Global sourcing panel @ supply chain conference

I caught this panel Global Sourcing Panel: Making It Happen at the Council of Supply Chain Management Professionals (CSCMP) Global Conference:

James Lewis, EVP/Chief Supply Chain Office, Fellowes Inc (F) led off.  Fellowes has offices in 15 countries, works with 130 customer countries, 500 supply chain partners, & $500M spend.  Their keys are total cost management & supplier risk assessment.

Gregory Rake, Sr VP, SC-Pier 1 Imports (P1)was 1 of the world’s 1st global importers…it’s in their name.  Their international buying department is 1st in class.  90% of Pier 1 product is imported with a $200M spend.  Importing with secure social responsiblity is a core competency for them.  Cottage industry sourcing, flexibility, & security are keys for them.

Farzad Khaledan, Director, ITW works in 2000 locations in 52 countries.  50% of their revenues come from outside of the US.  They started an international sourcing team in 2007 based in Europe.  They implemented small parcel & fleet management programs world-wide.    ITW saved $1B by cutting 200 freight forwarders/customs brokers down to 15.

Q&A

What changes have you made in reaction to changes in the economy, fuel prices, & financing?

• P1-terminate @ the coasts & ship own inland, waiting until Walmart & Target set rates for marine
• F-this is our biggest opportunity ever-challenge everything
• ITW-acquisitions are dead, so they are focusing on driving operations costs down

How do you conduct supplier risk management?

• ITW-rely on local management & intuition
• P1-65 factories closed in China resulting in unemployment of 1M.  They are building the equivalent of the US highway system every 5 years.
• F-use KPI’s to monitor & track local employees

Have you used international procurement organizations?

• F-a few in Asia didn’t work, so F had to build own (1 ex-pat out of 2000 employees in China)

Has nearshoring resulted in lower total costs?

• ITW-buy closest to the customer, ex. Vietnam & India are now viable markets & Africa is coming, but there are infrastructure issues

What modeling/analysis do you use?

• ITW-scanalytics
• F-global data warehouse & Oracle TMS
• P1-interns crunch supply chain data

How are you dealing with the 10+2 requirements/ensure CTPat compliance?

• P1-we’ll be OK by 2010.  It’s easy to get the information, except they have 5000 vendors.  Use buying agents.

What new approaches are you using to work with partners?

• F-qualify them
• P1-negotiate sustainable business relationships
• ITW-can’t change often-take a long-term partnership approach

How fully automated are your organizations?

• P1-use own internal systems
• F-use own operating platform with standards of expectations
• ITW-focus on 10+2 standards

How are you reducing your carbon footprints?

• F-recycle packaging
• ITW-focus on more efficient operations & curtail energy use in the summer