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

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9780684857763: The Purchasing Machine: How the Top Ten Companies Use Best Practices to Manage Their Supply Chains
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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.

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Review:

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

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 Profes-sional Excellence from Purchasing Magazine. With Patricia Moody and Rick Mayo, he co-authored Powered by Honda.

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