There are benefits to being in a procurement organization at a subsidiary company. There's often more of an entrepreneurial spirit at an acquired division, without the lack of resources typically associated with a small company. But there are also restrictions and limitations as well as organizational challenges to working at an acquired division.

Kerry Agnew was at one time the director of purchasing for 8 in 1, a pet products maker in Hauppauge, N.Y. But in January 2005, 8 in 1 was purchased by the Rayovac Corp. (which is now called Spectrum Brands) and 8 in 1 was made a brand only within a new division of a bigger company. Today Agnew is the senior manager of domestic sourcing and vendor relations at the Companion Animal division of United Pet Group, a Spectrum Brands company.

Prior to the acquisition, Agnew focused on both domestic and global supplier management issues, but post-merger he focuses specifically on U.S. sourcing and supplier relations—areas such as contract negotiations and supply agreements for U.S. suppliers.

"We are unique in that the divisions of Spectrum Brands are so far removed from each other that the operating strategies are very different," he says. "We have a lot of flexibility to run our businesses how we think is best."

United Pet Group makes a wide variety of products (still mostly in the U.S.) from shampoos to feed products for pets, which means Agnew's group is responsible for sourcing a wide variety of materials.

In the current lineup, Agnew reports to the division's vice president of operations and has four procurement specialists reporting to him, focused on major commodity spend areas: packaging, grains/seeds, chemicals/plastics and a co-packing specialist.

Typically, integrating into a larger parent company provides access to tools and technologies that might not be as accessible at a smaller firm. "We just went through an SAP migration, which was surprisingly painless," Agnew says. "There's a wealth of information captured in that kind of system, but it's taking us a while to learn the ins and outs of it."

But the former 8 in 1 was a strong proponent of technology and actually brought some expertise of its own to the merger. In 2003, Agnew approached Freemarkets (now Ariba) to use its e-auction tool. The first e-auction on corrugated packaging, resulted in 18% annual savings.

But Agnew points out that not using an online reverse auction can be as effective as using it. When the United Pet Group wanted to bring its folding box supply contract out to bid, Agnew decided to first sit down with suppliers to review their cost-reduction proposals and see what suppliers could offer before going out to bid online.

"We asked suppliers to prove to us why we should not bring their commodity out to bid," he says. "It was not a threat, but a chance for them to pitch something to us beyond a lower price."

The results showed that this was the right strategy—in every case, suppliers came back with cost-reduction proposals that would benefit both buyer and supplier.

"Through the entire reverse auction process we went out of our way to be honest, open and up front with our suppliers," Agnew says. "We made sure the RFQs were standardized—all suppliers got the same package. And any supplier could ask questions."