Purchasing Machine: How the Top Ten Companies Use Best Practices to Manage Their Supply Chains

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The Purchasing Machine, by supply-management professionals Dave Nelson, Patricia E. Moody, and Jonathan Stegner, presents a strong argument for the growing importance of this highly specialized facet of the manufacturing process--incorporating "purchasing, money and material flows, ownership of acquisition and sourcing strategies, and even intellectual property movement and control"--along with a series of related measures that could carry companies to the top in years ahead. It also focuses on the leadership skills necessary to make them a reality. The authors admit that their best-practice companies (American Express, Flextronics, Whirlpool, Harley-Davidson, IBM, John Deere, Honda of America, Sun Microsystems, SmithKline Beecham, and DaimlerChrysler) aren't perfect in all areas, as evidenced by the recent tribulations of the latter automaker. But each has learned to excel in a particular area, such as customer relations or systems innovations, and the authors describe them and ways their examples might help others cut costs and turn resultant savings into "lower consumer prices, exciting products, or fatter shareholder returns." Nelson, Moody, and Stegner identify 20 of these best practices (such as Training, Supplier Information Sharing, and Loaned Executives), and show how "the discipline of acquiring and moving material" can be turned to strategic advantage. --Howard Rothman


Review
Jim Scotti Vice President, Global Procurement & Materials, Halliburton Company For twenty-first-century supply chain leaders who have gone beyond stand-alone purchasing....Adaptable to a variety of global industries.


Book Description
Every day companies leave billions of dollars in invisible, unrealized savings on the table because of poor supply chain management practices. Now supply management experts Dave Nelson, Patricia E. Moody, and Jonathan Stegner show not only how leading companies recoup these savings through their mastery of target costing, value engineering, and supplier development, but how supply chain management -- the discipline of acquiring and moving material -- has become a manufacturing company's hottest competitive weapon. Based on a survey of 247 purchasing managers and more than 1,000 hours of interviews and on-site visits, the authors have selected ten top firms whose supply management pioneers excel at twenty "best practices." With cases and stories, Nelson, Moody, and Stegner show how these leading-edge purchasing departments at American Express, SmithKline Beecham, DaimlerChrysler, Harley-Davidson, Honda of America, IBM, John Deere, Whirlpool, Flextronics, and Sun Microsystems have put into place pathbreaking processes and procedures. Here, for example, described in step-by-step detail, are Chrysler's SCORE program and Honda's strategic sourcing strategy that saved the companies billions. The book also includes a crucial section on the next stage of supplier development that will involve the sourcing and allocation of ideas as well as materials. The authors provide concrete, practical steps to improvement that any supply chain manager can take to successfully implement these best practices. The Purchasing Machine will be required reading for logistics, purchasing, and procurement managers in hundreds of thousands of companies. The authoritative nature of the authors' source material is certain to make this the single most important and practical reference on best purchasing practices for years to come.


Download Description
Every day, businesses leave hard-earned dollars on the table that could have yielded lower consumer prices, exciting new products, or fatter shareholder returns. These companies don't even notice that cash is slipping away at the far end of the supply chain -- procurement, design, and development. The key to saving these dollars is to become proficient in target costing, value engineering, and supplier development -- "the new basics of supply management". The Purchasing Machine describes the costs, benefits, implementation, and results of the twenty best practices that must be in place in order to achieve world-class supply management objectives. These include cost management, value analysis, delivery improvement, supplier quality circles and support services, and purchasing systems. Led by Dave Nelson, the authors profile the top ten purchasing organizations -- including DaimlerChrysler, Honda of America, Harley Davidson, IBM, and John Deere -- and show how they have succeeded. Their book is a vital resource for all logistics, purchasing, and procurement managers who want to understand how to make their company both smart and rich.


Book Info
(The Free Press) A text showing how leading companies save money through excellent supply chain management. Uses data collected from a survey of 247 purchasing managers and more than 1,000 hours of interviews and on site visits to show how Honda of America, John Deere, and other companies have implementing innovative procedures. DLC: Business logistics--Case studies.


About the Author
DAVE NELSON is Vice President, Worldwide Supply Management, for Deere & Company. Previously, he led the growth of Honda’s Purchasing Division, which was the recipient of the Medal of Professional Excellence from Purchasing Magazine. With Patricia Moody and Rick Mayo, he co-authored Powered by Honda. PATRICIA E. MOODY, profiled by Fortune as one of the ten pioneering women in manufacturing, consults to leading companies such as Cisco Systems, Honda, Solectron, Motorola, Johnson & Johnson, and Mead Corporation. As editor of Target, she created and developed breakthrough work on issues such as the future of manufacturing, teams, and supply management. With Richard Morley, she co-authored The Technology Machine. JONATHAN STEGNER is Director, Supply Management Strategic Sourcing, at Deere & Company and a twenty-year supply management practitioner. Before joining Deere, he filled a number of important roles in Honda’s Purchasing Division and participated in many initiatives that resulted in the Purchasing Division’s rise to benchmark status. Prior to that, he was Director, Purchasing, for Bush Industries, Inc. and manager of purchasing at TRW.


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Jonathan Stegner is Director, Supply Management Strategic Sourcing, at Deere & Company and a twenty-year supply management practitioner. Before joining Deere, he filled a number of important roles in Honda's Purchasing Division and participated in many initiatives that resulted in the Purchasing Division's rise to benchmark status. Prior to that, he was Director, Purchasing, for Bush Industries, Inc. and manager of purchasing at TRW.


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