The Analyst Corner: Procurement

What's next after Lean? Author Patricia Moody believes that companies facing the "big squeeze" must look to their procurement organization for the next level of savings


But we still have to get the message out to the CEOs that being good in production is just a ticket to be involved in the industry. Manufacturing used to be more of an art than a science, but we know how to do this stuff now. We know how to organize flows so that we don't have piles of inventory sitting all over the place. We know how to do quality so that we have zero defects. We've been doing all that for 20 years. Now some of that art is coming from the procurement side, because it's those people who know where the money is and know how to go after it. And it's important to do that now.

S&DCE: Could you touch on your philosophy on the use of technology in procurement?

Moody: I'm a technology freak. It's the advantage that we have in the United States, the fact that we have technology that we can use to be more flexible and responsive. We've been slow to admit that because, again, we've been very preoccupied with Lean. One of the jokes in the back of my book is that even Toyota uses computers now. For a long time they really didn't; they had a kind of anti-computer bias. But I think technology is the answer; it's the advantage that we have.

S&DCE: And are you finding that the new generation of procurement executives is more accepting of the different kinds of technologies because they're growing up in a technology-laden society?

Moody: So many companies today still are running on volumes of Excel spreadsheets that they pass from one department to another. I would say that the newer people are probably going to go beyond that. They're willing to look at on-demand software, they're willing to look at risk management and consolidation and things that are not horrendously difficult the way forecasting used to be 20 to 25 years ago. They're willing to look at some of the wonderful packages in shipping and logistics that help you do a better job of planning your load. You know, it's always easier when you first get out of school to just do this stuff, right?

S&DCE: Because they aren't used to the old way?

Moody: Yes, and so I'm really hoping that will carry us a long way.

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