2008 Supply & Demand Chain Executive Pros to Know

Honoring supply chain leaders building their companies' 21st century supply chains


When FMC Technologies was spun off from FMC Corp in 2001, procurement was largely decentralized, with each of the company's business units operating autonomously with 33 independent purchasing staffs. The sourcing group consisted primarily of low-level buyers whose mantra was "three bids and a buy." Ellis began employing a new focus for FMC, quickly realizing that to stay competitive, he had to shift the entire purchasing organization and convert it into a strategic supply chain-focused group. He instituted a Global Supply Chain Leadership Team (GSCLT), comprised of top sourcing and supply chain directors, to lead the supply chain and sourcing activities for the enterprise. The GSCLT works within each business unit, managing change, selling sourcing benefits and aggregating and standardizing sourcing practices and processes across global operations, using the SAP ERP system as a common platform.

Ellis also has focused on developing the supply chain within the company. Operations, manufacturing and engineering managers not only have input early into the supplier selection process but are involved throughout the process with GSCLT leadership. Ellis believes that the key to successful supplier relationship management is early and continued involvement of the relationship managers. Facilitating the move from tactical to strategic also required Ellis to address his sourcing professionals' competencies. He instituted formal, recurring training for his staff, began replacing those that could not meet the new challenges with senior sourcing professionals from different businesses and geographies, and hiring sourcing MBAs to raise the bar within the sourcing team.

Along with governance and staffing, Randy has deployed a significant infrastructure to support the sourcing function. He has developed and implemented a sourcing process manual, a sourcing toolkit and an employee supply chain portal. These operational systems provide tactical guidance and direction to the day-to-day functioning of his supply chain organization. Today Ellis is implementing international purchasing offices (IPOs) in China and India to continue to move the organization upwards in the sourcing continuum, reaching towards a fully visible, nimble, proactive and risk-contained sourcing center of excellence (COE).

Combining savings from both process refinement and exploiting sourcing opportunities, Ellis has been able to reduce the total cost of ownership (TCO) upwards of 45 percent. Together with a new level of trained staff, leadership from the GSCLT, the institution of common practices and process, and ongoing professional review and development, Ellis has assured continuing success and cost savings for FMC for the foreseeable future.

... servicing customers profitably
Scott Brown, Manager Supply Chain Analysis & Design, Plexus. Successful companies must support a supply chain cost structure and model that ensures customers are serviced at high levels but also profitably. At Plexus, Brown has led the redesign and deployment of the company's analytical toolset, Optimal Procurement & Deployment Modeling (OPDM) and Inventory Service Level Modeling (ISLM), as part of the company's process for quoting new business. These tools integrate bill-of-materials data and typical BOM variables to achieve desired inventory velocity, desired service level and total cost for a given customer. Brown also has worked on a refined model and calculation engine for projecting the required inventory levels necessary to support a customer business model, recognizing the impact of increasing probabilities of sporadic demand patterns on future inventory levels through the use of the ISLM Monte Carlo simulation capability. Using the OPDM and ISLM toolsets, Plexus has transitioned nearly $500 million in spend to optimal procurement and replenishment models based on demand pull.

... bringing world-class performance to old line industries
Steve Miller, Vice President of Supply Chain, Wabash National Corporation. Working at this Fort Wayne, Ind.-based commercial truck-trailer manufacturer, Miller has been credited with transforming the supply chain operation of an organization in a traditionally stodgy industry into a world-class operation. Through the development and implementation of strategic initiatives, operational deployment and performance measurement tools, Miller and his organization have been recognized for delivering significant improvement to Wabash National. A 20-plus year veteran of the automotive industry, Miller previously served as director of purchasing at Cummins Engine Company.

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