Purchasing

The Low-cost Learning curve t might not be the best habit, but people have a tendency to categorize everything. The same often happens with low-cost country sourcing, which lumps totally diverse countries scattered all over the world into the same category of inexpensive procurement opportunities. Many still debate whether the process itself actually varies that much from country to country. Is the strategy for sourcing from China really any different than it is from India, Turkey or Brazil? For David Hoover, vice president of strategic procurement for HNI Corp., the answer is, “No, it’s not.” Of course, there’s a little more to it than that. “In the end, human beings are always the ones doing the business. And everyone has an interest,” notes Hoover. “The challenge, in any supplier relationship, is to understand what the other party’s interests are, so that you can help satisfy them. When you do that, they will be compelled to help satisfy yours.” A few years ago when HNI, a global office furniture manufacturer, started evaluating the potential cost benefits of sourcing in China, the company took an approach that utilized its decentralized business model called “split and focus.” However, while the model proved very effective on the customer side of the business to accommodate different product markets and consumer bases, the company quickly learned that the approach needed a few minor adjustments to be as successful on the supply side. “[Initially] we were sending mixed messages and creating confusion in the supply base, which created a lot of waste,” Hoover explains. “Now we are working toward common processes intent, and developing universal systems, processes and metrics for how we manage the supply base.” The new approach allows HNI to project a more “common face” to its supply base, while still respecting the operating autonomy provided within