Taking Supplier RELATIONSHIPS. to a New LEVEL SEPTEMBER 2017

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1 Taking Supplier RELATIONSHIPS to a New LEVEL 18 SEPTEMBER 2017

2 September 2017 COVER STORY By Sue Doerfler Keurig Green Mountain incorporates one of its core values community involvement when partnering with suppliers. Partnering has a unique meaning to Keurig Green Mountain. Like other organizations, the specialty coffee and brewing system company, headquartered in Waterbury, Vermont, forms strategic relationships with key suppliers. Whereas partnering entails creating mutual value, for Keurig Green Mountain (Keurig), it also means giving back to local communities. At the company s annual Top 100 Supplier Conference, where key suppliers come from around the world to meet with senior leadership, there is a volunteering component in which attendees can perform charitable work alongside Keurig employees. Supply management practitioners often use the word partner to talk about their supplier relations, says Amena Smith, director, indirect procurement at Keurig. But we re partnering with our top 100 suppliers on a whole different level. THE IMPORTANCE OF INVOLVEMENT Supplier conferences like the Top 100 event generally have a social activity such as a golf outing, baseball game or bowling tournament to create interaction between the host business and participants. Keurig has decided to take a different approach, and instead focuses on one of the company s tenets: community involvement. SEPTEMBER

3 Photos courtesy of of Keurig Green Mountain Giving back to the community is part of our culture, says Paul Iaderosa, Keurig s former senior vice president, procurement. It goes back to the impact we have, not only on our local communities, but the world as a whole. Coffee must be grown in certain altitudes and at certain temperatures, and we re very conscious of the impact we make on the world. That spirit of trying to make sure we re good citizens regarding where we draw our coffee from is the same thing we want to do locally where we work and where we manufacture. The result is the company s CAFE (Community Action For Employees) program, in which each employee is entitled to 52 paid hours a year equal to one hour a week or 6.5 work days for volunteering. Giving back to the community is part of our culture. It goes back to the impact we have, not only on our local communities, but the world as a whole. PAUL IADEROSA CAFE time can be used for any type of volunteer or charity work for local nonprofits, says Iaderosa. Some employees form teams and do organized events for local charities. Others do it individually. For example, last year, a group of procurement employees spent an afternoon working on a local farm that supplies area underprivileged families with organic vegetables. At the Burlington, Massachusetts location, about 50 employees recently spent half a day picking up trash around the facility, which abuts a six-lane highway. They gathered more than a metric ton of trash. Adding a CAFE program component to the Top 100 Supplier Conference carries the notion of community involvement forward, Smith says. And it furthers the company s four core values. We partner with suppliers for mutual success that s one of our values on a variety of levels, she says. We work on development. We innovate with passion another value and talk about ideas. We play to win another of our values on a regular basis. We thought it would be great to get our suppliers involved in something else. Our fourth value is brew a better world. Why not get them involved in our community work? GIVING BACK At the most recent Top 100 conference the third annual, held in April at the Burlington location participants attended formal presentations and receptions, as well as engaged with Keurig leaders to sign contracts, conduct negotiations or meet about another aspect of the business. 20 SEPTEMBER 2017

4 CAFE program activities were optional and subject to a participant s time and availability. Those who registered to participate could choose from several activities, which were held on- and off-site, including: Assembling outfit packs and book packs to donate to Cradles to Crayons, a nonprofit that provides needy children essentials to thrive at home and at school Shopping for items on children s wish lists, also to benefit Cradles to Crayons Making no-sew fleece blankets to donate to Boston Children s Hospital. Keurig employees had collected materials for the packs and blankets, so conference participants could start contributing right away, Iaderosa says. Some of the blankets they made were really fancy, with multiple layers of geometric patterns and edging, and trim around the side. They were beautiful works of art. Some participants worked individually, while others worked on teams with members of their own companies or with other Keurig suppliers. A group of three businessmen from one company assembled more than 50 packets of clothing for young girls in a four-hour period, Smith says: At first, our team was wondering if the men would be OK with the activity. But these three men made more packets for girls than anyone else did that day. They were probably all dads. It was great to see them in break loose of any conventional barriers and do this. In all, 217 outfit packs and 75 book packs were assembled. Shopping was accomplished for 101 kids. More than 150 well-wish notes were written. And more than two dozen blankets were crafted. LESSONS LEARNED The conference CAFE participation has grown each year. And Keurig has learned from each experience. Last year, the on-site events were hidden in a second-floor training room, Smith says. This year, we moved them into the cafeteria, so there was a lot more visibility. Thus, if you had only an hour, you could still sit down, make some cards, make a blanket or do what you had time to do and what appealed to you. Every year, Keurig asks participants for feedback. Our internal participants said that perhaps too many activities were geared to crafts, unless participants were able to go off-site, Smith says. We re a little limited in the types of events we offer because it s April in the Boston area who knows what the weather is going to be like. But we ve talked about some of the ways we could expand the activities, so if you don t want to work with glitter and fleece, there is something else you can do. For example, Keurig is considering sponsoring a local park, Smith says. If that happens, we thought one of the activities we can do it s still a little crafty but adds home improvement to the mix is build birdhouses for the park to attract different kinds of birds, she adds. Participants have suggested painting or refurbishing the house of someone in need, Iaderosa says. We re going to take that feedback and incorporate it into next year s event, he says. Perhaps some participants wanted to sign up but didn t, because they didn t think they had the appropriate skill set. So, we re going to try to widen our approach. CAPITALIZING ON VALUE No matter the approach or activity, the CAFE time conference event creates lasting value between Keurig and its suppliers. Any time you have a team-building activity with suppliers, you certainly get closer and build personal relationships, not just professional ones, Iaderosa says. What s important here is it s not just the procurement/sourcing organization that has dayto-day relationships with these suppliers. The greater Keurig team also forms these relationships when they participate with our supplier partners in these activities. Iaderosa calls it a huge win when business relationships become more personable, not only for the procurement organization, but for other parts of the business. We become more than just a customer on the other side of a purchase SEPTEMBER

5 order and invoice, but somebody with a need, somebody with a technical challenge, somebody with a plant to run, he says. When we have business to conduct a month from now or six months from now, the relationship that has been forged during these events will be more meaningful, particularly when an issue or concern arises, a new product is being developed or we re facing a customer challenge together. For Keurig, furthering supplier relationships through its core values including brewing a better world through community involvement is a win-win. Incorporating community involvement in a supplier relationship creates a new kind of conversation, Smith says: When you start to take away the barriers around your conversations, there is more room for creativity and ideation because you re learning more about each other, you re learning more about each other s capabilities and you re more open to hearing ideas from one another. Every conversation you have is a different kind of conversation that enhances that relationship with your suppliers. Keurig s community involvement initiative has impacted suppliers in another way: It has influenced them to start their own givingback programs. When we visit our suppliers locations, they are anxious to talk to us about the (charitable) work they re doing and how our cultures are so similar because we both are engaged in our communities, Smith says. I also think that people believe you more if they see your values in action. I think having those values so evident to our supplier base also inspires them to take things to the next level in their own companies, she adds. A WIN-WIN For Keurig, furthering supplier relationships through its core values including brewing a better world through community involvement is a win-win. By adding CAFE time to the Top 100 Supplier Conference, we re living and breathing all four of our values with 100 of our closest business partners, Iaderosa says. One participant ed the company, saying, We appreciated the opportunity to participate in the Keurig Green Mountain Top 100 Supplier Conference, including the charitable event activities. We enjoyed having the chance to engage with our Keurig partners and our extended supply chain partners in such a meaningful way. We are thrilled to have played a small role in helping to provide support for those in the community that need it most. The CAFE event, she wrote, really underscored the idea of people working together to achieve great things. ISM Sue Doerfler is a publications coordinator for Inside Supply Management. Institute for Supply Management. All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management. 22 SEPTEMBER 2017