Chemicals are not the most obvious component of manufacturing at Zeeland, Mich.-based office furniture maker Herman Miller. However, according to purchasing director Drew Schramm, substantial money goes to polymers and coatings used in the manufacture of its furniture. And suppliers need to be aware of just how closely Herman Miller works with them to ensure that quality standards are met.
Schramm initiated a series of steps to govern the procurement process. Having worked with consulting firm McKinsey & Co. in the past, he applied McKinsey's nine-step strategic sourcing plan, eliminated about 60 percent of the supplier base and implemented a Supplier Qualification Program (SQP).
As part of that SQP process, purchasing meets with its most important suppliers every six months and awards them points based on their performance, which would in turn rank them by level, from one to four. Level one means they earn the privilege of working with the Herman Miller new product development teams. Level two means they are considered good enough to quote on any job. "Level three means that you weren't very good but for whatever reason we still needed you," says Schramm. Level four went down from there.
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