1925 – Unlocking Procurement Potential with Conrad Snover

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1:06With us right now, Conrad Snover. Conrad, you are the CEO of ProcureAbility. Your website is ProcureAbility.com to our friend that's listening. Just kind of click on the show notes or click around and we have a direct link so that you can follow along. Conrad, it's great to have you. Thanks for having me. Good morning. Well, excited to talk about ProcureAbility. Also, Conrad and I enjoy similar music. We'll just leave it at that. Conrad, thank you so much for joining us. Yeah, it's great to be with you. Well, give us an overview of the work that Procurability does. Well, we're a professional services company.

1:42I mean, the name of the company is Procurability because we help companies with procurement. And every company does procurement. They buy things, right? They buy services or materials that they need to run their business. Every company out there, large, small, every industry does procurement. So that's what we do. We 100 % help companies do that. So you can imagine in the recent era of constrained supply chain and difficult procurement environment that we had coming through COVID, business was pretty good and gave everybody some visibility into what we do. And it's not just buying physical products, right?

2:26So you're also assist, are you also assisting with when a company needs professional services? Yeah, absolutely. So it's not, you're right. It's not just materials and it's not just services and it's not just procurement either. We do a lot more outside of that, but it's kind of an easy way to think about it. But we are a services company. So anytime any company needs help at all with their procurement environment, they call us. Now, what does that mean? Well, maybe they need to upgrade their technology. That's an easy one. Everybody can understand. Maybe they don't know how to implement technology.

3:04They want to fix their processes first. Maybe their technology is fine and their processes are broken. It takes forever to get something purchased and then contracted and then approved and then requisitioned and then ordered and then finally to the warehouse. Or maybe they're having trouble with supplier performance. or maybe they're paying too much in logistics and transportation and their supply chain function is broken between warehousing, their warehousing, their supplier's warehousing, their distribution network. So it's that whole network, the supply chain, the movement of the procurement and the movement of the materials through their system where we help.

3:44Yeah. And so for someone that's not in this world, Conrad, would you mind just helping us understand why procurement can sometimes be quite a challenge. So again, a lot of folks on this who listen to this might be more on the SMB side of things. But can you kind of help us, give us just a procurement 101 and why this is often rife with challenges? You bet. First, it's fun to, what I love about procurement and I love about all business and sort of being a consultant and doing different projects. And it's about learning how the world works. There's so much out there that is critical to everyday business function and everyday sort of corporate efficiency that a lot of people don't even know exists.

4:32And I would say procurement is kind of one of those things. It just happens in the background. A small company, maybe you're starting your own company, you just do it yourself. Slightly larger company, maybe you have several other people that do it. Even us, we're a procurement-focused company. It wasn't until we exceeded, oh, I don't know,$20 million in revenue to where we placed a specific focus on procurement, the very activity that we consult to our clients on how to improve. And the reason is, you know, most companies do it poorly. They waste money. They're inefficient. And when you're just doing a contract here, a contract there, for us, we're a professional services company.

5:11We don't buy much stuff. Our IT contract is probably our biggest contract. So we sourced that one very carefully. We negotiated that one very carefully. But then we'd have all these other little cats and dogs contracts that kind of, you know, if we spend, if we waste a little bit of money on them, meaning if we don't negotiate the very best deal, it's not the end of the world. We don't waste a huge amount of money and life goes on. But at a very large scale, imagine a huge company, a large global manufacturing company, a huge energy company they spend tens of millions and hundreds of millions of dollars on one thing one little thing and if we can negotiate and arrange and negotiate a better contract and arrange a better process and maybe consolidate the supply base down so that they only have one company they're buying from or maybe two or three for security of supply and for backup and that sort of thing.

6:12But if we optimize it, we can save a huge amount of money because we can save a small percentage of the purchase. But if the purchase is massive, it's a hundred million dollars and we save 10 % of that, save$10 million, boom, just like that. So this is a, we can have very, very, very significant impacts on bottom line, on profitability, on cost of goods sold, for improving the way procurement is run. But it's not just negotiating a better deal. We do a lot of things around actually establishing a procurement department. Like I said, as you're growing, maybe you don't have one. And then at some point you need to have one person in your company focused on it.

6:52Well, eventually you need a deliberate function. You need a leader, you need a staff, you need contracting experts, you need negotiating experts, and you need an official procurement department. Then you need technology. Then it interweaves with the rest of the business. Then you can optimize and figure out how to do it right and really save some money. Yeah. What do current procurement teams typically look like and where might they benefit from having some outside guidance? So a lot of the history of procurement is that it's underfunded, undertrained, underskilled, underutilized, and underappreciated.

7:35And it's, I guess, historically been viewed, and I'm going back here now 20, 30 years, historically viewed as a back office transactional function. And now, especially with constrained supply chain and what we're seeing, it's like front page of the New York Times. Every week, there's some supply chain constraint, whether it's a shipping container hitting a bridge, a container ship getting stuck in the canal, global supply chain constraints. You know, the list is cyber risk of suppliers attacking or, excuse me, attacking the cybersecurity penetration from suppliers' supply chains that are accessing the company's network.

8:23And supply chain and procurement now has this global presence. It has importance now to make sure that the company manages risk and does so in a way that allows sustainable operation. So if you take a function that historically was underappreciated and underfunded and all those things, and now it's front and center and very, very strategic, the question is, have we kept up? Have the people kept up? Has the skills kept up? Have the processes, is the position with the organization? And the answer for the most part is no. And so that's where we come in. We help procurement organizations upgrade everything, upgrade their skills, their platform, their process to become current.

9:09And it's usually a combination of all three of those things. It's the process that they follow, the technology platform, the skills of the people, and the mindset and the attitude of the people in general. So, you know, it is a people business. It's a services function. Procurement is staffed by people. So I would say, to answer your question most succinctly, it's a resourcing issue. Yeah. So certainly I'm thinking of those that might be on the supplier side, right, that are listening to this right now. You know, we provide professional services. I, as a company, want us to be very attractive to those who may be making decisions for fulfilling needs, right?

9:59What can I do as a service provider, as a supplier, just to be much more attractive to do business with from the procurement side? You know, it's a great, I love this. And I love this question because there's so many, so many angles to this. I love it too, because it's incredibly self-serving. Exactly. So what we've seen, I'll give you a quick metric to start the answer. So about 15 years ago, our customers were about 50 % materials and 50 % services, meaning the spend every year, the amount of money they spent, their checks they wrote, 50 % went to buy materials, 50 % went to service companies.

10:46Now that number is something like 80 % services. And so what that means is suppliers around the world in all disciplines are increasing their value-added services that they deliver. So they used to sell a part and now they sell a part with design and engineering or kitting, prefab, some other, you know, maybe inventory management, maybe restocking. So they've wrapped services around it to make them more sticky, more valuable to their customers and also to improve their own margin. So it's actually a win-win where the customer says, I need my life to be easier. How can you help me, supplier? What else can you do for me that you maybe haven't done before?

11:33And supplier says, well, this is great because I make more money, I make more margin, I increase my business. And so both in that collaborative relationship, both companies succeed. And I think this really opens the door to one of my passions is that historically, procurement has sort of beat on the table and said, give me 10 % less, Josh, I need you to give me your stuff. But, you know, I need to pay you less, your prices are too high. And, you know, this whole like negotiating, Glenn Garrigan, Glenn Ross kind of thing. And that's just not what we need to be doing anymore. We need to be working together in a collaborative way, more of alliance relationship where there really are no more supplier customer relationships.

12:24It's more customer to customer relationship. And so we treat each other with respect. We share information. I tell you what I need. You tell me what you can do. And together we uplift the interaction between the two of us. So back to your question, do more services. figure out what your customer needs, that you can, how can you enhance what you give them today? And make sure that they know that you're there for their success. And then you can work together on increasing the business. Before we kind of talk about, you know, where folks can go from here and kind of talk about procurability itself, I'd love to ask you about your experience in professional cycling.

13:06You're a sponsored athlete. And mostly what I'm curious about, you know, in those kinds of endurance type sports, what have you, like if you were to talk to a leadership team in relay, here's a couple of things or a thing or two that I've learned a professional or at least, you know, really being a competitive athlete has helped me with professionally. What anything come to mind? Yeah. A little bit of a shift here, but then I'll bring it back to the procurement space because, you know, we'll keep the theme, the thread running through this conversation as well. You know, the, uh, I think the most powerful lesson for me, there's probably several in there, of course, time management, discipline, focus, all those things, right?

13:52But the one most, most powerful for me is to focus on being in the now, to be present, and not overly concerned with what happened yesterday or what's going to happen, what might happen tomorrow. wrong so if you're in a bike race you really need to be worried about the bike race i need to be thinking about where i'm going to apex the turn where i'm going to attack or in my case how i'm going to catch up when i've been shot off the back because i'm not strong enough and uh and really just focusing only on that in the heat of a bike race i'm not worried about the emails i'm not worried about to-do list my calendar how busy my calendar is on monday i'm just worried about this right here and right now.

14:38And it doesn't mean that there's no planning, right? I mean, you allow yourself the capacity and the platform to do this because you've trained and you've planned and you've arrived. So I don't mean like you ignore everything else and you just focus on this, but it's kind of a stoicism mindset where you just, you really focus on what's happening right now. And I think bringing that back to business, I think that's very, very critical that we don't get overly wrapped up in maybe a mistake that we made yesterday and, geez, really letting it beat you up. I mean, you want to learn from mistakes and move on, but there's no reason to get beat up about mistakes.

15:16There's also no reason to be overly concerned and unnecessarily worried about what might happen in the future because it may or may not happen. And so we want to prepare for a challenging environment in the future, security of supply, sustainable supply chain, backup suppliers, backup shipping routes for when the canal gets blocked, suppliers in different locations in case one gets hit by a hurricane. So you plan all this stuff out. But right here, right now is what we're focused on today. Now, one last connection for you in the procurement space. So I recently moved and was cleaning out the garage and I was sort of shocked at my lack of best practices in inventory management because I had bike parts from many, many years ago.

16:09And that ties to my procurement expertise in getting sponsorships, so I didn't have to pay for any of that stuff. And then my inventory and supply chain expertise or lack thereof and letting it all pile up in my garage. Tell me just a bit about procurability itself. Obviously, I don't know of an organization that has your market dominance from the outside anyway. You're working with the biggest of the big. Governments, Campbell, Cigna, DaVita, Centerpoint Energy Companies, and Facebook, General Dynamics, Honda, IBM, the biggest of the big. Give us just a glimpse of like procurability as an organization.

17:00Yeah, you bet. So I mentioned at the beginning of the discussion that we do a product, what we deliver is procurement services. And so we do that in a number of different ways. We have a consulting practice where we come in and solve problems. We have a staffing practice where we can deploy a single individual to backfill if somebody is out on maternity leave, as an example, or you're having companies having trouble growing or finding the right resource, we can just deploy somebody. We have a scaled solution of that to do long-term implementation called managed services. This is a long-term implementation of procurement bandwidth.

17:37We also have technology, we have research, analytics, so we have some other complementary services for that, but we're basically a one-stop shop for all things procurement. Now, we were formed in 1996 as just the consulting firm. That's how we started. A lot of us came from large consulting firms, the big marquee brand name firms. And we decided that we didn't want to be in that environment where it was a little bit rigid in the way to deliver work. A project had to be of a certain size or a certain scale or structured a certain way to make it work. And we found that clients, there was an underserved market for clients who needed whatever they needed.

18:16And so we said, sure, you want one person, we'll give you one person. You want 30 people, we'll give you 30 people. You need a project to do this, we can do that. Absolutely. So we just said yes to all the options and built the company to be super, super flexible. So it was founded in 1996. And we evolved from consulting to what I described, where we have that big suite of complimentary services to do everything under the sun as it relates to procurement. Now we're about 250 people. We're global. We have offices in, uh, in Latin America and India. Most of our team is in the United States still, because that's where we started.

18:53And that's where the growth has been most of the time. Um, we are a virtual company. We don't have an office. Everybody works at home, but also travels to their, uh, their client site. We spend a lot of time working on site at our client's office location, hand in hand with the client to help solve problems that way. Now I can go into more if you want, but I'll pause there and check in. Yeah. For the sake of time, we've got about two minutes left. And so I'd love to make sure that someone who's listening to this podcast knows exactly where they go from here, who absolutely should be reaching out and learning about procurability, maybe grabbing a phone call, et cetera.

19:33Yeah. So look, every company has needs in the procurement space and the supply chain space, whether it's optimizing and improving the operating environment to decrease cost. So to buy the same things you buy today, but at a better price or a better structure or a better supply chain improvement or more sustainable supply chain. And so if you need help, come find us at Procurability.com. That's what we do. Excellent. All right. Conrad Snover, again, CEO of Procurability, your website. procureability.com. Conrad, it's been a great conversation. Thank you so much. Thanks for the time, Josh. Enjoyed it.

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