Ariba bestowed Tyco's Shelly Stewart with a Lifetime Spend Management Excellence Award on the main stage at LIVE this morning. I've known Shelly going back to the earlier FreeMarkets years and I've got to say that his success story is quite representative of the rise of procurement and sourcing overall. Shelly attributes much of the success of his teams not just to technology which is "critical" in his words, but specifically talent management. Shelly believes that "the talent aspect is the biggest part of what I do everyday." In his current role at Tyco, this meant recruiting a team to manage over $13 billion in spend, coming out of 106 disparate systems, sourced from 250,000 suppliers. The results speak for themselves. In only a few years since joining, Shelly's team has achieved 12% net savings (over $250 million dollars) across 500 separate projects. Where does Tyco hunt for talent? According to Shelly, one of the big difference today is that there are now universities where "we can recruit students that show up with the skill-set" from day one based on academic training in procurement and supply chain. This simply did not exist at the same level a decade ago and it's one of the reasons Shelly has given his own time with Howard University, among other institutions, to develop the future leaders of the sector, capturing and educating them before they go onto careers in other areas.
These skills will serve his organization well given that they are "at the inflection point of squeezing suppliers for cost versus improving their process." In other words, Tyco has been able to pluck much of the low-hanging sourcing fruit. What comes next, Shelly hopes, is savings from Six Sigma and supplier development initiatives designed to collaboratively take cost out of the Tyco supply chain. Considering that his "boss continues to raise my target savings numbers despite commodity prices" this is a critical task -- not to mention that 20% of Tyco's supply base are also their customers customers which can make aggressive and competitive sourcing practices impractical in some spend areas. What are Shelly's parting words of advice? "We are so buried in our day to day jobs, we don’t have the chance to be creative, but innovation is critical. You need to find the time to be innovative." So there you have it. Innovation is key (which is something that Michael Lamoureux (AKA The Doctor) will be quite happy to hear, given the name and focus of his blog). But most important, congrats, Shelly. Well earned.
- Jason Busch