Clear View of Spend is Step to Strategic Sourcing

By Susan Avery

November 08, 2011 at 3:48 PM

A category manager’s need for visibility into MRO spending four years ago led Newell Rubbermaid to embark on a journey that’s transforming its sourcing and procurement organization. 

Since then, the company has consolidated its buying activities, helping to reduce spending on indirect categories like MRO by $15 million and enable procurement to better plan and execute sourcing strategy for both indirect and direct categories. 

“The focus going forward was on technology,” said Paula Cushing, Senior Manager, E-Sourcing, at Newell Rubbermaid in Atlanta, in a webcast, “Driving Savings and Compliance at Newell Rubbermaid,” hosted recently by My Purchasing Center

Paula.JPG

“In the next 2-3 years, we focused on process change and enhancing systems to drive the company’s overarching strategy which was to leverage Newell as one enterprise,” she said.

When Cushing joined Newell Rubbermaid, a global marketer of consumer and commercial products, the company was in the midst of integrating its procurement and sourcing activities to leverage its spend and its resources. 

It also was rolling out an ERP (Enterprise Resource Planning) system from SAP, including the business software provider’s SRM (Supplier Relationship Management) application. SRM automates, simplifies and accelerates procure-to-pay processes for goods and services. 

In her webcast presentation, Cushing explained that Newell Rubbermaid, which has grown through acquisition, had a small ad hoc sourcing organization but left many buying decisions to budget owners within the businesses. Most processes were manual and there wasn’t much visibility into spending. “There was little understanding of the value a cohesive organization could bring,” she said. 

The company built an e-sourcing team that looked at processes to determine which ones should be automated; the team introduced a procurement process. It also created a central buying office.

“As we rolled out our ERP system, we saw a need to channel requirements and requisitions to a central buying organization,” Cushing said. The company added a new role, Business Process Champion. 

Going forward, Newell Rubbermaid plans to expand its use of technology, adding Contract Lifecycle Management and RFx capabilities, and Cushing said, pay more attention to data integrity. 

Introducing Cushing’s presentation, Emily Rakowski, Global Head of Procurement Marketing Solutions at SAP, discussed results of recent primary market research. She began with a look at trends that affect procurement including the recovering economy, globalization and sustainability. 

Emily.jpg

The research, which SAP conducted with Procurement Leaders, asked procurement professionals about their priorities. 

“Number one is spend visibility, the same as in 2010,” Rakowski said. “Companies continue to struggle with this. It is really critical for companies to have a strategy and system to get good spend visibility that enables the entirety of effective processes of procurement.” 

Another finding: Procurement professionals are concerned about quality. “It ranks higher in their priorities than direct material costs,” Rakowski said. The research also looked at strategies procurement pros plan to adapt. 

The webcast was sponsored by SAP

To view a recording of the webcast, “Driving Savings and Compliance at Newell Rubbermaid,” please click here

 

 

 

 



Tags: Professional development E-procurement Technology E-sourcing
Category: News Article

Susan Avery

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Susan Avery is Editor-in-Chief at My Purchasing Center. She writes articles, blogs and white papers and manages and creates other content for the online procurement and supply management publication. She produces and moderates roundtable discussions, podcasts, webcasts and video interviews. Susan has 30 years experience covering procurement and supply management for Purchasing magazine and Purchasing.com. 


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