Pulp & Paper CPO on Changing Procurement from Tactical to Strategic Function

Jakarta-based Haris Komarla is the Chief Procurement Officer for Pulp & Paper, Indonesia. Haris drives the overall Asia Pacific procurement, supporting business operations across six continents. As CPO - Haris develops and implements Pulp & Paper’s procurement strategies, business plan objectives, policies, procedures, systems, structures and frameworks for all procurement-related activities.

As a spearhead for innovation - Haris’s approach to procurement is “Make it practical and simple”. In this exclusive interview for Procurecon Asia - we discuss tactical vs strategic sourcing, why purchasing decisions either commercial and non-commercials are equally important and the way the CPO role has evolved in recent years.

Can you tell us about your background, and how you came to be CPO of Asia Pulp & Paper?

I started my procurement journey as a Procurement Officer in an insurance company responsible for Procure-to-pay process. I then moved to a mining company managing supply chain & procurement risk management, later moving into various roles in category management. I later joint a transport and logistics company managing Asia Pacific.

I moved to Asia Pulp and Paper based on a few reasons, paper packaging is one of the environmentally friendly products which will have more and more footprints in the future. This role also reports directly to CEO, and part of the board members. This will give me greater exposure to C-level and gain experience from my interactions with them.

Tactical vs strategic sourcing - can you tell us about the differences?

To me Tactical is like firefighting, we put off fires, whilst costs are important, but not critical, we would just like to ensure no supply disruptions. On the other hand, strategic sourcing is a mid / long term solutions to procurement problems. We have better planning, better pricing, and better overall T&Cs. we prevent the fire from happening.

How would you differentiate your approach to procurement from the typical CPO and what are some of the most important factors you consider when making purchasing decisions?

My approach to procurement is “Make it practical and simple”. We endeavour to avoid any complicated processes etc, vendor selection process and approval process. Compliance is one of the major critical areas to focus on. Factors to consider when making purchasing decisions are mainly compliance, commercial and non-commercials aspects which are equally important.

Non-commercials are areas such as compliance (CSR) quality, scope of services, supplier technical capability, delivery lead time, potential future development, and more, whilst commercials areas are pricing and payment term.

Strategic sourcing seems to be growing in popularity, as digital transformation is causing procurement and supply chain processes to evolve - what are your predictions for the next 1-2 years?

AI/ML will be the next big thing, where eProcurement tool alone won't be sufficient to cover what we need these days. I foresee there will be less and less people involved in procurement. For example, when we buy a product, we will be using AI to benchmark the market prices etc. in the market, there are some tools exist, but the maturity and accuracy is still being questioned.

The traditional focus of procurement has been on cost reduction and compliance management but with recent disruptions, the role has evolved substantially. How are you managing the expectations of all the various stakeholders and achieving the business goals you want?

We get our stakeholders involved in our procurement decision processes. However, we’d leave the commercials as a sole responsibility of procurement. We engage more and more suppliers to be part of our product standardizations and development, instead of using our own R&D to come up with new alternative materials/products.

I can imagine that many budget owners do not want procurement involved in their budgeting. How do you manage that dynamic?

In our company, procurement is the first point to start the budget journey. These budget numbers are later being used by budget owners in different business units to set their upcoming budget period, generally for the following year. When it comes to justification of new budget numbers, we always provide the budget owners with the outlook of certain materials trend that we buy. This has been proven widely accepted by our stakeholders.

What is your experience with working with suppliers in different parts of the world and provide an example of a time when you successfully implemented a cost-saving initiative in your sourcing process?

Business culture and local rules/knowledge and regulations are mainly the issues we come across, when working with suppliers from different countries.

We recently managed to understand the local regulations of gas environmental rebates for a certain size of business customers. With that understanding, we were exempted from the environmental levies charged by the gas company

How you’re using data analytics and real-time visibility to monitor the sustainability of your suppliers?

We are using delivery lead time, and product quality claims to measure our suppliers’ performances. We also give them ranking, and this year, we will introduce supplier of the year to entice good suppliers to perform better. Asia Pulp and Paper is a big buyer, to suppliers, by having us as their suppliers, we benefit them from looking for new customers.

For those suppliers that do not perform well, we will have in-depth discussions with them on how to improve their performances.

What do you expect to get out of ProcureCon Asia? And can you give us a sneak peek at what you will share with the audience when you moderate the panel?

Many of procurement professionals report to CFO, very few are stand alone. Reporting to the CFO comes with a few challenges.

Procurement is not the main stream in Finance department, so often being treated as a second-class citizen. Since finance is all about numbers and cost savings, unfortunately, modern procurement is not just about cost savings, but more about values we bring to the organization. This is one of the challenges that Procurement faces in their reporting line to finance.

Why is ProcureCon Asia an event not to be missed?

Year on year, I learnt a lot from other participants, from both attendees and presenters. I have valuable time to meet procurement professionals and expand my network. I love attending this event.

Haris Komarla will be speaking on the 12th July 2023, 9:30AM at ProcureCon Asia on C-Suite [CFO/CPO] Expectations Explained: Managing expectations: Is there a misalignment between procurement and business? What procurement wants to do vs. what the business wants procurement to do. Find out more here!