#Supply Chain#Technology

CBRE's supply chain transformation

Nye Longman
|Jun 3|magazine16 min read

Overseeing a supply chain transformation at the world’s largest real estate services company is no easy task. With around 90 offices in Asia – alongside thousands more affiliates and managed properties – the potential for CBRE to save its clients’ time and money was high. Backing up a plan to triple its present operations in the Asia-Pacific region, the transformation could not be timelier. With a remit to centralise supply chain operations, roll-out new technologies, and up-skill staff, we speak to two executives at CBRE – Mat Langley and Graham Morton, about how this is being achieved.

Operations

CBRE began its Asia operations nearly 40 years ago. The company’s first foray into the market began with entry into Singapore – a vital location which now serves as the country’s South East Asia regional hub, housing around 1,100 employees. Consistently growing, the company has attained a well-earned reputation as a leader in terms of commercial leasing, investment sales, residential project marketing and commercial asset management in a number of key Asian markets.

The company’s comprehensive offering includes transaction, facilities management, advisory, and a wide array of capital and asset management services. The company also retains a high degree of knowledge and capability, covering a range of industry verticals, namely hotels, industrial, logistics, and workplace solutions.

Transformation strategy

“I’ve been in procurement for 20 years,” says Langley, who holds the role of Director of Commercial Management at the company. Within a few months of joining, he had developed a business plan with change at the forefront: “Last year I joined CBRE, having previously worked as the procurement head for Citibank where I helped design and build a number of procurement activities. I saw the potential for CBRE to establish a leadership in the procurement space regionally, applying some of the practices that the finance industry has taken forward.

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Quotables

"If you don’t have supply chain operations working with you, you have a lot of leaking of spend and a riskier supplier base, which will cause the best category and negotiation strategies in the world to crumble.”

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“CBRE is a creative and entrepreneurial company,” he adds. “In two months I put together a business case that we needed to improve on our productivity. There was a service centre in Manila but we wanted to move the supply chain management up the value chain to form a centre of excellence and productivity.”

Morton, in his role as CBRE’s Regional Sourcing Director, is responsible for the company’s supply chain solutions in the APAC region. His hand in the transformation has focused on meeting the needs of the client. He explains: “Clients demand the best value - they want consistency, they want governance and they want flawless execution.

“They’re all coming from different places. For us, it’s being able to manage consistency and getting the best value to those clients in the right way, so that you’re not putting up any walls. This process starts with visibility. It is hard to execute strategies if you can’t see what you’re looking at – it’s providing real visibility on what we are doing and where we are going.”

Langley adds: “We will be moving the rest of CBRE to a cloud-focused organisation using Zycus. This migration will be significant for the firm, and throughout the transition period, we are using fit-for-purpose SaaS platforms Shortlist and Gatekeeper (eRFx/VMS and Contract Management tools respectively) to move the supply chain organisation along the transformation journey.”

Morton explains that the company is eyeing the next 18 months as the time to deliver the majority of its changes – and that, after this time, the company will be far better equipped to deliver for clients. He says: “We will be continuing and accelerating the path that we have been going down and leveraging scale for our clients to the point where we are ahead of the procurement game and ready for further automation and AI opportunities.

“It’s about moving forward, from my perspective, and being at that proactive front end to create the solutions that give the clients the best value and superior outcomes in all their locations.”

Langley adds: “We have partnered with finance on an initiative to go through and improve operations and the accounts payable process. We have strengthened the standard sourcing and supplier management foundations there; controls and risk management are more consistent across the supplier base.

“We have our insurance levels mapped to the vendors, and increased visibility in our supplier base, which we are managing closely. Another work stream we are working on is to hit the rest of the Procure-to-Pay process and really prepare for what we expect regulators are going to be focused on and what clients increasingly expect.”

Delivering change

From a training perspective, Langley is broadening skill sets in the supply chain management teams to include a stronger focus on stakeholder, change, and project management, through to developing strategic souring, category management and true vendor partnerships with an end goal of becoming a more trusted advisory / commercial consultant. CBRE has reinforced this through setting up a productivity centre in Manila, which also houses a number of centralised supply chain functions.

“This improves spend analytics and management reporting,” Langley explains. “We centralised all the contract management here, which was previously handled at a country account level. We are seeing improvements in standardising contract templates across the region. You can see where the gaps are, and really improving the insurance levels, risk, and control. And we’re also seeing faster adoption of technology and best practices.

“Having the vision and producing documents that people go ‘Wow – I can take that to the head of my country and explain what’s happening’ - you really get some momentum.”

Delivering a revolutionary supply chain transformation across a relatively large, diversified business is not without its challenges. Old habits and technologies can often be difficult to change; the right approach to delivery is critical. Langley continues: “We had two businesses and five divisions that, while present in the same industry, have been operating differently. We have also had legacy technology and country complexity that has added challenges.

To this end, communication is key. Langley and Morton are broadcasting the value that this transformation can bring to both the business and its clients. Langley explains: “This is really helping us move from the perception that we are just doing the buying and getting a couple of quotes. Supply Chain Solutions is moving from the back office to the executive level and creating major value.

“Support from our Suppliers has also been key. Suppliers such as SBM and Securitas have been open to the changes and different way we want to work with them. From better alignment of incentives through the use of outputs based pricing to increased operational performance management reporting.”

CBRE has set in motion a supply chain-led transformation that will enable it to become more intimately involved in the operations of its clients, while simultaneously hardwiring excellence across the entirety of its operations. Langley concludes: “Most of my career I was a negotiating category manager. I used to do the deal and didn’t care about the buying process.

“What I realised at Citi is that if you don’t have supply chain operations working with you, you have a lot of leaking of spend and a risker supplier base, which will cause the best category and negotiation strategies in the world to crumble.”

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