"One on One: An Interview with David L. Sorensen" By Andrew Reese, Summer 2000, Vol. 36, No. 3, p. 2
Journal of Supply Chain Management Copyright © August 2000, by the Institute for Supply Management, Inc.
Andrew Reese, a freelance writer based in Mesa, Arizona.
David L. Sorensen, vice president of purchasingfor General Mills Incorporated, joined the company right out of college in 1972. During his 28 years at General Mills, he advanced from his initial position as a grain buyer/merchandiser to become director of purchasing, packaging, and equipment, before being appointed to his current post in 1996. Along the way, he managed the company's Portland grain operations and its feed ingredient operations, was director of commodity analysis,and spent a year as director of new business development. Mr. Sorensen holds a bachelor's degree in business from Bemidji State University in Bemidji, Minnesota.
The Journal of Supply Chain Management:General Mills is one of the largest food companies in the United States, with lines of cereals, snacks,yogurts, and other food products. Worldwide sales for the company's last fiscal year totaled $7.1 billion, with net earnings of $535 million. What is your role within the organization?
David L. Sorensen: I am responsible for all procurement at Halliburton. This includes both direct and indirect spend. My role is one of global process owner for all Halliburton procurement and supply chain strategy, policies, and processes. Each Halliburton business unit has a dedicated procurement and materials director responsible for day-to-day execution. In this role, I report directly to the company president.
The Journal: What other challenges is your orga- nization facing?
Sorensen: One is to continue generating more strategic value in our relationships with suppliers by integrating both vertically and horizontally in our businesses. That is, by working more closely with our supply chain -from manufacturing and delivery to our customers, back up through the supply chains of our suppliers -to get as much efficiency as possible out of that holistic supply chain. That requires a much more strategic view than a traditional transactional view. Purchasing is having a much larger impact than we have had historically. The whole idea of continually trying to be innovative and finding new and better ways to do things is a challenge, not only for purchasing but also as we look at the supply chain and other parts of the company. Every day, our challenges become more complex and larger. As a result, it's more critical that we work synergistically together with our supply chain partners.
The Journal: How is purchasing and supply helping to resolve these challenges?
Sorensen: Many of the best ideas come from out- side sources. We have a huge obligation to identify what those are and to bring them into our organiza- tion. Because we have a better external look at the world than many different parts of our company, we have an obligation to be a center of innovation, or at least to bring in innovations for the company to look at.
The Journal: Where are you taking purchasing and supply management in your organization?
Sorensen: The whole idea is to work more strategi- cally. Obviously, e-commerce will have a large impact on our business. We are in a time of dynamic change, and when you have a lot of change, there are oppor- tunities for people, so the name of the game is to identify which of those changes bring value propo- sitions and to capture them.
The Journal: WWhat have been your successes and what areas are you working on?
Sorensen: We have been diligent about taking costs out of our interactive points with our suppliers. We have a fully integrated ERP system, so we have been able to significantly red~ce the amount of our transactional activities, as well as the associated costs. We have a low-cost supply chain relative to competi- tors, which has been a direct benefit. Not that some of the e-commerce things that people are talking about and the Jnternet won't allow us to take that even further. But because we are centralized and have a fully integrated ERP system, we have enjoyed the transactional advantages they can bring. As we look ahead in supply base management as a whole, we will continue to take on greater roles in the whole supply chain operation. The importance of being a low-cost supplier and being able to benchmark your success is going to be critical because change and consolidation will only continue [to increase] com- petitive pressure. The other thing that I think we have the opportunity to be better at, or will continue to try to focus on, is bringing in product ideas and supply chain innovations from outside sources.
The Journal: What has been the biggest lesson you have learned in purchasing and supply chain management?
Sorensen: Every day things change, things become more complex. If you really want to have an impact on what those changes can do for you, you have to understand the opportunities in those changes and be flexible and adaptable to capture the benefits.
The Journal: What kinds of research would you like to see done on behalf of purchasing and supply management?
Sorensen: Obviously, right now the activity around e-commerce is huge. But to the extent that our jour- nals can act as conduits for information about what different organizations are working on, I think there is a real opportunity to help cross-fertilize our pro- fession. And more strategic research: What kinds of things will purchasing be doing in the future? What will be the scope of our accountabilities? What are the big opportunities that we might be thinking about in terms of how our roles, organizations, and opportunities might be changing in the future?
The Journal: What is the future for purchasing and supply management in general and at your organization in particular?
Sorensen: We will continue to be in the role of trying to be innovative, and to think of new and different ways of doing things that will bring greater value. I also think that because we have upgraded the caliber of talent in the purchasing profession, other areas of the supply chain and the organiza- tion as a whole will look to purchasing as a place to identify people to add value in other parts of the organization, whether it's distribution, manufacturing, or even sales and marketing. We will continue to have to work to be a low-cost provider, in particular with all the visibility that e-commerce will bring to how people do things. In most organizations, direct and indirect materials account for a significant part of the cost of goods, so the need to be sure that you are a low-cost provider is going to be critical. I also think that we will have to increasingly network and benchmark externally, and bring best practices into our organization. You see more of that happening today with some of the strategic alliances that are being put together. I think you will see a continual rollout of various horizontal and vertical alliances, all geared to take advantage of new technologies that are coming into the marketplace. And also to make sure that the companies have the right critical mass to be low-cost providers, and to continue to benchmark best practices and innovation. It's a great profession to be in right now because it's very dynamic. It's changing a lot. And it's growing in visibility and its ability to impact everyone's business.