Implementing Best Purchasing and Supply Management Practices: Lessons from Innovative Commercial Firms
Rand, 2002 - Business logistics - 201 pages
Because the U.S. Air Force spends over one-third of its budget on nonweapons purchased goods and services, such purchases are a prime target area in which to seek performance improvements and cost savings. Prompted by a need for improved performance from its supply base, the Air Force has become increasingly aware of the advantages of using market research, contract consolidation, supply base rationalization, and other leading purchasing and supply management (PSM) practices in its dealings with suppliers. To aid the Air Force in its PSM efforts, RAND examined how innovative commercial firms implement such practices in their purchases of goods and services. After a review of the academic and trade literature, the study team conducted a series of elite interviews using a structured questionnaire to gather primary data from "best in class" commercial firms. The key findings are that (1) innovative commercial firms are moving to a strategic, goal-oriented approach to PSM, (2) implementing new PSM practices can take a number of years and often requires significant, permanent change throughout the organization, and (3) the Air Force needs strategies to sustain continuity of support for serious PSM change from one leadership team to the next.
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A STRATEGIC GOALORIENTED APPROACH
FORMAL IMPLEMENTATION PROGRAMS TO SUPPORT
FINDINGS RELEVENT TO THE AIR FORCE
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acquisition reform Air Force's aligned AlliedSignal approach to PSM benchmarking benefits best commercial practices best commercial PSM best practices best PSM practices Bethlehem Steel Bristol-Myers Squibb business units buyer change effort change management change their behavior commercial PSM practices communication continuous improvement corporate cost cross-functional teams Deere effective employees example execution firm we interviewed functional Harley-Davidson identify incentives increase innovative commercial contracting innovative commercial firms integration Kotter lean manufacturing learned logistics market research metrics Motorola number of suppliers operational participants PBSA and PSM percent pilot studies programs Project AIR FORCE PSM activities PSM change PSM organization purchasing and supply purchasing organizations purchasing processes RAND Project AIR reduce relevant responsibilities SDBs senior leadership services acquisition Six Sigma skills specific strategic goals strategic sourcing supplier development supply base supply chain Supply Chain Management supply management Web-based training