September 2003 | Case Studies | Reader Profile

Richard Jackson: Purchasing Power

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From cancer cultures to special valves to dual-engine aircraft, Richard Jackson stood ready to find and deliver almost anything. As manager of export purchasing for chemical company ICI Americas (later Zeneca and AstraZeneca) until his retirement in 1993, Jackson tapped U.S. suppliers for materials and equipment his company's overseas facilities couldn't find in their own backyards.

When he arrived at ICI in 1974, Jackson's first mission was to find out why overseas affiliates were complaining about U.S. purchasing. The main grievance was that items they needed were taking too long to reach them. The problem, it turned out, lay with the distribution operation, where employees were delaying service to internal customers.

"Our distribution department put it at the end of the list of things to take care of," Jackson says.

Jackson had three distribution employees reassigned to purchasing, where they reported directly to him. With the gap closed between the two departments, "things improved immediately," he says.

Prompt service was especially crucial when a facility needed replacement parts for manufacturing equipment. "Every day that you're broken down, you lose hundreds of thousands of dollars," Jackson says. "Sometimes the replacement part would be something simple, but not always readily available, such as a six-inch diameter nickel pipe that they could not find overseas."

In the days before online reverse auctions, searching for an unusual item meant calling lists of suppliers, who sometimes had to work through lists of their own. Jackson and his department also had to arrange for transportation.

"We'd get requests for items such as 5,000 tons of a bulk chemical and we'd have to charter a vessel to get it over," he says.

At least once, the purchasing department got so good at handling transportation that it prompted a supplier to drop its price. Jackson and one of ICI's engineers decided they could save money by moving a certain bulk chemical from the midwestern United States to Europe on their own, rather than paying the supplier's transportation charge.

The vendor "kind of shook us off because he didn't think we could do it," Jackson says. But ICI started having the material loaded onto railcars and unloaded at a port in California, where it was transferred to a chartered tanker and shipped to the plant overseas.

"On the first shipment," he says, "including all our costs—and we spent a week in the West going through the shipment when it came in—we saved more than $150,000."

Perturbed about losing full control of the transaction, the suppler "began to throw obstacles in our way, reducing the number of cars we could load in one day from about 10 or 12 down to three," Jackson recalls. Finally, after about a year, the vendor offered to renegotiate the price for door-to-door delivery.

"The vendor came down considerably in price and made it worthwhile," he says.

Throughout his career and into his retirement, Jackson has been active in the Institute for Supply Management (ISM) and its predecessor, the National Association of Purchasing Management (NAPM). In 1989 he was elected president of the national organization. This year, he received ISM's J. Shipman Gold Medal Award, which, the association says, honors "individuals whose modest, unselfish, sincere and persistent efforts have aided in the advancement of the supply management field."

The Big Questions

How are you spending your retirement?

I'm involved with the National Association of Purchasing Management, Delaware. I volunteer with the AstraZeneca Ambassadors, and through them and Junior Achievement I plan next year to teach an economics class to middle- school students. My wife and I volunteer with Meals on Wheels. I also do carving and painting of decoys and shore birds. I paint watercolors and have a pretty good stamp collection. And I play a lot of golf.

Business tool you wish had been available before you retired?

Reverse auctions would have been interesting to work with. You can find out quickly if people have what you want and what the price will be, instead of making many phone calls.

What are you reading?

The American Presidents by David C. Whitney and Robin Vaughn, and Painting Dynamic Watercolors by Domenic DiStefano.

Advice for people starting in logistics?

Get all the education you can. Once you get it, continue to take classes. Never stop trying to learn. But experience is also very important.

Business motto?

Do what you enjoy and enjoy what you do.

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