For Johnny Howze III, Senior Vice President and Chief Procurement Officer at NiSource, procurement and supply chain are no longer functions that sit quietly in the background of the enterprise. Rather, they have been transformed into strategic enablers of massive growth…
As utilities navigate rising energy demand, ageing infrastructure and growing customer expectations, procurement is emerging as a critical strategic function capable of shaping enterprise growth and resilience. At NiSource, supply chain transformation is no longer centred solely on cost reduction. Instead, the organisation is repositioning procurement as a driver of operational discipline, infrastructure expansion, supplier collaboration and intelligent decision-making, underpinned by technology, data and a renewed focus on enterprise-wide value creation.
NiSource is one of the largest fully regulated utility companies in the United States and the challenge and scale of leading a transformation designed to reposition procurement and supply chain as strategic partners is considerable.
NiSource manages around $4 billion in capital and operational spend while supporting extensive gas infrastructure projects and a growing electric business through NIPSCO in Northwest Indiana. “We replace a lot of natural gas pipelines to serve our customers and the Columbia Gas companies,” explains Johnny Howze III, Senior Vice President and Chief Procurement Officer at NiSource from his office in Columbus, Ohio. “We also have a small electric business, NIPSCO, where we serve 500,000 electric customers as well as natural gas service customers. I view that as the growth part of our business because in Northwest Indiana, growing our electric system and modernising our infrastructure is one of the key things we’re doing now to create value for our customers.”
That growth outlook is closely tied to wider market forces reshaping the utility industry. Demand for electricity is increasing rapidly, driven in large part by the expansion of data centres and digital infrastructure. At the same time, utilities face mounting pressure to modernise ageing networks while maintaining affordability for customers. Against this backdrop, Howze believes procurement and supply chain have become the most strategic capabilities within the enterprise.
From plant engineer to procurement leader
Unlike many procurement executives, Howze did not begin his career in sourcing or commercial management. His background is rooted in operations. “I grew up in the utility industry, the energy industry,” he reveals. “The bulk of my background is operating coal-fired power plants.”
From his early days as a plant engineer through to managing multiple generating facilities, Howze experienced first-hand how supply chain performance can directly affect operational reliability. “I was always a customer of supply chain,” he explains. “So, I know what it’s like to experience bad supply chain as well as having a vision for what great supply chain should be, based off what being a customer would expect.”
That operational grounding continues to shape his approach to procurement leadership today. Rather than focusing narrowly on savings, he sees procurement as fundamentally tied to operational resilience and risk management, explaining: “One of the key things you learn as a plant manager is managing the risk of the business, but supply chain is the same thing.”
He offers the example of transformers, where poor operational maintenance can place enormous strain on procurement teams already navigating extended lead times and constrained supply markets. “If I keep blowing transformers and not doing the appropriate maintenance and getting failures, then that puts more stress on my supply chain in a market where transformer lead times are very, very extended,” he says. “So, operate your equipment better and it takes the stress off supply chain and you de-risk the business.”
The experience has given Howze a broader perspective on what modern procurement should deliver. For him, procurement is not simply about sourcing equipment or reducing cost. It is about enabling the business to operate more effectively, more intelligently and with greater resilience.
Moving procurement into the ‘living room’
When Howze joined NiSource, nearly two years ago, one priority quickly became clear. The operating model needed to evolve. “Coming into NiSource and just paying attention to industry trends, one thing we all know is that the pace of change is getting faster and faster,” he says. “The amount of information out there is faster and faster, and this leads us to the data centre and the AI conversations.”
Recognising the scale of future infrastructure demand, Howze decided to restructure procurement around business units rather than traditional indirect and direct sourcing silos. The structure was designed to support flexibility and growth, whether through infrastructure expansion in Northwest Indiana or potential mergers and acquisitions. “Supply chain is a lever for growth and I had to install an operating model to help our business grow.”
That philosophy reflects one of Howze’s strongest beliefs: procurement must be involved at the very beginning of strategic decision-making. He refers to this ambition as moving procurement “from the back to the living room”. “Supply chain needs to be involved in the beginning of decisions,” he says. “That’s the living room, rather than reactive, which is what it has traditionally been in the past.”
Achieving that level of influence, however, requires more than structural change. As Howze puts it: “It’s really about the relationships and building the trust all throughout the organisation. That’s when you know you’ve arrived in the living room.”
Beyond cost reduction
Howze is clear that procurement’s value proposition cannot revolve solely around savings. “The value proposition of supply chain is not just cost reduction,” he says. “It’s not just saving money, which is still very, very important for our customers, but it’s about risk management to help us operate the business better.” That broader perspective is especially important in regulated industries such as utilities, where operational stability, regulatory outcomes and customer affordability are closely interconnected. “When I think about our regulatory outcomes, we get a rate case outcome and supply chain is a huge enabler to help us live within the financial constraints and the regulatory frameworks that we live with,” he explains.
A unique view
Howze believes procurement occupies a uniquely valuable position within the enterprise because it has visibility across virtually every business function. “The thing I love about supply chain is that we are in everybody’s business,” he says. “I see what everybody spends.”
That visibility creates opportunities not just for cost control, but for enterprise-wide optimisation. “How do you take everything that you see and make it work for the enterprise? That’s what it’s about, making it work for the enterprise,” he declares.
To reinforce this mindset internally, Howze has intentionally shifted the language his teams use. “I don’t talk about spend anymore,” he says. “I try to treat it like a private equity portfolio where you have to go and create value.” He points to pipeline investment as an example. “If I’ve got to spend $10 on a piece of pipe, can I spend that same $10 and not just get 10 feet of pipe, but 12 feet of pipe?” The focus, he says, must move away from transactional procurement and towards continuous value creation. “You’ve got to find value everywhere.”
Building a growth-oriented operating model
At the centre of NiSource’s procurement and supply chain transformation is a carefully balanced operating structure combining strategic category management with operational execution. Howze describes the organisation as having both a strategic and tactical side.
On the strategic side, category leaders are aligned to key areas of the business including gas and electric operations and enterprise services such as IT, HR and real estate. “The strategic part of our operating model deals with category management,” he explains.
On the tactical side sit warehousing, inventory management, governance, analytics and process operations. “I have a director for warehouse,” he says. “I have a director for governance, data and insights, which are all of my analytics and governance functions.” The structure reflects another lesson Howze learned during his operational career, with Howze noting that: “Somebody’s got to focus on today and somebody’s got to focus on tomorrow.”
Seeing the successes
For Howze, one of the clearest examples of the model’s success has been the support it has provided for large-scale electric infrastructure growth tied to major new customer demand. “When I think about our announcement with our generating company to focus on large load customers, supply chain has positioned the business to support this new business we’ve created,” he says. This includes sourcing and coordinating increasingly constrained equipment categories such as turbines, breakers, transformers, transmission structures and construction labour. “If supply chain is not out in front, being very, very strategic, then we’re not positioning the business for growth,” he warns.
Education, culture and organisational discipline
Howze repeatedly returns to one theme throughout the conversation: education. He believes one of procurement’s biggest challenges is that organisations often lack a shared understanding of what great supply chain actually looks like. “You have to educate people,” he says. “You have to educate all of the stakeholders.”
That education effort stretches from frontline operational teams through to the executive suite. “You have to speak to the mechanic on the shop floor or the gas tech all the way to the C-suite,” he says.
To support that ambition, NiSource has introduced a Procurement Academy designed to build common capability and understanding across the organisation. “We’re in the middle right now of doing a procurement academy for all of our employees to make sure that everybody’s got the same level of what I call ‘day one knowledge’ to be able to contribute,” Howze explains.
Education, he believes, is essential for creating consistency and operational discipline. “I firmly believe supply chain is one of the ways to bring a lot of organisational discipline to any organisation.” That discipline is particularly important when managing thousands of suppliers across multiple business areas. “At the end of the day, I’m looking at all 3,500 of our suppliers and I’m trying to leverage that supplier base for the good of the enterprise,” he says.
Howze also encourages his teams to become more proactive and commercially curious. “I told everybody, ‘I need you to go hunt,’” he says. “You can’t sit back and just wait for stuff to come to you. When you’re creating value, you have to go hunt.”
That means attending business meetings, engaging stakeholders early and actively identifying opportunities. “Go hunt all around this building,” he told his team.
Technology, AI and intelligent procurement
Technology is another major pillar of NiSource’s transformation agenda. For Howze, digital tools are not simply about automation. They are about improving visibility, enabling faster decision-making and helping procurement teams focus on strategic thinking rather than manual administration. As he explains: “We’ve got so much data. I talk a lot about data lakes.” His ambition is to create automated, repeatable reporting and insight generation that frees employees from spreadsheet-heavy administrative work. “Now I can use that liberated employee to tell me what this stuff means to our business,” he explains.
Artificial intelligence also plays an increasingly important role. “I have a lot of conversations these days about how can we use an AI chatbot, for example, to scan headlines every day out in industry,” he says. The goal is to strengthen risk management and supplier intelligence. “If I’ve got a supplier that I think is risky, I want to know everything I can know about that supplier.”
Howze acknowledges that technology cannot replace human judgement, however, but he sees enormous potential in combining AI-enabled intelligence gathering with experienced commercial decision-making. “AI can get you a starting place and do at least 60 per cent of that,” he says. “But you still have to have somebody that can take the data and think through ‘what does this mean for my business?’”
One initiative generating particular excitement internally at NiSource is the rollout of contract lifecycle management capabilities within SAP. “We’re starting to talk about this around the enterprise,” he says.
The technology will digitise contracts, automate workflows and provide far greater visibility over expiry dates and supplier obligations. “I want to get a ping just like a work order in a power plant that says, ‘Hey, this thing’s expiring in 10 months or six months. Go do something,’” he explains. That visibility, he says, creates new opportunities to renegotiate pricing, improve terms and proactively manage supplier relationships.
Change management and the future of procurement
Transforming procurement at enterprise scale is never straightforward. “Change is hard,” Howze admits. One of the biggest lessons he has learned is the importance of pacing transformation carefully. “You can only move as fast as the organisation will allow you to move,” he says.
At the same time, he recognises the importance of maintaining momentum. “I would’ve loved to have moved faster,” he reflects. For Howze, successful change management ultimately comes back to communication, trust and clarity of purpose. “People just want to know why,” he says. By continually reinforcing the business case for transformation, leaders can gradually build support and increase organisational appetite for change. “You can start spoon-feeding the business little bit by little bit,” he says. “Then as their appetite grows, my pace can change because their appetite is growing.”
The future’s bright
Looking ahead, Howze believes the future procurement organisation will look fundamentally different from the past. “It’s not going to be ‘three bids and a buy’ anymore,” he says. Instead, procurement will become increasingly analytical, intelligence-led and integrated into enterprise strategy. “The future will always be based on the operating model that’s installed in that business because operating models enable growth,” he says.
Technology and data, he believes, will only increase procurement’s strategic importance. Yet despite the growing importance of technology, Howze consistently returns to the human dimension of leadership. “It’s all about mindset,” he says.
Creating a culture focused on value, adaptability and enterprise thinking requires constant reinforcement. “Mindset is like a muscle,” he says. “You’ve got to work on that mindset every day.”
For fellow procurement leaders looking to reposition their own functions, his advice is simple but emphatic. “Focus on the narrative first,” he says. “What are you trying to get done? What’s the story that you want at the end of the day?” He also stresses the importance of people and organisational consistency. “The people are so important because as leaders, we don’t do anything alone,” he says.
Finally, he returns once more to the operational discipline that underpins everything else. “If you can get everybody to focus on processes and doing things more alike than disalike, it’s a win,” he enthuses.
At NiSource, it’s clear that the journey of procurement from back office to living room is still evolving. But under Howze’s leadership, the direction is unmistakable. Procurement and supply chain are no longer simply supporting the business. They are helping define its very future.