I got a question from the case study that What external data do you need for analysis in purchasing and supply management ?

X Document3.docx X WhatsApp urchasing-and-supply-management-15th-ed%20(1).pdf Lambert-Martin Automotive Systems Inc. Bill suggested that Arthur review the current on zation structure, develop alternatives, and meet with group vice presidents to solicit their input. It was Tue November 6, and Arthur was scheduled to meet with at the end of the month to review his preliminary and recommendations Arthur Thomas, vice president of global purchasing. En gine Systems Group at Lambert-Martin Automotive Sys- tems Inc. (Lambert-Martin), was preparing for the biggest challenge of his career. Bill McLaren, president and CEO, had asked Arthur the previous day to take over as the com- pany's new chief purchasing officer (CPO), replacing Jeff Trudell, who was retiring in two months after eight years in the role. As a first step, Bill asked Arthur to put together some ideas regarding potential changes to the purchasing organization at Lambert-Martin. During their meeting. Bill commented, "Our business plan calls for the company to grow from $10 billion in sales this year to SIS billion in five years. It is essential that we take advantage of opportu- nities in our supply chain to support our growth objectives and to keep costs in line." LAMBERT-MARTIN AUTOMOTIVE SYSTEMS INC. Lambert-Martin was a US-based supplier to the gk automotive industry, with headquarters in Troy, Michig Its origins dated back to the early days of the automo industry, when the company was formed in 1924 with merger of Lambert Clutch and Gear Company and Ma Chapter 3 Supply Organize PREPARING FOR THE MEETINGS Engine Systems. It was a recognized leader in drivetrain technology, providing innovative products that improved fuel economy, emissions, and performance. Its main prod- uct lines were drivetrain components, including transmis. sion control units. engine valve components, friction ma- terials and turbochargers With 70 manufacturing facilities across 22 countries, it provided components to the major original equipment manufacturers The company invested heavily in product engine ing and new product development. Its engineers worked closely with customers on new vehicle programs and the Lambert Martin Technology Center. alocated in Troy was a sodnew pination Laubert Martin operated under a decentralized inadel Arthur Thomas was a mechanical engineer with of experience in the automotive parts industry. I Lambert-Martin 15 years prior originally working neering and product management in the Emission Group. After five years in engineering Arthur was join the purchasing organization in Engine System he hell positions as strate supplier development and director of commodity ment before being held for the last the As Vice dent of global Systems Group that can Products Baltion Technol. Es Cooling Systems Purchase hasing-and-supply-management-15th-ed%20(1).pdf Engine Systems. It was a recognized leader in drivetrain technology, providing innovative products that improved fuel economy, emissions, and performance. Its main prod- uct lines were drivetrain components, including transmis- sion control units, engine valve components, friction me terials, and turbochargers. With 70 manufacturing facilities across 22 countries, it provided components to most major original equipment manufacturers The company invested heavily in product engineer ing and new product development. Its engineers worked closely with customers on new vehicle programs, and the Lambert-Martin Technology Center, also located in Troy. was a source of new product innovation Lambert-Martin operated under a decentralized model with five business groups: Engine Systems, Emission Products, Ignition Technology, Engine Cooling Systems and Transmission Technology. Corporate office func tions included accounting and finance, human resources, engineering, information technology, legal, and a small purchasing staff. Group vice presidents operated autono mously with control over sales and manufacturing open- tions, including purchasing, The largest group by sales was Transmission Technol- ogy, with annual revenues of approximately 53 billion, while annual revenues at the other four groups ranged from $1.5 to $2.0 billion. For the most recent fiscal year. cost of sales represented 80 percent of revenues, while purchases were 50 percent; and selling. general, and ad- ministrative expenses were 9 percent. Net earnings after tax were $690 million The Purchasing Organization Most purchasing staff were located in the five business groups, each with a vice president of purchasing that re- ported directly to their respective group vice president The group purchasing functions were responsible for commodity strategies, sourcing, quality control. costre ductions, and supplier development. The corporate pur- chasing group managed the supplier technology portal supplier scorecards, risk management reporting, and the supplier manual. Historically, the CPO had a dual role as vice president of purchasing for one of the groups as well as responsibility for the corporate purchasing orga nization. For example, Jeff Trudell had the title of vice PREPARING FOR THE MEETINGS Arthur Thomas was a mechanical engineer with 20 years of experience in the automotive parts industry. He joined Lambert-Martin 15 years prior, originally working in engi- neering and product management in the Emission Products Group. After five years in engineering. Arthur was asked to join the purchasing organization in Engine Systems, where he held positions as strategic sourcing manager, director of supplier development, and director of commodity manage- ment before being promoted to his current role, which he had held for the last three years. As vice president of global purchasing for the Engine Systems Group, Arthur reported to Bill McLaren, who, un til his recent promotion, had been group vice president of Engine Systems. During his tenure as head of purchasing for the group, Arthur could see where Lambert-Martin's decentralized purchasing organizational structure con strained the company from capturing important opportuni. ties in its supply chain. Specifically, the lack of communi cation among the purchasing organizations in the business groups meant that spend information for common suppliers was not shared, thereby potentially missing opportunities for price reductions through consolidation of purchases. Secondly, Arthur felt that because purchasing in each of the groups had separate organizations for sourcing, qual ity control, and supplier development, it would be possible to reduce overhead costs and improve the effectiveness of these activities through increased centralization Arthur had recently read a focus study report pre- pared by CAPS Research Supply's Organisational Roles, and Responsibilities, which indicated that approximately 10 percent of the large companies in the survey had de- centralized purchasing organizational structures, and the majority approximately two-thirds---used the hybrid structure. With a new CEO who was looking for oppor tunities to make positive changes at the company. Arthur thought this would be a good time to take a fresh look at Lambert Martin's purchasing organizational structure and the roles and responsibilities of the groups and head office functions. His meetings with the five group vice presidents were scheduled for mid-November. As he sat at his desk. Arthur wondered what questions he should ask during these meelings. Buyin from the group vice presidents would be acer 720(1).pdf closely with customers on new vehicle programs, and the Lambert-Martin Technology Center, also located in Troy, was a source of new product innovation Lambert-Martin operated under a decentralized model with five business groups: Engine Systems, Emission Products, Ignition Technology, Engine Cooling Systems and Transmission Technology. Corporate office func- tions included accounting and finance, human resources, engineering, information technology, legal, and a small purchasing staff. Group vice presidents operated autono mously with control over sales and manufacturing opera- tions, including purchasing. The largest group by sales was Transmission Technol- ogy, with annual revenues of approximately $3 billion, while annual revenues at the other four groups ranged from $1.5 to $2.0 billion. For the most recent fiscal year, cost of sales represented 80 percent of revenues, while purchases were 50 percent; and selling, general, and ad- ministrative expenses were 9 percent. Net earnings after tax were $690 million The Purchasing Organization Most purchasing staff were located in the five business groups, each with a vice president of purchasing that re- ported directly to their respective group vice president. The group purchasing functions were responsible for commodity strategies, sourcing, quality control, cost re- ductions, and supplier development. The corporate pur- chasing group managed the supplier technology portal supplier scorecards, risk management reporting, and the supplier manual. Historically, the CPO had a dual role as vice president of purchasing for one of the groups as well as responsibility for the corporate purchasing orga- nization. For example, Jeff Trudell had the title of vice president global supply for the Transmission Technology Group as well as being the company's CPO. Similarly, in his new role. Arthur would maintain his current position as vice president of global purchasing. Engine Systems Group, and add the corporate CPO title. men DIOEC Omg promo.com cum had held for the last three years. As vice president of global purchasing for the Engine Systems Group, Arthur reported to Bill McLaren, who, un- til his recent promotion, had been group vice president of Engine Systems. During his tenure as head of purchasing for the group, Arthur could see where Lambert-Martin's decentralized purchasing organizational structure con strained the company from capturing important opportuni- ties in its supply chain. Specifically, the lack of communi- cation among the purchasing organizations in the business groups meant that spend information for common suppliers was not shared, thereby potentially missing opportunities for price reductions through consolidation of purchases. Secondly, Arthur felt that because purchasing in each of the groups had separate organizations for sourcing, qual- ity control, and supplier development, it would be possible to reduce overhead costs and improve the effectiveness of these activities through increased centralization Arthur had recently read a focus study report pre- pared by CAPS Research, Supply's Organisational Roles and Responsibilities, which indicated that approximately 10 percent of the large companies in the survey had de- centralized purchasing organizational structures, and the majority-approximately two-thirds -used the hybrid structure. With a new CEO who was looking for oppor- tunities to make positive changes at the company. Arthur thought this would be a good time to take a fresh look at Lambert-Martin's purchasing organizational structure and the roles and responsibilities of the groups and head office functions. His meetings with the five group vice presidents were scheduled for mid-November. As he sat at his desk Arthur wondered what questions he should ask during these meetings. Buy-in from the group vice presidents would be essential if any major changes were to occur. Furthermore, Bill McLaren was expecting some alternatives from Arthur regarding where he saw opportunities and how the purchas. ing function would be able to make a greater contribution to the strategic and financial goals of Lambert-Martin acer X Document3.docx X WhatsApp urchasing-and-supply-management-15th-ed%20(1).pdf Lambert-Martin Automotive Systems Inc. Bill suggested that Arthur review the current on zation structure, develop alternatives, and meet with group vice presidents to solicit their input. It was Tue November 6, and Arthur was scheduled to meet with at the end of the month to review his preliminary and recommendations Arthur Thomas, vice president of global purchasing. En gine Systems Group at Lambert-Martin Automotive Sys- tems Inc. (Lambert-Martin), was preparing for the biggest challenge of his career. Bill McLaren, president and CEO, had asked Arthur the previous day to take over as the com- pany's new chief purchasing officer (CPO), replacing Jeff Trudell, who was retiring in two months after eight years in the role. As a first step, Bill asked Arthur to put together some ideas regarding potential changes to the purchasing organization at Lambert-Martin. During their meeting. Bill commented, "Our business plan calls for the company to grow from $10 billion in sales this year to SIS billion in five years. It is essential that we take advantage of opportu- nities in our supply chain to support our growth objectives and to keep costs in line." LAMBERT-MARTIN AUTOMOTIVE SYSTEMS INC. Lambert-Martin was a US-based supplier to the gk automotive industry, with headquarters in Troy, Michig Its origins dated back to the early days of the automo industry, when the company was formed in 1924 with merger of Lambert Clutch and Gear Company and Ma Chapter 3 Supply Organize PREPARING FOR THE MEETINGS Engine Systems. It was a recognized leader in drivetrain technology, providing innovative products that improved fuel economy, emissions, and performance. Its main prod- uct lines were drivetrain components, including transmis. sion control units. engine valve components, friction ma- terials and turbochargers With 70 manufacturing facilities across 22 countries, it provided components to the major original equipment manufacturers The company invested heavily in product engine ing and new product development. Its engineers worked closely with customers on new vehicle programs and the Lambert Martin Technology Center. alocated in Troy was a sodnew pination Laubert Martin operated under a decentralized inadel Arthur Thomas was a mechanical engineer with of experience in the automotive parts industry. I Lambert-Martin 15 years prior originally working neering and product management in the Emission Group. After five years in engineering Arthur was join the purchasing organization in Engine System he hell positions as strate supplier development and director of commodity ment before being held for the last the As Vice dent of global Systems Group that can Products Baltion Technol. Es Cooling Systems Purchase hasing-and-supply-management-15th-ed%20(1).pdf Engine Systems. It was a recognized leader in drivetrain technology, providing innovative products that improved fuel economy, emissions, and performance. Its main prod- uct lines were drivetrain components, including transmis- sion control units, engine valve components, friction me terials, and turbochargers. With 70 manufacturing facilities across 22 countries, it provided components to most major original equipment manufacturers The company invested heavily in product engineer ing and new product development. Its engineers worked closely with customers on new vehicle programs, and the Lambert-Martin Technology Center, also located in Troy. was a source of new product innovation Lambert-Martin operated under a decentralized model with five business groups: Engine Systems, Emission Products, Ignition Technology, Engine Cooling Systems and Transmission Technology. Corporate office func tions included accounting and finance, human resources, engineering, information technology, legal, and a small purchasing staff. Group vice presidents operated autono mously with control over sales and manufacturing open- tions, including purchasing, The largest group by sales was Transmission Technol- ogy, with annual revenues of approximately 53 billion, while annual revenues at the other four groups ranged from $1.5 to $2.0 billion. For the most recent fiscal year. cost of sales represented 80 percent of revenues, while purchases were 50 percent; and selling. general, and ad- ministrative expenses were 9 percent. Net earnings after tax were $690 million The Purchasing Organization Most purchasing staff were located in the five business groups, each with a vice president of purchasing that re- ported directly to their respective group vice president The group purchasing functions were responsible for commodity strategies, sourcing, quality control. costre ductions, and supplier development. The corporate pur- chasing group managed the supplier technology portal supplier scorecards, risk management reporting, and the supplier manual. Historically, the CPO had a dual role as vice president of purchasing for one of the groups as well as responsibility for the corporate purchasing orga nization. For example, Jeff Trudell had the title of vice PREPARING FOR THE MEETINGS Arthur Thomas was a mechanical engineer with 20 years of experience in the automotive parts industry. He joined Lambert-Martin 15 years prior, originally working in engi- neering and product management in the Emission Products Group. After five years in engineering. Arthur was asked to join the purchasing organization in Engine Systems, where he held positions as strategic sourcing manager, director of supplier development, and director of commodity manage- ment before being promoted to his current role, which he had held for the last three years. As vice president of global purchasing for the Engine Systems Group, Arthur reported to Bill McLaren, who, un til his recent promotion, had been group vice president of Engine Systems. During his tenure as head of purchasing for the group, Arthur could see where Lambert-Martin's decentralized purchasing organizational structure con strained the company from capturing important opportuni. ties in its supply chain. Specifically, the lack of communi cation among the purchasing organizations in the business groups meant that spend information for common suppliers was not shared, thereby potentially missing opportunities for price reductions through consolidation of purchases. Secondly, Arthur felt that because purchasing in each of the groups had separate organizations for sourcing, qual ity control, and supplier development, it would be possible to reduce overhead costs and improve the effectiveness of these activities through increased centralization Arthur had recently read a focus study report pre- pared by CAPS Research Supply's Organisational Roles, and Responsibilities, which indicated that approximately 10 percent of the large companies in the survey had de- centralized purchasing organizational structures, and the majority approximately two-thirds---used the hybrid structure. With a new CEO who was looking for oppor tunities to make positive changes at the company. Arthur thought this would be a good time to take a fresh look at Lambert Martin's purchasing organizational structure and the roles and responsibilities of the groups and head office functions. His meetings with the five group vice presidents were scheduled for mid-November. As he sat at his desk. Arthur wondered what questions he should ask during these meelings. Buyin from the group vice presidents would be acer 720(1).pdf closely with customers on new vehicle programs, and the Lambert-Martin Technology Center, also located in Troy, was a source of new product innovation Lambert-Martin operated under a decentralized model with five business groups: Engine Systems, Emission Products, Ignition Technology, Engine Cooling Systems and Transmission Technology. Corporate office func- tions included accounting and finance, human resources, engineering, information technology, legal, and a small purchasing staff. Group vice presidents operated autono mously with control over sales and manufacturing opera- tions, including purchasing. The largest group by sales was Transmission Technol- ogy, with annual revenues of approximately $3 billion, while annual revenues at the other four groups ranged from $1.5 to $2.0 billion. For the most recent fiscal year, cost of sales represented 80 percent of revenues, while purchases were 50 percent; and selling, general, and ad- ministrative expenses were 9 percent. Net earnings after tax were $690 million The Purchasing Organization Most purchasing staff were located in the five business groups, each with a vice president of purchasing that re- ported directly to their respective group vice president. The group purchasing functions were responsible for commodity strategies, sourcing, quality control, cost re- ductions, and supplier development. The corporate pur- chasing group managed the supplier technology portal supplier scorecards, risk management reporting, and the supplier manual. Historically, the CPO had a dual role as vice president of purchasing for one of the groups as well as responsibility for the corporate purchasing orga- nization. For example, Jeff Trudell had the title of vice president global supply for the Transmission Technology Group as well as being the company's CPO. Similarly, in his new role. Arthur would maintain his current position as vice president of global purchasing. Engine Systems Group, and add the corporate CPO title. men DIOEC Omg promo.com cum had held for the last three years. As vice president of global purchasing for the Engine Systems Group, Arthur reported to Bill McLaren, who, un- til his recent promotion, had been group vice president of Engine Systems. During his tenure as head of purchasing for the group, Arthur could see where Lambert-Martin's decentralized purchasing organizational structure con strained the company from capturing important opportuni- ties in its supply chain. Specifically, the lack of communi- cation among the purchasing organizations in the business groups meant that spend information for common suppliers was not shared, thereby potentially missing opportunities for price reductions through consolidation of purchases. Secondly, Arthur felt that because purchasing in each of the groups had separate organizations for sourcing, qual- ity control, and supplier development, it would be possible to reduce overhead costs and improve the effectiveness of these activities through increased centralization Arthur had recently read a focus study report pre- pared by CAPS Research, Supply's Organisational Roles and Responsibilities, which indicated that approximately 10 percent of the large companies in the survey had de- centralized purchasing organizational structures, and the majority-approximately two-thirds -used the hybrid structure. With a new CEO who was looking for oppor- tunities to make positive changes at the company. Arthur thought this would be a good time to take a fresh look at Lambert-Martin's purchasing organizational structure and the roles and responsibilities of the groups and head office functions. His meetings with the five group vice presidents were scheduled for mid-November. As he sat at his desk Arthur wondered what questions he should ask during these meetings. Buy-in from the group vice presidents would be essential if any major changes were to occur. Furthermore, Bill McLaren was expecting some alternatives from Arthur regarding where he saw opportunities and how the purchas. ing function would be able to make a greater contribution to the strategic and financial goals of Lambert-Martin acer