What the Duck?! Episode 22 Transcript
SUPPLIER EMPOWERMENT: Manage Relationships and Map Out Supply Bases with Rachel Hassall
Welcome to What the Duck?! A podcast with real experts talking about direct spin challenges and experiences. And now, here’s your host SourceDay’s very own manufacturing Maven, Sarah Scudder. Thank you for joining me for What the Duck?! Another Supply Chain Podcast brought to you by SourceDay. I am your host, Sarah Scudder, and this is the podcast for people working in the direct materials part of the supply chain. I’m at Sarah Scudder on LinkedIn and an S gutter on Twitter. If you are new to the show, make sure to follow this podcast so you don’t miss any of our direct materials supply chain content. Today, I’m going to be joined by Rachel Hassell, who I’ve known for a few years now. Her and I both used to live in the San Francisco Bay Area, and we are going to discuss how to empower your suppliers. If you work for a manufacturer and are struggling to get your suppliers to come to you with solutions, then this episode is for you. Rachel was most recently the VP of Direct Procurement, where she was responsible for not only solving very complex and challenged supply chain vendor base, but she was also responsible for unlocking a vendor base following a Chapter 11 filing in June, less than, I think, it was less than like six or eight months, right after she started. So, a crazy experience jumping into something like that. Rachel has also tackled the challenge of re-establishing the procurement organization within Revlon, ex-functional teams, and forums. So, Rachel, welcome to the show. Thanks for having me, Sarah. I’m super happy to be here.
So, I’d like to have you kick us off by describing yourself in one sense. I love this sort of thing. I mean, you really think about who I am, but what I would say is I’m an enabler of ideas, of people, of brands, of supply chains. I really love finding ways to make stuff happen, and most of the time, that’s through enabling the people around me to be the best version of themselves. What do you do for fun? So, fun, using air quotes maybe sometimes, but I love spending time with my one-year-old and my three-year-old, so a bunch of joy there, but also many challenges you could imagine. And I’ve recently restarted my powerlifting career. I’ve been a powerlifter for a number of years, competing competitively, and just restarted that journey. So, that’s what I do for fun. So, I have newlywed friends who purchased a house here in Austin and invited me over for dinner, and I made the mistake of buying them a very large plant as my gift for their house. Well, I had it delivered, and it weighed, I want to say, at least 30 pounds, and I do not lift weights, and it was quite a challenge getting the plant into the car and then trying to carry it up to their door. So, it was a reminder for me. I need to not do all cardio, and I need to do some weight lifting as well. And you need to look at your specifications for what you’re buying.
When you and I were prepping for the interview, there was kind of a theme that I pulled out in our conversation, and that was that you really love or have a passion for consumer brands. Why is that?
I would say that it’s pretty foundational and pretty core to me as a person. I’m an extrovert through and through, you know. I get my energy from connections with people, but this also carries into what I do for my job. Being able to truly connect with the brands that I’m working on, seeing them daily, using them daily, having my mom use them daily, being able to call my mom or my friends and say, “Go look at the shelf at Target, my latest project is there,” you know, being able to have that connection on a regular basis really ended up being the foundation to what I wanted my life to revolve around, and that includes, you know, in my day-to-day work.
So you started your career a little differently than a lot of us randomly fall into supply chain. So you actually started in R&D, and after going through that journey, you actually feel that is the starting point of supply chain. Why is that? I would like to dive into that a little bit more.
Yeah, so at the end of the day, you know, the products that we’re making, right, those definitions of what we’re making, those specifications of what we’re making, that is the start of the supply chain, right? So all of those choices that are made during that product development process, the specifications on the complexity of the product that you’re making, the sensitivity of the product that you’re making, now how quickly you can manufacture the product, you know, how many alternate vendors can you have, all of those decisions are made in the product development process, and that really defines then what you can do as a supply chain to be able to manufacture that product and then your ability to create any resiliency around that product. So my real belief is that we need to make sure that the supply chain is not starting after all of the specifications are locked in because it’s too late at that point. It needs to start during that development process.
So after you started in R&D, you then transitioned into something called category management. So why did you decide to make this transition?
Yeah, to be really specific, I was working at Unilever at the time, and I got pulled in and made the transition into what we called category management for procurement, which really meant that we were focusing on the procurement for when I was working on deodorants and oral care categories, right? So we were the representative for procurement to the category teams, and we were the representatives back to the procurement organization for those categories, right? So it was really much of a connect-the-dots sort of role. But I would be lying, Sarah, if I told you that this was part of the master plan. You know, it really wasn’t. I was approached by my first procurement boss, a gentleman named Dave Moore, and he told me that I’d be great in procurement. And I looked at him and I shook my head and I said, ‘Dave, you’re crazy. I can’t do what you do.’ He had a very specific, a very effective, but very specific style. And I said, ‘Look, I can’t do that.’ And he said, ‘Rachel, I’m not asking you to do what I do. I’m telling you we’re gonna figure out your style, and you’re gonna be great at procurement. So I’m asking you to trust me. I’m asking you to learn and to develop your style, and you’re going to be a great procurement person.’ So, Sarah, someone saw something to me that I had no idea existed, but that’s how I transitioned into my first procurement role.
So, a very dear friend of mine, Anna McGovern, spent the first 20 plus years of her career at Unilever. She actually retired there, and so I’ve heard a lot about the organization and their supply chain practice, which is quite elaborate and established compared to a lot of organizations.
So, what was it like working for Unilever, given that it is so big and, again, I would describe that as having a very mature supply chain function?
Yeah, first and foremost, Anna McGovern was my second boss at Unilever in a procurement space and learned so, so much from her. But, you know, really adding to that, Unilever was a fantastic learning ground. I can’t stress this enough, you know, really they have the best-in-practice processes, procedures, protocols, training. It was such a phenomenal place to go and to be a sponge and to just absorb, verb. When you’re starting out in procurement, you know, there’s a lot of things to be said for learning on the fly. Also, it’s a really phenomenal way to learn how to do things correctly and in the most efficient way possible. So, I thought it was really amazing being at Unilever. On top of that, I got to work on some really incredible brands, right? I got to work on globally recognized brands like Dove and Tresemme and TG. But really, one of the things that I walk away with from Unilever was I got to learn about what it really means to invest in people and what it means to invest in the support tools for people. So, whether that’s training, whether that’s systems, I really got an appreciation for how much that can unlock your teams to do really incredible things. So, jumping into procurement first at Unilever just gave me a great solid foundation on how to do procurement most effectively.
Yeah, I feel like you got a firsthand experience at the very beginning of your career, which is rare and awesome, of what it looks like to have a well-organized, well-functioning procurement team, and then you kind of took roles at different organizations that weren’t as built out, and you took that foundation with you. So, very cool.
So, what did you do next after Unilever? After Unilever, I went to People Against Dirty, which many people listening will really know as the Method brand, which is not a brand, not a Target brand, even though people might think that. But I joined People Against Dirty and I went in and did all of the packaging procurement for them. So, People Against Dirty, much smaller organization at that time, we had just built our first factory, and so really looking to establish the procurement space around packaging, kind of end-to-end. And that meant developing the long-term strategy for strategic partners, as well as picking up the phone and chasing down a truck as well as a last-minute move to a new vendor because of an issue. So, that’s the journey that I took right after Unilever.
So, let’s talk about your most recent role and kind of what that looked like. I know it was kind of a whirlwind, and you got thrown into dealing with a lot that most people probably never will ever experience in their career. Yeah, yeah. So, fast forward. So, I joined Revlon back just about a year ago in February, and it was actually much shorter into my tenure, Sarah, than you said. We were a couple of months into my tenure at Revlon when we filed Chapter 11, a very public filing, and a filing that was done very quickly. Most large organizations that size take anywhere from, I was told anyways by the group who led us through this, they usually take anywhere from nine months to a year to prepare for a filing of a company this size. In Revlon, we had a couple of weeks, so very quick process that we had to go through, had to come up with a lot of processes and procedures and protocols to get us through this. And the team was really incredible. We had about 300 vendors who were directly impacted by the filing process, and we had to unlock all of those vendors to get our supply chain back up and running.
So we, in record time, got through about 250 different settlement agreements with the vendors in order to get our supply chain back up and running. And this is, you know, really unheard of when you go through that bankruptcy process. As you said, Sarah, I learned a lot of things that I hope to never utilize again. I hope to never utilize a lot of the learnings about the actual bankruptcy process. But what I would tell you is that the learning that came through was, you know, how valuable our vendors are and how critical they are to our supply chain. And being able to be open with our vendors about the process really helped us to unlock that supply chain as fast as we could.
So, other than unlocking your supplier base, which you mentioned you had over 300 suppliers that you had to deal with because you had the filing bankruptcy, what was your greatest direct spend challenge last year?
“Yeah, so I think in the cosmetic space specifically, we had hyperinflation at the end of 2021. And some of our critical areas regarding really raw materials is where we were having some of the most significant impacts. Silicone, right, was one of the ones that was most impacted for us, right. So we saw that, you know, through the end of 2021, roll into 2022. And then as we went through 2022, we saw the chemical space starting to ease off with regards to the inflation, just in time to see packaging really take off with regards to the impacts. And as we approached the end of 2022, really looking at the energy crisis in Europe specifically really was super impactful for our supply chain in Europe. When you look at, you know, the Revlon Factory in Spain who’s doing a lot of fragrances, talk about glass, right? Glass in Europe with the energy crisis just really heavy hit. So the hardest challenge for us in 2022 was just this kind of roller coaster of inflation going from one part of our portfolio to the next.
And you mentioned a phrase hyperinflation, what do you mean by that?
We’re talking about unprecedented inflation numbers, right? We’re talking, you know, some of the areas you know, you looked at, you know, glass, you know, and you look from last year, you know, by the end of the year, we were seeing vendors coming to us with, you know, proposals of 20% increases. You talk about silicones, right? From the time of, let’s see, it would have been July, right, of 2021 when you study your targets for the year and your budgets for the next year, right? We had seen by the start of 2022, 300% increase in silicones, right?
So you’re talking about these numbers that are just completely unprecedented, and if you ever try to take those to a budgeting meeting, people would laugh, right? And I think that’s been one of the challenges in direct materials over the last couple of years. Pricing is no longer what it used to be. You can no longer set a stagnant price and then expect that to last for more than a couple of months, right? It’s just really unprecedented.
What was your strategy at Revlon, where you managed a global supply base, and you mentioned that it was kind of this rolling inflation where it would affect one category than the next? So the most important thing for me in running the direct materials was looking to make sure that we understood who our strategic partners were. If we didn’t have clearly articulated our strategic vendors, my goal with the team was to set up a strategic vendor base, right? I think sometimes we get into this mode of simply going from one vendor to another, trying to chase price, rather than taking a step back and saying, “Hey, actually, I’m gonna ride it out with this vendor because we have a strategic long-term vision that’s going to unlock over the next five years, being able to provide us consistency and resiliency.
So one of the reasons why I wanted you to come on the show is you have this philosophy and belief around empowering your suppliers. Why do you believe in empowering your suppliers? Why is this so important to the core of who you are in your career? Yeah, so, you know, I believe at the end of the day, anyone supporting your business needs to be empowered to do so. I think a lot of companies talk about and focus on how do we empower our employees, right?
How do we get them training? How do we give them the tools and the methods in order to do their job the best?
I think people forget that at the end of the day, we’re nothing without our vendors. We can’t produce anything without our vendors. So, I’m really in the mindset and belief that as much energy as I put into empowering my team, I need to empower our vendors to be able to be the best suppliers for us as well.
So, easier said than done, how do you empower your suppliers? That’s kind of scary and overwhelming, especially for buyers who work for small or mid-sized companies where they have very limited staff and resources.
So, I kind of put this into four kind of key buckets, right? The first bucket is being descriptive rather than prescriptive. And what I mean by that is I want to tell my vendors what I need. I don’t need to go and tell them how to run their Factory, how to do their jobs, but I need to tell them what I need and then have that conversation about how they can deliver best for what we need, right? So, again being descriptive about what my business needs rather than prescribing to them how to do it. I shouldn’t be in the business of telling my vendors how to blow bottles or create fragrance.
The second one is being clear on any non-negotiables, right? I think so often we get into this space where there’s 10 things that are absolutely most important. No, you get three non-negotiables. Sometimes you can flux to four or five, but really you need to be super clear on what is non-negotiable. Sometimes this is, ‘Hey, my brand is vegan,’ or, ‘Hey, you know, I need my bottles to contain 60% PCR.’ Whatever that the non-negotiable is, you need to be clear on that, and then everything else has to be negotiable. And for me, this is really clear, and if you can’t articulate what your non-negotiables are, you’ve got to go back to your business and figure out what that is.
The third thing is providing regular feedback to your vendors. Now, this can be as simple as scorecards, it can be QBRs (quarterly business reviews), it can be weekly phone calls. But setting up a cadence depending on how strategic or tactical they are, you need to have that regular cadence of feedback for your vendors. It’s super, super critical. And then the last area which I think is probably the most critical of any of these is holding all parties accountable. You’ll hold your vendors accountable by providing that regular feedback, but holding your internal teams accountable is absolutely most critical. If your teams can’t be clear about what they need, if your teams are not specifying correctly, if your teams are not giving the right signals to your vendors, it’s impossible for your vendors to provide for you. So really being able to hold your internal teams accountable, which is probably also the hardest thing to do, is the most important thing to empowering your vendors to delivering for you.
When I talk to suppliers, which I try to do on a very regular basis, I would say they’re one of their biggest points of feedback is how important communication is. And often their communication they get from their customers is very poor, and then they’re trying to guess and figure out and interpret what’s being asked of them versus the customer providing clear direction. So I think it’s something that a lot of companies struggle with, and I think the internal focus is really important.
Yep, absolutely. And what you really have to work with is your cross-functional colleagues to make sure that they understand what you’re doing. I think sometimes, if you’re just going and trying to empower the people in your organization to give the right information to your vendors, it can feel very weird for people. You’re holding those numbers, those cross-functional teammates accountable, and they don’t really understand. So bringing them along for that process is really, really important. And if you’re part of an organization who’s not used to that, invest in that relationship and bringing them along to empower your vendor base.
In regards to investing, have you implemented or used technology that has helped manage those expectations and the communications with your internal team and/or with your supply base?
Yeah, so you know, I’ve not gone in and implemented a new fancy technology system. But what I would tell you is that, you know, data is data is king. So, and it doesn’t necessarily need to be fancy. I’ve worked at Unilever where we had automated scorecards and beautiful data in order to transfer specifications and say, ‘hey, this was your on-time-in-full report card.’ But you can use very basic tools. I’ve seen great cubes that are created just from very basic ERP systems. But having those metrics available is really important. And I think if you’re unable to do that, beg, plead, work with your organization to get that in place. And if you don’t have that available, work with your vendors. A lot of vendors are actually really happy self-reporting if you tell them what you’re looking for. So don’t let it be an inhibitor if you don’t have a fancy tool. But really, some of those tools are really helpful, Sarah. They do make a difference when you can click a button and get a report. But utilize what you have. There are a number of ways to get that done. Another thing that I think has kind of come up.
When we’ve been prepping for our chat today, it’s around the whole supplier relationship management. So you’re really big on empowering your suppliers, managing internal stakeholders. How would you describe your supplier management strategy? And I’d also like to have you share some advice for buyers working at smaller organizations that maybe don’t have something in place yet for this.
Yeah, so my supplier management strategy is pretty simple. I think the famous “keep it simple, stupid” phrase applies here. Sometimes we like to get in our own way with our supplier management strategies, and I think there are really a couple of key things. First, understand what your vendor means to your business. Is this a tactical vendor or a strategic partner? Let that guide your management strategy of that vendor. There’s not a one-size-fits-all approach, and you definitely should have some strategic vendors and some tactical vendors. If you can’t map out your supply base, that’s the first thing you really need to do. That’s super critical. Number one, because that will then, when you say “mapping out your supply base,” what do you mean by that?
When you talk about mapping out your supply base, it means understanding if this is a vendor who you’re going to invest a lot in a relationship with, is this a strategic vendor that you’re going to put more and more business into, is this a tactical vendor who maybe you’re not going to invest a lot in that relationship but it’s someone that you go to periodically, or is this vendor on an exit strategy? Are you actively looking to leave a vendor? Then you can map that against the criticality to your business. So you can have a strategic vendor who is someone that you want to grow with, but they’re a very small part of your business right now, but you want to move them into higher spend. It’s really about knowing where your business or the vendor is today and then where do you see that going tomorrow and how do you plan for that? I would argue some buyers will base it on spend, and that is not necessarily the right strategy. You could have a supplier that has a very small spend but provides a critical part that you cannot get anywhere else, and if that part does not arrive on time, it will impact your entire production line.
So what should buyers be looking at when they’re ranking and organizing their supply base? Yeah, so when I’m ranking my supply base, the key metric number one that I’m looking for is this general bucket that we call resiliency, right? So, can I get this item from somewhere else? How long would it take me to turn on this supply elsewhere? If you have a vendor who creates a raw material that is one of a kind, that comes from Timbuktu and there’s only two kilos available a year, that’s a priority to be hyper-critical, and you need to be talking to them daily. You also need to be working with your teams internally to find an alternative, so that you’re looking at it through the scope of how dependent am I on this vendor? This resiliency question is going to then dictate what you need to do interacting with that vendor, as well as, you know, is there anything else that needs to change internally to reduce the criticality of that item or that vendor? And then, where does spend fall on your list?
Because spend is important. I mean, you need to look at how much you do spend with a supplier on an annual basis. Yeah, so I would really put spend, you know, kind of after you look at the resiliency ranking of it. From there, really, you talk about spend. After that, it is something that is important because of the fact of just, you know, in any change in inflation, any change of, you know, whether it’s currency fluctuation, things like this, it’s very important. So, I would say if you look at the resiliency as number one, spend is number two, simply because of the impact that it could have on your business with a small change. And then, where does geography and location factor in? Another thing that I think is really important is that companies have a diverse supply base. So, if your entire supply is in China and China shuts down for a month, your supply chain is really in a bad place. Yeah, it’s been a really interesting journey over the last year talking about that. You know, everyone knows the impact that China has had, whether you’re talking about the import tariffs, right? That’s been huge. You’re talking about the backlogs of the transit from China, right? Huge impacts. In the same breath, I look at any company who has spent the last couple years localizing into Europe. The energy crisis now. I mean, everyone’s getting bit by that. So really what you’re talking about is diversification, right? And your ability to move and transfer your supply chain. That is the most critical thing at this point because as we talked about, whether it’s inflation, the supply chain issues just kind of keep on evolving, right? So the more that you have duplicate supply or ability to change to an alternate vendor base, that is really what we’re talking about now. It’s no longer everything out of China. It’s no longer everything hyper-local because we see even hyper-local strategies around the world having significant impacts at this moment in time, yeah.
I host a Manufacturing Supply Chain Woe Show, and I bring panelists from all over the world to come on and tell their supply chain stories, specifically the train wrecks, right? The crazy stuff that they don’t ever want to think about or live through again. And the number one theme from our show last year was they wish their organization had multiple suppliers for everything that they purchased, and the number one mistake that they made was that they relied on a single supplier for some items, and then when that wasn’t available, it had a significant negative impact on their organization.
So I would, that was probably the most common thing that panelists brought up and talked about last year. Yeah, and I think you know, again going back to R&D being the start of the supply chain, working with your R&D teams up front to identify those potential problems, you can build in secondary qualifications into your development process, which is way easier than trying to do it after you can’t get something. Rachel, what is your top professional tip for those that are focusing on advancing their career and, you know, kind of figuring out what’s next for them?
Yeah, so one of the things, and it sounds a little bit strange when you talk about it this way, but you should be able to put a supplier as a professional reference on any job application. You should be able to say, ‘I’ve worked with this person strong enough and I have a good enough relationship with this vendor in order to put them as a reference for any job.’ I think a lot of times you say, ‘Oh, it’s you know, my boss or this colleague.’ We spend so much time daily working with our vendors and for me, if I picked up a resume and someone said, ‘This is one of my strategic vendors, and I’m putting them as a reference,’ that for me speaks more than talking about someone that you’ve worked with internally. I will tell you that right now, if someone asks for my resume, I have two vendors that I put down as professional references. Thanks for discussing how to empower your suppliers today, Rachel. If you have anything you’d like to promote or a project you want to talk about, now is a good time. And where would you like to send people if they want to connect or find out more about you?
“Yeah, if anyone wants to find me, you can find me by putting in Rachel Hassall into LinkedIn. I’m super happy to connect. I’m also part of the Chief Network for executive women, so if you don’t know about that network, please look into it or feel free to reach out. I believe it’s a great resource for anyone looking to build their career and really talking about women in supply chain. It’s such a great platform in order to connect to other supply chain leaders that are females in really learning about that space. So that’s where I would send people to connect to me. If you missed anything, you can check out our show notes. You can find us by typing in What the Duck?! Another Supply Chain Podcast in Google. To have optimal results, make sure to type in the ‘Another Supply Chain Podcast’ at the end to ensure you don’t miss a single episode. Make sure to follow this podcast and subscribe to us on YouTube. If you are new to the show, make sure to follow this podcast so you don’t miss any of our direct material supply chain content. I’m @SarahScudder on LinkedIn and @Sscutter on Twitter. This brings us to the end of another episode of What the Duck?! Another Supply Chain Podcast. I’m your host Sarah Scudder, and we’ll be back next week.