Bob Rudzki, President of Greybeard Advisors, author of Beat the Odds, and blog master of Transformation Leadership recently penned a piece for Chief Executive on Supply Management. It is, of course, a great piece that summarizes how world-class organizations are different and how their leaders adopt aggressive objectives and focus on key categories that will make a profound difference in the short and the long term. Specifically, world-class leaders in supply management
- set revenue enhancement goals and work with suppliers to achieve them,
- pursue achievable year-over-year cost reductions,
- develop expertise in commodity risk management,
- focus on optimizing working capital,
- institute “asset recovery” programs, and
- optimize capital project costs.
This is because the total impact from a comprehensive supply management transformation involving all of these core initiatives can be enormous. An manufacturing company with an 8% (or less) ROIC can transform itself into a 20% performer. That’s huge.
For more information on how your company can achieve these improvements, check out the hidden lever, his tips to avoid corporate death, and the many greybeard resources.