DC Velocity - Digital 2018

sions made in each category align with the strategic goal of adding value for business partners.

2. Regional procurement teams make sure procurement’s objectives are aligned with the day-to-day operational needs in each business unit. They also support the growth of new products.

3. The sourcing excellence team has two main charges: to provide enabling technology and analytics support to category managers, and to ensure key programs and processes, such as category management, are aligned globally and can be easily scaled up to keep pace with growth.

The new structure meant that some responsibilities
that previously had rested entirely with regional or
local groups would shift to new “owners.” For exam-
ple, Pratt notes, category managers started developing
and building contracts, and the sourcing excellence
team took on some inventory responsibilities, while
purchasing at the plants became responsible for
execution of the purchase orders for incoming raw
materials.
The new strategy affected McCormick’s suppliers,
too. Adopting a category management strategy led
procurement leaders to “redefine who we want to
work with, and to build much better relationships”
with those suppliers, Matthews says. The new focus
also included assessing whether suppliers had the
capabilities to meet McCormick’s future needs. Some,
but not all, were willing to invest the necessary time
and effort to work within the new procurement
approach. Some contracts were renegotiated, and new
suppliers were brought on board in some geographies
and supply categories.
The new strategy offers benefits for both McCormick

Perhaps no product exemplifies the idea of global trade better than spices. In fact, it’s not a stretch to say that spice hunters invented global trade. Many hundreds of years ago, the search for pepper, cinnamon, cloves, and other seasonings brought buyers and sellers from across Europe, Asia, Africa, and the Middle East into regular contact, profoundly changing the world’s economic, cultural, and political history.

While the spice trade no longer depends on sailing ships, desert caravans, or years-long treks across continents, buyers around the globe still source spices and natural flavorings like vanilla from growers in developing economies and remote areas. The growers are often family farmers who face an array of economic and environmental pressures, and McCormick & Company Inc. has taken a number of steps to assist them. For example, the company has hired an agronomist who helps growers apply modern farming techniques in an environmentally sustainable way. In some areas, McCormick is applying mobile technology, such as using smartphones to capture information like soil analyses and weather data at the point of origin, to advise farmers.

One of McCormick’s objectives, of course, is to
improve end-to-end control of its key agricultural
ingredients in order to ensure continuity and qual-
ity of supply. But its “Power of People” philoso-
phy means that its motivations extend beyond its
own interests. “We believe that the sourcing sus-
tainability strategy we have developed drives mean-
ingful improvements back to the community level,”
says Brant Matthews, vice
president of global strategic
procurement.

Indeed, adds Donald Pratt, managing director, McCormick Global Ingredients, at the same time that McCormick is “ looking at the long-term implications of sustainability of our iconic herbs and spices and other agricultural products,

we’re also looking at the livelihoods of people we are buying from.” In Madagascar, for example, the company is teaching vanilla farmers, who may only get paid once a year for their seasonal crop, how to manage their finances. McCormick is also helping them to make ongoing improvements in the yield and quality of their product. That will help growers not only improve their livelihoods and provide sustainable benefits for their communities, Matthews says, but it will also result in better-quality ingredients for consumers.