The supplier relationship management initiative culminated in September 2006 in a three-day conference that brought together about 50 of Kimball's top suppliers. The Office Furniture Group's executive team — including the president, brand presidents and the heads of manufacturing, quality and engineering — all addressed the suppliers on the company's vision for its products and business and Kimball's overall strategic direction. As part of the conference, the suppliers, like Kimball's commodity managers, also walked the flow through a Kimball plant and saw how their products move through production at the facility. The conference and the tour helped generate a burst of ideas among the suppliers for improvements in their own, and Kimball's, products and processes — ideas that Price has estimated have produced $1.2 million in savings for Kimball. As just one example of how the new collaboration has benefited Kimball, Unisource Worldwide, a Kimball supplier for packaging materials, suggested ways for transitioning from Styrofoam to honeycomb cartoning in certain instances. This move not only saved hundreds of thousands of dollars but also helped Kimball advance toward its "green" objectives by removing non-recyclable materials from the supply chain.
The only tool that Price has adopted for the supplier relationship management initiative is an internally developed Excel-based idea-tracking solution, similar to a lead-tracking application that a sales team might use. The tool ensures that as suppliers propose ideas for improvements, each new idea is assigned an "owner" who takes it through the necessary decision points and, where appropriate, through to implementation. "We have become much more efficient with the way that we manage supplier ideas," Price says, noting that the tool and the new supplier relationship management process as a whole have helped drive up the savings generated from supplier ideas from $100,000 per year in 2005 to $5 million per year in 2006.
Plotting a Skills Roadmap
Price says that he realized from the start of the initiatives within Kimball's Office Furniture Group that the sourcing team would require additional skills development to help them more strategically manage the company's supply chain. The group had a centralized team responsible for global sourcing for a few years already, comprised of eight commodity managers, an administrative assistant and a strategic sourcing analyst. But the team was still early in its development, according to Price. "We didn't have a lot of the basic tools and processes in place to execute on the strategic vision," he says.
Price engaged with Next Level Purchasing, a procurement training and certification firm based in Moon Township, Pa., to do a skills assessment of the sourcing team around such core areas as contract management, negotiation and project management. With that information in hand, Price was able to plot out a development plan for each member of the staff. The development plans targeted three levels: day-to-day tactical skills like contract management and negotiation; commodity-specific knowledge, including technical competency around each manager's assigned category; and leadership skills, focused around project management.
Each team member's "roadmap" depended on where that person was in the company and their current skills, based on the assessment. Some members received more training around the tactical or commodity skills to fill specific gaps, while others focused more on the project management and other "strategic" skills. The overall goal, Price says, was to build all the necessary competencies within the group as a whole so that the staff could, as a team, rise to the challenges inherent in taking sourcing to a more strategic level within the enterprise.
For the commodity-specific competency, the sourcing team members attended industry conferences and took advantage of onsite visits or training programs offered by vendors in their category areas. For the tactical skills, the team turned to several different channels for training and education. First, Price put four of his commodity managers through the Senior Professional in Supply Management (SPSM) certification program at Next Level Purchasing, which offers a series of both online and in-person training courses. The entire team completed other training modules offered through Next Level Purchasing, and Price also worked with the University of Louisville (Ky.) on quarterly workshops for his staff on such topics as supply chain management, strategic sourcing and purchasing groups.
For the leadership skills, several of the staff attended programs at the Center for Creative Leadership in Greensboro, N.C., a nonprofit organization that offers a variety of leadership training programs. Price himself received an Executive Certificate in Technology, Operations and Value Chain Management through a program at the MIT Sloan School of Management in Cambridge, Mass.
Building Global Skills
As the training progressed and the sourcing team continued to implement its improvements projects, Price says that, by and large, the development roadmaps were mostly on target and training met the evolving needs of the team. However, it became evident over time that one gap remained. "If there is one area where we underestimated the gap, it was the strategic sourcing skills around globalization," Price says.