The Critical Link in Supply Chain Management

Pedro Desdier’s specialty in supply-chain management plays a role in nearly every aspect of an organization’s successes

Pedro Desdier, Director of Procurement for the Americas and Global Direct Procurement, Mead Johnson Nutrition

Pedro Desdier began his professional life as an industrial engineer. But, in 2006, while pursuing his MBA at Michigan State University, a summer internship opened his eyes to his passion for supply-chain management, and procurement in particular. Desdier has worked in three different countries for several multinational consumer-goods, food-processing, and food-packaging companies.

He is also a second-generation supply-chain professional. His father spent more than thirty years in the pulp and paper industry in Mexico, in numerous positions at Kimberly Clark and Grupo Scribe, where he retired as head of supply chain.

Desdier spoke with Hispanic Executive about his passion for supply-chain management and the insights he has gained in the past ten years.

Why were you so attracted to supply chain?

Business school gave me a much broader overview of how companies and markets operate. Then, my summer internship with Bristol Myers / Mead Johnson put me in the position of managing two key projects in distribution and planning. That gave me a truly holistic view of supply chain. I saw how it fits into highly complex global dynamics, all the different areas it touches, and got a clear sense of the importance of contributing to leaner and more-agile operations. I also enjoyed the challenge of using an ethical and sustainable supply base to enable innovation and optimize margin / net working capital to create shareholder value and maximize value to the organization.

How do you effectively manage relationships with all the different parts of the organization that supply chain works with?

Staying on top of all current and future business drivers—like the competitive landscape, pricing dynamics, speed to market, ongoing industry innovations, and logistics complexities—is critical to developing robust procurement strategies. I also have to have insight into other departments’ priorities, objectives, and challenges. That’s the only way supply chain can work with them to develop appropriate solutions. That might mean coordinating with marketing to address consumer demand for new packaging. Or it could be partnering with R&D to identify flavor enhancers in order to reduce the amounts of expensive commodities needed to maintain a product’s flavor profile.

What benefits or insights have you gained from having worked in Mexico, Colombia, and the United States?

I feel lucky to have had those inter-national opportunities. They enabled me to not only better understand multicultural business settings and relationships but also gave me a unique sensitivity to key business dynamics and complexities across different markets. That’s especially true around trade issues, inflation, and foreign exchange, or differences in purchasing power between developed and developing countries. There are also very different regulations and requirements from one jurisdiction to another. Having a global perspective contributes to effectively balancing strategies like leveraging scale and centralization against other local and regional factors.

How much of a learning curve was there to understanding how to balance so many competing details?

The best way I can answer that is by describing two different experiences. One of the least-successful decisions I made in my career was relying on an external consultant to obtain import quotas for key raw materials from a government agency. At the last minute, we were informed that we had received zero allocation and were facing the potential of extraordinarily delayed supplies or paying extremely high duties. We solved the problem with a longer-term solution that leveraged a free-trade mechanism that avoided tariffs for raw materials used purely for export manufacturing. The flip side is that one of my best strategic decisions was to optimize supplier networks across North America and Latin America by optimizing free-trade agreements and logistics costs. Both of those scenarios reinforce the importance of constantly looking at the big picture and understanding global—not just local and regional—dynamics.

What are the most-important changes that have occurred in supply-chain management and procurement over the past ten years?

There have been so many different developments that it’s difficult to determine which ones have been the most important. Supplier-relationship management and quality supplier-development programs have really changed the nature of procurement. Digital procurement, with supplier portals, procure-to-pay, and source-to-pay platform standardization, have increased efficiency tremendously. Well-established risk-management and market-analytics applications have also become essential to remove volatility in pricing dynamics that can significantly affect financial targets.

Even with all these new developments, it’s still very important to know how to reduce costs, drive productivity, and maintain competitive advantage through old-fashioned, well-organized, resourced and supported pipeline programs and joint efforts with vendors. It’s not just squeezing and passing costs to vendors but also working together on new and more efficient ways to source raw and packaging materials.

How do you keep up with so many changes?

The teams that make up my departments are tremendously important. They contribute to my successes and to my keeping pace with an evolving industry. In fact, helping them develop professionally has been one of the highlights of my career. I introduced a layered structure that begins with graduate students and works with them up through senior-level positions. It’s been very gratifying to see that most of my associates have grown across multiple categories within direct and indirect procurement.

I also have to give credit to the companies I’ve worked for. They’ve all had very open cultures that facilitate building personal relationships with people at all levels. I’ve truly enjoyed working in environments that are open to trying new approaches and that support maximizing the potential of everyone that helps them succeed.