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by Lauren Gibbons Paul, Contributing Editor Posted on Thursday, February 28, 2008 1:48:42 AM   | Abstract: | After two decades of working to improve its supplier risk management, Hewlett-Packard can offer some pointers. |
As one of the first vertical industries to outsource component manufacturing to offshore suppliers, the high-tech sector has more experience with supplier risk management than most. Computer industry titan Hewlett-Packard has been at this for more than two decades, so it serves as a model for companies that are just beginning to mitigate sourcing risks. HP began its supplier management program at the dawn of the PC era. Back then, "there weren't as many standards or qualifications, and you had a lot of different suppliers of components all over the world," says Greg Shoemaker, director of central direct procurement for HP. "We started putting together an overt internal plan called the Procurement Management Process to address that." Based on a homegrown Web-based application, this process covers five different phases of procurement, from identification of a need to evaluation, selection, contracting, and execution. The selection process always entails site visits to the potential supplier, down to the specific plants that would produce the item in question. It's a question of scale. [Click to continue] |