Sourcing & Procurement News — November, 2008

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Church's Serves Up Big Savings with E-Procurement
Among other benefits, an on-demand purchasing solution frees up Church's Chicken store managers from the time-consuming and wasteful expense of invoice management.
By definition, a fast-food restaurant experience means a quick one-two-three: you order, it's fulfilled, and you're on your way. So, something is not quite right if you have to stand around because there aren't enough people to serve you. Usually, when lines start building, the store manager pitches in or at least is on hand to bring a little efficiency to things. However, that may not happen if he or she is in the back doing paperwork.
Recognizing that burying restaurant managers with admin work defeated their core responsibility to ensure high-quality customer service, Church's Chicken implemented an on-demand procurement system with a number of benefits beyond just automating purchasing. One of those is...
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PPG Analyzes, Then Brings Serious Focus to Managing Procurement
A conversation with Jim Polak, director of general purchasing at PPG Industries, Pittsburgh.
PPG Industries is a leading diversified manufacturer that supplies paints, coatings, chemicals, optical products, specialty materials, glass and fiberglass around the world. PPG operates in more than 60 countries and has more than 150 manufacturing facilities and equity affiliates. Last year the company generated sales of $11.2bn and spent more than $7bn on direct and indirect materials to support its operations. To help the company control and leverage its indirect spend, Jim Polak developed and led a corporate spend analysis project. Using tools from Ariba, the resulting sourcing strategy is having a significant impact on PPG's bottom line.
Q: How did you come to head up this spend management project at PPG?...
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Supplier Collaboration Initiatives Can Save Companies Millions
The relationship between organizations and their suppliers is continuously evolving. Today organizations expect their suppliers to continually reduce component costs, improve replenishment lead time and become more responsive to their business changes. Not surprisingly such demands can create a strained relationship, becoming confrontational rather than cooperative. Those relationships are further exacerbated by limited visibility of end-customer requirements, increased variability and delays as demand information works its way through the supply network.
These factors typically cause issues such as:
• Whiplash effect, where any changes in demand are amplified as it makes its way through the supply chain, causing increased inventory
• Supply variability, where suppliers are not able to respond to customer demand within the time frames requested, causing missed shipment dates and increased expediting costs
• Supplier proliferation, where customers begin to work with multiple suppliers in order to secure component supply in a timely manner, causing reduced leverage with suppliers and increased procurement costs
A streamlined supplier collaboration process can help address these issues on both sides of the equation, leading to more productive and profitable relationships between organizations and their suppliers.
Improved Supplier Collaboration...
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Wal-Mart Has Chinese Suppliers Under Its (Green) Thumb
If Wal-Mart is to be believed, the world's biggest retailer's latest slogan, "Saving people money, so they can live better," will soon need to be replaced with a greener, more socially conscious one. At a recent gathering of top company executives, nongovernmental organizations, and more than 1,000 suppliers in Beijing, the retailer announced...
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Air Products Spruces Up Its Sourcing Program
Ask Patricia (Pam) Mattimore how she gauges the success of her company's procurement and sourcing initiatives and she may quickly move from a discussion on traditional metrics to a more heartfelt one. "I know we are adding significant value when we are being asked to add more strategic supply management personnel," says Mattimore, the vice president of energy and materials for Allentown, Pa.-based Air Products. "We've made great strides in our acceptance across the company. Our organization is being pulled, not pushed."
With annual revenues of $10bn, Air Products employs 22,000 people in more than 40 countries supplying industrial, medical and specialty gases to customers around the world. Its electronics and performance materials business provides specialty and bulk gases to the semiconductor industry, as well as the coatings, inks, adhesives, mining, oil filed, and polyurethane industries.
Mattimore, a 26-year veteran with Air Products, has been in her present role for three years. The group she heads up, the Energy and Materials organization, is 400 strong and is responsible for sourcing all raw materials, energy, corporate services, operating and maintenance parts for the company. It also sources the...
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W.R. Grace Revamps Its Procurement System, Processes
It's a problem familiar to many a procurement organization, large or small: disorganized procure-to-pay processes. But when it comes to buying for a Fortune 1,000 company, the major differentiator always comes down to one thing: scale.
When Scott Campbell, vice president of supply chain at W.R. Grace, says there were inefficiencies in the company's procurement strategy, he is talking about serious money potentially tied up in those problems. The Columbia, Md.-based chemicals producer has about $1.7bn in spend that it splits into direct, indirect and logistics categories and distributes...
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Past Sourcing and Procurement News issues:
September, 2008
July, 2008
April, 2008
February, 2008

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