Like many companies, communications firm Harris Corp. has various business divisions focused on building their own products. But having buyers and procurement professionals spread across those divisions doesn't mean they cannot share information and best practices. To achieve the "best of both worlds" Harris has implemented a "direct and centralized" procurement organizational model.

At Harris, there are four major divisions: Government Communications Systems, RF Communications, Broadcast Communications and Harris Stratex Networks. Each division has its own head of procurement and its own supply chain management organization, which includes sourcing, manufacturing, distribution and service. But those procurement leaders report not only to the president of the division but also into Harris' centralized procurement and sourcing center, which is headed by Leon Shivamber, Harris' vice president of supply chain management and operations.

"Through our 'direct and decentralization' model, we want all the divisions to focus on the challenges of their customer base, as well as the technology and issues of that market," Shivamber tells Purchasing. "Then we in the centralized group provide them the strategies that cut across the business and allow us to identify priorities that they can leverage to other divisions."

There are some 20 employees at Harris' procurement and sourcing center and approximately 200 procurement staffers across the four divisions. The company's total annual spend is now in the $2.5–3 billion range and growing, Shivamber says, with indirect materials, such as marketing materials, office supplies, and travel, accounting for approximately 25% of that total.

Harris is in the process of hiring more sourcing professionals, focusing mostly on commodity leaders and individuals who can lend greater expertise to duties, such as steering the organization toward strategic and preferred supply chain partners and suppliers.

In addition to focusing on the design of its procurement organization, the procurement team at Harris has spent a great deal of time and resources honing the information it needs to make the best decisions on which suppliers can provide the most compatible products at the most appropriate costs. The company has created both a database infrastructure to house the information and processes to control the selection and utilization of its suppliers.

Janice Lindsay, vice president of strategic sourcing, joined Harris in November 2004 to help in the supply chain transformation. "It took a couple of years, but we have most of the plumbing in place right now," she says. "Now we have the ability to see the entire business and drive it with all the collaboration capabilities we have built."

Sourcing tools. Harris uses an extensive list of buying tools. The most unique sourcing tool is Harris' own internally developed program, dubbed Expo. The enterprise-wide portal, among other functions, connects the company's four divisions, their enterprise resource planning (ERP) programs and the company's engineers by way of specialized software. It helps manage internal collaborations, billing and materials with additional data from suppliers, who can communicate directly with Harris.

"From this one location, we can help find a quality record of a component and determine whether it is environmentally safe for use in a product to be delivered internationally," Shivamber says. "We can also find where we have inventory and whether it is recommended or sourced from a strategic partner."

Harris also uses Oracle's Agile Product Lifecycle Management (PLM) software, which helps the company manage information, processes and decisions about product lifecycle throughout the company.

Harris' use of Endeca's search engine technology helps company engineers locate a part that meets certain technical requirements. "We can influence their decision-making and steer them to the components that are early in their lifecycle and that are readily available in the cost targets we are trying to meet with preferred partners," Lindsay adds. And Centennial, Colo.-based PartMiner helps Harris locate electronic components and ancillary parts and offers safety alerts and other notifications about products.

In addition, Harris leverages Dun & Bradstreet's financial alerts about a company's ability to pay its bills. The business information firm also provides profiles on potential suppliers. For example, is the firm a small or disadvantaged business that Harris potentially can cultivate? Would the firm have a high dependency on Harris because of its situation?

Also on Harris' current agenda is "a huge focus on consolidating to far fewer suppliers, and much more world-class capable companies that we will use across all of our businesses," Shivamber says. "Ultimately, we would like to do most of our business with fewer, more strategic partners. They have the element of relationship, technology, forward vision, and the kind of cost, quality and service management that will allow us to continue to improve in the future."

The criteria for becoming a strategic partner with Harris starts with a supplier proving that it has the financial wherewithal to continually invest in its business over the long-term. The firm also, among other goals, must maintain a progressive strategy that allows for new technological advances at lower cost year after year. In addition, Harris measures responsiveness, on-time delivery and product quality, and shows those results to the suppliers, so they can make the necessary improvements.

Scheduling the all-important regular visits to its partners' operations is another reason Harris wants to reduce its supplier base. "[At those meetings] we'll put them in front of our engineers and dig deep into how they run their business," Shivamber says. "You can't do that with 12,000 suppliers."

Growing global. With an eye toward the future, Harris is looking to expand its global supply chain, using the backbone of its existing supplier performance and evaluation metrics, indicators and cycle-time benchmarks.

Approximately 75% of Harris's products are delivered within North America, so most of its manufacturing and procurement remains on the continent. International suppliers are more prevalent in Harris' commercial divisions, whereas its government segment is dominated by U.S.-based suppliers, due to government regulations.

"We are very much aware that there are certain devices that we will never be able to or want to source internationally," Shivamber notes.

For example, U.S. government regulations prohibit the exportation of tangible components, as well as conceptual drawings of a restricted technology and/or discussing that technology with a non-U.S. citizen. Those rules also extend to Harris' suppliers.

"If we are building a product that is governed by those restrictions, then we cannot allow a supplier to have a non-U.S. citizen look at the document, review a drawing or build the product," Shivamber says.

To keep tabs on its international suppliers, Harris stations employees in key locations around the globe. Harris Stratis Networks, for example, has a sourcing group in Singapore. The company also will place staff within a supplier's operation, if the firm is building what Shivamber describes a "critical piece of equipment."

New adventures. Harris' newest venture is the creation of a healthcare information technology unit within its Government Communications Systems group. Initially, the plan is to make use of the diverse technologies within the company's four divisions and apply them in an integrated way to medical communications. With Harris' current networking, data storage, graphics and high-speed transmission technologies, "all of the elements come to bear in a medical situation, where time is of the essence for a clear picture for a diagnostic perspective," Shivamber says.

The new Healthcare Solutions initiative is a microcosm of how Harris' mantra of collaboration—both within the company and with outside partners—has strengthened the company and reinforced the importance of its coordinated procurement and sourcing initiatives.

Collaboration "comes from across our divisions and with world-class suppliers to take advantage of their capabilities," adds Lindsay. "And, it comes across functions between supply chain procurement and engineering to find and make the best decision all the time as early in the process as we can."