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Change management in real time

By Paul Teague -- Purchasing, 5/4/2006

Brad Holcomb recently became senior vice president of global materials and supply at Toronto-based Royal Group Technologies, North America's largest producer of advanced polymer building materials. He is in the midst of a complete overhaul of the materials manufacturing and procurement functions at the company, and spoke with Purchasing about his strategy.

Q: What were the obstacles you faced when first making changes in procurement?

A: The "It can't be done, we already tried it" syndrome. So, we took a fresh look at everything, including the price we pay for resin. We buy 200 million pounds per year and make another 450 million at our own facilities. Others before us said we were getting the lowest prices possible. But, my new team went to work, rolled out a professional process, and attracted a lot of attention among competitive suppliers. We took our resin pricing to a whole new level, and we'll do that across the board. We have seen that Royal is a highly respected customer, and that suppliers want to compete for our business.

Q: How else are you overcoming resistance to change?

A:  You have to build relationships first. Among other things, we have visited with managers at headquarters and many of our manufacturing sites. My manufacturing counterpart and I traveled to most of our plants and talked about building a team environment to take advantage of each other's capabilities. We promised we would make their purchasing and supply problems go away so they could concentrate on other things. They liked that we reached out in a genuine way to share our expertise, and also take advantage of theirs.  We are building a culture based on competence and collaboration.

Q: How are you building your purchasing team?

A:  We start by thinking about what the organization should look like and why, then write comprehensive job descriptions for each position. We look inside and outside the corporation for competent, confident professionals with high energy and a passion for collaboration.

Q: What tools are you using to implement change?

A:  We are doing a lot of data analysis to get a better understanding of the market trends, and we're also analyzing our own spend and demand data. Plus, we have put together a rigorous RFP tool that covers the elements essential to Total Customer Satisfaction: product and technology leadership, service and support leadership, quality, leadtime performance and total cost performance. We tell suppliers that those who score the highest get a larger share of our business. It's a fair game based on performance against measurable expectations.

Q: How important is support for top management?

A: It's critical. And in our case, timing is critical too. We are action oriented and fast paced. We have a new CEO and a new senior team, and everyone totally supports our efforts to take a fresh look at everything from internal manufacture to external sourcing.

Holcomb, a member of the Purchasing Editorial Advisory Board, was CPO at Waste Management Inc. and totally revamped purchasing there. See the January 13, 2005 issue of Purchasing for the story.

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