Jon Herkins, Cannon's new Global Supply Chain Director, serves as a catalyst and good ideas conduit.
Cannon has created the new position of Global Supply Chain Director, and the person selected for the role brings a huge "supply" of experience.
Before joining Cannon in December, Jon Herkins was Senior Vice President of Procurement for a large division of Flextronics, the world's leading electronic manufacturing services (EMS) firm.
He has an extensive track record in developing and implementing sourcing strategies among multiple sites and divisions in large organizations on a global basis.
Q: Just how important is supply chain management?
A: As one of our senior executives said recently, managing our strategic supplier partnerships is just as important as developing superior internal operations and processes. Strategic sourcing to increase flexibility and reduce volatility is what distinguishes a premier company today from a company that just buys parts from a supplier.
Q: What are the lead items on your agenda?
A: The first step is to gather knowledge about our sites' supply chain activities. Next we need to get the procurement people talking to each other, so the successful programs they've set up locally can be leveraged between sites. Then we can begin to align procurement activities where there's commonality and it makes sense.
Q: How do you view your role?
A: I see myself as a catalyst helping to generate awareness and excitement about the benefits of supply management. I also want to serve as a conduit for the flow of good ideas between locations. Hopefully, we'll evolve to the point where sites will communicate regularly without my intervention.
Q: Does strategic sourcing mean centralized decision-making?
A: Not at all. We're not here to dictate to the plants from an "ivory tower" about what they should or shouldn't do. We're here to help the plants communicate and participate in best practices. When traveling to the plants, I'm struck by all the things that are working well. To usurp the decision-making authority from the local level would be counterproductive.
Q: Will local suppliers remain in the picture?
A: Absolutely. While we'll be focusing on key suppliers and some supplier reduction, the intent is not to eliminate local suppliers but to smartly promote commonality in areas where it makes sense.
For example, it may make sense to use a single stamping house for three plants that manufacture a similar product - to drive down cost and strengthen our position with that supplier. But it may not make sense to go with a single supplier for 17 locations that make dissimilar products.
It's important to maintain relationships with local suppliers for quick turns, prototyping and engineering activities that local resources can best handle.
Q: Any recent examples of this "commonality" you refer to?
A: Two of our plants in China were using different suppliers for stainless steel. One of the sources was about to raise its price 20 percent. By introducing the affected plant's purchasing manager to the low-cost supplier, we were able to address the impending increase by qualifying the same low-cost supplier.
Q: Where do our customers fit into the equation?
A: Increasingly, customers are showing great interest in how we manage this function. At a recent audit with Nokia, for example, they asked very detailed questions about our global procurement activities and processes. The lesson here is to understand our customers' requirements and then trickle that knowledge down to our supply base as well as respond to those requirements from a global perspective.
Q: How does strategic sourcing reduce volatility?
A: It enables us to respond more quickly to market and economic conditions. One way to meet increased customer demand is to add plants, equipment and employees. When a cyclical contraction occurs, selling off those assets and reducing personnel can create an unhealthy situation. Building strong supplier relationships gives us the option of outsourcing to stretch capacity instead of artificially inflating for a short period.
Q: How is operational excellence affected?
A: Focusing on the things we do well, our core competencies, and looking for partners where we need help is a real plus for operational excellence. The key is partnering with suppliers who can demonstrate on their end the same standard of excellence we impose on ourselves internally.
