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Organizations of The Future: SMT's - RDC's - TURF's

Author(s):

Norman K. Owen, C.P.M.
Norman K. Owen, C.P.M., Senior Director - Procurement Services BellSouth Telecommunications, Inc., Atlanta, GA 30375, (404) 420 - 6088.
W. J. Jack Wagner, C.P.M.
W. J. Jack Wagner, C.P.M., Manager -Procurement Services, BellSouth Telecommunications, Inc., Atlanta, GA 30375, (404) 420 - 6088.

80th Annual International Conference Proceedings - 1995 - Anaheim, California

Abstract: As corporations recognize the strategic role of purchasing to help meet increased competitive forces creative organizational structures are needed to balance this expanded role with the pressure to down size. Alliances and other cooperative arrangements with suppliers are being promoted throughout the purchasing profession. Equally important are the internal alliances between purchasing and its clients. Specifically addressed will be examples of new internal structures for; the purchasing function, internal client groups, and design teams with suppliers. These changes are being implemented in a telecommunications service industry (non - manufacturing) environment.

SELF - MANAGED TEAMS - SMTS:
Several world class manufacturing firms have used SMT production teams to improve productivity. These teams have developed a significant amount of autonomy and conduct many of the administrative "management tasks". These include cross training members, assigning of work, and selecting, evaluating, and removing individual team members. Self Managed Teams in a management function like purchasing, that operate with the same autonomy, are beginning to emerge as a viable alternative to the traditional hierarchical - structured organizations. Three functional SMT have been established in the Procurement organization (Quality, Strategic analysis, and Computer Products). The experiences and benefits of these teams are being tracked as a pilot for other organizations in BellSouth.

SUPPLIER ALIGNMENT - SERVICES INITIATIVE TURFS
Historically the supplier selection for services throughout the region has been conducted on a competitive basis for each project or transaction. In addition to this front end work, a significant amount of time and resources were used to conduct quality reviews and audits for compliance to various standards. This process has increased costs for both the supplier community and BellSouth. In addition, there was increased risk for the supplier with each transaction and any opportunity to maintain a stable work force was eliminated. These factors increased cycle times and fragmented the responsibility for quality work over the long term.

An initiative has been implemented that establishes geographical areas or "TURFS". Criteria was used to establish the appropriate size for these geographical areas and to select the optimum number of suppliers. The selected suppliers will be considered for multiple year contracts for one or more TURFS. Negotiations with the suppliers will establish price, quality and performance criteria. Suppliers will actively participate in the planning function and have accountability for quality. The benefits and structure of this internal organization and alliance between procurement and its clients will be described.

SUPPLIER ALIGNMENT - ORDERING/PRICING INITIATIVE
The detailed engineering work for specific transaction of work orders was traditionally part of the responsibility of local planners. They spent a significant amount of time on analysis, monitoring, and budget considerations. A "bill of materials" from this effort was used to order the equipment for each transaction. A Regional Design Center (RDC) was established with representatives from the client group, procurement and key suppliers. This RDC will be responsible for the development of standard models for ordering and pricing for both hardware and software and provide technical support and recommendations for the field locations. The relationship with the suppliers will be strengthened through joint work on standardization. The development of the RDC its benefits, organizational structure, and implementation program will be described.

BIBLIOGRAPHY
Asmus, David and Griffin, John. "Harnessing the Power of Your Suppliers." The McKinsey Quarterly, Reprint Series - Purchasing 1993.

Coleman, Stephanie. "Creating Value, Not Buying It!" 79th International Purchasing Conference Proceedings. 1994.

Quinn, Jarnes Brian. The Intelligent Enterprise. New York: The Free Press, 1992.

Kolchin, Michael G., D. B. A., C.P.M. and Trent, Robert J., Ph.D. "Developing Effective Cross-Functional Teams" 79th International Purchasing Conference Proceedings, 1994.


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