Small Business Leadership Academy: Understanding Corporate Procurement Practices (Part I)
If you are the owner of a small or medium-size business interacting with a big corporation, you need to know how that company thinks about procurement. That’s what students in the 2011 Small Business Leadership Academy are learning from Joseph Carter, the Avnet Professor of Supply Chain Management at the W. P. Carey School of Business.
Typically, suppliers concentrate on the internal operations of their companies, Carter says, but if that’s their predominant focus, they will miss out on the advantages of optimizing their relationships with the companies that are their customers. Jeffrey Campbell of Western Truck Equipment Company, Inc. had the right idea when he asked, “What can I learn to better service the companies that we work with?”
“Today, the creation of value often requires careful coordination of activities across the boundaries between functions, business units and firms,” Carter explains. “In short, organizations that learn how to leverage procurement collaboration can obtain speed, innovation, dependability, flexibility, cost and/or quality benefits that go far beyond those potentially realized from solely optimizing a single firm’s internal operations.”
Carter is one of the top scholars worldwide in the field of supply management. He has published 60 articles about sourcing and supply management issues, and he has shared his expertise with firms all over the world.
Students are learning to understand strategic sourcing and their role as suppliers. To begin, they need to understand the importance of developing a collaborative relationship with a customer and how to manage it efficiently. Carter is taking the students “inside” their client companies by explaining the various roles and functions of a procurement department.
“Business owners need to understand the primary importance of sourcing when developing their strategy,” Carter says. “We’ll be talking about what they need to know in order to drive success for the buyer’s company as well as their own.”
Each week we will bring you a few salient points from each class as well as comments from the professors themselves and the impact the information has had on the students.