878: Building Procurement as a Strategic Growth Engine W/ Travis Hodge

0:05Hi there, my name is Philip Leidson. I want to welcome you to the Art of Procurement podcast, the podcast that helps you, a forward-thinking procurement professional, position yourself and your team to proactively take advantage of the revolution that's taking place in procurement today. By interviewing industry trailblazers and sharing insights from our own experiences, my team and I pull back the curtain and shine a light on the strategies, tactics, and tools

0:30Travis Hodge: that procurement teams are using to elevate their impact. And today on the show, I'm joined by Travis Hodge. Travis is the Director of Enterprise Sourcing and Procurement at Envent, and we're here at iValue as Procurement Innovation on Torrevent in Chicago to discuss the role that procurement can play as a strategic AI-enabled growth engine for hyperscale infrastructure. And first of all, Travis, welcome to the show. Hey, thanks for having me. Yeah, it's a pleasure to join you. And we've had lots of good conversation off mic about football, but I don't think we can bring that into today's conversation.

1:03But the question I always ask when I start these podcasts is, did you find procurement or did procurement find you?

1:09Travis Hodge: No, it's a great starter question. So I was born and raised in the Appalachian Mountains in Virginia. And my father was an entrepreneur. So at a very early age, there was a lot of buying and selling. Maybe it started with a car or a truck or a camper. And then it got into housing and commercial real estate. And I ended up on the buy side of the equation. And I feel like I've got a lot of good experience from the early days all the way into this modern era. So what I like to advertise is I'm a mix of old school and new school. We talked as well. you spent some time in the automotive industry we both spent some time in auto and it's just interesting to see how many of those practices from you know for me it was 25 years ago kind of carried themselves forward and we're still kind of helping organizations embed some of those practices from those auto days they really have a lot of things that were solved we still struggle with today.

2:17Travis Hodge: And we talked a bit about soccer. It's like it goes back to fundamentals of dribbling and passing, right and left, being able to shoot right and left. And if you don't practice those fundamentals every day, you lose it. You lose it. Yeah. That's right. Now, here at the event, you have a session later this afternoon as we record. It's called Accelerating Value, Real World Procurement Transformation Journey. You're doing it with Laura. Laura Smith, who's the VP of Sales for North America here at iValuer. And I'm in Mo, who's the director of Optus Consulting. Can you talk a little bit about what that session's about, what you're going to be talking about in that session?

2:56Travis Hodge: Yeah, sure. So transformation is just that you're moving beyond the current horizon into a new area and you're giving shape to something that doesn't maybe have form. And so when we're talking about transforming sourcing and procurement at Invent, we're talking about a one-invent approach. So there's a lot of companies today that have grown through merger and acquisition, and it's very easy to pick up those entities. They have their own separate ERP. They have their own separate sourcing processes. And if you don't establish a one-invent or a united culture around how we're going to do these standard benchmark processes, you're going to get behind.

3:43Travis Hodge: Yeah. And so the business process transformation that we have rolled out to really help us define what one event looks like for sourcing and procurement is called supplier experience. So we have three experiences at Invent employee experience, which everyone knows well. We want it to be a great place to work. Customer experience, which has always been the focus. Right. It went as far as the customer is always right at one point. Right. But over the decades that I've been involved with this, supplier experience hasn't been a focus point and it is now for Invent. So we're using that to focus in on our global source to contract processes.

4:28Travis Hodge: And this is what's led us down the road with iValue to take a look at those progressive solutions. It's interesting that you talk about supplier experience because often supplier experience is an afterthought. or a, you know, we're going to build a procurement capability around, let's say, cost management. And then we'll think about supplier experience later as an offshoot of that, perhaps when we get to a certain level of maturity. So you're signaling something, I think, to your supply base as well as being partners to invent in how you're thinking about transformation of procurement. That's right.

5:00Travis Hodge: And the signal really is we can't do this without you. We need you to be our partner. And a partnership looks like a win-win. And so we have deployed a brand new supplier segmentation strategy to help us understand who are those strategic suppliers that we really need to be partners with us over the long haul. Who are those critical suppliers that we just live and die by? And then there's another fold of just transactional suppliers that you've got to churn through and make sure they get paid. And that supplier segmentation strategy is really helping. And in some way, shape, or form, every supplier is strategic.

5:38I look at those and think, sometimes you never quite know where the next opportunity or the next innovation is going to come from. And so while you can only focus so much time on, you've only got so many resources to focus across your entire supply base, it's important that you're able to lose sight of the fact that every supplier can be a strategic supplier. Agree.

5:59Travis Hodge: So it doesn't matter if it's a mom and pop local service that's conducting landscaping or janitorial. There's a time and a place for that. Right. And the supplier experience for them may look dramatically different than your top direct supplier that provides components that are critical to your products. And I think part of your objectives at Invent for Procurement is to really turn procurement into a strategic business unit. And it sounds like the suppliers are at the heart of that. Is that kind of how you're thinking about the value proposition of procurement within Invent? Yeah, so there's a term that's been used over the years called back office.

6:42Travis Hodge: Yeah. Right. And for those of us that are as old as me and you, back office literally meant like three part forms and rubber stamps and lots of manual transactions. And I think it's important to understand the difference between back office and strategic business. So what sourcing has really evolved to over the years is we are able to provide a return on investment, not just process transactions. And if you go back to the basic plan, source, make, deliver, right, there's source right in the middle. And what it feels like to me is it's become the collaboration hub where we are the link between the supplier and operations and many times a link back to the customer.

7:31Travis Hodge: So sourcing has certainly had its back office days and they're certainly still back office things that need to be done. Those are becoming more automated with AI and business solutions like what iValua offers. But at the end of the day, sourcing provides a return on investment. Yeah. And I think that's the big ticket item that a lot of leaders miss is not being afraid to carry that flag. So from a remit perspective, I should have asked this earlier, but are you on the direct side and the indirect side or just the one or the other? Yes. So my role encompasses direct and indirect. Everything we have in scope for supplier experience is both direct and indirect.

8:16Travis Hodge: But we started this journey by focusing on indirect and showing what can be done with business process transformation. We also believed that some of our highest value opportunity was there. So what we've done globally is aligned that indirect sourcing and procurement org to be more strategic with that supplier segmentation strategy, the supplier experience strategy. And now we're taking those learnings and springboarding them into the direct side of the business. How has executive sponsorship played a role in really helping to elevate procurement within the business? Yeah, so you remember back in school, there used to be a thing called a hall pass, right?

8:55Travis Hodge: and if you didn't have a hall pass you're probably going to go to detention yeah right one of the greatest things that the executive leadership team did for me when coming to Invent was they gave me a hall pass yeah and they said Travis we're not going to put you in detention we need you to go and go to Gimba right yeah and so what we did was just just picture yourself in that school hallway there are some classrooms that I would go into and I'm like oh my gosh I need to sit down and learn what's being taught here this is very very important and it's important to our future and it's it's something that I need to make sure we continue yeah there are other classrooms that I would go in and it was kind of like the stop stop what you're teaching we're not doing it this way anymore we need to cancel this curriculum and roll out a different curriculum and then there were other classes that i went in and there was no class in session there was no teacher and there was no no students and those are gaps that we had to define what do we want these spaces to be so when i think about executive sponsorship and how you elevate procurement's role in the business you have to get that top-down support day one yeah and they need to arm you up with a hall pass so you don't feel like you're going to get in trouble yeah uh during the school day it gives you a little bit more um you know there's not as much pressure either to do things that may not be aligned with the what the business needs that's right because you have a little bit of time to kind of figure out how would you best architect what you're building so it aligns with what the business that's right and part of that architecture is you have councils you have steering committees, you have quarterly ELT reviews, all that stuff is going to play out as far as approvals in that structured operating model.

10:51You mentioned the kind of the continuum of plan source, make, deliver. Are there areas of that where you believe that procurement can create the most impact?

11:03Travis Hodge: There are. So each one of those, plan, source, make, deliver, they're contingent on each other one cannot survive without the other picture it just like a body of parts we have to have all the pieces in order to get things in motion and and really procurement kind of sits right there in the middle and it is pointing in both directions so upstream sourcing and procurement are pointing to that supplier experience and how well we do that points downstream to that customer experience. And so I believe this is where the best use of the term integrated supply chain comes in and what that actually means.

11:45Travis Hodge: It's all of those things all at once coordinating with one another just like our body does. Yeah. For leaders who are yet to start thinking about, you know, they're at the beginning of a a change and a transformation journey. And they may be thinking like, what are some of the first steps I need to take for my organization, for my leadership team to look at procurement as being a driver of value versus that back office function? Any advice, it can be from your current role, but you've had a number of roles obviously leading into this as well. What are some of the wins, so to speak, or the strategies that you've undertaken that helps you get that visibility?

12:31Travis Hodge: Yeah, so 25 years of sourcing and procurement. And the one thing that I've learned over and over and over again is you have to become strategically relevant. The guiding strategy of the business, you have to tie back to it. That's also how you get the downstream buy-in is why are you asking this function or this resource to do this activity? If they understand how it ties back to the overarching business strategy and the transformational strategy that you're leading is relevant. You're going to get the sponsorship. Now, there's another piece of this in the South. We call it talk turkey. You have to talk turkey with the executive leadership team.

13:14Travis Hodge: For example, we've been entrusted with capital by our shareholders and we need to be good stewards with that capital, which means what? Provide a return on investment. Invent has hired me and is willing to give me a paycheck because they believe I'm going to provide a return on investment. The same thing with your transformational strategy. If you're not clearly demonstrating the turkey, right, that there is a return on investment here and you need to invest here because we're going to give you that return. That's another way that you become strategically relevant. As you think about, you know, what that turkey looks like, where we've traditionally only really measured or positioned procurement's value based on cost savings.

14:08That's right. And that, as we all know, who, you know, as we've been in this profession for so long, creates a lot of friction. It does. And positions procurement as not necessarily being on the side of the business. How do you think about positioning the ROI of procurement? You can't get away from cost savings necessarily. But when you think about more of a balanced scorecard of other things that you can include in there, they're then looked at by the people who sign the checks that invest in the procurement team to look at that and say, you know what, I can see that value.

14:42Travis Hodge: No, and for us that have been doing this for years, it was solved many, many years ago. And it's called total cost of ownership, which at the end of the day, you know what that means? You get what you pay for. Right. So, yes, we need to have savvy negotiators that are negotiating payment terms and price and escalators and all that stuff. Yeah. That is very logical that we need to do that. The harder you squeeze that supplier, the less they're going to give you. Yeah. And at the end of the day, you want a partnership. partnership means win-win which means i don't take all the turkey for myself we're going to cut some nice even slices and we're all going to sit down to the table and have a nice meal yeah and so i think that that's the best way to approach it is um it has to be win-win we have to deploy the sourcing tools and do what we need to do and there is a bit of a card game that has to be played in that trading plan.

15:42Travis Hodge: But once we come to terms, let's have a healthy family meal. You described some of your approaches as partly based on your experience over the last 25 years, but also the new and embracing the new. And of course, I don't think we can have a conversation these days without talking about AI. So I'd love to just understand how you're thinking about the opportunities associated with AI and their application to procurement. Yes, yes. So AI has been around a long time. We just haven't called it that. Yeah. We learned math longhand, right? And then once we learned it longhand, we got a calculator. We never had to worry about it ever again.

16:28That's right.

16:29Travis Hodge: Right. And that's a form of AI. It's doing the math for us. But we know what's happening in the background. And I think that that's what's very important about our AI journey today. Part of this journey is the efficiency in, let's say, the number of clicks. Amazon changed the game for all of that. How easy is it to go to Amazon today and buy something? Two clicks, maybe? And it's in the cart and it's on the way. I still get annoyed when they bring up, do you want a banana? Do you want to add a banana with that? Like, no, again. That's right. And so this is what our users expect when they go to the platform is fewer clicks to get to the solution.

17:10Travis Hodge: So part of it is that transactional reducing the number of clicks. But there's also a risk management strategy associated with this in terms of let's go back to the early iPhones and there would be a new software release. And I think we all learned rather quickly. You didn't want to be the first one. Yeah. You didn't want to turn your iPhone into a brick for a few days. That's correct. That's correct. And it's the same thing with AI. There's a lot of new coming. And what we're focused on as a company are what I value it called certified add-ons. They're like breakers in your breaker box that you can turn on.

17:48Travis Hodge: It's very safe. They've got the right amperage there. You're not going to get shocked. We can turn it on and give it a go and see what kind of value it provides for us. The deeper piece of AI, I believe, where the bigger bang for the buck is, each of these systems can have agentic AI, and that's great. It helps the user inside of that system. But we're applying a focus to our data lake strategy of what is all of our supplier master data, both internally and externally, including things like indices that we can dump down into a single data lake and have AI look across that. I believe that's where your bang for your buck is going to be over the long haul.

18:29Yeah, I couldn't agree more with that. You know, you're getting what the models can do in terms of connecting dots that we as humans either can't see or we don't have the bandwidth to even look for across data sources, across data from all these different sources that you can bring together. That's right. I'm excited about what the opportunity that can bring because it's probably tactics and strategies and opportunities that we've never even thought of before. And we've certainly in the last 25 years thought, I wish that I had something that could do this. Yeah, that's right. When you talk about reducing clicks, as an example, from an efficiency play, how do you think about that?

19:09Because you're putting supplier and the supplier experience, as you talked about before, and the supplier at the heart of your strategy. What does that mean to be a supplier?

19:17Travis Hodge: Yes. So there's a type of relationship, it's called a transactional relationship. Have you ever been in transactional relationships? Like you do this and I'll do that. Well, that's what so much of that back office has been built on. You issue the PO and we'll ship the part and we'll issue the invoice and then you issue the... That is a transactional relationship, right? And we want to take the work out of work in that transactional space, that operational piece that you have to turn out to conduct the business. The relationship piece, we can go back to like a marriage. We don't want those to be transactional.

19:58Travis Hodge: That's not going to last over the long haul, right? So we want the relationship piece to be what it needs to be. But that transactional piece, we need to take the work out of work for both the supplier and ourselves and the customer to just make it what we call ease of doing business. It's easy to do business with us. We want you to do business with us. And it gets that piece out of the way so we can have a healthy relationship. Yeah, and I think selfishly, it also reduces the cost to serve. So I think of myself now as a supplier on the other side of the table in some of the things that we do.

20:36sometimes our lives is made pretty hard in terms of how we onboard how we have to deal with you know invoices and payments and all those things and that that leads to an additional cost for us to be able to serve a customer and that will ultimately find its way to being passed on so it's not just a relationship thing you know you're you make it easier to serve then their input costs are going to be lower that's right you probably find that reflected in the bill and the proposals that they send you to.

21:07Travis Hodge: And what is the work that we hate the most? The redundant, over and over, mind-numbing stuff that nobody wants to do, right? And the more of that we eliminate, the better off we're all going to be. So I just want to talk in the remaining time that we have about speed and transformation at speed. I think it's important context just to ask you, which is something I probably should have asked at the beginning, but if you could just share a little bit about what Invent does because I think that's good context for some of the questions I have that follow. No it's good honestly most people have not heard of Invent but you have heard of our 11 primary brands that you'll you'll find out in the marketplace.

21:50Travis Hodge: Our motto is we connect and protect and we do that in the electrical and data solutions infrastructure space. We make everything from electrical connectors fasteners your electrical enclosures like your breaker box at your house all the way to liquid cooling systems for data solutions so you can imagine with the onset of AI and the demand of those AI leaders what kind of demand the market is facing so it has become about speed but it's also become about the entire supply chain from end in because we have a certain capacity we need to understand what our suppliers capacity our supplier supplier and then sometimes our suppliers supplier supplier so it is about speed in terms of we want to scale as quickly as we can to meet the demand that's there but there's also almost this global understanding that the supply chain can only produce so much and what it's forcing us to do is get back to the basic principles of plan source yeah make deliver to do it as quickly as we can with what is available in the supply chain I think that's where you're going to see the most speed yeah the the supply chain itself globally is gonna it's gonna take some time to build up to the to the demand curve.

23:19And as you do that, you know, as you're scaling, you're supporting hyperscalers, what kinds of talents or capabilities are actually the most important to you as you kind of support that growth and as you scale?

23:35Travis Hodge: So there is a supply chain on talent as well. Yeah. And you have to provide a great employee experience to recruit and retain that talent. Some of the capabilities that I've seen that are most effective is maybe not what you would think. There are resources out there that will literally take it from the window to the wall and go as hard as they can. And in the process, they'll run over a lot of people to get things done. And that's not sustainable. Some of the qualities that I've seen that are most important as we're trying to scale quickly is around the term collaborate. So if you break down the word collaborate, it means co-labor.

24:20Travis Hodge: It means we're going to come together shoulder to shoulder, and we're going to face this together, and we're going to get it done together. And it's that collaboration, that co-laboring. It's almost a quality that's hard to make tangible during an interview, but once you find it, you see exactly what it is. Some people call it a team player, but it's willing to get in there and get it done. At the same time, there is a skill set that I think is under advertised in sourcing and procurement that's related to project management, just general PMO. Again, some of these things were solved many, many years ago with things like a bowler chart for our KPIs.

25:07Travis Hodge: great but how do you manage those week after week month after month it's really project management and so those are the two skill sets that I'm finding actually most potent as we scale is the willingness to come in and collaborate but also the skills to actually do project management and manage these sourcing events these relationships these critical suppliers almost like a project yeah you need the structure still to support it that's right as we're talking about experiences, how about the employee experience? How does the employee experience actually look like when you're trying to keep everybody engaged on your team, but you're moving at such a pace while wrapping a layer of transformation around this?

25:52There's a lot going on.

25:53Travis Hodge: There is. And Invent, I spoke earlier, has a wonderful employee experience. It's actually, I would describe it as a competitive advantage and that dives into things like the people leader program, creating annual goals with your employee, writing an individual development plan that's meaningful to that employee's career. We also conduct employee satisfaction surveys several times here. All those things are wonderful and we need those tools and you need to be consistent with the delivery of those tools. But here's where the real truth is. Don't act like you care. Care. Don't act like you care about my kids.

26:36Travis Hodge: Care. Don't act like you care how I'm feeling today just to kind of pat me on the back and make sure I'm being a good performer. I need you to care about me. And honestly, that is what people leadership is all about. We can come in and we can manage the numbers. We can crunch out the ROI. we can do all those wonderful things but at the end of the day we're all people we have feelings we have lives we have children we have house payments and every day is not a sunshiny day yeah right and so getting back to just the care of things is um more important now or as important now than ever before and it sounds like that's the culture well that's not just a you know culture is set from the top and it sounds like from our conversation the conversation we had off mic as well that that's very important to invent as a as an organization as invent is growing and so it kind of filters from the top all the way down um and creates kind of this safe space it is and there's actually two uh mantras that that invent does very very well one is we want to we want you to show up to work as your authentic self yeah because that's where i'm most comfortable like i can sit here and act like i don't have a country accent but it's going to be very difficult for me to play that out all day.

27:52Travis Hodge: I'd rather just show up and this is who I am. After a while you get tired of trying to be somebody you're not. That's correct. And the other is we want people to go home in the same condition that they came to work and that's a safety culture. But it's also an emotional culture. I don't want to send anyone home that came to work happy and now they're going home sad or angry because of the day that they have. So I think when you encourage people to show up as their authentic self for the right reasons and then make sure they go home in at least the condition that they showed up in. We're going to have a good place to work.

28:28How do you kind of build the kind of perspectives and partnerships that you need to really lead through transformational change?

28:37Travis Hodge: It ties back to that strategy, the overarching strategy. So if we step back at Invent and we look at who we want to be as a company and where we are going with our products and our solutions. It's a specific strategy. It's clearly defined. You can go on our website right now and you can read all about it, right? If your employees don't understand it and embrace it and know where they fit in that journey, it's going to be disjointed. It could be frustrating. The more we tie out how every system, every tool, every process, every employee is meaningful to the strategy, the strategy takes care of itself.

29:19Travis Hodge: Yeah. So I can't speak. I can't speak highly enough about how well Invent has built its strategy, communicated its strategy, and is now managing these in what we call business process transformation initiatives, where we roll it up and we report it out every month. It holds us accountable to to the talk. And the last question, because I know we're coming up on time to wrap up, but I'd love to know, we've talked about change, we've talked about bringing in AI, kind of how we're thinking differently, we've talked about speed, but at the end of the day, some fundamentals need to exist. And those fundamentals are probably no different than fundamentals that you and I started in procurement 25 years ago.

30:04That's right. Can you talk a little bit about kind of what's the foundation upon which everything we've talked about today's builds?

30:11Travis Hodge: Yeah, so we grew up playing sports, right? Highly competitive and, and, and we want to win, right? It's the same thing today. We want to win at Invent, but Invent has some core qualities that are built around what's called win right values. We're, we're going to play to win. We're going to play hard, but we're going to play by some rules and we're going to win right. And it's going to be fair. And so I think embracing that win right value of we want you to come in and be competitive we want you to have that entrepreneurial spirit but we don't want you to step out of bounds and get a penalty right and there's one other thing I had the wonderful opportunity to go get my PhD and by the way that's the hardest thing I've ever done in my life I now know why dissertation and defense is what it is it is extremely difficult but one of the tools that I used for my dissertation was called exemplary leadership practices.

31:09Travis Hodge: And they're very easy to understand. And I think most people just commonly know what they are. But when you actually speak them out loud, it becomes meaningful. It's things like model the way. Show up and model the way every day. Enable others to act. Challenge the process. Encourage the heart. Like these kind of things, they just make sense as far as who we are as human beings but when you actually apply them daily to say I'm gonna come in I'm gonna play hard I'm gonna play to the rules and I'm gonna win right and I'm gonna come in I'm actually gonna model the way and I think this is how how we should do it I'm gonna encourage other people and challenge them to do better I believe those are the fundamentals that matter the most it is what drives success both for the company and for the employee.

32:00So I have one last question just to wrap. It's kind of a follow-on from that. And it's when I look at the procurement leaders in these times, these times of change, that I really respect in terms of what they're doing, what they're doing with their teams. There's a vulnerability and a curiosity about the fact that we don't necessarily know what's coming. When we look 10 years ago, we could probably say, oh yeah, I know, I've got to build an organization that does X, Y, and Z because that's what procurement's always done and that's what good practice looks like. And we all operated within these same four walls of doing that.

32:41Today, we don't know what things are going to look like in five years' time or in three years' time. And I'd just love to know kind of from a personal perspective, how do you kind of keep not necessarily informed, but it's like the mindset kind of how do you think about from a mindset perspective of recognizing that things might all change next year or in two years time and you've got to be agile you know

33:06Travis Hodge: to to be an adaptable to change you do so let's go all the way back we had green screen computers at at the uh auto manufacturing i remember them well that we started out at right some of those automotive companies still use those they still do and and they're still doing very well um that That turned into, hey, you need an ERP system. And we all went on that journey. And for all the right reasons. And that turned into, hey, you need a source to pay platform to sit down on top of that ERP like a turbocharger and really create a competitive advantage with your sourcing and procurement. And we went and we've done that.

33:48Travis Hodge: And now it's AI. And we need it. We need to embrace it. And we need to take the work out of work. and know, I don't know what's next, but I do know that it's still going to tie back to we need to plan, we need to source, we need to make, we need to deliver, and we need to use whatever tools are available to make that journey as efficient as possible. So the future's bright. It's bright for Invent. It's bright for iValua. It's bright for the art of procurement when we continue to do it the right way for the right reasons. And I've never been as excited for the future of the profession as I am now.

34:27So I think that it's a lot of energy around the opportunities for procurement.

34:30Travis Hodge: Hey, we've got a hungry generation coming up. Let's not forget about that. They are well-schooled in buying and selling and efficiency and AI. And if there is something for the future that we need to be keenly focused on, it's that next generation that's coming up and harnessing the power of their generation. All right. That was a great place to finish. Travis, I want to thank you so much for joining me. Thank you. On the podcast. What I'll do, if anyone is listening, would like to reach out, I'll put a link to your LinkedIn profile in the show notes for today's episode. Those will be at a procurement.com slash podcast.

35:06One last time, Travis, it's been a pleasure to welcome you to the show.

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