To effectively implement a complex global procurement/supply chain strategy, an organization that could support global leverage opportunities as well as country and local requirements needed to be developed. Outside of US, procurement was decentralized, requiring major restructuring of function. This would be particularly difficult in Europe due to the inherent cultural differences between countries compounded by labor laws particularly in Germany and France. Additionally, by restructuring procurement into centralized organization, local operations would cede control of 50% of their cost of sales.

Developed three regional procurement offices in Dallas, Frankfurt and Hong Kong with the charter to leverage global, regional and local spend opportunities. These regional procurement organizations existed within matrix organization with dual reporting (global procurement and regional operations) to achieve ownership. Organization was cross-functional with procurement, subject matter experts and operation management personnel. Teamed with legal experts to manage through European labor protection issues and allow restructuring of European procurement organization.

Organization was key enabler to executing procurement/supply chain strategy reducing costs by $40 million, working capital by $15 million, the supplier base by 25% and SKUs by 15%. In Europe, after the restructured organization was in place, achieved $15+ million in savings and reduced supplier base by 20+% within one year.

With nearly $500 million in spend, company made the strategic decision to restructure its purchasing organization to more effectively leverage purchasing power. Restructuring included strategy, organization, roles and responsibilities and tactics.

At the time purchasing was a tactical, decentralized function with buyers located at each of its 125+ units in US and Latin America. Using best practices the organization would be restructured into a centralized, strategic function with the objective of providing the company with a competitive cost advantage.

A significant challenge was that each operational unit had P&L responsibility and would be losing direct control of 50% of cost of sales budget to the new organization. This led to program endorsement concerns. At the same time, the company wanted immediate dividends because it was for sale.

Applying best practices developed by leading organizations and consultants (e.g. GE, McKinsey, AT Kearney) an organizational structure using commodity team model was developed. With the involvement of procurement, subject matter experts and operation management personnel, a cross-functional organization was established within 45 days. The process implemented included complete engagement between the new Procurement organization and local operations with most strategy/sourcing activities performed at operations level, rather than at headquarters to further buy-in.

Achieved overall endorsement from Operations as reflected by $12 million in savings and 50 long-term contracts in the first year.

A $6 billion private-equity company with more than 60 company holdings wanted to leverage buying power across its entire portfolio. Each portfolio company was independent and represented differing industries and data was not easily accessible from any company.

Selected top eight companies showing potential purchasing synergies and visited each to outline cost savings opportunities. Developed questionnaire and data-collection template, performing detailed spend analysis to create procurement strategy for $275 million of spend, including three high-value projects for quick execution and savings to gain buy in. Proposed centralized procurement organization structure as part of long-term strategy.

Identified 22% potential savings by sourcing products to China and aggregating domestic steel spend among three companies, yielding more than 15% savings.

Farm equipment distributor needed to purchase component parts and accessories from China for cost-competitive reasons. Concerns regarding quality and delivery reliability of Chinese product were paramount to many within distributor's organization.

Developed sourcing strategy identifying suppliers with US export track record that had or were willing to have third-party quality organization certify production lots. Implemented staged sourcing plan to source two product categories simultaneously, gradually building confidence in Chinese supplier base.

Achieved more than 20% savings in the first wave, with supplier experience providing confidence in quality and service reliability. Company used in-country staff to manage supplier closely, ensuring success.

Developing a cost competitive supplier base requires a disciplined approach to sourcing. Cross-functional commodity teams are accountable to drive cost out of key product categories. In the food business dry ice is one of those categories. European operations spent nearly €5M per annum using nine different suppliers and 11 different specifications paying between € 0.49/kg to € 0.98/kg.

Using a well-defined strategic sourcing process, the objective to reduce the TCO for dry ice was attacked. The sourcing team included local operations and examined product cost, internal cost (e.g., waste, handling, inventory) and joint costs (e.g. packaging, product standardization) as part of the RFP.

The process resulted in a 67% reduction in suppliers, 80% less specifications resulting in a 12.5% TCO savings (€350,000 on product cost and another €275,000 on waste reduction through better packaging and transportation methods).

Company was under pressure of lawsuit by FTC for misleading "Made in the U.S.A." labeling of hand tools. Majority of costs of these tools were incurred in US, however, FTC had strict interpretation of the law severely limiting any foreign content. Company agreed to re-source foreign components to avert lawsuit and bad publicity. Assignment was to lead effort of resourcing 5,000 components within nine-month deadline imposed by FTC.

A multitude of barriers confronted this project. There existed a significant lack of time to implement these changes. No project management team, drawings, or strategy had been developed. Tooling was required for many components that typically had four- to six-month lead-time after awarding contract. Many components were sourced offshore due to cost. Higher cost meant lower margins for many of items.

Pulled together a high-impact cross-functional team. Detailed approach and project plan were developed, including roles and responsibilities for team members. Execution of plan was based on longest lead items first. This required deployment of new manufacturing processes and material for many components to reduce lead-time and costs.

Achieved project success within nine months, averting lawsuit (FTC announcement of effort published in WSJ). Maintained records of all end items affected by re-sourced components for FTC and legal audit. Cost increased nearly 5% by resourcing to U.S. yet much of the increase was absorbed by customers requiring "Made in the U.S.A." Promoted to GM for successful leadership of the project. Named CEO Top Contributor for the year.

A primary company strategy was plant consolidation and closure to reduce overhead and focus on core competencies. An enabler to this strategy was to outsource non-core operations such as machining, stamping, forging, etc. Commodity team was selected to lead the outsourcing project because of expertise and track record of results.

A primary hurdle of the project was Operations buy-in coupled with labor union resistance. The prevailing position was they could do as well as any supplier. Accordingly, to effectively implement such a complex project, a thorough process and plan had to be developed. In addition to the outsourcing project plan, Finance created a make v. buy methodology; a core competency analysis was developed and communication plan was put in place.

To get the project momentum, a communication meeting was held with all GM's and operations executives to outline the process and tools to be used to determine what and how operations would be outsourced. Secondly, quick-impact projects were identified where Operations resistance would be minimal and process could be validated. Subsequently worked with executive management on outsourcing priorities and plant consolidations and focused work accordingly.

Through the outsourcing process material costs were reduced by 5%. More importantly, it enabled the plant consolidation strategy to be successfully executed reducing the number of facilities from 80 to 55 resulting in a multimillion-dollar overhead reduction.

With a track-record of leadership, team building and results-orientation coupled with lean manufacturing training, brought in to turn-around one of company's largest and poorest performing operations. This plant produced sockets, ratchets, wrenches and other hand tools from raw material to finished product. This included operations such as cold forming, machining, heat treating, polishing, chrome plating, assembly, packing and distribution. Operation was in three buildings with 300,000 sq. ft. of floor space and nearly 500 employees. Deploying lean manufacturing was the cornerstone for success.

There existed a lack of experience and credibility in this environment. Same leadership had directed complex operations for four years with very little productive change. Also present was language barrier with frontline employees (six different languages) adding a significant barrier to changing the culture.

Using Shingjitsu consultants (ex-Toyota lean experts) launched more than 50 kaizens to impart lean manufacturing philosophy into the operation. At the same time, developed a comprehensive communication plan using visuals to communicate processes and progress-to-plan as well as create a "Translators Club" using employees as translators for verbal and written communications.

Achieved 9% productivity gains in first year; 6% in year two. Reduced inventory by 30% enhanced customer service by 5 points and improved OSHA safety rating by 50%. As important, the plant culture became one more participatory; employees were motivated and proud of their work. Awarded CEO Top Contributor for turnaround work. This also brought mention in Annual Report.

After acquisition by parent company, organization became a global company with 400+ operating units worldwide. As Procurement/Supply Chain leader with accountability of more than $1 billion of spend, the critical first step was development of global supply chain strategy. Program needed to be integral piece of company's overall strategy. This included delivering competitively advantageous costs and reducing working capital while improving service, quality and product consistency.

Decentralized operations (400+ facilities) operated as own P&L centers. With 20,000+ suppliers, there was no product standardization, resulting in an overwhelming number of SKUs. Because food is a commodity, markets rather than volume, drive the majority of costs. With no accessible data, this process required manual collection and compilation of information.

Developed a strategy based on tenets of lean manufacturing addressing total cost of ownership v. product cost ("Lean Supply Chain Strategy"). This complemented Operations' rollout of lean manufacturing within facilities. Employing Lean Supply Chain included centralizing procurement organization; creating strategic sourcing processes and implementing eProcurement system for data collection and analysis to support sourcing, supplier reduction, and SKU reduction/standardization and, later, order management.

Realized $40 million in savings (after inflation) across two-year period through leveraging spend, value streaming supply chain process, supplier reduction and product standardization. Attained $15 million in working capital through aggressive payment terms and implementation of vendor managed inventory programs. Accomplished 30% reduction in supplier base and 15% reduction in SKUs, significantly reducing complexity of operations and backroom functions (e.g., accounting).

Configuration and global deployment of common procurement system was required to enable execution of supply chain strategy and drive standardization of purchase-to-pay (P2P) process at operations level. Previously there were 25+ different IT systems used in the 200+ operations globally. Data collection of purchasing spend was done manually, which was costly in terms of time and accuracy.

Time, costs, and resources to deploy a global ERP system were prohibitive. Database structure was not standardized. There was lack of consistency of purchasing and material management processes. There were language and currency complexities and system lacked supplier interface requirements. It was determined that an internet-based system would be most effective tool to deploy and interface with existing systems. Access to eProcurement module was used to build platform. Quick-response team was created with existing change management and IT resources. Standardized database configuration and P2P process was developed for global implementation and the eProcurement system was configured accordingly.

Pilot deployment of process and system in U.S. and Europe was implemented. Within one year, process and system was deployed to 100 units worldwide covering 80% of total spend. Once deployed, results were dramatic and fast: 15% SKU reduction and 25% reduction in supplier base through database analysis. The system was a key enabler for the Global Procurement organization to save $40 million and improved working capital by $15 million.

Sourced and implemented other P2P systems for $6 billion private equity company transacting more than $1million per week in its first 60 days of deployment.

Company strategically moved toward developing long-term relationships with suppliers as an enabler to reduce costs, lead-time, and risk to designing and manufacturing business jets. From a procurement perspective, this meant developing a process for strategic sourcing and negotiating long-term supplier agreements that ensured competitiveness and a maintaining a technological advantage over the length of the agreement.

In the past, supplier selection performed by engineering with little tailoring or negotiations (except for price and product liability). The change in developing Preferred Suppliers required a different approach to negotiations and supplier management.

Depth of experience in contract negotiations provided the impetus to develop a long-term agreement template. As part of this template, authored a number of unique provisions to address long-term competitiveness on cost and technology, pricing formulas, upfront investment, and participation in aircraft design. To effectively negotiate these complex agreements, initiated the use of cross-functional supplier management teams (engineering, quality, reliability, production, material management, finance and procurement) that would work together from strategic sourcing's RFP process through supplier selection, negotiations and supplier management.

Long-term agreements were executed for avionics, landing gear, engines and hydraulic systems with companies such as Honeywell, UTC, BF Goodrich, and Rockwell Collins. These agreements included provisions on long-term cost savings, pricing formulas, maintaining technological leadership, etc. resulting in average of $39 million annual savings in addition to intangibles such as supplier participation in design process.

The worldwide procurement organization built a highly cost-effective supply chain during a two-year period. With internet-based eProcurement order management system in place, the ingredients for procurement organization to transition from cost center to profit center by selling services to other caterers was in place. There remained internal doubts as well as complex legal and tax issues. This required establishment of new legal entity. There were additional concerns regarding perception of customers.

Supply Chain Solutions, Inc. (SCS) was formed as legal entity. Business development team was initiated and key supplier contracts were revised to allow third-party business purchases from existing contracts. The eProcurement system was redesigned to handle variable pricing for third-party business.

SCS team gained new business from two significant caterers achieving more than $12.5 million in revenues and $1million in EBITDA in its first full fiscal year. Further, little additional manpower or investment was required to support new business, thereby absorbing overhead previously paid by parent company. This same model was used to build a procurement company for a $6 billion private equity company two years later.