I’m back! And what a coincidinc!

March 16, 2012

Hellllllooooooo my long lost packaging and sustainability friends! Oh how I’ve missed you!

Vacation was awesome (isn’t it always?). The Sustainability in Packaging Conference was pretty cool, too! AND, the big deadline—which meeting required all of my time—has come and gone! Click here to read my latest white paper (bottom of homepage), “The Value Good Buyers can deliver: How to Develop a Customized and Competitive Purchasing Agenda.” This research describes contemporary thinking on strategic sourcing and cross-functional supply-chains in order to allow for innovation. Its totally crazy because the last day of Sustainability in Packaging included a panel discussion titled, “Partnering for Long Term Innovation;” Jeff Waymen, Director of Strategic Sourcing for McDonald’s, Scott Vitters, General Manager, PlantBottle Packaging, and Randy Boeller, Packaging Engineering Manager, Hewlett Packard, described their experiences facilitating innovation at their respected firms through collaboration with supply chain partners. One story that really resonated with me includes that delivered by Mr. Boeller, who explained how purchasing needs to be compensated for total net savings—as opposed to simply price reduction—in order to allow for innovation. Consider the following case study:

HP discovered a low-weight plastic pallet that significantly reduced its airfreight expenditures. These plastic pallets were four-times more expensive than HP’s current, wooden pallets. When instructing purchasing to substitute its cheaper wooden pallets with the more expensive yet lightweight plastic pallets, the project manager was met with significant resistance albeit purchasing; s/he would be penalized if the pallet part price increased, though the overall net gain to the company was significantly higher than the savings incurred from cheaper pallet part price. Consequently, HP had to revise its compensation policy to allow purchasing management to benefit from a more value- vs. cost-based approach to sourcing.

After each presenter on its experiences generating innovation via supply chain collaboration, I asked the following question, which curtails on the above HP case study:

“Hello, it’s Chandler Slavin with Dordan Manufacturing, again (I had asked an annoying amount of questions in the days’ sessions). Randy (HP), you said, “the way we are measuring performance is driving away innovation.” Can you and the panel expand on how you believe other organizations can learn to integrate a more cross-functional approach to purchasing? I have witnessed experiences in which purchasing made a decision based solely on part price as opposed to taking a more holistic approach to sourcing that emphasized value added services, such as innovation and security of supply…”

Randy of HP explained that a cross-functional approach to sourcing—which is as much involved with the supplying company as its own internal agenda—“was key.” For Randy, “cross-functional” was synonymous with the retro buzz-word “matrix,” which has for a long time encouraged a more sophisticated and transparent approach to purchasing that demands an intimate relationship between the business, and sourcing, agenda(s).

 The rest of the panel agreed.

 So yeah, what a coincidinc! It’s awesome that in researching for my latest white paper I was able to establish the intellectual foundation on which I could ask the sharpest minds in the game what they thought about what I thought! I feel like I’m back in school again hurray!

OKKKK sorry about that tangent. Ok, my next post is going to discuss the first portion of feedback from Sustainability in Packaging. I took over 15 pages of notes so get excited!

Have a great weekend! It’s 75 and sunny in Chicago. I’m totally confused, but in an awesome way. 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: