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Step 6.
Investigate distributors who may be able to handle the scope
and geography of a North American (or global) supply
agreement. “This is where you start looking for
your ‘Santa Claus.’ The team evaluates potential
distributors on their financial solvency, how they settle
accounts, ability to offer standard pricing across all
locations, the breadth of their product line, ability to
customize processes to fit Owens Corning’s processes and the
distributor’s level of technical support,” Drolett explains.
Step 7.
Determine specific distributor capabilities.
Here, the team selects the top three to five distributors
and sends them a request for a proposal. This inch-thick
comb bound document covers every aspect of the wish list.
Candidates must outline how they can address these needs in
their proposal.
Step 8. Assess fitness for use
against distributor capabilities. Those
distributors invited to make team presentations do best when
they follow the drill of the request for proposal. “It’s not
a dog and pony show. Show us how you’ll meet our needs, not
how great and sophisticated you are,” Drolett says.
Step 9. Develop a sourcing
strategy. Once the team has read all the
proposals and listened to distributor presentations, they
measure up the distributor to the wish list. “In some cases,
we may not use the same distributor across the company. We
do whatever makes the most sense so we can leverage our
buying power and get good technical support. Through this
process, no plant will pay more for a product than they have
in the past, nor will they see a drop in service.”
Step 10. Implement the sourcing
strategy. Getting the rubber to meet the road
with the least amount of slip takes getting team members to
help plan the transition to the new distributor. Their
insight on processes is key to a smooth transition.
Step 11. Manage the relationship
with your distributor — build two-way communication to
improve processes and reduce costs. Owens Corning
is developing its own computer network to take advantage of
electronic ordering and processing technology. “Many
consortiums and large distributors offer this ‘black box’
technology. We chose to develop our own across all of our
plants using the new computer technology that will be one
common system throughout the company.”
Step 12. Regularly review the
sourcing strategy to make sure it’s working and set goals
for improvement. This is the part of the process
that helps to bring additional cost savings to the party
long after agreements are made. Some likely targets: Using
the Owens Corning trucking fleet for MRO product shipments;
establishing relationships with complimentary manufacturers
to attain even greater volume discounts from suppliers; and
further streamlining the flow of information from the plant
floor to the distributor and the supplier.
The Sourcing Effectiveness Team (SET©) Process was created
by Integrated Strategies Incorporated, a strategic sourcing
leader. SET© is a cross-functional, lowest-total-cost
commodity sourcing strategy development approach. |
