In Depth: Global Supply Chain  Making Global Supply Chains Work

Once the new technologies and processes are fully in place across the company's global supply chain, the data generated by the various systems will form the foundation for driving greater savings through a methodical strategic sourcing program. "We want to develop global strategies around significant areas of spend within Newmont," Throneberry explains. "We want to look at spend categories consistently and uniformly across the world. Not to say that execution will always be global because of supplier capability or lack thereof, execution could wind up being completely local but what is important is that the strategy be global, with consistent contracting, logistics, INCO terms of payment and so on. But it all begins with data and the ability to analyze our spend patterns." With the spend data flowing in from the new systems in place, Throneberry and his colleagues will methodically develop category-based strategies for each area of spend in goods and services around the globe.

In addition, they will provide a channel for sharing best practices throughout the organization. "One site might have a fantastic contract for explosives, in terms of conditions, price escalation, de-escalation, etc.," Throneberry says. "We want to identify all those best-in-class practices for each category and apply them across the world."

Ultimately, Newmont views the processes and technologies being put in place as a way of creating tighter integration both among the company's units internally and between the company and its suppliers. Throneberry uses the metaphor of an enterprise resource planning (ERP) system tying an enterprise's functions together by allowing everyone in an organization to talk with one another. The supply chain systems that Newmont is putting in place will have the same effect, only they will encompass the company's suppliers around the globe, too. "So now Newmont's suppliers become part of the Newmont system, and we can digitize and integrate pretty much all means of trading commercial information and data," Throneberry says. "That's our end game, because it benefits everybody."

Procurement with a Global Perspective at Avaya

Onye Uzoukwu would seem like a natural choice to lead a global supply chain initiative at any major enterprise, and not so much because he is a native of Nigeria who was born in Scotland, but because Uzoukwu has more than 15 years of leadership experience building global commodity strategies for such technology sector stalwarts as Hewlett Packard, Solectron and his current employer, communications networks company Avaya.

In his position as vice president in Avaya's global procurement organization, Uzoukwu leads worldwide procurement at the company, with management responsibility for $2.5 billion in indirect and direct purchasing. His purview also includes Avaya's efforts to globalize its procurement, partly with an eye toward reducing costs, but also, importantly, as a way of positioning the company for growth in markets outside North America.

Based in Basking Ridge, N.J., Avaya has ridden the ups and downs of the telecommunications industry of recent years but remains a $4 billion company. In years past, Avaya did almost all its own manufacturing in the United States, but as the company realigned itself to weather the latest downturn in its industry, it outsourced most of that manufacturing to Celestica, the electronics manufacturing services (EMS) provider headquartered in Toronto. While most of that manufacturing remained domestic for a time, in the past 18 months that production has started to transition into Mexico and Asia.

Cost is clearly a factor in this transition, and the move to medium-cost geographies like Latin America and low-cost geographies like Asia is one strategy that Avaya, along with many other North American and European manufacturers, is pursuing in order to keep its products competitive with customers who themselves are continuously looking to reduce their costs. However, Uzoukwu says that the company's procurement strategy also aligns with Avaya's broader business objectives of building its customer base outside North America and Europe. "Part of the company's vision is to grow market share significantly in the international markets," Uzoukwu explains. "Asia is one of the market areas that has been less developed than, say, Europe. Consequently, we saw value in moving production and taking advantage of both the low-cost manufacturing opportunities present in Asia as well as the opportunity to take our manufacturing closer to the markets that we're trying to penetrate." By doing so, he says, Avaya can have a presence in the market as a company not only trying to sell product into those countries but also contributing to the region's economy.

Ensuring Consistency in Customer Service