2009, so far, has not offered many economic bright spots, either in the United States or abroad. It has been – to put it mildly – financial carnage on a colossal scale, with public and private wealth being destroyed at an alarming rate, and companies have been forced to shed parts of their businesses and countless workers just to stay afloat.
But despite all the doom and gloom being heralded from every sector, we’d like to put forward that this crisis is the very event that will put Supply Chain on the corporate map, so to speak, as senior management realizes the incredible power that an integrated, real-time supply chain can have on internal efficiency and costs savings, competitive advantage and brand building. Indeed, those companies that use these troubled times to polish up their supply chains – to invest in them – will not only stand a better chance of making it to the other side but will be poised to grow faster and gain market share when the business cycle turns upwards again, even as their competitors are still just getting back onto their feet.
So this year’s Pros to Know is a tribute to those who have seen the importance of Supply Chain – both on the Practitioner side and the Solution Provider side – and have quietly been working over the years to strengthen the supply chain at their own companies or at their clients.
Good business is not a matter of good luck, but rather of good knowledge that is applied in the proper way at the proper time. Therefore, we offer to you a look into the best practices of the 2009 Pros to Know in the hopes that you will be able to take these practical steps and apply them to your own supply and demand chain to fortify it through this crisis and prepare your company for the better days ahead. And we feel sure that, with Pros such as these at the helm, those better days will soon come.
2009 Pro of the Year
In turbulent economic times, a robust supplier diversity program provides stability and supply chain efficiency for Johnson Controls.
Reginald K. Layton, Director of Diversity Business Development, Johnson Controls, Inc.
When the National Minority Supplier Development Council (NMSDC) presented Johnson Controls with its "Corporation of the Year" award, the council also singled out Reginald K. Layton, director of diversity business development at Johnson Controls as its Minority Supplier Development Leader of the Year.
Based in Milwaukee, Johnson Controls provides automotive interiors and systems, building control and security solutions, and automotive batteries. Under Layton's leadership, the company has increased its spend with diverse suppliers from $1 billion in 2006 to more than $1.6 billion last year. In the same period, the company more than doubled the number of its diverse suppliers from 140 to greater than 300.
That's good news for minority- and women-owned business enterprises (MWBEs) that employ workers and support communities that are key markets and areas of growth for Johnson Controls. But it also is good news for Johnson Controls itself, according to Layton. "We've discovered that by having diverse suppliers, we actually optimize our supply chain by having more companies competing for our business and helping to lower our costs," Layton says. "It also allows us to provide products and services to our facilities in a more cost-effective manner because of the suppliers' location, performance or engineering design capability."
Michael Bartschat, group vice president and general manager of global purchasing, adds that Layton and his team have worked to give the company's diverse suppliers more business that involves manufacturing and technology, rather than just labor or assembly. "We're developing them into full-fledged tier-two companies," he says, adding that this approach has helped the company's minority- and women-owned suppliers weather the current economic turbulence better than the average for the entire supply base as measured by financial stability.
Looking ahead, Layton sees supplier diversity becoming a global issue as companies look to apply diversity principles to new markets in Asia, the United Kingdom and elsewhere. He also sees the increasing professionalization of supplier diversity practitioners. "The maturity of the profession has come a long way, and the outlook for supplier diversity is good," Layton says. "Those corporations like Johnson Controls that find the secret sauce of tying value-chain diversity to key corporate strategies are going to do well, and those that don't are going to miss an opportunity."
For a look at the key processes supporting diversity spend at Johnson Controls, and to read how Reginald Layton is advancing supplier diversity within the company's management, see the extended article in the e-book version of this issue of Supply & Demand Chain Executive at SDCExec.com.
Scott Brown, Manager, Supply Chain Analysis & Design, Plexus
Scott Brown, a four-time Pro to Know and 28-year veteran in supply chain and operations management, believes that it has never been more important to understand what drives supply chain success than it is in times such as this. The combination of significantly more uncertainty and risk and volatility places a premium on being able to design supply chains to be resilient and efficient, and to recognize and quantify that volatility. At the core of this philosophy, which Brown has been driving at Plexus even before the current contraction, are the abilities to define the functional and non-deterministic requirements, patterns and drivers for each of the more than 150 supply chains that the company services.
As a primary thought leader for Plexus, Brown has driven the continued evolution of the company's methodologies and systems to support and develop designs that are driven by the "Laws of Supply Chain Physics." These are the cornerstones to the design and operational tools that Plexus uses. Brown and his staff have successfully migrated the company's optimization and design tools onto a new memory resident calculation engine that refines their strategies across all SKU's on a daily basis, performing detailed statistical analysis to support non-deterministic, stochastic demand and supply patterns, and automating and implementing pull methodologies that provide flexibility but help control liability and risk.
This has contributed directly to the success of Plexus in remaining the leader in its industry in terms of return on capital and profitability. These programs have also proven to be differentiating strategies as the company goes to market and competes for business, helping it achieve significant compounded annual growth. They have also directly contributed to the realization of additional business from Plexus' customers for whom these tools are fully engaged, as well as led to reduced inventory levels and improved on-time delivery to requested delivery dates. "We expect to continue to expand the implementation of these tools into additional customers and business segments," Brown says. "We expect to be able to continue to improve efficiency and the integration of these tools into more day-to-day functions for the broader organization, extending them into supplier visibility and performance management, and executive and functional dashboards."
Because this approach builds in flexibility based on very robust analysis of all available data on demand and supply and the patterns of both, Brown says that it naturally builds a foundation that is primed already for any uptick or downtick in business cycles or period to period demand. "This approach is not targeted at this particular environment, but rather just recognizes the inherent uncertainty that is the real world and therefore is and has been well prepared to recognize signals of change," he concludes.
Michael DeLuca, Director, Supply Chain Systems & Consulting Services, University of Pittsburgh Medical Center
Michael DeLuca is a healthcare supply chain innovator and evangelist for Lean thinking and process improvement. DeLuca was recruited to UPMC from Alcoa, Inc., where he was instrumental in leading an e-procurement transformation. In his role as UPMC's chief e-procurement expert, he has been instrumental in driving real change and bottom line savings at this $7 billion global health enterprise, which operates a 20-hospital system with nearly $2 billion in spend.
DeLuca is only two levels removed from UPMC's chief financial officer, who demands results and accountability and continuous process improvement. He has delivered consistently on this charge, saving UPMC significant hard and soft dollar savings resulting from the implementation of key systems and processes.
Reporting directly to UPMC's chief supply chain officer, DeLuca has led a series of transformations, including the implementation of an innovative solution to enhance UPMC's expansive ERP system. The solution (which he successfully implemented at Alcoa) is a dynamic e-marketplace powered by Vinimaya Inc. This e-procurement solution leverages the base ERP system and is specifically designed to drive contract compliance, automation, improved data management and overall user adoption.
UPMC engaged an outside consulting firm, LEK Consulting, to validate the operational and process efficiencies gained by implementing this solution. Some key results include a double-digit percentage increases in contract compliance and automation (with "touchless" transactions) as well as the ability to redeploy staff resources from transactional to more strategic sourcing roles. Lastly, UPMC has experienced significant process savings resulting from the reduction in average order times and overall improved user adoption, with a total of more than 7,000 users enabled on this e-procurement system.
DeLuca's dynamic experience was instrumental in convincing UPMC's venture group to commercialize this e-marketplace technology for the healthcare sector. Ultimately, this new venture (Prodigo Solutions) will provide a direct benefit to the legions of healthcare purchasing organizations that are struggling with compliance, supplier management and user adoption.
He also leads a team of process consultants who are specifically focused on driving process improvements throughout the system. Examples of the team's impact include driving operational efficiencies after hospital acquisitions, participating in the design process for major ERP upgrades and several warehouse management design improvements. Lastly, DeLuca continues to be a consistent evangelist, going above and beyond to ensure that his philosophies and best practices are shared with his colleagues and peers at a variety of industry forums.
Timm Elrod, Chief Operating Officer, SkinCeuticals
At skincare product innovator SkinCeuticals, COO Timm Elrod has directed the company's project to automate inventory and shipping data collection and management to ensure that the company maintains its competitiveness even as it continues to grow.
As the volume of incoming orders has increased in line with the company's annual growth rate of more than 30 percent, the potential for shipping errors also has increased – especially with a lineup of similarly packaged products. For SkinCeuticals, maintaining its competitiveness against multi-billion dollar pharmaceutical and cosmetics companies has meant increasing shipping accuracy, streamlining inventory levels and providing the highest levels of quality customer service. These priorities directly translated into the need for more accurate picking and shipping processes and a more efficient approach to returns management. With multiple points of data capture supported by a wide range of devices, including barcode printers and RF scanners, SkinCeuticals needed to integrate shipping data to improve efficiency and accuracy, while preserving its existing investment in Oracle 11i.
To address these challenges, Elrod has overseen SkinCeuticals' implementation of solutions from supply chain enabler ClearOrbit. With ClearOrbit's Gemini Simplified Interface (G.SI) solution, SkinCeuticals has doubled shipping efficiency rates, tripled order processing capacity and increased order accuracy to more than 99.5 percent. The company also decreased labor costs by 13 percent and reduced space requirements by 50 percent. In addition, by using the enablers Enterprise Returns Management (ERM) solutions, SkinCeuticals has automated credit determination and return label production, further improving operational efficiencies by significantly reducing the 1.5 hours it took to complete each return. ERM created rules-based returns processes that dramatically simplified SkinCeuticals' returns operations, both internally and for customers, therefore improving the customer experience throughout the returns process.
According to Elrod, SkinCeuticals was able to gain a competitive advantage with improved efficiencies, accuracies and customer service capabilities while preserving the company's Oracle investment. Because Gemini worked with the Oracle system and data model, he says, SkinCeuticals was able to circumvent many of the challenges of extending an existing enterprise solution, so we could focus on other mission-critical priorities. In addition, by addressing the full spectrum of customer interactions through enhanced supply chain capabilities, SkinCeuticals has not only been able to maintain the company's reputation for quality service throughout its customer and partner network, but also gain competitive advantage in the market by further enhancing their service level while saving time and money.
Steve Gardner, Vice President of Purchasing, Americas, Sperian Protection
Sperian Protection is a top international manufacturer of personal protective equipment based in France and with operations in the European, Americas and Asia-Pacific regions. In his role at the company, Steve Gardner is responsible for implementing a common best-in-class strategic purchasing processes for direct and indirect materials for all of the Sperian operating units in the Americas.
When Gardner came on to lead the company's fledgling strategic purchasing team, he knew he would incorporate a rigorous supplier performance management program into the vendor management process – some day. What he didn't know is that Sperian's executive committee would open the door for his vision less than nine months after his arrival.
With a one-line directive from the committee, "Gain alignment of the organization worldwide on how we should measure supplier quality and delivery," Gardner seized the opportunity to accelerate his ambitious plans for a comprehensive supplier performance program that would meet these goals and more. In addition to ensuring product quality and reliability of supply, Gardner took this opportunity to develop a program that would improve supplier relationships, minimize supply risk for strategic categories and provide the information necessary to support ongoing, data-driven collaboration between buyers and suppliers. By providing performance visibility to both internal and external stakeholders, Gardner's program would open the door for more clarity and better information sharing between Sperian and its key suppliers, and would allow both parties to work together to anticipate and avoid supply risk.
Gardner recognized that the vendor management risks and priorities varied widely by category and even by business unit. To accommodate the needs of his stakeholders, he devised a system that enabled consistent measurement across several key risk areas – quality, delivery, total cost of ownership (TCO), innovation and service – while also providing flexibility within that framework to tailor supplier measurements to each BU and category's unique requirements. He identified a handful of internal champions and worked closely to develop a pilot with key stakeholders throughout the organization to ensure a system that was designed to deliver value beyond the procurement team. Following this initial pilot, the program was rolled out in phases to the entire business.
One of Gardner's challenges as he entered the rollout was coming up with a way to measure success. Unlike a standard sourcing process, there would be no easy way to identify dollars saved, and he faced the objection that has stalled many performance management programs, "How do you measure the problems you help to avoid?" In Gardner's case, the problem was answered simply enough when the pilot category identified a delivery issue whose resolution paid both the internal and external consulting and software costs for the program's startup and entire first year. Since that time, Sperian has also enjoyed a host of additional benefits, including:
- Increased supplier motivation and activity to achieve targets
- The ability to monitor performance trends and correct before a `slump' becomes a `crisis'
- Concrete metrics to use with suppliers during price negotiations
- Improved internal focus on monitoring supplier performance and supply risk
Today, Sperian's vendor management program tracks 65 strategic suppliers. Meanwhile, internal users have realized so much value from the information delivered by the program, they are clamoring to bring on a second tier of non-strategic suppliers to parlay their current success into additional benefit.
Jennifer Hughey, Vice President of Supply Chain, Electrolux Home Care Products
Jennifer Hughey has led the supply chain team at Electrolux Home Care Products North America for the past five years. Electrolux Home Care Products North America makes and markets more than 300 vacuum models under the brand names Electrolux, Sanitaire, Beam and Eureka. Its customer base is comprised of large mass retailers and home centers such as Target, Wal-Mart and Lowes.
This past year Hughey led her team in the implementation of a solution from supply chain enabler Logility to increase demand visibility, strengthen collaboration, improve forecast accuracy, reduce inventory and increase customer service levels. Electrolux had seen its business model in North America change over recent years from manufacturing to sourcing a larger percentage of finished goods and components from overseas suppliers. These factors added complexity into their global supply chain. With the growing expectations of their customer base and the current economic climate, Hughey knew that they needed to streamline their planning processes to ensure that Electrolux had a system in place that would support future growth and help maintain high customer service levels. Hughey led her team in the selection of Logility Voyager Solutions because it offered a complete supply chain solution that would enable Electrolux to increase forecast accuracy while supporting their global demand and supply planning needs.
As a result of the project, Electrolux is lowering days of supply while increasing the ability to quickly respond to customer demands and expectations with the addition of more demand visibility and the capability to share critical supply chain data across the company in real time. Electrolux is also now able to more accurately plan for the different stages of product lifecycles, including introduction, maturity, replacement, substitution and retirement, and gain the insight to better align inventory with customer demand to reduce inventory obsolescence and cycle times. Now Electrolux is able to react to the changing marketplace faster and more knowledgably, resulting in improved and more personalized service for their retail partners. With the downturn in the economy, Hughey says that the project has allowed Electrolux to more quickly react to the changes in the marketplace and to make those changes visible to sales and management. "With Logility, Electrolux has better visibility to analyze our business and more quickly get our inventory levels in line with our targeted days of supply (DOS) and maintain those levels throughout the immediate future," she says.
With Hughey's supply chain leadership, Electrolux Home Care Products North America is now positioned to keep their competitive edge and weather the current economic climate while continuing to deliver the highest levels of service to their customers. "While the economic downturn has definitely had an impact on DOS, we are able to significantly improve our forecasting and align our business to reflect what was actually taking place in the market," Hughey says. "We have achieved as much as 15 percent improvement in forecast accuracy with some of our trade partners and expect to continue seeing strong improvements going forward in order to improve and maintain our target DOS." In tough economic times, working capital reduction is critical to the company's success, Hughey believes that this project will help enable Electrolux North America to meet its goals for the coming year.
Eddie Kerr, Global Director of Purchasing, First Group plc
Kerr has demonstrated leadership during the current economic downturn by managing and globally transforming his company's supply chain to achieve a competitive advantage and selecting the technology to enable it. Managing procurement for the world's largest ground transportation company, with annual revenues of more than $8 billion, Kerr's strategy in obtaining a competitive advantage is to expose every opportunity for cost savings, using a supply management solution to analyze, source and optimize his business decisions.
Kerr believes that technology is the backbone behind supply chain transformation, and he understands how properly deployed technology can cut costs, reduce risks and improve quality and innovation in an enterprise. To execute his strategy for achieving a competitive advantage, Kerr frequently renegotiates contracts to increase value and flexibility and builds global economies of scale to reduce the company's average costs in the long-run.
With the rapid growth through acquisitions, Kerr was faced with the challenge of upgrading his company's sourcing processes and technology. In 2008, Kerr needed an easy-to-use software tool for a series of project that involved all of his international regions and teams. Kerr selected Iasta's e-sourcing software and service solutions to provide a tailored solution that would meet his aggressive savings goals. This technology offer end-to-end integration within the same application and also allowed Kerr's entire global team to upgrade their e-sourcing skill sets. In the first initial sourcing wave of the project, Kerr's decision to use Iasta saved his company $43 million.
Chris Kushmaul, Director of Global Logistics, Diebold Incorporated
Chris Kushmaul has provided the vision, leadership and momentum necessary for Diebold to significantly reengineer and transform its global supply chain operations. As Diebold's director of global logistics, he has advanced this goal by leveraging a strategic partnership with a fourth-party logistics (4PL) provider, Menlo Worldwide Logistics, which essentially acts as supply chain network manager for Diebold's far-flung global manufacturing and distribution operations.
At the heart of Kushmaul's approach has been a focus on supply chain visibility – not only to material in motion and at rest but also into costs and metrics that track supply chain performance at multiple levels. This visibility is based on stringent data quality standards and the use of a management dashboard that provides timely and accurate performance data, allowing Diebold to continually make proactive decisions that reduce costs and minimize risk in the supply chain. Another key element in Kushmaul's solution philosophy has been the use of balanced scorecards, which measure service provider partners against cost thresholds and minimum service levels or performance expectations. This has been a critical tool for ensuring performance expectations in the supply chain are met and for early identification and resolution of failure points. Technology has played a key supporting role and has been most effective in providing visibility and insight into performance. However, Kushmaul's view of technology is that it is only as good as the process it supports. Good technology will not correct for weak or ineffective processes, or the people managing those processes.
Diebold has been successful at achieving transformation of its global supply chain because it recognized the need for change and the importance of having a strong advocate driving the efforts to marshal change not just as a project, but as an ongoing element of the company's culture and values. That advocacy role has been one in which Kushmaul has been notably successful. His ability to gain buy-in from multiple stakeholders, make the case for change, ensure effective implementation and then measure and communicate results has been singularly valuable to the success of the company's supply chain transformation. As the lead advocate for supply chain change, he has challenged conventional wisdom, asking and answering with results why the need for change, setting and communicating a common vision, and demonstrating what transformation means for the organization. His effective use of collaborative tools such as value stream mapping has illustrated where there are opportunities for improvement, how the supply chain should operate once changes are made, and the future state of the supply chain as indicated by the value stream map. This approach, which stresses collaboration with accountability, continually challenges conventional wisdom and illustrates the value of the new vision and the rewards which will accrue to multiple stakeholders.
The result of this adoption of the 4PL model and its two-year journey to success directed by Chris Kushmaul has been a nearly 20 percent reduction in supply chain spend over that time period and the deployment of advanced supply chain operating practices that have dramatically improved customer service levels as the company has expanded globally.
Miguel Miciano, Director of Strategic Sourcing and Procurement, Amgen
Miguel Miciano is one of the rising stars of the supply chain world, having worked in strategic sourcing at Dell for four years prior to moving over to Amgen six years ago. In his role at Amgen, Miguel has been a driving force behind the company's global strategic sourcing, especially its strategy to more closely link sourcing applications in real time with financial reporting. It is estimated that the company will save millions of dollars using the suite of spend management solutions that Miciano and his team are currently developing and have implemented over the last two years.
Miciano also has worked on Amgen's Global Supplier Relationship Management program and Business Intelligence services for the past three years, and he took on the added responsibility of managing Global Systems services and software applications in 2007.
Miciano says that he is excited about the opportunities that are ahead of him, both personally and professionally, and he remains driven to advance Amgen's mission to serve patients. Amgen is focused on discovering, developing, manufacturing and delivering innovative human therapeutics. A biotechnology pioneer since 1980, Amgen was one of the first companies to realize the new science's promise by bringing safe and effective medicines from lab, to manufacturing plant, to patient. Amgen therapeutics have changed the practice of medicine, helping millions of people around the world in the fight against cancer, kidney disease, rheumatoid arthritis and other serious illnesses. With a deep and broad pipeline of potential new medicines, Amgen remains committed to advancing science to dramatically improve people's lives.
Under Miciano's guidance, Amgen's use of spend management solutions from enabler Zycus replaced inaccurate manual processes with automated applications that reduced its global spend reporting cycle time and improved its classification accuracy. That means sourcing professionals now dedicate substantially more time to a strategic approach to sourcing and supplier relationship management, rather than focusing on preparing data over weeks and months for analysis.
As Miciano's team examined its global spend, it realized that spend classification accuracy through existing systems was too low and no longer met the needs of the business. That's when Amgen brought in Zycus' Spend Management software to automatically and accurately classify its spend, thus enabling category managers with correct data that helped them to align with corporate-mandated spend initiatives. One of the key goals of Miciano's global spend management initiative is to better align procurement data with financial expense and budgetary data. For example, Miciano and his team are using a number of Zycus solutions to create a solution that is relevant and visible to analysts across the company, whether they are in procurement, finance or a business function.
Tanya Penny, Vice President, Sourcing & Purchase to Pay, Verizon
Tanya Penny is vice president of Sourcing and Purchase to Pay Systems for Supply Chain Services, which is part of Verizon Services Corp., the company’s shared services group. In her role, Penny is responsible for ensuring that Verizon's business groups – Business, Telecom and Wireless -- have access to the equipment and services needed to maintain industry leadership and gain a competitive advantage by building and operating one of the largest, most advanced broadband and IP-based wireline and wireless networks.
With 25 plus years of business experience in telecommunications, Penny was appointed to her current role in April 2006 after Verizon completed its acquisition of MCI. Penny oversees a team of 250 procurement professionals that is responsible for domestic sourcing activities for all of Verizon that totals more than $35 billion dollars annually.
In these turbulent economic times, Penny closely follows the personal philosophy on which she built her reputation over her 25 years in the telecommunications industry: staying ahead of changes within the sourcing profession, continuously improving systems and maintaining a balance of large and smaller, diverse suppliers. Technology is a common component of these goals.
The telecom industry is continuously changing, especially over the last five years. Overall, the market has seen vast change, including consolidation, technological improvement and the proliferation of wireless. Simultaneously, the procurement function has evolved just as rapidly to keep up with the industry. Penny credits her continuing success and longevity in the telecom industry with being on the forefront of changes to the supply chain and adapting her practices ahead of the curve.
Penny is constantly evaluating Verizon's systems and determining where improvements and upgrades are necessary and will impact the bottom line. An example of this is Verizon's use of Fieldglass InSite, a solution for gaining greater visibility into the company's temporary labor staffing process to better control its services spend. The company achieved ROI within just four months of the application's launch. While a Fieldglass customer for several years, the company's temporary labor programs have evolved to be one of the largest in the world, with more than 4,000 temporary workers and $400 million annual spend. Particularly throughout some of Verizon’s mergers and acquisitions, temporary labor is quickly uploaded and managed through the solution. As a result, Verizon reports faster onboarding, maintains compliance with monthly close timelines, and records an average annual savings of 7 percent.
These economic times have led to increased financial analysis and due diligence during supplier selection. Verizon proudly maintains a mix of diverse, large and small suppliers. Penny has concentrated her efforts on developing processes that make it less expensive for suppliers to support Verizon, and vice versa.
Rob Raeke, Controller, American Inks and Coatings
When American Inks and Coatings' cumbersome software systems began to threaten its business operations, Controller Rob Raeke led the company in an extensive search and selection process for an integrated enterprise resource planning (ERP) software system. The resulting selection and seven-week implementation helped the manufacturer to increase productivity, reduce costs and better position itself for future growth.
American Inks previously operated with a remote IT department in Allentown, Pa., nearly 1,200 miles from the home office in Sheridan, Ark. The department was located in Allentown because it had been convenient to a former plant, and the area provided enough bandwidth to run the company's three customized software systems, which required 18 servers. It was an expensive setup, and only one person knew how to make the systems work.
That person, the IT project manager, spent most of his time fixing the problem that repeatedly threatened to halt business: "suspended batches." That's the term Raeke used to describe what happened when communication breakdowns between software systems prevented inventory transactions from being processed. As a result, American Inks had to wait for the IT project manager to research, fix and release each batch before issuing invoices, shipping sales orders and updating accounting. This process was especially complicated because the company used five servers to process inventory transactions and sometimes experienced up to 60 suspended batches in a week. If they piled up at the wrong time, it could take the company up to a week to close physical inventory.
"Had our IT project manager ever been hospitalized for even a week, our entire computer process would have stopped," Raeke says. "Without him there to release suspended batches, we would have been back to notepads, pencils and calculators."
After five years spent struggling – and paying – to maintain communication between software systems, Raeke, along with an internal search team, started searching for a better way to manage the business. Five ERP systems were evaluated before the company selected the DEACOM Integrated Accounting and ERP Software System, produced by Deacom, Inc. Raeke says they chose DEACOM because it manages all the processes of a batch process manufacturer – formulation, regulatory reporting, inventory control, lot tracking, sales order entry, accounting, purchasing and production – in one system. For American Inks and Coatings, having integrated data with a single point of control eliminated problems like suspended batches.
With the new system, Raeke and another company manager can manage the system themselves without relying on the former full-time IT staff. Raeke's strong leadership, demonstrated through the software search and implementation process, as well as his ongoing commitment to improving the productivity and profitability of American Inks and Coatings, make him a strong leader during the current economic times and position the company for growth during improved market conditions.
M. Bridget Reidy, Senior Vice President, Chief Supply Officer, Exelon Corporation
For Bridget Reidy, reducing her supply chain's environmental impact is not an end in and of itself. It is a business imperative that is critical to her company's long-term sustainability. She has integrated the goal of a "green" supply chain with the goal of reducing the total cost for Exelon. She is an industry leader in demonstrating that going green does not have to be at the expense of total cost. In fact, she is proving that they are synergistic goals. In Reidy's view, environmental and business sustainability are inextricably linked. So, when she examined opportunities to "green" Exelon's supply chain, she prioritized activities that create process efficiencies, reduce costs and even generate revenue. Adopting green practices that benefit the bottom line helps to manage risk and ensure that corporate sustainability initiatives continue, even through challenging economic times.
Reidy heads the supply organization for Exelon, one of the nation's largest electric and gas utilities, which spends nearly $3 billion annually with external suppliers. In order to take a leadership role in addressing climate change, the company launched a comprehensive plan to reduce, offset or displace more than 15 million metric tons of greenhouse gas emissions (GHGs) per year by 2020. For her part, Reidy is charged with building an industry-leading green supply chain, in part through collaborations with suppliers, peers and other outside organizations.
Under Reidy's leadership, Exelon's supply organization:
- Recycled 14.2 million pounds of solid materials and 428,000 gallons of oil in the first half of 2008, generating more than $9 million in net revenue and more than 50,000 metric tons of avoided GHGs.
- Transitioned to paperless invoicing, with 80 percent of invoices now generated electronically.
- Began an initiative to reduce energy consumption in its warehouses by at least 25 percent, which will deliver long-term energy cost savings through stable and turbulent economies alike.
- Reduced its vehicle fleet by 10 percent and optimized delivery routes to achieve an annual cost reduction of $143,000 and GHGs reductions of 137 metric tons.
- Started using alternative fuels in warehouses to power 95 percent of qualified equipment, and piloted reusable plastic pallets and shrink wrap recycling — initiatives that reduced GHGs by 40 metric tons.
- Engaged employees in environmental efforts by promoting paperless meetings, eliminating use of Styrofoam cups and implementing an Employee Environmental Award program.
In Reidy's view, it is not enough to simply "green" Exelon's supply operations. If the company is to fulfill its vision of building an industry-leading green supply chain – and maximize its bottom-line benefit in the current economic downturn – Exelon must collaborate with suppliers, peers and outside organizations. To that end:
- Reidy is a founding member of the Electric Utility Industry Sustainable Supply Chain Alliance, a growing group of electric companies working to establish environmental criteria for supply chain practices.
- Exelon was the first U.S. utility to join the Carbon Disclosure Project's Supply Chain Leadership Collaboration, under which the company tracks and reports its emissions and energy consumption, and encourages suppliers to do the same. Supply has invited its top 100 suppliers to participate.
Exelon joined the Green Supplier Network, a program endorsed by the U.S. EPA in which the company will nominate five key suppliers for environmental assessments aimed at identifying opportunities to "go green" and reduce costs.
Douglas D. Rohn, Vice President Global Purchasing & Supply Management, Volvo AB
Doug Rohn is a proven leader with over 20 years experience in multi-cultural, multi-discipline positions in supply chain, marketing and finance. Doug is currently Vice President of Global Purchasing and Supplier Management for Volvo Construction Equipment (VCE) located in Brussels, Belgium. He is responsible for managing a global sourcing organization of $5.0 billion annual spend for 15 manufacturing plants worldwide and is a direct report to the CEO. In this position he has established one company management structure and process to improve purchasing leverage and product commonality across all global business lines, and he led a competency improvement program to improve the capability of the global purchasing organization.
A year may seem like a short time to make a mark, but Rohn has managed to do that and much more since he joined VCE. Walking into a situation where costs were rising and lead times increasing, he quickly realized that he had to make sure that he could have a significant impact on both issues. Having dealt with these types of situations in the past, he knew that establishing a strong collaborative culture within VCE was going to be critical. Given the worldwide footprint of VCE and its many business lines, that was not an easy task. In addition, the culture and business structure of VCE has always been one of decentralized governance, and he had to make sure that he did not run afoul of that. He also recognized that he had to continue to strongly support a worldwide competency initiative because he knew that without developing the competencies of the Purchasing and Supply Management organization (P&SM), everything that he wanted to accomplish was going to be at risk. To foster that collaborative culture and mindset, he knew that the people within P&SM had to develop and utilize new competencies. He therefore launched EVEREST, a competency improvement initiative, which has close to 100 percent participation. He also laid the groundwork for a Central Commodity Management Process, where he formed a number of cross-organizational teams that initiated new strategies for some key commodities that ensured minimizing the impact of rising prices and longer lead times. This excellent implementation of a center-led organizational model allowed him to encourage collaboration under a common process amongst diverse business lines.
Rohn is now extending the collaborative platform to include many of the other key functional areas within VCE (Engineering, Manufacturing, etc.) and is developing and leading a strategic cross organizational effort within VCE to fundamentally change how products are designed, manufactured and procured. These cross-functional teams are actively pursuing a common goal of taking out a significant amount of cost. This collaborative model is driven by common goals, tight Integration between P&SM, Engineering and Manufacturing, common, robust processes and clear metrics. He has secured sponsorship at the senior-most levels at VCE and is, in fact, looking to extend the leverage opportunities across the rest of the Volvo family using this collaborative platform. Given the current downturn in the global economy, this approach is going to make sure that VCE will retain a significant competitive edge during the hard times, But, even more importantly, when the economy does recover, VCE will be poised to take advantage. In addition, he has also established an International Procurement Office in China to extract maximum leverage while managing risk. The implementation of a productivity pipeline initiative means that the supplier development professionals are actively engaged in identifying and delivering a steady stream of productivity initiatives throughout the supply chain.
It is because of these critical initiatives that the P&SM organization is now recognized as a very strategic organization within VCE.
Ric Schneider, Senior Director, Packaging Procurement and Risk Management, Kraft Foods Inc.
At Kraft Foods, Ric Schneider is responsible for overseeing a team of packaging supply chain specialists. He is responsible for the North America packaging spend, including strategic sourcing, technical innovation and commodity risk management and coverage. Schneider has over 20 years of cross-functional experience and global expertise in the food and beverage industries, including three-tiered distribution and direct retail sales. Specifically, his expertise includes logistics, global sourcing, plant management, engineering, packaging, outsourcing, acquisition integration, Lean Six Sigma, co-manufacturing and business development.
Aligned with Kraft's overall corporate strategy, Schneider has developed a packaging supply chain strategy to help Kraft optimize its packaging costs and supply chain flexibility to support their growth through innovation strategy. This strategy incorporates three main components that focus on collaborating with suppliers to achieve relationship transparency, develop performance based specifications and systematically incorporate technological advancements to support new product introduction.
To help achieve relationship transparency and meet joint operating goals during these challenging economic times, Schneider has established a joint supply chain optimization team with each of his key suppliers. The team focuses on analyzing the supply chain from end-to-end to achieve additional supply chain efficiencies such as scheduling consistency, inventory management and transportation costs. Kraft's collaborative approach and relationship transparency encourages suppliers to work jointly with the company to find the best method within the combined supply chain to provide packaging that meets Kraft's business needs and drives out cost inefficiencies. The sharing of information on the real issues and opportunities that exist within both the supplier's process and Kraft's allows both parties jointly to identify the best technologies and make more cost effective choices. For example, commercial food service jugs are large and often difficult to handle. Working with suppliers, Kraft changed the packaging to improve usability/manageability while at the same time ensuring food service providers were able to use more of the product with less waste.
As a specialty branded food manufacturer, historically Kraft's packaging requirements were highly specialized and unique to each brand. Recognizing the limitations of this approach, Schneider worked with Kraft's packaging organization, including supply chain, R&D and manufacturing engineering to implement performance-based specifications. This effort allows both Kraft and suppliers to focus on what they do best and improves Kraft's supplier flexibility. Additionally, Kraft has pursued opportunities to harmonize packaging designs across brands, further reducing complexity and increasing their leverage in the market.
For branded consumer product companies, product innovation is key to driving growth. Recognizing that the majority of food-related intellectual property (IP) exists outside of Kraft, the company is actively expanding its external networks to tap into this vast pool of innovations. Kraft refined its focus driving reliable, consistent top-tier performance growth through open innovation activities that are complimentary to traditional R&D efforts. Two of Kraft's recent product innovation success stories were packaging-related innovations. New containers of Kraft Mayo and Miracle Whip salad dressings deliver added value and convenience, letting consumers use more of the product with less waste. In addition, resealability was the No. 1 consumer suggestion for cookies; Kraft used proprietary technology and IP based upon supplier collaboration to deliver the first "Snack 'n Seal" package with Chips Ahoy! Cookies.
Scott Singer, Head of Procurement, Rio Tinto
As Global Head of Procurement for Rio Tinto, Scott Singer is responsible for implementing sourcing strategies and executing supply agreements for the Rio Tinto Group businesses. He manages a team of 1,500 and is the primary executive responsible for delivering huge synergy-related savings from the $38 Billion Rio Tinto/Alcan merger. His use of Lean processes and, in particular, value mapping as a way to create a "safe zone," connect the two merged companies' different cultures and establish unified and streamlined sourcing and procurement processes has produced significant results. Meanwhile, his progressive views on category management and the investment he makes in his people have enabled him to exceed his aggressive goals and serve as an example of best-in-class leadership.
John A. Thomas, Executive Vice President, Global Supply Chain Management, The Hertz Corporation
Thomas oversees all supply chain operations at The Hertz Corporation. During today's challenging economic times, he is focusing on five guiding principles to manage Hertz's supply chain operations:
- Deliver strong cash/working capital management; improve asset utilization.
- Drive lowest total operating cost structure.
- Maintain focus on the customer and continue to drive innovation.
- Recruit and develop leading supply chain talent.
- Focus on risk management, tightly coordinated business planning and integrated, flexible and responsive supply chain processes.
Many of these guiding principles are enabled through Hertz's global strategic initiatives focused on reengineering the company's processes to be best-in-class, development of global centers of expertise (COE) across major functions, and outsourcing non-core processes to best-of-breed partner organizations. For example, beginning in 2006 Hertz began to establish centers of expertise around core business processes with the goals of standardizing and globally managing processes that formerly were fragmented, better leveraging best practices across locations and business units, and improving cost structure and service levels. Throughout, Hertz has adopted Lean Six-Sigma methodologies to reengineer processes, reduce waste and improve Hertz's ability to transform data into actionable business intelligence, saving hundreds of millions of dollars.
Thomas and his supply chain organization are responsible for managing over $10 billion in fleet assets across thousands of locations, representing 35 percent of Hertz's cost structure. As part of Thomas' global supply chain, he has led the newly formed Global Fleet Management COE in implementing a lifecycle holding cost model for every Hertz car class (e.g., compact, full-size) and every vehicle model, including acquisition cost, financing cost, operating cost and residual value. By establishing a global, standardized lifecycle holding cost model, Hertz has been able to analyze the revenue, cost and contribution for each model and use improved analytics to manage the entire portfolio. Using this information, Hertz has simplified the fleet portfolio, reduced the number of car classes and models, and increased overall contribution. The lifecycle holding cost model has helped Hertz more effectively negotiate with OEMs for their annual fleet purchases, providing a solid analytical fact base to compare lifecycle costs across supplier and models. Further, like Six Sigma, it's providing a common language across countries and geographies for Hertz leaders to evaluate information and make improved decisions.
Underlying much of Hertz's transformation is an improvement in the ability to utilize data and analytics to make business decisions. To support the reengineering efforts, Thomas and Hertz' supply chain organization have worked to simplify and standardize processes to improve the quality of the data to support better and more rapid business decisions, especially important in today's volatile economy.
The guiding principles Thomas is using to manage the supply chain through this challenging economy will also enable Hertz to take advantage of opportunities that market downturns provide and rapidly capitalize on the rebound when it occurs. Strong and disciplined cash management, cost containment and supply chain flexibility will enable Hertz to emerge stronger and better positioned than ever.
Joerg Tillmann, Director of Business Systems Integration, Catalent Pharma Solutions
As a director of business systems integration responsible for delivering a technology solution to support Catalent Pharma Solution's new strategic sourcing team, Joerg Tillmann had a weighty challenge on his plate. With new ownership anxious to see profits while minimizing exposure to risk, Catalent, recently spun-out from Cardinal Health was under pressure to deliver results fast. Catalent had recognized early on that a strong emphasis on strategic sourcing would be crucial to realizing this goal.
Chartered with aggressive savings targets, Catalent's centralized procurement team needed all of its business facilities to adopt a global sourcing approach that would allow the business to leverage its combined buying power at a global level. Having grown through mergers and acquisitions, buyers at individual Catalent facilities were by and large still used to operating independently and not collaborating across facilities, geographies or languages. By approaching the same supply base in different ways, Catalent was leaving savings on the table and potentially exposing itself to the risk that business units could compete with each other over key suppliers. Tillmann's challenge was to find a way to establish a new procurement culture by offering stakeholders a solution that delivered high-impact visibility into the benefits of global sourcing.
Tillmann knew the best way to implement a global sourcing strategy was to support the program with tools that offered the breadth of capabilities and the flexibility to support each stage of that strategy. He identified BravoSolution as the right partner to deliver a solution that could support Catalent's evolving supply management needs for the long-haul, as well as a flexible on-demand delivery that allowed his team to get up and running quickly.
Understanding the majority of spend and being able to rapidly execute on identified opportunities was the first priority. So Tillmann proposed a phased implementation strategy that would allow the team to gather about 70 percent of its spend within two to three months while deploying basic RFx capabilities in parallel. This approach not only provided the team with early return on investment but also improved the rate of adoption across the company because of enhanced team collaboration capabilities. By executing against a comprehensive communication plan, Tillmann and his team were able to demonstrate the value of using these new systems and processes in a tangible way to their user base.
Over the course of the next six months the team focused on obtaining the more challenging pockets of spend and standardizing the sourcing process with templates and project management methodology. Supplier enrichment, purchase and travel card spend, and data from various legacy ERP systems would round out Catalent's global spend visibility across all of its three business units and 35 facilities worldwide. Now the team had unprecedented visibility into global spending practices and was able to analyze price trends, differences in payment terms and supplier diversity spend.
Next Tillmann will tackle contract compliance, analyzing off-contract spend and invoice price compliance as well as additional supplier performance reporting using scorecards and contract management to further support Catalent's supplier relationship management.
Phil Wetherington, Chief Information Officer, Sugar Foods Corporation
For Phil Wetherington, life is sweet. But, it takes ingenuity and hard work to keep it that way, especially during this turbulent economy. A 20-year veteran of supply chain and business management, Wetherington currently is CIO of Sugar Foods Corporation, the industry's top supplier of food service staples like sugar substitutes (Sweet `N Low and Natra Taste), turbinado natural sugar (Sugar in the Raw), powdered non-dairy creamers, croutons, crunchy salad toppings, and almonds.
To maintain its dominant position, the company has leveraged its product quality, long-time relationships with 850,000 food service operators and new supply chain technology to keep going and growing. With production facilities in the United States and Mexico, a national sales force and a North American distribution network, supply chain management is a rigorous discipline.
Flexibility and product innovation are keys to Wetherington's successful strategy in managing the company's massive supply chain during these difficult times. That means "we have to be flexible to meet the economic challenges of today," he says. "For customers, that means we also have to deliver or offer more products, have more flexible packaging and different ways of getting those products to our customers."
It all requires improving supply chain planning, managing demand and production scheduling more accurately and efficiently than ever before, and paying closer attention to every detail. Under its CIO's leadership, Sugar Foods is using software from QAD Inc. to "help us achieve these goals faster and better," according to Wetherington. The company has been migrating all of its operations onto one framework, one database and one set of software for operations in the U.S. and Mexico.
"The benefits have especially been in the areas of purchasing and inventory control," Wetherington says. "Being able to see improved efficiencies in the way we manage our inventory and knowing what we have in the building at any given time provides tremendous visibility. We also went through a bar-coding implementation, giving us more enhanced visibility into the movement of products through our operations."
Wetherington's efforts have helped Sugar Foods maximize operational efficiencies and maintaining lean production practices to further enhance efficiencies. And it's paying big dividends in the way of SKU rationalization, closer sourcing, shorter lead times, greater product innovation, a 75 percent reduction in obsolescence and increased profitability. In addition, the company is well-positioned to take advantage of an upturn in the business cycle when it arrives. "We've optimized capacity utilization – adding, and adjusting production capacity by rigorous assessment of the value of each activity – and we're realigning manufacturing relative to customer demand to ensure they get the right product, at the right place, at the right time," he said.
Greg Wolljung, Vice President, Supply Chain, Lance, Inc.
With 25 years experience in the consumer packaged goods (CPG) industry primarily focused in Supply Chain/Operations, Greg Wolljung heads up the Service and Distribution group at Lance Inc., one of the largest producers and distributors of snack foods, and he also leads the Logistics Operations that include demand and supply planning strategies for the field selling organization. Wolljung's leadership in a recent initiative to improve business processes at Lance has better prepared Lance to weather the current economic climate by increasing visibility across the enterprise to achieve a consensus forecast, improve forecast accuracy on a 30-day horizon and optimize inventory levels.
About 50 percent of Lance's products are distributed through a direct store delivery (DSD) structure of approximately 1,400 sales routes in 25 states. Lance's acquisition of Tom's Foods in late 2005 introduced new complexity into Lance's supply chain by adding different forecasting avenues that exposed several operational opportunities for improvement and made increased customer service levels a focus. Adding to the complexity, the short shelf life of Lance's products and product promotions drive significant variability in demand patterns, making it costly to Lance if a forecast is inaccurate when predicting promotional lifts, seasonal volume changes (back-to-school months, for example) and new product introductions or phase-outs.
In order to give the company greater visibility into market demand, Wolljung led the team at Lance that sought a solution that would help them achieve a consensus forecast, improve forecast accuracy and optimize inventory levels. Lance wanted to become a "push" rather than "pull" demand-driven company and needed a solution that would help them build inventory at strategic points in their supply chain. A critical element to this plan was the formalization of an executive sales and operations planning (S&OP) process.
Wolljung and his team ultimately implemented a solution from the company Logility to help ensure visibility across the enterprise and increase customer service levels. The implementation of the Logility Voyager Solutions allowed Lance to increase forecast accuracy from 50 percent to an impressive 70 percent, a figure that is considered best-in-class in the snack food industry. The initiative that Wolljung led also has resulted in significant reduction in "days on hand" due to confidence in the demand signal, as well as the launch of an executive S&OP process that has contributed to streamlined sales collaboration, more effective business processes and increased trust in the new demand planning process. For the first time, Lance is now truly operating under one plan.
Team Practitioner Pros
Tough economic times bring challenges and opportunities. At Bell Incorporated, the supply chain team believes the key to weathering the storm and taking advantages of opportunities is to have a strong business model and supply chain in place before tough times hit.
Fortunately for Bell, its low-cost business model is built on solid supply chain tenets. The company invests in the latest high-speed technology, finds innovative cost solutions through technology and maintains a lean organization with a tenacious focus on cost. Bell partners with large national and multinational clients through long-term contracts that enable shared investment in customized equipment. Scale enables selective supplier relationships, but Bell suppliers are partners, with long-term, albeit flexible, contracts. And a low-cost mantra has driven Bell to eliminate waste and put the company on the sustainability bandwagon decades ago.
The current economic slowdown has put Bell's business model to the test. They saw some cutback in orders toward end of year, with customers managing their inventory carefully. The 2008 holiday season was the first in memory where there was downtime; Bell closed down for nine days during December, unheard of for them.
Despite this, Bell achieved its plan for 2008, and by the end of the first week of 2009 had experienced a strong bounce-back and was running at capacity. That clearly isn't due to an economic recovery but to supply chain strategies that have established and maintained Bell on solid footing. The supply chain team at Bell believes that economic crisis is not a time to be scrambling for new processes and programs.
An established approach to supplier relationships has helped Bell deal with risk and capitalize on opportunities. Bell buys few if any sole-sourced items and continuously qualifies multiple sources. The Bell team describes risk among some suppliers who are rumored to be in trouble or for sale, and are now quite interested in talking with Bell, which creates spot buying as well as other opportunities. As a matter of practice, Bell works only with suppliers on solid footing, but they are at some risk if they don't work with Bell in ways that reflect the times. The suppliers' costs have dropped dramatically; raw fiber, dipping recently from $100 to $20, is a case in point. Flexible contracts allow Bell to renegotiate, and the supply chain team continues to research the market on a daily basis, talking with other vendors and renegotiating with suppliers. If they have managed their own costs well, suppliers are able to say yes immediately – hard times test everybody.
The Bell team is also managing inventory and lead times. Specialized paperboard for frozen food packaging has a very long lead-time, for example, and the company carries extra inventory to ensure customer service with any upturn. Inks, glues and adhesives have very short lead times, so they're carrying just enough to meet current business needs.
What's important is that these strategies and principles are not sitting in a file somewhere, to revert to during economic downturns. Bell's supply chain team has taken the lead in living and breathing Bell's supply chain-grounded business model and driving its practices throughout the business. The fact that the supply chain team is led by Ben Graham, who is part of a small team that will assume leadership of Bell when CEO Mark Graham retires, speaks volumes about company priorities.
THE SUPPLY CHAIN TEAM AT BELL INCORPORATED
Ben Graham, Vice President of Sales, Finance & Supply Chain – Ben Graham has established Bell Incorporated as one of the most dynamic competitors in the packaging industry. In the process, he's helped Bell grow by more than 50 percent. As part of the company's senior management team, Graham played a key role in defining the business model that has driven Bell's success. The model he helped develop – manufacturing excellence, global supply chain strategies and a lean organization – has enabled Bell to establish one of the lowest cost structures in the industry. That has created significant competitive advantage for Bell and a strong brand identity that helped the company acquire such major clients as McDonald's, GE, and Barilla Pasta.
Tim Bunkers, Logistics Manager – Tim Bunkers is responsible for inbound and outbound transportation as well as management of the various responsibilities associated with transportation and freight costs. Bunkers is a supply chain veteran, having worked in the transportation and manufacturing industries since 1972. He joined Bell in 1996 as a traffic coordinator, and was quickly promoted to traffic manager. In 2002, Tim became purchasing manager and assumed responsibility for managing and monitoring the purchase of all raw materials involved in the production process, with paperboard being the largest component of raw materials used. In 2008 Tim was promoted to logistics manager.
Doug Charlson, Finance & Supply Chain Consultant – Doug Charlson has been an integral player in Bell's supply chain and financial innovations and successes. He has guided Bell in its focus on total cost of ownership and ongoing supplier improvement initiatives, including pricing and delivery terms. More specifically, Doug's leadership in a 2006 global sourcing initiative helped established Bell as an industry authority for overseas paperboard purchasing. A 2007 strategic sourcing project resulted $600,000 of cost takeout and the creation of strong multiyear supply agreements that benefit both Bell and its suppliers. Charlson first joined Bell in 1992 as controller, gaining a detailed knowledge of the company's finances and cost drivers prior to being promoted to director of manufacturing. From 1998 to 2002 he expanded his experience in manufacturing and finance through accounting and IT consulting services, and as vice president of manufacturing for Wybron, Inc., of Colorado Springs, returning as a key advisor and member on the Bell management team in 2002.
Staying competitive in this challenging economy calls for looking beyond traditional opportunities to cut costs or generate demand. With the goal of thinking out-of-the-box, Cisco's Customer Value Chain Management organization formed the Supply Chain Field Operations (SCFO) group in 2005. SCFO was given the charter of taking a fresh look at the "forward" supply chain of distribution and returns management and driving new opportunities to grow Cisco's top and bottom line. Key to SCFO's success at unlocking incremental profits, even in tough economic times, has been applying a sales-driven mentality to the operations side of the business, and specifically to previously overlooked parts of the value chain.
The cost savings and incremental demand made possible by SCFO are helping Cisco weather the current market challenges. For instance, under SCFO's Lean Forward initiative, which applies the principles of Lean manufacturing to Cisco's distribution model, SCFO works with major distribution partners to streamline operations and align inventory levels with end-customer requirements. The result? Cisco partners saved operating expenses while releasing $28 million of working capital in the initiative's first year. In its second year, ending July 2009, over $70-90 million of working capital savings are expected. The program plans on the reinvestment of at least 50 percent of these savings in demand generation and reseller-development programs so that these savings in the extended supply chain will be driven directly back into growing Cisco's sales. The Lean Forward program has been singled out for critical acclaim by industry analysts for its innovative approach to identifying and unlocking savings and designing in the mutual win for the OEM and for the distributor. AMR Research has called the effort "especially compelling."
Another example of SCFO's creative approach to identifying incremental, cost-cutting opportunities is its revamping of Cisco's product returns process from an $8 million cost center in 2005 to today generating over $100 million annually in contribution margin. Back in 2005 essentially all returned products ended up as recycled e-scrap, and Cisco footed the bill. After literally inspecting returns in the warehouse, the SCFO team recognized that most were actually still fully functional, with only minor, if any, repairs required. As a result, they saw the opportunity to launch a business within a business, marketing returned Cisco product to a range of internal customers. Today, as a result of SCFO's Value Recovery program, a sweeping effort to refurbish and reuse returned product, approximately 50 percent of all Cisco product returns are given a productive second or even third life before eventually being responsibly recycled. And SCFO customers range from Sales (for customer demos), Cisco labs and Cisco's services supply chain organization to the company's Networking Academies program. Savings to Cisco are huge – $100 million annually and growing – as these and other teams avoid having to purchase new equipment. Cisco's Value Recovery effort was recognized at the annual conference of the Council of Supply Chain Management Professionals (CSCMP) in October 2008 as the group's 2008 Supply Chain Innovation Award winner.
THE SUPPLY CHAIN TEAM AT CISCOo
Dan Gilbert, Vice President, Supply Chain Field Operations – As head of Field Operations for Cisco's Global Supply Chain Management organization, Gilbert leads the worldwide operation responsible for driving supply chain excellence via field support and channel enablement. Gilbert's group works closely with cross-functional groups within Cisco to develop new revenue streams. Both Value Recovery and Lean Forward were launched under his leadership.
Rehman Mohammed, Senior Director, Supply Chain Field Operations – Rehman Mohammed oversees the Worldwide Reverse Logistics (WWRL) function, including Value Recovery, and the Lean Forward initiative.
Dawn Wang, Senior Manager, Value Recovery, Supply Chain Field Operations – Dawn Wang's team is responsible for identifying and developing value recovery opportunities for returned product.
Members of the Lean Forward Program Management Office provide the partner interface, solution tracking and measurement functions, among others, for the initiative:
- Karen Hill, Program Manager
- Carrie Snyder-Woods, Manager, Supply Chain Field Operations
- Ying Wu, Program Manager
- Bin Liu, Program Manager
- Marisa Cordona, Manager, Supply Chain Field Operations
The Subsea Global Demand Management Team at FMC Technologies has created an integrated global forecasting process that consolidates subsea project opportunities by region and product and turns them into supply base requirements utilizing the long-term planning functionality of SAP. This group identified the end products, assemblies, components and raw materials to forecast, created forecasting bills of material that included these items, developed and maintained the master data that enable aggregation and utilized the business warehouse capabilities of SAP BI for reporting and data storage. "Since we are a projects-based business, we previously gathered supply requirements on an ad-hoc basis and mainly use historical results to communicate requirements rather than looking at our customer opportunities," explains Milton Young, subsea global sourcing director and a himself previous Pro to Know. "The product level forecasts are gathered in SAP CRM by region and opportunity and assigned to planning BOMs, which are then scheduled using the LTP functionality of the MRP system."
The five-year forecasts enable the company's sourcing and materials management staffs to better communicate FMC's requirements to their strategic global and regional suppliers and gives much better accuracy by region and product type. This enables FMC's suppliers to better manage their inventories and plan their production runs. Given that lead times for many of the company's raw materials and strategic OEM components are 26 or more weeks, FMC can utilize the new forecasts to better position inventories in the supply chain and look for opportunities to standardize and aggregate requirements and order more efficiently. With better forecast data, the company's suppliers are able to find more efficiency in their operations, which eliminates waste, improves quality and on-time delivery, and lowers total cost. "Many of our suppliers engage in product development," Young adds. "The new forecasts enable us to provide more accurate requirements for those new products. Internally we plan to use these forecasts to fine-tune our machining and assembly operations by balancing requirements across our global network of plants."
THE SUBSEA GLOBAL DEMAND MANAGEMENT TEAM AT FMC TECHNOLOGIES
Milton Young, Subsea Global Sourcing Director – Milton Young is a previous Pro to Know and Pro of the Year. He has been in his current position for the past five years. Previously he was in procurement, new product development and finance roles at Whirlpool Corporation.
The project team covers several functions across all the Subsea business unit locations and one of the Surface business units. Each team member brings specific customer, product, process, technical or systems knowledge to the project. The team members, broken out by geography, include:
- Bob Coffman – Technical Sales Manager
- Malcom Mittag – Product Manager
- Nat Mule – Materials Planning and Procurement Manager
- Steve Stolle - Engineer
- Eric Ringle – Engineering Manager
- Torgeir Gjellerud – Product Supply Manager
- Einar Jorgensen – Project Engineering Manager
- Gro Rustand – Procurement Analyst
- David Schnell – Procurement Analysis Manager
- Halvor Sandven – Procurement Specialist
- Richard Stone – Project Manager
- Colin Johnson – Materials Manager
- Graeme Collie - Engineer
- John Mulholland - Engineer
- Richard Toh – Materials Planning Manager
- Yen-Hwei Teo – Materials Planning Manager
- Pedro Setti – Planning Manager
- Neiva Mary – Internal IT Consultant
- Ben Cheng – Global Forecast Manager
- Javier Zubia – Global Commodity Analyst
- Nona Somoza – Global Supply Chain Analyst
- Mai Thomson – Sr. Systems Analyst
- Binod Rajgariah – Systems Analyst
- Mike Walker – BPA Developer
Provider Pros to Know
This year's Provider Pros to Know offer industry insights you can use when tough times call for you to wring every last bit of savings out of your supply chain.
Don Lesem, Vice President, Product Lifecycle, Global Products and Services, IHS (www.ihs.com). Operating globally without reliable information is like changing lanes without checking your blind spot. Supply chain complexity is now compounded with economic uncertainty. Undetected changes in supply availability or compliance can result in costly product delays, redesigns or lost sales. Accelerating “proactive vs. reactive” business-critical information strategies can be the difference between “success versus failure.”
Rory King, IHS (www.ihs.com). If you do only one thing, evaluate indirect MRO material and chemical inventory for a measurable "quick win." In about a month, optimization can show how to simultaneously reduce costs and maintain (or improve) production capacity. The best part – optimization dynamically readjusts inventory to meet your defined business objectives, so it promises sustained benefits as business conditions change.
Additional Pros to Know on the IHS team include Sheri Rhodine (Sr. Director, Product Marketing, IHS) as well as Mark Strandquest (with expertise in Indirect Supply & MRO Management), Cindi Hines (Global Trade Standards and Regulations), Tom Keyserlingk (Design for Environment), Jeremy Johnson (Chemical, Greenhouse Gas, and Carbon Performance).
Albert K. Beaney, Category Practice Leader of IT and Telecommunications, ICG Commerce (www.icgcommerce.com). In these tough economic times, Beaney advises clients to employ a contrarian strategy of carefully planned and coordinated strategic investments in IT and Telecom assets and services to reduce overall expenses, improve productivity and, at the same time, allow them to make strategic capital investments in a buyer's market. As a result, Beaney's clients have realized over $100 million of savings.
Tom Beaty, President & CEO, Insight Sourcing Group (www.insightsourcing.com). Stick to two core principles. First, keep it measurable – ensure that savings initiatives deliver actual auditable cost reduction or "hard dollar savings" as opposed to difficult to measure process savings, cost avoidance or other soft costs. And keep it simple – avoid solutions and tools that are too complex, too expensive, or over engineered for your core needs.
David Blinick, President, Blinco Systems (www.blinco.com). Take a proactive, rather than reactive, approach to complying with global trade regulations to mitigate risks raised by new and increasingly restrictive, punitive rules of engagement of regulatory compliance. Software-as-a-service global trade management solutions provide the ability for organizations to monitor regulatory requirements and attain a reasonable level of compliance management and reporting competency.
Robert F. Byrne, President & CEO, Terra Technology (www.terratechnology.com). Want to "go green"? The easiest way to reduce waste in the supply chain is to improve your planning processes to avoid manufacturing unwanted goods. By avoiding production, rather than recycling waste or improving packaging, resources are not consumed at all, decreasing inventory, reducing costs and improving profits.
Norman Conway, President & CEO, Prorizon Corporation (www.prorizon.com). As important as it is to prepare for the eventual upturn in the economy, it's more important for customers to solidify their operational foundation now! This strategy helps prepare for the future.
Nigel Davies, Senior Vice President, Supply Chain Solutions, CDC Software (www.cdcsoftware.com). Seek out specialized solutions that can help you company cope with increased market requirements on delivery precision and short lead times, with global competition and increasingly complex supplier networks, with financial impact analysis and transaction control, and with better utilization of warehouse and transportation resources.
Albert Jacobs, Vice President & COO, Puridiom (www.puridiom.com). Don't just invest in technology, invest in technology that supports best practice strategies for managing the supply chain, including the entire procure-to-pay process, and that offers the best opportunity to reduce cost, manage risks, improve performance and compliance, while delivering a real value proposition."
James V. Kelly, C.P.M., CEO and Managing Principal, JVKellyGroup, Inc (www.jvkg.com). Look for innovative ways to work with your supply chain solution and service providers, including gain-share arrangements that allow you to leverage services that might otherwise be unaffordable. Also, immediately review spending across the entire organization, and re-prioritize sourcing projects to focus on faster wins and quick hits as well as on unmanaged spend.
Ashif Mawji, CEO, Upside Software Inc. (www.upsidesoft.com). The importance of keeping existing customers satisfied is paramount today as many studies illustrate the heftier price tag of attracting new customers versus keeping existing ones. Leverage contract lifecycle management software to optimize relationships by providing clear indicators of contract/project progress so users can keep up-to-date and better anticipate customer needs.
Tim McEneny, President & CEO, PurchasingNet, Inc. (www.purchasingnet.com) Partner with solution and service providers that will work collaboratively with you to understand your unique needs and create return-on-investment (ROI) analyses that can help both get necessary supply chain improvements projects approved and also demonstrate Supply Management's value to senior executives.
Jim Piermarini, CEO, CTO, Profit Point, Inc. (www.profitpt.com). While a company may be inclined to focus on technology to solve problems, don't forget that the best results will come from focusing on the people and process side of the equation, and then looking to technology.
Nader Sabbaghian, CEO, BravoSolution (www.bravosolution.com). To weather an economic downturn, Sabbaghian has a threefold vision to help businesses to take advantage of key supply management opportunities while mitigating risk, first by ensuring they adhere to a rigorous process for conducting supply management activities, and to enforce compliance with those policies. Next he says companies should carefully track supplier performance, and Sabbaghian has delivered a set of tools and services worldwide to help clients with this step. Finally, he says companies should closely examine supplier-partners in low-cost-country sourcing arrangements.
David Saroli, CEO, Osiris Innovations Group (www.osirisinnovations.com). Leverage technologies that make supply chain management a more transparent and efficient process for both suppliers and buying organizations – by adopting technologies that help your suppliers lower their own costs, your company ultimately can reap the benefits of reduced costs and stronger supplier relationships.
Chris Timmer, Vice President, Customer Solutions, LeanLogistics (www.leanlogistics.com). Successful logistics management in any economic climate requires a holistic approach to the supply chain. Purchasing logistics services carefully can realize "paper" savings on annual budgets. But, visibility and tracking of the services you purchase is necessary to realize "executable" savings.
Dave Adams, CIO and Executive Vice President of Operations, GT Nexus. For those in international trade, make good use out of Web technologies to solve everyday and strategic challenges – it can save you tens of millions of dollars.
Eric Allais, President & CEO, PathGuide Technologies. Don't give into the temptation to hunker down and retreat from pushing well intended initiatives. The status quo, existing methods and overhead to ship product, gets protected. This "hope for the best" strategy simply squanders the opportunity to inject cost efficiencies into your logistics during times when your fulfillment operation should get lean and productive out of necessity.
Harry Allan, CEO, ClearTrack. Integrate disparate systems to resolve supply chain disruptions: "If you can't see the opportunity, you can't measure the opportunity, and if you can't measure the opportunity, then you can't manage the opportunity."
Mike Anguiano, Co-CEO, CVM Solutions. Strategy is key when times are tough, so identify suppliers that are or may be at risk, and identify new and existing suppliers that can provide the services you need to help your vendors stay competitive.
Amy Baxter, Vice President, Business Process Services, ProcureStaff. Apply sourcing and procurement methods that are broadly used and accepted in a market like the U.S. – like a vendor-neutral sourcing strategy for human capital category – and apply it to new regions of the world to mine new savings in new markets.
Joey Benadretti, President, SYSPRO USA, SYSPRO. Has your organization strayed from its initial successful business plans to focus on "make-to-stock" operations and complex supply chains, resulting in production that is poorly timed with little regard for the needs of the market? Re-focus on Lean, "make-to-order" operations and tight supply chains.
Jim Bengier, Global Industry Executive, Retail, Sterling Commerce. Leverage industry initiatives like the Cross-Channel Retailing Consortium, focused on helping retailers identify ways to integrate the selling and fulfillment processes to optimize processes and thereby improve the customer experience and reduce costs.
Richard Benyon, CEO, Decideware, Inc. The current economic climate has sharpened the focus companies should place on managing great performance from strategic suppliers in complex, high value categories like Marketing, IT and Professional Services.
Tim Brown, Principal, Profitability Analysis and Green Supply Chain Design, Chainalytics, LLC. Need to make supply chain changes, but can't swing the capital investment? Brown suggests cost and revenue driver analysis to sharpen policies for unprofitable customers, alter inventory strategies for underperforming products and ultimately improve the bottom line.
Jay Burgess, Director, Plan4Demand Solutions Inc. Recognize that your supply chain planning tools may not be recognizing the significance of economic trends. Often, supply chain planning tools use historical performance as a primary predictor of future performance. However, in a quickly down-turning economy, these tools could project a heavier inventory position than what is actually required, leading to a significant risk of excess and obsolete inventory which are especially difficult to accept in a climate of challenging cash management and decreased investment opportunities.
Bob Burich, President, Georgetown Consulting. Leverage distribution requirements planning as a forecasting tool to ensure that you have the right amount of inventory availability given your company's sales numbers.
David Bush, Iasta. Through the use of modern technology and modern sourcing processes, Bush helped the world's largest ground transportation company met their tough cost savings objectives – $43 million in the first sourcing wave alone.
Bill Carlson, Vice President, Marketing and Business Development, GHX. Carlson's goal is to create a common infrastructure for the entire healthcare industry, providing visibility to supply inventory and consumption information of high-cost medical supplies.
Vincent Chiodo, Senior Vice President, Transplace. Consider if the technology you are selecting will be a strategic enabler that helps you meet your business objectives. Companies must have the people and processes necessary to apply that technology to achieve supply chain improvements.
Sean Chou, Chief Technology Officer, Fieldglass. In order to make informed, strategic labor decisions during these increasingly difficult economic times, Chou urges customers to follow a strategy based on extensive reporting and analysis.
David Clevenger, Vice President, Corporate United. The key to success in the current economic environment, suggests Clevenger, lies in a combination of disciplines called strategic category management, which are designed to address spend management in an evolving, global economy.
Dr. Morris A. Cohen, Founder and Chairman of the Board, MCA Solutions Inc. Look to aftermarket services for opportunities to increase revenue and profits, reduce costs, stimulate market growth and absorb the shocks of business cycle variations.
Tim Cummins, CEO, IACCM. Take a multidisciplinary approach to supply management, engaging with stakeholders across different functions to understand their requirements and building partnerships across organizational silos.
Sean Delaney, Managing Director of Iasta UK, Iasta. The economic crisis isn't limited to the United States, and it is Delaney's goal to help European company's realize every available opportunity to maximize their cost-savings. Delaney's clients save millions of dollars, a critical action in a strained economic environment.
David Diamond, CEO, Arigo. Use advanced optimization algorithms to establish priorities consistent with your organization's needs and identify top sourcing options.
Charles Dominick, President and Chief Procurement Officer, Next Level Purchasing. Don't skimp on training for your company's supply chain staff. Now is the time to be firming up skill sets that can produce results and support company operations regardless of the economic climate.
Provider Pros to Know (continued)
William Dorn, Director of Operations, Source One Management Services. Can't get funding to invest in new supply management technology? Try free Web-based toolsets like Dorn's www.WhyAbe.com.
Don Dougherty, Managing Partner, SupplyStaff. In these tough times, it is essential to keep workforce morale up while investing in development activity to up-skill the organization.
Mark Doughton, President, Inmar CLS Reverse Logistics. To manage the reverse supply chain in challenging economic times, stay close to your customer to understand their challenges, provide visibility to their data and provide value-added solutions for streamlining processes and enhancing customer satisfaction.
Greg Dukat, CEO, StarCite. Don't overlook niche categories of spend to target for savings, such as meetings, which can represent up to 3% of revenues for many large companies.
J. Michael Edenfield, President and CEO, Logility, Inc. Instead of canceling new initiatives wholesale and pulling back on improvement investments, be more strategic and target areas within your supply chain that will help your company survive in the difficult economy but also position it to thrive in the future.
Christie Eykelkamp, General Manager, e-Business Solutions, ModusLink. Consider implementing a fully integrated set of e-business services, supporting both forward and service supply chains, that can help alleviate physical and digital supply chain challenges.
John Evans, Managing Partner, Denali Intelligence. During the recent period of volatile markets, John has helped establish category-specific market intelligence that helps sourcing professionals understand supply markets, pricing trends and sourcing best practices within specific spend categories.
Michele Flynn, President, Expense Management Solutions, Inc. Flynn pinpointed governance and strategic relationship management on an ongoing basis to drive millions in additional savings to the corporate bottom line, an advantage that might mean the difference between success or failure in a difficult economy.
Phil Friedman, Vice President of Consumer Products, QAD. Collaboration must be a tightly coupled relationship not only between retailer and manufacturer, but between manufacturers and all downstream suppliers and stake holders; including logistics, raw material, sub-contractors, packaging and quality / validation services and legal and finance. Without focusing on these downstream components there are too many points of failure to drive the right product at the right time at the right place and at the right cost.
Jim Frome, Chief Strategy Officer, SPS Commerce. Look at software-as-a-service and on-demand solutions not only for their potential to provide lower costs than installed software but also for their potential to offer capabilities that installed software can't provide.
Patrick Grady, CEO, Rearden Commerce. Leverage technology that allows you to manage and control demand within your own organization, for example, for employee business services, to ensure compliance and meet savings targets.
Bernard Gunther, CEO, Lexington Analytics. Establish a formal program to capture and leverage the data in your AP Spend Cube by better understanding what the company is buying, the prices being paid and how that compares to the contract and the marketplace.
Gary Hare, President and CEO, Vinimaya. As you take steps today to deal with the current downturn, ensure that you are not merely trimming costs but actually are improving the efficiency of your supply chain.
Bill Harrison, President, Demand Solutions. Before cutting jobs or conducting layoffs, Harrison thinks the one place organizations can look to save big right now is in their supply chain and encourages companies to "layoff their inventory."
David Henshall, President, Corporate Purchasing Practice Inc. Build your internal brand within the organization as a leader focused on your company's priorities. This helps overcome the perception of supply chain as a "single strategy function." Listen to the business stakeholders, understand their priorities and concerns, and develop a leadership brand that supports the values and motivations of the business.
Erik Huddleston, Chief Technology Officer, Inovis. On managing risk: use technology that provides supply chain visibility, analyze supply chains to create lean processes, automate the supply chain, and use outsourcing and SaaS to manage supply chain risk.
Tony Im, Practice Director, SciQuest, Inc. In these tough economic times, strengthen your supplier partnerships by negotiating terms and conditions that benefit both parties. Evaluating the entire relationship, rather than focusing solely on short-tem price cuts, will pay greater dividends down the road.
Melissa Irmen, VP Products & Services, Integration Point. Be proactive in industry groups and initiatives aimed at ensuring trade regulations and requirements can be implemented cost effectively as well as in a timely manner. Understand critical current and forthcoming regulations and the importers'/exporters' roles and responsibilities in upholding them.
Bill Jackowski, Vice President Professional Services, Management Dynamics. Look at expanding the global component of your supply chain, but consider internalizing and automating the direct import process to eliminate the "middle man" and further optimize the international supply chain.
Josh Johnson, President, Fidelitone Logistics. Johnson has helped his customers save millions of dollars through creative solutions such as virtual return programs – one major retailer's removed over $3 million dollars in freight costs through this process.
David Johnston, SVP of Manufacturing and Wholesale Distribution, JDA Software. For wholesaler-distributors, leverage supply and demand chain optimization solutions to proactively review forecasts, replenishment levels and supplier relationships to ensure the flexibility needed during these uncertain economic times.
Rene' Jones, Founder and President, Total Logistics Solutions, Inc. Jones' philosophy has remained the same in good and turbulent times: "The Simpler the Better!" Whether in technology or processes, he feels it is the responsibility of the manager not to over complicate things. His motto: "If it takes a genius to understand it or to do it, get rid of it!"
Marc Kalman, CEO, eZCom Software Inc. As a champion for SMBs, Kalman works to streamline their supply chains and increase efficiencies, giving his customers a competitive edge.
Jim Kandilas, Co-founder, The Shelby Group. Find innovative ways to fund projects. Kandilas worked on a solution where a cash-rich client communicated the need for their top 50 suppliers to accept discounted payment terms. The discount will be leveraged as fees from purchasing. Purchasing will then use those fees to fund their technology footprint, which will in turn enable them to place more spend under management and drive further savings.
Jeff Karrenbauer, President, INSIGHT, Inc. Ensure that strategic supply chain planning incorporates both marketing and supply chain strategy.
Duncan Klett, Vice President, Analytics Research, Kinaxis. Look for solutions that merge traditional planning and execution. As the volatility of the market intensifies, and "reality" moves farther from "the plan", managers have to engage in continuous planning to keep up with the changing landscape.
Anne M. Kohler, EVP, COO & Founding Partner, The Mpower Group. Looking for savings? Why not just ask your best suppliers for lower prices as an alternative to going to the market to rebid a category?
Tom Kozenski, VP, Product Strategy, Supply Chain Execution Solutions, RedPrairie. Ensure that you have an end-to-end view of the technology that runs your supply chain to identify additional points of integration that can produce additional efficiencies or visibility into your operations.
Shawn Lane, Vice President, Product Marketing, Servigistics. Consider ways to turn after-the-sale service into a new product line – and revenue source – for your company.
Steven LaVoie, Chairman and CEO, ArrowStream, Inc. For the foodservice industry, trading partners should share and have access to information on product, contract, pricing, inventory and freight – and share resulting savings – so everyone involved can make smarter forecasting, sourcing, product movement and logistics decisions.
Paige Leidig, Vice President, Procurement Solution Marketing, SAP. Link spend analysis, sourcing, global trade services, and contract management to close the loop between identified and negotiated savings, resulting in increased spend under management, reduced costs, and improved compliance with contracts and policies.
Fred Lizza, CEO, Optiant. Don't just reduce inventory – optimize it, including by using a "multi-echelon" approach to optimize inventory across an entire supply chain, not just discretely, location by location.
Thuy Q. Mai, CEO, DiCentral Corporation. Even during these hard financial times, vendors that have achieved EDI compliance are able to grow by expanding their customer base, says Mai.
Mike Maris, Senior Director, Transportation, Motorola. Invest in technologies that can provide end-to-end visibility of your supply chain is key, because if a company can understand all the components of the supply chain, they'll have a better grasp of where improvements can be made.
Doug Markle, Executive Vice President, Sales & Marketing, CVM Solutions. Ensure the smooth operation of your business, even in uncertain times, with supplier master data management, spend analysis, contract management and supplier registration platforms.
Monty Mason, Director of Product Marketing, Axway. Visibility, communication and collaboration. Mason's customers secure the crucial flow of actionable information across their trading partner community in order to manage risk and approach cost savings in a more targeted way.
Art Mesher, CEO, Descartes Systems Group. Supply chain disciplines will be the key drivers to helping organizations overcome the enormous obstacles they face in uncertain times, according to Mesher.
Karl Meyer, CEO, 3PD Inc. Looking for ways to save money? Take another look at the last mile. By increasing productive stop rates to 96 percent, Meyer's clients save, on average, 10-15 percent on redelivery costs.
Bill Michels, CEO, ADR North America. Manage the risks from troubled suppliers by assessing the strategic importance of your suppliers using a portfolio analysis; analyzing the health of the suppliers that leave your company most vulnerable; and preparing strategies that mitigate the risks you identify.
Provider Pros to Know (continued)
Mark Millar, Managing Director, M Power Associates, Hong Kong. In these turbulent times, companies are increasingly looking to their logistics and supply chain functions / partners for more innovative solutions, providing improved efficiencies, reduced costs and optimized supply chains. Use these times to reinforce the contribution and importance of supply chain and logistics disciplines across all industries, thereby boosting the reputation and credibility of the profession.
Patricia J. Moser-Stern, President, i3 advantage inc. Position Procurement and Supply Chain within your corporation so that these groups are considered a core-critical component to the success of the business.
Adeel Najmi, Solution Executive and Fellow, i2 Technologies, Inc. Apply Six Sigma methods to improve performance through continuously understanding and quantifying risks and tailoring supply chain policies by portfolio segment.
Kevin North, President and CEO, Dyadem International. Last year offered a warning to software vendors: Make yourself meaningful in measurable, immediate and practical ways or face significant financial losses and stalled revenue growth.
Miguel Mota, Senior Manager, Plan4Demand Solutions Inc. Develop "what-if" scenarios to promptly identify risks and opportunities in the supply chain. Technology provides the capability of creating these scenarios with real data using advanced algorithms and optimizers to enhance decision making. Define the most critical scenarios and create concrete action plans for each of them with metrics attached that allow for the monitoring of operational impact.
Louise O'Sullivan, President and CEO, Prime Advantage Corporation. Look to group purchasing organizations that can help you leverage group purchasing power and a broad breadth of supplier categories.
Brian Owens, Senior Vice President of Industry Solutions, IQNavigator. Reductions in spending during difficult times can be a doubled-edged sword. Exercise extreme caution to ensure that the reductions are not disruptive to the organization and do not pose the risk of eliminating revenue-generating opportunities. The key is to initiate the right strategy to make reductions in the right places and at the right times.
Elliot Owens, Director, Business Intelligence, ProcureStaff, Ltd. Don't just benchmark your spend against your own performance year-over-year, benchmark yourself against other companies in and out of your industry vertical. Owens architected a sophisticated business intelligence service that lets users of ProcureStaff's services procurement offering compare their performance in this thorny category against a cleansed and standardized set of data reflecting all of ProcureStaff's programs from the first human capital data warehouse. This approach can drive significant cost savings beyond the automation of human capital procurement, the most costly commodity used in any business.
Kirit Pandit, Vice President of Product Management for Spend Analysis and Compliance, Emptoris, Inc. Through his book Spend Analysis: The Window into Strategic Sourcing, public speaking engagements, and through consultation and engagements with Global 2000 companies, Pandit works to promote spend visibility and spend control as a way for companies to weather the economic downturn.
Dr. Christoph Plapp, CEO, Axxom Software AG. Take a look into smart supply chain reorganization. Dr. Plapp's customers have achieved savings up to 30 percent in various projects they have undertaken.
Kevin Potts, Vice President of Marketing and Product Management, Emptoris, Inc. "Technology and innovation can go a long way in helping companies to not only get lean and efficient, but also in delivering sustained business performance improvements," says Potts.
Margaret Price, Chairwoman and Chief Sustainability Officer, Green Supply Chain.org. As sustainability becomes an increasingly important in the supply chain, consider attaining a certification like the Certified Green Supply Chain professional to ensure that you are ahead of the curve in adopting sustainable supply chain practices that help meet business and corporate social responsibility goals.
Dalip Raheja, President & CEO, The Mpower Group, Inc. Encourage the adoption of an end-to-end systems mindset across supply chain functions to develop a collaborative platform where many different internal organizations acknowledge the critical role that each plays and enabling cross functional initiatives that fundamentally change the way you do business.
Sergio Retamal, President, Global4PL. Look to industry organizations like that Global Supply Chain Leaders Group (www.gsclg.com), which serves the senior leaders of supply chain management in business, government and industry on a worldwide basis, responding to the unique needs of leaders who are increasingly responsible for the profitable growth and health of their respective organizations.
Pieter Riedstra, Vice President, A.T. Kearney Procurement & Analytic Solutions. Use your supply chain data tactically with advanced analytics to better understand current processes and even reveal key factors that might affect new and future initiatives within the supply chain.
Robert A. Rudzki, President, Greybeard Advisors LLC. Find the optimum balance between pursuing quick wins and the long-term value of staying focused on strategic initiatives.
Matt Ryan, CEO, Riverwood Solutions. Leverage solutions and services like Riverwood’s Hybrid Outsourced Services Team model that allow you to communicate with, measure, manage, and ‘course correct’ with suppliers on a near real-time basis, including critical small and midsize suppliers.
Ashok Santhanam, CEO, Bristlecone. Cost-cutting is imperative in this economic climate, and Santhanam offers three principals to guide how you go about the process: maximize the efficiency of your supply chain, increase the velocity of information flow and ensure flexibility in your supply chain.
Bob Segert, President and CEO, GXS. Supply chain visibility is crucial in the current economic environment, and Segert has focused his efforts on expanding the B2B outsourcing services GXS offers, which have saved customers millions.
Raj Sharma, President & CEO, Censeo Consulting Group. In challenging economic times, Sharma argues that organizations cannot afford not to pursue demand management as a core supply management strategy. Sharma worked with one large defense agency to uncover capacity in excess of 70 percent of requirements.
Binayak Shrestha, Senior Director of Consulting, Global eProcure. Shift from identified to realized savings. Typical savings realized where on-going monitoring is absent is 40-50 percent. With change management, compliance, and savings tracking and reporting tools in place, 90-95 percent of identified savings can be achieved.
David Simchi-Levi, Chief Scientist, ILOG. New tactics and strategies, including manufacturing and supply chain flexibility, must be applied by companies to stay at the top of the new competitive environment.
Amar Singh, President and CEO, Amitive. Take a look at Community-SCM, which takes a risk-management approach to the supply chain, creating real-time visibility and collaboration across the entire trading community and leading to lowered costs, improved product velocity and reduced risk for all stakeholders.
Bob Solomon, Senior Vice President and General Manager, Ariba Supplier Network, Ariba, Inc. Provide access to capital for your suppliers through third-party supply chain financing options or receivables auctioning in order to promote overall supply chain health.
Charles Smart, President & CEO, Smart Software, Inc. Make changes to the way you create your forecasts to achieve better short-term results. Prioritize service levels for your products. To optimize inventory and maximize sales, service levels should be set high (90-99%) for highly demanded items, but can probably be set much lower (70-80%) for other items. By doing this type of analysis, many find that they need much less stock for many of their SKUs than they previously thought. Furthermore, to improve accuracy, shorten the demand history used to generate a forecast so that more emphasis is placed on recent trends and demand patterns rather than history from two or three years ago.
Stan Smith, CEO and President, CIMTEK. Manufacturers should find a balance between quality and cost.
Ara Surenian, President and Founder, Cadent Resources, Inc. Combine lean techniques with probabilistic demand technology to drive speed and visibility to better respond to impending changes in demand.
Pradeep Tapadiya, President and CEO, Software Labs. The supply chain is about moving goods, but keeping the supply chain moving means moving data efficiently. Leverage technologies that ensure your data move with accuracy and quality.
Dawn Tiura Evans, CEO and President, Sourcing Interests Group. In challenging economic times, the most important asset of supply management professionals is the ability to take a leadership role to drive bottom-line impact. Now is the time to "return to basics," execute professionally, capitalize on the new tools available to automate parts of the process, and execute on current market intelligence versus past "knowns."
Jason Treida, Chief Operating Officer and Founder, Iasta. In today's economy it's even more important to implement savings results quicker. Treida says advanced sourcing optimization technology is a critical function of increasing the speed of award analysis for implementation.
Mark Usher, Co-Founder and President, Treya Partners. Do you work for a small firm that can't afford big-time consulting fees and yet need to access the talent and delivery capability of a big consulting firm. Leverage the offerings of boutique consulting firms targeted at your market space.
Tim Vaio, Managing Vice President, Hitachi Consulting. Become responsive to all kinds of changes. Printing company client: By becoming more responsive in its transportation process, the company saved $2 million in the first year alone.
Rajesh Voddiraju, Co-CEO, CVM Solutions. Use your supply chain to help trim and even eliminate wasteful spending.
Terry Wellesley, Managing Director, BMO Spend & Payment Solutions. Better connect your physical and financial supply chains, such as incorporating spend and supplier management solutions with financial services, to gain control over corporate spending.
Mark Wheeler, Principal of Supply Chain Solutions, Motorola. Use the slow time to leverage the "relatively" fixed costs of internal engineering and IT staff to make the operational and technology changes that there wasn't time to address when your company focus was more on managing growth.
John Williford, President, Supply Chain Solutions, Ryder. Consider implementing exhaustive total landed cost and network design studies in the face of tough decisions about how much and what sourcing to shift, where to locate, and whether warehousing should remain overseas or be brought closer to home.