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Integrating purchasing in M&A: An interview with Lenovo’s chief procurement officer

The chief purchasing officer of Lenovo explains how he helped to create the operational basis for its continuing evolution from a Chinese powerhouse into a global one.

Operations, Purchasing article, interview Lenovo's chief procurement officer

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The Chinese computer maker Lenovo’s 2005 acquisition of IBM’s personal-computer division heralded the birth of a global technology giant. Behind the scenes, however, the deal created a giant operational challenge for Qiao Song, Lenovo’s senior vice president and chief procurement officer. Qiao Song, who has worked at the company since 1991, was asked to manage the rapid integration of two purchasing groups with different processes, management systems, and cultures. Moreover, three months before the deal was to close, Lenovo’s board gave him an aggressive target: save the merged companies more than $150 million in direct-spending costs within 18 months.

Qiao Song’s new team came together and exceeded that target. He also oversaw the successful creation of a general-procurement function responsible for managing expenditures in nonproduction-related areas (IBM had done so on Lenovo’s behalf for a time following the merger). Together, these efforts helped to lay the operational foundations for Lenovo’s continuing evolution from a Chinese powerhouse into a truly global one.

Recently, Qiao Song talked with James Hexter, a director in McKinsey’s Beijing office, about the challenges of integrating the two purchasing units, his approach to managing talent in purchasing, and his views on the way the procurement function in...

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