Seeking integrative solutions

by Dr. Robert A. Kemp

This article begins a three-part series that will examine the integrative supply management process. This article defines the need and process. The second will provide examples of companies moving to this supply method, and the third will establish a map and set of benchmarks to plot and measure progress toward needed change.

From history and experience, we know many firms have evolved the purchasing function through as many as five stages: 1) clerical support people, 2) beating up on suppliers, 3) centralized or leveraged operations, 4) better relations and longer-term processes, and 5) integrated to all other processes. Some consider this fifth stage as the ultimate. The future may hold bigger and better ideas, but for now we should focus on converting our supply operations to integrative processes that meet the needs for lean operations and cost reductions.

In general, integrated supply management means we tie the organizational processes from the supply chain together with joint strategies, collaborative planning, merged operations and effective teams. These integrative processes involve internal and external customers, selected suppliers, and support from top management across the supply chain. Obviously, this is easier said than done!  Even so, we know that all systems can be better and that we seldom work near perfection.

We must identify, examine and reduce barriers to the process. To some degree, almost all organizations, some more than others, have these barriers. With all we know today and what research and progressive companies tell and show us, this list is almost disheartening. Why aren’t we making more progress? Even so, it’s exciting that some organizations are on their way to reducing these barriers. They prove it can be done. As these organizations make progress in reducing or eliminating these barriers, they move closer to integrated supply processes. Learn from them.

Should you move in this direction? Yes!  We’ve learned important lessons together, including:
1) A constraint never entirely goes away.
2) Organizations with great leadership overcome these barriers.
3) We have or can create tools and processes to reach the fifth stage.
4) Bringing organizations together helps achieve mutual goals.
5) Educating and training people in cooperative organizations creates learning organizations that meet and exceed their challenges.

View the chart.

Robert Kemp is a consultant, speaker and the former president of the Institute for Supply Management. He can be reached at kempr@mchsi.com.

This article appeared in the August/September 2003 issue of MRO Today magazine. Copyright 2003.

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