparency, touches on efficiency and the use of technology. Consistency speaks to our strategy, our mission, our vision, and our talent. Again, consistent execution with our stakeholders and suppliers. Credibility is based on conversations that bring value for both organizations, that deliver on the commitments that we make. We talked about that earlier as well, actually doing what we say we're going to do and executing to the plan. And then finally, collaboration, that really touches on unlocking value, really the value of the opportunity and serving our end markets better. So how do we work together with our supply base and with our network to be able to drive really solid results for our end markets? So I think by adopting the strategy, Jabil really differentiates itself from other organizations who may be a bit more traditional or siloed, as you said. And we really focus our attention on elevating procurement to a position of a trusted partner, both internally and externally. And we do this with the 4C strategy. I love the 4C strategy. It's always good to have an acronym. So as we obviously you spoke about AI earlier, this question probably will be mostly about AI. But as we're looking towards the next generation of talent, what are some of the skills that we're asking for that wasn't on the job description five years ago? Yeah, so I really love this question. I love the topic of talent development and kind of the transformation that we're having internally around this talent. I would say there are a few skills that we look for outside of the basics. The first one is an entrepreneurial mindset. The next would be someone who is comfortable and capable of challenging the status quo and is okay with change and that whole change management process. And then someone who is becoming more of a digital native and comfortable integrating with technology. To expand on this, if we talk about the entrepreneurial mindset, need people on the team who can really think creatively and think outside of the box on how to drive enhanced commercial benefits for the company. They should be asking themselves questions like, is there something that we do today that external customers would be interested in partnering with Jabil on? Is there a sourcing strategy that we haven't tried that could drive better commercial performance or execution to our KPIs. Over the past eight years, we've adopted this mindset, and we've actually built multiple new businesses within Jabil. Businesses that we go externally to customers and provide these services for. Things like logistics support, things like procurement and supply chain outsourcing, direct and indirect material distribution, market intelligence, and other, I would say, AI generated solutions that are now coming to the market. And so having that entrepreneurial mindset has allowed us to look and unlock what is it that we do really well internally and now offer this to customers externally. If we look at the next skill, kind of challenging the status quo, again, I mentioned it, comfortable with change, constantly seeking that next iteration of how we operate as a team. To me, change should never always be top down. Change shouldn't be me saying, hey, this is where we're going be in six months, this is where we're gonna be in a year, this is where we're gonna be in two years. I mean, I'm tasked with having that vision, but I really like kind of more of that grassroots model or that grassroots movement. Hearing from the people that are on the frontline every single day saying, hey, this is an idea, this is something I thought about, this is something that we could do a little bit different that could bring some additional value or agility or efficiency. And having that collective alignment and feedback across the organization is what really brings change. And so I think challenging the status quo is a critical one. And the last one, obviously you touched on comfortable with technology. Yeah, we are moving in a very, very fast paced environment where technology is evolving quickly. And we need folks who are able to integrate and leverage tech to improve performance. We're kind of at this inflection point where there's some really transformative technology on the horizon. And this technology could really significantly improve performance within the team. Obviously AI is a hot topic and what we're seeing in this market is there's a lot of people who are fast followers, not people that are willing to just like dive in and go bleeding edge. And Jabil, we're kind of taking out a little bit of a hybrid approach. In Jabil, we're looking at external solutions, but we also have created a joint venture with an AI firm and our JV is called ID8. And the principal idea around ID8 is we have thousands of really, really smart practitioners in our supply chain and procurement organization. And the missing piece of the puzzle was we didn't really understand how to build an AI solution. So what we did is we kind of merged these two together. We created this JV. Now this AI firm has all the access that they need to seasoned practitioners with ten, twenty, thirty years of experience that could say, hey, I would like the tool to do this, or it needs to kind of flow in this process in order to be successful. And so we could really work through the process and kind of proof it out within Jabil and then turn that into a product to sell into an external customer. So we're really taking a unique approach here and these three skills, I think are becoming hypercritical within probably not only procurement, but many other functions within a company. And the reality is there's not like a pool of a thousand candidates just sitting off on the sidelines waiting to be picked up that have all these capabilities. It's just not there. So we have to look at fostering our talent growth internally and very organic. I was having a conversation with one of my leadership on my team and we were having a conversation around the performance of an employee and how when he was seeing the employee kind of operating, he intercepted at a certain point and made a little bit of a change and then the performance was magnified. I told him, I said, look, you can't get into the weeds every single day. We have to trust the team to be able to go off and be successful. So I told him, we really need to be okay with average performance or slightly above average performance today within our employees on their journey to being really seasoned high performing practitioners. But we need to invest that time. We need to invest the development elements into their day to day to ensure that we're leveling up that organization. So to me, one of the things that I think about the most is talent development. It is how do we get that next level of performance internally. I don't think you can just go out and find it and just pick it up and insert it in your team. You've really got to invest into your organization and put that effort into it. So the underlying skill really is being open and it goes for every level, so it's being open to change, being open to talking up and being open to tech and being open to train. Absolutely. So for the leaders who are listening today who are still stuck in the cost center trap, what is the first step that you'd suggest they take towards moving to a profit center model? The first step I would say is really determining the angle of the organization. What do they want to be when they grow up? We all get that question, where do you want to be in five years? If you can't answer that question, then it's very difficult to take that first step. Do they want to be like Jiggle, where we've developed multiple business lines that are driving net new revenue and margin streams for the company, while also investing heavily into scaling up our internal teams who are delivering significant value back to the balance sheet? Or do they want to focus on the perception of their organization? Things like we spoke about earlier, kind of start the storytelling, what is the why and focus on how are they being perceived by the C suite and the board and working on changing that mindset that investing into procurement is a viable solution that will yield great returns for the company. So I think understanding the end goal will help establish that first step. And really, if I kind of think back to Jabil's journey, our CPO and CSCO always had this entrepreneurial mindset. And like years ago, long before we started creating these business lines that we had, he was already entrepreneurial in his mindset. And he really kind of set that foundation from the beginning, this is the direction I want to go with this organization. It was never going to be, I want to maintain a very traditional procurement supply chain organization, do A, B and C. No, I want to scale this up. So he always had this kind of vision in his head as to where he wants to take the organization. And he and his leadership team really had a desire to go on this transformation journey with him. But taking that first step required a significant amount of forethought and really a clear communication as to the vision so that we, as the people that are supporting him on this journey, can really buy into the message. So obviously we've talked a lot about how volatile the world is right now and we need to prepare for change and prepare to be resilient. So this question might be really difficult to answer, but looking ahead to the next two, three years, what do you see as the biggest hurdle procurement leaders must overcome to maintain this profit engine status? I was on LinkedIn the other day and I was just kind of scrolling through as you do. And I stopped on this one video and this lady was being interviewed. And the person doing the interview asked her, what keeps you grounded when things get tough? And her response was actually pretty impactful. Her response was, just remember five years ago you dreamed about being in the position you're in today. And I really actually love that statement. It's something that I kind of keep close to me as when things get tough, I go, hey, look, you wanted to grow, wanted to take on more, you kind of got what you asked for, right? So as I mentioned before, getting a seat at the table and getting leadership buy in is that first step. But I think the next major hurdle is staying at the table. And it's not staying at the table for the next two to three years, it's staying at the table in perpetuity. Once you become this profit center, you have to maintain this consistent execution against like long term plans and investment strategies. If you're out making acquisitions to really scale up, like if you're driving business units and you want to make acquisitions to scale up your business units, there's an expectation. This isn't just, I'm a call center function, I do my job, everybody goes home. No, there's meaningful deliverables that we have to drive day in and day out. So obviously being a viable investment option means that you have to deliver on your financial commitments as I mentioned. And you have to constantly reflect and go, are business units driving the right KPI results and performance? Did the acquisition or partnerships that we've created, are they delivering? Ultimately as a whole, are we delivering the KPI performance that we expect? So moving from a cost center into a profit center really raises the expectations and requires a higher level of commitment and consistency in overall performance. You're now going to be scrutinized just like any other profit center, right? Just like any other organization that is viewed as a profit center. So the pressure does obviously increase once you make that transition. But honestly, I'm not trying to scare anybody by making these statements. Absolutely believe it's definitely the right thing to do, but you will now be viewed as a key contributor to the company and the company's financial performance. You will need to ensure that you have the right team there to be able to deliver on that performance day in and day out. So I think that's going to be the biggest hurdle and something that you're going to live in perpetuity as you get a seat at the table and you make that transition into a profit center. Well, you so much, Kat. There's so much to take away there for our listeners. We're running out of time, so I'll quickly move us on to the Q and A section. So our first question here is how do you foster a profit engine mindset in a team that's been trained for decades to only think about savings? That's a tough one, Making adjustment is really difficult, but I think there's a couple of things that you can do here. The first thing is you need to lead by example. You need to walk the walk. You can't just simply say, hey guys, we're making this adjustment. Your responsibilities are gonna be somewhat the same, but there's also going to be this nuance that's now going to be added to your remit. Best of luck. That's absolutely not what we can do for the team. Because what ends up happening is, we've created these business lines as I mentioned to you, right? Logistics services and all this kind of stuff. So we have to kind of be comfortable converting ourselves into like 80% procurement folks, 20% salespeople. And if you think about my team as a whole, let's just say again, 400 people, maybe five or 10 of them have ever sold anything in their life. Most of these guys are day one seasoned practitioners in procurement. So having them be able to get out of that comfort zone of just being a procurement guy and move more into the sales role, it takes a lot of coaching and it takes a lot of development. Prior to joining procurement at Jabil, I was in sales and I was more on the selling side historically. So to me, movement felt familiar and comfortable. So I kind of naturally gravitated towards it and was like, yeah, I really enjoy this. But the rest of the team did not. The majority of the team has never done that. So it really requires a significant amount of time to bring them up to the necessary levels. Also, what's even more important is ensure that the team understands the impact that this new work is going to have on the company. You need to help them see how their contributions are really gonna affect the overall performance of the company. And I think when you have that communication and they start to feel like, hey, this is why we're doing this. This how my efforts are contributing to the company. They're going be more likely to buy into the strategy and then be a little bit more energized and work on delivering really great results. So our second question here is, which we spoke a lot about given the volatility is the only constant, how do you maintain methodical practices and future planning with the need to remain agile when global supply chains are disrupted? If we think back to the pandemic, there were a lot of lessons that we learned during that period of time. I think to me, one of the lessons that we learned during that period that still is consistent today is speed to decision making. After the pandemic, we made actually a strategic move to invest into a technology that we actually created. It's called Resilience Hub. And Resilience Hub is an AI solution that we use to alert us of global issues that could affect our supply chain and our supplier network. The tool is constantly scrubbing media outlets for natural disasters, geopolitical issues, really anything that could disrupt our supply chain, this tool is out there scrubbing it. It's pretty slick because it uses geo mapping technology. And basically what we did is we said, hey, I've got this really, really core supplier that's critical to our business continuity. They're based in, let's just say Tokyo. I want to put this little geo mapping focal point on Tokyo and I want the tool to constantly scrub the sources within Tokyo and give me feedback when there's something that could be impactful to our supply chain. And what this does is it provides us with time. And during COVID, time was a rarity. You had to make swift decisions or you would lose allocation and that could impact your operations quite dramatically. So this tool is really designed to unlock more time for us to make decisions. If there's an earthquake in Tokyo, I think all the locals are going know instantly. So they're going to be able to react very, very swiftly. Then it's gonna hit the local news in Japan. And then from there it'll federate globally. But what this tool does is the second it hits the local news, it then comes to our dashboard and says, hey, there was an earthquake in Tokyo. Now we can react. Now we can go, okay, do we have a secondary supply line for this? Does this supplier have other manufacturing in other locations? Are we gonna be constrained? What do we need to do? Let's make a decision. So when we talk about obviously future planning and future proofing and disruptions, I think this is one unique thing that we've adopted and it's really working out well for us. And as that technology gets better, the foresight is only getting better. Some instances, AgenTik AI is now, you know, monitoring natural disasters that haven't even happened yet. I don't think that technology is readily available, but they're trialing it. And, you know that's that sort of technology is something that is only going to get better. Yep. So our third question here, we've got two more. We're suffering from serious inconsistent data. How critical is data integrity to building a foundation of excellence? Can be really, really concise here and say it's the most critical thing of building the foundation. If you have data that's readily available to you, it should be the foundation for all of your decision making. If it's inconsistent, if it's poor, then you need to invest the time to really clean that data up. So I know this is probably a brief answer, yeah, I would say data is absolutely most critical thing to building out a foundation for procurement organization. Yeah, so what would your one piece of advice then be on someone going about that, cleaning up that data? Because that's a daunting task. Yeah, no, I mean, you have siloed data and you're struggling to get it into a centralized location or to a data lake that where you can optimize the information to be able to make decisions, there's a lot of resources out there that can help. Jabil can help you as well. We've got that joint venture that we have within Jabil that really works well in this space in terms of collating data from different form factors and different solutions and being able to pull that into a singular data lake. So yeah, I would just say put that in your procurement budget for next fiscal year or whenever your fiscal year is and allocate some dollars to really get your data in good shape. Brilliant. And then we've got one more question here, and that is from your experience leading a global procurement organization, what are the key fundamentals you focused on first to build a strong foundation of value creation, such as sourcing strategy, SRM and P2P process discipline? If I were to look to set up procurement organization today, again, the first thing I would do is get my data right. Kind of extending on the last question. The very first thing I would do is I would spend all my time and efforts getting the data correct. And then from there, I would use the data to really focus on understanding what kind of talent we need to bring in. Focus on building out the team and the organization to marry well with the data that we have. So if there's a big area of spend in let's say PCBA manufacturing, surface mount technology, I would want to bring in a category lead that has that experience. Or maybe we have a lot of spend more on the plastic converting side, injection molding, then I would look to bring in some talent around that. So again, that data being that foundation, helping you make decisions on what it is you need in terms of right sizing the organization and the team. And then the third thing I would do is I would invest in technology to really augment what we're doing as an organization, building that agility, building that flexibility, building that efficiency, building that repeatability, which is always a great thing as well. And from there, obviously you can then scale up, you can look at SRMs, you can look at really kind of scaling the organization anywhere else that you feel is critical to the performance of the organization. Well, is unfortunately all we have time for. I want to say a massive thank you to you Kev for such a deep dive into procurement excellence and a massive thank you to you all at home for watching. Hopefully you're now ready to take the next step into moving your organization from a cost center to a profit engine. And don't forget to connect with Kurt on LinkedIn. So thank you for joining me again today, Kurt, and thanks to all of you at home for watching. Bye bye.