Smart Sourcing Summit: Keep an eye on supplier performance
Stewart tells buying groups to also think outside the box
Tom Stundza -- Purchasing, 10/16/2009 12:03:12 PM
Purchasing and supply chain organizations should focus on driving corporate innovation and efficiency improvements as the economy crawls out of recession, says Shelley Stewart Jr., senior vice president of operational excellence and chief procurement officer at Tyco International. And that includes monitoring supply performance and developing new partnerships with the best suppliers.
In a keynote address to the Smart Sourcing Summit this week in Chicago sponsored by Purchasing magazine, the winner of this year's Purchasing Medal of Professional Excellence suggests that buyers use the supply chain as a growth engine for cost reductions and supplier efficiencies, encourage process improvements throughout the procurement organization, and nurture long-term relationships with suppliers.
"Think outside the box!" when supervising supply, he tells the conference, but also insists buyers still need to pay close attention to such basics as monitoring supplier delivery and quality variability, scrutinizing the financial health of any and all suppliers and developing sourcing back-up strategies should suppliers disappear or become unable to perform.
He points out that economists may believe the recession is over but purchasing groups must keep up their guard "since this is going to be a long, drawn out recovery." He has told his own buying groups they must continue to monitor suppliers, develop better supplier relationships, manage risk and be proactive, not reactive, he says. "And they must honor corporate values, reinforce business ethics and play fair with their suppliers."
In an answer to questions from the floor, Stewart reiterated that 2010 should be a year for all purchasing groups to keep lines of communication open with suppliers, build partnerships and possibly renegotiate contracts.
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