Roberta J. Duffy
"Waste Management was a company in serious trouble a few years ago," admitted David Steiner, CEO of the company that has been successfully turned around due, in large part, to the efforts of the procurement department. Upon completion of a business merger, the Waste Management board realized it needed to hire new leadership to get the company back on track and kicked out the entire senior management team. They identified several key corporate initiatives, which included a new procurement department.
That's when Brad Holcomb, CPO and Steiner came on board. Upon a situation analysis they realized they had $5 billion in spend, no processes, no direction, no staff and more than 500,000 different suppliers. "The procurement practices were fragmented and unleveraged," said Steiner. "We didn't even know how many trucks or employees we had."
With a new vision focused on a world class supply base that produces a sustainable competitive advantage, this duo defined their guiding principles of procurement strategy: use competition to drive results, cross-functional teams, disciplined sourcing process, leverage spend and total customer satisfaction . In the first year, procurement reduced buy cost by $75 million and now 50 percent of the company's spend is through 105 supplier partners.
"Procurement is now a team with a vision, guiding principles and management support, said Steiner. "It is simple to turn around a troubled company, all you need to do is change the culture and execute."
By Roberta J. Duffy, editor of Inside Supply Management®