Editor's Note: On May 17-19 IndustryWeek held its Best Plants Conference in Nashville recognizing the 10 IW Best Plants of 2004. This article is based on a presentation given at the conference. You might also be interested in Maintenance Steps Into Leading Role In Rockwell Automatic's Power Lean and Quality Is What The Customer Says Is Quality.
Is it possible to ask 13,000 suppliers to register for an on-line bidding process? Just ask R. Gregg Brandyberry, vice president, procurement global systems and operations, GlaxoSmithKline. Realizing that on-line auctions and sealed bidding would become the future method of conducting business with a global network of suppliers, GlaxoSmithKline was one of the first to adopt this practice.
And it has paid off. Brandyberry was seeing a respectable 8% cost savings in his supply chain but it just about doubled to 15% when he moved his suppliers to this on-line system. And these savings drop right to the bottom line.
Brandyberry expressed his admiration for this system from a philosophical perspective as well, "It provides a "free market" environment in many places where the economic model doesn't currently support this type of commerce. We are encouraging suppliers all over the world to jump on our network and offer their services. Everyone has a chance to secure a contract."
In addition, Brandyberry sees other advantages to the suppliers such as specification rigor that is used to ask for bids, transparency in the supply chain and even a more ethical process. Brandyberry explains, "As all suppliers have equal access to this process, it is a very pure form of commerce that has no room for special considerations."
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