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December 18, 2017
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How McCormick & Company transformed its procurement organization

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Employee involvement was among five key success factors when the spice and flavorings company switched from a decentralized to a global model.

When McCormick & Company, the Baltimore-based producer of spices, flavorings, and related food products, adopted a long-term strategy focused on global growth, the procurement team stepped up with a bold plan to reshape their priorities and organizational structure. In the session "The Power of People: McCormick's Procurement Transformation," Brant Matthews, vice president—global strategic procurement, and Grace Woo, director, supply chain strategy talked about why and how the procurement team revamped the procurement function's organizational structure, distribution of responsibilities, and staffing on a global basis. They also discussed five factors that made the initiative a success.

The transformation program has reshaped the function's strategy, priorities, and organizational structure. Instead of a largely decentralized, regionally or locally directed and managed process, McCormick today has a global center of excellence that directs best practices, policies, and process management, while still retaining local and regional responsibilities where appropriate. The redesign of the organization also allowed the worldwide introduction of category management practices for the first time.

The initiative has been a success, with procurement nearly tripling its contribution to the company's cost picture in just three years. Matthews and Woo attributed the transformation's success to a key part of the company's culture: the "Power of People," or the belief that every employee is valued and respected, and that each person plays a role in the company's success and its customers' satisfaction. They also identified five other key success factors:

Design with your team. Employees at all levels in the various business units were involved in identifying the best ways to implement the planned changes. This was important for getting everyone's buy-in.

Implement at the right pace. Moving individual aspects of the initiative along at a speed that was neither too fast nor too slow was important for avoiding disruption and helping employees adjust too and absorb change.

Focus on every business partner. Every business unit and associated business partners received the same attention, priority, and support. The objective was to respect and meet their organizations' and markets' needs.

Invest in your people. Training designed to bring procurement staff up to a specified level of knowledge and to provide everyone with a common business language is provided around the world. More advanced training to develop further skills focuses on areas like category management and negotiations.

Match people to the right job. For the new team to function well, McCormick needed a different mix of individual skill sets and mindsets than in the past. Matthews and his team carefully matched current employees with jobs that were a good fit with their skills and interests. Individual and team job performance have greatly improved.

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