Kimball’s Procurement Transformation

July 19th, 2007 at 07:37am David Bush - Iasta

Indiana’s own, Kimball International, was recently highlighted in a Purchasing article to “overhaul processes to emphasize ‘creative cost savings’ ideas.”

This is a textbook replication of all the principles that would make Smock and Co. proud enough to write a book. Wait a minute, they did write a book, Straight to the Bottom Line, which is an playbook for best practices in supply management and an excellent breakdown of all the important issues companies should identify and address within procurement best practices.

Of interest were a few resulting outcomes:

• Kimball saved $1.2 million in one day but getting suppliers from their supply chain in the same place to discuss synergies.
• they reduced their overall number of suppliers from 2,000 to about 850 by “value mapping” the suppliers into categories.
• they made the majority of changes without an increase to budget or headcount—which made it much easier for senior leadership to support the ideas

Personally, I am glad to see this transformation be successfully executed and it was much needed. We worked with Kimball many years ago and it was downright painful because the company simply was not ready to do anything in eSourcing. The proper fundamentals and foundations did not exist in a fractured business unit silo system. It sounds to me like Bob Price is a raising star in procurement and made tremendous strides in transforming Kimball into a world class sourcing organization.

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Entry Filed under: General, Supply Management Best Practices