Most magazines do roundtable discussions with experts in the fields they cover. They invite a dozen executives, consultants and professors and convene in a stuffy boardroom somewhere. The magazine springs for a catered lunch and hosts a Q and A session.

MRO Today, as you know, does things a little differently. So, we hit the road and hosted the first-ever Dashboard Discussion. 

At the conclusion of the National Association of Purchasing Management — MRO Group conference Sept. 12 in Nashville, Tenn., MRO Today editor Paul V. Arnold rented a Lincoln Town Car from the Nashville airport and invited three real-world experts to discuss supply chain management issues on a 500-mile drive to Chicago. 

The menu? Gas station junk food and a dinner at Wendy’s. 

The view? Leather seats on the inside; rolling countryside and plenty of sun on the outside.

The takers? Check the bio box.

So, buckle up, find a cup holder and lower the power windows.

The road trip begins now.

Paul Arnold — My favorite part of association conferences is the case study presentations. You hear amazing tales of corporate or departmental change. The speaker — a purchasing manager, plant manager or maintenance manager — talks with pride and passion about the company’s improvement initiative. Listening inspires you to enact change at your company. But making change happen is very difficult. You’re all industry veterans. How do you make change happen?

Patricia Cabell — Any solution you’re considering will fail if you don’t noticeably improve your processes and get people to operate in those new processes. To install a solution that’s better and have it be adopted, you must do the work up front. It’s doing the flow charts. It’s knowing what your as-is and to-be components are, mapping old processes vs. new processes. Without this, the credibility of the new process will be questioned.

Cathy Neidner — You have to be very deliberate and screen to get the right people involved with implementing any change project. Without the right people in the right spots, it’s an uphill battle.

Cabell — That’s so true. I believe that in any organization, 10 to 20 percent will be avid supporters, 10 percent will be troublemakers and 70 to 80 percent will be on the fence. If the fencers start going with the troublemakers, act quickly. Realign the troublemakers and get them out of positions where these changes need to take place. If people are excited about doing their jobs and they help to convince the fencers, and if you move troublemakers, change can happen.

Neidner — Perhaps it comes down to education. We have to educate people on the reasons we are doing this. "It is a directive from corporate headquarters." "These are the industry trends." "This is what world-class companies are doing." If you take time to educate, they usually agree and go along. But still, you’ll have people out to derail it.

Ed Lachey — To get buy-in, you need the people who will be affected by change involved in the process from the get-go. When people get a chance to provide input, they feel they are a part of the process, part of the solution. There is a sense of ownership. To me, the worst way to do this is to have a small group operate in isolation, make a decision and then jam it down people’s throats. There will be resistance, especially in a union environment.

Take safety supplies, for example. You definitely want the union’s collective input on choosing safety supplies or safety suppliers. If you make a product or supplier change and create a less-than-safe result, there are all sorts of repercussions.

Arnold — What’s your aspirin? What fights off some of the biggest headaches you deal with?

Lachey — Information. I did a project this spring and needed four basic questions answered: What are we buying? Who are we buying it from? Where are we buying it? And, how much are we paying? The information was not available. I had to look deep into the organization to find answers. We’re working to improve in that area, and it will make everyone’s job easier.

Neidner — Playing off that, it’s asking questions: who, what, when, where, why. Speaking of which, Ed, did you ask, "Why are we buying it?"

Lachey — To me, that’s a management decision. I’m looking at it from the supply side. Management needs to look at it from the demand side. Procurement could develop the greatest, lowest-total-cost scenario for an item, but if we’re buying something we don’t need, we can bring that cost to zero. But, that needs to be the decision of the end-user’s management. 

Cabell — Through a process of questioning like Ed’s talking about, I sometimes facilitate a conversation with teams that leads them to the conclusion that they need to question their demands. Like Ed, I can say, "Instead of ordering 10 brands of tool boxes, we’re going to standardize on one and, therefore, get a better price and better total cost." But challenging someone — "Do you really need tool boxes?" — isn’t our role or responsibility.

Arnold — Standardization and single-sourcing are proven cost-savers, and each of your companies is implementing some facet of these. But end-users can be extremely loyal to the brands they use and the suppliers selling them these goods. Have your standardization and/or single-sourcing efforts experienced resistance? If so, how do you address non-compliance?

Cabell — We have one supplier that deals with a large majority of our MRO spend. Our implementation plan is to have that supplier go to the manufacturing operation and do an assessment of all inventory and do compatibility charts. It’s guessed that this supplier will be able to handle 60 to 75 percent of the portfolio. Over time, we’ll work with that supplier to handle more. That said, we know some purchases will be made outside of the supplier. Controlling that and understanding the reasons for maverick buying will be our challenge. When we identify the items our supplier has the ability to provide and what it doesn’t, we’ll set up suppliers that can meet those needs. But right now, we don’t have everything sorted out.

Neidner — If I want to make a switch to something they haven’t been using, I might bring in several options — if available — and take it to the end-user and say, "I have this product. It’s not what you’re using, but it’s similar. Over the next two weeks, can you use this and tell me what you think?" If they think the product isn’t good, they tell me. But if they tell me it’s better or the same, and they’ve been involved with the process, a switch is easier.

Lachey — You need a system for tracking compliance and finding the users not getting with the program. There are varying degrees of non-compliance. You try to locate the most maverick of maverick users. A good approach is discussing with them why the non-approved supplier is preferred over the approved supplier. Many times, people aren’t able to articulate an advantage. Sometimes you find that the maverick user prefers the non-approved supplier for totally non-business reasons, and that becomes an issue. You must ask, what’s the basis of this business decision?

If it doesn’t come down to a clear case of cost or quality or service, then you are debating somebody who has no position. Explain the purpose of going with a single supplier and the economic impact. Be diplomatic, not accusatory. If the person still doesn’t comply, I think it becomes a management issue.

Arnold — Would you say your job is harder (or easier, or the same) than it was five years ago?

Neidner — My job has changed because of realignments, so I can’t really answer that thoroughly. 

Cabell — I think that as you lose authority, and organizations become flatter and more matrix driven, you have to use more influence and persuasion. You must be a better facilitator. I believe that the skills required to be able to operate in a strategic sourcing environment are growing by leaps and bounds. Is it harder today? I wouldn’t say that, or that it’s more difficult. It’s just different. We used to use a stick. Today, we use more of a carrot.

Lachey — It’s a mix: some things are more difficult, some are less. Because of technology, information within the company is much better today than five years ago. I can sit at my desk for an hour and do something over the Internet that might have taken an entire day years ago. The more difficult aspect is management’s expectation of what sourcing or procurement contributes. My management has a much better understanding of what to expect. So, the bar keeps getting raised.

Arnold — In the past five years, companies have focused more attention on MRO. Many companies today are still just beginning to see the opportunities present on the indirect materials side. Given these opportunities and the state of the economy, can proactive MRO purchasing personnel use this as a time to raise their stock? Can they become heroes?

Lachey — I am where I am today in my company because of all that. You have a couple of dynamics in play. One, this is not a good time for any industrial company. And two, suppliers are in a position where, by and large, they are looking to reduce their risk by assuring themselves of continuing business — retaining and growing the business. So if the buyer and seller can come together on an agreement, I think this is a great time for both to win.

Neidner — Like everyone, I have performance goals, cost savings that I have to achieve each year. On the MRO side, it’s too easy. It’s like picking money off the tree. The opportunities go beyond my plant. We’re looking at MRO purchases on a global basis. We’re starting to interface with counterparts at our parent company in the United Kingdom. We’re making a difference.

Cabell — MRO is coming of age and higher levels of management are beginning to key on this area. If you look at MRO as a component of an organization’s total spend, it could be a B or C; it’s not necessarily an A. But even though it’s a B or C, those dollars add up. That helps the organization’s profitability.

Arnold — It’s fashionable for companies to say they work closely with suppliers, that they have a partnering relationship. But in many of those relationships, plenty of strong-arming still exists. Is it truly possible to have a win-win, arm-in-arm relationship with suppliers?

Cabell — I think you need to evaluate your supply base and list those suppliers in a pyramid shape. Put the strategic suppliers at the top, and then your key resources and your transactional ones. You need different strategies with different suppliers for different things. I don’t think you want to build alliances with every supplier. But if it’s a supplier that cares for the bread and butter needs of the plant, you should tend to that relationship.

Neidner — I think such a relationship is possible, but you have to be willing to share information and maybe some technology. For many companies, that’s hard to do.

Lachey — There are expectations that your suppliers need to meet. You set the cost-savings goals. I think suppliers now need to work harder than before in order to retain the business. On the flip side, as suppliers bring customers new ideas and cost-savings opportunities, it’s important to share the benefits of that work. If you don’t, you create such a disincentive that the supplier isn’t going to be back to help. You really have to create a true partnership by sharing the benefits.

Arnold — How is your department currently using the Internet?

Neidner — We use the Internet for spot buys. There are also several Web sites we refer requisitioners to. At some point, we want to have e-programs, but that won’t happen for two to three years.

Cabell — We do some things with spot buys. We also do some reverse auctioning. We have an Ariba tool we set up with our suppliers. We have catalogs and punchouts. We’re understanding and taking advantage of technology. As we learn, we’ll move forward.

Lachey — We’ve taken small steps. We’ll create an agreement with a supplier and then link the user to that supplier’s Web site. After a while, you have a list of URLs. You get many of the advantages of electronic commerce that way with very little investment. We haven’t proved to ourselves a real benefit to putting in a buy-side, electronic procurement system.

Arnold — How much time do you spend with key suppliers talking about each other’s e-procurement future?

Cabell — We haven’t had much time. Right now, we’re struggling to put a process in place that keeps all of our people — indirect sourcing, direct sourcing, IT and the people rolling out Ariba — on the same page. We all need to know the rules that we are playing with.

Lachey — We really haven’t had in-depth discussions. Most of the electronic relationships we have now are hosted by the supplier. It’s adequate. There are ways to streamline that, but it’s an investment we aren’t prepared to make right now.

Neidner — We are currently going through a system upgrade. Anything that a supplier can bring to help us in terms of information or technology is welcomed. 

Conclusion: Change and supply chain management weren’t the only topics of discussion during the 500-mile car drive from Nashville to Chicago. Jokes, personal observations and colorful stories gave the 13-hour drive the feel of a college road trip. With that blend of conversation, no one ever got around to asking, "Are we there yet?"

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