Transcript: What the Duck?! Episode 63

What the Duck?! Episode 63 Transcript

HANGING WITH THE ZHANG GANG: Exploring Sustainable Procurement and Strategic Sourcing with Jane Zhang

Welcome to What the Duck?! A podcast with real experts talking about direct spend 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’m your host, Sarah Scudder, and this is the podcast for people working in the direct materials part of the supply chain. I’m @SarahScudder on LinkedIn and @Sscudder on Twitter.

Thanks for joining me for What the Duck?! Another Supply Chain Podcast brought to you by SourceDay. I’m your host, Sarah Scudder, and this is the podcast for people working in the direct materials part of supply chain and manufacturing. I’m @SarahScudder on LinkedIn and @Sscudder on Twitter. I’ve decided to change things up a bit and incorporate past interviews I’ve conducted from our LinkedIn live events because I feel the content is good and relevant to our podcast audience. So, today, here’s an interview from a LinkedIn live show I hosted earlier this year.

Today, our guest is Jane Zhang, co-founder and co-CEO at ETCH Sourcing. Jane and I have been friends for several years now. I think we actually met at a SIG conference, so really excited to have her on the show. I think she has tremendous energy but also a really unique perspective about sourcing and what it means to be an entrepreneur.

So with that, Jane, I want to start off, why did you choose to go back to school to get an MBA?

Well, first of all, thank you so much for having me, Sarah, and also SourceDay for having me on the show. It’s fantastic to be here.

So, I went back to for my MBA before two reasons. One, because I wanted to really get an international angle around how business is done. And so, when I went back to get my MBA, I had a very targeted, focused structure to how what I wanted to get out of it. And so, I had actually structured my MBA so I spent almost half of it entirely overseas in Europe, going through Germany, going to the UK, going through the rural areas of the UK, conducting a couple of projects, things like that to really get an understanding of how business is done internationally. That was a big part of what drove me to go back. And the other thing was I wanted to get more expertise on specific topics. So, I had graduated with a marketing degree, and I wanted to get a little bit more granular into some of the financial aspects. So, I have a dual major, dual specialization in my MBA. One side is in finance, so very much more on the heavy meat and potato side of business. And then the other side was one of my biggest passions and something that you and I share and I know we both talk about. And actually, we had a session with ISM New Jersey last week about this, sustainability. So, I actually have a focus on global energy management and sustainability as part of my MBA. And that was part of connecting the whole idea of connecting sustainability with how businesses operated and how businesses run today. So, that’s been a really, really big focus for me as well.

In my previous role, I was heavily involved in sustainable packaging, and it was really awesome to see something as terrible as COVID have a really great impact in the sustainability space when it comes to packaging because people really started to care and think about, ‘Wow, I’m generating a ton of waste. Maybe we should make our packaging more sustainable.’ So, it was really fun to be a part of that industry and witness that change. And the work that we do now today in sustainable procurement, working with large organizations to really transform how they purchase, that has so much impact on the world in terms of positive social impact, positive environmental impact. And I have seen these organizations and these corporations really unlock their purchasing potential and leverage that buying potential to drive good in the world and the environment that they operate in is absolutely fantastic.

So, you graduated with a marketing degree. What was the best and worst part of your first paying gig after college?

So, best part of my first paying gig after college is probably getting paid. We like getting paid. It was great. But it was my first job after college. I think I worked in business development at the time. And so, because I had graduated marketing degree, it was actually with a smaller organization, which really I connected to a lot more many years later when I went off and started the firm that we operate today with ETCH Sourcing. But at the time, it was I joined, and in all honesty, it was a very small team. So, even though it was like your job is business development, your role is essentially everything and anything possible that the engineers don’t touch because we had a team of engineers, and that was the primary service that the organization was supplying. Everything else that was non-engineering, that was business-related, fell into my bucket. So, essentially, that was actually I think something is the best and worst part. The worst part was like that was a lot of things at once for somebody who just graduated that I had to learn very, very quickly. The best part of it was I got to see how businesses run on even though it was a smaller business, on all the different layers of complexity, all the different sides of the operations, and really push myself a little bit further than I think I would have if I had just gotten a very structured role within a corporation right away. I think what it forced me to do was become very self-sufficient in learning and establishing a lot of my skills, my capabilities, finding sources of information that did not come to me naturally. There was no guidebook for how do you do certain operations because our founder was an engineer. So, you know, if we wanted to redesign a website, we want to build a marketing strategy, there was no guidebook that was really supplied to me, no formal training aspect. So, a lot of time spent looking for information, looking for ways to develop my skills, and looking for channels and becoming very self-sufficient in that aspect.

So, Jane, why did you leave your first gig?

Well, I think I’d hit a plateau in terms of where I could grow. And it was a small organization, and I think with the founder of that organization, he was very happy to keep it in that very small space. And, you know, for him, it was, as long as I’m making my paycheck that I want to take home, I’m happy. I’ve got my team of three or four engineers, and I’m not looking to really extend, not really just looking to grow. And it was an amazing first row to really grow as, you know, my skill sets. But once you get to a certain point, and it was after about a year and a half that I was in that role, I kind of gone through the full gauntlet, and we explored a lot of these things. And an opportunity had opened up within a large corporation that was focused around um business architecture. And so, really designing the connections between how bigger teams would operate with each other, and that just really fascinated me because I was going from an environment where there was basically three or four individuals, another in a very close office. So, communication was never an issue. You know, alignment was never an issue. To now we’re jumping roles and we’re going into an environment where it’s a big corporation, and there is a whole team that is being built dedicated towards getting engineering and business to talk to each other, which was a very interesting concept. And I love that part of, you know, understanding the whys behind where the gaps were occurring and then building the right blocks so that we could actually close those gaps. And that was what kind of pulled me away from that first gig.

And then tell us, you’re getting into where, as I like to say, falling into procurement story.

I love that, and it’s so true, right? With so many of us in the industry, we talk about it’s like I was saying the other day to one of the area chairs at the post-secondary that we’ve taught at for three years now. It’s so fascinating that there’s now a supply chain and supply chain and procurement is really coming to the forefront in business schools. Like that was never a consideration of mine when I was doing my undergraduate degree. It just never even crossed my mind to say, ‘Okay, you know what? I’m going to study supply chain, I’m going to study procurement.’ It just never crossed my mind because you had your big three. It was like marketing, finance, and accounting. That’s what you studied when you went to business school at the time. But now, if you actually look at some of these post-secondaries, and especially the one that I was chatting with, the area chair, on their mark, they have like marketing, I believe, and then finance, and then right now it’s actually procurement. So, procurement and supply chain, that’s actually one of the top three areas that new generation talent is actually focusing on, which is super cool to me because that was not what I studied. I very much fell into procurement. I think the more I talked to my peers in the industry, a lot of us just kind of fell into it as well. How I kind of discovered procurement in that sense, our organization, and it was a big corporation. I’m sure this is going to sound very familiar to a lot of big corporations, maybe to a lot of our participants. It was a big corp that had been operating for many, many years on handshake agreements and very light procurement processes. Procurement run off this edge of the desk by engineering or by operations or whoever was buying whatever. You know, you had no really supplier lifecycle management. You had no quality assurance. None of those pieces were really there. No centralized strategy that would bring together all of the data and intelligence and really allow the organization to leverage a lot of the buying power that they were actually in charge of. And so that organization that I was working in underwent a transformation where they brought in a VP of supply chain. They brought in procurement, formalized procurement, strategic sourcing, all of those pieces. They started to go through that transformation. What that resulted in is, one day, I was at the city of my desk, and one of my engineers comes over, and he goes, ‘Jane, there’s a bunch of guys in suits, and they want to stop my new product development process because they want to run an RFP. But I already did an RFE, and I know exactly where I’m going with. So, can you go talk to them?’ I was like, ‘Okay, sure. I’m happy to have that conversation.’ And it was a very interesting thing because we sat as our business function at the time in business architecture to design the pieces of the process to get something to market, to get a new product out to market and out the door. And I sat down with grabbed one of the procurement guys and was like, ‘Okay, come on, come on. Let’s map this out. What do you guys do? Talk me through it. Like, what is this three bids in a pie process that you’re trying to force the engineers to go through? Because in the engineer’s mind, it’s like, ‘I went to the trade show. I did the technical comparison. I did the evaluation. And then I did a very brief commercial evaluation. I did the evaluation. Why do we need to go through this procurement process again? What is the procurement process?’ And so they had drawn on a board and very, very wide whiteboard the entire end-to-end procurement process, which made a lot of sense to me. And I was like, ‘Okay, well, I know exactly where this is going to fit in our current new product development model. But also, this actually looks really interesting. So, if you guys are hiring, I’m totally interested in getting involved in this.’ And that’s actually how I entered procurement at the time.

So, when you were on the procurement side, before you started your own company, what skills were most important during your practitioner procurement career?

That’s what I love about procurement, actually. I think it’s why I started an organization in procurement. And I had somebody tell me this the other day when we were out for a drink. It’s like, ‘I’ve never met anybody who is as passionate about procurement as you are.’ And he’s like, ‘You know, it has that connotation where it seems like it’s a tactical role within an organization, but it doesn’t have to be. And that’s the beauty, I think, of procurement. You have so many skills that are actually required. If you want to be really, really effective at your job as a practitioner, you need to know how to negotiate a contract. You need to know how to review a contract. You need to know how to actually conduct spend analysis. You need to know how to project manage, because you’re project managing the end-to-end process. You need to know how to write requirements, how to do business analytics. You need to know how to stakeholder manage, but not only broadly within your organization, but also vertically. You need to know how to summarize, how to report, how to influence. There are so many skills that are actually required. And every single time you take on a project, all of those skills are put into place. And so, you know, when you think about the procurement function, it can be very tactical, or it can be actually very strategic. And when you actually leverage all of those different skill sets that you build, it becomes so impactful for an organization. And it becomes so impactful for what you can actually generate for an organization. So, all the skills, I think. And most importantly, the ability to herd cats. I think I need to make you a herding cat t-shirt or hoodie. I think that would be great.

What was the most… Again, I’m talking about when you were on the practitioner side. What was the most difficult part for you about being in procurement?

I think the most difficult part of being in procurement was getting past the biases, I think. There’s definitely, especially in organizations where procurement is very new, or procurement has historically been fairly tactical, getting involved and getting that broad understanding of what it is that you actually have to offer out to your internal business units. Because fundamentally, procurement is a support organization. We’re a support function. We’re here to support the business in driving more value for the organization. And getting that messaging out there and having people see you not as a roadblock, not as somebody who’s going to come in and add time, add process, add paperwork, so on, so forth…

Not as somebody who just, you know, gets involved with the talent of ‘Hey, here I’m going to throw you something over the fence. I’ve already negotiated everything. Can you just put it on paper for me and just place the peel?’ Getting past those biases and transforming those business relationships was probably, I think, the most difficult part of procurement. However, I think that is also the most rewarding part of procurement when you actually work with business units. You start to solve their problems. You take that problem-solving focus and you start to engage these business units on their terms. You know, not just focusing on ‘Hey, I’m procurement. I have a cost savings mandate.’ That’s great, but most of your business units don’t care about your cost savings mandate. What they care about is, ‘Are my suppliers gonna pick up the phone? Are they gonna deliver? Is the quality gonna be good? What are we going to, is this going to satisfy what I need as a business unit?’ And when you start to help them solve those problems, you see kind of that transformational point where it’s almost like a tipping point. They go from very defensive to, ‘I see you as tactical too.’ You start to get invited into partnership conversations, into um, strategic conversations. You start to get involved and they start to come to you for a consultation because guess what? You’re procurement. You see everything across the organization. You have access to all the spend data. So, you can now start to add value in a much more meaningful way through that partnership, and I think that is one of the most difficult parts but also one of the most rewarding parts.

What would you say is the biggest impact that you made during your procurement roles?

Oh, biggest impact? I think it goes back to that. It’s transforming the views on procurement within business units. I think there was a quote a friend of mine said as we were, when we had established etch and my co-founder and I, we had decided, you know what, we’ve actually met in um, uh, in that corporation and we decided, okay, we’re gonna branch off, we’re gonna start ETCH, we’re gonna do procurement the way that we think it should be done. And we want to disrupt procurement. And when we had made that shift, we gave our notice, and it was an extended notice, so we gave an extended notice period, and we kind of went through all the transitional pieces, all that stuff. And on the very last day of, like, the last hour of the last day, so Friday afternoon, I think at 4:30 p.m., I was on, I remember this conversation because I was on the phone transitioning, um, and planning, working with one of my security business units because we were, we had this amazing, you know, plan for executing, um, an opportunity to really bring in a lot of efficiency in their area. But I was, of course, leaving, so that that was going to be a project that was transitioned off, and we were having a conversation around it. And I got a Skype message from one of my friends who was waiting for me to go for my farewell beers, and she’s like, ‘Can you please stop building bridges?’ And you are literally clocking out in, like, the next two minutes. She’s like, ‘You are building bridges on the Friday afternoon before you leave.’ And I think that was probably the biggest impact, and I like to think that that was the biggest impact that, um, I had during that time, is establishing those relationships, establishing those foundational changes of perspective, how procurement is viewed, and how procurement is collaborated with within the organization.

So, Rodrigo submitted a question and I think this is a good time to pose it. So, thank you for this question. The question is, ‘Hi Jane, thank you for sharing your experiences. At the moment, I’m transferring my procurement skills from working in the public sector in Mexico for more than 14 years to the private sector in the United States. I studied economics and also have postgraduate studies in politics. What would you recommend in order to consolidate a career in a new country and corporate environment?’

Absolutely, uh, it’s a fantastic question, and I think in the roles that we do today, we work with corporations that have global operations, and we’ll go from, you know, working with a client that is US-based to working with a client that is, you know, China-owned, and you have all the different cultural changes, you have all the different, um, corporate changes as well. I think the interesting thing about procurement is the fundamentals don’t change. Your how you do procurement, once you become a master of the procurement process, that doesn’t change. What does change, though, is the nuances of the organization that you’re working with. So, I would say one of the biggest things there is take your time to really understand the cultural implications of the organization that you’re working with. How is procurement viewed within that organization right now? Because the difference between public sector and private sector a lot of time is not just pace, it’s also, you know, the amount of requirements, the amount of mandates, and, um, when you look at kind of the policies that you know you absolutely must adhere to, the fierce adhesion to policy in public sector may not actually be reflected in private sector. And those are the kind of the little nuances that you really want to understand. You want to understand, take the approach of understanding the business, understanding the business units that you’re supporting, understand kind of their history, how do they view you today, and then start to take that approach of ‘I want to solve your problems, whatever they are, big or small. I’m here to solve your problems. Let me start to work together with you.’ And be a part of what you are going through as a business unit. And I think that is going to get you a lot further than if you try to force right away your procurement standpoint. You must comply with this procurement policy. I’m not saying don’t comply with procurement policy, not by any means. Considering that we do, we do right for current policy  but taking the approach of knowing that your job and your role as procurement is to help them navigate your world in the most effective manner so that they can accomplish their business objectives. And Rodrigo, I know Jane well enough, so I’m just going to throw it out there.

I think if you want to touch base with her on LinkedIn and maybe set up some time, she could be a really good resource and help you navigate as you transition into this new new world in the US. 100%, I’m more than happy to have a chat with anybody who wants to reach out.

So I want to talk about now the world of entrepreneurship, since you decided to leave corporate and co-found a consulting firm in Canada. So I know that this is something I’ve had many friends talk to me about who have been procurement practitioners, been on the supply chain side for a long time and have thought about, ‘Gosh, maybe, you know, I want to look at starting my own company or doing some consulting.’ And there’s a lot of uncertainty, and I think it can be very scary to people to leave a very, what I would call, more structured environment into something that’s completely unknown and can be very scary and challenging. So, what is the… Let’s start off by having you talk about the best part of having your own business.

The best part of having my own business? Well, I don’t have to get approved vacation. Nobody approves my vacation. But on the flip side, you know, I keep saying nobody approves my vacation, but nobody gives me vacation either because I work for myself. So, you have that desire, if you have that desire to push forward, I find that a lot of times you actually end up spending more time than you would and working a lot harder than you would in a corporation. Even if you were a high performer in a corporation, that’s kind of just how it kind of evolves. But the difference is that, you know, because you love what you do and creating the environment where you know, our people can love what they do. And I think that’s the best part about it. I get to work with some absolutely phenomenal people. My teams, my clients that we work with are just absolutely amazing. And creating the environment that kind of enables our team members to be able to grow, to be able to enjoy what they do, and really fully expand. And, you know, watching their journeys and unfold is super, super rewarding.

So now I’m going to flip side it, and I’ve worked in startups my entire career, so I know that it is not all pretty. What is the worst part of having your own business?

The worst part of having my own business? Well, I think initially, to start, it’s definitely challenging. You have to be prepared for the fact that you’re going to lose a lot of those nice cushy safety cushions from a corporate standpoint. You lose a lot of that, those comfortable perks, I’ll call them. They definitely go away. But then, seeing the organization grow and then growing your organization to the point where you can start to bring a lot of that back, I think that’s super rewarding. But definitely, the worst, I wouldn’t even call it the worst part, but the most challenging part is the start. It’s definitely the start. It’s the first, you know, two, three months where you’re sitting there like, ‘Oh my goodness, I just… all right.’ Like day two after we quit and started the company, we’re sitting there at a cafe, and I remember looking at my business partner, like, ‘Okay, so now what?’ And you know, building that unknown is super exciting but also knowing that at that point in time, we have no fixed income at all whatsoever, and it’s now up to you to bring all that, and it’s up to you to grow that. And as you continue to grow the organization and people join, it’s amazing to see how fast and how far you can go with people who really want to share in that journey with you. And I think that’s pretty fantastic.

So talk to us a little bit about this company that you co-founded. So, what does ETCH Sourcing do?

Yeah, that’s fantastic. ETCH Sourcing, we are a boutique consulting firm. We’re based out of Canada, and we have a regional office in Montreal, and our headquarters is in Calgary. And what we specialize in is all things procurement, category management, strategic sourcing. And there’s really three core focuses for us. One is around managed procurement services. That is essentially the deployment of our teams within organizations, client organizations, to really take on the work of doing the procurement, running their procurement, helping them manage that spend, getting their arms around to spend, compliance, risk, whatever challenges that they’re having within their organization. Our teams come in, and we actually act as an extension of our clients’ procurement teams. We don’t really see ourselves as ourselves ever in any of our streams of business as outside consultants. We really want to come in and be part of an organization’s team and part of an organization’s growth and sharing that journey with them. So that’s one aspect of it. The other aspect that we really drive very, very strongly towards is sustainable procurement. And really that is the function of embedding sustainability into your procurement function, whether it’s again us performing and running the RFPs on behalf of our clients or whether it’s helping our clients modify their existing procedures, processes, tools, build the right training, and really deploy that within their organizations across their organization to really lead to some tangible results. And then the third part is really around technology adoption. So we never get involved from the technology implementation perspective. I’m terrible with code. I cannot code to save my life. But what we really specialize in is because we are industry professionals, we do come from industry, and we do do day in and day out procurement, we understand when a technology is deployed, how to most effectively integrate it into our day-to-day. And so that’s what we help organizations with that are going through technology transformations as well.

What has surprised you the most in supply chain or procurement?

How much I would love it. I think definitely how much I would love it. I did not go into procurement thinking that this was going to be a forever role, and I did not go into procurement thinking I was gonna start a business in procurement. Before I started with procurement, I think I’ve always kind of gone through these cycles within my professional career where I would get very good at something, and then I move into something else, go into another skill set. But what surprised me the most about procurement was how varied it is and how… how at the same time you can build your core skill sets to become very, very strong in it. Your challenges are still going to change. New contracts change, your fires change. We’ve dealt with everything from very tactical contracts to, you know, million-dollar, multi-million dollar audits, to trying to resolve highly confidential and negotiate non-existent tangibles into a massive contract. So these challenges change constantly. The tools and the skills that you’re applying are constantly maturing, but the challenges that you’re faced with are ever-changing. I think that was definitely a very pleasant surprise for me.

I want to talk a little bit about supplier management. I know this is something that has become really a focal point with all the supply chain disruption this year. What do you think are some basic tips that procurement professionals should know or that they can work on to help better manage and foster relationships with suppliers?

Absolutely. I think open communication is definitely one thing that I actually stand by, and I do encourage all of our teams, even when they engage with our clients and our client suppliers, to have that open communication. Because you might be at the negotiation table with that supplier, but when you turn away and that you go back into your organization, they go into their organization, they are your voice within that organization. And the more that you can better equip that individual to have those conversations, to represent you within that organization, the better. And especially as we’re kind of moving into, and we’re already in this wave of sustainable procurement, don’t try to be an expert in terms of your supplier’s business. You’re not going to be. They do this day in, day out. That is their core operation. So instead of trying to master and become, you know, for a lack of a better example, the print master and the printer, the print uh, expert in this area, um, why don’t you ask them? Ask them what they’re seeing. Ask these suppliers, ‘What are you seeing? What trends are you looking at?’ Look, we have these targets. How are you going to help us get there? And have that open dialogue with your suppliers. I think that is super, super important when you look at supplier management. And the other thing is, don’t treat it as an afterthought. Like, when you look at your procurement process, and a lot of times we get very busy and we go start to end, it’s, you know, we initiate, and then we get to contract, and then we hand it off to someone to operationalize, and then we go into the next cycle and so forth. But that supplier relationship and really taking the ownership of that supplier relationship, helping to facilitate those conversations along with your business unit to grow that relationship, is super important and should be continued as part of the function that is part of the life cycle. Yeah. And one of the things that I think is really interesting is the pivot from the ‘I’ to ‘We’ conversation. And I think that’s an important cultural shift as companies are starting to embrace collaboration and working more closely with suppliers. And I think it’s really important to drive supplier innovation because if you don’t, your competitors will, and they’re going to be getting the cool new innovations from the supplier community and you are not, and that can really, really hurt and ruin a company.

Awesome. Well, Jane, I want to thank you so much for coming on our show today. Love your energy, love your passion, and I think it’s a really unique niche that you are in, Canada, and really focused on that market as well. So if anyone, you know, has a global team and is needing procurement and sourcing support in Canada, I think it’s a really great option.

Thanks for tuning in today. If you missed anything, you can check out the show notes, you can find us by typing in ‘What the Duck?! Another Supply Chain Podcast’ in Google. To have optimal search results, make sure to add ‘Another Supply Chain Podcast.’ This brings us to the end of What the Duck?! Another Supply Chain Podcast. I’m your host, Sarah Scudder, and we’ll be back next week.