UTC supply management alumni branch out
A number of former UTC supply chain professionals are now leading procurement and supply organizations at other companies.
By David Hannon -- Purchasing, 9/7/2006 2:00:00 AM
Perhaps the factor that says the most about United Technologies’ supply management organization is the number of “alumni” now heading up or driving supply chain and procurement functions at other companies.
Back in the 1997 when mastermind Kent Brittan was selecting executives to be part of the new centralized supply management organization (it was called a purchasing council then), he focused not only on the best and brightest, but also on getting the right mixture of backgrounds and personalities together. He picked leaders from UTC business units and assigned them specific roles within the new corporate organization.
One of the first selections Brittan made was Shelley Stewart, who was pulled up from the Hamilton-Sundstrand unit of UTC to be the director of worldwide sourcing. In turn, Stewart took with him some of his stars at the time, including Tim Fiore, Mike Rager, and later Leo Diaz, all UTC veterans.
“That was an exciting time for us,” Stewart tells Purchasing. “We were all very excited to get those jobs and go to the corporate headquarters. ”
Tim Fiore calls Brittan’s supply management project “an organizational masterpiece. He got agreement from the Presidents Council to have senior operational leaders from the divisions to take savings responsibility for categories of spend across the corporation.”
Ken Marcia had been with UTC for more than 30 years and was at Hamilton-Sundstrand when Brittan drafted him to work specifically on supplier performance across all the divisions of UTC globally.
“The supply management initiative we started had a lot to do with change management; changing processes, changing buyers’ skills and what buyers were asked to do. So there was an advantage to having people with executive experience because you could get more credibility in the change management.”
Creating the right environment
But having the right people in the right positions was only the first step. Making sure they were in an environment that was well-suited for sharing knowledge and experience was the next step. UTC as a company had a reputation for supporting continuing education and mentoring programs. Both were heavily emphasized in the new supply management organization in its early days at UTC and are a common thread at all of the organizations now run by former UTCers.
“Some of the mentoring focused on developing good leadership skills,” Rager says. “Our leadership development program brought in recent graduates for two years to work in different global regions and supply chain functions. That was the model we installed at Raytheon as well as Invensys and I’m now working with the management team on it here at Diebold.”
Richard Wize was director of global souring in the Carrier division and says many companies worry that an MBA may lead a good employee out of an organization or company, UTC’s encouragement of further education made it the successful company it is today.
Letting them go
Once the right team and the right environment was in place, Brittan let the players play. The ability to take risks, try new things and learn from mistakes was perhaps the most prominent aspect of the early UTC supply management organization. It was truly considered a “fault-free zone” at the time. “Part of our job in the central supply chain organization was to push the envelope,” says Marcia.
“The organizational structure allowed us to have some runway, which was very important,” Stewart says. “And I’ve got similar support here at Tyco.”
Perhaps the clearest example of this was UTC’s early use of online reverse auction technology from then fledgling provider Freemarkets (now Ariba). Stewart admits that when he first reviewed reverse auction technology he was skeptical, but Brittan encouraged the members of his team to explore the possibilities.
“Kent was not a purchasing person, so he didn’t have the constraints or preconceptions some of us had,” Stewart says.
Also, the decision to bring in AT Kearney consultants for opportunity assessments was considered out of the norm. But that work set the first $1 billion of savings as a goal, says Fiore. “The sourcing process that was developed in the early stages allowed us to communicate with internal and external clients consistently.”
The lasting impact
UTC alumni say their experience at UTC during the early days of its supply management organization has shaped their careers.
Rager: “I’ve had an opportunity to lead organizations in three different industries since I left UTC and one of the fundamental elements that I took away is having that 'fault-free zone’ where we allow people to take risks and we don’t assess blame, but instead look at root-cause analysis. ”
Marcia: “The supply organization [Brittan] created impacted the supply management discipline overall. It was a pretty remarkable, once-in-a-career chance.”
Fiore: “I have used many of these concepts in my subsequent and current roles.”
Stewart: “Purchasing was always emphasized even at the business units of UTC before the creation of the central organization. That was one of my best experiences and perfect experience for my work here at Tyco. Some day I hope a bunch of my people will be running other global organizations.”
Wize: “I learned data-driven gap analysis at UTC. Finance always blessed the savings which helps lend credibility to them.”
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