1. Chapter 41 Purchasing Relationships with Other functional areas The Supplier community

2. 2 A Philosophy of Integration Closely working with other functional areas Professional association with suppliers

3. 3 Purchasing’s Relationships within the firm Engineering Quality Assurance Operations Accounting and finance Marketing Transportation Legal Office

4. 4 Relationships with Suppliers under a new philosophy Awareness of the supplier community Open communication with suppliers including ESI Co-location of a supplier Cross Functional Teams New Product Development

5. 5 Obstacles to the New Philosophy with suppliers Resistance to change “Old School” Buyers Senior Management Confidentiality Market-Power imbalance with a supplier

6. 6 The Team Approach Share knowledge, expertise, and ideas Different perspectives on the issue Faster resolution of the problem Faster product development Sense of “buy in” to design or decision

7. 7 Cross Functional Teams Source selection and contract negotiation Solving supplier problems New product development Commodity Teams Engineering Change Proposals Special tasks or activities (supplier certification, developing a materials catalog or a PPM are examples )

8. 8 The Engineering Change Process Engineering Change Proposal (ECP) Engineering Change Board Rejected Engineering Change Order (ECO) or ECPs may be originated by engineering, quality, operations, marketing, or the supplier A Cross Functional Team

9. 9 Team Approaches Team Duration Member Commitment Ad HocContinuous Full time Part Time

10. 10 Team Approaches Team Duration Member Commitment Ad HocContinuous Full time Part Time

11. 11 Team Approaches Team Duration Member Commitment Ad HocContinuous Full time Part Time Source Selection Commodity Teams

12. 12 Advantages to the team approach Enhanced communication Synergy in idea sharing, perspectives, decisions Expeditious decisions and actions Joint ownership of decisions

13. 13 Prerequisites to successful CFTs Support of senior management and all division executives Executive sponsorship

14. 14 Prerequisites to successful CFTs, cont. Effective Team Leaders Qualified, motivated team members Adequate time and resources

15. 15 Impediments to the team concept Selling the concept Time availability of team members and the issue of overload Role conflicts No system of rewards

16. 16 Why some teams fall short Process Loss Groupthink and teams arrive at poor decisions There is nothing inherently good or bad about the team approach. Teams have the potential for great achievement and contribution. However, teams frequently fail in meeting expected results.

17. 17 Let’s move on