We catch up with Danielle Sampaio, Head of Directs Procurement at BAT LATAM South, to discuss the company’s culture of constant transformation, and the key role procurement plays on that journey.
Danielle Sampaio has been with BAT (British American Tobacco) for almost 15 years, and has watched a dramatic shift during that time. Having always been part of the supply chain, she’s witnessed every change in the industry and helped steer BAT in the right direction. As smoking bans have become increasingly commonplace across the world, BAT effectively diversified into the ‘potential-reduced-risk-product’ industry, embracing what it calls ‘new categories’ alongside its traditional tobacco products. And Sampaio is a major element of this shift, as Head of Direct Procurement; it’s her job to know exactly what people want and what changes need to occur to deliver that at the best cost and in a more sustainable way.
“I joined the Leaf Department as a Management Trainee – the first female Management Trainee in that department for a very long time,” she explains. “I stayed for five years before moving to operations as a Sourcing Manager for direct materials. At this point, I learned more about cigarettes themselves and everything about the BAT supply chain. After that, I became regional materials planning manager.”
Later, Sampaio moved towards the end-market in New Product Introduction, responsible for Dunhill – a global cigarette brand. At this point, she took on the establishment of project management for operational and productivity savings initiatives, which streamlined operations significantly. Subsequently, she moved to procurement as a Sourcing Manager, and headed up an office – BAT LATAM South headquarter – relocation project in order to improve daily operations, enrich employee experience, and deliver modernity in the work space.
Finally, in January 2019, Sampaio became Head of Direct Procurement for Brazil, and a year later, this was extended to LATAM South. “In my current position, I have three big factories that I’m responsible for supplying to,” she says. “Brazil is the biggest one, and it has a joint venture with Cuba, so we have a supportive function with the Cuban factory as well.”
BAT – in general, not just in procurement – is a company on a transformation journey. It’s quite open about the fact, declaring it on the homepage of its website. And as someone who’s been along for the ride for a decade and a half, Sampaio has had a top-down view of this transformation as it happens. “We are focused on ‘Building A Better Tomorrow™’, which relies on giving people what they want,” she explains. “Cigarettes are our foundation, they’re our primary product, but we know we need to develop others. So, developing new categories is our biggest agenda, and we’re doing our best to deliver what customers want. We need to have products that each one of us, as individuals, need to – or want to – consume. I have seen many changes within this organisation and it’s very dynamic.”
Over the last year, BAT has been honing its ethos. This is based on responsibility, empowerment, diversity, and being fast and bold. “These are the principles that are going to support us on our transformation journey and deliver the next phase of BAT business,”pledges Sampaio. It’s working hard to understand the needs of every country it operates in, and address consumer needs. Because, ultimately, that’s what is going to keep BAT relevant and thriving – understanding the end-user. The general populace is increasingly concerned about health, so a business that traditionally produces tobacco products has to maintain its image as an entity which provides more than that.
“Regulation is different for each country,” Sampaio reiterates. “In Brazil, BAT is responsible for about 75% of the market share, but the country is very concerned about health as a whole. BAT is the leader in the market, and that’s in spite of the fact that, for over 20 years, we haven’t had marketing communication about our brands – Brazil has very restrictive regulations for tobacco and cigarettes. So, we have done very powerful brand migrations in the last few years, and introduced new products that we could communicate to our customers through our own product.”
Health and sustainability
Public health genuinely is deeply important to BAT – in fact, it’s part of the business’s sustainability agenda. “Sustainability isn’t just ESG agenda – it’s health and creating A Better Tomorrow™ as well,” Sampaio clarifies. ESG goes beyond its factories and beyond BAT itself – it’s about the end-to-end supply chain. Procurement is the part of the business that speaks to the market, it’s in direct contact with suppliers, so it has to be very conscious about tier two and tier three suppliers.
“Procurement is doing its part to drive the ESG agenda. We have a global portfolio, global suppliers, and a global demand, so there is a specific agenda in regard to ESG and procurement that is playing a very special role in BAT,” she notes. The entire global team is delivering the agenda, but it’s mainly being driven with the tier two and three suppliers. This is all part of the general focus on innovation that’s being adopted and spread across the business, and, once again, procurement is a major part of that due to its proximity to the market.
“We’re closer to the outside of the business,” says Sampaio. “Operations, for example, would only reach outside the business if it has a pain point, but we can go to the market at any time. So procurement is always benchmarking for innovation in other areas with other companies looking for services. At BAT, we have some programs that are very aggressive when going to the market. We look for innovative companies and they help us drive our agenda.
“Leading this agenda, a few years ago Procurement Brazil developed a program to connect procurement professionals, business main stakeholders, and start-ups. The new potential suppliers showcased disruptive technologies, applications, and solutions in a pitch session. The ‘Be Supplier’ program has gone so well that was exported to the other countries of LATAM South and expanded to the globe within Procurement community.
“Innovation is everywhere. We need to be connected to it, to the environment as a whole, to bring and configure the solutions that are possible for our business and for our own pains. Not only that, we need to be open about everything, to know that in some moments you may need something you didn’t know was required. That’s the secret to innovation.”
Proximity to the market is also what helps enable and develop procurement’s business acumen and its ability to spread its expertise across BAT. Sampaio also believes that procurement professionals should have a broad set of skills and business knowledge, in order to do their jobs effectively. “Your experiences through your corporate journey are going to open your eyes to different things,” she explains. “Business acumen means you have the skills for contacting brands and manufacturers, doing project management, overseeing quality and compliance – things like that. And this is all going to support you when you’re driving that specific agenda within procurement. So, I do believe this varied background for procurement professionals is really important for delivering value, not just savings.”
And making sure procurement professionals have the knowledge they need is something BAT approaches in a hands-on way. The most important asset any business has is its people, and investing in them is a must to ensure the continued improvement of the organisation. Hence, BAT does just that. “Procurement professionals need to have all the skills required to perform a procurement role as a function,” says Sampaio. “But, more important than that function, is leadership skills. We coach our people and make sure they have the support they need to flourish and thrive. We have a platform that is spread across BAT globally, and it’s very good because you can learn anything you want and need for your current role and preparing yourself for the following ones.”
This has created a real culture of learning across the business, and keeps everybody focused on their own growth journey. Procurement professionals need to be agile and flexible, because every day is different, and stakeholder demands need to be met. The digital platform supporting this development in procurement and across BAT is one small part of the improved digitalisation of the business, and is not to be overlooked. As much as people are the biggest asset, technology is running alongside them, supporting all the way.
“Anyone not trying to advance with their digitalisation is going to be left in the past,” says Sampaio. “So new digital skills are also something we’re developing. In BAT, we call it the ‘digital DNA’. When we talk about digital DNA, we’re talking about agile, storytelling, data & analytics, design thinking – we have to address it, and we have to deliver this agenda. The world is moving very fast and this is where our lifelong learning program comes into play – BAT is providing the tools and our people provide their own time to learn. Time is a scarce resource so we all have to manage it in a powerful way to guarantee we’re delivering results and developing ourselves.”
Facing challenges head-on
With that strong focus on learning and constant development, procurement is able to remain as agile as it needs to be – which means, when something goes awry in the supply chain, the team can move quickly to solve the issue. The last 18 months or so has provided plenty of challenges for the procurement team; when the pandemic hit, the first area of concern was ensuring business continuity from suppliers.
“We were validating contingencies and implementing business continuity plans across the globe,” Sampaio explains. “From China, Europe, the Americas – big ones, small ones, everyone; we had to guarantee security of supply. Resiliency was the most demanding skill required for procurement, because navigating through COVID-19 has been very difficult. But we’re very proud of what we have done and how we managed to secure our supply chain.”
Alongside a full portfolio migration in Argentina, a contingency had to be activated for the Canadian market because Canada is usually supplied by the Mexican factory, which was shut down. Major challenges, but ones which were overcome thanks to the agility, business acumen, and leadership expertise of the procurement team. COVID is just one of the challenges BAT has faced – as we touched on earlier in the article, compliance can be a minefield for a business selling tobacco products. BAT has to be able to guarantee that it offers end-to-end compliance, and legislation changes all the time – these are everyday challenges for the procurement team, but it’s more than equipped to handle them.
Once again, people – and how they deal with everyday situations – are at the heart of BAT’s continued success, and the business puts a lot of effort into making sure the right people are in the right place. This is a global company and that includes a wide variety of nationalities and types of people.
“We are made of our experiences and backgrounds,” says Sampaio, “so we do have an agenda towards creating more diversity within our team. Part of that is paying a debt of the past, when that was not the focus of the company, so that we extend opportunities to everybody.” To support them, BAT Brazil has a robust agenda for handling COVID-19 specifically, with psychological support for those who need it, and a more flexible working style from now on.
Strategic, tactical, digital. These are the values, or pillars, which Sampaio and BAT hold dear. With a firm belief in the strategic and tactical – and strategies and tactics being fed through digital technology – a robust system of end-to-end management is created. In terms of strategy, the priority is engaging with stakeholders to truly understand demand and improve long-term sustainability. On the tactical side, the focus is low spend and fast, efficient delivery. Digitally, a new COUPA system has been introduced to streamline all of this and collect the data BAT needs for continual improvement. The outcome? Improvements across the board, and a shiny new CIPS Excellence in Procurement Awards with Project PACE.
So, what’s next? “When we talk about the procurement agenda and strategy, we’re talking about creating A Better Tomorrow™,” Sampaio says, repeating that key phrase. “We have very challenging targets when it comes to ESG, and procurement is driving this agenda. This is the future. BAT is a very strategic company, and very constructive. We’re all focused on the same thing and connected by this goal.”