We spoke with Elvire Regnier, seasoned procurement executive and founder of Regenerative-Advisory, for her insight on the impact of artificial intelligence in procurement, ESG regulations and climate change causing changing expectations of customers and investors, how tools like Craft enable critical collaboration and relationship building, and more.
Elvire Regnier brings over three decades of global expertise as a procurement executive, having navigated pivotal roles across esteemed French, European, and American corporations. With a rich background spanning fast-moving consumer goods (FMCG), construction, renewable energies, chemicals, and cosmetics sectors, Elvire’s journey includes leadership positions such as Chief Procurement Officer and strategic advisory roles at top-tier firms like Alix-Partners and Kearney, Yoplait, Colgate-Palmolive, Unilever Group, L’Occitane, and more.
She is the visionary force behind Regenerative-Advisory, a consulting powerhouse dedicated to fostering corporate resilience through innovative ESG and AI-driven procurement strategies. As an industry luminary, Elvire not only spearheads transformative initiatives, but also shapes future procurement leaders through her teaching engagements at prestigious institutions like Essec Business School. Her unwavering commitment to sustainability, coupled with her profound business acumen, marks Elvire as a trailblazer shaping the future of procurement and commercial operations.
AI Top of Mind in Procurement
Q: We saw your recent post about your attendance at some Procurement Forums as a keynote speaker. During these events, many presentations were about the role artificial intelligence will play in the future of procurement. You emphasized in your posts that emotional intelligence to build relationships and business value is an irreplaceable skill.
Please tell us more about that, or anything else you learned or observed.
Elvire: Most of the presentations were about artificial intelligence. So, I decided to lead with emotional intelligence. I was trying to open the chakras.
AI is good because it frees up time, enabling supply chain professionals to talk to their suppliers and build partnerships. I spoke about what we should do with that free time, now that we are able to give AI and/or robots the responsibility of managing recurring tasks.
Q: These new advancements in AI will surely enable us to be more efficient, and build relationships across borders into the future.
We really like that you’re calling that out, and bringing a fresh perspective on how we will approach AI with the analogy of opening chakras.
The Procurement Landscape
Q: How have you noticed the procurement landscape change over the years?
Elvire: It’s changed a lot.
Crisis creates opportunity for change in procurement. When things are going well, people don’t need procurement. They need procurement when there’s an issue.
When I started working in the 90s, we were looking for savings without electronic tools, spending hours, days, months negotiating prices 1:1.
Then, we started to use the electronic platform, which freed up time. So, instead of spending time with suppliers discussing prices, we started to discuss quality and timeline.
We had the first crisis in 2008: the housing crisis. Before this, buyers were really in a position to choose their suppliers. This served as a heads up because some suppliers disappeared as a result of the crisis. Some went bankrupt. A lot of them delocalized production to Southeast Asia.
From then, we started to lose control of our suppliers. They were far away, so we were not able to visit or audit them as easily. We lost control. But, we were happy because prices were dropping and dropping.
Then, we had the COVID crisis. Suddenly, we were surprised. We were wondering why we didn’t have necessities, such as drugs, masks, and production material. During globalization, everything was well organized, like a puzzle. COVID was like an earthquake that shook the puzzle; the pieces were still there, but they were all over the place. Everything was frozen.
Once again, suppliers started to make decisions about who they were going to serve. Sanctions increased. Even if we had a contract, there was no way for us to get everything that was in the contract in terms of quality and quantity. I thought, “Wow. This is a window of opportunity for procurement to really move to the next step.” This is accelerating because of AI.
One of the windows for opportunity is risk management. Craft is great for this because until now, we were trying to manage risk with excel. Craft now helps us act smarter.
Craft provides not only data, but also analysis of data, because data is not enough. If you have a mountain of data, what are you to do with that? Having the analysis or digested data helps to have the right discussions with your suppliers, focusing on improvement to remove or control supplier risk.
Crisis plus AI is really moving us to jobs that are much more interesting because all the tactical activities are going to be replaced by robots.
For instance, 80% of the tenders of some major FMCG companies are managed by robots, which is fine. Frankly speaking, there is no added value for humans to organize tender negotiations. That can be managed by robots.
Decision still needs to be with humans. I’m not going to work with my cheapest supplier, because if I am, I may miss something important in the relationship, like risk and value creation. But, the machine can at least manage the negotiation, because a negotiation is just comparing my objective with what the suppliers can offer. The machine can do that easily.
I teach my students that the pyramid of procurement used to include a lot of people doing tactical activities with very few people working on strategy. Again, there was no tool to help us deploy the right strategies.
Now, the pyramid is flipped. We need less and less tactical people. That means if you want today’s way of doing procurement to improve, you need to accelerate your ability to be strategic, because these are the only jobs that will remain in procurement.
This is definitely the evolution I have seen. I don’t think we’re at the end of the process. There’s more to come.
Crisis plus acceleration of artificial intelligence is the right environment for procurement to flourish.
Q: That’s beautiful in a way. Crisis and chaos push the boundaries for procurement.
Elvire: Exactly. But I must emphasize, crisis and chaos with artificial intelligence. Without artificial intelligence, procurement remains in chaos. Chaos is productive for procurement, but at a certain stage, you need to use AI. If not, you’re back to tactics.
Adapting with AI
Q: It’s fascinating you mention procurement used to operate within Excel. A lot of companies are still in the phase of trying to learn how to get out of Excel or even clipboards.
Do you think there is an opportunity for them to shift into this more strategic area of procurement? What advice do you have for companies trying to adapt with this age of artificial intelligence?
Elvire: You need to get rid of your procurement attitude; “I’m going to maximize my savings by taking advantage of my suppliers.” You need to shift to another approach, which is collaboration, partnership, co-creation.
Suppliers have so much to offer. But, if you’re not open and able to put in place the right conditions for the supplier to offer you what they can offer, you will not survive in the future of procurement.
Emotional intelligence is becoming a competitive advantage. The higher your emotional intelligence, the better your ability to attract and cultivate relationships with your suppliers.
Focusing only on your prices is destroying value, and the machines are going to do that very, very quickly. Very soon, machines are going to do that on our behalf. But, if we leave the machine alone, it is going to be a disaster.
We say “artificial intelligence”, but the machine remains a machine. If we ask machines to choose the cheapest supplier, the machine will choose the cheapest supplier. The human connection with suppliers is never going to be replaced by a machine.
We need to get better at human connection, strengthen our emotional intelligence, understand other people’s point of view, and put ourselves in other people’s shoes to understand our suppliers. This is my approach to procurement. Understand your suppliers’ ability and your customer.
People in procurement only do what they are expected to do, sourcing material or service without really understanding why.
Q: It’s interesting that you emphasize increasing our use of empathy to understand not only suppliers and achieving initial objectives, but also understanding customers, their thinking, and building those relationships.
We’re excited where procurement is going, and to experience how people will adapt. It’s definitely a credible fear that people don’t want to be phased out of their job. Procurement and supply chain risk management is definitely an area where young professionals have to be intentional where they’re going. And, this doesn’t apply to only the procurement function. It applies to every business. We have to figure out how we can adapt with AI.
Let’s talk about data, since you mentioned that earlier. In our webinar covering the resilience model, you mentioned glasses as a metaphor for data. May we hear a little bit more about that?
Elvire: A lot of data is available, but we don’t know how to analyze this information because there’s too much data. Tools like Craft help us analyze the data. I compare these tools to glasses. These tools exist, and we know they exist. Do we want to buy these tools the same way we buy glasses? Of course, we can assume we want to buy glasses (or tools) to be aware of what is going on.
But, that also means taking on responsibility. As soon as you get an opportunity to analyze the data, both good and bad things start to appear. So, you might decide to not buy the tool (not buy the glasses), and just wait to see what happens. I think many companies are doing that because they reason that if they don’t see a problem, the problem is not going to happen. I would be very careful with that.
Some other people are going to buy these “glasses”. If people can get all this information sitting in their offices by just pushing a button, they will do it. Craft is tracking information all around the world about breaches in the supply chain. So, you need to be bold and decide what to do.
In my experience, companies sometimes prefer to be reactive rather than proactive. In fact, I don’t know why they don’t try to be proactive because companies are always in a hurry [trying to fix things and put out fires]. If you start working with AI, you can get rid of many last-minute, time consuming activities that have no value and make you blind. You need to take the time to anticipate what’s going on.
Perhaps fixing an issue is more gratifying than anticipating something. In procurement, some buyers love to be the firefighters. Anticipation is less sexy, but it’s better for the company to have your process under control to manage the risk beforehand. It’s definitely a shift.
Buyers now need to save time on tactical activities and face the real challenges of the job, which is managing risk with the suppliers, not against the suppliers.
Q: There absolutely is a required shift from a reactionary to proactive mindset.
As the world has become more data-oriented with technology, there’s also a shift within data from collecting and ingesting data to standardizing and canonicalizing data to make it actionable for businesses. There’s a world of data out there, and putting on those “glasses” is the component that makes it actionable.
Procurement Themes Here to Stay
Q: What’s a recurring theme in supply chain and procurement that you believe is going to stand the test of time as we move into the next phase of procurement?
Elvire: Procurement is a commercial job. We are here to talk with people and deal with people. This is going to stay. It’s a human connection. This is also why I love the job: you meet and get to know people. I don’t know how the machine can replace that. People should be really relaxed about that.
Some people say they don’t want to use the technology to manage a negotiation because they want to be the negotiators, and buyers ought to be good negotiators. Frankly, I don’t know if I am a good negotiator or not. I try to do my best, but what I know is that it’s not because I am a buyer that I am supposed to be a negotiator. Procurement is much, much more than just negotiating prices. Unfortunately, the people who limit procurement to negotiation skills are going to be in trouble. What’s going to stay is this ability to connect with people.
There’s competition amongst companies trying to sell their products, and everybody’s aware of that. But, I’m not sure people fully understand there’s a competition between customers to get served by the best suppliers. Good suppliers choose their customers. I’ve experienced suppliers deciding not to answer requests because they don’t want more clients, or the buyers have shortages, bad attitude, late payments, or are just making the supplier’s life inconvenient.
Procurement professionals are responsible to make sure they have access to the best suppliers, and manage conditions in the company to retain the best suppliers. Losing both customers and suppliers is dangerous.
Of course, as a buyer, you organize and have backup solutions. You can do plenty of things. But, I think the first thing you need to do is have good relationships with your suppliers to make sure that in case of issues, you will be served first. To do that, you need to use AI to know and manage your risks.
In the past, everything was about consolidation into as few suppliers as possible to extend time to negotiate best conditions. Then we had the financial crisis of 2008 and COVID crisis in 2020. We were in the hands of a few suppliers, and we didn’t have backup options. The buyers who were really struggling were the people who had consolidated their needs to a limited number of suppliers and also didn’t have a good relationship with these suppliers. So, these suppliers didn’t put them on top of the list.
Before trying to identify other partners, work with the one you already chose, and strengthen the relationship. The machine will never do that. So, the human element will remain in procurement.
Q: It’s becoming even more imperative that there is a human in play, and relationship building is a big part of that. Since the drop in trust in the supply chain since COVID, there’s more awareness with regulations, especially ESG. There’s an assumption that buyers are just selecting the cheapest supplier because they want to be able to provide the quickest, cheapest product to the consumer.
It’s great that people are becoming more aware. Customers and buyers now have many ways of perceiving value past money, such as carbon output, ethical business practices, forced labor, etc. The internet has definitely driven that awareness. And, as AI is coming more into the forefront, it’ll be increasingly part of how we perceive value and treat one another to improve those relationships.
ESG Compliance and Human Rights
Q: What European ESG regulations have been specifically impactful for you? And, how do you recommend supply chain and procurement organizations to respond?
Elvire: In Europe, we have a strong legislation now called CSRD (Corporate Sustainable Reporting Directive) where companies will have to report the extra financial performance. So, this is the end of greenwashing.
Legislation in Europe right now is centered around double materiality. Companies are required to report two things in the European legislation: the impact of the environment (including human rights) into the business system (outside-in), and the impact of the business into the environment, including the human rights (inside-out). This is part of what Craft is assessing.
For example: If a business is at risk because they have plants in stormy regions, they need to report that in their extra financial reports so investors are aware of that risk. This is what we call the outside-in.
But, Europe has also made it mandatory for companies to report the inside-out: everything companies are doing that has an impact on the environment. A 360-degree view is now required. China is also putting in place legislation around double materiality. When thinking about Chinese business, we think businesses are focusing mainly on cheap production, but the Chinese people are aware that their cities are struggling with pollution.
Investors are now going to read the extra financial reports and consider if companies impact the environment, human rights, etc. It is so important because you cannot fix the environmental issue without fixing human rights issues.
The human rights factor is critical. In Europe and the US, we have no risks of slavery. We are protected, in our rights as humans. But, we know that this is not the case in many, many countries. Since you have countries where human rights are not respected, there is no minimum wage, and so these countries are able to produce cheap products, which are competing with European or American products. As a result, businesses ship goods that are in far away countries, increasing GHG emissions. Therefore, human rights have a direct impact on climate.
We seem to only focus on what is immediately impacting us, like storms, odd winters, flooding, hot summers etc. But, without understanding that if we don’t fix the human rights issues, that will forever stay.
I would love to make people realize that it’s not only about the climate.
Q It’s a poignant statement that Earth doesn’t need humans; humans need Earth. And, humans need each other. When we treat each other unfairly and unethically, the truth comes out in the wash in terms of how we treat our environment. When we treat each other badly, it ultimately results in neglect for our environment.
Elvire: The planet is going to survive. Humans are going to disappear before the planet. We are beating ourselves up by buying fast fashion, not taking care of risk, and not taking care of where and how our goods are produced.
Q: One of our favorite things about working in this industry is being a part of the practical change to make our world sustainable. How we orchestrate our supply chain has very big ripple effects. Humans need to be much more cognizant of how we’re behaving in our society, and how we construct our supply chain.
The Next Generation of Procurement Professionals
Q: Because you’re so involved with teaching the next generation, what do you see in the new generation? What kind of skills are they bringing that you see can help move the industry forward? What do you think they need to do to join and contribute to the industry? What are their concerns?
Elvire: I’m noticing two kinds of young people.
One group mentions that when they work in companies as trainees, they are told only the price matters, (that still happens, unfortunately). Because they want to find a job, they want to get adjusted to what the business is looking for. I tell them, “I understand. Do whatever you have to do, but remember the skills I taught you. You can use them in two, even five years. You at least have the basics, and an approach that you can use in five years when you will be asked to be more strategic than tactical.”
The other group is very determined to never work for pollutant industries, like oil. They never buy new clothes, and always buy second hand. They are very much involved in conservation in their private life. Therefore, for their professional life, they are going to be very selective in terms of the company they join.
Even for those who are not convinced yet because they maybe don’t have strong convictions, the world that’s coming very soon is going to make them decide. Doing what the company is expecting you to do without thinking about the impact is not going to last much longer. Companies who expect that mentality are going to lose talent, market share, customers, interests, etc.
So, it’s a journey. Changes are not coming overnight. It takes time. There are some progresses, some step backs. But, what is important is the trajectory. It’s a direction. Of course, it has ups and downs. But, I think we are moving in the right direction.
Responsibility for Positive Change
Q: There’s a debate around whose responsibility is it to actually make sure that we make this change within the world. Does the responsibility lie with the government, big organizations, individuals, or a mixture of all the above?
Elvire: You remind me of something that happened at a recent event.
We had a breakout session, where I was facilitating a session on ESG. One particular group of buyers mentioned they were so happy about this legislation in Europe now, because at least the agenda will be clear. They had management asking them to deliver big savings, but be mindful of the planet at the same time. The plate was full. So, now at least, there is an obligation. It clarifies their agenda.
I was very surprised because I thought people hate legislation, but in this specific case, they were happily saying legislation will clarify their agenda.
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As crisis inevitably occurs and regulations evolve, the human connection within procurement and beyond is imperative for human survival. Supply chain and procurement professionals have a major responsibility to be bold and set the standard for human connection while adapting to evolving concerns of investors and customers. Thankfully, people like Elvire are leading the way toward positive change.
We hope you found our discussion with Elvire as insightful and inspiring as we did. The shift toward more strategic work and human connection fueled by AI over time-consuming, tactical roles is already apparent, as we’ve witnessed with tools like our platform where you can configure AI-driven alerts that are highly tailored to your unique business needs. And, this is just the beginning.