The roles logistics and supply chains play in a corporate environment is one which cuts “across the grain” and ultimately plays a large role in customer satisfaction, which is the leading indicator of a company’s success, according to Carly Fiorina, former chief executive officer of Hewlett-Packard.
Speaking at the Council of Supply Chain Management’s (CSCMP) Annual Conference, she detailed how supply chain operations were arranged when she arrived at HP in 1999 and how they evolved between that time and when she left the technology giant in 2005. In 1999, she said that HP was comprised of 87 disparate units, each with its own supply chain.
With so many supply chains in place, she noted that it seemed difficult to understand how this type of set-up could not work, as human nature interceded, and each unit viewed its presence as protecting their “own turf.”
She explained how over time HP reduced its 85 supply chains down to five, which saved the company $1 billion annually on logistics and supply chain costs and improved purchasing power as well. To build a world-class supply chain, companies often run into a lot of internal resistance and need to change what is available to them. She said this change requires a holistic approach that thinks through strategy, culture, process, and methods.
