The Innovators Dilemma How Intel and DHL Drove a Paradigm Shift in Procurement |
|
| Author:
| Vitasek, Kate
Kling, Jeanne |
| ISBN: | 978-1-959858-21-8 |
| Publication Date: | Apr 2012 |
| Publisher: | University of Tennessee at Knoxville, Center for Executive Education
|
| Book Format: | Digital online |
| List Price: | Contact Supplier contact
|
Book Description:
|
Like most businesses, Intel regularly uses a highly competitive approach for buying logistics goods and services by using a tried and true RFP bid process to award contracts to suppliers. Logic would say that a company the size of Intel should exert its power in the marketplace. But some procurement and operations folks within Intel began to question the efficacy of a highly competitive transaction-based model. "Is a laser focus on price somewhat myopic?" The bid process assures...
More DescriptionLike most businesses, Intel regularly uses a highly competitive approach for buying logistics goods and services by using a tried and true RFP bid process to award contracts to suppliers. Logic would say that a company the size of Intel should exert its power in the marketplace. But some procurement and operations folks within Intel began to question the efficacy of a highly competitive transaction-based model. "Is a laser focus on price somewhat myopic?" The bid process assures competition, but does it encourage innovation? Intel and one of its logistics suppliers - DHL - had talked about reforming its logistics supply chain. But the talk was resulting in very little action, frustrating executives from both companies. Fortunately, the discussion changed on a cloudy day in Oregon when Intel and DHL executives met once again to challenge each other to turn talk into action. Todd Shire, Intel Global Logistics Sourcing Strategy Manager and Randy Eck, Intel Director of Global Transportation and Logistics Outsourcing, sat on the Intel side of the table in a windowless conference room. Sitting on the DHL side were Doug Whaley, DHL's Global Forwarding Key Account Manager for Intel, and Hans Toggweiler, former DHL Global Forwarding CEO for North America and Intel's Executive Sponsor. But this time, the discussion was radically different. A consensus had built around the Vested® sourcing business model codified by University of Tennessee researchers. Hope emerged that Vested's structured methodology could help Intel and DHL breakthrough their impasse.