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DAY TWO: Leading Supply Management Trends

Posted 05-04-2009 at 10:39 PM by 94th Annual
Would you describe your supply management organization as a leader or a laggard? In his presentation “Leading Edge Trends in Supply Management,” Robert A. Rudzki, president of Greybeard Advisors LLC, and former senior vice president and CPO for Bayer Corporation and Bethlehem Steel Corp., put forth several trends that supply management professionals should be using in their organizations.

Highlighted in his presentation were the following trends:
• Speaking, and writing, in the language of the executive suite — To gain the attention and support of the C-suite in the organization, supply management professionals should use terminology and concepts, such as revenue, cost, capital expenditure and working capital, to explain how they can either enhance or improve cash flow.

• Active participant in revenue growth initiatives — Supply management can provide competitive advantage with early involvement and alignment of such initiatives (for example, removing excess manufacturing costs or reducing cycle times).

• Market knowledge expertise valued not just for sourcing projects and supplier management, but also for corporate planning insights (“eyes and ears” for opportunity analysis and threat analysis) — Through experience of tracking economic indicators and supply chain risk, supply management professionals offer valuable information around new innovations and obstacles to avoid.

• Leadership role in risk management — With both regulatory and operational risks at the top of the radar screen, supply management should take the lead in mitigating these risks for the organization, because these issues are entrenched in their relationships with suppliers. Conduct a risk assessment workshop or perform value stream mapping to identify areas of concern for the organization.

• Being smart about low-cost country sourcing — Does China, India or an emerging country offer the best value proposition to your company? Consider rising labor rates, currency fluctuations and geopolitics of a region prior to investing in a supplier because what was low-cost can quickly become medium- to high-cost sources of supply.

• Actively managing consultants — Just like any project, bringing in a consultant requires project management to ensure that objectives meet the needs of the organization and that the consulting firm follows through on its obligations.

• Providing high-potentials into a corporate-wide career rotation program — As supply management professionals gain experience, provide them with growth opportunities outside the department to broaden their skill sets. Rather than lose a high-potential employee to a competitor, inquire about their career aspirations and provide the opportunities for he or she to achieve those goals for the betterment of the employee and the company.

Among other trends that Rudzki identified, include:
• Leadership role in creating a “Speaking with One Voice” discipline throughout the company.
• Leadership role in Negotiations Management best practices – not just for sourcing activities.
• Sponsoring, and demonstrating the value of, supplier partnerships and supplier recognition.
• All spend categories in scope, through developing internal credibility for the processes and personnel in supply management.
• Viewing “compliance” as an indicator of how well you use strategic sourcing cross-functional teams, and stakeholder involvement (rather than an after-the-fact enforcement metric).
• Providing suitable opportunities in supply management for high-potential employees from other areas.
• Playing a central role in asset recovery programs.
• Playing an early and strategic role in capital project procurement.
• Playing a central role in working capital management.
• Recognizing “transformation” is a never-ending process of renewal.

More in-depth discussion about these and other trends can be found in the books Straight to the Bottom Line and Beat the Odds, and at www.greybeardadvisors.com.
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