S03E06 - Profit - Back to Basics- with Dan Bartel, CPO American Airlines

A Dialogue with Dan Bartel: Back to Basics

(Due to the not perfect audio quality, we add an excerpt here.)

In this episode of Supply Chain Dialogue’s third season, Daniel Helmig, the host, sat down with Dan Bartel, American Airlines' Chief Procurement Officer (CPO), to discuss the current state and future of procurement. Here's an excerpt detailing their conversation on the key principles and strategies driving procurement excellence.

Helmig: Dan, it’s great to have you on the show. Given your extensive experience across top global companies, what has been the most critical insight you’ve gained in procurement?

Bartel: Thanks for inviting me, Daniel. The most impactful thing I’ve learned is the importance of people in procurement. Many advanced tools and technologies are available now, but progress is limited without great people. Your competitors can replicate your tools but can’t replicate your team. So, securing top talent and never settling for less is essential.

Helmig: You've had an illustrious career, with roles at Schneider Electric, ABB, and now American Airlines. How do you ensure the procurement organisation aligns with the company’s strategic goals?

Bartel: The key is thoroughly understanding the company’s strategy and objectives. At Schneider Electric, which Time Magazine named the most sustainable company, procurement played a crucial role in driving sustainability. Similarly, at American Airlines, our priorities are reliability and cost efficiency. Understanding these business goals allows us to tailor our procurement strategies accordingly.

Helmig: Communication and alignment with stakeholders can be challenging. What’s your approach to ensuring effective collaboration?

Bartel: Effective collaboration starts with investing time to understand each department's goals. Building KPIs around these objectives and maintaining regular engagement with stakeholders is crucial. It’s a mix of bottom-up support and securing top-down endorsement, ensuring stakeholders and leadership align with procurement’s goals.

Helmig: Organizational structure plays a significant role in procurement efficiency. What structure works best from your perspective?

Bartel: There’s no one-size-fits-all answer. At American Airlines, we organise around stakeholders. For example, we have a category team dedicated to Crew, which includes everything from hotel arrangements to uniforms. Naming these categories based on stakeholder functions rather than the procurement categories helps in internal alignment and clarity.

Helmig: Let’s talk about technology. How do you leverage technology to optimise procurement processes?

Bartel: It starts with robust master data. After that, an integrated end-to-end platform for procurement processes is essential. This backbone—at American Airlines, a combination of SAP and Coupa—allows us to plug in best-in-breed solutions for specific needs, from AI tools to advanced spend analytics.

Helmig: Supplier management and risk mitigation are vital, especially in an unpredictable environment. How do you manage these?

Bartel: Clear expectations and firm contracts are foundational. We include performance-based penalties and rewards to align supplier behaviour with our goals. Beyond that, mapping the supply chain and managing risks at multiple tiers is vital. Ensuring business continuity with detailed contingency plans is key for categories where we rely on a single supplier.

Helmig: What about performance monitoring and reporting? What’s your approach to striking the right balance?

Bartel: It’s about finding the sweet spot where reporting is comprehensive but not overwhelming. We have detailed cost reduction reports crucial for audit and incentive alignment. The goal is to standardise and streamline processes so that our team spends more time on value-adding activities than just reporting.

Helmig: Finally, fostering collaboration within the organisation is crucial. What steps do you take to ensure this?

Bartel: Ensuring that procurement is represented at all levels within the company helps. Our category leaders are deeply involved in the staff meetings of the departments they support, which fosters a seamless integration of procurement with operational goals.

Helmig: Thank you, Dan, for sharing your valuable insights. Before we close, do you have a favourite quote that resonates with your procurement philosophy?

Bartel: Absolutely. One of my favourites is from Dwight D. Eisenhower: “Plans are useless, but planning is essential.” This highlights the importance of adaptability and preparedness to rethink strategies as circumstances change.

At the end of the interview, Helmig concludes that effective procurement can transform an organisation into a profit engine and a sustainability champion, provided it’s led by a skilled CPO, a motivated team, and supported by executive management.

For more detailed insights from this discussion and to explore further episodes, visit helmigadvisory.com. The Supply Chain Dialogues will return in October with more engaging content. Stay safe, and enjoy your summer break.