In Depth: Global Supply Chain  Making Global Supply Chains Work

For many supply and demand chain practitioners, globalization isn't a newfound political issue; it's a reality they've been contending with for years. As companies have sought to lower their costs and expand their markets by taking a more international...


Uzoukwu and his team are also working to take a more global approach to Avaya's indirect spend. In the past, Uzoukwu says, the company's indirect spending was very disaggregated across its various divisions, including North America, EMEA (Europe, Middle East and Africa), Latin America and Asia-Pacific. An Ariba e-procurement platform deployed in North America did provide a common purchasing platform for that region, but outside the United States and Canada the company did not have a consolidated view of its spend. To remedy that, over the past 12 to 15 months, Avaya has extended its Ariba deployment globally to its units across the world. "We have brought the world into our warm embrace, in a manner of speaking," Uzoukwu says. "That is enabling us now to get better insight and visibility into, and manage more effectively, the spend on the indirect side."

In addition, Avaya has engaged with King of Prussia, Pa.-based ICG Commerce for procurement business process outsourcing (BPO) services. ICG Commerce is providing Avaya with supplier enablement, transaction processing and content management services to address the full range of the company's indirect purchasing commodities. Furthermore, ICG Commerce is providing strategic sourcing, category management and contract management for a majority of Avaya's indirect buying categories. The advantage of working with a provider like ICG Commerce, Uzoukwu says, is that it alleviates Avaya of the need to build internal capacity and competency to procure a variety of commodity areas primarily on the indirect side and allows Avaya's current procurement staff to focus on more strategic activities.

Here, again, the company's motivation goes beyond just potential cost benefits. Yes, by consolidating its spend globally through Ariba or ICG Commerce Avaya can better leverage its size and work with suppliers to drive down its indirect expenses. But, as Uzoukwu explains, the company's procurement organization also believes that it can improve satisfaction among both internal users and, more importantly, external customers by bringing consistency to its global spend. "The customer experience for a client in New York should be the same whether we're installing [equipment] in their offices in Asia, in Shanghai or Kuala Lumpur, or in Kansas City," Uzoukwu says.

Building Global Relationships

Change management has been a significant component of the process of moving toward more global procurement at Avaya. The U.S.-based procurement team and procurement staff in other countries have had to adjust to thinking in more global terms than they had been accustomed to in the past, but the change process has not simply been a matter of corporate strategy dictating uniform policies across the enterprise, according to Uzoukwu. "You have folks [at Avaya offices around the world] that are accustomed to making buying decisions without reference to a corporate strategy, and so there is a little bit of tension as you start to bring them into the fold and to think in terms of a corporate strategy," he says. "But at the same time, the folks devising the corporate strategies must be sufficiently knowledgeable about the issues and challenges that exist [at those offices]."

Culture has played a role in the change management process, too, as Avaya staff have had to learn to deal with different cultures and different languages. One step that the company has taken to address the culture issue is to invest significantly in creating a more international organizational population. "We have gone out of our way to recruit people from different nationalities and make them part of the organization, so that at least in the hallways and the cafeterias and in the phone conversations, people start to get a little bit more exposed to different nationalities and cultures than may have been the case historically," Uzoukwu says. In addition, the company has invested in having its employees traveling back and forth to visit the different country units around the globe as a way of building bonds between staff on different continents. "Because you can do the systems very easily," Uzoukwu continues. "You can put in an Ariba and deploy it very easily, but at the end of the day it's human relationships that lubricate the systems. So we have gone out of our way to make sure that there are rich enough, deep enough human relationships permeating the entire organization that some of the things that we're trying to do, and the systems that we're trying to install, are well lubricated."

Streamlining Global Financial Transactions at Wolverine

Three years ago, footwear company Wolverine World Wide decided that it was time for the letter of credit (LC) to go. But how could a company that was sourcing 28 million pairs of shoes around the world kiss the LC goodbye?

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