According to Jeff Labosco, senior director of asset optimization and infrastructure technology for LyondellBasell, procurement relied on more traditional methods just a few years ago than it does today.
From left are Ana Freund of ExxonMobil, Jeff Labosco of LyondellBasell and Nikki Mason of Covestro.
"We are becoming very nontraditional these days, as it relates to procurement and supply chain," Labosco said.
Labosco pointed to his group's adoption of its advancing strategic potential program as an example of such nontraditional methods.
"Our aspiration is not so much to partner with companies that use traditional procurement models focused on transactions or performance," he said. "This is about joint value creation up to and including co-investment."
LyondellBasell has been partnering with companies for the past 18 months to generate breakthroughs and innovation in value creation, Labosco said.
"More and more, what you're going to hear from is this notion of 'partnership potential,' which is really a transformation of the partnerships we have with suppliers," he said. "We're creating 'what's in it for we,' as opposed to 'what's in it for me.'"
The other nontraditional approach being adopted by LyondellBasell is advancing competitiveness.
"This is about value beyond price," Labosco said. "My team has about 300 people around the globe, and we realize that to be a good partner with the supplier, there has to be some share of benefit. You need to achieve your profit margins and revenue, and we need good quality service materials, value and competitiveness."
That concept is in line with what LyondellBasell is doing today, he said. "If you think about our relationship with vendors, what we're asking our supply base to do is to think about next-level value creation," he said.
Labosco said that two scaffolding providers work in LyondellBasell facilities in the U.S.
"It was a traditional relationship, but we challenged each other - CEOs included - to look at how we can create value," he said. "We implemented some digital tools. [Going] digital was really a fundamental part of what I consider to be the next level for measuring the productivity of scaffold erection and disassembly.
"What we found, oddly enough, was that there was a huge variety of productivity rates across our sites. Some sites were operating at a very low level, and some were high. By working with the supplier, we were able to standardize some approaches. We were able to eliminate delays and, through that, bring the productivity levels up."
"Technology can be a challenge, but harnessed properly and with the right intent, it can be part of our solution moving forward," said Thomas Brinsko, CEO of BIC Alliance.
Get your foot in the door
Discussing how her group procures its raw materials and services, Nikki Mason, regional lead for technical goods, services and sites - North America for Covestro, urged potential vendors to follow the proper channels of Covestro's procurement department in order to be prequalified.
"We'll be able to tell you what qualifications are needed and what our processes are for these different commodities and categories that we're sourcing," Mason said.
Ana Freund, area procurement manager of ExxonMobil's Baytown operations, shared some key strategy tips for developing relationships.
"If you can be a subcontractor for one of our primary vendors, that is a great way to get your foot in the door," she said. "I agree that it's great if you can reach out to procurement, but if you don't have a contact, another thing you can do if you are a subcontractor is try to find a sponsor at the site, and that person who we already have a close working relationship with can come back to me or anyone else on my team and say, 'Hey, here's a new supplier here who is doing a bang-up job.'"
