Taming the Rapidly Changing Supplier/Buyer Dynamic: Midwest's Top Sourcing and Supply Chain Executives Organize to Discuss Effective Supplier Relationship Management

The prestigious and influential Best Practices Xchange met June 19th, 2006, this time to discuss Effective Supplier Relationship Management. Collectively, these Strategic Sourcing and Supply Chain Management executives represent most of the Midwest’s top corporations which generate over $225 billion in sales and employ over 1.0 million people.

Oak Brook, IL (PRWEB) June 28, 2006 -- The Best Practices Xchange (www.bestpracticesxchange.com) is one of the most prestigious and influential executive groups in the procurement and sourcing world. These Strategic Sourcing and Supply Chain Management executives represent most of the Midwest’s top corporations. Collectively, these firms generate over $225 billion in sales, employ over 1.0 million people and enjoy worldwide operations. These executives meet each quarter to discuss the challenges faced by supply chain and procurement industry leaders. Their latest meeting, on June 19, 2006, focused on enabling more effective Supplier Relationship Management (“SRM”).

In the highly interactive discussions this event triggers, attendees discussed how businesses need to do a much better job of segmenting their suppliers based on their strategic importance to the firm. One executive described how one group of suppliers was never deemed strategic until recently as supplies for metal have gotten quite tight. Other areas that got executive attention included:

- how top executive ownership of certain supplier relationships is a major business imperative

- how some firms spend too much time managing relationships that do little or nothing to help their customer

- how rapidly supplier firms are changing and how buyers need to re-evaluate their supplier relationships more frequently

- how difficult it is to understand what is happening in offshore suppliers.

The Group had an opportunity to hear from three diverse and senior speakers. Joseph Youssef, Director, Information Services at McDonald’s Corporation discussed Global Technology Supplier Management. Brad Peterson, Partner at Mayer, Brown, Rowe, & Maw LLP led a discussion on Reducing the Risk of Troubled Relationships. Lastly, Anne Kohler, EVP & COO of The Mpower Group presented and led the discussion surrounding the findings of an exclusive, members only Supplier Relationship Management Diagnostic. The presentations, discussion, and the opportunity to benchmark with other leading sourcing/supply chain organizations is the reason the members take time out of their hectic schedules to meet on a quarterly basis.

The members only Supplier Relationship Management Diagnostic explored SRM across six key areas: Awareness, Strategy, Infrastructure, Execution, Skills, and Metrics/Improvement. The diagnostic was delivered through a short questionnaire that explored 20 key performance traits covering each of the six SRM domains. A number of key findings from the survey were uncovered;

- 76% of the respondents indicated there is a clear need to increase the awareness of the value of SRM across the organization and a need for senior management to ensure the appropriate resources are available to realize the value.

- In 38% of the organizations, sourcing/supply chain departments direct supplier risk management and have risk mitigation strategies in place.

- 66% of the respondents indicated that technology exists to support the SRM process but it is not fully utilized. Tools such as SLA’s, balanced scorecards and relationship scorecards are regularly used.

- In many cases (nearly 50%) key suppliers have been identified and relationships are developed to drive out cost, however, 50% rarely work with suppliers to deploy advanced standardization and cost reduction techniques.

Other topics covered at the meeting included:

-Global Technology Supplier Management: Joseph Youssef, Director of Information Services at McDonald’s Corporation discussed the challenges of SRM, the desired end state, plan framework as it relates to people, process and tools, and progress to date/lessons learned.

-Reducing the Risk of Troubled Relationships: presented by Brad Peterson, Partner at Mayer, Brown, Rowe, & Maw LLP. Brad discussed what happens in troubled relationships as well as the causes of troubled relationships.

As Mike Nebendahl, Senior Director of Sourcing for Health Care Service Corporation (Blue Cross Blue Shield) put it, “I was able to determine precisely where I need to have my organization focus its efforts in terms of Supplier Relationship Management. Not only that, I also picked up many different techniques and tools for my team to use. What was even more valuable was the discussion around lessons learned as my group can now avoid a number of traps. This will save my organization a tremendous amount of time and effort.”

The next meeting for the Best Practices Xchange Council (BPX) will be scheduled for the third quarter of 2006.

Customary with every BPX meeting, one half of membership dues are allocated to support a designated charity. This quarter BPX supports the ongoing efforts of Ronald McDonald House Charities in Chicago and, http://www.rmhccni.org, commonly known as “The House That Love Built.”

About Best Practices Xchange (BPX):

BPX is a members-only, peer-to-peer group with a charter to provide thought leadership, advanced solutions and networking opportunities to group members. The group meets four times.

BPX addresses major Global Strategic Sourcing and Supply Chain Management challenges such as:

o Building world-class sourcing and Supply Chain Management Organization

o Supplier Relationship Management (SRM) and Governance

o Low Cost Country Sourcing

o Integration of Technology into Supply Chain processes

o Integration of 6 Sigma and Strategic Sourcing

o Managing IT Outsourcing Arrangements

If you would like more information on The Best Practices Xchange (BPX) or to apply for membership, please contact Glenn Kwiatkowski at The Mpower Group, 630-268-8963.

Media Inquiries for BPX should be addressed to:

Dalip K. Raheja

President and CEO

The Mpower Group

(630)268-8963 (Office)

www.thempowergroup.com

About The Mpower Group:

The Mpower Group (“TMG”), a certified minority supplier, services Fortune 500 organizations globally, solving complex issues related to their supply chain and strategic sourcing operations including outsourcing and off shoring. TMG emphasizes world-class business practices related to strategy, process and technology that truly drive superior financial results for their clients. Dalip Raheja, the firm’s President and CEO, is nationally recognized for his thought-leadership and advanced strategic concepts in the areas of Strategic Sourcing and Supply Chain Management.

Contact Information:

Glenn Kwiatkowski

Director of Marketing

The Mpower Group

(630)268-8963 (Office)

www.thempowergroup.com

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