Table of Contents
Making Internal Preparations for SCM
Supply chain management (SCM) has come to hold an important place within organizations’ value-added purchasing and supply management strategies. It’s been credited with saving millions of dollars, improving profits, and changing the way that organizations view their roles within supply chains. In many instances, full implementation has not been realized, but the terminology and the philosophies for more integrated relationships, reducing total costs, improving processes, more comprehensive joint activities, and optimizing value have made their way to some extent into almost every organization. By its nature, supply chain management, or supply chain value analysis, involves participation by two or more members of a supply chain. For that reason, setting a foundation with supply partners and mutually developing and effectively communicating expectations about changes, improvements, and the relationship is vital. Even successful purchasing organizations must sell these concepts to their supply partners.
Getting Suppliers Aboard with Supply Chain Management
Some of your suppliers may already implicitly or explicitly understand the benefits of SCM. If they have many; trading partners, they have heard about SCM or may already be participating in similar activities with another customer. Others will not know about SCM, not understand it, or not have had any related success in the past. In any case, the purchasing organization will need to explain to the suppliers its own SCM objectives. In addition, the supplier will need to know:
Setting Up the Relationship to Succeed
The real measure of success of your supply chain is the economic success of all parties involved. Your suppliers’ expectations of future success through participation in your SCM activities will serve to determine their commitment to economic and emotional investment in the new relationship.
Steven J. Pickowitz
Steve Pickowitz is the manager of Wafer Foundry Procurement at Texas Instruments, Inc. in Dallas. He holds a bachelor’s of science degree in electrical engineering from Rutgers University. His nearly 21 years of experience at Texas Instruments, Inc., both domestic and international assignments, been in engineering, co-production management, international procurement, and supply management.
Jeffery P. Reekers
Jeff Reekers is the director of purchasing at Briggs-Weaver in Coppell, Texas. He holds a bachelor’s degree in industrial management from the University of Cincinnati and a master’s of science degree from the University of Texas at Dallas. With nearly 20 years’ experience in manufacturing and materials management, he has held positions at Texas Instruments, Inc. and Cell Star Ltd.
- Humphries, B., "Why Go There?" Purchasing Today®, November 1997
- Isikoff, B., "The Best Suppliers for the Chain," Purchasing Today®, March 1998
- Kesinger, S.L., "Understanding Supply Chain Management," NAPM InfoEdge, March 1998
- Scheuing, E.E., Glossary of Key Purchasing Terms, 3rd ed., NAPM, 2000
- Cavinato, Ph.D., C.P.M., Joseph L. and Kauffman, Ph.D., C.P.M., Ralph G. The Purchasing Handbook: A Guide for the Purchasing and Supply Professional, 6th ed., McGraw-Hill, 2000
FOR FURTHER READING
- Austin, T.A. and Lee, H.L., "Unlocking the Supply Chain’s Hidden Value: A Lesson from the PC Industry," Supply Chain Management Review, Summer 1998
- Moore, J.F., The Death of Competition: Leadership and Strategy in the Age of Business Ecosystems, Harper Business, 1997
- Ness, J.A. and Cucuzza, T.G., "Tapping the Full Potential of ABC," Harvard Business Review, July-August 1995
- O’Guin, M.C., The Complete Guide to Activity Based Costing, Prentice Hall, 1991
- Preiss, K., Goldman, S.L., and Nagel, R.N., Cooperate to Compete: Building Agile Business Relationships, John Wiley & Sons, 1997
- Roztocki, N., "Activity-Based Costing (ABC) Economic Value Added Internet Website Guide," http://www.pitt.edu/~roztocki/abc/abc.htm
- Womack, J.P. and Jones, D.T., Lean Thinking: Banish Waste and Create Wealth in Your Corporation, Simon & Schuster, 1996
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