Innovation, transformation and cost reduction. Final thoughts from ISM 2015

Procurement is being asked to innovate and transform its processes. But the profession is still measured on cost reduction. Can we have it all?

Subscriber: Log Out

What were the two words I heard most often at ISM 2015? Innovation and transformation. They both were covered by the umbrellas of strategic sourcing and supplier relationship management.

It makes sense, of course. Everyone in the supply chain profession, from manufacturing to logistics and transportation, to distribution – and sourcing – wants to elevate their discipline within the organization. What's more, who doesn't want to automate the mundane transactions associated with issuing a PO, arranging a shipment, or scheduling a production run so they can lead an effort to transform their department or have a role in new product or process development and innovation?

So where are we? Certainly headway is being made. In the last two issues of SCMR, we've run stories about how Molson Coors is integrating supply management into its new product development process and how Raytheon is launching a supplier advisory council in its journey to become the Customer Of Choice – the one that gets access to supplier innovation first.

At the same time, there's a long way to go. “When you talk to CFOs, which is where the rubber hits the road, they are still focused on cost reduction,” says Chris Sawchuck, a principal at The Hackett Group and a proponent of strategic sourcing, transformation and innovation.

So, can we have it all? Or will cost-cutting lead the day? That push-pull was illustrated during the Q&A that followed a presentation on supplier relationship management by Sawchuck and Mark Fortney, an executive with Staples Advantage. Sawchuck and Fortney discussed innovation and transformation in their presentations. When it got to the Q&A, one category manager for a CPG company raised her hand and said that she is constantly being asked to innovate. “I'm not very creative,” she said with a little frustration. “But when we talk to suppliers, we know they are experts that have solutions that align with our business needs. We really need to learn to listen to them.”

That led to a great conversation about the challenges of trying to innovate and cut costs that would have gone on all morning if we hadn't had to clear the room for the next session.

Done right, it seems that procurement can do all three – transform its processes, innovate with suppliers and deliver cost savings to the total cost of a product or service. But it also seems as if the profession, just like our friends in manufacturing, logistics, and distribution, have to convince the C suite of the value strategic sourcing can deliver.

SC
MR

Latest Podcast
Talking Supply Chain: Navigating today’s geopolitical world
While companies can’t plan for every scenario, they can prepare for most. EY’s Courtney Rickert McCaffrey joined the Talking Supply Chain…
Listen in

About the Author

Bob Trebilcock, MMH Executive Editor and SCMR contributor
Bob Trebilcock's Bio Photo

Bob Trebilcock is the editorial director for Modern Materials Handling and an editorial advisor to Supply Chain Management Review. He has covered materials handling, technology, logistics, and supply chain topics for nearly 40 years. He is a graduate of Bowling Green State University. He lives in Chicago and can be reached at 603-852-8976.

View Bob's author profile.

Subscribe

Supply Chain Management Review delivers the best industry content.
Subscribe today and get full access to all of Supply Chain Management Review’s exclusive content, email newsletters, premium resources and in-depth, comprehensive feature articles written by the industry's top experts on the subjects that matter most to supply chain professionals.
×

Search

Search

Sourcing & Procurement

Inventory Management Risk Management Global Trade Ports & Shipping

Business Management

Supply Chain TMS WMS 3PL Government & Regulation Sustainability Finance

Software & Technology

Artificial Intelligence Automation Cloud IoT Robotics Software

The Academy

Executive Education Associations Institutions Universities & Colleges

Resources

Podcasts Webcasts Companies Visionaries White Papers Special Reports Premiums Magazine Archive

Subscribe

SCMR Magazine Newsletters Magazine Archives Customer Service

Press Releases

Press Releases Submit Press Release