In March 2019, IndustryWeek announced the launch of its Supply Chain Initiative. As you may recall, its two primary objectives were to:
1. Provide thought leadership on strategic supply management practices, so that this function will more positively impact company financials—above and beyond lower piece-prices.
2. Call out the importance of small- and medium-sized supplier/ manufacturers (SMEs) to overall OEM manufacturing effectiveness.
So, you may ask—where are we at in addressing those goals?
The short answer is that to date, my articles have been the primary deliverable for the initiative, and, for the most part, they support the objectives.
With this column, I’d like create awareness of additional initiative-related activities that are in the works.
Some of our planned activities for 2020 have been negatively impacted by the COVID-19 pandemic. For instance, the Supply Chain Initiative was slated to be a point of emphasis at this year’s annual Manufacturing & Technology conference—until, of course the pandemic scaled down the conference to a virtual event. The conference, in fact, was going to include an overview of future initiative activities as well as invite conference participants to play an active role in their implementation.
Given what people in our country have had to give up due to COVID-19, I’m not going to bemoan much over losing the opportunity to do this.
Below I outline a few of those activities, as well as describe the actual progress of one:
- I have written a book tentatively titled Better Business: Breaking down the Walls of the Purchasing Silo. The book is organized into two parts. The first summarizes and provides business justifications for strategies and practices that IW believes provide the basis for progressive supply management function. This section includes personal examples that illustrate many of the points being made. The second section provides a step-by-step model needed for incorporating those strategies into a company’s current supply management practice. Templates for introducing and rolling out these steps—to both internal and supplier personnel—are also included. The book is scheduled to publish in early spring 2021; look for an announcement in IndustryWeek closer to that date.
- Upon publication of the book, IndustryWeek is planning to conduct monthly virtual meetings that will, a chapter at a time, both review the book’s main ideas and allow for questions and further dialog on them among session participants. These sessions will be open to those who have purchased the book. This may seem like a scheme to encourage book sales (which, I’ll admit, I hope it does) but more importantly it is being set to increase the likelihood that session participants have the needed background for the more detailed presentation and discussion I expect to be a part of each session.
- IW is looking to collaborate with organizations whose goals overlap with those of our initiative. The more involvement from like-minded folks, the more visibility and momentum we can give to the strategies and practices that companies will need to adopt to take increased advantage of their supply management functions. I have already had a few virtual meetings with three organizations expressing interested in working with IndustryWeek on this.
The type of assets these organizations bring to the table include:
- They truly believe that supply management organizations need to implement step-function change if they are to move beyond their status with corporate executives as a tactical function.
- They share similar views with IndustryWeek on the need for change in supply management strategy and practice. Their views need not completely align with IW’s, but should have a relatively high overlap—at least 75 to 80%.
- They have a large membership comprised of or connected with suppliers and OEM customers that can be used for outreach purposes. Some also have an association website, a regular digital and/or print publication or a large event to promote the strategies and practices that IW is advocating.
- They would commit to playing an active role in the IW initiative.
One of the organizations I’ve had contact with is AMT, the Association for Manufacturing Technology. Even those unfamiliar with the name are probably aware of their event, specifically,IMTS– the International Manufacturing Technology Show, held in Chicago’s McCormick Place every two years.
Here are some points of our discussion that provide more detail into what they are looking to create, how IndustryWeek can help and how collaboration between our two organizations can forward our joint goals:
- AMT’s primary focus includes facilitating contacts between companies; determining whether collaboration could be mutually beneficial to those companies through the exchange of information; and, where advantageous, encouraging those companies to develop business relationships with each other. Sort of sounds like what Supply Management is all about, doesn’t it? In other words, involvement in the supply chain discussion would be a natural fit for their organization.
- AMT believes that incremental change in supply management will not address functional needs. For instance, in their eyes, shifting sourcing from one Asian country to another does not address the primary cause of supply chain failure; i.e., step-function changes are needed to raise the level of professionalism to the purchasing function.
- They have heard a significant amount of feedback from their membership on instances where supply chain breakdowns have led to significant negative impacts on companies’ financials. This provides AMT with an important motivation for getting involved in the supply management arena.
- AMT understands that OEM Total Acquisition Cost formulas do not do a good job of taking into account all the costs of working with suppliers, and that these costs can outweigh piece-price advantages.
- They understand that supply chain speed of response—not just the machine processing rates supplier quotes are typically based on—will be critical going forward to ensure supply chain performance.
If you are a regular reader my columns the above positions should sound pretty familiar.
In fact, the following statement from Peter R. Eelman, vice-president and chief experience officer of AMT, shows how committed his organization is to the need for change in supply management strategies and practices:
“The Corona crisis has exposed a major flaw in the entire supply chain process. The Association for Manufacturing Technology is excited to partner with IndustryWeek to provide potential road maps to readjust the supply chain process.”
If you are interested in learning more about AMT and their involvement in supply chain management, you can click on the following link to their website: https://www.imts.com/supply-chain/index.html
If you have read the above and represent an organization that might be interested in collaborating with IndustryWeek on its Supply Chain Initiative, please feel free to contact me at my email address.
Paul Ericksen is IndustryWeek’s supply chain advisor. He has 40 years of experience in industry, primarily in supply management at two large original equipment manufacturers.