Kelso Industries

Shaping Strategic Sourcing Through Operational Experience

Most of my career has been spent close to the operational side of the business, and that has probably shaped my approach to procurement more than anything else.

In construction, procurement decisions have a very real impact on the people actually doing the work. If material isn’t available, equipment doesn’t show up or a supplier can’t support the schedule, the theoretical savings on a purchase order don’t mean much. You learn pretty quickly that price is only one part of the equation.

That experience has made me look at strategic sourcing through a broader lens. Cost is obviously important, but so are availability, service, safety, standardization, working capital and the ability of a supplier to support the business as it grows.

At Kelso Industries, that is especially important because we support a growing group of operating companies with different markets, customers and histories. The goal isn’t to force every business into the exact same model. It is to identify where our collective scale can create value without losing the speed and entrepreneurial mindset that made those companies successful in the first place.

Aligning Decentralized Teams around Shared Value

I think the biggest mistake a corporate procurement function can make is assuming that standardization means taking decisions away from the operating companies.

My approach is to create a framework rather than a mandate whenever possible. Corporate procurement should do the work that is difficult for an individual operating company to do on its own: aggregate spend, negotiate enterprise agreements, establish supplier relationships, create visibility, identify best practices and provide tools that make purchasing easier. 

Then the operating companies need a voice in how those programs are implemented.

At Kelso, I want our teams to understand not just what a preferred program is, but why it exists and what value it creates for them. Adoption is much stronger when people see procurement as a resource rather than another layer of corporate approval.

Turning Procurement Data into Action

I’m a big believer in data, but I’m probably even more focused on data quality.

A dashboard is only useful if the information behind it is accurate enough to make decisions from. In a decentralized organization, one of the first challenges is often getting consistent visibility across different systems, suppliers and operating companies.

That means the work starts before the dashboard. You have to reconcile supplier data, understand what is being purchased, identify where spend is fragmented and make sure the organization can measure the results of the programs it is implementing.

Once that foundation is established, analytics become extremely valuable. You can identify consolidation opportunities, measure contract adoption, track rebates, find leakage, evaluate supplier performance and prioritize the categories where strategic sourcing can have the greatest impact.

For me, the goal isn’t to create more reports. It is to turn information into action.

Building Supplier Partnerships That Scale

I’ve always viewed supplier relationships as partnerships rather than simply transactions.

The strongest relationships are the ones where both sides understand what the other is trying to accomplish. Suppliers need visibility into where the organization is going and what will be expected of them. At the same time, procurement needs to understand what the supplier needs in order to provide better pricing, service, capacity and support.

That requires transparency and consistency.

As Kelso continues to grow, one of the opportunities we have is to bring suppliers into the conversation earlier and build relationships that can scale with us. When suppliers see the broader opportunity and understand that we are looking for long-term partners, not just the lowest bid on the next purchase, the conversation changes.

The best supplier programs should create value for the enterprise, the operating company and the supplier.

Measuring Procurement through Business Impact

Procurement has to be able to connect its work to measurable business outcomes.

Savings are part of that, but they aren’t the whole story. Procurement can create value through cost avoidance, rebates, improved payment terms, better utilization, reduced administrative work, supplier consolidation, improved compliance and stronger operational support.

I also think procurement leaders have to be careful about claiming savings that never actually reach the business. If we say a program created value, we should be able to explain how it was measured and where that value showed up. That discipline builds credibility.

Ultimately, I see strategic sourcing as an enabler of growth. As companies scale, informal processes that worked when the organization was smaller become harder to manage. A strong procurement function creates structure, visibility and leverage while allowing the operating business to stay focused on serving customers and executing the work.

That is the type of procurement organization we are continuing to build at Kelso.