Celebrating 15 Years
Passion for understanding costs and working collaboratively with suppliers to reduce it led me to establish APD some 15 years ago (incorporated on June 30, 2019).
I did not grow up with my mother whispering in my ear “You want to be in purchasing”. Instead, it was Charlie Ross, a Purchasing Manager at Ford, who recruited me with my freshly minted MBA and manufacturing operations experience into purchasing back in 1984.
At the time, GM, Ford and Chrysler had 80% or so of the US market share but were losing a quality battle with the Japanese. Why? For years they had been buying on price, not trying to understand costs but leveraging multiple suppliers in bidding wars to award new business. “Three bids and a cloud of dust” was the self-proclaimed order of the day within Ford.
In order to maintain pricing pressures, and to support the rapid growth that happened in the 70’s, Ford had many suppliers. This was especially true when compared with the Japanese competition. Additionally, the quality systems employed the US OE’s and their suppliers were outdated and noncompetitive. Ford was taking steps to update the quality systems employed in their operations and by their suppliers. However, they also the needed to drastically reduce their supply base so that quality improvements could be focused with fewer suppliers.
Ford recognized that fewer suppliers would lessen competitive pressures and create the need for buyers to better understand the manufacturing processes and costs of what they were buying. They also realized that with few suppliers they would have to employ a more collaborative approach in all aspects of the business. From a cost perspective the “Three bids and a cloud of dust’ mantra was replaced with “Understand what it should cost before asking the supplier for a quote”.
According to Charlie Ross, my manufacturing process and cost knowledge could be put to good use at Ford. I agreed and started my purchasing career.
I left Ford in 1997 and spent time in the supply base as a purchasing leader and as a general manager. I was at a career transition point 15 years ago and had the idea of starting a business around what brought me into purchasing in the first place; cost and collaboration. Over the years cost and collaboration had become more of a passion than a vocation. It seemed like a good idea.
So far, it’s exceeded my expectations. My team and I have been working to help organizations answer the four questions we believe are fundamental to commodity cost management:
- What does it cost?
- What should it cost?
- What is the plan to close the gap?
- And if the gap is closed or close to being closed – What is the plan to reduce the should-be costs?
We thank our customers and friends and look forward to the next 15 years and the further development of AI and machine learning to help answer the questions we are so passionate about.