The Purchasing Machine: How the Top Ten Companies Use Best Practices to Manage Their Supply Chains

The Purchasing Machine, by supply-management professionals Dave Nelson, Patricia E. Moody, and Jonathan Stegner, presents a strong argument for the growing importance of this highly specialized facet of the manufacturing process--incorporating "purchasing, money and material flows, ownership of acquisition and sourcing strategies, and even intellectual property movement and control"--along with a series of related measures that could carry companies to the top in years ahead. It also focuses on the leadership skills necessary to make them a reality. The authors admit that their best-practice companies (American Express, Flextronics, Whirlpool, Harley-Davidson, IBM, John Deere, Honda of America, Sun Microsystems, SmithKline Beecham, and DaimlerChrysler) aren't perfect in all areas, as evidenced by the recent tribulations of the latter automaker. But each has learned to excel in a particular area, such as customer relations or systems innovations, and the authors describe them and ways their examples might help others cut costs and turn resultant savings into "lower consumer prices, exciting products, or fatter shareholder returns." Nelson, Moody, and Stegner identify 20 of these best practices (such as Training, Supplier Information Sharing, and Loaned Executives), and show how "the discipline of acquiring and moving material" can be turned to strategic advantage. --Howard Rothman