November 2007 | Commentary | Checking In

Changing Directions Involves Tough Choices

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Imagine walking into a board meeting in one of the largest companies in the world and telling your management peers you can streamline the company's global operations from 87 vertical-silo supply chains into a horizontally integrated network of five—then doing it.

That's the story Carly Fiorina shared with Council of Supply Chain Management Professionals (CSCMP) members during her keynote address at this year's conference in Philadelphia.

Recounting her chain of command at Hewlett Packard, and its evolution from a market also-ran to a leading contender, Fiorina championed using supply chain as a change agent within today's global enterprise.

The former HP CEO spoke of a corporate culture that in the late 1990s reflected the mergers and organic growth of the time, resulting in a lack of supply chain integration across business units and sound procurement strategies.

HP could not leverage the broad scope or huge market scale, and passed along the costs of this madness to the consumer. This was a company so fraught with customer service problems that it missed hitting its numbers for nine consecutive quarters during technology's boom years.

Fiorina correctly diagnosed the problem and ruffled plenty of feathers to fix it. HP flipped its fortune by approaching supply chain management from a holistic perspective, integrating business units and concentrating purchasing power to leverage and reduce costs throughout the enterprise.

Recognizing that the supply chain cuts across vertical hierarchies and therefore acts as a change agent in marshalling innovative ideas and strategies, Fiorina impressed a "C-change" effect on HP's organizational structure. The impact was immediate and enduring.

Fiorina's holistic vision has relevance today, especially in organizations where the natural momentum is to maintain the logistics status quo.

Another innovative approach is being taken by the NASCO trade partnership (see page 67). The nonprofit public/private partnership is helping grow multi-modal infrastructure development along the NASCO trade corridor, linking Mexico, the United States, and Canada.

Global businesses shackled by the increasing challenges of bringing Asian-origin goods to market may appreciate a new perspective—whether it's taking a horizontal approach to managing their inbound supply chain or reengineering transportation links by exploring new trade channels. As the NASCO article illustrates, being imaginative can help your enterprise reap real rewards.

Can you imagine walking into a board meeting holding the key to helping management unlock the West Coast capacity conundrum? Or slashing costs and boosting customer service by really reengineering supply chain practices?

All it takes is a little supply chain imagination.

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