Ep. 18 - Continuous Reinvention: Navigating Volatility in Procurement Leadership - with Gaël De Martelaere

Navigating a volatile world with a calm mindset, a collaborative spirit, and a drive for continuous reinvention—that's what true procurement leadership is all about.

In this episode, host Richard McIntosh sits down with Gaël De Martelaere, Head of Direct Procurement at Dow, for a candid exploration of how procurement can thrive in times of disruption and transformation.

Gaël unpacks Dow’s journey as it shifts from relentless cost-out and pandemic-era capacity scrambles to a new era of collaborative, digitally enabled cost reduction. He reveals how a culture built on sustainability, innovation, and inclusion continues to endure, even when the market demands resilience above all.


You’ll learn:

1. How agile, digital procurement adapts to margin pressure and supply volatility
2. What it takes to build a resilient culture—staying true to the long-term ambition while managing the short-term realities
3. How calm, transparent leadership drives focus and clarity when disruption strikes
4. How true supplier collaboration creates value and resilience in an unpredictable market

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Get in touch with Gaël De Martelaere on LinkedIn: https://www.linkedin.com/in/gaeldemartelaere/

Gaël’s book recommendation:
Shocks, Crises, and False Alarms by Philipp Carlsson-Szlezak and Paul Swartz | https://www.amazon.de/Shocks-Crises-False-Alarms-Macroeconomic/dp/1647825407

Learn more about Women in Logistics, an initiative to promote gender balance in the logistics sector, on LinkedIn https://www.linkedin.com/company/women-in-logistics-eu/ or visit the website https://www.essers.com/women-in-logistics-fostering-male-female-parity/

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About the host Richard McIntosh:
Richard McIntosh, Partner at H&Z Management Consulting, has spent over 23 years helping procurement leaders succeed. Richard is an avid rugby fan, and a children's rugby coach, with a passion for helping children to become their best selves through sports. He spends his time outside of work with his wife and children.

Get in touch with Richard McIntosh on LinkedIn: https://www.linkedin.com/in/mcintosh-richard/ 

Transcript

SPEAKER_00 0:02

There's a lot going on in the world. There's many escalating conflicts. There's changing macroeconomics. There's geopolitical tension. I think it's important to keep perspective and really don't get too riled up about what you read in the media and really focus on the fundamentals of the market.

SPEAKER_01 0:20

Welcome to the Procurement Initiative Leaders Podcast, the ultimate resource for top-level procurement professionals looking to stay ahead of the curve and drive meaningful change within their organizations. I'm your host, Richard McIntosh, Honor at H ⁇ Z, Europe's leading procurement consultancy. Join me as I sit down with Global Leaders in Procurement to uncover the latest trends, strategies and insights that are shaping the future of procurement. We tackle crucial topics like leadership, technology, value creation, cost management, supply chain resilience, and many more. Ready to up your game as a leader in procurement? Let's jump into this episode of the Procurement Initiative Leaders Podcast with me, Richard McIntosh. So uh today Gail DeMartelay, Global Director for Direct Materials at DAO joins us. Um Gail, welcome to the show.

SPEAKER_00 1:08

Thank you, uh Richard. Happy to be here.

SPEAKER_01 1:10

Great, great. Um so uh firstly, Gail, um, can you tell us about DAO? Um what does the company do? Where does it operate?

SPEAKER_00 1:18

Yeah, yeah. So DAO is one of the leading material science companies. We uh we serve customers in uh markets like packaging, uh, infrastructure, mobility, uh, consumer applications. We've been around a minute uh since 1897, so about 128 years now. Uh we're about 40 billion dollars uh of revenue. Uh we're US headquartered, but we operate manufacturing in about 30 countries. Uh we're 36,000 people strong. And uh from a procurement perspective, our global procurement hub is uh located in Horgan in uh Switzerland.

SPEAKER_01 1:56

Great, great, thank you. Um and and Gail, your your role at the company, what does what does that encompass?

SPEAKER_00 2:01

Yeah, what I do. Uh so I lead our direct procurement team. Uh, I've got a wonderful global team of uh about 150 uh professionals, sourcing professionals. Uh we manage uh roughly $13 billion of spend. We always try to make that less, right? Yeah. And that's in raw materials, in packaging materials, in external manufacturing, and also in logistics. We classify logistics as direct. Um I drive the procurement strategy uh in that space. And that of course includes driving costs down, uh driving our service agenda, but also driving the right culture. We're gonna talk about that a little bit. Um so we we innovate both internally and with our partners, and that that innovation takes uh a couple of different forms. It's innovation in our digital procurement journey, sustainability journey, uh IDE journey, amongst others.

SPEAKER_01 2:55

Yeah, yeah, great. Brilliant. Thank you. Um and of just talking about Dow, it's um uh you know, it's as you say, it's uh it's an old company, um, always known for its strategic vision and um and the DAO way of thinking. Um how does procurement um support that? How does procurement mesh into that?

SPEAKER_00 3:12

Yeah, I would go back to our ambition. Uh so Dow's ambition is to be the most customer-centric, the most innovative, the most sustainable, and the most inclusive material science company in the world. Um, that's a lot of most, right? And that comes on top of some of the more hygiene factors like productivity, cost, service. And we have to take, and we do, we take all of that into account into how we select, how we work with our supply base. Yeah. Now, uh, I will add, there is always a balance between the short-term needs, especially now with where we are in the industry, uh and our longer-term ambitions, but we do want to do both. And our procurement strategy does reflect that. Um we more than just focusing on service and on cost, we aspire to really be a growth engine to our businesses and the functions that we support. And that reflects itself in our culture, in our mindset, our skill set as well. Yeah. Um, how we work uh our end-to-end connectivity with commercial teams, um, how we translate data to insights, uh, how we ensure reliability of supply, all of that.

SPEAKER_01 4:25

Yeah, great. Thank you. Um and this, um, I I guess with with recording the podcast in uh in interesting times. Um so uh um, I mean the chemical industry is in a a bit of a crisis at the minute. Um, can you provide uh yeah, you know, what what's driving that?

SPEAKER_00 4:42

Well, yeah, it's been in a bit of a crisis for uh a little while now. Um the the chemical industry is seeing uh a convergence of escalating trends, I would say. There's a there's a need for more sustainable product offerings, there's a need for decarbonization, uh, there is also a global oversupply. So you basically have a volume problem, you've got a margin problem, and on top of that come macroeconomic and geopolitical uncertainties and volatility. Um, we probably need to add uh the tariff volatility now. Yeah, uh, and so that that leads us to to a need to reinvent ourselves. And it it almost feels like we had to do that a couple of times since 2019. Yeah, but but definitely the the tariffs this year add uh their own complexities and uncertainties. And it's not necessarily the tariff as it is, but it's more the volatility around it. Yes, yeah.

SPEAKER_01 5:42

And and then, yeah, I mean they talk about that reinvention. I mean, how how how does that play out? How are you reacting in the short term to to that?

SPEAKER_00 5:51

With uh a lot of agility, yeah, um, but also a lot of blood, sweat, and tears. Yeah, if I'm honest, yeah. Um look, the reality is that the petrochemical industry that it's a cyclical business to begin with, right? So if you go back a couple of years, I think it's fair to say that we probably started seeing the start of the downturn in the 2019 time frame. We just got uh a bit of a break from that with uh with the whole COVID time when demand for goods drove our business back up, right? As you remember, um, a lot of people started renovating their houses, bought new stuff. Um and then coming out of COVID, the industry got a double whammy because of a whole lot of new capacity that had come online in the meantime, but also a slowing economy. And and you know, you have to keep in mind the markets that I I mentioned at the beginning, and especially the durable consumer products, we've seen pent-up demand during that COVID, right? As people did renovate and refurbish their homes, they bought new furniture, appliances, they painted their homes. Uh, that demand's not coming back for another couple of years. You bought your fridge, well, you're not gonna buy another fridge until you know it's it's dead, right? And that's the situation that we're in today, which is why we all we we started talking about lower for longer. And and how this reflected on procurement over the past couple of years is I mentioned agility is we went from a cost out program in 2019 to a frenzy to secure capacity in 2020 and 2022, where all we thought about was where's my truck and where's my products, right? Yeah, to to now basically back to being a cost out, uh uh having a cost out focus. And I think we've we've all lived in in many industries, we've all lived through a period of price increases uh during COVID. The team, I will say, did a fantastic job uh bringing that back down over the past couple of years, but we've come at a point now that the fat's gone. And and and um but it it also gave us an opportunity to rethink how we do things, right? Uh you think about e auctions, game theory, autonomous procurement. Um, it was all designed and and introduced to address more spent quicker because you know you're not gonna add a whole bunch of people to your organization at a time of uncertainty. Um yeah, that's what we've we've done. We brought a whole bunch of digital uh in uh in the game as well. Great, great.

SPEAKER_01 8:32

So that's had that that, I guess, the the price down effect, the as you say, the mar the margin, the the fat's been squeezed out. So um, yeah, well what what happens next? Where's what's the focus now?

SPEAKER_00 8:45

Yeah, um the the reality is that entire sector is seeing what Dow is seeing, right? This isn't a a DAO issue. We see sluggish demand, we see low growth, we see margin compression. And if you keep going back to the same well, um at some point that well's running dry, and I think we're there. Yeah, um, we took a different approach this year and we really doubled down on collaborative cost reductions, where we engage our suppliers and we're working with our suppliers for uh win-win savings opportunities. Now we've always done that, right? But we really uh emphasize that now more than ever. So we're working through that with um our suppliers, but also thinking through that, what does it mean for our customers? And and part of this is also reviewing our own requirements and challenging them when they're not market conform, but but more importantly, when they don't enable us to capture a higher margin. So going back to kind of that reinvention, uh going back to some of those requirements you set over time that perhaps don't make sense anymore. That's what we're focusing on now.

SPEAKER_01 9:54

Oh, that's really interesting. And how and how's that that working? Because you've I guess you've shifted from a I guess a sort of competitive position with your supply base, which is um uh yeah, to to actually then collaborative and looking for looking for win-win rather than a win-lose relationship. Yeah, are they responding well?

SPEAKER_00 10:18

You know, the chemical industry is um it is quite a tight group. Yeah. Um, what I would say is, you know, you transport, uh I've got logistics, right? So yeah, you transport chemicals, not everybody's gonna transport chemicals. So yeah. So so we are we've always been uh very close to our suppliers. Um the the key thing is that uh when you ask your suppliers for ideas that you action on them. Yeah, yeah uh because you you might you might ask them once, you might ask them twice, but the third time they're probably gonna say, well, you we've given you everything already, you're not actioning it. So so I think that's that's on us. Yeah, is um our suppliers are are very willing to come to the table and have joint discussions around productivity. Right. Uh it's now on us to take a look at what those largest opportunities are and and effectively executing them.

SPEAKER_01 11:16

Absolutely. Yeah. So I guess you're dedicating your team focus to those strategic initiatives now. Yeah, exactly. Okay, that's that's great. Um, and then yeah, I mean, we talked at the beginning about that that long-term view, the you know, being being the best in in those areas. So what what's happened to that, you know, as you've you focused short-term and and collaborative now, but what about the longer-term view?

SPEAKER_00 11:42

I I mentioned we uh we are preparing for lower for longer, and and we're still, I guess, trying to figure out what that means, uh, you know, because how what how low and how long? Yes. Um, but I would say I do I we stay committed. We stay committed to the ambition around sustainability, around customer centricity, innovation, and inclusion, because it's core to who we are. We've we've worked really hard to build that culture. It's really ingrained in our DNA. And and so if you just take a look at a couple of proof points, a couple of weeks ago, we won uh 10 Edison Awards, which is which is uh I think now the eighth year that we won more Edison Awards than any other company. Right. Um we uh we are named uh great place to work. Uh we are in Fortune's 25 World World's Best Workplaces. So from a culture and inclusion diversity perspective, yes, um, you know that that's that's not gonna die because the the market's not doing well, but we do need to keep the current realities in mind. And and when we think about sustainability, for example, last year we announced that we would build uh a first ever carbon neutral uh cracker and polyethylene complex in in Canada. And while we're still very committed to that project and to decarbonization as a whole, the current economic conditions uh really have us move to kind of slow playing this a little bit until the market conditions improve. Um, what I would say is not stopping is our commitment to IDNE. And a really good example here, we talked about this before, is women in logistics in Europe.

SPEAKER_01 13:28

Yeah, yeah.

SPEAKER_00 13:29

Um a few years ago, Dow and uh Hessers, uh a woman-owned logistics provider in Belgium, uh, we founded a consortium of five logistics companies, five chemical companies to advance women in logistics. Yes, great. Because whatever the market conditions are, some things remain, right? There's gender, uh, well, there's inequality in the world. In this particular case, we're focusing on gender inequality, coupled with industry challenges like the lack of skilled workforce. And women in logistics aims to solve for both. Uh using inclusion and diversity, we solve uh a pressing industry problem, both in women in management, uh women in operations, but also female drivers. So that's that's something that we keep keep working on.

SPEAKER_01 14:16

Yeah, great, great example. I mean, really interesting that that you know is the challenge for the you know many CPOs, which is the the balance of the short-term, the short-term requirements, quarterly reporting, near the need for savings, um, and as you say, that agility with keeping keeping the long-term objectives in play at the same at the same time. Yeah, really um, yeah, great, great example. Um, and and Gail, I'm I'm interested in um in leadership. So, I mean, it's uh you know, very challenging times with this volatility. Um, I mean, how how are you steering that procurement function through this?

SPEAKER_00 14:56

I think it's uh a combination of uh being real, yeah, and adding maybe a little bit of humor to it. Yeah. Um you'd always want to say to your team, don't watch the news. Yeah. Um it if you watch the news, you're gonna get hyped up with everything that's happening, right?

SPEAKER_01 15:16

Yes, yeah.

SPEAKER_00 15:17

And I think it's important for us to, as leaders, bring a bit of calm to the organization. Um but also recognize that there's a lot of things going on in the world that we cannot control. And so going back to to that, what what you can do is is control what you what you can and manage that to the best of your your ability, which then comes back to prioritization and and managing the critical issues that are going on in your particular space. Yeah. I think it's also important to keep the long-term objectives in play. Yes. It's it's important to have a vision of where you want to go and articulate that over and over because if you're being honest, if you constantly look at what's going on today, it can get really depressing really fast. Yeah. And and and I think there's for us, it there's there's a need for us to paint what that future looks like or what it could look like, articulate that very well, and then provide that roadmap that it's not just you know a vision out there, but that we actually have a way of achieving it. And I think that's very uplifting. Um you know, we talked about tariffs a couple of times. I I I will say I don't get all that um riled up uh about the tariffs because you have to keep in mind an administration tends to go four years, five years. They come and go. Uh, and if you take a look at history, you've seen that. So I'm not I'm not too worked up about it.

SPEAKER_01 16:58

Yeah, yeah. Okay, that's yeah, good. Yeah, and it that's that's great. And and how does that play out in terms of um I guess managing managing up to the board, managing to to the supply base, managing with the team? I mean, how's the how do you manage that communication with them?

SPEAKER_00 17:17

Yeah, yeah, that's a really good question. Um, I just mentioned I'm not getting too worked up about tariffs, but yeah, truth is it's a new reality, right? Absolutely. It is right there.

SPEAKER_01 17:28

The board can be quite worked up about that daily truth.

SPEAKER_00 17:31

Yeah, yeah. Um resetting for lower for longer is isn't just a tagline. You you have to get a mindset shift. And the first thing that I think is important is you have to stay close to your team more than ever. And we did that during COVID, right? With daily check-ins, weekly check-ins. Um, it feels like we're back to that.

SPEAKER_01 17:56

Yeah.

SPEAKER_00 17:57

And we're trying to do that with virtual coffee chats. Um, I started writing an internal blog last year where I just talk about just about anything that comes to mind. Um and that that seems to be appreciated. I think it's important for us to be more transparent than ever, yeah, both internally and with our supply base. But as I said, the chemical industry is a very interdependent industry. So our our customers, our suppliers, our swap partners, our co-producers, our GV partners, but also our competitors. And many of my suppliers are in the very same boat as we are. Yes. In that lower for longer. Um, there's not a whole lot of explaining to do about what's happening. Um, but but that's also why it's so important that we look for joint productivity projects. Yeah. Um, I think there's a lot going on in the world. There's many escalating conflicts, there's changing macroeconomics, there's geopolitical tension. I think it's important to keep perspective and really don't get too riled up about what you read in the media and really focus on on the fundamentals of the market. And um yeah, so so I I'd love to give a good uh a good book recommend recommendation here. Can I can I do that? Yeah, of course you can. Yes, please do. Yeah. You know, it it's a book that brings you down to core fundamentals, and it's called Shocks, Crisis, and False Alarms. It's by Philip Carl Carlson, Slizak, and Paul Schwartz. Yeah, and it really gives a new way of thinking about macro risks. If you you read that book, you won't get all too worked up about much of what the news outlets are hyping up because that's that's reality, right? That it's it news is is is hyped up.

SPEAKER_01 19:47

Great. Gail, that's um that's that's fantastic. Um, really, really insightful and yeah, really interesting to discuss that that long-term, long-term, short-term balance with you, and and in particular, yeah, um how you've managed that to keep communicating with the team, keep communicating with the supply base. Um, so yeah, really interesting. Um, thank you. Um we always wrap up with some guidance. Um couple of questions. Um, yeah, what's the from your perspective, what's the the one thing that procurement people should focus on more?

SPEAKER_00 20:22

I think there's two things. One is ultimately the customer. Yeah. Um, you you don't just need to understand what your business, your function, uh, your end customer want, but you need to translate that to, or you need to translate what you see happening in your space into insights that are meaningful to your internal stakeholders and your partners. Yeah. So that that it that that's that's critical. The second thing is uh we haven't talked a whole lot about digital. Yeah. Um digital is here. Yeah. And what I'm seeing is there's a whole lot of tools out there that we can go implement. Tools is not the issue. You think about a problem, there's gonna be a tool for it or an app for it. Yeah. What's really critical is the mindset of wanting to go digital. I think we all want to go digital until we're we're being um uh we're being confronted with, well, here's then a new tool that can help you. Yeah, and and I think that's that's gonna be important for our our next generation procurement people uh to really embrace, which I think actually the next generation is probably a little bit easier than the current uh and I include myself in that.

SPEAKER_01 21:36

Yeah, absolutely. They've grown up grown up with that. Um and that and that's the next question. What advice would you give that next generation as they as they come into our profession?

SPEAKER_00 21:47

You know, I I don't think there's ever been a more exciting time uh to enter into procurement. Um we we've seen some movements over the past decades, right? The introduction of the seven steps and what have you.

SPEAKER_01 22:00

Yeah.

SPEAKER_00 22:00

Um it felt very uh programmatic, very process-oriented. I'm not saying the seven steps aren't aren't value added, but right now it's not no longer just about cost, it's about how you bring value to the business, and that includes innovation, it includes ESG, it includes digital as an enabler. And then again, to bring those insights and value uh in an ever increasing complex world. Um, so so you're gonna have to have an end-to-end process understanding to be able to do that, yes, and really be in the market and understanding that. I think procurement um more than perhaps other functions has a very, very good view on an overall market. Yes, but that insight needs to feed back to the business because they can then do something with that. So that's what I would do is keep that end end-to-end view, um, and and think about how you deliver value beyond getting your uh your cost uh per unit down, which is is important, uh, but it's not all.

SPEAKER_01 23:12

Not everything. Great, great. Um, Gail, thank you. That that that's brilliant. Thank you for your time. Um just um yeah, where where can listeners get in touch with you?

SPEAKER_00 23:22

Well, I would say LinkedIn probably is is the best, right? Um and um I guess we we're gonna put maybe a couple of we can put that book recommendation uh there and a couple of other links that we talked about.

SPEAKER_01 23:34

Yeah, absolutely. We'll put the the the women in logistics link um into the the show notes and on the website and also the the book recommendation. Thank you for that. That's that's great. Wonderful. Um so Gail, um thank you very much. Been a pleasure. Thank you. It was uh pleasure, it was mine. Thank you, Richard. Thank you for joining us on the Procurement Initiative Leaders podcast. I really hope you enjoyed it. Looking for more procurement insights, tips, and developments from leading procurement professionals? Join our procurement initiative community on LinkedIn. Just open LinkedIn and search for the Procurement Initiative and be sure to hit that subscribe button to never miss another episode.