Having led a major overhaul of procurement operations, Marcelo Stefani, Global Chief Procurement Officer, discusses the strategies, philosophy, and goals of swapping from PepsiCo’s localised approach to a global one
Procurement’s importance within the business landscape has scarcely been clearer than now. Unprecedented levels of disruption to global supply chains via the Covid-19 pandemic, the war in Ukraine, aberrant weather events and international trade uncertainties have centralised procurement as not just a strategic enabler, but a functional imperative.
Gone are the days where procurement operated in the background; now it’s a fundamental component of top-level strategy. For a complex multinational like PepsiCo, the depth of value offered by a robust, technologically enabled and strategically versatile procurement organisation is abundantly clear.
Marcelo Stefani, Global Chief Procurement Officer at PepsiCo, took charge of the food and drink giant’s worldwide procurement efforts in 2023. For Marcelo, taking the reins at the top of PepsiCo’s procurement function meant re-examining the fundamental principles governing its supply chain operations.
A new vision for PepsiCo’s procurement operations
Despite its global footprint, PepsiCo’s procurement was conducted on a regional basis, and Marcelo leapt upon the untapped potential.
“When I started this role, I was really surprised by the lacking use of PepsiCo’s global levers,” he says. “We are a $92 billion company, and we weren’t using the leverage of our global brands, specifically in procurement.”
The trick is knowing where to start, but for Marcelo the focus had to be with PepsiCo’s enormous supplier base.
First, we had to ensure that we can negotiate globally with suppliers,” he explains. “I established a team that was dedicated to supplier negotiations and delivering our strategy among them.
“That wasn’t the only thing we changed, but to deliver results and execute your mission and vision you need to have great talent and capabilities within the organisation, so that was another element. Then, even though you go global when global makes sense, the execution and the operational side have to be at the local level.”
Of course, the top-level procurement strategy covers considerably more ground than the supplier relationship management element, as Marcelo elaborates.
Four key pillars
“There are four buckets: global portfolios and commodities comprising the strategy of looking at global negotiations and opportunities to engage with suppliers more deeply,” he says. “Then we have operational procurement excellence, making sure that whatever we negotiate is on-time with flawless execution in each market, with each line being properly fed. It’s all interconnected.
“The third one is sustainability and innovation. Sustainability is very important at PepsiCo, so we ask how we can drive sustainability on a global level. It can be more challenging because you may require more investment in some regions compared with others. We took sustainability from a regional basis to a global one, because it’s better when you talk with long-term suppliers on a global level about investments and ways of working together.
“Then the fourth bucket is a bit of the glue of it all: capabilities and process harmonisations across the world, across the whole procurement organisation. Each of these – the operational procurement, the leaders of the commodities and the portfolio, the innovation and sustainability, and the capabilities – are part of what we call the ‘PepsiCo Procurement Leadership Team’.
“But there is a fifth element that is very important,” adds Marcelo. “We have a digitalisation person that is sitting amongst the leadership team, and we are of course working together to deliver digitalisation efforts across procurement that will help to drive everything forward.”