Friday, January 20, 2006

Supply Base Rationalization

I hope that you have enjoyed the article "Supply Base Rationalization: Not 1, But 5 Options."

Though Next Level Purchasing is a global organization, in terms of number of employees, it is the smallest organization I've had to purchase for. I've previously worked for a small manufacturer (200 employees), a Fortune 500 airline (44,000 employees), and an internationally renowned university (10,000 employees).

Though we are growing extremely rapidly and we could have a larger staff, I believe in running a lean organization. I will not increase our employment until we have exhausted all alternatives, such as automation, outsourcing, etc.

So, this lean strategy has made me pay close attention to the size of the supply base. In order to minimize administrivia, I want to use as few suppliers as possible for our tactical needs.

But recent supplier performance led me to step back, re-examine our supply base in two categories, and make some adjustments.

Historically, we have done very little printing. So, we have always relied on our office supply vendor to handle our printing. They actually broker the printing, which means they source it, find the best deal, and give us a single point of contact. It used to be too small of a category to warrant us focusing on.

Recently, they haven't been doing so well with our growing print requirements.

Print jobs have been late. And because they broker the printing, they have little visibility into the status of our orders and any expediting is quite filtered and untimely due to the disconnect.

The purpose of consolidating spend for us in this case was to reduce administrative costs. This arrangement was beginning to increase them.

So, seeing our printing requirements grow, I decided to exercise supply base rationalization option #2 - Increase It. We sourced for a new printing supplier (sourcing is quite a competency of ours, you know) and split printing off from our office supply vendor.

Now, instead of getting good office products supplier performance and poor printing supplier performance, we get good performance in both areas. And the administration across those two categories is reduced so that we can focus on our mission: helping purchasing professionals who are struggling to have rewarding careers.

Got a story of your own? Click on the comments link and share it!

Respectfully,
Charles Dominick, C.P.M., SPSM
President
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM Certification Online At
http://www.NextLevelPurchasing.com

Monday, January 09, 2006

Supply Chain Developments

I hope that you have enjoyed reading the article "Supply Chain Developments To Watch In 2006."

It's always fun to look ahead and try to predict the future of the purchasing profession. As 2005 began, there really didn't seem to be much exciting on the horizon. Sure, there are always developments and improvements in the field. But nothing stood out that screamed "2005 will be a big year for..."

Probably the biggest supply chain event of 2005 was predicted by no one - Hurricane Katrina, the resultant declarations of Force Majeure by tons of suppliers, and the subsequent spikes in fuel and, later, raw materials pricing.

This year, I feel different. I feel the winds of change are upon us. And I'm looking forward to reviewing the three questions from the aforementioned article as we begin 2007.

Happy New Year, everyone!

Respectfully,
Charles Dominick, C.P.M., SPSM
President
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM Certification Online At
http://www.NextLevelPurchasing.com

ShareThis