At the CSCMP 2007 conference (Council of Supply Chain Management Professionals) held this week in Philadelphia, keynote speaker Carly Fiorina, former CEO of Hewlett-Packard, reminded the audience that the work they do has a global effect. The business that the supply chain gives to global suppliers is directly responsible for creating prosperity, she said. She gave the example of HP's $10 billion spend globally.
What has enabled the strength of the supply chain is also its greatest challenge and this is what she calls horizontal thinking which cuts across all areas of a compay. It is especially difficult when companies are set up in a hierarchical manner.
She presented a structure that was used during her tenure at HP which moved the company from 87 separate supply chains to 5. The four tenants of her philosophy and action are:
- Strategies and Goals
- Structure and Process
- Metrics and Rewards
- Culture and Behavior
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Looking at the structure she found that the state of the supply chain did not allow HP to use its bargaining power based on the size of its spend. That changed when the supply chain was narrowed to five.
As for metrics, she found that when the workforce was measured on innovation, the number of patents increased to a point where the company receives 11 per day. They are now recognized as of the top three innovative companies. -- a big leap from just five years ago where they didn't rank in the top 25.
As for culture and behavior, HP focused on teaching collaboration, a different mode of thinking that the command and control model. And it is this internal collaboration that leads to the external collaboration that HP has with is global partners. The supply chain, she pointed out, is the conduit for that collaboration.
"Your work creates a more interconnected and prosperous world," Fiorina said to the 3,400 professionals gathered at the conference.