Leaders in Supply Chain Management who Saved the Airline Industry

January 22nd, 2010 at 12:42pm David Bush - Iasta

I recently read an interesting article at the Institute for Supply Management about the Sourcing Transformation of United Airlines. As we all know this is an industry that to this day, stays alive on thin margins. In that capacity, it is crucial that they have strong supply chain management and procurement practices. Grace Puma, who took charge of United’s sourcing transformation, gives a detailed look at how she was able to get her team, the company, and her suppliers to buy into her new strategy.

She was able to lay the foundation for success with strong team buy in from her department and suppliers by creating strong lines of communication and development.

“The cornerstone of this process was that it was very collaborative in nature, so throughout our discussions and the process no one felt that anyone else had a greater role, and that was a big change for United,” says Kate Gebo, vice president of corporate real estate. “We explained that by working together, we’re providing a value-added service for bringing new suppliers in, introducing new analytics and looking at things from a total cost of ownership perspective. It’s been an evolving process, but today it’s simply the way we do business.”

The other interesting component of this article was United’s level of transparency and development with their suppliers. She created collaborative supplier workshops and ongoing supplier summits to strengthen communication, educate suppliers, and educate themselves on their supplier’s price components. Puma summarizes her rationale for this level of communication and development perfectly.

“Our approach to sourcing is really around supplier development, helping them to understand that our success is their success, and that they have an active accountability to ensure that our customers have a good experience on board our planes.”

I thought this was an interesting look at how the Airline industry continues to survive. It’s because of people like Ms. Puma, who can transform an out dated process and turn it into a mutually beneficial relationship between company and suppliers.

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