A Supply Chain Genius Chimes In …

I enjoyed reading Corey Billington's just released whitepaper, The New CPO: Shifting the Opportunity Continuum to Create Real Business value. For those who don't know Corey, the rumor is that his business card reads "Supply Chain Genius". A lofty self-granted title, yes, but given his credentials as a former Stanford Professor and VP of supply chain at HP (where he managed procurement and central engineering), perhaps the ego is partially justified. In any event,the whitepaper, sponsored by Akoya, explains how CPOs can use Product Cost Management Analytics (PMCA) to reduce their direct material spend. PMCA is a new set of applications that Corey explains throughout the paper: "In a complex manufacturing process, a company may be looking at a list of thousands of parts sourced from different world markets. Most may be competitively priced, but not all of them. An effective PMCA program can single out uncompetitive parts and enable the procurement organization to ... identify the 5 to 10 percent of parts that are out of alignment on price so that companies can focus on the ones they actually need concessions on. Then they can work with their suppliers on how to reduce costs on the problem parts. This is ultimately more productive than seeking across the board cuts that alienate suppliers and damage what could be a collaborative relationship." If you source direct materials, the whitepaper is definitely worth a quick read. Perhaps Corey's genius will rub off on us lesser Spend Management mortals.

Jason Busch

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