From the April 2020 print edition
Kia Razmjouyan on putting strategy into procurement
For Kia Razmjouyan, procurement is anything but a dry, rules-bound profession. It requires creativity, for example, in dealing with suppliers, says Razmjouyan, who is a procurement specialist – distributed hardware and tubes, at Pratt & Whitney Canada. That creativity in turn helps to spur innovation.
“You’ve got to be creative or you’ve got to have very good knowledge of the parts that you’re buying,” says Razmjouyan. “It’s not just about what you’re asking your suppliers to do. It’s sometimes about asking the right questions. ‘What does your R&D department focus on right now? What kind of research activities are you doing right now? What is the next generation of your product? Where are you going?’”
These and other strategic questions are the kinds of inquiries that procurement specialists should routinely make when talking to clients, he notes. The field is about more than simply pushing suppliers to drive down costs.
These are among the lessons that Razmjouyan has picked up during more than a decade in the field across multiple sectors. While Razmjouyan is a mechanical engineer — having earned a Bachelor of Engineering from Azad University in his native Iran – he has been working in procurement for about 13 years. He started his career in the manufacturing sector and automotive industries.
Razmjouyan began his career at Azin Khodro Industrial Group in 2004, an automotive parts manufacturer, where he worked as a project engineer and manufacturing engineer. His first foray into procurement came while working on a lean manufacturing project. Razmjouyan realized that a specific cutting machine for a production line could help to realize the project’s goals. The realization led to a series of negotiations with a foreign company to get the machinery.
“If we could buy that piece of equipment, we could improve our cutting process and it could result in zero waste of our production, and a specific sector in production,” he says.
A full-time procurement position arrived after a chance conversation at a party, where he got a tip about a job opportunity in the field. Without knowing the job title or even who he was applying to, Razmjouyan forwarded his resume. He was hired as a procurement specialist in 2006 after a quick interview process at the company, which turned out to be Iran Khodro, branded as IKCO, an Iranian automaker headquartered in Tehran. The company produced 688,000 passenger cars in 2009 to service the country’s booming automotive demand.
Until then, he hadn’t worked in a fulltime procurement role, Razmjouyan says. But several years as a project manager in operations and manufacturing gave him an understanding of the elements comprising the price of parts and what drives part quality. He also realized the criticality of delivery time.
Then, in 2010, he landed a job as an operations manager with Taknam Food Industries, a role that still allowed him to keep his hand in procurement. He also became responsible for managing 40 people from different backgrounds.
“That helped me to improve my leadership skills,” he says. “Thanks to that two years of experience as an operations manager, I understood that leadership in procurement is pretty important. It’s about how powerfully you can motivate your suppliers to drive change. That was the other thing that I learned in that two years of experience in operations. Today, I’m using that in my procurement career.”
During that period, beginning around 2008, Razmjouyan founded a side-business with an Italian partner to begin importing hydraulic parts from Italy and reselling them in Iran. The experience, he notes, taught him about inventory.
Razmjouyan’s final position in Iran was at Bahman Group, a vehicle manufacturer. He worked for the company until 2014 before deciding to relocate to Canada, landing first in Montreal.
And although he started in Quebec, his first job offer was as an engineer in Alberta. But yet another chance encounter changed his plans. Just 20 days before leaving for Alberta a stranger he met in a park suggested Razmjouyan give procurement a try, despite his concerns that imperfect language skills
in English and French might be a barrier.
The encounter fortified his resolve to submit more resumes while he waited out the last 20 days before heading to Alberta.
“I was like OK, in 20 days I’m leaving Montreal and I’m going to start my career as an engineer again, but at least I can try, I have this resume,” he says. “I sent that resume to only four companies. Two or three days later the second one called me. They set up an interview a week later. In the second interview I got hired. It was pretty quick.”
The job was as a procurement specialist at MEDISCA, a pharmaceutical company, where he began working in 2014. An advantage of the job, Razmjouyan now notes, was that he could apply all his engineering knowledge to the position. Engineers have a deep understanding of what they’re involved in purchasing, and the field provides the ability to innovate – something that Razmjouyan stresses procurement can benefit from.
“I would strongly recommend more engineers come to procurement,” he says. “We really need that sort of expertise in the procurement function today. I see how I’m creating value by using that knowledge with my suppliers.”
By 2017, Razmjouyan had developed a business idea for a procurement skills-sharing platform, a sort of marketplace for procurement professionals. Procurement professionals he told supported the notion, and he quit his job in December of that year to pursue his new idea.
He pitched his vision to an entrepreneurship accelerator and incubator program called District 3 Innovation Center, attached to Concordia University, which accepted it and put it in their program. Razmjouyan worked on the idea for several months, developing a business model and calling it Project Mathy X. But ultimately, he decided to halt the project as the timing simply wasn’t right, realizing that he needed a stronger network to get it off the ground.
He then got a job offer in 2019 at Pratt & Whitney Canada, his current employer, where he is now a procurement specialist. The company is an aerospace manufacturer with global service operations. Pratt & Whitney’s aircraft engines are widely used in both civil and military aviation. Its global headquarters, where Razmjouyan works, is located in Longueuil, near Montreal. Pratt & Whitney has about 10,000 employees worldwide and 6,000 in Canada.
“Now it’s been a year that I’m working in the aerospace industry and I’m pretty happy,” he says. “Most of the knowledge that I gained since 2003, after I graduated from university, I’m using in my career. I love it.”
While Razmjouyan maintains that the procurement role is far from simply tactical, cost savings remain an important part of the field. One of his career highlights illustrates this importance. In 2007 and 2008, Razmjouyan was able to save as much as 400,000 Euros out of his purchasing portfolio. In the mid-2000s, the air pollution in Iran was so bad, the country decided to transform the public transportation system’s fleet from diesel fuel to compressed natural gas, or CNG. At the time, Razmjouyan was tasked with purchasing parts for CNG fuel systems, including high-pressure tanks. Most manufacturers’ capacity was booked and prices were skyrocketing due to that demand. Razmjouyan convinced engineers involved in the project to approve the part he wanted and to negotiate with an appropriate supplier for a suitable price.
“We had a very good negotiation with the Korean supplier to drive down the costs,” he says. “It was a combination of engineering and procurement job.”
In Montreal, Razmjouyan also began volunteering with the Persica Management Quality Association, or PMQA, a non-governmental organization that uses space at Concordia University, although it’s headquartered in Toronto. Each Saturday, he coaches immigrants on procurement and how to advance their careers in Canada. The first two hours of the day’s instruction are devoted to teaching Six Sigma. There is also an hour and 45 minutes of procurement coaching. His title with the organization is coordinator of volunteers.
“We also read their resumes and give them comments on how to improve their resume or job-hunting skills,” Razmjouyan says. “In the future, we’re planning to rent a place; some community centres offer space to NGOs. Now we’re in the registration process based on the number of candidates. We’re going to run the classes in a better place with a bigger space. That’s what I do and I’m going to keep doing that. I’m going to expand that part in the future.”
He also plans to one day run his own procurement consulting company.
Razmjouyan considers himself an avid hiker and climber, although he hasn’t been able to pursue that passion during his four-plus years in Canada. In Iran, a rugged country of plateaus and mountains, he would often hike for five or six hours straight – a pastime he misses.
“Maybe I’ll have to do skiing?” he says. “Hiking was my passion, I love it. I also love people; I love being able to help them actuate their dreams. This is what really resonates with me.”
When giving advice to procurement practitioners, Razmjouyan urges them to become more strategic. Some organizations focus largely on the operational side, getting wrapped up in the daily, tactical functions, he notes.
But that’s not what the field needs in the future. For example, his own company Pratt & Whitney, along with others, has worked to separate the buying function from more strategic roles. Buyers, for example, are responsible for the more tactical functions on a day-to-day basis: placing purchasing orders, ensuring suppliers receive those purchasing orders, processing the orders in a timely way and so on. Others can then focus on more strategic functions.
Procurement must also work to be more efficient, Razmjouyan stresses, and Lean/Six Sigma and data analysis are key skills for the future. Without more efficiency, procurement can easily wind up viewed merely as a cost. But in reality, procurement is one of a company’s most valuable elements in terms of creating value, he notes. For example, within a company with revenue of $1 million, 50 per cent
of that revenue is normally the cost of material acquisition. If that company saves five per cent
of its material acquisition costs, its profits can be increased by 25 per cent, or five times more than the amount of the cost decrease.
Another way to realize value is through customer satisfaction. For example, if a customer is totally satisfied with a part you delivered to them, and therefore continues to place orders in the future, that creates value even if it is not easily visible on the balance sheet.
“(Companies) really need to make sure procurement is efficient, and they should not see procurement as a cost centre,” Razmjouyan says. “They have to know how to drive procurement to create value. They have to lead procurement or hire good managers. It depends on what kind of strategy they’d like to choose.”
As with many successful procurement practitioners, Razmjouyan credits past and present mentors with helping him achieve his current level of success in the field. Among them, he points to his current manager Daniel Di Liello, who hired him at Pratt & Whitney, noting Di Liello is “one of the great leaders in procurement.”
The second mentor Razmjouyan notes is Ross Saheli, his former manager at IKCO. Not only did Saheli explain the importance of being strategic in procurement, but also of why ethics in the field is so important. “With the amount of dignity and integrity that he showed in his job, he was always very inspiring to me,” Razmjouyan says.
One of the factors he has most enjoyed in his time in Canada has been the diversity he’s observed in the procurement field, Razmjouyan notes. In his current role, he is able to work with colleagues from France, Algeria and Egypt, to name a few places. Each of these professionals brings with them their own experiences, which helps to make the work environment all the more interesting. In the coming decades, he says, Canada sits poised to benefit from a huge opportunity as it absorbs talent from all over the world.
“Not just in supply chain management, but in all fields and areas, we are going to see a huge improvement thanks to the diversity from the immigrants that Canada has welcomed every year,” he says. “I’m one of them and I appreciate it. I appreciate the opportunity.”