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The Organized Climb

March 12, 2009
GE takes a big step to improve the flow of information through a complex supply chain.

Having detailed and precise information from each and every one of your suppliers is a critical part of making good purchasing decisions. It can provide buyers with invaluable resources from which to see new opportunities to save time and cut costs. But if the information is not available in a clear and manageable format, those benefits could easily be overlooked.

Managing one of the most diverse and complex supply chains in the world, General Electric Co. (GE) conducts business with over 500,000 suppliers across thousands of entities in more than 100 countries. And while dealing with such a diverse supply base might have certain advantages, ease of organization isn't one of them.

"When you look at all the various products we make and the global nature of our businesses, it really does make for a pretty complicated set of suppliers," notes Tom Hattier, shared sourcing services manager for GE's corporate initiatives group.

Until recently, this complexity was managed through GE's own internal, homegrown solution called Support Central, which generates workflows at the user level. For years, these workflows were a powerful productivity tool that covered many of the company's supplier information needs. However, the supply chain eventually outgrew the old system. "We just got to the point where we simply had too many workflows," Hattier explains. "At that point we wanted the ability to simplify each process for its defined use."

A Smarter Way to Gather Intelligence

"Quality of data was key for how we want our supplier information managed. We need the process to be flawless."

-- Tom Hattier, shared sourcing services manager for GE's corporate initiatives group

The realization left GE looking for an outside solution. In addition to reducing its proliferation of vendors, the company also wanted to improve its visibility into companywide spend, aggregate supplier information, and create a better understanding of what was being purchased and from whom. Eventually their search ended with the Aravo SIM (supplier information management) solution. After about six months of preparation, GE went live with the software in October 2008, extending the new SIM processes across all of its business units worldwide.

With such a globally diverse supplier base, one of the company's primary concerns was to keep potential communication barriers to a minimum.That meant being able to support French, Chinese and Japanese suppliers just as well as it could those who spoke English and Spanish, according to Hattier.

"Frankly, [language support] was one of the drivers for us," he says. "We wanted to go live with a solution that would have multi-language capabilities on the first day. All too often, companies roll out a new solution with English-only for some period of time. But we felt we were already far enough down that path that we needed to be global instantly."

Language capabilities also serve to expand suppliers' roles in the process, regardless of where they happen to be. In the past, workflows were essentially used by suppliers to self-validate information in the database. However, the majority of the work still needed to be done by GE internally, Hattier says. For example, chasing down an accurate shipping address or bank account number would have been labor intensive in the past, requiring someone to follow up and close the loop. In the new system, much of that is self maintained by the supplier.

"If an invoice gets held up because things are not aligned properly, that all goes into rework and you have to resolve what went wrong and determine how to get the right data and get it back on track," says Hattier. "That's why quality of data was key for how we wanted our supplier information managed. We need the process to be flawless."

It was also important for GE that its new system was intuitive enough that suppliers didn't need to worry about yet another unique system from another customer. The improved flow of information is also expected to improve relationships throughout the supply chain, because it promotes the type of interaction that suppliers want.

"If suppliers want to see information presented slightly differently, then they can go ahead and provide the data to make those changes," adds Hattier. "That part was also very important to us because we believe suppliers should feel like they also have a voice."

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