STRATEGIC SOURCING PROGRAM KICKS OFF
CNH Industrial is committed to growth and constant innovation; therefore, the company is embarking on an important multi-year supply chain transformation under our new Strategic Sourcing Program (SSP). It will shift us from a more traditional, tactical approach to a strategic sourcing based on selected partner suppliers.
On this journey, which will take place in parallel with current processes, the company aims to establish a robust way of sourcing the very best suppliers, forging transparent relationships across the supply chain and ultimately achieving what we call Best Total Value.
Best Total value is when all value drivers are in balance. Some examples include Quality, Product Development, Delivery and Profit. With these core values in balance, the company is building a stable and mutual way of working with our partners.
So what does SSP look like in action?
CNH Industrial has assembled a cross-functional team of experienced and dedicated colleagues to guide the process. Made up of 55 employees from diverse backgrounds and functions within the company, the teams are founded on inclusivity.
It is important to us that team members engage in tasks across disciplines and develop a multitude of skills: a trained engineer might develop their negotiation skills, for example. Each team is focused on one of five categories representing a group of components used in the production process or aftermarket. For the first wave, they are Gearboxes/Cardon Shafts/Friction Material, Cast/Machine, Fluid Conveyance/Cylinders, Plastics/Filtration and Wire Harness/Sensors.
One employee involved in one of the SSP teams is Tim Smith, now a Team Leader for Electrical who said, “I’m excited to be part of this transformative project having worked as a plant manager for 20 years and experienced first-hand the importance of the supply chain. I truly believe in the importance of approaching this program strategically and appointing the right suppliers who will become real partners, long term, to benefit us all.”
The dedicated SSP teams have already been busy working on the first stages of the 7-step process. The program commenced earlier this year with the undertaking of supplier research whereby category teams have evaluated the global marketplace and identified suppliers with whom to explore a potential partnership.
The second step in the process involved the development of the Request for Proposal, whereby questionnaires for suppliers were prepared based on critical value drivers to evaluate their qualitative and quantitative suitability. The third step was recently completed as CNH Industrial hosted two supplier conventions where the company presented our vision for this transformation program to the suppliers.
From the 21st to 22nd September, suppliers from North America and 12 other countries touched down in Nashville and from the 5th to 6th October, those from Europe, Middle East and Africa as well as Asia Pacific and Latin America arrived in Milan.
I truly believe in the importance of approaching this program strategically and appointing the right suppliers who will become real partners, long term, to benefit us all
Tim Smith, Team Leader for Electrical
At both events our Senior Leadership Team outlined CNH Industrial’s vision for SSP and emphasized the benefit of the supply chain transformation, whilst also touching on our future goals, enduring commitment to driving technology and enhancing sustainability. Suppliers were also given the opportunity to get hands-on with our exciting products. They too were informed by their category teams about the specific process they should follow to win business to become valuable partners with CNH Industrial.
Following the Supplier Conferences, there will be a further four steps in the program to reach the final outcome, these are: RFP Analysis by category, Supplier site visits to help identify the most suitable vendors, supplier negotiations and ultimately supplier selection which centers around the notion of who will offer the Best Total Value.
What does the future of the program look like?
SSP will be rolled out in waves, with each one lasting from 20 to 24 months. Once this first wave is well underway, the company will be recruiting more people to get involved in further iterations of the program. The project presents an exciting opportunity for employees to develop their careers in a new way, expanding on their competencies whilst also driving the company towards a future founded on strong and enduring partnerships with suppliers.
