Supply Management Team Formation Insights from Kimball
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| Supply Management Team Formation Insights from Kimball by Dave Bush October 10, 2007 | Go Back |
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The Kimball press machine is in full swing these days. Kimball, which was recently highlighted in a Purchasing article, that I covered in Kimball's Procurement Transformation, just had another piece written about them. This time, Supply & Demand Chain Executive ran an article by Editor Andrew K. Reese titled Building a Strategic Supply Management Team that also dived in to how skills development helped to transform the sourcing group into a strategic asset at Kimball International that had some good insights. Since the process they used was critical in getting the results I highlighted in my last post, I figured I might as well summarize the process, just in case you missed both of the articles.
When Bob Price, now the Director of Global Supply Chain Management, started transforming sourcing at the Office Furniture Group of Kimball International two years ago, in addition to setting out specific initiatives to make sourcing more strategic (supplier relationship management, category management planning, commodity councils, strategic sourcing and global target setting), he also put in place a fifth initiative designed to provide vital training and skills development to help ensure the success of the strategic initiatives as he realized that the most important investment a company can make is in its people.
Price started by engaging Next Level Purchasing to do a skills assessment of the sourcing team around core areas - contract management, egotiation, and project management. Then Price plotted out a development plan for each staff member that targeted three levels: day to day tactical skills (e.g. contract management & negotiation), commodity specific knowledge (technical competency), and leadership skills. The goal was to build all necessary competencies within the group as a whole to make sure the team as a whole could rise to the challenges inherent in making sourcing more strategic.
As the training progressed, Price found that the development roadmaps were on target and the training met the evolving needs of the team that found their inherent skills and competencies they need to go through a standard make versus buy for any given product. However, one gap remained - globalization. Which products could be successfully sourced from which regions of the world? Price then initiated a process to learn about different countries and regions based on economic drivers underpinning 15 core commodity groups. The evaluation criteria included labor content, internal logistics, supply reliability, intellectual property, currency issues, and political stability. The results were then channeled into a commodity opportunity matrix which had the effect of assisting the team in global sourcing. The result was an additional $5M of import savings for 2006, for a total of $8.6M in savings from the initiatives.
According to Price, the "trickle-up approach" deployed by the team was the key success factor and the key to execution was not involving the executives but involving the actual people who have to implement the strategy day in and day out. Senior executive support is important, especially for setting strategic directions and goals, but its up to the commodity managers, material managers, product development engineers, and the quality engineers to iron out the execution strategy and get it done.
Great advice.
