theceomagazine.com The CEO Magazine - June 2014 51.

In The OfficeEXECUTIVE INTERVIEW

With 29 years’ experience in the steel-making and mining industry in supply chain

management, business process re-engineering, and plant efficiency improvement, Brijesh Garg was a clear choice for the newly created role of Vice President of Procurement and Member of Group Management Board for NLMK.

“I started my career working with Tata Steel in 1985 in the field of industrial engineering, which evolved into plant efficiency and productivity. After working there for 10 years, I moved onto technical advisory roles in plant

ExcellenceOperational

CONTINUOUS

As a leader in international steel supply, NLMK is working to continuously improve its internal operations and its collaboration with key external partners.

Images courtesy of NLMK Steel

operations and logistics within Tata Steel.

“Following my appointment as the leader of the taskforce, Tata Steel initiated a supply chain restructuring in 1998. So until 2001 I worked on the restructuring of supply chain. After a long and successful career in Tata Steel, I joined ArcelorMittal in Kazakhstan, where I worked on procurement restructuring, SAP functional improvement, and procurement of major CAPEX projects. I then moved to New Zealand and worked for BlueScope Steel’s plant there, which exposed me to a different corporate culture. In 2009 I made a comeback to ArcelorMittal in Kryvorizhstal,

Ukraine, in the role of chief procurement officer. In 2012 I joined NLMK, and since then I have been working here as the Vice President of Procurement and Member of Group Management Board.”

Having worked in India, Kazakhstan, New Zealand, and Ukraine, for various international companies, Brijesh was challenged by the change of his role and the environment when he arrived in Russia. “Joining NLMK was quite a different experience as I came from a multinational culture to a leading Russian steel company, which although global, is predominantly Russian. To perform well within this new environment and to

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understand company operations was demanding, but to strive for the best procurement practices was even more challenging.

However, undeterred, within a short time of starting with NMLK, Brijesh initiated a Procurement Excellence Program (PEP) to enable NMLK to achieve the ‘best-in-class’ status.

As the industry becomes more capricious, Brijesh notes the impact of changing expectations from all stakeholders. “Given the volatility of the market over the past few years, we’re not talking about the next few years or the next few quarters; we’re going quarter to quarter. That presents a challenge for plant operations and logistics for the supply of steel in the product mix that customers buy. Due to this, procurement needs to reduce response time to the continuously changing needs of our customers. This trend is likely to grow as production cycles

shrink, demanding greater flexibility in production and procurement, which continues to pose a challenge for the future.”

In 2013, NLMK launched a Procurement Excellence Program to transform its supply chain. “The basic idea is to deliver a transparent, flexible, and responsible supply management for NLMK that responds quickly to the needs of our internal and external customers. This program, in many ways, will change the way we work in the future. For example, we are looking at establishing close relationships with our key suppliers and stakeholders. At the end of this transformation program, we want to have the best-in-class procurement processes throughout our group.

“The main changes come through three key areas. The first is establishing lean and efficient processes. The second is adding

value through direct involvement of our stakeholders, be it the suppliers or the end users of our materials and services. We are creating a cross-functional culture, by newly created cross-functional teams in a matrix structure, to add value.

“The third is ensuring sustainability of our work through a continuous learning program. This is because we want to empower our people, and I believe empowerment can only be realised with staff that have the right skills and a clear understanding of their roles and responsibilities. Only then can we deliver the best results quickly and cost-effectively.”

NLMK has brought a company-wide focus to further improve its procurement performance by deploying a number of initiatives. “We have a continuous learning program incorporated into our daily work to make our processes leaner, and to enable our people to understand the key principles of

supply chain. Presently, we’re creating category-by-category sourcing strategies based on the key requirements from our internal customers and investigating how we can meet those requirements regularly with minimal risk. This is being done, not just by looking at the price alone, but also the total cost of operations. This has been at the heart of our work in terms of how we should buy. Additionally, this year we have focused on supplier collaboration to create joint initiatives.”

According to Brijesh, collaboration is paramount to the company and he believes that strategic supplier relationships are a vital element of the company’s success. “We are collaborating with our suppliers on the improvement of our supply management process, which incorporates supplier on-boarding, establishing relationships with suppliers during the procurement cycles, and evaluating suppliers’ performance.

“Last year, we started with a supplier partnership program where we identified several key suppliers for our major categories, and awarded them with the status of business partners. We, at NLMK, understand the responsibility that comes along with it; to deliver exceptional value through it. In the coming years, supplier collaboration will continue to remain a main focus for us and we will drive maximum value through this process.”

NLMK values its open, honest, and transparent working culture, which is driven by everyone in the company, from the frontline to the global leadership team. “In procurement, it’s important that we have like-minded suppliers who share our values. The key ingredients for successful procurement are honesty, transparency, and lean and flexible working. That’s what we inspire in our people, and that’s what we seek in our suppliers. We

“The key ingredients for successful procurement are honesty, transparency, and lean and efficient working. That’s what we’re incorporating into our people, and that’s what we look for in our suppliers.” - Brijesh Garg

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“Being one of the biggest producers of paint materials for coil coating, PTI cooperates successfully with NLMK. We are proud to have an opportunity to work and develop together with the worldwide leader of metallurgical industry, NLMK.”

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For more information, please visit our site: www.prime-top.ru

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would like to promote an honest and transparent culture on both sides to create value for both parties.”

Brijesh envisions NLMK in a strong position for the future ahead. The company has forged close working partnerships with its key suppliers and is continuously looking to improve all aspects of the business process. The coming years will see NLMK grow and expand, into new markets with new capabilities, utilising the experience Brijesh has in improving companies’ operational excellence in the field of procurement. “NLMK is a great company. Over the past several years we have focused on capacity expansion. And since last year, we have been focusing on improvements in operational efficiency and the efficiency of our other key supporting functions. I foresee NLMK will strengthen its leadership position in operational and cost efficiency in the shortest possible time.”

“The basic idea is to deliver flexible management for NLMK that responds quickly to the needs of our customers internally and externally.” -Brijesh Garg

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