How Meritor is Driving Growth through Supplier Collaboration

by Doug Keeley

Recently, Ivalua hosted a webinar focusing on Meritor’s digital transformation into a collaborative, growth focused company with participants from Meritor, KPMG and Spend Matters (watch a recording of the webinar at your convenience by clicking here). This is a great story showcasing how Meritor transformed not only by adopting best practices (similar to everyone else) but by actually building in unique processes and approaches that enable them to go beyond best-in-class and create significant competitive advantages.

Ivalua CMO Alex Saric kicked off the discussion by highlighting a key takeaway from a new Forrester report (Enabling Smarter Procurement ). The report uncovers how crucial supplier collaboration is and the impact it can have on company objectives. In fact, it has become clear that relationships with direct material suppliers are evolving rapidly:

• Suppliers are partners, not vendors
• Relationships are collaborative not combative
• Suppliers are product and solution innovators not order-takers
• Suppliers are essential to your company’s success not expendable

Improving collaboration with suppliers can lead to great benefits, such as margin improvement, innovations & revenue growth, minimize supplier risk and support lean organization management. To achieve these results, Meritor and other organizations are turning to collaborative S2P (Source to Pay) platforms.

The next speaker, Jason Busch, Managing Director of the Spend Matters, gave an excellent presentation titled “The Evolving Landscape of Buyer/Supplier Relationships”.  Jason discusses the increasing level of importance placed on tracking and managing supplier compliance to policy, governance and regulation as well as how these factors relate to the company’s Physical/Service, Information, and Financial supply chain.  Going forward Spend Matters suggests that AI and other technologies such as blockchain will provide far reaching benefits in the realm of supplier management and throughout the S2P (Source to Pay) business processes.

Today Meritor is achieving new levels of revenue growth, launching new products and improving their bottom line. However, it hasn’t always been this way. Between 2009 and 2012, Meritor struggled to find success, and embarked on a corporate initiative to significantly change the company to improve their financial position, reduce costs and maintain high delivery standards (which is imperative in their markets).

Mark Gursky, Director of Meritor’s Procurement Center of Excellence, explained that it was clear that the procurement organization needed to make dramatic changes in their S2C (Source to Contract) process to achieve their corporate initiatives, and that digital transformation would play a significant role in the solution. The procurement organization had historically relied heavily on email, hard drives, and shared drives to conduct business and because of this, wasn’t operating efficiently or in ways to support supplier collaboration or launch new products fast. To correct this, Meritor began the digital transformation process with Ivalua and focused on their New Product Introduction process, Supplier Management and Tooling Management. By leveraging Ivalua’s flexibility, Meritor was able to incorporate efficiency, risk and compliance into everything they do:

• Project Managers use the NPI module to centrally assign work, manage tasks, capture project status, and roll-up sourcing results and real time. Ivalua is helping to drive efficiency, improved project management, and to rapidly identify where problems and additional attention is required. All working towards faster speed-to-market.
• Sourcing and Supplier Launch Processes have improved NDA and quality certification compliance with the inclusion of gated processes that ensure only the right suppliers have access.
• Supplier Management in Ivalua is used to tag suppliers with capabilities, contracts, commodities, ratings and quality scores, locations, and even with third-party risk information from KPMG’s own “intelligence engine” Additionally, Meritor Risk Managers can use collaborative workflows with KPMG to request new 3rd Party Information analysis and reports on new suppliers.
• Meritor’s engineering team leverage Ivalua’s collaborative capabilities to work directly with suppliers in contract manufacturing projects where the product is a Meritor design, but manufactured by a supplier, as well as “black box” projects where a supplier designs and manufactures the product that Meritor is buying. These improved collaborative processes reduce risk and protect the Meritor brand.
• Meritor has replaced emails and spreadsheets with Ivalua to centrally track tooling and use workflows to manage cost and application approvals. In addition to managing the location of tools, Meritor has improved capital budget planning by monitoring and managing tooling life within Ivalua. This is a collaborative process involving both buyers and suppliers, which gives buyers the ability avoid surprise charges for tool maintenance, and plan budgets accordingly.

Meritor’s collaborative digital transformation of the NPI process, Supplier and Tooling Management is increasing efficiency, enabling faster product launches, removing risk and improving the access and quality of data. Ultimately the collaborative nature of the Ivalua platform is helping Meritor achieve its primary objective of becoming a growth-oriented organization where speed to market is a significant competitive advantage.

Click this link  if you would like to watch the webinar and learn more about Meritor’s collaborative transformation and the steps they are taking to become a growth oriented company. If you would like to learn more about Ivalua click here  to contact us.