Also, having the logistics spend and contracts centralized helped Harris make a very quick transition when DHL exited the U.S. small parcel market earlier this year. "We were able to shift that business by negotiating a new central agreement with FedEx and make the move seamlessly while keeping DHL for warehousing and international," McKeefery says.
One of the benefits being realized with a centralized logistics purchasing team at Goodyear's Akron headquarters is that now there is a home for its logistics contracts and routing guides. "We can disseminate the most updated rates and information out to our regional contacts," says Stratton. "In addition to aiding us in negotiations, on any given day, any group around the world that needs the updated information can get the latest information on our global contracts."
With a centralized view of logistics spend and contracts, Goodyear is also able to use an internal e-sourcing system more effectively to execute and optimize its logistics bids.
In addition, Stratton points out that Goodyear's regional logistics procurement teams now understand they are "not on an island" in dealing with carriers. Goodyear's purchasing team has also asked its carriers to assign a single global account contact to deal with Goodyear on a global basis to ensure that higher-level issues get resolved.
"Through our organization, they now have access to carriers at a very high level, which can help get any local or regional issues resolved," he says. "We can go to the carriers with one voice now."
For P&G, centralizing the logistics spend allowed the company to gain much deeper spend visibility and expand business opportunities for its best suppliers while rationalizing its overall logistics supply base.
"One of the benefits of centralizing is you can aggregate your spend globally and engage suppliers more strategically," says Antonio. "We like to say that P&G purchasing professionals are farmers, not hunters. We seek to cultivate, grow and nurture the best supplier relationships."
"Our best suppliers are now able to explore commercial growth opportunities with a single organization that is leveraging P&G's $4.5 billion spend in logistics," says Antonio. "This is a huge incentive for our suppliers to bring their best ideas and capabilities to P&G and leverage our ability to commercialize them. This was difficult to do in the past, when we were tendering discrete fragments of business around the world in a less coordinated fashion."
For top suppliers, this is good news, but for the low performers, it is an incentive to step up and improve their business, he says, adding that P&G has trimmed its logistics supply base down from 1,400 to 1,200 suppliers.
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