By Andrew K. Reese
When Bob Price began leading the transformation of sourcing at the Office Furniture Group of Kimball International two years ago, he quickly drew up plans for four specific initiatives to take sourcing in a more strategic direction at the company. But he also put in place a fifth initiative to help ensure the success of the other four projects by providing vital training and skills development for Kimball's sourcing team. In Price's view, to meet its goals, one of Kimball's most important investments would be in its people.
A Strategic Mandate
Jasper, Ind.-based Kimball International is a $1.3 billion manufacturer of furniture and electronic assemblies, operating in 14 U.S. states and in seven countries on three continents. The company employed about 6,800 people worldwide as of the end of last year. In 2006, about 56.5 percent of the company's sales came from its Furniture and Cabinets business segment, with the remainder coming from its Electronic Contract Assemblies segment.
Back in 2005, as part of a broader realignment within Kimball's Furniture and Cabinets segment, the executive leadership in the segment's Office Furniture Group came up with a vision for transforming the sourcing function into a strategic team that could make additional contributions to Kimball's competitive advantage in the marketplace. At the time, Price headed the sourcing team as director of global sourcing within the Office Furniture Group, and he was charged with leading the transformation of the function. (Price has been named director of global supply chain management for the Kimball Furniture Group since the interview for this article.)
A 20-year veteran of the supply management field, Price's plan for achieving transformation in Kimball's sourcing focused on five initiatives, including supplier relationship management, category management planning, commodity councils, strategic sourcing and globalization target setting, and, importantly, training and skills development. All the initiatives involved little or no investment in new technology or staff changes, while offering the possibility of significant short- and long-term gains, according to Price.
Generating Supplier Ideas
The goals of the supplier relationship management initiative, for example, included fostering closer relationships with key, strategic suppliers and involving them early on in Kimball's product design process. "During product development, we were designing products in a vacuum," Price explains. He believed that by engaging Kimball's product developers with its suppliers in the initial stages of the design process, Kimball could benefit from the suppliers' ideas regarding the design of the products as well as their thoughts on alternative materials and strategies for actually building the products.
The commodity managers working under Price were put into service as the intermediaries between Kimball's product development group and the company's suppliers. As part of this process, Price had the commodity managers "walk the flow," actually getting down on the plant floor at Kimball's own production facilities to watch their commodities go through production. In addition, as part of quarterly business reviews with strategic suppliers, the commodity managers began touring the suppliers' plants, too, to watch products destined for Kimball go through that phase of the production process. In this way, the commodity managers gained a deeper understanding of where suppliers can help improve Kimball's own costs and processes.