"One On One: An Interview with Becky Lancaster" By Michael Fredette, Fall 2001, Vol. 37, No. 4, p. 2
Journal of Supply Chain Management Copyright © November 2001, by the Institute for Supply Management, Inc.
Interview by Michael Fredette, writer for Purchasing Today®
Becky Lancaster is vice president, director of purchasing for Wells Fargo, a $290 billion company with 120,000 team members. Wells Fargo is a diversified financial services company providing banking, insurance, wealth management and estate planning, investments, mortgage, and consumer finance. Ms. Lancaster joined Wells Fargo (First Interstate Bank) in 1985 in the purchasing department. Her experience with the bank includes regionalization, centralization, decentralization, two mergers of equals, and 20-25 acquisitions per year. Prior to joining the bank, she worked in manufacturing and data processing, again in the procurement area. Ms. Lancaster's professional involvement includes membership in NAPM, CAPS Research, and The Conference Board's Purchasing Council.
The Journal of Supply Chain Management: What is your background and how did you get into purchasing?
Becky Lancaster: I got into purchasing by the luck of the draw. I started out in property management, and became interested in purchasing because of the negotiation and partnering that was involved. I've been in purchasing for 25 years in data processing, manufacturing, and finance industries.
The Journal: To whom do you report and what is the role of purchasing at the strategic level?
Lancaster: The CFO has been working on sourcing for two years, not as strategic as manufacturing due to ours being a service industry; however, reporting to finance certainly supports the potential saves and provides our group with tremendous support for our programs. I've reported to admin, human resources, CRA, and operations in my career and finance is the best yet.
The Journal: What are the challenges that your organization faces and are any unique to your industry?
Lancaster: (1) Attracting the talent needed to remain at the front of the pack. Banks typically aren't the highest-paying employers, but we've put together a group that is implementing processes/programs others are only talking about. Combined with our work environment (work hard, play hard), we've got the best team I've had in our career. Our team members tell us they decided to join because they could "do it," not just talk about it. (2) Our bank typically acquires 20-25 smaller banks each year and in the past five years has also gone through two mergers of equals. Bringing all the suppliers under a single program, sourcing and managing programs in such a volatile environment is very challenging.
The Journal: How is purchasing helping to resolve these challenges, such as cost reduction, revenue enhancement, and strategic positioning?
Lancaster: We've developed great relationships with our suppliers, to the point we're sharing true costs and looking at opportunities to reduce process in both of the organizations resulting in saves shared on both sides. We've also challenged our team members to identify opportunity (included in their goals) for saves - not just hard dollars but process also.
The Journal: Purchasing at Wells Fargo has historically been highly decentralized. If this is still true, what special challenges does this present for you?
Lancaster: I view us as strategic or virtual (centralized and decentralized really doesn't exist anymore and the term is overused). A good procurement group will connect the supplier directly to the customer whenever possible as it reduces cost and will focus on managing the supplier and SLAs, continuing to spot trends and opportunities. Programs that are more difficult/custom/prone to rapid change require that the purchasing team be involved in the daily activities until it's possible to back out of the process and let the customer work directly with the supplier. Some programs will require our participation in the daily activities for a very long time such as acquisitions.
The Journal: What is the role of corporate purchasing in a decentralized organization and what changes/opportunities has the change created for you?
Lancaster: The biggest changes are that it's caused us to raise the bar on skill levels, and gotten us out of transactions. The biggest opportunity is that by being more global we can affect the bottomline.
The Journal: What is the vision for purchasing at Wells Fargo? In service industries, such as banking, historically purchasing has not been considered a strategic area. Is this the case at Wells Fargo? If so, what challenges does this present? If purchasing is considered strategic at Wells Fargo, how did this develop?
Lancaster: I believe the opportunity to achieve saves is always the quickest way to gather attention for sourcing. However, many sourcing programs don't achieve the expected dollars due to the teams not really understanding the process and the customers' needs. We view ourselves as the bank's conscience - we're very in tune with our customers and ensure that any saves are realistic, and the directive from our CFO has been "execution must be flawless," so that's our goal.
The Journal: Wells Fargo has a well-developed Web site for its retail customers. Have you been able to leverage this sell-side e-commerce expertise in any way on the buy side? What don't you know that purchasing/supply chain management research could help you with?
Lancaster: Resolving the whole e-commerce mess. It's the topic of conversation everywhere we go. Typically, people have very few suppliers or a lot of suppliers to a very small audience. Through our wholesale group, we are offering procurement as part of the financial dashboard. We're just involving ourselves in the process, but there are other departments that are farther ahead than we are.
The Journal: Are you finding it a challenge to find and hire qualified people?
Lancaster: Yes and no. The challenge is really to hire and retain the "right" team members. There are many qualified procurement people out there who just don't "get it." Meaning they really don't understand partnership and process opportunity and really just want to bid/buy and manage commodities.
The Journal: What is the future of purchasing at Wells Fargo and what will your role be?
Lancaster: We will continue to be strategic and our role will become more global as the company grows. It is a requirement that our procurement people are internally certified as project managers and it's included in their goals, as we believe managing projects for our customers will ensure our growth and opportunity to continue contributing to the bottomline.