The digital transformation of Dole Sunshine Company’s indirect procurement promises a more sustainable, visible and profitable value chain
A new era is dawning at Dole Sunshine Company, a world-leading food and beverage company on a bold mission, representing the global interests and combined efforts of Dole Asia Holdings, Dole Food & Beverage Group and Dole Fresh Produce. The company’s extraordinary history of quality and innovation stretches back to 1899, when James Dole, a newly minted Harvard graduate with a fascination for agriculture, began growing pineapples in Hawaii. In 2012 Dole Asia Holdings was established, as Itochu acquired the Dole global packaged foods and Asian fresh produce business.
Flash forward more than 120 years and Dole remains a byword for pineapples, bananas, and packaged fruit products, and retains a high reputation for freshness and quality. From the perspective of a company as old as Dole, the world is changing rapidly, but Dole is up to the challenge to catch up by focusing on developing formal standard procurement and sourcing processes, while driving digitalisation. In June 2020, Naissa von Pein joined the company to spearhead a programme dedicated to those objectives. The Global Director for Indirect Categories and Procurement Excellence is leading a fundamental overhaul of indirect sourcing practices, while building Dole’s procurement centre of excellence, tasks which she says are “quite different in their scope of work, but complementary due to the nature of indirects being very fragmented and locally managed. Fragmentation of information being the greatest challenge to a strategic procurement approach.”
“We are going through a period of evolution at Dole, which is a company that in the past has been traditional with a decentralised structure and limited visibility due to the lack of systems,” she adds. “We’re now working towards centralisation and process standardisation, while driving automation through procurement tools and focusing on a more strategic procurement approach for relevant categories. Our procurement teams are receiving the support they need for strategic transformation initiatives, aiming to keep supply lines flowing smoothly while delivering the necessary cost savings.”
Dole is still in the early stages of its digital transformation, von Pein admits, and much of the focus of her first year at the company has been spent crystallising the fundamentals of indirect category management’s best practices, while using e-sourcing strategies to digitalise and accelerate strategic sourcing processes. But great early strides have been made through the implementation and strengthening of Ivalua’s platform, Dole’s primary digital investment and its central procurement tool.
“Implementing Ivalua’s software has enabled us to prioritise bottom-line cost savings through procurement-led spend management and competitive sourcing initiatives. We’ve also been able to further enable automation and standardisation for supplier qualification, as well as contract management,” von Pein says. “My current focus from a procurement excellence standpoint relates to process streamlining, automation, and elevating procurement’s profile and visibility within the company. We are reviewing procurement processes to identify ways of eliminating time-consuming tasks through the use of automated systems and analysis, as well as identifying weak links in the existing supply chain, strengthening us as a function and freeing up time to focus on long-term initiatives. We must ensure that the team is using Ivalua to the best of its capabilities, while drawing the digital roadmap for further enhancements to achieve our automation and efficiency goals.”
The Ivalua system was implemented before her appointment, initially at three production sites in Asia, and has been key in achieving procurement’s short-term objectives. But von Pein has a more ambitious vision. “I want to ensure that our team is using the tool to its full capability. It comes back to change management, and as with every new tool implementation, if this is not properly led by the management, and if we do not emphasise the benefits to the people and teams that are using it, then ultimately we will not achieve the results that we are expecting. I have seen this happen in the past, but we have already been seeing great results this year.”
With the fundamentals improving rapidly, von Pein is turning her focus to procurement excellence, Dole’s overarching objective for the next two to four years. “One of the key pillars of building our centre of excellence surrounds defining our category structure, based on the spend and risk profiles within our supply chain. We’re taking a proactive step on supply risk management, and building mutually beneficial long-term partnerships with suppliers,” she says.
One of the biggest developments in the past year stems from a new strategic approach to indirect categories, reassessing the structure and efficacy of local, regional and global suppliers. Beginning with local suppliers, where procurement teams were already in place, von Pein says the initial challenge was in bringing indirect spend back under the control of procurement.
“Through continuous engagement and proving the benefit of procurement’s involvement with the other stakeholders, we managed to take ownership of that indirect spend,” she says. “The different categories were previously managed locally across various functions, with a limited strategic approach, but by bringing it under our control, we now have a much better understanding of the opportunities, with a mature approach on strategic sourcing and spend management.”
“On the regional levels we managed to consolidate spend in categories such as logistics, MRO, PPE, office supplies, professional services and others. On a global level, the focus is primarily on logistics, financial services, legal services, and IT. Of course, we haven’t had the time to address all of them within the last year, but just by having this new visibility and building a strategy, we have a clear roadmap.”
As with any other business in the past 18 months, the COVID-19 pandemic presented its own unique set of challenges that threatened to derail these roadmaps and development plans. “It was a surprise factor and we all struggled,” von Pein admits. But it did act as a catalyst for implementing a “supply chain risk resilience and business continuity framework”. Von Pein’s goal is to identify possible changes in supply chains and create the ability to implement treatment plans and re-engineer procurement processes to mitigate risk. Suppliers are now rated on a number of factors based on their geopolitical, supply, demand, and environmental impact, among others.
"Based on that outcome, we work closely with the suppliers on a business continuity plan building necessary partnerships to ensure that our supply chain cannot be disrupted by any further surprises,” von Pein explains. The system has already paid dividends through monitoring and managing supply chain events, with attention paid to potential risks (such as recent peaks in commodity markets, for example packaging) leading to general improvements in supply chain performance.
The Dole Promise
Dole unified its commitments to a more sustainable and equitable supply chain with the launch of the Dole Promise initiative in 2020.
“We launched Dole Promise last year with the key words being: people, planet and prosperity. One of our main goals is to deliver shared value for all stakeholders within our value chain,” Naissa von Pein, says. “As a leader in our procurement excellence programme, I’m also in charge of building our sustainable procurement process. We have engaged BSR as a partner, a very well-known sustainability consultant, to support us in this journey. The success of Dole’s business depends on many thousands of people. Farmers, communities and suppliers must all see the value of working with Dole, and shareholders must see ongoing corporate value in our business.”
In the 18 months to come, von Pein hopes to further exploit the many efficiencies of digitalisation, and how it can impact Dole’s sustainability drive, a pledge under the Dole Promise banner. “Sustainable procurement is a priority at this moment,” she says. “We want to ensure that we develop the right process to onboard our suppliers and get proper visibility about the sustainable risks that we have in our supply chain. That way we will be able to mitigate and act on them as we go along.
“Digitalisation again plays an important role, as we access thousands of suppliers in a transparent and efficient manner. I fully believe that by becoming automated and digital, we get the visibility that our teams need to make the right strategic decisions. Leading back to indirect procurement, I think the biggest challenge is poor quality of information, as I have little visibility today on how much and where we are buying, and for what cost. It's still a lot of manual work but, two years down the line, we will be in a much better position to increasingly benefit from the elusive opportunities of procurement-led, business performance-improvement projects.”