Motorola
Jason Seigel -- Purchasing, 9/2/2004 2:00:00 AM
Title: Director of corporate e-procurement
Company: Motorola, Inc., a $27.1 billion global leader in wireless, broadband and automotive communications technologies and embedded electronic products, based in Schaumberg, Ill.
Reports to: Rick Canada, vice president of strategy and business operations for global procurement.
Education: B.S., industrial engineering, Purdue University; M.B.A., finance, University of Chicago. Harlan also is a C.P.M.
Professional background: After three years working as facilities project manager for General Dynamics, Harlan went back to school for his M.B.A. in finance and consulted on systems implementation, business strategy and process engineering, "rode that whole e-business wave" and ultimately joined Motorola.
Responsibilities: Harlan is responsible for the strategy and implementation of e-procurement systems at Motorola.
His mission: "What I think about long-term is how e-procurement systems can enable our global procurement function to be more efficient and more effective. It's taking a system or functionality within a system and then putting that in the hands of the people that are going to use it." Corporate e-procurement directors like Harlan "roll out" products that allow employees to "analyze spend, manage commodities, increase speed of activity sourcing—or just make decisions better."
On procurement: "It's almost more important to say what e-procurement is not than what it is. It is not the simplistic answer: it's not reverse e-auctions. It's much, much broader than that. It's many different capabilities. "E-procurement can be "a system or an online or a web-based application you can use to help people in your company gain a competitive advantage. It can be electronic quoting; category or commodity management; spend analysis; e-auctions; optimization of spend; rigorous, complex algorithms to optimize spend; an online submittal of demand or communication with suppliers. Take all these factors together and you get competitive advantage."
Success with e-procurement: MINT (Motorola Internet negotiation tool), an online quoting and optimization program we adopted across all our sectors. With "billions in spend in electronic quoting and e-auctions, MINT was very, very successful: It helped to bring down our cost base and make us more competitive."
Strategic use of reverse e-auctions: One great misconception is that the lowest bidder wins the bid at the end of a reverse e-auction: "Whoever's the lowest bidder doesn't necessarily win. If you go out and select a builder, you're going to look at their price, how reputable they are, how well they did the design drawings, references and so on. It's the same decision at Motorola when you're looking at suppliers that supply parts: past relationships, quality, how well they've been working with us" all factor into bidder selection.
"Where people feel a reluctance is where somebody has not followed some major steps in the (reverse e-auction) process: they haven't informed suppliers of necessary criteria or given adequate specs to bid on, and suppliers are compelled to bid even though they've been misinformed. So you've got to make sure when you run through the process that you hit all the necessary steps before, during and after."
Working with suppliers: E-procurement doesn't mean there's no relationship between buyer and supplier. Suppliers are "a part of our extended team, that's for sure. They're critical: we have many, many direct suppliers who are the integral lifeblood of our business. We bring many suppliers in early to design, simplify and implement new technologies." Motorola is much more likely to elect one of the suppliers that has been involved in product R&D than a less expensive competing supplier when it comes time for the reverse e-auction. Harlan's team even designed a system called ESI (early supplier involvement) that brings initial designs to suppliers earlier, allowing Motorola to enjoy decreased "cost and cycle time because they're working closely with us and are attune to our needs."
Now Playing: 