Procurement Award Winning Case Series from Horizon 2013: Part 3
We started the ‘Procurement Award Winning Case Series from Horizon 2013’ to discuss the business case studies of the award winning companies and understand their procurement differentiators & success factors to better procurement performance. We started the series by discussing the business case of Cargill, Inc., followed by the business case of Cubist Pharmaceuticals to understand their success factor to winning the Ace Organization Adoption Award which is given to the best organization wide adoption of Zycus’ solutions through improved processes and user KPIs.
We will now come to next award which is High Performing Procurement Leader for the individual who demonstrated leadership and excellence and contributed to the success of the entire organization by adopting best practices. The winner was Alex Brown, CPO, Advanced Micro Devices (AMD). Advanced Micro Devices delivers computational capabilities to create natural, intelligent and innovative ways for people to interact with the devices they love. They design and manufacture graphics cards and microprocessors that power millions of the world’s personal computers, tablets, gaming consoles, embedded devices and cloud servers.
NYSE Listing: Fortune 500 firm
*Revenue: $5.42 billion (2012)
Led by a strong vision and key focus on people process & technology, procurement at AMD today is a key contributor to the organizational goals. Zycus suite of solutions has been a key enabler in AMD’s ability to rise to the challenge and deliver against the set goals. In between 2008 to 2013, AMD successfully reduced the procurement labor costs by 23% — which was not limited to an absolute reduction in headcount, but also on a cost per FTE basis. AMD also saw an increase of 23% saving per FTE in the same period. During the same 5 year period, supplier rationalization efforts contributed to a 30% reduction in vendor base.
Let us now try to understand what did Alex Brown, CPO, AMD did differently and the Key Success Parameters that helped him achieve the above mentioned results:
- AMD started the procurement operational changes with a strategic plan. According to Alex, having a strategic plan in place increases the probability of getting support at executive and operating level as people recognize the vision and the intentions behind the actions.
- Documented processes that are based on Lean Six Sigma principles. Lean Six Sigma is an enabler to improve efficiency and also a key talking point for engineering and manufacturing management while building relationships.
- Creating a collaborative environment/culture that motivates employees to be creative and nurtures them to become high performers
- Innovation. The innovation has to begin from the leaders and has to extend to a periodical reengineering of the organization, processes & systems by embracing new technology.
- Seeking external inputs that help set targets and plan strategies. According to Alex, innovation is often driven by benchmarking and organizations should continue to seek out examples of success.
To check out the interviews and experience of Horizon 2013 Attendees, click here.